21–666 

Calendar No. 121 

109TH CONGRESS REPORT " ! SENATE 1st Session 109–78 

ENERGY POLICY ACT OF 2005 

JUNE 9, 2005.—Ordered to be printed 

Mr. DOMENICI, from the Committee on Energy and Natural 

Resources, submitted the following 

R E P O R T 

together with 

ADDITIONAL VIEWS 

[To accompany S. 10] 

The Committee on Energy and Natural Resources having considered the same, report favorably thereon an original bill (S. 10) to 

enhance the energy security of the United States, and for other 

purposes, and recommends that the bill do pass. 

CONTENTS 

Page 

Purpose of the Measure ........................................................................................... 1 

Summary of Major Provisions ................................................................................ 2 

Background and Need ............................................................................................. 6 

Legislative History .................................................................................................. 10 

Committee Recommendation and Tabulation of Votes ......................................... 13 

Section-by-Section Analysis .................................................................................... 13 

Cost and Budgetary Considerations ....................................................................... 57 

Regulatory Impact Evaluation ................................................................................ 57 

Executive Communications ..................................................................................... 57 

Additional Views ...................................................................................................... 58 

Changes in Existing Law ........................................................................................ 61 

PURPOSE OF THE MEASURE

The purpose of the measure is to provide a comprehensive national energy policy that balances domestic energy production with 

conservation and efficiency efforts to enhance the security of the 

United States and decrease dependence on foreign sources of fuel. 

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SUMMARY OF MAJOR PROVISIONS

Title I—Energy Efficiency. Title I provides for programs to ensure 

that energy efficiency is a central focus of national energy policy. 

The title addresses Federal and state energy efficiency programs, 

provides funding for home weatherization, establishes numerous efficiency standards for a variety of consumer and commercial energy 

consuming products, requires reduction in energy use in Federal facilities, establishes and updates energy efficiency standards for 

public and assisted housing, and requires the President to develop 

methods to save 1 million barrels of petroleum per day by 2015. 

Title II—Renewable Energy. Title II creates programs to expand 

the use of renewable sources of energy. The title requires the Secretary of Energy to develop a detailed inventory of the Nation’s renewable energy resources. It also renews and expands the Renewable Energy Production Incentive for not-for-profit electric utilities 

and requires the Federal government to try to increase its use of 

renewable energy to 7.5 percent of the total amount of energy consumed by 2013. A major provision of the title requires that 8 billion 

gallons of renewable fuel be used in motor vehicle fuel markets by 

2012 and requires the Federal Government to expand its use of 

ethanol and bio-diesel motor fuels. 

Subtitle B directs the Secretary of Energy, in consultation with 

the Secretary of the Interior, to assess and report to Congress on 

projects with the greatest potential for reducing dependence on fossil fuels used in the generation of electricity, and for promoting distributed energy, in the U.S.-affiliated insular areas. The subtitle 

would also authorize the Secretary to provide technical and financial assistance, on a matching basis with local utilities, for feasibility studies and the implementation of those projects the Secretary determines are feasible, and appropriate for implementation. 

Subtitle C establishes two biomass grant programs to encourage 

the removal of slash, brush, pre-commercial thinning material and 

other non-merchantable forest biomass from Federal lands and Indian reservations for biomass energy production. 

Subtitle E addresses hydroelectric licensing and other hydropower provisions. The licensing section requires the resource agencies (Departments of the Interior, Commerce, and Agriculture) to 

issue regulations establishing procedures for on the record ‘‘trialtype’’ hearings on disputed issues of material fact with respect to 

conditions or prescriptions sought by Federal resource agencies to 

be imposed on hydroelectric licenses. Any party to the Federal Energy Regulatory Commission (FERC) licensing proceeding can initiate the trial-type hearing. Once initiated, all disputed issues of 

material fact must be considered in a single hearing, which is to 

last no more than 90 days. 

The Subtitle adds a new section to the Federal Power Act providing for the adoption of alternative conditions and prescriptions. 

These alternatives can be proposed by any party to the FERC proceeding and must be adopted if the Secretary determines that certain standards are met and concurs in the judgment of the license 

applicant that the alternative condition or prescription would cost 

significantly less or result in improved operation of the project 

works for electricity production. The Secretary of the applicable resource agency is directed to provide a written statement for the 

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hearing record explaining the basis for the condition or prescription 

selected and reason for not accepting a proposed alternative. Such 

statement must demonstrate that the Secretary gave equal consideration to a number of listed factors. If a resource agency does not 

accept a license applicant’s proposed alternative and FERC finds 

the Secretary’s condition or prescription to be inconsistent with applicable law, FERC can refer the dispute to FERC’s dispute resolution service for a non-binding advisory. 

Subtitle E also conforms the treatment of disagreements over 

fish and wildlife conditions for hydroelectric projects of less than 5 

MW in Alaska to the standards under section 10(j) of the Federal 

Power Act. Finally, Subtitle E contains a provision reducing fees 

payable for the use of Federal lands with respect to the Flint Creek 

project in Montana. 

Title III—Oil and Gas: 

Subtitle A permanently authorizes the Strategic Petroleum Reserve and other energy programs. 

Subtitle B includes provisions relating to a program for taking 

in-kind royalties on Federal oil and gas production, establishes an 

archive system for certain geological and geophysical data, addresses oil and gas leasing in the National Petroleum Reserve-Alaska, 

establishes a science initiative for the North Slope of Alaska, establishes a program to reclaim orphaned, abandoned or idled wells, 

addresses alternate energy-related uses of the Outer Continental 

Shelf (OCS), provides for a comprehensive inventory of OCS oil and 

gas resources, and provides incentives for production of oil and gas 

both on Federal lands and off-shore on the OCS. 

Subtitle C addresses administrative and permitting issues to improve access to Federal lands for exploration and production of oil 

and gas. 

Subtitle D provides coastal impact assistance to coastal states 

that help contribute to our nation’s energy supply. 

Subtitle E increases regulatory certainty for natural gas infrastructure; promotes investment in needed storage; increases penalties for violations of the Natural Gas Act and Natural Gas Policy 

Act; addresses natural gas market transparency, and provides additional market reforms. 

Title IV—Coal. Title IV establishes programs to ensure that coal 

remains a major component of national energy policy. The title establishes a program to facilitate research, development and deployment of advanced coal gasification and combustion technologies for 

electric power generation. The title also amends the Mineral Leasing Act to allow for more efficient development of coal resources on 

Federal lands. 

Title V—Indian Energy. Title V provides for programs, funding 

assistance and structured consultation with the Department of the 

Interior (DOI) and Department of Energy (DOE) to ensure that the 

energy resources on Indian land continue to be a major component 

of the Nation’s energy supply should tribes wish them to be. The 

title amends existing law to allow tribes to submit Tribal Energy 

Resource Agreements to the DOI and, subsequent to DOI’s approval of those plans, enter into leases, contracts and agreements 

with private and public business partners in furtherance of those 

resource development plans. The title authorizes the Federal Government to provide loans, grants and loan guarantees to qualifying 

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tribes for the implementation of their Tribal Energy Resource 

Agreements and authorizes $20 million annually for such endeavors through 2016. The title also requires two studies, makes the 

Dine Power Authority, a Navajo Nation enterprise, eligible for Federal funding and renews the Navajo Electrification Project through 

2011. 

Title VI—Nuclear. Title VI provides for programs to ensure that 

nuclear energy continues as a major component of the Nation’s energy supply. Price-Anderson liability protection is extended for both 

Nuclear Regulatory Commission (NRC) licensees and DOE contractors for twenty years. Coverage is increased and indexed for inflation, and non-profit contractors of the Department are made subject to payment of penalties assessed for nuclear safety violations. 

Title VI also provides for the export of high enriched uranium to 

Canada, Belgium, France, Germany or the Netherlands for the sole 

purpose of producing medical isotopes until a low enriched uranium 

alternative is commercially viable and available. Title VI also requires the DOE to propose a permanent disposal facility to Congress for Greater Than Class C waste, also known as sealed 

sources, within one year of enactment. This title also amplifies existing laws that contain prohibitions of nuclear exports to countries 

identified by the Secretary of State as engaging in State sponsored 

terrorism. Additionally, title VI establishes that an advanced next 

generation nuclear power plant reactor will be built at the Idaho 

National Laboratory to demonstrate both electricity and hydrogen 

production. This new reactor will feature improved safety, reduced 

waste, higher efficiency, and increased proliferation resistance and 

physical security. This research project is an advanced reactor hydrogen cogeneration project to move America toward advanced nuclear energy power plants and a hydrogen economy. 

Title VII—Vehicles and Fuels. Title VII addresses the use of alternative fuels by Federal and covered vehicle fleets by ensuring 

greater use of alternative fuels, creating an alternative mechanism 

for non-Federal fleets to comply with petroleum use reduction requirements and requiring the Secretary of Energy to provide a report to Congress on program compliance. The title also creates a 

number of programs to enhance energy efficiency and technology 

development in the transportation sector. 

Title VIII—Hydrogen. Title VIII reauthorizes and updates the 

Spark M. Matsunaga Hydrogen Research, Development, and Demonstration Act of 1990, which provides for basic hydrogen energy 

research and development programs. The title also authorizes new 

research and development programs for hydrogen vehicle technologies and for use of hydrogen as a transportation fuel. The title 

provides authorization for a variety of programs to demonstrate hydrogen and fuel cells for use in light- and heavy-duty vehicle fleets, 

stationary power and international projects. The title requires Federal agencies to consider how they can incorporate hydrogen and 

fuel cell technologies into their missions, creates an interagency 

task force, and requires a National Academy study of progress 

made toward achieving the goals of the hydrogen program. 

Title IX—Research and Development. Title IX provides the research and development base underpinning the full range of energy-related technologies. Subtitles of the title are devoted to Energy Efficiency, Distributed Energy and Electric Energy Systems, 

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Renewable Energy, Nuclear Energy, Fossil Energy, Science, Energy 

and Environment, and Management. Authorizations are provided 

in each Subtitle for the programs described therein. Broad goals 

are established to guide the research and development activities of: 

diversifying energy supplies, increasing energy efficiency, decreasing dependence on foreign energy supplies, improving energy security, and decreasing environmental impact. The Secretary is annually directed to publish specific goals in major program areas consistent with these broad goals. 

Title X—Department of Energy Management. Title X provides 

cost-sharing requirements for DOE research, development, demonstration, and commercial application activities from non-Federal 

sources. The title requires merit review of proposals, and external 

technical review of Department Programs. The title requires initiatives to improve technology transfer and small business interactions. The title increases the number of assistant secretaries 

from 6 to 8, and creates a new Undersecretary for Science and Energy. 

Title XI—Personnel and Training. Title XI requires the Secretary 

of Energy to monitor energy workforce trends and, where necessary, use grants, fellowships, traineeships or other training programs to ensure a sufficient number of workers in energy fields. 

The bill requires establishment of training guidelines for electric 

energy industry personnel, establishment of centers for building 

technologies and power plant operations training, and increased activity by the DOE to improve recruitment of under-represented 

groups into energy fields of education and employment. 

Title XII—Electricity. Title XII will reduce regulatory uncertainty, promote transmission infrastructure development and security, and increase consumer protections. 

Subtitle A requires mandatory rules for operation to ensure 

transmission grid reliability. Subtitle B provides limited Federal 

backstop siting authority for electric transmission lines in areas 

designated by the Secretary of Energy as national interest transmission corridors. It also authorizes FERC to issue siting permits 

if a State withholds approval inappropriately. It would also provide 

FERC with eminent domain authority for electric transmission infrastructure. Subtitle C authorizes FERC to exercise limited jurisdiction over unregulated transmitting utilities (such as municipals 

and cooperatives) to ensure open access to the transmission grid. 

It encourages voluntary RTO developments. It terminates FERC’s 

Proposed Rulemaking on Standard Market Design. It protects 

transmission access for native load customers. Subtitle D directs 

FERC to issue rules on transmission pricing policies. It authorizes 

FERC to approve a participant funding cost allocation plan, without regard to whether the applicant is in an RTO, as long as it results in just and reasonable rates. Subtitle E amends the Public 

Utility Regulatory Policies Act of 1978 (PURPA). It prospectively 

repeals the mandatory purchase and sale from qualifying facilities 

requirements on electric utilities if there is a competitive market. 

It amends PURPA to ensure that qualifying facilities are legitimate, commercially useful facilities. It encourages states to promote net metering, smart metering and distributed generation. 

Subtitle F provides consumer protections through strengthened 

market transparency rules, increased penalties, and prohibitions on 

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manipulative practices. It directs the Federal Trade Commission 

(FTC) to promulgate rules to increase consumer protections. It creates an Office of Consumer Advocacy at the DOE. It allows courts 

to prevent traders who manipulate markets from serving as officers 

or directors of electric utility companies. It allows FERC to consider 

validity of termination payment provisions in certain Western 

Interconnection contracts. Subtitle G repeals the Public Utility 

Holding Company Act of 1935 (PUHCA). It also amends section 203 

of the Federal Power Act giving FERC limited jurisdiction over 

transactions valued over $10 million, including acquisitions of 

FERC jurisdictional generation facilities. In addition to making a 

finding consistent with the public interest, it requires FERC to 

make a finding that a merger will not result in cross-subsidization 

to the detriment of the utility. Subtitle H amends and adds definitions to the Federal Power Act. Subtitle I makes technical changes 

in the Federal Power Act. 

Title XIII—Studies. Title XIII provides for studies on a variety 

of energy issues. 

Title XIV—Incentives for Innovative Technologies. Title XIV provides general requirements that the Secretary of Energy must meet 

in granting loan guarantees. The title directs the Secretary to offer 

loan guarantees for any new or significantly improved energy technology for nearly all end-uses if the technology avoids, reduces, or 

sequesters air pollutants or greenhouse gases. The title also specifically authorizes loan guarantees for a variety of Integrated Gas 

Combined Cycle technologies. 

BACKGROUND AND NEED

Nearly five decades ago energy demand in the United States 

began exceeding domestic supply. That trend has increased over 

the years as the Nation has grown in population and expanded its 

economy. Current DOE projections indicate that the disparity between energy supply and demand will continue to grow. The widening gap between supply and demand, accompanied by reliance on 

foreign sources to close that gap, has created profound concerns in 

the Congress over the Nation’s energy security. The supply and demand gap places pressure on the market and leads to volatile 

prices, exacerbating economic problems. Coupled with those concerns is the recognition that meeting demand must be accomplished in an environmentally sound manner. A combination of energy production, conservation, efficiency, and development of new 

technologies is the bedrock of a sound energy policy aimed at closing the supply and demand imbalance. Such a policy is necessary 

to ensure the country’s continued growth and prosperity and to protect our national security. 

PRODUCTION

Today, U.S. oil production is at a 50-year low and continues to 

decline, placing increasing importance on imports, often from unstable regimes. Oil imports accounted for roughly 60 percent of 

U.S. consumption in 2002, and nearly a third of the current trade 

deficit. Currently, the United States consumes roughly 19 million 

barrels of oil per day (mmbd)—12 million in the transportation sector alone. Demand in the transportation sector is projected to grow 

7 

to more than 20 million barrels per day by 2025. The growing demand for petroleum used in transportation is of particular concern 

to the United States for a number of reasons, including energy security issues related to increasing dependence on foreign oil, and 

environmental concerns over emissions of air pollutants and greenhouse gases resulting from increased oil usage. 

Projected growth in domestic production of natural gas and coal 

provides a limited counterbalance to the dismal oil outlook. Over 

the next 20 years, natural gas production is expected to grow by 

1.5 percent per year, and coal by 1.5 percent per year. Natural gas 

currently represents 24 percent of all energy consumed in the U.S. 

and supplies nearly one-fifth of all electricity generation. Coal remains the primary, and most efficient, fuel for electricity generation, currently accounting for over half of all electric generation in 

the U.S., and will remain so through 2025. Even though production 

is expected to grow in the two sectors, demand for natural gas is 

projected to outpace supply, and neither fuel is able to offset the 

overall gap between energy supply and energy demand in the 

United States. 

Despite the growing dependence on imports, the Nation has a 

wealth of domestic resources that are currently untapped. The 

United States currently has an estimated 22.4 billion barrels of 

proven oil reserves—12th highest in the world—with over 65 percent of proven oil reserves concentrated in the Gulf of Mexico and 

Alaska. A 1999 National Petroleum Council study found that the 

lower 48 States, including the Gulf of Mexico, hold a tremendous 

supply of natural gas (1,466 tcf). Obstacles to development of these 

resources include regulatory hurdles, price volatility, and lack of infrastructure. While the price spikes in 2000 led to a significant increase in gas well drilling activity in 2001, domestic gas producers 

have not responded to recent higher prices as robustly. U.S. production fell by 2.3 percent in 2002. World market prices for crude 

oil remain high, but domestic producers need additional incentives 

to encourage the development of available resources. 

Resource development on onshore Federal land administered by 

the Bureau of Land Management (BLM) provides 5 percent of the 

Nation’s oil production; 11 percent of its natural gas production; 35 

percent of its coal production; 20 percent of its wind power production; and 48 percent of its geothermal energy production. In addition to traditional sources of energy, Federal lands provide significant renewable resources, accounting for 17 percent of the Nation’s 

hydropower, 20 percent of its wind power, and 48 percent of its 

geothermal production. However, various regulatory restrictions 

and processes hinder full development of all of these resources. 

Production on Federal lands and in the OCS can be encouraged 

through regulatory streamlining and incentives such as royalty relief. Certain renewable energy sources have been provided royalty 

relief to increase their economic viability. Other energy sources 

such as geothermal and OCS oil and gas production, still face a significant financial burden that prevents increased development. Hydropower projects on Federal lands can take years to license, hampering long-term investment and stability. 

In addition to their potential for providing new domestic energy 

production, Federal lands could also play an important role in developing a comprehensive interstate delivery system for the NaVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00007 Fmt 6659 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
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tion’s energy supplies. Streamlining the permitting and siting of 

energy infrastructure investments on Federal lands will add to the 

reliability of energy supplies and help to reduce the cost of domestic production. 

There are abundant energy resources available for production on 

Indian lands. Development of those resources must be encouraged. 

Currently, nuclear power provides over 20 percent of our electricity. Reauthorization of the liability and indemnification provisions of the Price-Anderson Act is critical for protection of consumers as well as stability in the industry. The importance of continued investments in nuclear energy cannot be overstated. Only 

nuclear and hydroelectric power can provide significant levels of 

power with zero air emissions. While renewables can and must 

play a role in a diverse energy mix, only nuclear power offers significant long-term potential to address global climate concerns. 

An important aspect of accessing available domestic energy supplies will be the assurance that supplies are able to reach the growing demand. A 1999 study published by the INGAA Foundation estimates that $47.7 billion in new investment in pipeline infrastructure is needed to deliver new gas supplies. 

Billions of dollars need to be invested in the national transmission grid to ensure reliability and to allow markets to function. 

Siting challenges, including a lack of coordination among States, 

impede the improvement of the electric system. 

Regulatory uncertainty in the electricity industry also hinders 

needed infrastructure investment. Lack of certainty as to the viability of market structures and the financial stability of market 

participants impedes access to and increases the cost of capital for 

the electricity sector. Uncertainty in the marketplace about the 

rules and regulations that will govern generation and transmission 

facilities contributes to financial instability and endangers reliability of service. 

Over the past fifteen years, energy policy has evolved toward 

more open access to the transmission grid and increased competition. The Energy Policy Act of 1992 facilitated the development of 

a competitive electric sector by allowing non-utility power producers to compete in wholesale markets. Utilities were required to 

open their transmission lines to these new competitors. These 

changes in the law allowed development of the merchant generator 

and power marketer sectors. In 1996, FERC issued Orders 888 and 

889, which required jurisdictional public utilities to file an open access transmission tariff with FERC and encouraged the formation 

of Independent System Operators. In December 1999, FERC issued 

Order 2000, encouraging transmission owners to join voluntarily 

Regional Transmission Organizations that would independently operate the transmission system. In 2002, FERC proposed the Standard Market Design (SMD) as a way to address alleged continued 

discriminatory transmission practices. The SMD was strongly opposed because of infringement on State commissions’ jurisdiction. 

A balance between access to the transmission grid for the benefit 

of competition and access to the transmission grid to provide reliable, efficient service to retail consumers is the appropriate goal of 

energy policy. Clear regulatory rules and the minimization of barriers are required to achieve that goal. 

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CONSERVATION AND EFFICIENCY

In addition to increasing domestic supplies of energy, reducing 

demand and using supplies wisely is an essential part of a balanced national energy policy. According to the Energy Information 

Administration, as energy prices increased between 1970 and 1986, 

energy intensity (measured by energy use per dollar of GDP) declined at an average annual rate of 2.3 percent. About half of that 

decrease comes from efficiency measures. Energy intensity is projected to continue its decline at an average annual rate of 1.5 percent through 2025 as continued efficiency gains and structural 

shifts in the economy offset increasing energy demand. 

One of the key roles the Federal Government plays in conservation is ensuring the efficient operation of Federal facilities. The annual energy bill for the Federal Government is about $9.6 billion. 

However, through the Federal Energy Management Program, the 

Federal Government spent $2.3 billion less in real dollars for energy for its buildings in FY 2000 compared to FY 1985. The Energy 

Policy Act of 1992 set a 20 percent energy reduction goal (per 

square foot) for Federal facilities by FY 2000 relative to FY 1985. 

Preliminary FEMP data indicated that this goal was exceeded by 

2.7 percent additional savings relative to the FY 1985 baseline. The 

current goals of the FEMP program, established in 1999 by Executive Order 13123, are to reduce energy consumption in Federal facilities by 30 percent per square foot in 2005 and 35 percent in 

2010 relative to 1990 levels. 

On the consumer side, efficiency standards for homes and appliances have also added to the improved use of scarce energy resources. The National Appliance Energy Conservation Act 

(NAECA), enacted in 1987, provided the framework for establishing 

minimum energy efficiency standards for more than two dozen 

types of appliances and equipment. Congress expanded the products covered by NAECA in 1988 and 1992. DOE estimates that the 

12 standards developed by the Department have saved consumers 

over $25 billion in cumulative electricity costs. A 2001 study by the 

American Council for an Energy Efficient Economy (ACEEE) estimated that standards in place through the year 2000 reduced U.S. 

electricity use by 2.5 percent and reduced peak demand by approximately 21,000 megawatts. There are several appliances and equipment types not currently covered by Federal standards that offer 

the significant energy savings potential in the future. Additional 

incentives are needed to encourage new development in these 

areas. 

INNOVATION

The third aspect of a balanced national energy policy looks to the 

long-term future. New sources of energy and improved technologies 

for existing resources will lead to long-term energy security. Research and development opportunities range from new advanced 

nuclear technologies to improved conductivity of transmission lines 

to improved efficiency of light bulbs. 

President Bush announced a $1.2-billion Hydrogen Fuel Initiative to develop hydrogen-powered fuel cells during his State of the 

Union speech on January 28, 2003. This initiative will develop the 

technology needed for commercially viable hydrogen-powered fuel 

10 

cells to power cars, trucks, homes, and businesses. Central to the 

development of hydrogen as a fuel source will be research into the 

technologies and infrastructure needed to produce, store, and distribute hydrogen fuel. 

Nuclear cogeneration of hydrogen is a new opportunity for nuclear power, along with deployment of the next generation of nuclear reactors. New nuclear reactors offer the ability to provide energy security, add to fuel and technology diversity, and meet clean 

air goals. The next generation of reactors is safer and more efficient, and is vital to the nation’s energy supply. A new and aggressive program into innovative nuclear technologies can foster the development of a new generation of nuclear powerplants to meet future demand. 

Innovation for the future also includes improving on technologies 

for existing fuel resources. New advances in the oil and gas industry have led to less intrusive drilling, improved success in drilling 

wells, and stronger stewardship of the environment. Clean coal initiatives have resulted in drastic reductions in emissions without 

limiting the ability of coal to serve as the most reliable and efficient means of electric generation. Looking to the future, clean coal 

research will ensure that new powerplants meet high standards of 

economic viability and environmental protection. 

Continuing innovation also is crucial to improve the economic viability of producing energy from new supplies of woody biomass 

produced from treatments aimed at improving the health of our forests on Federal and Indian lands. Federal land managers and other 

experts have recommended removing some of the slash, brush, precommercial thinnings and other non-merchantable wood and plant 

material from forests to improve forest health and reduce the 

threat of uncharacteristic wildfire. But land managers have indicated that in many regions of the country there currently are few 

economically viable enterprises using this type of biomass and that 

this increases the costs of forest restoration treatments. The two 

grant programs authorized in Title II, Subtitle C, are designed to 

encourage the production of energy from biomass produced from 

restoration treatments on Federal and Indian lands and, ultimately, to reduce the costs of those treatments. 

The Committee believes that some of the newest, most innovative 

technologies for energy production and use, those that are cleaner 

and more efficient compared to existing commercial technologies, 

need a jump-start to get to the marketplace more quickly. The 

Committee believes that the provisions contained in this legislation, especially when combined with the tax provisions to be offered 

from the Finance Committee, are the genesis for improving the national security of this Nation, enhancing the environment, 

strengthening self-government for Native American communities, 

decreasing dependence on foreign sources of energy, aiding the 

economy, and diversifying the energy base of the country. 

LEGISLATIVE HISTORY

During the 107th and 108th Congresses, both the Senate and the 

House of Representatives passed comprehensive energy policy legislation dealing with energy conservation and efficiency, energy research and development, renewable, hydrogen, oil, gas, coal, and 

11 

nuclear energy resources, vehicle efficiency, and electricity regulation and infrastructure. 

During the 107th Congress, numerous measures were introduced 

dealing with energy issues either on a comprehensive or more limited basis. Both the Senate and the House of Representatives 

passed comprehensive energy policy legislation using H.R. 4, the 

Securing America’s Future Energy Act of 2001, as the primary legislative vehicle. The House of Representatives passed H.R. 4 on August 2, 2001 and it was placed on the Senate Calendar on September 4, 2001 without reference to Committee. The Senate considered comprehensive legislation in the context of Senate Amendment 2917, an amendment in the nature of a substitute, offered by 

Senators Daschle and Bingaman. The amendment was offered to S. 

517, the National Laboratories Partnership Improvement Act of 

2001. The Senate debated S. 517 on February 15, March 5, 6, 7, 

8, 11, 12, 13, 14, 15, 19, 20, and 21, and April 8, 9, 10, 11, 16, 17, 

18, 22, 23, 24, and 25, 2002 adopting approximately 125 amendments. On April 25, 2002, the Senate passed H.R. 4 after agreeing 

to Amendment 2917, as amended, striking the House-passed text 

of H.R. 4 and inserting the text of S. 517, as amended. A conference was agreed to and met on June 27, July 25, September 12, 

19, 25, and 26, and October 2 and 3, but was unable to resolve the 

differences between the two bodies before the 107th Congress adjourned. 

In the 108th Congress, the principal legislative vehicle was H.R. 

6, a bill to enhance energy conservation and research and development, to provide for security and diversity in the energy supply for 

the American people, and for other purposes. The bill was introduced on April 7, 2003, but was not the subject of any hearings in 

the House of Representatives. The Committee of the Whole House 

on the State of the Union began consideration of H.R. 6 on April 

10, 2003, and the House of Representatives passed it on April 11, 

2003. H.R. 6 was placed on the Senate Calendar on May 6, 2003, 

without reference to committee. 

The Committee conducted several hearings examining various 

aspects of energy. On February 13, the Committee conducted a 

hearing on Oil Supply and Prices; on February 25 on Natural Gas 

Supply and Prices; on February 27 on Energy Production on Federal Lands; on March 4 on the Financial Condition of the Electricity Market; on March 6 on Energy Use in the Transportation 

Sector; on March 11 on Energy Efficiency and Conservation; and on 

March 27 on various legislative proposals dealing with Electricity. 

The Committee held business meetings on April 8, addressing title 

V—Renewable Energy, title VI—Energy Efficiency, title VIII—Hydrogen, title X—Personnel and Training, and title XIII—State Energy Programs; on April 9 to consider title I—Oil and Gas and title 

II—Coal; on April 10 to consider title IV—Nuclear Matters; on 

April 29 to consider title III—Indian Energy, title VII—Transportation Fuels, and title IX—Research and Development; and on 

April 30 to consider title XI—Electricity. 

On April 30, 2003, the Committee voted to report favorably an 

original bill. On April 30, 2003, the text of the original bill, as ordered reported, was introduced by Chairman Domenici as S. 14. 

On May 1, 2003, S. 14 was read the second time and placed on 

the Senate Legislative Calendar. On May 6, 2003, the original bill 

12 

was reported, with technical amendments, to the Senate as S. 

1005. S. Rept. 108–43. 

On May 6, 2003, S. 14 was laid before the Senate by unanimous 

consent. The Senate debated S. 14 on May 8, 9, and 13, and June 

2, 3, 4, 5, 9, 10, 11, and 12, and July 24, 25, 28, 29, 30, and 31. 

Over the course of the debate, the Senate agreed to approximately 

20 amendments to S. 14. On July 31, 2003, in lieu of further action 

on S. 14, Senator Frist laid H.R. 6 before the Senate by unanimous 

consent and introduced Amendment 1537, which struck the text of 

the House-passed bill and inserted the text of H.R. 4 from the 

107th Congress, as passed by the Senate on April 25, 2002. On 

July 31, 2003, the Senate passed the House energy bill, H.R. 6, as 

amended by Amendment 1537. 

The Senate asked for, and the House agreed to, a conference. The 

conference met on September 5 and November 17, 2003. On November 18, 2003 (legislative day November 17, 2003), the conference report was filed. H. Rept. 108–375. The House passed the 

conference report on November 18, 2003. The Senate began consideration of the conference report on November 19, 2003. On November 21, 2003, the motion to end debate failed, and the conference 

report was not agreed to by the Senate. 

On February 12, 2004, Senator Domenici introduced S. 2095, the 

Energy Policy Act of 2003, which consisted of the text of the conference report on H.R. 6, with certain provisions eliminated. On 

February 23, 2004, S. 2095 was placed on the Senate Legislative 

Calendar. No further action was taken on S. 2095. 

During the 109th Congress, the Committee conducted several 

hearings examining various aspects of energy. On February 15, the 

Committee conducted a hearing on the Future of Liquefied Natural 

Gas: Siting and Safety; on March 8, the Committee conducted a 

hearing on Power Generation Resource Incentives and Diversity 

Standards; on April 12, the Committee conducted a hearing on the 

Development of America’s Oil Shale Resources; and on April 26, 

the Committee conducted a hearing on the Department of Energy’s 

Nuclear Power 2010 Program. In addition, the Committee conducted a series of meetings on issues to be addressed in comprehensive energy legislation. On January 24, the Committee met 

on Natural Gas; on March 10 and April 21, on Coal; and on April 

5, on Water Supply and Resource Management. 

The Committee conducted five business meetings to consider 

comprehensive energy policy legislation. On May 17, the Committee considered title V, Indian Energy; title X, Department of 

Energy Management; and title XI, Personnel and Training. On 

May 18, the Committee considered title IV, Coal; title VII, Vehicles 

and Fuels; title VIII, Hydrogen; and title IX, Research and Development. On May 19, the Committee considered title I, Energy Efficiency; and title XII, Electricity. On May 25, the Committee considered title II, Renewable Energy; title VI, Nuclear Matters; and title 

XVI, Studies. On May 26, the Committee considered title III, Oil 

and Gas; and title XIV, Incentives for Innovative Technology. At 

the business meeting on May 26, 2005, the Committee on Energy 

and Natural Resources voted to report favorably an original bill. 

13 

COMMITTEE RECOMMENDATION AND TABULATION OF VOTES

The Senate Committee on Energy and Natural Resources, in 

open business section on May 26, 2005, by a majority vote of a 

quorum present recommends that the Senate pass an original bill, 

as described herein. 

The rollcall vote on reporting the measure was 21 yeas, 1 nay as 

follows: 

YEAS NAYS 

Mr. Domenici Mr. Wyden 

Mr. Craig 

Mr. Thomas 

Mr. Alexander 

Ms. Murkowski 

Mr. Burr 

Mr. Martinez* 

Mr. Talent* 

Mr. Burns 

Mr. Allen 

Mr. Smith* 

Mr. Bunning 

Mr. Bingaman 

Mr. Akaka 

Mr. Dorgan* 

Mr. Johnson* 

Ms. Landrieu 

Mrs. Feinstein 

Ms. Cantwell 

Mr. Corzine* 

Mr. Salazar 

* Indicates voted by proxy. 

SECTION-BY-SECTION ANALYSIS

Section 1. Short Title 

Section 1 is self-explanatory. 

Section 2. Definitions 

Section 2 is self-explanatory. 

TITLE I—ENERGY EFFICIENCY 

SUBTITLE A—FEDERAL PROGRAMS

Section 101. Energy and water saving measures in congressional 

buildings 

Section 101 establishes requirements for energy and water savings in Congressional Buildings. 

Section 102. Energy management requirements 

Section 102 establishes new energy conservation goals for Federal buildings. The section changes the baseline for measuring Federal energy performance from 1985 to 2004 and requires a 20 percent improvement over 2004 levels by 2015. The section provides 

exclusions from these requirements under certain conditions and 

14 

directs the Secretary to issue guidelines that establish criteria for 

excluding buildings from these requirements. Agencies are authorized to retain funds appropriated for energy expenditures that are 

not spent because of energy savings in agency buildings and to use 

those funds for energy efficiency and renewable energy projects. 

Section 103. Energy use measurement and accountability 

In order to encourage greater energy efficiency and energy cost 

reduction by Federal agencies section 103 requires Federal buildings to be metered or sub-metered by October 1, 2012, using advanced meters, to the maximum extent practicable. Agencies must 

also develop plans to use real-time electricity consumption data to 

reduce energy costs and consumption. 

Section 104. Procurement of energy efficient products 

Section 104 requires Federal agency managers to purchase highly energy efficient products for use by those agencies. 

Section 105. Energy savings performance contracts 

Section 105 extends the Energy Savings Performance Contracts 

program through FY 2016. 

Section 106. Voluntary commitments to reduce industrial energy intensity 

Section 106 encourages business and industry to enter into voluntary agreements with the DOE to reduce energy intensity by not 

less than 2.5 percent annually. 

Section 107. Federal building performance standards 

Section 107 requires the Secretary to revise Federal building energy efficiency performance standards. 

Section 108. Increased use of recovered mineral component in federally funded projects involving procurement of cement or concrete 

Section 108 requires Federal agencies to fully implement all procurement requirements and incentives that provide for the use of 

cement and concrete incorporating recovered mineral component in 

cement or concrete projects. 

SUBTITLE B—ENERGY ASSISTANCE AND STATE PROGRAMS

Section 121. Weatherization assistance 

Section 121 authorizes the expenditure of $1.23 billion for 

Weatherization Assistance for fiscal years 2006 through 2008. 

Section 122. State energy programs 

Section 122 requires the Secretary to assist States in reviewing 

and revising state energy conservation plans and in establishing 

State energy efficiency goals. 

Section 123. Energy efficient appliance rebate programs 

Section 123 provides funding for State grant programs to provide 

rebates to consumers purchasing residential Energy Star products. 

It authorizes $50 million for each of fiscal years 2006 through 2010. 

15 

Section 124. Energy efficient public buildings 

Section 124 provides for grants to States to assist units of local 

government in improving the efficiency of public buildings and facilities. 

Section 125. Low income community energy efficiency pilot program 

Section 125 allows the Secretary to provide grants to units of 

local government, private or non-profit community development organizations, and economic development entities of Indian tribes to 

improve energy efficiency, develop alternative, renewable and distributed energy supplies and to increase energy conservation in 

low-income rural and urban communities. 

Section 126. State technologies advancement collaborative 

Section 126 directs the Secretary, in cooperation with the States, 

to establish a 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. 

Section 127. Model building energy code compliance grant program 

Section 127 directs the Secretary to carry out a program to provide grants to each State that the Secretary determines, with respect to new buildings in the State, achieves at least a 90-percent 

rate of compliance (based on energy performance) with the most recent model building energy codes. Funds may be used to carry out 

activities relating to the implementation of building energy codes 

and building practices that exceed efficiency requirements of the 

most recent model building codes. It authorizes the expenditure of 

$25 million for each of fiscal years 2006 through 2010. 

SUBTITLE C—ENERGY EFFICIENT PRODUCTS

Section 131. Energy star program 

Section 131 establishes a voluntary program within the DOE and 

the Environmental Protection Agency (EPA) 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. The section requires regular updating of Energy Star requirements through a transparent process that includes solicitation of comments from interested parties prior to establishment of new Energy Star categories, specifications or criteria along with responses to such comments; and allows 12 

months of lead time before such changes take effect unless such 

time period is waived or reduced by mutual consent between EPA 

or DOE and the affected parties. 

Section 132. HVAC maintenance consumer education program 

Section 132 directs the Secretary to 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. Additionally, the section authorVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00015 Fmt 6659 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
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izes the Small Business Administration to work with the DOE and 

EPA to provide energy efficiency information to small business. 

Section 133. Public energy education program 

Section 133 directs the Secretary to convene an organizational 

conference for the purpose of establishing an ongoing, self-sustaining national public energy education program. 

Section 134. Energy efficiency public information initiative 

Section 134 directs the Secretary to carry out a comprehensive 

national program, including advertising and media awareness to 

inform consumers about the need to reduce energy consumption, 

the benefits to consumers of reducing energy consumption, the importance of low energy costs to economic growth and job formation, 

and practical, cost-effective measures consumers can take to reduce 

consumption of energy. $90 million is authorized for each of fiscal 

years 2006 through 2010. 

Section 135. Energy conservation standards for additional products 

Section 135 establishes energy conservation standards and testing requirements for the following products: illuminated exit signs; 

torchiere lighting fixtures; distribution transformers; traffic and pedestrian signals; commercial unit heaters; medium base compact 

fluorescent lamps; dehumidifiers; pre-rinse spray valves; and mercury vapor lamp ballasts. The section also directs the DOE to prescribe standards for: refrigerated beverage vending machines; suspended ceiling fans and the standby power mode of battery chargers and external power supplies. The legislative standards reflect 

consensus agreements that have been negotiated by the trade associations representing the manufacturers of the products and environmental, energy efficiency and consumer groups. The section authorizes the Secretary to set standards for electricity use for residential furnace fans, to set more than one standard for a product 

that serves more than one function, and, under specified conditions, 

to use an expedited rulemaking process to establish a standard. Finally, the section provides that existing State and local standards 

for a new product added by the section are not preempted until the 

Federal standards for such product goes into effect. 

Section 136. Energy conservation standards for commercial equipment 

This section establishes conservation standards and testing requirements for: commercial air conditioning and heat pumps; commercial refrigerators and freezers; commercial clothes washers; and 

commercial ice makers. The standards reflect agreements that have 

been negotiated by the trade associations representing the manufacturers of the products and environmental, energy efficiency, and 

consumer groups. 

Section 137. Expedited rulemaking 

Section 137 amends the Energy Policy and Conservation Act to 

make conforming changes related to the expedited rulemaking in 

subsection 135. 

17 

Section 138. Energy labeling 

Section 138 directs the FTC to undertake a rulemaking to consider the effectiveness of the consumer products labeling program 

in assisting consumers in making purchasing decisions and improving energy efficiency; and changes to the labeling rules (including 

categorical labeling) that would improve the effectiveness of consumer product labels and directs the Secretary or the FTC to prescribe labeling requirements for products for which standards are 

set by rule or by statute in section 135. 

Section 139. Energy efficient electric and natural gas utilities study 

Section 139 directs the Secretary, in consultation with the National Association of Regulatory Utility Commissioners and the National Association of State Energy Officials, to 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 utilities subject to State regulation and nonregulated utilities. This section also requires the Secretary to report the findings of the study and any recommendations on model 

policies to promote energy efficiency programs. 

Section 140. Energy efficiency pilot program 

Section 140 directs the Secretary to 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 States 

for planning and adopting statewide programs that encourage energy efficiency and energy consumption reductions. States with 

adopted programs may use funds for expanding and improving 

their programs. It authorizes $5 million in each of fiscal years 2006 

through 2010. 

Section 141. Energy efficiency resource programs 

Section 141 amends the Public Utilities Regulatory Policy Act of 

1978 to require State regulatory bodies, within 3 years after enactment, to consider implementing energy efficiency or other demand 

reduction programs. 

SUBTITLE D—MEASURES TO CONSERVE PETROLEUM

Section 151. Reduction of dependence on imported petroleum 

Section 151 directs the President to develop and implement 

measures in end-uses throughout the economy of the United States 

sufficient to reduce total demand for petroleum in the United 

States by 1,000,000 barrels per day. It requires the President to report annually on progress toward meeting that goal. 

SUBTITLE E—ENERGY EFFICIENCY IN HOUSING

Section 161. Public housing capital fund 

Section 161 allows the Public Housing Capital Fund to include 

use for certain improvements for energy efficiency, including integrated utility management and capital planning and third party 

contracts similar to Energy Savings Performance Contracts 

(ESPCs). 

18 

Section 162. Energy efficient appliances 

Section 162 requires public housing agencies to purchase Energy 

Star or FEMP-designated products where cost-effective. 

Section 163. Energy efficiency standards 

Section 163 updates efficiency standards used in the CranstonGonzales National Affordable Housing Act low-income housing programs to current best codes and practices. 

Section 164. Energy strategy for HUD 

Section 164 requires the Department of Housing and Urban Development to develop and implement an integrated energy strategy 

for public and assisted housing and requires a report to Congress 

and updates of the report every two years. 

TITLE II—RENEWABLE ENERGY 

SUBTITLE A—GENERAL PROVISIONS

Section 201. Assessment of renewable energy resources 

Section 201 directs the Secretary of Energy to publish a report, 

based on his most recent assessment, containing a detailed inventory of the available quantity and characteristics of renewable energy resources in the United States. 

Section 202. Renewable energy production incentive 

Section 202 extends funding authorization for incentive programs 

for producing electricity from renewable energy sources, expands 

eligibility to cooperatives and municipal utilities, and includes 

landfill gas as an eligible energy resource. The section also provides 

that if funds are not available for full payments in a given calendar 

year, 60 percent of available funds shall be assigned to solar, wind, 

geothermal, and closed-loop biomass. 

Section 203. Federal purchase requirement 

Section 203 requires the Federal Government to try to purchase 

not less than 3 percent renewable electric energy in fiscal years 

2007 through 2009, increasing to not less than 7.5 percent renewable electric energy in fiscal year 2013 and thereafter. The section 

also provides a double credit for renewable electric energy produced 

and used on-site at a Federal facility, as well as for renewable energy produced on Federal or Indian lands and used at a Federal 

facility. 

Section 204. Renewable content of motor vehicle fuel 

Section 204 mandates that motor vehicle fuel sold or dispensed 

to consumers in the contiguous United States contain renewable 

fuel as defined by this section. Under the mandate 4 billion gallons 

of renewable fuel must be used in 2006 rising to 8 billion gallons 

in 2012. After 2012 the annual volume of renewable fuel must be 

at least equal to the percentage of renewable fuel, relative to the 

total number of gallons of gasoline introduced into commerce in 

2012. The section also contains provisions relating to participation 

by small refiners, opportunities for a State or States to waive the 

19 

program requirements, and provisions for a fuel producer credit 

and trading program. 

Section 205. Federal agency ethanol-blended gasoline and biodiesel 

purchasing requirement 

Section 205 requires the head of each Federal agency to ensure 

that the agency purchases ethanol-blended gasoline containing at 

least 10 percent ethanol rather than nonethanol-blended gasoline 

for use in agency vehicles. The section also requires that Federal 

agencies purchase biodiesel for diesel fueled vehicles based on a 

schedule set forth in this section. 

Section 206. Data collection 

Section 206 requires the Administrator of the Energy Information Administration of the DOE to conduct and publish the results 

of a survey of renewable fuels demand in the motor vehicle fuels 

market in the United States on a monthly basis. 

Section 207. Sugar cane ethanol program 

Section 207 directs the Secretary of Energy to establish a multiState project designed to study the production of ethanol from cane 

sugar, sugar cane, and sugar cane byproducts. 

Section 208. Modification of Commodity Credit Corporation bioenergy program 

Section 208 is self-explanatory. 

Section 209. Advanced biofuel technologies program 

Section 209 directs the Secretary of Energy, in consultation with 

the Secretary of Agriculture, to establish a program to demonstrate 

advanced technologies for the production of alternative transportation fuels. 

Section 210. Assistance for rural communities with high energy 

costs 

Section 210 permits the Secretary and the Administrator of the 

Rural Utilities Service to use authorities provided pursuant to the 

1936 Rural Electrification Act and the Consolidated Farm and 

Rural Development Act, including the deferral, extension, refinancing, restructuring, and reduction of loans made under those 

Acts, to make grants available to existing rural electric projects in 

Alaska. The purpose of such grants is to aid electric borrowers 

serving rural Alaskan communities to reduce consumer rates, 

maintain reliable service, preserve the economic feasibility of an 

electric system, and avoid default. 

SUBTITLE B—INSULAR ENERGY

Section 221. Definitions 

Section 221 defines the terms used in the subtitle. 

Section 222. Assessment 

Section 222 authorizes the Secretary of Energy, in consultation 

with the Secretary of the Interior, to conduct an assessment of the 

energy needs of the U.S.-affiliated insular areas and submit a reVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00019 Fmt 6659 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
20 

port within one year of enactment to Congress that evaluates the 

strategies or projects with the greatest potential for reducing the 

dependence of each insular area on imported fossil fuels as used for 

the generation of electricity, and, when there is a significant need 

for distributed energy, identify promising strategies and projects 

for meeting that need. 

Section 223. Project feasibility studies 

Section 223 authorizes the Secretary of Energy, in consultation 

with the Secretary of the Interior, and upon the request of the local 

electric utility and a commitment by the utility to at least ten percent of the cost, to conduct a feasibility study of a project to implement a strategy or project identified under section 222 as having 

the potential to—(1) significantly reduce the dependence of an insular area on imported fossil fuels; or (2) provide needed distributed 

generation to an insular area. 

Section 224. Implementation 

Section 224 authorizes, upon a determination by the Secretary of 

Energy, in consultation with the Secretary of the Interior, that a 

project is feasible under section 223, and a commitment by the 

local electric utility to operate and maintain the project, such technical and financial assistance as the Secretary determines is appropriate for the implementation of the project. 

Section 225. Authorization of appropriations 

Section 225 authorizes to be appropriated to the Secretary of Energy: (1) $500,000 for the completion of the assessment under section 222; (2) $500,000 for each fiscal year for project feasibility 

studies under section 223; and (3) $5,000,000 for each fiscal year 

for project implementation under section 224. No insular area may 

receive more than 20 percent of the total funds made available during any 3-year period unless the Secretary determines that providing funding in excess of that percentage best advances existing 

opportunities to meet the objectives of this subtitle. 

SUBTITLE C—BIOMASS ENERGY

Section 231. Definitions 

Section 231 defines the terms used in the subtitle. 

Section 232. Biomass commercial utilization grant program 

Section 232 authorizes the Secretary of the Interior and the Secretary of Agriculture to make grants to offset the cost of purchasing 

biomass from hazardous fuels reduction and other forest restoration projects on Federal or Indian lands to produce electricity, heat, 

or transportation fuels. This section authorizes appropriations of 

$12.5 million to each Secretary for each of fiscal years 2006 

through 2010. 

Section 233. Improved biomass utilization program 

Section 233 authorizes the Secretary of the Interior and the Secretary of Agriculture to make grants to offset the cost of developing 

or researching proposals to improve or add value to the use of biomass from hazardous fuels reduction and other forest restoration 

21 

projects. This section authorizes appropriations of $12.5 million to 

each for each of fiscal years 2006 through 2010. 

Section 234. Report 

Section 224 directs the Secretaries of the Departments of the Interior and Agriculture to provide a joint report on the interim results of the program no later than 3 years after the date of enactment. 

SUBTITLE D—GEOTHERMAL ENERGY

Section 241. Leasing procedures 

Section 241 modifies the Geothermal Steam Act to require that 

all lands to be leased be made available on a competitive basis. If 

no competitive interest in the lands exists, they can be made available for leasing on a noncompetitive basis for a period of two years. 

Pending lease applications are grandfathered. The mechanics for 

this system of competitive leasing is patterned after the Federal 

onshore oil and gas leasing program. 

Section 242. Direct use 

Section 242 directs the Secretary to issue a schedule of fees (as 

opposed to royalties) for direct use geothermal (geothermal used for 

a purpose other than commercial generation of electricity and not 

sold—e.g., geothermal steam used for greenhouses). This section 

also gives the Secretary discretion to provide an exception from the 

requirement for competitive leasing for land to be used exclusively 

for direct use if the Secretary follows certain procedures and determines that no competitive interest exists. 

Section 243. Royalties 

Section 243 requires the Secretary to issue a rule within one year 

to provide a simplified methodology for calculating royalties on 

Federal geothermal resources. It requires the Secretary to consider 

a methodology based on gross proceeds from the sale of electricity 

and to ensure that the final regulation results in the same level of 

royalty revenues over a 10-year period as the current regulation. 

This section also provides that existing leases can be modified on 

the application of the lessee to conform to the schedule of fees for 

leases for direct use and to the new simplified methodology for all 

other leases. 

Section 244. Geothermal leasing and permitting on Federal land 

Section 244 requires the Secretaries of the Interior and Agriculture to enter into a memorandum of understanding regarding 

leasing and permitting for geothermal development of public lands 

and National Forest System lands. It requires a joint data retrieval 

system for tracking lease and permit applications. 

Section 245. Assessment of geothermal energy potential 

Section 245 requires the Secretary to update the 1978 Assessment of Geothermal Resources. 

22 

Section 246. Cooperative or unit plans 

Section 246 clarifies the authority of the Secretary with respect 

to the creation of cooperative or unit agreements for the development of Federal geothermal resources. 

Section 247. Royalty on byproducts 

Section 247 provides that the royalty on any byproduct mineral 

be at the applicable rate contained in the Mineral Leasing Act. 

Section 248. Lease duration and work commitment requirements 

Section 248 requires the Secretary to establish payments at a 

level that ensures diligent development of the lease. 

Section 249. Annual rental 

Section 249 increases the rentals required to be paid on Federal geothermal leases, escalating over time from $1 (for noncompetitive 

leases) and $2 (for competitive leases) to $5 per acre. This section 

also modifies the provisions relating to termination of a lease for 

failure to pay rental. 

Section 250. Advanced royalties required for cessation of production 

Section 250 provides that a lease will remain in effect if production ceases after coming into production if the lessee pays for an 

aggregate of not more than 10 years an advance royalty that is the 

monthly average royalty paid during the period of production. The 

advance royalty can be credited against future production royalties. 

There is an exception in cases where the production ceases due to 

a force majeure. 

Section 251. Leasing and permitting on Federal land withdrawn for 

military purposes 

Section 251 requires the Secretaries of the Interior and Defense 

to submit a joint report on leasing and permitting activities for geothermal energy on Federal land withdrawn for military purposes. 

Section 252. Technical amendments 

Section 252 makes a series of technical amendments to the Geothermal Steam Act of 1970, replacing the term ‘‘geothermal steam 

and associated resources’’ with ‘‘geothermal resources’’ throughout 

the Act, and providing section titles for each section of the Act. 

SUBTITLE E—HYDROELECTRIC

Section 261. Alternative conditions and fishways 

Subsection (a) amends section 4(e) of the Federal Power Act to 

provide that the license applicant and any party to the proceeding 

is 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 4(e) conditions. All disputed issues of material fact raised by any party are to be determined in a single trial-type hearing to be conducted within a time 

frame established by FERC for each license proceeding. Within 90 

days of the date of enactment, the Secretaries of the Interior, Commerce, and Agriculture are directed to establish jointly by rule procedures for the expedited trial-type hearing, including an opporVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00022 Fmt 6659 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
23 

tunity to undertake discovery and cross-examine witnesses, in consultation with the FERC. 

Subsection (b) amends section 18 of the Federal Power Act to 

provide the same trial-type hearing requirements with respect to 

prescriptions sought by a resource agency. 

Subsection (c) amends the Federal Power Act by adding a new 

section addressing alternative conditions and prescriptions. It allows the license applicant or any other party to the license proceeding to propose an alternative condition or prescription. The 

subsection directs the Secretary of the resource agency to accept 

the proposed alternative condition or prescription 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 the alternative condition provides for the 

adequate protection and utilization of the reservation (or in the 

case of a prescription, that the alternative will be no less protective 

than the fishway initially proposed by the Secretary) and the Secretary concurs with the license applicant’s judgment that the alternative condition or prescription will either cost significantly less to 

implement or result in improved operation of the project works for 

electricity production. The concurrence by any Secretary of the license applicant’s judgment on costs and project operations should 

be based upon a determination that the judgment is supported by 

substantial evidence. The Secretary must submit into the record a 

written statement explaining the basis for any condition or prescription selected and the reason for not accepting any proposed alternative condition or prescription. The written statement must 

demonstrate that the Secretary gave equal consideration to a number of specified factors. The subsection provides that if the Secretary does not accept an applicant’s proposed alternative condition 

or prescription and the FERC finds the resource agency’s condition 

or prescription to be inconsistent with applicable law, the FERC 

may refer the dispute to its Dispute Resolution Service for a nonbinding advisory. The Committee does not intend section 261 to 

shift the burden of proof or to change the standard of proof required by section 556(d) of title 5, United States Code, to support 

an agency determination. 

Section 262. Alaska State jurisdiction over small hydroelectric 

projects 

The provision is self-explanatory. 

Section 263. Flint Creek hydroelectric project 

The provision is self-explanatory. 

TITLE III—OIL AND GAS 

SUBTITLE A—PETROLEUM RESERVE AND HOME HEATING OIL

Section 301. Permanent authority to operate the Strategic Petroleum 

Reserve and other energy programs 

Section 301 permanently authorizes the Strategic Petroleum Reserve (SPR). The SPR was established pursuant to the authority 

granted under the Energy Policy and Conservation Act (EPCA). 

This section authorizes the Secretary of Energy to expeditiously as 

24 

practicable, without incurring excessive cost or appreciably affecting the price of gasoline or heating oil to consumers, acquire petroleum sufficient to fill the SPR to the one billion barrel capacity authorized by the EPCA. 

Section 301 also permanently authorizes the Northeast Home 

Heating Oil Reserves. 

Section 302. National oilheat research alliance 

Section 302 amends the Energy Act of 2000 (P.L. 106–469; 42 

U.S.C. 6201) to extend the authorization for the National Oilheat 

Research Alliance (NORA) until nine years after the date on which 

NORA was established. 

SUBTITLE B—PRODUCTION INCENTIVES

Section 311. Definition of Secretary 

Section 311 is self-explanatory. 

Section 312. Program on oil and gas royalties-in-kind 

Subsection (a) provides that the section applies to all royalty-inkind (RIK) accepted by the Secretary under specified statutes. 

Subsection (b) provides that all royalty accruing for oil or gas 

under a Federal lease issued under those authorities shall, on the 

demand of the Secretary, be paid in oil or gas beginning on the 

date of enactment and sets forth other requirements applicable to 

RIK payments. The subsection gives the Secretary the authority to 

retain and use a portion of the revenues generated from RIK sales 

to pay costs of transporting, processing, or disposing of the royalty 

production and for salaries and administrative costs of the RIK 

program. 

Subsection (c) provides that if a lessee, pursuant to an agreement 

with the United States or if provided in the lease, processes the 

royalty gas or delivers the oil or gas at a point not on or adjacent 

to the lease area, the Secretary shall compensate the lessee in a 

manner articulated in the subsection. 

Subsection (d) provides that the Secretary may receive oil or gas 

royalties-in-kind only if the Secretary determines that doing so provides benefits to the United States greater than or equal to those 

likely to have been received had royalties been taken in value. 

Subsections (e), (f), (g), (h), (i) and (j) are self-explanatory. 

Section 313. Marginal property production incentives 

Subsection (a) defines ‘‘marginal property’’ as set forth in the section, until such time as the Secretary issues regulations that prescribe a different definition, with respect to Federal onshore oil and 

gas leases. 

Subsection (b) sets forth conditions for the reduction of the royalty rate on such properties. 

Subsection (c) sets forth the reduced royalty rate. 

Subsection (d) sets forth the authority for the termination of the 

reduced royalty rate. 

Subsection (e) explicitly provides authority for the Secretary of 

the Interior to prescribe different standards for royalty relief by 

regulation. The subsection directs the Secretary to accept and consider petitions for royalty relief for marginal properties on the OCS 

25 

under existing authorities and to act on such petitions within 90 

days. 

Subsection (f) is self-explanatory. 

Section 314. Incentives for natural gas production from deep wells 

in the shallow waters of the Gulf of Mexico 

Section 314 is self-explanatory. 

Section 315. Royalty relief for deep water production 

Section 315 is self-explanatory. 

Section 316. Alaska offshore royalty suspension 

Section 316 authorizes the Secretary of the Interior under the 

Outer Continental Shelf Lands Act to give royalty relief to existing, 

non-producing leases for production in Alaska frontier regions, as 

specified in the section. 

Section 317. Oil and gas leasing in the National Petroleum Reserve 

in Alaska 

Subsection (a) transfers authorities and is self-explanatory. 

Subsection (b) restates the requirement of current law that the 

Secretary conduct an expeditious program of competitive oil and 

gas leasing in the NPRA. It states that the Secretary should prevent to the extent practicable and mitigate adverse effects from 

leasing and development activities. It also states that the Secretary 

minimize to the extent practicable the impact to surface resources 

and consolidate facilities. Subsection (b) does not present a new 

standard for the leasing program conducted under this section, but 

rather is a further exposition of existing law. It does not express 

the view of Congress as to whether the BLM has or has not met 

the standard. The section provides that leases be for an initial period of not more than 10 years and so long thereafter as oil or gas 

is produced from the lease in paying quantities or drilling or reworking operations, as approved by the Secretary, are conducted on 

the leased land. The section provides that at the end of the primary 

term of the lease, the Secretary shall renew the lease for one additional 10–year term if certain standards as set forth in the subsection are met and the lessee pays a renewal fee of $100 per acre. 

The subsection authorizes the Secretary to unitize leases and sets 

forth requirements relating to unit agreements. The section conforms the Secretary’s authority to waive, suspend or reduce royalties on the NPRA with the authority under the Mineral Leasing 

Act with respect to onshore oil and gas leasing in the lower 48 

states. The provision requires the Secretary to waive administration of leases where the Native Regional Corporation owns the subsurface estate; however, the provision does not limit the authority 

of the Secretary to manage the federally-owned surface estate within the NPRA. 

Subsection (c) makes conforming amendments. 

Section 318. North Slope science initiative 

Subsection (a) establishes a North Slope Science Initiative to implement efforts to coordinate collection of scientific data to provide 

a better understanding of the terrestrial, aquatic, and marine ecosystems of the North Slope of Alaska. 

26 

Subsections (b), (c), (d), (e), and (f) are self-explanatory. 

Section 319. Orphaned, abandoned, or idled wells on Federal land 

Subsection (a) requires the Secretary of the Interior, in cooperation with the Secretary of Agriculture, to establish a program to remediate, reclaim, and close, orphaned, abandoned, or idled wells on 

Federal lands administered by the Secretaries of the Interior and 

Agriculture. 

Subsections (b), (c), (d), and (e) sets forth requirements for the 

program, provisions related to cooperation and consultation, requirements for a plan, and defines ‘‘idled well’’. 

Subsection (f) requires the Secretary of Energy to establish a 

technical assistance program to provide assistance to states in 

dealing with orphaned and abandoned wells on state and private 

lands. 

Subsection (g) authorizes funding for the programs. 

Section 320. Combined hydrocarbon leasing 

The section amends the Mineral Leasing Act to authorize the 

Secretary of the Interior to issue separately leases for exploration 

for and extraction of tar sand and oil and gas in areas that contain 

a combination of tar sand and oil and gas. 

Section 321. Alternate energy-related uses on the Outer Continental 

Shelf 

Section 321 amends the Outer Continental Shelf Lands Act to 

provide authority to the Secretary of the Interior to grant leases, 

easements, or rights-of-way for energy and related purposes on the 

OCS. The section does not allow the grant of easements or rightsof-way for activities that support the exploration, development, or 

production of oil and gas in areas where oil and gas preleasing, 

leasing and related activities are prohibited by a congressional 

moratorium or a withdrawal pursuant to section 12 of the Outer 

Continental Shelf Lands Act. The authority does not apply to any 

area within the exterior boundaries of any unit of the National 

Park System, National Wildlife Refuge System, or National Marine 

Sanctuary System, or any National Monument. The section requires the Secretary to undertake a coordinated OCS mapping initiative to assist in decision-making relating to the siting of facilities 

under the section. 

Section 322. Preservation of geological and geophysical data 

Section 322 requires the Secretary to carry out an initiative with 

the States to archive and provide a national catalog of geologic, 

geophysical, and engineering data, maps, well logs and samples. 

The Secretary is required to establish a data archive system of repositories and to provide technical and financial assistance related 

to the archival material. 

Section 323. Oil and gas lease acreage limitations 

Section 323 amends the Mineral Leasing Act provision to increase the limitation on the amount of acreage that can be held by 

a person under lease in any one State. 

27 

Section 324. Assessment of dependence of State of Hawaii on oil 

Section 324 requires the Secretary of Energy to assess the economic implications of the dependence of the State of Hawaii on oil 

as the principal source of energy for the State including; the prospects for supply disruptions and price volatility impacts on the 

State economy; the economic relationship between the use of residual fuel in oil-fired generation of electricity and the consumption of 

refined petroleum products in transportation; the feasibility of increasing the contribution of renewable energy for the generation of 

electricity; the feasibility of using liquefied natural gas for electric 

generation; the feasibility for using renewable energy (including 

hydrogen) for transportation; and the development of hydrogen 

from renewable resources and its application to the energy needs 

of the State. 

The section further directs the Secretary to prepare and submit 

a report to Congress on the findings, conclusions and recommendations of this assessment within 300 days after the date of enactment. 

Section 325. Denali Commission 

Section 325 authorizes the appropriation of funds to the Denali 

Commission to carry out energy programs and power cost equalization programs. It also provides requirements for conducting open 

commission meetings including public announcements about such 

meetings and the maintaining transcripts or minutes. 

Section 326. Comprehensive inventory of OCS oil and natural gas 

resources 

Section 326 requires the Secretary of the Interior to conduct an 

inventory and analysis of OCS oil and gas resources. The Secretary 

is directed to use data on resources offshore Canada and Mexico, 

as well as using any available technology (except for drilling which 

is explicitly prohibited), including 3–D seismic technology, to develop accurate domestic oil and gas resource estimates. The Secretary is to submit a report within 6 months of enactment and update the report at least every 5 years. 

Section 327. Review and demonstration program for oil and gas 

production 

Section 327 requires the Secretaries of the Interior and Energy 

to review of opportunities to enhance production of oil and gas from 

public land and the OCS through royalty or production incentives 

to lessees that inject carbon dioxide to enhance recovery. The provision also requires the Secretary of Energy to establish a competitive grant program for enhancing recovery of oil and gas by injecting carbon dioxide. It provides for up to 10 projects in the Willistin 

Basin of North Dakota and Montana and 1 project in the Cook 

Inlet Basin of Alaska. 

SUBTITLE C—ACCESS TO FEDERAL LAND

Section 341. Federal onshore oil and gas leasing practices 

Section 341 provides for a review by the National Academy of 

Public Administration of the Federal onshore oil and gas leasing 

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view concurrent with the work of the National Academy of Public 

Administration. The Secretary of the Interior and the National 

Academy are to report findings and recommendations to Congress 

within 18 months. 

Section 342. Management of Federal oil and gas leasing programs 

Section 342 directs the Secretary of the Interior to ensure expeditious compliance with the requirements of the National Environmental Policy Act of 1969, improve consultation and coordination 

with the States, and improve collection, storage, and retrieval of information related to onshore oil and gas leasing on lands otherwise 

available for leasing. The section directs the Secretary to improve 

inspection and enforcement of oil and gas activities under the onshore oil and gas leasing program. The section provides that the 

Secretary of Agriculture also ensure expeditious compliance with 

all applicable environmental laws and improve collection, storage 

and retrieval of information. The provision requires the Secretary 

of the Interior to develop and implement best management practice 

for the onshore oil and gas leasing program. The section authorizes 

additional appropriations for the BLM, Fish and Wildlife Service, 

and Forest Service for these purposes. 

Section 343. Consultation regarding oil and gas leasing on public 

land 

Section 343 requires the Secretaries of the Interior and Agriculture to enter into a memorandum of understanding regarding oil 

and gas leasing on public lands and National Forest System lands 

to establish procedures to ensure timely processing of leasing authorizations and applications for permits to drill. Section 343 requires Secretaries to agree to establish a joint data retrieval system and a joint Geographic Information System for mapping. 

Section 344. Pilot program to improve federal permit coordination 

Section 344 requires the Secretary of the Interior to establish a 

Federal Permit Streamlining Pilot Project. Seven Western offices of 

the BLM are identified for participation in the project. The provision requires that relevant Federal agencies deploy staff to work 

with BLM land managers as a team on all environmental permits 

and land use planning documents in order to coordinate and improve Federal decisionmaking with respect to the permits. This section also requires the Secretary to prepare a report for submission 

to the President. The section directs the Secretary of the Interior 

to assign such additional personnel to the seven BLM offices as 

necessary to ensure effective implementation of the Pilot Program 

and the other programs administered by the BLM offices pursuant 

to the statutory mandate for the multiple use of public lands. 

Section 345. Energy facility rights-of-ways and corridors on Federal 

land 

Section 345 requires the Secretary of the Interior, with respect 

to public lands, and the Secretary of Agriculture, with respect to 

National Forest System lands, to designate utility corridors in 

Western States and to incorporate such corridors into land use and 

resource management plans within 24 months following execution 

of the memorandum required by the section. The section requires 

29 

the Secretary of Energy to develop a memorandum of understanding with the Secretary of the Interior, the Secretary of Agriculture, and the Secretary of Defense to coordinate applicable Federal authorizations and environmental reviews related to a proposed or existing utility facility. 

Section 346. Oil shale leasing 

The section requires the Secretary of the Interior to offer lands 

otherwise available for leasing for a period to be determined by the 

Secretary for purposes of research and development of innovative 

technologies for the recovery of shale oil from oil shale resources 

on public land. Within 18 months after the date of enactment, the 

Secretary must complete a programmatic environmental impact 

statement and a report relating to the potential leasing for commercial purposes of oil shale resources on public land. The U.S. Geological Survey is directed to undertake an assessment of oil shale 

resources. 

SUBTITLE D—COASTAL PROGRAMS

Section 371. Coastal Impact Assistance Program 

Section 371 authorizes the appropriation for fiscal years 2006 

through 2010 of $500 million per year for payments to Producing 

Coastal States with approved Coastal Impact Assistance Plans and 

political subdivisions in accordance with a formula set forth in the 

section. Thirty-five percent of a State’s allocable share will be paid 

to the coastal political subdivisions in the State. Amounts provided 

under the section must be used only for one or more of the following: (i) Projects and activities for the conservation, protection, or 

restoration of coastal areas, including wetlands; (ii) mitigating 

damage to fish, wildlife, or natural resources; (iii) planning assistance and administrative costs of complying with the provisions of 

this section; (iv) implementation of approved marine, coastal or 

conservation plans; (v) mitigating the impacts of OCS activities 

through funding onshore infrastructure and public service needs. 

SUBTITLE E—NATURAL GAS

Section 381. Exportation or importation of natural gas 

Section 381 clarifies FERC’s exclusive jurisdiction under the Natural Gas Act for siting, construction, expansion and operation of 

import/export facilities located onshore or in State waters. This section does not provide FERC eminent domain authority over siting 

LNG facilities. The Committee believes that State and local government involvement should be a critical part of the FERC siting process. In particular, State and local government entities should play 

an important role in the development of the safety and security 

guidelines for proposed facilities. The committee believes that the 

State and local governments are in the best position to understand 

the needs of the community surrounding proposed sites and should 

remain a critical asset to the FERC during the siting process. 

Section 381 also codifies FERC’s Hackberry policy. In Hackberry, 

FERC allowed the owners of a proposed LNG regasification terminal to negotiate contracts for terminal services directly with proVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00029 Fmt 6659 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
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spective LNG suppliers (eliminating open access requirements) as 

a way to encourage site development. 

Section 382. New natural gas storage facilities 

Section 382 allows FERC to grant new storage capacity marketbased rate treatment, notwithstanding the fact the applicant may 

have market power, if (1) it is in the public interest, (2) it is needed 

storage capacity, and (3) customers are adequately protected. 

Section 383. Process coordination; hearings; rules of procedures 

Section 383 establishes FERC as the lead agency for NEPA purposes and provides FERC authority to set schedules for required 

Federal authorizations. Agencies with jurisdiction over natural gas 

infrastructure are encouraged to coordinate their proceedings with 

the timeframe established by FERC. If a schedule deadline is not 

met, the President may issue a decision. 

Section 384. Penalties 

Section 384 increases penalties under the Natural Gas Act and 

Natural Gas Policy Act, parallel to increases in the Federal Power 

Act ($5,000 to $1,000,000). Section 384 also creates a civil penalty 

under Natural Gas Act. 

Section 385. Market manipulation 

Section 385 amends the Natural Gas Act to ban 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 connection with jurisdictional natural gas transactions, 

that are in violation of FERC rules. 

Section 386. Natural gas market transparency rules 

Section 386 authorizes FERC to establish an electronic information system to provide information about the price or transportation costs of natural gas in interstate commerce. Section 386 requires FERC to exempt from disclosure information the disclosure 

of which would be detrimental to the operation of an effective market or which would jeopardize system security. Section 386 shall 

not affect the CFTC’s exclusive jurisdiction with respect to commodities under the Commodity Exchange Act. Section 386 provides 

that FERC shall not compete with private sector publishers of energy prices. 

Section 387. Deadline for decision on appeals of consistency determination under the Coastal Zone Management Act of 1972 

Section 387 amends the CZMA by establishing a 270-day period 

in which the Secretary of Commerce must close the decision record. 

The Secretary may stay the 270-day clock for up to 60 days to acquire supplemental information regarding the consistency determination or clarifying information from a party to the proceeding 

related to information already in the record. Section 387 provides 

that the Secretary has 90 days after the record is closed (90 days 

after the 270 to 330 days, if stayed 60 days) to issue a decision or 

explain why it cannot, in which case the Secretary has an additional 45 days to issue a decision. In total, section 387 allows for 

31 

1 year and 100 days for the Secretary to complete action on an appeal of a consistency determination. 

Section 388. Federal-State liquefied natural gas forums 

Section 388 directs the Secretary of Energy, in cooperation and 

consultation with Secretary of Transportation, Secretary of Homeland Security, FERC, and Governors of coastal States, to convene 

at least 3 forums to discuss LNG siting issues such as siting, safety, and emergency response. The purpose of the forums is to identify and develop best practices related to LNG and to foster cooperative efforts. 

Section 389. Prohibition on trading and serving by certain persons 

Section 389 allows courts to prevent anyone who manipulates 

markets from serving as officers or directors of gas utility companies or engaging in the business of selling or purchasing gas or gas 

transmission services jurisdictional to FERC. 

SUBTITLE F—FEDERAL COALBED METHANE REGULATION

Section 391. Federal coalbed methane regulation 

Section 391 provides that any State that, as of the date of enactment of this Act, is included 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 

steps to implement a program promoting the permitting, drilling 

and production of coalbed methane wells within that State. 

TITLE IV—COAL 

SUBTITLE A—CLEAN COAL POWER INITIATIVE

Section 401. Authorization of appropriations 

Section 401 authorizes $200 million annually for each of fiscal 

years 2006 through 2014 to carry out the purposes of this subtitle. 

It requires a report from the Secretary of Energy that contains an 

8-year plan for implementing the Clean Coal Power Initiative. 

Section 402. Project criteria 

Section 402 establishes criteria for eligibility to receive assistance under this subtitle. It establishes emissions and thermal efficiency criteria for gasification projects and ‘‘other projects.’’ It requires the Secretary to allocate at least 80 percent of funds to coal 

gasification technologies and not more than 20 percent of funds to 

other combustion technologies. All projects must meet increasingly 

strict environmental and thermal efficiency performance standards. 

The section permits the expenditure of funds on carbon capture 

and sequestration technologies. The Secretary must give priority to 

projects that include carbon capture and sequestration as part of 

the project. The section also places this program under the costsharing requirements of section 1002, in lieu of the existing costsharing requirements (including repayment requirements) that 

have been imposed on the program in past appropriations Acts. 

32 

Section 403. Report 

Section 403 requires the Secretary to report within one year of 

the date of enactment and every two years thereafter on the status 

and progress of the Initiative. 

Section 404. Clean coal centers of excellence 

Section 404 requires the Secretary to award competitive grants 

to establish centers of excellence for clean coal technologies at institutions of higher education selected for their potential to advance 

new clean coal technologies. 

Section 405. Integrated coal/renewable energy system 

Section 405 allows the Secretary of Energy to provide loan guarantees to an integrated gas combined cycle project that uses coal 

and wind and other renewable energy sources and that has the capacity to sequester carbon dioxide and provide a source of hydrogen. 

Section 406. Loan to place Alaska Clean Coal Technology facility in 

service 

Section 406 allows the Secretary of Energy to grant a direct loan 

of not more than $80 million to allow the borrower to place a clean 

coal technology plant into reliable operation for the generation of 

electricity. 

Section 407. Western integrated coal gasification demonstration 

project 

Section 407 directs the Secretary of Energy to carry out a demonstration project to produce energy from coal mined in the Western United States using integrated gasification combined cycle 

technology capable of sequestering carbon dioxide emissions. 

SUBTITLE B—FEDERAL COAL LEASES

Section 411. Repeal of the 160-acre limitation for coal leases 

Section 411 amends the Mineral Leasing Act to allow leases up 

to 320 acres subject to certain limitations. 

Section 412. Mining plans 

Section 412 amends the Mineral Leasing Act to allow the Secretary of the Interior to allow a period of more than 40 years if the 

Secretary makes certain determinations regarding maximum economic recovery of a coal deposit, and that the longer period is in 

the interest of the orderly, efficient, or economic development of a 

coal resource. 

Section 413. Payment of advance royalties under coal leases 

Section 413 amends the Mineral Leasing Act to extend 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 to no more than twenty years. 

33 

Section 414. Elimination of deadline for submission of coal lease operation and reclamation plan 

Section 414 eliminates the deadline for submitting an operation 

and reclamation plan. 

Section 415. Application of amendments 

Section 415 stipulates that amendments made by this subtitle 

apply to any coal lease issued on or after the date of enactment of 

this Act. Amendments made by this Act may apply to any lease 

issued before the date of enactment on the date of readjustment of 

the lease under section 7(a) of the Mineral Leasing Act or on request by the lessee, prior to the date of adjustment. 

TITLE V—INDIAN ENERGY 

Section 501. Short title 

Section 501 contains the short title, the ‘‘Indian Tribal Energy 

Development and Self-Determination Act of 2005’’. 

Section 502. Office of Indian Energy Policy and Programs 

Section 502 amends title II of the DOE Organization Act to create the Office of Indian Energy Policy and Programs within the 

DOE to support the development and use of tribal energy resources. It states that a director shall be appointed by the Secretary of Energy and outlines the duties of the director. 

Section 503. Indian energy 

Section 503 provides a complete substitute for title XXVI of the 

Energy Policy Act of 1992 specifically as follows: 

Section 2601 defines terms used in the Act. 

Section 2602(a) requires the Secretary of the Interior to implement an Indian energy resource development program to assist Indian tribes in the development of their resources and to further the 

goal of Indian self-determination. The Secretary is authorized to 

provide grants and low-interest loans to qualifying tribes and Tribal Energy Resource Development Organizations. Such sums as are 

necessary to carry out the subsection are authorized to be appropriated from fiscal year 2006 through 2016. 

Section 2602(b) directs the Director of the Office of Indian Energy Policy and Programs at DOE to develop a program to assist 

consenting tribes in meeting energy education, research and development, planning and management needs and authorizes the Director to provide grants to tribes or tribal energy resource development organizations. The Director is also required to develop a program to provide tribes with the opportunity to participate in carbon 

sequestration practices. The sum of $20 million is authorized to be 

appropriated for each of fiscal years 2006 through 2016. 

Section 2602(c) authorizes, under specified conditions, the Secretary of Energy to provide loan guarantees for an amount equal 

to not more than 90 percent of unpaid interest and principal due 

on any loan made to an Indian tribe for energy development. The 

aggregate outstanding sum guaranteed by the Secretary of Energy 

shall not exceed $2 billion. 

34 

Section 2602(d) authorizes Federal agencies to give preference in 

purchasing electricity or other energy products to Indian-owned or 

controlled entities under specified conditions. 

Section 2603 authorizes the Secretary of the Interior to provide 

grants to tribes to inventory, study, and develop their energy resources and to enhance the legal and administrative ability of 

tribes to manage their energy resources. 

Section 2604 establishes a program by which an Indian tribe 

may submit to the Secretary of the Interior for approval a tribal 

energy resources agreement (TERA) for the development of energy 

resources on tribal land and gives the Secretary one year to approve or disapprove that agreement. Upon approval of the TERA, 

Indian tribes are authorized to enter into leases and business 

agreements, or approve rights-of-way for applicable energy projects 

without separate approval of the Secretary of the Interior. The Secretary is required to conduct a periodic review and evaluation of 

the tribe’s activities and the tribes must monitor the activities of 

their business partners. The section outlines a process for public 

input into proposed TERAs as well as a process to review alleged 

violations of the TERA by an applicable tribe and the Secretary. 

There are authorized to be appropriated such sums as necessary 

from 2006 through 2016 to carry out this section. 

The program established by this section advances the ongoing 

policy of encouraging greater tribal self-determination in energy-related leasing and agreements. The program is consistent with policies ensuring that tribal self-determination and the Federal trusteeship are complementary, and that an Indian tribe that elects to 

pursue greater self-determination does not do so at the expense of 

the trust relationship between the United States and the Indian 

tribe. 

Section 2605 authorizes and encourages actions by the Power 

Marketing Administration to assist tribal energy development. The 

Western Area Power Administration is authorized to make power 

allocations to meet the firming and reserve needs of Indian-owned 

energy projects and to acquire power generated by Indian tribes for 

firming and reserve needs, so long as the rates and terms are competitive. The Secretary of Energy is also required to complete a 

study that describes the use by Indian tribes of Federal power market allocations, the quantity of power allocated to tribes by Power 

Marketing Administrations and identification of barriers that impede tribal access to Federal power. The sum of $750,000 is authorized to be appropriated to carry out this section. 

Section 2606 authorizes a study on the feasibility of a demonstration project using wind energy generated by Indian tribes and hydropower generated by the Army Corps of Engineers on the Missouri River to supply firming power to WAPA. The sum of $1 million is authorized to be appropriated for this study. 

Section 504. Four Corners transmission line project and electrification 

Section 504 makes the Dine Power Authority, a Navajo Nation 

enterprise, eligible for funding under this title for activities associated with the development of a transmission line from the Four 

Corners Area to southern Nevada and related power generation opportunities. This section also amends section 602 of Public Law 

35 

106–511 to extend the administration of the Navajo Electrification 

project through 2011. 

Section 505. Energy efficiency in Federal housing 

Section 505 directs the Secretary of Housing and Urban Development to promote energy conservation and efficiency in Federal 

housing located on Indian land. 

Section 506. Consultation with Indian tribes 

Section 506 requires the Secretary of the Interior and Secretary 

of Energy to involve and consult with Indian tribes in the implementation of this title. 

TITLE VI—NUCLEAR MATTERS 

SUBTITLE A—PRICE-ANDERSON ACT AMENDMENTS

Section 601. Short title 

Section 601 is self-explanatory. 

Section 602. Extension of indemnification authority 

The authorization period for indemnification provisions for NRC 

licensees and DOE contractors is extended for a period of twenty 

years. 

Section 603. Maximum assessment 

Section 603 increases the maximum annual assessment under 

the standard deferred premium on NRC licensees from $10 million 

to $15 million, increases the overall cap from $63 million to $95.8 

million, and adjusts these numbers for inflation in the future. 

Section 604. Department of Energy liability limit 

Section 604 sets the total amount of indemnification for DOE 

contractors at $10 billion, and adjusts this number for inflation in 

the future. 

Section 605. Incidents outside the United States 

This section increases the amount of indemnification for DOE 

contractors engaged in nuclear activities outside the United States 

from $100 million to $500 million. 

Section 606. Reports 

Section 606 requires DOE and NRC to issue a report to Congress 

on the status of the Price-Anderson program by December 31, 2021. 

Section 607. Inflation adjustment 

Section 607 requires the NRC to adjust for inflation the standard 

deferred premium for NRC licensees every five years. 

Section 608. Treatment of modular reactors 

Section 608 allows NRC to consider a combination of small modular reactors at one site to be a single facility for purposes of PriceAnderson indemnification. 

36 

Section 609. Applicability 

Section 609 clarifies that the amendments made by sections 603, 

604, and 605 do not apply to a nuclear incident that occurs before 

the date of their enactment. 

Section 610. Civil penalties 

Section 610 ends the automatic remission of civil penalties for 

nuclear safety violations by DOE contractors that are nonprofit institutions and establishes a limit on such civil penalties not to exceed the total fees paid within one year to the nonprofit institution. 

SUBTITLE B—GENERAL NUCLEAR MATTERS

Section 621. Medical isotope production 

Section 621 provides for the NRC to license the export of highly 

enriched uranium for medical isotope production in Canada, Belgium, France, Germany and the Netherlands. The intent of the 

medical isotope provision is to ensure that the United States medical community has an adequate and reliable supply of isotopes for 

nuclear medicine. The medical isotope provision does not mitigate 

or restrict the NRCs authority to require that recipients of high enriched uranium (HEU) be actively working to convert to low enriched targets. Nor does the provision reduce any security measures implemented by the NRC which ensure the safe transport and 

storage of HEU. Section 621 provides the NRC with more authority 

to add additional safeguards if it believes they are necessary. 

Section 622. Safe disposal of greater-than-class C radioactive waste 

Section 622 requires the designation of an entity within the DOE 

to be responsible for the final disposal of Greater-Than-Class C Radioactive Waste (GTCC). This section also requires the development of a comprehensive plan with alternatives for the disposal of 

GTCC. Before a final action is taken by the Secretary, a report is 

required to Congress describing all alternatives under consideration and await action by Congress. 

Section 623. Prohibition on nuclear exports to countries that sponsor 

terrorism 

Section 623 strengthens existing laws that contain prohibitions of 

nuclear exports to countries identified by the Secretary of State as 

engaging in state-sponsored terrorism. 

Section 624. Decommissioning pilot program 

Section 624 establishes a pilot program to decommission and decontaminate the sodium-cooled fast breeder experimental test-site 

reactor in Arkansas and authorizes appropriation of $16,000,000. 

SUBTITLE C—NEXT GENERATION NUCLEAR PLANT PROJECT

Section 661. Project establishment 

This section is self-explanatory. 

Section 662. Project management 

Section 662 designates the Office of Nuclear Energy, Science and 

Technology as the project manager. The Secretary may also call 

37 

upon the Office of Science to provide their expertise for the project. 

The Idaho National Laboratory (INL) is designated as the lead laboratory and directed to organize a consortium of industrial partners 

to participate in the project. The prototype plant will be built in 

Idaho at the INL. The project may utilize facilities at other national laboratories. 

Section 663. Project organization 

Section 663 establishes the major project elements, the phases in 

which the project will be conducted, project requirements, international collaboration, and project review. The program will be 

completed in phases; the first phase will validate the technologies 

under the major project elements. The first phase will examine 

whether it is appropriate to produce electricity and hydrogen concurrently and begin initial design activities for a prototype nuclear 

power plant. The second phase of the project includes the competitive process for reactor and plant design, licenses to construct and 

operate from the NRC and general construction and operation. 

Project requirements include making full use of the expertise of the 

nuclear power industry, chemical processing industry and Generation IV International Forum partners. The Nuclear Energy Research Advisory Committee (NERAC) will review all project plans 

on an ongoing basis to ensure all scientific, technical, safety and 

program management issues receive proper attention. After a review of phase one activities, the NERAC will also make a recommendation to the Secretary to proceed to phase two of the 

project. The Secretary shall transmit any NGNP NERAC report to 

the Congress after reviewing it. 

Section 664. Nuclear Regulatory Commission 

Section 664 sets forth that the NRC will have licensing and regulatory authority for any reactor authorized in this program. The 

NRC and DOE are also required to notify Congress of the preferred 

licensing strategy for NGNP. Requires the Secretary of the DOE to 

have ongoing interaction with the NRC throughout the duration of 

the project 

Section 665. Project timelines and authorization of appropriations 

This section is self-explanatory. 

TITLE VII—VEHICLES AND FUELS 

SUBTITLE A—EXISTING PROGRAMS

Section 701. Use of alternative fuels by dual-fueled vehicles 

Section 701 amends current law to strengthen requirements that 

Federal vehicle fleets actually use alternative fuels in their alternative fuel capable vehicles. 

Section 702. Alternative fuel use by light duty vehicles 

Section 702 sunsets the alternative fuel vehicle requirements for 

covered motor vehicle fleets under sections 501, 507, and 508 of the 

Energy Policy Act of 1992 not later than 2015. 

38 

Section 703. Incremental cost allocation 

Section 703 makes a minor technical amendment to section 

303(c) of the Energy Policy Act of 1992. 

Section 704. Alternative compliance 

Section 704 amends title V of the Energy Policy Act of 1992 to 

allow covered fleet operators to apply for a waiver of the requirements of the Act. The amendment would provide flexibility to fleet 

operators and ease compliance with the fleet requirements for petroleum fuel use reductions. 

Section 705. Report concerning compliance with alternative fueled 

vehicle purchasing requirements 

Section 705 requires a report from the Secretary of Energy on 

purchasing requirements by February 15, 2006. 

SUBTITLE B—AUTOMOBILE EFFICIENCY

Section 711. Authorization of appropriations for implementation 

and enforcement of fuel economy standards 

Section 711 authorizes $2 million for each of fiscal years 2006 

through 2010 for the National Highway Traffic Safety Administration to carry out its obligations with respect to fuel economy standards. 

SUBTITLE C—MISCELLANEOUS

Section 721. Railroad efficiency 

Section 721 establishes a cost-shared, public-private research 

partnership to develop and demonstrate technologies that increase 

railroad locomotive fuel economy, reduce air emissions and lower 

operating costs. It authorizes $110 million over three years for the 

program. 

Section 722. Conserve by bicycling program 

Section 722 establishes a program in the Department of Transportation to promote fuel conservation through greater use of bicycling as an alternative to motor vehicle use. It authorizes $6.2 million for the program. 

Section 723. Reduction of engine idling of heavy-duty vehicles 

Section 723 establishes a program under the EPA to develop and 

deploy stationary and mobile technologies that will assist in reducing the amount of time large over-the-road trucks spend idling. The 

program is authorized to spend $49.5 million over three years to 

promote stationary idling technologies. The amendment provides 

for a 250 pound weight exemption for large trucks that make use 

of auxiliary power units in lieu of engine idling. 

Section 724. Biodiesel engine testing project 

Section 724 requires the Secretary of Energy to initiate a project 

in partnership with the diesel engine diesel fuel injection system, 

and diesel vehicle manufacturers and diesel and biodiesel fuel providers to provide biodiesel testing in advanced diesel engine and 

39 

fuel system technology. It authorizes $5 million for each of fiscal 

years 2006 through 2008. 

SUBTITLE D—FEDERAL AND STATE PROCUREMENT

Section 731. Definitions 

Section 731 sets forth the definitions of terms used in this subtitle. 

Section 732. Federal and State procurement of fuel cell vehicles and 

hydrogen energy systems 

Section 732 sets forth the purposes of the section: to stimulate 

acceptance by the market of fuel cell vehicles and hydrogen energy 

systems and support development of technologies relating to fuel 

cell vehicles, public refueling stations, and hydrogen energy systems and to require the Federal Government to adopt those technologies as soon as practicable. 

This section also establishes a program for Federal leases and 

purchases of fuel cell technologies and authorizes a total of $105 

million over fiscal years 2008 through 2010. 

Section 733. Federal procurement of stationary, portable, and micro 

fuel cells 

Section 733 sets for the purposes of the section which are to 

stimulate the acceptance by the market of these technologies and 

support the development of technologies related to stationary, portable and micro fuel cells. 

The section also establishes a program for Federal leases and 

purchases of stationary, portable and micro fuel cells and authorizes a total of $345 million over fiscal years 2006 through 2010. 

TITLE VIII—HYDROGEN 

Section 801. Hydrogen research, development, and demonstration 

Section 801 provides a complete substitute for the Spark M. Matsunaga Hydrogen Research, Development, and Demonstration Act 

of 1990 (42 U.S.C. 12401 et seq.), authorizes basic research, development and demonstration activities related to hydrogen energy, 

fuel cells and related infrastructure. The substitute establishes an 

interagency task force to advise the Secretary, provides for the 

transfer of critical hydrogen and fuel cell technologies to the private sector, provides for the development of safety codes and standards related to fuel cell vehicles and hydrogen energy systems, and 

requires a National Academy report. 

TITLE IX—RESEARCH AND DEVELOPMENT 

Section 901. Short title 

Section 901 designates the title as the ‘‘Energy Research, Development, Demonstration, and Commercial Application Act of 2003’’. 

Section 902. Goals 

Section 902 defines broad goals and requires the Secretary of Energy to publish specific goals with each annual budget submission. 

40 

Section 903. Definitions 

This section is self-explanatory. 

SUBTITLE A—ENERGY EFFICIENCY

Section 911. Energy efficiency 

This section sets authorization levels and is self-explanatory. 

Section 912. Next generation lighting initiative 

Section 912 authorizes a new initiative to develop advanced solid 

state lighting options through research, development, demonstration, and commercial application activities. A definition regarding 

the selection of an Industry Alliance to assist in updating roadmaps and assessing progress of the Initiative is provided within 

this section. 

Section 913. National building performance initiative 

Section 913 authorizes the Director of Office of Science and Technology Policy (OSTP) to establish an interagency program to address energy conservation and R&D efforts to reduce energy use in 

buildings. An advisory committee is established to oversee creation 

and implementation of a plan, and requires annual progress reports. 

Section 914. Secondary electric vehicle battery use program 

Section 914 authorizes a program to evaluate secondary use of 

electric vehicle batteries through research, development, demonstration, and commercial application activities. 

Section 915. Energy efficiency science initiative 

Section 915 authorizes a research program administered by the 

Assistant Secretary responsible for energy conservation. 

SUBTITLE B—DISTRIBUTED ENERGY AND ELECTRIC ENERGY

SYSTEMS

Section 921. Distributed energy and electric energy systems 

Section 921 provides authorization levels and is self-explanatory. 

Section 922. High power density industry program 

Section 922 authorizes the creation of a research and demonstration program for high power density facilities. 

Section 923. Micro-cogeneration energy technology 

Section 923 authorizes grants to consortia to develop small-scale 

combined heat and power systems for residential applications. 

Section 924. Distributed energy technology demonstration program 

Section 924 authorizes assistance to demonstration projects using 

distributed energy technologies in highly energy intensive commercial applications. 

Section 925. Electric transmission and distribution programs 

Section 925 authorizes research, development and demonstration 

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rity of electrical transmission systems and requires a 5-year program plan to be completed within the first year. This section authorizes a Power Delivery Research Initiative focused on establishing test beds at national laboratories, universities, or in industry, to evaluate and demonstrate the technologies required to move 

high temperature superconductivity into commercial use. A Transmission and Distribution Grid Planning and Operations Initiative 

for research, development and demonstration of tools to plan, operate, and expand transmission and distribution grids in realistic 

market scenarios is authorized and this initiative shall use a distributed research center involving universities and national laboratories with a focus on transfer of useful technologies to industry. 

SUBTITLE C—RENEWABLE ENERGY

Section 931. Renewable energy 

Section 931 provides authorization levels and is self-explanatory. 

Section 932. Bioenergy programs 

Section 932 authorizes a broad program of research in biopower, 

biofuels and bioproducts, including technologies utilizing cellulosic 

feedstocks or enzyme-based processing. 

Section 933. Concentrating solar power research program 

Section 933 authorizes a program of research on concentrating 

solar power research to establish technologies and economics of 

both electricity and hydrogen production. A report with recommendations for future research is required within 4 years. 

Section 934. Hybrid solar lighting research and development program 

Section 934 authorizes a program of research on novel lighting 

systems that integrate sunlight and electrical lighting in complement to each other in common lighting fixtures for the purpose 

of increasing energy efficiency. A National Academy of Sciences report is required within 2 years. 

Section 935. Miscellaneous projects 

Section 935 authorizes research and development in ocean energy, combining renewable and other energy sources, and hydrogen 

carrier fuels. 

SUBTITLE D—NUCLEAR ENERGY

Section 941. Nuclear energy 

Section 941 provides authorization levels and is self-explanatory. 

Section 942. Nuclear energy research programs 

Section 942 authorizes the Nuclear Energy Research Initiative, 

Nuclear Energy Plant Optimization, Nuclear Power 2010, Generation IV Nuclear Energy Systems, Reactor Production of Hydrogen, 

and Nuclear Infrastructure Support Programs. 

42 

Section 943. Advanced fuel cycle initiative 

Section 943 authorizes the Advanced Fuel Cycle Initiative to 

evaluate proliferation-resistant fuel recycling and transmutation 

technologies, which support evaluation of alternative national 

strategies for spent fuel management and Generation IV advanced 

reactor concepts. An annual progress report is required. 

Section 944. University nuclear science and engineering support 

Section 944 authorizes fellowship and faculty assistance programs, maintains university research and training reactors, and 

encourages interactions between universities and national laboratories. 

Section 945. Security of nuclear facilities 

Section 945 authorizes research and development on technologies 

for improving safety and security of reactors. 

Section 946. Alternatives to industrial radioactive sources 

Section 946 authorizes research and development on alternatives 

to large industrial radioactive sources, including well-logging 

sources, that reduce safety, environmental, or proliferation risks. A 

survey and report to Congress are required of existing types of 

commercial sources, along with review of available disposal options 

for such sources and evaluation of the need for alternative future 

disposal options. 

SUBTITLE E—FOSSIL ENERGY

Section 951. Fossil energy 

Section 951 provides authorization levels and is self-explanatory. 

Section 952. Oil and gas research programs 

Section 952 authorizes research programs for oil and gas technologies with applications including exploration and production, 

reservoir life and extension, heavy oil and shale, and related environmental research. The section also authorizes research on fuel 

cells and requires a report at two year intervals on estimates of oil 

and gas reserves, reserves growth, and undiscovered resources. 

Section 953. Methane hydrate research 

Section 953 reauthorizes the Methane Hydrate Research and Development Act of 2000. It adds findings to the current Act, provides 

a new focus for ongoing activities in light of past recommendations 

of the National Research Council, requires a new study of the program by the National Research Council in 2009, and authorizes appropriations for the program through fiscal year 2010. 

Section 954. Research and development for coal mining technologies 

Section 954 authorizes research and development program on 

coal mining technologies. The research is to be guided by the Mining Industry of the Future program and relevant National Academy reports and is to include technologies to enable mining of coal 

with reduced contaminant levels. 

43 

Section 955. Coal and related technologies program 

Section 955 authorizes a broad research, development, demonstration and commercial application program for coal and power 

systems and requires the Secretary to identify goals for coal-based 

technologies. 

Section 956. Carbon dioxide capture research and development 

Section 956 establishes a program of research and development 

aimed at developing carbon dioxide capture technologies for pulverized coal combustion units. 

Section 957. Complex well technology testing facility 

Section 957 is self-explanatory. 

SUBTITLE F—SCIENCE

Section 961. Science 

Section 961 establishes authorization levels for the Office of 

Science and authorizes separate funding for construction costs associated with the international burning plasma fusion research 

project known as ITER. 

Section 962. United States participation in ITER 

Section 962 authorizes U.S. participation in the international 

burning plasma fusion research project known as ITER and requires the Secretary to submit a plan within 180 days of enactment 

describing the design and implementation of international or national facilities for the testing of fusion materials and technologies. 

Section 963. Support for science and energy facilities and infrastructure 

Section 963 requires the development and implementation of a 

strategy for maintaining or building essential facilities and infrastructure primarily supporting programs at 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. 

Section 964. Catalysis research program 

Section 964 authorizes a broad research and development program for catalysis science including use of precious metals and requires National Academy of Science review every 3 years. 

Section 965. Hydrogen 

Section 965 authorizes a program of fundamental research and 

development in support of the hydrogen and fuel cell programs authorized under Title VIII of the Act. 

Section 966. Solid state lighting 

Section 966 authorizes a program of fundamental research on advanced solid state lighting in support of the Next Generation Lighting Initiative carried out under Section 912. 

44 

Section 967. Advanced scientific computing for energy missions 

Section 967 authorizes a scientific computing research and development program, including activities related to applied mathematics, with the goal of supporting departmental missions and providing the computational, networking, and workforce resources required for world leadership in science. 

Section 968. Genomes to life program 

Section 968 authorizes research and development in microbial 

and plant systems biology, protein science, and computational biology and authorizes construction of user facilities at national laboratories. 

Section 969. Fission and fusion energy materials research program 

Section 969 authorizes a research and development program on 

material science issues presented by advanced fission reactors and 

Department’s fusion program. 

Section 970. Energy-water supply technologies program 

Section 970 authorizes a research and demonstration program to 

study energy-related issues associated with water resources and 

issues associated with sustaining water supplies for energy production. Program topics shall include arsenic removal, desalination, 

and energy and water sustainability. The arsenic removal program 

is to be run by the American Water Works Association Research 

Foundation for the Department. Desalination program is to follow 

the national Desalination and Water Purification Technology Roadmap in partnership with the U.S. Bureau of Reclamation. The sustainability program supports water modeling studies, on the level 

of major national river basins, to understand water usage patterns 

and the impact of energy production activities in these basins. 

Section 971. Spallation neutron source 

Section 971 requires the development of an operational plan for 

the Spallation Neutron Source Facility that ensures the facility is 

employed to its full capability in support of the study of advanced 

materials, nanoscience, and other missions of the Department. The 

section authorizes funds for completion of construction of the facility, funds for operations, and additional funds to be available in the 

event that Department stockpiles of heavy water are insufficient to 

meet the needs of the facility. 

SUBTITLE G—INTERNATIONAL COOPERATION

Section 981. Western Hemisphere energy cooperation 

Section 981 authorizes a program to promote cooperation on energy issues with countries of the Western Hemisphere, including 

energy production, energy efficiency, and the development and 

transfer of technologies to world energy markets. 

Section 982. Cooperation between United States and Israel 

Section 982 requires the Secretary of Energy to report to Congress on the 1996 ‘‘Agreement between the Department of Energy 

of the United States and the Ministry of Energy and Infrastructure 

of Israel Concerning Energy Cooperation.’’

45 

TITLE X—DEPARTMENT OF ENERGY MANAGEMENT 

Section 1001. Availability of funds 

This section provides that all funding authorized to be appropriated under this Act or by amendments made by this Act shall 

remain available until expended. 

Section 1002. Cost sharing 

This section establishes Department-wide cost-sharing requirements for all research, development, demonstration, and commercial application activities initiated after the date of enactment of 

this Act. These requirements will take the place of the current 

patchwork of cost-sharing requirements that have been contained 

in previous authorization and appropriations laws. The cost-sharing requirements will generally require a 20 percent cost share for 

research and development activities and a 50 percent cost share for 

demonstration and commercial application activities, with an exemption for basic or fundamental research and development and 

the ability for the Secretary to waive cost-sharing requirements in 

appropriate situations. The section specifies how in-kind contributions are to be treated for purposes of calculating a cost-sharing 

contribution. The section also prohibits repayment or ‘‘recoupment’’

provisions from being made part of cost-shared research, development, demonstration, and commercial application activities in the 

future. Such provisions in the past have been difficult to administer, have yielded little funding back to the Department, and have 

been a barrier to attracting the most competent external organizations to participate in Departmental cost-shared research, development, and demonstration activities. 

Section 1003. Merit review of proposals 

Section 1003 requires merit review of proposals for the award of 

any funds authorized under this Act or by amendments made by 

this Act. 

Section 1004. External technical review of Departmental programs 

Section 1004 requires advisory boards for Department programs 

and authorizes the Secretary to use the National Academy of 

Sciences to establish such boards and to conduct other reviews and 

assessments of programs and goals on at least 5-year intervals. 

Section 1005. Improved technology transfer of energy technologies 

Section 1005 requires the Secretary to appoint a Technology 

Transfer Coordinator, establishes a Technology Transfer Working 

Group with representation from each of the national laboratories 

and single-purpose research facilities, and establishes a Technology 

Commercialization Fund to be used to provide matching funds to 

private partners to promote promising technologies. 

Section 1006. Technology infrastructure program 

Section 1006 requires the Secretary to establish a pilot program 

to encourage the creation of technology clusters and improve the 

ability of the national laboratories and single-purpose research facilities to leverage and benefit from commercial research. 

46 

Section 1007. Small business advocacy and assistance 

Section 1007 requires each National Laboratory, and enables 

each single-purpose research facility, to designate a small business 

advocate to facilitate participation of small businesses in procurement and research opportunities. 

Section 1008. Outreach 

Section 1008 requires each program authorized under the Act to 

include an outreach component to provide appropriate information 

to manufacturers, consumers, institutions of higher education, facility planners and managers, State and local governments, and 

other entities. 

Section 1009. Relationship to other laws 

Section 1009 clarifies that, except as otherwise provided in this 

Act or the amendments made by this Act, DOE research, development, demonstration, and commercial application programs should 

continue to be governed by the applicable provisions of the existing 

statutes that provide the Department with its authorities for research, development, demonstration, and commercial application. 

The five leading such statutes are specifically named in this section. 

Section 1010. Improved coordination and management of civilian 

science and technology 

Section 1010 amends the Department of Energy Organization 

Act to establish an additional Under Secretary designated as the 

Under Secretary for Science and Energy, and an Assistant Secretary for Science to head the Office of Science. An additional Assistant Secretary position is created, accompanied by a sense of 

Congress that leadership in nuclear energy shall be at the Assistant Secretary level. Sections 5314 and 5315 of title 5, United 

States Code, are amended to show 3, instead of 2, Under Secretaries of Energy and 8, instead of 6, Assistant Secretaries of Energy. 

Section 1011. Other transactions authority 

Section 1011 amends the Department of Energy Organization 

Act (42 U.S.C. 7256) to allow transactions by the Secretary of Energy to further research, development, or demonstrations and exempts them from provisions of section 9 of the Federal Nonnuclear 

Energy Research and Development Act of 1974 (42 U.S.C. 5908). 

These other transactions can only be entered if standard contract, 

grant or cooperative agreements are not feasible or appropriate. 

The amendment also allows the Secretary to protect from disclosure certain business information for up to 5 years and requires 

that the Secretary develop guidelines within 3 months for using the 

other transactions mechanism. 

Section 1012. Prizes for achievement in grand challenges of science 

and technology 

Section 1012 authorizes cash prizes in recognition of breakthrough achievements in research, development, demonstration, 

and commercial application that have the potential for application 

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mittee anticipates that the DOE will use such authority to overcome grand challenges in energy research and development similar 

in complexity to the Defense Advanced Research Projects Agency’s 

‘‘Grand Challenge’’ for autonomous robot ground vehicles. 

Section 1013. Technical corrections 

Section 1013 updates and makes technical corrections to the Act 

of July 7, 1960, the Federal Nonnuclear Energy Research and Development Act of 1974, the Stevenson-Wydler Technology Innovation Act of 1980, and the Department of Energy Organization Act. 

TITLE XI—PERSONNEL AND TRAINING 

Section 1101. Workforce trends and traineeship grants 

Section 1101 requires the DOE, in consultation with the Department of Labor (DOL), to monitor workforce trends in the energy industry and report to Congress. It authorizes the DOE, in consultation with the DOL, to establish traineeship grants to address shortages of trained personnel. 

Section 1102. Energy research fellowships 

Section 1102 authorizes the Secretary of Energy to establish fellowships for postdoctoral and senior researchers in energy research 

and development fields. The fellowships are intended to be different in character from those currently offered through project 

funding. The postdoctoral fellowship is to be awarded to individuals, based on their promise as researchers, and is to be portable 

to the institution of higher education of each individual’s choice. 

The senior fellowship is also to be awarded based on the track 

record of the individual, and not on the basis of a particular project 

proposal. The intention is to provide a mechanism in the DOE 

similar to the IBM Fellows program and similar programs in industry, which identify and give greater autonomy in selection of research topics to the most outstanding researchers 

Section 1103. Educational programs in science and mathematics 

Section 1103 amends the Department of Energy Science Education Enhancement Act (42 U.S.C. 7381a) to authorize the DOE 

to support competitive science and mathematics events and professional development for K–12 mathematics and science teachers. 

Section 1104. Training guidelines for electric energy industry personnel 

Section 1003 requires the Secretary of Labor, in consultation 

with the Secretary of Energy, to develop, jointly with the electric 

industry and recognized employee representatives, model personnel 

training guidelines to support electric system reliability and safety. 

Section 1105. National Center on Energy Management and Building Technologies 

Section 1105 requires the Secretary of Energy to support the establishment of a National Center on Energy Management and 

Building Technologies, to carry out research, education, and training activities to facilitate the improvement of energy efficiency and 

48 

indoor air quality in industrial, commercial, and residential buildings. 

Section 1106. Improved Access to energy-related scientific and technical careers 

Section 1106 requires the Director of each National Laboratory, 

and, at the discretion of the Secretary of Energy, each science facility operated by the Department, to take actions to increase the participation of historically Black colleges or universities, Hispanicserving institutions, or tribal colleges in activities that improve 

these institutions’ ability to train students in scientific and technical careers. 

Section 1107. National Power Plant Operations Technology and 

Education Center 

Section 1107 requires the Secretary of Energy to support the establishment of a national training center to address the need for 

training and educating certified operators for electric power generation plants. 

TITLE XII—ELECTRICITY 

Section 1201. Short title 

Section 1201 is self-explanatory. 

SUBTITLE A—RELIABILITY STANDARDS

Section 1211. Electric reliability standards 

Section 1211 changes our current voluntary rules system to a 

mandatory rules system under an Electricity Reliability Organization (ERO). This section grants ERO, approved by FERC, the 

power to establish mandatory rules for operation of the transmission grid and authority to penalize anyone who violates those 

standards. 

SUBTITLE B—TRANSMISSION INFRASTRUCTURE MODERNIZATION

Section 1221. Siting of interstate electric transmission facilities 

Section 1221 directs DOE to conduct a study of transmission congestion within 1 year of enactment (and triennially thereafter). 

This section authorizes the Secretary of Energy to designate one or 

more geographic areas as national interest electric transmission 

corridors. This section provides limited federal backstop siting authority (eminent domain) for electric transmission lines in areas 

designated by the Secretary of Energy as national interest transmission corridors. This section provides for just compensation for 

any rights-of-way acquired by eminent domain. 

Section 1221 establishes DOE as the lead agency for setting 

schedules and coordinating Federal authorizations required in 

order to site a transmission facility. This section designates the 

President as the arbitrator for any delays or denials of Federal permits. This section authorizes States to enter into interstate compacts for the purpose of establishing regional transmission siting 

agencies with authority to site transmission facilities. 

49 

Section 1222. Third-party finance 

Section 1222 authorizes the Western Area Power Administration 

(WAPA) and the Southwestern Power Administration (SWPA) to 

enter into public-private financial arrangements (third-party finance) to build or upgrade transmission facilities if certain criteria 

are met. 

Section 1223. Advanced transmission technologies 

Section 1223 directs FERC to encourage the deployment of advanced transmission technologies, including: high-temperature 

lines; underground cables; advanced conductor technology; high-capacity ceramic electric wire, connectors and insulators; optimized 

transmission line configurations; and modular equipment. The 

Committee is aware that the DOE has conducted one or more studies on high temperature, low sag technologies, the results of which 

the Committee would be interested in receiving from the Department as soon as practicable. 

Section 1224. Advanced power system technology incentive program 

Section 1224 authorizes the Secretary of Energy to establish an 

Advanced Power System Technology Incentive Program to support 

deployment of certain advanced power system technologies like fuel 

cells, turbines, or hybrid power systems or power storage systems 

to generate or store electric energy. 

SUBTITLE C—TRANSMISSION OPERATION IMPROVEMENTS

Section 1231. Open nondiscriminatory access 

Section 1231 amends the FPA to authorize FERC to require unregulated transmitting utilities to provide open access to their 

transmission systems at rates that are comparable to those that 

the unregulated transmitting utility charges itself and on terms 

and conditions that are comparable to those the utility charges 

itself that are not unduly discriminatory or preferential. Small unregulated transmitting utilities, such as distribution co-ops, as well 

as unregulated transmitting utilities that do not own or operate 

significant transmission facilities are exempt from this section. 

Section 1232. Regional Transmission Organizations 

Section 1232 amends the FPA to authorize FERC to encourage 

and approve the voluntary formation of Transmission Organizations. 

FERC may not condition any order issued under the FPA on a 

requirement that a transmitting utility transfer operational control 

of jurisdictional facilities to a Transmission Organization. The new 

language added to subsection (b) of section 217 of the Federal 

Power Act by this section is intended to prohibit FERC from requiring, or imposing as a condition, that a transmitting utility 

transfer operational control of jurisdictional facilities to a Transmission Organization. It is not intended to limit FERC authority 

with respect to transmitting utilities that are participating in 

Transmission Organizations. 

Transmission Organizations must report annually to FERC to 

demonstrate their cost effectiveness. 

50 

Section 1233. Federal utility participation in Transmission Organizations 

Section 1233 authorizes the appropriate Federal regulatory authority (the Secretary of Energy, the Administrator of a PMA or 

the Board of Directors of TVA) to 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. 

Section 1234. Standard market design 

Section 1234 terminates FERC’s Proposed Rulemaking on Standard Market Design. 

Section 1235. Native load service obligation 

Section 1235 entitles load-serving entities to exercise firm transmission rights or equivalent tradable or financial transmission 

rights to the extent needed to meet their service obligation. This 

section does not affect the Commission’s authority under sections 

205 and 206 to ensure that rates are just and reasonable and not 

unduly discriminatory or preferential. With respect to the Midwest 

ISO, nothing in Section 218 is intended to guarantee that an entity 

shall be: (1) entitled to a particular financial transmission right allocation; (2) held harmless from applicable congestion charges; or 

(3) exempt from an applicable congestion management methodology 

within the Midwest ISO. The language of subsection (c) is intended 

to provide the Commission with flexibility in taking into account 

the policies, as opposed to the strict letter of subsections (b) (1), (b) 

(2), and (b)(3) as well as other considerations reflected in the Act, 

such as reliability and system-wide customer costs, in addressing 

allocation methodology changes proposed by the Midwest ISO. 

Section 1236. Protection of transmission contracts in the Pacific 

Northwest 

Section 1236 protects firm transmission rights of entities in the 

Pacific Northwest by allowing only voluntary conversion of firm to 

financial transmission rights. 

SUBTITLE D—TRANMISSION RATE REFORM

Section 1241. Transmission infrastructure investment 

Section 1241 directs FERC to issue rules on transmission pricing 

policies that provide a return on equity that attracts capital for investment in grid improvements and advanced transmission technologies. This section directs FERC to allow for the recovery of all 

prudently incurred costs necessary to comply with reliability standards and Federal back-stop siting needs. 

Section 1242. Funding new interconnection and transmission upgrades 

Section 1242 authorizes FERC to approve a participant funding 

cost allocation plan, without regard to whether the applicant is in 

a Transmission Organization, as long as it results in just and reasonable rates. 

51 

SUBTITLE E—AMENDMENTS TO PURPA 

Section 1251. Net metering and additional standards 

Section 1251 amends PURPA section 111(d) to require States to 

consider implementing standards in the following areas: 

(1) net metering (a requirement that utilities make net metering, 

regarding on-site energy production, measurement and billing, 

available to any electric consumer); 

(2) fuel diversity (a requirement that utilities reduce dependency 

on a single fuel source and increase fuel diversity, including the 

use of renewables); and 

(3) fossil fuel generation efficiency (a requirement that utilities 

implement 10 year plans to increase fossil fuel efficiency). 

Section 1252. Smart metering 

Section 1252 amends PURPA section 111(d) to require States to 

consider implementing smart metering standards that require electric utilities to offer time based rate schedules (such as time-of-use 

pricing, critical-peak pricing, and real-time pricing) that enable 

customers to manage energy use and cost through advanced metering and communications technology. 

Section 1253. Cogeneration and small power production purchase 

and sale requirements 

Section 1253 amends PURPA section 210 by ensuring that qualifying facilities (QFs) meet specific criteria to be eligible for mandatory purchase and sale benefits and that such benefits terminate 

when a competitive wholesale market exists. This section sets forth 

new criteria for future QFs to ensure that they are fundamentally 

designed to support commercial or industrial processes. 

Section 1254. Interconnection 

Section 1254 amends PURPA section 111(d) to require States to 

consider best practices for promoting interconnection for distributed generation. 

SUBTITLE F—MARKET TRANSPARENCY, ENFORCEMENT, AND

CONSUMER PROTECTION

Section 1261. Market transparency rules 

Section 1261 authorizes FERC to establish an electronic information system to provide information about the availability and price 

of wholesale electric energy and transmission services. This section 

requires FERC to exempt from disclosure information the disclosure of which would be detrimental to the operation of an effective 

market or which would jeopardize system security. This section 

provides that this section shall not affect the CFTC’s exclusive jurisdiction with respect to commodities under the Commodity Exchange Act. This section provides that FERC shall not compete 

with private sector publishers of energy prices. 

Section 1262. False Statements 

Section 1262 amends the FPA to prohibit the filing of false information regarding price of wholesale electricity and availability of 

transmission capacity. 

52 

Section 1263. Market manipulation 

Section 1263 amends the FPA to ban 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 connection with the purchase or sale of electricity or FERC jurisdictional transmission services in violation of FERC rules. 

Section 1264. Enforcement 

Section 1264 amends FPA section 306 to add an electric utility 

to the list of persons that may file a complaint and adds a transmitting utility to the list of persons against which a complaint may 

be filed. 

Section 1264 mends FPA section 313 to include any electric utility in the procedures for review of Commission orders. 

Section 1264 amends FPA section 307 to make electric utilities 

and transmitting utilities subject to FERC investigations and subject to FERC authority to obtain information regarding wholesale 

sales of electricity and transmission in interstate commerce. 

Section 1264 amends FPA section 316 by increasing criminal 

penalties for FPA violations to $1 million; 5 years imprisonment; 

and $25,000 per day fines. 

Section 1264 amends FPA section 316A by repealing exemption 

from criminal penalties violations of sections 211–214. 

Section 1264 amends FPA section 316A by extending civil penalties to any violation of Part II of the FPA and increases civil penalties to $1 million per day. 

Section 1265. Refund effective date 

Section 1265 amends FPA section 206 by making the refund effective date the date of the filing instead of 60 days later. 

Section 1266. Refund authority 

Section 1266 amends FPA section 206(f) to provide that if an entity described in section 201(f) voluntarily makes a short-term (i.e., 

less than 31 days) sale of electricity that violates Commission 

rules, the entity shall be subject to FERC refund authority. The refund authority would not apply to municipal or Federal utilities 

that sell less than 8 million MWh of electricity per year or any electric co-ops. Special provisions are included for the Bonneville Power 

Administration (refund authority is limited to sales at unjust and 

unreasonable rates, and only for BPA sales that were higher than 

the highest just and reasonable rate charged by other sellers in the 

same geographic market). With respect to TVA and the PMAs, 

FERC’s authority is limited to ordering refunds to achieve just and 

reasonable rates. 

Section 1267. Consumer privacy and unfair trade practices 

Section 1267 requires the FTC to issue rules to protect electric 

consumers from disclosure of consumer information obtained in 

connection with the sale or delivery of electricity. This section requires FTC to issue rules prohibiting slamming (switching customers’ service without consent) and cramming (charging customers for services not requested). 

53 

Section 1268. Office of Consumer Advocacy 

Section 1268 establishes within DOE an Office of Consumer Advocacy to represent energy customers on matters regarding rates or 

services of public utilities and natural gas companies at FERC 

hearings and in civil proceedings. 

Section 1269. Authority of court to prohibit persons from serving as 

officers, directors, and energy traders 

Section 1269 allows courts to prevent anyone who manipulates 

markets from serving as officers or directors of electric utility companies or engaging in the business of selling or purchasing electric 

or transmission services jurisdictional to FERC. 

Section 1270. Relief for extraordinary violations 

Section 1270 gives FERC exclusive jurisdiction to determine 

whether termination payments required by certain Western Interconnection contracts are unjust and unreasonable. 

SUBTITLE G—PUHCA REPEAL—MERGER REFORM

Section 1271. Short Title 

Section 1271 is self-explanatory. 

Section 1272. Definitions 

Section 1272 is self-explanatory. 

Section 1273. Repeal of the Public Utility Holding Company Act of 

1935 

Section 1273 repeals the Public Utility Holding Company Act of 

1935 (PUHCA). 

Section 1274. Federal access to books and records 

Section 1274 gives FERC authority to require that each holding 

company, associate company and affiliate company make available 

to FERC books, accounts and records that FERC determines are 

relevant to costs incurred by a public utility or natural gas company that is an associate of a holding company and that are necessary and appropriate to protect utility customers with respect to 

jurisdictional rates. 

Section 1275. State access to books and records 

Section 1275 provides that upon request of a State commission 

having jurisdiction to regulate a public utility company in a holding 

company system, and under conditions to ensure confidentiality of 

trade secrets or sensitive commercial information, a holding company, associate company or affiliate company is to make available 

to the State commission books, accounts and records that have 

been identified in a proceeding of the State commission and that 

the State commission determines are relevant to costs incurred by 

such public utility company and that are necessary and appropriate 

to protect utility customers with respect to jurisdictional rates. 

States can obtain books and records under state law or other applicable Federal law. 

54 

Section 1276. Exemption authority 

Section 1276 provides that not later than 90 days after the date 

of enactment, FERC is to promulgate a final rule exempting from 

the Federal books and records requirement any person that is a 

holding company solely with respect to a qualifying facility, exempt 

wholesale generator, or foreign utility companies. FERC can exempt other records for any class of transactions that it finds are 

not relevant to jurisdictional rates. 

Section 1277. Affiliate transactions 

Section 1277 preserves the authority of FERC or a State commission to determine if a jurisdictional public utility company can recover in rates costs incurred through transactions with affiliates. 

Section 1278. Applicability 

Section 1278 provides that PUHCA provisions do not apply to the 

U.S. Government, any state or political subdivision, any foreign 

government authority not operating in the United States, or any 

agency, authority or instrumentality of any of the above. 

Section 1279. Effect on other regulations 

Section 1279 preserves authorities of FERC or State commissions 

under other applicable law. 

Section 1280. Enforcement 

Section 1280 authorizes FERC to use its enforcement authorities 

under the FPA to enforce this subtitle. 

Section 1281. Savings provisions 

Section 1281 permits continuation of activities authorized as of 

the date of enactment and preserves FERC authority under the 

FPA and the Natural Gas Act. 

Section 1282. Implementation 

Section 1282 authorizes FERC to promulgate regulations to implement this subtitle and to submit recommendations to Congress 

for technical and conforming amendments within 4 months of enactment. 

Section 1283. Transfer of resources 

Section 1283 provides that the Securities and Exchange Commission is to transfer books and records to FERC. 

Section 1284. Effective date 

Section 1284 provides that this subtitle takes effect 6 months 

after the date of enactment. 

Section 1285. Service allocation 

Section 1285 allows FERC to allocate non-power services among 

associate companies in a holding company for the protection of investors and consumers. 

Section 1286. Authorization of appropriations 

Section 1286 authorizes such funds as may be necessary to carry 

out this subtitle. 

55 

Section 1287. Conforming amendments to the Federal Power Act 

Section 1287 repeals FPA section 318, dealing with conflicts in 

jurisdiction between PUHCA and the FPA. 

Section 1288. Merger review reform 

Section 1288 expands FERC’s merger review authority and increases transaction value thresholds from $50,000 to $10 million. 

Section 1288 provides FERC jurisdiction over acquisitions of generation facilities used in interstate commerce and acquisitions by 

public-utility companies of gas utility companies. Section 1288 requires FERC to consider factors such as effects on markets, rates, 

and regulation when evaluating whether a transaction is consistent 

with the public interest. Section 1288 also requires FERC to make 

an additional finding that a transaction will not result in cross-subsidizations of associate companies to the detriment of the utility. 

SUBTITLE H—DEFINITIONS

Section 1291. Definitions 

Section 1291 clarifies the FPA definition of electric utility to include any entity described in section 201(f) of the Federal Power 

Act (FPA) that sells electric energy and adds Federal power marketing agencies to the definition. 

Section 1291 adds to the FPA a new definition of transmitting 

utility. Under the new definition, a transmitting utility is an entity, including an entity described in FPA section 201(f), that owns, 

operates or controls facilities used for the transmission of electric 

energy in interstate commerce or for the sale of electric energy at 

wholesale. This definition includes Transmission Organizations. 

Section 1291 adds to the FPA a new definition for electric cooperative. Under the new definition, an electric cooperative is a cooperatively owned electric utility. 

Section 1291 adds to the FPA a new definition for RTO. Under 

the new definition, an RTO is an entity of sufficient regional scope 

approved by FERC to exercise operational/functional control of 

interstate transmission facilities and to assure nondiscriminatory 

access to such facilities. 

Section 1291 adds to the FPA a new definition for ISO. Under 

the new definition, an ISO is an entity approved by FERC to exercise operational/functional control of interstate transmission facilities and to assure nondiscriminatory access to such facilities. 

Section 1291 adds to the FPA a new definition for Transmission 

Organization. Under the new definition, a Transmission Organization is an RTO, ISO, independent transmission provider or other 

transmission organization finally approved by FERC for the operation of transmission facilities. 

Section 1291 amends FPA section 201(f) to include electric cooperatives that are either financed under the Rural Electrification 

Act or that sell less than 4 million MWh of electricity per year. 

SUBTITLE I—TECHNICAL AND CONFORMING AMENDMENTS

Section 1295. Conforming amendments 

Section 1295 amends technical errors in the Federal Power Act. 

56 

TITLE XIII—STUDIES 

Title XIII requires studies on energy and water saving measures 

in congressional buildings (Section 1301), increased hydroelectric 

generation at existing Federal facilities (Section 1302), the Alaskan 

natural gas pipeline (Section 1303), renewable energy on Federal 

land (Section 1304), coalbed methane (Section 1305), backup fuel 

capabilities (Section 1306), energy rights-of-way on tribal lands to 

be conducted jointly by DOE and DOI (Section 1307), Energy Policy 

Act of 1992 programs (Section 1308), the feasibility and effects of 

reducing automobile fuel use (Section 1309), hybrid distributed 

power systems (Section 1310), the mobility of scientific and technical personnel (Section 1311), energy technologies (Section 1312), 

research and development program evaluation methodologies (Section 1313), transmission system monitoring (Section 1314), competition in the wholesale and retail markets for electric energy 

(Section 1315), the benefits of economic dispatch (Section 1316), 

rapid electrical grid restoration (Section 1317), cogeneration (Section 1318), petroleum and natural gas storage inventory (Section 

1319), natural gas supply shortage (Section 1320), split-estate Federal oil and gas leasing and development practices (Section 1321), 

resolution of Federal resource development conflicts in the Powder 

River Basin (Section 1322), energy efficiency standards (Section 

1323), telecommuting (Section 1324), oil bypass filtration technology (Section 1325), total integrated thermal systems (Section 

1326), University collaboration (Section 1327), and reliability and 

consumer protection (Section 1328). 

TITLE XIV—INCENTIVES FOR INNOVATIVE TECHNOLOGIES 

Section 1401. Definitions 

Section 1401 is self-explanatory 

Section 1402. Terms and conditions 

Section 1402 provides general terms and conditions for loan 

guarantees made by the Secretary. The cost of a loan guarantee 

must be appropriated or paid by the borrower. The guarantee cannot exceed 80% of the project cost, and the term of the obligation 

must require full repayment within the lesser of 30 years or 90 

percent of the projected useful life of the asset. The section provides specifics in the event of default by the borrower. The section 

allows for the Secretary to make payments on behalf of the borrower to avoid default, if appropriations are provided for that specific purpose. The section also provides for the collection of administrative fees. The full faith and credit of the United States is 

pledged to the payment of all guarantees. 

Section 1403. Eligible projects 

Subsection (a) contains broad criteria that any project must meet 

to receive a loan guarantee under this title. Subsection (b) lists the 

categories of eligible projects. Projects must fall within the parameters of both subsections to be eligible for a guarantee. 

Subsection (c) identifies specific gasification projects that are eligible for loan guarantees. 

Subsection (d) provides emission levels that eligible gasification 

projects must meet. 

57 

Subsection (e) clarifies that projects that receive tax credits are 

not disqualified from also receiving a loan guarantee under this 

title. 

Section 1404. Authorization of Appropriations 

Section 1404 is self-explanatory. 

COST AND BUDGETARY CONSIDERATIONS

The Congressional Budget Office estimate of the costs of this 

measure has been requested but was not received at the time the 

report was filed. When the report is available, the Chairman will 

request it to be printed in the Congressional Record for the advice 

of the Senate. 

REGULATORY IMPACT EVALUATION

In compliance with paragraph 11(b) of rule XXVI of the Standing 

Rules of the Senate, the Committee makes the following evaluation 

of the regulatory impact which would be incurred in carrying out 

S.————. The bill contains a variety of regulatory measures that 

impose Government-established standards on private individuals 

and businesses in establishing efficiency standards and similar programs. There may be some economic costs associated with certain 

of the requirements. There are also voluntary programs, such as 

the authorization for Tribal governments to enter into agreements 

that would allow them to assume full responsibility for development of energy resources. Compliance with those agreements will 

require commitments of resources and the establishment of a regulatory program by the Tribes. Various grant and other assistance 

programs will require submission of documentation or plans as a 

condition for the assistance and the amendments to the Federal 

Power Act may result in information being made available in different modes or times than at present, especially under market 

transparency provisions. The Committee believes that the effects 

are not undue and are reasonable in light of the benefits of the programs. 

No personal information would be collected in administering the 

program. Therefore, there would be no impact on personal privacy. 

Little, if any, additional paperwork would result from the enactment of S.ll, as ordered reported, with the exception of the various studies required by the legislation and the reporting associated with grant and financial assistance programs, the Tribal energy development agreement implementation, or the requirements 

associated with amendments to the Federal Power Act and the 

Public Utility Regulatory Purposes Act of 1978. 

EXECUTIVE COMMUNICATIONS

Executive views on the original bill have not been received. 

(58) 

ADDITIONAL VIEWS OF SENATOR BINGAMAN 

Bob Galvin, the former Chairman of Motorola, once said that 

‘‘there are certain things that a country needs to set out to do on 

purpose.’’ I believe that establishing a good energy policy is one of 

them. A policy, by definition, is a plan, a reasoned course of action. 

Good policy does not happen by accident. It requires purposeful 

forethought and planning. It must be built on sound principles. 

To my mind, a good energy policy must be anchored on four fundamental principles. 

First, it must increase our supplies of energy from all available 

sources—oil, gas, coal, nuclear, and renewables. It must ensure 

that energy resources that have not yet been developed as extensively as they could be, such as renewable energy, are given the assistance and the incentives they need to make their maximum contribution. 

Second, it must ensure that the energy we do produce is transported and consumed as efficiently as possible. It must ensure that 

adequate investments are made in the critical infrastructure of 

ports and pipelines, transmission lines, and other modes of moving 

energy from one place to another. It must also ensure that consumers are not hurt by price spikes and other problems caused by 

bottlenecks in the supply system. And, importantly, it must ensure 

that energy is not wasted when it reaches its point of end use. 

Third, good energy policy must reduce the impact of energy production and consumption on the environment. We need to develop 

domestic energy resources, but we must do so without unnecessary 

harm and degradation to the environment. And we need to begin 

to address the environmental effects of energy use, as well as energy production. 98 percent of the carbon dioxide produced in the 

United States is associated somehow with energy production and 

use. We can no longer afford an energy policy that does not take 

into account environmental and climate impact, any more than we 

can afford to have a climate policy that ignores economic impacts. 

Fourth and finally, sound energy policy requires energy markets 

that are transparent and fair to consumers. Energy markets are 

not inherently free markets. Yet we have increasingly come to rely 

on market forces and signals to set energy prices and shape our energy choices. When competitive energy markets work fairly, everyone in the energy chain from producer to consumer benefits. When 

they do not, as in California and the West Coast electricity crisis, 

great economic harm can be done. So we need to make sure that 

our energy markets are transparent and fair to consumers. 

The Committee bill, on balance, meets these four tests. It encourages the production of both traditional and new energy resources 

through research and development, financial incentives, and regulatory reforms. It facilitates both the development of new energy 

infrastructure and improvements in efficiency. It avoids rolling 

59 

back environmental protections. And it increases consumer protections by making energy markets more transparent and imposing 

sanctions on those who try to manipulate those markets. 

The bill is not perfect. It fails to include major initiatives that 

I think it should contain. It does not contain a renewable portfolio 

standard designed to increase the percentage of our electricity that 

is produced from renewable energy. It does not increase the corporate average fuel economy standards of our cars and trucks, or 

even close the so-called ‘‘SUV’’ loophole. It does little to respond to 

the growing challenge of global warming. 

The Committee bill also contains several provisions it should not. 

Chief among them is the hydroelectric relicensing provision. Although it is a substantial improvement over earlier proposals, it is 

still troubling. It creates a tilted playing field that places the interests of dam operators over those of states, Indian tribes, and recreational users. And it creates a ‘‘trial-type’’ appeal process for resolving licensing disputes that will create substantial new delays of 

Dickensian proportions. 

I hope that the Senate may yet correct the deficiencies that remain and resist amendments that would undermine the principles 

I have outlined. But, even as it stands, the benefits of the bill outweigh its deficiencies, and I am pleased to support it and recommend it to my colleagues. 

Good energy legislation, like all good legislation, is the product 

of consensus, of striking a balance, of finding a compromise, between disparate and often discordant ideas. The quality of the 

product depends upon the quality of the process that is used to 

produce it. The quality of this bill owes much to Chairman’s judicious leadership, his patience, his openness to new ideas, and his 

determined effort to reach a bipartisan consensus, for which he is 

to be commended. 

JEFF BINGMAN.

(61) 

CHANGES IN EXISTING LAW

In compliance with paragraph 12 of Rule XXVI of the Standing 

Rules of the Senate, changes in existing law made by the original 

bill, as ordered reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is 

printed in italic, existing law in which no change is proposed is 

shown in roman): 

TABLE OF CONTENTS 

Page 

1. National Energy Conservation Policy Act, Public Law 95–619, as Amended 

(42 U.S.C. 8201 et seq.) ....................................................................................... 62 

2. Legislative Branch Appropriations Act, 1999, Public Law 105–275 (2. 

U.S.C. 1815) .......................................................................................................... 69 

3. Energy Conservation and Production Act, Public Law 94–385, as Amended 

(42 U.S.C. 6801 et seq.) ....................................................................................... 70 

4. Solid Waste Disposal Act, Public Law 89–272, as Amended (42 U.S.C. 

6901 et seq.) .......................................................................................................... 71 

5. Energy Policy and Conservation Act, Public Law 94–163, as Amended 

(42 U.S.C. 6201 et seq.) ....................................................................................... 73 

6. United States Housing Act of 1937, Act of September 1, 1937, Chapter 

896, as Amended (42 U.S.C. 1437 et seq.) ......................................................... 104 

7. Cranston-Gonzalez National Affordable Housing Act, Public Law 101–625, 

as Amended (42 U.S.C. 12701 et seq.) ................................................................ 105 

8. Energy Policy Act of 1992, Public Law 102–486, as Amended (42 U.S.C. 

13211 et seq.) ........................................................................................................ 106 

9. Farm Security and Rural Investment Act of 2002, Public Law 107–171, 

(7 U.S.C. 8108(a)(3)(A)) ........................................................................................ 131 

10. Geothermal Steam Act of 1970, Public Law 91–581, as Amended (30 

U.S.C. 1001 et seq.) .............................................................................................. 131 

11. Federal Power Act, Act of June 10, 1920, Chapter 285, as Amended 

(16 U.S.C. 791A–825R) ........................................................................................ 145 

12. Mineral Leasing Act, Act of February 25, 1920, as Amended (30 U.S.C. 

181 et seq.) ............................................................................................................ 175 

13. Appropriations for the Department of the Interior and Related Agencies 

for the Fiscal Year Ending September 30, 1981, Public Law 96–514 .............. 178 

14. National Petroleum Reserve in Alaska, Public Law 94–258 as Amended 

Through P.L. 108–68, June 18, 2003 .................................................................. 180 

15. Natural Gas Act, Act of June 21, 1938, Chapter 556, as Amended (15 

U.S.C. 717–717W) ................................................................................................ 186 

16. Natural Gas Policy Act of 1978, Public Law 95–621 ...................................... 192 

17. Coastal Zone Management Act of 1972, Public Law 92–583, 86 Stat. 

1280, as Amended ................................................................................................ 193 

18. Public Law 106–511, 114 Stat. 2376 ................................................................ 194 

19. The Native American Housing and Self-Determination Act of 1996, Public 

Law 104–330, as Amended (25 U.S.C. 4101 et seq.) ......................................... 195 

20. Atomic Energy Act of 1954, Act of August 1, 1946, Chapter 724, as 

Amended by the Act of August 30, 1954, Chapter 1073, as Amended (42 

U.S.C. 2011 et seq.) .............................................................................................. 195 

21. Title 23, United States Code, Highways, Public Law 109–13 ....................... 207 

22. Department of Energy Organization Act, Public Law 95–91, as Amended 

(42 U.S.C. 7101 et seq.) ....................................................................................... 209 

23. Department of Energy Science Education Enhancement Act, Part E of 

Title XXXI of Public Law 101–510, as Amended (42 U.S.C. 7381–7381E) ..... 215 

62 

24. Spark M. Matsunaga Hydrogen Research, Development, and Demonstration Act of 1990, Public Law 101–566, as Amended (42 U.S.C. 12401 et 

seq.) ....................................................................................................................... 217 

25. Methane Hydrate Research and Development Act of 2000, Act May 2, 

2000, Public Law 106–193 (30 U.S.C. 1902 Note) ............................................. 228 

26. High-Performance Computing Act of 1991, Public Law 102–194, as 

Amended (15 U.S.C. 5501 et seq.) ...................................................................... 235 

27. Coal Research and Development Act of 1960, Public Law 96–480 (30 

U.S.C. 661 et seq.) ................................................................................................ 236 

28. Title 35, United States Code, Public Law 96–517 .......................................... 237 

29. Federal Nonnuclear Energy Research and Development Act of 1974, Public Law 93–577 ..................................................................................................... 238 

30. Stevenson-Wydler Technology Innovation Act of 1980, 15 U.S.C. 3712 ....... 270 

31. Agricultural Risk Protection Act of 2000, Public Law 106–224, as Amended ........................................................................................................................... 270 

32. Public Utility Holding Company Act of 1935, Act of August 26, 1935, 

Chapter 687, as Amended (15 U.S.C. 79–79Z–6) .............................................. 271 

33. Public Utility Regulatory Policies Act of 1978, Public Law 95–617, as 

Amended (16 U.S.C. 2601 et seq.) ...................................................................... 321 

NATIONAL ENERGY CONSERVATION POLICY 

ACT PUBLIC LAW 95–619 AS AMENDED (42 

U.S.C. 8201 ET SEQ.) 

* * * * * * * 

TITLE I—GENERAL PROVISIONS 

SEC. 101. SHORT TITLE AND TABLE OF CONTENTS 

* * * * * * * 

TITLE V—FEDERAL ENERGY INITIATIVES 

* * * * * * * 

PART 3—FEDERAL ENERGY MANAGEMENT 

* * * * * * * 

Sec. 550. Survey of energy saving potential. 

Sec. 551. Energy and water savings measures in congressional buildings. 

Sec. 552. Federal procurement of energy efficient products. 

Sec. ø551.¿ 553. Definitions. 

* * * * * * * 

TITLE V—FEDERAL ENERGY INITIATIVES 

* * * * * * * 

PART 3—FEDERAL ENERGY MANAGEMENT 

* * * * * * * 

SEC. 543. ENERGY MANAGEMENT REQUIREMENTS. 

(a) ENERGY PERFORMANCE REQUIREMENT FOR FEDERAL BUILDINGS.—(1) øSubject to paragraph (2), each agency shall apply energy conservation measures to, and shall improve the design for 

the construction of, its Federal buildings so that the energy consumption per gross square foot of its Federal buildings in use durVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00062 Fmt 6601 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
63 

ing the fiscal year 1995 is at least 10 percent less than the energy 

consumption per gross square foot of its Federal buildings in use 

during the fiscal year 1985 and so that the energy consumption per 

gross square foot of its Federal buildings in use during the fiscal 

year 2000 is at least 20 percent less than the energy consumption 

per gross square foot of its Federal buildings in use during fiscal 

year 1985.¿ (A) Subject to paragraph (2), each agency shall apply 

energy conservation measures to, and shall improve the design for 

the construction of, the Federal buildings of the agency (including 

each industrial or laboratory facility) so that the energy consumption for each gross square foot of the Federal buildings of the agency 

for fiscal years 2006 through 2015 is reduced, as compared with the 

energy consumption for each gross square foot of the Federal buildings of the agency for fiscal year 2004, 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 

(B) The energy reduction goals and baseline established in subparagraph (A) supersede—

(i) all goals and baselines under this paragraph in effect on 

the day before the date of enactment of this subparagraph; and 

(ii) any related reporting requirements. 

(2) An agency may exclude from the requirements of paragraph 

(1) any building, and the associated energy consumption and gross 

square footage, in which energy intensive activities are carried out. 

Each agency shall identify and list in each report made under section 548(a) the buildings designated by it for such exclusion. 

(3) Not later than December 31, 2013, the Secretary shall—

(A) review the results of the implementation of the energy performance requirement established under paragraph (1); and 

(B) submit to Congress recommendations concerning energy 

performance requirements for each of fiscal years 2015 through 

2024. 

* * * * * * * 

(c) EXCLUSIONS.—(1) øAn agency may exclude, from the energy 

consumption requirements for the year 2000 established under subsection (a) and the requirements of subsection (b)(1), any Federal 

building or collection of Federal buildings, and the associated energy consumption and gross square footage, if the head of such 

agency finds that compliance with such requirements would be impractical. A finding of impracticability shall be based on the energy 

intensiveness of activities carried out in such Federal buildings or 

collection of Federal buildings, the type and amount of energy consumed, the technical feasibility of making the desired changes, and, 

in the cases of the Departments of Defense and Energy, the unique 

character of certain facilities operated by such Departments.¿ (A) 

64 

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 

(42 U.S.C. 13201 et seq.), Executive orders, and other Federal 

law; and 

(iv) the agency has implemented all practicable, life-cycle 

cost-effective projects with respect to the Federal building or collection of Federal buildings to be excluded. 

(B) A finding of impracticability under subparagraph (A)(i) shall 

be based on— (i) the energy intensiveness of activities carried out in the 

Federal building or collection of Federal buildings; or 

(ii) the fact that the Federal building or collection of Federal 

buildings is used in the performance of a national security function. 

(2) Each agency shall identify and list, in each report made 

under section 548(a), the Federal buildings designated by it for 

such exclusion. The Secretary shall review such findings for consistency with the øimpracticability standards¿ standards for exclusion set forth in paragraph (1), and may within 90 days after receipt of the findings, reverse øa finding of impracticability¿ the exclusion. In the case of any such reversal, the agency shall comply 

with the øenergy consumption requirements¿ requirements of subsections (a) and (b)(1) for the building concerned. 

(3) Not later than 180 days after the date of enactment of this 

paragraph, the Secretary shall issue guidelines that establish criteria for exclusions under paragraph (1). 

* * * * * * * 

(e) METERING OF ENERGY USE.—(1)(A) Not later than October 1, 

2012, in accordance with guidelines established by the Secretary 

under paragraph (2), each Federal building shall, for the purposes 

of efficient use of energy and reduction in the cost of electricity used 

in the building, be metered or submetered. 

(B) Each agency shall use, to the maximum extent practicable, advanced meters or advanced metering devices that provide data at least daily on, and that measure at least hourly, 

consumption of electricity in the Federal buildings of the agency. 

(C) The data shall be— (i) incorporated into Federal energy tracking systems; 

and 

(ii) made available to Federal facility energy managers. 

(2)(A) Not later than 180 days after the date of enactment of this 

subsection, the Secretary (in consultation with the Secretary of Defense, the Administrator of General Services, representatives from 

the metering industry, utility industry, energy services industry, enVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00064 Fmt 6601 Sfmt 6603 E:\HR\OC\SR078.XXX SR078
65 

ergy efficiency industry, energy efficiency advocacy organizations, 

national laboratories, and universities, and Federal facility energy 

managers) shall establish guidelines for agencies to carry out paragraph (1). 

(B) The guidelines shall— (i) take into consideration— (I) the cost of metering and submetering and the reduced 

cost of operation and maintenance expected to result from 

metering and submetering; 

(II) the extent to which metering and submetering are expected to result in increased potential for energy management, increased potential for energy savings and energy efficiency improvement, and cost and energy savings because 

of utility contract aggregation; and 

(III) the measurement and verification protocols of the 

Department of Energy; 

(ii) include recommendations concerning the amount of funds 

and the number of trained personnel necessary to gather and 

use the metering information to track and reduce energy use; 

(iii) establish priorities for types and locations of buildings to 

be metered and submetered based on cost-effectiveness and a 

schedule of 1 or more dates, not later than 1 year after the date 

of issuance of the guidelines, on which paragraph (1) takes effect; and 

(iv) establish exclusions from the requirements of paragraph 

(1) based on the de minimis quantity of energy use of a Federal 

building, industrial process, or structure. 

(3) Not later than 180 days after the date on which guidelines are 

established under paragraph (2), in a report submitted by an agency 

under section 548(a), the agency shall submit to the Secretary a 

plan describing the manner in which the agency will implement 

paragraph (1), including— (A) the manner in which the agency will designate personnel 

primarily responsible for carrying out that implementation; and 

(B) demonstration by the agency, complete with documentation, of any finding that the use of advanced meters or advanced metering devices described in paragraph (1) is not practicable. 

* * * * * * * 

SEC. 546. INCENTIVES FOR AGENCIES. * * * 

(d). * * * 

(2) * * * 

(G) succeeded in the implementation of the guidelines 

established under section 159 of the Energy Policy Act of 

1992 (42 U.S.C. 8262e). 

(e) RETENTION OF ENERGY AND WATER SAVINGS.—(1) An agency 

may retain any funds appropriated to the agency for energy expenditures, water expenditures, or wastewater treatment expenditures, at 

buildings subject to the requirements of subsections (a) and (b) of 

section 543, that are not expended because of energy savings or 

water savings. 

(2) Except as otherwise provided by law, funds described in 

paragraph (1) may be used by an agency only for energy efficiency, 

66 

water conservation, or unconventional and renewable energy resources projects. 

* * * * * * * 

SEC. 548. REPORTS. 

(a) * * * 

(b) REPORTS TO THE PRESIDENT AND CONGRESS.—The Secretary 

shall report, not later than April 2 of each year, with respect to 

each fiscal year beginning after the date of the enactment of this 

subsection, to the President and Congress—

* * * * * * * 

SEC. 550. SURVEY OF ENERGY SAVING POTENTIAL. 

(a) * * * 

* * * * * * * 

(d) REPORT.—As soon as practicable after the completion of the 

project carried out under this section, the Secretary shall transmit 

a report of the findings and conclusions of the project to the Committee on Energy and Natural Resources and the Committee on 

Governmental Affairs of the Senate, the Committee on Energy and 

Commerce, the Committee on Government Operations, and the 

Committee on Public Works and Transportation of the House of 

Representatives, and the agencies who own the buildings involved 

in such project. Such report shall include an analysis of the probability of each agency achieving [the 20 percent reduction goal established under section 543(a) of the National Energy Conservation 

Policy Act (42 U.S.C. 8253(a)).] each of the energy reduction goals 

established under section 543(a). 

* * * * * * * 

SEC. 551. ENERGY AND WATER SAVINGS MEASURES IN CONGRESSIONAL Buildings. 

(a) DEFINITIONS.—In this section: 

(1) CONGRESSIONAL BUILDING.—The term ‘‘congressional 

building’’ means a facility administered by Congress. 

(2) PLAN.—The term ‘‘plan’’ means an energy conservation 

and management plan developed under subsection (b)(1). 

(b) PLAN.—

(1) IN GENERAL.—The Architect of the Capitol shall develop, 

update, and implement a cost-effective energy conservation and 

management plan for congressional buildings to meet the energy performance requirements for Federal buildings established under section 543(a)(1). 

(2) REQUIREMENTS.—The plan shall include—

(A) a description of the life-cycle cost analysis used to determine the cost-effectiveness of proposed energy efficiency 

projects; 

(B) a schedule that ensures that complete energy surveys 

of all congressional buildings are conducted every 5 years 

to determine the cost and payback period of energy and 

water conservation measures; 

(C) a strategy for installation of life-cycle cost-effective energy and water conservation measures; 

67 

(D) the results of a study of the costs and benefits of installation of submetering in congressional buildings; and 

(E) information packages and ‘‘how-to’’ guides for each 

Member and employing authority of Congress that describe 

simple and cost-effective methods to save energy and taxpayer dollars in congressional buildings. 

(3) SUBMISSION TO CONGRESS.—Not later than 180 days after 

the date of enactment of the Energy Policy Act of 2005, the Architect of the Capitol shall submit to Congress the plan developed under paragraph (1). 

(c) ANNUAL REPORT.— (1) IN GENERAL.—The Architect of the Capitol shall annually 

submit to Congress a report on congressional energy management and conservation programs carried out for congressional 

buildings under this section. 

(2) REQUIREMENTS.—A report submitted under paragraph (1) 

shall describe in detail—

(A) energy expenditures and savings estimates for each 

congressional building; 

(B) any energy management and conservation projects for 

congressional buildings; and 

(C) future priorities to ensure compliance with this section. 

* * * * * * * 

SEC. 552. FEDERAL PROCUREMENT OF ENERGY EFFICIENT PRODUCTS. 

(a) DEFINITIONS.—In this section: 

(1) The term ‘‘Energy Star product’’ means a product that is 

rated for energy efficiency under an Energy Star program. 

(2) The term ‘‘Energy Star program’’ means the program established by section 324A of the Energy Policy and Conservation Act. 

(3) The term ‘‘executive agency’’ has the meaning given the 

term in section 4 of the Office of Federal Procurement Policy Act 

(41 U.S.C. 403). 

(4) The term ‘‘FEMP designated product’’ means a product 

that is designated under the Federal Energy Management Program of the Department of Energy as being among the highest 

25 percent of equivalent products for energy efficiency. 

(b) PROCUREMENT OF ENERGY EFFICIENT PRODUCTS.—(1) Except 

as provided in paragraph (2), to meet the requirements of an executive agency for an energy consuming product, the head of the executive agency shall procure—

(A) an Energy Star product; or 

(B) a FEMP designated product. 

(2) The head of an executive agency shall not be required to comply with paragraph (1) if the head of the executive agency specifies 

in writing that—

(A) taking into account energy cost savings, an Energy Star 

product or FEMP designated product is not cost-effective over 

the life of the product; or 

(B) no Energy Star product or FEMP designated product is 

reasonably available that meets the functional requirements of 

the executive agency. 

68 

(3) The head of an executive agency shall incorporate criteria for 

energy efficiency that are consistent with the criteria used for rating 

Energy Star products and FEMP designated products into—

(A) the specifications for any procurements involving energy 

consuming products and systems, including—

(i) guide specifications; 

(ii) project specifications; and 

(iii) construction, renovation, and services contracts that 

include the provision of energy consuming products and 

systems; and 

(B) the factors for the evaluation of offers received for the 

sprocurement. 

(c) LISTING OF ENERGY EFFICIENT PRODUCTS IN FEDERAL CATALOGS.—(1) Any inventory or listing of products by the General Services Administration or the Defense Logistics Agency shall clearly 

identify and prominently display Energy Star products and FEMP 

designated products. 

(2)(A) Except as provided in subparagraph (B), 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. 

(B) Subparagraph (A) shall not apply if an agency ordering a 

product specifies in writing that—

(i) taking into account energy cost savings, no Energy Star 

product or FEMP designated product is cost-effective for the intended application over the life of the product; or 

(ii) no Energy Star product or FEMP designated product is 

available to meet the functional requirements of the ordering 

agency. 

(d) SPECIFIC PRODUCTS.—(1) In the case of an electric motor of 1 

to 500 horsepower, an executive agency shall select only a premium 

efficient motor that meets the standard established by the Secretary 

under paragraph (2). 

(2) Not later than 120 days after the date of enactment of this 

subsection and after considering the recommendations of associated 

electric motor manufacturers and energy efficiency groups, the Secretary shall establish a standard for premium efficient motors. 

(3)(A) Each Federal agency is encouraged to take actions (such as 

appropriate cleaning and maintenance) to maximize the efficiency of 

air conditioning and refrigeration equipment, including the use of 

a system treatment or additive that—

(i) would reduce the electricity consumed by air conditioning 

and refrigeration equipment; and 

(ii) meets the criteria specified in subparagraph (B). 

(B) A system treatment or additive referred to in subparagraph 

(A) shall be—

(i) determined by the Secretary to be effective in increasing 

the efficiency of air conditioning and refrigeration equipment 

without having an adverse impact on—

(I) air conditioning and refrigeration performance (including cooling capacity); or 

(II) the useful life of the equipment; 

69 

(ii) determined by the Administrator of the Environmental 

Protection Agency to be environmentally safe; and 

(iii) shown, in tests conducted by the National Institute of 

Standards and Technology, in accordance with Department of 

Energy test procedures, to increase the seasonal energy efficiency ratio (SEER) or energy efficiency ratio (EER) without 

having any adverse impact on the system, system components, 

the refrigerant or lubricant, or other materials in the system. 

(4) The results of the tests described in paragraph (3)(B)(iii) shall 

be published in the Federal Register for public review and comment. 

(5) For purposes of this subsection, a hardware device or primary 

refrigerant shall not be considered an additive. 

(e) REGULATIONS.—Not later than 180 days after the date of enactment of this section, the Secretary shall issue guidelines to carry 

out this section. 

Sec. ø551.¿ 553. Definitions. * * * 

* * * * * * * 

TITLE VIII—ENERGY SAVINGS PERFORMANCE 

CONTRACTS 

SEC. 801. AUTHORITY TO ENTER INTO CONTRACTS. 

(a) * * * 

(c) SUNSET AND REPORTING REQUIREMENTS.—The authority to 

enter into new contracts under this section shall cease to be effective on October 1, 2016. 

LEGISLATIVE BRANCH APPROPRIATIONS ACT, 

1999—PUBLIC LAW 105–275 (2 U.S.C. 1815) 

* * * * * * * 

øSEC. 310. Energy conservation and management 

øThe Architect of the Capitol—

ø(1) shall develop and implement a cost-effective energy conservation strategy for all facilities currently administered by 

Congress to achieve a net reduction of 20 percent in energy 

consumption on the congressional campus compared to fiscal 

year 1991 consumption levels on a Btu-per-gross-square-foot 

basis not later than 7 years after October 21, 1998; 

ø(2) shall submit to Congress no later than 10 months after 

October 21, 1998, a comprehensive energy conservation and 

management plan which includes life cycle costs methods to 

determine the cost-effectiveness of proposed energy efficiency 

projects; 

ø(3) shall submit to the Committee on Appropriations in the 

Senate and the House of Representatives a request for the 

amount of appropriations necessary to carry out this section; 

ø(4) shall present to Congress annually a report on congressional energy management and conservation programs which 

details energy expenditures for each facility, energy manageVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00069 Fmt 6601 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
70 

ment and conservation projects, and future priorities to ensure 

compliance with the requirements of this section; 

ø(5) shall perform energy surveys of all congressional buildings and update such surveys as needed; 

ø(6) shall use such surveys to determine the cost and payback period of energy and water conservation measures likely 

to achieve the required energy consumption levels; 

ø(7) shall install energy and water conservation measures 

that will achieve the requirements through previously determined life cycle cost methods and procedures; 

ø(8) may contract with nongovernmental entities and employ 

private sector capital to finance energy conservation projects 

and achieve energy consumption targets; 

ø(9) may develop innovative contracting methods that will 

attract private sector funding for the installation of energy-efficient and renewable energy technology to meet the requirements of this section; 

ø(10) may participate in the Department of Energy’s Financing Renewable Energy and Efficiency (FREE Savings) contracts program for Federal Government facilities; and 

ø(11) shall produce information packages and ‘‘how-to’’ guides for each Member and employing authority of the Congress that detail simple, cost-effective methods to save energy 

and taxpayer dollars.¿ 

ENERGY CONSERVATION AND PRODUCTION 

ACT—PUBLIC LAW 94–385, AS AMENDED (42 

U.S.C. 6801 ET SEQ.) 

* * * * * * * 

SEC. 305. FEDERAL BUILDING ENERGY EFFICIENCY STANDARDS. 

(a)(1) * * * 

(2) The standards established under paragraph (1) shall—

(A) contain energy saving and renewable energy specifications that meet or exceed the energy saving and renewable energy specifications of øCABO Model Energy Code, 1992 (in the 

case of residential buildings) or ASHRAE Standard 90.1–1989¿ 

the 2004 International Energy Conservation Code (in the case 

of residential buildings) or ASHRAE Standard 90.1–2004 (in 

the case of commercial buildings); 

* * * * * * * 

(3)(A) 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, 

71 

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. 

(B) 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. 422. For the purpose of carrying out the weatherization program under this part, there are authorized to be appropriated øfor 

fiscal years 1999 through 2003 such sums as may be necessary¿ 

$325,000,000 for fiscal year 2006, $400,000,000 for fiscal year 2007, 

and $500,000,000 for fiscal year 2008. 

SOLID WASTE DISPOSAL ACT—PUBLIC LAW 89–

272, AS AMENDED (42 U.S.C. 6901 ET SEQ.) 

SHORT TITLE AND TABLE OF CONTENTS 

* * * * * * * 

Subtitle F—Federal Responsibilities 

Sec. 6001. Application of Federal, State and local law to Federal facilities. 

Sec. 6002. Federal Procurement. 

Sec. 6003. Cooperation with Environmental Protection Agency. 

Sec. 6004. Applicability of solid waste disposal guidelines to executive agencies. 

Sec. 6005. Increased use of recovered mineral component in federally funded projects 

involving procurement of cement or concrete. 

* * * * * * * 

Subtitle F—Federal Responsibilities 

* * * * * * * 

SEC. 6005. (a) DEFINITIONS.—In this section: 

(1) AGENCY HEAD.—The term ‘‘agency head’’ means—

(A) the Secretary of Transportation; and 

72 

(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. 

(3) RECOVERED MINERAL COMPONENT.—The term ‘‘recovered 

mineral component’’ means—

(A) ground granulated blast furnace slag; 

(B) coal combustion fly ash; and 

(C) any other waste material or byproduct recovered or 

diverted from solid waste that the Administrator, in consultation with an agency head, determines should be treated as recovered mineral component under this section for 

use in cement or concrete projects paid for, in whole or in 

part, by the agency head. 

(b) IMPLEMENTATION OF REQUIREMENTS.— (1) IN GENERAL.—Not later than 1 year after the date of enactment of this section, the Administrator and each agency 

head shall take such actions as are necessary to implement fully 

all procurement requirements and incentives in effect as of the 

date of enactment of this section (including guidelines under 

section 6002) that provide for the use of cement and concrete incorporating recovered mineral component in cement or concrete 

projects. 

(2) PRIORITY.—In carrying out paragraph (1), an agency head 

shall give priority to achieving greater use of recovered mineral 

component in cement or concrete projects for which recovered 

mineral components historically have not been used or have 

been used only minimally. 

(3) 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; 

73 

(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 

(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 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). 

ENERGY POLICY AND CONSERVATION ACT—

Public Law 94–163, as amended (42 U.S.C. 6201 

et seq.) 

* * * * * * * 

TABLE OF CONTENTS 

* * * * * * * 

TITLE I—MATTERS RELATED TO DOMESTIC SUPPLY AVAILABILITY 

* * * * * * * 

PART C—AUTHORITY TO CONTRACT FOR PETROLEUM PRODUCT NOT OWNED BY THE

UNITED STATES

* * * * * * * 

Sec. 174. Contracts for which implementing legislation is needed. 

øPART D—EXPIRATION

øSec. 181. Expiration.¿ 

74 

PART D—NORTHEAST HOME HEATING OIL RESERVE

Sec. 181. Establishment. 

Sec. 182. Authority. 

Sec. 183. Conditions for release; plan. 

Sec. 184. Northeast Home Heating Oil Reserve Account. 

Sec. 185. Exemptions. 

TITLE II—STANDBY ENERGY AUTHORITIES 

* * * * * * * 

øPART C—ENERGY EMERGENCY PREPAREDNESS

øSec. 271. Congressional findings, policy, and purpose. 

øSec. 272. Preparation for petroleum supply interruptions. 

øSec. 273. Summer fill and fuel budgeting programs.¿ 

PART C—SUMMER FILL AND FUEL BUDGETING PROGRAMS

Sec. 273. Summer fill and fuel budgeting programs. 

øPART D—EXPIRATION

Sec. 281. Expiration.¿ 

* * * * * * * 

TITLE III—IMPROVING ENERGY EFFICIENCY 

* * * * * * * 

PART B—ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS OTHER THAN

AUTOMOBILES

* * * * * * * 

Sec. 324. Labeling 

Sec. 324A. Energy Star Program 

* * * * * * * 

TITLE I—MATTERS RELATED TO DOMESTIC 

SUPPLY AVAILABILITY 

* * * * * * * 

Part B—Strategic Petroleum Reserve 

øSEC. 166. There are authorized to be appropriated such sums as 

may be necessary to implement this part, to remain available until 

expended.¿ 

AUTHORIZATION OF APPROPRIATIONS

SEC. 166. There are authorized to be appropriated to the Secretary 

such sums as may be necessary to carry out this part and part D, 

to remain available until expended. 

* * * * * * * 

CONDITIONS FOR RELEASE; PLAN

SEC. 183.* * * 

(b) DEFINITION.—For purposes of this section a ‘‘dislocation in the 

heating oil market’’ shall be deemed to occur only when—

(1) The price differential between crude oil, as reflected in an 

industry daily publication such as ‘‘Platt’s Oilgram Price Report’’ or ‘‘Oil Daily’’ and No. 2 heating oil, as reported in the 

Energy Information Administration’s retail price data for the 

75 

Northeast, increases øby more than 60 percent over its 5 year 

rolling average for the months of mid-October through March¿ 

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), and continues for 7 consecutive days; and 

(2) The price differential continues to increase during the 

most recent week for which price information is available. 

* * * * * * * 

øSEC. 186. There are authorized to be appropriated such sums as 

may be necessary to implement this part.¿ 

* * * * * * * 

øPart E—Expiration 

øSEC. 191. Except as otherwise provided in title I, all authority 

under any provision of title I (other than a provision of such title 

amending another law) and any rule, regulation, or order issued 

pursuant to such authority, shall expire at midnight, September 

30, 2008, but such expiration shall not affect any action or pending 

proceedings, civil or criminal, not finally determined on such date, 

nor any action or proceeding based upon any act committed prior 

to midnight, September 30, 2008.¿ 

* * * * * * * 

TITLE II—STANDBY ENERGY AUTHORITIES 

* * * * * * * 

Part C—Summer Fill and Fuel Budgeting Programs 

SEC. 273. SUMMER FILL AND FUEL BUDGETING PROGRAMS. 

Section 602(a) of P.L. 106–469 (114 Stat. 2040) indicated that 

this new section 273 should be added at the end of part C of title 

II, but, section 104(3) of the same Public Law repealed that part 

C. 

(a) DEFINITIONS.—In this section: 

(1) BUDGET CONTRACT.—The term ‘‘budget contract’’ means a 

contract between a retailer and a consumer under which the 

heating expenses of the consumer are spread evenly over a period of months. 

(2) FIXED-PRICE CONTRACT.—The term ‘‘fixed-price contract’’

means a contract between a retailer and a consumer under 

which the retailer charges the consumer a set price for propane, kerosene, or heating oil without regard to market price 

fluctuations. 

(3) PRICE CAP CONTRACT.—The term ‘‘price cap contract’’

means a contract between a retailer and a consumer under 

which the retailer charges the consumer the market price for 

propane, kerosene, or heating oil, but the cost of the propane, 

kerosene, or heating oil may exceed a maximum amount stated 

in the contract. 

76 

(b) ASSISTANCE.—At the request of the chief executive officer of 

a State, the Secretary shall provide information, technical assistance, and funding— (1) to develop education and outreach programs to encourage 

consumers to fill their storage facilities for propane, kerosene, 

and heating oil during the summer months; and 

(2) to promote the use of budget contracts, price cap contracts, fixed-price contracts, and other advantageous financial 

arrangements, to avoid severe seasonal price increases for and 

supply shortages of those products. 

(c) PREFERENCE.—In implementing this section, the Secretary 

shall give preference to States that contribute public funds or leverage private funds to develop State summer fill and fuel budgeting 

programs. 

(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to 

be appropriated to carry out this section—

(1) $25,000,000 for fiscal year 2001; and 

(2) such sums as are necessary for each fiscal year thereafter. 

ø(e) INAPPLICABILITY OF EXPIRATION PROVISION.—Section 281 

does not apply to this section.¿ 

* * * * * * * 

øPart D—Expiration 

SEC. 281. Except as otherwise provided in title II, all authority 

under any provision of title II (other than a provision of such title 

amending another law) and any rule, regulation, or order issued 

pursuant to such authority, shall expire at midnight, September 

30, 2008, but such expiration shall not affect any action or pending 

proceedings, civil or criminal, not finally determined on such date, 

nor any action or proceeding based upon any act committed prior 

to midnight, September 30, 2008.¿ 

* * * * * * * 

SEC. 321. For purposes of this part: 

* * * * * * * 

(29)(D)(i) The term ‘‘F40T12 lamp’’ means a nominal 40 watt 

tubular fluorescent lamp which is 48 inches in length and oneand-a-half inches in diameter, and conforms to ANSI standard 

[C78.1–1978(R1984)] C78.81–2003 (Data Sheet 7881–ANSI–

1010–1). 

(ii) The term ‘‘F96T12 lamp’’ means a nominal 75 watt tubular fluorescent lamp which is 96 inches in length and one-anda-half inches in diameter, and conforms to ANSI standard 

[C78.3–1978(R1984)] C78.81–2003 (Data Sheet 7881–ANSI–

3007–1). 

(iii) The term ‘‘F96T12HO lamp’’ means a nominal 110 watt 

tubular fluorescent lamp which is 96 inches in length and oneand-a-half inches in diameter, and conforms to ANSI standard 

[C78.1–1978(R1984)] C78.81–2003 (Data Sheet 7881–ANSI–

1019–1). 

* * * * * * * 

77 

(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 11⁄2 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 11⁄2 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 11⁄2 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. 

* * * * * * * 

(30)(S)(i) The term ‘‘medium base compact fluorescent lamp’’ means an integrally ballasted fluorescent lamp with a medium 

screw base and a rated input voltage of 115 to 130 volts and 

which is designed as a direct replacement for a general service 

incandescent lamp. (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 

(bb) unlikely to be used in general purpose 

applications. 

* * * * * * * 

(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— 

78 

(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; 

(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 

79 

(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 fantype heater designed to be installed within the heated space. 

(B) The term ‘‘unit heater’’ does not include a warm air furnace. 

(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/cm2. 

(B) The term ‘‘high intensity discharge lamp’’ includes mercury vapor, metal halide, and high-pressure sodium lamps described in subparagraph (A). 

80 

(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, phosphorcoated, 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. 

* * * * * * * 

SEC. 323. * * * 

(b) AMENDED AND NEW PROCEDURES.—

* * * * * * * 

(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. 

(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. 

81 

(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’’. 

* * * * * * * 

(f) ADDITIONAL 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—

(A) suspended ceiling fans; and 

(B) 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. 

* * * * * * * 

LABELING

SEC. 324. (a). IN GENERAL.—(1) * * * 

(2) * * * 

(F)(i) 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). 

* * * * * * * 

(5)(A) For covered products described in subsections (u) through 

(ee) 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. 

* * * * * * * 

82 

ENERGY STAR PROGRAM

SEC. 324A. (a) IN GENERAL.—There is 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 

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. 

ENERGY CONSERVATION STANDARDS

SEC. 325. (A) PURPOSES. * * * 

(F) STANDARDS FOR FURNACES.—

(3)(D) Notwithstanding any other provision of this Act, if the 

requirements of subsection (o) are met, the Secretary may conVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00082 Fmt 6601 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
83 

sider and prescribe energy conservation standards or energy use 

standards for electricity used for purposes of circulating air 

through duct work. 

* * * * * * * 

(g) STANDARDS FOR DISHWASHERS; CLOTHES WASHERS; CLOTHES

DRYERS, FLUORESCENT LAMP BALLASTS.—

* * * * * * * 

(6) The standards described in paragraph (5) do not apply to 

(A) a ballast which is designed for dimming or for use in ambient temperatures of 0<< F or less, or (B) a ballast which has 

a power factor of less than 0.90 and is designed and labeled 

for use only in residential building applications. 

* * * * * * * 

(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: 

Application for operation of— Ballast input 

voltage 

Total nominal 

lamp watts 

Ballast efficacy factor 

One F34T12 lamp ................................................................................................... 120/277 34 2.61 

Two F34T12 lamps .................................................................................................. 120/277 68 1.35 

Two F96 T12/ES lamps ........................................................................................... 120/277 120 0.77

Two F96 T12HO/ES lamps ...................................................................................... 120/277 190 0.42 

(B) 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 subparagraphs (A) and (B) 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 20F 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. 

* * * * * * * 

84 

(o) CRITERIA FOR PRESCRIBING NEW OR AMENDED STANDARDS.—

* * * * * * * 

(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. 

* * * * * * * 

(p) PROCEDURE FOR PRESCRIBING NEW OR AMENDED STANDARDS.—[Any] Except as provided in subsection (u), any new or 

amended energy conservation standard shall be prescribed in accordance with the following procedure: 

* * * * * * * 

(u) SPECIAL RULEMAKING PROCEDURES.—(1) Notwithstanding any 

other provision of law, the Secretary may publish a notice of direct 

final rulemaking based on an energy conservation standard recommended by an interested person, if—

(A) in response to an advance notice of proposed rulemaking 

under paragraph (p), the interested person (including a representative of a manufacturer of a covered product, a conservation advocate, or consumer) submits a joint comment recommending an energy conservation standard; and 

(B) the Secretary determines that the energy conservation 

standard complies with the substantive provisions of this Act 

that apply to the type (or class) of covered products to which the 

rule may apply. 

(2) The Secretary shall publish a notice of direct final rulemaking 

under paragraph (1) with a notice of proposed rulemaking incorporating by reference the regulatory language of the direct final rule 

that provides for an effective date not earlier than 90 days after the 

date of publication. 

(3) The Secretary may withdraw a direct final rule published 

under paragraph (2) before the effective date of the rule if an interested person files a significant adverse comment in response to the 

related notice of proposed rulemaking. 

(v) BATTERY 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 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 

85 

(ii) suggested product classes for energy conservation 

standards. 

(D) 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) 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) 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. 

(w) SUSPENDED CEILING FANS AND REFRIGERATED BEVERAGE

VENDING MACHINES.—(1) Not later than 4 years after the date of enactment of this subsection, the Secretary shall prescribe, by rule, energy conservation standards for—

(A) suspended ceiling fans; and 

(B) refrigerated bottled or canned beverage vending machines. 

(2) In establishing energy conservation standards under this subsection, the Secretary shall use the criteria and procedures prescribed under subsections (o) and (p). 

(3) 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. 

(x) 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. 

86 

(y) 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. 

(z) LOW VOLTAGE DRY-TYPE DISTRIBUTION TRANSFORMERS.—The 

efficiency of a low voltage dry-type distribution transformer manufactured on or after January 1, 2006, 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). 

(aa) 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. 

(bb) 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. 

(cc) 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. 

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. 

(dd) DEHUMIDIFIERS.—(1) Dehumidifiers manufactured on or 

after October 1, 2007, shall have an Energy Factor that meets or exceeds the following values: 

87 

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) 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) 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. 

(ee) 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. 

(ff) MERCURY VAPOR LAMP BALLASTS.—Mercury vapor lamp ballasts shall not be manufactured or imported after January 1, 2008. 

(gg) APPLICATION DATE.—Section 327 applies— (1) to products for which energy conservation standards are 

to be established under subsection (l), (u), (v), or (w) 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), (v), or (w) for the product 

takes effect; and 

(2) to products for which energy conservation standards are 

established under subsections (x) 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 (x) through 

(ff) take effect. 

* * * * * * * 

EFFECT ON OTHER LAW

SEC. 327(a). * * * 

88 

(b). GENERAL RULE OF PREEMPTION FOR ENERGY CONSERVATION

STANDARDS BEFORE FEDERAL STANDARD BECOMES EFFECTIVE FOR

A PRODUCT.—

* * * * * * * 

(5) is a regulation concerning the water use of lavatory or 

kitchen faucets adopted by the State of Rhode Island prior to 

the date of the enactment of the Energy Policy Act of 1992; 

øor¿ 

(6) is a regulation (or portion thereof) concerning the water 

efficiency or water use of gravity tank-type low consumption 

water closets for installation in public places, except that such 

a regulation shall be effective only until January 1, 1997ø.¿; or 

(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’’. 

* * * * * * * 

ADMINISTRATIVE PROCEDURE AND JUDICIAL REVIEW

SEC. 336. (a). * * * 

(b)(2) Upon the filing of the petition referred to in paragraph (1), 

the court shall have jurisdiction to review the rule in accordance 

with chapter 7 of title 5, United States Code, and to grant appropriate relief as provided in øsuch chapter¿ that chapter, except, notwithstanding section 706(2)(D) of title 5, United States Code, no direct final rule prescribed or withdrawn under section 325(u) may be 

held unlawful or set aside because of the failure of the Secretary to 

observe a procedure required by law other than the procedures required under section 325(u). No rule under section 323, 324, or 325 

may be affirmed unless supported by substantial evidence. 

* * * * * * * 

CONSUMER EDUCATION

SEC. 337 (a). * * * 

(c) HVAC MAINTENANCE.—(1) 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. 

89 

(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 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; and 

(C) identifying financing options for energy efficiency upgrades. 

(2) The Secretary and the Administrator of the Small Business 

Administration shall make program information available directly 

to small businesses and through other Federal agencies, including 

the Federal Emergency Management Agency and the Department of 

Agriculture. 

* * * * * * * 

PART C—CERTAIN INDUSTRIAL EQUIPMENT 

DEFINITIONS 

SEC. 340. For purposes of this part— (1) The term ‘‘covered equipment’’ means one of the following 

types of industrial equipment: 

(A) Electric motors and pumps. 

(B) Small commercial package air conditioning and heating equipment. 

(C) Large commercial package air conditioning and heating equipment. 

(D) Very large commercial package air conditioning and 

heating equipment. 

(E) Commercial refrigerators, freezers, and refrigeratorfreezers. 

(F) Automatic commercial ice makers. 

(G) Commercial clothes washers. 

ø(D)¿ (H) Packaged terminal air-conditioners and packaged terminal heat pumps. 

ø(E)¿ (I) Warm air furnaces and packaged boilers. 

ø(F)¿ (J) Storage water heaters, instantaneous water 

heaters, and unfired hot water storage tanks. 

ø(G)¿ (K) Any other type of industrial equipment which 

the Secretary classifies as covered equipment under section 341(b). 

* * * * * * * 

(2)(B) The types of equipment referred to in this subparagraph (in addition to electric motors and pumps, øsmall and 

large commercial package air conditioning and heating equipment¿ commercial package air conditioning and heating equipment, commercial refrigerators, freezers, and refrigerator-freezVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00089 Fmt 6601 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
90 

ers, automatic commercial ice makers, commercial clothes 

washers, packaged terminal air-conditioners, packaged terminal heat pumps, warm air furnaces, packaged boilers, storage water heaters, instantaneous water heaters, and unfired 

hot water storage tanks) are as follows: 

* * * * * * * 

ø(8) The term ‘‘small 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 which are rated below 135,000 Btu per hour (cooling capacity).¿ 

ø(9) The term ‘‘large 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 which are rated at or above 135,000 Btu per hour and 

below 240,000 Btu per hour (cooling capacity).¿ 

(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 

91 

(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. 

(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 1 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 1 or more refrigerant compressors, refrigerant condensers, condenser fans 

and motors, and factory supplied accessories. 

* * * * * * * 

(19) The term ‘‘automatic commercial ice maker’’ means a factory-made assembly (not necessarily shipped in 1 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 softmount 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 

1 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. 

* * * * * * * 

SEC. 342. (a) øSMALL AND LARGE¿ SMALL, LARGE, AND VERY

LARGE Commercial Package Air Conditioning and Heating Equipment, Packaged Terminal Air Conditioners and Heat Pumps, 

92 

Warm-Air Furnaces, Packaged Boilers, Storage Water Heaters, Instantaneous Water Heaters, and Unfired Hot Water Storage 

Tanks.—

(1) Each small commercial package air conditioning and 

heating equipment manufactured on or after January 1, 1994 

but before January 1, 2010, shall meet the following standard 

levels: 

* * * * * * * 

(2) Each large commercial package air conditioning and heating equipment manufactured on or after January 1, 1995 but 

before January 1, 2010, shall meet the following standard levels: 

* * * * * * * 

(6)(A)(i) If ASHRAE/IES Standard 90.1, as in effect on øthe 

date of enactment of the Energy Policy Act of 1992¿ January 

1, 2010, is amended with respect to any 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, or if ASHRAE/IES Standard 90.1, as in effect on 

October 24, 1992, is amended with respect to any, packaged terminal air conditioners, packaged terminal heat pumps, warmair furnaces, packaged boilers, storage water heaters, instantaneous water heaters, or unfired hot water storage tanks, the 

Secretary shall establish an amended uniform national standard for that product at the minimum level for each effective 

date specified in the amended ASHRAE/IES Standard 90.1, 

unless the Secretary determines, by rule published in the Federal Register and supported by clear and convincing evidence, 

that adoption of a uniform national standard more stringent 

than such amended ASHRAE/IES Standard 90.1 for such product would result in significant additional conservation of energy and is technologically feasible and economically justified. 

(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. 

* * * * * * * 

(C)(i) * * * 

(ii) with respect to large commercial package air conditioning 

and heating equipment and very large commercial package air 

conditioning and heating equipment, on or after a date which 

is three years after the effective date of the applicable minVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00092 Fmt 6601 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
93 

imum energy efficiency requirement in the amended ASHRAE/ 

IES standard referred to in subparagraph (A); 

* * * * * * * 

(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—

(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 

94 

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). 

* * * * * * * 

(b) * * * 

(c) COMMERCIAL REFRIGERATORS, FREEZERS, AND REFRIGERATORFREEZERS.—(1) In this subsection: 

(A) The term ‘‘AV’’ means the adjusted volume (ft3) (defined 

as 1.63 × frozen temperature compartment volume (ft3) + 

chilled temperature compartment volume (ft3)) with compartment volumes measured in accordance with the Association of 

Home Appliance Manufacturers Standard HRF1–1979. 

(B) The term ‘‘V’’ means the chilled or frozen compartment 

volume (ft3) (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 doors .................................................................. 0.12 V + 3.34 

Freezers with solid doors ..................................................................................... 0.40 V + 1.38 

Freezers with transparent doors .......................................................................... 0.75 V + 4.10 

Refrigerators/freezers with solid doors the greater of ........................................ 0.27 AV¥0.71 or 0.70. 

95 

(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) 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) 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) 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) 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: 

Equipment type Type of 

cooling 

Harvest rate 

(lbs ice/24 hours) 

Maximum energy use 

(kWh/100 lbs ice) 

Maximum condenser water 

use 

(gal/100 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 (but not 

remote compressor).

Air .............. <1000 ..........................

≥1000 ..........................

8.85–0.0038H ..............

5.10 ..............................

Not Applicable. 

Remote Condensing and Remote Compressor.Air .............. <934 ............................

≥934 ............................

8.85–0.0038H ..............

5.3 ................................

Not Applicable 

Not Applicable. 

Self Contained ....................... Water .......... <200 ............................

≥200 ............................

11.40–0.019H ..............

7.60 ..............................

191–0.0315H 

191–0.0315H 

96 

Equipment type Type of 

cooling 

Harvest rate 

(lbs ice/24 hours) 

Maximum energy use 

(kWh/100 lbs ice) 

Maximum condenser water 

use 

(gal/100 lbs ice) 

Self Contained ....................... Air .............. <175 ............................

≥175 ............................

18.0–0.0469H ..............

9.80 ..............................

Not Applicable 

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) 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 

(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. 

(3)(A) 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) 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 

3. 

(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) 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. 

97 

(ii) 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) 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. 

* * * * * * * 

TEST PROCEDURES

SEC. 343. (a) * * * 

(4)(A) With respect to small commercial package air conditioning and heating equipment, large commercial package air 

conditioning and heating equipment very large commercial 

package air conditioning and heating equipment, packaged terminal air conditioners, packaged terminal heat pumps, warmair furnaces, packaged boilers, storage water heaters, instantaneous water heaters, and unfired hot water storage tanks to 

which standards are applicable under section 342, the test procedures shall be those generally accepted industry testing procedures or rating procedures developed or recognized by the 

Air-Conditioning and Refrigeration Institute or by the American Society of Heating, Refrigerating and Air Conditioning 

Engineers, as referenced in ASHRAE/IES Standard 90.1 and in 

effect on June 30, 1992. 

(B) If such an industry test procedure or rating procedure for 

small commercial package air conditioning and heating equipment, large commercial package air conditioning and heating 

equipment very large commercial package air conditioning and 

heating equipment, packaged terminal air conditioners, packaged terminal heat pumps, warm-air furnaces, packaged boilers, storage water heaters, instantaneous water heaters, or 

unfired hot water storage tanks is amended, the Secretary 

shall amend the test procedure for the product as necessary to 

be consistent with the amended industry test procedure or rating procedure 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 described in paragraphs (2) and (3) 

of this subsection. 

* * * * * * * 

(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 proceVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00097 Fmt 6601 Sfmt 6603 E:\HR\OC\SR078.XXX SR078
98 

dures 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 refrigerators-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 ( 2 degrees F) 

for refrigerator compartments and 0 degrees F ( 2 degrees 

F) for freezer compartments. 

(C) 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 subsection 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) 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) 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) 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 1 new test procedure 

for use in the standards program. 

(ii) If a new test procedure is adopted under clause (i)—

(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) 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 

99 

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). 

* * * * * * * 

(d)(1) Effective 180 days (or, in the case of small commercial 

package air conditioning and heating equipment, large commercial 

package air conditioning and heating equipment, very large commercial package air conditioning and heating equipment, commercial refrigerators, freezers, and refrigerator-freezers, automatic commercial ice makers, commercial clothes washers, packaged terminal 

air conditioners, packaged terminal heat pumps, warm-air furnaces, packaged boilers, storage water heaters, instantaneous 

water heaters, and unfired hot water storage tanks, 360 days) after 

a test procedure rule applicable to any covered equipment is prescribed under this section, no manufacturer, distributor, retailer, or 

private labeler may make any representation—

* * * * * * * 

LABELING REQUIREMENTS

SEC. 344. (a) * * * 

(e) Subject to subsection (h), not later than 12 months after the 

Secretary establishes test procedures for small commercial package 

air conditioning and heating equipment, large commercial package 

air conditioning and heating equipment, very large commercial 

package air conditioning and heating equipment, commercial refrigerators, freezers, and refrigerator-freezers, automatic commercial ice 

makers, commercial clothes washers, packaged terminal air conditioners, packaged terminal heat pumps, warm-air furnaces, packaged boilers, storage water heaters, instantaneous water heaters, 

and unfired hot water storage tanks under section 343, the Secretary shall prescribe labeling rules under this section for such 

equipment. Such rules shall provide that the labeling of any small 

commercial package air conditioning and heating equipment, large 

commercial package air conditioning and heating equipment, very 

large commercial package air conditioning and heating equipment, 

commercial refrigerators, freezers, and refrigerator-freezers, automatic commercial ice makers, commercial clothes washers, packaged terminal air conditioner, packaged terminal heat pump, 

warm-air furnace, packaged boiler, storage water heater, instantaneous water heater, and unfired hot water storage tank manufactured after the 12-month period beginning on the date the Secretary prescribes such rules shall—

100 

(1) indicate the energy efficiency of the equipment on the 

permanent nameplate attached to such equipment or other 

nearby permanent marking; 

(2) prominently display the energy efficiency of the equipment in new equipment catalogs used by the manufacturer to 

advertise the equipment; and 

(3) include such other markings as the Secretary determines 

necessary solely to facilitate enforcement of the standards established for such equipment under section 342. 

* * * * * * * 

ADMINISTRATION, ENFORCEMENT, PENALTIES, AND PREEMPTION

SEC. 345(a) * * * 

(7) section 327(b)(4) shall be applied as if electric motors 

were fluorescent lamp ballasts and as if paragraph (5) of section 325(g) were section 342; øand¿ 

(8) notwithstanding any other provision of law, a regulation 

or other requirement adopted by a State or subdivision of a 

State contained in a State or local building code for new construction concerning the energy efficiency or energy use of an 

electric motor covered under this part is not superseded by the 

standards for such electric motor established or prescribed 

under section 342(b) if such regulation or requirement is identical to the standards established or prescribed under such 

sectionø.¿; and 

(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. 

* * * * * * * 

(b)(1) The provisions of section 325(u), section 326(a), (b), and (d), 

section 327(a), and sections 328 through 336 shall apply with respect to the equipment specified in subparagraphs (B), (C), (D), (E), 

and (F) of section 340(1) to the same extent and in the same manner as they apply in øpart B¿ part A. In applying such provisions 

for the purposes of such equipment, paragraphs (1), (2), (3), and (4) 

of subsection (a) shall apply. 

* * * * * * * 

(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. 

(2) 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) 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. 

101 

(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) 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) As part of certification, information on equipment energy use 

and interior volume shall be made available to the Secretary. 

(f)(1)(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)(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. 

102 

(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 subsection 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. 

* * * * * * * 

STATE ENERGY CONSERVATION PLANS

SEC. 362 (a) * * * 

(g)(1) 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 the State submitted under subsection (b) or (e). 

(2) A review conducted under paragraph (1) should—

(A) consider the energy conservation plans of other States 

within the region; and 

103 

(B) identify opportunities and actions carried out in pursuit 

of common energy conservation goals. 

* * * * * * * 

STATE ENERGY EFFICIENCY GOALS

øSEC. 364. Each State energy conservation plan with respect to 

which assistance is made available under this part on or after October 1, 1991, shall contain a goal, consisting of an improvement 

of 10 percent or more in the efficiency of use of energy in the State 

concerned in the calendar year 2000 as compared to the calendar 

year 1990, and may contain interim goals.¿ 

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— (1) shall contain a goal, consisting of an improvement of 25 

percent or more in the efficiency of use of energy in the State 

concerned in calendar year 2012 as compared to calendar year 

1992; and 

(2) may contain interim goals. 

* * * * * * * 

GENERAL PROVISIONS

SEC. 365 (a). * * * 

(e) For the purpose of carrying out this part, there are authorized 

to be appropriated for øfiscal years 1999 through 2003 such sums 

as may be necessary¿ $100,000,000 for each of fiscal years 2006 

and 2007 and $125,000,000 for fiscal year 2008. 

* * * * * * * 

PART J—ENCOURAGING THE USE OF ALTERNATIVE 

FUELS 

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

(a) DEPARTMENT OF ENERGY PROGRAM.—

* * * * * * * 

(3) * * * 

ø(E) Dual fueled vehicles acquired pursuant to this section shall be operated on alternative fuels unless the Secretary determines that operation on such alternative fuels 

is not feasible.¿ 

(E)(i) Dual fueled vehicles acquired pursuant to this section shall be operated on alternative fuels unless the Secretary determines that an agency qualifies for a waiver of 

the requirements of this section 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 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 expenVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00103 Fmt 6601 Sfmt 6603 E:\HR\OC\SR078.XXX SR078
104 

sive compared to gasoline, as certified to the Secretary 

by the head of the agency. 

(ii) The Secretary shall monitor compliance with this 

subparagraph by all fleets receiving a waiver. 

(iii) The Secretary shall report annually to Congress on 

the extent to which the requirements of this subparagraph 

are being achieved, including information on annual reductions achieved from the use of petroleum-based fuels and 

the problems, if any, encountered in acquiring alternative 

fuels. 

UNITED STATES HOUSING ACT OF 1937—ACT 

OF SEPTEMBER 1, 1937, CHAPTER 896, AS 

AMENDED (42 U.S.C. 1437 ET SEQ.) 

* * * * * * * 

SEC. 9. * * * 

(d) * * * 

(1) * * * 

(I) capital expenditures to improve the security and safety of residentsø; and¿; 

(J) homeownership activities, including programs under 

section 32ø.¿; 

(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. 

* * * * * * * 

(e) * * * 

(2) * * * 

(C) TREATMENT OF SAVINGS.—øThe treatment¿ (i) IN

GENERAL.—The treatment of utility and waste management 

costs under the formula shall provide that a public housing 

agency shall receive the full financial benefit from any reduction in the cost of utilities or waste management resulting from any contract with a third party to undertake 

energy conservation improvements in one or more of its 

public housing projects. 

(ii) Third party contracts.—Contracts described in clause 

(i) may include contracts for—

(I) equipment conversions to less costly utility 

sources; 

(II) projects with resident-paid utilities; and (III) adjustments to frozen base year consumption, including 

systems repaired to meet applicable building and safety 

105 

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— (I) windows; 

(II) heating system replacements; 

(III) wall insulation; 

(IV) site-based generation; and 

(V) advanced energy savings technologies, including 

renewable energy generation and other such retrofits. 

CRANSTON-GONZALEZ NATIONAL AFFORDABLE HOUSING ACT—PUBLIC LAW 101–625, 

AS AMENDED (42 U.S.C. 12701 ET SEQ.) 

SEC. 109. (a) * * * 

(1) IN GENERAL.—The Secretary of Housing and Urban Development and the Secretary of Agriculture shall, not later 

than ø1 year after the date of the enactment of the Energy Policy Act of 1992¿ September 30, 2006, jointly establish, by rule, 

energy efficiency standards for—

(A) new construction of public and assisted housing and 

single family and multifamily residential housing (other 

than manufactured homes) subject to mortgages insured 

under the National Housing Actø; and¿; 

(B) new construction of single family housing (other than 

manufactured homes) subject to mortgages insured, guaranteed, or made by the Secretary of Agriculture under title 

V of the Housing Act of 1949ø.¿; and 

(C) rehabilitation and new construction of public and assisted housing funded by HOPE VI revitalization grants, 

established 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. 

(2) CONTENTS.—Such standards shall meet or exceed the requirements of the Council of American Building Officials Model 

Energy Code, 1992 (hereafter in this section referred to as 

‘‘CABO Model Energy Code, 1992’’), or, in the case of multifamily high rises, the requirements of the American Society of 

Heating, Refrigerating, and Air-Conditioning Engineers Standard 90.1–1989 (hereafter in this section referred to as ‘‘ASHRAE Standard 90.1–1989’’), and, with respect to rehabilitation and new construction of public and assisted housing 

funded by HOPE VI revitalization grants, established under 

section 24 of the United States Housing Act of 1937 (42 U.S.C. 

1437v), the 2003 International Energy Conservation Code, and 

shall be cost-effective with respect to construction and operating costs on a life-cycle cost basis. In developing such standards, the Secretaries shall consult with an advisory task force 

composed of homebuilders, national, State, and local housing 

106 

agencies (including public housing agencies), energy agencies, 

building code organizations and agencies, energy efficiency organizations, utility organizations, low-income housing organizations, and other parties designated by the Secretaries. 

(b) MODEL ENERGY CODE.—If the Secretaries have not, øwithin 

1 year after the date of the enactment of the Energy Policy Act of 

1992¿ by September 30, 2006, established energy efficiency standards under subsection (a), all new construction of housing specified 

in such subsection shall meet the requirements of CABO Model Energy Code, 1992, or, in the case of multifamily high rises, the requirements of ASHRAE Standard 90.1–1989), and, with respect to 

rehabilitation and new construction of public and assisted housing 

funded by HOPE VI revitalization grants, established under section 

24 of the United States Housing Act of 1937 (42 U.S.C. 1437v), the 

2003 International Energy Conservation Code. 

(c) REVISIONS OF MODEL ENERGY CODE and the International 

Energy Conservation Code.—If the requirements of CABO Model 

Energy Code, 1992, or, in the case of multifamily high rises, 

ASHRAE Standard 90.1–1989 or, with respect to rehabilitation and 

new construction of public and assisted housing funded by HOPE 

VI revitalization grants, established under section 24 of the United 

States Housing Act of 1937 (42 U.S.C. 1437v), the 2003 International Energy Conservation Code are revised at any time, the Secretaries shall, not later than 1 year after such revision, amend the 

standards established under subsection (a) to meet or exceed the 

requirements of such revised code or standard unless the Secretaries determine that compliance with such revised code or standard would not result in a significant increase in energy efficiency 

or would not be technologically feasible or economically justified. 

ENERGY POLICY ACT OF 1992—PUBLIC LAW 

102–486, AS AMENDED (42 U.S.C. 13211 ET SEQ.) 

* * * * * * * 

SECTION 1. SHORT TITLE; TABLE OF CONTENTS 

* * * * * * * 

TITLE III—NATURAL GAS 

* * * * * * * 

øSec. 306.—Agency Incentives Program.¿ 

Sec. 306—Federal agency ethanol-blended gasoline and biodiesel purchasing requirements. 

* * * * * * * 

TITLE V—AVAILABILITY AND USE OF REPLACEMENT FUELS, 

ALTERNATIVE FUELS, AND ALTERNATIVE FUELED PRIVATE VEHICLES 

* * * * * * * 

øSec. 514. Authorization of Appropriations.¿ 

Sec. 514. Alternative compliance. 

Sec. 515. Authorization of appropriations. 

Sec. 516. Termination of authority. 

* * * * * * * 

107 

TITLE XXXVI—INDIAN ENERGY RESOURCES 

øSec. 2601. Definitions. 

øSec. 2602. Tribal Consultation. 

øSec. 2603. Promoting energy resource development and energy vertical integration 

on Indian reservations. 

øSec. 2604. Indian energy resource regulation. 

øSec. 2605. Indian Energy Resource Commission. 

øSec. 2606. Tribal government energy assistance program.¿ 

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. 

* * * * * * * 

TITLE III—ALTERNATIVE FUELS—GENERAL 

* * * * * * * 

SEC. 303. MINIMUM FEDERAL FLEET REQUIREMENT. 

* * * * * * * 

(c) ALLOCATION OF INCREMENTAL COSTS.—The General Services 

Administration and any other Federal agency that procures motor 

vehicles for distribution to other Federal agencies ømay¿ shall allocate the incremental cost of alternative fueled vehicles over the cost 

of comparable gasoline vehicles across the entire fleet of motor vehicles distributed by such agency. 

* * * * * * * 

øSEC. 306. AGENCY INCENTIVES PROGRAM. 

ø(a) REDUCTION IN RATES.—To encourage and promote use of alternative fueled vehicles in Federal agencies, the Administrator of 

General Services may offer a reduction in fees charged to agencies 

for the lease of alternative fueled vehicles below those fees charged 

for the lease of comparable conventionally fueled motor vehicles. 

ø(b) SUNSET PROVISION.—This section shall cease to be effective 

3 years after the date of the enactment of this Act.¿ 

SEC. 306. FEDERAL AGENCY ETHANOL-BLENDED GASOLINE AND BIODIESEL PURCHASING REQUIREMENT. 

(a) ETHANOL-BLENDED GASOLINE.—The head of each Federal 

agency shall ensure that, in areas in which ethanol-blended gasoline is reasonably available at a generally competitive price, the 

Federal agency purchases ethanol-blended gasoline containing at 

least 10 percent ethanol rather than nonethanol-blended gasoline, 

for use in vehicles used by the agency that use gasoline. 

(b) BIODIESEL.—

(1) DEFINITION OF BIODIESEL.—In this subsection, the term 

‘‘biodiesel’’ has the meaning given the term in section 312(f). 

(2) REQUIREMENT.—The head of each Federal agency shall 

ensure that the Federal agency purchases, for use in fueling 

fleet vehicles that use diesel fuel used by the Federal agency at 

the location at which fleet vehicles of the Federal agency are 

centrally fueled, in areas in which the biodiesel-blended diesel 

108 

fuel described in subparagraphs (A) and (B) is available at a 

generally competitive price— (A) as of the date that is 5 years after the date of enactment of this paragraph, biodiesel-blended diesel fuel that 

contains at least 20 percent biodiesel, rather than 

nonbiodiesel-blended diesel fuel; and 

(B) as of the date that is 10 years after the date of enactment of this paragraph, biodiesel-blended diesel fuel that 

contains at least 20 percent biodiesel, rather than 

nonbiodiesel-blended diesel fuel. 

(3) REQUIREMENT OF FEDERAL LAW.—The provisions of this 

subsection shall not be considered a requirement of Federal law 

for the purposes of section 312. 

(c) EXEMPTION.—This section does not apply to fuel used in vehicles excluded from the definition of ‘‘fleet’’ by subparagraphs (A) 

through (H) of section 301(9). 

* * * * * * * 

SEC. 310. REPORTS. 

* * * * * * * 

(b) COMPLIANCE REPORT.— (1) IN GENERAL.—Not later than ø1 year after the date of enactment of this subsection¿ February 15, 2006, and annually 

thereafter for the next 14 years, the head of each Federal agency which is subject to this Act and Executive Order No. 13031 

shall prepare, and submit to Congress, a report that—

* * * * * * * 

TITLE V—AVAILABILITY AND USE OF REPLACEMENT FUELS, ALTERNATIVE FUELS, 

AND ALTERNATIVE FUELED PRIVATE VEHICLES 

* * * * * * * 

SEC. 508. CREDITS. 

(a) IN GENERAL.—øThe Secretary¿ 

(1) The Secretary shall allocate a credit to a fleet or covered 

person that is required to acquire an alternative fueled vehicle 

under this title, if that fleet or person acquires an alternative 

fueled vehicle in excess of the number that fleet or person is 

required to acquire under this title or acquires an alternative 

fueled vehicle before the date that fleet or person is required 

to acquire an alternative fueled vehicle under such title. 

(2) Not later than January 31, 2007, the Secretary shall—

(A) allocate credit in an amount to be determined by the 

Secretary for—

(i) acquisition of—

(I) a light-duty hybrid electric vehicle; 

(II) a plug-in hybrid electric vehicle; 

(III) a fuel cell electric vehicle; 

(IV) a medium- or heavy-duty dedicated vehicle; 

and (ii) investment in qualified alternative fuel inVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00108 Fmt 6601 Sfmt 6603 E:\HR\OC\SR078.XXX SR078
109 

frastructure or nonroad equipment, as determined 

by the Secretary; and 

(B) allocate more than 1, but not to exceed 5 credits for 

investment in an emerging technology relating to any vehicle described in subparagraph (A) to encourage— (i) a reduction in petroleum demand; 

(ii) technological advancement; and 

(iii) environmental safety. 

* * * * * * * 

øSEC. 514. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated to the Secretary for carrying out this title $10,000,000 for each of the fiscal years 1993 

through 1997, and such sums as may be necessary for fiscal years 

1998 through 2000.¿ 

SEC. 514. 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) REVOCATION OF WAIVER.—The Secretary shall revoke any 

waiver granted under this section if the State or covered person fails 

to comply with subsection (b). 

* * * * * * * 

SEC. 516. TERMINATION OF AUTHORITY. 

The authority provided by sections 501, 507, and 508 terminates 

the earlier of—

(1) September 30, 2015; or 

(2) the date, the Secretary has established, by rule, a replacement program that achieves the goals of those sections. 

* * * * * * * 

SEC. 1212. RENEWABLE ENERGY PRODUCTION INCENTIVE. 

(a) INCENTIVE PAYMENTS.—

110 

(1) For electric energy generated and sold by a qualified renewable energy facility during the incentive period, the Secretary shall make, subject to the availability of appropriations, 

incentive payments to the owner or operator of such facility. 

(2) The amount of such payment made to any such owner or 

operator shall be as determined under subsection (e). 

(3) 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 øand which satisfies such other requirements as the 

Secretary deems necessary.¿ 

(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, 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). øSuch application shall be 

in such form, and shall be submitted at such time, as the Secretary shall establish.¿ 

(b) QUALIFIED RENEWABLE ENERGY FACILITY.—For purposes of 

this section, a qualified renewable energy facility is a facility which 

is owned by øa State or any political subdivision of a State (or an 

agency, authority, or instrumentality of a State or a political subdivision), by any corporation or association which is wholly owned, 

directly or indirectly, by one or more of the foregoing, or by a nonprofit electrical cooperative¿ a not-for-profit electric cooperative, a 

public utility described in section 115 of the Internal Revenue Code 

of 1986, a State, Commonwealth, territory, or possession of the 

United States, or the District of Columbia, or a political subdivision 

thereof, or an Indian tribal government or subdivision thereof, and 

which generates electric energy for sale in, or affecting, interstate 

commerce using solar, wind, biomass, landfill gas or geothermal energy, except that—

(1) the burning of municipal solid waste shall not be treated 

as using biomass energy; and 

(2) geothermal energy shall not include energy produced 

from a dry steam geothermal reservoir which has—

(A) no mobile liquid in its natural state; 

(B) steam quality of 95 percent water; and 

(C) an enthalpy for the total produced fluid greater than 

or equal to 1200 Btu/lb (British thermal units per pound). 

(c) ELIGIBILITY WINDOW.—Payments may be made under this 

section only for electricity generated from a qualified renewable energy facility first used øduring the 10-fiscal year period beginning 

with the first full fiscal year occurring after the enactment of this 

section¿ before October 1, 2016. 

111 

(d) PAYMENT PERIOD.—A qualified renewable energy facility may 

receive payments under this section for a 10-fiscal year period. 

Such period shall begin with the fiscal year in which electricity 

generated from the facility is first eligible for such payments, or in 

which the Secretary determines that all necessary Federal and State 

authorizations have been obtained to begin construction of the facility. 

(e) AMOUNT OF PAYMENT.— (1) IN GENERAL.—Incentive payments made by the Secretary 

under this section to the owner or operator of any qualified renewable energy facility shall be based on the number of kilowatt hours of electricity generated by the facility through the 

use of solar, wind, biomass, landfill gas or geothermal energy 

during the payment period referred to in subsection (d). For 

any facility, the amount of such payment shall be 1.5 cents per 

kilowatt hour, adjusted as provided in paragraph (2). 

(2) ADJUSTMENTS.—The amount of the payment made to any 

person under this subsection as provided in paragraph (1) shall 

be adjusted for inflation for each fiscal year beginning after 

calendar year 1993 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 

1993 shall be substituted for calendar year 1979. 

(f) SUNSET.—No payment may be made under this section to any 

facility after øthe expiration of the 20-fiscal year period beginning 

with the first full fiscal year occurring after the enactment of this 

section,¿ September 30, 2026 and no payment may be made under 

this section to any facility after a payment has been made with respect to such facility for a 10-fiscal year period. 

ø(g) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated to the Secretary for fiscal years 1993, 1994, and 

1995 such sums as may be necessary to carry out the purposes of 

this section.¿ 

(g) AUTHORIZATION OF APPROPRIATIONS.—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. 

* * * * * * * 

øTITLE XXVI—INDIAN ENERGY RESOURCES 

øSEC. 2601. DEFINITIONS. 

øFor purposes of this title—

ø(1) the term ‘‘Indian tribe’’ means any Indian tribe, band, 

nation, or other organized group or community, including any 

Alaska Native village or regional or village corporation as defined in or established pursuant to the Alaska Native Claims 

Settlement Act (43 U.S.C. 1601 et seq.), which is recognized as 

eligible for the special programs and services provided by the 

United States to Indians because of their status as Indians; 

and 

ø(2) the term ‘‘Indian reservation’’ includes Indian reservations; public domain Indian allotments; former Indian reservaVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00111 Fmt 6601 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
112 

tions in Oklahoma; land held by incorporated Native groups, 

regional corporations, and village corporations under the provisions of the Alaska Native Claims Settlement Act (43 U.S.C. 

1601 et seq.); and dependent Indian communities within the 

borders of the United States whether within the original or 

subsequently acquired territory thereof, and whether within or 

without the limits of a State. 

øSEC. 2602. TRIBAL CONSULTATION. 

øIn implementing the provisions of this Act, the Secretary of 

Energy shall involve and consult with Indian tribes to the 

maximum extent possible and where appropriate and shall do 

so in a manner that is consistent with the Federal trust and 

the Government-to-Government relationships between Indian 

tribes and the Federal Government. 

øSEC. 2603. PROMOTING ENERGY RESOURCE DEVELOPMENT AND ENERGY VERTICAL INTEGRATION ON INDIAN RESERVATIONS. 

ø(a) DEMONSTRATION PROGRAMS.—The Secretary of Energy, in 

consultation with the Secretary of the Interior, shall establish and 

implement a demonstration program to assist Indian tribes in pursuing energy self-sufficiency and to promote the development of a 

vertically integrated energy industry on Indian reservations, in 

order to increase development of the substantial energy resources 

located on such Indian reservations. Such program shall include, 

but not be limited to, the following components: 

ø(1) The Secretary shall provide development grants to Indian tribes or to joint ventures which are 51 percent or more 

controlled by an Indian tribe to assist Indian tribes in obtaining the managerial and technical capability needed to develop 

the energy resources on Indian reservations. Such grants shall 

include provisions for management training for tribal or village 

members, improving the technical capacity of the Indian tribe, 

and the reduction of tribal unemployment. Each grant shall be 

for a period of 3 years. 

ø(2) The Secretary shall provide grants, not to exceed 50 percent of the project costs, for vertical integration projects. For 

purposes of this paragraph, the term ‘‘vertical integration 

project’’ means a project that promotes the vertical integration 

of the energy resources on an Indian reservation, so that the 

energy resources are used or processed on such Indian reservation. Such term includes, but is not limited to, projects involving solar and wind energy, oil refineries, the generation and 

transmission of electricity, hydroelectricity, cogeneration, natural gas distribution, and clean, innovative uses of coal. 

ø(3) The Secretary shall provide technical assistance (and 

such other assistance as is appropriate) to Indian tribes for energy resource development and to promote the vertical integration of energy resources on Indian reservations. 

ø(b) LOW INTEREST LOANS.—

ø(1) IN GENERAL.—The Secretary shall establish a program 

for making low interest loans to Indian tribes. Such loans shall 

be used exclusively by Indian tribes in the promotion of energy 

resource development and vertical integration on Indian reservations. 

113 

ø(2) TERMS.—The Secretary shall establish reasonable terms 

for loans made under this section which are to be used to carry 

out the purposes of this section. 

ø(c) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated—

ø(1) $10,000,000 for each of the fiscal years 1994, 1995, 1996, 

and 1997 to carry out the purposes of subsection (a)(1); 

ø(2) $10,000,000 for each of the fiscal years 1994, 1995, 1996, 

and 1997 to carry out the purposes of subsection (a)(2); and 

ø(3) $10,000,000 for each of the fiscal years 1994, 1995, 1996, 

and 1997 to carry out the purposes of subsection (b). 

øSEC. 2604. INDIAN ENERGY RESOURCE REGULATION. 

ø(a) GRANTS.—The Secretary of the Interior is authorized to 

make annual grants to Indian tribes for the purpose of assisting Indian tribes in the development, administration, implementation, 

and enforcement of tribal laws and regulations governing the development of energy resources on Indian reservations. 

ø(b) PURPOSE.—The purposes for which funds provided under a 

grant awarded under subsection (a) may be used include, but are 

not limited to—

ø(1) the training and education of employees responsible for 

enforcing or monitoring compliance with Federal and tribal 

laws and regulations; 

ø(2) the development of tribal inventories of energy resources; 

ø(3) the development of tribal laws and regulations; 

ø(4) the development of tribal legal and governmental infrastructure to regulate environmental quality pursuant to Federal and tribal laws; and 

ø(5) the enforcement and monitoring of Federal and tribal 

laws and regulations. 

ø(c) OTHER ASSISTANCE.—The Secretary of the Interior and the 

Secretary of Energy shall cooperate with and provide assistance to 

Indian tribes for the purpose of assisting Indian tribes in the development, administration, and enforcement of tribal programs. Such 

cooperation and assistance shall include the following: 

ø(1) Technical assistance and training, including the provision of necessary circulars and training materials. 

ø(2) Assistance in the preparation and maintenance of a continuing inventory of information on tribal energy resources and 

tribal operations. In providing assistance under this para 

graph, Federal departments and agencies shall make available 

to Indian tribes all relevant data concerning tribal energy resource development consistent with applicable laws regarding 

disclosure of proprietary and confidential information. 

ø(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated $10,000,000 for each of the fiscal years 1994, 

1995, 1996, and 1997 to carry out the purposes of this section. 

øSEC. 2605. INDIAN ENERGY RESOURCE COMMISSION. 

ø(a) ESTABLISHMENT.—There is hereby established the Indian 

Energy Resource Commission (hereafter in this section referred Ito 

as the ‘‘Commission’’). 

ø(b) MEMBERSHIP.—The Commission shall consist of—

114 

ø(1) 8 members appointed by the Secretary of the Interior 

from recommendations submitted by Indian tribes with developable energy resources, at least 4 of whom shall be elected 

tribal leaders; 

ø(2) 3 members appointed by the Secretary of the Interior 

from recommendations submitted by the Governors of States 

that have Indian reservations with developable energy resources; 

ø(3) 2 members appointed by the Secretary of the Interior 

from among individuals in the private sector with expertise in 

tribal and State taxation of energy resources; 

ø(4) 2 members appointed by the Secretary of the Interior 

from individuals with expertise in oil and gas royalty management administration, including auditing and accounting; 

ø(5) 2 members appointed by the Secretary of the Interior 

from individuals in the private sector with expertise in energy 

development; 

ø(6) 1 member appointed by the Secretary of the Interior 

from recommendations submitted by National environmental 

organizations; 

ø(7) the Secretary of the Interior, or his designee; and 

ø(8) the Secretary of Energy, or his designee. 

ø(c) APPOINTMENTS.—Members of the Commission shall be appointed not later than 60 days after the date of the enactment of 

this title. 

ø(d) VACANCIES.—A vacancy in the Commission shall be filled in 

the same manner as the original appointment was made. A vacancy in the Commission shall not affect the powers of the Commission. 

ø(e) CHAIRPERSON.—The members of the Commission shall elect 

a Chairperson from among the members of the Commission. 

ø(f) QUORUM.—Eleven members of the Commission shall constitute a quorum, but a lesser number may hold hearings. 

ø(g) ORGANIZATIONAL MEETING.—The Commission shall hold an 

organizational meeting to establish the rules and procedures of the 

Commission not later than 30 days after the members are first appointed to the Commission. 

ø(h) COMPENSATION.—Each member of the Commission who is 

not an officer or employee of the United States shall be compensated at a rate established by the Commission, not to exceed 

the rate of basic pay payable for level IV of the Executive Schedule 

under section 5315 of title.5, United States Code, for each day (including travel time) during which such member is engaged in the 

actual performance of duties as a member of the Commission. Each 

member of the Commission who is an officer or employee of the 

United States shall receive no additional compensation. 

ø(i) TRAVEL.—While away from their homes or regular places of 

business in the performance of duties for the Commission, all members of the Commission shall be allowed travel expenses, including 

per diem in lieu of subsistence, at a rate established by the Commission not to exceed the rates authorized for employees under sections 5702 and 5703 of title 5, United States Code. 

ø(j) COMMISSION STAFF.—

115 

ø(1) EXECUTIVE DIRECTOR.—The Commission shall appoint 

an Executive Director who shall be compensated at a rate established by the Commission not to exceed the rate of basic 

pay payable for level V of the Executive Schedule under section 

5316 of title 5, United States Code. 

ø(2) ADDITIONAL PERSONNEL.—With the approval of the 

Commission, the Executive Director may appoint and fix the 

compensation of such additional personnel as the Executive Director considers necessary to carry out the duties of the Commission. Such appointments shall be made in accordance with 

the provisions of title 5, United States Code, governing appointments in the competitive service, but at rates not to exceed the rate of basic pay payable for level 15 of the General 

Schedule. 

ø(3) EXPERTS AND CONSULTANTS.—Subject to such rules as 

may be issued by the Commission, the Chairperson may procure temporary and intermittent services of experts and consultants to the same extent as is authorized by section 3109 of 

title 5, United States Code, but at rates not to exceed $200 a 

day for individuals. 

ø(4) PERSONNEL DETAIL AUTHORIZED.—Upon the request of 

the Chairperson, the head of any Federal agency is authorized 

to detail, on a reimbursable basis, any of the personnel of such 

agency to the Commission to assist the Commission in carrying 

out its duties under this title. Such detail shall be without 

interruption or loss of civil service status or privilege. 

ø(k) DUTIES OF THE COMMISSION.—The Commission shall— ø(1) Develop proposals to address the dual taxation by Indian tribes and States of the extraction of mineral resources on 

Indian reservations; 

ø(2) make recommendations to improve the management, administration, accounting and auditing of royalties associated 

with the production of oil and gas on Indian reservations; 

ø(3) develop alternatives for the collection and distribution of 

royalties associated with production of oil and gas on Indian 

reservations; 

ø(4) develop proposals on incentives to foster the development of energy resources on Indian reservations; 

ø(5) identify barriers or obstacles to the development of energy resources on Indian reservations, and make recommendations designed to foster the development of energy resources on 

Indian reservations and promote economic development; 

ø(6) develop proposals for the promotion of vertical integration of the development of energy resources on Indian reservations; and 

ø(7) develop proposals on taxation incentives to foster the development of energy resources on Indian reservations including, but not limited to, investment tax credits and enterprise 

zone credits. 

ø(l) POWERS OF THE COMMISSION.—The powers of the Commission shall include the following: 

ø(1) For the purpose of carrying out its duties under this section, the Commission may hold hearings, take testimony, and 

receive evidence at such times and places as the Commission 

116 

considers appropriate. The Commission may administer oaths 

or affirmations to witnesses appearing before the Commission. 

ø(2) Any member or employee of the Commission may, if authorized by the Commission, take any action which the Commission is authorized to take by this section. 

ø(3) The Commission may secure directly from any Federal 

agency such information as may be necessary to enable the 

Commission to carry out its duties under this section. 

ø(m) COMMISSION REPORT.— ø(1) IN GENERAL.—The Commission shall, within 12 months 

after funds are made available to carry out this section, prepare and transmit to the President, the Committee on Interior 

and Insular Affairs of the House of Representatives, the Select 

Committee on Indian Affairs: of the Senate, and the Committee on Energy and Natural Resources of the Senate, a report containing the recommendations and proposals specified 

in subsection (k). 

ø(2) REVIEW AND COMMENT.—Prior to submission of the report required under this section, the Chairman shall circulate 

a draft of the report to Indian tribes and States that have Indian reservations with developable energy resources and other 

interested tribes and States for review and comment. 

ø(n) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated to the Commission $1,000,000 to carry out this 

section. Such sum shall remain available, without fiscal year limitation, until expended. 

ø(o) TERMINATION.—The Commission shall terminate 30 days 

after submitting the final report required by subsection (m). 

øSEC. 2606. TRIBAL GOVERNMENT ENERGY ASSISTANCE PROGRAM. 

ø(a) FINANCIAL ASSISTANCE.—The Secretary may grant financial 

assistance to Indian tribal governments, or private sector persons 

working in cooperation with Indian tribal governments, to carry 

out projects to evaluate the feasibility of, develop options for, and 

encourage the adoption of energy efficiency and renewable energy 

projects on Indian reservations. Such grants may include the costs 

of technical assistance in resource assessment, feasibility analysis, 

technology transfer, and the resolution of other technical, financial, 

or management issues identified by the applicants for such grants. 

ø(b) CONDITIONS.—Any applicant for financial assistance under 

this section must evidence coordination and cooperation with, and 

support from, local educational institutions and the affected local 

energy institutions. 

ø(c) CONSIDERATIONS.—In determining the amount of financial 

assistance to be provided for a proposed project, the Secretary shall 

consider—

ø(1) the extent of involvement of local educational institutions and local energy institutions; 

ø(2) the ease and costs of operation and maintenance of any 

project contemplated as a part of the project; 

ø(3) whether the measure will contribute significantly to the 

development, or the quality of the environment, of the affected 

Indian reservations; and 

ø(4) any other factors which the Secretary may determine to 

be relevant to a particular project. 

117 

ø(d) COST-SHARE.—With the exception of grants awarded for the 

purpose of feasibility studies, the Secretary shall require at least 

20 percent of the costs of any project under this section to be provided from non-Federal sources, unless the grant recipient is a forprofit private sector institution, in which case the Secretary shall 

require at least 50 percent of the costs of any project to be provided 

from non-Federal sources. 

ø(e) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to appropriated such sums as are necessary for the development 

and implementation of the program established by this section.¿ 

TITLE XXVI—INDIAN ENERGY 

SEC. 2601. 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 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 particular State. 

(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). 

(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, transporVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00117 Fmt 6601 Sfmt 6603 E:\HR\OC\SR078.XXX SR078
118 

tation 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 2 or more entities, at least 1 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. 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) 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; and 

(C) 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. 

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(3) 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 PLAN- NING 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 

(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 

tribal 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 

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tribe with inadequate electric service (as determined by the Director). 

(5) The Secretary of Energy may issue such regulations as the 

Secretary determines to be necessary to carry out this subsection. 

(6) 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 evaluating energy development proposals for which the 

Secretary of Energy may provide a loan guarantee under paragraph (1), the Secretary of Energy shall give priority to any 

project that uses a new technology, such as coal gasification, 

carbon capture and sequestration, or renewable energy-based 

electricity generation, if competing proposals are similar with 

respect to the level at which the proposals meet or exceed the 

criteria established by the Secretary of Energy for the loan 

guarantee program. 

(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. 

(5) 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) 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 

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(B) obtain less than prevailing market terms and conditions. 

SEC. 2603. 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 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. 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—

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(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 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 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—

(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-ofway is authorized by a tribal energy resource agreement approved 

by the Secretary under subsection (e)(2). 

(e) TRIBAL ENERGY RESOURCE AGREEMENTS.—

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(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) Not later than 1 year 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; 

(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 

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(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. 

(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 rightof-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 the 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; 

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(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 the review and 

evaluation under subparagraph (D) to be conducted once 

every 2 years. 

(3) The Secretary shall provide notice and opportunity for 

public comment on tribal energy resource agreements submitted 

for approval under paragraph (1). 

(4) 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) 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, 

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126 

source 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) a copy of the lease, business agreement, or right-ofway 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 

terms of any lease, business agreement, or right-of-way 

under this section; or 

(ii) any provision in a lease, business agreement, or rightof-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). 

127 

(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) Not later than 20 days after the date on which the Secretary receives a petition under subparagraph (B), the Secretary 

shall—

(I) 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) 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) 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, 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—

128 

(i) make a written determination that describes the manner in which the tribal energy resource agreement has been 

violated; 

(ii) provide the Indian tribe with a written notice of the 

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) 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-ofway 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 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. FEDERAL POWER MARKETING ADMINISTRATIONS. 

(a) DEFINITIONS.—In this section: 

129 

(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.—

(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 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 

130 

(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. 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 feasibility of blending wind energy and hydropower generated from the Missouri River dams operated by 

the Army Corps of Engineers; 

(2) review historical and projected requirements for, and patterns of availability and use 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 

(5) include an independent tribal engineer as a study team 

member. 

(c) REPORT.—Not later than 1 year after the date of enactment of 

the Energy Policy Act of 2005, 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 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 evaluation of whether a combined wind and hydropower system can reduce reservoir fluctuation, enhance efficient 

and reliable energy production, and provide Missouri River 

management flexibility; 

(3) recommendations for a demonstration project to be carried 

out by the Western Area Power Administration, in partnership 

with an Indian tribal government or tribal energy resource development organization, to demonstrate the feasibility and potential of using wind energy produced on Indian land to supply 

firming energy to the Western Area Power Administration or 

any other Federal power marketing agency; and 

(4) an identification of— (A) the economic and environmental costs of, or benefits 

to be realized through, a Federal-tribal partnership; and 

(B) the manner in which a Federal-tribal 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. 

131 

(2) NONREIMBURSABILITY.—Costs incurred by the Secretary in 

carrying out this section shall be nonreimbursable. 

FARM SECURITY AND RURAL INVESTMENT 

ACT OF 2002—PUBLIC LAW 107–171, (7 U.S.C. 

8108(a)(3)(A)) 

TITLE IX—ENERGY 

BIOENERGY PROGRAM

SEC. 9010 

(a) * * * 

(3) ELIGIBLE COMMODITY.—The term ‘‘eligible commodity’’

means—

(A) wheat, corn, grain sorghum, barley, oats, rice, soybeans, sunflower seed, rapeseed, canola, safflower, 

flaxseed, mustard, crambe, sesame seed, potatoes, sugarcane, sugar beets, products of sugarcane or sugar beets, and 

cottonseed; 

GEOTHERMAL STEAM ACT OF 1970—PUBLIC 

LAW 91–581, AS AMENDED (30 U.S.C. 1001 ET 

SEQ.) 

AN ACT To authorize the Secretary of the Interior to make disposition of øgeothermal steam and associated geothermal resources¿ geothermal resources, and for other purposes. 

Be it enacted by the Senate and House of Representatives of the 

United States of America in Congress assembled, øThat this¿ 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Geothermal Steam Act of 1970’’. 

øSEC. 2. As¿ 

SEC. 2. DEFINITIONS. 

As used in this Act, the term—

* * * * * * * 

(c) ‘‘øgeothermal steam and associated geothermal resources¿ 

geothermal resources’’ means (i) all products of geothermal processes, embracing indigenous steam, hot water and hot brines; (ii) 

steam and other gases, hot water and hot brines resulting from 

water, gas, or other fluids artificially introduced into geothermal 

formations; (iii) heat or other associated energy found in geothermal formations; and (iv) any byproduct derived from; 

* * * * * * * 

ø(e) ‘‘known geothermal resources area’’ means an area in which 

the geology, nearby discoveries, competitive interests, or other indicia would, in the opinion of the Secretary, engender a belief in men 

who are experienced in the subject matter that the prospects for 

extraction of geothermal steam or associated geothermal resources 

132 

are good enough to warrant expenditures of money for that purpose.¿ (e) ‘‘direct use’’ means use of geothermal resources for commercial, residential, agricultural, public facilities, or other energy 

needs other than the commercial production of electricity; and 

* * * * * * * 

øSEC. 3. Subject¿ 

SEC. 3. LANDS SUBJECT TO GEOTHERMAL LEASING. 

Subject to the provisions of section 15 of this Act, the Secretary 

of the Interior may issue leases for the development and utilization 

of øgeothermal steam and associated geothermal resources¿ geothermal resources (1) in lands administered by him, including public, withdrawn, and acquired lands, (2) in any national forest or 

other lands administered by the Department of Agriculture 

through the Forest Service, including Public, withdrawn, and acquired lands, and (3) in lands which have been conveyed by the 

United States subject to a reservation to the United States of the 

øgeothermal steam and associated geothermal resources¿ geothermal resources therein. 

øSEC. 4. If lands to be leased under this Act are within any 

known geothermal resources area, they shall be leased to the highest responsible qualified bidder by competitive bidding under regulations formulated by the Secretary. If the lands to be leased are 

not within any known geothermal resources area, the qualified person first making application for the lease shall be entitled to a 

lease of such lands without competitive bidding. Notwithstanding 

the foregoing, at any time within one hundred and eighty days following the effective date of this Act:¿ 

ø(a) with respect to all lands which were on September 7, 1965, 

subject to valid leases or permits issued under the Mineral Leasing 

Act of February 25, 1920, as amended (30 U.S.C. 181 et seq.), or 

under the Mineral Leasing Act of Acquired Lands, as amended (30 

U.S.C. 351, 358), or to existing mining claims located on or prior 

to September 7, 1965, the lessees or permittees or claimants or 

their successors in interest who are qualified to hold geothermal 

leases shall have the right to convert such leases or permits or 

claims to geothermal leases covering the same lands;¿ 

ø(b) where there are conflicting claims, leases, or permits therefore embracing the same land, the person who first was issued a 

lease or permit, or who first recorded the mining claim shall be entitled to first consideration;¿ 

ø(c) with respect to all lands which were on September 7, 1965, 

the subject of applications for leases or permits under the above 

Acts, the applicants may convert their applications to applications 

for geothermal leases having priorities dating from the time of filing of such applications under such Acts;¿ 

ø(d) no person shall be permitted to convert mineral leases, permits, applications therefore, or mining claims for more than 10,240 

acres;¿ 

ø(e) the conversion of leases, permits, and mining claims and applications for leases and permits shall be accomplished in accordance with regulations prescribed by the Secretary. No right to conversion to a geothermal lease shall accrue to any person under this 

section unless such person shows to the reasonable satisfaction of 

133 

the Secretary that substantial expenditures for the exploration, development, or production of geothermal steam have been made by 

the applicant who is seeking conversion, on the lands for which a 

lease is sought or on adjoining, adjacent, or nearby Federal or nonFederal lands; and¿ 

ø(f) with respect to lands within any known geothermal resources 

area and which are subject to a right to conversion to a geothermal 

lease, such lands shall be leased by competitive bidding: Provided, 

That the competitive geothermal lease shall be issued to the person 

owning the right to conversion to a geothermal lease if he makes 

payment of an amount equal to the highest bona fide bid for the 

competitive geothermal lease, plus the rental for the first year, 

within thirty days after he receives written notice from the Secretary of the amount of the highest bid.¿ 

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. 

(c) NONCOMPETITIVE LEASING.—The Secretary shall make available for a period of 2 years for noncompetitive leasing any tract for 

which a competitive lease sale is held, but for which the Secretary 

does not receive any bids in 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 necessary to process applications for geothermal leasing 

pending on May 19, 2005. 

(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) 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) publishes a notice of the land proposed for leasing not 

later than 120 days before the date of the issuance of the lease; 

134 

(2) does not receive during the 120-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 land to 

be leased. 

(f) 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. 

øSEC. 5. Geothermal¿ 

SEC. 5. RENTS AND ROYALTIES. 

(a) IN GENERAL.—Geothermal leases shall provide for— ø(a)¿ (1) a royalty of not less than 10 per centum or more than 

15 per centum of the amount or value of steam, or any other form 

of heat or energy derived from production under the lease and sold 

or utilized by the lessee or reasonably susceptible to sale or utilization by the lessee; 

ø(b)(2) a royalty of not more than 5 per centum of the value of 

any byproduct derived from production under the lease and sold or 

utilized or reasonably susceptible of sale or utilization by the lessee, except that as to any byproduct which is a mineral named in 

section 1 of the Mineral Leasing Act of February 25, 1920, as 

amended (30 U.S.C. 181), the rate of royalty for such mineral shall 

be the same as that provided in that Act and the maximum rate 

of royalty for such mineral shall not exceed the maximum royalty 

applicable under that Act;¿ (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; 

ø(c)(3) payment in advance of an annual rental of not less than $1 per acre or fraction thereof for each year of the lease. If there 

is no well on the leased lands capable of producing geothermal resources in commercial quantities, the failure to pay rental on or before the anniversary date shall terminate the lease by operation of 

law: Provided, however, That whenever the Secretary discovers 

that the rental payment due under a lease is paid timely but the 

amount of the payment is deficient because of an error or other 

reason and the deficiency is nominal, as determined by the Secretary pursuant to regulations prescribed by him, he shall notify 

the lessee of the deficiency and such lease shall not automatically 

terminate unless the lessee fails to pay the deficiency within the 

period prescribed in the notice: Provided further, That where any 

lease has been terminated automatically by operation of law under 

this section for failure to pay rental timely and it is shown to the 

satisfaction of the Secretary of the Interior that the failure to pay 

timely the lease rental was justifiable or not due to a lack of reasonable diligence, he in his judgment may reinstate the lease if— ø(1)(A) a petition for reinstatement, together with the required 

rental, is filed with the Secretary of the Interior; and 

135 

ø(2)(B) no valid lease has been issued affecting any of the lands 

in the terminated lease prior to the filing of the petition for reinstatement;¿ (3) payment in advance of an annual rental of not less 

than 

(A) for each of the first through tenth 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 first year and 

$3 per acre or fraction thereof for each of the second 

through 10th years; and (B) for each year after the 10th year of the lease, $5 per acre 

or fraction thereof; and 

ø(d)¿ (4) a minimum royalty of $2 per acre or fraction thereof in 

lieu of rental payable at the expiration of each lease year for each 

producing lease, commencing with the lease year beginning on or 

after the commencement of production in commercial quantities. 

For the purpose of determining royalties hereunder the value of 

any geothermal steam and byproduct used by the lessee and not 

sold and reasonably susceptible of sale shall be determined by the 

Secretary, who shall take into consideration the cost of exploration 

and production and the economic value of the resource in terms of 

its ultimate utilization. 

(b) DIRECT USE.— (1) IN GENERAL.—Notwithstanding 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 or any other basis that 

the Secretary finds appropriate under the circumstances; 

and 

(B) shall ensure a fair return to the United States for use 

of the resource. 

(3) STATE OR LOCAL GOVERNMENTS.—If a State or local government is the lessee and uses geothermal resources without 

sale and for purposes other than commercial generation of electricity, the Secretary shall charge only a nominal fee for use of 

the resource. 

(c) 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 

136 

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. 

(d) ADVANCED ROYALTIES REQUIRED FOR CESSATION OF PRODUC- TION.—

(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 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. 

øSEC. 6. (a) Geothermal¿ 

SEC. 6. TERMS. 

(a) Geothermal leases shall be for a primary term of ten years. 

If geothermal steam is produced or utilized in commercial quantities within this term, such lease shall continue for so long thereafter as geothermal steam is produced or utilized in commercial 

quantities, but such continuation shall not exceed an additional 

forty years. 

* * * * * * * 

(f) Minerals locatable under the mining laws of the United States 

in lands subject to a geothermal lease issued under the provisions 

of this Act which are not associated with the øgeothermal steam 

and associated geothermal resources¿ geothermal resources of such 

lands as defined in section 2(c) herein shall be locatable under said 

mining laws in accordance with the principles of the Multiple Mineral Development Act (68 Stat. 708; found in 30 U.S.C. 521 et seq.). 

* * * * * * * 

(i)(1) To meet the payments in lieu of commercial quantities 

production requirement referred to in subsection (g)(1)(A) the lessee must agree to the modification of the terms and conditions of 

the lease to require annual payments to the Secretary in accordance with this subsection. 

ø(2) Payments under this subsection shall commence with the 

first year of the extension. Payments shall be equal to the following: 

ø(A) In each of the first through the fifth payment years, at 

least $3.00 per acre or fraction thereof, of lands under lease. 

137 

ø(B) In each of the sixth through the tenth payment years, at least $6.00 per acre or fraction thereof, of lands under 

lease.¿ 

(2) The Secretary shall, by regulation, establish payments 

under this subsection at levels that ensure the diligent development of the lease. 

* * * * * * * 

øSEC. 7. A geothermal¿ 

SEC. 7. ACREAGE OF GEOTHERMAL LEASE. 

A geothermal lease shall embrace a reasonably compact area of 

not more than two thousand five hundred and sixty acres, except 

where a departure therefrom is occasioned by an irregular subdivision or subdivisions. No person, association, or corporation, except 

as otherwise provided in this Act, shall take, hold, own, or control 

at one time, whether acquired directly from the Secretary under 

this Act or otherwise, any direct or indirect interest in Federal geothermal leases in any one State exceeding twenty thousand four 

hundred and eighty acres, including leases acquired under the provisions of section 4 of this Act. 

At any time after fifteen years from the effective date of this Act 

the Secretary, after public hearings, may increase this maximum 

holding in any one State by regulation, not to exceed fifty-one thousand two hundred acres. 

øSEC. 8. (a) The¿ 

SEC. 8. READJUSTMENT OF LEASE TERMS AND CONDITIONS. 

(a) The Secretary may readjust the terms and conditions, except 

as otherwise provided herein, of any geothermal lease issued under 

this Act at not less than ten-year intervals beginning ten years 

after the date the geothermal steam is produced, as determined by 

the Secretary. Each geothermal lease issued under this Act shall 

provide for such readjustment. The Secretary shall give notice of 

any proposed readjustment of terms and conditions, and, unless the 

lessee files with the Secretary objection to the proposed terms or 

relinquishes the lease within thirty days after receipts of such notice, the lessee shall conclusively be deemed to have agreed with 

such terms and conditions. If the lessee files objections, and no 

agreement can be reached between the Secretary and the lessee 

within a period of not less than sixty days, the lease may be terminated by either party. 

* * * * * * * 

øSEC. 9. If¿ 

SEC. 9. BYPRODUCTS. 

If the production, use, or conversion of geothermal steam is susceptible of producing a valuable byproduct or byproducts, including 

commercially demineralized water for beneficial uses in accordance 

with applicable State water laws, the Secretary shall require substantial beneficial production or use thereof unless, in individual 

circumstances he modifies or waives this requirement in the interest of conservation of natural resources or for other reasons satisfactory to him. However, the production or use of such byproducts 

shall be subject to the rights of the holders of preexisting leases, 

138 

claims, or permits covering the same land or the same minerals, if 

any. 

øSEC. 10. The¿ 

SEC. 10. RELINQUISHMENT OF GEOTHERMAL RIGHTS. 

The holder of any geothermal lease at any time may make and 

file in the appropriate land office a written relinquishment of all 

rights under such lease or of any legal subdivision of the area covered by such lease. Such relinquishment shall be effective as of the 

date of its filing. Thereupon the lessee shall be released of all obligations thereafter accruing under said lease with respect to the 

lands relinquished, but no such relinquishment shall release such 

lessee, or his surety or bond, from any liability for breach of any 

obligation of the lease, other than an obligation to drill, accrued at 

the date of the relinquishment, or from the continued obligation, in 

accordance with the applicable lease terms and regulations, (1) to 

make payment of all accrued rentals any royalties, (2) to place all 

wells on the relinquished lands in condition for suspension or abandonment, and (3) to protect or restore substantially the surface and 

surface resources. 

øSEC. 11. The¿ 

SEC. 11. SUSPENSION OF OPERATIONS AND PRODUCTION. 

The Secretary, upon application by the lessee, may authorize the 

lessee to suspend operations and production on a producing lease 

and he may, on his own motion, in the interest of conservation suspend operations on any lease but in either case he may extend the 

lease term for the period of any suspension, and he may waive, suspend, or reduce the rental or royalty required in such lease. 

øSEC. 12. Leases¿ 

SEC. 12. TERMINATION OF LEASES. 

Leases may be terminated by the Secretary for any violation of 

the regulations or lease terms after thirty days notice provided that 

such violation is not corrected within the notice period, or in the 

event the violation is such that it cannot be corrected within the 

notice period then provided that lessee has not commenced in good 

faith within said notice period to correct such violation and thereafter to proceed diligently to correct such violation. Lessee shall be 

entitled to a hearing on the matter of such claimed violation or proposed termination of lease if request for a hearing is made to the 

Secretary within the thirty-day period after notice. The period for 

correction of violation or commencement to correct such violation of 

regulations or of lease terms, as aforesaid, shall be extended to 

thirty days after the Secretary’s decision after such hearing if the 

Secretary shall find that a violation exists. 

øSEC. 13. The¿ 

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

The Secretary may waive, suspend, or reduce the rental or royalty for any lease or portion thereof in the interests of conservation 

and to encourage the greatest ultimate recovery of geothermal resources, if he determines that this is necessary to promote development or that the lease cannot be successfully operated under the 

lease terms. 

øSEC. 14. Subject¿ 

139 

SEC. 14. SURFACE LAND USE. 

Subject to the other provisions of this Act, a lessee shall be entitled to use so much of the surface of the land covered by his geothermal lease as may be found by the Secretary to be necessary for 

the production, utilization, and conservation of geothermal resources. 

øSEC. 15. (a) Geothermal¿ 

SEC. 15. LANDS SUBJECT TO GEOTHERMAL LEASING. 

(a) Geothermal leases for lands withdrawn or acquired in aid of 

functions of the Department of the Interior may be issued only 

under such terms and conditions as the Secretary may prescribe to 

insure adequate utilization of the lands for the purposes for which 

they were withdrawn or acquired. 

* * * * * * * 

øSEC. 16. Leases¿ 

SEC. 16. REQUIREMENT FOR LESSEES. 

Leases under this Act may be issued only to citizens of the 

United States, associations of such citizens, corporations organized 

under the laws of the United States or of any State or the District 

of Columbia, or governmental units, including, without limitation, 

municipalities. 

øSEC. 17. Administration¿ 

SEC. 17. ADMINISTRATION. 

Administration of this Act shall be under the principles of multiple use of lands and resources, and geothermal leases shall, insofar as feasible, allow for coexistence of other leases of the same 

lands for deposits of minerals under the laws applicable to them, 

for the location and production of claims under the mining laws, 

and for other uses of the areas covered by them. Operations under 

such other leases or for such other uses, however, shall not unreasonably interfere with or endanger operations under any lease 

issued pursuant to this Act, nor shall operations under leases so 

issued unreasonably interfere with or endanger operations under 

any lease, license, claim, or permit issued pursuant to the provisions of any other Act. 

øSEC. 18. For the purpose of properly conserving the natural resources of any geothermal pool, field, or like area, or any part 

thereof, lessees thereof and their representatives may unite with 

each other, or jointly or separately with others, in collectively 

adopting and operating under a cooperative or unit plan of development or operation of such pool, field, or like area, or any part 

thereof, whenever this is determined and certified by the Secretary 

to be necessary or advisable in the public interest. The Secretary 

may in his discretion and with the consent of the holders of leases 

involved, establish, alter, change, revoke, and make such regulations with reference to such leases in connection with the institution and operation of any such cooperative or unit plan as he may 

deem necessary or proper to secure reasonable protection of the 

public interest. He may include in geothermal leases a provision requiring the lessee to operate under such a reasonable cooperative 

or unit plan, and he may prescribe such a plan under which such 

lessee shall operate, which shall adequately protect the rights of all 

140 

parties in interest, including the United States. Any such plan 

may, in the discretion of the Secretary, provide for vesting in the 

Secretary or any other person, committee, or Federal or State agency designated therein, authority to alter or modify from time to 

time the rate of prospecting and development and the quantity and 

rate of production under such plan. All leases operated under any 

such plan approved or prescribed by the Secretary shall be excepted in determining holdings or control for the purposes of section 7 of this Act. 

No more than five years after approval of any cooperative or unit 

plan of development or operation, and at least every five years 

thereafter, the Secretary shall review each such plan and, after notice and opportunity for comment, eliminate from inclusion in such 

plan any lease or part of a lease not regarded as reasonably necessary to cooperative or unit operations under the plan. In the case 

of a cooperative or unit plan approved before the enactment of the 

Geothermal Steam Act Amendments of 1988, the Secretary shall 

complete such review and elimination within 5 years after the enactment of such Act. Such elimination shall be based on scientific 

evidence, and shall occur only when it is determined by the Secretary to be for the purpose of conserving and properly managing 

the geothermal resource. Any lease or part of a lease so eliminated 

shall be eligible for an extension under subsection (c) or (g) of section 6 if it separately meets the requirements for such an extension. 

When separate tracts cannot be independently developed and operated in conformity with an established well-spacing or development program, any lease, or a portion thereof, may be pooled with 

other lands, whether or not owned by the United States, under a 

communitization or drilling agreement providing for an apportionment of production or royalties among the separate tracts of land 

comprising the drilling or spacing unit when determined by the 

Secretary to be in the public interest, and operations or production 

pursuant to such an agreement shall be deemed to be operations 

or production as to each lease committed thereto. 

The Secretary is hereby authorized, on such conditions as he may 

prescribe, to approve operating, drilling, or development contracts 

made by one or more lessees of geothermal leases, with one or more 

persons, associations, or corporations whenever, in his discretion, 

the conservation of natural products or the public convenience or 

necessity may require or the interests of the United States may be 

best served thereby. All leases operated under such approved operating, drilling, or development contracts, and interests thereunder, 

shall be excepted in determining holdings or control under section 

7 of this Act.¿ 

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, 

141 

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. 

(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 steam 

and associated 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 producVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00141 Fmt 6601 Sfmt 6603 E:\HR\OC\SR078.XXX SR078
142 

tion 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 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 1 or more lessees of geothermal leases, with 

1 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. 

øSEC. 19. Upon¿ 

SEC. 19. DATA FROM FEDERAL AGENCIES. 

Upon request of the Secretary, other Federal departments and 

agencies shall furnish him with any relevant data then in their 

possession or knowledge concerning or having bearing upon fair 

and adequate charges to be made for geothermal steam produced 

or to be produced for conversion to electric power or other purposes. 

Data given to any department or agency as confidential under law 

shall not be furnished in any fashion which identifies or tends to 

identify the business entity whose activities are the subject of such 

data or the person or persons who furnished such in information. 

øSEC. 20. Subject¿ 

143 

SEC. 20. DISPOSITION OF AMOUNTS RECEIVED FROM SALES, BONUSES, ROYALTIES, AND RENTALS. 

Subject to the provisions of section 35(b) of the Mineral Leasing 

Act (30 U.S.C. 191(b)), all moneys received from the sales, bonuses, 

royalties and rentals under the provisions of this Act, including the 

payments referred to in section 6(i), shall be disposed of in the 

same manner as such moneys received pursuant to section 35 of 

the Mineral Leasing Act or pursuant to section 6 of the Mineral 

Leasing Act for Acquired Lands, as the case may be. 

øSEC. 21. (a) Within one hundred and twenty days after the effective date of this Act, the Secretary shall cause to be published 

in the Federal Register a determination of all lands which were included within any known geothermal resources area on the effective date of the Act. He shall likewise publish in the Federal Register from time to time his determination of other known geothermal resources areas specifying in each case the date the lands 

were included in such area; and 

ø(b) Geothermal¿ 

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

Geothermal resources in lands the surface of which has passed 

from Federal ownership but in which the minerals have been reserved to the United States shall not be developed or produced except under geothermal leases made pursuant to this Act. If the Secretary of the Interior finds that such development is imminent, or 

that production from a well heretofore drilled on such lands in imminent, he shall so report to the Attorney General, and the Attorney General is authorized and directed to institute an appropriate 

proceeding in the United States district court of the district in 

which such lands are located, to quiet the title of the United States 

in such resources, and if the court determines that the reservation 

of minerals to the United States in the lands involved included the 

geothermal resources, to enjoin their production otherwise than 

under the terms of this Act: Provided, That upon an authoritative 

judicial determination that Federal mineral reservation does not 

include øgeothermal steam and associated geothermal resources¿ 

geothermal resources the duties of the Secretary of the Interior to 

report and of the Attorney General to institute proceedings, as 

hereinbefore set forth, shall cease. 

øSEC. 22. Nothing¿ 

SEC. 22. FEDERAL EXEMPTION FROM STATE WATER LAWS. 

Nothing in this Act shall constitute an express or implied claim 

or denial on the part of the Federal Government as to its exemption from State water laws. 

øSEC. 23. (a) All¿ 

SEC. 23. PREVENTION OF WASTE; EXCLUSIVITY. 

(a) All leases under this Act shall be subject to the condition that 

the lessee will, in conducting his exploration, development and producing operations, use all reasonable precautions to prevent waste 

of øgeothermal steam and associated geothermal resources¿ geothermal resources developed in lands leased. 

(b) Rights to develop and utilize øgeothermal steam and associated geothermal resources¿ geothermal resources underlying lands 

144 

owned by the United States may be acquired solely in accordance 

with the provisions of this Act. 

øSEC. 24. The¿ 

SEC. 24. RULES AND REGULATIONS. 

The Secretary shall prescribe such rules and regulations as he 

may deem appropriate to carry out the provisions of this Act. Such 

regulations may include, without limitation, provisions for (a) the 

prevention of waste, (b) development and conservation of geothermal and other natural resources, (c) the protection of the public 

interest, (d) assignment, segregation, extension of terms, relinquishment of leases, development contracts, unitization, pooling, 

and drilling agreements, (e) compensatory royalty agreements, suspension of operations or production, and suspension or reduction of 

rentals or royalties, (f) the filing of surety bonds to assure compliance with the terms of the lease and to protect surface use and resources, (g) use of the surface by a lessee of the lands embraced in 

his lease, (h) the maintenance by the lessee of an active development program, and (i) protection of water quality and other environmental qualities. 

øSEC. 25. As¿ 

SEC. 25. INCLUSION OF GEOTHERMAL LEASING UNDER CERTAIN 

OTHER LAWS. 

As to any land subject to geothermal leasing under section 3 of 

this Act, all laws which either (a) provide for the disposal of land 

by patent or other form of conveyance or by grant or by operation 

of law subject to a reservation of any mineral or (b) prevent or restrict the disposal of such land because of the mineral character of 

the land, shall hereafter be deemed to embrace øgeothermal steam 

and associated geothermal resources¿ geothermal resources as a 

substance which either must be reserved or must prevent or restrict the disposal of such land, as the case may be. This section 

shall not be construed to affect grants, patents, or other forms of 

conveyances made prior to the date of enactment of this Act. 

øSEC. 26. The¿ 

SEC. 26. AMENDMENT. 

The first two clauses in section 11 of the Act of August 13, 1954 

(68 Stat. 708, 716), are amended to read as follows: ‘‘As used in this Act, ‘‘mineral leasing laws’’ shall mean the Act 

of February 25, 1920 (41 Stat. 437); the Act of April 17, 1926 (44 

Stat. 301); the Act of February 7, 1927 (44 Stat. 1057); Geothermal 

Steam Act of 1970, and all Acts heretofore or hereafter enacted 

which are amendatory of or supplementary to any of the foregoing 

Acts; ‘‘Leasing Act minerals’’ shall mean all minerals which, upon 

the effective date of this Act, are provided in the mineral leasing 

laws to be disposed of thereunder and all øgeothermal steam and 

associated geothermal resources¿ geothermal resources which, upon 

the effective date of the Geothermal Steam Act of 1970, are provided in that Act to be disposed of thereunder;’’. 

øSEC. 27. The¿ 

SEC. 27. FEDERAL RESERVATION OF CERTAIN MINERAL RIGHTS. 

The United States reserves the ownership of and the right to extract under such rules and regulations as the Secretary may prescribe oil, hydrocarbon gas, and helium from all øgeothermal steam 

145 

and associated geothermal resources¿ geothermal resources produced from lands leased under this Act in accordance with presently applicable laws: Provided, That whenever the right to extract 

oil, hydrocarbon gas, and helium from øgeothermal steam and associated geothermal resources¿ geothermal resources produced from 

such lands is exercised pursuant to this section, it shall be exercised so as to cause no substantial interference with the production 

of øgeothermal steam and associated geothermal resources¿ geothermal resources from such lands. 

øSEC. 28. (a)(1) The¿ 

SEC. 28. SIGNIFICANT THERMAL FEATURES. 

(a)(1) The Secretary shall maintain a list of significant thermal 

features, as defined in section 2(f), within units of the National 

Park System, including but not limited to the following units: 

(A) Mount Rainier National Park. 

* * * * * * * 

(d) With respect to all leases or drilling permits issued, extended, 

renewed or modified under this Act, the Secretary shall include 

stipulations in such leases and permits necessary to protect significant thermal features within units of the National Park System 

where the Secretary determines that, based on scientific evidence, 

the exploration, development or utilization of the land subject to 

the lease or drilling permit is reasonably likely to adversely affect 

any such significant thermal feature. Stipulations shall include, 

but not be limited to—

(1) requiring the lessee to reinject geothermal fluids into the 

rock formations from which they originate; 

(2) requiring the lessee to report annually to the Secretary 

on activities taken on the lease; 

(3) requiring the lessee to continuously monitor øgeothermal 

steam and associated geothermal resources¿ geothermal resources production and injection wells; and 

* * * * * * * 

øSEC. 29. The¿ 

SEC. 29. LAND SUBJECT TO PROHIBITION ON LEASING. 

The Secretary shall not issue any lease under this Act on those 

lands subject to the prohibition provided under section 43 of the 

Mineral Leasing Act. 

FEDERAL POWER ACT—ACT OF JUNE 10, 1920, 

CHAPTER 285, AS AMENDED (16 U.S.C. 791A– 825R) 

PART I 

* * * * * * * 

SEC. 3. The words defined in this section shall have the following 

meanings for the purpose of this Act, to wit: 

* * * * * * * 

(17)(A) * * * 

146 

ø(C) ‘‘qualifying small power production facility’’ means a 

small power production facility— (i) which the Commission determines, by rule, meets 

such requirements (including requirements respecting fuel 

use, fuel efficiency, and reliability) as the Commission 

may, by rule, prescribe; and 

(ii) which is owned by a person not primarily engaged in 

the generation or sale of electric power (other than electric 

power solely from cogeneration facilities or small power 

production facilities);¿ 

(C) ‘‘qualifying small power production facility’’ means a 

small power production facility that the Commission determines, by rule, meets such requirements (including requirements respecting fuel use, fuel efficiency, and reliability) as the 

Commission may, by rule, prescribe; 

* * * * * * * 

(18)(A) ‘‘cogeneration facility’’ means a facility which produces—

(i) electric energy, and 

(ii) steam or forms of useful energy (such as heat) which 

are used for industrial, commercial, heating, or cooling 

purposes; 

ø(B) ‘‘qualifying cogeneration facility’’ means a cogeneration 

facility which— (i) the Commission determines, by rule, meets such requirements (including requirements respecting minimum 

size, fuel use, and fuel efficiency) as the Commission may, 

by rule, prescribe; and 

(ii) is owned by a person not primarily engaged in the 

generation or sale of electric power (other than electric 

power solely from cogeneration facilities or small power 

production facilities); 

(B) ‘‘qualifying cogeneration facility’’ means a cogeneration facility that the Commission determines, by rule, meets such requirements (including requirements respecting minimum size, 

fuel use, and fuel efficiency) as the Commission may, by rule, 

prescribe;¿ 

* * * * * * * 

ø(22) ‘‘electric utility’’ means any person or State agency (including any municipality) which sells electric energy; such 

term includes the Tennessee Valley Authority, but does not include any Federal power marketing agency.¿ 

ø(23) TRANSMITTING UTILITY.—The term ‘‘transmitting utility’’ means any electric utility, qualifying cogeneration facility, 

qualifying small power production facility, or Federal power 

marketing agency which owns or operates electric power transmission facilities which are used for the sale of electric energy 

at wholesale.¿ 

(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. 

147 

(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. 

* * * * * * * 

(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. 

(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. 

* * * * * * * 

SEC. 4. * * * 

(e) To issue licenses to citizens of the United States, or to any 

association of such citizens, or to any corporation organized under 

the laws of the United States or any State thereof, or to any State 

or municipality for the purpose of constructing, operating, and 

maintaining dams, water conduits, reservoirs, power houses, transmission lines, or other project works necessary or convenient for 

the development and improvement of navigation and for the development, transmission, and utilization of power across, along, from 

or in any of the streams or other bodies of water over which Congress has jurisdiction under its authority to regulate commerce 

with foreign nations and among the several States, or upon any 

part of the public lands and reservations of the United States (including the Territories), or for the purpose of utilizing the surplus 

water or water power from any Government dam, except as herein 

provided: Provided, That licenses shall be issued within any reservation only after a finding by the Commission that the license 

will not interfere or be inconsistent with the purpose for which 

such reservation was created or acquired, and shall be subject to 

and contain such conditions as the Secretary of the department 

under whose supervision such reservation falls shall deem necessary for the adequate protection and utilization of such reservation. 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 

148 

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 within a time frame established by the Commission for each license proceeding. Within 90 

days of the date of enactment of this Act, 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. Provided further, That no license affecting the navigable capacity of 

any navigable waters of the United States shall be issued until the 

plans of the dam or other structures affecting navigation have been 

approved by the Chief of Engineers and the Secretary of the Army. 

* * * * * * * 

SEC. 18. The Commission shall require the construction, maintenance, and operation by a licensee at its own expense of such lights 

and signals as may be directed by the Secretary of the Department 

in which the Coast Guard is operating, and such fishways as may 

be prescribed by the Secretary of the Interior or the Secretary of 

Commerce. 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 single trial-type hearing to be conducted within a time 

frame established by the Commission for each license proceeding. 

Within 90 days of the date of enactment of this Act, 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. 

The operation of any navigation facilities which may be constructed 

as a part of or in connection with any dam or diversion structure 

built under the provisions of this Act, whether at the expense of 

a licensee hereunder or of the United States, shall at all times be 

controlled by such reasonable rules and regulations in the interest 

of navigation, including the control of the level of the pool caused 

by such dam or diversion structure as may be made from time to 

time by the Secretary of the Army, and for willful failure to comply 

with any such rule or regulation such licensee shall be deemed 

guilty of a misdemeanor, and upon conviction thereof shall be punished as provided in section 316 hereof. 

* * * * * * * 

SEC. 32. ALASKA STATE JURISDICTION OVER SMALL HYDROELECTRIC 

PROJECTS. 

SEC. (a). * * * 

(3)(C) except as provided in subsection (j), conditions for the 

protection, mitigation, and enhancement of fish and wildlife 

based on recommendations received pursuant to the Fish and 

Wildlife Coordination Act (16 U.S.C. 661 et seq.) from the NaVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00148 Fmt 6601 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
149 

tional Marine Fisheries Service, the United Sates Fish and 

Wildlife Service, and State fish and wildlife agencies. 

* * * * * * * 

(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. 33. ALTERNATIVE CONDITIONS AND PRESCRIPTIONS. 

(a) ALTERNATIVE CONDITIONS— (1) Whenever any person applies for a license for any project 

works within any reservation of the United States, and the Secretary of the department under whose supervision such reservation falls (referred to in this subsection as ‘‘the Secretary’’) 

deems a condition to such license to be necessary under the first 

proviso of section 4(e), the license applicant 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) the Secretary concurs with the license applicant’s 

judgment that the alternative condition will either— (i) cost significantly less to implement; or 

(ii) result in improved operation of the project works 

for electricity production, as compared to the condition 

initially deemed necessary by the Secretary. 

(3) The Secretary concerned shall submit into the public 

record of the Commission proceeding with any condition under 

section 4(e) or alternative condition it accepts under this section, a written statement explaining the basis for such condition, and reason for not accepting any alternative condition 

under this section. The written statement must demonstrate 

that the Secretary gave equal consideration to the effects of the 

condition adopted and alternatives not accepted on energy supply, distribution, cost, and use; flood control; navigation; water 

supply; and air quality (in addition to the preservation of other 

aspects of environmental quality); based on such information as 

may be available to the Secretary, including information voluntarily provided in a timely manner by the applicant and others. 

The Secretary shall also submit, together with the aforementioned written statement, all studies, data, and other factual information available to the Secretary and relevant to the Secretary’s decision. 

(4) If the Secretary does not accept an applicant’s alternative 

condition under this section, and the Commission finds that the 

Secretary’s condition would be inconsistent with the purposes of 

150 

this part, or other applicable law, the Commission may refer 

the dispute to the Commission’s Dispute Resolution Service. The 

Dispute Resolution Service shall consult with the Secretary and 

the Commission and issue a non-binding advisory within 90 

days. The Secretary may accept the Dispute Resolution Service 

advisory unless the Secretary finds that the recommendation 

will not adequately protect the reservation. The Secretary shall 

submit the advisory and the Secretary’s final written determination into the record of the Commission’s proceeding. 

(b) ALTERNATIVE PRESCRIPTIONS— (1) Whenever the Secretary of the Interior or the Secretary of 

Commerce prescribes a fishway under section 18, the license applicant or any other party to the 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) the Secretary concurs with the license applicant’s 

judgment that the alternative prescription will either— (i) cost significantly less to implement; or 

(ii) result in improved operation of the project works 

for electricity production, as compared to the fishway 

initially deemed necessary by the Secretary. 

(3) The Secretary concerned shall submit into the public 

record of the Commission proceeding with any prescription 

under section 18 or alternative prescription it accepts under this 

section, a written statement explaining the basis for such prescription, and reason for not accepting any alternative prescription under this section. The written statement must demonstrate 

that the Secretary gave equal consideration to the effects of the 

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. 

(4) If the Secretary concerned does not accept an applicant’s 

alternative prescription under this section, and the Commission 

finds that the Secretary’s prescription would be inconsistent 

with the purposes of this part, or other applicable law, the Commission may refer the dispute to the Commission’s Dispute Resolution Service. The Dispute Resolution Service shall consult 

151 

with the Secretary and the Commission and issue a non-binding advisory within 90 days. The Secretary may accept the Dispute Resolution Service advisory unless the Secretary finds that 

the recommendation will not adequately protect the fish resources. The Secretary shall submit the advisory and the Secretary’s final written determination into the record of the Commission’s proceeding. 

* * * * * * * 

PART II—REGULATION OF ELECTRIC UTILITY 

COMPANIES ENGAGED IN INTERSTATE COMMERCE 

DECLARATION OF POLICY; APPLICATION OF PART; 

DEFINITIONS 

SECTION 201. * * * 

(b) * * * 

(2) øThe¿ Notwithstanding section 201(f), the provisions of 

sections ø210, 211, and 212¿ 203(a)(2), 206(e), 210, 211, 211A, 

212, 215, 216, 217, 218, 219, 220, 221, 222, and 223 of this title 

shall apply to the entities described in such provisions, and 

such entities shall be subject to the jurisdiction of the Commission for purposes of carrying out such provisions and for purposes of applying the enforcement authorities of this chapter 

with respect to such provisions. Compliance with any order or 

rule of the Commission under the provisions of sections ø210 

or 211¿ 203(a)(2), 206(e), 210, 211, 211A, 212, 215, 216, 217, 

218, 219, 220, 221, 222, and 223 of this title, shall not make 

an electric utility or other entity subject to the jurisdiction of 

the Commission for any purposes other than the purposes specified in the preceding sentence. 

* * * * * * * 

(e) The term ‘‘public utility’’ when used in this subchapter and 

subchapter III of this chapter means any person who owns or operates facilities subject to the jurisdiction of the Commission under 

this subchapter (other than facilities subject to such jurisdiction 

solely by reason of section ø210, 211, or 212¿ 206(e), 206(f), 210, 

211, 211A, 212, 215, 216, 217, 218, 219, 220, 221, 222, or 223 of 

this title). 

(f) No provision in this subchapter shall apply to, or be deemed 

to include, the United States, a State or any øpolitical subdivision 

of a State¿ 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 sells less than 4,000,000 megawatt hours 

of electricity per year, or any agency, authority, or instrumentality 

of any one or more of the foregoing, or any corporation which is 

wholly owned, directly or indirectly, by any one or more of the foregoing, or any officer, agent, or employee of any of the foregoing acting as such in the course of his official duty, unless such provision 

makes specific reference thereto. 

(g) * * * 

(5) As used in this subsection the terms affiliate, associate 

company, electric utility company, holding company, subsidiary 

company, and exempt wholesale generator shall have the same 

152 

meaning as when used in the Public Utility Holding Company 

Act of ø1935¿ 2005. 

* * * * * * * 

DISPOSITION OF PROPERTY; CONSOLIDATION; 

PURCHASE OF SECURITIES 

øSEC. 203. (a) No public utility shall sell, lease, or otherwise dispose of the whole of its facilities subject to the jurisdiction of the 

Commission, or any part thereof of a value in excess of $50,000, or 

by any means whatsoever, directly or indirectly, merge or consolidate such facilities or any part thereof with those of any other person, or purchase, acquire, or take any security of any other public 

utility, without first having secured an order of the Commission 

authorizing it to do so. Upon application for such approval the 

Commission shall give reasonable notice in writing to the Governor 

and State commission of each of the States in which the physical 

property affected, or any part thereof, is situated, and to such other 

persons as it may deem advisable. After notice and opportunity for 

hearing, if the Commission finds that the proposed disposition, consolidation, acquisition, or control will be consistent with the public 

interest, it shall approve the same.¿ 

(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 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 gas utility company, or a holding 

company in a holding company system that includes a transmitting utility, an electric utility company, or a gas 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) 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. 

153 

(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—

(A) will be consistent with the public interest, taking into 

account the effect of the transaction on competition in the 

electricity markets, electric rates, and effective regulation; 

and 

(B) shall 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 would not be harmful. 

(5) 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. 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. 

* * * * * * * 

FIXING RATES AND CHARGES; DETERMINATION OF 

COST OF PRODUCTION OR TRANSPORTATION 

SEC. 206. (a) Whenever the Commission, after a øhearing had¿ 

hearing held * * * 

(b) Whenever the Commission institutes a proceeding under this 

section, the Commission shall establish a refund effective date. In 

the case of a proceeding instituted on complaint, the refund effective date shall not be earlier than øthe date 60 days after the filing 

of such complaint nor later than 5 months after the expiration of 

such 60-day period¿ the date of the filing of such complaint nor 

later than 5 months after the filing of such complaint. In the case 

of a proceeding instituted by the Commission on its own motion, 

the refund effective date shall not be earlier than the date ø60 days 

after¿ of the publication by the Commission of notice of its intention to initiate such proceeding nor later than 5 months after the 

øexpiration of such 60-day period¿ publication date. Upon institution of a proceeding under this section, the Commission shall give 

154 

to the decision of such proceeding the same preference as provided 

under section 205 of this Act and otherwise act as speedily as possible. øIf no final decision is rendered by the refund effective date 

or by the conclusion of the 180-day period commencing upon initiation of a proceeding pursuant to this section, whichever is earlier, 

the Commission shall state the reasons why it has failed to do so 

and shall state its best estimate as to when it reasonably expects 

to make such decision.¿ If no final decision is rendered by the conclusion of the 180-day period commencing upon initiation of a proceeding pursuant to this section, the Commission shall state the reasons why it has failed to do so and shall state its best estimate as 

to when it reasonably expects to make such decision. In any proceeding under this section, the burden of proof to show that any 

rate, charge, classification, rule, regulation, practice, or contract is 

unjust, unreasonable, unduly discriminatory, or preferential shall 

be upon the Commission or the complainant. At the conclusion of 

any proceeding under this section, the Commission may order øthe 

public utility to make¿ refunds of any amounts paid, for the period 

subsequent to the refund * * * 

* * * * * * * 

(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 48 hours or less. 

(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) any 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. 

(5) In the case of any Federal power marketing agency or the Tennessee Valley Authority, the Commission shall not assert or exercise 

155 

any regulatory authority or power under paragraph (2) other than 

the ordering of refunds to achieve a just and reasonable rate. 

* * * * * * * 

CERTAIN WHEELING AUTHORITY 

SEC. 211. (a) * * * 

(c)ø(2)¿ No order may be issued under subsection (a) or (b) which 

requires the transmitting utility subject to the order to transmit, 

during any period, an amount of electric energy which replaces any 

amount of electric energy—

ø(A)¿ (1) required to be provided to such applicant pursuant 

to a contract during such period, or 

ø(B)¿ (2) currently provided to the applicant by the utility 

subject to the order pursuant to a rate schedule on file during 

such period with the Commission: Provided, That nothing in 

this subparagraph shall prevent an application for an order 

hereunder to be filed prior to øtermination of modification¿ termination or modification of an existing rate schedule: Provided, That such order shall not become effective until termination of such rate schedule or the modification becomes effective. 

(d)(1) Any transmitting utility ordered under subsection (a) or (b) 

to provide transmission services may apply to the Commission for 

an order permitting such transmitting utility to cease providing all, 

or any portion of, such services. After public notice, notice to each 

affected State regulatory authority, each affected Federal power 

marketing agency, each affected transmitting utility, and each affected electric utility, and after an opportunity for an evidentiary 

hearing, the Commission shall issue an order terminating or modifying the order issued under subsection (a) or (b), if the øelectric 

utility¿ transmitting utility providing such transmission services 

has demonstrated, and the Commission has found, that—

(A) due to changed circumstances, the requirements applicable, under this section and section 212, to the issuance of an 

order under subsection (a) or (b) are no longer met, or 

(B) any transmission capacity of the utility providing transmission services under such order which was, at the time such 

order was issued, in excess of the capacity necessary to serve 

its own customers is no longer in excess of the capacity necessary for such purposes, or 

(C) the ordered transmission services require enlargement of 

transmission capacity and the transmitting utility subject to 

the order has failed, after making a good faith effort, to obtain 

the necessary approvals or property rights under applicable 

Federal, State, and local laws. 

No order shall be issued under this subsection pursuant to a finding under subparagraph (A) unless the Commission finds that such 

order is in the public interest. 

* * * * * * * 

156 

SEC. 211A. 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 PREPERATION IMPROVEMENTS.—Subject to section 212(h), the Commission may, by rule or order, require an unregulated transmitting utility to provide transmission services—

(1) at rates that are comparable to those that the unregulated 

transmitting utility charges itself; and 

(2) on terms and conditions (not relating to rates) that are 

comparable to those under which such unregulated transmitting utility provides transmission services to itself and that are 

not unduly discriminatory or preferential. 

(C) EXEMPTION.—The Commission shall exempt from 

any rule or order under this subsection 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 UTILTIES.—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. 

(g) REMAND.—In exercising its authority under subsection (b)(1), 

the Commission may remand transmission rates to an unregulated 

transmitting utility for review and revision where necessary to meet 

the requirements of subsection (b). 

(h) OTHER REQUESTS.—The provision of transmission services 

under subsection (a) 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 

157 

of its transmitting facilities to a Transmission Organization that is 

designated to provide non-discriminatory transmission access. 

* * * * * * * 

SEC. 214. SALES BY EXEMPT WHOLESALE GENERATORS. 

No rate or charge received by an exempt wholesale generator for 

the sale of electric energy shall be lawful under section 824d of this 

title if, after notice and opportunity for hearing, the Commission 

finds that such rate or charge results from the receipt of any undue 

preference or advantage from an electric utility which is an associate company or an affiliate of the exempt wholesale generator. 

For purposes of this section, the terms associate company and affiliate shall have the same meaning as provided in section 2(a) of the 

Public Utility Holding Company Act of ø1935¿ 2005. 

SEC. 215. ELECTRIC RELIABILITY. 

(a) DEFINITIONS.—In this section: 

(1)(A) The term ‘‘bulk-power system’’ means—

(i) facilities and control systems necessary for operating 

an interconnected electric energy transmission network (or 

any portion of such a network); and 

(ii) electric energy from generation facilities needed to 

maintain transmission system reliability. 

(B) The term ‘‘bulk-power system’’ 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 review 

by the Commission. 

(3)(A) The term ‘‘reliability standard’’ means a requirement, 

approved by the Commission under this section, to provide for 

reliable operation of the bulk-power system. 

(B) The term ‘‘reliability standard’’ includes requirements for 

the operation of existing bulk-power system components and the 

design of planned additions or modifications to those components to the extent necessary to provide for reliable operation of 

the bulk-power system, except that the term does not include 

any requirement to enlarge those components or to construct 

new transmission capacity or generation capacity. 

(4) The term ‘‘reliable operation’’ means operating the components of the bulk-power system within equipment and electric 

system thermal, voltage, and stability limits so that instability, 

uncontrolled separation, or cascading failures of the system will 

not occur as a result of a sudden disturbance or unanticipated 

failure of system components. 

(5) The term ‘‘interconnection’’ means a geographic area in 

which the operation of bulk-power system components is synchronized such that the failure of 1 or more of the components 

may adversely affect the ability of the operators of other components within the system to maintain reliable operation of the 

portion of the system within their control. 

(6) The term ‘‘regional entity’’ means an entity having enforcement authority pursuant to subsection (e)(4). 

158 

(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 

the entities described in section 201(f)), for purposes of approving reliability standards established under this section and enforcing 

compliance with this section. 

(2) All users, owners, and operators of the bulk-power system 

shall comply with reliability standards that take effect under this 

section. 

(3) 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.—(1) Following the issuance of a Commission 

rule under subsection (b)(3), any person may submit an application 

to the Commission for certification as the Electric Reliability Organization. 

(2) The Commission may certify 1 such ERO if the Commission 

determines that the ERO—

(A) 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 

(B) has established rules that—

(i) ensure the independence of the ERO from the users 

and owners and operators of the bulk-power system, while 

ensuring fair stakeholder representation in the selection of 

the directors of the ERO and balanced decisionmaking in 

any ERO committee or subordinate organizational structure; 

(ii) allocate equitably reasonable dues, fees, and other 

charges among end users for all activities under this section; 

(iii) 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); 

(iv) provide for reasonable notice and opportunity for 

public comment, due process, openness, and balance of interests in developing reliability standards and otherwise exercising the duties of the ERO; and 

(v) provide for taking, after certification, appropriate 

steps to gain recognition in Canada and Mexico. 

(d) RELIABILITY STANDARDS.—(1) The ERO shall file each reliability standard or modification to a reliability standard that the 

ERO proposes to be made effective under this section with the Commission. 

(2)(A) The Commission may approve, by rule or order, a proposed 

reliability standard or modification to a reliability standard if the 

Commission determines that the standard is just, reasonable, not 

unduly discriminatory or preferential, and in the public interest. 

(B) The Commission— (i) shall give due weight to the technical expertise of the ERO 

with respect to the content of a proposed standard or modificaVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00158 Fmt 6601 Sfmt 6603 E:\HR\OC\SR078.XXX SR078
159 

tion 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 

(ii) shall not defer with respect to the effect of a standard on 

competition. 

(C) A proposed standard or modification shall take effect on approval by the Commission. 

(3) The ERO shall rebuttably presume that a proposal from a regional entity organized on an interconnection-wide basis for a reliability standard or modification to a reliability standard to be applicable on an interconnection-wide basis is just, reasonable, not unduly discriminatory or preferential, and in the public interest. 

(4) The Commission shall remand to the ERO for further consideration a proposed reliability standard or a modification to a reliability standard that the Commission disapproves in whole or in 

part. 

(5) The Commission, on a motion of the Commission or on complaint, may order the ERO to submit to the Commission a proposed 

reliability standard or a modification to a reliability standard that 

addresses a specific matter if the Commission considers such a new 

or modified reliability standard appropriate to carry out this section. 

(6)(A) 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. 

(B) The transmission organization shall continue to comply with 

such function, rule, order, tariff, rate schedule or agreement accepted approved, or ordered by the Commission until— (i) the Commission finds a conflict exists between a reliability 

standard and any such provision; 

(ii) the Commission orders a change to the provision pursuant 

to section 206; and 

(iii) the ordered change becomes effective under this part. 

(C) If the Commission determines that a reliability standard 

needs to be changed as a result of such a conflict, the Commission 

shall order the ERO to develop and file with the Commission a 

modified reliability standard under paragraph (4) or (5). 

(e) ENFORCEMENT.—(1) Subject to paragraph (2), the ERO may 

impose a penalty on a user or owner or operator of the bulk-power 

system for a violation of a reliability standard approved by the 

Commission under subsection (d) if the ERO, after notice and an 

opportunity for a hearing—

(A) finds that the user or owner or operator has violated a reliability standard approved by the Commission under subsection (d); and 

(B) files notice and the record of the proceeding with the Commission. 

(2)(A) A penalty imposed under paragraph (1) may take effect not 

earlier than the day that is 31 days after the date on which the 

ERO files with the Commission notice of the penalty and the record 

of proceedings. 

160 

(B) The penalty shall be subject to review by the Commission on— (i) a motion by the Commission; or 

(ii) application by the user, owner or operator that is the subject of the penalty filed not later than 30 days after the date on 

which the notice is filed with the Commission. 

(C) Application to the Commission for review, or the initiation of 

review by the Commission on a motion of the Commission, shall not 

operate as a stay of the penalty unless the Commission orders otherwise on a motion of the Commission or on application by the user, 

owner or operator that is the subject of the penalty. 

(D) 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— (i) affirm, modify, or set aside the penalty), shall by order affirm, set aside, reinstate, or modify the penalty; and 

(ii) if appropriate, remand to the ERO for further proceedings. 

(E) The Commission shall implement expedited procedures for the 

hearings described in subparagraph (D). 

(3) On a motion of the Commission or on 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 act or practice that constitutes or will constitute a violation of a reliability standard. 

(4)(A) 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— (i) the regional entity is governed by— (I) an independent board; 

(II) a balanced stakeholder board; or 

(III) a combination independent and balanced stakeholder board; 

(ii) the regional entity otherwise meets the requirements of 

paragraphs (1) and (2) of subsection (c); and 

(iii) the agreement promotes effective and efficient administration of bulk-power system reliability. 

(B) The Commission may modify a delegation under this paragraph. 

(C) 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. 

(D) The regulation issued under this paragraph may provide that 

the Commission may assign the authority of the ERO to enforce reliability standards under paragraph (1) directly to a regional entity 

in accordance with 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. 

161 

(6) Any penalty imposed under this section shall— (A) bear a reasonable relation to the seriousness of the violation; and 

(B) take into consideration the efforts of the user, owner, or 

operator to remedy the violation in a timely manner. 

(f) CHANGES IN ELECTRIC RELIABILITY ORGANIZATION RULES.—(1) 

The Electric Reliability Organization shall file with the Commission 

for approval any proposed rule or proposed rule change, accompanied by an explanation of the basis and purpose of the rule and 

proposed rule change. 

(2) The Commission, upon a motion of the Commission or upon 

complaint, may propose a change to the rules of the ERO. 

(3) 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, and not unduly discriminatory or preferential, is in the public interest, and meets 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 may develop and enforce 

compliance with reliability standards for only the bulk-power system. 

(2) Nothing in this section authorizes 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 preempts any authority of any State to 

take action to ensure the safety, adequacy, and reliability of electric 

service within that State, as long as the action is not inconsistent 

with any reliability standard. 

(4) Not later than 90 days after the date of 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 issuance by the Commission of a final order. 

(j) REGIONAL ADVISORY BODIES.—(1) The Commission shall establish a regional advisory body on the petition of at least 2⁄3 of the 

States within a region that have more than 1⁄2 of the electric load 

of the States served within the region. 

(2) A regional advisory body—

(A) shall be composed of 1 member from each participating 

State in the region, appointed by the Governor of the State; and 

(B) may include representatives of agencies, States, and provinces outside the United States. 

162 

(3) A regional advisory body may provide advice to the Electric 

Reliability Organization, a regional entity, or the Commission regarding—

(A) the governance of an existing or proposed regional entity 

within the same region; 

(B) whether a standard proposed to apply within the region 

is just, reasonable, not unduly discriminatory or preferential, 

and in the public interest; 

(C) whether fees proposed to be assessed within the region are 

just, reasonable, not unduly discriminatory or preferential, and 

in the public interest; and 

(D) any other responsibilities requested by the Commission. 

(4) The Commission may give deference to the advice of a regional 

advisory body if that body is organized on an interconnection-wide 

basis. 

(k) ALASKA AND HAWAII.—This section does not apply to Alaska 

or Hawaii. 

(l) STATUS OF ERO.—The Electric Reliability Organization certified by the Commission under section 215(c) of the Federal Power 

Act (as added by subsection (a)) and any regional entity delegated 

enforcement authority pursuant to section 215(e)(4) of that Act (as 

so added) are not departments, agencies, or instrumentalities of the 

Federal Government. 

SEC. 216. SITING OF INTERSTATE ELECTRIC TRANSMISSION FACILITIES. 

(a) DESIGNATION OF NATIONAL INTEREST ELECTRIC TRANS- MISSION 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) 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—

(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 

163 

(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 1 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 so as to minimize the environmental 

and visual impact of the proposed modification. 

(c) PERMIT APPLICATIONS.—(1) Permit applications under subsection (b) shall be made in writing to the Commission. 

(2) 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 

164 

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. 

(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 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 environVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00164 Fmt 6601 Sfmt 6603 E:\HR\OC\SR078.XXX SR078
165 

mental 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) 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) 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 or distribution facility, or has failed to act by the 

deadline established by the Secretary pursuant to this section for deciding whether to issue the authorization, the applicant or any State 

in which the facility would be located may file an appeal with the 

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—

(i) issue the necessary authorization with any appropriate 

conditions; or 

(ii) deny the application. 

(C) The President shall issue a decision not later than 90 days 

after the date of the filing of the appeal. 

(D) 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.); 

166 

(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) 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) 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 or distribution 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 3 or more contiguous States to enter into an interstate compact, 

subject to approval by Congress, establishing regional transmission 

siting agencies to— (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 

167 

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. 

SEC. 217. PROMOTION OF VOLUNTARY TRANSMISSION ORGANIZATIONS. 

(a) IN GENERAL.—The Commission may encourage and may approve the voluntary formation of RTOs, ISOs, or other similar organizations approved by the Commission for the purposes of—

(1) promoting fair, open access to electric transmission service; 

(2) facilitating wholesale competition; 

(3) improving efficiencies in transmission grid management; 

(4) promoting grid reliability; 

(5) removing opportunities for unduly discriminatory or preferential transmission practices; and 

(6) providing for the efficient development of transmission infrastructure needed to meet the growing demands of competitive 

wholesale power markets. 

(b) OPERATIONAL CONTROL.—No order issued under this Act shall 

be conditioned on or require a transmitting utility to transfer operational control of jurisdictional facilities to a Transmission Organization approved by the Commission. 

(c) ANNUAL AUDITS.—(1) Each Transmission Organization shall 

report to the Commission on a scheduled basis, as determined by 

the Commission, the means by which the Transmission Organization will ensure that the Transmission Organization will operate 

and perform the functions of the Transmission Organization in a 

cost effective manner that is also consistent with the obligations of 

the Transmission Organization under the Commission-approved 

tariffs and agreements of the Transmission Organization. 

(2) The Commission shall annually audit the compliance of the 

Transmission Organization with the filed plan and any additional 

Commission requirements concerning the performance, operations, 

and cost efficiencies of the Transmission Organization. 

(3) The Commission shall establish appropriate accounting procedures for recording costs to facilitate comparisons among Transmission Organizations and, to the extent practicable, among other 

transmitting utilities performing similar functions. 

SEC. 218. 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 1 or 

168 

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. 

(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 1 or more States or political subdivisions, or a corporation that is wholly owned, directly or indirectly, by any 1 

or more of the States or political subdivisions, competent to 

carry on the business of developing, transmitting, using, or distributing power. 

(b) 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 1 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 1 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 loadserving 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 TransVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00168 Fmt 6601 Sfmt 6603 E:\HR\OC\SR078.XXX SR078
169 

mission 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 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 loadserving 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 provides a basis for abrogating any contract or service agreement for firm transmission service or rights in effect as of the date of enactment of this section. 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 loadserving 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. 

170 

(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). 

(h) FERC RULEMAKING ON LONG-TERM TRANSMISSION RIGHTS IN

ORGANIZED MARKETS.—Within one 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 subsection (b)(4) in 

Transmission Organizations with organized electricity markets. 

(i) EFFECT OF EXERCISING RIGHTS.—An entity that to the extent 

required to meet its service obligations exercises rights described in 

subsection (b) shall not be considered by such action as engaging in 

undue discrimination or preference under this Act. 

SEC. 219. 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—

(1) firm transmission rights described in subsection (a)(1); or 

(2) firm transmission rights obtained by exercising contract or 

tariff rights associated with the firm transmission rights described in subsection (a)(1). 

SEC. 220. TRANSMISSION INFRASTRUCTURE INVESTMENT. 

(a) 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 benefiting 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); 

171 

(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— (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) 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. 221. MARKET TRANSPARENCY RULES. 

(a) IN GENERAL.—The Commission may issue such rules as the 

Commission considers to be appropriate to establish an electronic 

information system to provide the Commission and the public with 

access to such information as is necessary or appropriate to facilitate price transparency and participation in markets for the sale in 

interstate commerce of electric energy at wholesale. 

(b) INFORMATION TO BE MADE AVAILABLE.—(1) The system under 

subsection (a) shall provide, on a timely basis, information about 

the availability and market price of wholesale electric energy and 

transmission services to the Commission, State commissions, buyers 

and sellers of wholesale electric energy, users of transmission services, and the public. 

(2) In determining the information to be made available under the 

system and the time at which to make such 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) AUTHORITY TO OBTAIN INFORMATION.—The Commission shall 

have authority to obtain information described in subsections (a) 

and (b) from any electric utility or transmitting utility (including 

any entity described in section 201(f)). 

(d) EXEMPTIONS.—The rules of the Commission, if adopted, shall 

exempt from disclosure information that the Commission determines 

would, if disclosed—

(1) be detrimental to the operation of an effective market; or 

(2) jeopardize system security. 

(e) COMMODITY FUTURES TRADING COMMISSION.—(1) This section 

shall not affect the exclusive jurisdiction of the Commodity Futures 

Trading Commission with respect to accounts, agreements, contracts, or transactions in commodities under the Commodity Exchange Act (7 U.S.C. 1 et seq.). 

(2) Any request for information to a designated contract market, 

registered derivatives transaction execution facility, board of trade, 

exchange, or market involving an account, agreement, contract, or 

transaction in a commodity (including natural gas, electricity and 

other energy commodities) within the exclusive jurisdiction of the 

Commodity Futures Trading Commission shall be directed to the 

172 

Commodity Futures Trading Commission, which shall cooperate in 

responding to any information request by the Commission. 

(f) SAVINGS PROVISION.—In exercising authority under this section, the Commission shall not— (1) compete with, or displace from the market place, any price 

publisher (including any electronic price publisher); or 

(2) regulate price publishers (including any electronic price 

publisher) or impose any requirements on the publication of information by price publishers (including any electronic price 

publisher). 

(g) ERCOT.—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. 222. 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. 223. PROHIBITION OF ENERGY MARKET MANIPULATION. 

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 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. 

* * * * * * * 

PART III—LICENSEES AND PUBLIC UTILITIES; 

PROCEDURAL AND ADMINISTRATIVE PROVISIONS 

* * * * * * * 

COMPLAINTS 

SEC. 306. Any person, electric utility, State, municipality, or 

State commission complaining of anything done or omitted to be 

done by any licensee, transmitting utility, or public utility in contravention of the provisions of this Act may apply to the Commission by petition which shall briefly state the facts, whereupon a 

statement of the complaint thus made shall be forwarded by the 

Commission to such licensee, transmitting utility, or public utility, 

who shall be called upon to satisfy the complaint or to answer the 

same in writing within a reasonable time to be specified by the 

Commission. If such licensee, transmitting utility, or public utility 

shall not satisfy the complaint within the time specified or there 

shall appear to be any reasonable ground for investigating such 

complaint, it shall be the duty of the Commission to investigate the 

173 

matters complained of in such manner and by such means as it 

shall find proper. 

INVESTIGATIONS BY COMMISSION; ATTENDANCE OF 

WITNESSES; DEPOSITIONS 

SEC. 307. (a) The Commission may investigate any facts, conditions, practices, or matters which it may find necessary or proper 

in order to determine whether any person, electric utility, transmitting utility, or other entity has violated or is about to violate any 

provision of this Act or any rule, regulation, or order thereunder, 

or to aid in the enforcement of the provisions of this Act or in prescribing rules or regulations thereunder, or in obtaining information to serve as a basis for recommending further legislation concerning the matters to which this Act relates, or in obtaining information about the sale of electric energy at wholesale in interstate 

commerce and the transmission of electric energy in interstate commerce. The Commission may permit any person, electric utility, 

transmitting utility, or other entity to file with it a statement in 

writing under oath or otherwise, as it shall determine, as to any 

or all facts and circumstances concerning a matter which may be 

the subject of investigation. 

* * * * * * * 

REHEARINGS; COURT REVIEW OF ORDERS 

SEC. 313. (a) Any person, electric utility, State, municipality, or 

State commission aggrieved by an order issued by the Commission 

in a proceeding under this chapter to which such person, electric 

utility, State, municipality, or State commission is a party may 

apply for a rehearing within thirty days after the issuance of such 

order. The application for rehearing shall set forth specifically the 

ground or grounds upon which such application is based. Upon 

such application the Commission shall have power to grant or deny 

rehearing or to abrogate or modify its order without further hearing. Unless the Commission acts upon the application for rehearing 

within thirty days after it is filed, such application may be deemed 

to have been denied. No proceeding to review any order of the Commission shall be brought by øany person unless such person¿ any 

entity unless such entity shall have made application to the Commission for a rehearing thereon. Until the record in a proceeding 

shall have been filed in a court of appeals, as provided in subsection (b) of this section, the Commission may at any time, upon 

reasonable notice and in such manner as it shall deem proper, 

modify or set aside, in whole or in part, any finding or order made 

or issued by it under the provisions of this chapter. 

* * * * * * * 

ENFORCEMENT OF ACT, REGULATIONS AND ORDERS 

SEC. 314. * * * 

(c) * * * 

(d) In any proceeding under paragraph (a), the court may prohibit, conditionally or unconditionally, and permanently or for such 

period of time as the Court determines, any person who is engaged 

174 

or has engaged in practices constituting a violation of Section 222 

(and related rules or 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. 

GENERAL FORFEITURE PROVISIONS; VENUE 

SEC. 315. * * * 

(b) * * * 

(c) This øsubsection¿ section shall not apply in the case of any 

provision of section 211, 212, 213, or 214 or any rule or order 

issued under any such provision. 

GENERAL PENALTIES 

SEC. 316. (a) Any person who willfully and knowingly does or 

causes or suffers to be done any act, matter, or thing in this Act 

prohibited or declared to be unlawful, or who willfully and knowingly omits or fails to do any act, matter, or thing in this Act required to be done, or willfully and knowingly causes or suffers such 

omission or failure, shall, upon conviction thereof, be punished by 

a fine of not more than ø$5,000¿ $1,000,000 or by imprisonment for 

not more than øtwo years¿ five years, or both. 

(b) Any person who willfully and knowingly violates any rule, 

regulation, restriction, condition, or order made or imposed by the 

Commission under authority of this Act, or any rule or regulation 

imposed by the Secretary of the Army under authority of Part I of 

this Act shall, in addition to any other penalties provided by law, 

be punished upon conviction thereof by a fine of not exceeding 

ø$500¿ $25,000 for each and every day during which such offense 

occurs. 

ø(c) This subsection shall not apply in the case of any provision 

of section 211, 212, 213, or 214 or any rule or order issued under 

any such provision.¿ 

SEC. 316A. ENFORCEMENT OF CERTAIN PROVISIONS 

(a) VIOLATIONS.—It shall be unlawful for any person to violate 

any provision of øsection 211, 212, 213, or 214¿ Part II or any rule 

or order issued under any such provision. 

(b) CIVIL PENALTIES.—Any person who violates any provision of 

øsection 211, 212, 213, or 214¿ Part II or any provision of any rule 

or order thereunder shall be subject to a civil penalty of not more 

than ø$10,000¿ $1,000,000 for each day that such violation continues. 

* * * * * * * 

øCONFLICT OF JURISDICTION¿ 

øSEC. 318. If, with respect to the issue, sale, or guaranty of a security, or assumption of obligation or liability in respect of a security, the method of keeping accounts, the filing of reports, or the 

acquisition or disposition of any security, capital assets, facilities, 

or any other subject matter, any person is subject both to a requireVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00174 Fmt 6601 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
175 

ment of the Public Utility Holding Company Act of 1935 or of a 

rule, regulation, or order thereunder and to a requirement of this 

Act or of a rule, regulation, or order thereunder, the requirement 

of the Public Utility Holding Company Act of 1935 shall apply to 

such person, and such person shall not be subject to the requirement of this Act, or of any rule, regulation, or order thereunder, 

with respect to the same subject matter, unless the Securities and 

Exchange Commission has exempted such person from such requirement of the Public Utility Holding Company Act of 1935, in 

which case the requirements of this Act shall apply to such person.¿ 

MINERAL LEASING ACT—ACT OF FEBRUARY 

25, 1920, AS AMENDED (30 U.S.C. 181 ET SEQ.) 

COAL 

SEC. 2. * * * 

(d)(1) * * * 

(2)(A) After the Secretary has approved the establishment of a 

logical mining unit, any mining plan approved for that unit must 

require such diligent development, operation, and production that 

the reserves of the entire unit will be mined within a period established by the Secretary which shall not be more than forty years. 

(B) The Secretary may establish a period of more than forty years 

if the Secretary determines that—

(i) the longer period 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. 3. øAny person,¿ (a)(1) Except as provided in paragraph (3), 

on a finding by the Secretary under paragraph (2), any person, association, or corporation holding a lease of coal lands or coal deposits under the provisions of this chapter may with the approval of 

the Secretary of the Interior, øupon a finding by him that it would 

be in the interest of the United States, secure modifications of the 

original coal lease by including additional coal lands or coal deposits contiguous or cornering to those embraced in such lease, but in 

no event shall the total area added by such modifications to an existing coal lease exceed one hundred sixty acres, or add acreage 

larger than that in the original lease.¿ secure modifications of the 

original coal lease by including additional coal lands or coal deposits contiguous or cornering to those embraced in the lease. 

(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 (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 320 acres; or (B) add acreage 

larger than that in the original lease. øThe Secretary¿ (b) The SecVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00175 Fmt 6601 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
176 

retary shall prescribe terms and conditions which shall be consistent with this chapter and applicable to all of the acreage in 

such modified lease except that nothing in this section shall require 

the Secretary to apply the production or mining plan requirements 

of sections 202a(2) and 207(c) of this title. øThe minimum¿ (c) The 

minimum royalty provisions of section 207(a) of this title shall not 

apply to any lands covered by this modified lease prior to a modification until the term of the original lease or extension thereof 

which became effective prior to the effective date of this Act has 

expired. 

* * * * * * * 

SEC. 7. * * * 

(b) øEach lease¿ (1) Each lease shall be subject to the conditions 

of diligent development and continued operation of the mine or 

mines, except where operations under the lease are interrupted by 

strikes, the elements, or casualties not attributable to the lessee. 

øThe Secretary¿ (2) The Secretary of the Interior, upon determining 

that the public interest will be served thereby, may suspend the 

condition of continued operation upon the payment of advance royalties. øSuch advance royalties¿ (3) Advance royalties described in 

paragraph (2) shall be no less than the production royalty which 

would otherwise be paid and shall be computed on a fixed reserve 

to production ratio (determined by the Secretary). øThe 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 ten. The amount of any production royalty 

paid for any year shall be reduced (but not below 0) by the amount 

of any advance royalties paid under such lease to the extent that 

such advance royalties have not been used to reduce production 

royalties for a prior year. No advance royalty paid during the initial twenty-year term of a lease shall be used to reduce a production royalty after the twentieth year of a lease.¿ (4) 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. (5) 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 (4) to the extent that the advance royalties have not been 

used to reduce production royalties for a prior year. øThe Secretary¿ (6) The Secretary may, upon six months’ notification to the 

lessee cease to accept advance royalties in lieu of the requirement 

of continued operation. øNothing¿ (7) Nothing in this subsection 

shall be construed to affect the requirement contained in the second sentence of subsection (a) of this section relating to commencement of production at the end of ten years. 

(c) Prior to taking any action on a leasehold which might cause 

a significant disturbance of the environment, øand not later than 

three years after a lease is issued,¿ the lessee shall submit for the 

Secretary’s approval an operation and reclamation plan. The Secretary shall approve or disapprove the plan or require that it be 

modified. Where the land involved is under the surface jurisdiction 

177 

of another Federal agency, that other agency must consent to the 

terms of such approval. 

* * * * * * * 

SEC. 17. * * * 

(b)(1)(B) The national minimum acceptable bid shall be $2 per 

acre for a period of 2 years from the date of enactment of the Federal Onshore Oil and Gas Leasing Reform Act of 1987. Thereafter, 

the Secretary may establish by regulation a higher national minimum acceptable bid for all leases based upon a finding that such 

action is necessary: (i) to enhance financial returns to the United 

States; and (ii) to promote more efficient management of oil and 

gas resources on Federal lands. Ninety days before the Secretary 

makes any change in the national minimum acceptable bid, the 

Secretary shall notify the Committee on Natural Resources of the 

United States House of Representatives and the Committee on Energy and Natural Resources of the United States Senate. øThe¿ 

Subject to paragraph (2)(B), the proposal or promulgation of any 

regulation to establish a national minimum acceptable bid shall not 

be considered a major Federal action subject to the requirements 

of section 102(2)(C) of the National Environmental Policy Act of 

1969. 

(2)(A) If the lands to be leased are within a special tar sand area, 

øthey shall be¿ the lands may be leased to the highest responsible 

qualified bidder by competitive bidding under general regulations 

in units of not more than five thousand one hundred and twenty 

acres, which shall be as nearly compact as possible, upon the payment by the lessee of such bonus as may be accepted by the Secretary. Royalty shall be 121⁄2 per centum in amount of value of production removed or sold from the lease subject to section 

17(k)(1)(c). The Secretary may lease such additional lands in special tar sand areas as may be required in support of any operations 

necessary for the recovery of tar sands. 

(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 described in subparagraph (B) shall have provisions 

addressing the appropriate accommodation of resources. 

(D) A lease issued for tar sand development 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. 

* * * * * * * 

SEC. 27. * * * 

(d)(1) No person, association, or corporation, except as otherwise 

provided in this Act, shall take, hold, own or control at one time, 

whether acquired directly from the Secretary under this Act or otherwise, oil or gas leases (including options for such leases or interests therein) on land held under the provisions of this Act exceeding in the aggregate two hundred forty-six thousand and eighty 

acres in any one State other than Alaska: Provided, however, That 

acreage held in special tar sand areas, and acreage under any lease 

178 

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, shall not be chargeable against 

such State limitations. In the case of the State of Alaska, the limit 

shall be three hundred thousand acres in the northern leasing district and three hundred thousand acres in the southern leasing district, and the boundary between said two districts shall be the left 

limit of the Tanana River from the border between the United 

States and Canada to the confluence of the Tanana and Yukon Rivers, and the left limit of the Yukon River from said confluence to 

its principal southern mouth. 

APPROPRIATIONS FOR THE DEPARTMENT OF 

THE INTERIOR AND RELATED AGENCIES 

FOR THE FISCAL YEAR ENDING SEPTEMBER 

30, 1981—PUBLIC LAW 96–514, AS AMENDED 

An Act 

Making appropriations for the Department of the Interior and related agencies for the fiscal year ending September 30, 1981, and 

for other purposes. 

Be it enacted by the Senate and House of Representatives of the 

United States of America in Congress assembled, That the following 

sums are appropriated, out of any money in the Treasury not otherwise appropriated, for the Department of the Interior and related 

agencies for the fiscal year ending September 30, 1981, and for 

other purposes, namely: 

TITLE I—DEPARTMENT OF THE INTERIOR 

* * * * * * * 

ENERGY AND MINERALS 

* * * * * * * 

øFor necessary expenses of carrying out the provisions of section 

104 of Public Law 94–258, and for conducting hereafter and with 

funds appropriated by this Act and by subsequent appropriations 

Acts, notwithstanding any other provision of law and pursuant to 

such rules and regulations as the Secretary may prescribe, an expeditious program of competitive leasing of oil and gas in the National Petroleum Reserve in Alaska: Provided, That (1) activities 

undertaken pursuant to this section shall include or provide for, 

$107,001,000, to remain available until expended: Provided, that 

(1) activities undertaken pursuant to this Act shall include or provide for such conditions, restrictions, and prohibitions as the Secretary deems necessary or appropriate to mitigate reasonably foreseeable and significantly adverse effects on the surface resources of 

the National Petroleum Reserve in Alaska (the Reserve); (2) the 

provisions of section 202 and section 603 of the Federal Lands Policy and Management Act of 1976 (90 Stat. 2743) shall not be appliVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00178 Fmt 6601 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
179 

cable to the Reserve; (3) the first lease sale shall be conducted 

within twenty months of the date of enactment of this Act: Provided, That the first lease sale shall be conducted only after publication of a final environmental impact statement if such is deemed 

necessary under the provisions of the National Environmental Policy Act of 1969 (42 U.S.C. 4332); (4) the withdrawals established 

by section 102 of Public Law 94–258 are rescinded for the purposes 

of the oil and gas leasing program authorized herein; (5) bidding 

systems used in lease sales shall be based on bidding systems included in section 205(a)(1)(A) through (H) of the Outer Continental 

Shelf Lands Act Amendments of 1978 (92 Stat. 629); (6) lease 

tracts may encompass identified geological structures; (7) the size 

of lease tracts may be up to sixty thousand acres, as determined 

by the Secretary; (8) each lease shall be issued for an initial period 

of ten years, and shall be extended for so long thereafter as oil or 

gas is produced from the lease in paying quantities, or as drilling 

or reworking operations, as approved by the Secretary, are conducted thereon; (9) for purposes of conservation of the natural resources of any oil or gas pool, field, or like area, or any part thereof, lessees thereof and their representatives are authorized to unite 

with each other, or jointly or separately with others, in collectively 

adopting and operating under a unit agreement for such pool, field, 

or like area, or any part thereof (whether or not any other part of 

said oil or gas pool, field, or like area is already subject to any cooperative or unit plan of development or operation), whenever determined by the Secretary to be necessary or advisable in the public interest. Drilling, production, and well reworking operations 

performed in accordance with a unit agreement shall be deemed to 

be performed for the benefit of all leases that are subject in whole 

or in part to such unit agreement. When separate tracts cannot be 

independently developed and operated in conformity with an established well spacing or development program, any lease, or a portion 

thereof, may be pooled with other lands, whether or not owned by 

the United States, under a communitization or drilling agreement 

providing for an apportionment of production or royalties among 

the separate tracts of land comprising the drilling or spacing unit 

when determined by the Secretary of the Interior to be in the public interest, and operations or production pursuant to such an 

agreement shall be deemed to be operations or production as to 

each such lease committed thereto; (10) to encourage the greatest 

ultimate recovery of oil or gas or in the interest of conservation the 

Secretary is authorized to waive, suspend, or reduce the rental, or 

minimum royalty, or reduce the royalty on an entire leasehold, including on any lease operated pursuant to a unit agreement, whenever in his judgment the leases cannot be successfully operated 

under the terms provided therein. The Secretary is authorized to 

direct or assent to the suspension of operations and production on 

any lease or unit. In the event the Secretary, in the interest of conservation, shall direct or assent to the suspension of operations and 

production on any lease or unit, any payment of acreage rental or 

minimum royalty prescribed by such lease or unit likewise shall be 

suspended during the period of suspension of operations and production, and the term of such lease shall be extended by adding 

any such suspension period thereto; and (11) all receipts from 

180 

sales, rentals, bonuses, and royalties on leases issued pursuant to 

this section shall be paid into the Treasury of the United States: 

Provided, That 50 percent thereof shall be paid by the Secretary of 

the Treasury semiannually, as soon thereafter as practicable after 

March 30 and September 30 each year, to the State of Alaska for: 

(A) planning; (B) construction, maintenance, and operation of essential public facilities; and (C) other necessary provisions of public 

service: Provided further, That in the allocation of such funds, the 

State shall give priority to use by subdivisions of the State most 

directly or severely impacted by development of oil and gas leased 

under this section. 

øAny agency of the United States and any person authorized by 

the Secretary may conduct geological and geophysical explorations 

in the National Petroleum Reserve in Alaska which do not interfere 

with operations under any contract maintained or granted previously. Any information acquired in such explorations shall be 

subject to the conditions of 43 U.S.C. 1352(a)(1)(A). 

øAny action seeking judicial review of the adequacy of any program or site-specific environmental impact statement under section 

102 of the National Environmental Policy Act of 1969 (42 U.S.C. 

4332) concerning oil and gas leasing in the National Petroleum Reserve-Alaska shall be barred unless brought in the appropriate District Court within 60 days after notice of the availability of such 

statement is published in the Federal Register. 

øThe detailed environmental studies and assessments that have 

been conducted on the exploration program and the comprehensive 

land-use studies carried out in response to sections 105(b) and (c) 

of Public Law 94–258 shall be deemed to have fulfilled the requirements of section 102(2)(c) of the National Environmental Policy Act 

(Public Law 91–190), with regard to the first two oil and gas lease 

sales in the National Petroleum Reserve-Alaska: Provided, That 

not more than a total of 2,000,000 acres may be leased in these two 

sales: Provided further, That any exploration or production undertaken pursuant to this section shall be in accordance with section 

104(b) of the Naval Petroleum Reserves Production Act of 1976 (90 

Stat. 304; 42 U.S.C. 6504).¿ 

NATIONAL PETROLEUM RESERVE IN ALASKA—

PUBLIC LAW 94–258 AS AMENDED THROUGH 

P.L. 108–68, JUNE 18, 2003 

AN ACT To authorize the Secretary of the Interior to establish 

on certain public lands of the United States national petroleum reserves the development of which needs to be regulated in a manner 

consistent with the total energy needs of the Nation, and for other 

purposes. 

Be it enacted by the Senate and House of Representatives of the 

United States of America in Congress assembled, That the Act may 

be cited as the ‘‘Naval Petroleum Reserves Production Act of 1976’’. 

181 

TITLE I—NATIONAL PETROLEUM RESERVE IN 

ALASKA 

* * * * * * * 

ADMINISTRATION OF THE RESERVE 

SEC. 104. ø(a) Except as provided in subsection (e) of this section, 

production of petroleum from the reserve is prohibited and no development leading to production of petroleum from the reserve 

shall be undertaken until authorized by an Act of Congress.¿ 

ø(b)¿ (a) Any exploration within the Utukok River, the 

Teshekpuk Lake areas, and other areas designated by the Secretary of the Interior containing any significant subsistence, recreational, fish and wildlife, or historical or scenic value, shall be 

conducted in a manner which will assure the maximum protection 

of such surface values to the extent consistent with the requirements of this Act for the exploration of the reserve. 

ø(c)¿ (b) The Secretary of the Navy shall continue the ongoing 

petroleum exploration program within the reserve until the date of 

the transfer of jurisdiction specified in section 103(a). Prior to the 

date of such transfer of jurisdiction the Secretary of the Navy 

shall—

(1) cooperate fully with the Secretary of the Interior providing him access to such facilities and such information as he 

may request to facilitate the transfer of jurisdiction; 

(2) provide to the Committee on Energy and Natural Resources of the Senate and the Committee on Natural Resources 

of the House of Representatives copies of any reports, plans, or 

contracts pertaining to the reserve that are required to be submitted to the Committees on Armed Services of the Senate and 

the House of Representatives; and 

(3) cooperate and consult with the Secretary of the Interior 

before executing any new contract or amendment to any existing contract pertaining to the reserve and allow him a reasonable opportunity to comment on such contract or amendment, 

as the case may be. 

ø(d)¿ (c) The Secretary of the Interior shall commence further petroleum exploration of the reserve as of the date of transfer of jurisdiction specified in section 103(a). In conducting this exploration effort, the Secretary of the Interior—

* * * * * * * 

ANTITRUST PROVISIONS 

SEC. 106. Unless otherwise provided by Act of Congress, whenever development leading to production of petroleum is authorized, 

the provisions of subsections (g), (h), and (i) of section 7430 of title 

10, United States Code, shall be deemed applicable to the Secretary 

of the Interior with respect to rules and regulations, plans of development and amendments thereto, and contracts and operating 

agreements. All plans and proposals submitted to the Congress 

under this title or pursuant to legislation authorizing development 

leading to production shall contain a report by the Attorney GenVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00181 Fmt 6601 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
182 

eral of the United States on the anticipated effects upon competition of such plans and proposals. 

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.—

(1) IN GENERAL.—Activities undertaken pursuant to this Act 

shall include or provide for such conditions, restrictions, and 

prohibitions as the Secretary deems necessary or appropriate to 

prevent to the extent practicable, and to mitigate, reasonably 

foreseeable and significantly adverse effects on the surface resources of the National Petroleum Reserve in Alaska. 

(2) CERTAIN RESOURCES AND FACILITIES.—In carrying out the 

leasing program under this section, the Secretary shall minimize, to the extent practicable, the impact to surface resources 

and consolidate facilities. 

(c) LAND USE PLANNING; BLM WILDERNESS STUDY.—The provisions of section 202 and section 603 of the Federal Lands Policy and 

Management Act of 1976 (90 Stat. 2743) shall not be applicable to 

the Reserve. 

(d) FIRST LEASE SALE.—The first lease sale shall be conducted 

within twenty months of the date of enactment of this Act: Provided, 

That the first lease sale shall be conducted only after publication of 

a final environmental impact statement if such is deemed necessary 

under the provisions of the National Environmental Policy Act of 

1969 (42 U.S.C. 4321 et seq.). 

(e) WITHDRAWALS.—The withdrawals established by section 102 of 

Public Law 94–258 are rescinded for the purposes of the oil and gas 

leasing program authorized under this section. 

(f) BIDDING SYSTEMS.—Bidding systems used in lease sales shall 

be based on bidding systems included in section 205(a)(1) (A) 

through (H) of the Outer Continental Shelf Lands Act Amendments 

of 1978 (92 Stat. 629). 

(g) GEOLOGICAL STRUCTURES.—Lease tracts may encompass identified geological structures. 

(h) SIZE OF LEASE TRACTS.—The size of lease tracts may be up 

to sixty thousand acres, as determined by the Secretary. 

(i) 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 or drilling or reworking operations, as approved 

by the Secretary, are conducted on the leased land. 

(2) 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 unless 

the lessee is allowed a reasonable time, which shall be not less 

than 60 days after notice by registered or certified mail, within 

which to place the lands in producing status or unless, after 

such status is established, production is discontinued on the 

leased premises without permission granted by the Secretary 

under the provisions of this Act. 

183 

(3) RENEWAL OF LEASES WITHOUT DISCOVERIES.—At the end 

of the primary term of a lease, the Secretary shall renew for one 

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, 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. 

(j) UNIT AGREEMENTS.—

(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 shall, among other things, examine 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 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 

184 

controlled by agreement among the affected lessors and lessees. 

(4) BENEFIT OF OPERATIONS.—Drilling, production, and well 

reworking operations performed in accordance with a unit 

agreement shall be deemed to be performed for the benefit of all 

leases that are subject in whole or in part to such unit agreement. 

(5) POOLING.—If separate tracts cannot be independently developed and operated in conformity with an established well 

spacing or development program, any lease, or a portion thereof, may be pooled with other lands, whether or not owned by 

the United States, under a communitization or drilling agreement providing for an apportionment of production or royalties 

among the separate tracts of land comprising the drilling or 

spacing unit when determined by the Secretary of the Interior 

(in consultation with the owners of the other land) to be in the 

public interest, and operations or production pursuant to such 

an agreement shall be deemed to be operations or production as 

to each such lease committed 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 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. 

(2) SUSPENSION OF OPERATIONS AND PRODUCTION.—The Secretary may direct or assent to the suspension of operations and 

production on any lease or unit. 

(3) SUSPENSION OF PAYMENTS.—If the Secretary, in the interest of conservation, shall direct or assent to the suspension of 

operations and production on any lease or unit, any payment of 

acreage rental or minimum royalty prescribed by such lease or 

unit likewise shall be suspended during the period of suspension of operations and production, and the term of such lease 

shall be extended by adding any such suspension period to the 

lease. 

(l) RECEIPTS.—All receipts from sales, rentals, bonuses, and royalties on leases issued pursuant to this section shall be paid into the 

Treasury of the United States: Provided, That 50 percent thereof 

185 

shall be paid by the Secretary of the Treasury semiannually, as soon 

thereafter as practicable after March 30 and September 30 each 

year, to the State of Alaska for: 

(1) planning; 

(2) construction, maintenance, and operation of essential public facilities; and 

(3) other necessary provisions of public service: Provided further, That in the allocation of such funds, the State shall give 

priority to use by subdivisions of the State most directly or severely impacted by development of oil and gas leased under this 

Act. 

(m) EXPLORATIONS.—Any agency of the United States and any 

person authorized by the Secretary may conduct geological and geophysical explorations in the National Petroleum Reserve in Alaska 

which do not interfere with operations under any contract maintained or granted previously. Any information acquired in such explorations shall be subject to the conditions of 43 U.S.C. 

1352(a)(1)(A). 

(n) ENVIRONMENTAL IMPACT STATEMENTS.—

(1) JUDICIAL REVIEW.—Any action seeking judicial review of 

the adequacy of any program or site-specific environmental impact statement under section 102 of the National Environmental Policy Act of 1969 (42 U.S.C. 4332) concerning oil and 

gas leasing in the National Petroleum Reserve-Alaska shall be 

barred unless brought in the appropriate District Court within 

60 days after notice of the availability of such statement is published in the Federal Register. 

(2) INITIAL LEASE SALES.—The detailed environmental studies 

and assessments that have been conducted on the exploration 

program and the comprehensive land-use studies carried out in 

response to sections 105 (b) and (c) of Public Law 94–258 shall 

be deemed to have fulfilled the requirements of section 102(2)(c) 

of the National Environmental Policy Act (Public Law 91–190), 

with regard to the first two oil and gas lease sales in the National Petroleum Reserve-Alaska: Provided, That not more than 

a total of 2,000,000 acres may be leased in these two sales: Provided further, That any exploration or production undertaken 

pursuant to this section shall be in accordance with section 

104(b). 

(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)), 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’’). 

(2) PARTIAL CONVEYANCE.— (A) IN GENERAL.—In a case in which a conveyance of a 

subsurface estate described in paragraph (1) does not include all of the land covered by the oil and gas lease, the 

186 

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. 

(B) SEGREGATION OF LEASE.—In a case described in subparagraph (A), 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 

(ii) waive administration of the lease that covers the 

subsurface estate conveyed to the Corporation. 

(C) NO CHANGE IN LEASE OBLIGATIONS.—The segregation 

of the lease described in subparagraph (B)(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). 

(3) AUTHORITY TO MANAGE FEDERALLY OWNED SURFACE ESTATE.—Nothing in this subsection limits the authority of the 

Secretary of the Interior to manage the federally-owned surface 

estate within the Reserve. 

AUTHORIZATION FOR APPROPRIATIONS 

øSEC. 107¿ SEC. 108. (a) There are authorized to be appropriated 

to the Department of the Interior such sums as may be necessary 

to carry out the provisions of this title. 

(b) If the Secretary of the Interior determines that there is an 

immediate and substantial increase in the need for municipal services and facilities in communities located on or near the reserve as 

a direct result of the exploration and study activities authorized by 

this title and that an unfair and excessive financial burden will be 

incurred by such communities as a result of the increased need for 

such services and facilities, then he is authorized to assist such 

communities in meeting the costs of providing increased municipal 

services and facilities. The Secretary of the Interior shall carry out 

the provisions of this section through existing Federal programs 

and he shall consult with the heads of the departments or agencies 

of the Federal Government concerned with the type of services and 

facilities for which financial assistance is being made available. 

NATURAL GAS ACT—ACT OF JUNE 21, 1938, 

CHAPTER 556, AS AMENDED (15 U.S.C. 717–

717W) 

* * * * * * * 

EXPORTATION OR IMPORTATION OF NATURAL GAS 

SEC. 3. * * * 

187 

(d) Except as specifically provided in this part, 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) No facilities located onshore or in State waters for the import of natural gas from a foreign country, or the export of natural 

gas to a foreign country, shall be sited, constructed, expanded, or 

operated, unless the Commission has authorized such acts or operations. 

(2) The Commission shall have the exclusive authority to approve 

or deny an application for the siting, construction, expansion, or operation of facilities located onshore or in State waters for the import 

of natural gas from a foreign county or the export of natural gas 

to a foreign country. 

(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 finds appropriate. 

(B) The Commission shall not— (i) deny an application solely on the basis that the applicant 

proposes to use the liquefied natural gas import facility 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 liquefied natural gas import 

facility 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 liquefied natural gas import facility; 

or 

(III) a requirement to file with the Commission schedules 

or contracts related to the rates, charges, terms, or conditions of service of the liquefied natural gas import facility. 

(4) An order issued for a liquefied natural gas import facility 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. 

RATES AND CHARGES; SCHEDULES; SUSPENSION OF 

NEW RATES 

SEC. 4. * * * 

(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 placed in service after the date of enactment of the 

Energy Policy Act of 2005, notwithstanding the fact that the comVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00187 Fmt 6601 Sfmt 6603 E:\HR\OC\SR078.XXX SR078
188 

pany 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 storage capacity in areas 

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 (but not more frequently than triennially) whether 

the market-based rate is just, reasonable, and not unduly discriminatory or preferential. 

SEC. 4A. 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. 

* * * * * * * 

[HEARINGS; RULES OF PROCEDURE] PROCESS 

COORDINATION; HEARINGS; RULES OF PROCEDURE 

øSEC. 15. (a) Hearings under this act may be held before the 

Commission, any member or members thereof, or any representative of the Commission designated by it, and appropriate records 

thereof shall be kept. In any proceeding before it, the Commission 

in accordance with such rules and regulations as it may prescribe, 

may admit as a party any interested State, State commission, municipality or any representative of interested consumers or security 

holders, or any competitor of a party to such proceeding, or any 

other person whose participation in the proceeding may be in the 

public interest.¿ 

ø(b) All hearings, investigations, and proceedings under this act 

shall be governed by rules of practice and procedure to be adopted 

by the Commission, and in the conduct thereof the technical rules 

of evidence need not be applied. No informality in any hearing, investigation, or proceeding or in the manner of taking testimony 

shall invalidate any order, decision, rule, or regulation issued 

under the authority of this act.¿ 

SEC. 15. (a) In this section: 

(1) The term ‘‘Federal authorization’’ means any authorization 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. 

(2) The term ‘‘Federal authorization’’ 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. 

189 

(b)(1) With respect to an application for Federal authorization, the 

Commission shall, unless the Commission orders otherwise, be the 

lead agency for purposes of complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). 

(2) As lead agency, the Commission, in consultation with affected 

agencies, shall prepare a single environmental review document, 

which shall be used as a basis for all decisions under Federal law 

on— (A) an application for authorization under section 3; or 

(B) a certificate of public convenience and necessity under section 7. 

(c)(1) The Commission shall, in consultation with agencies responsible for Federal authorizations and with due consideration of 

recommendations by the agencies, establish a schedule for all Federal authorizations required to be completed before an application 

under section 3 or 7 may be approved. 

(2) In establishing a schedule, the Commission shall comply with 

applicable schedules established by Federal law. 

(3) All Federal and State agencies with jurisdiction over natural 

gas infrastructure shall seek to coordinate their proceedings within 

the timeframes established by the Commission with respect to an 

application for authorization under section 3 or a certificate of public convenience and necessity under section 7. 

(d)(1) In a case in which an administrative agency or officer has 

failed to act by the deadline established by the Commission under 

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, take action on the pending application. 

(2) Based on the overall record and in consultation with the affected agency, the President may— (A) issue the necessary authorization with any appropriate 

conditions; or 

(B) deny the application. 

(3) Not later than 90 days after the filing of an appeal, the President shall issue a decision as to that appeal. 

(4) In making a decision under this subsection, the President 

shall comply with applicable requirements of Federal law, including—

(A) the Endangered Species Act of 1973 (16 U.S.C. 1531 et 

seq.) 

(B) the Federal Water Pollution Control Act (33 U.S.C. 1251 

et seq.); 

(C) the National Forest Management Act of 1976 (16 U.S.C. 

472a et seq.); 

(D) the National Environmental Policy Act of 1969 (42 U.S.C. 

4321 et seq.); 

(E) the Federal Land Policy and Management Act of 1976 (43 

U.S.C. 1701 et seq.); 

(F) the Coastal Zone Management Act of 1972 (16 U.S.C. 

1451 et seq.); and 

(G) the Clean Air Act (42 U.S.C. 7401 et seq.). 

(e) Hearings under this act may be held before the Commission, 

any member or members thereof, or any representative of the ComVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00189 Fmt 6601 Sfmt 6603 E:\HR\OC\SR078.XXX SR078
190 

mission designated by it, and appropriate records thereof shall be 

kept. In any proceeding before it, the Commission in accordance 

with such rules and regulations as it may prescribe, may admit as 

a party any interested State, State commission, municipality or any 

representative of interested consumers or security holders, or any 

competitor of a party to such proceeding, or any other person whose 

participation in the proceeding may be in the public interest. 

(f) All hearings, investigations, and proceedings under this act 

shall be governed by rules of practice and procedure to be adopted 

by the Commission, and in the conduct thereof the technical rules 

of evidence need not be applied. No informality in any hearing, investigation, or proceeding or in the manner of taking testimony 

shall invalidate any order, decision, rule, or regulation issued under 

the authority of this act. 

* * * * * * * 

ENFORCEMENT OF ACT; REGULATIONS AND ORDERS 

SEC. 20. * * * 

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 person 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. 

GENERAL PENALTIES 

SEC. 21. (a) Any person who willfully and knowingly does or 

causes or suffers to be done any act, matter, or thing in this act 

prohibited or declared to be unlawful, or who willfully and knowingly omits or fails to do any act, matter, or thing in this act required to be done, or willfully and knowingly causes or suffers such 

omission or failure, shall, upon conviction thereof, be punished by 

a fine of not more than ø$5,000¿ $1,000,000 or by imprisonment for 

not more than øtwo years¿ 5 years, or both. 

(b) Any person who willfully and knowingly violates any rule, 

regulation, restriction, condition, or order made or imposed by the 

Commission under authority of this act, shall, in addition to any 

other penalties provided by law, be punished upon conviction thereof by a fine of not exceeding ø$500¿ $50,000 for each and every day 

during which such offense occurs. 

CIVIL PENALTY AUTHORITY 

SEC. 22. (a) 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 penVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00190 Fmt 6601 Sfmt 6603 E:\HR\OC\SR078.XXX SR078
191 

alty 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. 

NATURAL GAS MARKET TRANSPARENCY RULES 

SEC. 23. (a)(1) The Commission may issue such rules as the Commission considers to be appropriate to establish an electronic information system to provide the Commission and the public with access to such information as is necessary to facilitate price transparency and participation in markets for the sale or transportation 

of natural gas in interstate commerce. 

(2) The system under paragraph (1) shall provide, on a timely 

basis, information about the availability and prices 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 information described in paragraph (2) from any 

market participant; and 

(B) rely on an entity other than the Commission to receive 

and make public the information. 

(b)(1) Rules described in subsection (a)(1), 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 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) This section shall not affect the exclusive jurisdiction of the 

Commodity Futures Trading Commission with respect to accounts, 

agreements, contracts, or transactions in commodities under the 

Commodity Exchange Act (7 U.S.C. 1 et seq.). 

(2) Any request for information to a designated contract market, 

registered derivatives transaction execution facility, board of trade, 

exchange, or market involving accounts, agreements, contracts, or 

transactions in commodities (including natural gas, electricity and 

other energy commodities) within the exclusive jurisdiction of the 

Commodity Futures Trading Commission shall be directed to the 

Commodity Futures Trading Commission, which shall cooperate in 

responding to any information request by the Commission. 

(d) In carrying out this section, the Commission shall not—

(1) compete with, or displace from the market place, any price 

publisher (including any electronic price publisher); 

(2) regulate price publishers (including any electronic price 

publisher); or 

(3) impose any requirements on the publication of information 

by price publishers (including any electronic price publisher). 

192 

(e)(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. 

(f)(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. 

JURISDICTION OF OFFENSES; ENFORCEMENT OF 

LIABILITIES AND DUTIES 

SEC. ø22¿ 24. The District Courts of the United States, the District Court of the United States for the District of Columbia, and 

the United States courts of any Territory or other place subject to 

the jurisdiction of the United States shall have exclusive jurisdiction of violations of this act or the rules, regulations, and orders 

thereunder, and of all suits in equity and actions at law, brought 

to enforce any liability or duty created by, or to enjoin any violation 

of, this act or any rule, regulation, or order thereunder. Any criminal proceeding shall be brought in the district wherein any act or 

transaction constituting the violation occurred. Any suit or action 

to enforce any liability or duty created by, or to enjoin any violation 

of, this act or any rule, regulation, or order thereunder may be 

brought in any such district or in the district wherein the defendant is an inhabitant, and process in such cases may be served 

wherever the defendant may be found. Judgments and decrees so 

rendered shall be subject to review as provided in øformer¿ sections 128 and 240 of the Judicial Code, as amended (U.S.C., title 

28, secs. 225 and 347). No costs shall be assessed against the Commission in any judicial proceeding by or against the Commission 

under this act. 

SEPARABILITY OF PROVISIONS 

SEC. ø23¿ 25. If any provision of this act, or the application of 

such provision to any person or circumstance, shall be held invalid, 

the remainder of the act, and the application of such provision to 

persons or circumstances other than those as to which it is held invalid, shall not be affected thereby. 

SEC. ø24¿ 26. This act may be cited as the ‘‘Natural Gas Act.’’

NATURAL GAS POLICY ACT OF 1978—PUBLIC 

LAW 95–621 

SEC. 504. ENFORCEMENT. * * * 

(b) CIVIL ENFORCEMENT.— * * * 

(6) CIVIL PENALTIES. 

193 

(A) IN GENERAL.—Any person who knowingly violates 

any provision of this Act, or any provision of any rule or 

order under this Act, shall be subject to— (i) except as provided in clause (ii) a civil penalty, 

which the Commission may assess, of not more than 

ø$5,000¿ $1,000,000 for any one violation; and 

(ii) a civil penalty, which the President may assess, 

of not more than ø$25,000¿ $1,000,000, in the case of 

any violation of an order under section 302 or an order 

or supplemental order under section 303. 

* * * * * * * 

(c) CRIMINAL PENALTIES.— (1) VIOLATIONS OF ACT.—Except in the case of violations covered under paragraph (3), any person who knowingly and willfully violates any provision of this Act shall be subject to— (A) a fine of not more than ø$5,000¿ $1,000,000; or 

(B) imprisonment for not more than øtwo years¿ 5 years; 

or 

(C) both such fine and such imprisonment. 

(2) VIOLATION OF RULES OR ORDERS GENERALLY.—Except in 

the case of violations covered under paragraph (3), any person 

who knowingly and willfully violates any rule or order under 

this Act (other than an order of the Commission assessing a 

civil penalty under subsection (b)(4)(E)), shall be subject to a 

fine of not more than ø$500¿ $50,000 for each violation. 

COASTAL ZONE MANAGEMENT ACT OF 1972—

PUBLIC LAW 92–583, APPROVED OCT. 27, 1972, 

86 STAT. 1280—AS AMENDED THROUGH PUBLIC LAW 104–150, JUNE 3, 1996 

* * * * * * * 

øSEC. 319. (a) NOTICE.—The Secretary shall publish in the Federal Register a notice indicating when the decision record has been 

closed on any appeal to the Secretary taken from a consistency determination under section 307(c) or (d). No later than 90 days after 

the date of publication of this notice, the Secretary shall—

(1) issue a final decision in the appeal; or 

(2) publish a notice in the Federal Register detailing why a 

decision cannot be issued within the 90-day period. 

(b) DEADLINE.—In the case where the Secretary publishes a notice under subsection (a)(2), the Secretary shall issue a decision in 

any appeal filed under section 307 no later than 45 days after the 

date of the publication of the notice. 

(c) APPLICATION.—This section applies to appeals initiated by the 

Secretary and appeals filed by an applicant.¿ 

SEC. 319. (a) NOTICE.—Not 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.—

194 

(1) IN GENERAL.—Not later than the end of the 270-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 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 270-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—

(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 already existing in the sole record. 

(B) APPLICABILITY.—The Secretary may only stay the 

270-day period described in paragraph (1) for a period not 

to exceed 60 days. 

(c) DEADLINE FOR DECISION.—

(1) IN GENERAL.—Not later than 90 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 45 days after the 

date of publication of a Federal Register notice explaining why 

a decision cannot be issued within the 90-day period, the Secretary shall issue a decision. 

PUBLIC LAW 106–511 (114 Stat. 2376) 

* * * * * * * 

TITLE VI—SOUTHEASTERN ALASKA INTERTIE 

SYSTEM CONSTRUCTION; NAVAJO ELECTRIFICATION DEMONSTRATION PROGRAM 

* * * * * * * 

SEC. 602. NAVAJO ELECTRIFICATION DEMONSTRATION PROGRAM. 

(a) ESTABLISHMENT.—The Secretary of Energy shall establish øa 

5-year program¿ 10-year to assist the Navajo Nation to meet its 

electricity needs. The purpose of the program shall be to provide 

electric power to the estimated 18,000 occupied structures on the 

Navajo Nation that lack electric power. The goal of the program 

shall be to ensure that every household on the Navajo Nation that 

195 

requests it has access to a reliable and affordable source of electricity by the year ø2006.¿ 2011. 

* * * * * * * 

(e) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to 

be appropriated to the Secretary of Energy to carry out this section 

$15,000,000 for each of the fiscal years 2002 through ø2006.¿ 2011. 

THE NATIVE AMERICAN HOUSING AND SELFDETERMINATION ACT OF 1996—PUBLIC LAW 

104–330, AS AMENDED (25 U.S.C. 4101 ET SEQ.) 

* * * * * * * 

SEC. 202. ELIGIBLE AFFORDABLE HOUSING ACTIVITIES. * * * 

(1) * * * 

(2) DEVELOPMENT.—The acquisition, new construction, reconstruction, or moderate or substantial rehabilitation of affordable housing, which may include real property acquisition, site 

improvement, development of utilities and utility services, conversion, demolition, financing, administration and planning, 

improvement to achieve greater energy efficiency and other related activities. 

ATOMIC ENERGY ACT OF 1954—ACT OF AUGUST 1, 1946, CHAPTER 724, AS AMENDED BY 

THE ACT OF AUGUST 30, 1954, CHAPTER 1073, 

AS AMENDED (42 U.S.C. 2011 ET SEQ.) 

* * * * * * * 

CHAPTER 11. INTERNATIONAL ACTIVITIES 

* * * * * * * 

SEC. 129. CONDUCT RESULTING IN TERMINATION OF NUCLEAR EXPORTS. 

a. No nuclear materials and equipment or sensitive nuclear technology shall be exported to—

(1) any non-nuclear-weapon state that is found by the President to have, at any time after the effective date of this section, the effective date was March 10, 1978. 

(A) detonated a nuclear explosive device; or 

(B) terminated or abrogated IAEA safeguards; or 

(C) materially violated an IAEA safeguards agreement; 

or 

(D) engaged in activities involving source or special nuclear material and having direct significance for the manufacture or acquisition of nuclear explosive devices, and has 

failed to take steps which, in the President’s judgment, 

represent sufficient progress toward terminating such activities; or 

196 

(2) any nation or group of nations that is found by the President to have, at any time after the effective date of this section, 

(A) materially violated an agreement for cooperation 

with the United States, or, with respect to material or 

equipment not supplied under an agreement for cooperation, materially violated the terms under which such material or equipment was supplied or the terms of any commitments obtained with respect thereto pursuant to section 402(a) of the Nuclear Non-Proliferation Act of 1978; or 

(B) assisted, encouraged, or induced any non-nuclearweapon state to engage in activities involving source or 

special nuclear material and having direct significance for 

the manufacture or acquisition of nuclear explosive devices, and has failed to take steps which, in the President’s 

judgment, represent sufficient progress toward terminating 

such assistance, encouragement, or inducement; or 

(C) entered into an agreement after the date of enactment of this section for the transfer of reprocessing equipment, materials, or technology to the sovereign control of 

a non-nuclear-weapon state except in connection with an 

international fuel cycle evaluation in which the United 

States is a participant or pursuant to a subsequent international agreement or understanding to which the United 

States subscribes; 

unless the President determines that cessation of such exports 

would be seriously prejudicial to the achievement of United States 

non-proliferation objectives or otherwise jeopardize the common defense and security: Provided, That prior to the effective date of any 

such determination, the President’s determination, together with a 

report containing the reasons for his determination, shall be submitted to the Congress and referred to the Committee on Foreign 

Affairs of the House of Representatives and the Committee on Foreign Relations of the Senate for a period of sixty days of continuous 

session (as defined in subsection 130 g. of this Act), but any such 

determination shall not become effective if during such sixty-day 

period the Congress adopts a concurrent resolution stating in substance that it does not favor the determination. Any such determination shall be considered pursuant to the procedures set forth 

in section 130 of this Act for the consideration of Presidential submissions. 

b.(1)(A) Notwithstanding any other provision of law, including 

section 121, 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. and regulated under part 810 of title 10, Code of Federal Regulations (or 

a successor regulation), and nuclear-related items on the Commerce 

Control List maintained under part 774 of title 15 of the Code of 

Federal Regulations (or a successor regulation), 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 the items or assistance described 

in this paragraph to any country the government of which has been 

197 

identified by the Secretary of State as engaged in state sponsorship 

of terrorist activities. 

(B) Countries described in subparagraph (A) specifically include 

any country the government of which has been determined by the 

Secretary of State to have repeatedly provided support for acts of 

international terrorism under— (i) section 620A(a) of the Foreign Assistance Act of 1961 (22 

U.S.C. 2371(a)); 

(ii) section 6(j)(1) of the Export Administration Act of 1979 

(50 U.S.C. App. 2405(j)(1)); or 

(iii) section 40(d) of the Arms Export Control Act (22 U.S.C. 

2780(d)). 

(2) This subsection does 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 the 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—(A) 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 

(B)(i) the government of the 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; 

(ii) in the judgment of the President, the government of the 

country has provided adequate, verifiable assurances that the 

country will cease its support for acts of international terrorism; 

(iii) the waiver of paragraph (1) is in the vital national security interest of the United States; or 

(iv) the waiver of paragraph (1) 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. 

* * * * * * * 

SEC. 134. FURTHER RESTRICTIONS ON EXPORTS. 

øa. The Commission may issue a license for the export of highly 

enriched uranium to be used as a fuel or target in a nuclear research or test reactor only if, in addition to any other requirement 

of this Act, the Commission determines that— ø(1) there is no alternative nuclear reactor fuel or target enriched in the isotope 235 to a lesser percent than the proposed 

export, that can be used in that reactor; 

ø(2) the proposed recipient of that uranium has provided assurances that, whenever an alternative nuclear reactor fuel or 

198 

target can be used in that reactor, it will use that alternative 

in lieu of highly enriched uranium; and 

ø(3) the United States Government is actively developing an 

alternative nuclear reactor fuel or target that can be used in 

that reactor.¿ 

a. DEFINITIONS.—In this section—’’

(1) the term ‘‘alternative nuclear reactor fuel or target’’ means 

a nuclear reactor fuel or target which is enriched to less than 

20 percent in the isotope U–235; 

(2) the term ‘‘highly enriched uranium’’ means uranium enriched to 20 percent or more in the isotope U–235; and 

(3) a fuel or target ‘‘can be used’’ in a nuclear research or test 

reactor if— (A) the fuel or target has been qualified by the Reduced 

Enrichment Research and Test Reactor Program of the Department of Energy, and 

(B) use of the fuel or target will permit the large majority 

of ongoing and planned experiments and isotope production 

to be conducted in the reactor without a large percentage 

increase in the total cost of operating the reactor. 

øb. As used in this section— ø(1) the term ‘‘alternative nuclear reactor fuel or target’’ means a nuclear reactor fuel or target which is enriched to less 

than 20 percent in the isotope U–235; 

ø(2) the term ‘‘highly enriched uranium’’ means uranium enriched to 20 percent or more in the isotope U–235; and 

ø(3) a fuel or target ‘‘can be used’’ in a nuclear research or 

test reactor if— ø(A) the fuel or target has been qualified by the Reduced 

Enrichment Research and Test Reactor Program of the Department of Energy, and 

ø(B) use of the fuel or target will permit the large majority of ongoing and planned experiments and isotope production to be conducted in the reactor without a large percentage increase in the total cost of operating the reactor.¿ 

b. RESTRICTIONS ON EXPORTS.—Except as provided in subsection 

c., the Commission; and may issue a license for the export of highly 

enriched uranium to be used as a fuel or target in a nuclear research or test reactor only if, in addition to any other requirement 

of this Act, the Commission determines that— (1) there is no alternative nuclear reactor fuel or target enriched in the isotope 235 to a lesser percent than the proposed 

export, that can be used in that reactor; 

(2) the proposed recipient of that uranium has provided assurances that, whenever an alternative nuclear reactor fuel or 

target can be used in that reactor, it will use that alternative 

in lieu of highly enriched uranium; and 

(3) the United States Government is actively developing an alternative nuclear reactor fuel or target that can be used in that 

reactor. 

c. MEDICAL ISOTOPE PRODUCTION.— (1) DEFINITIONS.—In this subsection: 

(A) MEDICAL ISOTOPE.—The term ‘‘medical isotope’’ includes Molybdenum 99, Iodine 131, Xenon 133, and other 

199 

radioactive materials used to produce a radiopharmaceutical for diagnostic, therapeutic procedures or for research and development. 

(B) 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— (I) therapeutic purposes; or 

(II) enabling the production of a useful image for 

use in a diagnosis of a medical condition. 

(C) 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 b.), the Commission determines that—

(A) a recipient country that supplies an assurance letter 

to the United States in connection with the consideration by 

the Commission of the export license application has informed the United States 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 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 the requirements as license conditions or through other appropriate means. 

(4) FIRST REPORT TO CONGRESS.— (A) NAS STUDY.—The Secretary shall enter into an arrangement with the National Academy of Sciences under 

200 

which the National Academy of Sciences shall 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 being made by the Department of 

Energy and other agencies and entities 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 the 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, not later than the 

date that is 4 years after the date of submission of the 

report, domestic requirements for medical isotopes 

without use of highly enriched uranium consistent with 

the feasibility criteria described in subparagraph (B). 

(5) SECOND REPORT TO CONGRESS.—If the National Academy 

of Sciences determines in the study under paragraph (4)(A) 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 adequate to meet domestic demand 

201 

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 use, the Secretary shall submit to Congress a certification to that effect. 

(7) TERMINATION OF REVIEW.—After the Secretary submits a 

certification under paragraph (6), the Commission shall, by 

rule, terminate the review by the Commission of export license 

applications under this subsection. 

CHAPTER 14. GENERAL AUTHORITY 

* * * * * * * 

SEC. 170. INDEMNIFICATION AND LIMITATION OF LIABILITY. 

* * * * * * * 

(b) AMOUNT AND TYPE OF FINANCIAL PROTECTION FOR LICENS- EES.—(1) The amount of primary financial protection required shall 

be the amount of liability insurance available from private sources, 

except that the Commission may establish a lesser amount on the 

basis of criteria set forth in writing, which it may revise from time 

to time, taking into consideration such factors as the following: (A) 

the cost and terms of private insurance, (B) the type, size, and location of the licensed activity and other factors pertaining to the hazard, and (C) the nature and purpose of the licensed activity: Provided, That for facilities designed for producing substantial 

amounts of electricity and having a rated capacity of 100,000 electrical kilowatts or more, the amount of primary financial protection 

required shall be the maximum amount available at reasonable 

cost and on reasonable terms from private sources (excluding the 

amount of private liability insurance available under the industry 

retrospective rating plan required in this subsection). Such primary 

financial protection may include private insurance, private contractual indemnities, self-insurance, other proof of financial responsibility, or a combination of such measures and shall be subject to 

such terms and conditions as the Commission may, by rule, regulation, or order, prescribe. The Commission shall require licensees 

that are required to have and maintain primary financial protection equal to the maximum amount of liability insurance available 

from private sources to maintain, in addition to such primary financial protection, private liability insurance available under an 

industry retrospective rating plan providing for premium charges 

deferred in whole or major part until public liability from a nuclear 

incident exceeds or appears likely to exceed the level of the primary 

financial protection required of the licensee involved in the nuclear 

incident: Provided, That such insurance is available to, and required of, all of the licensees of such facilities without regard to the 

manner in which they obtain other types or amounts of such primary financial protection: And provided further: That the maximum amount of the standard deferred premium that may be 

202 

charged a licensee following any nuclear incident under such a plan 

shall not be more than ø $63,000,000¿ $95,800,000 (subject to adjustment for inflation under subsection t.), but not more than 

ø$10,000,000 in any 1 year¿ $15,000,000 in any 1 year (subject to 

adjustment for inflation under subsection t.), for each facility for 

which such licensee is required to maintain the maximum amount 

of primary financial protection: And provided further, That the 

amount which may be charged a licensee following any nuclear incident shall not exceed the licensee’s pro rata share of the aggregate public liability claims and costs (excluding legal costs subject 

to subsection o. (1)(D), payment of which has not been authorized 

under such subsection) arising out of the nuclear incident. Payment 

of any State premium taxes which may be applicable to any deferred premium provided for in this Act shall be the responsibility 

of the licensee and shall not be included in the retrospective premium established by the Commission. 

* * * * * * * 

(5)(A) For purposes of this section only, the Commission shall consider a combination of facilities described in subparagraph (B) to be 

a single facility having a rated capacity of 100,000 electrical kilowatts or more. 

(B) A combination of facilities referred to in subparagraph (A) is 

2 or more facilities located at a single site, each of which has a 

rated capacity of not less than 100,000 electrical kilowatts and not 

more than 300,000 electrical kilowatts, with a combined rated capacity of not more than 1,300,000 electrical kilowatts. 

(c) INDEMNIFICATION OF øLICENSES¿ LICENSEES BY NUCLEAR

REGULATORY COMMISSION.—The Commission shall, with respect to 

licenses issued between August 30, 1954, and øDecember 31, 2003¿ 

December 31, 2025, for which it requires financial protection of less than $560,000,000, agree to indemnify and hold harmless the licensee and other persons indemnified, as their interest may appear, from public liability arising from nuclear incidents which is 

in excess of the level of financial protection required of the licensee. 

The aggregate indemnity for all persons indemnified in connection 

with each nuclear incident shall not exceed $500,000,000, excluding 

costs of investigating and settling claims and defending suits for 

damage: Provided, however, That this amount of indemnity shall be 

reduced by the amount that the financial protection required shall 

exceed $60,000,000. Such a contract of indemnification shall cover 

public liability arising out of or in connection with the licensed activity. With respect to any production or utilization facility for 

which a construction permit is issued between August 30, 1954, 

and øDecember 31, 2003¿ December 31, 2025, the requirements of 

this subsection shall apply to any license issued for such facility 

subsequent to øDecember 31, 2003¿ December 31, 2025. (d) INDEMNIFICATION OF CONTRACTORS BY DEPARTMENT OF EN- ERGY.—(1)(A) In addition to any other authority the Secretary of 

Energy (in this section referred to as the ‘‘Secretary’’) may have, 

the Secretary shall, until øDecember 31, 2006¿ December 31, 2025, enter into agreements of indemnification under this subsection 

with any person who may conduct activities under a contract with 

the Department of Energy that involve the risk of public liability 

and that are not subject to financial protection requirements under 

203 

subsection b. or agreements of indemnification under subsection c. 

or k. 

* * * * * * * 

ø(2) In agreements of indemnification entered into under paragraph (1), the Secretary may require the contractor to provide and 

maintain financial protection of such a type and in such amounts 

as the Secretary shall determine to be appropriate to cover public 

liability arising out of or in connection with the contractual activity, and shall indemnify the persons indemnified against such 

claims above the amount of the financial protection required, to the 

full extent of the aggregate public liability of the persons indemnified for each nuclear incident, including such legal costs of the 

contractor as are approved by the Secretary. 

ø(3)(A) Notwithstanding paragraph (2), if the maximum amount 

of financial protection required of the contractor, shall at all times 

remain equal to or greater than the maximum amount of financial 

protection required of licensees under subsection b. 

ø(B) The amount of indemnity provided contractors under this 

subsection shall not, at any time, be reduced in the event that the 

maximum amount of financial protection required of licensees is reduced. 

ø(C) All agreements of indemnification under which the Department of Energy (or its predecessor agencies) may be required to indemnify any person, shall be deemed to be amended, on the date 

of the enactment of the Price-Anderson Amendments Act of 1988, 

to reflect the amount of indemnity for public liability and any applicable financial protection required of the contractor under this 

subsection on such date.¿ 

(2) In an agreement of indemnification entered into under paragraph (1), the Secretary— (A) may require the contractor to provide and maintain financial protection of such a type and in such amounts as the Secretary determines 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 expenses incurred by the contractor 

as are approved by the Secretary. 

(3) All agreements of indemnification under which the Department of Energy (or 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. 

* * * * * * * 

(5) In the case of nuclear incidents occurring outside the United 

States, the amount of the indemnity provided by the Secretary 

204 

under this subsection shall not exceed ø$100,000,000¿ 

$500,000,000. 

* * * * * * * 

(e) LIMITATION ON AGGREGATE PUBLIC LIABILITY.—(1) The aggregate public liability for a single nuclear incident of persons indemnified, including such legal costs as are authorized to be paid under 

subsection o. (1)(D), shall not exceed—

(A) in the case of facilities designed for producing substantial 

amounts of electricity and having a rated capacity of 100,000 

electrical kilowatts or more, the maximum amount of financial 

protection required of such facilities under subsection b. (plus 

any surcharge assessed under subsection o. (1)(E)); 

(B) in the case of contractors with whom the Secretary has 

entered into an agreement of indemnification under subsection 

d., øthe maximum amount of financial protection required 

under subsection b. or¿ the amount of indemnity and financial 

protection that may be required under øparagraph (3) of subsection d., whichever amount is more¿ paragraph (2) of subsection d.; and 

(C) in the case of all licensees of the Commission required to 

maintain financial protection under this section—

(i) $500,000,000, together with the amount of financial 

protection required of the licensee; or 

(ii) if the amount of financial protection required of the 

licensee exceeds $60,000,000, $560,000,000 or the amount 

of financial protection required of the licensee, whichever 

amount is more. 

* * * * * * * 

(4) With respect to any nuclear incident occurring outside of the 

United States to which an agreement of indemnification entered 

into under the provisions of subsection d. is applicable, such aggregate public liability shall not exceed the amount of ø$100,000,000¿ 

$500,000,000, together with the amount of financial protection required of the contractor. 

* * * * * * * 

(k) EXEMPTION FROM FINANCIAL PROTECTION REQUIREMENT FOR

NONPROFIT EDUCATIONAL INSTITUTIONS.—With respect to any license issued pursuant to section 53, 63, 81, 104 a., or 104 c. for the 

conduct of educational activities to a person found by the Commission to be a nonprofit educational institution, the Commission shall 

exempt such licensee from the financial protection requirement of 

subsection a. With respect to licenses issued between August 30, 

1954, and øAugust 1, 2002¿ December 31, 2025, for which the Commission grants such exemption: 

(1) the Commission shall agree to indemnify and hold harmless the licensee and other persons indemnified, as their interests may appear, from public liability in excess of $250,000 

arising from nuclear incidents. The aggregate indemnity for all 

persons indemnified in connection with each nuclear incident 

shall not exceed $500,000,000, including such legal costs of the 

licensee as are approved by the Commission; 

205 

(2) such contracts of indemnification shall cover public liability arising out of or in connection with the licensed activity; 

and shall include damage to property of persons indemnified, 

except property which is located at the site of and used in connection with the activity where the nuclear incident occurs; 

and 

(3) such contracts of indemnification, when entered into with 

a licensee having immunity from public liability because it is 

a State agency, shall provide also that the Commission shall 

make payments under the contract on account of activities of 

the licensee in the same manner and to the same extent as the 

Commission would be required to do if the licensee were not 

such a State agency. 

Any licensee may waive an exemption to which it is entitled under 

this subsection. With respect to any production or utilization facility for which a construction permit is issued between August 30, 

1954, and øAugust 1, 2002¿ December 31, 2025, the requirements 

of this subsection shall apply to any license issued for such facility 

subsequent to August 1, 2002. 

* * * * * * * 

(p) REPORTS TO CONGRESS.—The Commission and the Secretary 

shall submit to the Congress by øAugust 1, 1998¿ December 31, 

2021, detailed reports concerning the need for continuation or 

modification of the provisions of this section, taking into account 

the condition of the nuclear industry, availability of private insurance, and the state of knowledge concerning nuclear safety at that 

time, among other relevant factors, and shall include recommendations as to the repeal or modification of any of the provisions of this 

section. 

* * * * * * * 

(t) INFLATION ADJUSTMENT.—(1) The Commission shall adjust the 

amount of the maximum total and annual standard deferred premium under subsection b. (1) not less than once during each 5-year 

period following øthe date of the enactment of the Price-Anderson 

Amendments Act of 1988¿ August 20, 2003, in accordance with the 

aggregate percentage change in the Consumer Price Index since—

(A) øsuch date of enactment¿ August 20, 2003, in the case 

of the first adjustment under this subsection; or 

(B) the previous adjustment under this subsection. 

(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. 

ø(2)¿ (3) For purposes of this subsection, the term ‘‘Consumer 

Price Index’’ means the Consumer Price Index for all urban consumers published by the Secretary of Labor. 

* * * * * * * 

206 

SEC. 234A. CIVIL MONETARY PENALTIES FOR VIOLATIONS OF DEPARTMENT OF ENERGY SAFETY REGULATIONS. 

* * * * * * * 

(b)(1) The Secretary shall have the power to compromise, modify 

or remit, with or without conditions, such civil penalties and to prescribe regulations as he may deem necessary to implement this section. 

(2) In determining the amount of any civil penalty under this 

subsection, the Secretary shall take into account the nature, circumstances, extent, and gravity of the violation or violations and, 

with respect to the violator, ability to pay, effect on ability to continue to do business, any history of prior such violations, the degree of culpability, and such other matters as justice may require. 

øIn implementing this section, the Secretary shall determine by 

rule whether nonprofit educational institutions should receive automatic remission of any penalty under this section.¿ 

* * * * * * * 

ø(d) The provisions of this section shall not apply to: 

ø(1) The University of Chicago (and any subcontractors or 

suppliers thereto) for activities associated with Argonne National Laboratory; 

ø(2) The University of California (and any subcontractors or 

suppliers thereto) for activities associated with Los Alamos National Laboratory, Lawrence Livermore National Laboratory, 

and Lawrence Berkeley National Laboratory; 

ø(3) American Telephone and Telegraph Company and its 

subsidiaries (and any subcontractors or suppliers thereto) for 

activities associated with Sandia National Laboratories; 

ø(4) Universities Research Association, Inc. (and any subcontractors or suppliers thereto) for activities associated with 

FERMI National Laboratory; 

ø(5) Princeton University (and any subcontractors or suppliers thereto) for activities associated with Princeton Plasma 

Physics Laboratory; 

ø(6) The Associated Universities, Inc. (and any subcontractors or suppliers thereto) for activities associated with the 

Brookhaven National Laboratory; and 

ø(7) Battelle Memorial Institute (and any subcontractors or 

suppliers thereto) for activities associated with Pacific Northwest Laboratory.¿ 

(d)(1) Notwithstanding subsection (a), in the case of any not-forprofit contractor, subcontractor, or supplier, the total amount of 

civil penalties paid under subsection a. may not exceed the total 

amount of fees paid within any one-year period (as determined by 

the Secretary) under the contract under which the violation occurs. 

(2) For purposes of this section, the term ‘‘not-for-profit’’ means 

that no part of the net earnings of the contractor, subcontractor, or 

207 

supplier inures to the benefit of any natural person or for-profit artificial person. 

TITLE 23, UNITED STATES CODE—PUBLIC LAW 

109–13 

HIGHWAYS 

* * * * * * * 

CHAPTER 1. FEDERAL-AID HIGHWAYS 

* * * * * * * 

Subchapter I—General Provisions 

* * * * * * * 

§ 127. Vehicle weight limitations—Interstate System 

(a) IN GENERAL.— (1) No funds shall be apportioned in any fiscal year under 

section 104(b)(1) of this title ø23 USCS § 104(b)(1)¿ to any 

State which does not permit the use of the National System of 

Interstate and Defense Highways øThe Dwight D. Eisenhower 

System of Interstate and Defense Highways¿ within its boundaries by vehicles with a weight of twenty thousand pounds carried on any one axle, including enforcement tolerances, or with 

a tandem axle weight of thirty-four thousand pounds, including 

enforcement tolerances, or a gross weight of at least eighty 

thousand pounds for vehicle combinations of five axles or more. 

(2) However, the maximum gross weight to be allowed by 

any State for vehicles using the National System of Interstate 

and Defense Highways øThe Dwight D. Eisenhower System of 

Interstate and Defense Highways¿ shall be twenty thousand 

pounds carried on one axle, including enforcement tolerances, 

and a tandem axle weight of thirty-four thousand pounds, including enforcement tolerances and with an overall maximum 

gross weight, including enforcement tolerances, on a group of 

two or more consecutive axles produced by application of the 

following formula: 

where W equals overall gross weight on any group of two or more 

consecutive axles to the nearest five hundred pounds, L equals distance in feet between the extreme of any group of two or more consecutive axles, and N equals number of axles in group under consideration, except that two consecutive sets of tandem axles may 

carry a gross load of thirty-four thousand pounds each providing 

the overall distance between the first and last axles of such consecutive sets of tandem axles is (1) thirty-six feet or more, or (2) 


Insert graphi folio 232a here SR78.001
208 

in the case of a motor vehicle hauling any tank trailer, dump trailer, or ocean transport container before September 1, 1989, is 30 

feet or more: Provided, That such overall gross weight may not exceed eighty thousand pounds, including all enforcement tolerances, 

except for vehicles using Interstate Route 29 between Sioux City, 

Iowa, and the border between Iowa and South Dakota or vehicles 

using Interstate Route 129 between Sioux City, Iowa, and the border between Iowa and Nebraska, and except for those vehicles and 

loads which cannot be easily dismantled or divided and which have 

been issued special permits in accordance with applicable State 

laws, or the corresponding maximum weights permitted for vehicles using the public highways of such State under laws or regulations established by appropriate State authority in effect on July 

1, 1956, except in the case of the overall gross weight of any group 

of two or more consecutive axles on any vehicle (other than a vehicle comprised of a motor vehicle hauling any tank trailer, dump 

trailer, or ocean transport container on or after September 1, 1989), 

on the date of enactment of the Federal-Aid Highway Amendments 

of 1974 øenacted Jan. 4, 1975¿, whichever is the greater. 

(3) Any amount which is withheld from apportionment to 

any State pursuant to the foregoing provisions shall lapse if 

not released and obligated within the availability period specified in section 118(b)(1) of this title. 

(4) This section shall not be construed to deny apportionment 

to any State allowing the operation within such State of any 

vehicles or combinations thereof, other than vehicles or combinations subject to subsection (d) of this section, which the 

State determines could be lawfully operated within such State 

on July 1, 1956, except in the case of the overall gross weight 

of any group of two or more consecutive axles, on the date of 

enactment of the Federal-Aid Highway Amendments of 1974 

øenacted Jan. 4, 1975¿. (5) With respect to the State of Hawaii, laws or regulations 

in effect on February 1, 1960, shall be applicable for the purposes of this section in lieu of those in effect on July 1, 1956. 

(6) With respect to the State of Colorado, vehicles designed 

to carry 2 or more precast concrete panels shall be considered 

a nondivisible load. 

(7) With respect to the State of Michigan, laws or regulations 

in effect on May 1, 1982, shall be applicable for the purposes 

of this subsection. 

(8) With respect to the State of Maryland, laws and regulations in effect on June 1, 1993, shall be applicable for the purposes of this subsection. 

(9) The State of Louisiana may allow, by special permit, the 

operation of vehicles with a gross vehicle weight of up to 

100,000 pounds for the hauling of sugarcane during the harvest season, not to exceed 100 days annually. 

(10) With respect to Interstate Routes 89, 93, and 95 in the 

State of New Hampshire, State laws (including regulations) 

concerning vehicle weight limitations that were in effect on 

January 1, 1987, and are applicable to State highways other 

than the Interstate System, shall be applicable in lieu of the 

requirements of this subsection. 

209 

(11) With respect to that portion of the Maine Turnpike designated Interstate Route 95 and 495, and that portion of Interstate Route 95 from the southern terminus of the Maine Turnpike to the New Hampshire State line, laws (including regulations) of the State of Maine concerning vehicle weight limitations that were in effect on October 1, 1995, and are applicable 

to State highways other than the Interstate System, shall be 

applicable in lieu of the requirements of this subsection. 

(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 250 

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 250-pound gross weight increase is not used 

for any purpose other than the use of idle reduction 

technology described in subparagraph (A). 

* * * * * * * 

DEPARTMENT OF ENERGY ORGANIZATION 

ACT—PUBLIC LAW 95–91, AS AMENDED (42 

U.S.C. 7101 ET SEQ.) 

* * * * * * * 

TABLE OF CONTENTS 

* * * * * * * 

TITLE II—ESTABLISHMENT OF THE DEPARTMENT 

SEC. 201. Establishment. 

SEC. 202. Principal officers. 

SEC. 203. Assistant Secretaries. 

SEC. 204. Federal Energy Regulatory Commission. 

SEC. 205. Energy Information Administration. 

SEC. 206. Economic Regulatory Administration. 

SEC. 207. Comptroller General functions. 

SEC. 208. øRepealed¿. 

øSEC. 209.¿ SEC. 209. Office of Science. 

SEC. 210. Leasing Liaison Committee. 

SEC. 211. Office of Minority Economic Impact. 

øSEC. 212. Repealed P.L. 106–65, SEC. 3294(d)(1), Oct. 5, 1999, 113 Stat. 970¿ 

ø213.¿ SEC. 213. Establishment of policy for National Nuclear Security Administration. 

ø214.¿ SEC. 214. Establishment of security, counterintelligence, and intelligence 

policies. 

ø215.¿ SEC. 215. Office of Counterintelligence. 

210 

ø216.¿ SEC. 216. Office of Intelligence. 

SEC. 217. Office of Indian Energy Policy and Programs. 

TITLE II—ESTABLISHMENT OF THE 

DEPARTMENT 

* * * * * * * 

PRINCIPAL OFFICERS 

SEC. 202. (a) There shall be in the Department a Deputy Secretary, who shall be appointed by the President, by and with the 

advice and consent of the Senate, and who shall be compensated 

at the rate provided for level II of the Executive Schedule under 

section 5313 of title 5. The Deputy Secretary shall act for and exercise the functions of the Secretary during the absence or disability 

of the Secretary or in the event the office of Secretary becomes vacant. The Secretary shall designate the order in which the Under 

Secretary and other officials shall act for and perform the functions 

of the Secretary during the absence or disability of both the Secretary and Deputy Secretary or in the event of vacancies in both 

of those offices. 

ø(b) There shall be in the Department an Under Secretary and 

a General Counsel, who shall be appointed by the President, by 

and with the advice and consent of the Senate, and who shall perform such functions and duties as the Secretary shall prescribe. 

The Under Secretary shall bear primary responsibility for energy 

conservation. The Under Secretary shall be compensated at the 

rate provided for level III of the Executive Schedule under section 

5314 of title 5, and 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.¿ 

(b)(1) There shall be in the Department an Under Secretary for 

Energy and Science, who shall be appointed by the President, by 

and with the advice and consent of the Senate. 

(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 Energy and Science shall be appointed from among persons who—

(A) have extensive background in scientific or engineering 

fields; and 

(B) are well qualified to manage the civilian research and development programs of the Department. 

(4) The Under Secretary for Energy and 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; 

211 

(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) bear primary responsibility for energy conservation; and 

(G) exercise authority and responsibility over Assistant Secretaries carrying out energy research and development and energy 

technology functions under sections 203 and 209, as well as 

other elements of the Department assigned by the Secretary. 

(c)(1) There shall be in the Department an Under Secretary for 

Nuclear Security, who shall be appointed by the President, by and 

with the advice and consent of the Senate. The Under Secretary 

shall be compensated at the rate provided for at level III of the Executive Schedule under section 5314 of title 5. 

(2) The Under Secretary for Nuclear Security shall be appointed 

from among persons who— (A) have extensive background in national security, organizational management, and appropriate technical fields; and 

(B) are well qualified to manage the nuclear weapons, nonproliferation, and materials disposition programs of the National Nuclear Security Administration in a manner that advances and protects the national security of the United States. 

(3) The Under Secretary for Nuclear Security shall serve as 

the Administrator for Nuclear Security under section 2402 of 

title 50. In carrying out the functions of the Administrator, the 

Under Secretary shall be subject to the authority, direction, 

and control of the Secretary. Such authority, direction, and 

control may be delegated only to the Deputy Secretary of Energy, without redelegation. 

(d)(1) There shall be in the Department an Under Secretary, who 

shall be appointed by the President, by and with the advice and 

consent of the Senate, and who shall perform such functions and 

duties as the Secretary shall prescribe, consistent with this section. 

(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 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. 

* * * * * * * 

ASSISTANT SECRETARIES 

SEC. 203 (a) øThere shall be in the Department six Assistant 

Secretaries¿ Except as provided in section 209, there shall be in the 

Department seven Assistant Secretaries, each of whom shall be appointed by the President, by and with the advice and consent of the 

212 

Senate; who shall be compensated at the rate provided for at level 

IV of the Executive Schedule under section 5315 of title 5; and who 

shall perform, in accordance with applicable law, such of the functions transferred or delegated to, or vested in, the Secretary as he 

shall prescribe in accordance with the provisions of this chapter. 

The functions which the Secretary shall assign to the Assistant 

Secretaries include, but are not limited to, the following: 

* * * * * * * 

ENERGY INFORMATION ADMINISTRATION 

SEC. 205. * * * 

(n) * * * 

(m)(1) In order to improve the ability to evaluate the effectiveness 

of the renewable fuels mandate of the United States, 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. 

(2) In conducting the survey, the Administrator shall collect information both on a national and regional basis, including—

(A) information on—

(i) the quantity of renewable fuels produced; 

(ii) the quantity of renewable fuels blended; 

(iii) the quantity of renewable fuels imported; and 

(iv) the quanity of renewable fuels demanded; and 

(B) market price data. 

* * * * * * * 

øOFFICE OF SCIENCE 

øSEC. 209. (a) There shall be within the Department an Office of 

Science to be headed by a Director, who shall be appointed by the 

President, by and with the advice and consent of the Senate, and 

who shall be compensated at the rate provided for level IV of the 

Executive Schedule under section 5315 of title 5, United States 

Code. 

ø(b) It shall be the duty and responsibility of the Director—

ø(1) to advise the Secretary with respect to the physical research program transferred to the Department from the Energy Research and Development Administration; 

ø(2) to monitor the Department’s energy research and development programs in order to advise the Secretary with respect 

to any undesirable duplication or gaps in such programs; 

ø(3) to advise the Secretary with respect to the well-being 

and management of the multipurpose laboratories under the 

jurisdiction of the Department, excluding laboratories that constitute part of the nuclear weapons complex; 

ø(4) to 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; 

ø(5) to advise the Secretary with respect to grants and other 

forms of financial assistance required for effective short- and 

213 

long-term basic and applied research activities of the Department; and 

ø(6) to carry out such additional duties assigned to the Office 

by the Secretary relating to basic and applied research, including but not limited to 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.¿ 

OFFICE OF SCIENCE 

SEC. 209. (a) There shall be within the Department an Office of 

Science, to be headed by an Assistant Secretary for Science, who 

shall be appointed by the President, by and with the advice and 

consent of the Senate, and who shall be compensated at the rate 

provided for level IV of the Executive Schedule under section 5315 

of title 5, United States Code. 

(b) The Assistant Secretary for Science shall be in addition to the 

Assistant Secretaries provided for under section 203 of this Act. 

(c) It shall be the duty and responsibility of the Assistant Secretary for Science to carry out the fundamental science and engineering research functions of the Department, including the responsibility for policy and management of such research, as well as 

other functions vested in the Secretary which he may assign to the 

Assistant Secretary. 

* * * * * * * 

OFFICE OF INDIAN ENERGY POLICY AND PROGRAMS 

SEC. 217. (a) ESTABLISHMENT.—

(1) There is established within the Department an Office of 

Indian Energy Policy and Programs (referred to in this section 

as the ‘‘Office’’). 

(2) The Office shall be headed by a Director, to 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 that are—

(A) located on Indian land; or 

(B) acquired, constructed, or improved (in whole or in 

part) with Federal funds. 

* * * * * * * 

214 

CONTRACTS 

SEC. 646. * * * 

(f) * * * 

(g)(1) In addition to other authorities granted to the Secretary 

under any other provision of law, the Secretary may enter into other 

transactions on such terms as the Secretary may consider appropriate in furtherance of research, development, or demonstration 

functions vested in the Secretary. 

(2) The other transactions shall not be subject to section 9 of the 

Federal Nonnuclear Energy Research and Development Act of 1974 

(42 U.S.C. 5908). 

(3)(A) The Secretary shall ensure that—

(i) to the maximum extent the Secretary determines practicable, no transaction entered into under paragraph (1) provides for research, development, or demonstration that duplicates research, development, or demonstration being conducted 

under existing projects carried out by the Department; 

(ii) to the extent the Secretary determines practicable, the 

funds provided by the Federal Government under a transaction 

authorized by paragraph (1) do not exceed the total amount provided by other parties to the transaction; and 

(iii) to the extent the Secretary determines practicable, competitive, merit-based selection procedures shall be used when entering into transactions under paragraph (1). 

(B) A transaction authorized by paragraph (1) may be used for a 

research, development, or demonstration project only if the Secretary 

determines the use of a standard contract, grant, or cooperative 

agreement for the project is not feasible or appropriate. 

(4)(A) The Secretary shall protect from disclosure (including disclosure under section 552 of title 5, United States Code) for up to 

5 years after the date the information is received by the Secretary—

(i) a proposal, proposal abstract, and supporting documents 

submitted to the Department in a competitive or noncompetitive 

process having the potential for resulting in an award to the 

party submitting the information entering into a transaction 

under paragraph (1); and 

(ii) a business plan and technical information relating to a 

transaction authorized by paragraph (1) submitted to the Department as confidential business information. 

(B) The Secretary may protect from disclosure, for up to 5 years 

after the information was developed, any information developed 

pursuant to a transaction under paragraph (1) which developed information is of a character that it would be protected from disclosure under section 552(b)(4) of title 5, United States Code, if obtained from a person other than a Federal agency. 

(5)(A) Not later than 90 days after the date of enactment of this 

subsection, the Secretary shall prescribe guidelines for using other 

transactions authorized by paragraph (1). 

(B) The guidelines shall be published in the Federal Register for 

public comment under rulemaking procedures of the Department. 

(6) The authority of the Secretary under this subsection may be 

delegated only to an officer of the Department who is appointed by 

215 

the President by and with the advice and consent of the Senate and 

may not be delegated to any other person. 

DEPARTMENT OF ENERGY SCIENCE 

EDUCATION ENHANCEMENT ACT 

PART E OF TITLE XXXI OF PUBLIC LAW 101–510, AS 

AMENDED (42 U.S.C. 7381–7381E) 

* * * * * * * 

SEC. 3164. SCIENCE EDUCATION PROGRAMS 

(a) PROGRAMS.—The Secretary is authorized to establish programs to enhance the quality of mathematics, science, and engineering education. Any such programs shall be operated at or 

through the support of Department research and development facilities, shall use the scientific resources of the Department, and 

shall be consistent with the overall Federal plan for education and 

human resources in science and technology developed by the Federal Coordinating Council for Science, Engineering, and Technology. 

(b) RELATIONSHIP TO OTHER DEPARTMENT ACTIVITIES.—The programs described in subsection (a) shall supplement and be coordinated with current activities of the Department, but shall not supplant them. 

(c) PROGRAMS FOR STUDENTS FROM UNDER-REPRESENTED

GROUPS.—In carrying out a program under subsection (a), the Secretary shall give priority to activities that are designed to encourage 

students from under-represented groups to pursue scientific and 

technical careers. 

SEC. 3165. LABORATORY COOPERATIVE SCIENCE CENTERS AND 

OTHER AUTHORIZED EDUCATION ACTIVITIES 

* * * * * * * 

(13) Establish a prefreshman enrichment program in which 

middle-school students attend summer workshops on mathematics, science, and engineering conducted by universities on 

their campuses. 

(14) Support competitive events for students, under supervision of teachers, designed to encourage student interest and 

knowledge in science and mathematics. 

(15) Support comptetively-awarded science resource centers at 

National Laboratories to promote professional development of 

mathematics teachers and science teachers who teach in grades 

from kindergarten through grade 12. 

(16) Support summer internships at National Laboratories 

for mathematics teachers and science teachers who teach in 

grades from kindergarten through grade 12. 

* * * * * * * 

SEC. 3167. PARTNERSHIPS WITH HISTORICALLY BLACK COLLEGES AND 

UNIVERSITIES, HISPANIC-SERVING INSTITUTIONS, AND 

TRIBAL COLLEGES. 

(a) DEFINITIONS.—In this section: 

216 

(1) HISPANIC-SERVING INSTITUTION.—The term ‘‘Hispanicserving 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 that term in section 902 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(8) 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 direct the Director of each National Laboratory, and may direct the head of any 

science facility, to increase the participation of historically Black 

colleges or universities, Hispanic-serving institutions, or tribal colleges in activities that increase the capacity of the historically Black 

colleges or universities, Hispanic-serving institutions, or tribal colleges to train personnel in science or engineering. 

(c) ACTIVITIES.—An activity under subsection (b) may include—

(1) collaborative research; 

(2) equipment transfer; 

(3) training activities conducted at a National Laboratory or 

science facility; and 

(4) mentoring activities conducted at a National Laboratory 

or science facility. 

(d) REPORT.—Not later than 2 years after the date of enactment 

of this section, the Secretary shall submit to the Congress a report 

on the activities carried out under this section. 

SEC. ø3167.¿ 3168. DEFINITIONS. 

In this part: 

(1) The term ‘‘Secretary’’ means the Secretary of Energy. 

(2) The term ‘‘Department’’ means the Department of Energy. 

(3) The term ‘‘Department research and development facilities’’ means all Department of Energy single-purpose and multipurpose National Laboratories and research and development 

facilities and programs, and any other facility or program operated by a contractor funded from the Office of Energy Research 

of the Department of Energy. 

(4) The term ‘‘local educational agency’’ has the meaning 

given that term by section 1471(12) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 2891(12)). 

SEC. ø3168.¿ 3169. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated to the Secretary for carrying out university research support and other science, mathematics, and engineering education programs authorized by this 

217 

subchapter and administered by the Office of Science of the Department of Energy, $40,000,000 for fiscal year 1991; and $40,000,000 

for each of fiscal years 2004 through 2008. 

SPARK M. MATSUNAGA HYDROGEN RESEARCH, DEVELOPMENT, AND DEMONSTRATION ACT OF 1990—PUBLIC LAW 101–566, AS 

AMENDED (42 U.S.C. 12401 ET SEQ.) 

* * * * * * * 

øSEC. 101. SHORT TITLE. 

This Act may be referred to as the ‘‘Spark M. Matsunaga Hydrogen Research, Development, and Demonstration Act of 1990’’. 

øSEC. 102. FINDING, PURPOSES, AND DEFINITION. 

ø(a) FINDING.—Congress finds that it is in the national interest 

to accelerate efforts to develop a domestic capability to economically produce hydrogen in quantities that will make a significant 

contribution toward reducing the Nation’s dependence on conventional fuels. 

ø(b) PURPOSES.—The purposes of this Act are—

ø(1) to direct the Secretary of Energy to conduct a research, 

development, and demonstration program leading to the production, storage, transport, and use of hydrogen for industrial, 

residential, transportation, and utility applications; 

ø(2) to direct the Secretary to develop a technology assessment and information transfer program among the Federal 

agencies and aerospace, transportation, energy, and other entities; and 

ø(3) to develop renewable energy resources as a primary 

source of energy for the production of hydrogen. 

ø(c) DEFINITION.—As used in this Act, the term: 

ø(1) ‘‘critical technology’’ (or critical technical issue’’) means 

a technology (or issue) that, in the opinion of the Secretary, requires understanding and development in order to take the 

next needed step in the development of hydrogen as an economic fuel or storage medium; 

ø(2) ‘‘Department’’ means the Department of Energy; and 

ø(3) ‘‘Secretary’’ means the Secretary of Energy. 

øSEC. 103. COMPREHENSIVE MANAGEMENT PLAN. 

ø(a) PLAN.—The Secretary shall prepare a comprehensive 5-year 

program management plan for research and development activities, 

which shall be conducted over a period of no less than 5 years and 

shall be consistent with the provisions of sections 104 and 105. In 

the preparation of such plan, the Secretary shall consult with the 

Administrator of the National Aeronautics and Space Administration, the Secretary of Transportation, the Hydrogen Technical Advisory Panel established under section 108, and the heads of such 

other Federal agencies and such public and private organizations 

as he deems appropriate. The plan shall be structured to identify 

and address areas of research critical to the realization of a domesVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00217 Fmt 6601 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
218 

tic hydrogen production capability within the shortest time practicable. 

ø(b) CONTENTS OF PLAN.—Within 180 days after the date of the 

enactment of this Act, the Secretary shall transmit the comprehensive program management plan to the Committee on Science, 

Space, and Technology of the House of Representatives and the 

Committee on Energy and Natural Resources of the Senate. Subsequent plans shall be incorporated in the management plan under 

this section. The plan shall include— ø(1) a prioritization of research areas critical to the economic 

use of hydrogen as a fuel and energy storage medium; 

ø(2) the program elements, management structure, and activities, including program responsibilities of individual agencies and individual institutional elements; 

ø(3) the program strategies including technical milestones to 

be achieved toward specific goals during each fiscal year for all 

major activities and projects; 

ø(4) the estimated costs of individual program items, including current as well as proposed funding levels for each of the 

5 years of the plan for each of the participating agencies; 

ø(5) a description of the methodology of coordination and 

technology transfer; and 

ø(6) the proposed participation by industry and academia in 

the planning and implementation of the program. 

ø(c) DEMONSTRATION PLAN.—The Secretary shall, in consultation 

with the Secretary of Transportation, the Administrator of the National Aeronautics and Space Administration, and the Hydrogen 

Technical Advisory Panel established under section 108, also prepare a comprehensive large-scale hydrogen demonstration plan 

with respect to demonstrations carried out pursuant to section 105. 

Subsequent plans shall be incorporated in the management plan 

under this section. Such plan shall include— ø(1) a description of the necessary research and development 

activities that must be completed before initiation of a largescale hydrogen production and storage demonstration program; 

ø(2) an assessment of the appropriateness of a large-scale 

demonstration immediately upon completion of the necessary 

research and development activities; 

ø(3) an implementation schedule with associated budget and 

program management resource requirements; and 

ø(4) a description of the role of the private sector in carrying 

out the demonstration program. 

øSEC. 104. RESEARCH AND DEVELOPMENT. 

ø(a) PROGRAM.—The Secretary shall conduct a research and development program, consistent with the comprehensive 5-year program management plan under section 103, to ensure the development of a domestic hydrogen fuel production capability within the 

shortest time practicable consistent with market conditions. 

ø(b) RESEARCH.—(1) Particular attention shall be given to developing an understanding and resolution of all critical technical 

issues preventing the introduction of hydrogen into the marketplace. 

ø(2) The Secretary shall initiate research or accelerate existing 

research in critical technical issues that will contribute to the deVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00218 Fmt 6601 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
219 

velopment of more economic hydrogen production and use, including, but not limited to, critical technical issues with respect to production, liquefaction, transmission, distribution, storage, and use 

(including use of hydrogen in surface transportation). 

ø(c) RENEWABLE ENERGY PRIORITY.—The Secretary shall give priority to those production techniques that use renewable energy resources as their primary source of energy for hydrogen production. 

ø(d) NEW TECHNOLOGIES.—The Secretary shall, for the purpose 

of performing his responsibilities pursuant to this Act, solicit proposals for and evaluate any reasonable new or improved technology 

that could lead or contribute to the development of economic hydrogen production storage and utilization. 

ø(e) INFORMATION.—The Secretary shall conduct evaluations, arrange for tests and demonstrations, and disseminate to developers 

information, data, and materials necessary to support efforts undertaken pursuant to this section, consistent with section 106. 

øSEC. 105. DEMONSTRATIONS. 

ø(a) REQUIREMENT.—The Secretary shall conduct demonstrations 

of critical technologies, preferably in self-contained locations, so 

that technical and non-technical parameters can be evaluated to 

best determine commercial applicability of the technology. 

ø(b) SMALL-SCALE DEMONSTRATIONS.—Concurrently with activities conducted pursuant to section 104, the Secretary shall conduct 

small-scale demonstrations of hydrogen technology at self-contained sites. 

øSEC. 106. TECHNOLOGY TRANSFER PROGRAM. 

ø(a) PROGRAM.—The Secretary shall conduct a program designed 

to accelerate wider application of hydrogen production, storage, utilization, and other technologies available in near term as a result 

of aerospace experience as well as other research progress by transferring critical technologies to the private sector. The Secretary 

shall direct the program with the advice and assistance of the Hydrogen Technical Advisory Panel established under section 108. 

The objective in seeking this advice is to increase participation of 

private industry in the demonstration of near commercial applications through cooperative research and development arrangements, 

joint ventures or other appropriate arrangements involving the private sector. 

ø(b) INFORMATION.—The Secretary, in carrying out the program 

authorized by subsection (a), shall—

ø(1) Undertake an inventory and assessment of hydrogen 

technologies and their commercial capability to economically 

produce, store, or utilize hydrogen in aerospace, transportation, 

electric utilities, petrochemical, chemical, merchant hydrogen, 

and other industrial sectors; and 

ø(2) develop a National Aeronautics Space Administration, 

Department of Energy, and industry information exchange program to improve technology transfer for— ø(A) application of aerospace experience by industry; 

øB) application of research progress by industry and 

aerospace; 

ø(C) application of commercial capability of industry by 

aerospace; and 

220 

ø(D) expression of industrial needs to research organizations. 

øThe information exchange program may consist of workshops, 

publications, conferences, and a data base for the use by the public 

and private sectors. 

øSEC. 107. COORDINATION AND CONSULTATION. 

ø(a) SECRETARY’S RESPONSIBILITY.—The Secretary shall have 

overall management responsibility for carrying out programs under 

this Act. In carrying out such programs, the Secretary, consistent 

with such overall management responsibility—

ø(1) shall use the expertise of the National Aeronautics and 

Space Administration and the Department of Transportation; 

and 

ø(2) may use the expertise of any other Federal agency in accordance with subsection (b) in carrying out any activities 

under this title, to the extent that the Secretary determines 

that any such agency has capabilities which would allow such 

agency to contribute to the purpose of this Act. 

ø(b) ASSISTANCE.—The Secretary may, in accordance with subsection (a), obtain the assistance of any department, agency, or instrumentality of the Executive branch of the Federal Government 

upon written request, on a reimbursable basis or otherwise and 

with the consent of such department, agency, or instrumentality. 

Each such request shall identify the assistance the Secretary 

deems necessary to carry out any duty under this Act. 

ø(c) CONSULTATION.—The Secretary shall consult with the Administrator of the National Aeronautics and Space Administration, 

the Administrator of the Environmental Protection Agency, the 

Secretary of Transportation, and the Hydrogen Technical Advisory 

Panel established under section 108 in carrying out his authorities 

pursuant to this Act. 

øSEC. 108. TECHNICAL PANEL. 

ø(a) ESTABLISHMENT.—There is hereby established the Hydrogen 

Technical Advisory Panel (the ‘‘technical panel’’), to advise the Secretary on the programs under this Act. 

ø(b) MEMBERSHIP.—The technical panel shall be appointed by the 

Secretary and shall be comprised of such representatives from domestic industry, universities, professional societies, Government 

laboratories, financial, environmental, and other organizations as 

the Secretary deems appropriate based on his assessment of the 

technical and other qualifications of such representatives. Appointments to the technical panel shall be made within 90 days after the 

enactment of this Act. The technical panel shall have a chairman, 

who shall be elected by the members from among their number. 

ø(c) COOPERATION.—The heads of the departments, agencies, and 

instrumentalities of the Executive branch of the Federal Government shall cooperate with the technical panel in carrying out the 

requirements of this section and shall furnish to the technical 

panel such information as the technical panel deems necessary to 

carry out this section. 

ø(d) REVIEW.—The technical panel shall review and make any 

necessary recommendations to the Secretary on the following 

items—

221 

ø(1) the implementation and conduct of programs under this 

Act; 

ø(2) the economic, technological, and environmental consequences of the deployment of hydrogen production and use 

systems; and 

ø(3) comments on and recommendations for improvements in 

the comprehensive 5-year program management plan required 

under section 103. 

ø(e) SUPPORT.—The Secretary shall provide such staff, funds and 

other support as may be necessary to enable the technical panel to 

carry out the functions described in this section 

øSEC. 109. AUTHORIZATION OF APPROPRIATIONS. 

øThere is hereby authorized to be appropriated to carry out the 

purposes of this Act (in addition to any amounts made available for 

such purposes to other Acts)—

ø(1) $3,000,000 for the fiscal year 1992; 

ø(2) $7,000,000 for the fiscal year 1993; and 

ø(3) $10,000,000 for the fiscal year 1994.¿ 

SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Spark M. Matsunaga Hydrogen Research, Development, and Demonstration Act of 

1990’’. 

(b) TABLE OF CONTENTS.—The table of contents of this Act is as 

follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Purposes. 

Sec. 3. Definitions. 

TITLE I—HYDROGEN AND FUEL CELLS 

Sec. 101. Hydrogen and fuel cell technology research and development. 

Sec. 102. Task Force. 

Sec. 103. Technology transfer. 

Sec. 104. Authorization of appropriations. 

TITLE II—HYDROGEN AND FUEL CELL DEMONSTRATION 

Sec. 201. Hydrogen Supply and Fuel Cell Demonstration Program. 

Sec. 202. Authorization of appropriations. 

TITLE III—REGULATORY MANAGEMENT 

Sec. 301. Codes and standards. 

Sec. 302. Disclosure. 

Sec. 303. Authorization of appropriations. 

TITLE IV—REPORTS 

Sec. 401. Deployment of hydrogen technology. 

Sec. 402. Authorization of appropriations. 

TITLE V—TERMINATION OF AUTHORITY 

Sec. 501. Termination of authority. 

SEC. 2. PURPOSES. 

The purposes of this Act 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, NaVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00221 Fmt 6601 Sfmt 6603 E:\HR\OC\SR078.XXX SR078
222 

tional 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. 3. DEFINITIONS. 

In this Act: 

(1) DEPARTMENT.—The term ‘‘Department’’ means the Department of Energy. 

(2) 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. 

(3) 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. 

(4) INFRASTRUCTURE.—The term ‘‘infrastructure’’ means the 

equipment, systems, or facilities used to produce, distribute, deliver, or store hydrogen (except for onboard storage). 

(5) LIGHT-DUTY VEHICLE.—The term ‘‘light-duty vehicle’’ means a motor vehicle that is rated at 8,500 or less pounds 

gross vehicle weight. 

(6) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of 

Energy. 

(7) 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. 

(8) TASK FORCE.—The term ‘‘Task Force’’ means the Hydrogen 

and Fuel Cell Technical Task Force established under section 

102(a). 

(9) TECHNICAL ADVISORY COMMITTEE.—The term ‘‘Technical 

Advisory Committee’’ means the independent Technical Advisory Committee of the Task Force selected under section 102(d). 

TITLE I—HYDROGEN AND FUEL CELLS 

SEC. 101. HYDROGEN AND FUEL CELL TECHNOLOGY RESEARCH AND 

DEVELOPMENT. 

(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. 

223 

(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, and other 

problems that emerge from research and development; 

(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) COST SHARING.—The costs of carrying out projects and activities under this section shall be shared in accordance with section 

1002 of the Energy Policy Act of 2005. 

SEC. 102. TASK FORCE. 

(a) ESTABLISHMENT.—The Secretary, in consultation with the Director of the Office of Science and Technology Policy, shall establish 

an interagency Task Force, to be known as the ‘‘Hydrogen and Fuel 

Cell Technical Task Force’’ to advise the Secretary in carrying out 

programs under this Act. 

(b) MEMBERSHIP.— (1) IN GENERAL.—Task Force shall be comprised of such representatives of the Office of Science and Technology Policy, the 

Environmental Protection Agency, the Department of Transportation, the Department of Defense, the National Aeronautics 

and Space Administration, and such other members, as the Secretary, in consultation with the Director of the Office of Science 

and Technology Policy, determines to be appropriate. 

(2) VOTING.—A member of the Task Force that does not represent a Federal agency shall serve on the Task Force only in 

a nonvoting, advisory capacity. 

(c) DUTIES.—The Task Force shall review and make any necessary recommendations to the Secretary on implementation and 

conduct of programs under this Act. 

(d) TECHNICAL ADVISORY COMMITTEE.—

(1) IN GENERAL.—The Secretary shall select such number of 

members as the Secretary considers to be appropriate to form 

an independent, nonpolitical Technical Advisory Committee. 

224 

(2) MEMBERSHIP.—Each member of the Technical Advisory 

Committee shall have scientific, technical, or industrial expertise, as determined by the Secretary. 

(3) DUTIES.—The Technical Advisory Committee shall provide technical advice and assistance to the Task Force and the 

Secretary. 

SEC. 103. TECHNOLOGY TRANSFER. 

In carrying out this Act, 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. 104. AUTHORIZATION OF APPROPRIATIONS. 

(a) 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 title—

(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 2015. 

(b) FUEL CELL TECHNOLOGIES.—There are authorized to be appropriated to carry out projects and activities relating to fuel cell 

technologies under this title—

(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 2015. 

TITLE II—HYDROGEN AND FUEL CELL 

DEMONSTRATION 

SEC. 201. HYDROGEN SUPPLY AND FUEL CELL DEMONSTRATION PROGRAM. 

(a) IN GENERAL.—The Secretary, in consultation with the Task 

Force and the Technical Advisory Committee, shall 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—

(1) light-duty vehicles; 

225 

(2) heavy-duty vehicles; 

(3) fleet vehicles; 

(4) specialty industrial and farm vehicles; and 

(5) commercial and residential portable, continuous, and 

backup electric power generation. 

(b) OTHER DEMONSTRATION PROGRAMS.—To develop widespread 

hydrogen supply and use options, and assist evolution of technology, 

the Secretary shall— (1) 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; 

(2) 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 

(3) 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. 

(c) SYSTEM DEMONSTRATIONS.— (1) IN GENERAL.—As a 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— (A) devising system design concepts that provide for the 

use of advanced composite vehicles in programs under section 732 of the Energy Policy Act of 2005 that— (i) have as a primary goal the reduction of drive energy requirements; 

(ii) after 2010, add another research and development phase to 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, offgrid 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. 

(2) COST SHARING.—The costs of carrying out a project or activity under this subsection shall be shared in accordance with 

[section 1002 of the Energy Policy Act of 2005]. 

226 

(d) IDENTIFICATION OF NEW RESEARCH AND DEVELOPMENT 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 research and development 

requirements that refine technological concepts, planning, and 

applications; and 

(2) during the second phase of the learning demonstrations 

under subsection (c)(1)(A)(ii) redesign subsequent research and 

development to incorporate those requirements. 

SEC. 202. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated to carry out this title—

(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 2015. 

TITLE III—REGULATORY MANAGEMENT 

SEC. 301. CODES AND STANDARDS. 

(a) IN GENERAL.—The 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. 

(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. 

SEC. 302. 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 Act. 

SEC. 303. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated to carry out this title—

(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 

and 2012. 

227 

TITLE IV—REPORTS 

SEC. 401. DEPLOYMENT OF HYDROGEN TECHNOLOGY. 

(a) SECRETARY.—Subject to subsection (c), not later than 2 years 

after the date of enactment of the Hydrogen and Fuel Cell Technology Act of 2005, and triennially thereafter, the Secretary shall 

submit to Congress a report describing— (1) any activity carried out by the Department of Energy 

under this Act, including a research, development, demonstration, and commercial application program 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 a research, development, or deployment strategy of the Secretary relating to hydrogen and fuel cell 

technology to reflect the results of a learning demonstration 

under title II; 

(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 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 can be achieved 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 Act; 

(7) progress made toward and goals achieved in carrying out 

this Act 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) NATIONAL ACADEMY OF SCIENCE.—

(1) IN GENERAL.—The Secretary shall enter into an arrangement with the National Academy of Sciences to conduct and 

submit to the Secretary, not later than September 30, 2007, and 

triennially thereafter—

(A) the results of a review of the projects and activities 

carried out under this Act; 

(B) recommendations for any new authorities or resources 

needed to achieve strategic goals; and 

(C) recommendations for approaches by which the Secretary could achieve a substantial decrease in the dependence on and consumption of natural gas and imported oil 

by the Federal Government, including by increasing the use 

of fuel cell vehicles, stationary and portable fuel cells, and 

hydrogen energy systems. 

228 

(2) REAUTHORIZATION.—The Secretary shall use the results of 

reviews conducted under paragraph (1) in proposing to Congress any legislative changes relating to reauthorization of this 

Act. 

SEC. 402. AUTHORIZATION OF APPROPRIATIONS. 

There is authorized to be appropriated to carry out this title $1,500,000 for each of fiscal years 2006 through 2010. 

TITLE V—TERMINATION OF AUTHORITY 

SEC. 501. TERMINATION OF AUTHORITY. 

This Act and the authority provided by this Act terminate on September 30, 2015. 

METHANE HYDRATE RESEARCH AND DEVELOPMENT ACT OF 2000—PUBLIC LAW 106–193 

(30 U.S.C. 1902 NOTE) 

* * * * * * * 

øSECTION 1. Short title. 

This Act may be cited as the ‘‘Methane Hydrate Research and 

Development Act of 2000’’. SEC. 2. Definitions. 

In this Act: 

ø(1) CONTRACT.—The term ‘‘contract’’ means a procurement 

contract within the meaning of section 6303 of title 31, United 

States Code. 

ø(2) COOPERATIVE AGREEMENT.—The term ‘‘cooperative 

agreement’’ means a cooperative agreement within the meaning of section 6305 of title 31, United States Code. 

ø(3) DIRECTOR.—The term ‘‘Director’’ means the Director of 

the National Science Foundation. 

ø(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. 

ø(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. 

ø(6) INSTITUTION OF HIGHER EDUCATION.—The term ‘‘institution of higher education’’ means an institution of higher education, within the meaning of section 102(a) of the Higher Education Act of 1965 (20 U.S.C. 1002(a)). 

ø(7) SECRETARY.—The term ‘‘Secretary’’ means the Secretary 

of Energy, acting through the Assistant Secretary for Fossil 

Energy. 

ø(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. 

ø(9) SECRETARY OF DEFENSE.—The term ‘‘Secretary of Defense’’ means the Secretary of Defense, acting through the Secretary of the Navy. 

229 

ø(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 

and the Director of the Minerals Management Service. 

øSEC. 3. Methane hydrate research and development program. 

ø(a) IN GENERAL.— ø(1) COMMENCEMENT OF PROGRAM.—Not later than 180 days 

after the date of he enactment of this Act, 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. 

ø(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. 

ø(3) COORDINATION.—The individual designated by the Secretary shall coordinate all activities within the Department of 

Energy relating to methane hydrate research and development. 

ø(4) MEETINGS.—The individuals designated under paragraph (2) shall meet not later than 270 days after the date of 

the enactment of this Act and not less frequently than every 

120 days thereafter to—

ø(A) review the progress of the program under paragraph (1); and 

ø(B) make recommendations on future activities to occur 

subsequent to the meeting. 

ø(b) GRANTS, CONTRACTS, COOPERATIVE AGREEMENTS, INTERAGENCY FUNDS TRANSFER AGREEMENTS, AND FIELD WORK PROPOSALS.—

ø(1) ASSISTANCE AND COORDINATION.—In carrying out the 

program of methane hydrate research and development authorized by this section, the Secretary may award grants or contracts to, or enter into cooperative agreements with, institutions of higher education and industrial enterprises to—

ø(A) conduct basic and applied research to identify, explore, assess, and develop methane hydrate as a source of 

energy; 

ø(B) assist in developing technologies required for efficient and environmentally sound development of methane 

hydrate resources; 

ø(C) undertake research programs to provide safe means 

of transport and storage of methane produced from methane hydrates; 

ø(D) promote education and training in methane hydrate 

resource research and resource development; 

ø(E) conduct basic and applied research to assess and 

mitigate the environmental impacts of hydrate degassing 

(including both natural degassing and degassing associated 

with commercial development); 

ø(F) develop technologies to reduce the risks of drilling 

through methane hydrates; and 

ø(G) conduct exploratory drilling in support of the activities authorized by this paragraph. 

230 

ø(2) COMPETITIVE MERIT-BASED REVIEW.—Funds made available under paragraph (1) shall be made available based on a 

competitive merit-based process. 

ø(c) CONSULTATION.—The Secretary shall establish an advisory 

panel consisting of experts from industrial enterprises, institutions 

of higher education, and Federal agencies to—

ø(1) advise the Secretary on potential applications of methane hydrate; 

ø(2) assist in developing recommendations and priorities for 

the methane hydrate research and development program carried out under subsection (a)(1); and 

ø(3) not later than 2 years after the date of the enactment 

of this Act, and at such later dates as the panel considers advisable, submit to Congress a report on the anticipated impact 

on global climate change from—

ø(A) methane hydrate formation; 

ø(B) methane hydrate degassing (including natural 

degassing and degassing associated with commercial development); and 

ø(C) the consumption of natural gas produced from 

methane hydrates. 

Not more than 25 percent of the individuals serving on the advisory panel shall be Federal employees. 

ø(d) LIMITATIONS.—

ø(1) ADMINISTRATIVE EXPENSES.—Not more than 5 percent of 

the amount made available to carry out this section for a fiscal 

year may be used by the Secretary for expenses associated 

with the administration of the program carried out under subsection (a)(1). 

ø(2) 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). 

ø(e) RESPONSIBILITIES OF THE SECRETARY.—In carrying out subsection (b)(1), the Secretary shall—

ø(1) facilitate and develop partnerships among government, 

industrial enterprises, and institutions of higher education to 

research, identify, assess, and explore methane hydrate resources; 

ø(2) undertake programs to develop basic information necessary for promoting long-term interest in methane hydrate resources as an energy source; 

ø(3) ensure that the data and information developed through 

the program are accessible and widely disseminated as needed 

and appropriate; 

ø(4) promote cooperation among agencies that are developing 

technologies that may hold promise for methane hydrate resource development; and 

ø(5) report annually to Congress on accomplishments under 

this section. 

øSEC. 4. [Omitted—This section amended 30 USCS § 1901.] 

øSEC. 5. Authorization of appropriations. 

231 

øThere are authorized to be appropriated to the Secretary of Energy to carry out this Act— ø(1) $5,000,000 for fiscal year 2001; 

ø(2) $7,500,000 for fiscal year 2002; 

ø(3) $11,000,000 for fiscal year 2003; 

ø(4) $12,000,000 for fiscal year 2004; and 

ø(5) $12,000,000 for fiscal year 2005. 

øAmounts authorized under this section shall remain available 

until expended. 

øSEC. 6. Sunset. 

Section 3 of this Act shall cease to be effective after the end of 

fiscal year 2005. 

øSEC. 7. National Research Council study. 

øThe Secretary shall enter into an agreement with the National 

Research Council for such council to conduct a study of the 

progress made under the methane hydrate research and development program implemented pursuant to this Act, and to make recommendations for future methane hydrate research and development needs. The Secretary shall transmit to the Congress, not later 

than September 30, 2004, a report containing the findings and recommendations of the National Research Council under this section. 

øSEC. 8. Reports and studies. 

øThe Secretary of Energy shall provide to the Committee on 

Science of the House of Representatives copies of any report or 

study that the Department of Energy prepares at the direction of 

any committee of the Congress.¿ 

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 1⁄4

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 Science states that methane hydrate may have the potential to alleviate the projected shortfall 

in the natural gas supply. 

SEC. 3. DEFINITIONS. 

In this Act: 

232 

(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 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 individuals designated under paragraph 

(2) shall meet not later than 180 days after the date of enactment of the Energy Research, Development, Demonstration, and 

233 

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 1 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 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); 

234 

(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 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) 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) 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. 

235 

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) $50,000,000 for fiscal year 2009; and 

(5) $50,000,000 for fiscal year 2010. 

HIGH-PERFORMANCE COMPUTING ACT OF 

1991—PUBLIC LAW 102–194, AS AMENDED (15 

U.S.C. 5501 ET SEQ.) 

SEC. 203. DEPARTMENT OF ENERGY ACTIVITIES. 

(a) GENERAL RESPONSIBILITIES.—As part of the Program described in øsubchapter¿ title I [of this chapter], the Secretary of 

Energy shall—

ø(1) perform research and development on, and systems evaluations of, high-performance computing and communications 

systems; 

ø(2) conduct computational research with emphasis on energy applications; 

ø(3) support basic research, education, and human resources 

in computational science; and 

ø(4) provide for networking infrastructure support for energy-related mission activities.¿ 

(1) conduct and support basic and applied research in highperformance 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—

236 

(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. 

COAL RESEARCH AND DEVELOPMENT ACT OF 

1960—PUBLIC LAW 86–599 (30 U.S.C. 661 ET 

SEQ.) 

* * * * * * * 

øSection 1. Definitions 

øAs used in this chapter (a) The term ‘‘Secretary’’ means the Secretary of the Interior. (b) The term ‘‘research’’ means scientific, 

technical, and economic research and the practical application of 

that research.¿ 

Section 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. 

Section 2. Office of Coal Research; powers and duties 

The Secretary øshall establish within the Department of the Interior an Office of Coal Research, and through such Office¿ shall 

(1) develop through research, new and more efficient methods of 

mining, preparing, and utilizing coal; (2) contract for, sponsor, cosponsor, and promote the coordination of, research with recognized 

interested groups, including but not limited to, coal trade associations, coal research associations, educational institutions, and agencies of States and political subdivisions of States; (3) establish technical advisory committees composed of recognized experts in various aspects of coal research to assist in the examination and evaluation of research progress and of all research proposals and contracts and to insure the avoidance of duplication of research; and 

(4) cooperate to the fullest extent possible with other departments, 

agencies, and independent establishments of the Federal Government and with State governments, and with all other interested 

agencies, governmental and nongovernmental. 

øSection 3. Advisory committees 

ø(a) Minutes of meetings. Any advisory committee appointed 

under the provisions of this chapter shall keep minutes of each 

meeting, which shall contain as a minimum (1) the name of each 

person attending such meeting, (2) a copy of the agenda, and (3) 

a record of all votes or polls taken during the meeting. 

ø(b) Availability of minutes or reports. A copy of any such minutes or of any report made by any such committee after final action 

237 

has been taken thereon by the Secretary shall be available to the 

public upon request and payment of the cost of furnishing such 

copy. 

ø(c) Compensation; travel expenses. Members of any advisory 

committee appointed from private life under authority of this section shall each receive $50 per diem when engaged in the actual 

performance of their duties as a member of such advisory committee. Such members shall also be entitled to travel expenses and 

per diem in lieu of subsistence at the rates authorized by section 

5703 of title 5 for all persons employed intermittently as consultants or experts receiving compensation on a per diem basis. 

(d) Exemption from conflict-of-interest statutes. Service by an individual as a member of such an advisory committee shall not subject him to the provisions of section 1914 of title 18, or, except with 

respect to a particular matter which directly involves the Office of 

Coal Research or in which the Office of Coal Research is directly 

interested, to the provisions of sections 281, 283, or 284 of title 18 

or of section 190 of the Revised Statutes (5 U.S.C. 99). 

øSection 4. Director of Coal Research; appointment. 

øThe Secretary may appoint a Director of Coal Research without 

regard to the provisions of the civil service laws, or chapter 51 and 

subchapter III of chapter 53 of title 5.¿ 

* * * * * * * 

Section ø5¿ 3. Sites for conducting research; availability of personnel and facilities 

* * * * * * * 

Section ø6¿ 4. Public-availability requirement; national defense; 

patent agreements 

* * * * * * * 

Section ø8¿ 5. Authorization of appropriations 

* * * * * * * 

øSection 7. Reports to President and Congress 

øThe Secretary shall submit to the President and the Congress, 

on or before February 15 of each year, beginning with the year 

1961, a comprehensive report concerning activities under the authority of this chapter, including information on all research 

projects conducted, sponsored, or cosponsored under the authority 

of this chapter during the preceding year.¿ 

TITLE 35, UNITED STATES CODE—PUBLIC LAW 

96–517 

* * * * * * * 

SEC. 210. Precedence of chapter. 

(a) This chapter shall take precedence over any other Act which 

would require a disposition of rights in subject inventions of small 

business firms or nonprofit organizations contractors in a manner 

238 

that is inconsistent with this chapter, including but not necessarily 

limited to the following: 

* * * * * * * 

(8) section 6 of the øCoal Research Development Act of 1960¿ 

Coal Research and Development Act (30 U.S.C. 666; 74 Stat. 337); 

FEDERAL NONNUCLEAR ENERGY RESEARCH 

AND DEVELOPMENT ACT OF 1974—PUBLIC 

LAW 93–577 (42 U.S.C. 5902 ET SEQ.) 

* * * * * * * 

SHORT TITLE AND DEFINITIONS

SECTION 1. (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; 

and 

(2) the term ‘‘Secretary’’ means the Secretary of Energy. 

STATEMENT OF FINDINGS

SEC. 2. The Congress hereby finds that—

(a) The Nation is suffering from a shortage of environmentally 

acceptable forms of energy. 

(b) Compounding this energy shortage is our past and present 

failure to formulate a comprehensive and aggressive research and 

development program designed to make available to American consumers our large domestic energy reserves including fossil fuels, 

nuclear fuels, geothermal resources, solar energy, and other forms 

of energy. This failure is partially because the unconventional energy technologies have not been judged to be economically competitive with traditional energy technologies. 

(c) The urgency of the Nation’s energy challenge will require 

commitments similar to those undertaken in the Manhattan and 

Apollo projects; it will require that the Nation undertake a research, development, and demonstration program in nonnuclear energy technologies with a total Federal investment which may reach 

or exceed $20,000,000,000 over the next decade. 

(d) In undertaking such program, full advantage must be taken 

of the existing technical and managerial expertise in the various 

energy fields within Federal agencies and particularly in the private sector. 

(e) The Nation’s future energy needs can be met if a national 

commitment is made now to dedicate the necessary financial resources, to enlist our scientific and technological capabilities, and 

to accord the proper priority to developing new nonnuclear energy 

options to serve national needs, conserve vital resources, and protect the environment. 

239 

STATEMENT OF POLICY

SEC. 3. (a) It is the policy of the Congress to develop on an urgent basis the technological capabilities to support the broadest 

range of energy policy options through conservation and use of domestic resources by socially and environmentally acceptable means. 

(b)(1) The Congress declares the purpose of this Act to be to establish and vigorously conduct a comprehensive, national program 

of basic and applied research and development, including but not 

limited to demonstrations of practical applications, of all potentially beneficial energy sources and utilization technologies, within 

the øEnergy Research and Development Administration¿ Department. 

(2) In carrying out this program, the øAdministrator of the Energy Research and Development Administration (hereinafter in this 

Act referred to as the ‘‘Administrator’’)¿ Secretary shall be governed by the terms of this Act and other applicable provisions of 

law with respect to all nonnuclear aspects of the research, development, and demonstration program; and the policies and provisions 

of the Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.), and 

other provisions of law shall continue to apply to the nuclear research, development, and demonstration program. 

(3) In implementing and conducting the research, development, 

and demonstration programs pursuant to this Act, the øAdministrator¿ Secretary shall incorporate programs in specific nonnuclear 

technologies previously enacted into law, including those established by the Solar Heating and Cooling Demonstration Act of 1974 

(Public Law 93–409), the Geothermal Energy Research, Development, and Demonstration Act of 1974 (Public Law 93–410), and the 

Solar Energy Research, Development, and Demonstration Act of 

1974 (Public Law 93–473). 

DUTIES AND AUTHORITIES OF THE øADMINISTRATOR¿ SECRETARY

SEC. 4. The øAdministrator¿ Secretary shall—(a) review the current status of nonnuclear energy resources and current nonnuclear 

energy research and development activities, including research and 

development being conducted by Federal and non-Federal entities; 

(b) formulate and carry out a comprehensive Federal nonnuclear 

energy research, development, and demonstration program which 

will expeditiously advance the policies established by this Act and 

other relevant legislation establishing programs in specific energy 

technologies; 

(c) utilize the funds authorized pursuant to this Act to advance 

energy research and development by initiating and maintaining, 

through fund transfers, grants or contracts, energy research, development and demonstration programs or activities utilizing the facilities, capabilities, expertise, and experience of Federal agencies, 

national laboratories, universities, nonprofit organizations, industrial entities, and other non-Federal entities which are appropriate 

to each type of research, development, and demonstration activity; 

(d) establish procedures for periodic consultation with representatives of science, industry, environmental organizations, consumers, and other groups who have special expertise in the areas 

of energy research, development, and technology; and 

240 

(e) initiate programs to design, construct, and operate energy facilities of sufficient size to demonstrate the technical and economic 

feasibility of utilizing various forms of nonnuclear energy. 

GOVERNING PRINCIPLES

* * * * * * * 

SEC. 5. * * * 

(b) The Congress further directs that the execution of the comprehensive research, development, and demonstration program 

shall conform to the following principles: 

(1) Research and development of nonnuclear energy sources 

shall be pursued in such a way as to facilitate the commercial 

availability of adequate supplies of energy to all regions of the 

United States. 

(2) In determining the appropriateness of Federal involvement in any particular research and development undertaking, 

the øAdministrator¿ Secretary shall give consideration to the 

extent to which the proposed undertaking satisfies criteria including, but not limited to, the following: 

* * * * * * * 

COMPREHENSIVE PLANNING AND PROGRAMMING

* * * * * * * 

SEC. 6. 

(b) * * * 

* * * * * * * 

(3) The øAdministrator¿ Secretary shall assign program elements 

and activities in specific nonnuclear energy technologies to the 

short-term, middle-term, and long-term time intervals, and shall 

present full and complete justification for these assignments and 

the degree of emphasis for each. These program elements and activities shall include, but not be limited to, research, development, 

and demonstrations designed—

(A) to advance energy conservation technologies, including 

but not limited to—

(i) productive use of waste, including garbage, sewage, 

agricultural wastes, and industrial waste heat; 

(ii) reuse and recycling of materials and consumer products; 

(iii) improvements in automobile design for increased efficiency and lowered emissions, including investigation of 

the full range of alternatives to the internal combustion 

engine and systems of efficient public transportation; and 

(iv) advanced urban and architectural design to promote 

efficient energy use in the residential and commercial sectors, improvements in home design and insulation technologies, small thermal storage units and increased efficiency in electrical appliances and lighting fixtures; 

(B) to accelerate the commercial demonstration of technologies for producing low-sulfur fuels suitable for boiler use; 

(C) to demonstrate improved methods for the generation, 

storage, and transmission of electrical energy through 

241 

(i) advances in gas turbine technologies, combined power 

cycles, the use of low British thermal unit gas and, if practicable, magnetohydrodynamics; 

(ii) storage systems to allow more efficient load following, including the use of inertial energy storage systems; and 

(iii) improvement in cryogenic transmission methods; 

(D) to accelerate the commercial demonstration of technologies for producing substitutes for natural gas, including 

coal gasification: Provided, That the øAdministrator¿ Secretary 

shall invite and consider proposals from potential participants 

based upon Federal assistance and participation in the form of 

a joint Federal-industry corporation, and recommendations 

pursuant to this clause shall be accompanied by a report on 

the viability of using this form of Federal assistance or participation; 

(E) to accelerate the commercial demonstration of technologies for producing syncrude and liquid petroleum products 

from coal: Provided, That the øAdministrator¿ Secretary shall 

invite and consider proposals from potential participants based 

upon Federal assistance and participation through guaranteed 

prices or purchase of the products, and recommendations pursuant to this clause shall be accompanied by a report on the 

viability of using this form of Federal assistance or participation; 

(F) in accordance with the program authorized by the Geothermal Energy Research, Development, and Demonstration 

Act of 1974 (Public Law 93–410), to accelerate the commercial 

demonstration of geothermal energy technologies; 

(G) to demonstrate the production of syncrude from oil shale 

by all promising technologies including insitu technologies; 

(H) to demonstrate new and improved methods for the extraction of petroleum resources, including secondary and tertiary recovery of crude oil; 

(I) to demonstrate the economics and commercial viability of 

solar energy for residential and commercial energy supply applications in accordance with the program authorized by the 

Solar Heating and Cooling Demonstration Act of 1974 (Public 

Law 93–409); 

(J) to accelerate the commercial demonstration of environmental control systems for energy technologies developed pursuant to this Act; 

(K) to investigate the technical and economic feasibility of 

tidal power for supplying electrical energy; 

(L) to commercially demonstrate advanced solar energy technologies in accordance with the Solar Energy Research, Development, and Demonstration Act of 1974 (Public Law 93–473); 

(M) to determine the economics and commercial viability of 

the production of synthetic fuels such as hydrogen and methanol; 

(N) to commercially demonstrate the use of fuel cells for central station electric power generation; 

(O) to determine the economics and commercial viability of 

in situ coal gasification; 

242 

(P) to improve techniques for the management of existing energy systems by means of quality control; application of systems analysis, communications, and computer techniques; and 

public information with the objective of improving the reliability and efficiency of energy supplies and encourage the conservation of energy resources; 

(Q) to improve methods for the prevention and cleanup of 

marine oil spills; 

(R) to implement the Renewable Energy and Energy Efficiency Technology Competitiveness Act of 1989 (42 U.S.C. 

12001 et seq.); and 

(S) to implement titles XX through XXIII of the Energy Policy Act of 1992. 

(c) Based upon the comprehensive plan developed under subsection (a), the Secretary, in consultation with the Advisory Board 

established under section 2302 of the Energy Policy Act of 1992, 

shall develop and transmit to the Congress, on or before September 

1, 1978, a comprehensive environment and safety program to insure the full consideration and evaluation of all environmental, 

health, and safety impacts of each element, program, or initiative 

contained in the nuclear and nonnuclear energy research, development, and demonstration plans. Such program shall be updated 

and transmitted to the Congress annually as part of the report required under section 1. 

FORMS OF FEDERAL ASSISTANCE

SEC. 7. (a) In carrying out the objectives of this Act, the øAdministrator¿ Secretary may utilize various forms of Federal assistance 

and participation which may include but are not limited to— (1) joint Federal-industry experimental, demonstration, or 

commercial corporations consistent with the provisions of subsection (b) of this section; 

(2) contractual arrangements with non-Federal participants 

including corporations, consortia, universities, governmental 

entities and nonprofit institutions; 

(3) contracts for the construction and operation of federally 

owned facilities; 

(4) Federal purchases or guaranteed price of the products of 

demonstration plants or activities consistent with the provisions of subsection (c) øof the section¿; 

(5) Federal loans to non-Federal entities conducting demonstrations of new technologies; 

(6) incentives, including financial awards, to individual inventors, such incentives to be designed to encourage the participation of a large number of such inventors; and 

(7) Federal loan guarantees and commitments thereof as provided in section 19. 

(b) Joint Federal-industry corporations proposed for congressional authorization pursuant to this Act shall be subject to the 

provisions of section 9 of this Act and shall conform to the following 

guidelines except as otherwise authorized by Congress: 

(1) Each such corporation may design, construct, operate, 

and maintain one or more experimental, demonstration, or 

commercial-size facilities, or other operations which will ascerVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00242 Fmt 6601 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
243 

tain the technical, environmental, and economic feasibility of a 

particular energy technology. In carrying out this function, the 

corporation shall be empowered, either directly or by contract, 

to utilize commercially available technologies, perform tests, or 

design, construct, and operate pilot plants, as may be necessary for the design of the full-scale facility. 

(2) Each corporation shall have— (A) a Board of nine directors consisting of individuals 

who are citizens of the United States, of whom one shall 

be elected annually by the Board to serve as Chairman. 

The Board shall be empowered to adopt and amend bylaws. Five members of the Board shall be appointed by the 

President of the United States, by and with the advice and 

consent of the Senate, and four members of the Board 

shall be appointed by the President on the basis of recommendations received by him from any non-Federal entity or entities entering into contractual arrangements to 

participate in the corporation; 

(B) a President and such other officers and employees as 

may be named and appointed by the Board (with the rates 

of compensation of all officers and employees being fixed 

by the Board); and 

(C) the usual powers conferred upon corporations by the 

laws of the District of Columbia. 

(3) An appropriate time interval, not to exceed 12 years, 

shall be established for the term of Federal participation in the 

corporation, at the expiration of which the Board of Directors 

shall take such action as may be necessary to dissolve the corporation or otherwise terminate Federal participation and financial interests. In carrying out such dissolution, the Board 

of Directors shall dispose of all physical facilities of the corporation in such manner and subject to such terms and conditions as the Board determines are in the public interest and 

consistent with existing law; and a share of the appraised 

value of the corporate asset proportional to the Federal participation in the corporation, including the proceeds from the disposition of such facilities, on the date of its dissolution, after 

satisfaction of all its legal obligations, shall be made available 

to the United States and deposited in the Treasury of the 

United States as miscellaneous receipts. All patent rights of 

the corporation shall, on such date of dissolution, be vested in 

the øAdministrator¿ Secretary: Provided, That Federal participation may be terminated prior to the time established in the 

authorizing Act upon recommendation of the Board of Directors. 

(4) Any commercially valuable product produced by demonstration facilities shall be disposed of in such manner and 

under such terms and conditions as the corporation shall prescribe. All revenues received by the corporation from the sale 

of such products shall be available to the corporation for use 

by it in defraying expenses incurred in connection with carrying out its functions to which this Act applies. 

(5) The estimated Federal share of the construction, operation, and maintenance cost over the life of each corporation 

244 

shall be determined in order to facilitate a single congressional 

authorization of the full amount at the time of establishment 

of the corporation. 

(6) The Federal share of the cost of each such corporation 

shall reflect: 

(A) the technical and economic risk of the venture, 

(B) the probability of any financial return to the nonFederal participants arising from the venture, 

(C) the financial capability of the potential non-Federal 

participants, and 

(D) such other factors as the øAdministrator¿ Secretary 

may set forth in proposing the corporation: Provided, That 

in no instance shall the Federal share exceed 90 per centum of the cost. 

(7) No such corporation shall be established unless previously authorized by specific legislation enacted by the Congress. 

(c) Competitive systems of price supports proposed for congressional authorization pursuant to this Act shall conform to the following guidelines: 

(1) The øAdministrator¿ Secretary shall determine the types 

and capacities of the desired full-scale, commercial-size facility 

or other operation which would demonstrate the technical, environmental, and economic feasibility of a particular nonnuclear energy technology. 

(2) The øAdministrator¿ Secretary may award planning 

grants for the purpose of financing a study of the full cycle economic and environmental costs associated with the demonstration facility selected pursuant to paragraph (1) of this subsection. Such planning grants may be awarded to Federal and 

non-Federal entities including, but not limited to, industrial 

entities, universities, and nonprofit organizations. Such planning grants may also be used by the grantee to prepare a detailed and comprehensive bid to construct the demonstration 

facility. 

(3) Following the completion of the studies pursuant to the 

planning grants awarded under paragraph (2) of this subsection regarding each such potential price supported demonstration facility for which the øAdministrator¿ Secretary intends to request congressional authorization, he shall invite 

bids from all interested parties to determine the minimum 

amount of Federal price support needed to construct the demonstration facility. The øAdministrator¿ Secretary may designate one or more competing entities, each to construct one 

commercial demonstration facility. Such designation shall be 

made on the basis of those entities’

(A) commitment to construct the demonstration facility 

at the minimum level of Federal price supports, 

(B) detailed plan of environmental protection, and 

(C) proposed design and operation of the demonstration 

facility. 

(4) The construction plans and actual construction of the 

demonstration facility, together with all related facilities, shall 

be monitored by the Environmental Protection Agency. If addiVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00244 Fmt 6601 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
245 

tional environmental requirements are imposed by the øAdministrator¿ Secretary after the designation of the successful 

bidders and if such additional environmental requirements result in additional costs, the øAdministrator¿ Secretary is authorized to renegotiate the support price to cover such additional costs. 

(5) The estimated amount of the Federal price support for a 

demonstration facility’s product over the life of such facility 

shall be determined by the øAdministrator¿ Secretary to facilitate a single congressional authorization of the full amount of 

such support at the time of the designation of the successful 

bidders. 

(6) No price support program shall be implemented unless 

previously authorized by specific legislation enacted by the 

Congress. 

(d) Nothing in this section shall preclude Federal participation in 

and support for, joint university-industry nonnuclear energy research efforts. 

DEMONSTRATIONS

SEC. 8. (a) The øAdministrator¿ Secretary is authorized to—

(1) identify opportunities to accelerate the commercial applications of new energy technologies, and provide Federal assistance for or participation in demonstration projects (including 

pilot plants demonstrating technological advances and field 

demonstrations of new methods and procedures, and demonstrations of prototype commercial applications for the exploration, development, production, transportation, conversion, 

and utilization of energy resources); and 

(2) enter into cooperative agreements with non-Federal entities to demonstrate the technical feasibility and economic potential of energy technologies on a prototype or full-scale basis. 

(b) In reviewing potential projects, the øAdministrator¿ Secretary 

shall consider criteria including but not limited to—

(1) the anticipated research, development, and application 

objectives to be achieved by the activities or facilities proposed; 

(2) the economic, environmental, and societal significance 

which a successful demonstration may have for the national 

fuels and energy system; 

(3) the relationship of the proposal to the criteria of priority 

set forth in section 5(b)(2); 

(4) the availability of non-Federal participants to construct 

and operate the facilities or perform the activities associated 

with the proposal and to contribute to the financing of the proposal; 

(5) the total estimated cost including the Federal investment 

and the probable time schedule; 

(6) the proposed participants and the proposed financial contributions of the Federal Government and of the non-Federal 

participants; and 

(7) the proposed cooperative arrangement, agreements 

among the participants, and form of management of the activities. 

246 

(c)(1) A financial award under this section may be made only to 

the extent of the Federal share of the estimated total design and 

construction costs, plus operation and maintenance costs. 

(2) For the purposes of this Act the non-Federal share may be in 

any form, including, but not limited to, lands or interests therein 

needed for the project or personal property or services, the value 

of which shall be determined by the øAdministrator¿ Secretary. 

(d)(1) The Administrator of the Energy Research and Development Administration shall, within six months of enactment of this 

Act, promulgate regulations establishing procedures for submission 

of proposals to the Energy Research and Development Administration for the purposes of this Act. Such regulations shall establish 

a procedure for selection of proposals which— (A) provides that projects will be carried out under such conditions and varying circumstances as will assist in solving energy extraction, transportation, conversion, conservation, and 

end-use problems of various areas and regions, under representative geological, geographic, and environmental conditions; and 

(B) provides time schedules for submission of, and action on, 

proposal requests for the purposes of implementing the goals 

and objectives of this Act. 

(2) Such regulations also shall specify the types and form of the 

information, data, and support documentation that are to be contained in proposals for each form of Federal assistance or participation set forth in subsection 7(a): Provided, That such proposals to 

the extent possible shall include, but not be limited to— (A) specification of the technology; 

(B) description of prior pilot plant operating experience with 

the technology; 

(C) preliminary design of the demonstration plant; 

(D) time tables containing proposed construction and operation plans; 

(E) budget-type estimates of construction and operating 

costs; 

(F) description and proof of title to land for proposed site, 

natural resources, electricity and water supply and logistical 

information related to access to raw materials to construct and 

operate the plant and to dispose of salable products produced 

from the plant; 

(G) analysis of the environmental impact of the proposed 

plant and plans for disposal of wastes resulting from the operation of the plant; 

(H) plans for commercial use of the technology if the demonstration is successful; 

(I) plans for continued use of the plant if the demonstration 

is successful; and 

(J) plans for dismantling of the plant if the demonstration is 

unsuccessful or otherwise abandoned. 

(3) The øAdministrator¿ Secretary shall from time to time review 

and, as appropriate, modify and repromulgate regulations issued 

pursuant to this section. 

(e) If the estimate of the Federal investment with respect to construction costs of any demonstration project proposed to be estabVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00246 Fmt 6601 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
247 

lished under this section exceeds $50,000,000, no amount may be 

appropriated for such project except as specifically authorized by 

legislation hereafter enacted by the Congress. 

(f) If the total estimated amount of the Federal contribution to 

the construction cost of a demonstration project does not exceed 

$50,000,000, the øAdministrator¿ Secretary is authorized to proceed with the negotiation of agreements and implementation of the 

proposal subject to the availability of funds under the authorization 

of appropriations pursuant to section 16: Provided, That if such 

Federal contribution to the construction cost is estimated to exceed 

$25,000,000 the øAdministrator¿ Secretary shall provide a full and 

comprehensive report on the proposed demonstration project to the 

appropriate committees of the Congress and no funds may be expended for any agreement under the authority granted by this section prior to the expiration of sixty calendar days (not including 

any day on which either House of Congress is not in session because of an adjournment of more than three calendar days to a day 

certain) from the date on which the øAdministrator’s¿ Secretary’s 

report on the proposed project is received by the Congress. Such reports shall contain an analysis of the extent to which the proposed 

demonstration satisfies the criteria specified in subsection (b) of 

this section. 

PATENT POLICY

SEC. 9. (a) Whenever any invention is made or conceived in the 

course of or under any contract of the øAdministration¿ Department, other than nuclear energy research, development, and demonstration pursuant to the Atomic Energy Act of 1954 (42 U.S.C. 

2011 et seq.) and the øAdministrator¿ Secretary determines that— (1) the person who made the invention was employed or assigned to perform research, development, or demonstration 

work and the invention is related to the work he was employed 

or assigned to perform, or that it was within the scope of his 

employment duties, whether or not it was made during working hours, or with a contribution by the Government of the use 

of Government facilities, equipment, materials, allocated funds, 

information proprietary to the Government, or services of Government employees during working hours; or 

(2) the person who made the invention was not employed or 

assigned to perform research, development, or demonstration 

work, but the invention is nevertheless related to the contract 

or to the work or duties he was employed or assigned to perform, and was made during working hours, or with a contribution from the Government of the sort referred to in clause (1); 

title to such invention shall vest in the United States, and if 

patents on such invention are issued they shall be issued to 

the United States, unless in particular circumstances the øAdministrator¿ Secretary waives all or any part of the rights of 

the United States to such invention in conformity with the provisions of this section. 

(b) Each contract entered into by the øAdministration¿ Department with any person shall contain effective provisions under 

which such person shall furnish promptly to the øAdministration¿ 

Department a written report containing full and complete technical 

248 

information concerning any invention, discovery, improvement, or 

innovation which may be made in the course of or under such contract. 

(c) Under such regulations in conformity with the provisions of 

this section as the øAdministrator¿ Secretary shall prescribe, the 

øAdministrator¿ Secretary may waive all or any part of the rights 

of the United States under this section with respect to any invention or class of inventions made or which may be made by any person or class of persons in the course of or under any contract of the 

øAdministration¿ Department if he determines that the interests of 

the United States and the general public will best be served by 

such waiver. The øAdministration¿ Department shall maintain a 

publicly available, periodically updated record of waiver determinations. In making such determinations, the øAdministrator¿ Secretary shall have the following objectives: 

(1) Making the benefits of the energy research, development, 

and demonstration program widely available to the public in 

the shortest practicable time. 

(2) Promoting the commercial utilization of such inventions. 

(3) Encouraging participation by private persons in the øAdministration’s¿ Department’s energy research, development, 

and demonstration program. 

(4) Fostering competition and preventing undue market concentration or the creation or maintenance of other situations 

inconsistent with the antitrust laws. 

(d) In determining whether a waiver to the contractor at the time 

of contracting will best serve the interests of the United States and 

the general public, the øAdministrator¿ Secretary shall specifically 

include as considerations—

(1) the extent to which the participation of the contractor 

will expedite the attainment of the purposes of the program; 

(2) the extent to which a waiver of all or any part of such 

rights in any or all fields of technology is needed to secure the 

participation of the particular contractor; 

(3) the extent to which the contractor’s commercial position 

may expedite utilization of the research, development, and 

demonstration program results; 

(4) the extent to which the Government has contributed to 

the field of technology to be funded under the contract; 

(5) the purpose and nature of the contract, including the intended use of the results developed thereunder; 

(6) the extent to which the contractor has made or will make 

substantial investment of financial resources or technology developed at the contractor’s private expense which will directly 

benefit the work to be performed under the contract; 

(7) the extent to which the field of technology to be funded 

under the contract has been developed at the contractor’s private expense; 

(8) the extent to which the Government intends to further 

develop to the point of commercial utilization the results of the 

contract effort; 

(9) the extent to which the contract objectives are concerned 

with the public health, public safety, or public welfare; 

249 

(10) the likely effect of the waiver on competition and market 

concentration; and 

(11) in the case of a nonprofit educational institution, the extent to which such institution has a technology transfer capability and program, approved by the øAdministrator¿ Secretary 

as being consistent with the applicable policies of this section. 

(e) In determining whether a waiver to the contractor or inventor of rights to an identified invention will best serve the 

interests of the United States and the general public, the øAdministrator¿ Secretary shall specifically include as considerations paragraphs (4) through (11) of subsection (d) as applied 

to the invention and— (1) the extent to which such waiver is a reasonable and 

necessary incentive to call forth private risk capital for the development and commercialization of the invention; and 

(2) the extent to which the plans, intentions, and ability of 

the contractor or inventor will obtain expeditious commercialization of such invention. 

(f) Whenever title to an invention is vested in the United 

States, there may be reserved to the contractor or inventor— (1) a revocable or irrevocable nonexclusive, paid-up license 

for the practice of the invention throughout the world; and 

(2) the rights to such invention in any foreign country 

where the United States has elected not to secure patent rights 

and the contractor elects to do so, subject to the rights set forth 

in paragraphs (2), (3), (6), and (7) of subsection (h): Provided, 

That when specifically requested by the øAdministration¿ Department and three years after issuance of such a patent, the 

contract shall submit the report specified in subsection (h)(1) 

of this section. 

* * * * * * * 

(j) The øAdministrator¿ Secretary shall, in granting waivers or licenses, consider the small business status of the applicant. 

(k) The øAdministrator¿ Secretary is authorized to take all suitable and necessary steps to protect any invention or discovery to 

which the United States holds title, and to require that contractors 

or persons who acquire rights to inventions under this section protect such inventions. 

(l) The øAdministration¿ Department shall be considered a defense agency of the United States for the purpose of chapter 17 of 

title 35 of the United States Code. ø2¿ 

(m) As used in this section— (1) the term ‘‘person’’ means any individual, partnership, corporation, association, institution, or other entity; 

(2) the term ‘‘contract’’ means any contract, grant, agreement, understanding, or other arrangement, which includes research, development, or demonstration work, and includes any 

assignment, substitution of parties, or subcontract executed or 

entered into thereunder; 

(3) the term ‘‘made’’, when used in relation to any invention 

means the conception or first actual reduction to practice of 

such invention; 

(4) the term ‘‘invention’’ means inventions or discoveries, 

whether patented or unpatented; and 

250 

(5) the term ‘‘contractor’’ means any person having a contract 

with or on behalf of the øAdministration¿ Department. 

(n) Within twelve months after the date of the enactment 

of this Act, the øAdministrator¿ Secretary with the participation of the Attorney General, the Secretary of Commerce, and 

other officials as the President may designate, shall submit to 

the President and the appropriate congressional committees a 

report concerning the applicability of existing patent policies 

affecting the programs under this Act, along with his recommendations for amendments or additions to the statutory 

patent policy, including his recommendations on mandatory licensing, which he deems advisable for carrying out the purposes of this Act. 

RELATIONSHIP TO ANTITRUST LAWS

SEC. 10. (a) Nothing in this Act shall be deemed to convey to any 

individual, corporation, or other business organization immunity 

from civil or criminal liability, or to create defenses to actions, 

under the antitrust laws. 

(b) As used in this section, the term ‘‘antitrust law’’ means—

(1) the Act entitled ‘‘An Act to protect trade and commerce 

against unlawful restraints and monopolies’’, approved July 2, 

1890 (15 U.S.C. 1 et seq.), as amended; 

(2) the Act entitled ‘‘An Act to supplement existing laws 

against unlawful restraints and monopolies, and for other purposes’’, approved October 15, 1914 (15 U.S.C. 12 et seq.) as 

amended; 

(3) the Federal Trade Commission Act (15 U.S.C. 41 et seq.), 

as amended; 

(4) sections 73 and 74 of the Act entitled ‘‘An Act to reduce 

taxation, to provide revenue for the Government, and for other 

purposes’’, approved August 27, 1894 (15 U.S.C. 8 and 9), as 

amended; and 

(5) the Act of June 19, 1936, chapter 592 (15 U.S.C. 13, 13a, 

13b, and 21a). 

ACQUISITION OF ESSENTIAL MATERIALS

SEC. 12. (a) The President may, by rule or order, require the allocation of, or the performance under contracts or orders (other than 

contracts of employment) relating to, supplies of materials and 

equipment if he finds that—

(1) such supplies are scarce, critical, and essential to carry 

out the purposes of this Act; and (2) such supplies cannot reasonably be obtained without exercising the authority granted 

by this section. 

ø(b) The President shall transmit any rule or order proposed 

under subsection (a) of this section (bearing an identification number) to each House of Congress on the date on which it is proposed. 

If such proposed rule or order is transmitted to the Congress such 

proposed rule or order shall take effect at the end of the first period 

of thirty calendar days of continuous session of Congress after the 

date on which such proposed rule or order is transmitted to it unless, between the date of transmittal and the end of the thirty day 

251 

period, either House passes a resolution stating in substance that 

such House does not favor such a proposed rule or order.¿ 

(b) A rule or order under subsection (a) shall be deemed to be a 

major rule subject to the requirements and procedures in chapter 8 

of title 5, United States Code. 

WATER RESOURCE EVALUATION

SEC. 13. (a) The Water Resources Council shall undertake assessments of water resource requirements and water supply availability for any nonnuclear energy technology and any probable 

combinations of technologies which are the subject of Federal research and development efforts authorized by this Act, and the 

commercial development of which could have significant impacts on 

water resources. In the preparation of its assessment, the Council 

shall—

(1) utilize to the maximum extent practicable data on water 

supply and demand available in the files of member agencies 

of the Council; 

(2) collect and compile any additional data it deems necessary for complete and accurate assessments; 

(3) give full consideration to the constraints upon availability 

imposed by treaty, compact, court decree, State water laws, 

and water rights granted pursuant to State and Federal law; 

(4) assess the effects of development of such technology on 

water quality; 

(5) include estimates of cost associated with production and 

management of the required water supply, and the cost of disposal of waste water generated by the proposed facility or process; 

(6) assess the environmental, social, and economic impact of 

any change in use of currently utilized water resource that 

may be required by the proposed facility or process; and 

(7) consult with the Council on Environmental Quality. 

(b) For any proposed demonstration project which may involve a 

significant impact on water resources, the øAdministrator¿ Secretary shall, as a precondition of Federal assistance to that project, 

request the Water Resources Council to prepare an assessment of 

water requirements and availability for such project. A report on 

the assessment shall be published in the Federal Register for public review thirty days prior to the expenditure of Federal funds on 

the demonstration. 

(c) For any proposed Federal assistance for commercial application of energy technologies pursuant to this Act, the Water Resource Council shall, as a precondition of such Federal assistance, 

provide to the øAdministrator¿ Secretary an assessment of the 

availability of adequate water resources for such commercial application and an evaluation of the environmental, social, and economic 

impacts of the dedication of water to such uses. 

(d) Reports of assessments and evaluations prepared by the 

Council pursuant to subsections (a) and (c) shall be published in 

the Federal Register and at least ninety days shall be provided for 

public review and comment. Comments received shall accompany 

the reports when they are submitted to the øAdministrator¿ Secretary and shall be available to the public. 

252 

(e) The Council shall include a broad survey and analysis of regional and national water resource availability for energy development in the biennial assessment required by section 102(a) of the 

WaterResources Planning Act (42 U.S.C. 1962a–1(a)). 

(f) The øAdministrator¿ Secretary shall, upon enactment of this 

subsection, be a member of the Council. 

* * * * * * * 

APPROPRIATION AUTHORIZATION

SEC. 16. (a) There may be appropriated to the øAdministrator¿ 

Secretary to carry out the purposes of this Act such sums as may 

be authorized in annual authorization Acts. 

ø(b) Of the amounts appropriated pursuant to subsection (a) of 

this section—¿ 

ø(1) $500,000 annually shall be made available by fund 

transfer to the Council on Environmental Quality for the purposes authorized by section 11; and¿ 

ø(2) not to exceed $1,000,000 annually shall be made available by fund transfer to the Water Resources Council for the 

purposes authorized by section 13¿ 

ø(c) There also may be appropriated to the Administrator by separate Acts such amounts as are required for demonstration projects 

for which the total Federal contribution to construction costs exceeds $50,000,000.¿ 

CENTRAL SOURCE OF NONNUCLEAR ENERGY INFORMATION

SEC. 17. The øAdministrator¿ Secretary shall promptly establish, 

develop, acquire, and maintain a central source of information on 

all energy resources and technology in furtherance of the øAdministrator’s¿ research, development, and demonstration mission carried out directly or indirectly under this Act. When the øAdministrator¿ Secretary determines that such information is needed to 

carry out the purposes of this Act, he may acquire proprietary and 

other information (a) by purchase through negotiation or by donation from any person, or 

(b) from another Federal agency. The information maintained by 

the øAdministrator¿ Secretary shall be made available to the public, subject to the provisions of section 552 of title 5, United States 

Code, and section 1905 of title 18, United States Code, and to other 

Government agencies in a manner that will facilitate its dissemination; Provided, That upon a showing satisfactory to the øAdministrator¿ Secretary by any person that any information, or portion 

thereof, obtained under this section by the øAdministrator¿ Secretary directly or indirectly from such person, would, if made public, divulge 

(1) trade secrets or 

(2) other proprietary information of such person, the øAdministrator¿ Secretary shall not disclose such information and 

disclosure thereof shall be punishable under section 1905 øor¿ 

of title 18, United States Code: Provided further, That the øAdministrator¿ Secretary shall, upon request, provide such information to 

253 

(A) any delegate of the øAdministrator¿ Secretary for the 

purpose of carrying out this Act, and 

(B) the Attorney General, the Secretary of Agriculture, 

the Secretary of the Interior, the Federal Trade Commission, øthe Federal Energy Administration¿, the Environmental Protection Agency, øthe Federal Power Commission¿, the Federal Energy Regulatory Commission, the 

øGeneral Accounting Office¿, øGovernment Accountability 

Office¿, other Federal agencies, when necessary to carry 

out their duties and responsibilities under this and other 

statutes, but such agencies and agency heads shall not release such information to the public. This section is not authority to withhold information from Congress or any committee of Congress upon request of the chairman or ranking minority member. 

øENERGY INFORMATION

øSEC. 18. The Administrator is, upon request, authorized to obtain energy information under section 11(d) of the Energy Supply 

and Environmental Coordination Act of 1974, as amended (15 

U.S.C. 796(d)). 

øLOAN GUARANTEES FOR ALTERNATIVE FUEL DEMONSTRATION

FACILITIES

øSEC. 19. (a) It is the purpose of this section— ø(1) to assure adequate Federal support to foster a demonstration program to produce alternative fuels from coal, oil 

shale, biomass, and other domestic resources; 

ø(2) to authorize assistance, through loan guarantees under 

subsection (b) and (y) for construction and startup and related 

costs, to demonstration facilities for the conversion of domestic 

coal, oil shale, biomass, and other domestic resources into alternative fuels; and 

ø(3) to gather information about the technological, economic, 

environmental, and social costs, benefits, and impacts of such 

demonstration facilities. 

ø(b)(1) Except as provided in paragraph (5) of this subsection and 

subsection (y) of this section the Administrator is authorized, in accordance with such rules and regulations as he shall prescribe after 

consultation with the Secretary of the Treasury, to guarantee and 

to make commitments to guarantee, in such manner and subject to 

such conditions (not inconsistent with the provisions of this Act) as 

he deems appropriate, the payment of interest on, and the principal balance of, bonds, debentures, notes, and other obligations 

issued by, or on behalf of, any borrower for the purpose of financing 

the construction and startup costs of demonstration facilities for 

the conversion of domestic coal, oil shale, biomass, and other domestic resources into alternative fuels: Provided, That no loan 

guarantee for a full sized oil shale facility shall be provided under 

this section until after successful demonstration of a modular facility producing between six and ten thousand barrels per day, taking 

into account such considerations as water usage, environmental effects, waste disposal, labor conditions, health and safety, and the 

254 

socioeconomic impacts on local communities: Provided further, That 

no loan guarantee shall be available under this subsection for the 

manufacture of component parts for demonstration facilities eligible for assistance under this subsection. 

ø(2) An applicant for any financial assistance under this section 

shall provide information to the Administrator in such form and 

with such content as the Administrator deems necessary. 

ø(3) Prior to issuing any guarantee under this section the Administrator shall obtain the concurrence of the Secretary of the Treasury with respect to the timing, interest rate, and substantial terms 

and conditions of such guarantee. The Secretary of the Treasury 

shall insure to the maximum extent feasible that the timing, interest rate, and substantial terms and conditions of such guarantee 

will have the minimum possible impact on the capital markets of 

the United States, taking into account other Federal direct and indirect securities activities. 

ø(4) 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. 

ø(5)(A) The Administrator is authorized, in the case of a facility 

for the conversion of oil shale to alternative fuels which is determined by the Administrator pursuant to the proviso in paragraph 

(1) of this subsection, to be constructed at a modular size, to enter 

into a cooperative agreement with the applicant in accordance with 

section 8 of this Act and the other provisions of this Act to share 

the estimated total design and construction costs, plus operation 

and maintenance costs, of such modular facility. The Federal share 

shall not exceed 75 per centum of such costs. All receipts for the 

sale of any products produced during the operation of the facility 

shall be used to offset the costs incurred in the operation and maintenance of the facility. The provisions of subsections (d), (e), (k), 

(m), (p), (s), (t), (u), (v), (w), and (x) shall apply to any such modular facility. The provisions of this section shall apply to any loan 

guarantee for such modular facility. 

ø(B) After successful demonstration of the modular facility, as 

determined by the Administrator, the facility is eligible for financial assistance under this section for purposes of expansion to a full 

sized facility and the applicant may purchase the Federal interest 

in the modular facility as represented by the Federal share thereof 

by means of (i) a cash payment to the United States, or (ii) a share 

of the product or sales resulting from such expanded operation, as 

determined by the Administrator. If expansion of such facility is 

determined not to be warranted by the Administrator, he may, at 

the option of the applicant, dispose of the modular facility to the 

applicant at not less than fair market value, as determined by the 

Administrator as of the date of the disposal, or otherwise dispose 

of it, in accordance with applicable provisions of law, and distribute 

the net proceeds thereof, after expenses of such disposal, to the applicant in proportion to the applicant’s share of the costs of such 

facility. 

ø(6) To the extent possible, loan guarantees shall be issued on 

the basis of competitive bidding among guarantee applicants in a 

particular technology area. 

255 

ø(c) The Administrator, with due regard for the need for competition, shall guarantee or make a commitment to guarantee any obligation under subsection (b) or (y) only if— ø(1) the Administrator is satisfied that the financial assistance applied for is necessary to encourage financial participation; 

ø(2) the amount guaranteed to any borrower at any time 

does not exceed— ø(A) an amount equal to 75 per centum of the project 

cost of the demonstration facility as estimated at the time 

the guarantee is issued, which cost shall not include 

amounts expended for facilities and equipment used in the 

extraction of a mineral other than coal or shale, and in the 

case of coal only to the extent that the Administrator determines that the coal is to be converted to alternative 

fuel; and 

ø(B) an amount equal to 60 per centum of that portion 

of the actual total project cost of any demonstration facility 

which exceeds the project cost of such facility as estimated 

at the time the loan guarantee is issued; 

ø(3) the Administrator has determined that there will be a 

continued reasonable assurance of full repayment; 

ø(4) the obligation is subject to the condition that it not be 

subordinated to any other financing; 

ø(5) the Administrator has determined, taking into consideration all reasonably available forms of assistance under this 

section and other Federal and State statutes, that the impacts 

resulting from the proposed demonstration facility have been 

fully evaluated by the borrower, the Administrator, and the 

Governor of the affected State, and that effective steps have 

been taken or will be taken in a timely manner to finance community planning and development costs resulting from such facility under this section, under other provisions of law, or by 

other means; 

ø(6) the maximum maturity of the obligation does not exceed 

twenty years, or 90 per centum of the projected useful economic life of the physical assets of the demonstration facility 

covered by the guarantee, whichever is less, as determined by 

the Administrator; 

ø(7) the Administrator has determined that, in the case of 

any demonstration or modular facility planned to be located on 

Indian lands, the appropriate Indian tribe, with the approval 

of the Secretary of the Interior, has given written consent to 

such location; 

ø(8) the obligation provides for the orderly and ratable retirement of the obligation and includes sinking fund provisions, 

installment payment provisions or other methods of payments 

and reserves as may be reasonably required by the Administrator. Prior to approving and repayment schedule the Administrator may consider the date on which operating revenues are 

anticipated to be generated by the project. To the maximum 

extent possible repayment or provision therefore shall be required to be made in equal payment payable at equal intervals; 

and 

256 

ø(9) the obligation provides that the Administrator shall, 

after, a period of not less than ten years from issuance of the 

obligation, taking into consideration whether the Government’s 

needs for information to be derived from the project have been 

substantially met and whether the project is capable of commercial operation, determine the feasibility and advisability of 

terminating the Federal participation in the project. In the 

event that such determination is positive, the Administrator 

shall notify the borrower and provide the borrower with not 

less than two nor more than three years in which to find alternative financing. At the expiration of the designated period of 

time, if the borrower has been unable to secure alternative financing, the Administrator is authorized to collect from the 

borrower an additional fee of 1 per centum per annum on the 

remaining obligation to which the Federal guarantee applies. 

* * * * * * * 

ø(e)(1) As soon as the Administrator knows the geographic location of a proposed facility for which a guarantee or a commitment 

to guarantee or cooperative agreement is sought under this section, 

he shall inform the Governor of the State, and officials of each political subdivision and Indian Tribe, as appropriate, in which the 

facility would be located or which would be impacted by such facility. The Administrator shall not guarantee or make a commitment 

to guarantee or enter into a cooperative agreement under subsection (b) or subsection (y) of this section, if the Governor of the 

State in which the proposed facility would be located recommends 

that such action not be taken, unless the Administrator finds that 

there is an overriding national interest in taking such action in 

order to achieve the purpose of this section. If the Administrator 

decides to guarantee or make a commitment to guarantee or enter 

into a cooperative agreement despite a Governor’s recommendation 

not to take such action, the Administrator shall communicate, in 

writing, to the Governor reasons for not concurring with such recommendation. This Administrator’s decision, pursuant to this subsection, shall be final unless determined upon judicial review initiated by the Governor to be unlawful by the reviewing court pursuant to 5 U.S.C. 706(2) (A) through (D). Such review shall take place 

in the United States court of appeals for the circuit in which the 

State involved is located, upon application made within ninety days 

from the date of such decision. The Administrator shall, by regulation, establish procedures for review of, and comment on, the proposed facility by States, local political subdivisions, and Indian 

tribes which may be impacted by such facility, and the general 

public. 

(2) The Administrator shall review and approve the plans of the 

applicant for the construction and operation of any demonstration 

and related facilities constructed or to be constructed with assistance under this section. Such plans and the actual construction 

shall include such monitoring and other data-gathering costs associated with such facility as are required by the comprehensive plan 

and program under this section. The Administrator shall determine 

the estimated total cost of such demonstration facility, including, 

but not limited to, construction costs, startup costs, costs to political subdivisions and Indian tribe by such facility, and cost of any 

257 

water storage facilities needed in connection with such demonstration facility, and determine who shall pay such costs. Such determination shall not be binding upon the States, political subdivisions, or Indian tribes. 

ø(3) There is hereby established a panel to advise the Administrator on matters relating to the program authorized by this section, including, but not limited to, the impact of the demonstration 

facilities on communities and States and Indian tribes, the environmental and health and safety effects of such facilities, and the 

means, measures, and planning for preventing or mitigating such 

impacts, and other matters relating to the development of alternative fuels and other energy sources under this section. The panel 

shall include such Governors or their designees as shall be designated by the Chairman of the National Governors Conference. 

Representatives of Indian tribes, industry, environmental organizations, and the general public shall be appointed by the Administrator. The Chairman of the panel shall be selected by the Administrator. No person shall be appointed to the panel who has a financial interest in any applicant applying for assistance under this 

section. Members of the panel shall serve without compensation. 

The provisions of section 106(e) of the Energy Reorganization Act 

of 1974 (42 U.S.C. 5816(e)) shall apply to the panel. 

ø(f) Except in accordance with reasonable terms and conditions 

contained in the written contract of guarantee, no guarantee issued 

or commitment to guarantee made under this section shall be terminated, canceled, or otherwise revoked. Such a guarantee or commitment shall be conclusive evidence that the underlying obligation 

is in compliance with the provisions of this section and that such 

obligation has been approved and is legal as to principal, interest, 

and other terms. Subject to the conditions of the guarantee or commitment to guarantee, such a guarantee shall be incontestable in 

the hands of the holder of the guaranteed obligation, except as to 

fraud or material misrepresentation on the part of the holder. 

ø(g)(1) If there is a default by the borrower, as defined in regulations promulgated by the Administrator and in the guarantee contract, the holder of the obligation shall have the right to demand 

payment of the unpaid amount from the Administrator. Within 

such period as may be specified in the guarantee or related agreements, the Administrator shall pay to the holder of the obligation 

the unpaid interest on, and unpaid principal of, the guaranteed obligation as to which the borrower has defaulted, unless the Administrator finds that there was no default by the borrower in the payment of interest or principal or that such default has been remedied. Nothing in this section shall be construed to preclude any 

forebearance by the holder of the obligation for the benefit of the 

borrower which may be agreed upon by the parties to the guaranteed obligation and approved by the Administrator. 

ø(2) If the Administrator makes a payment under paragraph (1) 

of this subsection, the Administrator shall be subrogated to the 

rights of the recipient of such payment (and such subrogation shall 

be expressly set forth in the guarantee or related agreements), including the authority to complete, maintain, operate, lease, or otherwise dispose of any property acquired pursuant to such guarantee or related agreements, or any other property of the borrower 

258 

(of a value equal to the amount of such payment) to the extent that 

the guarantee applies to amounts in excess of the estimated project 

cost under subsection (c)(2)(B), without regard to the provisions of 

the Federal Property and Administrative Services Act of 1949, as 

amended, except section 207 of that Act (40 U.S.C. 488), or any 

other law, or to permit the borrower pursuant to an agreement 

with the Administrator, to continue to pursue the purposes of the 

demonstration facility if the Administrator determines that this is 

in the public interest. The rights of the Administrator with respect 

to any property acquired pursuant to such guarantee or related 

agreements, shall be superior to the rights of any other person with 

respect to such property. 

ø(3) In the event of a default on any guarantee under this section, the Administrator shall notify the Attorney General, who 

shall take such action as may be appropriate to recover the 

amounts of any payments made under paragraph (1) including any 

payment of principal and interest under subsection (h) from such 

assets of the defaulting borrower as are associated with the demonstration facility, or from any other security included in the terms 

of the guarantee. 

ø(4) For purposes of this section, patents, including any inventions for which a waiver was made by the Administrator under section 9 of this Act, and technology resulting from the demonstration 

facility, shall be treated as project assets of such facility. The guarantee agreement shall include such detailed terms and conditions 

as the Administrator deems appropriate to protect the interests of 

the United States in the case of default and to have available all 

the patents and technology necessary for any person selected, including, but not limited to the Administrator, to complete and operate the defaulting project. Furthermore, the guarantee agreement 

shall contain a provision specifying that patents, technology, and 

other proprietary rights which are necessary for the completion or 

operation of the demonstration facility shall be available to the 

United States and its designees on equitable terms, including due 

considerations to the amount of the United States default payments. Inventions made or conceived in the course of or under such 

guarantee, title to which is vested in the United States under this 

Act, shall not be treated as project assets of such facility for disposal purposes under this subsection, unless the Administrator determines in writing that it is in the best interests of the United 

States to do so. 

ø(h) With respect to any obligation guaranteed under this section, the Administrator is authorized to enter into a contract to 

pay, and to pay, holders of the obligations, for and on behalf of the 

borrowers, from the fund established by this section, the principal 

and interest payments which become due and payable on the unpaid balance of such obligation if the Administrator finds that—

ø(1) the borrower is unable to meet such payments and is 

not in default; it is in the public interest to permit the borrower to continue to pursue the purposes of such demonstration facility; and the probable net benefit to the Federal Government in paying such principal and interest will be greater 

than that which would result in the event of a default; 

259 

ø(2) the amount of such payment which the Administrator is 

authorized to pay shall be no greater than the amount of principal and interest which the borrower is obligated to pay under 

the loan agreement; and 

ø(3) the borrower agrees to reimburse the Administrator for 

such payment on terms and conditions, including interest, 

which are satisfactory to the Administrator. 

ø(i) Regulations required by this section shall be issued within 

one hundred and eighty days after enactment of this section. All 

regulations under this section and any amendments thereto shall 

be issued in accordance with section 553 of title 5, of the United 

States Code. 

ø(j) The Administrator shall charge and collect fees for guarantees of obligations authorized by subsection (b)(1), in amounts 

which (1) are sufficient in the judgment of the Administrator to 

cover the applicable administrative costs, and (2) reflect the percentage of projects costs guaranteed. In no event shall the fee be 

less than 1 per centum per annum of the outstanding indebtedness 

covered by the guarantee. Nothing in this subsection shall be construed to apply to community planning and development assistance 

pursuant to subsection (k) of this section. 

ø(k)(1) In accordance with such rules and regulations as the Administrator in consultation with the Secretary of the Treasury shall 

prescribe, and subject to such terms and conditions as he deems 

appropriate, the Administrator is authorized, for the purpose of financing essential community development and planning which directly result from, or are necessitated by, one or more demonstration facilities assisted under this section to—

ø(A) guarantee and make commitments to guarantee the 

payment of interest on, and the principal balance of obligations 

for such financing issued by eligible States, political subdivisions, or Indian tribes, 

ø(B) guarantee and make commitments to guarantee the 

payment of taxes imposed on such demonstration facilities by 

eligible non-Federal taxing authorities which taxes are earmarked by such authorities to support the payment of interest 

and principal on obligations for such financing, and 

ø(C) require that the applicant for assistance for a demonstration facility under this section advance sums of eligible 

States, political subdivisions, and Indian tribes to pay for the 

financing of such development and planning: Provided, That 

the State, political subdivision, or Indian tribe agrees to provide tax abatement credits over the life of the facilities for such 

payments by such applicant. 

ø(2) Prior to issuing any guarantee under this subsection, the 

Administrator shall obtain the concurrence of the Secretary of the 

Treasury with respect to the timing, interest rate, and substantial 

terms and conditions of such guarantee. The Secretary of the 

Treasury shall insure to the maximum extent feasible that the timing, interest rate, and substantial terms and conditions of such 

guarantee will have the minimum possible impact on the capital 

markets of the United States, taking into account other Federal direct and indirect securities activities. 

260 

ø(3) In the event of any default by the borrower in the payment 

of taxes guaranteed by the Administrator under this subsection, 

the Administrator shall pay out of the fund established by this section such taxes at the time or times they may fall due, and shall 

have by reason of such payment a claim against the borrower for 

all sums paid plus interest. 

ø(4) If after consultation with the State, political subdivision, or 

Indian tribe, the Administrator finds that the financial assistance 

programs of paragraph (1) of this subsection will not result in sufficient funds to carry out the purposes of this subsection, then the 

Administrator may— ø(A) make direct loans to the eligible States, political subdivisions, or Indian tribes for such purposes: Provided, That such 

loans shall be made on such reasonable terms and conditions 

as the Administrator shall prescribe: Provided further, That 

the Administrator may waive repayment of all or part of a loan 

made under this paragraph, including interest, if the State or 

political subdivision or Indian tribe involved demonstrates to 

the satisfaction of the Administrator that due to a change in 

circumstances there will be net adverse impacts resulting from 

such demonstration facility that would probably cause such 

State, subdivision, or tribe to default on the loan; or 

ø(B) require that any community development and planning 

costs which are associated with, or result from, such demonstration facility and which are determined by the Administrator to be appropriate for such inclusion shall be included in 

the total costs of the demonstration facility. 

ø(5) The Administrator is further authorized to make grants to 

States, political subdivisions, or Indian tribes for studying and 

planning for the potential economic, environmental, and social consequences of demonstration facilities, and for establishing related 

management expertise. 

ø(6) At any time the Administrator may, with the concurrence of 

the Secretary of the Treasury, redeem, in whole or in part, out of 

the fund established by this section, the debt obligations guaranteed or the debt obligations for which tax payments are guaranteed 

under this subsection. 

ø(7) When one or more States, political subdivisions, or Indian 

tribes would be eligible for assistance under this subsection, but for 

the fact that construction and operation of the demonstration facilities occurs outside its jurisdiction, the Administrator is authorized 

to provide, to the greatest extent possible, arrangements for equitable sharing of such assistance. 

ø(8) Such amounts as may be necessary for direct loans and 

grants pursuant to this subsection shall be available as provided in 

annual authorization Acts. 

ø(9) The Administrator, if appropriate, shall provide assistance 

in the financing of up to 100 per centum of the costs of the required 

community development and planning pursuant to this subsection. 

ø(10) In carrying out the provisions of this subsection, the Administrator shall provide that title to any facility receiving financial assistance under this subsection shall vest in the applicable 

State, political subdivision, or Indian tribe, as appropriate, and in 

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261 

ity shall not be considered a project asset for the purposes of subsection (g) of this section. 

ø(l)(1) The Administrator is directed to submit a report to the 

Congress within one hundred and eighty days after the enactment 

of this section setting forth his recommendations on the best opportunities to implement a program of Federal financial assistance 

with the objective of demonstrating production and conservation of 

energy. Such report shall be updated and submitted to Congress at 

least annually and shall include specific comments and recommendations by the Secretary of the Treasury on the methods 

and procedures set forth in subparagraph (B)(viii) of this subsection, including their adequacy, and changes necessary to satisfy 

the objectives stated in this subsection. This report shall include— ø(A) a study of the purchase or commitment to purchase by 

the Federal Government, for the use by the United States, of 

all or a portion of the products of any alternative fuel facilities 

constructed pursuant to this program as a direct or an alternate form of Federal assistance, which assistance, if recommended, shall be carried out pursuant to section 7(a)(4) of 

this Act; and 

ø(B) a comprehensive plan and program to acquire information and evaluate the environmental, economic, social, and 

technological impacts of the demonstration program under this 

section. In preparing such a comprehensive plan and program, 

the Administrator shall consult with the Environmental Protection Agency, the Federal Energy Administration, the Department of Housing and Urban Development, the Department 

of the Interior, the Department of Agriculture, and the Department of the Treasury, and shall include therein, but not be 

limited to, the following: 

ø(i) information about potential demonstration facilities 

proposed in the program under this section; 

ø(ii) any significant adverse impacts which may result 

from any activity included in the program; 

ø(iii) the extent to which it is feasible to commercialize 

the technologies as they affect different regions of the Nation; 

ø(iv) proposed regulations required to carry out the purposes of this section; 

ø(v) a list of Federal agencies, governmental entities, 

and other persons that will be consulted or utilized to implement the program; 

ø(vi) the methods and procedures by which the information gathered under the program will be analyzed and disseminated; 

ø(vii) a plan for the study and monitoring of the health 

effects of such facilities on workers and other persons, including, but not limited to, any carcinogenic effect of alternative fuels; and 

ø(viii) the methods and procedures to insure that (I) the 

use of the Federal assistance for demonstration facilities is 

kept to the minimum level necessary for the information 

objectives of this section, (II) the impact of loan guarantees 

on the capital markets of the United States is minimized, 

262 

taking into account other Federal direct and indirect securities activities, and any economic sectors which may be 

negatively impacted as a result of the reduction of capital 

by the placement of guaranteed loans, and (III) the granting of Federal loan guarantees under this Act does not impede movement toward improvement in the climate for attracting private capital to develop alternative fuels without 

continued direct Federal incentives. 

ø(2) The Administrator shall annually submit a detailed report 

to the Congress concerning— ø(A) the actions taken or not taken by the Administrator 

under this section during the preceding fiscal year, and including, but not be limited to (i) a discussion of the status of each 

demonstration facility and related facilities financed under this 

section, including progress made in the development of such facilities, and the expected or actual production from each such 

facility, including byproduct production therefrom, and the distribution of such products and byproducts, (ii) a detailed statement of the financial conditions of each such demonstration facility, (iii) data concerning the environmental, community, and 

health and safety impacts of each such facility and the actions 

taken or planned to prevent or mitigate such impacts, (iv) the 

administrative and other costs incurred by the Administrator 

and other Federal agencies in carrying out this program, and 

(v) such other data as may be helpful in keeping Congress and 

the public fully and currently informed about the program authorized by this section; and 

ø(B) the activities of the fund referred to in subsection 

(n) of this section during the preceding fiscal year, including a statement of the amount and source of fees or other 

moneys, property, or assets deposited into the funds, all 

payments made, the notes or other obligations issued by 

the Administrator, and such other data as may be appropriate. 

ø(3) The annual reports required by this subsection shall be a 

part of the annual report required by section 15 of this Act, except 

that the matters required to be reported by this subsection shall 

be clearly set out and identified in such annual reports. Such reports and the one-hundred-and-eighty-day report required in paragraph (1) of this subsection shall be transmitted to the Speaker of 

the House of Representatives and the House Committee on Science, 

Space, and Technology and to the President of the Senate and the 

Committee on Energy and Natural Resources of the Senate. 

ø(m) Prior to issuing any guarantee or commitment to guarantee 

or cooperative agreement pursuant to subsection (b) or subsection 

(y) of this section the Administrator shall submit to the Committee 

on Science, Space, and Technology of the House of Representatives 

and the Committee on Energy and Natural Resources of the Senate 

a full and complete report on the proposed demonstration facility 

and such guarantee, agreement, or contract. Such guarantee, commitment to guarantee, cooperative agreement, or contract shall not 

be finalized under the authority granted by this section prior to the 

expiration of ninety calendar days (not including any day on which 

either House of Congress is not in session because of an adjournVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00262 Fmt 6601 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
263 

ment of more than three calendar days to a day certain) from the 

date on which such report is received by such committees: Provided, That, where the cost of a demonstration facility to be assisted with a guarantee or cooperative agreement pursuant to subsection (b) or subsection (y) of this section exceeds $50,000,000 such 

guarantee or commitment to guarantee or cooperative agreement 

shall not be finalized unless (1) the making of such guarantee or 

commitment or agreement is specifically authorized by legislation 

hereafter enacted by the Congress or (2) both Houses pass a resolution stating in substance that the Congress favors the making of 

such guarantee or commitment or agreement. 

ø(n)(1) There is hereby created within the Treasury a separate 

fund (hereafter in this section called the ‘‘fund’’) which shall be 

available to the Administrator without fiscal year limitation as a 

revolving fund for the purpose of carrying out the program authorized by subsection (b)(1) and subsections (g), (h), (k), and (y) of this 

section. 

ø(2) There are hereby authorized to be appropriated to the fund 

for administrative expenses from time to time such amounts as 

may be necessary to carry out the purposes of the applicable provisions of this section, inclusding, but not limited to, the payments 

of interest and principal and the payment of interest differentials 

and redemption of debt. All amounts received by the Administrator 

as interest payments or repayments of principal on loans which are 

guaranteed under this section, fees, and any other moneys, property, or assets derived by him from operations under this section 

shall be deposited in the fund. 

ø(3) All payments on obligations, appropriate expenses (including 

reimbursements to other Government accounts), and repayments 

pursuant to operations of the Administrator under this section 

shall be paid from the fund subject to appropriations. If at any 

time the Administrator determines that moneys in the fund exceed 

the present and reasonably foreseeable future requirements of the 

fund, such excess shall be transferred to the general fund of the 

Treasury. 

ø(4) If at any time the moneys available in the fund are insufficient to enable the Administrator to discharge his responsibilities 

as authorized by subsections (b)(1), (g), (h), and (y) of this section, 

the Administrator shall issue to the Secretary of the Treasury 

notes or other obligations in such forms and denominations, bearing such maturities, and subject to such terms and conditions as 

may be prescribed by the Secretary of the Treasury. Redemption of 

such notes or obligations shall be made by the Administrator from 

appropriations or other moneys available under paragraph (2) of 

this subsection for loan guarantees authorized by subsection (b)(1) 

and subsections (g), (h), (k), and (y) of this section. Such notes or 

other obligations shall bear interest at a rate determined by the 

Secretary of the Treasury, which shall be not less than a rate determined by taking into consideration the average market yield on 

outstanding marketable obligations of the United States of comparable maturities during the month preceding the issuance of the 

notes or other obligations. The Secretary of the Treasury may at 

any time sell any of the notes or other obligations acquired by him 

under this subsection. 

264 

ø(5) The provisions of this subsection do not apply to direct loans 

or planning grants made under subsection (k) of this section. 

ø(o) For the purposes of this section, the term— ø(1) ‘‘State’’ means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, 

the Virgin Islands, American Samoa, any territory or possession of the United States, 

ø(2) ‘‘United States’’ means the several States, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American 

Samoa, 

ø(3) ‘‘borrower’’ or ‘‘applicant’’ shall include any individual, 

firm, corporation, company, partnership, association, society, 

trust, joint venture, joint stock company, or other non-Federal 

entity, and 

ø(4) ‘‘biomass’’ shall include, but is not limited to, animal 

and timber waste, municipal and industrial waste, sewage, 

sludge, and oceanic and terrestrial crops. 

ø(p)(1) An applicant seeking a guarantee or cooperative agreement under subsection (b) or subsection (y) of this section must be 

a citizen or national of the United States. A corporation, partnership, firm, or association shall not be deemed to be a citizen or national of the United States unless the Administrator determines 

that it satisfactorily meets all the requirements of section 802 of 

title 46, United States Code for determining such citizenship, except that the provisions in subsection (a) of such section 802 concerning (A) the citizenship of officers or directors of a corporation, 

and (B) the interest required to be owned in the case of a corporation, association, or partnership operating a vessel in the coastwise 

trade, shall not be applicable. 

ø(2) The Administrator, in consultation with the Secretary of 

State, may waive such requirements in the case of a corporation, 

partnership, firm, or association, controlling interest in which is 

owned by citizens of countries which are participants in the International Energy Agreement. 

ø(q) No part of the program authorized by this section shall be 

transferred to any other agency or authority, except pursuant to 

Act of Congress enacted after the date of enactment of this section. 

ø(r) Inventions made or conceived in the course of or under a 

guarantee authorized by this section shall be subject to the title 

and waiver requirements and conditions of section 9 of this Act. 

ø(s) Nothing in this section shall be construed as affecting the obligations of any person receiving financial assistance pursuant to 

this section to comply with Federal and State environmental, land 

use, water, and health and safety laws and regulations or to obtain 

applicable Federal and State permits, licenses, and certificates. 

ø(t) The information maintained by the Administrator under this 

section shall be made available to the public subject to the provision of section 552 of title 5, United States Code, and section 1905 

of title 18, United States Code, and to other Government agencies 

in a manner that will facilitate its dissemination: Provided, That 

upon a showing satisfactory to the Administrator by any person 

that any information, or portion thereof obtained under this section 

by the Administrator directly or indirectly from such person would, 

if made public, divulge (1) trade secrets or (2) other proprietary inVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00264 Fmt 6601 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
265 

formation of such person, the Administrator shall not disclose such 

information and disclosure thereof shall be punishable under section 1905 of title 18, United States Code: Provided further, That 

the Administrator shall, upon request, provide such information 

to—

ø(A) any delegate of the Administrator for the purpose of 

carrying out this Act, and 

ø(B) the Attorney General, the Secretary of Agriculture, the 

Secretary of the Interior, the Federal Trade Commission, the 

Federal Energy Administration, the Environmental Protection 

Agency, the Federal Power Commission, the General Accounting Office, other Federal agencies, or heads of other Federal 

agencies, when necessary to carry out their duties and responsibilities under this and other statutes, but such agencies and 

agency heads shall not release such information to the public. 

This section is not authority to withhold information from Congress, or from any committee of Congress upon request of the 

Chairman. For the purposes of this subsection, the term ‘‘person’’ shall include the borrower. 

ø(u) Notwithstanding any other provision of this section, the authority provided in this section to make guarantees or commitments to guarantee or enter into cooperative agreements under 

subsection (b)(1) or subsection (y), to make guarantees or commitments to guarantees, or to make loans or grants, under subsection 

(k), to make contracts under subsection (h), and to use fees and receipts collected under subsections (b), (j), and (y) of this section, 

and the authorities provided under subsection (n) of this section 

shall be effective only to the extent provided, without fiscal year 

limitation, in appropriation Acts enacted after the date of enactment of this section. 

ø(v) No person in the United States shall on the grounds of race, 

color, religion, national origin, or sex, be excluded from participation in, be denied benefits of, or be subjected to discrimination 

under any program or activity funded in whole or in part with assistance made available under this section: Provided, That Indian 

tribes are exempt from the operation of this subsection: Provided 

further, That such exemption shall be limited to the planning and 

provision of public facilities which are located on reservations and 

which are provided for members of the affected Indian tribes as the 

primary beneficiaries. 

ø(w) In carrying out his functions under this section, the Administrator shall provide a realistic and adequate opportunity for small 

business concerns to participate in the program to the optimum extent feasible consistent with the size and nature of each project. 

ø(x)(1) recipients of financial assistance under this section shall 

keep such records and other pertinent documents, as the Administrator shall prescribe by regulation, including, but not limited to, 

records which fully disclose the disposition of the proceeds of such 

assistance, the cost of any facility, the total cost of the provision 

of public facilities for which assistance was used and such other 

records as the Administrator may require to facilitate an effective 

audit. The Administrator and the Comptroller General of the 

United States, or their duly authorized representative shall have 

266 

access, for the purpose of audit, to such records and other pertinent 

documents. 

ø(2) All laborers and mechanics employed by contractors or subcontractors in the performance of construction work financed in 

whole or in part with assistance under this section shall be paid 

wages at rates not less than those prevailing on similar construction in the locality as determined by the Secretary of Labor in accordance with the Davis-Bacon Act, as amended (40 U.S.C. 276a– 276a–5). The Secretary of Labor shall have, with respect to such 

labor standards, the authority and functions set forth in Reorganization Plan Numbered 14 of 1950 (15 F.R. 3176; 64 Stat. 1267) 

and section 2 of the Act of June 13, 1934, as amended (48 Stat. 

948; 40 U.S.C. 276(c)). 

ø(y)(1) The Administrator is authorized in accordance with such 

rules and regulations as he shall prescribe after consultation with 

the Secretary of the Treasury, to guarantee and to make commitments to guarantee the payment of interest on, and the principal 

balance of, bonds, debentures, notes, and other obligations issued 

by or on behalf of any borrower for the purpose of (A) financing the 

construction and startup costs of demonstration facilities for the 

conversion of municipal or industrial waste, sewage sludge, or 

other municipal organic wastes into synthetic fuels, and (B) financing the construction and startup costs of demonstration facilities to 

generate desirable forms of energy (including synthetic fuels) from 

municipal or industrial waste, sewage sludge, or other municipal 

organic waste. With respect to a guarantee or a commitment to 

guarantee authorized by this subsection; the following subsections 

of this section shall not apply: (b)(1), (b)(5), (c)(2), (c)(5), (c)(6), 

(c)(7), (c)(8), (c)(9), (e)(3), (j), (k), and (q). 

ø(2) In the case where the Administrator seeks to guarantee or 

to make commitments to guarantee as provided by this subsection 

he is authorized to incur an outstanding indebtedness which at no 

time shall exceed $300,000,000. 

ø(3) The Administrator shall apply the following provisions 

thereto: 

ø(A) With respect to any demonstration facility for the conversion of solid waste (as the term is defined in the Resource 

Conservation and Recovery Act (42 U.S.C. 6903)), the Administrator, prior to issuing any guarantee under this section, must 

be in receipt of a certification from the Administrator of the 

Environmental Protection Agency and any appropriate State or 

areawide solid waste management planning agency that the 

proposed application for a guarantee is consistent with any applicable suggested guidelines published pursuant to section 

1008(a) of the Resource Conservation and Recovery Act, and 

any applicable State or regional solid waste management plan. 

ø(B) The amount guaranteed shall not exceed 75 per centum 

of the total cost of the commercial demonstration facility, as 

determined by the Administrator: Provided, That the amount 

guaranteed may not exceed 90 per centum of the total cost of 

the commercial demonstration facility during the period of construction and startup. 

ø(C) The maximum maturity of the obligation shall not exceed thirty years, or 90 per centum of the projected useful ecoVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00266 Fmt 6601 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
267 

nomic life of the physical assets of the commercial demonstration facility covered by the guarantee, whichever is less, as determined by the Administrator. 

ø(D) The Administrator shall charge and collect fees for 

guarantees of obligations in amounts sufficient in the judgment 

of the Administrator to cover the applicable administrative 

costs and probable losses on guaranteed obligations, but in any 

event not to exceed 1 per centum per annum of the outstanding indebtedness covered by the guarantee. 

ø(E) No part of the program authorized by this section shall 

be transferred to any other agency or authority, except pursuant to Act of Congress enacted after the date of enactment of 

this section: Provided, That project agreements entered into 

pursuant to this section for any commercial demonstration facility for the conversion of bioconversion of solid waste (as that 

term is defined in the Resource Conservation and Recovery 

Act) shall be administered in accordance with the May 7, 1976, 

Interagency Agreement between the Environmental Protection 

Agency and the Energy Research and Development Administration on the Development of Energy From Solid Wastes, and 

provided specifically that in accordance with this agreement (i) 

for those energy-related projects of mutual interest, planning 

will be conducted jointly by the Environmental Protection 

Agency and the Energy Research and Development Administration, following which project responsibility will be assigned 

to one agency; (ii) energy-related projects for recovery of synthetic fuels or other forms of energy from solid waste shall be 

the responsibility of the Energy Research and Development 

Administration; and (iii) the Environmental Protection Agency 

shall retain responsibility for the environmental, economic, and 

institutional aspects of solid waste projects and for assurance 

that such projects are consistent with any applicable suggested 

guidelines pursuant to section 1008 of the Resource Conservation and Recovery Act of 1976 (42 U.S.C. 6901 et seq.), as 

amended, and any applicable State or regional solid waste 

management plan. 

ø(F) With respect to any obligation which is issued after the 

enactment of this section by, or in behalf of, any State, political 

subdivision, or Indian tribe and which is either guaranteed 

under, or supported by taxes levied by said issuer which are 

guaranteed under, this section, the interest paid on such obligation and received by the purchaser thereof (or the purchaser’s successor in interest) shall be included in gross income 

for the purpose of chapter 1 of the Internal Revenue Code of 

1954, as amended: Provided, That the Administrator shall pay 

to such issuer out of the fund established by this section such 

portion of the interest on such obligations, as determined by 

the Secretary of the Treasury to be appropriated after taking 

into account current market yields (i) on obligations of said 

issuer, if any, and (ii) on other obligations with similar terms 

and conditions the interest on which is not so included in gross 

income for purposes of chapter 1 of such Code, and in accordance with, such terms and conditions as the Secretary of the 

Treasury shall require. 

268 

øFINANCIAL SUPPORT PROGRAM FOR MUNICIPAL WASTE

REPROCESSING DEMONSTRATION FACILITIES

øSEC. 20. (a) It is the purpose of this section—

ø(1) to assure adequate Federal support to foster a program 

to demonstrate municipal waste reprocessing for the production of fuel and energy intensive products; and 

ø(2) to gather information about the technological, economic, 

environmental, and social costs, benefits, and impacts of such 

demonstration facilities. 

ø(b)(1) The Administrator is authorized and directed, to the extent provided in appropriation Acts, to establish such a demonstration program by making grants, contracts, price supports, and cooperative agreements pursuant to this Act or any combination thereof 

for the establishment of municipal waste reprocessing demonstration facilities. For the purpose of this section municipal waste shall 

include but not be limited to municipal solid waste, sewage sludge, 

and other municipal organic wastes. 

ø(2) The aggregate amount of funds available for grants, contracts, price supports, and cooperative agreements for municipal 

waste reprocessing demonstration facilities shall not exceed 

$20,000,000 in the fiscal year ending September 30, 1978. 

ø(3) For purposes of this section the term ‘‘municipal’’ shall include any city, town, borough, county, parish, district, or other public body created by or pursuant to State law. 

ø(4) Municipal was reprocessing demonstration facilities established under this section shall be owned or operated (or both owned 

and operated) by the municipality and shall involve the recovery of 

energy or energy intensive products. Such facilities may be established by any public or private entity, by contract or otherwise, as 

may be determined by the local government which will own or operate (or both own and operate) such facilities and to which financial support is provided. The Federal share for any such facility to 

which this section applies shall not exceed 75 per centum of the 

cost of such facility, and not more than $40,000,000 in Federal 

funds under this section may be used for the construction of any 

one facility. 

ø(5) The Administrator shall promulgate such regulations as he 

deems necessary, pursuant to section 7(a)(4) and section 7(c) (1) 

and (6) of this Act, for purposes of establishing a price support program for revenue producing products of municipal waste reprocessing demonstration facilities. 

ø(c)(1) The Administrator shall consult with the Environmental 

Protection Agency to assure that the provisions of section 8004 of 

the Resource Conservation and Recovery Act of 1976 (Public Law 

94–580) are applied in carrying out this section. 

ø(2) Any energy-related research, development, or demonstration 

project for the conversion (including bioconversion) of municipal 

waste carried out by the Energy Research and Development Administration pursuant to this or any other Act shall be administered in accordance with the May 7, 1976, Interagency Agreement 

between the Environmental Protection Agency and the Energy Research and Development Administration on the development of energy from solid wastes; and specifically, in accordance with such 

269 

Agreement (A) for those energy-related projects of mutual interest, 

planning will be conducted jointly by the Environmental Protection 

Agency and the Energy Research and Development Administration, 

following which project responsibility will be assigned to one agency; (B) energy-related aspects of projects for recovery of fuels or energy intensive products from municipal waste as defined in this 

section shall be the responsibility of the Energy Research and Development Administration including energy-related economic and 

institutional aspects; and (C) the Environmental Protection Agency 

shall retain responsibility for the environmental and other economic and institutional aspects of solid waste projects and for assurance that such projects are consistent with any applicable suggested guidelines published pursuant to section 1008 of the Resource Conservation and Recovery Act of 1976 (Public Law 94–580), 

and any applicable State or regional waste management plan. 

ø(d)(1) The Administrator shall establish such guidelines as he 

deems necessary for purposes of obtaining pertinent information 

from municipalities receiving funding under this section. These 

guidelines shall include but not be limited to methods of assessment and evaluation of projects authorized under this section. Such 

assessments and evaluations shall be presented by the Administrator to the House Committee on Science, Space, and Technology 

and the Senate Committee on Energy and Natural Resources upon 

the request of either such committee. 

ø(2) The Administrator shall annually submit a report to the 

Congress concerning the actions taken or not taken by the Administrator under this section during the preceding fiscal year, and including but not limited to: 

ø(A) a discussion of the status of each demonstration facility 

and related facilities financed under this section, including 

progress made in the development of such facilities, and the 

expected or actual production from each such facility including 

byproduct production therefrom, and the distribution of such 

products and byproducts, 

ø(B) a statement of the financial condition of each such demonstration facility, 

ø(C) data concerning the environmental, community, and 

health and safety impacts of each such facility and the actions 

taken or planned to prevent or mitigate such impacts, 

(D) the administrative and other costs incurred by the Administrator and other Federal agencies in carrying out this 

program, and (E) such other data as may be helpful in keeping 

Congress and the public fully and currently informed about the 

program authorized by this section. 

ø(3) The annual reports required by this subsection shall be a 

part of the annual report required by section 15 of this Act, except 

that the matters required to be reported by this subsection shall 

be clearly set out and identified in such annual reports. Such reports shall be transmitted to the Speaker of the House of Representatives and the House Committee on Science, Space, and 

Technology and to the President of the Senate and the Senate 

Committee on Energy and Natural Resources. 

ø(e) No part of the program authorized by this section shall be 

transferred to any other agency or authority, except pursuant to 

270 

Act of Congress enacted after the date of the enactment of this section. 

ø(f) Nothing in this section shall be construed as abrogating any 

obligations of any municipality receiving financial assistance pursuant to this section to comply with Federal and State environmental, land use, water, and health and safety laws and regulations or to obtain applicable Federal and State permits, licenses, 

and certificates. 

STEVENSON-WYDLER TECHNOLOGY INNOVATION ACT OF 1980—PL 96–480 AS AMENDED 

(15 U.S.C. 3712) 

* * * * * * * 

SEC. 20. PERSONNEL EXCHANGES. 

The Secretary, the Secretary of Energy, and the Director of the 

National Science Foundation, øand the National Science Foundation¿ jointly, shall establish a program to foster the exchange of 

scientific and technical personnel among academia, industry, and 

Federal laboratories. Such program shall include both (1) federally 

supported exchanges and (2) efforts to stimulate exchanges without 

Federal funding. 

AGRICULTURAL RISK PROTECTION ACT OF 

2000—PUBLIC LAW 106–224, AS AMENDED 

* * * * * * * 

TITLE III—BIOMASS RESEARCH AND 

DEVELOPMENT ACT OF 2000 

* * * * * * * 

øSEC. 311. 7 U.S.C. 7624 TERMINATION OF AUTHORITY. 

øThe authority provided under this title shall terminate on September 30, 2007.¿ 

PUBLIC UTILITY HOLDING COMPANY ACT OF 1935—ACT 

OF AUGUST 26, 1935, CHAPTER 687, AS AMENDED (15 

U.S.C. 79–79Z–6) 

øPUBLIC UTILITY HOLDING COMPANY ACT OF 1935 

øAN ACT To provide for control and regulation of public-utility holding 

companies, and for other purposes 

øBe it enacted by the Senate and House of Representatives of the 

United States of America in Congress assembled, That this Act may 

be cited as the ‘‘Public Utility Act of 1935.’’

271 

øTITLE I—CONTROL OF PUBLIC-UTILITY 

HOLDING COMPANIES 

øNECESSITY FOR CONTROL OF HOLDING COMPANIES 

øSECTION 1. (a) Public-utility holding companies and their subsidiary companies are affected with a national public interest in 

that, among other things, (1) their securities are widely marketed 

and distributed by means of the mails and instrumentalities of 

interstate commerce and are sold to a large number of investors in 

different States; (2) their service, sales, construction, and other contracts and arrangements are often made and performed by means 

of the mails and instrumentalities of interstate commerce; (3) their 

subsidiary public-utility companies often sell and transport gas and 

electric energy by the use of means and instrumentalities of interstate commerce; (4) their practices in respect of and control over 

subsidiary companies often materially affect the interstate commerce in which those companies engage; (5) their activities extending over many States are not susceptible of effective control by any 

State and make difficult, if not impossible, effective State regulation of public-utility companies. 

ø(b) Upon the basis of facts disclosed by the reports of the Federal Trade Commission made pursuant to S. Res. 83 (Seventieth 

Congress, first session), the reports of the Committee on Interstate 

and Foreign Commerce, House of Representatives, made pursuant 

to H. Res. 59 (Seventy-second Congress, first session) and H.J. Res. 

572 (Seventy-second Congress, second session) and otherwise disclosed and ascertained, it is hereby declared that the national public interest, the interest of investors in the securities of holding 

companies and their subsidiary companies and affiliates, and the 

interest of consumers of electric energy and natural and manufactured gas, are or may be adversely affected—

ø(1) when such investors cannot obtain the information necessary to appraise the financial position or earning power of 

the issuers, because of the absence of uniform standard accounts; when such securities are issued without the approval 

or consent of the States having jurisdiction over subsidiary 

public-utility companies; when such securities are issued upon 

the basis of fictitious or unsound asset values having no fair 

relation to the sums invested in or the earning capacity of the 

properties and upon the basis of paper profits from intercompany transactions, or in anticipation of excessive revenues 

from subsidiary public-utility companies; when such securities 

are issued by a subsidiary public-utility company under circumstances which subject such company to the burden of supporting an overcapitalized structure and tend to prevent voluntary rate reductions; 

ø(2) when subsidiary public-utility companies are subjected 

to excessive charges for services, construction work, equipment, 

and materials, or enter into transactions in which evils result 

from an absence of arm’s-length bargaining or from restraint 

of free and independent competition; when service, management, construction, and other contracts involve the allocation 

of charges among subsidiary public-utility companies in difVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00271 Fmt 6601 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
272 

ferent States so as to present problems of regulation which 

cannot be dealt with effectively by the States; 

ø(3) when control of subsidiary public-utility companies affects the accounting practices and rate, dividend, and other 

policies of such companies so as to complicate and obstruct 

State regulation of such companies, or when control of such 

companies is exerted through disproportionately small investment; 

ø(4) when the growth and extension of holding companies 

bears no relation to economy of management and operation or 

the integration and coordination of related operating properties; or 

ø(5) when in any other respect there is lack of economy of 

management and operation of public-utility companies or lack 

of efficiency and adequacy of service rendered by such companies, or lack of effective public regulation, or lack of economies 

in the raising of capital. 

ø(c) When abuses of the character above enumerated become persistent and widespread the holding company becomes an agency 

which, unless regulated, is injurious to investors, consumers, and 

the general public; and it is hereby declared to be the policy of this 

title, in accordance with which policy all the provisions of this title 

shall be interpreted, to meet the problems and eliminate the evils 

as enumerated in this section, connected with public-utility holding 

companies which are engaged in interstate commerce or in activities which directly affect or burden interstate commerce; and for 

the purpose of effectuating such policy to compel the simplification 

of public-utility holding-company systems and the elimination 

therefrom of properties detrimental to the proper functioning of 

such systems, and to provide as soon as practicable for the elimination of public-utility holding companies except as otherwise expressly provided in this title. 

øDEFINITIONS 

øSEC. 2. (a) When used in this title, unless the context otherwise 

requires—

ø(1) ‘‘Person’’ means an individual or company. 

ø(2) ‘‘Company’’ means a corporation, a partnership, an association, a joint-stock company, a business trust, or an organized group of persons, whether incorporated or not; or any receiver, trustee, or other liquidating agent of any of the foregoing in his capacity as such. 

ø(3) ‘‘Electric utility company’’ means any company which 

owns or operates facilities used for the generation, transmission, or distribution of electric energy for sale, other than 

sale to tenants or employees of the company operating such facilities for their own use and not for resale. The Commission, 

upon application, shall by order declare a company operating 

any such facilities not to be an electric utility company if the 

Commission finds that (A) such company is primarily engaged 

in one or more businesses other than the business of an electric utility company, and by reason of the small amount of electric energy sold by such company it is not necessary in the 

public interest or for the protection of investors or consumers 

that such company be considered an electric utility company 

273 

for the purposes of this title, or (B) such company is one operating within a single State, and substantially all of its outstanding securities are owned directly or indirectly by another 

company to which such operating company sells or furnishes 

electric energy which it generates; such other company uses 

and does not resell such electric energy, is engaged primarily 

in manufacturing (other than the manufacturing of electric energy or gas) and is not controlled by any other company; and 

by reason of the small amount of electric energy sold or furnished by such operating company to other persons it is not 

necessary in the public interest or for the protection of investors or consumers that it be considered an electric utility company for the purposes of this title. The filing of an application 

hereunder in good faith shall exempt such company (and the 

owner of the facilities operated by such company) from the application of this paragraph until the Commission has acted 

upon such application. As a condition to the entry of any such 

order, and as a part thereof, the Commission may require application to be made periodically for a renewal of such order, 

and may require the filing of such periodic or special reports 

regarding the business of the company as the Commission may 

find necessary or appropriate to insure that such company continues to be entitled to such exemption during the period for 

which such order is effective. The Commission, upon its own 

motion or upon application, shall revoke such order whenever 

it finds that the conditions specified in clause (A) or (B) are not 

satisfied in the case of such company. Any action of the Commission under the preceding sentence shall be by order. Application under this paragraph may be made by the company in 

respect of which the order is to be issued or by the owner of 

the facilities operated by such company. Any order issued 

under this paragraph shall apply equally to such company and 

such owner. The Commission may by rules or regulations conditionally or unconditionally provide that any specified class or 

classes of companies which it determines to satisfy the conditions specified in clause (A) or (B), and the owners of the facilities operated by such companies, shall not be deemed electric 

utility companies within the meaning of this paragraph. 

ø(4) ‘‘Gas utility company’’ means any company which owns 

operates facilities used for the distribution at retail (other than 

distribution only in enclosed portable containers, or distribution to tenants or employees of the company operating such facilities for their own use and not for resale) of natural or manufactured gas for heat, light, or power. The Commission, upon 

application, shall by order declare a company operating any 

such facilities not to be a gas utility company if the Commission finds that (A) such company is primarily engaged in one 

or more businesses other than the business of a gas utility 

company, and (B) by reason of the small amount of natural or 

manufactured gas distributed at retail by such company it is 

not necessary in the public interest or for the protection of investors or consumers that such company be considered a gas 

utility company for the purposes of this title. The filing of an 

application hereunder in good faith shall exempt such company 

274 

(and the owner of the facilities operated by such company) 

from the application of this paragraph until the Commission 

has acted upon such application. As a condition to the entry of 

any such order, and as a part thereof, the Commission may require application to be made periodically for a renewal of such 

order, and may require the filing of such periodic or special reports regarding the business of the company as the Commission may find necessary or appropriate to insure that such 

company continues to be entitled to such exemption during the 

period for which such order is effective. The Commission, upon 

its own motion or upon application, shall revoke such order 

whenever it finds that the conditions specified in clauses (A) 

and (B) are not satisfied in the case of such company. Any action of the Commission under the preceding sentence shall be 

by order. Application under this paragraph may be made by 

the company in respect of which the order is to be issued or 

by the owner of the facilities operated by such company. Any 

order issued under this paragraph shall apply equally to such 

company and such owner. The Commission may by rules or 

regulations conditionally or unconditionally provide that any 

specified class or classes of companies which it determines to 

satisfy the conditions specified in clauses (A) and (B), and the 

owners of the facilities operated by such companies, shall not 

be deemed gas utility companies within the meaning of this 

paragraph. 

ø(5) ‘‘Public-utility company’’ means an electric utility company or a gas utility company. 

ø(6) ‘‘Commission’’ means the Securities and Exchange Commission. 

ø(7) ‘‘Holding company’’ means— ø(A) any company which directly or indirectly owns, controls, or holds with power to vote, 10 per centum or more 

of the outstanding voting securities of a public-utility company or of a company which is a holding company by virtue of this clause or clause (B), unless the Commission, as 

hereinafter provided, by order declares such company not 

to be a holding company; and 

ø(B) any person which the Commission determines, after 

notice and opportunity for hearing, directly or indirectly to 

exercise (either alone or pursuant to an arrangement or 

understanding with one or more other persons) such a controlling influence over the management or policies of any 

public utility or holding company as to make it necessary 

or appropriate in the public interest or for the protection 

of investors or consumers that such person be subject to 

the obligations, duties, and liabilities imposed in this title 

upon holding companies. 

øThe Commission, upon application, shall by order declare that a 

company is not a holding company under clause (A) if the Commission finds that the applicant (i) does not, either alone or pursuant 

to an arrangement or understanding with one or more other persons, directly or indirectly control a public-utility or holding company either through one or more intermediary persons or by any 

means or device whatsoever, (ii) is not an intermediary company 

275 

through which such control is exercised, and (iii) does not, directly 

or indirectly, exercise (either alone or pursuant to an arrangement 

or understanding with one or more other persons) such a controlling influence over the management or policies of any public-utility 

or holding company as to make it necessary or appropriate in the 

public interest or for the protection of investors or consumers that 

the applicant be subject to the obligations, duties, and liabilities 

imposed in this title upon holding companies. The filing of an application hereunder in good faith by a company other than a registered holding company shall exempt the applicant from any obligation, duty, or liability imposed in this title upon the applicant as 

a holding company, until the Commission has acted upon such application. Within a reasonable time after the receipt of any application hereunder, the Commission shall enter an order granting, or, 

after notice and opportunity for hearing, denying or otherwise disposing of, such application. As a condition to the entry of any order 

granting such application and as a part of any such order, the 

Commission may require the applicant to apply periodically for a 

renewal of such order and to do or refrain from doing such acts or 

things, in respect of exercise of voting rights, control over proxies, 

designation of officers and directors, existence of interlocking officers, directors and other relationships, and submission of periodic 

or special reports regarding affiliations or intercorporate relationships of the applicant, as the Commission may find necessary or 

appropriate to ensure that in the case of the applicant the conditions specified in clauses (i), (ii), and (iii) are satisfied during the 

period for which such order is effective. The Commission, upon its 

own motion or upon application of the company affected, shall revoke the order declaring such company not to be a holding company whenever in its judgment any condition specified in clause (i), 

(ii), or (iii) is not satisfied in the case of such company, or modify 

the terms of such order whenever in its judgment such modification 

is necessary to ensure that in the case of such company the conditions specified in clauses (i), (ii), and (iii) are satisfied during the 

period for which such order is effective. Any action of the Commission under the preceding sentence shall be by order. 

ø(8) ‘‘Subsidiary company’’ of a specified holding company 

means—

ø(A) any company 10 per centum or more of the outstanding voting securities of which are directly or indirectly owned, controlled, or held with power to vote, by 

such holding company (or by a company that is a subsidiary company of such holding company by virtue of this 

clause or clause (B)), unless the Commission, as hereinafter provided, by order declares such company not to be 

a subsidiary company of such holding company; and 

ø(B) any person the management or policies of which the 

Commission, after notice and opportunity for hearing, determines to be subject to a controlling influence, directly or 

indirectly, by such holding company (either alone or pursuant to an arrangement or understanding with one or more 

other persons) so as to make it necessary or appropriate in 

the public interest or for the protection of investors or consumers that such person be subject to the obligations, duVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00275 Fmt 6601 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
276 

ties, and liabilities imposed in this title upon subsidiary 

companies of holding companies. 

øThe Commission, upon application, shall by order declare that a 

company is not a subsidiary company of a specified holding company under clause (A) if the Commission finds that (i) the applicant 

is not controlled, directly or indirectly, by such holding company 

(either alone or pursuant to an arrangement or understanding with 

one or more other persons) either through one or more intermediary persons or by any means or device whatsoever, (ii) the applicant is not an intermediary company through which such control 

of another company is exercised, and (iii) the management or policies of the applicant are not subject to a controlling influence, directly or indirectly, by such holding company (either alone or pursuant to an arrangement or understanding with one or more other 

persons) so as to make it necessary or appropriate in the public interest or for the protection of investors or consumers that the applicant be subject to the obligations, duties, and liabilities imposed in 

this title upon subsidiary companies of holding companies. The filing of an application hereunder in good faith shall exempt the applicant from any obligation, duty, or liability imposed in this title 

upon the applicant as a subsidiary company of such specified holding company until the Commission has acted upon such application. Within a reasonable time after the receipt of any application 

hereunder, the Commission shall enter an order granting, or, after 

notice and opportunity for hearing, denying or otherwise disposing 

of, such application. As a condition to the entry of, and as a part 

of, any order granting such application, the Commission may require the applicant to apply periodically for a renewal of such order 

and to file such periodic or special reports regarding the affiliations 

or intercorporate relationships of the applicant as the Commission 

may find necessary or appropriate to enable it to determine whether in the case of the applicant the conditions specified in clauses 

(i), (ii), and (iii) are satisfied during the period for which such order 

is effective. The Commission, upon its own motion or upon application, shall revoke the order declaring such company not to be a 

subsidiary company whenever in its judgment any condition specified in clause (i), (ii), or (iii) is not satisfied in the case of such company, or modify the terms of such order whenever in its judgment 

such modification is necessary to ensure that in the case of such 

company the conditions specified in clauses (i), (ii), and (iii) are satisfied during the period for which such order is effective. Any action of the Commission under the preceding sentence shall be by 

order. Any application under this paragraph may be made by the 

holding company or the company in respect of which the order is 

to be entered, but as used in this paragraph the term applicant’’

means only the company in respect of which the order is to be entered. 

ø(9) ‘‘Holding-company system’’ means any holding company, 

together with all its subsidiary companies, and all mutual 

service companies (as defined in paragraph (13) of this subsection) of which such holding company or any subsidiary company thereof is a member company (as defined in paragraph 

(14) of this subsection). 

277 

ø(10) ‘‘Associate company’’ of a company means any company 

in the same holding-company system with such company. 

ø(11) ‘‘Affiliate’’ of a specified company means— ø(A) any person that directly or indirectly owns, controls, 

or holds with power to vote, 5 per centum or more of the 

outstanding voting securities of such specified company; 

ø(B) any company 5 per centum or more of whose outstanding voting securities are owned, controlled, or held 

with power to vote, directly or indirectly, by such specified 

company; 

ø(C) any individual who is an officer or director of such 

specified company, or of any company which is an affiliate 

thereof under clause (A) of this paragraph; and 

ø(D) any person or class of persons that the Commission 

determines, after appropriate notice and opportunity for 

hearing, to stand in such relation to such specified company that there is liable to be such an absence of arm’s 

length bargaining in transactions between them as to 

make it necessary or appropriate in the public interest or 

for the protection of investors or consumers that such person be subject to the obligations, duties, and liabilities imposed in this title upon affiliates of a company. 

ø(12) ‘‘Registered holding company’’ means a person whose 

registration is in effect under section 5. 

ø(13) ‘‘Mutual service company’’ means a company approved 

mutual service company under section 13. 

ø(14) ‘‘Member company’’ means a company which is a member of an association or group of companies mutually served by 

a mutual service company. 

ø(15) ‘‘Director’’ means any director of a corporation or any 

individual who performs similar functions in respect of any 

company. 

ø(16) ‘‘Security’’ means any note, draft, stock, treasury stock, 

bond, debenture, certificate of interest or participation in any 

profit-sharing agreement or in any oil, gas, other mineral royalty or lease, any collateral-trust certificate, preorganization 

certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, receiver’s or trustee’s certificate, or, in general, any instrument commonly known as a ‘‘security’’; or any certificate of 

interest or participation in, temporary or interim certificate for, 

receipt for, guaranty of, assumption of liability on, or warrant 

or right to subscribe to or purchase, any of the foregoing. 

ø(17) ‘‘Voting security’’ means any security presently entitling the owner or holder thereof to vote in the direction or 

management of the affairs of a company, or any security issued 

under or pursuant to any trust, agreement, or arrangement 

whereby a trustee or trustees or agent or agents for the owner 

or holder of such security are presently entitled to vote in the 

direction or management of the affairs of a company; and a 

specified per centum of the outstanding voting securities of a 

company means such amount of the outstanding voting securities of such company as entitles the holder or holders thereof 

to cast said specified per centum of the aggregate votes which 

278 

the holders of all the outstanding voting securities of such company are entitled to cast in the direction or management of the 

affairs of such company. 

ø(18) ‘‘Utility assets’’ means the facilities, in place, of any 

electric utility company or gas utility company for the production, transmission, transportation, or distribution of electric energy or natural or manufactured gas. 

ø(19) ‘‘Service contract’’ means any contract, agreement, or 

understanding whereby a person undertakes to sell or furnish, 

for a charge, any managerial, financial, legal, engineering, purchasing, marketing, auditing, statistical, advertising, publicity, 

tax research, or any other service, information, or data. 

ø(20) ‘‘Sales contract’’ means any contract, agreement, or understanding whereby a person undertakes to sell, lease, or furnish, for a charge, any goods, equipment, materials, supplies, 

appliances, or similar property. As used in this paragraph the 

term ‘‘property’’ does not include electric energy or natural or 

manufactured gas. 

ø(21) ‘‘Construction contract’’ means any contract, agreement, or understanding for the construction, extension, improvement, maintenance, or repair of the facilities or any park 

thereof of a company for a charge. 

ø(22) ‘‘Buy’’, ‘‘acquire’’, ‘‘acquisition’’, or ‘‘purchase’’ includes 

any purchase, acquisition by lease, exchange, merger, consolidation, or other acquisition. 

ø(23) ‘‘Sale’’ or ‘‘sell’’ includes any sale, disposition by lease, 

exchange or pledge, or other disposition. 

ø(24) ‘‘State’’ means any State of the United States or the 

District of Columbia. 

ø(25) ‘‘United States’’, when used in a geographical sense, 

means the States. 

ø(26) ‘‘State commission’’ means any commission, board, 

agency, or officer, by whatever name designated, of a State, 

municipality, or other political subdivision of a State which 

under the law of such State has jurisdiction to regulate public 

utility companies. 

ø(27) ‘‘State securities commission’’ means any commission, 

board, agency, or officer, by whatever name designated, other 

than a State commission as defined in paragraph (26) of this 

subsection, which under the law of a State has jurisdiction to 

regulate, approve, or control the issue or sale of a security by 

a company. 

ø(28) ‘‘Interstate commerce’’ means trade, commerce, transportation, transmission, or communication among the several 

States or between any State and any place outside thereof. 

ø(29) ‘‘Integrated public-utility system’’ means—

ø(A) As applied to electric utility companies, a system 

consisting of one or more units of generating plants and/ 

or transmission lines and/or distributing facilities, whose 

utility assets, whether owned by one or more electric utility companies, are physically interconnected or capable of 

physical interconnection and which under normal conditions may be economically operated as a single interconnected and coordinated system confined in its operVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00278 Fmt 6601 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
279 

ations to a single area or region, in one or more States, not 

so large as to impair (considering the state of the art and 

the area or region affected) the advantages of localized 

management, efficient operation, and the effectiveness of 

regulation; and 

ø(B) As applied to gas utility companies, a system consisting of one or more gas utility companies which are so 

located and related that substantial economies may be effectuated by being operated as a single coordinated system 

confined in its operations to a single area or region, in one 

or more States, not so large as to impair (considering the 

state of the art and the area or region affected) the advantages of localized management, efficient operation, and the 

effectiveness of regulation; Provided, That gas utility companies deriving natural gas from a common source of supply may be deemed to be included in a single area or region. 

ø(b) No person shall be deemed to be a holding company under 

clause (B) of paragraph (7) of subsection (a), or a subsidiary company under clause (B) of paragraph (8) of such subsection, or an 

affiliate under clause (D) of paragraph (11) of such subsection, unless the Commission, after appropriate notice and opportunity for 

hearing, has issued an order declaring such person to be a holding 

company, a subsidiary company, or an affiliate, or declaring a class 

of which such person is a member to be affiliates. Such an order 

shall not become effective for at least thirty days after the mailing 

of a copy thereof to the person thereby declared to be a holding 

company, subsidiary company, or affiliate; or, in the case of determination of affiliates by classes, until at least thirty days after appropriate publication thereof in such manner as the Commission 

shall determine. Whenever the Commission, on its own motion or 

upon application by the person declared to be a holding company, 

subsidiary company, or affiliate, finds that the circumstances which 

gave rise to the issuance of any such order no longer exist, the 

Commission shall by order revoke such order. 

ø(c) No provision in this title shall apply to, or be deemed to include, the United States, a State, or any political subdivision of a 

State, or any agency, authority, or instrumentality of any one or 

more of the foregoing, or any corporation which is wholly owned directly or indirectly by any one or more of the foregoing, or any officer, agent, or employee of any of the foregoing acting as such in the 

course of his official duty, unless such provision makes specific reference thereto. 

øPOWER TO MAKE PARTICULAR EXEMPTIONS REGARDING HOLDING 

COMPANIES, SUBSIDIARY COMPANIES, AND AFFILIATES 

øSEC. 3. (a) The Commission, by rules and regulations upon its 

own motion, or by order upon application, shall exempt any holding 

company, and every subsidiary company thereof as such, from any 

provision or provisions of this title, unless and except insofar as it 

finds the exemption detrimental to the public interest or the interest of investors or consumers, if—

ø(1) such holding company, and every subsidiary company 

thereof which is a public-utility company from which such 

holding company derives, directly or indirectly, any material 

280 

part of its income, are predominantly intrastate in character 

and carry on their business substantially in a single State in 

which such holding company and every such subsidiary company thereof are organized; 

ø(2) such holding company is predominantly a public-utility 

company whose operations as such do not extend beyond the 

State in which it is organized and States contiguous thereto; 

ø(3) such holding company is only incidentally a holding 

company, being primarily engaged or interested in one or more 

businesses other than the business of a public-utility company 

and (A) not deriving, directly or indirectly, any material part 

of its income from any one or more subsidiary companies, the 

principal business of which is that of a public-utility company, 

or (B) deriving a material part of its income from any one or 

more such subsidiary companies, if substantially all the outstanding securities of such companies are owned, directly or indirectly, by such holding company; 

ø(4) such holding company is temporarily a holding company 

solely by reason of the acquisition of securities for purposes of 

liquidation or distribution in connection with a bona fide debt 

previously contracted or in connection with a bona fide arrangement for the underwriting or distribution of securities; or 

ø(5) such holding company is not, and derives no material 

part of its income, directly or indirectly, from any one or more 

subsidiary companies which are, a company or companies the 

principal business of which within the United States is that of 

public-utility company. 

ø(b) The Commission, by rules and regulations upon its own motion, or by order upon application, shall exempt any subsidiary 

company, as such, of a holding company from any provision or provisions of this title, the application of which to such subsidiary 

company the Commission finds is not necessary in the public interest or for the protection of investors, if such subsidiary company 

derives no material part of its income, directly or indirectly, from 

sources within the United States, and neither it nor any of its subsidiary companies is a public-utility company operating in the 

United States. 

ø(c) Within a reasonable time after the receipt of an application 

for exemption under subsection (a) or (b), the Commission shall 

enter an order granting, or, after notice and opportunity for hearing, denying or otherwise disposing of such application. The filing 

of an application in good faith under subsection (a) by a person 

other than a registered holding company shall exempt the applicant from any obligation, duty, or liability imposed in this title 

upon the applicant as a holding company until the Commission has 

acted upon such application. The filing of an application in good 

faith under subsection (b) shall exempt the applicant from any obligation, duty, or liability imposed in this title upon the applicant as 

a subsidiary company until the Commission has acted upon such 

application. Whenever the Commission, on its own motion, or upon 

application by the holding company or any subsidiary company 

thereof exempted by any order issued under subsection (a), or by 

the subsidiary company exempted by any order issued under subsection (b), finds that the circumstances which gave rise to the 

281 

issuance of such order no longer exist, the Commission shall by 

order revoke such order. 

ø(d) The Commission may, by rules and regulations, conditionally 

or unconditionally exempt any specified class or classes of persons 

from the obligations, duties, or liabilities imposed upon such persons as subsidiary companies or affiliates under any provision or 

provisions of this title, and may provide within the extent of any 

such exemption that such specified class or classes of persons shall 

not be deemed subsidiary companies or affiliates within the meaning of any such provision or provisions, if and to the extent that 

it deems the exemption necessary or appropriate in the public interest or for the protection of investors or consumers and not contrary to the purposes of this title. 

ƒTRANSACTIONS BY UNREGISTERED HOLDING COMPANIES 

øSEC. 4. (a) After December 1, 1935, unless a holding company 

is registered under section 5, it shall be unlawful for such holding 

company, directly or indirectly— ø(1) to sell, transport, transmit, or distribute, or own or operate any utility assets for the transportation, transmission, or 

distribution of, natural or manufactured gas or electric energy 

in interstate commerce; 

ø(2) by use of the mails or any means or instrumentality of 

interstate commerce, to negotiate, enter into, or take any step 

in the performance of, any service, sales, or construction contract undertaking to perform services or construction work for, 

or sell goods to, any public-utility company or holding company; 

ø(3) to distribute or make any public offering for sale or exchange of any security of such holding company, any subsidiary company or affiliate of such holding company, any public-utility company, or any holding company, by use of the 

mails or any means or instrumentality of interstate commerce, 

or to sell any such security having reason to believe that such 

security, by use of the mails or any means or instrumentality 

of interstate commerce, will be distributed or made the subject 

of a public offering; 

ø(4) by use of the mails or any means or instrumentality of 

interstate commerce, to acquire or negotiate for the acquisition 

of any security or utility assets of any subsidiary company or 

affiliate of such holding company, any public-utility company, 

or any holding company; 

ø(5) to engage in any business in interstate commerce; or 

ø(6) to own, control, or hold with power to vote, any security 

of any subsidiary company thereof that does any of the acts 

enumerated in paragraphs (1) to (5), inclusive, of this subsection. 

ø(b) Every holding company which has outstanding any security 

any of which, by use of the mails or any means or instrumentality 

of interstate commerce, has been distributed or made the subject 

of a public offering subsequent to January 1, 1925, and any of 

which security is owned or held on October 1, 1935 (or, if such company is not a holding company on that date, on the date such company becomes a holding company) by persons not resident in the 

State in which such holding company is organized, shall register 

282 

under section 5 on or before December 1, 1935 or the thirtieth day 

after such company becomes a holding company, whichever date is 

later. 

ƒREGISTRATION OF HOLDING COMPANIES 

øSEC. 5. (a) On or at any time after October 1, 1935, any holding 

company or any person purposing to become a holding company 

may register by filing with the Commission a notification of registration, in such form as the Commission may by rules and regulations prescribe as necessary or appropriate in the public interest or 

for the protection of investors or consumers. A person shall be 

deemed to be registered upon receipt by the Commission of such 

notification of registration. 

ø(b) It shall be the duty of every registered holding company to 

file with the Commission, within such reasonable time after registration as the Commission shall fix by rules and regulations or 

order, a registration statement in such form as the Commission 

shall by rules and regulations or order prescribe as necessary or 

appropriate in the public interest or for the protection of investors 

or consumers. Such registration statement shall include—

ø(1) such copies of the charter or articles of incorporation, 

partnership, or agreement, with all amendments thereto, and 

the bylaws, trust indentures, mortgages, underwriting arrangements, voting-trust agreements, and similar documents, by 

whatever name known, of or relating to the registrant or any 

of its associate companies as the Commission may by rules and 

regulations or order prescribe as necessary or appropriate in 

the public interest or for the protection of investors or consumers; 

ø(2) such information in such form and in such detail relating 

to, and copies of such documents of or relating to, the registrant and its associate companies as the Commission may by 

rules and regulations or order prescribe as necessary or appropriate in the public interest or for the protection of investors 

or consumers in respect of—

ø(A) the organization and financial structure of such companies and the nature of their business; 

ø(B) the terms, position, rights, and privileges of the different classes of their securities outstanding; 

ø(C) the terms and underwriting arrangements under 

which their securities, during not more than the five preceding years, have been offered to the public or otherwise 

disposed of and the relations of underwriters to, and their 

interest in, such companies; 

ø(D) the directors and officers of such companies, their remuneration, their interest in the securities of, their material contracts with, and their borrowings from, any of such 

companies; 

ø(E) bonus and profit-sharing arrangements; 

ø(F) material contracts, not made in the ordinary course 

of business, and service, sales, and construction contracts; 

ø(G) options in respect of securities; 

ø(H) balance sheets for not more than the five preceding 

fiscal years certified, if required by the rules and regulaVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00282 Fmt 6601 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
283 

tions of the Commission, by an independent public accountant; 

ø(I) profit and loss statements for not more than the five 

preceding fiscal years, certified, if required by the rules 

and regulations of the Commission, by an independent 

public accountant; 

ø(3) such further information or documents regarding the registrant or its associate companies or the relations between 

them as the Commission may by rules and regulations or order 

prescribe as necessary or appropriate in the public interest or 

for the protection of investors or consumers. 

ø(c) The Commission by such rules and regulations or order as 

it deems necessary or appropriate in the public interest or for the 

protection of investors or consumers, may permit a registrant to 

file a preliminary registration statement without complying with 

the provisions of subsection (b); but every registrant shall file a 

complete registration statement with the Commission within such 

reasonable period of time as the Commission shall fix by rules and 

regulations or order, but not later than one year after the date of 

registration. 

ø(d) Whenever the Commission, upon application, finds that a 

registered holding company has ceased to be a holding company, it 

shall so declare by order and upon the taking effect of such order 

the registration of such company shall, upon such terms and conditions as the Commission finds and in such order prescribes as necessary for the protection of investors, cease to be in effect. The denial of any such application by the Commission shall be by order. 

ƒLAWFUL SECURITY TRANSACTIONS BY REGISTERED HOLDING AND 

SUBSIDIARY COMPANIES 

øSEC. 6. (a) Except in accordance with a declaration effective 

under section 7 and with the order under such section permitting 

such declaration to become effective, it shall be unlawful for any 

registered holding company or subsidiary company thereof, by use 

of the mails or any means or instrumentality of interstate commerce, or otherwise, directly or indirectly (1) to issue or sell any 

security of such company; or (2) to exercise any privilege or right 

to alter the priorities, preferences, voting power, or other rights of 

the holders of an outstanding security of such company. 

ø(b) The provisions of subsection (a) shall not apply to the issue, 

renewal, or guaranty by a registered holding company or subsidiary 

company thereof of a note or draft (including the pledge of any security as collateral therefor) if such note or draft (1) is not part of 

a public offering, (2) matures or is renewed for not more than nine 

months, exclusive of days of grace, after the date of such issue, renewal, or guaranty thereof, and (3) aggregates (together with all 

other then outstanding notes and drafts of a maturity of nine 

months or less, exclusive of days of grace, as to which such company is primarily or secondarily liable) not more than 5 per centum 

of the principal amount and par value of the other securities of 

such company then outstanding, or such greater per centum thereof as the Commission upon application may by order authorize as 

necessary or appropriate in the public interest or for the protection 

of investors or consumers. In the case of securities having no principal amount or no par value, the value for the purposes of this 

284 

subsection shall be the fairmarket value as of the date of issue. The 

Commission by rules and regulations or order, subject to such 

terms and conditions as it deems appropriate in the public interest 

or for the protection of investors or consumers, shall exempt from 

the provisions of subsection (a) the issue or sale of any security by 

any subsidiary company of a registered holding company, if the 

issue and sale of such security are solely for the purpose of financing the business of such subsidiary company and have been expressly authorized by the State commission of the State in which 

such subsidiary company is organized and doing business, or if the 

issue and sale of such security are solely for the purpose of financing the business of such subsidiary company when such subsidiary 

company is not a holding company, a public-utility company, an investment company, or a fiscal or financing agency of a holding company, a public-utility company, or an investment company. The 

provisions of subsection (a) shall not apply to the issue, by a registered holding company or subsidiary company thereof, of a security issued pursuant to the terms of any security outstanding on 

January 1, 1935, giving the holder of such outstanding security the 

right to convert such outstanding security into another security of 

the same issuer or of another person, or giving the right to subscribe to another security of the same issuer or another issuer. 

Within ten days after any issue, sale, renewal, or guaranty exempted from the application of subsection (a) by or under authority of 

this subsection, such holding company or subsidiary company 

thereof shall file with the Commission a certificate of notification 

in such form and setting forth such of the information required in 

a declaration under section 7 as the Commission may by rules and 

regulations or order prescribe as necessary or appropriate in the 

public interest or for the protection of investors or consumers. 

ø(c) It shall be unlawful, by use of the mails or any means or instrumentality of interstate commerce, or otherwise, for any registered holding company or any subsidiary company thereof, directly or indirectly— ø(1) to sell or offer for sale or to cause to be sold or offered 

for sale, from house to house, any security of such holding company; or 

ø(2) to cause any officer or employee of any subsidiary company of such holding company to sell or cause to be sold any 

security of such holding company. 

øAs used in this subsection the term ‘‘house’’ shall not include an 

office used for business purposes. 

øDECLARATIONS BY REGISTERED HOLDING AND SUBSIDIARY COMPANIES IN RESPECT OF SECURITY TRANSACTIONS 

øSEC. 7. (a) A registered holding company or subsidiary company 

thereof may file a declaration with the Commission, regarding any 

of the acts enumerated in subsection (a) of section 6, in such form 

as the Commission may be rules and regulations prescribe as necessary or appropriate in the public interest or for the protection of 

investors or consumers. Such declaration shall include—

ø(1) such of the information and documents which are required to be filed in order to register a security under section 

7 of the Securities Act of 1933, as amended, as the Commission 

may by rules and regulations or order prescribe as necessary 

285 

or appropriate in the public interest or for the protection of investors or consumers; and 

ø(2) such additional information, in such form and detail, 

and such documents regarding the declarant or any associate 

company thereof, the particular security and compliance with 

such State laws as may apply to the act in question as the 

Commission may by rules and regulations or order prescribe as 

necessary or appropriate in the public interest or for the protection of investors or consumers. 

ø(b) A declaration filed under this section shall become effective 

within such reasonable period of time after the filing thereof as the 

Commission shall fix by rules and regulations or order, unless the 

Commission prior to the expiration of such period shall have issued 

an order to the declarant to show cause why such declaration 

should become effective. Within a reasonable time after an opportunity for hearing upon an order to show cause under this subsection, unless the declarant shall withdraw its declaration, the 

Commission shall enter an order either permitting such declaration 

to become effective as filed or amended, or refusing to permit such 

declaration to become effective. Amendments to a declaration may 

be made upon such terms and conditions as the Commission may 

prescribe. 

ø(c) The Commission shall not permit a declaration regarding the 

issue or sale of a security to become effective unless it finds that— ø(1) such security is (A) a common stock having a par value 

and being without preference as to dividends or distribution 

over, and having at least equal voting rights with, any outstanding security of the declarant; (B) a bond (i) secured by a 

first lien on physical property of the declarant, or (ii) secured 

by an obligation of a subsidiary company of the declarant secured by a first lien on physical property of such subsidiary 

company, or (iii) secured by any other assets of the type and 

character which the Commission by rules and regulations or 

order may prescribe as appropriate in the public interest or for 

the protection of investors; (C) a guaranty of, or assumption of 

liability on, a security of another company; or (D) a receiver’s 

or trustee’s certificate duly authorized by the appropriate court 

or courts; or 

ø(2) such security is to be issued or sold solely (A) for the 

purpose of refunding, extending, exchanging, or discharging an 

outstanding security of the declarant and/or a predecessor company thereof or for the purpose of effecting a merger, consolidation, or other reorganization; (B) for the purpose of financing 

the business of the declarant as a public-utility company; (C) 

for the purpose of financing the business of the declarant, 

when the declarant is neither a holding company nor a publicutility company; and/or (D) for necessary and urgent corporate 

purposes of the declarant where the requirements of the provisions of paragraph (1) would impose an unreasonable financial 

burden upon the declarant and are not necessary or appropriate in the public interest or for the protection of investors 

or consumers; or 

ø(3) such security is one the issuance of which was authorized by the company prior to January 1, 1935, and which the 

286 

Commission by rules and regulations or order authorizes as 

necessary or appropriate in the public interest or for the protection of investors or consumers. 

ø(d) If the requirements of subsections (c) and (g) are satisfied, 

the Commission shall permit a declaration regarding the issue or 

sale of a security to become effective unless the Commission finds 

that 

ø(1) the security is not reasonably adapted to the security 

structure of the declarant and other companies in the same 

holding-company system; 

ø(2) the security is not reasonably adapted to the earning 

power of the declarant; 

ø(3) financing by the issue and sale of the particular security 

is not necessary or appropriate to the economical and efficient 

operation of a business in which the applicant lawfully is engaged or has an interest; 

ø(4) the fees, commissions, or other remuneration, to whomsoever paid, directly or indirectly, in connection with the issue, 

sale or distribution of the security are not reasonable; 

ø(5) in the case of a security that is a guaranty of, or assumption of liability on, a security of another company, the circumstances are such as to constitute the making of such guaranty or the assumption of such liability an improper risk for 

he declarant; or 

ø(6) the terms and conditions of the issue or sale of the security are detrimental to the public interest or the interest of investors or consumers. 

ø(e) If the requirements of subsection (g) are satisfied, the Commission shall permit a declaration to become effective regarding the 

exercise of a privilege or right to alter the priorities, preferences, 

voting power, or other rights of the holders of an outstanding security unless the Commission finds that such exercise of such privilege or right will result in an unfair or inequitable distribution of 

voting power among holders of the securities of the declarant or is 

otherwise detrimental to the public interest or the interest of investors or consumers. 

ø(f) Any order permitting a declaration to become effective may 

contain such terms and conditions as the Commission finds necessary to assure compliance with the conditions specified in this 

section. 

ø(g) If a State commission or State securities commission, having 

jurisdiction over any of the acts enumerated in subsection (a) of 

section 6, shall inform the Commission, upon request by the Commission for an opinion or otherwise, that State laws applicable to 

the act in question have not been complied with, the Commission 

shall not permit a declaration regarding the act in question to become effective until and unless the Commission is satisfied that 

such compliance has been effected. 

øACQUIRING INTEREST IN ELECTRIC AND GAS UTILITY COMPANIES 

SERVING SAME TERRITORY 

øSEC. 8. Whenever a State law prohibits, or requires approval or 

authorization of, the ownership or operation by a single company 

of the utility assets of an electric utility company and a gas utility 

company serving substantially the same territory, it shall be unVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00286 Fmt 6601 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
287 

lawful for a registered holding company, or any subsidiary company thereof, by use of the mails or any means or instrumentality 

of interstate commerce, or otherwise—

ø(1) to take any step, without the express approval of the 

State commission of such State, which results in its having a 

direct or indirect interest in an electric utility company and a 

gas utility company serving substantially the same territory; or 

ø(2) if it already has any such interest, to acquire, without 

the express approval of the State commission, any direct or indirect interest in an electric utility company or gas utility company serving substantially the same territory as that served by 

such companies in which it already has an interest. 

øACQUISITION OF SECURITIES AND UTILITY ASSETS AND OTHER INTERESTS 

øSEC. 9. (a) Unless the acquisition has been approved by the 

Commission under section 10, it shall be unlawful—

ø(1) for any registered holding company or any subsidiary 

company thereof, by use of the mails or any means or instrumentality of interstate commerce, or otherwise, to acquire, directly or indirectly, any securities or utility assets or any other 

interest in any business; or 

ø(2) for any person, by use of the mails or any means or instrumentality of interstate commerce, to acquire, directly or indirectly, any security of any public-utility company, if such person is an affiliate, under clause (A) of paragraph (11) of subsection (a) of section 2, of such company and of any other public utility or holding company, or will by virtue of such acquisition become such an affiliate. 

ø(b) Subsection (a) shall not apply to—

ø(1) the acquisition by a public-utility company of utility assets the acquisition of which has been expressly authorized by 

a State commission; or 

ø(2) the acquisition by a public-utility company of securities 

of a subsidiary public-utility company thereof, provided that 

both such public-utility companies and all other public-utility 

companies in the same holding-company system are organized 

in the same State, that the business of each such company in 

such system is substantially confined to such State, and that 

the acquisition of such securities has been expressly authorized 

by the State commission of such State. 

ø(c) Subsection (a) shall not apply to the acquisition by a registered holding company, or a subsidiary company thereof, of—

ø(1) securities of, or securities the principal or interest of 

which is guaranteed by, the United States, a State, or political 

subdivision of a State, or any agency, authority, or instrumentality of any one or more of the foregoing, or any corporation 

which is wholly owned, directly or indirectly, by any one or 

more of the foregoing; 

ø(2) such other readily marketable securities, within the limitation of such amounts, as the Commission may by rules and 

regulations prescribe as appropriate for investment of current 

funds and as not detrimental to the public interest or the interest of investors or consumers; or 

288 

ø(3) such commercial paper and other securities, within such 

limitations, as the Commission may by rules and regulations 

or order prescribe as appropriate in the ordinary course of 

business of a registered holding company or subsidiary company thereof and as not detrimental to the public interest or 

the interest of investors or consumers. 

øAPPROVAL OF ACQUISITION OF SECURITIES AND UTILITY ASSETS 

AND OTHER INTERESTS 

øSEC. 10. (a) A person may apply for approval of the acquisition 

of securities or utility assets, or of any other interest in any business, by filing an application in such form as the Commission may 

by rules and regulations prescribe as necessary or appropriate in 

the public interest or for the protection of investors and consumers. 

Such application shall include—

ø(1) in the case of the acquisition of securities, such information and copies of such documents as the Commission may by 

rules and regulations or order prescribe as necessary or appropriate in the public interest or for the protection of investors 

or consumers in respect of—

ø(A) the security to be acquired, the consideration to be 

paid therefor, and compliance with such State laws as may 

apply in respect of the issue, sale, or acquisition thereof, 

ø(B) the outstanding securities of the company whose security is to be acquired, the terms, position, rights, and 

privileges of each class and the options in respect of any 

such securities, 

ø(C) the names of all security holders of record (or otherwise known to the applicant) owning, holding, or controlling 1 per centum or more of any class of security of such 

company, the officers and directors of such company, and 

their remuneration, security holdings in, material contracts with, and borrowings from such company and the offices or directorships held, and securities owned, held, or 

controlled, by them in other companies, 

ø(D) the bonus, profit-sharing and voting-trust agreement, underwriting arrangements, trust indentures, mortgages, and similar documents, by whatever name known, 

of or relating to such company, 

ø(E) the material contracts, not made in the ordinary 

course of business, and the service, sales, and construction 

contracts of such company, 

ø(F) the securities owned, held, or controlled, directly or 

indirectly, by such company, 

ø(G) balance sheets and profit and loss statements of 

such company for not more than the five preceding fiscal 

years, certified, if required by the rules and regulations of 

the Commission by an independent public accountant, 

ø(H) any further information regarding such company 

and any associate company or affiliate thereof, or its relation with the applicant company, and 

ø(I) if the applicant be not a registered holding company, 

any of the information and documents which may be required under section 5 from a registered holding company; 

289 

ø(2) in the case of the acquisition of utility assets, such information concerning such assets, the value thereof and consideration to be paid therefor, the owner or owners thereof and 

their relation to, agreements with, and interest in the securities of, the applicant or any associate company thereof as the 

Commission may by rules and regulations or order prescribe as 

necessary or appropriate in the public interest or for the protection of investors or consumers; and 

ø(3) in the case of the acquisition of any other interest in an 

business, such information concerning such business and the 

interest to be acquired, and the consideration to be paid, as the 

Commission may by rules and regulations or order prescribe as 

necessary or appropriate in the public interest or for the protection of investors or consumers. 

ø(b) If the requirements of subsection (f) are satisfied, the Commission shall approve the acquisition unless the Commission finds 

that—ø(1) such acquisition will tend towards interlocking relations 

or the concentration of control of public-utility companies, of a 

kind or to an extent detrimental to the public interest or the 

interest of investors, or consumers; 

ø(2) in case of the acquisition of securities or utility assets, 

the consideration, including all fees, commissions, and other 

remuneration, to whomsoever paid, to be given, directly or indirectly, in connection with such acquisition is not reasonable 

or does not bear a fair relation to the sums invested in or the 

earning capacity of the utility assets to be acquired or the utility assets underlying the securities to be acquired; or 

ø(3) such acquisition will unduly complicate the capital 

structure of the holding-company system of the applicant or 

will be detrimental to the public interest or the interest of investors or consumers or the proper functioning of such holdingcompany system. 

The Commission may condition its approval of the acquisition of securities of another company upon such a fair offer to purchase such 

of the other securities of the company whose security is to be acquired as the Commission may find necessary or appropriate in the 

public interest or for the protection of investors or consumers. 

ø(c) Notwithstanding the provisions of subsection (b), the Commission shall not approve—

ø(1) an acquisition of securities or utility assets, or of any 

other interest, which is unlawful under the provisions of section 8 or is detrimental to the carrying out of the provisions 

of section 11; or 

ø(2) the acquisition of securities or utility assets of a public 

utility or holding company unless the Commission finds that 

such acquisition will serve the public interest by tending towards the economical and efficient development of an integrated public-utility system. This paragraph shall not apply to 

the acquisition of securities or utility assets of a public-utility 

company operating exclusively outside the United States. 

ø(d) Within such reasonable time after the filing of an application under this section as the Commission shall fix by rules and 

regulations or order, the Commission shall enter an order either 

290 

granting or, after notice and opportunity for hearing, denying approval of the acquisition unless the applicant shall withdraw its application. Amendments to an application may be made upon such 

terms and conditions as the Commission may prescribe. 

ø(e) The Commission, in any order approving the acquisition of 

securities or utility assets, may prescribe such terms and conditions in respect of such acquisition, including the price to be paid 

for such securities or utility assets, as the Commission may find 

necessary or appropriate in the public interest or for the protection 

of investors or consumers. 

ø(f) The Commission shall not approve any acquisition as to 

which an application is made under this section unless it appears 

to the satisfaction of the Commission that such State laws as may 

apply in respect of such acquisition have been complied with, except where the Commission finds that compliance with such State 

laws would be detrimental to the carrying out of the provisions of 

section 11. 

øSIMPLIFICATION OF HOLDING-COMPANY SYSTEMS 

øSEC. 11. (a) It shall be the duty of the Commission to examine 

the corporate structure of every registered holding company and 

subsidiary company thereof, the relationships among the companies in the holding-company system of every such company and the 

character of the interests thereof and the properties owned or controlled thereby to determine the extent to which the corporate 

structure of such holding-company system and the companies 

therein may be simplified, unnecessary complexities therein eliminated, voting power fairly and equitably distributed among the 

holders of securities thereof, and the properties and business thereof confined to those necessary or appropriate to the operations of 

an integrated public-utility system. 

ø(b) It shall be the duty of the Commission, as soon as practical 

after January 1, 1938: 

ø(1) To require by order, after notice and opportunity for 

hearing, that each registered holding company, and each subsidiary company thereof, shall take such action as the Commission shall find necessary to limit the operations of the holdingcompany system of which such company is a part to a single 

integrated public-utility system, and to such other businesses 

as are reasonably incidental, or economically necessary or appropriate to the operations of such integrated public-utility system: Provided, however, That the Commission shall permit a 

registered holding company to continue to control one or more 

additional integrated public-utility systems, if, after notice and 

opportunity for hearing, it finds that— ø(A) Each of such additional systems cannot be operated 

as an independent system without the loss of substantial 

economies which can be secured by the retention of control 

by such holding company of such system; 

ø(B) All of such additional systems are located in one 

State, or in adjoining States, or in a contiguous foreign 

country; and 

ø(C) The continued combination of such systems under 

the control of such holding company is not so large (considering the state of the art and the area or region affected) 

291 

as to impair the advantages of localized management, efficient operation, or the effectiveness of regulation. 

øThe Commission may permit as reasonably incidental, or economically necessary or appropriate to the operations of one or more integrated public-utility systems and retention of an interest in any 

business (other than the business of a public-utility company as 

such) which the Commission shall find necessary or appropriate in 

the public interest or for the protection of investors or consumers 

and not detrimental to the proper functioning of such system or 

systems. 

ø(2) To require by order, after notice and opportunity for 

hearing, that each registered holding company, and each subsidiary company thereof, shall take such steps as the Commission shall find necessary to ensure that the corporate structure 

or continued existence of any company in the holding-company 

system does not unduly or unnecessarily complicate the structure, or unfairly or inequitable distribute voting power among 

security holders, of such holding-company system. In carrying 

out the provisions of this paragraph the Commission shall require each registered holding company (and any company in 

the same holding-company system with such holding company) 

to take such action as the Commission shall find necessary in 

order that such holding company shall cease to be a holding 

company with respect to each of its subsidiary companies 

which itself has a subsidiary company which is a holding company. Except for the purpose of fairly and equitably distributing voting power among the security holders of such company, nothing in this paragraph shall authorize the Commission to require any change in the corporate structure or existence of any company which is not a holding company, or of any 

company whose principal business is that of a public-utility 

company. 

øThe Commission may by order revoke or modify any order previously made under this subsection, if, after notice and opportunity 

for hearing, it finds that the conditions upon which the order was 

predicated do not exist. Any order made under this subsection shall 

be subject to judicial review as provided in section 24. 

ø(c) Any order under subsection (b) shall be complied with within 

one year from the date of such order; but the Commission shall, 

upon a showing (made before or after the entry of such order) that 

the applicant has been or will be unable in the exercise of due diligence to comply with such order within such time, extend such 

time for an additional period not exceeding one year if it finds such 

extension necessary or appropriate in the public interest or for the 

protection of investors or consumers. 

ø(d) The Commission may apply to a court, in accordance with 

the provisions of subsection (f) of section 18, to enforce compliance 

with any order issued under subsection (b). In any such proceeding, 

the court as a court of equity may, to such extent as it deems necessary for purposes of enforcement of such order, take exclusive jurisdiction and possession of the company or companies and the assets thereof, wherever located; and the court shall have jurisdiction, in any such proceeding, to appoint a trustee, and the court 

may constitute and appoint the Commission as sole trustee, to hold 

292 

or administer under the direction of the court the assets so possessed. In any proceeding for the enforcement of an order of the 

Commission issued under subsection (b), the trustee with the approval of the court shall have power to dispose of any or all of such 

assets and, subject to such terms and conditions as the court may 

prescribe, may make such disposition in accordance with a fair and 

equitable reorganization plan which shall have been approved by 

the Commission after opportunity for hearing. Such reorganization 

plan may be proposed in the first instance by the Commission, or, 

subject to such rules and regulations as the Commission may deem 

necessary or appropriate in the public interest or for the protection 

of investors, by any person having a bona fide interest (as defined 

by the rules and regulations of the Commission) in the reorganization. 

ø(e) In accordance with such rules and regulations or order as 

the Commission may deem necessary or appropriate in the public 

interest or for the protection of investors or consumers, any registered holding company or any subsidiary company of a registered 

holding company may, at any time after January 1, 1936, submit 

a plan to the Commission for the divestment of control, securities, 

or other assets, or for other action by such company or any subsidiary company thereof for the purpose of enabling such company 

or any subsidiary company thereof to comply with the provisions of 

subsection (b). If, after notice and opportunity for hearing, the 

Commission shall find such plan, as submitted or as modified, necessary to effectuate the provisions of subsection (b) and fair and equitable to the persons affected by such plan, the Commission shall 

make an order approving such plan; and the Commission, at the 

request of the company, may apply to a court, in accordance with 

the provisions of subsection (f) of section 18, to enforce and carry 

out the terms and provisions of such plan. If, upon any such application, the court, after notice and opportunity for hearing, shall approve such plan as fair and equitable and as appropriate to effectuate the provisions of section 11, the court as a court of equity 

may, to such extent as it deems necessary for the purpose of carrying out the terms and provisions of such plan, take exclusive jurisdiction and possession of the company or companies and the assets thereof, wherever located; and the court shall have jurisdiction 

to appoint a trustee, and the court may constitute and appoint the 

Commission as sole trustee, to hold or administer, under the direction of the court and in accordance with the plan theretofore approved, by the court and the Commission, the assets so possessed. 

ø(f) In any proceeding in a court of the United States, whether 

under this section or otherwise, in which a receiver or trustee is 

appointed for any registered holding company, or any subsidiary 

company thereof, the court may constitute and appoint the Commission as sole trustee or receiver, subject to the directions and orders of the court, whether or not a trustee or receiver shall theretofore have been appointed, and in any such proceeding the court 

shall not appoint any person other than the Commission trustee or 

receiver without notifying the Commission and giving it an opportunity to be heard before making any such appointment. In no proceeding under this section or otherwise shall the Commission be 

appointed as trustee or receiver without its express consent. In any 

293 

such proceeding a reorganization plan for a registered holding company or any subsidiary company thereof shall not become effective 

unless such plan shall have been approved by the Commission 

after opportunity for hearing prior to its submission to the court. 

Notwithstanding any other provision of law, any such reorganization plan may be proposed in the first instance by the Commission 

or, subject to such rules and regulations as the Commission may 

deem necessary or appropriate in the public interest or for the protection of investors, by any person having a bona fide interest (as 

defined by the rules and regulations of the Commission) in the reorganization. The Commission may, by such rules and regulations 

or order as it may deem necessary or appropriate in the public interest or for the protection of investors or consumers, require that 

any or all fees, expenses, and remuneration, to whomsoever paid, 

in connection with any reorganization, dissolution, liquidation, 

bankruptcy, or receivership of a registered holding company or subsidiary company thereof, in any such proceeding, shall be subject 

to approval by the Commission. 

ø(g) It shall be unlawful for any person to solicit or permit the 

use of his or its name to solicit, by use of the mails or any means 

or instrumentality of interstate commerce, or otherwise, any proxy, 

consent, authorization, power of attorney, deposit, or dissent in respect of any reorganization plan of a registered holding company or 

any subsidiary company thereof under this section, or otherwise, or 

in respect of any plan under this section for the divestment of control, securities, or other assets, or for the dissolution of any registered holding company or any subsidiary company thereof, unless— ø(1) the plan has been proposed by the Commission, or the 

plan and such information regarding it and its sponsors as the 

Commission may deem necessary or appropriate in the public 

interest or for the protection of investors or consumers has 

been submitted to the Commission by a person having a bona 

fide interest (as defined by the rules and regulations of the 

Commission) in such reorganization; 

ø(2) each such solicitation is accompanied or preceded by a 

copy of a report on the plan which shall be made by the Commission after an opportunity for a hearing on the plan and 

other plans submitted to it, or by an abstract of such report 

made or approved by the Commission; and 

ø(3) each such solicitation is made not in contravention of 

such rules and regulations or orders as the Commission may 

deem necessary or appropriate in the public interest or for the 

protection of investors or consumers. 

Nothing in this subsection or the rules and regulations thereunder 

shall prevent any person from appearing before the Commission or 

any court through an attorney or proxy. 

øINTERCOMPANY LOANS; DIVIDENDS; SECURITY TRANSACTIONS; 

SALE OF UTILITY ASSETS; PROXIES; OTHER TRANSACTIONS 

øSEC. 12. (a) It shall be unlawful for any registered holding company, by use of the mails or any means or instrumentality of interstate commerce, or otherwise, directly or indirectly, to borrow, or 

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294 

utility company in the same holding-company system or from any 

subsidiary company of such holding company, but it shall not be 

unlawful under this subsection to renew, or extend the time of, any 

loan, credit, or indemnity outstanding on the date of the enactment 

of this title. 

ø(b) It shall be unlawful for any registered holding company or 

subsidiary company thereof, by use of the mails or any means or 

instrumentality of interstate commerce, or otherwise, directly or indirectly, to lend or in any manner extend its credit to or indemnify 

any company in the same holding-company system in contravention 

of such rules and regulations or orders as the Commission deems 

necessary or appropriate in the public interest or for the protection 

of investors or consumers or to prevent the circumvention of the 

provisions of this title or the rules, regulations, or orders thereunder. 

ø(c) It shall be unlawful for any registered holding company or 

any subsidiary company thereof, by use of the mails or any means 

or instrumentality of interstate commerce, or otherwise, to declare 

or pay any dividend on any security of such company or to acquire, 

retire, or redeem any security of such company, in contravention of 

such rules and regulations or orders as the Commission deems necessary or appropriate to protect the financial integrity of companies 

in holding-company systems, to safeguard the working capital of 

public-utility companies, to prevent the payment of dividends out 

of capital or unearned surplus, or to prevent the circumvention of 

the provisions of this title or the rules, regulations, or orders thereunder. 

ø(d) It shall be unlawful for any registered holding company, by 

use of the mails or any means or instrumentality of interstate commerce, or otherwise, to sell any security which it owns of any public-utility company, or any utility assets, in contravention of such 

rules and regulations or orders regarding the consideration to be 

received for such sale, maintenance of competitive conditions, fees 

and commissions, accounts, disclosure of interest, and similar matters as the Commission deems necessary or appropriate in the public interest or for the protection of investors or consumers or to prevent the circumvention of the provisions of this title or the rules, 

regulations, or orders thereunder. 

ø(e) It shall be unlawful for any person to solicit or to permit the 

use of his or its name to solicit, by use of the mails or any means 

or instrumentality of interstate commerce, or otherwise, any proxy, 

power of attorney, consent, or authorization regarding any security 

of a registered holding company or a subsidiary company thereof in 

contravention of such rules and regulations or orders as the Commission deems necessary or appropriate in the public interest or for 

the protection of investors or consumers or to prevent the circumvention of the provisions of this title or the rules, regulations, 

or orders thereunder. 

ø(f) It shall be unlawful for any registered holding company or 

subsidiary company thereof, by use of the mails or any means or 

instrumentality of interstate commerce, or otherwise, to negotiate, 

enter into, or take any step in the performance of any transaction 

not otherwise unlawful under this title, with any company in the 

same holding-company system or with any affiliate of a company 

295 

in such holding-company system in contravention of such rules and 

regulations or orders regarding reports, accounts, costs, maintenance of competitive conditions, a disclosure of interest, duration of 

contracts, and similar matters as the Commission deems necessary 

or appropriate in the public interest or for the protection of investors or consumers or to prevent the circumvention of the provisions 

of this title or the rules and regulations thereunder. 

ø(g) It shall be unlawful for any affiliate of any public-utility 

company, by use of the mails or any means or instrumentality of 

interstate commerce, or for any affiliate of any public-utility company engaged in interstate commerce, or of any registered holding 

company or any subsidiary company thereof, by use of the mails or 

any means or instrumentality of interstate commerce, or otherwise, 

to negotiate, enter into, or take any step in the performance of any 

transaction not otherwise unlawful under this title, with any such 

company of which it is an affiliate, in contravention of such rules 

and regulations or orders regarding reports, accounts, costs, maintenance of competitive conditions, disclosure of interest, duration of 

contracts, and similar matters as the Commission deems necessary 

or appropriate to prevent the circumvention of the provisions of 

this title. 

ø(h) It shall be unlawful for any registered holding company, or 

any subsidiary company thereof, by use of the mails or any means 

or instrumentality of interstate commerce, or otherwise, directly or 

indirectly— ø(1) to make any contribution whatsoever in connection with 

the candidacy, nomination, election or appointment of any person for or to any office or position in the Government of the 

United States, a State, or any political subdivision of a State, 

or any agency, authority, or instrumentality of any one or more 

of the foregoing; or 

ø(2) to make any contribution to or in support of any political 

party or any committee or agency thereof. 

øThe term ‘‘contribution’’ as used in this subsection includes any 

gift, subscription, loan, advance, or deposit of money or anything 

of value, and includes any contract, agreement, or promise, whether or not legally enforceable, to make a contribution. 

ø(i) It shall be unlawful for any person employed or retained by 

any registered holding company, or any subsidiary company thereof, to present, advocate, or oppose any matter affecting any registered holding company or any subsidiary company thereof, before 

the Congress or any Member or committee thereof, or before the 

Commission or Federal Power Commission, or any member, officer, 

or employee of either such Commission, unless such person shall 

file with the Commission in such form and detail and at such time 

as the Commission shall by rules and regulations or order prescribe 

as necessary or appropriate in the public interest or for the protection of investors or consumers, a statement of the subject matter 

in respect of which such person is retained or employed, the nature 

and character of such retainer or employment, and the amount of 

compensation received or to be received by such person, directly or 

indirectly, in connection therewith. It shall be the duty of every 

such person so employed or retained to file with the Commission 

within ten days after the close of each calendar month during such 

296 

retainer or employment, in such form and detail as the Commission 

shall by rules and regulations or order prescribe as necessary or 

appropriate in the public interest or for the protection of investors 

or consumers, a statement of the expenses incurred and the compensation received by such person during such month in connection 

with such retainer or employment. 

øSERVICE, SALES, AND CONSTRUCTION CONTRACTS 

øSEC. 13. (a) After April 1, 1936, it shall be unlawful for any registered holding company, by use of the mails or any means or instrumentality of interstate commerce, or otherwise, to enter into or 

take any step in the performance of any service, sales, or construction contract by which such company undertakes to perform services or construction work for, or sell goods to, any associate company thereof which is a public-utility or mutual service company. 

This provision shall not apply to such transactions, involving special or unusual circumstances or not in the ordinary course of business, as the Commission by rules and regulations or order may 

conditionally or unconditionally exempt as being necessary or appropriate in the public interest or for the protection of investors or 

consumers. 

ø(b) After April 1, 1936, it shall be unlawful for any subsidiary 

company of any registered holding company or for any mutual service company, by use of the mails or any means or instrumentality 

of interstate commerce, or otherwise, to enter into or take any step 

in the performance of any service, sales, or construction contract by 

which such company undertakes to perform services or construction 

work for, or sell goods to, any associate company thereof except in 

accordance with such terms and conditions and subject to such limitations and prohibitions as the Commission by rules and regulations or order shall prescribe as necessary or appropriate in the 

public interest or for the protection of investors or consumers and 

to insure that such contracts are performed economically and efficiently for the benefit of such associate companies at cost, fairly 

and equitably allocated among such companies. This provision shall 

not apply to such transactions as the Commission by rules and regulations or order may conditionally or unconditionally exempt as 

being necessary or appropriate in the public interest or for the protection of investors or consumers, if such transactions (1) are with 

any associate company which does not derive, directly or indirectly, 

any material part of its income from sources within the United 

States and which is not a public-utility company operating within 

the United States, or (2) involve special or unusual circumstances 

or are not in the ordinary course of business. 

ø(c) The rules and regulations and orders of the Commission 

under this section may prescribe, among other things, such terms 

and conditions regarding the determination of costs and the allocation thereof among specified classes of companies and for specified 

classes of service, sales, and construction contracts, the duration of 

such contracts, the making and keeping of accounts and cost-accounting procedures, the filing of annual and other periodic and 

special reports, the maintenance of competitive conditions, the disclosure of interests, and similar matters, as the Commission deems 

necessary or appropriate in the public interest or for the protection 

of investors or consumers. 

297 

ø(d) The rules and regulations and orders of the Commission 

under this section shall prescribe, among other things, such terms 

and conditions regarding the manner in which application may be 

made for approval as a mutual service company and the granting 

and continuance of such approval, the nature and enforcement of 

agreements for the sharing of expenses and distributing of revenues among member companies, and matters relating to such 

agreements, the nature and types of businesses and transactions in 

which mutual service companies may engage, and the manner of 

engaging therein, and the relations and transactions with member 

companies and affiliates, as the Commission deems necessary or 

appropriate in the public interest or for the protection of investors 

or consumers. The Commission shall not approve, or continue the 

approval of, any company as a mutual service company unless the 

Commission finds such company is so organized as to ownership, 

costs, revenues, and the sharing thereof as reasonably to insure the 

efficient and economical performance of service, sales, or construction contracts by such company for member companies, at cost fairly and equitably allocated among such member companies, at a 

reasonable saving to member companies over the cost to such companies of comparable contracts performed by independent persons. 

The Commission, upon its own motion or at the request of a member company or a State commission, may, after notice and opportunity for hearing, by order require a reallocation or reapportionment of costs among member companies of a mutual service company if it finds the existing allocation inequitable and may require 

the elimination of a service or services to a member company which 

does not bear its fair proportion of costs or which, by reason of its 

size or other circumstances, does not require such service or services. The Commission, after notice and opportunity for hearing, by 

order shall revoke, suspend, or modify the approval given any mutual service company if it finds that such company has persistently 

violated any provision of this section or any rule, regulation, or 

order thereunder. 

ø(e) It shall be unlawful for any affiliate of any public-utility 

company engaged in interstate commerce, or of any registered holding company or subsidiary company thereof, by use of the mails or 

any means or instrumentality of interstate commerce, or otherwise, 

to enter into or take any step in the performance of any service, 

sales, or construction contract, by which such affiliate undertakes 

to perform services or construction work for, or sell goods to, any 

such company of which it is an affiliate, in contravention of such 

rules and regulations or orders regarding reports, accounts, costs, 

maintenance of competitive conditions, disclosure of interest, duration of contracts, and similar matters, as the Commission deems 

necessary or appropriate to prevent the circumvention of the provisions of this title or the rules, regulations, or orders thereunder. 

ø(f) It shall be unlawful for any person whose principal business 

is the performance of service, sales, or construction contracts for 

public-utility or holding companies, by use of the mails or any 

means or instrumentality of interstate commerce, to enter into or 

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state commerce, or otherwise, to enter into or take any step in the 

performance of any service, sales, or construction contract with any 

public-utility company engaged in interstate commerce, or with any 

registered holding company or any subsidiary company of a registered holding company, in contravention of such rules and regulations or orders regarding reports, accounts, costs, maintenance of 

competitive conditions, disclosure of interest, duration of contracts, 

and similar matters as the Commission deems necessary or appropriate in the public interest or for the protection of investors or 

consumers or to prevent the circumvention of the provisions of this 

title or the rules, regulations, or orders thereunder. 

ø(g) The Commission, in order to obtain information to serve as 

a basis for recommending further legislation, shall from time to 

time conduct investigations regarding the making, performance, 

and costs of service, sales, and construction contracts with holding 

companies and subsidiary companies thereof and with public-utility 

companies, the economies resulting therefrom, and the desirability 

thereof. The Commission shall report to Congress, from time to 

time, the results of such investigations, together with such recommendations for legislation as it deems advisable. On the basis 

of such investigations the Commission shall classify the different 

types of such contracts and the work done thereunder, and shall 

make recommendations from time to time regarding the standards 

and scope of such contracts in relation to public-utility companies 

of different kinds and sizes and the costs incurred thereunder and 

economies resulting therefrom. Such recommendations shall be 

made available to State commissions, public-utility companies, and 

to the public in such form and at such reasonable charge as the 

Commission may prescribe. 

øPERIODIC AND OTHER REPORTS 

øSEC. 14. Every registered holding company and every mutual 

service company shall file with the Commission such annual, quarterly, and other periodic and special reports, the answers to such 

specific questions and the minutes of such directors’, stockholders’, 

and other meetings, as the Commission may by rules and regulations or order prescribe as necessary or appropriate in the public 

interest or for the protection of investors or consumers. Such reports, if required by the rules and regulations of the Commission, 

shall be certified by an independent public accountant, and shall be 

made and filed at such time and in such form and detail as the 

Commission shall prescribe. The Commission may require that 

there be included in reports filed with it such information and documents as it finds necessary or appropriate to keep reasonably current the information filed under section 5 or 13, and such further 

information concerning the financial condition, security structure, 

security holdings, assets, and cost thereof, wherever determinable, 

and affiliations of the reporting company and the associate companies, member companies, and affiliates thereof as the Commission 

deems necessary or appropriate in the public interest or for the 

protection of investors or consumers. 

øACCOUNTS AND RECORDS 

øSEC. 15. (a) Every registered holding company and every subsidiary company thereof shall make, keep, and preserve for such 

299 

periods, such accounts, cost-accounting procedures, correspondence, 

memoranda, papers, books, and other records as the Commission 

deems necessary or appropriate in the public interest or for the 

protection of investors or consumers or for the enforcement of the 

provisions of this title or the rules, regulations, or orders thereunder. 

ø(b) Every affiliate of a registered holding company or of any 

subsidiary company thereof, or of any public-utility company engaged in interstate commerce or not so engaged, shall make, keep, 

and preserve for such periods, such accounts, cost-accounting procedures, correspondence, memoranda, papers, books, and other 

records relating to any transaction of such affiliate which is subject 

to any provision of this title or any rule, regulation, or order thereunder, as the Commission deems necessary or appropriate in the 

public interest or for the protection of investors or consumers or for 

the enforcement of the provisions of this title or the rules, regulations, or orders thereunder. 

ø(c) Every mutual service company, and ever affiliate of a mutual 

service company as to any transaction of such affiliate which is 

subject to any provision of this title or any rule, regulation, or 

order thereunder, shall make, keep, and preserve for such periods, 

such accounts, cost-accounting procedures, correspondence, memoranda, papers, books, and other records, as the Commission deems 

necessary or appropriate in the public interest or for the protection 

of investors or consumers or for the enforcement of the provisions 

of this title or the rules, regulations, or orders thereunder. 

ø(d) Every person whose principal business is the performance of 

service, sales, or construction contracts for public-utility or holding 

companies shall make, keep, and preserve for such periods, such 

accounts, cost-accounting procedures, correspondence, memoranda, 

papers, books, and other records, relating to any transaction by 

such person which is subject to any provision of this title or any 

rule, regulation, or order thereunder, as the Commission deems 

necessary or appropriate in the public interest or for the protection 

of investors or consumers or for the enforcement of the provisions 

of this title or the rules and regulations thereunder. 

ø(e) After the Commission has prescribed the form and manner 

of making and keeping accounts, cost-accounting procedures, correspondence, memoranda, papers, books, and other records to be 

kept by any person hereunder, it shall be unlawful for any such 

person to keep any accounts, cost-accounting procedures, correspondence, memoranda, papers, books, or other records other 

than those prescribed or such as may be approved by the Commission, or to keep his or its accounts, cost-accounting procedures, correspondence, memoranda, papers, books, or other records in any 

manner other than that prescribed or approved by the Commission. 

ø(f) All accounts, cost-accounting procedures, correspondence, 

memoranda, papers, books, and other records kept or required to 

be kept by persons subject to any provision of this section shall be 

subject at any time and from time to time to such reasonable periodic, special, and other examinations by the Commission, or any 

member or representative thereof, as the Commission may prescribe. The Commission, after notice and opportunity for hearing, 

may prescribe the account or accounts in which particular outlays, 

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receipts, and other transactions shall be entered, charged, or credited and the manner in which such entry, charge, or credit shall 

be made, and may require an entry to be modified or supplemented 

so as properly to show the cost of any asset or any other cost. 

ø(g) It shall be the duty of every registered holding company and 

of every subsidiary company thereof and of every affiliate of a company insofar as such affiliate is subject to any provision of this title 

or any rule, regulation, or order thereunder, to submit the accounts, cost-accounting procedures, correspondence, memoranda, 

papers, books, and other records of such holding company, subsidiary company, or affiliate, as the case may be, to such examinations, in person or by duly appointed attorney, by the holder of any 

security of such holding company, subsidiary company, or affiliate, 

as the case may be, as the Commission deems necessary or appropriate in the public interest or for the protection of investors or 

consumers. 

ø(h) It shall be the duty of every mutual service company, and 

of every affiliate of a mutual service company, and of every person 

whose principal business is the performance of service, sales, or 

construction contracts for public-utility or holding companies, insofar as such affiliate or such person is subject to any provision of 

this title or any rule, regulation, or order thereunder, to submit the 

accounts, cost-accounting procedures, correspondence, memoranda, 

papers, books, and other records of such mutual service company, 

affiliate, or person to such examinations, in person or by duly appointed attorney, by member companies of such mutual service 

company and by public-utility or holding companies for which such 

person performs service, sales, or construction contracts as the 

Commission deems necessary or appropriate in the public interest 

or for the protection of investors or consumers. 

ø(i) The Commission, by such rules and regulations as it deems 

necessary or appropriate in the public interest or for the protection 

of investors or consumers may prescribe for persons subject to the 

provisions of subsection (a), (b), (c), or (d) of this section uniform 

methods for keeping accounts required under any provision of this 

section, including, among other things, the manner in which the 

cost of all assets, whenever determinable, shall be shown, the 

methods of classifying and segregating accounts, and the manner 

in which cost-accounting procedures shall be maintained. 

øLIABILITY FOR MISLEADING STATEMENTS 

øSEC. 16. (a) Any person who shall make or cause to be made 

any statement in any application, report, registration statement, or 

document filed pursuant to any provision of this title, or any rule, 

regulation, or order thereunder, which statement was at the time 

and in the light of the circumstances under which it was made 

false or misleading with respect to any material fact shall be liable 

in the same manner, to the same extent, and subject to the same 

limitations as provided in section 18 of the Securities Exchange Act 

of 1934 with respect to an application, report, or document filed 

pursuant to the Securities Exchange Act of 1934. 

ø(b) The rights and remedies provided by this title, except as provided in section 17(b), shall be in addition to any and all other 

rights and remedies that may exist under the Securities Act of 

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301 

erwise at law or in equity; but no person permitted to maintain a 

suit for damages under the provisions of this title shall recover, 

through satisfaction of judgment in one or more actions, a total 

amount in excess of his actual damages on account of the act complained of. 

øOFFICERS, DIRECTORS, AND OTHER AFFILIATES 

øSEC. 17. (a) Every person who is an officer or director of a registered holding company shall file with the Commission in such 

form as the Commission shall prescribe (1) at the time of the registration of such holding company, or within ten days after such 

person becomes an officer or director, a statement of the securities 

of such registered holding company or any subsidiary company 

thereof of which he is, directly or indirectly, the beneficial owner, 

and (2) within ten days after the close of each calendar month 

thereafter, if there has been any change in such ownership during 

such month, a statement of such ownership as of the close of such 

calendar month and of the changes in such ownership that have occurred during such calendar month. 

ø(b) For the purpose of preventing the unfair use of information 

which may have been obtained by any such officer or director by 

reason of his relationship to such registered holding company or 

any subsidiary company thereof, any profit realized by any such officer or director from any purchase and sale, or any sale and purchase, of any security of such registered holding company or any 

subsidiary company thereof within any period of less than six 

months, unless such security was acquired in good faith in connection with a debt previously contracted, shall inure to and be recoverable by the holding company or subsidiary company in respect of 

the security of which such profit was realized, irrespective of any 

intention on the part of such officer or director in entering into 

such transaction to hold the security purchased or not to repurchase the security sold for a period of more than six months. Suit 

to recover such profit may be instituted at law or in equity in any 

court of competent jurisdiction by the company entitled thereto or 

by the owner of any security of such company in the name and in 

the behalf of such company if such company shall fail or refuse to 

bring such suit within sixty days after request or shall fail diligently to prosecute the same thereafter; but no such suit shall be 

brought more than two years after the date such profit was realized. This subsection shall not cover any transaction where such 

person was not an officer or director at the times of the purchase 

and sale, or the sale and purchase, of the security involved, or any 

transaction or transactions which the Commission by rules and 

regulations may, as necessary or appropriate in the public interest 

or for the protection of investors or consumers, exempt as not comprehended within the purpose of this subsection. Nothing in this 

subsection shall be construed to give a remedy in the case of any 

transaction in respect of which a remedy is given under subsection 

(b) of section 16 of the Securities Exchange Act of 1934. 

ø(c) After one year from the date of the enactment of this title, 

no registered holding company or any subsidiary company thereof 

shall have, as an officer or director thereof, any executive officer, 

director, partner, appointee, or representative of any bank, trust 

company, investment banker, or banking association or firm, or any 

302 

executive officer, director, partner, appointee, or representative of 

any corporation a majority of whose stock, having the unrestricted 

right to vote for the election of directors, is owned by any bank, 

trust company, investment banker, or banking association or firm, 

except in such cases as rules and regulations prescribed by the 

Commission may permit as not adversely affecting the public interest or the interest of investors or consumers. 

øINVESTIGATIONS; INJUNCTIONS, ENFORCEMENT OF TITLE, AND 

PROSECUTION OF OFFENSES 

øSEC. 18. (a) The Commission, in its discretion, may investigate 

any facts, conditions, practices, or matters which it may deem necessary or appropriate to determine whether any person has violated or is about to violate any provision of this title or any rule 

or regulation thereunder, or to aid in the enforcement of the provisions of this title, in the prescribing of rules and regulations thereunder, or in obtaining information to serve as a basis for recommending further legislation concerning the matters to which this 

title relates. The Commission may require or permit any person to 

file with it a statement in writing, under oath or otherwise as it 

shall determine, as to any or all facts and circumstances concerning a matter which may be the subject of investigation. The 

Commission, in its discretion, may publish, or make available to 

State commissions, information concerning any such subject. 

ø(b) The Commission upon its own motion or at the request of 

a State commission may investigate, or obtain any information regarding the business, financial condition, or practices of any registered holding company or subsidiary company thereof or facts, 

conditions, practices, or matters affecting the relations between any 

such company and any other company or companies in the same 

holding-company system. 

ø(c) For the purpose of any investigation or any other proceeding 

under this title, any member of the Commission, or any officer 

thereof designated by it, is empowered to administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, contracts, agreements, or other records which 

the Commission deems relevant or material to the inquiry. Such attendance of witnesses and the production of any such records may 

be required from any place in any State or in any Territory or 

other place subject to the jurisdiction of the United States at any 

designated place of hearing. 

ø(d) In case of contumacy by, or refusal to obey a subpoena 

issued to, any person, the Commission may invoke the aid of any 

court of the United States within the jurisdiction of which such investigation or proceeding is carried on, or where such person resides or carries on business, in requiring the attendance and testimony of witnesses and the production of books, papers, correspondence, memoranda, contracts, agreements, and other records. And 

such court may issue an order requiring such person to appear before the Commission or member or officer designated by the Commission, there to produce records, if so ordered, or to give testimony touching the matter under investigation or in question; and 

any failure to obey such order of the court may be punished by 

such court as a contempt thereof. All process in any such case may 

303 

be served in the judicial district whereof such person is an inhabitant or wherever he may be found. Any person who, without just 

cause, shall fail or refuse to attend and testify or to answer any 

lawful inquiry or to produce books, papers, correspondence, memoranda, contracts, agreements, or other records, if in his or its power 

so to do, in obedience to the subpoena of the Commission, shall be 

guilty of a misdemeanor and, upon conviction, shall be subject to 

a fine of not more than $1,000 or to imprisonment for a term of 

not more than one year, or both. 

ø(e) Whenever it shall appear to the Commission that any person 

is engaged or about to engage in any acts or practices which constitute or will constitute a violation of the provisions of this title, 

or of any rule, regulation, or order thereunder, it may in its discretion bring an action in the proper district court of the United 

States or the United States courts of any Territory or other place 

subject to the jurisdiction of the United States, to enjoin such acts 

or practices and to enforce compliance with this title or any rule, 

regulation, or order thereunder, and upon a proper showing a permanent or temporary injunction or degree or restraining order 

shall be granted without bond. The Commission may transmit such 

evidence as may be available concerning such acts or practices to 

the Attorney General, who, in his discretion, may institute the appropriate criminal proceedings under this title. 

ø(f) Upon application of the Commission, the district courts of the 

United States, and the United States courts of any Territory or 

other place subject to the jurisdiction of the United States shall 

have jurisdiction to issue writs of mandamus commanding any person to comply with the provisions of this title or any rule, regulation, or order of the Commission thereunder. 

øHEARINGS BY COMMISSION 

øSEC. 19. Hearings may be public and may be held before the 

Commission, any member or members thereof, or any officer or officers of the Commission designated by it, and appropriate records 

thereof shall be kept. In any proceeding before the Commission, the 

Commission, in accordance with such rules and regulations as it 

may prescribe, shall admit as a party any interested State, State 

commission, State securities commission, municipality, or other political subdivision of a State, and may admit as a party any representative of interested consumers or security holders, or any 

other person whose participation in the proceedings may be in the 

public interest or for the protection of investors or consumers. 

øRULES, REGULATIONS, AND ORDERS 

øSEC. 20. (a) The Commission shall have authority from time to 

time to make, issue, amend, and rescind such rules and regulations 

and such orders as it may deem necessary or appropriate to carry 

out the provisions of this title, including rules and regulations defining accounting, technical, and trade terms used in this title. 

Among other things, the Commission shall have authority, for the 

purpose of this title, to prescribe the form or forms in which information required in any statement, declaration, application, report, 

or other document filed with the Commission shall be set forth, the 

items or details to be shown in balance sheets, profit and loss 

statements, and surplus accounts, the manner in which the cost of 

304 

all assets, whenever determinable, shall be shown in regard to such 

statements, declarations, applications, reports, and other documents filed with the Commission, or accounts required to be kept 

by the rules, regulations, or orders of the Commission, and the 

methods to be followed in the keeping of accounts and cost-accounting procedures and the preparation of reports, in the segregation 

and allocation of costs, in the determination of liabilities, in the determination of depreciation and depletion, in the differentiation of 

recurring and nonrecurring income, in the differentiation of investment and operating income, and in the keeping or preparation, 

where the Commission deems it necessary or appropriate, of separate or consolidated balance sheets or profit and loss statements for 

any companies in the same holding-company system. 

ø(b) In the case of the accounts of any company whose methods 

of accounting are prescribed under the provisions of any law of the 

United States or of any State, the rules and regulations or orders 

of the Commission in respect of accounts shall not be inconsistent 

with the requirements imposed by such law or any rule or regulation thereunder; nor shall anything in this title relieve any publicutility company from the duty to keep the accounts, books, records, 

or memoranda which may be required to be kept by the law of any 

State in which it operates or by the State commission of any such 

State. But this provision shall not prevent the Commission from 

imposing such additional requirements regarding reports or accounts as it may deem necessary or appropriate in the public interest or for the protection of investors or consumers. 

ø(c) The rules and regulations of the Commission shall be effective upon publication in the manner which the Commission shall 

prescribe. For the purpose of its rules, regulations, or orders the 

Commission may classify persons and matters within its jurisdiction and prescribe different requirements for different classes of 

persons or matters. Orders of the Commission under this title shall 

be issued only after opportunity for hearing. 

ø(d) The Commission, by such rules and regulations or order as 

it deems necessary or appropriate in the public interest or for the 

protection of investors or consumers, may authorize the filing of 

any information or documents required to be filed with the Commission under this title, or under the Securities Act of 1933, as 

amended, or under the Securities Exchange Act of 1934, by incorporating by reference any information or documents theretofore or 

concurrently filed with the Commission under this title or either of 

such Acts. No provision of this title imposing any liability shall 

apply to any act done or omitted in good faith in conformity with 

any rule, regulation, or order of the Commission, notwithstanding 

that such rule, regulation, or order may, after such act or omission, 

be amended or rescinded or be determined by judicial or other authority to be invalid for any reason. 

øEFFECT ON EXISTING LAW 

øSEC. 21. Nothing in this title shall affect (1) the jurisdiction of 

the Commission under the Securities Act of 1933, as amended, or 

the Securities Exchange Act of 1934 over any person, security, or 

contract, or (2) the rights, obligations, duties, or liabilities of any 

person under such Acts; nor shall anything in this title affect the 

jurisdiction of any other commission, board, agency, or officer of the 

305 

United States or of any State or political subdivision of any State, 

over any person, security, or contract, insofar as such jurisdiction 

does not conflict with any provision of this title or any rule, regulation, or order thereunder. 

øINFORMATION FILED WITH THE COMMISSION 

øSEC. 22. (a) When in the judgment of the Commission the disclosure of such information would be in the public interest or the 

interest of investors or consumers, the information contained in 

any statement, application, declaration, report, or other document 

filed with the Commission shall be available to the public, and copies thereof may be furnished to any person at such reasonable 

charge and under such reasonable limitations as the Commission 

may prescribe: Provided, however, That nothing in this title shall 

be construed to require, or to authorize the Commission to require, 

the revealing of trade secrets or processes in any application, declaration, report, or document filed with the Commission under this 

title. 

ø(b) Any person filing such application, declaration, report, or 

document may make written objection to the public disclosure of information contained therein, stating the grounds for such objection, 

and the Commission is authorized to hear objections in any such 

case where it finds it advisable. 

ø(c) It shall be unlawful for any member, officer, or employee of 

the Commission to disclose to any person other than a member, officer, or employee of the Commission, or to use for personal benefit, 

any information contained in any application, declaration, report, 

or document filed with the Commission which is not made available to the public pursuant to this section. 

øANNUAL REPORTS OF COMMISSION 

øSEC. 23. The Commission shall submit annually a report to the 

Congress covering the work of the Commission for the preceding 

year and including such information, data, and recommendations 

for further legislation in connection with the matters covered by 

this title as it may find advisable. 

øCOURT REVIEW OF ORDERS 

øSEC. 24. (a) Any person or party aggrieved by an order issued 

by the Commission under this title may obtain a review of such 

order in the court of appeals of the United States within any circuit 

wherein such person resides or has his principal place of business, 

or in the United States Court of Appeals for the District of Columbia, by filing in such court, within sixty days after the entry of such 

order, a written petition praying that the order of the Commission 

be modified or set aside in whole or in part. A copy of such petition 

shall be forthwith transmitted by the clerk of the court to any 

member of the Commission, or any officer thereof designated by the 

Commission for that purpose, and thereupon the Commission shall 

file in the court the record upon which the order complained of was 

entered, as provided in section 2112 of title 28, United States Code. 

Upon the filing of such petition such court shall have jurisdiction, 

which upon the filing of the record shall be exclusive, to affirm, 

modify, or set aside such order, in whole or in part. No objection 

to the order of the Commission shall be considered by the court unless such objection shall have been urged before the Commission or 

306 

unless there were reasonable grounds for failure so to do. The findings of the Commissions as to the facts, if supported by substantial 

evidence, shall be conclusive. If application is made to the court for 

leave to adduce additional evidence, and it is shown to the satisfaction of the court that such additional evidence is material and that 

there were reasonable grounds for failure to adduce such evidence 

in the proceeding before the Commission, the court may order such 

additional evidence to be taken before the Commission and to be 

adduced upon the hearing in such manner and upon such terms 

and conditions as to the court may seem proper. The Commission 

may modify its findings as to the facts by reason of the additional 

evidence so taken, and it shall file with the court such modified or 

new findings, which, if supported by substantial evidence, shall be 

conclusive, and its recommendation, if any, for the modification or 

setting aside of the original order. The judgment and decree of the 

court affirming, modifying, or setting aside, in whole or in part, any 

such order of the Commission shall be final, subject to review by 

the Supreme Court of the United States upon certiorari or certification as provided in section 1254 of title 28, United States Code. 

ø(b) The commencement of proceedings under subsection (a) shall 

not, unless specifically ordered by the court, operate as a stay of 

the Commission’s order. 

øJURISDICTION OF OFFENSES AND SUITS 

øSEC. 25. The District Courts of the United States and the 

United States courts of any Territory or other place subject to the 

jurisdiction of the United States shall have jurisdiction of violations 

of this title or the rules, regulations, or orders thereunder, and, 

concurrently with State and Territorial courts, of all suits in equity 

and actions at law brought to enforce any liability or duty created 

by, or to enjoin any violation of, this title or the rules, regulations, 

or orders thereunder. Any criminal proceeding may be brought in 

the district wherein any act or transaction constituting the violation occurred. Any suit or action to enforce any liability or duty created by, or to enjoin any violation of, this title or rules, regulations, 

or orders thereunder, may be brought in any such district or in the 

district wherein the defendant is an inhabitant or transacts business, and process in such cases may be served in any district of 

which the defendant is an inhabitant or transacts business or 

wherever the defendant may be found. Judgments and decrees so 

rendered shall be subject to review as provided in sections 1254, 

1291, 1292, and 1294 of title 28, United States Code. No costs shall 

be assessed for or against the Commission in any proceeding under 

this title brought by or against the Commission in any court. 

øVALIDITY OF CONTRACTS 

øSEC. 26. (a) Any condition, stipulation, or provision binding any 

person to waive compliance with any provision of this title or with 

any rule, regulation, or order thereunder shall be void. 

ø(b) Every contract made in violation of any provision of this title 

or of any rule, regulation, or order thereunder, and every contract 

heretofore or hereafter made, the performance of which involves 

the violation of, or the continuance of any relationship or practice 

in violation of, any provision of this title, or any rule, regulation, 

or order thereunder, shall be void (1) as regards the rights of any 

307 

person who, in violation of any such provision, rule, regulation, or 

order, shall have made or engaged in the performance of any such 

contract, and (2) as regards the rights of any person who, not being 

a party to such contract, shall have acquired any right thereunder 

with actual knowledge of the facts by reason of which the making 

or performance of such contract was in violation of any such provision, rule, regulation, or order. 

ø(c) Nothing in this title shall be construed (1) to affect the validity of any loan or extension of credit (or any extension or renewal 

thereof) made or of any lien created prior or subsequent to the enactment of this title, unless at the time of the making of such loan 

or extension of credit (or extension or renewal thereof) or the creating of such lien, the person making such loan or extension of 

credit (or extension or renewal thereof) or acquiring such lien shall 

have actual knowledge of facts by reason of which the making of 

such loan or extension of credit (or extension or renewal thereof) 

or the acquisition of such lien as a violation of the provisions of this 

title or any rule or regulation thereunder, or (2) to afford a defense 

to the collection of any debt or obligation or the enforcement of any 

lien by any person who shall have acquired such debt, obligation, 

or lien in good faith for value and without actual knowledge of the 

violation of any provision of this title or any rule or regulation 

thereunder affecting the legality of such debt, obligation, or lien. 

øLIABILITY OF CONTROLLING PERSONS; PREVENTING COMPLIANCE 

WITH TITLE 

øSEC. 27. (a) It shall be unlawful for any person, directly or indirectly, to cause to be done any act or thing through or by means 

of any other person which it would be unlawful for such person to 

do under the provisions of this title or any rule, regulation, or order 

thereunder. 

ø(b) It shall be unlawful for any person without just cause to 

hinder, delay, or obstruct the making, filing, or keeping of any information, document, report, record, or account required to be 

made, filed, or kept under any provision of this title or any rule, 

regulation, or order thereunder. 

øUNLAWFUL REPRESENTATIONS 

øSEC. 28. It shall be unlawful for any person in issuing, selling, 

offering for sale any security of a registered holding company or 

subsidiary company thereof, to represent or imply in any manner 

whatsoever that such security has been guaranteed, sponsored, or 

recommended for investment by the United States or any agency 

or officer thereof. 

øPENALTIES 

øSEC. 29. Any person who willfully violates any provision in this 

title or any rule, regulation, or order thereunder (other than an 

order of the Commission under subsection (b), (d), (e), or (f) of section 11), or any person who willfully makes any statement or entry 

in an application, report, document, account, or record filed or kept 

or required to be filed or kept under the provisions of this title or 

any rule, regulation, or order thereunder, knowing such statement 

or entry to be false or misleading in any material respect, or any 

person who willfully destroys (except after such time as may be 

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308 

lates, alters, or by any means, or device falsifies any account, correspondence, memorandum, book, paper, or other record kept or required to be kept under the provisions of this title or any rule, regulation, or order thereunder, shall upon conviction be fined not 

more than $10,000 or imprisoned not more than five years, or both, 

except that in the case of a violation of a provision of subsection 

(a) or (b) of section 4 by a holding company which is not an individual, the fine imposed upon such holding company shall be a fine 

not exceeding $200,000; but no person shall be convicted under this 

section for the violation of any rule, regulation, or order if he 

proves that he had no knowledge of such rule, regulation, or order. 

øSTUDY OF PUBLIC-UTILITY AND INVESTMENT COMPANIES 

øSEC. 30. The Commission is authorized and directed to make 

studies and investigations of public-utility companies, the territories served or which can be served by public-utility companies, 

and the manner in which the same are or can be served, to determine the sizes, types, and locations of public-utility companies 

which do or can operate most economically and efficiently in the 

public interest, in the interest of investors and consumers, and in 

furtherance of a wider and more economical use of gas and electric 

energy; upon the basis of such investigations and studies the Commission shall make public from time to time its recommendations 

as to the type and size of geographically and economically integrated public-utility systems which, having regard for the nature 

and character of the locality served, can best promote and harmonize the interests of the public, the investor, and the consumer. 

øHIRING AND LEASING AUTHORITY OF THE COMMISSION 

øSEC. 31. The provisions of section 4(b) of the Securities Exchange Act of 1934 shall be applicable with respect to the power 

of the Commission—

ø(1) to appoint and fix the compensation of such employees 

as may be necessary for carrying out its functions under this 

title, and 

ø(2) to lease and allocate such real property as may be necessary for carrying out its functions under this title. 

øSEC. 32. EXEMPT WHOLESALE GENERATORS. 

ø(a) DEFINITIONS.—For purposes of this section—

ø(1) EXEMPT WHOLESALE GENERATOR.—The term ‘‘exempt 

wholesale generator’’ means any person determined by the 

Federal Energy Regulatory Commission to be engaged directly, 

or indirectly through one or more affiliates as defined in section 2(a)(11)(B), and exclusively in the business of owning or 

operating, or both owning and operating, all or part of one or 

more eligible facilities and selling electric energy at wholesale. 

No person shall be deemed to be an exempt wholesale generator under this section unless such person has applied to the 

Federal Energy Regulatory Commission for a determination 

under this paragraph. A person applying in good faith for such 

a determination shall be deemed an exempt wholesale generator under this section, with all of the exemptions provided by 

this section, until the Federal Energy Regulatory Commission 

makes such determination. The Federal Energy Regulatory 

Commission shall make such determination within 60 days of 

309 

its receipt of such application and shall notify the Commission 

whenever a determination is made under this paragraph that 

any person is an exempt wholesale generator. Not later than 

12 months after the date of enactment of this section, the Federal Energy Regulatory Commission shall promulgate rules implementing the provisions of this paragraph. Applications for 

determination filed after the effective date of such rules shall 

be subject thereto. 

ø(2) ELIGIBLE FACILITY.—The term ‘‘eligible facility’’ means a 

facility, wherever located, which is either— ø(A) used for the generation of electric energy exclusively for sale at wholesale, or 

ø(B) used for the generation of electric energy and leased 

to one or more public utility companies; Provided, That 

any such lease shall be treated as a sale of electric energy 

at wholesale for purposes of sections 205 and 206 of the 

Federal Power Act. 

Such term shall not include any facility for which consent is required under subsection (c) if such consent has not been obtained. 

Such term includes interconnecting transmission facilities necessary to effect a sale of electric energy at wholesale. For purposes 

of this paragraph, the term ‘‘facility’’ may include a portion of a facility subject to the limitations of subsection (d) and shall include 

a facility the construction of which has not been commenced or 

completed. 

ø(3) SALE OF ELECTRIC ENERGY AT WHOLESALE.—The term ‘‘sale of electric energy at wholesale’’ shall have the same 

meaning as provided in section 201(d) of the Federal Power Act 

(16 U.S.C. 824(d)). 

ø(4) RETAIL RATES AND CHARGES.—The term ‘‘retail rates and 

charges’’ means rates and charges for the sale of electric energy directly to consumers. 

ø(b) FOREIGN RETAIL SALES.—Notwithstanding paragraphs (1) 

and (2) of subsection (a), retail sales of electric energy produced by 

a facility located in a foreign country shall not prevent such facility 

from being an eligible facility, or prevent a person owning or operating, or both owning and operating, such facility from being an exempt wholesale generator if none of the electric energy generated 

by such facility is sold to consumers in the United States. 

ø(c) STATE CONSENT FOR EXISTING RATE-BASED FACILITIES.—If a 

rate or charge for, or in connection with, the construction of a facility, or for electric energy produced by a facility (other than any portion of a rate or charge which represents recovery of the cost of a 

wholesale rate or charge) was in effect under the laws of any State 

as of the date of enactment of this section, in order for the facility 

to be considered an eligible facility, every State commission having 

jurisdiction over any such rate or charge must make a specific determination that allowing such facility to be an eligible facility (1) 

will benefit consumers, (2) is in the public interest, and (3) does not 

violate State law; Provided, That in the case of such a rate or 

charge which is a rate or charge of an affiliate of a registered holding company: 

ø(A) such determination with respect to the facility in question shall be required from every State commission having juVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00309 Fmt 6601 Sfmt 6602 E:\HR\OC\SR078.XXX SR078
310 

risdiction over the retail rates and charges of the affiliates of 

such registered holding company; and 

ø(B) the approval of the Commission under this Act shall not 

be required for the transfer of the facility to an exempt wholesale generator. 

ø(d) HYBRIDS.—(1) No exempt wholesale generator may own or 

operate a portion of any facility if any other portion of the facility 

is owned or operated by an electric utility company that is an affiliate or associate company of such exempt wholesale generator. 

ø(2) ELIGIBLE FACILITY.—Notwithstanding paragraph (1), an 

exempt wholesale generator may own or operate a portion of a facility identified in paragraph (1) if such portion has become an eligible facility as a result of the operation of subsection (c). 

ø(e) EXEMPTION OF EWGS.—An exempt wholesale generator 

shall not be considered an electric utility company under section 

2(a)(3) of this Act and, whether or not a subsidiary company, an 

affiliate, or an associate company of a holding company, an exempt 

wholesale generator shall be exempt from all provisions of this Act. 

ø(f) OWNERSHIP OF EWGS BY EXEMPT HOLDING COMPANIES.—

Notwithstanding any provision of this Act, a holding company that 

is exempt under section 3 of this Act shall be permitted, without 

condition or limitation under this Act, to acquire and maintain an 

interest in the business of one or more exempt wholesale generators. 

ø(g) OWNERSHIP OF EWGS BY REGISTERED HOLDING COMPA- NIES.—Notwithstanding any provision of this Act and the Commission’s jurisdiction as provided under subsection (h) of this section, 

a registered holding company shall be permitted (without the need 

to apply for, or receive, approval from the Commission, and otherwise without condition under this Act) to acquire and hold the securities, or an interest in the business, of one or more exempt 

wholesale generators. 

ø(h) FINANCING AND OTHER RELATIONSHIPS BETWEEN EWGS AND

REGISTERED HOLDING COMPANIES.—The issuance of securities by a 

registered holding company for purposes of financing the acquisition of an exempt wholesale generator, the guarantee of securities 

of an exempt wholesale generator by a registered holding company, 

the entering into service, sales or construction contracts, and the 

creation or maintenance of any other relationship in addition to 

that described in subsection (g) between an exempt wholesale generator and a registered holding company, its affiliates and associate 

companies, shall remain subject to the jurisdiction of the Commission under this Act: Provided, That 

ø(1) section 11 of this Act shall not prohibit the ownership 

of an interest in the business of one or more exempt wholesale 

generators by a registered holding company (regardless of 

where facilities owned or operated by such exempt wholesale 

generators are located), and such ownership by a registered 

holding company shall be deemed consistent with the operation 

of an integrated public utility system; 

ø(2) the ownership of an interest in the business of one or 

more exempt wholesale generators by a registered holding company (regardless of where facilities owned or operated by such 

exempt wholesale generators are located) shall be considered 

311 

as reasonably incidental, or economically necessary or appropriate, to the operations of an integrated public utility system; 

ø(3) in determining whether to approve (A) the issue or sale 

of a security by a registered holding company for purposes of 

financing the acquisition of an exempt wholesale generator, or 

(B) the guarantee of a security of an exempt wholesale generator by a registered holding company, the Commission shall 

not make a finding that such security is not reasonably adapted to the earning power of such company or to the security 

structure of such company and other companies in the same 

holding company system, or that the circumstances are such as 

to constitute the making of such guarantee an improper risk 

for such company, unless the Commission first finds that the 

issue or sale of such security, or the making of the guarantee, 

would have a substantial adverse impact on the financial integrity of the registered holding company system; 

ø(4) in determining whether to approve (A) the issue or sale 

of a security by a registered holding company for purposes 

other than the acquisition of an exempt wholesale generator, 

or (B) other transactions by such registered holding company 

or by its subsidiaries other than with respect to exempt wholesale generators, the Commission shall not consider the effect of 

the capitalization or earnings of any subsidiary which is an exempt wholesale generator upon the registered holding company 

system, unless the approval of the issue or sale or other transaction, together with the effect of such capitalization and earnings, would have a substantial adverse impact on the financial 

integrity of the registered holding company system; 

ø(5) the Commission shall make its decision under paragraph (3) to approve or disapprove the issue or sale of a security or the guarantee of a security within 120 days of the filing 

of a declaration concerning such issue, sale or guarantee; and 

ø(6) the Commission shall promulgate regulations with respect to the actions which would be considered, for purposes of 

this subsection, to have a substantial adverse impact on the financial integrity of the registered holding company system; 

such regulations shall ensure that the action has no adverse 

impact on any utility subsidiary or its customers, or on the 

ability of State commissions to protect such subsidiary or customers, and shall take into account the amount and type of 

capital invested in exempt wholesale generators, the ratio of 

such capital to the total capital invested in utility operations, 

the availability of books and records, and the financial and operating experience of the registered holding company and the 

exempt wholesale generator; the Commission shall promulgate 

such regulations within 6 months after the enactment of this 

section; after such 6–month period the Commission shall not 

approve any actions under paragraph (3), (4) or (5) except in 

accordance with such issued regulations. 

ø(i) APPLICATION OF ACT TO OTHER ELIGIBLE FACILITIES.—In the 

case of any person engaged directly and exclusively in the business 

of owning or operating (or both owning and operating) all or part 

of one or more eligible facilities, an advisory letter issued by the 

Commission staff under this Act after the date of enactment of this 

312 

section, or an order issued by the Commission under this Act after 

the date of enactment of this section, shall not be required for the 

purpose, or have the effect, of exempting such person from treatment as an electric utility company under section 2(a)(3) or exempting such person from any provision of this Act. 

ø(j) OWNERSHIP OF EXEMPT WHOLESALE GENERATORS AND QUALIFYING FACILITIES.—The ownership by a person of one or more exempt wholesale generators shall not result in such person being 

considered as being primarily engaged in the generation or sale of 

electric power within the meaning of sections 3(17)(C)(ii) and 

3(18)(B)(ii) of the Federal Power Act (16 U.S.C. 796(17)(C)(ii) and 

796(18)(B)(ii)). 

ø(k) PROTECTION AGAINST ABUSIVE AFFILIATE TRANSACTIONS.—

ø(1) PROHIBITION.—After the date of enactment of this section, an electric utility company may not enter into a contract 

to purchase electric energy at wholesale from an exempt wholesale generator if the exempt wholesale generator is an affiliate 

or associate company of the electric utility company. 

ø(2) STATE AUTHORITY TO EXEMPT FROM PROHIBITION.—Notwithstanding paragraph (1), an electric utility company may 

enter into a contract to purchase electric energy at wholesale 

from an exempt wholesale generator that is an affiliate or associate company of the electric utility company—

ø(A) if every State commission having jurisdiction over 

the retail rates of such electric utility company makes each 

of the following specific determinations in advance of the 

electric utility company entering into such contract: 

ø(i) A determination that such commission has sufficient regulatory authority, resources and access to 

books and records of the electric utility company and 

any relevant associate, affiliate or subsidiary company 

to exercise its duties under this subparagraph. 

ø(ii) A determination that the transaction—

ø(I) will benefit consumers, 

ø(II) does not violate any State law (including 

where applicable, least cost planning), 

ø(III) would not provide the exempt wholesale 

generator any unfair competitive advantage by 

virtue of its affiliation or association with the electric utility company, and 

ø(IV) is in the public interest; or 

ø(B) if such electric utility company is not subject to 

State commission retail rate regulation and the purchased 

electric energy: 

ø(i) would not be resold to any affiliate or associate 

company, or 

ø(ii) the purchased electric energy would be resold to 

an affiliate or associate company and every State commission having jurisdiction over the retail rates of 

such affiliate or associate company makes each of the 

determinations provided under subparagraph (A), including the determination concerning a State commission’s duties. 

313 

ø(l) RECIPROCAL ARRANGEMENTS PROHIBITED.—Reciprocal arrangements among companies that are not affiliates or associate 

companies of each other that are entered into in order to avoid the 

provisions of this section are prohibited. 

øSEC. 33. TREATMENT OF FOREIGN UTILITIES. 

ø(a) EXEMPTIONS FOR FOREIGN UTILITY COMPANIES.— ø(1) IN GENERAL.—A foreign utility company shall be exempt 

from all of the provisions of this Act, except as otherwise provided under this section, and shall not, for any purpose under 

this Act, be deemed to be a public utility company under section 2(a)(5), notwithstanding that the foreign utility company 

may be a subsidiary company, an affiliate, or an associate company of a holding company or of a public utility company. 

ø(2) STATE COMMISSION CERTIFICATION.—Section 1(a)(1) shall 

not apply or be effective unless every State commission having 

jurisdiction over the retail electric or gas rates of a public utility company that is an associate company or an affiliate of a 

company otherwise exempted under section (a)(1) (other than 

a public utility company that is an associate company or an affiliate of a registered holding company) has certified to the 

Commission that it has the authority and resources to protect 

ratepayers subject to its jurisdiction and that it intends to exercise its authority. Such certification, upon the filing of a notice by such State commission, may be revised or withdrawn 

by the State commission prospectively as to any future acquisition. The requirement of State certification shall be deemed 

satisfied if the relevant State commission had, prior to the date 

of enactment of this section, on the basis of prescribed conditions of general applicability; determine that ratepayers of a 

public utility company are adequately insulated from the effects of diversification and the diversification would not impair 

the ability of the State commission to regulate effectively the 

operations of such company. 

ø(3) DEFINITION.—For purposes of this section, the term ‘‘foreign utility company’’ means any company that— ø(A) owns or operates facilities that are not located in 

any State and that are used for the generation, transmission, or distribution of electric energy for sale or the 

distribution at retail of natural or manufactured gas for 

heat, light, or power, if such company— ø(i) derives no part of its income, directly or indirectly, from the generation, transmission, or distribution of electric energy for sale or the distribution at retail of natural or manufactured gas for heat, light, or 

power, within the United States; and 

ø(ii) neither the company nor any of its subsidiary 

companies is a public utility company operating in the 

United States; and 

ø(B) provides notice to the Commission, in such form as 

the Commission may prescribe, that such company is a foreign utility company. 

ø(b) OWNERSHIP OF FOREIGN UTILITY COMPANIES BY EXEMPT

HOLDING COMPANIES.—Notwithstanding any provision of this Act 

except as provided under this section, a holding company that is 

314 

exempt under section 3 of the Act shall be permitted without condition or limitation under the Act to acquire and maintain an interest in the business of one or more foreign utility companies. 

ø(c) REGISTERED HOLDING COMPANIES.—

ø(1) OWNERSHIP OF FOREIGN UTILITY COMPANIES BY REGISTERED HOLDING COMPANIES.—Notwithstanding any provision 

of this Act except as otherwise provided under this section, a 

registered holding company shall be permitted as of the date 

of enactment of this section (without the need to apply for, or 

receive approval from the Commission) to acquire and hold the 

securities or an interest in the business, of one or more foreign 

utility companies. The Commission shall promulgate rules or 

regulations regarding registered holding companies’ acquisition 

of interests in foreign utility companies which shall provide for 

the protection of the customers of a public utility company 

which is an associate company of a foreign utility company and 

the maintenance of the financial integrity of the registered 

holding company system. 

ø(2) ISSUANCE OF SECURITIES.—The issuance of securities by 

a registered holding company for purposes of financing the acquisition of a foreign utility company, the guarantee of securities of a foreign utility company by a registered holding company, the entering into service, sales, or construction contracts, 

and the creation or maintenance of any other relationship between a foreign utility company and a registered holding company, its affiliates and associate companies, shall remain subject to the jurisdiction of the Commission under this Act (unless otherwise exempted under this Act, in the case of a transaction with an affiliate or associate company located outside of 

the United States). Any State commission with jurisdiction 

over the retail rates of a public utility company which is part 

of a registered holding company system may make such recommendations to the Commission regarding the registered 

holding company’s relationship to a foreign utility company, 

and the Commission shall reasonably and fully consider such 

State recommendation. 

ø(3) CONSTRUCTION.—Any interest in the business of 1 or 

more foreign utility companies, or 1 or more companies organized exclusively to own, directly or indirectly, the securities or 

other interest in a foreign utility company, shall for all purposes of his Act, be considered to be—

ø(A) consistent with the operation of a single integrated 

public utility system, within the meaning of section 11; 

and 

ø(B) reasonably incidental, or economically necessary or 

appropriate, to the operations of an integrated public utility system, within the meaning of section 11. 

ø(d) EFFECT ON EXISTING LAW; NO STATE PREEMPTION.—Nothing 

in this section shall—

ø(1) preclude any person from qualifying for or maintaining 

any exemption otherwise provided for under this Act or the 

rules, regulations, or orders promulgated or issued under this 

Act; or 

315 

ø(2) be deemed or construed to limit the authority of any 

State (including any State regulatory authority) with respect 

to—

ø(A) any public utility company or holding company subject to such State’s jurisdiction; or 

ø(B) any transaction between any foreign utility company (or any affiliate or associate company thereof) and 

any public utility company or holding company subject to 

such State’s jurisdiction. 

ø(e) REPORTING REQUIREMENTS.—

ø(1) FILING OF REPORTS.—A public utility company that is an 

associate company of a foreign utility company shall file with 

the Commission such reports (with respect to such foreign utility company) as the Commission may by rules, regulations, or 

order prescribe as necessary or appropriate in the public interest or for the protection of investors or consumers. 

ø(2) NOTICE OF ACQUISITIONS.—Not later than 30 days after 

the consummation of the acquisition of an interest in a foreign 

utility company by an associate company of a public utility 

company that is subject to the jurisdiction of a State commission with respect to its retail electric or gas rates or by such 

public utility company, such associate company or such public 

utility company, shall provide notice of such acquisition to 

every State commission having jurisdiction over the retail electric or gas rates of such public utility company, in such form 

as may be prescribed by the State commission. 

ø(f) PROHIBITION ON ASSUMPTION OF LIABILITIES.—

ø(1) IN GENERAL.—No public utility company that is subject 

to the jurisdiction of a State commission with respect to its retail electric or gas rates shall issue any security for the purpose of financing the acquisition, or for the purposes of financing the ownership or operation, of a foreign utility company, 

nor shall any such pubic utility company assume any obligation or liability as guarantor, endorser, surety, or otherwise in 

respect of any security of a foreign utility company. 

ø(2) EXCEPTION FOR HOLDING COMPANIES WHICH ARE PREDOMINANTLY PUBLIC UTILITY COMPANIES.—Subsection (f)(1) 

shall not apply if: 

ø(A) The public utility company that is subject to the jurisdiction of a State commission with respect to its retail 

electric or gas rates is a holding company and is not an affiliate under section 2(a)(11)(B) of another holding company or is not subject to regulation as a holding company 

and has no affiliate as defined in section 2(a)(11)(A) that 

is a pubic utility company subject to the jurisdiction of a 

State commission with respect to its retail electric or gas 

rates; and 

ø(B) each State commission having jurisdiction with respect to the retail electric and gas rates of such public utility company expressly permits such public utility to engage in a transaction otherwise prohibited under section 1 

ø(C) the transaction (aggregated with all other then outstanding transactions exempted under this subsection) 

316 

does not exceed 5 per centum of the then-outstanding total 

capitalization of the public utility. 

ø(g) PROHIBITION ON PLEDGING OR ENCUMBERING UTILITY AS- SETS.—No public utility company that is subject to the jurisdiction 

of State commission with respect to its retail electric or gas rates 

shall pledge or encumber any utility assets or utility assets of any 

subsidiary thereof for the benefit of an associate foreign utility 

company. 

øSEC. 34. EXEMPT TELECOMMUNICATIONS COMPANIES. 

ø(a) DEFINITIONS.—For purposes of this section— ø(1) EXEMPT TELECOMMUNICATIONS COMPANY.—The term ‘‘exempt telecommunications company’’ means any person determined by the Federal Communications Commission to be 

engaged directly or indirectly, wherever located, through one or 

more affiliates (as defined in section 2(a)(11)(B)), and exclusively in the businesses of providing— ø(A) telecommunications services; 

ø(B) information services; 

ø(C) other services or products subject to the jurisdiction 

of the Federal Communications Commission; or 

ø(D) products or services that are related or incidental 

to the provision of a product or service described in subparagraph (A) (B), or (C). 

No person shall be deemed to be an exempt telecommunications 

company under this section unless such person has applied to the 

Federal Communications Commission for a determination under 

this paragraph. A person applying in good faith for such a determination shall be deemed an exempt telecommunications company 

under this section, with all of the exemptions provided by this section, until the Federal Communications Commission makes such 

determination. The Federal Communications Commission shall 

make such determination within 60 days of its receipt of any such 

application filed after the enactment of this section and shall notify 

the Commission whenever a determination is made under this 

paragraph that any person is an exempt telecommunications company. Not later than 12 months after the date of enactment of this 

section, the Federal Communications Commission shall promulgate 

rules implementing the provisions of this paragraph which shall be 

applicable to applications filed under this paragraph after the effective date of such rules. 

ø(2) OTHER TERMS.—For purposes of this section, the terms 

‘‘telecommunications services’’ and ‘‘information services’’ shall 

have the same meanings as provided in the Communications 

Act of 1934. 

ø(b) STATE CONSENT FOR SALE OF EXISTING RATE-BASED FACILITIES.—If a rate or charge for the sale of electric energy or natural 

gas (other than any portion of a rate or charge which represents 

recovery of the cost of a wholesale rate or charge) for, or in connection with, assets of a public utility company that is an associate 

company or affiliate of a registered holding company was in effect 

under the laws of any State as of December 19, 1995, the public 

utility company owning such assets may not sell such assets to an 

exempt telecommunications company that is an associate company 

or affiliate unless State commissions having jurisdiction over such 

317 

public utility company approve such sale. Nothing in this subsection shall preempt the otherwise applicable authority of any 

State to approve or disapprove the sale of such assets. The approval of the Commission under this Act shall not be required for 

the sale of assets as provided in this subsection. 

ø(c) OWNERSHIP OF ETCS BY EXEMPT HOLDING COMPANIES.—

Notwithstanding any provision of this Act, a holding company that 

is exempt under section 3 of this Act shall be permitted, without 

condition or limitation under this Act, to acquire and maintain an 

interest in the business of one or more exempt telecommunications 

companies. 

ø(d) OWNERSHIP OF ETCS BY REGISTERED HOLDING COMPANIES.—Notwithstanding any provision of this Act, a registered holding company shall be permitted (without the need to apply for, or 

receive, approval from the Commission, and otherwise without condition under this Act) to acquire and hold the securities, or an interest in the business, of one or more exempt telecommunications 

companies. 

ø(e) FINANCING AND OTHER RELATIONSHIPS BETWEEN ETCS AND

REGISTERED HOLDING COMPANIES.—The relationship between an 

exempt telecommunications company and a registered holding company, its affiliates and associate companies, shall remain subject to 

the jurisdiction of the Commission under this Act: Provided, That—

ø(1) section 11 of this Act shall not prohibit the ownership 

of an interest in the business of one or more exempt telecommunications companies by a registered holding company 

(regardless of activities engaged in or where facilities owned or 

operated by such exempt telecommunications companies are located), and such ownership by a registered holding company 

shall be deemed consistent with the operation of an integrated 

public utility system; 

ø(2) the ownership of an interest in the business of one or 

more exempt telecommunications companies by a registered 

holding company (regardless of activities engaged in or where 

facilities owned or operated by such exempt telecommunications companies are located) shall be considered as reasonably incidental, or economically necessary or appropriate, to 

the operations of an integrated public utility system; 

ø(3) the Commission shall have no jurisdiction under this 

Act over, and there shall be no restriction or approval required 

under this Act with respect to (A) the issue or sale of a security 

by a registered holding company for purposes of financing the 

acquisition of an exempt telecommunications company, or (B) 

the guarantee of a security of an exempt telecommunications 

company by a registered holding company; and 

ø(4) except for costs that should be fairly and equitably allocated among companies that are associate companies of a registered holding company, the Commission shall have no jurisdiction under this Act over the sales, service, and construction 

contracts between an exempt telecommunications company and 

a registered holding company, its affiliates and associate companies. 

318 

ø(f) REPORTING OBLIGATIONS CONCERNING INVESTMENTS AND ACTIVITIES OF REGISTERED PUBLIC-UTILITY HOLDING COMPANY SYSTEMS.—

ø(1) OBLIGATIONS TO REPORT INFORMATION.—Any registered 

holding company or subsidiary thereof that acquires or holds 

the securities, or an interest in the business, of an exempt telecommunications company shall file with the Commission such 

information as the Commission, by rule, may prescribe concern 

ø(A) investments and activities by the registered holding 

company, or any subsidiary thereof, with respect to exempt 

telecommunications companies, and 

ø(B) any activities of an exempt telecommunications 

company within the holding company system, that are reasonably likely to have a material impact on the financial 

or operational condition of the holding company system. 

ø(2) AUTHORITY TO REQUIRE ADDITIONAL INFORMATION.—If, 

based on reports provided to the Commission pursuant to paragraph (1) of this subsection or other available information, the 

Commission reasonably concludes that it has concerns regarding the financial or operational condition of any registered 

holding company or any subsidiary thereof (including an exempt telecommunications company), the Commission may require such registered holding company to make additional reports, and provide additional information. 

ø(3) AUTHORITY TO LIMIT DISCLOSURE OF INFORMATION.—Notwithstanding any other provision of law, the Commission shall 

not be compelled to disclose any information required to be reported under this subsection. Nothing in this subsection shall 

authorize the Commission to withhold the information from 

Congress, or prevent the Commission from complying with a 

request for information from any other Federal or State department or agency requesting the information for purposes 

within the scope of its jurisdiction. For purposes of section 552 

of title 5, United States Code, this subsection shall be considered a statute described in subsection (b)(3)(B) of such section 

552. 

ø(g) ASSUMPTION OF LIABILITIES.—Any public utility company 

that is an associate company, or an affiliate, of a registered holding 

company and that is subject to the jurisdiction of a State commission with respect to its retail electric or gas rates shall not issue 

any security for the purpose of financing the acquisition, ownership, or operation of an exempt telecommunications company. Any 

public utility company that is an associate company, or an affiliate, 

of a registered holding company and that is subject to the jurisdiction of a State commission with respect to its retail electric or gas 

rates shall not assume any obligation or liability as guarantor, endorser, surety, or otherwise by the public utility company in respect 

of an security of an exempt telecommunications company. 

ø(h) PLEDGING OR MORTGAGING OF ASSETS.—Any public utility 

company that is an associate company, or affiliate, of a registered 

holding company and that is subject to the jurisdiction of a State 

commission with respect to its retail electric or gas rates shall not 

pledge, mortgage, or otherwise use as collateral any assets of the 

319 

public utility company or assets of any subsidiary company thereof 

for be benefit of an exempt telecommunications company. 

ø(i) PROTECTION AGAINST ABUSIVE AFFILIATE TRANSACTIONS.—A 

public utility company may enter into a contract to purchase services or products described in subsection (a)(1) from an exempt telecommunications company that is an affiliate or associate company 

of the public utility company only if— ø(1) every State commission having jurisdiction over the retail rates of such public utility company approves such contract, or 

ø(2) such public utility company is not subject to State commission retail rate regulation and the purchased services or 

product—

ø(A) would not be resold to any affiliate or associate 

company; or 

ø(B) would be resold to an affiliate or associate company 

and every State commission having jurisdiction over the 

retail rates of such affiliate or associate company makes 

the determination required by subparagraph (A). 

The requirements of this subsection shall not apply in any case in 

which the State or the State commission concerned publishes a notice that the State or State commission waives its authority under 

this subsection. 

ø(j) NONPREEMPTION OF RATE AUTHORITY.—Nothing in this Act 

shall preclude the Federal Energy Regulatory Commission or a 

State commission from exercising its jurisdiction under otherwise 

applicable law to determine whether a public utility company may 

recover in rates the costs of products or services purchased from or 

sold to an associate company or affiliate that is an exempt telecommunications company, regardless of whether such costs are incurred through the direct or indirect purchase or sale of products 

or services from such associate company or affiliate. 

ø(k) RECIPROCAL ARRANGEMENTS PROHIBITED.—Reciprocal arrangements among companies that are not affiliates or associate 

companies of each other that are entered into in order to avoid the 

provisions of this section are prohibited. 

ø(l) BOOKS AND RECORDS.—(1) Upon written order of a State 

commission, a State commission may examine the books, accounts, 

memoranda, contracts, and records of— ø(A) a public utility company subject to its regulatory authority under State law; 

ø(B) any exempt telecommunications company selling products or services to such public utility company or to an associate company of such public utility company; and 

ø(C) any associate company or affiliate of an exempt telecommunications company which sells products or services to a 

public utility company referred to in subparagraph (A), 

wherever located, if such examination is required for the effective 

discharge of the State commission’s regulatory responsibilities affecting the provision of electric or gas service in connection with 

the activities of such exempt telecommunications company. 

ø(2) Where a State commission issues an order pursuant to paragraph (1), the State commission shall not publicly disclose trade secrets or sensitive commercial information. 

320 

ø(3) Any United States district court located in the State in 

which the State commission referred to in paragraph (1) is located 

shall have jurisdiction to enforce compliance with this subsection. 

ø(4) Nothing in this section shall—

ø(A) preempt applicable State law concerning the provision 

of records and other information; or 

ø(B) in any way limit rights to obtain records and other information under Federal law, contracts, or otherwise. 

ø(m) INDEPENDENT AUDIT AUTHORITY FOR STATE COMMISSIONS.—

ø(1) STATE MAY ORDER AUDIT.—Any State commission with 

jurisdiction over a public utility company that—

ø(A) is an associate company of a registered holding 

company; and 

ø(B) transacts business, directly or indirectly, with a 

subsidiary company, an affiliate or an associate company 

that is an exempt telecommunications company, may order 

an independent audit to be performed, no more frequently 

than on an annual basis, of all matters deemed relevant 

by the selected auditor that reasonably relate to retail 

rates: Provided, That such matters relate, directly or indirectly, to transactions or transfers between the public utility company subject to its jurisdiction and such exempt 

telecommunications company. 

ø(2) SELECTION OF FIRM TO CONDUCT AUDIT.—(A) If a State 

commission orders an audit in accordance with paragraph (1), 

the public utility company and the State commission shall 

jointly select, within 60 days, a firm to perform the audit. The 

firm selected to perform the audit shall possess demonstrated 

qualifications relating to—

ø(i) competency, including adequate technical training 

and professional proficiency in each discipline necessary to 

carry out the audit; and 

ø(ii) independence and objectivity, including that the 

firm be free from personal or external impairments to 

independence, and should assume an independent position 

with the State commission and auditee, making certain 

that the audit is based upon an impartial consideration of 

all pertinent facts and responsible opinions. 

ø(B) The public utility company and the exempt telecommunications company shall cooperate fully with all reasonable requests necessary to perform the audit and the public 

utility company shall bear all costs of having the audit performed. 

ø(3) AVAILABILITY OF AUDITOR’S REPORT.—The auditor’s report shall be provided to the State commission not later than 

6 months after the selection of the auditor, and provided to the 

public utility company not later than 60 days thereafter. 

ø(n) APPLICABILITY OF TELECOMMUNICATIONS REGULATION.—

Nothing in this section shall affect the authority of the Federal 

Communications Commission under the Communications Act of 

1934, or the authority of State commissions under State laws concerning the provision of telecommunications services, to regulate 

the activities of an exempt telecommunications company. 

321 

øSEPARABILITY OF PROVISIONS 

øSEC. 35. If any provision of this title or the application of such 

provision to any person or circumstances shall be held invalid, the 

remainder of the title and the application of such provision to persons or circumstances other than those as to which it is held invalid shall not be affected thereby. 

øSHORT TITLE 

øSEC. 36. This title may be cited as the Public Utility Holding 

Company Act of 1935’’. ¿ 

PUBLIC UTILITY REGULATORY POLICIES ACT 

OF 1978—PUBLIC LAW 95–617, AS AMENDED 

(16 U.S.C. 2601 ET SEQ.) 

* * * * * * * 

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

* * * * * * * 

(d) ESTABLISHMENT.—The following Federal standards are hereby 

established: 

* * * * * * * 

(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. 

(14) 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 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. 

322 

(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 the planned capacity obligations of a utility. 

(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) 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). 

(15) INTERCONNECTION.—(A) In this paragraph, the term ‘‘interconnection service’’ means service to an electric consumer 

by which an on-site generating facility on the premises of the 

electric consumer is connected to the local distribution facilities. 

323 

(B)(i) Each electric utility shall make available, on request, 

interconnection service to any electric consumer that the electric 

utility serves. 

(ii) Interconnection services shall be made available under 

clause (i) based on the standards developed by the Institute of 

Electrical and Electronics Engineers, entitled IEEE Standard 

1547 for Interconnecting Distributed Resources with Electric 

Power Systems (or successor standards). 

(C)(i) Electric utilities shall establish agreements and procedures providing that the interconnection services made available under subparagraph (B) promote current best practices of 

interconnection for distributed generation, including practices 

stipulated in model codes adopted by associations of State regulatory agencies. 

(ii) Any agreements and procedures established under clause 

(i) shall be just and reasonable and not unduly discriminatory 

or preferential. 

* * * * * * * 

(e) ENERGY EFFICIENCY RESOURCE PROGRAMS.—

(1) DEFINITIONS.—In this subsection: 

(A) DEMAND BASELINE.—The term ‘‘demand baseline’’

means the baseline determined by the Secretary for an appropriate period preceding the implementation of an energy 

efficiency resource program. 

(B) ENERGY EFFICIENCY RESOURCE PROGRAMS.—The term 

‘‘energy efficiency resource program’’ means an energy efficiency or other demand reduction program that is designed 

to reduce annual electricity consumption or peak demand of 

consumers served by an electric utility by a percentage of 

the demand baseline of the utility that is equal to not less 

than 0.75 percent of the number of years during which the 

program is in effect. 

(2) PUBLIC HEARINGS; DETERMINATIONS.—

(A) As soon as practicable after the date of enactment of 

this subsection, but not later than 3 years after that date, 

each State regulatory authority (with respect to each electric utility over which the State has ratemaking authority) 

and each nonregulated electric utility shall, after notice, 

conduct a public hearing on the benefits and feasibility of 

implementing an energy efficiency resource program. 

(B) A State regulatory authority or nonregulated utility 

shall implement an energy efficiency resource program if, 

on the basis of a hearing under subparagraph (A), the 

State regulatory authority or nonregulated utility determines that the program would—

(i) benefit end-use customers; 

(ii) be cost-effective based on total resource cost; 

(iii) serve the public welfare; and (iv) be feasible to 

implement. 

(3) IMPLEMENTATION.—

(A) STATE REGULATORY AUTHORITIES.—If a State regulatory authority makes a determination under paragraph 

(2)(B), the State regulatory authority shall—

324 

(i) require each electric utility over which the State 

has ratemaking authority to implement an energy efficiency resource program; and 

(ii) allow such a utility to recover any expenditures 

incurred by the utility in implementing the energy efficiency resource program. 

(B) NONREGULATED ELECTRIC UTILITIES.—If a nonregulated electric utility makes a determination under paragraph (2)(B), the utility shall implement an energy efficiency resource program. 

(4) UPDATING REGULATIONS.—A State regulatory authority or 

nonregulated utility may update periodically a determination 

under paragraph (2)(B) to determine whether an energy efficiency resource program should be— (A) continued;, 

(B) modified; or 

(C) terminated. 

(5) EXCEPTION.—Paragraph (2) shall not apply to a State regulatory authority (or any nonregulated electric utility operating in 

the State) that demonstrates to the Secretary that an energy efficiency resource program is in effect in the State. 

* * * * * * * 

SEC. 112. OBLIGATIONS TO CONSIDER AND DETERMINE. 

* * * * * * * 

(b) TIME LIMITATIONS.—(1) Not later than 2 years after the date 

of the enactment of this Act (or after the enactment of the Comprehensive National Energy Policy Act in the case of standards 

under paragraphs (7), (8), and (9) of section 111(d)), 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 section 111(d). 

(2) Not later than three years after the date of the enactment of 

this Act (or after the enactment of the Comprehensive National Energy Policy Act in the case of standards under paragraphs (7), (8), 

and (9) of section 111(d)), 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 section 111(d). 

(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 

325 

to each standard established by paragraphs (11) through (13) of section 111(d). 

(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), 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). 

(5)(A) Not later than 1 year after the date of enactment of this 

paragraph, each State regulatory authority (with respect to each 

electric utility for which the State regulatory authority has ratemaking authority) and each nonregulated utility shall, with respect 

to the standard established by section 111(d)(15)— (i) commence the consideration under section 111(a); or 

(ii) set a hearing date for the consideration. 

(B) Not later than 2 years after the date of enactment of this paragraph, each State regulatory authority (with respect to each electric 

utility for which the State regulatory authority has ratemaking authority) and each nonregulated electric utility shall, with respect to 

the standard established by section 111(d)(15), complete the consideration and make the determination under section 111(a). 

(c) FAILURE TO COMPLY.—Each State regulatory authority (with 

respect to each electric utility for which it has ratemaking authority) and each nonregulated electric utility shall undertake the consideration, and make the determination, referred to in section 111 

with respect to each standard established by section 111(d) in the 

first rate proceeding commenced after the date three years after 

the date of enactment of this Act respecting the rates of such utility if such State regulatory authority or nonregulated electric utility has not, before such date, complied with subsection (b)(2) with 

respect to such standard. 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). 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). In the 

case of the standard established by paragraph (15) 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 (15). 

(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); 

326 

(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. 

(e) PRIOR STATE ACTIONS.—Subsections (b) and (c) of this section 

shall not apply to the standard established by paragraph (14) or 

(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 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. 

* * * * * * * 

SEC. 115. SPECIAL RULES FOR STANDARDS. 

* * * * * * * 

(b) TIME-OF-DAY RATES.—In undertaking the consideration and 

making the determination required under section 111 with respect 

to the standard for time-of-day rates established by section 

111(d)(3) and the standard for time-based metering and communications established by section 111(d)(14) a time-of-day rate 

charged by an electric utility for providing electric service to each 

class of electric consumers shall be determined to be cost-effective 

with respect to each such class if the long-run benefits of such rate 

to the electric utility and its electric consumers in the class concerned are likely to exceed the metering and communications costs 

and other costs associated with the use of such rates. 

* * * * * * * 

(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. 

* * * * * * * 

SEC. 124. PRIOR AND PENDING PROCEEDINGS. 

For purposes of subtitle A and B, and this subtitle, proceedings 

commenced by State regulatory authorities (with respect to electric 

utilities for which it has ratemaking authority) and nonregulated 

electric utilities before the date of the enactment of this Act and 

actions taken before such date in such proceedings shall be treated 

327 

as complying with the requirements of subtitles A and B, and this 

subtitle if such proceedings and actions, substantially conform to 

such requirements. For purposes of subtitles A and B, and this subtitle, any such proceeding or action commenced before the date of 

enactment of this Act, but not completed before such date, shall 

comply with the requirements of subtitles A and B, and this subtitle, to the maximum extent practicable, with respect to so much 

of such proceeding or action as takes place after such date, except 

as otherwise provided in section 121(c). 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). In the case of the standard 

established by paragraph (14) or (15) 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) or (15). 

* * * * * * * 

SEC. 132. RESPONSIBILITIES OF SECRETARY OF ENERGY. 

(a) * * * 

(1) load management techniques and the results of studies 

and experiments concerning load management techniques; 

(2) developments and innovations in electric utility rate making throughout the United States, including the results of studies and experiments in rate structure and rate reform; 

(3) methods for determining cost of service; øand¿ 

(4) any other data or information which the Secretary determines would assist such authorities and utilities in carrying 

out the provisions of this titleø.¿ and 

(5) technologies, techniques, and rate-making methods related 

to advanced metering and communications and the use of these 

technologies, techniques and methods in demand response programs. 

* * * * * * * 

(d) DEMAND RESPONSE.—The Secretary shall be responsible for—

(1) educating consumers on the availability, advantages, and 

benefits of advanced metering and communications technologies, including the funding of demonstration or pilot 

projects; 

(2) working with States, utilities, other energy providers and 

advanced metering and communications experts to identify and 

address barriers to the adoption of demand response programs; 

and 

(3) not later than 180 days after the date of enactment of the 

Energy Policy Act of 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, 2005. 

* * * * * * * 

SEC. 210. COGENERATION AND SMALL, POWER PRODUCTION. 

* * * * * * * 

328 

(n) * * * 

(m) TERMINATION OF MANDATORY PURCHASE AND SALE REQUIRE- MENTS.— (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 

(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 C.F.R. 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 subparagraphs (A), (B) or (C) of paragraph 

(1) of this subsection have been met. After notice, including sufVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00328 Fmt 6601 Sfmt 6603 E:\HR\OC\SR078.XXX SR078
329 

ficient 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 subparagraphs (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 why the 

conditions set forth in subparagraphs (A), (B) or (C) of paragraph (1) of this subsection are no longer met. 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 enforceVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00329 Fmt 6601 Sfmt 6603 E:\HR\OC\SR078.XXX SR078
330 

ment of regulations under the Federal Power Act (16 U.S.C. 

791a et seq.). 

(n) 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 C.F.R. 

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 

(iii) continuing progress in the development of efficient electric energy generating technology. 

(B) The rule issued pursuant to section (n)(1)(A) 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 section (m)(2)(A), qualifying facility status shall be determined in accordance with the rules and regulations of this Act. 

(2) 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 C.F.R. 292.207 prior to the date on which 

the Commission issues the final rule required by paragraph (1). 

* * * * * * * 

TITLE III—RETAIL POLICIES FOR NATURAL 

GAS UTILITIES 

* * * * * * * 

SEC. 303. Adoption of certain standards. 

* * * * * * * 

(e) ENERGY EFFICIENCY RESOURCE PROGRAMS.—

(1) DEFINITIONS.—In this subsection: 

(A) DEMAND BASELINE.—The term ‘‘demand baseline’’

means the baseline determined by the Secretary for an appropriate period preceding the implementation of an energy 

efficiency resource program. 

(B) ENERGY EFFICIENCY RESOURCE PROGRAMS.—The term 

‘‘energy efficiency resource program’’ means an energy efficiency or other demand reduction program that is designed 

to reduce annual gas consumption or peak demand of consumers served by a gas utility by a percentage of the deVerDate Aug 04 2004 06:48 Jun 12, 2005 Jkt 021666 PO 00000 Frm 00330 Fmt 6601 Sfmt 6603 E:\HR\OC\SR078.XXX SR078
331 

mand baseline of the utility that is equal to not less than 

0.75 percent of the number of years during which the program is in effect. 

(2) PUBLIC HEARINGS; DETERMINATIONS.—

(A) As soon as practicable after the date of enactment of 

this subsection, but not later than 3 years after that date, 

each State regulatory authority (with respect to each gas 

utility over which the State has ratemaking authority) and 

each nonregulated gas utility shall, after notice, conduct a 

public hearing on the benefits and feasibility of implementing an energy efficiency resource program. 

(B) A State regulatory authority or nonregulated utility 

shall implement an energy efficiency resource program if, 

on the basis of a hearing under subparagraph (A), the 

State regulatory authority or nonregulated utility determines that the program would—

(i) benefit end-use customers; 

(ii) be cost-effective based on total resource cost; 

(iii) serve the public welfare; and 

(iv) be feasible to implement. 

(3) IMPLEMENTATION.—

(A) STATE REGULATORY AUTHORITIES.—If a State regulatory authority makes a determination under paragraph 

(2)(B), the State regulatory authority shall—

(i) require each gas utility over which the State has 

ratemaking authority to implement an energy efficiency 

resource program; and 

(ii) allow such a utility to recover any expenditures 

incurred by the utility in implementing the energy efficiency resource program. 

(B) NONREGULATED GAS UTILITIES.—If a nonregulated 

gas utility makes a determination under paragraph (2)(B), 

the utility shall implement an energy efficiency resource 

program. 

(4) UPDATING REGULATIONS.—A State regulatory authority or 

nonregulated utility may update periodically a determination 

under paragraph (2)(B) to determine whether an energy efficiency resource program should be—

(A) continued;, 

(B) modified; or 

(C) terminated. 

(5) EXCEPTION.—Paragraph (2) shall not apply to a State regulatory authority (or any nonregulated gas utility operating in 

the State) that demonstrates to the Secretary that an energy efficiency resource program is in effect in the State. 

* * * * * * * 

Æ