22–715

109TH CONGRESS REPT. 109–215 " HOUSE OF REPRESENTATIVES ! 1st Session Part 1

ENERGY POLICY ACT OF 2005

JULY 29, 2005.—Ordered to be printed 

Mr. BARTON of Texas, from the Committee on Energy and 

Commerce, submitted the following 

R E P O R T 

together with 

DISSENTING AND ADDITIONAL DISSENTING VIEWS 

[To accompany H.R. 1640] 

[Including cost estimate of the Congressional Budget Office]

The Committee on Energy and Commerce, to whom was referred 

the bill (H.R. 1640) to ensure jobs for our future with secure and 

reliable energy, having considered the same, report favorably thereon with an amendment and recommend that the bill as amended 

do pass.

CONTENTS 

Page 

Amendment .............................................................................................................. 2

Purpose and Summary ............................................................................................ 169

Background and Need for Legislation .................................................................... 170

Hearings ................................................................................................................... 172

Committee Consideration ........................................................................................ 173

Committee Votes ...................................................................................................... 173

Committee Oversight Findings ............................................................................... 206

Statement of General Performance Goals and Objectives .................................... 206

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 206

Committee Cost Estimate ....................................................................................... 206

Congressional Budget Office Estimate ................................................................... 206

Federal Mandates Statement ................................................................................. 227

Advisory Committee Statement .............................................................................. 227

Constitutional Authority Statement ...................................................................... 227

Applicability to Legislative Branch ........................................................................ 227

Section-by-Section Analysis of the Legislation ...................................................... 228

Changes in Existing Law Made by the Bill, as Reported ..................................... 278

Dissenting Views ..................................................................................................... 484

Exchange of Committee Correspondence ............................................................... 508

2 

AMENDMENT

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Energy Policy Act of 2005’’. 

(b) TABLE OF CONTENTS.—The table of contents for the bill is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—ENERGY EFFICIENCY 

Subtitle A—Federal Programs 

Sec. 101. Energy and water saving measures in congressional buildings. 

Sec. 102. Energy management requirements. 

Sec. 103. Energy use measurement and accountability. 

Sec. 104. Procurement of energy efficient products. 

Sec. 105. Energy Savings Performance Contracts. 

Sec. 107. Voluntary commitments to reduce industrial energy intensity. 

Sec. 108. Advanced Building Efficiency Testbed. 

Sec. 109. Federal building performance standards. 

Sec. 110. Daylight savings. 

Subtitle B—Energy Assistance and State Programs 

Sec. 121. Low Income Home Energy Assistance Program. 

Sec. 122. Weatherization assistance. 

Sec. 123. State energy programs. 

Sec. 124. Energy efficient appliance rebate programs. 

Sec. 125. Energy efficient public buildings. 

Sec. 126. Low income community energy efficiency pilot program. 

Subtitle C—Energy Efficient Products 

Sec. 131. Energy Star Program. 

Sec. 132. HVAC maintenance consumer education program. 

Sec. 133. Energy conservation standards for additional products. 

Sec. 134. Energy labeling. 

Sec. 135. Preemption. 

Sec. 136. State consumer product energy efficiency standards. 

Subtitle D—Public Housing 

Sec. 145. Grants for energy-conserving improvements for assisted housing. 

Sec. 147. Energy-efficient appliances. 

Sec. 149. Energy strategy for HUD. 

TITLE II—RENEWABLE ENERGY 

Subtitle A—General Provisions 

Sec. 201. Assessment of renewable energy resources. 

Sec. 202. Renewable energy production incentive. 

Sec. 203. Federal purchase requirement. 

Sec. 204. Insular areas energy security. 

Sec. 205. Use of photovoltaic energy in public buildings. 

Sec. 206. Grants to improve the commercial value of forest biomass for electric energy, useful heat, transportation fuels, petroleum-based product substitutes, and other commercial purposes. 

Sec. 207. Biobased products. 

Sec. 208. Renewable energy security. 

Subtitle C—Hydroelectric 

PART I—ALTERNATIVE CONDITIONS

Sec. 231. Alternative conditions and fishways. 

PART II—ADDITIONAL HYDROPOWER

Sec. 241. Hydroelectric production incentives. 

Sec. 242. Hydroelectric efficiency improvement. 

Sec. 243. Small hydroelectric power projects. 

Sec. 244. Increased hydroelectric generation at existing Federal facilities. 

Sec. 245. Shift of project loads to off-peak periods. 

TITLE III—OIL AND GAS 

Subtitle A—Petroleum Reserve and Home Heating Oil 

Sec. 301. Permanent authority to operate the Strategic Petroleum Reserve and other energy programs. 

Sec. 302. National Oilheat Research Alliance. 

Sec. 303. Site selection. 

Sec. 304. Suspension of Strategic Petroleum Reserve deliveries. 

Subtitle B—Production Incentives 

Sec. 320. Liquefaction or gasification natural gas terminals. 

Sec. 327. Hydraulic fracturing. 

Sec. 330. Appeals relating to pipeline construction or offshore mineral development projects. 

Sec. 333. Natural gas market transparency. 

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Subtitle C—Access to Federal Land 

Sec. 344. Consultation regarding oil and gas leasing on public land. 

Sec. 346. Compliance with executive order 13211; actions concerning regulations that significantly affect energy 

supply, distribution, or use. 

Sec. 350. Energy facility rights-of-way and corridors on Federal land. 

Sec. 355. Encouraging Great Lakes oil and gas drilling ban. 

Sec. 358. Federal coalbed methane regulation. 

Subtitle D—Refining Revitalization 

Sec. 371. Short title. 

Sec. 372. Findings. 

Sec. 373. Purpose. 

Sec. 374. Designation of Refinery Revitalization Zones. 

Sec. 375. Memorandum of understanding. 

Sec. 376. State environmental permitting assistance. 

Sec. 377. Coordination and expeditious review of permitting process. 

Sec. 378. Compliance with all environmental regulations required. 

Sec. 379. Definitions. 

TITLE IV—COAL 

Subtitle A—Clean Coal Power Initiative 

Sec. 401. Authorization of appropriations. 

Sec. 402. Project criteria. 

Sec. 403. Report. 

Sec. 404. Clean Coal Centers of Excellence. 

Subtitle B—Clean Power Projects 

Sec. 411. Coal technology loan. 

Sec. 412. Coal gasification. 

Sec. 414. Petroleum coke gasification. 

Sec. 416. Electron scrubbing demonstration. 

Subtitle D—Coal and Related Programs 

Sec. 441. Clean air coal program. 

TITLE V—INDIAN ENERGY 

Sec. 501. Short title. 

Sec. 502. Office of Indian Energy Policy and Programs. 

Sec. 503. Indian energy. 

Sec. 504. Four Corners transmission line project. 

Sec. 505. Energy efficiency in federally assisted housing. 

Sec. 506. Consultation with Indian tribes. 

TITLE VI—NUCLEAR MATTERS 

Subtitle A—Price-Anderson Act Amendments 

Sec. 601. Short title. 

Sec. 602. Extension of indemnification authority. 

Sec. 603. Maximum assessment. 

Sec. 604. Department of Energy liability limit. 

Sec. 605. Incidents outside the United States. 

Sec. 606. Reports. 

Sec. 607. Inflation adjustment. 

Sec. 608. Treatment of modular reactors. 

Sec. 609. Applicability. 

Sec. 610. Prohibition on assumption by United States Government of liability for certain foreign incidents. 

Sec. 611. Civil penalties. 

Sec. 612. Financial accountability. 

Subtitle B—General Nuclear Matters 

Sec. 621. Licenses. 

Sec. 622. NRC training program. 

Sec. 623. Cost recovery from government agencies. 

Sec. 624. Elimination of pension offset. 

Sec. 625. Antitrust review. 

Sec. 626. Decommissioning. 

Sec. 627. Limitation on legal fee reimbursement. 

Sec. 629. Report on feasibility of developing commercial nuclear energy generation facilities at existing Department of Energy sites. 

Sec. 630. Uranium sales. 

Sec. 631. Cooperative research and development and special demonstration projects for the uranium mining industry. 

Sec. 632. Whistleblower protection. 

Sec. 633. Medical isotope production. 

Sec. 634. Fernald byproduct material. 

Sec. 635. Safe disposal of greater-than-class c radioactive waste. 

Sec. 636. Prohibition on nuclear exports to countries that sponsor terrorism. 

Sec. 638. National uranium stockpile. 

Sec. 639. Nuclear Regulatory Commission meetings. 

Sec. 640. Employee benefits. 

Subtitle C—Additional Hydrogen Production Provisions 

Sec. 651. Hydrogen production programs. 

Sec. 652. Definitions. 

4 

Subtitle D—Nuclear Security 

Sec. 661. Nuclear facility threats. 

Sec. 662. Fingerprinting for criminal history record checks. 

Sec. 663. Use of firearms by security personnel of licensees and certificate holders of the Commission. 

Sec. 664. Unauthorized introduction of dangerous weapons. 

Sec. 665. Sabotage of nuclear facilities or fuel. 

Sec. 666. Secure transfer of nuclear materials. 

Sec. 667. Department of Homeland Security consultation. 

Sec. 668. Authorization of appropriations. 

TITLE VII—VEHICLES AND FUELS 

Subtitle A—Existing Programs 

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

Sec. 704. Incremental cost allocation. 

Sec. 705. Lease condensates. 

Sec. 706. Review of Energy Policy Act of 1992 programs. 

Sec. 707. Report concerning compliance with alternative fueled vehicle purchasing requirements. 

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

PART 1—HYBRID VEHICLES

Sec. 711. Hybrid vehicles. 

Sec. 712. Hybrid retrofit and electric conversion program. 

PART 2—ADVANCED VEHICLES

Sec. 721. Definitions. 

Sec. 722. Pilot program. 

Sec. 723. Reports to Congress. 

Sec. 724. Authorization of appropriations. 

PART 3—FUEL CELL BUSES

Sec. 731. Fuel cell transit bus demonstration. 

Subtitle C—Clean School Buses 

Sec. 741. Definitions. 

Sec. 742. Program for replacement of certain school buses with clean school buses. 

Sec. 743. Diesel retrofit program. 

Sec. 744. Fuel cell school buses. 

Subtitle D—Miscellaneous 

Sec. 751. Railroad efficiency. 

Sec. 752. Mobile emission reductions trading and crediting. 

Sec. 753. Aviation fuel conservation and emissions. 

Sec. 754. Diesel fueled vehicles. 

Sec. 757. Biodiesel engine testing program. 

Sec. 759. Ultra-efficient engine technology for aircraft. 

Subtitle E—Automobile Efficiency 

Sec. 771. Authorization of appropriations for implementation and enforcement of fuel economy standards. 

Sec. 772. Revised considerations for decisions on maximum feasible average fuel economy. 

Sec. 773. Extension of maximum fuel economy increase for alternative fueled vehicles. 

Sec. 774. Study of feasibility and effects of reducing use of fuel for automobiles. 

TITLE VIII—HYDROGEN 

Sec. 801. Definitions. 

Sec. 802. Plan. 

Sec. 803. Programs. 

Sec. 804. Interagency task force. 

Sec. 805. Advisory Committee. 

Sec. 806. External review. 

Sec. 807. Miscellaneous provisions. 

Sec. 808. Savings clause. 

Sec. 809. Authorization of appropriations. 

Sec. 810. Solar and wind technologies. 

TITLE IX—STUDIES AND PROGRAM SUPPORT 

Sec. 901. Goals. 

Sec. 902. Definitions. 

Subtitle A—Energy Efficiency 

Sec. 904. Energy efficiency. 

Sec. 905. Next Generation Lighting Initiative. 

Sec. 906. National Building Performance Initiative. 

Sec. 907. Secondary electric vehicle battery use program. 

Sec. 908. Energy efficiency study initiative. 

Sec. 909. Electric motor control technology. 

Subtitle B—Distributed Energy and Electric Energy Systems 

Sec. 911. Distributed energy and electric energy systems. 

Sec. 913. High power density industry program. 

Sec. 916. Reciprocating power. 

Sec. 917. Advanced portable power devices. 

5 

Subtitle C—Renewable Energy 

Sec. 918. Renewable energy. 

Sec. 919. Bioenergy programs. 

Sec. 920. Concentrating solar power study program. 

Sec. 921. Miscellaneous projects. 

Sec. 922. Renewable energy in public buildings. 

Sec. 923. University biodiesel program. 

Subtitle D—Nuclear Energy 

Sec. 929. Alternatives to industrial radioactive sources. 

Sec. 930. Geological isolation of spent fuel. 

Subtitle E—Fossil Energy 

PART I—STUDIES AND PROGRAM SUPPORT

Sec. 931. Fossil energy. 

Sec. 932. Oil and gas studies. 

Sec. 933. Technology transfer. 

Sec. 934. Coal mining technologies. 

Sec. 935. Coal and related technologies program. 

Sec. 936. Complex Well Technology Testing Facility. 

PART II—ULTRA-DEEPWATER AND UNCONVENTIONAL NATURAL GAS AND OTHER PETROLEUM RESOURCES

Sec. 941. Program authority. 

Sec. 942. Ultra-deepwater Program. 

Sec. 943. Unconventional natural gas and other petroleum resources Program. 

Sec. 944. Additional requirements for awards. 

Sec. 945. Advisory committees. 

Sec. 946. Limits on participation. 

Sec. 947. Sunset. 

Sec. 948. Definitions. 

Sec. 949. Funding. 

Subtitle F—Energy Sciences 

Sec. 953. Plan for Fusion Energy Sciences Program. 

Sec. 954. Spallation Neutron Source. 

Sec. 962. Nitrogen fixation. 

Subtitle G—Energy and environment 

Sec. 966. Waste reduction and use of alternatives. 

Sec. 967. Report on fuel cell test center. 

Sec. 968. Arctic Engineering Research Center. 

Sec. 970. Western Michigan demonstration project. 

Sec. 971. Low-cost hydrogen propulsion and infrastructure. 

Sec. 972. Carbon-based fuel cell development. 

Subtitle H—International Cooperation 

Sec. 981. United States-Israel cooperation. 

TITLE X—DEPARTMENT OF ENERGY MANAGEMENT 

Sec. 1001. Additional Assistant Secretary position. 

Sec. 1002. Other transactions authority. 

Sec. 1003. University collaboration. 

Sec. 1004. Sense of Congress. 

TITLE XII—ELECTRICITY 

Sec. 1201. Short title. 

Subtitle A—Reliability Standards 

Sec. 1211. Electric reliability standards. 

Subtitle B—Transmission Infrastructure Modernization 

Sec. 1221. Siting of interstate electric transmission facilities. 

Sec. 1222. Third-party finance. 

Sec. 1223. Transmission system monitoring. 

Sec. 1224. Advanced transmission technologies. 

Sec. 1225. Electric transmission and distribution programs. 

Sec. 1226. Advanced Power System Technology Incentive Program. 

Sec. 1227. Office of Electric Transmission and Distribution. 

Subtitle C—Transmission Operation Improvements 

Sec. 1231. Open nondiscriminatory access. 

Sec. 1232. Sense of Congress on Regional Transmission Organizations. 

Sec. 1233. Regional Transmission Organization applications progress report. 

Sec. 1234. Federal utility participation in Regional Transmission Organizations. 

Sec. 1235. Standard market design. 

Sec. 1236. Native load service obligation. 

Sec. 1237. Study on the benefits of economic dispatch. 

Subtitle D—Transmission Rate Reform 

Sec. 1241. Transmission infrastructure investment. 

Subtitle E—Amendments to PURPA 

Sec. 1251. Net metering and additional standards. 

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Sec. 1252. Smart metering. 

Sec. 1253. Cogeneration and small power production purchase and sale requirements. 

Sec. 1254. Interconnection. 

Subtitle F—Repeal of PUHCA 

Sec. 1261. Short title. 

Sec. 1262. Definitions. 

Sec. 1263. Repeal of the Public Utility Holding Company Act of 1935. 

Sec. 1264. Federal access to books and records. 

Sec. 1265. State access to books and records. 

Sec. 1266. Exemption authority. 

Sec. 1267. Affiliate transactions. 

Sec. 1268. Applicability. 

Sec. 1269. Effect on other regulations. 

Sec. 1270. Enforcement. 

Sec. 1271. Savings provisions. 

Sec. 1272. Implementation. 

Sec. 1273. Transfer of resources. 

Sec. 1274. Effective date. 

Sec. 1275. Service allocation. 

Sec. 1276. Authorization of appropriations. 

Sec. 1277. Conforming amendments to the Federal Power Act. 

Subtitle G—Market Transparency, Enforcement, and Consumer Protection 

Sec. 1281. Market transparency rules. 

Sec. 1282. Market manipulation. 

Sec. 1283. Enforcement. 

Sec. 1284. Refund effective date. 

Sec. 1285. Refund authority. 

Sec. 1286. Sanctity of contract. 

Sec. 1287. Consumer privacy and unfair trade practices. 

Subtitle H—Merger Reform 

Sec. 1291. Merger review reform and accountability. 

Sec. 1292. Electric utility mergers. 

Subtitle I—Definitions 

Sec. 1295. Definitions. 

Subtitle J—Technical and Conforming Amendments 

Sec. 1297. Conforming amendments. 

Subtitle K—Economic Dispatch 

Sec. 1298. Economic dispatch. 

TITLE XIV—MISCELLANEOUS 

Subtitle C—Other Provisions 

Sec. 1441. Continuation of transmission security order. 

Sec. 1442. Review of agency determinations. 

Sec. 1443. Attainment dates for downwind ozone nonattainment areas. 

Sec. 1444. Energy production incentives. 

Sec. 1446. Regulation of certain oil used in transformers. 

Sec. 1447. Risk assessments. 

Sec. 1448. Oxygen-fuel. 

Sec. 1449. Petrochemical and oil refinery facility health assessment. 

TITLE XV—ETHANOL AND MOTOR FUELS 

Subtitle A—General Provisions 

Sec. 1501. Renewable content of motor vehicle fuel. 

Sec. 1502. Fuels safe harbor. 

Sec. 1503. Findings and MTBE transition assistance. 

Sec. 1504. Use of MTBE. 

Sec. 1505. National Academy of Sciences review and presidential determination. 

Sec. 1506. Elimination of oxygen content requirement for reformulated gasoline. 

Sec. 1507. Analyses of motor vehicle fuel changes. 

Sec. 1508. Data collection. 

Sec. 1509. Reducing the proliferation of State fuel controls. 

Sec. 1510. Fuel system requirements harmonization study. 

Sec. 1511. Commercial byproducts from municipal solid waste and cellulosic biomass loan guarantee program. 

Sec. 1512. Cellulosic biomass and waste-derived ethanol conversion assistance. 

Sec. 1513. Blending of compliant reformulated gasolines. 

Subtitle B—Underground Storage Tank Compliance 

Sec. 1521. Short title. 

Sec. 1522. Leaking underground storage tanks. 

Sec. 1523. Inspection of underground storage tanks. 

Sec. 1524. Operator training. 

Sec. 1525. Remediation from oxygenated fuel additives. 

Sec. 1526. Release prevention, compliance, and enforcement. 

Sec. 1527. Delivery prohibition. 

Sec. 1528. Federal facilities. 

Sec. 1529. Tanks on Tribal lands. 

Sec. 1530. Additional measures to protect groundwater. 

Sec. 1531. Authorization of appropriations. 

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Sec. 1532. Conforming amendments. 

Sec. 1533. Technical amendments. 

Subtitle C—Boutique Fuels 

Sec. 1541. Reducing the proliferation of boutique fuels. 

TITLE XVI—STUDIES 

Sec. 1601. Study on inventory of petroleum and natural gas storage. 

Sec. 1605. Study of energy efficiency standards. 

Sec. 1606. Telecommuting study. 

Sec. 1607. LIHEAP report. 

Sec. 1608. Oil bypass filtration technology. 

Sec. 1609. Total integrated thermal systems. 

Sec. 1610. University collaboration. 

Sec. 1611. Reliability and consumer protection assessment. 

Sec. 1612. Report on energy integration with Latin America. 

Sec. 1613. Low-volume gas reservoir study. 

TITLE I—ENERGY EFFICIENCY 

Subtitle A—Federal Programs 

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

(a) IN GENERAL.—Part 3 of title V of the National Energy Conservation Policy Act 

(42 U.S.C. 8251 et seq.) is amended by adding at the end the following: 

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

‘‘(a) IN GENERAL.—The Architect of the Capitol— 

‘‘(1) shall develop, update, and implement a cost-effective energy conservation 

and management plan (referred to in this section as the ‘plan’) for all facilities 

administered by Congress (referred to in this section as ‘congressional buildings’) to meet the energy performance requirements for Federal buildings established under section 543(a)(1); and 

‘‘(2) shall submit the plan to Congress, not later than 180 days after the date 

of enactment of this section. 

‘‘(b) PLAN REQUIREMENTS.—The plan shall include— 

‘‘(1) a description of the life cycle cost analysis used to determine the costeffectiveness of proposed energy efficiency projects; 

‘‘(2) a schedule of energy surveys to ensure complete surveys of all congressional buildings every 5 years to determine the cost and payback period of energy and water conservation measures; 

‘‘(3) a strategy for installation of life cycle cost-effective energy and water conservation measures; 

‘‘(4) the results of a study of the costs and benefits of installation of submetering in congressional buildings; and 

‘‘(5) information packages and ‘how-to’ guides for each Member and employing 

authority of Congress that detail simple, cost-effective methods to save energy 

and taxpayer dollars in the workplace. 

‘‘(c) ANNUAL REPORT.—The Architect of the Capitol shall submit to Congress annually a report on congressional energy management and conservation programs required under this section that describes in detail— 

‘‘(1) energy expenditures and savings estimates for each facility; 

‘‘(2) energy management and conservation projects; and 

‘‘(3) future priorities to ensure compliance with this section.’’. 

(b) TABLE OF CONTENTS AMENDMENT.—The table of contents of the National Energy Conservation Policy Act is amended by adding at the end of the items relating 

to part 3 of title V the following new item: 

‘‘Sec. 552. Energy and water savings measures in congressional buildings.’’. 

(c) REPEAL.—Section 310 of the Legislative Branch Appropriations Act, 1999 (2 

U.S.C. 1815), is repealed. 

(d) ENERGY INFRASTRUCTURE.—The Architect of the Capitol, building on the Master Plan Study completed in July 2000, shall commission a study to evaluate the 

energy infrastructure of the Capital Complex to determine how the infrastructure 

could be augmented to become more energy efficient, using unconventional and renewable energy resources, in a way that would enable the Complex to have reliable 

utility service in the event of power fluctuations, shortages, or outages. 

(e) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated 

to the Architect of the Capitol to carry out subsection (d), $2,000,000 for each of fiscal years 2006 through 2010. 

8 

SEC. 102. ENERGY MANAGEMENT REQUIREMENTS. 

(a) ENERGY REDUCTION GOALS.— (1) AMENDMENT.—Section 543(a)(1) of the National Energy Conservation Policy Act (42 U.S.C. 8253(a)(1)) is amended by striking ‘‘its Federal buildings so 

that’’ and all that follows through the end and inserting ‘‘the Federal buildings 

of the agency (including each industrial or laboratory facility) so that the energy 

consumption per gross square foot of the Federal buildings of the agency in fiscal years 2006 through 2015 is reduced, as compared with the energy consumption per gross square foot of the Federal buildings of the agency in fiscal year 

2003, by the percentage specified in the following table: 

(2) REPORTING BASELINE.—The energy reduction goals and baseline established in paragraph (1) of section 543(a) of the National Energy Conservation 

Policy Act (42 U.S.C. 8253(a)(1)), as amended by this subsection, supersede all 

previous goals and baselines under such paragraph, and related reporting requirements. 

(b) REVIEW AND REVISION OF ENERGY PERFORMANCE REQUIREMENT.—Section 

543(a) of the National Energy Conservation Policy Act (42 U.S.C. 8253(a)) is further 

amended by adding at the end the following: 

‘‘(3) Not later than December 31, 2014, the Secretary shall review the results of 

the implementation of the energy performance requirement established under paragraph (1) and submit to Congress recommendations concerning energy performance 

requirements for fiscal years 2016 through 2025.’’. 

(c) EXCLUSIONS.—Section 543(c)(1) of the National Energy Conservation Policy Act 

(42 U.S.C. 8253(c)(1)) is amended by striking ‘‘An agency may exclude’’ and all that 

follows through the end and inserting ‘‘(A) An agency may exclude, from the energy 

performance requirement for a fiscal year established under subsection (a) and the 

energy management requirement established under subsection (b), any Federal 

building or collection of Federal buildings, if the head of the agency finds that— 

‘‘(i) compliance with those requirements would be impracticable; 

‘‘(ii) the agency has completed and submitted all federally required energy 

management reports; 

‘‘(iii) the agency has achieved compliance with the energy efficiency requirements of this Act, the Energy Policy Act of 1992, Executive orders, and other 

Federal law; and 

‘‘(iv) the agency has implemented all practicable, life cycle cost-effective 

projects with respect to the Federal building or collection of Federal buildings 

to be excluded. 

‘‘(B) A finding of impracticability under subparagraph (A)(i) shall be based on— 

‘‘(i) the energy intensiveness of activities carried out in the Federal building 

or collection of Federal buildings; or 

‘‘(ii) the fact that the Federal building or collection of Federal buildings is 

used in the performance of a national security function.’’. 

(d) REVIEW BY SECRETARY.—Section 543(c)(2) of the National Energy Conservation 

Policy Act (42 U.S.C. 8253(c)(2)) is amended— 

(1) by striking ‘‘impracticability standards’’ and inserting ‘‘standards for exclusion’’; 

(2) by striking ‘‘a finding of impracticability’’ and inserting ‘‘the exclusion’’; 

and 

(3) by striking ‘‘energy consumption requirements’’ and inserting ‘‘requirements of subsections (a) and (b)(1)’’. 

(e) CRITERIA.—Section 543(c) of the National Energy Conservation Policy Act (42 

U.S.C. 8253(c)) is further amended by adding at the end the following: 

‘‘(3) Not later than 180 days after the date of enactment of this paragraph, the 

Secretary shall issue guidelines that establish criteria for exclusions under paragraph (1).’’. 

(f) RETENTION OF ENERGY AND WATER SAVINGS.—Section 546 of the National Energy Conservation Policy Act (42 U.S.C. 8256) is amended by adding at the end the 

following new subsection: 

‘‘(e) RETENTION OF ENERGY AND WATER SAVINGS.—An agency may retain any 

funds appropriated to that agency for energy expenditures, water expenditures, or 

wastewater treatment expenditures, at buildings subject to the requirements of section 543(a) and (b), that are not made because of energy savings or water savings. 

Except as otherwise provided by law, such funds may be used only for energy efficiency, water conservation, or unconventional and renewable energy resources 

projects.’’. 

(g) REPORTS.—Section 548(b) of the National Energy Conservation Policy Act (42 

U.S.C. 8258(b)) is amended— 

(1) in the subsection heading, by inserting ‘‘THE PRESIDENT AND’’ before ‘‘CONGRESS’’; and 

9 

(2) by inserting ‘‘President and’’ before ‘‘Congress’’. 

(h) CONFORMING AMENDMENT.—Section 550(d) of the National Energy Conservation Policy Act (42 U.S.C. 8258b(d)) is amended in the second sentence by striking 

‘‘the 20 percent reduction goal established under section 543(a) of the National Energy Conservation Policy Act (42 U.S.C. 8253(a)).’’ and inserting ‘‘each of the energy 

reduction goals established under section 543(a).’’. 

SEC. 103. ENERGY USE MEASUREMENT AND ACCOUNTABILITY. 

Section 543 of the National Energy Conservation Policy Act (42 U.S.C. 8253) is 

further amended by adding at the end the following: 

‘‘(e) METERING OF ENERGY USE.— 

‘‘(1) DEADLINE.—By October 1, 2012, in accordance with guidelines established by the Secretary under paragraph (2), all Federal buildings shall, for the 

purposes of efficient use of energy and reduction in the cost of electricity used 

in such buildings, be metered or submetered. Each agency shall use, to the maximum extent practicable, advanced meters or advanced metering devices that 

provide data at least daily and that measure at least hourly consumption of 

electricity in the Federal buildings of the agency. Such data shall be incorporated into existing Federal energy tracking systems and made available to 

Federal facility energy managers. 

‘‘(2) GUIDELINES.— 

‘‘(A) IN GENERAL.—Not later than 180 days after the date of enactment 

of this subsection, the Secretary, in consultation with the Department of 

Defense, the General Services Administration, representatives from the metering industry, utility industry, energy services industry, energy efficiency 

industry, energy efficiency advocacy organizations, national laboratories, 

universities, and Federal facility energy managers, shall establish guidelines for agencies to carry out paragraph (1). 

‘‘(B) REQUIREMENTS FOR GUIDELINES.—The guidelines shall— 

‘‘(i) take into consideration— 

‘‘(I) the cost of metering and submetering and the reduced cost 

of operation and maintenance expected to result from metering and 

submetering; 

‘‘(II) the extent to which metering and submetering are expected 

to result in increased potential for energy management, increased 

potential for energy savings and energy efficiency improvement, 

and cost and energy savings due to utility contract aggregation; 

and 

‘‘(III) the measurement and verification protocols of the Department of Energy; 

‘‘(ii) include recommendations concerning the amount of funds and 

the number of trained personnel necessary to gather and use the metering information to track and reduce energy use; 

‘‘(iii) establish priorities for types and locations of buildings to be metered and submetered based on cost-effectiveness and a schedule of 1 

or more dates, not later than 1 year after the date of issuance of the 

guidelines, on which the requirements specified in paragraph (1) shall 

take effect; and 

‘‘(iv) establish exclusions from the requirements specified in paragraph (1) based on the de minimis quantity of energy use of a Federal 

building, industrial process, or structure. 

‘‘(3) PLAN.—Not later than 6 months after the date guidelines are established 

under paragraph (2), in a report submitted by the agency under section 548(a), 

each agency shall submit to the Secretary a plan describing how the agency will 

implement the requirements of paragraph (1), including (A) how the agency will 

designate personnel primarily responsible for achieving the requirements and 

(B) demonstration by the agency, complete with documentation, of any finding 

that advanced meters or advanced metering devices, as defined in paragraph 

(1), are not practicable.’’. 

SEC. 104. PROCUREMENT OF ENERGY EFFICIENT PRODUCTS. 

(a) REQUIREMENTS.—Part 3 of title V of the National Energy Conservation Policy 

Act (42 U.S.C. 8251 et seq.), as amended by section 101, is amended by adding at 

the end the following: 

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

‘‘(a) DEFINITIONS.—In this section: 

‘‘(1) AGENCY.—The term ‘agency’ has the meaning given that term in section 

7902(a) of title 5, United States Code. 

10 

‘‘(2) ENERGY STAR PRODUCT.—The term ‘Energy Star product’ means a product 

that is rated for energy efficiency under an Energy Star program. 

‘‘(3) ENERGY STAR PROGRAM.—The term ‘Energy Star program’ means the program established by section 324A of the Energy Policy and Conservation Act. 

‘‘(4) FEMP DESIGNATED PRODUCT.—The term ‘FEMP designated product’ 

means a product that is designated under the Federal Energy Management Program of the Department of Energy as being among the highest 25 percent of 

equivalent products for energy efficiency. 

‘‘(b) PROCUREMENT OF ENERGY EFFICIENT PRODUCTS.— 

‘‘(1) REQUIREMENT.—To meet the requirements of an agency for an energy 

consuming product, the head of the agency shall, except as provided in paragraph (2), procure— 

‘‘(A) an Energy Star product; or 

‘‘(B) a FEMP designated product. 

‘‘(2) EXCEPTIONS.—The head of an agency is not required to procure an Energy Star product or FEMP designated product under paragraph (1) if the head 

of the agency finds in writing that— 

‘‘(A) an Energy Star product or FEMP designated product is not cost-effective over the life of the product taking energy cost savings into account; 

or 

‘‘(B) no Energy Star product or FEMP designated product is reasonably 

available that meets the functional requirements of the agency. 

‘‘(3) PROCUREMENT PLANNING.—The head of an agency shall incorporate into 

the specifications for all procurements involving energy consuming products and 

systems, including guide specifications, project specifications, and construction, 

renovation, and services contracts that include provision of energy consuming 

products and systems, and into the factors for the evaluation of offers received 

for the procurement, criteria for energy efficiency that are consistent with the 

criteria used for rating Energy Star products and for rating FEMP designated 

products. 

‘‘(c) LISTING OF ENERGY EFFICIENT PRODUCTS IN FEDERAL CATALOGS.—Energy 

Star products and FEMP designated products shall be clearly identified and prominently displayed in any inventory or listing of products by the General Services Administration or the Defense Logistics Agency. The General Services Administration 

or the Defense Logistics Agency shall supply only Energy Star products or FEMP 

designated products for all product categories covered by the Energy Star program 

or the Federal Energy Management Program, except in cases where the agency ordering a product specifies in writing that no Energy Star product or FEMP designated product is available to meet the buyer’s functional requirements, or that no 

Energy Star product or FEMP designated product is cost-effective for the intended 

application over the life of the product, taking energy cost savings into account. 

‘‘(d) SPECIFIC PRODUCTS.—(1) In the case of electric motors of 1 to 500 horsepower, 

agencies shall select only premium efficient motors that meet a standard designated 

by the Secretary. The Secretary shall designate such a standard not later than 120 

days after the date of the enactment of this section, after considering the recommendations of associated electric motor manufacturers and energy efficiency 

groups. 

‘‘(2) All Federal agencies are encouraged to take actions to maximize the efficiency 

of air conditioning and refrigeration equipment, including appropriate cleaning and 

maintenance, including the use of any system treatment or additive that will reduce 

the electricity consumed by air conditioning and refrigeration equipment. Any such 

treatment or additive must be— 

‘‘(A) determined by the Secretary to be effective in increasing the efficiency 

of air conditioning and refrigeration equipment without having an adverse impact on air conditioning performance (including cooling capacity) or equipment 

useful life; 

‘‘(B) determined by the Administrator of the Environmental Protection Agency 

to be environmentally safe; and 

‘‘(C) shown to increase seasonal energy efficiency ratio (SEER) or energy efficiency ratio (EER) when tested by the National Institute of Standards and 

Technology according to Department of Energy test procedures without causing 

any adverse impact on the system, system components, the refrigerant or lubricant, or other materials in the system. 

Results of testing described in subparagraph (C) shall be published in the Federal 

Register for public review and comment. For purposes of this section, a hardware 

device or primary refrigerant shall not be considered an additive. 

‘‘(e) REGULATIONS.—Not later than 180 days after the date of the enactment of 

this section, the Secretary shall issue guidelines to carry out this section.’’. 

11 

(b) CONFORMING AMENDMENT.—The table of contents of the National Energy Conservation Policy Act is further amended by inserting after the item relating to section 552 the following new item: 

‘‘Sec. 553. Federal procurement of energy efficient products.’’. 

SEC. 105. ENERGY SAVINGS PERFORMANCE CONTRACTS. 

(a) LIMITATIONS.— (1) IN GENERAL.—Section 801(a)(2) of the National Energy Conservation Policy Act (42 U.S.C. 8287(a)(2)) is amended by adding at the end the following 

subparagraph: 

‘‘(E) All Federal agencies combined may not, after the date of enactment of the 

Energy Policy Act of 2005, enter into more than a total of 100 contracts under this 

title. Payments made by the Federal Government under all contracts permitted by 

this subparagraph combined shall not exceed a total of $500,000,000. Each Federal 

agency shall appoint a coordinator for Energy Savings Performance Contracts with 

the responsibility to monitor the number of such contracts for that Federal agency 

and the investment value of each contract. The coordinators for each Federal agency 

shall meet monthly to ensure that the limits specified in this subparagraph on the 

number of contracts and the payments made for the contracts are not exceeded.’’. 

(2) DEFINITION.—Section 804(1) of the National Energy Conservation Policy 

Act (42 U.S.C. 8287c(1)) is amended to read as follows: 

‘‘(1) The term ‘Federal agency’ means the Department of Defense, the Department of Veterans Affairs, and the Department of Energy. ’’. 

(3) VALIDITY OF CONTRACTS.—The amendments made by this subsection shall 

not affect the validity of contracts entered into under title VIII of the National 

Energy Conservation Policy Act (42 U.S.C. 8287 et seq.) before the date of enactment of this Act, or of contracts described in subsection (h). 

(b) PERMANENT EXTENSION.—Effective October 1, 2006, section 801(c) of the National Energy Conservation Policy Act (42 U.S.C. 8287(c)) is repealed. 

(c) REVIEW.—Not later than 180 days after the date of the enactment of this Act, 

the Secretary of Energy shall complete a review of the Energy Savings Performance 

Contract program to identify statutory, regulatory, and administrative obstacles 

that prevent Federal agencies from fully utilizing the program. In addition, this review shall identify all areas for increasing program flexibility and effectiveness, including audit and measurement verification requirements, accounting for energy use 

in determining savings, contracting requirements, including the identification of additional qualified contractors, and energy efficiency services covered. The Secretary 

shall report these findings to Congress and shall implement identified administrative and regulatory changes to increase program flexibility and effectiveness to the 

extent that such changes are consistent with statutory authority. 

(d) EXTENSION OF AUTHORITY.—Any energy savings performance contract entered 

into under section 801 of the National Energy Conservation Policy Act (42 U.S.C. 

8287) after October 1, 2006, and before the date of enactment of this Act, shall be 

deemed to have been entered into pursuant to such section 801 as amended by subsection (a) of this section. 

SEC. 107. VOLUNTARY COMMITMENTS TO REDUCE INDUSTRIAL ENERGY INTENSITY. 

(a) VOLUNTARY AGREEMENTS.—The Secretary of Energy is authorized to enter into 

voluntary agreements with 1 or more persons in industrial sectors that consume significant amounts of primary energy per unit of physical output to reduce the energy 

intensity of their production activities by a significant amount relative to improvements in each sector in recent years. 

(b) RECOGNITION.—The Secretary of Energy, in cooperation with the Administrator of the Environmental Protection Agency and other appropriate Federal agencies, shall recognize and publicize the achievements of participants in voluntary 

agreements under this section. 

(c) DEFINITION.—In this section, the term ‘‘energy intensity’’ means the primary 

energy consumed per unit of physical output in an industrial process. 

SEC. 108. ADVANCED BUILDING EFFICIENCY TESTBED. 

(a) ESTABLISHMENT.—The Secretary of Energy, in consultation with the Administrator of General Services, shall establish an Advanced Building Efficiency Testbed 

program for the development, testing, and demonstration of advanced engineering 

systems, components, and materials to enable innovations in building technologies. 

The program shall evaluate efficiency concepts for government and industry buildings, and demonstrate the ability of next generation buildings to support individual 

and organizational productivity and health (including by improving indoor air quality) as well as flexibility and technological change to improve environmental sustainability. Such program shall complement and not duplicate existing national programs. 

12 

(b) PARTICIPANTS.—The program established under subsection (a) shall be led by 

a university with the ability to combine the expertise from numerous academic 

fields including, at a minimum, intelligent workplaces and advanced building systems and engineering, electrical and computer engineering, computer science, architecture, urban design, and environmental and mechanical engineering. Such university shall partner with other universities and entities who have established programs and the capability of advancing innovative building efficiency technologies. 

(c) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated 

to the Secretary of Energy to carry out this section $6,000,000 for each of the fiscal 

years 2006 through 2008, to remain available until expended. For any fiscal year 

in which funds are expended under this section, the Secretary shall provide 1⁄3 of 

the total amount to the lead university described in subsection (b), and provide the 

remaining 2⁄3 to the other participants referred to in subsection (b) on an equal 

basis. 

SEC. 109. FEDERAL BUILDING PERFORMANCE STANDARDS. 

Section 305(a) of the Energy Conservation and Production Act (42 U.S.C. 6834(a)) 

is amended— 

(1) in paragraph (2)(A), by striking ‘‘CABO Model Energy Code, 1992’’ and inserting ‘‘the 2003 International Energy Conservation Code’’; and 

(2) by adding at the end the following: 

‘‘(3) REVISED FEDERAL BUILDING ENERGY EFFICIENCY PERFORMANCE STANDARDS.— 

‘‘(A) IN GENERAL.—Not later than 1 year after the date of enactment of this 

paragraph, the Secretary of Energy shall establish, by rule, revised Federal 

building energy efficiency performance standards that require that— 

‘‘(i) if life-cycle cost-effective, for new Federal buildings— 

‘‘(I) such buildings be designed so as to achieve energy consumption 

levels at least 30 percent below those of the version current as of the 

date of enactment of this paragraph of the ASHRAE Standard or the 

International Energy Conservation Code, as appropriate; and 

‘‘(II) sustainable design principles are applied to the siting, design, 

and construction of all new and replacement buildings; and 

‘‘(ii) where water is used to achieve energy efficiency, water conservation 

technologies shall be applied to the extent they are life-cycle cost effective. 

‘‘(B) ADDITIONAL REVISIONS.—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 of Energy shall determine, based on the cost-effectiveness of the requirements under the amendments, whether the revised standards established under this paragraph should 

be updated to reflect the amendments. 

‘‘(C) STATEMENT ON COMPLIANCE OF NEW BUILDINGS.—In the budget request 

of the Federal agency for each fiscal year and each report submitted by the Federal agency under section 548(a) of the National Energy Conservation Policy Act 

(42 U.S.C. 8258(a)), the head of each Federal agency shall include— 

‘‘(i) a list of all new Federal buildings owned, operated, or controlled by 

the Federal agency; and 

‘‘(ii) a statement concerning whether the Federal buildings meet or exceed 

the revised standards established under this paragraph.’’. 

SEC. 110. DAYLIGHT SAVINGS. 

(a) REPEAL.—Section 3(a) of the Uniform Time Act of 1966 (15 U.S.C. 260a(a)) is 

amended— 

(1) by striking ‘‘April’’ and inserting ‘‘March’’; and 

(2) by striking ‘‘October’’ and inserting ‘‘November’’. 

(b) REPORT TO CONGRESS.—Not later than 9 months after the date of enactment 

of this Act, the Secretary of Energy shall report to Congress on the impact this section on energy consumption in the United States. 

Subtitle B—Energy Assistance and State 

Programs 

SEC. 121. LOW INCOME HOME ENERGY ASSISTANCE PROGRAM. 

(a) AUTHORIZATION OF APPROPRIATIONS.—Section 2602(b) of the Low-Income Home 

Energy Assistance Act of 1981 (42 U.S.C. 8621(b)) is amended by striking ‘‘and 

$2,000,000,000 for each of fiscal years 2002 through 2004’’ and inserting ‘‘and 

$5,100,000,000 for each of fiscal years 2005 through 2007’’. 

13 

(b) RENEWABLE FUELS.—The Low-Income Home Energy Assistance Act of 1981 

(42 U.S.C. 8621 et seq.) is amended by adding at the end the following new section: 

‘‘RENEWABLE FUELS

‘‘SEC. 2612. In providing assistance pursuant to this title, a State, or any other 

person with which the State makes arrangements to carry out the purposes of this 

title, may purchase renewable fuels, including biomass.’’. 

(c) REPORT TO CONGRESS.—The Secretary of Energy shall report to Congress on 

the use of renewable fuels in providing assistance under the Low-Income Home Energy Assistance Act of 1981 (42 U.S.C. 8621 et seq.). 

SEC. 122. WEATHERIZATION ASSISTANCE. 

(a) AUTHORIZATION OF APPROPRIATIONS.—Section 422 of the Energy Conservation 

and Production Act (42 U.S.C. 6872) is amended by striking ‘‘for fiscal years 1999 

through 2003 such sums as may be necessary’’ and inserting ‘‘$500,000,000 for fiscal 

year 2006, $600,000,000 for fiscal year 2007, and $700,000,000 for fiscal year 2008’’. 

(b) ELIGIBILITY.—Section 412(7) of the Energy Conservation and Production Act 

(42 U.S.C. 6862(7)) is amended by striking ‘‘125 percent’’ both places it appears and 

inserting ‘‘150 percent’’. 

SEC. 123. STATE ENERGY PROGRAMS. 

(a) STATE ENERGY CONSERVATION PLANS.—Section 362 of the Energy Policy and 

Conservation Act (42 U.S.C. 6322) is amended by inserting at the end the following 

new subsection: 

‘‘(g) The Secretary shall, at least once every 3 years, invite the Governor of each 

State to review and, if necessary, revise the energy conservation plan of such State 

submitted under subsection (b) or (e). Such reviews should consider the energy conservation plans of other States within the region, and identify opportunities and actions carried out in pursuit of common energy conservation goals.’’. 

(b) STATE ENERGY EFFICIENCY GOALS.—Section 364 of the Energy Policy and Conservation Act (42 U.S.C. 6324) is amended to read as follows: 

‘‘STATE ENERGY EFFICIENCY GOALS

‘‘SEC. 364. Each State energy conservation plan with respect to which assistance 

is made available under this part on or after the date of enactment of the Energy 

Policy Act of 2005 shall contain a goal, consisting of an improvement of 25 percent 

or more in the efficiency of use of energy in the State concerned in calendar year 

2012 as compared to calendar year 1990, and may contain interim goals.’’. 

(c) AUTHORIZATION OF APPROPRIATIONS.—Section 365(f) of the Energy Policy and 

Conservation Act (42 U.S.C. 6325(f)) is amended by striking ‘‘for fiscal years 1999 

through 2003 such sums as may be necessary’’ and inserting ‘‘$100,000,000 for each 

of the fiscal years 2006 and 2007 and $125,000,000 for fiscal year 2008’’. 

SEC. 124. ENERGY EFFICIENT APPLIANCE REBATE PROGRAMS. 

(a) DEFINITIONS.—In this section: 

(1) ELIGIBLE STATE.—The term ‘‘eligible State’’ means a State that meets the 

requirements of subsection (b). 

(2) ENERGY STAR PROGRAM.—The term ‘‘Energy Star program’’ means the program established by section 324A of the Energy Policy and Conservation Act. 

(3) RESIDENTIAL ENERGY STAR PRODUCT.—The term ‘‘residential Energy Star 

product’’ means a product for a residence that is rated for energy efficiency 

under the Energy Star program. 

(4) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Energy. 

(5) STATE ENERGY OFFICE.—The term ‘‘State energy office’’ means the State 

agency responsible for developing State energy conservation plans under section 

362 of the Energy Policy and Conservation Act (42 U.S.C. 6322). 

(6) STATE PROGRAM.—The term ‘‘State program’’ means a State energy efficient appliance rebate program described in subsection (b)(1). 

(b) ELIGIBLE STATES.—A State shall be eligible to receive an allocation under subsection (c) if the State— 

(1) establishes (or has established) a State energy efficient appliance rebate 

program to provide rebates to residential consumers for the purchase of residential Energy Star products to replace used appliances of the same type; 

(2) submits an application for the allocation at such time, in such form, and 

containing such information as the Secretary may require; and 

(3) provides assurances satisfactory to the Secretary that the State will use 

the allocation to supplement, but not supplant, funds made available to carry 

out the State program. 

(c) AMOUNT OF ALLOCATIONS.— 

14 

(1) IN GENERAL.—Subject to paragraph (2), for each fiscal year, the Secretary 

shall allocate to the State energy office of each eligible State to carry out subsection (d) an amount equal to the product obtained by multiplying the amount 

made available under subsection (f) for the fiscal year by the ratio that the population of the State in the most recent calendar year for which data are available bears to the total population of all eligible States in that calendar year. 

(2) MINIMUM ALLOCATIONS.—For each fiscal year, the amounts allocated 

under this subsection shall be adjusted proportionately so that no eligible State 

is allocated a sum that is less than an amount determined by the Secretary. 

(d) USE OF ALLOCATED FUNDS.—The allocation to a State energy office under subsection (c) may be used to pay up to 50 percent of the cost of establishing and carrying out a State program. 

(e) ISSUANCE OF REBATES.—Rebates may be provided to residential consumers 

that meet the requirements of the State program. The amount of a rebate shall be 

determined by the State energy office, taking into consideration— 

(1) the amount of the allocation to the State energy office under subsection 

(c); 

(2) the amount of any Federal or State tax incentive available for the purchase of the residential Energy Star product; and 

(3) the difference between the cost of the residential Energy Star product and 

the cost of an appliance that is not a residential Energy Star product, but is 

of the same type as, and is the nearest capacity, performance, and other relevant characteristics (as determined by the State energy office) to, the residential Energy Star product. 

(f) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated 

to the Secretary to carry out this section $50,000,000 for each of the fiscal years 

2006 through 2010. 

SEC. 125. ENERGY EFFICIENT PUBLIC BUILDINGS. 

(a) GRANTS.—The Secretary of Energy may make grants to the State agency responsible for developing State energy conservation plans under section 362 of the 

Energy Policy and Conservation Act (42 U.S.C. 6322), or, if no such agency exists, 

a State agency designated by the Governor of the State, to assist units of local government in the State in improving the energy efficiency of public buildings and facilities— 

(1) through construction of new energy efficient public buildings that use at 

least 30 percent less energy than a comparable public building constructed in 

compliance with standards prescribed in the most recent version of the International Energy Conservation Code, or a similar State code intended to achieve 

substantially equivalent efficiency levels; or 

(2) through renovation of existing public buildings to achieve reductions in energy use of at least 30 percent as compared to the baseline energy use in such 

buildings prior to renovation, assuming a 3-year, weather-normalized average 

for calculating such baseline. 

(b) ADMINISTRATION.—State energy offices receiving grants under this section 

shall— 

(1) maintain such records and evidence of compliance as the Secretary may 

require; and 

(2) develop and distribute information and materials and conduct programs 

to provide technical services and assistance to encourage planning, financing, 

and design of energy efficient public buildings by units of local government. 

(c) AUTHORIZATION OF APPROPRIATIONS.—For the purposes of this section, there 

are authorized to be appropriated to the Secretary of Energy $30,000,000 for each 

of fiscal years 2006 through 2010. Not more than 10 percent of appropriated funds 

shall be used for administration. 

SEC. 126. LOW INCOME COMMUNITY ENERGY EFFICIENCY PILOT PROGRAM. 

(a) GRANTS.—The Secretary of Energy is authorized to make grants to units of 

local government, private, non-profit community development organizations, and Indian tribe economic development entities to improve energy efficiency; identify and 

develop alternative, renewable, and distributed energy supplies; and increase energy 

conservation in low income rural and urban communities. 

(b) PURPOSE OF GRANTS.—The Secretary may make grants on a competitive basis 

for— 

(1) investments that develop alternative, renewable, and distributed energy 

supplies; 

(2) energy efficiency projects and energy conservation programs; 

(3) studies and other activities that improve energy efficiency in low income 

rural and urban communities; 

15 

(4) planning and development assistance for increasing the energy efficiency 

of buildings and facilities; and 

(5) technical and financial assistance to local government and private entities 

on developing new renewable and distributed sources of power or combined heat 

and power generation. 

(c) DEFINITION.—For purposes of this section, the term ‘‘Indian tribe’’ means any 

Indian tribe, band, nation, or other organized group or community, including any 

Alaskan Native village or regional or village corporation as defined in or established 

pursuant to the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.), that 

is recognized as eligible for the special programs and services provided by the 

United States to Indians because of their status as Indians. 

(d) AUTHORIZATION OF APPROPRIATIONS.—For the purposes of this section there are authorized to be appropriated to the Secretary of Energy $20,000,000 for each 

of fiscal years 2006 through 2008. 

Subtitle C—Energy Efficient Products 

SEC. 131. ENERGY STAR PROGRAM. 

(a) AMENDMENT.—The Energy Policy and Conservation Act (42 U.S.C. 6201 et 

seq.) is amended by inserting the following after section 324: 

‘‘SEC. 324A. ENERGY STAR PROGRAM. 

‘‘There is established at the Department of Energy and the Environmental Protection Agency a 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 efficiency standards. Responsibilities under the program shall be divided between the Department of Energy and the Environmental Protection Agency consistent with the terms of agreements between the 2 agencies. The Administrator and the Secretary shall— 

‘‘(1) promote Energy Star compliant technologies as the preferred technologies 

in the marketplace for achieving energy efficiency and to reduce pollution; 

‘‘(2) work to enhance public awareness of the Energy Star label, including special outreach to small businesses; 

‘‘(3) preserve the integrity of the Energy Star label; 

‘‘(4) solicit comments from interested parties prior to establishing or revising 

an Energy Star product category, specification, or criterion (or effective dates for 

any of the foregoing); 

‘‘(5) upon 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 an explanation of such changes and, where appropriate, responses to comments submitted by interested parties; and 

‘‘(6) provide appropriate lead time (which shall be 9 months, unless the Agency or Department determines otherwise) prior to the 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.’’. 

(b) TABLE OF CONTENTS AMENDMENT.—The table of contents of the Energy Policy 

and Conservation Act is amended by inserting after the item relating to section 324 

the following new item: 

‘‘Sec. 324A. Energy Star program.’’. 

SEC. 132. HVAC MAINTENANCE CONSUMER EDUCATION PROGRAM. 

Section 337 of the Energy Policy and Conservation Act (42 U.S.C. 6307) is amended by adding at the end the following: 

‘‘(c) HVAC MAINTENANCE.—For the purpose of ensuring that installed air conditioning and heating systems operate at their 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 resulting from properly conducted maintenance of air 

conditioning, heating, and ventilating systems. The Secretary shall carry out the 

program in a cost-shared manner in cooperation with the Administrator of the Environmental Protection Agency and such other entities as the Secretary considers appropriate, including industry trade associations, industry members, and energy efficiency organizations. 

‘‘(d) SMALL BUSINESS EDUCATION AND ASSISTANCE.—The Administrator of the 

Small Business Administration, in consultation with the Secretary of Energy and 

16 

the Administrator of the Environmental Protection Agency, shall develop and coordinate a Government-wide program, building on the existing Energy Star for Small 

Business Program, to assist small businesses to become more energy efficient, understand the cost savings obtainable through efficiencies, and identify financing options for energy efficiency upgrades. The Secretary and the Administrator of the 

Small Business Administration shall make the program information available directly to small businesses and through other Federal agencies, including the Federal 

Emergency Management Program and the Department of Agriculture.’’. 

SEC. 133. ENERGY CONSERVATION STANDARDS FOR ADDITIONAL PRODUCTS. 

(a) DEFINITIONS.—Section 321 of the Energy Policy and Conservation Act (42 

U.S.C. 6291) is amended— 

(1) in paragraph (30)(S), by striking the period and adding at the end the following: ‘‘but does not include any lamp specifically designed to be used for special purpose applications and that is unlikely to be used in general purpose applications such as those described in subparagraph (D), and also does not include any lamp not described in subparagraph (D) that is excluded by the Secretary, by rule, because the lamp is designed for special applications and is unlikely to be used in general purpose applications.’’; and 

(2) by adding at the end the following: 

‘‘(32) The term ‘battery charger’ means a device that charges batteries for consumer products and includes battery chargers embedded in other consumer 

products. 

‘‘(33) The term ‘commercial refrigerators, freezers, and refrigerator-freezers’ 

means refrigerators, freezers, or refrigerator-freezers that— 

‘‘(A) are not consumer products regulated under this Act; and 

‘‘(B) incorporate most components involved in the vapor-compression cycle 

and the refrigerated compartment in a single package. 

‘‘(34) The term ‘external power supply’ means an external power supply circuit that is used to convert household electric current into either DC current 

or lower-voltage AC current to operate a consumer product. 

‘‘(35) The term ‘illuminated exit sign’ means a sign that— 

‘‘(A) is designed to be permanently fixed in place to identify an exit; and 

‘‘(B) consists of an electrically powered integral light source that illuminates the legend ‘EXIT’ and any directional indicators and provides contrast 

between the legend, any directional indicators, and the background. 

‘‘(36)(A) Except as provided in subparagraph (B), 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) transformers with multiple voltage taps, with the highest voltage tap 

equaling at least 20 percent more than the lowest voltage tap; 

‘‘(ii) transformers, such as those commonly known as drive transformers, 

rectifier transformers, auto-transformers, Uninterruptible Power System 

transformers, impedance transformers, regulating transformers, sealed and 

nonventilating transformers, machine tool transformers, welding transformers, grounding transformers, or testing transformers, that are designed 

to be used in a special purpose application and are unlikely to be used in 

general purpose applications; 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. 

‘‘(37) 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. 

‘‘(38) The term ‘standby mode’ means the lowest power consumption mode 

that— 

‘‘(A) cannot be switched off or influenced by the user; and 

‘‘(B) may persist for an indefinite time when an appliance is connected 

to the main electricity supply and used in accordance with the manufacturer’s instructions, 

17 

as defined on an individual product basis by the Secretary. 

‘‘(39) The term ‘torchiere’ means a portable electric lamp with a reflector bowl 

that directs light upward so as to give indirect illumination. 

‘‘(40) The term ‘traffic signal module’ means a standard 8-inch (200mm) or 12- 

inch (300mm) traffic signal indication, consisting of a light source, a lens, and 

all other parts necessary for operation, that communicates movement messages 

to drivers through red, amber, and green colors. 

‘‘(41) 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. 

‘‘(42) The term ‘unit heater’ means a self-contained fan-type heater designed 

to be installed within the heated space, except that such term does not include 

a warm air furnace. 

‘‘(43) The term ‘ceiling fan’ means a non-portable device that is suspended 

from a ceiling for circulating air via the rotation of fan blades. 

‘‘(44) The term ‘ceiling fan light kit’ means equipment designed to provide 

light from a ceiling fan which can be— 

‘‘(A) integral, such that the equipment is attached to the ceiling fan prior 

to the time of retail sale; or 

‘‘(B) attachable, such that at the time of retail sale the equipment is not 

physically attached to the ceiling fan, but may be included inside the ceiling 

fan package at the time of sale or sold separately for subsequent attachment to the fan.’’. 

(b) TEST PROCEDURES.—Section 323 of the Energy Policy and Conservation Act 

(42 U.S.C. 6293) is amended— 

(1) in subsection (b), by adding at the end the following: 

‘‘(9) Test procedures for illuminated exit signs shall be based on the test method 

used under Version 2.0 of the Energy Star program of the Environmental Protection 

Agency for illuminated exit signs. 

‘‘(10) 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). The Secretary may review 

and revise this test procedure. For purposes of section 346(a), this test procedure 

shall be deemed to be 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 be technologically feasible and 

economically justified, and would result in significant energy savings. 

‘‘(11) Test procedures for traffic signal modules shall be based on the test method 

used under the Energy Star program of the Environmental Protection Agency for 

traffic signal modules, as in effect on the date of enactment of this paragraph. 

‘‘(12) Test procedures for medium base compact fluorescent lamps shall be based 

on the test methods used under the August 9, 2001, version of the Energy Star program of the Environmental Protection Agency and Department of Energy for compact fluorescent lamps. Covered products shall meet all test requirements for regulated parameters in section 325(bb). However, covered products may be marketed 

prior to completion of lamp life and lumen maintenance at 40 percent of rated life 

testing provided manufacturers document engineering predictions and analysis that 

support expected attainment of lumen maintenance at 40 percent rated life and 

lamp life time. 

‘‘(13) The Secretary shall, not later than 18 months after the date of enactment 

of this paragraph, prescribe testing requirements for ceiling fans and ceiling fan 

light kits.’’; and 

(2) by adding at the end the following: 

‘‘(f) ADDITIONAL CONSUMER AND COMMERCIAL PRODUCTS.—The Secretary shall, 

not later than 24 months after the date of enactment of this subsection, prescribe 

testing requirements for suspended ceiling fans, refrigerated bottled or canned beverage vending machines, and commercial refrigerators, freezers, and refrigeratorfreezers. Such testing requirements shall be based on existing test procedures used 

in industry to the extent practical and reasonable. In the case of suspended ceiling 

fans, such test procedures shall include efficiency at both maximum output and at 

an output no more than 50 percent of the maximum output.’’. 

(c) NEW STANDARDS.—Section 325 of the Energy Policy and Conservation Act (42 

U.S.C. 6295) is amended by adding at the end the following: 

‘‘(u) BATTERY CHARGER AND EXTERNAL POWER SUPPLY ELECTRIC ENERGY CON- SUMPTION.— 

‘‘(1) INITIAL RULEMAKING.—(A) The Secretary shall, within 18 months after 

the date of enactment of this subsection, prescribe by notice and comment, definitions and test procedures for the power use of battery chargers and external 

18 

power supplies. In establishing these test procedures, the Secretary shall consider, among other factors, existing definitions and test procedures used for 

measuring energy consumption in standby mode and other modes and assess 

the current and projected future market for battery chargers and external 

power supplies. This assessment shall include estimates of the significance of 

potential energy savings from technical improvements to these products and 

suggested product classes for standards. Prior to the end of this time period, 

the Secretary shall hold a scoping workshop to discuss and receive comments 

on plans for developing energy conservation standards for energy use for these 

products. 

‘‘(B) The Secretary shall, within 3 years after the date of enactment of this 

subsection, issue a final rule that determines whether energy conservation 

standards shall be issued for battery chargers and external power supplies or 

classes thereof. For each product class, any such standards shall be set at the 

lowest level of energy use that— 

‘‘(i) meets the criteria and procedures of subsections (o), (p), (q), (r), (s), 

and (t); and 

‘‘(ii) will result in significant overall annual energy savings, considering 

both standby mode and other operating modes. 

‘‘(2) REVIEW OF STANDBY ENERGY USE IN COVERED PRODUCTS.—In determining 

pursuant to section 323 whether test procedures and energy conservation standards pursuant to this section should be revised, the Secretary shall consider, for 

covered products that are major sources of standby mode energy consumption, 

whether to incorporate standby mode into such test procedures and energy conservation standards, taking into account, among other relevant factors, standby 

mode power consumption compared to overall product energy consumption. 

‘‘(3) RULEMAKING.—The Secretary shall not propose a standard under this 

section unless the Secretary has issued applicable test procedures for each product pursuant to section 323. 

‘‘(4) EFFECTIVE DATE.—Any standard issued under this subsection shall be applicable to products manufactured or imported 3 years after the date of 

issuance. 

‘‘(5) VOLUNTARY PROGRAMS.—The Secretary and the Administrator shall collaborate and develop programs, including programs pursuant to section 324A 

(relating to Energy Star Programs) and other voluntary industry agreements or 

codes of conduct, that are designed to reduce standby mode energy use. 

‘‘(v) SUSPENDED CEILING FANS, VENDING MACHINES, AND COMMERCIAL REFRIGERATORS, FREEZERS, AND REFRIGERATOR-FREEZERS.—The Secretary shall not later 

than 36 months after the date on which testing requirements are prescribed by the 

Secretary pursuant to section 323(f), prescribe, by rule, energy conservation standards for suspended ceiling fans, refrigerated bottled or canned beverage vending machines, and commercial refrigerators, freezers, and refrigerator-freezers. In establishing standards under this subsection, the Secretary shall use the criteria and procedures contained in subsections (o) and (p). Any standard prescribed under this 

subsection shall apply to products manufactured 3 years after the date of publication of a final rule establishing such standard. 

‘‘(w) ILLUMINATED EXIT SIGNS.—Illuminated exit signs manufactured on or after 

January 1, 2006, shall meet the Version 2.0 Energy Star Program performance requirements for illuminated exit signs prescribed by the Environmental Protection 

Agency. 

‘‘(x) TORCHIERES.—Torchieres manufactured on or after January 1, 2006— 

‘‘(1) shall consume not more than 190 watts of power; and 

‘‘(2) shall not be capable of operating with lamps that total more than 190 

watts. 

‘‘(y) LOW VOLTAGE DRY-TYPE DISTRIBUTION TRANSFORMERS.—The efficiency of low 

voltage dry-type distribution transformers 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). 

‘‘(z) TRAFFIC SIGNAL MODULES.—Traffic signal modules manufactured on or after 

January 1, 2006, shall meet the performance requirements used under the Energy 

Star program of the Environmental Protection Agency for traffic signals, as in effect 

on the date of enactment of this subsection, and shall be installed with compatible, 

electrically connected signal control interface devices and conflict monitoring systems. 

‘‘(aa) UNIT HEATERS.—Unit heaters manufactured on or after the date that is 3 

years after the date of enactment of this subsection shall be equipped with an interVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00018 Fmt 6659 Sfmt 6621 E:\HR\OC\HR215P1.XXX HR215P1
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mittent ignition device and shall have either power venting or an automatic flue 

damper. 

‘‘(bb) MEDIUM BASE COMPACT FLUORESCENT LAMPS.—Bare lamp and covered lamp 

(no reflector) medium base compact fluorescent lamps 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: minimum initial 

efficacy; lumen maintenance at 1000 hours; lumen maintenance at 40 percent of 

rated life; rapid cycle stress test; and lamp life. 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. The Secretary may, by rule, revise these requirements or establish other requirements considering energy savings, cost effectiveness, and consumer satisfaction. 

‘‘(cc) EFFECTIVE DATE.—Section 327 shall apply— 

‘‘(1) to products for which standards are to be established under subsections 

(u) and (v) on the date on which a final rule is issued by the Department of 

Energy, except that any State or local standards prescribed or enacted for any 

such product prior to the date on which such final rule is issued shall not be 

preempted until the standard established under subsection (u) or (v) for that 

product takes effect; and 

‘‘(2) to products for which standards are established under subsections (w) 

through (bb) on the date of enactment of those subsections, except that any 

State or local standards prescribed or enacted prior to the date of enactment 

of those subsections shall not be preempted until the standards established 

under subsections (w) through (bb) take effect. 

‘‘(dd) CEILING FANS.— 

‘‘(1) FEATURES.—All ceiling fans manufactured on or after January 1, 2006, 

shall have the following features: 

‘‘(A) Lighting controls operate independently from fan speed controls. 

‘‘(B) Adjustable speed controls (either more than 1 speed or variable 

speed). 

‘‘(C) The capability of reversible fan action, except for fans sold for industrial applications, outdoor applications, and where safety standards would 

be violated by the use of the reversible mode. The Secretary may promulgate regulations to define in greater detail the exceptions provided under 

this subparagraph but may not substantively expand the exceptions. 

‘‘(2) REVISED STANDARDS.— 

‘‘(A) IN GENERAL.—Notwithstanding any provision of this Act, if the requirements of subsections (o) and (p) are met, the Secretary may consider 

and prescribe energy efficiency or energy use standards for electricity used 

by ceiling fans to circulate air in a room. 

‘‘(B) SPECIAL CONSIDERATION.—If the Secretary sets such standards, the 

Secretary shall consider— 

‘‘(i) exempting or setting different standards for certain product classes for which the primary standards are not technically feasible or economically justified; and 

‘‘(ii) establishing separate exempted product classes for highly decorative fans for which air movement performance is a secondary design 

feature. 

‘‘(C) APPLICATION.—Any air movement standard prescribed under this 

subsection shall apply to products manufactured on or after the date that 

is 3 years after the date of publication of a final rule establishing the standard.’’. 

(d) RESIDENTIAL FURNACE FANS.—Section 325(f)(3) of the Energy Policy and Conservation Act (42 U.S.C. 6295(f)(3)) is amended by adding the following new subparagraph at the end: 

‘‘(D) Notwithstanding any provision of this Act, the Secretary may consider, and 

prescribe, if the requirements of subsection (o) of this section are met, energy efficiency or energy use standards for electricity used for purposes of circulating air 

through duct work.’’. 

SEC. 134. ENERGY LABELING. 

(a) RULEMAKING ON EFFECTIVENESS OF CONSUMER PRODUCT LABELING.—Section 

324(a)(2) of the Energy Policy and Conservation Act (42 U.S.C. 6294(a)(2)) is amended by adding at the end the following: 

20 

‘‘(F) Not later than 3 months after the date of enactment of this subparagraph, 

the Commission shall initiate a rulemaking to consider the effectiveness of the current consumer products labeling program in assisting consumers in making purchasing decisions and improving energy efficiency and to consider changes to the labeling rules that would improve the effectiveness of consumer product labels. Such 

rulemaking shall be completed not later than 2 years after the date of enactment 

of this subparagraph. 

‘‘(G)(i) Not later than 18 months after date of enactment of this subparagraph, the 

Commission shall prescribe by rule, pursuant to this section, labeling requirements 

for the electricity used by ceiling fans to circulate air in a room. 

‘‘(ii) The rule prescribed under clause (i) shall apply to products manufactured 

after the later of— 

‘‘(I) January 1, 2009; or 

‘‘(II) the date that is 60 days after the final rule is prescribed.’’. 

(b) RULEMAKING ON LABELING FOR ADDITIONAL PRODUCTS.—Section 324(a) of the 

Energy Policy and Conservation Act (42 U.S.C. 6294(a)) is further amended by adding at the end the following: 

‘‘(5) The Secretary or the Commission, as appropriate, may, for covered products 

referred to in subsections (u) through (aa) of section 325, prescribe, by rule, pursuant to this section, labeling requirements for such products after a test procedure 

has been set pursuant to section 323. 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 upon the date 

of enactment of this paragraph.’’. 

SEC. 135. PREEMPTION. 

Section 327 of the Energy Policy and Conservation Act (42 U.S.C. 6297) is amended by adding at the end the following: 

‘‘(h) CEILING FANS.—Effective on January 1, 2006, this section shall apply to and 

supersede all State and local standards prescribed or enacted for ceiling fans and 

ceiling fan light kits.’’. 

SEC. 136. STATE CONSUMER PRODUCT ENERGY EFFICIENCY STANDARDS. 

Section 327 of the Energy Policy and Conservation Act (42 U.S.C. 6297) is amended by adding at the end the following new subsection: 

‘‘(h) LIMITATION ON PREEMPTION.—Subsections (a) and (b) shall not apply with respect to State regulation of energy consumption or water use of any covered product 

during any period of time— 

‘‘(1) after the date which is 3 years after a Federal standard is required by 

law to be established or revised, but has not been established or revised; and 

‘‘(2) before the date on which such Federal standard is established or revised.’’. 

Subtitle D—Public Housing 

SEC. 145. GRANTS FOR ENERGY-CONSERVING IMPROVEMENTS FOR ASSISTED HOUSING. 

Section 251(b)(1) of the National Energy Conservation Policy Act (42 U.S.C. 

8231(1)) is amended— 

(1) by striking ‘‘financed with loans’’ and inserting ‘‘assisted’’; 

(2) by inserting after ‘‘1959,’’ the following: ‘‘which are eligible multifamily 

housing projects (as such term is defined in section 512 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note)) and 

are subject to mortgage restructuring and rental assistance sufficiency plans 

under such Act,’’; and 

(3) by inserting after the period at the end of the first sentence the following 

new sentence: ‘‘Such improvements may also include the installation of energy 

and water conserving 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.’’. 

SEC. 147. ENERGY-EFFICIENT APPLIANCES. 

In purchasing appliances, a public housing agency shall purchase energy-efficient 

appliances that are Energy Star products or FEMP-designated products, as such 

terms are defined in section 553 of the National Energy Conservation Policy Act (as 

amended by this title), unless the purchase of energy-efficient appliances is not costeffective to the agency. 

21 

SEC. 149. ENERGY STRATEGY FOR HUD. 

The Secretary of Housing and Urban Development shall develop and implement 

an integrated strategy to reduce utility expenses through cost-effective energy conservation and efficiency measures and energy efficient design and construction of 

public and assisted housing. The energy strategy shall include the development of 

energy reduction goals and incentives for public housing agencies. The Secretary 

shall submit a report to Congress, not later than 1 year after the date of the enactment of this Act, on the energy strategy and the actions taken by the Department 

of Housing and Urban Development to monitor the energy usage of public housing 

agencies and shall submit an update every 2 years thereafter on progress in implementing the strategy. 

TITLE II—RENEWABLE ENERGY 

Subtitle A—General Provisions 

SEC. 201. ASSESSMENT OF RENEWABLE ENERGY RESOURCES. 

(a) RESOURCE ASSESSMENT.—Not later than 6 months after the date of enactment 

of this Act, and each year thereafter, the Secretary of Energy shall review the available assessments of renewable energy resources within the United States, including 

solar, wind, biomass, ocean (tidal, wave, current, and thermal), geothermal, and hydroelectric energy resources, and undertake new assessments as necessary, taking 

into account changes in market conditions, available technologies, and other relevant factors. 

(b) CONTENTS OF REPORTS.—Not later than 1 year after the date of enactment of 

this Act, and each year thereafter, the Secretary shall publish a report based on the 

assessment under subsection (a). The report shall contain— 

(1) a detailed inventory describing the available amount and characteristics 

of the renewable energy resources; and 

(2) such other information as the Secretary believes would be useful in developing such renewable energy resources, including descriptions of surrounding 

terrain, population and load centers, nearby energy infrastructure, location of 

energy and water resources, and available estimates of the costs needed to develop each resource, together with an identification of any barriers to providing 

adequate transmission for remote sources of renewable energy resources to current and emerging markets, recommendations for removing or addressing such 

barriers, and ways to provide access to the grid that do not unfairly disadvantage renewable or other energy producers. 

(c) AUTHORIZATION OF APPROPRIATIONS.—For the purposes of this section, there 

are authorized to be appropriated to the Secretary of Energy $10,000,000 for each 

of fiscal years 2006 through 2010. 

SEC. 202. RENEWABLE ENERGY PRODUCTION INCENTIVE. 

(a) INCENTIVE PAYMENTS.—Section 1212(a) of the Energy Policy Act of 1992 (42 

U.S.C. 13317(a)) is amended by striking ‘‘and which satisfies’’ and all that follows 

through ‘‘Secretary shall establish.’’ and inserting ‘‘. If there are insufficient appropriations to make full payments for electric production from all qualified renewable 

energy facilities in any given year, the Secretary shall assign 60 percent of appropriated funds for that year to facilities that use solar, wind, geothermal, or closedloop (dedicated energy crops) biomass technologies to generate electricity, and assign 

the remaining 40 percent to other projects. The Secretary may, after transmitting 

to Congress an explanation of the reasons therefor, alter the percentage requirements of the preceding sentence.’’. 

(b) QUALIFIED RENEWABLE ENERGY FACILITY.—Section 1212(b) of the Energy Policy Act of 1992 (42 U.S.C. 13317(b)) is amended— 

(1) by striking ‘‘a State or any political’’ and all that follows through ‘‘nonprofit electrical cooperative’’ and inserting ‘‘a not-for-profit electric cooperative, 

a public utility described in section 115 of the Internal Revenue Code of 1986, 

a State, Commonwealth, territory, or possession of the United States or the District of Columbia, or a political subdivision thereof, or an Indian tribal government or subdivision thereof,’’; and 

(2) by inserting ‘‘landfill gas, livestock methane, ocean (tidal, wave, current, 

and thermal),’’ after ‘‘wind, biomass,’’. 

(c) ELIGIBILITY WINDOW.—Section 1212(c) of the Energy Policy Act of 1992 (42 

U.S.C. 13317(c)) is amended by striking ‘‘during the 10-fiscal year period beginning 

with the first full fiscal year occurring after the enactment of this section’’ and inserting ‘‘after October 1, 2005, and before October 1, 2015’’. 

22 

(d) AMOUNT OF PAYMENT.—Section 1212(e)(1) of the Energy Policy Act of 1992 (42 

U.S.C. 13317(e)(1)) is amended by inserting ‘‘landfill gas, livestock methane, ocean 

(tidal, wave, current, and thermal),’’ after ‘‘wind, biomass,’’. 

(e) SUNSET.—Section 1212(f) of the Energy Policy Act of 1992 (42 U.S.C. 13317(f)) 

is amended by striking ‘‘the expiration of’’ and all that follows through ‘‘of this section’’ and inserting ‘‘September 30, 2025’’. 

(f) AUTHORIZATION OF APPROPRIATIONS.—Section 1212(g) of the Energy Policy Act 

of 1992 (42 U.S.C. 13317(g)) is amended to read as follows: 

‘‘(g) AUTHORIZATION OF APPROPRIATIONS.— ‘‘(1) IN GENERAL.—Subject to paragraph (2), there are authorized to be appropriated such sums as may be necessary to carry out this section for fiscal years 

2005 through 2025. 

‘‘(2) AVAILABILITY OF FUNDS.—Funds made available under paragraph (1) 

shall remain available until expended.’’. 

SEC. 203. FEDERAL PURCHASE REQUIREMENT. 

(a) REQUIREMENT.—The President, acting through the Secretary of Energy, shall 

seek to ensure that, to the extent economically feasible and technically practicable, 

of the total amount of electric energy the Federal Government consumes during any 

fiscal year, the following amounts shall be renewable energy: 

(1) Not less than 3 percent in fiscal years 2007 through 2009. 

(2) Not less than 5 percent in fiscal years 2010 through 2012. 

(3) Not less than 7.5 percent in fiscal year 2013 and each fiscal year thereafter. 

(b) DEFINITIONS.—In this section: 

(1) BIOMASS.—The term ‘‘biomass’’ means any solid, nonhazardous, cellulosic 

material that is derived from— 

(A) any of the following forest-related resources: mill residues, 

precommercial thinnings, slash, and brush, or nonmerchantable material; 

(B) solid wood waste materials, including waste pallets, crates, dunnage, 

manufacturing and construction wood wastes (other than pressure-treated, 

chemically-treated, or painted wood wastes), and landscape or right-of-way 

tree trimmings, but not including municipal solid waste (garbage), gas derived from the biodegradation of solid waste, or paper that is commonly recycled; 

(C) agriculture wastes, including orchard tree crops, vineyard, grain, legumes, sugar, and other crop by-products or residues, and livestock waste 

nutrients; or 

(D) a plant that is grown exclusively as a fuel for the production of electricity. 

(2) RENEWABLE ENERGY.—The term ‘‘renewable energy’’ means electric energy 

generated from solar, wind, biomass, landfill gas, ocean (tidal, wave, current, 

and thermal), geothermal, municipal solid waste, or new hydroelectric generation capacity achieved from increased efficiency or additions of new capacity at 

an existing hydroelectric project. 

(c) CALCULATION.—For purposes of determining compliance with the requirement 

of this section, the amount of renewable energy shall be doubled if— 

(1) the renewable energy is produced and used on-site at a Federal facility; 

(2) the renewable energy is produced on Federal lands and used at a Federal 

facility; or 

(3) the renewable energy is produced on Indian land as defined in title XXVI 

of the Energy Policy Act of 1992 (25 U.S.C. 3501 et. seq.) and used at a Federal 

facility. 

(d) REPORT.—Not later than April 15, 2007, and every 2 years thereafter, the Secretary of Energy shall provide a report to Congress on the progress of the Federal 

Government in meeting the goals established by this section. 

SEC. 204. INSULAR AREAS ENERGY SECURITY. 

Section 604 of the Act entitled ‘‘An Act to authorize appropriations for certain insular areas of the United States, and for other purposes’’, approved December 24, 

1980 (48 U.S.C. 1492), is amended— 

(1) in subsection (a)(4) by striking the period and inserting a semicolon; 

(2) by adding at the end of subsection (a) the following new paragraphs: 

‘‘(5) electric power transmission and distribution lines in insular areas are inadequate to withstand damage caused by the hurricanes and typhoons which 

frequently occur in insular areas and such damage often costs millions of dollars 

to repair; and 

‘‘(6) the refinement of renewable energy technologies since the publication of 

the 1982 Territorial Energy Assessment prepared pursuant to subsection (c) reveals the need to reassess the state of energy production, consumption, infraVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00022 Fmt 6659 Sfmt 6621 E:\HR\OC\HR215P1.XXX HR215P1
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structure, reliance on imported energy, opportunities for energy conservation 

and increased energy efficiency, and indigenous sources in regard to the insular 

areas.’’; 

(3) by amending subsection (e) to read as follows: 

‘‘(e)(1) The Secretary of the Interior, in consultation with the Secretary of Energy 

and the head of government of each insular area, shall update the plans required 

under subsection (c) by— 

‘‘(A) updating the contents required by subsection (c); 

‘‘(B) drafting long-term energy plans for such insular areas with the objective 

of reducing, to the extent feasible, their reliance on energy imports by the year 

2012, increasing energy conservation and energy efficiency, and maximizing, to 

the extent feasible, use of indigenous energy sources; and 

‘‘(C) drafting long-term energy transmission line plans for such insular areas 

with the objective that the maximum percentage feasible of electric power 

transmission and distribution lines in each insular area be protected from damage caused by hurricanes and typhoons. 

‘‘(2) Not later than December 31, 2007, the Secretary of the Interior shall submit 

to Congress the updated plans for each insular area required by this subsection.’’; 

and 

(4) by amending subsection (g)(4) to read as follows: 

‘‘(4) POWER LINE GRANTS FOR INSULAR AREAS.— 

‘‘(A) IN GENERAL.—The Secretary of the Interior is authorized to make 

grants to governments of insular areas of the United States to carry out eligible projects to protect electric power transmission and distribution lines 

in such insular areas from damage caused by hurricanes and typhoons. 

‘‘(B) ELIGIBLE PROJECTS.—The Secretary may award grants under subparagraph (A) only to governments of insular areas of the United States 

that submit written project plans to the Secretary for projects that meet the 

following criteria: 

‘‘(i) The project is designed to protect electric power transmission and 

distribution lines located in 1 or more of the insular areas of the United 

States from damage caused by hurricanes and typhoons. 

‘‘(ii) The project is likely to substantially reduce the risk of future 

damage, hardship, loss, or suffering. 

‘‘(iii) The project addresses 1 or more problems that have been repetitive or that pose a significant risk to public health and safety. 

‘‘(iv) The project is not likely to cost more than the value of the reduction in direct damage and other negative impacts that the project 

is designed to prevent or mitigate. The cost benefit analysis required 

by this criterion shall be computed on a net present value basis. 

‘‘(v) The project design has taken into consideration long-term 

changes to the areas and persons it is designed to protect and has manageable future maintenance and modification requirements. 

‘‘(vi) The project plan includes an analysis of a range of options to 

address the problem it is designed to prevent or mitigate and a justification for the selection of the project in light of that analysis. 

‘‘(vii) The applicant has demonstrated to the Secretary that the 

matching funds required by subparagraph (D) are available. 

‘‘(C) PRIORITY.—When making grants under this paragraph, the Secretary 

shall give priority to grants for projects which are likely to— 

‘‘(i) have the greatest impact on reducing future disaster losses; and 

‘‘(ii) best conform with plans that have been approved by the Federal 

Government or the government of the insular area where the project 

is to be carried out for development or hazard mitigation for that insular area. 

‘‘(D) MATCHING REQUIREMENT.—The Federal share of the cost for a 

project for which a grant is provided under this paragraph shall not exceed 

75 percent of the total cost of that project. The non-Federal share of the 

cost may be provided in the form of cash or services. 

‘‘(E) TREATMENT OF FUNDS FOR CERTAIN PURPOSES.—Grants provided 

under this paragraph shall not be considered as income, a resource, or a 

duplicative program when determining eligibility or benefit levels for Federal major disaster and emergency assistance. 

‘‘(F) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to carry out this paragraph $5,000,000 for each fiscal year beginning after the date of the enactment of this paragraph.’’. 

24 

SEC. 205. USE OF PHOTOVOLTAIC ENERGY IN PUBLIC BUILDINGS. 

(a) IN GENERAL.—Part 4 of title V of the National Energy Conservation Policy Act 

(42 U.S.C. 8271 et seq.) is amended by adding at the end the following: 

‘‘SEC. 570. USE OF PHOTOVOLTAIC ENERGY IN PUBLIC BUILDINGS. 

‘‘(a) PHOTOVOLTAIC ENERGY COMMERCIALIZATION PROGRAM.— 

‘‘(1) IN GENERAL.—The Secretary may establish a photovoltaic energy commercialization program for the procurement and installation of photovoltaic solar 

electric systems for electric production in new and existing public buildings. 

‘‘(2) PURPOSES.—The purposes of the program shall be to accomplish the following: 

‘‘(A) To accelerate the growth of a commercially viable photovoltaic industry to make this energy system available to the general public as an option 

which can reduce the national consumption of fossil fuel. 

‘‘(B) To reduce the fossil fuel consumption and costs of the Federal Government. 

‘‘(C) To attain the goal of installing solar energy systems in 20,000 Federal buildings by 2010, as contained in the Federal Government’s Million 

Solar Roof Initiative of 1997. 

‘‘(D) To stimulate the general use within the Federal Government of lifecycle costing and innovative procurement methods. 

‘‘(E) To develop program performance data to support policy decisions on 

future incentive programs with respect to energy. 

‘‘(3) ACQUISITION OF PHOTOVOLTAIC SOLAR ELECTRIC SYSTEMS.— 

‘‘(A) IN GENERAL.—The program shall provide for the acquisition of photovoltaic solar electric systems and associated storage capability for use in 

public buildings. 

‘‘(B) ACQUISITION LEVELS.—The acquisition of photovoltaic electric systems shall be at a level substantial enough to allow use of low-cost production techniques with at least 150 megawatts (peak) cumulative acquired 

during the 5 years of the program. 

‘‘(4) ADMINISTRATION.—The Secretary shall administer the program and 

shall— 

‘‘(A) issue such rules and regulations as may be appropriate to monitor 

and assess the performance and operation of photovoltaic solar electric systems installed pursuant to this subsection; 

‘‘(B) develop innovative procurement strategies for the acquisition of such 

systems; and 

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

‘‘(b) PHOTOVOLTAIC SYSTEMS EVALUATION PROGRAM.— 

‘‘(1) IN GENERAL.—Not later than 60 days after the date of enactment of this 

section, the Secretary shall establish a photovoltaic solar energy systems evaluation program to evaluate such photovoltaic solar energy systems as are required in public buildings. 

‘‘(2) PROGRAM REQUIREMENT.—In evaluating photovoltaic solar energy systems 

under the program, the Secretary shall ensure that such systems reflect the 

most advanced technology. 

‘‘(c) AUTHORIZATION OF APPROPRIATIONS.— 

‘‘(1) PHOTOVOLTAIC ENERGY COMMERCIALIZATION PROGRAM.—There are authorized to be appropriated to carry out subsection (a) $50,000,000 for each of fiscal 

years 2006 through 2010. Such sums shall remain available until expended. 

‘‘(2) PHOTOVOLTAIC SYSTEMS EVALUATION PROGRAM.—There are authorized to 

be appropriated to carry out subsection (b) $10,000,000 for each of fiscal years 

2006 through 2010. Such sums shall remain available until expended.’’. 

(b) CONFORMING AMENDMENT.—The table of sections for the National Energy Conservation Policy Act is amended by inserting after the item relating to section 569 

the following: 

‘‘Sec. 570. Use of photovoltaic energy in public buildings.’’. 

SEC. 206. GRANTS TO IMPROVE THE COMMERCIAL VALUE OF FOREST BIOMASS FOR ELECTRIC ENERGY, USEFUL HEAT, TRANSPORTATION FUELS, PETROLEUM-BASED 

PRODUCT SUBSTITUTES, AND OTHER COMMERCIAL PURPOSES. 

(a) FINDINGS.—Congress finds the following: 

(1) Thousands of communities in the United States, many located near Federal lands, are at risk to wildfire. Approximately 190,000,000 acres of land managed by the Secretary of Agriculture and the Secretary of the Interior are at 

risk of catastrophic fire in the near future. The accumulation of heavy forest 

fuel loads continues to increase as a result of disease, insect infestations, and 

drought, further raising the risk of fire each year. 

25 

(2) In addition, more than 70,000,000 acres across all land ownerships are at 

risk to higher than normal mortality over the next 15 years from insect infestation and disease. High levels of tree mortality from insects and disease result 

in increased fire risk, loss of old growth, degraded watershed conditions, and 

changes in species diversity and productivity, as well as diminished fish and 

wildlife habitat and decreased timber values. 

(3) Preventive treatments such as removing fuel loading, ladder fuels, and 

hazard trees, planting proper species mix and restoring and protecting early 

successional habitat, and other specific restoration treatments designed to reduce the susceptibility of forest land, woodland, and rangeland to insect outbreaks, disease, and catastrophic fire present the greatest opportunity for longterm forest health by creating a mosaic of species-mix and age distribution. 

Such prevention treatments are widely acknowledged to be more successful and 

cost effective than suppression treatments in the case of insects, disease, and 

fire. 

(4) The byproducts of preventive treatment (wood, brush, thinnings, chips, 

slash, and other hazardous fuels) removed from forest lands, woodlands and 

rangelands represent an abundant supply of biomass for biomass-to-energy facilities and raw material for business. There are currently few markets for the 

extraordinary volumes of byproducts being generated as a result of the necessary large-scale preventive treatment activities. 

(5) The United States should— 

(A) promote economic and entrepreneurial opportunities in using byproducts removed through preventive treatment activities related to hazardous 

fuels reduction, disease, and insect infestation; and 

(B) develop and expand markets for traditionally underused wood and 

biomass as an outlet for byproducts of preventive treatment activities. 

(b) DEFINITIONS.—In this section: 

(1) BIOMASS.—The term ‘‘biomass’’ means trees and woody plants, including 

limbs, tops, needles, and other woody parts, and byproducts of preventive treatment, such as wood, brush, thinnings, chips, and slash, that are removed— 

(A) to reduce hazardous fuels; or 

(B) to reduce the risk of or to contain disease or insect infestation. 

(2) INDIAN TRIBE.—The term ‘‘Indian tribe’’ has the meaning given the term 

in section 4(e) of the Indian Self-Determination and Education Assistance Act 

(25 U.S.C. 450b(e)). 

(3) PERSON.—The term ‘‘person’’ includes— 

(A) an individual; 

(B) a community (as determined by the Secretary concerned); 

(C) an Indian tribe; 

(D) a small business, micro-business, or a corporation that is incorporated 

in the United States; and 

(E) a nonprofit organization. 

(4) PREFERRED COMMUNITY.—The term ‘‘preferred community’’ means— 

(A) any town, township, municipality, or other similar unit of local government (as determined by the Secretary concerned) that— 

(i) has a population of not more than 50,000 individuals; and 

(ii) the Secretary concerned, in the sole discretion of the Secretary 

concerned, determines contains or is located near land, the condition of 

which is at significant risk of catastrophic wildfire, disease, or insect 

infestation or which suffers from disease or insect infestation; or 

(B) any county that— 

(i) is not contained within a metropolitan statistical area; and 

(ii) the Secretary concerned, in the sole discretion of the Secretary 

concerned, determines contains or is located near land, the condition of 

which is at significant risk of catastrophic wildfire, disease, or insect 

infestation or which suffers from disease or insect infestation. 

(5) SECRETARY CONCERNED.—The term ‘‘Secretary concerned’’ means— 

(A) the Secretary of Agriculture with respect to National Forest System 

lands; and 

(B) the Secretary of the Interior with respect to Federal lands under the 

jurisdiction of the Secretary of the Interior and Indian lands. 

(c) BIOMASS COMMERCIAL USE GRANT PROGRAM.— 

(1) IN GENERAL.—The Secretary concerned may make grants to any person 

that owns or operates a facility that uses biomass as a raw material to produce 

electric energy, sensible heat, transportation fuels, or substitutes for petroleumbased products to offset the costs incurred to purchase biomass for use by such 

facility. 

26 

(2) GRANT AMOUNTS.—A grant under this subsection may not exceed $20 per 

green ton of biomass delivered. 

(3) MONITORING OF GRANT RECIPIENT ACTIVITIES.—As a condition of a grant 

under this subsection, the grant recipient shall keep such records as the Secretary concerned may require to fully and correctly disclose the use of the grant 

funds and all transactions involved in the purchase of biomass. Upon notice by 

a representative of the Secretary concerned, the grant recipient shall afford the 

representative reasonable access to the facility that purchases or uses biomass 

and an opportunity to examine the inventory and records of the facility. 

(d) IMPROVED BIOMASS USE GRANT PROGRAM.— (1) IN GENERAL.—The Secretary concerned may make grants to persons to offset the cost of projects to develop or research opportunities to improve the use 

of, or add value to, biomass. In making such grants, the Secretary concerned 

shall give preference to persons in preferred communities. 

(2) SELECTION.—The Secretary concerned shall select a grant recipient under 

paragraph (1) after giving consideration to the anticipated public benefits of the 

project, including the potential to develop thermal or electric energy resources 

or affordable energy, opportunities for the creation or expansion of small businesses and micro-businesses, and the potential for new job creation. 

(3) GRANT AMOUNT.—A grant under this subsection may not exceed $500,000. 

(e) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated $50,000,000 for each of the fiscal years 2006 through 2016 to carry out this section. 

(f) REPORT.—Not later than October 1, 2012, the Secretary of Agriculture, in consultation with the Secretary of the Interior, shall submit to the Committee on Energy and Natural Resources and the Committee on Agriculture, Nutrition, and Forestry of the Senate and the Committee on Resources, the Committee on Energy and 

Commerce, and the Committee on Agriculture of the House of Representatives a report describing the results of the grant programs authorized by this section. The report shall include the following: 

(1) An identification of the size, type, and the use of biomass by persons that 

receive grants under this section. 

(2) The distance between the land from which the biomass was removed and 

the facility that used the biomass. 

(3) The economic impacts, particularly new job creation, resulting from the 

grants to and operation of the eligible operations. 

SEC. 207. BIOBASED PRODUCTS. 

Section 9002(c)(1) of the Farm Security and Rural Investment Act of 2002 (7 

U.S.C. 8102(c)(1)) is amended by inserting ‘‘or such items that comply with the regulations issued under section 103 of Public Law 100–556 (42 U.S.C. 6914b–1)’’ after 

‘‘practicable’’. 

SEC. 208. RENEWABLE ENERGY SECURITY. 

(a) WEATHERIZATION ASSISTANCE.—Section 415(c) of the Energy Conservation and 

Production Act (42 U.S.C. 6865(c)) is amended— 

(1) in paragraph (1), by striking ‘‘in paragraph (3)’’ and inserting ‘‘in paragraphs (3) and (4)’’; 

(2) in paragraph (3), by striking ‘‘$2,500 per dwelling unit average provided 

in paragraph (1)’’ and inserting ‘‘dwelling unit averages provided in paragraphs 

(1) and (4)’’; and 

(3) by adding at the end the following new paragraphs: 

‘‘(4) The expenditure of financial assistance provided under this part for labor, 

weatherization materials, and related matters for a renewable energy system shall 

not exceed an average of $3,000 per dwelling unit. 

‘‘(5)(A) The Secretary shall by regulations— 

‘‘(i) establish the criteria which are to be used in prescribing performance and 

quality standards under paragraph (6)(A)(ii) or in specifying any form of renewable energy under paragraph (6)(A)(i)(I); and 

‘‘(ii) establish a procedure under which a manufacturer of an item may request the Secretary to certify that the item will be treated, for purposes of this 

paragraph, as a renewable energy system. 

‘‘(B) The Secretary shall make a final determination with respect to any request 

filed under subparagraph (A)(ii) within 1 year after the filing of the request, together with any information required to be filed with such request under subparagraph (A)(ii). 

‘‘(C) Each month the Secretary shall publish a report of any request under subparagraph (A)(ii) which has been denied during the preceding month and the reasons for the denial. 

‘‘(D) The Secretary shall not specify any form of renewable energy under paragraph (6)(A)(i)(I) unless the Secretary determines that— 

27 

‘‘(i) there will be a reduction in oil or natural gas consumption as a result of 

such specification; 

‘‘(ii) such specification will not result in an increased use of any item which 

is known to be, or reasonably suspected to be, environmentally hazardous or a 

threat to public health or safety; and 

‘‘(iii) available Federal subsidies do not make such specification unnecessary 

or inappropriate (in the light of the most advantageous allocation of economic 

resources). 

‘‘(6) In this subsection— 

‘‘(A) the term ‘renewable energy system’ means a system which— 

‘‘(i) when installed in connection with a dwelling, transmits or uses— 

‘‘(I) solar energy, energy derived from the geothermal deposits, energy derived from biomass, or any other form of renewable energy 

which the Secretary specifies by regulations, for the purpose of heating 

or cooling such dwelling or providing hot water or electricity for use 

within such dwelling; or 

‘‘(II) wind energy for nonbusiness residential purposes; 

‘‘(ii) meets the performance and quality standards (if any) which have 

been prescribed by the Secretary by regulations; 

‘‘(iii) in the case of a combustion rated system, has a thermal efficiency 

rating of at least 75 percent; and 

‘‘(iv) in the case of a solar system, has a thermal efficiency rating of at 

least 15 percent; and 

‘‘(B) the term ‘biomass’ means any organic matter that is available on a renewable or recurring basis, including agricultural crops and trees, wood and 

wood wastes and residues, plants (including aquatic plants), grasses, residues, 

fibers, and animal wastes, municipal wastes, and other waste materials.’’. 

(b) DISTRICT HEATING AND COOLING PROGRAMS.—Section 172 of the Energy Policy 

Act of 1992 (42 U.S.C. 13451 note) is amended— 

(1) in subsection (a)— 

(A) by striking ‘‘and’’ at the end of paragraph (3); 

(B) by striking the period at the end of paragraph (4) and inserting ‘‘; 

and’’; and 

(C) by adding at the end the following new paragraph: 

‘‘(5) evaluate the use of renewable energy systems (as such term is defined 

in section 415(c) of the Energy Conservation and Production Act (42 U.S.C. 

6865(c))) in residential buildings.’’; and 

(2) in subsection (b), by striking ‘‘this Act’’ and inserting ‘‘the Energy Policy 

Act of 2005’’. 

(c) DEFINITION OF BIOMASS.—Section 203(2) of the Biomass Energy and Alcohol 

Fuels Act of 1980 (42 U.S.C. 8802(2)) is amended to read as follows: 

‘‘(2) The term ‘biomass’ means any organic matter that is available on a renewable or recurring basis, including agricultural crops and trees, wood and 

wood wastes and residues, plants (including aquatic plants), grasses, residues, 

fibers, and animal wastes, municipal wastes, and other waste materials.’’. 

(d) REBATE PROGRAM.— 

(1) ESTABLISHMENT.—The Secretary of Energy shall establish a program providing rebates for consumers for expenditures made for the installation of a renewable energy system in connection with a dwelling unit or small business. 

(2) AMOUNT OF REBATE.—Rebates provided under the program established 

under paragraph (1) shall be in an amount not to exceed the lesser of— 

(A) 25 percent of the expenditures described in paragraph (1) made by the 

consumer; or 

(B) $3,000. 

(3) DEFINITION.—For purposes of this subsection, the term ‘‘renewable energy 

system’’ has the meaning given that term in section 415(c)(6)(A) of the Energy 

Conservation and Production Act (42 U.S.C. 6865(c)(6)(A)), as added by subsection (a)(3) of this section. 

(4) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to the Secretary of Energy for carrying out this subsection, to remain 

available until expended— 

(A) $150,000,000 for fiscal year 2006; 

(B) $150,000,000 for fiscal year 2007; 

(C) $200,000,000 for fiscal year 2008; 

(D) $250,000,000 for fiscal year 2009; and 

(E) $250,000,000 for fiscal year 2010. 

(e) RENEWABLE FUEL INVENTORY.—Not later than 180 days after the date of enactment of this Act, the Secretary of Energy shall transmit to Congress a report containing— 

28 

(1) an inventory of renewable fuels available for consumers; and 

(2) a projection of future inventories of renewable fuels based on the incentives provided in this section 

Subtitle C—Hydroelectric 

PART I—ALTERNATIVE CONDITIONS 

SEC. 231. ALTERNATIVE CONDITIONS AND FISHWAYS. 

(a) FEDERAL RESERVATIONS.—Section 4(e) of the Federal Power Act (16 U.S.C. 

797(e)) is amended by inserting after ‘‘adequate protection and utilization of such 

reservation.’’ at the end of the first proviso the following: ‘‘The license applicant 

shall be entitled to a determination on the record, after opportunity for an expedited 

agency trial-type hearing of any disputed issues of material fact, with respect to 

such conditions. Such hearing may be conducted in accordance with procedures established by agency regulation in consultation with the Federal Energy Regulatory 

Commission.’’. 

(b) FISHWAYS.—Section 18 of the Federal Power Act (16 U.S.C. 811) is amended 

by inserting after ‘‘and such fishways as may be prescribed by the Secretary of Commerce.’’ the following: ‘‘The license applicant shall be entitled to a determination on 

the record, after opportunity for an expedited agency trial-type hearing of any disputed issues of material fact, with respect to such fishways. Such hearing may be 

conducted in accordance with procedures established by agency regulation in consultation with the Federal Energy Regulatory Commission.’’. 

(c) ALTERNATIVE CONDITIONS AND PRESCRIPTIONS.—Part I of the Federal Power 

Act (16 U.S.C. 791a et seq.) is amended by adding the following new section at the 

end thereof: 

‘‘SEC. 33. ALTERNATIVE CONDITIONS AND PRESCRIPTIONS. 

‘‘(a) ALTERNATIVE CONDITIONS.—(1) Whenever any person applies for a license for 

any project works within any reservation of the United States, and the Secretary 

of the department under whose supervision such reservation falls (referred to in this 

subsection as ‘the Secretary’) deems a condition to such license to be necessary 

under the first proviso of section 4(e), the license applicant may propose an alternative condition. 

‘‘(2) Notwithstanding the first proviso of section 4(e), the Secretary shall accept 

the proposed alternative condition referred to in paragraph (1), and the Commission 

shall include in the license such alternative condition, if the Secretary determines, 

based on substantial evidence provided by the license applicant or otherwise available to the Secretary, that such alternative condition— 

‘‘(A) provides for the adequate protection and utilization of the reservation; 

and 

‘‘(B) will either— 

‘‘(i) cost less to implement; or 

‘‘(ii) result in improved operation of the project works for electricity production, 

as compared to the condition initially deemed necessary by the Secretary. 

‘‘(3) The Secretary shall submit into the public record of the Commission proceeding with any condition under section 4(e) or alternative condition it accepts 

under this section, a written statement explaining the basis for such condition, and 

reason for not accepting any alternative condition under this section. The written 

statement must demonstrate that the Secretary gave equal consideration to the effects of the condition adopted and alternatives not accepted on energy supply, distribution, cost, and use; flood control; navigation; water supply; and air quality (in 

addition to the preservation of other aspects of environmental quality); based on 

such information as may be available to the Secretary, including information voluntarily provided in a timely manner by the applicant and others. The Secretary shall 

also submit, together with the aforementioned written statement, all studies, data, 

and other factual information available to the Secretary and relevant to the Secretary’s decision. 

‘‘(4) Nothing in this section shall prohibit other interested parties from proposing 

alternative conditions. 

‘‘(5) If the Secretary does not accept an applicant’s alternative condition under 

this section, and the Commission finds that the Secretary’s condition would be inconsistent with the purposes of this part, or other applicable law, the Commission 

may refer the dispute to the Commission’s Dispute Resolution Service. The Dispute 

Resolution Service shall consult with the Secretary and the Commission and issue 

a non-binding advisory within 90 days. The Secretary may accept the Dispute ResoVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00028 Fmt 6659 Sfmt 6621 E:\HR\OC\HR215P1.XXX HR215P1
29 

lution Service advisory unless the Secretary finds that the recommendation will not 

provide for the adequate protection and utilization of the reservation. The Secretary 

shall submit the advisory and the Secretary’s final written determination into the 

record of the Commission’s proceeding. 

‘‘(b) ALTERNATIVE PRESCRIPTIONS.—(1) Whenever the Secretary of the Interior or 

the Secretary of Commerce prescribes a fishway under section 18, the license applicant or licensee may propose an alternative to such prescription to construct, maintain, or operate a fishway. 

‘‘(2) Notwithstanding section 18, the Secretary of the Interior or the Secretary of 

Commerce, as appropriate, shall accept and prescribe, and the Commission shall require, the proposed alternative referred to in paragraph (1), if the Secretary of the 

appropriate department determines, based on substantial evidence provided by the 

licensee or otherwise available to the Secretary, that such alternative— 

‘‘(A) will be no less protective than the fishway initially prescribed by the Secretary; and 

‘‘(B) will either— 

‘‘(i) cost less to implement; or 

‘‘(ii) result in improved operation of the project works for electricity production, 

as compared to the fishway initially deemed necessary by the Secretary. 

‘‘(3) The Secretary concerned shall submit into the public record of the Commission proceeding with any prescription under section 18 or alternative prescription 

it accepts under this section, a written statement explaining the basis for such prescription, and reason for not accepting any alternative prescription under this section. The written statement must demonstrate that the Secretary gave equal consideration to the effects of the condition adopted and alternatives not accepted on energy supply, distribution, cost, and use; flood control; navigation; water supply; and 

air quality (in addition to the preservation of other aspects of environmental quality); based on such information as may be available to the Secretary, including information voluntarily provided in a timely manner by the applicant and others. The 

Secretary shall also submit, together with the aforementioned written statement, all 

studies, data, and other factual information available to the Secretary and relevant 

to the Secretary’s decision. 

‘‘(4) Nothing in this section shall prohibit other interested parties from proposing 

alternative prescriptions. 

‘‘(5) If the Secretary concerned does not accept an applicant’s alternative prescription under this section, and the Commission finds that the Secretary’s prescription 

would be inconsistent with the purposes of this part, or other applicable law, the 

Commission may refer the dispute to the Commission’s Dispute Resolution Service. 

The Dispute Resolution Service shall consult with the Secretary and the Commission and issue a non-binding advisory within 90 days. The Secretary may accept the 

Dispute Resolution Service advisory unless the Secretary finds that the recommendation will be less protective than the fishway initially prescribed by the Secretary. The Secretary shall submit the advisory and the Secretary’s final written determination into the record of the Commission’s proceeding.’’. 

PART II—ADDITIONAL HYDROPOWER 

SEC. 241. HYDROELECTRIC PRODUCTION INCENTIVES. 

(a) INCENTIVE PAYMENTS.—For electric energy generated and sold by a qualified 

hydroelectric facility during the incentive period, the Secretary of Energy (referred 

to in this section as the ‘‘Secretary’’) shall make, subject to the availability of appropriations, incentive payments to the owner or operator of such facility. The amount 

of such payment made to any such owner or operator shall be as determined under 

subsection (e) of this section. Payments under this section may only be made upon 

receipt by the Secretary of an incentive payment application which establishes that 

the applicant is eligible to receive such payment and which satisfies such other requirements as the Secretary deems necessary. Such application shall be in such 

form, and shall be submitted at such time, as the Secretary shall establish. 

(b) DEFINITIONS.—For purposes of this section: 

(1) QUALIFIED HYDROELECTRIC FACILITY.—The term ‘‘qualified hydroelectric 

facility’’ means a turbine or other generating device owned or solely operated 

by a non-Federal entity which generates hydroelectric energy for sale and which 

is added to an existing dam or conduit. 

(2) EXISTING DAM OR CONDUIT.—The term ‘‘existing dam or conduit’’ means 

any dam or conduit the construction of which was completed before the date of 

the enactment of this section and which does not require any construction or 

enlargement of impoundment or diversion structures (other than repair or reVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00029 Fmt 6659 Sfmt 6621 E:\HR\OC\HR215P1.XXX HR215P1
30 

construction) in connection with the installation of a turbine or other generating 

device. 

(3) CONDUIT.—The term ‘‘conduit’’ has the same meaning as when used in section 30(a)(2) of the Federal Power Act (16 U.S.C. 823a(a)(2)). 

The terms defined in this subsection shall apply without regard to the hydroelectric 

kilowatt capacity of the facility concerned, without regard to whether the facility 

uses a dam owned by a governmental or nongovernmental entity, and without regard to whether the facility begins operation on or after the date of the enactment 

of this section. 

(c) ELIGIBILITY WINDOW.—Payments may be made under this section only for electric energy generated from a qualified hydroelectric facility which begins operation 

during the period of 10 fiscal years beginning with the first full fiscal year occurring 

after the date of enactment of this subtitle. 

(d) INCENTIVE PERIOD.—A qualified hydroelectric facility may receive payments 

under this section for a period of 10 fiscal years (referred to in this section as the 

‘‘incentive period’’). Such period shall begin with the fiscal year in which electric energy generated from the facility is first eligible for such payments. 

(e) AMOUNT OF PAYMENT.— 

(1) IN GENERAL.—Payments made by the Secretary under this section to the 

owner or operator of a qualified hydroelectric facility shall be based on the number of kilowatt hours of hydroelectric energy generated by the facility during the 

incentive period. For any such facility, the amount of such payment shall be 1.8 

cents per kilowatt hour (adjusted as provided in paragraph (2)), subject to the 

availability of appropriations under subsection (g), except that no facility may 

receive more than $750,000 in 1 calendar year. 

(2) ADJUSTMENTS.—The amount of the payment made to any person under 

this section as provided in paragraph (1) shall be adjusted for inflation for each 

fiscal year beginning after calendar year 2005 in the same manner as provided 

in the provisions of section 29(d)(2)(B) of the Internal Revenue Code of 1986, 

except that in applying such provisions the calendar year 2005 shall be substituted for calendar year 1979. 

(f) SUNSET.—No payment may be made under this section to any qualified hydroelectric facility after the expiration of the period of 20 fiscal years beginning with 

the first full fiscal year occurring after the date of enactment of this subtitle, and 

no payment may be made under this section to any such facility after a payment 

has been made with respect to such facility for a period of 10 fiscal years. 

(g) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated 

to the Secretary to carry out the purposes of this section $10,000,000 for each of 

the fiscal years 2006 through 2015. 

SEC. 242. HYDROELECTRIC EFFICIENCY IMPROVEMENT. 

(a) INCENTIVE PAYMENTS.—The Secretary of Energy shall make incentive payments to the owners or operators of hydroelectric facilities at existing dams to be 

used to make capital improvements in the facilities that are directly related to improving the efficiency of such facilities by at least 3 percent. 

(b) LIMITATIONS.—Incentive payments under this section shall not exceed 10 percent of the costs of the capital improvement concerned and not more than 1 payment may be made with respect to improvements at a single facility. No payment 

in excess of $750,000 may be made with respect to improvements at a single facility. 

(c) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated 

to carry out this section not more than $10,000,000 for each of the fiscal years 2006 

through 2015. 

SEC. 243. SMALL HYDROELECTRIC POWER PROJECTS. 

Section 408(a)(6) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 

2708(a)(6)) is amended by striking ‘‘April 20, 1977’’ and inserting ‘‘March 4, 2003’’. 

SEC. 244. INCREASED HYDROELECTRIC GENERATION AT EXISTING FEDERAL FACILITIES. 

(a) IN GENERAL.—The Secretary of the Interior and the Secretary of Energy, in 

consultation with the Secretary of the Army, shall jointly conduct a study of the potential for increasing electric power production capability at federally owned or operated water regulation, storage, and conveyance facilities. 

(b) CONTENT.—The study under this section shall include identification and description in detail of each facility that is capable, with or without modification, of 

producing additional hydroelectric power, including estimation of the existing potential for the facility to generate hydroelectric power. 

(c) REPORT.—The Secretaries shall submit to the Committees on Energy and Commerce, Resources, and Transportation and Infrastructure of the House of Representatives and the Committee on Energy and Natural Resources of the Senate a report 

on the findings, conclusions, and recommendations of the study under this section 

31 

by not later than 18 months after the date of the enactment of this Act. The report 

shall include each of the following: 

(1) The identifications, descriptions, and estimations referred to in subsection 

(b). 

(2) A description of activities currently conducted or considered, or that could 

be considered, to produce additional hydroelectric power from each identified facility. 

(3) A summary of prior actions taken by the Secretaries to produce additional 

hydroelectric power from each identified facility. 

(4) The costs to install, upgrade, or modify equipment or take other actions 

to produce additional hydroelectric power from each identified facility and the 

level of Federal power customer involvement in the determination of such costs. 

(5) The benefits that would be achieved by such installation, upgrade, modification, or other action, including quantified estimates of any additional energy 

or capacity from each facility identified under subsection (b). 

(6) A description of actions that are planned, underway, or might reasonably 

be considered to increase hydroelectric power production by replacing turbine 

runners, by performing generator upgrades or rewinds, or construction of 

pumped storage facilities. 

(7) The impact of increased hydroelectric power production on irrigation, fish, 

wildlife, Indian tribes, river health, water quality, navigation, recreation, fishing, and flood control. 

(8) Any additional recommendations to increase hydroelectric power production from, and reduce costs and improve efficiency at, federally owned or operated water regulation, storage, and conveyance facilities. 

SEC. 245. SHIFT OF PROJECT LOADS TO OFF-PEAK PERIODS. 

(a) IN GENERAL.—The Secretary of the Interior shall— 

(1) review electric power consumption by Bureau of Reclamation facilities for 

water pumping purposes; and 

(2) make such adjustments in such pumping as possible to minimize the 

amount of electric power consumed for such pumping during periods of peak 

electric power consumption, including by performing as much of such pumping 

as possible during off-peak hours at night. 

(b) CONSENT OF AFFECTED IRRIGATION CUSTOMERS REQUIRED.—The Secretary 

may not under this section make any adjustment in pumping at a facility without 

the consent of each person that has contracted with the United States for delivery 

of water from the facility for use for irrigation and that would be affected by such 

adjustment. 

(c) EXISTING OBLIGATIONS NOT AFFECTED.—This section shall not be construed to 

affect any existing obligation of the Secretary to provide electric power, water, or 

other benefits from Bureau of Reclamation facilities, including recreational releases. 

TITLE III—OIL AND GAS 

Subtitle A—Petroleum Reserve and Home Heating 

Oil 

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

OTHER ENERGY PROGRAMS. 

(a) AMENDMENT TO TITLE I OF THE ENERGY POLICY AND CONSERVATION ACT.— 

Title I of the Energy Policy and Conservation Act (42 U.S.C. 6211 et seq.) is amended— 

(1) by striking section 166 (42 U.S.C. 6246) and inserting the following: 

‘‘AUTHORIZATION OF APPROPRIATIONS

‘‘SEC. 166. There are authorized to be appropriated to the Secretary such sums 

as may be necessary to carry out this part and part D, to remain available until 

expended.’’; 

(2) by striking section 186 (42 U.S.C. 6250e); and 

(3) by striking part E (42 U.S.C. 6251; relating to the expiration of title I of 

the Act). 

(b) AMENDMENT TO TITLE II OF THE ENERGY POLICY AND CONSERVATION ACT.— 

Title II of the Energy Policy and Conservation Act (42 U.S.C. 6271 et seq.) is 

amended— 

(1) by inserting before section 273 (42 U.S.C. 6283) the following: 

32 

‘‘PART C—SUMMER FILL AND FUEL BUDGETING 

PROGRAMS’’; 

(2) by striking section 273(e) (42 U.S.C. 6283(e); relating to the expiration of 

summer fill and fuel budgeting programs); and 

(3) by striking part D (42 U.S.C. 6285; relating to the expiration of title II 

of the Act). 

(c) TECHNICAL AMENDMENTS.—The table of contents for the Energy Policy and 

Conservation Act is amended— 

(1) by amending part D of title I to read as follows: 

‘‘PART D—NORTHEAST HOME HEATING OIL RESERVE

‘‘Sec. 181. Establishment. 

‘‘Sec. 182. Authority. 

‘‘Sec. 183. Conditions for release; plan. 

‘‘Sec. 184. Northeast Home Heating Oil Reserve Account. 

‘‘Sec. 185. Exemptions.’’; 

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

‘‘PART C—SUMMER FILL AND FUEL BUDGETING PROGRAMS

‘‘Sec. 273. Summer fill and fuel budgeting programs.’’ 

(3) by striking the items relating to part D of title II. 

(d) AMENDMENT TO THE ENERGY POLICY AND CONSERVATION ACT.—Section 

183(b)(1) of the Energy Policy and Conservation Act (42 U.S.C. 6250(b)(1)) is amended by striking all after ‘‘increases’’ through ‘‘mid-October through March’’ and inserting ‘‘by more than 60 percent over its 5-year rolling average for the months of midOctober through March (considered as a heating season average)’’. 

(e) FILL STRATEGIC PETROLEUM RESERVE TO CAPACITY.—The Secretary of Energy 

shall, as expeditiously as practicable, acquire petroleum in amounts sufficient to fill 

the Strategic Petroleum Reserve to the 1,000,000,000 barrel capacity authorized 

under section 154(a) of the Energy Policy and Conservation Act (42 U.S.C. 6234(a)), 

consistent with the provisions of sections 159 and 160 of such Act (42 U.S.C. 6239, 

6240). 

SEC. 302. NATIONAL OILHEAT RESEARCH ALLIANCE. 

Section 713 of the Energy Act of 2000 (42 U.S.C. 6201 note) is amended by striking ‘‘4’’ and inserting ‘‘9’’. 

SEC. 303. SITE SELECTION. 

Not later than 1 year after the date of enactment of this Act, the Secretary of 

Energy shall complete a proceeding to select, from sites that the Secretary has previously studied, sites necessary to enable acquisition by the Secretary of the full authorized volume of the Strategic Petroleum Reserve. 

SEC. 304. SUSPENSION OF STRATEGIC PETROLEUM RESERVE DELIVERIES. 

The Secretary of Energy shall suspend deliveries of royalty-in-kind oil to the Stra- tegic Petroleum Reserve until the price of oil falls below $40 per barrel for 2 consecutive weeks on the New York Mercantile Exchange. 

Subtitle B—Production Incentives 

SEC. 320. LIQUEFACTION OR GASIFICATION NATURAL GAS TERMINALS. 

(a) SCOPE OF NATURAL GAS ACT.—Section 1(b) of the Natural Gas Act (15 U.S.C. 

717(b)) is amended by inserting ‘‘and to the importation or exportation of natural 

gas in foreign commerce and to persons engaged in such importation or exportation,’’ after ‘‘such transportation or sale,’’. 

(b) DEFINITION.—Section 2 of the Natural Gas Act (15 U.S.C. 717a) is amended 

by adding at the end the following new paragraph: 

‘‘(11) ‘Liquefaction or gasification natural gas terminal’ includes all facilities 

located onshore or in State waters that are used to receive, unload, load, store, 

transport, gasify, liquefy, or process natural gas that is imported to the United 

States from a foreign country, exported to a foreign country from the United 

States, or transported in interstate commerce by waterborne tanker, but does 

not include— 

‘‘(A) waterborne tankers used to deliver natural gas to or from any such 

facility; or 

‘‘(B) any pipeline or storage facility subject to the jurisdiction of the Commission under section 7.’’. 

33 

(c) AUTHORIZATION FOR CONSTRUCTION, EXPANSION, OR OPERATION OF LIQUE- FACTION OR GASIFICATION NATURAL GAS TERMINALS.—(1) The title for section 3 of 

the Natural Gas Act (15 U.S.C. 717b) is amended by inserting ‘‘; LIQUEFACTION OR

GASIFICATION NATURAL GAS TERMINALS’’ after ‘‘EXPORTATION OR IMPORTATION OF NAT- URAL GAS’’. 

(2) Section 3 of the Natural Gas Act (15 U.S.C. 717b) is amended by adding at 

the end the following: 

‘‘(d) AUTHORIZATION FOR CONSTRUCTION, EXPANSION, OR OPERATION OF LIQUE- FACTION OR GASIFICATION NATURAL GAS TERMINALS.— ‘‘(1) COMMISSION AUTHORIZATION REQUIRED.—No person shall construct, expand, or operate a liquefaction or gasification natural gas terminal without an 

order from the Commission authorizing such person to do so. 

‘‘(2) AUTHORIZATION PROCEDURES.— ‘‘(A) NOTICE AND HEARING.—Upon the filing of any application to construct, expand, or operate a liquefaction or gasification natural gas terminal, the Commission shall— 

‘‘(i) set the matter for hearing; 

‘‘(ii) give reasonable notice of the hearing to all interested persons, 

including the State commission of the State in which the liquefaction 

or gasification natural gas terminal is located; 

‘‘(iii) decide the matter in accordance with this subsection; and 

‘‘(iv) issue or deny the appropriate order accordingly. 

‘‘(B) DESIGNATION AS LEAD AGENCY.— 

‘‘(i) IN GENERAL.—The Commission shall act as the lead agency for 

the purposes of coordinating all applicable Federal authorizations and 

for the purposes of complying with the National Environmental Policy 

Act of 1969 (42 U.S.C. 4312 et seq.) for a liquefaction or gasification 

natural gas terminal. 

‘‘(ii) OTHER AGENCIES.—Each Federal agency considering an aspect of 

the construction, expansion, or operation of a liquefaction or gasification natural gas terminal shall cooperate with the Commission and 

comply with the deadlines established by the Commission. 

‘‘(C) SCHEDULE.— 

‘‘(i) COMMISSION AUTHORITY TO SET SCHEDULE.—The Commission 

shall establish a schedule for all Federal and State administrative proceedings required under authority of Federal law to construct, expand, 

or operate a liquefaction or gasification natural gas terminal. In establishing the schedule, the Commission shall— 

‘‘(I) ensure expeditious completion of all such proceedings; and 

‘‘(II) accommodate the applicable schedules established by Federal law for such proceedings. 

‘‘(ii) FAILURE TO MEET SCHEDULE.—If a Federal or State administrative agency does not complete a proceeding for an approval that is required before a person may construct, expand, or operate the liquefaction or gasification natural gas terminal, in accordance with the 

schedule established by the Commission under this subparagraph, and 

if— 

‘‘(I) a determination has been made by the Court pursuant to section 19(d) that such delay is unreasonable; and 

‘‘(II) the agency has failed to act on any remand by the Court 

within the deadline set by the Court, 

that approval may be conclusively presumed by the Commission. 

‘‘(D) EXCLUSIVE RECORD.—The Commission shall, with the cooperation of 

Federal and State administrative agencies and officials, maintain a complete consolidated record of all decisions made or actions taken by the Commission or by a Federal administrative agency or officer (or State administrative agency or officer acting under delegated Federal authority) with respect to the construction, expansion, or operation of a liquefaction or gasification natural gas terminal. Such record shall be the exclusive record for 

any Federal administrative proceeding that is an appeal or review of any 

such decision made or action taken. 

‘‘(E) STATE AND LOCAL SAFETY CONSIDERATIONS.— 

‘‘(i) IN GENERAL.—The Commission shall consult with the State commission of the State in which the liquefaction or gasification natural 

gas terminal is located regarding State and local safety considerations 

prior to issuing an order pursuant to this subsection and consistent 

with the schedule established under subparagraph (C). 

‘‘(ii) STATE SAFETY INSPECTIONS.—The State commission of the State 

in which a liquefaction or gasification natural gas terminal is located 

34 

may, after the terminal is operational, conduct safety inspections with 

respect to the liquefaction or gasification natural gas terminal if— 

‘‘(I) the State commission provides written notice to the Commission of its intention to do so; and 

‘‘(II) the inspections will be carried out in conformance with Federal regulations and guidelines. 

Enforcement of any safety violation discovered by a State commission 

pursuant to this clause shall be carried out by Federal officials. The 

Commission shall take appropriate action in response to a report of a 

violation not later that 90 days after receiving such report. 

‘‘(iii) STATE AND LOCAL SAFETY CONSIDERATIONS.—For the purposes of 

this subparagraph, State and local safety considerations include— 

‘‘(I) the kind and use of the facility; 

‘‘(II) the existing and projected population and demographic characteristics of the location; 

‘‘(III) the existing and proposed land use near the location; 

‘‘(IV) the natural and physical aspects of the location; 

‘‘(V) the medical, law enforcement, and fire prevention capabilities near the location that can respond at the facility; and 

‘‘(VI) the feasibility of remote siting. 

‘‘(3) ISSUANCE OF COMMISSION ORDER.— 

‘‘(A) IN GENERAL.—The Commission shall issue an order authorizing, in 

whole or in part, the construction, expansion, or operation covered by the 

application to any qualified applicant— 

‘‘(i) unless the Commission finds such actions or operations will not 

be consistent with the public interest; and 

‘‘(ii) if the Commission has found that the applicant is— 

‘‘(I) able and willing to carry out the actions and operations proposed; and 

‘‘(II) willing to conform to the provisions of this Act and any requirements, rules, and regulations of the Commission set forth 

under this Act. 

‘‘(B) TERMS AND CONDITIONS.—The Commission may by its order grant an 

application, in whole or in part, with such modification and upon such 

terms and conditions as the Commission may find necessary or appropriate. 

‘‘(C) LIMITATIONS ON TERMS AND CONDITIONS TO COMMISSION ORDER.— 

‘‘(i) IN GENERAL.—Any Commission order issued pursuant to this subsection before January 1, 2011, shall not be conditioned on— 

‘‘(I) a requirement that the liquefaction or gasification natural 

gas terminal offer service to persons other than the person, or any 

affiliate thereof, securing the order; or 

‘‘(II) any regulation of the liquefaction or gasification natural gas 

terminal’s rates, charges, terms, or conditions of service. 

‘‘(ii) INAPPLICABLE TO TERMINAL EXIT PIPELINE.—Clause (i) shall not 

apply to any pipeline subject to the jurisdiction of the Commission 

under section 7 exiting a liquefaction or gasification natural gas terminal. 

‘‘(iii) EXPANSION OF REGULATED TERMINAL.—An order issued under 

this paragraph that relates to an expansion of an existing liquefaction 

or gasification natural gas terminal, where any portion of the existing 

terminal continues to be subject to Commission regulation of rates, 

charges, terms, or conditions of service, may not result in— 

‘‘(I) subsidization of the expansion by regulated terminal users; 

‘‘(II) degradation of service to the regulated terminal users; or 

‘‘(III) undue discrimination against the regulated terminal users. 

‘‘(iv) EXPIRATION.—This subparagraph shall cease to have effect on 

January 1, 2021. 

‘‘(4) DEFINITION.—For the purposes of this subsection, the term ‘Federal authorization’ means any authorization required under Federal law in order to 

construct, expand, or operate a liquefaction or gasification natural gas terminal, 

including such permits, special use authorizations, certifications, opinions, or 

other approvals as may be required, whether issued by a Federal or State agency.’’. 

(d) JUDICIAL REVIEW.—Section 19 of the Natural Gas Act (15 U.S.C. 717r) is 

amended by adding at the end the following: 

‘‘(d) JUDICIAL REVIEW.— 

‘‘(1) IN GENERAL.—The United States Court of Appeals for the District of Columbia Circuit shall have original and exclusive jurisdiction over any civil action— 

35 

‘‘(A) for review of any order, action, or failure to act of any Federal or 

State administrative agency to issue, condition, or deny any permit, license, 

concurrence, or approval required under Federal law for the construction, 

expansion, or operation of a liquefaction or gasification natural gas terminal; 

‘‘(B) alleging unreasonable delay, in meeting a schedule established under 

section 3(d)(2)(C) or otherwise, by any Federal or State administrative 

agency in entering an order or taking other action described in subparagraph (A); or 

‘‘(C) challenging any decision made or action taken by the Commission 

under section 3(d). 

‘‘(2) COMMISSION ACTION.—For any action described in this subsection, the 

Commission shall file with the Court the consolidated record maintained under 

section 3(d)(2)(D). 

‘‘(3) COURT ACTION.—If the Court finds under paragraph (1)(A) or (B) that an 

order, action, failure to act, or delay is inconsistent with applicable Federal law, 

and would prevent the construction, expansion, or operation of a liquefaction or 

gasification natural gas terminal, the order or action shall be deemed to have 

been issued or taken, subject to any conditions established by the Federal or 

State administrative agency upon remand from the Court, such conditions to be 

consistent with the order of the Court. If the Court remands the order or action 

to the Federal or State agency, the Court shall set a reasonable deadline for 

the agency to act on remand. 

‘‘(4) UNREASONABLE DELAY.—For the purposes of paragraph (1)(B), the failure 

of an agency to issue a permit, license, concurrence, or approval within the later 

of— 

‘‘(A) 1 year after the date of filing of an application for the permit, license, 

concurrence, or approval; or 

‘‘(B) 60 days after the date of issuance of the order under section 3(d), 

shall be considered unreasonable delay unless the Court, for good cause shown, 

determines otherwise. 

‘‘(5) EXPEDITED REVIEW.—The Court shall set any action brought under this 

subsection for expedited consideration.’’. 

SEC. 327. HYDRAULIC FRACTURING. 

Paragraph (1) of section 1421(d) of the Safe Drinking Water Act (42 U.S.C. 

300h(d)) is amended to read as follows: 

‘‘(1) UNDERGROUND INJECTION.—The term ‘underground injection’— 

‘‘(A) means the subsurface emplacement of fluids by well injection; and 

‘‘(B) excludes— 

‘‘(i) the underground injection of natural gas for purposes of storage; 

and 

‘‘(ii) the underground injection of fluids or propping agents pursuant 

to hydraulic fracturing operations related to oil or gas production activities.’’. 

SEC. 330. APPEALS RELATING TO PIPELINE CONSTRUCTION OR OFFSHORE MINERAL DEVELOPMENT PROJECTS. 

(a) AGENCY OF RECORD, PIPELINE CONSTRUCTION PROJECTS.—Any Federal administrative agency proceeding that is an appeal or review under section 319 of the 

Coastal Zone Management Act of 1972 (16 U.S.C. 1465), as amended by this Act, 

related to Federal authority for an interstate natural gas pipeline construction 

project, including construction of natural gas storage and liquefied natural gas facilities, shall use as its exclusive record for all purposes the record compiled by the 

Federal Energy Regulatory Commission pursuant to the Commission’s proceeding 

under sections 3 and 7 of the Natural Gas Act (15 U.S.C. 717b, 717f). 

(b) SENSE OF CONGRESS.—It is the sense of Congress that all Federal and State 

agencies with jurisdiction over interstate natural gas pipeline construction activities 

should coordinate their proceedings within the timeframes established by the Federal Energy Regulatory Commission when the Commission is acting under sections 

3 and 7 of the Natural Gas Act (15 U.S.C. 717b, 717f) to determine whether a certificate of public convenience and necessity should be issued for a proposed interstate natural gas pipeline. 

(c) AGENCY OF RECORD, OFFSHORE MINERAL DEVELOPMENT PROJECTS.—Any Federal administrative agency proceeding that is an appeal or review under section 319 

of the Coastal Zone Management Act of 1972 (16 U.S.C. 1465), as amended by this 

Act, related to Federal authority for the permitting, approval, or other authorization 

of energy projects, including projects to explore, develop, or produce mineral resources in or underlying the outer Continental Shelf shall use as its exclusive record 

36 

for all purposes (except for the filing of pleadings) the record compiled by the relevant Federal permitting agency. 

SEC. 333. NATURAL GAS MARKET TRANSPARENCY. 

The Natural Gas Act (15 U.S.C 717 et seq.) is amended— 

(1) by redesignating section 24 as section 25; and 

(2) by inserting after section 23 the following: 

‘‘SEC. 24. NATURAL GAS MARKET TRANSPARENCY. 

‘‘(a) AUTHORIZATION.—(1) Not later than 180 days after the date of enactment of 

the Energy Policy Act of 2005, the Federal Energy Regulatory Commission shall 

issue rules directing all entities subject to the Commission’s jurisdiction as provided 

under this Act to timely report information about the availability and prices of natural gas sold at wholesale in interstate commerce to the Commission and price publishers. 

‘‘(2) The Commission shall evaluate the data for adequate price transparency and 

accuracy. 

‘‘(3) Rules issued under this subsection requiring the reporting of information to 

the Commission that may become publicly available shall be limited to aggregate 

data and transaction-specific data that are otherwise required by the Commission 

to be made public. 

‘‘(4) In exercising its authority under this section, the Commission shall not— 

‘‘(A) compete with, or displace from the market place, any price publisher; or 

‘‘(B) regulate price publishers or impose any requirements on the publication 

of information. 

‘‘(b) TIMELY ENFORCEMENT.—No person shall be subject to any penalty under this 

section with respect to a violation occurring more than 3 years before the date on 

which the Federal Energy Regulatory Commission seeks to assess a penalty. 

‘‘(c) LIMITATION ON COMMISSION AUTHORITY.—(1) The Commission shall not condition access to interstate pipeline transportation upon the reporting requirements authorized under this section. 

‘‘(2) Natural gas sales by a producer that are attributable to volumes of natural 

gas produced by such producer shall not be subject to the rules issued pursuant to 

this section. 

‘‘(3) The Commission shall not require natural gas producers, processors, or users 

who have a de minimis market presence to participate in the reporting requirements provided in this section.’’. 

Subtitle C—Access to Federal Land 

SEC. 344. CONSULTATION REGARDING OIL AND GAS LEASING ON PUBLIC LAND. 

(a) IN GENERAL.—Not later than 180 days after the date of enactment of this Act, 

the Secretary of the Interior and the Secretary of Agriculture shall enter into a 

memorandum of understanding regarding oil and gas leasing on— 

(1) public lands under the jurisdiction of the Secretary of the Interior; and 

(2) National Forest System lands under the jurisdiction of the Secretary of 

Agriculture. 

(b) CONTENTS.—The memorandum of understanding shall include provisions 

that— 

(1) establish administrative procedures and lines of authority that ensure 

timely processing of oil and gas lease applications, surface use plans of operation, and applications for permits to drill, including steps for processing surface use plans and applications for permits to drill consistent with the timelines 

established by the amendment made by section 348; 

(2) eliminate duplication of effort by providing for coordination of planning 

and environmental compliance efforts; and 

(3) ensure that lease stipulations are— 

(A) applied consistently; 

(B) coordinated between agencies; and 

(C) only as restrictive as necessary to protect the resource for which the 

stipulations are applied. 

(c) DATA RETRIEVAL SYSTEM.— 

(1) IN GENERAL.—Not later than 1 year after the date of enactment of this 

Act, the Secretary of the Interior and the Secretary of Agriculture shall establish a joint data retrieval system that is capable of— 

(A) tracking applications and formal requests made in accordance with 

procedures of the Federal onshore oil and gas leasing program; and 

37 

(B) providing information regarding the status of the applications and requests within the Department of the Interior and the Department of Agriculture. 

(2) RESOURCE MAPPING.—Not later than 2 years after the date of enactment 

of this Act, the Secretary of the Interior and the Secretary of Agriculture shall 

establish a joint Geographic Information System mapping system for use in— 

(A) tracking surface resource values to aid in resource management; and 

(B) processing surface use plans of operation and applications for permits 

to drill. 

SEC. 346. COMPLIANCE WITH EXECUTIVE ORDER 13211; ACTIONS CONCERNING REGULATIONS 

THAT SIGNIFICANTLY AFFECT ENERGY SUPPLY, DISTRIBUTION, OR USE. 

(a) REQUIREMENT.—The head of each Federal agency shall require that before the 

Federal agency takes any action that could have a significant adverse effect on the 

supply of domestic energy resources from Federal public land, the Federal agency 

taking the action shall comply with Executive Order No. 13211 (42 U.S.C. 13201 

note). 

(b) GUIDANCE.—Not later than 180 days after the date of enactment of this Act, 

the Secretary of Energy shall publish guidance for purposes of this section describing what constitutes a significant adverse effect on the supply of domestic energy 

resources under Executive Order No. 13211 (42 U.S.C. 13201 note). 

(c) MEMORANDUM OF UNDERSTANDING.—The Secretary of the Interior and the Secretary of Agriculture shall include in the memorandum of understanding under section 344 provisions for implementing subsection (a) of this section. 

SEC. 350. ENERGY FACILITY RIGHTS-OF-WAY AND CORRIDORS ON FEDERAL LAND. 

(a) REPORT TO CONGRESS.— 

(1) IN GENERAL.—Not later than 1 year after the date of enactment of this 

Act, the Secretary of Agriculture and the Secretary of the Interior, in consultation with the Secretary of Commerce, the Secretary of Defense, the Secretary 

of Energy, and the Federal Energy Regulatory Commission, shall submit to 

Congress a joint report— 

(A) that addresses— 

(i) the location of existing rights-of-way and designated and de facto 

corridors for oil and gas pipelines and electric transmission and distribution facilities on Federal land; and 

(ii) opportunities for additional oil and gas pipeline and electric 

transmission capacity within those rights-of-way and corridors; and 

(B) that includes a plan for making available, on request, to the appropriate Federal, State, and local agencies, tribal governments, and other persons involved in the siting of oil and gas pipelines and electricity transmission facilities Geographic Information System-based information regarding the location of the existing rights-of-way and corridors and any planned 

rights-of-way and corridors. 

(2) CONSULTATIONS AND CONSIDERATIONS.—In preparing the report, the Secretary of the Interior and the Secretary of Agriculture shall consult with— 

(A) other agencies of Federal, State, tribal, or local units of government, 

as appropriate; 

(B) persons involved in the siting of oil and gas pipelines and electric 

transmission facilities; and 

(C) other interested members of the public. 

(3) LIMITATION.—The Secretary of the Interior and the Secretary of Agriculture shall limit the distribution of the report and Geographic Information 

System-based information referred to in paragraph (1) as necessary for national 

and infrastructure security reasons, if either Secretary determines that the information may be withheld from public disclosure under a national security or 

other exception under section 552(b) of title 5, United States Code. 

(b) CORRIDOR DESIGNATIONS.— 

(1) 11 CONTIGUOUS WESTERN STATES.—Not later than 2 years after the date 

of enactment of this Act, the Secretary of Agriculture, the Secretary of Commerce, the Secretary of Defense, the Secretary of Energy, and the Secretary of 

the Interior, in consultation with the Federal Energy Regulatory Commission 

and the affected utility industries, shall jointly— 

(A) designate, under title V of the Federal Land Policy and Management 

Act of 1976 (43 U.S.C. 1761 et seq.) and other applicable Federal laws, corridors for oil and gas pipelines and electricity transmission and facilities on 

Federal land in the eleven contiguous Western States (as defined in section 

103 of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 

1702)); 

38 

(B) perform any environmental reviews that may be required to complete 

the designations of corridors for the facilities on Federal land in the eleven 

contiguous Western States; and 

(C) incorporate the designated corridors into— 

(i) the relevant departmental and agency land use and resource management plans; or 

(ii) equivalent plans. 

(2) OTHER STATES.—Not later than 4 years after the date of enactment of this 

Act, the Secretary of Agriculture, the Secretary of Commerce, the Secretary of 

Defense, the Secretary of Energy, and the Secretary of the Interior, in consultation with the Federal Energy Regulatory Commission and the affected utility 

industries, shall jointly— 

(A) identify corridors for oil and gas pipelines and electricity transmission 

and distribution facilities on Federal land in the States other than those 

described in paragraph (1); and 

(B) schedule prompt action to identify, designate, and incorporate the corridors into the land use plan. 

(3) ONGOING RESPONSIBILITIES.—The Secretary of Agriculture, the Secretary 

of Commerce, the Secretary of Defense, the Secretary of Energy, and the Secretary of the Interior, with respect to lands under their respective jurisdictions, 

in consultation with the Federal Energy Regulatory Commission and the affected utility industries, shall establish procedures that— 

(A) ensure that additional corridors for oil and gas pipelines and electricity transmission and distribution facilities on Federal land are promptly 

identified and designated; and 

(B) expedite applications to construct or modify oil and gas pipelines and 

electricity transmission and distribution facilities within the corridors, taking into account prior analyses and environmental reviews undertaken during the designation of corridors. 

(c) CONSIDERATIONS.—In carrying out this section, the Secretaries shall take into 

account the need for upgraded and new electricity transmission and distribution facilities to— 

(1) improve reliability; 

(2) relieve congestion; and 

(3) enhance the capability of the national grid to deliver electricity. 

(d) DEFINITION OF CORRIDOR.— 

(1) IN GENERAL.—In this section and title V of the Federal Land Policy and 

Management Act of 1976 (43 U.S.C. 1761 et seq.), the term ‘‘corridor’’ means— 

(A) a linear strip of land— 

(i) with a width determined with consideration given to technological, 

environmental, and topographical factors; and 

(ii) that contains, or may in the future contain, 1 or more utility, 

communication, or transportation facilities; 

(B) a land use designation that is established— 

(i) by law; 

(ii) by Secretarial Order; 

(iii) through the land use planning process; or 

(iv) by other management decision; and 

(C) a designation made for the purpose of establishing the preferred location of compatible linear facilities and land uses. 

(2) SPECIFICATIONS OF CORRIDOR.—On designation of a corridor under this 

section, the centerline, width, and compatible uses of a corridor shall be specified. 

SEC. 355. ENCOURAGING GREAT LAKES OIL AND GAS DRILLING BAN. 

Congress encourages no Federal or State permit or lease to be issued for new oil 

and gas slant, directional, or offshore drilling in or under one or more of the Great 

Lakes. 

SEC. 358. FEDERAL COALBED METHANE REGULATION. 

Any State currently on the list of Affected States established under section 

1339(b) of the Energy Policy Act of 1992 (42 U.S.C. 13368(b)) shall be removed from 

the list if, not later than 3 years after the date of enactment of this Act, the State 

takes, or prior to the date of enactment has taken, any of the actions required for 

removal from the list under such section 1339(b). 

39 

Subtitle D—Refining Revitalization 

SEC. 371. SHORT TITLE. 

This subtitle may be cited as the ‘‘United States Refinery Revitalization Act of 

2005’’. 

SEC. 372. FINDINGS. 

Congress finds the following: 

(1) It serves the national interest to increase petroleum refining capacity for 

gasoline, heating oil, diesel fuel, jet fuel, kerosene, and petrochemical feedstocks 

wherever located within the United States, to bring more supply to the markets 

for use by the American people. Nearly 50 percent of the petroleum in the 

United States is used for the production of gasoline. Refined petroleum products 

have a significant impact on interstate commerce. 

(2) United States demand for refined petroleum products currently exceeds 

the country’s petroleum refining capacity to produce such products. By 2025, 

United States gasoline consumption is projected to rise from 8,900,000 barrels 

per day to 12,900,000 barrels per day. Diesel fuel and home heating oil are becoming larger components of an increasing demand for refined petroleum supply. With the increase in air travel, jet fuel consumption is projected to be 

789,000 barrels per day higher in 2025 than today. 

(3) The petroleum refining industry is operating at 95 percent of capacity. The 

United States is currently importing 5 percent of its refined petroleum products 

and because of the stringent United States gasoline and diesel fuel specifications, few foreign refiners can produce the clean fuels required in the United 

States and the number of foreign suppliers that can produce United States 

quality gasoline is decreasing. 

(4) Refiners are subject to significant environmental and other regulations 

and face several new Clean Air Act requirements over the next decade. New 

Clean Air Act requirements will benefit the environment but will also require 

substantial capital investment and additional government permits. 

(5) No new refinery has been built in the United States since 1976 and many 

smaller domestic refineries have become idle since the removal of the Domestic 

Crude Oil Allocation Program and because of regulatory uncertainty and generally low returns on capital employed. Today, the United States has 149 refineries, down from 324 in 1981. Restoration of recently idled refineries alone 

would amount to 483,570 barrels a day in additional capacity, or approximately 

3.3 percent of the total operating capacity. 

(6) Refiners have met growing demand by increasing the use of existing 

equipment and increasing the efficiency and capacity of existing plants. But refining capacity has begun to lag behind peak summer demand. 

(7) Heavy industry and manufacturing jobs have closed or relocated due to 

barriers to investment, burdensome regulation, and high costs of operation, 

among other reasons. 

(8) Because the production and disruption in supply of refined petroleum 

products has a significant impact on interstate commerce, it serves the national 

interest to increase the domestic refining operating capacity. 

(10) More regulatory certainty for refinery owners is needed to stimulate investment in increased refinery capacity and required procedures for Federal, 

State, and local regulatory approvals need to be streamlined to ensure that increased refinery capacity can be developed and operated in a safe, timely, and 

cost-effective manner. 

(11) The proposed Yuma Arizona Refinery, a grassroots refinery facility, 

which only recently received its Federal air quality permit after 5 years under 

the current regulatory process, and is just now beginning its environmental impact statement and local permitting process, serves as an example of the obstacles a refiner would have to overcome to reopen an idle refinery. 

SEC. 373. PURPOSE. 

The purpose of this subtitle is to encourage the expansion of the United States 

refining capacity by providing an accelerated review and approval process of all regulatory approvals for certain idle refineries and lending corresponding legal and 

technical assistance to States with resources that may be inadequate to meet such 

permit review demands. 

SEC. 374. DESIGNATION OF REFINERY REVITALIZATION ZONES. 

Not later than 90 days after the date of enactment of this Act, the Secretary shall 

designate as a Refinery Revitalization Zone any area— 

(1) that— 

40 

(A) has experienced mass layoffs at manufacturing facilities, as determined by the Secretary of Labor; or 

(B) contains an idle refinery; and 

(2) that has an unemployment rate that exceeds the national average by at 

least 10 percent of the national average, as set by the Department of Labor, Bureau of Labor Statistics, at the time of the designation as a Refinery Revitalization Zone. 

SEC. 375. MEMORANDUM OF UNDERSTANDING. 

(a) IN GENERAL.—Not later than 90 days after the date of enactment of this Act, 

the Secretary shall enter into a memorandum of understanding with the Administrator for the purposes of this subtitle. The Secretary and the Administrator shall 

each designate a senior official responsible for, and dedicate sufficient other staff 

and resources to ensure, full implementation of the purposes of this subtitle and any 

regulations enacted pursuant to this subtitle. 

(b) ADDITIONAL SIGNATORIES.—The Governor of any State, and the appropriate 

representative of any Indian Tribe, with jurisdiction over a Refinery Revitalization 

Zone, as designated by the Secretary pursuant to section 374, may be signatories 

to the memorandum of understanding under this section. 

SEC. 376. STATE ENVIRONMENTAL PERMITTING ASSISTANCE. 

Not later than 30 days after a Revitalization Program Qualifying State becomes 

a signatory to the memorandum of understanding under section 375(b)— 

(1) the Secretary shall designate one or more employees of the Department 

with expertise relating to the siting and operation of refineries to provide legal 

and technical assistance to that Revitalization Program Qualifying State; and 

(2) the Administrator shall designate, to provide legal and technical assistance for that Revitalization Program Qualifying State, one or more employees 

of the Environmental Protection Agency with expertise on regulatory issues, relating to the siting and operation of refineries, with respect to each of— 

(A) the Clean Air Act (42 U.S.C. 7401 et seq.); 

(B) the Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.); 

(C) the Safe Drinking Water Act (42 U.S.C. 300f et seq.); 

(D) the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et seq.); 

(E) the Solid Waste Disposal Act (42 U.S.C. 6901 et seq.); 

(F) the Toxic Substances Control Act (15 U.S.C. 2601 et seq.); 

(G) the National Historic Preservation Act (16 U.S.C. 470 et seq.); and 

(H) the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et 

seq.). 

SEC. 377. COORDINATION AND EXPEDITIOUS REVIEW OF PERMITTING PROCESS. 

(a) DEPARTMENT OF ENERGY AS LEAD AGENCY.—Upon written request of a prospective applicant for Federal authorization for a refinery facility in a Refinery Revitalization Zone, the Department shall act as the lead Federal agency for the purposes of coordinating all applicable Federal authorizations and environmental reviews of the refining facility. To the maximum extent practicable under applicable 

Federal law, the Secretary shall coordinate this Federal authorization and review 

process with any Indian Tribes and State and local agencies responsible for conducting any separate permitting and environmental reviews of the refining facility. 

(b) SCHEDULE.— 

(1) IN GENERAL.—The Secretary, in coordination with the agencies with authority over Federal authorizations and, as appropriate, with Indian Tribes and 

State and local agencies that are willing to coordinate their separate permitting 

and environmental reviews with the Federal authorizations and environmental 

reviews, shall establish a schedule with prompt and binding intermediate and 

ultimate deadlines for the review of, and Federal authorization decisions relating to, refinery facility siting and operation. 

(2) PREAPPLICATION PROCESS.—Prior to establishing the schedule, the Secretary shall provide an expeditious preapplication mechanism for applicants to 

confer with the agencies involved and to have each agency communicate to the 

prospective applicant within 60 days concerning— 

(A) the likelihood of approval for a potential refinery facility; and 

(B) key issues of concern to the agencies and local community. 

(3) SCHEDULE.—The Secretary shall consider the preapplication findings 

under paragraph (2) in setting the schedule and shall ensure that once an application has been submitted with such information as the Secretary considers 

necessary, all permit decisions and related environmental reviews under all applicable Federal laws shall be completed within 6 months or, where circumstances require otherwise, as soon as thereafter practicable. 

41 

(c) CONSOLIDATED ENVIRONMENTAL REVIEW.— (1) LEAD AGENCY.—In carrying out its role as the lead Federal agency for environmental review, the Department shall coordinate all applicable Federal actions for complying with the National Environmental Policy Act of 1969 (42 

U.S.C. 4321 et seq.) and shall be responsible for preparing any environmental 

impact statement required by section 102(2)(C) of that Act (42 U.S.C. 

4332(2)(C)) or such other form of environmental review as is required. 

(2) CONSOLIDATION OF STATEMENTS.—In carrying out paragraph (1), if the Department determines an environmental impact statement is required, the Department shall prepare a single environmental impact statement, which shall 

consolidate the environmental reviews of all Federal agencies considering any 

aspect of the project covered by the environmental impact statement. 

(d) OTHER AGENCIES.—Each Federal agency considering an aspect of the siting or 

operation of a refinery facility in a Refinery Revitalization Zone shall cooperate with 

the Department and comply with the deadlines established by the Department in 

the preparation of any environmental impact statement or such other form of review 

as is required. 

(e) EXCLUSIVE RECORD.—The Department shall, with the cooperation of Federal 

and State administrative agencies and officials, maintain a complete consolidated 

record of all decisions made or actions taken by the Department or by a Federal 

administrative agency or officer (or State administrative agency or officer acting 

under delegated Federal authority) with respect to the siting or operation of a refinery facility in a Refinery Revitalization Zone. Such record shall be the exclusive 

record for any Federal administrative proceeding that is an appeal or review of any 

such decision made or action taken. 

(f) APPEALS.—In the event any agency has denied a Federal authorization required for a refinery facility in a Refinery Revitalization Zone, or has failed to act 

by a deadline established by the Secretary pursuant to subsection (b) for deciding 

whether to issue the Federal authorization, the applicant or any State in which the 

refinery facility would be located may file an appeal with the Secretary. Based on 

the record maintained under subsection (e), and in consultation with the affected 

agency, the Secretary may then either issue the necessary Federal authorization 

with appropriate conditions, or deny the appeal. The Secretary shall issue a decision 

within 60 days after the filing of the appeal. In making a decision under this subsection, the Secretary shall comply with applicable requirements of Federal law, including each of the laws referred to in section 376(2)(A) through (H). Any judicial 

appeal of the Secretary’s decision shall be to the United States Court of Appeals for 

the District of Columbia. 

(g) CONFORMING REGULATIONS.—Not later than 6 months after the date of enactment of this Act, the Secretary shall issue any regulations necessary to implement 

this subtitle. 

SEC. 378. COMPLIANCE WITH ALL ENVIRONMENTAL REGULATIONS REQUIRED. 

Nothing in this subtitle shall be construed to waive the applicability of environmental laws and regulations to any refinery facility. 

SEC. 379. DEFINITIONS. 

For the purposes of this subtitle, the term— 

(1) ‘‘Administrator’’ means the Administrator of the Environmental Protection 

Agency; 

(2) ‘‘Department’’ means the Department of Energy; 

(3) ‘‘Federal authorization’’ means any authorization required under Federal 

law (including the Clean Air Act, the Federal Water Pollution Control Act, the 

Safe Drinking Water Act, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, the Solid Waste Disposal Act, the Toxic 

Substances Control Act, the National Historic Preservation Act, and the National Environmental Policy Act of 1969) in order to site, construct, upgrade, or 

operate a refinery facility within a Refinery Revitalization Zone, including such 

permits, special use authorizations, certifications, opinions, or other approvals 

as may be required, whether issued by a Federal, State, or local agency; 

(4) ‘‘idle refinery’’ means any real property site that has been used at any 

time for a refinery facility since December 31, 1979, that has not been in operation after April 1, 2005; 

(5) ‘‘refinery facility’’ means any facility designed and operated to receive, unload, store, process and refine raw crude oil by any chemical or physical process, 

including distillation, fluid catalytic cracking, hydrocracking, coking, alkylation, 

etherification, polymerization, catalytic reforming, isomerization, hydrotreating, 

blending, and any combination thereof; 

(6) ‘‘Revitalization Program Qualifying State’’ means a State or Indian Tribe 

that— 

42 

(A) has entered into the memorandum of understanding pursuant to section 375(b); and 

(B) has established a refining infrastructure coordination office that the 

Secretary finds will facilitate Federal-State cooperation for the purposes of 

this subtitle; and 

(7) ‘‘Secretary’’ means the Secretary of Energy. 

TITLE IV—COAL 

Subtitle A—Clean Coal Power Initiative 

SEC. 401. AUTHORIZATION OF APPROPRIATIONS. 

(a) CLEAN COAL POWER INITIATIVE.—There are authorized to be appropriated to 

the Secretary of Energy (referred to in this title as the ‘‘Secretary’’) to carry out the 

activities authorized by this subtitle $200,000,000 for each of fiscal years 2006 

through 2014, to remain available until expended. 

(b) REPORT.—The Secretary shall submit to Congress the report required by this 

subsection not later than March 31, 2007. The report shall include, with respect to 

subsection (a), a 10-year plan containing— 

(1) a detailed assessment of whether the aggregate funding levels provided 

under subsection (a) are the appropriate funding levels for that program; 

(2) a detailed description of how proposals will be solicited and evaluated, including a list of all activities expected to be undertaken; 

(3) a detailed list of technical milestones for each coal and related technology 

that will be pursued; and 

(4) a detailed description of how the program will avoid problems enumerated 

in General Accounting Office reports on the Clean Coal Technology Program, including problems that have resulted in unspent funds and projects that failed 

either financially or scientifically. 

SEC. 402. PROJECT CRITERIA. 

(a) IN GENERAL.—The Secretary shall not provide funding under this subtitle for 

any project that does not advance efficiency, environmental performance, and cost 

competitiveness well beyond the level of technologies that are in commercial service 

or have been demonstrated on a scale that the Secretary determines is sufficient to 

demonstrate that commercial service is viable as of the date of enactment of this 

Act. 

(b) TECHNICAL CRITERIA FOR CLEAN COAL POWER INITIATIVE.— 

(1) GASIFICATION PROJECTS.— 

(A) IN GENERAL.—In allocating the funds made available under section 

401(a), the Secretary shall ensure that at least 60 percent of the funds are 

used only for projects on coal-based gasification technologies, including gasification combined cycle, gasification fuel cells, gasification coproduction, 

and hybrid gasification/combustion. 

(B) TECHNICAL MILESTONES.—The Secretary shall periodically set technical milestones specifying the emission and thermal efficiency levels that 

coal gasification projects under this subtitle shall be designed, and reasonably expected, to achieve. The technical milestones shall become more restrictive during the life of the program. The Secretary shall set the periodic 

milestones so as to achieve by 2020 coal gasification projects able— 

(i) to remove 99 percent of sulfur dioxide; 

(ii) to emit not more than .05 lbs of NOx per million Btu; 

(iii) to achieve substantial reductions in mercury emissions; and 

(iv) to achieve a thermal efficiency of— 

(I) 60 percent for coal of more than 9,000 Btu; 

(II) 59 percent for coal of 7,000 to 9,000 Btu; and 

(III) 50 percent for coal of less than 7,000 Btu. 

(2) OTHER PROJECTS.—The Secretary shall periodically set technical milestones and ensure that up to 40 percent of the funds appropriated pursuant to 

section 401(a) are used for projects not described in paragraph (1). The milestones shall specify the emission and thermal efficiency levels that projects 

funded under this paragraph shall be designed to and reasonably expected to 

achieve. The technical milestones shall become more restrictive during the life 

of the program. The Secretary shall set the periodic milestones so as to achieve 

by 2010 projects able— 

(A) to remove 97 percent of sulfur dioxide; 

(B) to emit no more than .08 lbs of NOx per million Btu; 

43 

(C) to achieve substantial reductions in mercury emissions; and 

(D) to achieve a thermal efficiency of— 

(i) 45 percent for coal of more than 9,000 Btu; 

(ii) 44 percent for coal of 7,000 to 9,000 Btu; and 

(iii) 40 percent for coal of less than 7,000 Btu. 

(3) CONSULTATION.—Before setting the technical milestones under paragraphs 

(1)(B) and (2), the Secretary shall consult with the Administrator of the Environmental Protection Agency and interested entities, including coal producers, 

industries using coal, organizations to promote coal or advanced coal technologies, environmental organizations, and organizations representing workers. 

(4) EXISTING UNITS.—In the case of projects at units in existence on the date 

of enactment of this Act, in lieu of the thermal efficiency requirements set forth 

in paragraph (1)(B)(iv) and (2)(D), the milestones shall be designed to achieve 

an overall thermal design efficiency improvement, compared to the efficiency of 

the unit as operated, of not less than— 

(A) 7 percent for coal of more than 9,000 Btu; 

(B) 6 percent for coal of 7,000 to 9,000 Btu; or 

(C) 4 percent for coal of less than 7,000 Btu. 

(5) PERMITTED USES.—In carrying out this subtitle, the Secretary may fund 

projects that include, as part of the project, the separation and capture of carbon dioxide. The thermal efficiency goals of paragraphs (1), (2), and (4) shall not 

apply for projects that separate and capture at least 50 percent of the facility’s 

potential emissions of carbon dioxide. 

(c) FINANCIAL CRITERIA.—The Secretary shall not provide a funding award under 

this subtitle unless the recipient documents to the satisfaction of the Secretary 

that— 

(1) the award recipient is financially viable without the receipt of additional 

Federal funding; 

(2) the recipient will provide sufficient information to the Secretary to enable 

the Secretary to ensure that the award funds are spent efficiently and effectively; and 

(3) a market exists for the technology being demonstrated or applied, as evidenced by statements of interest in writing from potential purchasers of the 

technology. 

(d) FINANCIAL ASSISTANCE.—The Secretary shall provide financial assistance to 

projects that meet the requirements of subsections (a), (b), and (c) and are likely 

to— 

(1) achieve overall cost reductions in the utilization of coal to generate useful 

forms of energy; 

(2) improve the competitiveness of coal among various forms of energy in 

order to maintain a diversity of fuel choices in the United States to meet electricity generation requirements; and 

(3) demonstrate methods and equipment that are applicable to 25 percent of 

the electricity generating facilities, using various types of coal, that use coal as 

the primary feedstock as of the date of enactment of this Act. 

(e) FEDERAL SHARE.—The Federal share of the cost of a coal or related technology 

project funded by the Secretary under this subtitle shall not exceed 50 percent. 

(f) APPLICABILITY.—No technology, or level of emission reduction, shall be treated 

as adequately demonstrated for purposes of section 111 of the Clean Air Act (42 

U.S.C. 7411), achievable for purposes of section 169 of that Act (42 U.S.C. 7479), 

or achievable in practice for purposes of section 171 of that Act (42 U.S.C. 7501) 

solely by reason of the use of such technology, or the achievement of such emission 

reduction, by 1 or more facilities receiving assistance under this subtitle. 

SEC. 403. REPORT. 

Not later than 1 year after the date of enactment of this Act, and once every 2 

years thereafter through 2014, the Secretary, in consultation with other appropriate 

Federal agencies, shall submit to Congress a report describing— 

(1) the technical milestones set forth in section 402 and how those milestones 

ensure progress toward meeting the requirements of subsections (b)(1)(B) and 

(b)(2) of section 402; and 

(2) the status of projects funded under this subtitle. 

SEC. 404. CLEAN COAL CENTERS OF EXCELLENCE. 

As part of the program authorized in section 401, the Secretary shall award competitive, merit-based grants to universities for the establishment of Centers of Excellence for Energy Systems of the Future. The Secretary shall provide grants to 

universities that show the greatest potential for advancing new clean coal technologies. 

44 

Subtitle B—Clean Power Projects 

SEC. 411. COAL TECHNOLOGY LOAN. 

There are authorized to be appropriated to the Secretary $125,000,000 to provide 

a loan to the owner of the experimental plant constructed under United States Department of Energy cooperative agreement number DE-FC-22–91PC90544 on such 

terms and conditions as the Secretary determines, including interest rates and upfront payments. 

SEC. 412. COAL GASIFICATION. 

The Secretary is authorized to provide loan guarantees for a project to produce 

energy from a plant using integrated gasification combined cycle technology of at 

least 400 megawatts in capacity that produces power at competitive rates in deregulated energy generation markets and that does not receive any subsidy (direct or 

indirect) from ratepayers. 

SEC. 414. PETROLEUM COKE GASIFICATION. 

The Secretary is authorized to provide loan guarantees for at least 5 petroleum 

coke gasification projects. 

SEC. 416. ELECTRON SCRUBBING DEMONSTRATION. 

The Secretary shall use $5,000,000 from amounts appropriated to initiate, 

through the Chicago Operations Office, a project to demonstrate the viability of 

high-energy electron scrubbing technology on commercial-scale electrical generation 

using high-sulfur coal. 

Subtitle D—Coal and Related Programs 

SEC. 441. CLEAN AIR COAL PROGRAM. 

(a) AMENDMENT.—The Energy Policy Act of 1992 is amended by adding the following new title at the end thereof: 

‘‘TITLE XXXI—CLEAN AIR COAL PROGRAM 

‘‘SEC. 3101. FINDINGS; PURPOSES; DEFINITIONS. 

‘‘(a) FINDINGS.—The Congress finds that— 

‘‘(1) new environmental regulations present additional challenges for coalfired electrical generation in the private marketplace; and 

‘‘(2) the Department of Energy, in cooperation with industry, has already fully 

developed and commercialized several new clean-coal technologies that will 

allow the clean use of coal. 

‘‘(b) PURPOSES.—The purposes of this title are to— 

‘‘(1) promote national energy policy and energy security, diversity, and economic competitiveness benefits that result from the increased use of coal; 

‘‘(2) mitigate financial risks, reduce the cost, and increase the marketplace acceptance of the new clean coal technologies; and 

‘‘(3) advance the deployment of pollution control equipment to meet the current and future obligations of coal-fired generation units regulated under the 

Clean Air Act (42 U.S.C. 7402 and following). 

‘‘SEC. 3102. AUTHORIZATION OF PROGRAM. 

‘‘The Secretary shall carry out a program to facilitate production and generation 

of coal-based power and the installation of pollution control equipment. 

‘‘SEC. 3103. AUTHORIZATION OF APPROPRIATIONS. 

‘‘(a) POLLUTION CONTROL PROJECTS.—There are authorized to be appropriated to 

the Secretary $300,000,000 for fiscal year 2006, $100,000,000 for fiscal year 2007, 

$40,000,000 for fiscal year 2008, $30,000,000 for fiscal year 2009, and $30,000,000 

for fiscal year 2010, to remain available until expended, for carrying out the program for pollution control projects, which may include— 

‘‘(1) pollution control equipment and processes for the control of mercury air 

emissions; 

‘‘(2) pollution control equipment and processes for the control of nitrogen dioxide air emissions or sulfur dioxide emissions; 

‘‘(3) pollution control equipment and processes for the mitigation or collection 

of more than one pollutant; 

45 

‘‘(4) advanced combustion technology for the control of at least two pollutants, 

including mercury, particulate matter, nitrogen oxides, and sulfur dioxide, 

which may also be designed to improve the energy efficiency of the unit; and 

‘‘(5) advanced pollution control equipment and processes designed to allow use 

of the waste byproducts or other byproducts of the equipment or an electrical 

generation unit designed to allow the use of byproducts. 

Funds appropriated under this subsection which are not awarded before fiscal year 

2012 may be applied to projects under subsection (b), in addition to amounts authorized under subsection (b). 

‘‘(b) GENERATION PROJECTS.—There are authorized to be appropriated to the Secretary $250,000,000 for fiscal year 2007, $350,000,000 for fiscal year 2008, 

$400,000,000 for fiscal year 2009, $400,000,000 for fiscal year 2010, $400,000,000 

for fiscal year 2011, $400,000,000 for fiscal year 2012, and $300,000,000 for fiscal 

year 2013, to remain available until expended, for generation projects and air pollution control projects. Such projects may include— 

‘‘(1) coal-based electrical generation equipment and processes, including gasification combined cycle or other coal-based generation equipment and processes; 

‘‘(2) associated environmental control equipment, that will be cost-effective 

and that is designed to meet anticipated regulatory requirements; 

‘‘(3) coal-based electrical generation equipment and processes, including gasification fuel cells, gasification coproduction, and hybrid gasification/combustion 

projects; and 

‘‘(4) advanced coal-based electrical generation equipment and processes, including oxidation combustion techniques, ultra-supercritical boilers, and chemical looping, which the Secretary determines will be cost-effective and could substantially contribute to meeting anticipated environmental or energy needs. 

‘‘(c) LIMITATION.—Funds placed at risk during any fiscal year for Federal loans or 

loan guarantees pursuant to this title may not exceed 30 percent of the total funds 

obligated under this title. 

‘‘SEC. 3104. AIR POLLUTION CONTROL PROJECT CRITERIA. 

‘‘The Secretary shall pursuant to authorizations contained in section 3103 provide 

funding for air pollution control projects designed to facilitate compliance with Federal and State environmental regulations, including any regulation that may be established with respect to mercury. 

‘‘SEC. 3105. CRITERIA FOR GENERATION PROJECTS. 

‘‘(a) CRITERIA.—The Secretary shall establish criteria on which selection of individual projects described in section 3103(b) should be based. The Secretary may 

modify the criteria as appropriate to reflect improvements in equipment, except that 

the criteria shall not be modified to be less stringent. These selection criteria shall 

include— 

‘‘(1) prioritization of projects whose installation is likely to result in significant air quality improvements in nonattainment air quality areas; 

‘‘(2) prioritization of projects that result in the repowering or replacement of 

older, less efficient units; 

‘‘(3) documented broad interest in the procurement of the equipment and utilization of the processes used in the projects by electrical generator owners or operators; 

‘‘(4) equipment and processes beginning in 2006 through 2011 that are projected to achieve an thermal efficiency of— 

‘‘(A) 40 percent for coal of more than 9,000 Btu per pound based on higher heating values; 

‘‘(B) 38 percent for coal of 7,000 to 9,000 Btu per pound based on higher 

heating values; and 

‘‘(C) 36 percent for coal of less than 7,000 Btu per pound based on higher 

heating values, 

except that energy used for coproduction or cogeneration shall not be counted 

in calculating the thermal efficiency under this paragraph; and 

‘‘(5) equipment and processes beginning in 2012 and 2013 that are projected 

to achieve an thermal efficiency of— 

‘‘(A) 45 percent for coal of more than 9,000 Btu per pound based on higher heating values; 

‘‘(B) 44 percent for coal of 7,000 to 9,000 Btu per pound based on higher 

heating values; and 

‘‘(C) 40 percent for coal of less than 7,000 Btu per pound based on higher 

heating values, 

except that energy used for coproduction or cogeneration shall not be counted 

in calculating the thermal efficiency under this paragraph. 

46 

‘‘(b) SELECTION.—(1) In selecting the projects, up to 25 percent of the projects selected may be either coproduction or cogeneration or other gasification projects, but 

at least 25 percent of the projects shall be for the sole purpose of electrical generation, and priority should be given to equipment and projects less than 600 MW to 

foster and promote standard designs. 

‘‘(2) The Secretary shall give priority to projects that have been developed and 

demonstrated that are not yet cost competitive, and for coal energy generation 

projects that advance efficiency, environmental performance, or cost competitiveness 

significantly beyond the level of pollution control equipment that is in operation on 

a full scale. 

‘‘SEC. 3106. FINANCIAL CRITERIA. 

‘‘(a) IN GENERAL.—The Secretary shall only provide financial assistance to projects 

that meet the requirements of sections 3103 and 3104 and are likely to— 

‘‘(1) achieve overall cost reductions in the utilization of coal to generate useful 

forms of energy; and 

‘‘(2) improve the competitiveness of coal in order to maintain a diversity of 

domestic fuel choices in the United States to meet electricity generation requirements. 

‘‘(b) CONDITIONS.—The Secretary shall not provide a funding award under this 

title unless— 

‘‘(1) the award recipient is financially viable without the receipt of additional 

Federal funding; and 

‘‘(2) the recipient provides sufficient information to the Secretary for the Secretary to ensure that the award funds are spent efficiently and effectively. 

‘‘(c) EQUAL ACCESS.—The Secretary shall, to the extent practical, utilize cooperative agreement, loan guarantee, and direct Federal loan mechanisms designed to ensure that all electrical generation owners have equal access to these technology deployment incentives. The Secretary shall develop and direct a competitive solicitation process for the selection of technologies and projects under this title. 

‘‘SEC. 3107. FEDERAL SHARE. 

‘‘The Federal share of the cost of a coal or related technology project funded by 

the Secretary under this title shall not exceed 50 percent. For purposes of this title, 

Federal funding includes only appropriated funds. 

‘‘SEC. 3108. APPLICABILITY. 

‘‘No technology, or level of emission reduction, shall be treated as adequately demonstrated for purposes of section 111 of the Clean Air Act (42 U.S.C. 7411), achievable for purposes of section 169 of the Clean Air Act (42 U.S.C. 7479), or achievable 

in practice for purposes of section 171 of the Clean Air Act (42 U.S.C. 7501) solely 

by reason of the use of such technology, or the achievement of such emission reduction, by one or more facilities receiving assistance under this title.’’. 

(b) TABLE OF CONTENTS AMENDMENT.—The table of contents of the Energy Policy 

Act of 1992 is amended by adding at the end the following: 

‘‘TITLE XXXI—CLEAN AIR COAL PROGRAM 

‘‘Sec. 3101. Findings; purposes; definitions. 

‘‘Sec. 3102. Authorization of program. 

‘‘Sec. 3103. Authorization of appropriations. 

‘‘Sec. 3104. Air pollution control project criteria. 

‘‘Sec. 3105. Criteria for generation projects. 

‘‘Sec. 3106. Financial criteria. 

‘‘Sec. 3107. Federal share. 

‘‘Sec. 3108. Applicability.’’. 

TITLE V—INDIAN ENERGY 

SEC. 501. SHORT TITLE. 

This title may be cited as the ‘‘Indian Tribal Energy Development and Self-Determination Act of 2005’’. 

SEC. 502. OFFICE OF INDIAN ENERGY POLICY AND PROGRAMS. 

(a) IN GENERAL.—Title II of the Department of Energy Organization Act (42 

U.S.C. 7131 et seq.) is amended by adding at the end the following: 

‘‘OFFICE OF INDIAN ENERGY POLICY AND PROGRAMS

‘‘SEC. 217. (a) ESTABLISHMENT.—There is established within the Department an 

Office of Indian Energy Policy and Programs (referred to in this section as the ‘Office’). The Office shall be headed by a Director, who shall be appointed by the SecVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00046 Fmt 6659 Sfmt 6621 E:\HR\OC\HR215P1.XXX HR215P1
47 

retary and compensated at a rate equal to that of level IV of the Executive Schedule 

under section 5315 of title 5, United States Code. 

‘‘(b) DUTIES OF DIRECTOR.—The Director, in accordance with Federal policies promoting Indian self-determination and the purposes of this Act, shall provide, direct, 

foster, coordinate, and implement energy planning, education, management, conservation, and delivery programs of the Department that— 

‘‘(1) promote Indian tribal energy development, efficiency, and use; 

‘‘(2) reduce or stabilize energy costs; 

‘‘(3) enhance and strengthen Indian tribal energy and economic infrastructure 

relating to natural resource development and electrification; and 

‘‘(4) bring electrical power and service to Indian land and the homes of tribal 

members located on Indian lands or acquired, constructed, or improved (in 

whole or in part) with Federal funds.’’. 

(b) CONFORMING AMENDMENTS.— (1) The table of contents of the Department of Energy Organization Act (42 

U.S.C. prec. 7101) is amended— 

(A) in the item relating to section 209, by striking ‘‘Section’’ and inserting 

‘‘Sec.’’; and 

(B) by striking the items relating to sections 213 through 216 and inserting the following: 

‘‘Sec. 213. Establishment of policy for National Nuclear Security Administration. 

‘‘Sec. 214. Establishment of security, counterintelligence, and intelligence policies. 

‘‘Sec. 215. Office of Counterintelligence. 

‘‘Sec. 216. Office of Intelligence. 

‘‘Sec. 217. Office of Indian Energy Policy and Programs.’’. 

(2) Section 5315 of title 5, United States Code, is amended by inserting after 

‘‘Inspector General, Department of Energy.’’ the following: 

‘‘Director, Office of Indian Energy Policy and Programs, Department of 

Energy.’’ 

§ 503. Indian energy 

(a) IN GENERAL.—Title XXVI of the Energy Policy Act of 1992 (25 U.S.C. 3501 et 

seq.) is amended to read as follows: 

‘‘TITLE XXVI—INDIAN ENERGY 

‘‘SEC. 2601. DEFINITIONS. 

‘‘For purposes of this title: 

‘‘(1) The term ‘Director’ means the Director of the Office of Indian Energy Policy and Programs, Department of Energy. 

‘‘(2) The term ‘Indian land’ means— 

‘‘(A) any land located within the boundaries of an Indian reservation, 

pueblo, or rancheria; 

‘‘(B) any land not located within the boundaries of an Indian reservation, 

pueblo, or rancheria, the title to which is held— 

‘‘(i) in trust by the United States for the benefit of an Indian tribe 

or an individual Indian; 

‘‘(ii) by an Indian tribe or an individual Indian, subject to restriction 

against alienation under laws of the United States; or 

‘‘(iii) by a dependent Indian community; and 

‘‘(C) land that is owned by an Indian tribe and was conveyed by the 

United States to a Native Corporation pursuant to the Alaska Native 

Claims Settlement Act (43 U.S.C. 1601 et seq.), or that was conveyed by 

the United States to a Native Corporation in exchange for such land. 

‘‘(3) The term ‘Indian reservation’ includes— 

‘‘(A) an Indian reservation in existence in any State or States as of the 

date of enactment of this paragraph; 

‘‘(B) a public domain Indian allotment; and 

‘‘(C) a dependent Indian community located within the borders of the 

United States, regardless of whether the community is located— 

‘‘(i) on original or acquired territory of the community; or 

‘‘(ii) within or outside the boundaries of any particular State. 

‘‘(4) 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), 

except that the term ‘Indian tribe’, for the purpose of paragraph (11) and sections 2603(b)(3) and 2604, shall 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, 

48 

gathering system, transportation system or facility, or electric transmission or 

distribution facility) on or near Indian land to process, refine, generate electricity from, or otherwise develop energy resources on, Indian land. 

‘‘(6) The term ‘Native Corporation’ has the meaning given the term in section 

3 of the Alaska Native Claims Settlement Act (43 U.S.C. 1602). 

‘‘(7) The term ‘organization’ means a partnership, joint venture, limited liability company, or other unincorporated association or entity that is established 

to develop Indian energy resources. 

‘‘(8) The term ‘Program’ means the Indian energy resource development program established under section 2602(a). 

‘‘(9) The term ‘Secretary’ means the Secretary of the Interior. 

‘‘(10) The term ‘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 authorized by 

section 2602. 

‘‘(11) 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 which 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. 

‘‘(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 PLANNING AND MANAGEMENT ASSISTANCE PROGRAM.— 

‘‘(1) The Director shall establish programs to assist consenting Indian tribes 

in meeting energy education, research and development, planning, and management needs. 

‘‘(2) In carrying out this subsection, the Director may provide grants, on a 

competitive basis, to an Indian tribe or tribal energy resource development organization for use in carrying out— 

‘‘(A) energy, energy efficiency, and energy conservation programs; 

‘‘(B) studies and other activities supporting tribal acquisitions of energy 

supplies, services, and facilities; 

‘‘(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 may develop, in consultation with Indian tribes, a formula for providing grants under this subsection. 

‘‘(B) In providing a grant under this subsection, the Director shall give priority to an application received from an Indian tribe with inadequate electric 

service (as determined by the Director). 

‘‘(4) The Secretary of Energy may issue such regulations as necessary to carry 

out this subsection. 

‘‘(5) There are 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.— 

49 

‘‘(1) Subject to paragraph (3), 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 not more than 90 percent of the unpaid principal and interest 

due on any loan made to any Indian tribe for energy development. 

‘‘(2) 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. 

‘‘(3) The aggregate outstanding amount guaranteed by the Secretary of Energy at any time under this subsection shall not exceed $2,000,000,000. 

‘‘(4) The Secretary of Energy may issue such regulations as the Secretary of 

Energy determines are necessary to carry out this subsection. 

‘‘(5) There are authorized to be appropriated such sums as are necessary to 

carry out this subsection, to remain available until expended. 

‘‘(6) Not later than 1 year from the date of enactment of this section, the Secretary of Energy shall report to Congress on the financing requirements of Indian tribes for energy development on Indian land. 

‘‘(d) FEDERAL AGENCIES-INDIAN ENERGY PREFERENCE.— 

‘‘(1) In purchasing electricity or any other energy product or byproduct, a Federal agency or department may give preference to an energy and resource production enterprise, partnership, consortium, corporation, or other type of business organization the majority of the interest in which is owned and controlled 

by 1 or more Indian tribes. 

‘‘(2) In carrying out this subsection, a Federal agency or department shall 

not— 

‘‘(A) pay more than the prevailing market price for an energy product or 

byproduct; or 

‘‘(B) obtain less than prevailing market terms and conditions. 

‘‘SEC. 2603. 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) by an Indian tribe for the development of a tribal energy resource inventory or tribal energy resource on Indian land; 

‘‘(2) by an Indian tribe for the development of a feasibility study or other report necessary to the development of energy resources on Indian land; 

‘‘(3) by an Indian tribe (other than an Indian Tribe in Alaska except the 

Metlakatla Indian Community) for the development and enforcement of tribal 

laws (including regulations) relating to tribal energy resource development and 

the development of technical infrastructure to protect the environment under 

applicable law; or 

‘‘(4) 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 

‘‘(5) 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.—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 upon the request of an Indian tribe, the 

Indian tribe shall have available scientific and technical information and expertise, 

for use in the Indian tribe’s regulation, development, and management of energy resources on Indian land. The Secretary may fulfill this responsibility either directly, 

through the use of Federal officials, or indirectly, by providing financial assistance 

to the 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.—Subject to the provisions of this section— 

‘‘(1) an Indian tribe may, at its discretion, 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 Indian tribe’s energy mineral resources located on tribal land; and 

50 

‘‘(B) construction or operation of an electric generation, transmission, or 

distribution facility located on tribal land or a facility to process or refine 

energy resources developed on tribal land; and 

‘‘(2) such 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 the provisions required by 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 Indian tribe’s activities under such 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 pursuant to the provisions of this section shall 

be valid unless the lease, business agreement, or right-of-way is authorized by the 

provisions of a tribal energy resource agreement approved by the Secretary under 

subsection (e)(2). 

‘‘(e) TRIBAL ENERGY RESOURCE AGREEMENTS.— 

‘‘(1) On issuance of regulations 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 180 days after the date on which the Secretary receives 

a tribal energy resource agreement submitted by an Indian tribe under paragraph (1), or not later than 60 days after the Secretary receives a revised tribal 

energy resource agreement submitted by an Indian tribe under paragraph 

(4)(C), (or such later date as may be 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; 

51 

‘‘(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; 

‘‘(VIII) identify final approval authority; 

‘‘(IX) provide for public notification of final approvals; 

‘‘(X) establish a process for consultation with any affected States concerning off-reservation impacts, if any, identified pursuant to the provisions required 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, in the event that any of its provisions violates 

an express term or requirement set forth in the tribal energy resource 

agreement pursuant to which it was executed— 

‘‘(aa) such provision shall be null and void; and 

‘‘(bb) if the Secretary determines such provision to be material, 

the Secretary shall have the authority to 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 adopted pursuant to this subsection; and 

‘‘(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 pursuant to paragraph (7)(B). 

‘‘(C) Tribal energy resource agreements submitted under paragraph (1) shall 

establish, and include provisions to ensure compliance with, an environmental 

review process that, with respect to a lease, business agreement, or right-of-way 

under this section, provides for— 

‘‘(i) the identification and evaluation of all significant environmental impacts (as compared with a no-action alternative), including effects on cultural resources; 

‘‘(ii) the identification of proposed mitigation; 

‘‘(iii) a process for ensuring that the public is informed of and has an opportunity to comment on the environmental impacts of the proposed action 

before tribal approval of the lease, business agreement, or right-of-way; and 

‘‘(iv) sufficient administrative support and technical capability to carry 

out the environmental review process. 

‘‘(D) A tribal energy resource agreement negotiated between the Secretary 

and an Indian tribe in accordance with this subsection shall include— 

‘‘(i) provisions requiring the Secretary to conduct a periodic review and 

evaluation to monitor the performance of the Indian tribe’s activities associated with the development of energy resources under the tribal energy resource agreement; and 

‘‘(ii) when such review and evaluation result 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 appropriate actions determined by the 

Secretary to be necessary to protect such asset, which actions may include 

reassumption of responsibility for activities associated with the development of energy resources on tribal land until the violation and conditions 

that gave rise to such jeopardy have been corrected. 

‘‘(E) The periodic review and evaluation described in subparagraph (D) shall 

be conducted on an annual basis, except that, after the third such 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 required by 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). The Secretary’s review of a tribal energy resource agreement under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) shall be limited 

to the direct effects of that approval. 

‘‘(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— 

52 

‘‘(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 or grants a 

right-of-way in accordance with a tribal energy resource agreement approved 

under this subsection, the Indian tribe shall, in accordance with the process and 

requirements set forth in the Secretary’s regulations adopted pursuant to paragraph (8), provide to the Secretary— 

‘‘(A) a copy of the lease, business agreement, or right-of-way document 

(including all amendments to and renewals of the document); and 

‘‘(B) in the case of a tribal energy resource agreement or a lease, business 

agreement, or right-of-way that permits payments to be made directly to 

the Indian tribe, information and documentation of those payments sufficient to enable the Secretary to discharge the trust responsibility of the 

United States to enforce the terms of, and protect the Indian tribe’s rights 

under, the lease, business agreement, or right-of-way. 

‘‘(6)(A) For purposes of the activities to be undertaken by the Secretary pursuant to this section, the Secretary shall— 

‘‘(i) carry out such activities in a manner consistent 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-ofway 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 have a trust obligation to ensure that the 

rights and interests of an Indian tribe are protected in the event that— 

‘‘(i) any other party to any such lease, business agreement, or right-ofway violates any applicable provision of Federal law or the terms of any 

lease, business agreement, or right-of-way under this section; or 

‘‘(ii) any provision in such lease, business agreement, or right-of-way violates any express provision or requirement set forth in the tribal energy resource agreement pursuant to which the lease, business agreement, or 

right-of-way was executed. 

‘‘(D) Notwithstanding subparagraph (B), the United States shall not be liable 

to any party (including any Indian tribe) for any of the negotiated terms of, or 

any losses 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). For the purpose of this subparagraph, the term ‘negotiated terms’ means any terms or provisions that are negotiated by an Indian tribe and any other party or parties 

to a lease, business agreement, or right-of-way entered into pursuant to an approved tribal energy resource agreement. 

‘‘(7)(A) In this paragraph, the term ‘interested party’ means any person or entity the interests of which have sustained or will sustain a significant 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 tribal remedies, and in accordance with the process 

and requirements set forth in regulations adopted by the Secretary pursuant to 

paragraph (8), an interested party may submit to the Secretary a petition to review compliance of 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 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, as 

alleged in the petition. 

‘‘(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. 

53 

‘‘(iii) Subject to subparagraph (D), if the Secretary determines that the Indian 

tribe is not in compliance with the tribal energy resource agreement as alleged 

in the petition, the Secretary shall take such action as is necessary to ensure 

compliance with the provisions of the tribal energy resource agreement, which 

action may include— 

‘‘(I) temporarily suspending some or all activities under a lease, business 

agreement, or right-of-way under this section until the Indian tribe or such 

activities are in compliance with the provisions of the approved tribal energy resource agreement; or 

‘‘(II) rescinding approval of all or part of the tribal energy resource agreement, and if all of such agreement is rescinded, reassuming the responsibility for approval of any future leases, business agreements, or rights-ofway described in subsections (a) and (b). 

‘‘(D) Prior to seeking to ensure compliance with the provisions of the tribal 

energy resource agreement of an Indian tribe under subparagraph (C)(iii), the 

Secretary shall— 

‘‘(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 (C)(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. 

‘‘(E) An Indian tribe described in subparagraph (D) shall retain all rights to 

appeal as provided in regulations issued by the Secretary. 

‘‘(8) Not later than 1 year after the date of enactment of the Indian Tribal 

Energy Development and Self-Determination Act of 2005, the Secretary shall 

issue regulations that implement the provisions of this subsection, including— 

‘‘(A) criteria to be used in determining the capacity of an Indian tribe described in 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 

leases, business agreements, and rights-of-way described in this subsection; 

‘‘(C) provisions setting forth 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 defining 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 environment 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.) and the National Environmental Policy Act of 1969 (42 U.S.C. 4321 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 implement the provisions of 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 

the provisions of this section. 

‘‘SEC. 2605. INDIAN MINERAL DEVELOPMENT REVIEW. 

‘‘(a) IN GENERAL.—The Secretary shall conduct a review of all activities being conducted under the Indian Mineral Development Act of 1982 (25 U.S.C. 2101 et seq.) 

as of that date. 

54 

‘‘(b) REPORT.—Not later than 1 year after the date of enactment of the Indian 

Tribal Energy Development and Self-Determination Act of 2005, the Secretary shall 

submit to Congress a report that includes— 

‘‘(1) the results of the review; 

‘‘(2) recommendations to ensure that Indian tribes have the opportunity to develop Indian energy resources; and 

‘‘(3) an analysis of the barriers to the development of energy resources on Indian land (including legal, fiscal, market, and other barriers), along with recommendations for the removal of those barriers.’’. 

(b) CONFORMING AMENDMENTS.—The table of contents for the Energy Policy Act 

of 1992 is amended by striking the items relating to title XXVI and inserting the 

following: 

‘‘Sec. 2601. Definitions. 

‘‘Sec. 2602. Indian tribal energy resource development. 

‘‘Sec. 2603. Indian tribal energy resource regulation. 

‘‘Sec. 2604. Leases, business agreements, and rights-of-way involving energy development or transmission. 

‘‘Sec. 2605. Indian mineral development review.’’. 

§ 504. Four Corners transmission line project 

The Dine Power Authority, an enterprise of the Navajo Nation, shall be eligible 

to receive grants and other assistance as authorized by section 217 of the Department of Energy Organization Act, as added by section 502 of this title, and section 

2602 of the Energy Policy Act of 1992, as amended by this title, for activities associated with the development of a transmission line from the Four Corners Area to 

southern Nevada, including related power generation opportunities. 

§ 505. Energy efficiency in federally assisted housing 

(a) IN GENERAL.—The Secretary of Housing and Urban Development shall promote energy conservation in housing that is located on Indian land and assisted 

with Federal resources through— 

(1) the use of energy-efficient technologies and innovations (including the procurement of energy-efficient refrigerators and other appliances); 

(2) the promotion of shared savings contracts; and 

(3) the use and implementation of such other similar technologies and innovations as the Secretary of Housing and Urban Development considers to be appropriate. 

(b) AMENDMENT.—Section 202(2) of the Native American Housing and Self-Determination Act of 1996 (25 U.S.C. 4132(2)) is amended by inserting ‘‘improvement to 

achieve greater energy efficiency,’’ after ‘‘planning,’’. 

§ 506. Consultation with Indian tribes 

In carrying out this title and the amendments made by this title, the Secretary 

of Energy and the Secretary shall, as appropriate and to the maximum extent practicable, involve and consult with Indian tribes in a manner that is consistent with 

the Federal trust and the government-to-government relationships between Indian 

tribes and the United States. 

TITLE VI—NUCLEAR MATTERS 

Subtitle A—Price-Anderson Act Amendments 

§ 601. Short title 

This subtitle may be cited as the ‘‘Price-Anderson Amendments Act of 2005’’ . 

§ 602. Extension of indemnification authority 

(a) INDEMNIFICATION OF NUCLEAR REGULATORY COMMISSION LICENSEES.—Section 

170 c. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(c)) is amended— 

(1) in the subsection heading, by striking ‘‘LICENSES’’ and inserting ‘‘LICENSEES’’; and 

(2) by striking ‘‘December 31, 2003’’ each place it appears and inserting ‘‘December 31, 2025’’. 

(b) INDEMNIFICATION OF DEPARTMENT OF ENERGY CONTRACTORS.—Section 170 

d.(1)(A) of the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)(1)(A)) is amended by 

striking ‘‘December 31, 2006’’ and inserting ‘‘December 31, 2025’’. 

(c) INDEMNIFICATION OF NONPROFIT EDUCATIONAL INSTITUTIONS.—Section 170 k. 

of the Atomic Energy Act of 1954 (42 U.S.C. 2210(k)) is amended by striking ‘‘August 1, 2002’’ each place it appears and inserting ‘‘December 31, 2025’’. 

55 

§ 603. Maximum assessment 

Section 170 of the Atomic Energy Act of 1954 (42 U.S.C. 2210) is amended— 

(1) in the second proviso of the third sentence of subsection b.(1)— 

(A) by striking ‘‘$63,000,000’’ and inserting ‘‘$95,800,000’’; and 

(B) by striking ‘‘$10,000,000 in any 1 year’’ and inserting ‘‘$15,000,000 in 

any 1 year (subject to adjustment for inflation under subsection t.)’’; and 

(2) in subsection t.(1)— 

(A) by inserting ‘‘total and annual’’ after ‘‘amount of the maximum’’; 

(B) by striking ‘‘the date of the enactment of the Price-Anderson Amendments Act of 1988’’ and inserting ‘‘August 20, 2003’’; and 

(C) in subparagraph (A), by striking ‘‘such date of enactment’’ and inserting ‘‘August 20, 2003’’. 

§ 604. Department of Energy liability limit 

(a) INDEMNIFICATION OF DEPARTMENT OF ENERGY CONTRACTORS.—Section 170 d. 

of the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)) is amended by striking paragraph (2) and inserting the following: 

‘‘(2) In an agreement of indemnification entered into under paragraph (1), the Secretary— 

‘‘(A) may require the contractor to provide and maintain financial protection 

of such a type and in such amounts as the Secretary shall determine to be appropriate to cover public liability arising out of or in connection with the contractual activity; and 

‘‘(B) shall indemnify the persons indemnified against such liability above the 

amount of the financial protection required, in the amount of $10,000,000,000 

(subject to adjustment for inflation under subsection t.), in the aggregate, for 

all persons indemnified in connection with the contract and for each nuclear incident, including such legal costs of the contractor as are approved by the Secretary.’’. 

(b) CONTRACT AMENDMENTS.—Section 170 d. of the Atomic Energy Act of 1954 (42 

U.S.C. 2210(d)) is further amended by striking paragraph (3) and inserting the following— 

‘‘(3) All agreements of indemnification under which the Department of Energy (or 

its predecessor agencies) may be required to indemnify any person under this section shall be deemed to be amended, on the date of enactment of the Price-Anderson 

Amendments Act of 2005, to reflect the amount of indemnity for public liability and 

any applicable financial protection required of the contractor under this subsection.’’. 

(c) LIABILITY LIMIT.—Section 170 e.(1)(B) of the Atomic Energy Act of 1954 (42 

U.S.C. 2210(e)(1)(B)) is amended— 

(1) by striking ‘‘the maximum amount of financial protection required under 

subsection b. or’’; and 

(2) by striking ‘‘paragraph (3) of subsection d., whichever amount is more’’ 

and inserting ‘‘paragraph (2) of subsection d.’’. 

§ 605. Incidents outside the United States 

(a) AMOUNT OF INDEMNIFICATION.—Section 170 d.(5) of the Atomic Energy Act of 

1954 (42 U.S.C. 2210(d)(5)) is amended by striking ‘‘$100,000,000’’ and inserting 

‘‘$500,000,000’’. 

(b) LIABILITY LIMIT.—Section 170 e.(4) of the Atomic Energy Act of 1954 (42 

U.S.C. 2210(e)(4)) is amended by striking ‘‘$100,000,000’’ and inserting 

‘‘$500,000,000’’. 

§ 606. Reports 

Section 170 p. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(p)) is amended 

by striking ‘‘August 1, 1998’’ and inserting ‘‘December 31, 2021’’. 

§ 607. Inflation adjustment 

Section 170 t. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(t)) is amended— 

(1) by redesignating paragraph (2) as paragraph (3); and 

(2) by inserting after paragraph (1) the following: 

‘‘(2) The Secretary shall adjust the amount of indemnification provided under an 

agreement of indemnification under subsection d. not less than once during each 5- 

year period following July 1, 2003, in accordance with the aggregate percentage 

change in the Consumer Price Index since— 

‘‘(A) that date, in the case of the first adjustment under this paragraph; or 

‘‘(B) the previous adjustment under this paragraph.’’. 

56 

§ 608. Treatment of modular reactors 

Section 170 b. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(b)) is amended 

by adding at the end the following: 

‘‘(5)(A) For purposes of this section only, the Commission shall consider a combination of facilities described in subparagraph (B) to be a single facility having a 

rated capacity of 100,000 electrical kilowatts or more. 

‘‘(B) A combination of facilities referred to in subparagraph (A) is 2 or more facilities located at a single site, each of which has a rated capacity of 100,000 electrical 

kilowatts or more but not more than 300,000 electrical kilowatts, with a combined 

rated capacity of not more than 1,300,000 electrical kilowatts.’’. 

§ 609. Applicability 

The amendments made by sections 603, 604, and 605 do not apply to a nuclear 

incident that occurs before the date of the enactment of this Act. 

§ 610. Prohibition on assumption by United States Government of liability 

for certain foreign incidents 

Section 170 of the Atomic Energy Act of 1954 (42 U.S.C. 2210) is amended by adding at the end the following new subsection: 

‘‘u. PROHIBITION ON ASSUMPTION OF LIABILITY FOR CERTAIN FOREIGN INCIDENTS.— 

Notwithstanding this section or any other provision of law, no officer of the United 

States or of any department, agency, or instrumentality of the United States Government may enter into any contract or other arrangement, or into any amendment 

or modification of a contract or other arrangement, the purpose or effect of which 

would be to directly or indirectly impose liability on the United States Government, 

or any department, agency, or instrumentality of the United States Government, or 

to otherwise directly or indirectly require an indemnity by the United States Government, for nuclear incidents occurring in connection with the design, construction, 

or operation of a production facility or utilization facility in any country whose government has been identified by the Secretary of State as engaged in state sponsorship of terrorist activities (specifically including any country the government of 

which, as of September 11, 2001, had been determined by the Secretary of State 

under section 620A(a) of the Foreign Assistance Act of 1961 (22 U.S.C. 2371(a)), section 6(j)(1) of the Export Administration Act of 1979 (50 U.S.C. App. 2405(j)(1)), or 

section 40(d) of the Arms Export Control Act (22 U.S.C. 2780(d)) to have repeatedly 

provided support for acts of international terrorism). This subsection shall not apply 

to nuclear incidents occurring as a result of missions, carried out under the direction of the Secretary of Energy, the Secretary of Defense, or the Secretary of State, 

that are necessary to safely secure, store, transport, or remove nuclear materials for 

nuclear safety or nonproliferation purposes.’’. 

§ 611. Civil penalties 

(a) REPEAL OF AUTOMATIC REMISSION.—Section 234A b.(2) of the Atomic Energy 

Act of 1954 (42 U.S.C. 2282a(b)(2)) is amended by striking the last sentence. 

(b) LIMITATION FOR NOT-FOR-PROFIT INSTITUTIONS.—Subsection d. of section 234A 

of the Atomic Energy Act of 1954 (42 U.S.C. 2282a(d)) is amended to read as follows: 

‘‘d.(1) Notwithstanding subsection a., in the case of any not-for-profit contractor, 

subcontractor, or supplier, the total amount of civil penalties paid under subsection 

a. may not exceed the total amount of fees paid within any 1-year period (as determined by the Secretary) under the contract under which the violation occurs. 

‘‘(2) For purposes of this section, the term ‘not-for-profit’ means that no part of 

the net earnings of the contractor, subcontractor, or supplier inures to the benefit 

of any natural person or for-profit artificial person.’’. 

(c) EFFECTIVE DATE.—The amendments made by this section shall not apply to 

any violation of the Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.) occurring 

under a contract entered into before the date of enactment of this section. 

§ 612. Financial accountability 

(a) AMENDMENT.—Section 170 of the Atomic Energy Act of 1954 (42 U.S.C. 2210) 

is amended by adding at the end the following new subsection: 

‘‘v. FINANCIAL ACCOUNTABILITY.—(1) Notwithstanding subsection d., the Attorney 

General may bring an action in the appropriate United States district court to recover from a contractor of the Secretary (or subcontractor or supplier of such contractor) amounts paid by the Federal Government under an agreement of indemnification under subsection d. for public liability resulting from conduct which constitutes intentional misconduct of any corporate officer, manager, or superintendent 

of such contractor (or subcontractor or supplier of such contractor). 

‘‘(2) The Attorney General may recover under paragraph (1) an amount not 

to exceed the amount of the profit derived by the defendant from the contract. 

57 

‘‘(3) No amount recovered from any contractor (or subcontractor or supplier 

of such contractor) under paragraph (1) may be reimbursed directly or indirectly 

by the Department of Energy. 

‘‘(4) Paragraph (1) shall not apply to any nonprofit entity conducting activities 

under contract for the Secretary. 

‘‘(5) No waiver of a defense required under this section shall prevent a defendant from asserting such defense in an action brought under this subsection. 

‘‘(6) The Secretary shall, by rule, define the terms ‘profit’ and ‘nonprofit entity’ 

for purposes of this subsection. Such rulemaking shall be completed not later 

than 180 days after the date of the enactment of this subsection.’’. 

(b) EFFECTIVE DATE.—The amendment made by this section shall not apply to any 

agreement of indemnification entered into under section 170 d. of the Atomic Energy 

Act of 1954 (42 U.S.C. 2210(d)) before the date of the enactment of this Act. 

Subtitle B—General Nuclear Matters 

§ 621. Licenses 

Section 103 c. of the Atomic Energy Act of 1954 (42 U.S.C. 2133(c)) is amended 

by inserting ‘‘from the authorization to commence operations’’ after ‘‘forty years’’. 

§ 622. NRC training program 

(a) IN GENERAL.—In order to maintain the human resource investment and infrastructure of the United States in the nuclear sciences, health physics, and engineering fields, in accordance with the statutory authorities of the Nuclear Regulatory 

Commission relating to the civilian nuclear energy program, the Nuclear Regulatory 

Commission shall carry out a training and fellowship program to address shortages 

of individuals with critical nuclear safety regulatory skills. 

(b) AUTHORIZATION OF APPROPRIATIONS.— (1) IN GENERAL.—There are authorized to be appropriated to the Nuclear Reg- ulatory Commission to carry out this section $1,000,000 for each of fiscal years 

2005 through 2009. 

(2) AVAILABILITY.—Funds made available under paragraph (1) shall remain 

available until expended. 

§ 623. Cost recovery from government agencies 

Section 161 w. of the Atomic Energy Act of 1954 (42 U.S.C. 2201(w)) is amended— 

(1) by striking ‘‘for or is issued’’ and all that follows through ‘‘1702’’ and inserting ‘‘to the Commission for, or is issued by the Commission, a license or certificate’’; 

(2) by striking ‘‘483a’’ and inserting ‘‘9701’’; and 

(3) by striking ‘‘, of applicants for, or holders of, such licenses or certificates’’. 

§ 624. Elimination of pension offset 

Section 161 of the Atomic Energy Act of 1954 (42 U.S.C. 2201) is amended by adding at the end the following: 

‘‘y. Exempt from the application of sections 8344 and 8468 of title 5, United States 

Code, an annuitant who was formerly an employee of the Commission who is hired 

by the Commission as a consultant, if the Commission finds that the annuitant has 

a skill that is critical to the performance of the duties of the Commission.’’. 

§ 625. Antitrust review 

Section 105 c. of the Atomic Energy Act of 1954 (42 U.S.C. 2135(c)) is amended 

by adding at the end the following: 

‘‘(9) APPLICABILITY.—This subsection does not apply to an application for a license 

to construct or operate a utilization facility or production facility under section 103 

or 104 b. that is filed on or after the date of enactment of this paragraph.’’. 

§ 626. Decommissioning 

Section 161 i. of the Atomic Energy Act of 1954 (42 U.S.C. 2201(i)) is amended— 

(1) by striking ‘‘and (3)’’ and inserting ‘‘(3)’’; and 

(2) by inserting before the semicolon at the end the following: ‘‘, and (4) to 

ensure that sufficient funds will be available for the decommissioning of any 

production or utilization facility licensed under section 103 or 104 b., including 

standards and restrictions governing the control, maintenance, use, and disbursement by any former licensee under this Act that has control over any fund 

for the decommissioning of the facility’’. 

§ 627. Limitation on legal fee reimbursement 

Title II of the Energy Reorganization Act of 1974 (42 U.S.C. 5841 et seq.) is 

amended by adding at the end the following new section: 

58 

‘‘LIMITATION ON LEGAL FEE REIMBURSEMENT

‘‘SEC. 212. The Department of Energy shall not, except as required under a contract entered into before the date of enactment of this section, reimburse any contractor or subcontractor of the Department for any legal fees or expenses incurred 

with respect to a complaint subsequent to— 

‘‘(1) an adverse determination on the merits with respect to such complaint 

against the contractor or subcontractor by the Director of the Department of 

Energy’s Office of Hearings and Appeals pursuant to part 708 of title 10, Code 

of Federal Regulations, or by a Department of Labor Administrative Law Judge 

pursuant to section 211 of this Act; or 

‘‘(2) an adverse final judgment by any State or Federal court with respect to 

such complaint against the contractor or subcontractor for wrongful termination 

or retaliation due to the making of disclosures protected under chapter 12 of 

title 5, United States Code, section 211 of this Act, or any comparable State 

law, 

unless the adverse determination or final judgment is reversed upon further administrative or judicial review.’’. 

§ 629. Report on feasibility of developing commercial nuclear energy generation facilities at existing Department of Energy sites 

Not later than 1 year after the date of the enactment of this Act, the Secretary 

of Energy shall submit to Congress a report on the feasibility of developing commercial nuclear energy generation facilities at Department of Energy sites in existence 

on the date of enactment of this Act. 

§ 630. Uranium sales 

(a) SALES, TRANSFERS, AND SERVICES.—Section 3112 of the USEC Privatization 

Act (42 U.S.C. 2297h–10) is amended by striking subsections (d), (e), and (f) and 

inserting the following: 

‘‘(3) The Secretary may transfer to the Corporation, notwithstanding subsections 

(b)(2) and (d), natural uranium in amounts sufficient to fulfill the Department of 

Energy’s commitments under Article 4(B) of the Agreement between the Department and the Corporation dated June 17, 2002. 

‘‘(d) INVENTORY SALES.—(1) In addition to the transfers and sales authorized 

under subsections (b) and (c) and under paragraph (5) of this subsection, the United 

States Government may transfer or sell uranium in any form subject to paragraphs 

(2), (3), and (4). 

‘‘(2) Except as provided in subsections (b) and (c) and paragraph (5) of this subsection, no sale or transfer of uranium shall be made under this subsection by the 

United States Government unless— 

‘‘(A) the President determines that the material is not necessary for national 

security needs and the sale or transfer has no adverse impact on implementation of existing government-to-government agreements; 

‘‘(B) the price paid to the appropriate Federal agency, if the transaction is a 

sale, will not be less than the fair market value of the material; and 

‘‘(C) the sale or transfer to commercial nuclear power end users is made pursuant to a contract of at least 3 years’ duration. 

‘‘(3) Except as provided in paragraph (5), the United States Government shall not 

make any transfer or sale of uranium in any form under this subsection that would 

cause the total amount of uranium transferred or sold pursuant to this subsection 

that is delivered for consumption by commercial nuclear power end users to exceed— 

‘‘(A) 3,000,000 pounds of U3 O8 equivalent in fiscal year 2005, 2006, 2007, 

2008, or 2009; 

‘‘(B) 5,000,000 pounds of U3O8 equivalent in fiscal year 2010 or 2011; 

‘‘(C) 7,000,000 pounds of U3O8 equivalent in fiscal year 2012; and 

‘‘(D) 10,000,000 pounds of U3O8 equivalent in fiscal year 2013 or any fiscal 

year thereafter. 

‘‘(4) Except for sales or transfers under paragraph (5), for the purposes of this subsection, the recovery of uranium from uranium bearing materials transferred or sold 

by the United States Government to the domestic uranium industry shall be the 

preferred method of making uranium available. The recovered uranium shall be 

counted against the annual maximum deliveries set forth in this section, when such 

uranium is sold to end users. 

‘‘(5) The United States Government may make the following sales and transfers: 

‘‘(A) Sales or transfers to a Federal agency if the material is transferred for 

the use of the receiving agency without any resale or transfer to another entity 

and the material does not meet commercial specifications. 

59 

‘‘(B) Sales or transfers to any person for national security purposes, as determined by the Secretary. 

‘‘(C) Sales or transfers to any State or local agency or nonprofit, charitable, 

or educational institution for use other than the generation of electricity for 

commercial use. 

‘‘(D) Sales or transfers to the Department of Energy research reactor sales 

program. 

‘‘(E) Sales or transfers, at fair market value, for emergency purposes in the 

event of a disruption in supply to commercial nuclear power end users in the 

United States. 

‘‘(F) Sales or transfers, at fair market value, for use in a commercial reactor 

in the United States with nonstandard fuel requirements. 

‘‘(G) Sales or transfers provided for under law for use by the Tennessee Valley 

Authority in relation to the Department of Energy’s highly enriched uranium 

or tritium programs. 

‘‘(6) For purposes of this subsection, the term ‘United States Government’ does not 

include the Tennessee Valley Authority. 

‘‘(e) SAVINGS PROVISION.—Nothing in this subchapter modifies the terms of the 

Russian HEU Agreement. 

‘‘(f) SERVICES.—Notwithstanding any other provision of this section, if the Secretary determines that the Corporation has failed, or may fail, to perform any obligation under the Agreement between the Department of Energy and the Corporation dated June 17, 2002, and as amended thereafter, which failure could result in 

termination of the Agreement, the Secretary shall notify Congress, in such a manner that affords Congress an opportunity to comment, prior to a determination by 

the Secretary whether termination, waiver, or modification of the Agreement is required. The Secretary is authorized to take such action as he determines necessary 

under the Agreement to terminate, waive, or modify provisions of the Agreement to 

achieve its purposes.’’. 

(b) REPORT.—Not later than 3 years after the date of enactment of this Act, the 

Secretary of Energy shall report to Congress on the implementation of this section. 

The report shall include a discussion of available excess uranium inventories; all 

sales or transfers made by the United States Government; the impact of such sales 

or transfers on the domestic uranium industry, the spot market uranium price, and 

the national security interests of the United States; and any steps taken to remediate any adverse impacts of such sales or transfers. 

§ 631. Cooperative research and development and special demonstration 

projects for the uranium mining industry 

(a) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to the Secretary of Energy $10,000,000 for each of fiscal years 2006, 2007, and 2008 

for— 

(1) cooperative, cost-shared agreements between the Department of Energy 

and domestic uranium producers to identify, test, and develop improved in situ 

leaching mining technologies, including low-cost environmental restoration technologies that may be applied to sites after completion of in situ leaching operations; and 

(2) funding for competitively selected demonstration projects with domestic 

uranium producers relating to— 

(A) enhanced production with minimal environmental impacts; 

(B) restoration of well fields; and 

(C) decommissioning and decontamination activities. 

(b) DOMESTIC URANIUM PRODUCER.—For purposes of this section, the term ‘‘domestic uranium producer’’ has the meaning given that term in section 1018(4) of the 

Energy Policy Act of 1992 (42 U.S.C. 2296b–7(4)), except that the term shall not include any producer that has not produced uranium from domestic reserves on or 

after July 30, 1998. 

(c) LIMITATION.—No activities funded under this section may be carried out in the 

State of New Mexico. 

§ 632. Whistleblower protection 

(a) DEFINITION OF EMPLOYER.—Section 211(a)(2) of the Energy Reorganization Act 

of 1974 (42 U.S.C. 5851(a)(2)) is amended— 

(1) in subparagraph (C), by striking ‘‘and’’ at the end; 

(2) in subparagraph (D), by striking the period at the end and inserting ‘‘; 

and’’ and 

(3) by adding at the end the following: 

‘‘(E) a contractor or subcontractor of the Commission.’’. 

(b) DE NOVO REVIEW.—Subsection (b) of such section 211 is amended by adding 

at the end the following new paragraph: 

60 

‘‘(4) If the Secretary has not issued a final decision within 540 days after the 

filing of a complaint under paragraph (1), and there is no showing that such 

delay is due to the bad faith of the person seeking relief under this paragraph, 

such person may bring an action at law or equity for de novo review in the appropriate district court of the United States, which shall have jurisdiction over 

such an action without regard to the amount in controversy.’’. 

§ 633. Medical isotope production 

Section 134 of the Atomic Energy Act of 1954 (42 U.S.C. 2160d) is amended— 

(1) in subsection a., by striking ‘‘a. The Commission’’ and inserting ‘‘a. IN

GENERAL.—Except as provided in subsection b., the Commission’’; 

(2) by redesignating subsection b. as subsection c.; and 

(3) by inserting after subsection a. the following: 

‘‘b. MEDICAL ISOTOPE PRODUCTION.— 

‘‘(1) DEFINITIONS.—In this subsection: 

‘‘(A) HIGHLY ENRICHED URANIUM.—The term ‘highly enriched uranium’ 

means uranium enriched to include concentration of U–235 above 20 percent. 

‘‘(B) MEDICAL ISOTOPE.—The term ‘medical isotope’ includes Molybdenum 

99, Iodine 131, Xenon 133, and other radioactive materials used to produce 

a radiopharmaceutical for diagnostic, therapeutic procedures or for research 

and development. 

‘‘(C) RADIOPHARMACEUTICAL.—The term ‘radiopharmaceutical’ means a 

radioactive isotope that— 

‘‘(i) contains byproduct material combined with chemical or biological 

material; and 

‘‘(ii) is designed to accumulate temporarily in a part of the body for 

therapeutic purposes or for enabling the production of a useful image 

for use in a diagnosis of a medical condition. 

‘‘(D) RECIPIENT COUNTRY.—The term ‘recipient country’ means Canada, 

Belgium, France, Germany, and the Netherlands. 

‘‘(2) LICENSES.—The Commission may issue a license authorizing the export 

(including shipment to and use at intermediate and ultimate consignees specified in the license) to a recipient country of highly enriched uranium for medical 

isotope production if, in addition to any other requirements of this Act (except 

subsection a.), the Commission determines that— 

‘‘(A) a recipient country that supplies an assurance letter to the United 

States Government in connection with the consideration by the Commission 

of the export license application has informed the United States Government that any intermediate consignees and the ultimate consignee specified 

in the application are required to use the highly enriched uranium solely 

to produce medical isotopes; and 

‘‘(B) the highly enriched uranium for medical isotope production will be 

irradiated only in a reactor in a recipient country that— 

‘‘(i) uses an alternative nuclear reactor fuel; or 

‘‘(ii) is the subject of an agreement with the United States Government to convert to an alternative nuclear reactor fuel when alternative 

nuclear reactor fuel can be used in the reactor. 

‘‘(3) REVIEW OF PHYSICAL PROTECTION REQUIREMENTS.— 

‘‘(A) IN GENERAL.—The Commission shall review the adequacy of physical 

protection requirements that, as of the date of an application under paragraph (2), are applicable to the transportation and storage of highly enriched uranium for medical isotope production or control of residual material after irradiation and extraction of medical isotopes. 

‘‘(B) IMPOSITION OF ADDITIONAL REQUIREMENTS.—If the Commission determines that additional physical protection requirements are necessary (including a limit on the quantity of highly enriched uranium that may be contained in a single shipment), the Commission shall impose such requirements as license conditions or through other appropriate means. 

‘‘(4) FIRST REPORT TO CONGRESS.— 

‘‘(A) NAS STUDY.—The Secretary shall enter into an arrangement with 

the National Academy of Sciences to conduct a study to determine— 

‘‘(i) the feasibility of procuring supplies of medical isotopes from commercial sources that do not use highly enriched uranium; 

‘‘(ii) the current and projected demand and availability of medical isotopes in regular current domestic use; 

‘‘(iii) the progress that is being made by the Department of Energy 

and others to eliminate all use of highly enriched uranium in reactor 

fuel, reactor targets, and medical isotope production facilities; and 

61 

‘‘(iv) the potential cost differential in medical isotope production in 

the reactors and target processing facilities if the products were derived 

from production systems that do not involve fuels and targets with 

highly enriched uranium. 

‘‘(B) FEASIBILITY.—For the purpose of this subsection, the use of low enriched uranium to produce medical isotopes shall be determined to be feasible if— 

‘‘(i) low enriched uranium targets have been developed and demonstrated for use in the reactors and target processing facilities that 

produce significant quantities of medical isotopes to serve United 

States needs for such isotopes; 

‘‘(ii) sufficient quantities of medical isotopes are available from low 

enriched uranium targets and fuel to meet United States domestic 

needs; and 

‘‘(iii) the average anticipated total cost increase from production of 

medical isotopes in such facilities without use of highly enriched uranium is less than 10 percent. 

‘‘(C) REPORT BY THE SECRETARY.—Not later than 5 years after the date 

of enactment of the Energy Policy Act of 2005, the Secretary shall submit 

to Congress a report that— 

‘‘(i) contains the findings of the National Academy of Sciences made 

in the study under subparagraph (A); and 

‘‘(ii) discloses the existence of any commitments from commercial producers to provide domestic requirements for medical isotopes without 

use of highly enriched uranium consistent with the feasibility criteria 

described in subparagraph (B) not later than the date that is 4 years 

after the date of submission of the report. 

‘‘(5) SECOND REPORT TO CONGRESS.—If the study of the National Academy of 

Sciences determines under paragraph (4)(A)(i) that the procurement of supplies 

of medical isotopes from commercial sources that do not use highly enriched 

uranium is feasible, but the Secretary is unable to report the existence of commitments under paragraph (4)(C)(ii), not later than the date that is 6 years 

after the date of enactment of the Energy Policy Act of 2005, the Secretary shall 

submit to Congress a report that describes options for developing domestic supplies of medical isotopes in quantities that are adequate to meet domestic demand without the use of highly enriched uranium consistent with the cost increase described in paragraph (4)(B)(iii). 

‘‘(6) CERTIFICATION.—At such time as commercial facilities that do not use 

highly enriched uranium are capable of meeting domestic requirements for medical isotopes, within the cost increase described in paragraph (4)(B)(iii) and 

without impairing the reliable supply of medical isotopes for domestic utilization, the Secretary shall submit to Congress a certification to that effect. 

‘‘(7) SUNSET PROVISION.—After the Secretary submits a certification under 

paragraph (6), the Commission shall, by rule, terminate its review of export license applications under this subsection.’’. 

§ 634. Fernald byproduct material 

Title III of the Nuclear Waste Policy Act of 1982 (42 U.S.C. 10221 et seq.) is 

amended by adding at the end the following new section: 

‘‘FERNALD BYPRODUCT MATERIAL

‘‘SEC. 307. Notwithstanding any other law, the material in the concrete silos at 

the Fernald uranium processing facility managed on the date of enactment of this 

section by the Department shall be considered byproduct material (as defined by 

section 11 e.(2) of the Atomic Energy Act of 1954 (42 U.S.C. 2014(e)(2))). The Department may dispose of the material in a facility regulated by the Commission or 

by an Agreement State. If the Department disposes of the material in such a facility, the Commission or the Agreement State shall regulate the material as byproduct material under that Act. This material shall remain subject to the jurisdiction 

of the Department until it is received at a commercial, Commission-licensed, or 

Agreement State-licensed facility, at which time the material shall be subject to the 

health and safety requirements of the Commission or the Agreement State with jurisdiction over the disposal site.’’. 

§ 635. Safe disposal of greater-than-class c radioactive waste 

Subtitle D of title I of the Nuclear Waste Policy Act of 1982 (42 U.S.C. 10171) 

is amended by adding at the end the following new section: 

62 

‘‘SAFE DISPOSAL OF GREATER-THAN-CLASS C RADIOACTIVE WASTE

‘‘SEC. 152. (a) DESIGNATION OF RESPONSIBILITY.—The Secretary shall designate an 

Office within the Department to have the responsibility for activities needed to develop a new, or use an existing, facility for safely disposing of all low-level radioactive waste with concentrations of radionuclides that exceed the limits established 

by the Commission for Class C radioactive waste (referred to in this section as 

‘GTCC waste’). 

‘‘(b) COMPREHENSIVE PLAN.—The Secretary shall develop a comprehensive plan for 

permanent disposal of GTCC waste which includes plans for a disposal facility. This 

plan shall be transmitted to Congress in a series of reports, including the following: 

‘‘(1) REPORT ON SHORT-TERM PLAN.—Not later than 180 days after the date 

of enactment of this section, the Secretary shall submit to Congress a plan describing the Secretary’s operational strategy for continued recovery and storage 

of GTCC waste until a permanent disposal facility is available. 

‘‘(2) UPDATE OF 1987 REPORT.— ‘‘(A) IN GENERAL.—Not later than 1 year after the date of enactment of 

this section, the Secretary shall submit to Congress an update of the Secretary’s February 1987 report submitted to Congress that made comprehensive recommendations for the disposal of GTCC waste. 

‘‘(B) CONTENTS.—The update under this paragraph shall contain— 

‘‘(i) a detailed description and identification of the GTCC waste that 

is to be disposed; 

‘‘(ii) a description of current domestic and international programs, 

both Federal and commercial, for management and disposition of GTCC 

waste; 

‘‘(iii) an identification of the Federal and private options and costs for 

the safe disposal of GTCC waste; 

‘‘(iv) an identification of the options for ensuring that, wherever possible, generators and users of GTCC waste bear all reasonable costs of 

waste disposal; 

‘‘(v) an identification of any new statutory authority required for disposal of GTCC waste; and 

‘‘(vi) in coordination with the Environmental Protection Agency and 

the Commission, an identification of any new regulatory guidance needed for the disposal of GTCC waste. 

‘‘(3) REPORT ON COST AND SCHEDULE FOR COMPLETION OF ENVIRONMENTAL IM- PACT STATEMENT AND RECORD OF DECISION.—Not later than 180 days after the 

date of submission of the update required under paragraph (2), the Secretary 

shall submit to Congress a report containing an estimate of the cost and schedule to complete a draft and final environmental impact statement and to issue 

a record of decision for a permanent disposal facility, utilizing either a new or 

existing facility, for GTCC waste.’’. 

§ 636. Prohibition on nuclear exports to countries that sponsor terrorism 

(a) IN GENERAL.—Section 129 of the Atomic Energy Act of 1954 (42 U.S.C. 2158) 

is amended— 

(1) by inserting ‘‘a.’’ before ‘‘No nuclear materials and equipment’’; and 

(2) by adding at the end the following new subsection: 

‘‘b.(1) Notwithstanding any other provision of law, including specifically section 

121 of this Act, and except as provided in paragraphs (2) and (3), no nuclear materials and equipment or sensitive nuclear technology, including items and assistance 

authorized by section 57 b. of this Act and regulated under part 810 of title 10, Code 

of Federal Regulations, and nuclear-related items on the Commerce Control List 

maintained under part 774 of title 15 of the Code of Federal Regulations, shall be 

exported or reexported, or transferred or retransferred whether directly or indirectly, and no Federal agency shall issue any license, approval, or authorization for 

the export or reexport, or transfer, or retransfer, whether directly or indirectly, of 

these items or assistance (as defined in this paragraph) to any country whose government has been identified by the Secretary of State as engaged in state sponsorship of terrorist activities (specifically including any country the government of 

which has been determined by the Secretary of State under section 620A(a) of the 

Foreign Assistance Act of 1961 (22 U.S.C. 2371(a)), section 6(j)(1) of the Export Administration Act of 1979 (50 U.S.C. App. 2405(j)(1)), or section 40(d) of the Arms 

Export Control Act (22 U.S.C. 2780(d)) to have repeatedly provided support for acts 

of international terrorism). 

‘‘(2) This subsection shall not apply to exports, reexports, transfers, or retransfers 

of radiation monitoring technologies, surveillance equipment, seals, cameras, tamper-indication devices, nuclear detectors, monitoring systems, or equipment necessary to safely store, transport, or remove hazardous materials, whether such 

63 

items, services, or information are regulated by the Department of Energy, the Department of Commerce, or the Nuclear Regulatory Commission, except to the extent 

that such technologies, equipment, seals, cameras, devices, detectors, or systems are 

available for use in the design or construction of nuclear reactors or nuclear weapons. 

‘‘(3) The President may waive the application of paragraph (1) to a country if the 

President determines and certifies to Congress that the waiver will not result in any 

increased risk that the country receiving the waiver will acquire nuclear weapons, 

nuclear reactors, or any materials or components of nuclear weapons and— 

‘‘(A) the government of such country has not within the preceding 12-month 

period willfully aided or abetted the international proliferation of nuclear explosive devices to individuals or groups or willfully aided and abetted an individual 

or groups in acquiring unsafeguarded nuclear materials; 

‘‘(B) in the judgment of the President, the government of such country has 

provided adequate, verifiable assurances that it will cease its support for acts 

of international terrorism; 

‘‘(C) the waiver of that paragraph is in the vital national security interest of 

the United States; or 

‘‘(D) such a waiver is essential to prevent or respond to a serious radiological 

hazard in the country receiving the waiver that may or does threaten public 

health and safety.’’. 

(b) APPLICABILITY TO EXPORTS APPROVED FOR TRANSFER BUT NOT TRANSFERRED.— 

Subsection b. of section 129 of Atomic Energy Act of 1954, as added by subsection 

(a) of this section, shall apply with respect to exports that have been approved for 

transfer as of the date of the enactment of this Act but have not yet been transferred as of that date. 

§ 638. National uranium stockpile 

The USEC Privatization Act (42 U.S.C. 2297h et seq.) is amended by adding at 

the end the following new section: 

‘‘SEC. 3118. NATIONAL URANIUM STOCKPILE. 

‘‘(a) STOCKPILE CREATION.—The Secretary of Energy may create a national lowenriched uranium stockpile with the goals to— 

‘‘(1) enhance national energy security; and 

‘‘(2) reduce global proliferation threats. 

‘‘(b) SOURCE OF MATERIAL.—The Secretary shall obtain material for the stockpile 

from— 

‘‘(1) material derived from blend-down of Russian highly enriched uranium 

derived from weapons materials; and 

‘‘(2) domestically mined and enriched uranium. 

‘‘(c) LIMITATION ON SALES OR TRANSFERS.—Sales or transfer of materials in the 

stockpile shall occur pursuant to section 3112.’’. 

§ 639. Nuclear Regulatory Commission meetings 

If a quorum of the Nuclear Regulatory Commission gathers to discuss official 

Commission business the discussions shall be recorded, and the Commission shall 

notify the public of such discussions within 15 days after they occur. The Commission shall promptly make a transcript of the recording available to the public on request, except to the extent that public disclosure is exempted or prohibited by law. 

This section shall not apply to a meeting, within the meaning of that term under 

section 552b(a)(2) of title 5, United States Code. 

§ 640. Employee benefits 

Section 3110(a) of the USEC Privatization Act (42 U.S.C. 2297h-8(a)) is amended 

by adding at the end the following new paragraph: 

‘‘(8) CONTINUITY OF BENEFITS.—Not later than 30 days after the date of enactment of this paragraph, the Secretary shall implement such actions as are necessary 

to ensure that any employee who— 

‘‘(A) is involved in providing infrastructure or environmental remediation 

services at the Portsmouth, Ohio, or the Paducah, Kentucky, Gaseous Diffusion 

Plant; 

‘‘(B) has been an employee of the Department of Energy’s predecessor management and integrating contractor (or its first or second tier subcontractors), 

or of the Corporation, at the Portsmouth, Ohio, or the Paducah, Kentucky, facility; and 

‘‘(C) was eligible as of April 1, 2005, to participate in or transfer into the Multiple Employer Pension Plan or the associated multiple employer retiree health 

care benefit plans, as defined in those plans, 

64 

shall continue to be eligible to participate in or transfer into such pension or health 

care benefit plans.’’. 

Subtitle C—Additional Hydrogen Production Provisions 

§ 651. Hydrogen production programs 

(a) ADVANCED REACTOR HYDROGEN COGENERATION PROJECT.— 

(1) PROJECT ESTABLISHMENT.— The Secretary is directed to establish an Advanced Reactor Hydrogen Cogeneration Project. 

(2) PROJECT DEFINITION.— The project shall consist of the research, development, design, construction, and operation of a hydrogen production cogeneration 

research facility that, relative to the current commercial reactors, enhances 

safety features, reduces waste production, enhances thermal efficiencies, increases proliferation resistance, and has the potential for improved economics 

and physical security in reactor siting. This facility shall be constructed so as 

to enable research and development on advanced reactors of the type selected 

and on alternative approaches for reactor-based production of hydrogen. 

(3) PROJECT MANAGEMENT.— 

(A) MANAGEMENT.—The project shall be managed within the Department 

by the Office of Nuclear Energy, Science, and Technology. 

(B) LEAD LABORATORY.—The lead laboratory for the project, providing the 

site for the reactor construction, shall be the Idaho National Laboratory (in 

this subsection referred to as ‘‘INL’’). 

(C) STEERING COMMITTEE.—The Secretary shall establish a national steering committee with membership from the national laboratories, universities, and industry to provide advice to the Secretary and the Director of 

the Office of Nuclear Energy, Science, and Technology on technical and program management aspects of the project. 

(D) COLLABORATION.—Project activities shall be conducted at INL, other 

national laboratories, universities, domestic industry, and international 

partners. 

(4) PROJECT REQUIREMENTS.— 

(A) RESEARCH AND DEVELOPMENT.— 

(i) IN GENERAL.—The project shall include planning, research and development, design, and construction of an advanced, next-generation, 

nuclear energy system suitable for enabling further research and development on advanced reactor technologies and alternative approaches 

for reactor-based generation of hydrogen. 

(ii) REACTOR TEST CAPABILITIES AT INL.—The project shall utilize, 

where appropriate, extensive reactor test capabilities resident at INL. 

(iii) ALTERNATIVES.—The project shall be designed to explore technical, environmental, and economic feasibility of alternative approaches 

for reactor-based hydrogen production. 

(iv) INDUSTRIAL LEAD.—The industrial lead for the project shall be a 

company incorporated in the United States. 

(B) INTERNATIONAL COLLABORATION.— 

(i) IN GENERAL.—The Secretary shall seek international cooperation, 

participation, and financial contribution in this project. 

(ii) ASSISTANCE FROM INTERNATIONAL PARTNERS.—The Secretary may 

contract for assistance from specialists or facilities from member countries of the Generation IV International Forum, the Russian Federation, or other international partners where such specialists or facilities 

provide access to cost-effective and relevant skills or test capabilities. 

(iii) GENERATION IV INTERNATIONAL FORUM.—International activities 

shall be coordinated with the Generation IV International Forum. 

(iv) GENERATION IV NUCLEAR ENERGY SYSTEMS PROGRAM.—The Secretary may combine this project with the Generation IV Nuclear Energy Systems Program. 

(C) DEMONSTRATION.—The overall project, which may involve demonstration of selected project objectives in a partner nation, must demonstrate 

both electricity and hydrogen production and may provide flexibility, where 

technically and economically feasible in the design and construction, to enable tests of alternative reactor core and cooling configurations. 

(D) PARTNERSHIPS.—The Secretary shall establish cost-shared partnerships with domestic industry or international participants for the research, 

development, design, construction, and operation of the research facility, 

and preference in determining the final project structure shall be given to 

65 

an overall project which retains United States leadership while maximizing 

cost sharing opportunities and minimizing Federal funding responsibilities. 

(E) TARGET DATE.—The Secretary shall select technologies and develop 

the project to provide initial testing of either hydrogen production or electricity generation by 2011, or provide a report to Congress explaining why 

this date is not feasible. 

(F) WAIVER OF CONSTRUCTION TIMELINES.—The Secretary is authorized to 

conduct the Advanced Reactor Hydrogen Cogeneration Project without the 

constraints of DOE Order 413.3, relating to program and project management for the acquisition of capital assets, as necessary to meet the specified 

operational date. 

(G) COMPETITION.—The Secretary may fund up to 2 teams for up to 1 

year to develop detailed proposals for competitive evaluation and selection 

of a single proposal and concept for further progress. The Secretary shall 

define the format of the competitive evaluation of proposals. 

(H) USE OF FACILITIES.—Research facilities in industry, national laboratories, or universities either within the United States or with cooperating 

international partners may be used to develop the enabling technologies for 

the research facility. Utilization of domestic university-based facilities shall 

be encouraged to provide educational opportunities for student development. 

(I) ROLE OF NUCLEAR REGULATORY COMMISSION.— 

(i) IN GENERAL.—The Nuclear Regulatory Commission shall have licensing and regulatory authority for any reactor authorized under this 

subsection, pursuant to section 202 of the Energy Reorganization Act 

of 1974 (42 U.S.C. 5842). 

(ii) RISK-BASED CRITERIA.—The Secretary shall seek active participation of the Nuclear Regulatory Commission throughout the project to 

develop risk-based criteria for any future commercial development of a 

similar reactor architecture. 

(J) REPORT.—The Secretary shall develop and transmit to Congress a 

comprehensive project plan not later than 3 months after the date of enactment of this Act. The project plan shall be updated annually with each annual budget submission. 

(b) ADVANCED NUCLEAR REACTOR TECHNOLOGIES.—The Secretary shall— 

(1) prepare a detailed roadmap for carrying out the provisions in this subtitle 

related to advanced nuclear reactor technologies and for implementing the recommendations related to advanced nuclear reactor technologies that are included in the report transmitted under subsection (d); and 

(2) provide for the establishment of 5 projects in geographic areas that are 

regionally and climatically diverse to demonstrate the commercial production of 

hydrogen at existing nuclear power plants, including one demonstration project 

at a national laboratory or institution of higher education using an advanced 

gas-cooled reactor. 

(c) COLLOCATION WITH HYDROGEN PRODUCTION FACILITY.—Section 103 of the 

Atomic Energy Act of 1954 (42 U.S.C. 2011) is amended by adding at the end the 

following new subsection: 

‘‘g. The Commission shall give priority to the licensing of a utilization facility that 

is collocated with a hydrogen production facility. The Commission shall issue a final 

decision approving or disapproving the issuance of a license to construct and operate 

a utilization facility not later than the expiration of 3 years after the date of the 

submission of such application, if the application references a Commission-certified 

design and an early site permit, unless the Commission determines that the applicant has proposed material and substantial changes to the design or the site design 

parameters.’’. 

(d) REPORT.—The Secretary shall transmit to the Congress not later than 120 

days after the date of enactment of this Act a report containing detailed summaries 

of the roadmaps prepared under subsection (b)(1), descriptions of the Secretary’s 

progress in establishing the projects and other programs required under this section, and recommendations for promoting the availability of advanced nuclear reactor energy technologies for the production of hydrogen. 

(e) AUTHORIZATION OF APPROPRIATIONS.—For the purpose of supporting research 

programs related to the development of advanced nuclear reactor technologies under 

this section, there are authorized to be appropriated to the Secretary— 

(1) $65,000,000 for fiscal year 2006; 

(2) $74,750,000 for fiscal year 2007; 

(3) $85,962,500 for fiscal year 2008; 

(4) $98,856,875 for fiscal year 2009; 

(5) $113,685,406 for fiscal year 2010; 

66 

(6) $130,738,217 for fiscal year 2011; 

(7) $150,348,950 for fiscal year 2012; 

(8) $172,901,292 for fiscal year 2013; 

(9) $198,836,486 for fiscal year 2014; and 

(10) $228,661,959 for fiscal year 2015. 

§ 652. Definitions 

For purposes of this subtitle— 

(1) the term ‘‘advanced nuclear reactor technologies’’ means— 

(A) technologies related to advanced light water reactors that may be 

commercially available in the near-term, including mid-sized reactors with 

passive safety features, for the generation of electric power from nuclear fission and the production of hydrogen; and 

(B) technologies related to other nuclear reactors that may require prototype demonstration prior to availability in the mid-term or long-term, including high-temperature, gas-cooled reactors and liquid metal reactors, for 

the generation of electric power from nuclear fission and the production of 

hydrogen; 

(2) the term ‘‘institution of higher education’’ has the meaning given to that 

term in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)); 

and 

(3) the term ‘‘Secretary’’ means the Secretary of Energy. 

Subtitle D—Nuclear Security 

§ 661. Nuclear facility threats 

(a) STUDY.—The President, in consultation with the Nuclear Regulatory Commission (referred to in this subtitle as the ‘‘Commission’’) and other appropriate Federal, State, and local agencies and private entities, shall conduct a study to identify 

the types of threats that pose an appreciable risk to the security of the various 

classes of facilities licensed by the Commission under the Atomic Energy Act of 1954 

(42 U.S.C. 2011 et seq.). Such study shall take into account, but not be limited to— 

(1) the events of September 11, 2001; 

(2) an assessment of physical, cyber, biochemical, and other terrorist threats; 

(3) the potential for attack on facilities by multiple coordinated teams of a 

large number of individuals; 

(4) the potential for assistance in an attack from several persons employed 

at the facility; 

(5) the potential for suicide attacks; 

(6) the potential for water-based and air-based threats; 

(7) the potential use of explosive devices of considerable size and other modern weaponry; 

(8) the potential for attacks by persons with a sophisticated knowledge of facility operations; 

(9) the potential for fires, especially fires of long duration; 

(10) the potential for attacks on spent fuel shipments by multiple coordinated 

teams of a large number of individuals; 

(11) the adequacy of planning to protect the public health and safety at and 

around nuclear facilities, as appropriate, in the event of a terrorist attack 

against a nuclear facility; and 

(12) the potential for theft and diversion of nuclear materials from such facilities. 

(b) SUMMARY AND CLASSIFICATION REPORT.—Not later than 180 days after the 

date of the enactment of this Act, the President shall transmit to Congress and the 

Commission a report— 

(1) summarizing the types of threats identified under subsection (a); and 

(2) classifying each type of threat identified under subsection (a), in accordance with existing laws and regulations, as either— 

(A) involving attacks and destructive acts, including sabotage, directed 

against the facility by an enemy of the United States, whether a foreign 

government or other person, or otherwise falling under the responsibilities 

of the Federal Government; or 

(B) involving the type of risks that Commission licensees should be responsible for guarding against. 

(c) FEDERAL ACTION REPORT.—Not later than 90 days after the date on which a 

report is transmitted under subsection (b), the President shall transmit to Congress 

a report on actions taken, or to be taken, to address the types of threats identified 

under subsection (b)(2)(A), including identification of the Federal, State, and local 

67 

agencies responsible for carrying out the obligations and authorities of the United 

States. Such report may include a classified annex, as appropriate. 

(d) REGULATIONS.—Not later than 180 days after the date on which a report is 

transmitted under subsection (b), the Commission may revise, by rule, the design 

basis threats issued before the date of enactment of this section as the Commission 

considers appropriate based on the summary and classification report. 

(e) PHYSICAL SECURITY PROGRAM.—The Commission shall establish an operational 

safeguards response evaluation program that ensures that the physical protection 

capability and operational safeguards response for sensitive nuclear facilities, as determined by the Commission consistent with the protection of public health and the 

common defense and security, shall be tested periodically through Commission approved or designed, observed, and evaluated force-on-force exercises to determine 

whether the ability to defeat the design basis threat is being maintained. For purposes of this subsection, the term ‘‘sensitive nuclear facilities’’ includes at a minimum commercial nuclear power plants and category I fuel cycle facilities. 

(f) CONTROL OF INFORMATION.—Notwithstanding any other provision of law, the 

Commission may undertake any rulemaking under this subtitle in a manner that 

will fully protect safeguards and classified national security information. 

(g) FEDERAL SECURITY COORDINATORS.— 

(1) REGIONAL OFFICES.—Not later than 18 months after the date of enactment 

of this Act, the Commission shall assign a Federal security coordinator, under 

the employment of the Commission, to each region of the Commission. 

(2) RESPONSIBILITIES.—The Federal security coordinator shall be responsible 

for— 

(A) communicating with the Commission and other Federal, State, and 

local authorities concerning threats, including threats against such classes 

of facilities as the Commission determines to be appropriate; 

(B) ensuring that such classes of facilities as the Commission determines 

to be appropriate maintain security consistent with the security plan in accordance with the appropriate threat level; and 

(C) assisting in the coordination of security measures among the private 

security forces at such classes of facilities as the Commission determines 

to be appropriate and Federal, State, and local authorities, as appropriate. 

(h) TRAINING PROGRAM.—The President shall establish a program to provide technical assistance and training to Federal agencies, the National Guard, and State 

and local law enforcement and emergency response agencies in responding to 

threats against a designated nuclear facility. 

§ 662. Fingerprinting for criminal history record checks 

(a) IN GENERAL.—Subsection a. of section 149 of the Atomic Energy Act of 1954 

(42 U.S.C. 2169(a)) is amended— 

(1) by striking ‘‘a. The Nuclear’’ and all that follows through ‘‘section 147.’’ 

and inserting the following: 

‘‘a. IN GENERAL.— 

‘‘(1) REQUIREMENTS.— 

‘‘(A) IN GENERAL.—The Commission shall require each individual or entity— 

‘‘(i) that is licensed or certified to engage in an activity subject to regulation by the Commission; 

‘‘(ii) that has filed an application for a license or certificate to engage 

in an activity subject to regulation by the Commission; or 

‘‘(iii) that has notified the Commission, in writing, of an intent to file 

an application for licensing, certification, permitting, or approval of a 

product or activity subject to regulation by the Commission, 

to fingerprint each individual described in subparagraph (B) before the individual is permitted unescorted access or access, whichever is applicable, as 

described in subparagraph (B). 

‘‘(B) INDIVIDUALS REQUIRED TO BE FINGERPRINTED.—The Commission 

shall require to be fingerprinted each individual who— 

‘‘(i) is permitted unescorted access to— 

‘‘(I) a utilization facility; or 

‘‘(II) radioactive material or other property subject to regulation 

by the Commission that the Commission determines to be of such 

significance to the public health and safety or the common defense 

and security as to warrant fingerprinting and background checks; 

or 

‘‘(ii) is permitted access to safeguards information under section 

147.’’; 

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(2) by striking ‘‘All fingerprints obtained by a licensee or applicant as required in the preceding sentence’’ and inserting the following: 

‘‘(2) SUBMISSION TO THE ATTORNEY GENERAL.—All fingerprints obtained by an 

individual or entity as required in paragraph (1)’’; 

(3) by striking ‘‘The costs of any identification and records check conducted 

pursuant to the preceding sentence shall be paid by the licensee or applicant.’’ 

and inserting the following: 

‘‘(3) COSTS.—The costs of any identification and records check conducted pursuant to paragraph (1) shall be paid by the individual or entity required to conduct the fingerprinting under paragraph (1)(A).’’; and 

(4) by striking ‘‘Notwithstanding any other provision of law, the Attorney 

General may provide all the results of the search to the Commission, and, in 

accordance with regulations prescribed under this section, the Commission may 

provide such results to the licensee or applicant submitting such fingerprints.’’ 

and inserting the following: 

‘‘(4) PROVISION TO INDIVIDUAL OR ENTITY REQUIRED TO CONDUCT

FINGERPRINTING.—Notwithstanding any other provision of law, the Attorney 

General may provide all the results of the search to the Commission, and, in 

accordance with regulations prescribed under this section, the Commission may 

provide such results to the individual or entity required to conduct the 

fingerprinting under paragraph (1)(A).’’. 

(b) ADMINISTRATION.—Subsection c. of section 149 of the Atomic Energy Act of 

1954 (42 U.S.C. 2169(c)) is amended— 

(1) by striking ‘‘, subject to public notice and comment, regulations—’’ and inserting ‘‘requirements—’’; and 

(2) by striking, in paragraph (2)(B), ‘‘unescorted access to the facility of a licensee or applicant’’ and inserting ‘‘unescorted access to a utilization facility, radioactive material, or other property described in subsection a.(1)(B)’’. 

(c) BIOMETRIC METHODS.—Subsection d. of section 149 of the Atomic Energy Act 

of 1954 (42 U.S.C. 2169(d)) is redesignated as subsection e., and the following is inserted after subsection c.: 

‘‘d. USE OF OTHER BIOMETRIC METHODS.—The Commission may satisfy any requirement for a person to conduct fingerprinting under this section using any other 

biometric method for identification approved for use by the Attorney General, after 

the Commission has approved the alternative method by rule.’’. 

§ 663. Use of firearms by security personnel of licensees and certificate 

holders of the Commission 

Section 161 of the Atomic Energy Act of 1954 (42 U.S.C. 2201) is amended by adding at the end the following subsection: 

‘‘(z)(1) notwithstanding section 922(o), (v), and (w) of title 18, United States 

Code, or any similar provision of any State law or any similar rule or regulation 

of a State or any political subdivision of a State prohibiting the transfer or possession of a handgun, a rifle or shotgun, a short-barreled shotgun, a short-barreled rifle, a machinegun, a semiautomatic assault weapon, ammunition for the 

foregoing, or a large capacity ammunition feeding device, authorize security personnel of licensees and certificate holders of the Commission (including employees of contractors of licensees and certificate holders) to receive, possess, transport, import, and use 1 or more of those weapons, ammunition, or devices, if 

the Commission determines that— 

‘‘(A) such authorization is necessary to the discharge of the security personnel’s official duties; and 

‘‘(B) the security personnel— 

‘‘(i) are not otherwise prohibited from possessing or receiving a firearm under Federal or State laws pertaining to possession of firearms 

by certain categories of persons; 

‘‘(ii) have successfully completed requirements established through 

guidelines implementing this subsection for training in use of firearms 

and tactical maneuvers; 

‘‘(iii) are engaged in the protection of— 

‘‘(I) facilities owned or operated by a Commission licensee or certificate holder that are designated by the Commission; or 

‘‘(II) radioactive material or other property owned or possessed 

by a person that is a licensee or certificate holder of the Commission, or that is being transported to or from a facility owned or operated by such a licensee or certificate holder, and that has been 

determined by the Commission to be of significance to the common 

defense and security or public health and safety; and 

‘‘(iv) are discharging their official duties. 

69 

‘‘(2) Such receipt, possession, transportation, importation, or use shall be subject to— 

‘‘(A) chapter 44 of title 18, United States Code, except for section 

922(a)(4), (o), (v), and (w); 

‘‘(B) chapter 53 of title 26, United States Code, except for section 5844; 

and 

‘‘(C) a background check by the Attorney General, based on fingerprints 

and including a check of the system established under section 103(b) of the 

Brady Handgun Violence Prevention Act (18 U.S.C. 922 note) to determine 

whether the person applying for the authority is prohibited from possessing 

or receiving a firearm under Federal or State law. 

‘‘(3) This subsection shall become effective upon the issuance of guidelines by 

the Commission, with the approval of the Attorney General, to govern the implementation of this subsection. 

‘‘(4) In this subsection, the terms ‘handgun’, ‘rifle’, ‘shotgun’, ‘firearm’, ‘ammunition’, ‘machinegun’, ‘semiautomatic assault weapon’, ‘large capacity ammunition feeding device’, ‘short-barreled shotgun’, and ‘short-barreled rifle’ shall have 

the meanings given those terms in section 921(a) of title 18, United States 

Code.’’. 

§ 664. Unauthorized introduction of dangerous weapons 

Section 229 a. of the Atomic Energy Act of 1954 (42 U.S.C. 2278a(a)) is amended 

in the first sentence by inserting ‘‘or subject to the licensing authority of the Commission or to certification by the Commission under this Act or any other Act’’ before the period at the end. 

§ 665. Sabotage of nuclear facilities or fuel 

(a) IN GENERAL.—Section 236 a. of the Atomic Energy Act of 1954 (42 U.S.C. 

2284(a)) is amended— 

(1) in paragraph (2), by striking ‘‘storage facility’’ and inserting ‘‘storage, 

treatment, or disposal facility’’; 

(2) in paragraph (3)— 

(A) by striking ‘‘such a utilization facility’’ and inserting ‘‘a utilization facility licensed under this Act’’; and 

(B) by striking ‘‘or’’ at the end; 

(3) in paragraph (4)— 

(A) by striking ‘‘facility licensed’’ and inserting ‘‘, uranium conversion, or 

nuclear fuel fabrication facility licensed or certified’’; and 

(B) by striking the comma at the end and inserting a semicolon; and 

(4) by inserting after paragraph (4) the following: 

‘‘(5) any production, utilization, waste storage, waste treatment, waste disposal, uranium enrichment, uranium conversion, or nuclear fuel fabrication facility subject to licensing or certification under this Act during construction of 

the facility, if the destruction or damage caused or attempted to be caused could 

adversely affect public health and safety during the operation of the facility; 

‘‘(6) any primary facility or backup facility from which a radiological emergency preparedness alert and warning system is activated; or 

‘‘(7) any radioactive material or other property subject to regulation by the 

Nuclear Regulatory Commission that, before the date of the offense, the Nuclear 

Regulatory Commission determines, by order or regulation published in the 

Federal Register, is of significance to the public health and safety or to common 

defense and security,’’. 

(b) PENALTIES.—Section 236 of the Atomic Energy Act of 1954 (42 U.S.C. 2284) 

is amended by striking ‘‘$10,000 or imprisoned for not more than 20 years, or both, 

and, if death results to any person, shall be imprisoned for any term of years or 

for life’’ both places it appears and inserting ‘‘$1,000,000 or imprisoned for up to life 

without parole’’. 

§ 666. Secure transfer of nuclear materials 

(a) AMENDMENT.—Chapter 14 of the Atomic Energy Act of 1954 (42 U.S.C. 2201– 

2210b) is amended by adding at the end the following new section: 

‘‘SEC. 170C. SECURE TRANSFER OF NUCLEAR MATERIALS. 

‘‘a. The Nuclear Regulatory Commission shall establish a system to ensure that 

materials described in subsection b., when transferred or received in the United 

States by any party pursuant to an import or export license issued pursuant to this 

Act, are accompanied by a manifest describing the type and amount of materials 

being transferred or received. Each individual receiving or accompanying the transfer of such materials shall be subject to a security background check conducted by 

appropriate Federal entities. 

70 

‘‘b. Except as otherwise provided by the Commission by regulation, the materials 

referred to in subsection a. are byproduct materials, source materials, special nuclear materials, high-level radioactive waste, spent nuclear fuel, transuranic waste, 

and low-level radioactive waste (as defined in section 2(16) of the Nuclear Waste 

Policy Act of 1982 (42 U.S.C. 10101(16))).’’. 

(b) REGULATIONS.—Not later than 1 year after the date of the enactment of this 

Act, and from time to time thereafter as it considers necessary, the Nuclear Regulatory Commission shall issue regulations identifying radioactive materials or classes of individuals that, consistent with the protection of public health and safety and 

the common defense and security, are appropriate exceptions to the requirements 

of section 170C of the Atomic Energy Act of 1954, as added by subsection (a) of this 

section. 

(c) EFFECTIVE DATE.—The amendment made by subsection (a) shall take effect 

upon the issuance of regulations under subsection (b), except that the background 

check requirement shall become effective on a date established by the Commission. 

(d) EFFECT ON OTHER LAW.—Nothing in this section or the amendment made by 

this section shall waive, modify, or affect the application of chapter 51 of title 49, 

United States Code, part A of subtitle V of title 49, United States Code, part B of 

subtitle VI of title 49, United States Code, and title 23, United States Code. 

(e) TABLE OF SECTIONS AMENDMENT.—The table of sections for chapter 14 of the 

Atomic Energy Act of 1954 is amended by adding at the end the following new item: 

‘‘Sec. 170C. Secure transfer of nuclear materials.’’. 

§ 667. Department of Homeland Security consultation 

Before issuing a license for a utilization facility, the Nuclear Regulatory Commission shall consult with the Department of Homeland Security concerning the potential vulnerabilities of the location of the proposed facility to terrorist attack. 

§ 668. Authorization of appropriations 

(a) IN GENERAL.—There are authorized to be appropriated such sums as are necessary to carry out this subtitle and the amendments made by this subtitle. 

(b) NUCLEAR REGULATORY COMMISSION USER FEES AND ANNUAL CHARGES.—Section 6101 of the Omnibus Budget Reconciliation Act of 1990 (42 U.S.C. 2214) is 

amended— 

(1) in subsection (a)— 

(A) by striking ‘‘Except as provided in paragraph (3), the’’ and inserting 

‘‘The’’ in paragraph (1); and 

(B) by striking paragraph (3); and 

(2) in subsection (c)— 

(A) by striking ‘‘and’’ at the end of paragraph (2)(A)(i); 

(B) by striking the period at the end of paragraph (2)(A)(ii) and inserting 

a semicolon; 

(C) by adding at the end of paragraph (2)(A) the following new clauses: 

‘‘(iii) amounts appropriated to the Commission for the fiscal year for 

implementation of section 3116 of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005; and 

‘‘(iv) amounts appropriated to the Commission for homeland security 

activities of the Commission for the fiscal year, except for the costs of 

fingerprinting and background checks required by section 149 of the 

Atomic Energy Act of 1954 (42 U.S.C. 2169) and the costs of conducting 

security inspections.’’; and 

(D) by amending paragraph (2)(B)(v) to read as follows: 

‘‘(v) 90 percent for fiscal year 2005 and each fiscal year thereafter.’’. 

(c) REPEAL.—Section 7601 of the Consolidated Omnibus Budget Reconciliation Act 

of 1985 (42 U.S.C. 2213) is repealed. 

TITLE VII—VEHICLES AND FUELS 

Subtitle A—Existing Programs 

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

Section 400AA(a)(3)(E) of the Energy Policy and Conservation Act (42 U.S.C. 

6374(a)(3)(E)) is amended to read as follows: 

‘‘(E)(i) Dual fueled vehicles acquired pursuant to this section shall be operated on 

alternative fuels unless the Secretary determines that an agency qualifies for a 

waiver of such requirement for vehicles operated by the agency in a particular geographic area in which— 

71 

‘‘(I) the alternative fuel otherwise required to be used in the vehicle is not 

reasonably available to retail purchasers of the fuel, as certified to the Secretary 

by the head of the agency; or 

‘‘(II) the cost of the alternative fuel otherwise required to be used in the vehicle is unreasonably more expensive compared to gasoline, as certified to the Secretary by the head of the agency. 

‘‘(ii) The Secretary shall monitor compliance with this subparagraph by all such 

fleets and shall report annually to Congress on the extent to which the requirements of this subparagraph are being achieved. The report shall include information 

on annual reductions achieved from the use of petroleum-based fuels and the problems, if any, encountered in acquiring alternative fuels.’’. 

§ 704. Incremental cost allocation 

Section 303(c) of the Energy Policy Act of 1992 (42 U.S.C. 13212(c)) is amended 

by striking ‘‘may’’ and inserting ‘‘shall’’. 

§ 705. Lease condensates 

(a) LEASE CONDENSATE FUELS.—Section 301 of the Energy Policy Act of 1992 (42 

U.S.C. 13211) is amended— 

(1) in paragraph (2), by inserting ‘‘mixtures containing 50 percent or more by 

volume of lease condensate or fuels extracted from lease condensate;’’ after ‘‘liquefied petroleum gas;’’; 

(2) in paragraph (13), by striking ‘‘and’’ at the end; 

(3) in paragraph (14)— 

(A) by inserting ‘‘mixtures containing 50 percent or more by volume of 

lease condensate or fuels extracted from lease condensate,’’ after ‘‘liquefied 

petroleum gas,’’; and 

(B) by striking the period and inserting ‘‘; and’’; 

(4) by adding at the end the following: 

‘‘(15) the term ‘lease condensate’ means a mixture, primarily of pentanes and 

heavier hydrocarbons, that is recovered as a liquid from natural gas in lease 

separation facilities.’’. 

(b) LEASE CONDENSATE USE CREDITS.— 

(1) IN GENERAL.—Title III of the Energy Policy Act of 1992 (42 U.S.C. 13211 

et seq.) is amended by adding at the end the following: 

‘‘SEC. 313. LEASE CONDENSATE USE CREDITS. 

‘‘(a) IN GENERAL.—Subject to subsection (d), the Secretary shall allocate 1 credit 

under this section to a fleet or covered person for each qualifying volume of the 

lease condensate component of fuel containing at least 50 percent lease condensate, 

or fuels extracted from lease condensate, after the date of enactment of this section 

for use by the fleet or covered person in vehicles owned or operated by the fleet or 

covered person that weigh more than 8,500 pounds gross vehicle weight rating. 

‘‘(b) REQUIREMENTS.—A credit allocated under this section— 

‘‘(1) shall be subject to the same exceptions, authority, documentation, and 

use of credits that are specified for qualifying volumes of biodiesel in section 

312; and 

‘‘(2) shall not be considered a credit under section 508. 

‘‘(c) REGULATION.— 

‘‘(1) IN GENERAL.—Subject to subsection (d), not later than January 1, 2006, 

after the collection of appropriate information and data that consider usage options, uses in other industries, products, or processes, potential volume capacities, costs, air emissions, and fuel efficiencies, the Secretary shall issue a regulation establishing requirements and procedures for the implementation of this 

section. 

‘‘(2) QUALIFYING VOLUME.—The regulation shall include a determination of an 

appropriate qualifying volume for lease condensate, except that in no case shall 

the Secretary determine that the qualifying volume for lease condensate is less 

than 1,125 gallons. 

‘‘(d) APPLICABILITY.—This section applies unless the Secretary finds that the use 

of lease condensate as an alternative fuel would adversely affect public health or 

safety or ambient air quality or the environment.’’. 

(2) TABLE OF CONTENTS AMENDMENT.—The table of contents of the Energy 

Policy Act of 1992 (42 U.S.C. prec. 13201) is amended by adding at the end of 

the items relating to title III the following: 

‘‘Sec. 313. Lease condensate use credits.’’. 

(c) EMERGENCY EXEMPTION.—Section 301 of the Energy Policy Act of 1992 (42 

U.S.C. 13211) is amended in paragraph (9)(E) by inserting before the semicolon at 

the end ‘‘, including vehicles directly used in the emergency repair of transmission 

72 

lines and in the restoration of electricity service following power outages, as determined by the Secretary’’. 

§ 706. Review of Energy Policy Act of 1992 programs 

(a) IN GENERAL.—Not later than 180 days after the date of enactment of this section, the Secretary of Energy shall complete a study to determine the effect that titles III, IV, and V of the Energy Policy Act of 1992 (42 U.S.C. 13211 et seq.) have 

had on— 

(1) the development of alternative fueled vehicle technology; 

(2) the availability of that technology in the market; and 

(3) the cost of alternative fueled vehicles. 

(b) TOPICS.—As part of the study under subsection (a), the Secretary shall specifically identify— 

(1) the number of alternative fueled vehicles acquired by fleets or covered persons required to acquire alternative fueled vehicles; 

(2) the quantity, by type, of alternative fuel actually used in alternative fueled 

vehicles acquired by fleets or covered persons; 

(3) the quantity of petroleum displaced by the use of alternative fuels in alternative fueled vehicles acquired by fleets or covered persons; 

(4) the direct and indirect costs of compliance with requirements under titles 

III, IV, and V of the Energy Policy Act of 1992 (42 U.S.C. 13211 et seq.), including— 

(A) vehicle acquisition requirements imposed on fleets or covered persons; 

(B) administrative and recordkeeping expenses; 

(C) fuel and fuel infrastructure costs; 

(D) associated training and employee expenses; and 

(E) any other factors or expenses the Secretary determines to be necessary to compile reliable estimates of the overall costs and benefits of complying with programs under those titles for fleets, covered persons, and the 

national economy; 

(5) the existence of obstacles preventing compliance with vehicle acquisition 

requirements and increased use of alternative fuel in alternative fueled vehicles 

acquired by fleets or covered persons; and 

(6) the projected impact of amendments to the Energy Policy Act of 1992 

made by this title. 

(c) REPORT.—Upon completion of the study under this section, the Secretary shall 

submit to Congress a report that describes the results of the study and includes any 

recommendations of the Secretary for legislative or administrative changes concerning the alternative fueled vehicle requirements under titles III, IV and V of the 

Energy Policy Act of 1992 (42 U.S.C. 13211 et seq.). 

§ 707. Report concerning compliance with alternative fueled vehicle purchasing requirements 

Section 310(b)(1) of the Energy Policy Act of 1992 (42 U.S.C. 13218(b)(1)) is 

amended by striking ‘‘1 year after the date of enactment of this subsection’’ and inserting ‘‘February 15, 2006’’. 

Subtitle B—Hybrid Vehicles, Advanced Vehicles, and Fuel 

Cell Buses 

PART 1—HYBRID VEHICLES 

§ 711. Hybrid vehicles 

The Secretary of Energy shall accelerate efforts directed toward the improvement 

of batteries and other rechargeable energy storage systems, power electronics, hybrid systems integration, and other technologies for use in hybrid vehicles. 

§ 712. Hybrid retrofit and electric conversion program 

(a) ESTABLISHMENT.—The Administrator of the Environmental Protection Agency, 

in consultation with the Secretary, shall establish a program for awarding grants 

on a competitive basis to entities for the installation of hybrid retrofit and electric 

conversion technologies for combustion engine vehicles. 

(b) ELIGIBLE RECIPIENTS.—A grant shall be awarded under this section only— 

(1) to a local or State governmental entity; 

(2) to a for-profit or nonprofit corporation or other person; or 

(3) to 1 or more contracting entities that service combustion engine vehicles 

for an entity described in paragraph (1) or (2). 

(c) AWARDS.— 

73 

(1) IN GENERAL.—The Administrator shall seek, to the maximum extent practicable, to ensure a broad geographic distribution of grants under this section. 

(2) PREFERENCES.—In making awards of grants under this section, the Administrator shall give preference to proposals that— 

(A) will achieve the greatest reductions in emissions per proposal or per 

vehicle; or 

(B) involve the use of emissions control retrofit or conversion technology. 

(d) CONDITIONS OF GRANT.—A grant shall be provided under this section on the 

conditions that— 

(1) combustion engine vehicles on which hybrid retrofit or conversion technology are to be demonstrated— 

(A) with the retrofit or conversion technology applied will achieve lowemission standards consistent with the Voluntary National Low Emission 

Vehicle Program for Light-Duty Vehicles and Light-Duty Trucks (40 CFR 

Part 86) without model year restrictions; and 

(B) will be used for a minimum of 3 years; 

(2) grant funds will be used for the purchase of hybrid retrofit or conversion 

technology, including State taxes and contract fees; and 

(3) grant recipients will provide at least 15 percent of the total cost of the 

retrofit or conversion, including the purchase of hybrid retrofit or conversion 

technology and all necessary labor for installation of the retrofit or conversion. 

(e) VERIFICATION.—Not later than 90 days after the date of enactment of this Act, 

the Administrator shall publish in the Federal Register procedures to verify— 

(1) the hybrid retrofit or conversion technology to be demonstrated; and 

(2) that grants are administered in accordance with this section. 

(f) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated 

to the Administrator to carry out this section, to remain available until expended— 

(1) $20,000,000 for fiscal year 2005; 

(2) $35,000,000 for fiscal year 2006; 

(3) $45,000,000 for fiscal year 2007; and 

(4) such sums as are necessary for each of fiscal years 2008 and 2009. 

PART 2—ADVANCED VEHICLES 

§ 721. Definitions 

In this part: 

(1) ALTERNATIVE FUELED VEHICLE.— 

(A) IN GENERAL.—The term ‘‘alternative fueled vehicle’’ means a vehicle 

propelled solely on an alternative fuel (as defined in section 301 of the Energy Policy Act of 1992 (42 U.S.C. 13211)). 

(B) EXCLUSION.—The term ‘‘alternative fueled vehicle’’ does not include a 

vehicle that the Secretary determines, by regulation, does not yield substantial environmental benefits over a vehicle operating solely on gasoline 

or diesel derived from fossil fuels. 

(2) FUEL CELL VEHICLE.—The term ‘‘fuel cell vehicle’’ means a vehicle propelled by an electric motor powered by a fuel cell system that converts chemical 

energy into electricity by combining oxygen (from air) with hydrogen fuel that 

is stored on the vehicle or is produced onboard by reformation of a hydrocarbon 

fuel. Such fuel cell system may or may not include the use of auxiliary energy 

storage systems to enhance vehicle performance. 

(3) HYBRID VEHICLE.—The term ‘‘hybrid vehicle’’ means a medium or heavy 

duty vehicle propelled by an internal combustion engine or heat engine using 

any combustible fuel and an onboard rechargeable energy storage device. 

(4) NEIGHBORHOOD ELECTRIC VEHICLE.—The term ‘‘neighborhood electric vehicle’’ means a motor vehicle that— 

(A) meets the definition of a low-speed vehicle (as defined in part 571 of 

title 49, Code of Federal Regulations); 

(B) meets the definition of a zero-emission vehicle (as defined in section 

86.1702–99 of title 40, Code of Federal Regulations); 

(C) meets the requirements of Federal Motor Vehicle Safety Standard No. 

500; and 

(D) has a maximum speed of not greater than 25 miles per hour. 

(5) PILOT PROGRAM.—The term ‘‘pilot program’’ means the competitive grant 

program established under section 722. 

(6) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Energy. 

(7) ULTRA-LOW SULFUR DIESEL VEHICLE.—The term ‘‘ultra-low sulfur diesel vehicle’’ means a vehicle manufactured in any of model years 2004 through 2006 

powered by a heavy-duty diesel engine that— 

74 

(A) is fueled by diesel fuel that contains sulfur at not more than 15 parts 

per million; and 

(B) emits not more than the lesser of— 

(i) for vehicles manufactured in model years 2004 through 2006, 2.5 

grams per brake horsepower-hour of nonmethane hydrocarbons and oxides of nitrogen and .01 grams per brake horsepower-hour of particulate matter; or 

(ii) the quantity of emissions of nonmethane hydrocarbons, oxides of 

nitrogen, and particulate matter of the best-performing technology of 

ultra-low sulfur diesel vehicles of the same class and application that 

are commercially available. 

§ 722. Pilot program 

(a) ESTABLISHMENT.—The Secretary, in consultation with the Secretary of Transportation, shall establish a competitive grant pilot program, to be administered 

through the Clean Cities Program of the Department of Energy, to provide not more 

than 15 geographically dispersed project grants to State governments, local governments, or metropolitan transportation authorities to carry out a project or projects 

for the purposes described in subsection (b). 

(b) GRANT PURPOSES.—A grant under this section may be used for the following 

purposes: 

(1) The acquisition of alternative fueled vehicles or fuel cell vehicles, including— 

(A) passenger vehicles (including neighborhood electric vehicles); and 

(B) motorized 2-wheel bicycles, scooters, or other vehicles for use by law 

enforcement personnel or other State or local government or metropolitan 

transportation authority employees. 

(2) The acquisition of alternative fueled vehicles, hybrid vehicles, or fuel cell 

vehicles, including— 

(A) buses used for public transportation or transportation to and from 

schools; 

(B) delivery vehicles for goods or services; and 

(C) ground support vehicles at public airports (including vehicles to carry 

baggage or push or pull airplanes toward or away from terminal gates). 

(3) The acquisition of ultra-low sulfur diesel vehicles. 

(4) Installation or acquisition of infrastructure necessary to directly support 

an alternative fueled vehicle, fuel cell vehicle, or hybrid vehicle project funded 

by the grant, including fueling and other support equipment. 

(5) Operation and maintenance of vehicles, infrastructure, and equipment acquired as part of a project funded by the grant. 

(c) APPLICATIONS.— 

(1) REQUIREMENTS.— 

(A) IN GENERAL.—The Secretary shall issue requirements for applying for 

grants under the pilot program. 

(B) MINIMUM REQUIREMENTS.—At a minimum, the Secretary shall require 

that an application for a grant— 

(i) be submitted by the head of a State or local government or a metropolitan transportation authority, or any combination thereof, and a 

registered participant in the Clean Cities Program of the Department 

of Energy; and 

(ii) include— 

(I) a description of the project proposed in the application, including how the project meets the requirements of this part; 

(II) an estimate of the ridership or degree of use of the project; 

(III) an estimate of the air pollution emissions reduced and fossil 

fuel displaced as a result of the project, and a plan to collect and 

disseminate environmental data, related to the project to be funded 

under the grant, over the life of the project; 

(IV) a description of how the project will be sustainable without 

Federal assistance after the completion of the term of the grant; 

(V) a complete description of the costs of the project, including 

acquisition, construction, operation, and maintenance costs over 

the expected life of the project; 

(VI) a description of which costs of the project will be supported 

by Federal assistance under this part; and 

(VII) documentation to the satisfaction of the Secretary that diesel fuel containing sulfur at not more than 15 parts per million is 

available for carrying out the project, and a commitment by the applicant to use such fuel in carrying out the project. 

75 

(2) PARTNERS.—An applicant under paragraph (1) may carry out a project 

under the pilot program in partnership with public and private entities. 

(d) SELECTION CRITERIA.—In evaluating applications under the pilot program, the 

Secretary shall— 

(1) consider each applicant’s previous experience with similar projects; and 

(2) give priority consideration to applications that— 

(A) are most likely to maximize protection of the environment; 

(B) demonstrate the greatest commitment on the part of the applicant to 

ensure funding for the proposed project and the greatest likelihood that the 

project will be maintained or expanded after Federal assistance under this 

part is completed; and 

(C) exceed the minimum requirements of subsection (c)(1)(B)(ii). 

(e) PILOT PROJECT REQUIREMENTS.— 

(1) MAXIMUM AMOUNT.—The Secretary shall not provide more than 

$20,000,000 in Federal assistance under the pilot program to any applicant. 

(2) COST SHARING.—The Secretary shall not provide more than 50 percent of 

the cost, incurred during the period of the grant, of any project under the pilot 

program. 

(3) MAXIMUM PERIOD OF GRANTS.—The Secretary shall not fund any applicant 

under the pilot program for more than 5 years. 

(4) DEPLOYMENT AND DISTRIBUTION.—The Secretary shall seek to the maximum extent practicable to ensure a broad geographic distribution of project 

sites. 

(5) TRANSFER OF INFORMATION AND KNOWLEDGE.—The Secretary shall establish mechanisms to ensure that the information and knowledge gained by participants in the pilot program are transferred among the pilot program participants and to other interested parties, including other applicants that submitted 

applications. 

(f) SCHEDULE.— 

(1) PUBLICATION.—Not later than 90 days after the date of enactment of this 

Act, the Secretary shall publish in the Federal Register, Commerce Business 

Daily, and elsewhere as appropriate, a request for applications to undertake 

projects under the pilot program. Applications shall be due not later than 180 

days after the date of publication of the notice. 

(2) SELECTION.—Not later than 180 days after the date by which applications 

for grants are due, the Secretary shall select by competitive, peer reviewed proposal, all applications for projects to be awarded a grant under the pilot program. 

(g) LIMIT ON FUNDING.—The Secretary shall provide not less than 20 nor more 

than 25 percent of the grant funding made available under this section for the acquisition of ultra-low sulfur diesel vehicles. 

§ 723. Reports to Congress 

(a) INITIAL REPORT.—Not later than 60 days after the date on which grants are 

awarded under this part, the Secretary shall submit to Congress a report containing— 

(1) an identification of the grant recipients and a description of the projects 

to be funded; 

(2) an identification of other applicants that submitted applications for the 

pilot program; and 

(3) a description of the mechanisms used by the Secretary to ensure that the 

information and knowledge gained by participants in the pilot program are 

transferred among the pilot program participants and to other interested parties, including other applicants that submitted applications. 

(b) EVALUATION.—Not later than 3 years after the date of enactment of this Act, 

and annually thereafter until the pilot program ends, the Secretary shall submit to 

Congress a report containing an evaluation of the effectiveness of the pilot program, 

including— 

(1) an assessment of the benefits to the environment derived from the projects 

included in the pilot program; and 

(2) an estimate of the potential benefits to the environment to be derived from 

widespread application of alternative fueled vehicles and ultra-low sulfur diesel 

vehicles. 

§ 724. Authorization of appropriations 

There are authorized to be appropriated to the Secretary to carry out this part 

$200,000,000, to remain available until expended. 

76 

PART 3—FUEL CELL BUSES 

§ 731. Fuel cell transit bus demonstration 

(a) IN GENERAL.—The Secretary of Energy, in consultation with the Secretary of 

Transportation, shall establish a transit bus demonstration program to make competitive, merit-based awards for 5-year projects to demonstrate not more than 25 

fuel cell transit buses (and necessary infrastructure) in 5 geographically dispersed 

localities. 

(b) PREFERENCE.—In selecting projects under this section, the Secretary of Energy 

shall give preference to projects that are most likely to mitigate congestion and improve air quality. 

(c) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to the Secretary of Energy to carry out this section $10,000,000 for each of fiscal 

years 2006 through 2010. 

Subtitle C—Clean School Buses 

§ 741. Definitions 

In this subtitle: 

(1) ADMINISTRATOR.—The term ‘‘Administrator’’ means the Administrator of 

the Environmental Protection Agency. 

(2) ALTERNATIVE FUEL.—The term ‘‘alternative fuel’’ means liquefied natural 

gas, compressed natural gas, liquefied petroleum gas, hydrogen, propane, or 

methanol or ethanol at no less than 85 percent by volume. 

(3) ALTERNATIVE FUEL SCHOOL BUS.—The term ‘‘alternative fuel school bus’’ 

means a school bus that meets all of the requirements of this subtitle and is 

operated solely on an alternative fuel. 

(4) EMISSIONS CONTROL RETROFIT TECHNOLOGY.—The term ‘‘emissions control 

retrofit technology’’ means a particulate filter or other emissions control equipment that is verified or certified by the Administrator or the California Air Resources Board as an effective emission reduction technology when installed on 

an existing school bus. 

(5) IDLING.—The term ‘‘idling’’ means operating an engine while remaining 

stationary for more than approximately 15 minutes, except that the term does 

not apply to routine stoppages associated with traffic movement or congestion. 

(6) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Energy. 

(7) ULTRA-LOW SULFUR DIESEL FUEL.—The term ‘‘ultra-low sulfur diesel fuel’’ 

means diesel fuel that contains sulfur at not more than 15 parts per million. 

(8) ULTRA-LOW SULFUR DIESEL FUEL SCHOOL BUS.—The term ‘‘ultra-low sulfur 

diesel fuel school bus’’ means a school bus that meets all of the requirements 

of this subtitle and is operated solely on ultra-low sulfur diesel fuel. 

§ 742. Program for replacement of certain school buses with clean school 

buses 

(a) ESTABLISHMENT.—The Administrator, in consultation with the Secretary and 

other appropriate Federal departments and agencies, shall establish a program for 

awarding grants on a competitive basis to eligible entities for the replacement of existing school buses manufactured before model year 1991 with alternative fuel 

school buses and ultra-low sulfur diesel fuel school buses. 

(b) REQUIREMENTS.— (1) IN GENERAL.—Not later than 90 days after the date of enactment of this 

Act, the Administrator shall establish and publish in the Federal Register grant 

requirements on eligibility for assistance, and on implementation of the program established under subsection (a), including instructions for the submission 

of grant applications and certification requirements to ensure compliance with 

this subtitle. 

(2) APPLICATION DEADLINES.—The requirements established under paragraph 

(1) shall require submission of grant applications not later than— 

(A) in the case of the first year of program implementation, the date that 

is 180 days after the publication of the requirements in the Federal Register; and 

(B) in the case of each subsequent year, June 1 of the year. 

(c) ELIGIBLE RECIPIENTS.—A grant shall be awarded under this section only— 

(1) to 1 or more local or State governmental entities responsible for providing 

school bus service to 1 or more public school systems or responsible for the purchase of school buses; 

(2) to 1 or more contracting entities that provide school bus service to 1 or 

more public school systems, if the grant application is submitted jointly with 

77 

the 1 or more school systems to be served by the buses, except that the application may provide that buses purchased using funds awarded shall be owned, operated, and maintained exclusively by the 1 or more contracting entities; or 

(3) to a nonprofit school transportation association representing private contracting entities, if the association has notified and received approval from the 

1 or more school systems to be served by the buses. 

(d) AWARD DEADLINES.— (1) IN GENERAL.—Subject to paragraph (2), the Administrator shall award a 

grant made to a qualified applicant for a fiscal year— 

(A) in the case of the first fiscal year of program implementation, not 

later than the date that is 90 days after the application deadline established under subsection (b)(2); and 

(B) in the case of each subsequent fiscal year, not later than August 1 

of the fiscal year. 

(2) INSUFFICIENT NUMBER OF QUALIFIED GRANT APPLICATIONS.—If the Administrator does not receive a sufficient number of qualified grant applications to 

meet the requirements of subsection (i)(1) for a fiscal year, the Administrator 

shall award a grant made to a qualified applicant under subsection (i)(2) not 

later than September 30 of the fiscal year. 

(e) TYPES OF GRANTS.— (1) IN GENERAL.—A grant under this section shall be used for the replacement 

of school buses manufactured before model year 1991 with alternative fuel 

school buses and ultra-low sulfur diesel fuel school buses. 

(2) NO ECONOMIC BENEFIT.—Other than the receipt of the grant, a recipient 

of a grant under this section may not receive any economic benefit in connection 

with the receipt of the grant. 

(3) PRIORITY OF GRANT APPLICATIONS.—The Administrator shall give priority 

to applicants that propose to replace school buses manufactured before model 

year 1977. 

(f) CONDITIONS OF GRANT.—A grant provided under this section shall include the 

following conditions: 

(1) SCHOOL BUS FLEET.—All buses acquired with funds provided under the 

grant shall be operated as part of the school bus fleet for which the grant was 

made for a minimum of 5 years. 

(2) USE OF FUNDS.—Funds provided under the grant may only be used— 

(A) to pay the cost, except as provided in paragraph (3), of new alternative fuel school buses or ultra-low sulfur diesel fuel school buses, including State taxes and contract fees associated with the acquisition of such 

buses; and 

(B) to provide— 

(i) up to 20 percent of the price of the alternative fuel school buses 

acquired, for necessary alternative fuel infrastructure if the infrastructure will only be available to the grant recipient; and 

(ii) up to 25 percent of the price of the alternative fuel school buses 

acquired, for necessary alternative fuel infrastructure if the infrastructure will be available to the grant recipient and to other bus fleets. 

(3) GRANT RECIPIENT FUNDS.—The grant recipient shall be required to provide 

at least— 

(A) in the case of a grant recipient described in paragraph (1) or (3) of 

subsection (c), the lesser of— 

(i) an amount equal to 15 percent of the total cost of each bus received; or 

(ii) $15,000 per bus; and 

(B) in the case of a grant recipient described in subsection (c)(2), the lesser of— 

(i) an amount equal to 20 percent of the total cost of each bus received; or 

(ii) $20,000 per bus. 

(4) ULTRA-LOW SULFUR DIESEL FUEL.—In the case of a grant recipient receiving a grant for ultra-low sulfur diesel fuel school buses, the grant recipient shall 

be required to provide documentation to the satisfaction of the Administrator 

that diesel fuel containing sulfur at not more than 15 parts per million is available for carrying out the purposes of the grant, and a commitment by the applicant to use such fuel in carrying out the purposes of the grant. 

(5) TIMING.—All alternative fuel school buses, ultra-low sulfur diesel fuel 

school buses, or alternative fuel infrastructure acquired under a grant awarded 

under this section shall be purchased and placed in service as soon as practicable. 

(g) BUSES.— 

78 

(1) IN GENERAL.—Except as provided in paragraph (2), funding under a grant 

made under this section for the acquisition of new alternative fuel school buses 

or ultra-low sulfur diesel fuel school buses shall only be used to acquire school 

buses— 

(A) with a gross vehicle weight of greater than 14,000 pounds; 

(B) that are powered by a heavy duty engine; 

(C) in the case of alternative fuel school buses manufactured in model 

years 2004 through 2006, that emit not more than 1.8 grams per brake 

horsepower-hour of nonmethane hydrocarbons and oxides of nitrogen and 

.01 grams per brake horsepower-hour of particulate matter; and 

(D) in the case of ultra-low sulfur diesel fuel school buses manufactured 

in model years 2004 through 2006, that emit not more than 2.5 grams per 

brake horsepower-hour of nonmethane hydrocarbons and oxides of nitrogen 

and .01 grams per brake horsepower-hour of particulate matter. 

(2) LIMITATIONS.—A bus shall not be acquired under this section that emits 

nonmethane hydrocarbons, oxides of nitrogen, or particulate matter at a rate 

greater than the best performing technology of the same class of ultra-low sulfur diesel fuel school buses commercially available at the time the grant is 

made. 

(h) DEPLOYMENT AND DISTRIBUTION.—The Administrator shall— 

(1) seek, to the maximum extent practicable, to achieve nationwide deployment of alternative fuel school buses and ultra-low sulfur diesel fuel school 

buses through the program under this section; and 

(2) ensure a broad geographic distribution of grant awards, with a goal of no 

State receiving more than 10 percent of the grant funding made available under 

this section for a fiscal year. 

(i) ALLOCATION OF FUNDS.— 

(1) IN GENERAL.—Subject to paragraph (2), of the amount of grant funding 

made available to carry out this section for any fiscal year, the Administrator 

shall use— 

(A) 70 percent for the acquisition of alternative fuel school buses or supporting infrastructure; and 

(B) 30 percent for the acquisition of ultra-low sulfur diesel fuel school 

buses. 

(2) INSUFFICIENT NUMBER OF QUALIFIED GRANT APPLICATIONS.—After the first 

fiscal year in which this program is in effect, if the Administrator does not receive a sufficient number of qualified grant applications to meet the requirements of subparagraph (A) or (B) of paragraph (1) for a fiscal year, effective beginning on August 1 of the fiscal year, the Administrator shall make the remaining funds available to other qualified grant applicants under this section. 

(j) REDUCTION OF SCHOOL BUS IDLING.—Each local educational agency (as defined 

in section 9101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 

7801)) that receives Federal funds under the Elementary and Secondary Education 

Act of 1965 (20 U.S.C. 6301 et seq.) is encouraged to develop a policy, consistent 

with the health, safety, and welfare of students and the proper operation and maintenance of school buses, to reduce the incidence of unnecessary school bus idling at 

schools when picking up and unloading students. 

(k) ANNUAL REPORT.— 

(1) IN GENERAL.—Not later than January 31 of each year, the Administrator 

shall transmit to Congress a report evaluating implementation of the programs 

under this section and section 743. 

(2) COMPONENTS.—The reports shall include a description of— 

(A) the total number of grant applications received; 

(B) the number and types of alternative fuel school buses, ultra-low sulfur 

diesel fuel school buses, and retrofitted buses requested in grant applications; 

(C) grants awarded and the criteria used to select the grant recipients; 

(D) certified engine emission levels of all buses purchased or retrofitted 

under the programs under this section and section 743; 

(E) an evaluation of the in-use emission level of buses purchased or retrofitted under the programs under this section and section 743; and 

(F) any other information the Administrator considers appropriate. 

(l) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated 

to the Administrator to carry out this section, to remain available until expended— 

(1) $45,000,000 for fiscal year 2005; 

(2) $65,000,000 for fiscal year 2006; 

(3) $90,000,000 for fiscal year 2007; and 

(4) such sums as are necessary for each of fiscal years 2008 and 2009. 

79 

§ 743. Diesel retrofit program 

(a) ESTABLISHMENT.—The Administrator, in consultation with the Secretary, shall 

establish a program for awarding grants on a competitive basis to entities for the 

installation of retrofit technologies for diesel school buses. 

(b) ELIGIBLE RECIPIENTS.—A grant shall be awarded under this section only— 

(1) to a local or State governmental entity responsible for providing school bus 

service to 1 or more public school systems; 

(2) to 1 or more contracting entities that provide school bus service to 1 or 

more public school systems, if the grant application is submitted jointly with 

the 1 or more school systems that the buses will serve, except that the application may provide that buses purchased using funds awarded shall be owned, operated, and maintained exclusively by the 1 or more contracting entities; or 

(3) to a nonprofit school transportation association representing private contracting entities, if the association has notified and received approval from the 

1 or more school systems to be served by the buses. 

(c) AWARDS.— 

(1) IN GENERAL.—The Administrator shall seek, to the maximum extent practicable, to ensure a broad geographic distribution of grants under this section. 

(2) PREFERENCES.—In making awards of grants under this section, the Administrator shall give preference to proposals that— 

(A) will achieve the greatest reductions in emissions of nonmethane hydrocarbons, oxides of nitrogen, or particulate matter per proposal or per 

bus; or 

(B) involve the use of emissions control retrofit technology on diesel 

school buses that operate solely on ultra-low sulfur diesel fuel. 

(d) CONDITIONS OF GRANT.—A grant shall be provided under this section on the 

conditions that— 

(1) buses on which retrofit emissions-control technology are to be demonstrated— 

(A) will operate on ultra-low sulfur diesel fuel where such fuel is reasonably available or required for sale by State or local law or regulation; 

(B) were manufactured in model year 1991 or later; and 

(C) will be used for the transportation of school children to and from 

school for a minimum of 5 years; 

(2) grant funds will be used for the purchase of emission control retrofit technology, including State taxes and contract fees; and 

(3) grant recipients will provide at least 15 percent of the total cost of the 

retrofit, including the purchase of emission control retrofit technology and all 

necessary labor for installation of the retrofit. 

(e) VERIFICATION.—Not later than 90 days after the date of enactment of this Act, 

the Administrator shall publish in the Federal Register procedures to verify— 

(1) the retrofit emissions-control technology to be demonstrated; 

(2) that buses powered by ultra-low sulfur diesel fuel on which retrofit emissions-control technology are to be demonstrated will operate on diesel fuel containing not more than 15 parts per million of sulfur; and 

(3) that grants are administered in accordance with this section. 

(f) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated 

to the Administrator to carry out this section, to remain available until expended— 

(1) $20,000,000 for fiscal year 2005; 

(2) $35,000,000 for fiscal year 2006; 

(3) $45,000,000 for fiscal year 2007; and 

(4) such sums as are necessary for each of fiscal years 2008 and 2009. 

§ 744. Fuel cell school buses 

(a) ESTABLISHMENT.—The Secretary shall establish a program for entering into cooperative agreements— 

(1) with private sector fuel cell bus developers for the development of fuel cellpowered school buses; and 

(2) subsequently, with not less than 2 units of local government using natural 

gas-powered school buses and such private sector fuel cell bus developers to 

demonstrate the use of fuel cell-powered school buses. 

(b) COST SHARING.—The non-Federal contribution for activities funded under this 

section shall be not less than— 

(1) 20 percent for fuel infrastructure development activities; and 

(2) 50 percent for demonstration activities and for development activities not 

described in paragraph (1). 

(c) REPORTS TO CONGRESS.—Not later than 3 years after the date of enactment 

of this Act, the Secretary shall transmit to Congress a report that— 

80 

(1) evaluates the process of converting natural gas infrastructure to accommodate fuel cell-powered school buses; and 

(2) assesses the results of the development and demonstration program under 

this section. 

(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to the Secretary to carry out this section $25,000,000 for the period of fiscal years 

2005 through 2007. 

Subtitle D—Miscellaneous 

§ 751. Railroad efficiency 

(a) ESTABLISHMENT.—The Secretary of Energy shall, in cooperation with the Secretary of Transportation and the Administrator of the Environmental Protection 

Agency, establish a cost-shared, public-private research partnership involving the 

Federal Government, railroad carriers, locomotive manufacturers and equipment 

suppliers, and the Association of American Railroads, to develop and demonstrate 

railroad locomotive technologies that increase fuel economy, reduce emissions, and 

lower costs of operation. 

(b) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated 

to the Secretary of Energy to carry out this section— (1) $25,000,000 for fiscal year 2006; 

(2) $35,000,000 for fiscal year 2007; and 

(3) $50,000,000 for fiscal year 2008. 

§ 752. Mobile emission reductions trading and crediting 

(a) IN GENERAL.—Not later than 180 days after the date of enactment of this Act, 

the Administrator of the Environmental Protection Agency shall submit to Congress 

a report on the experience of the Administrator with the trading of mobile source 

emission reduction credits for use by owners and operators of stationary source 

emission sources to meet emission offset requirements within a nonattainment area. 

(b) CONTENTS.—The report shall describe— 

(1) projects approved by the Administrator that include the trading of mobile 

source emission reduction credits for use by stationary sources in complying 

with offset requirements, including a description of— 

(A) project and stationary sources location; 

(B) volumes of emissions offset and traded; 

(C) the sources of mobile emission reduction credits; and 

(D) if available, the cost of the credits; 

(2) the significant issues identified by the Administrator in consideration and 

approval of trading in the projects; 

(3) the requirements for monitoring and assessing the air quality benefits of 

any approved project; 

(4) the statutory authority on which the Administrator has based approval of 

the projects; 

(5) an evaluation of how the resolution of issues in approved projects could 

be used in other projects; and 

(6) any other issues that the Administrator considers relevant to the trading 

and generation of mobile source emission reduction credits for use by stationary 

sources or for other purposes. 

§ 753. Aviation fuel conservation and emissions 

(a) IN GENERAL.—Not later than 60 days after the date of enactment of this Act, 

the Administrator of the Federal Aviation Administration and the Administrator of 

the Environmental Protection Agency shall jointly initiate a study to identify— 

(1) the impact of aircraft emissions on air quality in nonattainment areas; 

and 

(2) ways to promote fuel conservation measures for aviation to— 

(A) enhance fuel efficiency; and 

(B) reduce emissions. 

(b) FOCUS.—The study under subsection (a) shall focus on how air traffic management inefficiencies, such as aircraft idling at airports, result in unnecessary fuel 

burn and air emissions. 

(c) REPORT.—Not later than 1 year after the date of the initiation of the study 

under subsection (a), the Administrator of the Federal Aviation Administration and 

the Administrator of the Environmental Protection Agency shall jointly submit to 

the Committee on Energy and Commerce and the Committee on Transportation and 

Infrastructure of the House of Representatives and the Committee on Environment 

and Public Works and the Committee on Commerce, Science, and Transportation of 

the Senate a report that— 

81 

(1) describes the results of the study; and 

(2) includes any recommendations on ways in which unnecessary fuel use and 

emissions affecting air quality may be reduced— 

(A) without adversely affecting safety and security and increasing individual aircraft noise; and 

(B) while taking into account all aircraft emissions and the impact of the 

emissions on human health. 

§ 754. Diesel fueled vehicles 

(a) DEFINITION OF TIER 2 EMISSION STANDARDS.—In this section, the term ‘‘tier 

2 emission standards’’ means the motor vehicle emission standards that apply to 

passenger cars, light trucks, and larger passenger vehicles manufactured after the 

2003 model year, as issued on February 10, 2000, by the Administrator of the Environmental Protection Agency under sections 202 and 211 of the Clean Air Act (42 

U.S.C. 7521, 7545). 

(b) DIESEL COMBUSTION AND AFTER-TREATMENT TECHNOLOGIES.—The Secretary of 

Energy shall accelerate efforts to improve diesel combustion and after-treatment 

technologies for use in diesel fueled motor vehicles. 

(c) GOALS.—The Secretary shall carry out subsection (b) with a view toward 

achieving the following goals: 

(1) Developing and demonstrating diesel technologies that, not later than 

2010, meet the following standards: 

(A) Tier 2 emission standards. 

(B) The heavy-duty emissions standards of 2007 that are applicable to 

heavy-duty vehicles under regulations issued by the Administrator of the 

Environmental Protection Agency as of the date of enactment of this Act. 

(2) Developing the next generation of low-emission, high efficiency diesel engine technologies, including homogeneous charge compression ignition technology. 

§ 757. Biodiesel engine testing program 

(a) IN GENERAL.—Not later that 180 days after the date of enactment of this Act, 

the Secretary shall initiate a partnership with diesel engine, diesel fuel injection 

system, and diesel vehicle manufacturers and diesel and biodiesel fuel providers, to 

include biodiesel testing in advanced diesel engine and fuel system technology. 

(b) SCOPE.—The program shall provide for testing to determine the impact of biodiesel from different sources on current and future emission control technologies, 

with emphasis on— 

(1) the impact of biodiesel on emissions warranty, in-use liability, and 

antitampering provisions; 

(2) the impact of long-term use of biodiesel on engine operations; 

(3) the options for optimizing these technologies for both emissions and performance when switching between biodiesel and diesel fuel; and 

(4) the impact of using biodiesel in these fueling systems and engines when 

used as a blend with 2006 Environmental Protection Agency-mandated diesel 

fuel containing a maximum of 15-parts-per-million sulfur content. 

(c) REPORT.—Not later than 2 years after the date of enactment of this Act, the 

Secretary shall provide an interim report to Congress on the findings of the program, including a comprehensive analysis of impacts from biodiesel on engine operation for both existing and expected future diesel technologies, and recommendations for ensuring optimal emissions reductions and engine performance with biodiesel. 

(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated 

$5,000,000 for each of fiscal years 2006 through 2010 to carry out this section. 

(e) DEFINITION.—For purposes of this section, the term ‘‘biodiesel’’ means a diesel 

fuel substitute produced from nonpetroleum renewable resources that meets the registration requirements for fuels and fuel additives established by the Environmental 

Protection Agency under section 211 of the Clean Air Act (42 U.S.C. 7545) and that 

meets the American Society for Testing and Materials D6751–02a Standard Specification for Biodiesel Fuel (B100) Blend Stock for Distillate Fuels. 

§ 759. Ultra-efficient engine technology for aircraft 

(a) ULTRA-EFFICIENT ENGINE TECHNOLOGY PARTNERSHIP.—The Secretary of Energy shall enter into a cooperative agreement with the National Aeronautics and 

Space Administration for the development of ultra-efficient engine technology for 

aircraft. 

(b) PERFORMANCE OBJECTIVE.—The Secretary of Energy shall establish the following performance objectives for the program set forth in subsection (a): 

(1) A fuel efficiency increase of 10 percent. 

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(2) A reduction in the impact of landing and takeoff nitrogen oxides emissions 

on local air quality of 70 percent. 

(c) AUTHORIZATION OF APPROPRIATIONS .—There are authorized to be appropriated 

to the Secretary of Energy for carrying out this section $45,000,000 for each of the 

fiscal years 2006, 2007, 2008, 2009, and 2010. 

Subtitle E—Automobile Efficiency 

§ 771. Authorization of appropriations for implementation and enforcement 

of fuel economy standards 

In addition to any other funds authorized by law, there are authorized to be appropriated to the National Highway Traffic Safety Administration to carry out its 

obligations with respect to average fuel economy standards $2,000,000 for each of 

fiscal years 2006 through 2010. 

§ 772. Revised considerations for decisions on maximum feasible average 

fuel economy 

Section 32902(f) of title 49, United States Code, is amended to read as follows: 

‘‘(f) CONSIDERATIONS FOR DECISIONS ON MAXIMUM FEASIBLE AVERAGE FUEL ECONOMY.—When deciding maximum feasible average fuel economy under this section, 

the Secretary of Transportation shall consider the following matters: 

‘‘(1) Technological feasibility. 

‘‘(2) Economic practicability. 

‘‘(3) The effect of other motor vehicle standards of the Government on fuel 

economy. 

‘‘(4) The need of the United States to conserve energy. 

‘‘(5) The effects of fuel economy standards on passenger automobiles, nonpassenger automobiles, and occupant safety. 

‘‘(6) The effects of compliance with average fuel economy standards on levels 

of automobile industry employment in the United States.’’. 

§ 773. Extension of maximum fuel economy increase for alternative fueled 

vehicles 

(a) MANUFACTURING INCENTIVES.—Section 32905 of title 49, United States Code, 

is amended— 

(1) in each of subsections (b) and (d), by striking ‘‘1993–2004’’ and inserting 

‘‘1993–2010’’; 

(2) in subsection (f), by striking ‘‘2001’’ and inserting ‘‘2007’’; and 

(3) in subsection (f)(1), by striking ‘‘2004’’ and inserting ‘‘2010’’. 

(b) MAXIMUM FUEL ECONOMY INCREASE.—Subsection (a)(1) of section 32906 of 

title 49, United States Code, is amended— 

(1) in subparagraph (A), by striking ‘‘the model years 1993–2004’’ and inserting ‘‘model years 1993–2010’’; and 

(2) in subparagraph (B), by striking ‘‘the model years 2005–2008’’ and inserting ‘‘model years 2011–2014’’. 

§ 774. Study of feasibility and effects of reducing use of fuel for automobiles 

(a) IN GENERAL.—Not later than 30 days after the date of the enactment of this 

Act, the Administrator of the National Highway Traffic Safety Administration shall 

initiate a study of the feasibility and effects of reducing by model year 2014, by a 

significant percentage, the amount of fuel consumed by automobiles. 

(b) SUBJECTS OF STUDY.—The study under this section shall include— 

(1) examination of, and recommendation of alternatives to, the policy under 

current Federal law of establishing average fuel economy standards for automobiles and requiring each automobile manufacturer to comply with average 

fuel economy standards that apply to the automobiles it manufactures; 

(2) examination of how automobile manufacturers could contribute toward 

achieving the reduction referred to in subsection (a); 

(3) examination of the potential of fuel cell technology in motor vehicles in 

order to determine the extent to which such technology may contribute to 

achieving the reduction referred to in subsection (a); and 

(4) examination of the effects of the reduction referred to in subsection (a) 

on— 

(A) gasoline supplies; 

(B) the automobile industry, including sales of automobiles manufactured 

in the United States; 

(C) motor vehicle safety; and 

(D) air quality. 

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(c) REPORT.—The Administrator shall submit to Congress a report on the findings, 

conclusion, and recommendations of the study under this section by not later than 

1 year after the date of the enactment of this Act. 

TITLE VIII—HYDROGEN 

§ 801. Definitions 

In this title: 

(1) ADVISORY COMMITTEE.—The term ‘‘Advisory Committee’’ means the Hydrogen Technical and Fuel Cell Advisory Committee established under section 805. 

(2) DEPARTMENT.—The term ‘‘Department’’ means the Department of Energy. 

(3) FUEL CELL.—The term ‘‘fuel cell’’ means a device that directly converts the 

chemical energy of a fuel and an oxidant into electricity by an electrochemical 

process taking place at separate electrodes in the device. 

(4) INFRASTRUCTURE.—The term ‘‘infrastructure’’ means the equipment, systems, or facilities used to produce, distribute, deliver, or store hydrogen. 

(5) LIGHT DUTY VEHICLE.—The term ‘‘light duty vehicle’’ means a car or truck 

classified by the Department of Transportation as a Class I or IIA vehicle. 

(6) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Energy. 

§ 802. Plan 

Not later than 6 months after the date of enactment of this Act, the Secretary 

shall transmit to Congress a coordinated plan for the programs described in this 

title and any other programs of the Department that are directly related to fuel cells 

or hydrogen. The plan shall describe, at a minimum— 

(1) the agenda for the next 5 years for the programs authorized under this 

title, including the agenda for each activity enumerated in section 803(a); 

(2) the types of entities that will carry out the activities under this title and 

what role each entity is expected to play; 

(3) the milestones that will be used to evaluate the programs for the next 5 

years; 

(4) the most significant technical and nontechnical hurdles that stand in the 

way of achieving the goals described in section 803(b), and how the programs 

will address those hurdles; and 

(5) the policy assumptions that are implicit in the plan, including any assumptions that would affect the sources of hydrogen or the marketability of hydrogen-related products. 

§ 803. Programs 

(a) ACTIVITIES.—The Secretary, in partnership with the private sector, shall conduct programs to address— 

(1) production of hydrogen from diverse energy sources, including— 

(A) fossil fuels, which may include carbon capture and sequestration; 

(B) hydrogen-carrier fuels (including ethanol and methanol); 

(C) renewable energy resources, including biomass; and 

(D) nuclear energy; 

(2) use of hydrogen for commercial, industrial, and residential electric power 

generation; 

(3) safe delivery of hydrogen or hydrogen-carrier fuels, including— 

(A) transmission by pipeline and other distribution methods; and 

(B) convenient and economic refueling of vehicles either at central refueling stations or through distributed on-site generation; 

(4) advanced vehicle technologies, including— 

(A) engine and emission control systems; 

(B) energy storage, electric propulsion, and hybrid systems; 

(C) automotive materials; and 

(D) other advanced vehicle technologies; 

(5) storage of hydrogen or hydrogen-carrier fuels, including development of 

materials for safe and economic storage in gaseous, liquid, or solid form at refueling facilities and onboard vehicles; 

(6) development of safe, durable, affordable, and efficient fuel cells, including 

fuel-flexible fuel cell power systems, improved manufacturing processes, hightemperature membranes, cost-effective fuel processing for natural gas, fuel cell 

stack and system reliability, low temperature operation, and cold start capability; 

(7) development, after consultation with the private sector, of necessary codes 

and standards (including international codes and standards and voluntary consensus standards adopted in accordance with OMB Circular A–119) and safety 

84 

practices for the production, distribution, storage, and use of hydrogen, hydrogen-carrier fuels, and related products; 

(8) a public education program to develop improved knowledge and acceptability of hydrogen-based systems; and 

(9) the ability of domestic automobile manufacturers to manufacture commercially available competitive hybrid vehicle technologies in the United States. 

(b) PROGRAM GOALS.— (1) VEHICLES.—For vehicles, the goals of the program are— 

(A) to enable a commitment by automakers no later than year 2015 to 

offer safe, affordable, and technically viable hydrogen fuel cell vehicles in 

the mass consumer market; and 

(B) to enable production, delivery, and acceptance by consumers of model 

year 2020 hydrogen fuel cell and other hydrogen-powered vehicles that will 

have— 

(i) a range of at least 300 miles; 

(ii) improved performance and ease of driving; 

(iii) safety and performance comparable to vehicle technologies in the 

market; and 

(iv) when compared to light duty vehicles in model year 2003— 

(I) fuel economy that is substantially higher; 

(II) substantially lower emissions of air pollutants; and 

(III) equivalent or improved vehicle fuel system crash integrity 

and occupant protection. 

(2) HYDROGEN ENERGY AND ENERGY INFRASTRUCTURE.—For hydrogen energy 

and energy infrastructure, the goals of the program are to enable a commitment 

not later than 2015 that will lead to infrastructure by 2020 that will provide— 

(A) safe and convenient refueling; 

(B) improved overall efficiency; 

(C) widespread availability of hydrogen from domestic energy sources 

through— 

(i) production, with consideration of emissions levels; 

(ii) delivery, including transmission by pipeline and other distribution 

methods for hydrogen; and 

(iii) storage, including storage in surface transportation vehicles; 

(D) hydrogen for fuel cells, internal combustion engines, and other energy 

conversion devices for portable, stationary, and transportation applications; 

and 

(E) other technologies consistent with the Department’s plan. 

(3) FUEL CELLS.—The goals for fuel cells and their portable, stationary, and 

transportation applications are to enable— 

(A) safe, economical, and environmentally sound hydrogen fuel cells; 

(B) fuel cells for light duty and other vehicles; and 

(C) other technologies consistent with the Department’s plan. 

(c) DEMONSTRATION.—In carrying out the programs under this section, the Secretary shall fund a limited number of demonstration projects, consistent with a determination of the maturity, cost-effectiveness, and environmental impacts of technologies supporting each project. In selecting projects under this subsection, the Secretary shall, to the extent practicable and in the public interest, select projects 

that— 

(1) involve using hydrogen and related products at existing facilities or installations, such as existing office buildings, military bases, vehicle fleet centers, 

transit bus authorities, or units of the National Park System; 

(2) depend on reliable power from hydrogen to carry out essential activities; 

(3) lead to the replication of hydrogen technologies and draw such technologies into the marketplace; 

(4) include vehicle, portable, and stationary demonstrations of fuel cell and 

hydrogen-based energy technologies; 

(5) address the interdependency of demand for hydrogen fuel cell applications 

and hydrogen fuel infrastructure; 

(6) raise awareness of hydrogen technology among the public; 

(7) facilitate identification of an optimum technology among competing alternatives; 

(8) address distributed generation using renewable sources; and 

(9) address applications specific to rural or remote locations, including isolated villages and islands, the National Park System, and tribal entities. 

The Secretary shall give preference to projects which address multiple elements contained in paragraphs (1) through (9). 

(d) DEPLOYMENT.—In carrying out the programs under this section, the Secretary 

shall, in partnership with the private sector, conduct activities to facilitate the deVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00084 Fmt 6659 Sfmt 6621 E:\HR\OC\HR215P1.XXX HR215P1
85 

ployment of hydrogen energy and energy infrastructure, fuel cells, and advanced vehicle technologies. 

(e) FUNDING.— 

(1) IN GENERAL.—The Secretary shall carry out the programs under this section using a competitive, merit-based review process and consistent with the 

generally applicable Federal laws and regulations governing awards of financial 

assistance, contracts, or other agreements. 

(2) RESEARCH CENTERS.—Activities under this section may be carried out by 

funding nationally recognized university-based or Federal laboratory research 

centers. 

(f) COST SHARING.— 

(1) RESEARCH AND DEVELOPMENT.—Except as otherwise provided in this title, 

for research and development programs carried out under this title the Secretary shall require a commitment from non-Federal sources of at least 20 percent of the cost of the project. The Secretary may reduce or eliminate the nonFederal requirement under this paragraph if the Secretary determines that the 

research and development is of a basic or fundamental nature or involves technical analyses or educational activities. 

(2) DEMONSTRATION AND COMMERCIAL APPLICATION.—Except as otherwise provided in this title, the Secretary shall require at least 50 percent of the costs 

directly and specifically related to any demonstration or commercial application 

project under this title to be provided from non-Federal sources. The Secretary 

may reduce the non-Federal requirement under this paragraph if the Secretary 

determines that the reduction is necessary and appropriate considering the 

technological risks involved in the project and is necessary to meet the objectives of this title. 

(3) CALCULATION OF AMOUNT.—In calculating the amount of the non-Federal 

commitment under paragraph (1) or (2), the Secretary may include personnel, 

services, equipment, and other resources. 

(4) SIZE OF NON-FEDERAL SHARE.—The Secretary may consider the size of the 

non-Federal share in selecting projects. 

(g) DISCLOSURE.—Section 623 of the Energy Policy Act of 1992 (42 U.S.C. 13293) 

relating to the protection of information shall apply to projects carried out through 

grants, cooperative agreements, or contracts under this title. 

§ 804. Interagency task force 

(a) ESTABLISHMENT.—Not later than 120 days after the date of enactment of this 

Act, the President shall establish an interagency task force chaired by the Secretary 

with representatives from each of the following: 

(1) The Office of Science and Technology Policy within the Executive Office 

of the President. 

(2) The Department of Transportation. 

(3) The Department of Defense. 

(4) The Department of Commerce (including the National Institute of Standards and Technology). 

(5) The Department of State. 

(6) The Environmental Protection Agency. 

(7) The National Aeronautics and Space Administration. 

(8) Other Federal agencies as the Secretary determines appropriate. 

(b) DUTIES.— 

(1) PLANNING.—The interagency task force shall work toward— 

(A) a safe, economical, and environmentally sound fuel infrastructure for 

hydrogen and hydrogen-carrier fuels, including an infrastructure that supports buses and other fleet transportation; 

(B) fuel cells in government and other applications, including portable, 

stationary, and transportation applications; 

(C) distributed power generation, including the generation of combined 

heat, power, and clean fuels including hydrogen; 

(D) uniform hydrogen codes, standards, and safety protocols; and 

(E) vehicle hydrogen fuel system integrity safety performance. 

(2) ACTIVITIES.—The interagency task force may organize workshops and conferences, may issue publications, and may create databases to carry out its duties. The interagency task force shall— 

(A) foster the exchange of generic, nonproprietary information and technology among industry, academia, and government; 

(B) develop and maintain an inventory and assessment of hydrogen, fuel 

cells, and other advanced technologies, including the commercial capability 

of each technology for the economic and environmentally safe production, 

distribution, delivery, storage, and use of hydrogen; 

86 

(C) integrate technical and other information made available as a result 

of the programs and activities under this title; 

(D) promote the marketplace introduction of infrastructure for hydrogen 

fuel vehicles; and 

(E) conduct an education program to provide hydrogen and fuel cell information to potential end-users. 

(c) AGENCY COOPERATION.—The heads of all agencies, including those whose agencies are not represented on the interagency task force, shall cooperate with and furnish information to the interagency task force, the Advisory Committee, and the Department. 

§ 805. Advisory Committee 

(a) ESTABLISHMENT.—The Hydrogen Technical and Fuel Cell Advisory Committee 

is established to advise the Secretary on the programs and activities under this 

title. 

(b) MEMBERSHIP.— 

(1) MEMBERS.—The Advisory Committee shall be comprised of not fewer than 

12 nor more than 25 members. The members shall be appointed by the Secretary to represent domestic industry, academia, professional societies, government agencies, Federal laboratories, previous advisory panels, and financial, environmental, and other appropriate organizations based on the Department’s assessment of the technical and other qualifications of committee members and 

the needs of the Advisory Committee. 

(2) TERMS.—The term of a member of the Advisory Committee shall not be 

more than 3 years. The Secretary may appoint members of the Advisory Committee in a manner that allows the terms of the members serving at any time 

to expire at spaced intervals so as to ensure continuity in the functioning of the 

Advisory Committee. A member of the Advisory Committee whose term is expiring may be reappointed. 

(3) CHAIRPERSON.—The Advisory Committee shall have a chairperson, who is 

elected by the members from among their number. 

(c) REVIEW.—The Advisory Committee shall review and make recommendations to 

the Secretary on— 

(1) the implementation of programs and activities under this title; 

(2) the safety, economical, and environmental consequences of technologies for 

the production, distribution, delivery, storage, or use of hydrogen energy and 

fuel cells; and 

(3) the plan under section 802. 

(d) RESPONSE.— 

(1) CONSIDERATION OF RECOMMENDATIONS.—The Secretary shall consider, but 

need not adopt, any recommendations of the Advisory Committee under subsection (c). 

(2) BIENNIAL REPORT.—The Secretary shall transmit a biennial report to Congress describing any recommendations made by the Advisory Committee since 

the previous report. The report shall include a description of how the Secretary 

has implemented or plans to implement the recommendations, or an explanation of the reasons that a recommendation will not be implemented. The report shall be transmitted along with the President’s budget proposal. 

(e) SUPPORT.—The Secretary shall provide resources necessary in the judgment of 

the Secretary for the Advisory Committee to carry out its responsibilities under this 

title. 

§ 806. External review 

(a) PLAN.—The Secretary shall enter into an arrangement with the National 

Academy of Sciences to review the plan prepared under section 802, which shall be 

completed not later than 6 months after the Academy receives the plan. Not later 

than 45 days after receiving the review, the Secretary shall transmit the review to 

Congress along with a plan to implement the review’s recommendations or an explanation of the reasons that a recommendation will not be implemented. 

(b) ADDITIONAL REVIEW.—The Secretary shall enter into an arrangement with the 

National Academy of Sciences under which the Academy will review the programs 

under section 803 during the fourth year following the date of enactment of this Act. 

The Academy’s review shall include the research priorities and technical milestones, 

and evaluate the progress toward achieving them. The review shall be completed 

not later than 5 years after the date of enactment of this Act. Not later than 45 

days after receiving the review, the Secretary shall transmit the review to Congress 

along with a plan to implement the review’s recommendations or an explanation for 

the reasons that a recommendation will not be implemented. 

87 

§ 807. Miscellaneous provisions 

(a) REPRESENTATION.—The Secretary may represent the United States interests 

with respect to activities and programs under this title, in coordination with the Department of Transportation, the National Institute of Standards and Technology, 

and other relevant Federal agencies, before governments and nongovernmental organizations including— 

(1) other Federal, State, regional, and local governments and their representatives; 

(2) industry and its representatives, including members of the energy and 

transportation industries; and 

(3) in consultation with the Department of State, foreign governments and 

their representatives including international organizations. 

(b) REGULATORY AUTHORITY.—Nothing in this title shall be construed to alter the 

regulatory authority of the Department. 

§ 808. Savings clause 

Nothing in this title shall be construed to affect the authority of the Secretary of 

Transportation that may exist prior to the date of enactment of this Act with respect 

to— 

(1) research into, and regulation of, hydrogen-powered vehicles fuel systems 

integrity, standards, and safety under subtitle VI of title 49, United States 

Code; 

(2) regulation of hazardous materials transportation under chapter 51 of title 

49, United States Code; 

(3) regulation of pipeline safety under chapter 601 of title 49, United States 

Code; 

(4) encouragement and promotion of research, development, and deployment 

activities relating to advanced vehicle technologies under section 5506 of title 

49, United States Code; 

(5) regulation of motor vehicle safety under chapter 301 of title 49, United 

States Code; 

(6) automobile fuel economy under chapter 329 of title 49, United States 

Code; or 

(7) representation of the interests of the United States with respect to the activities and programs under the authority of title 49, United States Code. 

§ 809. Authorization of appropriations 

There are authorized to be appropriated to the Secretary to carry out this title, 

in addition to any amounts made available for these purposes under other Acts— 

(1) $546,000,000 for fiscal year 2006; 

(2) $750,000,000 for fiscal year 2007; 

(3) $850,000,000 for fiscal year 2008; 

(4) $900,000,000 for fiscal year 2009; and 

(5) $1,000,000,000 for fiscal year 2010. 

§ 810. Solar and wind technologies 

(a) SOLAR ENERGY TECHNOLOGIES.—The Secretary shall— 

(1) prepare a detailed roadmap for carrying out the provisions in this subtitle 

related to solar energy technologies and for implementing the recommendations 

related to solar energy technologies that are included in the report transmitted 

under subsection (c); 

(2) provide for the establishment of 5 projects in geographic areas that are 

regionally and climatically diverse to demonstrate the production of hydrogen 

at solar energy facilities, including one demonstration project at a national laboratory or institution of higher education; 

(3) establish a research and development program— 

(A) to develop optimized concentrating solar power devices that may be 

used for the production of both electricity and hydrogen; and 

(B) to evaluate the use of thermochemical cycles for hydrogen production 

at the temperatures attainable with concentrating solar power devices; 

(4) coordinate with activities sponsored by the Department of Energy’s Office 

of Nuclear Energy, Science, and Technology on high-temperature materials, 

thermochemical cycles, and economic issues related to solar energy; 

(5) provide for the construction and operation of new concentrating solar 

power devices or solar power cogeneration facilities that produce hydrogen either concurrently with, or independently of, the production of electricity; 

(6) support existing facilities and research programs dedicated to the development and advancement of concentrating solar power devices; and 

(7) establish a program— 

88 

(A) to research and develop methods that use electricity from photovoltaic 

devices for the onsite production of hydrogen, such that no intermediate 

transmission or distribution infrastructure is required or used and future 

demand growth may be accommodated; 

(B) to evaluate the economics of small-scale electrolysis for hydrogen production; and 

(C) to research the potential of modular photovoltaic devices for the development of a hydrogen infrastructure, the security implications of a hydrogen infrastructure, and the benefits potentially derived from a hydrogen infrastructure. 

(b) WIND ENERGY TECHNOLOGIES.—The Secretary shall— 

(1) prepare a detailed roadmap for carrying out the provisions in this subtitle 

related to wind energy technologies and for implementing the recommendations 

related to wind energy technologies that are included in the report transmitted 

under subsection (c); and 

(2) provide for the establishment of 5 projects in geographic areas that are 

regionally and climatically diverse to demonstrate the production of hydrogen 

at existing wind energy facilities, including one demonstration project at a national laboratory or institution of higher education. 

(c) PROGRAM SUPPORT.—The Secretary shall support research programs at institutions of higher education for the development of solar energy technologies and wind 

energy technologies for the production of hydrogen. The research programs supported under this subsection shall— 

(1) enhance fellowship and faculty assistance programs; 

(2) provide support for fundamental research; 

(3) encourage collaborative research among industry, national laboratories, 

and institutions of higher education; 

(4) support communication and outreach; and 

(5) to the greatest extent possible— 

(A) be located in geographic areas that are regionally and climatically diverse; and 

(B) be located at part B institutions, minority institutions, and institutions of higher education located in States participating in the Experimental Program to Stimulate Competitive Research of the Department of 

Energy. 

(d) INSTITUTIONS OF HIGHER EDUCATION AND NATIONAL LABORATORY INTER- ACTIONS.—In conjunction with the programs supported under this section, the Secretary shall develop sabbatical, fellowship, and visiting scientist programs to encourage national laboratories and institutions of higher education to share and exchange 

personnel. 

(e) DEFINITIONS.—For purposes of this section— 

(1) the term ‘‘concentrating solar power devices’’ means devices that concentrate the power of the sun by reflection or refraction to improve the efficiency of a photovoltaic or thermal generation process; 

(2) the term ‘‘institution of higher education’’ has the meaning given to that 

term in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)); 

(3) the term ‘‘minority institution’’ has the meaning given to that term in section 365 of the Higher Education Act of 1965 (20 U.S.C. 1067k); 

(4) the term ‘‘part B institution’’ has the meaning given to that term in section 322 of the Higher Education Act of 1965 (20 U.S.C. 1061); and 

(5) the term ‘‘photovoltaic devices’’ means devices that convert light directly 

into electricity through a solid-state, semiconductor process. 

TITLE IX—STUDIES AND PROGRAM SUPPORT 

§ 901. Goals 

(a) IN GENERAL.—The Secretary shall conduct a balanced set of programs of study 

to support Federal energy policy and programs by the Department. Such programs 

shall be focused on— 

(1) increasing the efficiency of all energy intensive sectors through conservation and improved technologies; 

(2) promoting diversity of energy supply; 

(3) decreasing the Nation’s dependence on foreign energy supplies; 

(4) improving United States energy security; and 

(5) decreasing the environmental impact of energy-related activities. 

(b) GOALS.—The Secretary shall publish measurable 5-year cost and performancebased goals with each annual budget submission in at least the following areas: 

(1) Energy efficiency for buildings, energy-consuming industries, and vehicles. 

89 

(2) Electric energy generation (including distributed generation), transmission, and storage. 

(3) Renewable energy technologies including wind power, photovoltaics, solar 

thermal systems, geothermal energy, hydrogen-fueled systems, biomass-based 

systems, biofuels, and hydropower. 

(4) Fossil energy including power generation, onshore and offshore oil and gas 

resource recovery, and transportation. 

(5) Nuclear energy including programs for existing and advanced reactors and 

education of future specialists. 

(c) PUBLIC COMMENT.—The Secretary shall provide mechanisms for input on the 

annually published goals from industry, university, and other public sources. 

(d) EFFECT OF GOALS.— 

(1) NO NEW AUTHORITY OR REQUIREMENT.—Nothing in subsection (a) or the 

annually published goals shall— 

(A) create any new— 

(i) authority for any Federal agency; or 

(ii) requirement for any other person; 

(B) be used by a Federal agency to support the establishment of regulatory standards or regulatory requirements; or 

(C) alter the authority of the Secretary to make grants or other awards. 

(2) NO LIMITATION.—Nothing in this subsection shall be construed to limit the 

authority of the Secretary to impose conditions on grants or other awards based 

on the goals in subsection (a) or any subsequent modification thereto. 

§ 902. Definitions 

For purposes of this title: 

(1) DEPARTMENT.—The term ‘‘Department’’ means the Department of Energy. 

(2) DEPARTMENTAL MISSION.—The term ‘‘departmental mission’’ means any of 

the functions vested in the Secretary of Energy by the Department of Energy 

Organization Act (42 U.S.C. 7101 et seq.) or other law. 

(3) INSTITUTION OF HIGHER EDUCATION.—The term ‘‘institution of higher education’’ has the meaning given that term in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)). 

(4) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Energy. 

Subtitle A—Energy Efficiency 

§ 904. Energy efficiency 

(a) IN GENERAL.—The following sums are authorized to be appropriated to the 

Secretary for energy efficiency and conservation activities, including activities authorized under this subtitle: 

(1) For fiscal year 2006, $616,000,000. 

(2) For fiscal year 2007, $695,000,000. 

(3) For fiscal year 2008, $772,000,000. 

(4) For fiscal year 2009, $865,000,000. 

(5) For fiscal year 2010, $920,000,000. 

(b) ALLOCATIONS.—From amounts authorized under subsection (a), the following 

sums are authorized: 

(1) For activities under section 905— 

(A) for fiscal year 2006, $20,000,000; 

(B) for fiscal year 2007, $30,000,000; 

(C) for fiscal year 2008, $50,000,000; 

(D) for fiscal year 2009, $50,000,000; and 

(E) for fiscal year 2010, $50,000,000. 

(2) For activities under section 907— 

(A) for fiscal year 2006, $4,000,000; and 

(B) for each of fiscal years 2007 through 2010, $7,000,000. 

(3) For activities under section 908— 

(A) for fiscal year 2006, $20,000,000; 

(B) for fiscal year 2007, $25,000,000; 

(C) for fiscal year 2008, $30,000,000; 

(D) for fiscal year 2009, $35,000,000; and 

(E) for fiscal year 2010, $40,000,000. 

(4) For activities under section 909, $2,000,000 for each of fiscal years 2007 

through 2010. 

(c) EXTENDED AUTHORIZATION.—There are authorized to be appropriated to the 

Secretary for activities under section 905, $50,000,000 for each of fiscal years 2011 

through 2015. 

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(d) LIMITATION ON USE OF FUNDS.—None of the funds authorized to be appropriated under this section may be used for— 

(1) the issuance and implementation of energy efficiency regulations; 

(2) the Weatherization Assistance Program under part A of title IV of the Energy Conservation and Production Act (42 U.S.C. 6861 et seq.); 

(3) the State Energy Program under part D of title III of the Energy Policy 

and Conservation Act (42 U.S.C. 6321 et seq.); or 

(4) the Federal Energy Management Program under part 3 of title V of the 

National Energy Conservation Policy Act (42 U.S.C. 8251 et seq.). 

§ 905. Next Generation Lighting Initiative 

(a) IN GENERAL.—The Secretary shall carry out a Next Generation Lighting Initiative in accordance with this section to support activities related to advanced solidstate lighting technologies based on white light emitting diodes. 

(b) OBJECTIVES.—The objectives of the initiative shall be to develop advanced 

solid-state organic and inorganic lighting technologies based on white light emitting 

diodes that, compared to incandescent and fluorescent lighting technologies, are 

longer lasting; more energy-efficient; and cost-competitive, and have less environmental impact. 

(c) INDUSTRY ALLIANCE.—The Secretary shall, not later than 3 months after the 

date of enactment of this section, competitively select an Industry Alliance to represent participants that are private, for-profit firms which, as a group, are broadly 

representative of United States solid state lighting expertise as a whole. 

(d) STUDY.— 

(1) IN GENERAL.—The Secretary shall carry out the activities of the Next Generation Lighting Initiative through competitively awarded grants, including to 

Industry Alliance participants, National Laboratories, and institutions of higher 

education. 

(2) ASSISTANCE FROM THE INDUSTRY ALLIANCE.—The Secretary shall annually 

solicit from the Industry Alliance— 

(A) comments to identify solid-state lighting technology needs; 

(B) assessment of the progress of the Initiative’s research activities; and 

(C) assistance in annually updating solid-state lighting technology roadmaps. 

(3) AVAILABILITY OF INFORMATION AND ROADMAPS.—The information and roadmaps under paragraph (2) shall be available to the public and public response 

shall be solicited by the Secretary. 

(e) INTELLECTUAL PROPERTY.—The Secretary may require, in accordance with the 

authorities provided in section 202(a)(ii) of title 35, United States Code, section 152 

of the Atomic Energy Act of 1954 (42 U.S.C. 2182), and section 9 of the Federal 

Nonnuclear Energy Research and Development Act of 1974 (42 U.S.C. 5908), that— 

(1) for any new invention resulting from activities under subsection (d)— 

(A) the Industry Alliance members that are active participants in research, development, and demonstration activities related to the advanced 

solid-state lighting technologies that are the subject of this section shall be 

granted first option to negotiate with the invention owner nonexclusive licenses and royalties for uses of the invention related to solid-state lighting 

on terms that are reasonable under the circumstances; and 

(B)(i) for 1 year after a United States patent is issued for the invention, 

the patent holder shall not negotiate any license or royalty with any entity 

that is not a participant in the Industry Alliance described in subparagraph 

(A); and 

(ii) during the year described in clause (i), the invention owner shall negotiate nonexclusive licenses and royalties in good faith with any interested 

participant in the Industry Alliance described in subparagraph (A); and 

(2) such other terms as the Secretary determines are required to promote accelerated commercialization of inventions made under the Initiative. 

(f) NATIONAL ACADEMY REVIEW.—The Secretary shall enter into an arrangement 

with the National Academy of Sciences to conduct periodic reviews of the Next Generation Lighting Initiative. The Academy shall review the priorities, technical milestones, and plans for technology transfer and progress towards achieving them. The 

Secretary shall consider the results of such reviews in evaluating the information 

obtained under subsection (d)(2). 

(g) DEFINITIONS.—As used in this section: 

(1) ADVANCED SOLID-STATE LIGHTING.—The term ‘‘advanced solid-state lighting’’ means a semiconducting device package and delivery system that produces 

white light using externally applied voltage. 

(2) INDUSTRY ALLIANCE.—The term ‘‘Industry Alliance’’ means an entity selected by the Secretary under subsection (c). 

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(3) WHITE LIGHT EMITTING DIODE.—The term ‘‘white light emitting diode’’ 

means a semiconducting package, utilizing either organic or inorganic materials, that produces white light using externally applied voltage. 

§ 906. National Building Performance Initiative 

(a) INTERAGENCY GROUP.—Not later than 90 days after the date of enactment of 

this Act, the President shall establish an interagency group to develop, in coordination with the advisory committee established under subsection (e), a National Building Performance Initiative (in this section referred to as the ‘‘Initiative’’). The interagency group shall be co-chaired by appropriate officials of the Department and the 

Department of Commerce, who shall jointly arrange for the provision of necessary 

administrative support to the group. 

(b) INTEGRATION OF EFFORTS.—The Initiative, working with the National Institute 

of Building Sciences, shall integrate Federal, State, and voluntary private sector efforts to reduce the costs of construction, operation, maintenance, and renovation of 

commercial, industrial, institutional, and residential buildings. 

(c) DEPARTMENT OF ENERGY ROLE.—Within the Federal portion of the Initiative, 

the Department shall be the lead agency for all aspects of building performance related to use and conservation of energy. 

(d) ADVISORY COMMITTEE.— (1) ESTABLISHMENT.—The Secretary, in consultation with the Secretary of 

Commerce and the Director of the Office of Science and Technology Policy, shall 

establish an advisory committee to— 

(A) analyze and provide recommendations on potential private sector 

roles and participation in the Initiative; and 

(B) review and provide recommendations on the plan described in subsection (c). 

(2) MEMBERSHIP.—Membership of the advisory committee shall include representatives with a broad range of appropriate expertise, including expertise 

in— 

(A) building technology; 

(B) architecture, engineering, and building materials and systems; and 

(C) the residential, commercial, and industrial sectors of the construction 

industry. 

(e) CONSTRUCTION.—Nothing in this section provides any Federal agency with new 

authority to regulate building performance. 

§ 907. Secondary electric vehicle battery use program 

(a) DEFINITIONS.—For purposes of this section: 

(1) ASSOCIATED EQUIPMENT.—The term ‘‘associated equipment’’ means equipment located where the batteries will be used that is necessary to enable the 

use of the energy stored in the batteries. 

(2) BATTERY.—The term ‘‘battery’’ means an energy storage device that previously has been used to provide motive power in a vehicle powered in whole 

or in part by electricity. 

(b) PROGRAM.—The Secretary shall establish and conduct a program of study for 

the secondary use of batteries if the Secretary finds that there are sufficient numbers of such batteries to support the program. The program shall be— 

(1) designed to demonstrate the use of batteries in secondary applications, including utility and commercial power storage and power quality; 

(2) structured to evaluate the performance, including useful service life and 

costs, of such batteries in field operations, and the necessary supporting infrastructure, including reuse and disposal of batteries; and 

(3) coordinated with ongoing secondary battery use programs at the National 

Laboratories and in industry. 

(c) SOLICITATION.—Not later than 180 days after the date of enactment of this Act, 

if the Secretary finds under subsection (b) that there are sufficient numbers of batteries to support the program, the Secretary shall solicit proposals to demonstrate 

the secondary use of batteries and associated equipment and supporting infrastructure in geographic locations throughout the United States. The Secretary may make 

additional solicitations for proposals if the Secretary determines that such solicitations are necessary to carry out this section. 

(d) SELECTION OF PROPOSALS.— 

(1) IN GENERAL.—The Secretary shall, not later than 90 days after the closing 

date established by the Secretary for receipt of proposals under subsection (c), 

select up to 5 proposals which may receive financial assistance under this section, subject to the availability of appropriations. 

(2) DIVERSITY; ENVIRONMENTAL EFFECT.—In selecting proposals, the Secretary 

shall consider diversity of battery type, geographic and climatic diversity, and 

life-cycle environmental effects of the approaches. 

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(3) LIMITATION.—No 1 project selected under this section shall receive more 

than 25 percent of the funds authorized for the program under this section. 

(4) OPTIMIZATION OF FEDERAL RESOURCES.—The Secretary shall consider the 

extent of involvement of State or local government and other persons in each 

demonstration project to optimize use of Federal resources. 

(5) OTHER CRITERIA.—The Secretary may consider such other criteria as the 

Secretary considers appropriate. 

(e) CONDITIONS.—The Secretary shall require that— 

(1) relevant information be provided to the Department, the users of the batteries, the proposers, and the battery manufacturers; 

(2) the proposer provide at least 50 percent of the costs associated with the 

proposal; and 

(3) the proposer provide to the Secretary such information regarding the disposal of the batteries as the Secretary may require to ensure that the proposer 

disposes of the batteries in accordance with applicable law. 

§ 908. Energy efficiency study initiative 

(a) ESTABLISHMENT.—The Secretary shall establish an Energy Efficiency Science 

Initiative to be managed by the Assistant Secretary in the Department with responsibility for energy conservation under section 203(a)(9) of the Department of Energy 

Organization Act (42 U.S.C. 7133(a)(9)), in consultation with the Director of the Office of Science, for grants to be competitively awarded and subject to peer review 

for studies relating to energy efficiency. 

(b) REPORT.—The Secretary shall submit to Congress, along with the President’s 

annual budget request under section 1105(a) of title 31, United States Code, a report on the activities of the Energy Efficiency Science Initiative, including a description of the process used to award the funds and an explanation of how the studies 

relate to energy efficiency. 

§ 909. Electric motor control technology 

The Secretary shall conduct a program of study on advanced control devices to 

improve the energy efficiency of electric motors used in heating, ventilation, air conditioning, and comparable systems. 

Subtitle B—Distributed Energy and Electric Energy Systems 

§ 911. Distributed energy and electric energy systems 

(a) IN GENERAL.—The following sums are authorized to be appropriated to the 

Secretary for distributed energy and electric energy systems activities, including activities authorized under this subtitle: 

(1) For fiscal year 2006, $190,000,000. 

(2) For fiscal year 2007, $200,000,000. 

(3) For fiscal year 2008, $220,000,000. 

(4) For fiscal year 2009, $240,000,000. 

(5) For fiscal year 2010, $260,000,000. 

(b) MICRO-COGENERATION ENERGY TECHNOLOGY.—From amounts authorized 

under subsection (a), $20,000,000 for each of fiscal years 2006 and 2007 is authorized for activities under section 914. 

§ 913. High power density industry program 

The Secretary shall establish a comprehensive program of study to improve energy efficiency of high power density facilities, including data centers, server farms, 

and telecommunications facilities. Such program shall consider technologies that 

provide significant improvement in thermal controls, metering, load management, 

peak load reduction, or the efficient cooling of electronics. 

§ 916. Reciprocating power 

The Secretary shall conduct a program of study regarding fuel system optimization and emissions reduction after-treatment technologies for industrial reciprocating engines. Such after-treatment technologies shall use processes that reduce 

emissions by recirculating exhaust gases and shall be designed to be retrofitted to 

any new or existing diesel or natural gas engine used for power generation, peaking 

power generation, combined heat and power, or compression. 

§ 917. Advanced portable power devices 

(a) PROGRAM.—The Secretary shall— 

(1) establish a program to develop working models of small scale portable 

power devices; and 

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(2) to the fullest extent practicable, identify and utilize the resources of universities that have shown expertise with respect to advanced portable power devices for either civilian or military use. 

(b) ORGANIZATION.—The universities identified and utilized under subsection 

(a)(2) are authorized to establish an organization to promote small scale portable 

power devices. 

(c) DEFINITION.—For purposes of this section, the term ‘‘small scale portable 

power device’’ means a field deployable portable mechanical or electromechanical device that can be used for applications such as communications, computation, mobility enhancement, weapons systems, optical devices, cooling, sensors, medical devices 

and active biological agent detection systems. 

(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated 

to the Secretary for carrying out this section $8,000,000 for the period encompassing 

fiscal years 2006 through 2010. 

Subtitle C—Renewable Energy 

§ 918. Renewable energy 

(a) IN GENERAL.—The following sums are authorized to be appropriated to the 

Secretary for renewable energy activities, including activities authorized under this 

subtitle: 

(1) For fiscal year 2006, $480,000,000. 

(2) For fiscal year 2007, $550,000,000. 

(3) For fiscal year 2008, $610,000,000. 

(4) For fiscal year 2009, $659,000,000. 

(5) For fiscal year 2010, $710,000,000. 

(b) BIOENERGY.—From the amounts authorized under subsection (a), the following 

sums are authorized to be appropriated to carry out section 919: 

(1) For fiscal year 2006, $135,425,000. 

(2) For fiscal year 2007, $155,600,000. 

(3) For fiscal year 2008, $167,650,000. 

(4) For fiscal year 2009, $180,000,000. 

(5) For fiscal year 2010, $192,000,000. 

(c) CONCENTRATING SOLAR POWER.—From amounts authorized under subsection 

(a), the following sums are authorized to be appropriated to carry out section 920: 

(1) For fiscal year 2006, $20,000,000. 

(2) For fiscal year 2007, $40,000,000. 

(3) For each of fiscal years 2008, 2009, and 2010, $50,000,000. 

(d) PUBLIC BUILDINGS.—From the amounts authorized under subsection (a), 

$30,000,000 for each of the fiscal years 2006 through 2010 are authorized to be appropriated to carry out section 922. 

(e) LIMITS ON USE OF FUNDS.— 

(1) NO FUNDS FOR RENEWABLE SUPPORT AND IMPLEMENTATION.—None of the 

funds authorized to be appropriated under this section may be used for Renewable Support and Implementation. 

(2) GRANTS.—Of the funds authorized under subsection (b), not less than 

$5,000,000 for each fiscal year shall be made available for grants to Historically 

Black Colleges and Universities, Tribal Colleges, and Hispanic-Serving Institutions. 

(3) REGIONAL FIELD VERIFICATION PROGRAM.—Of the funds authorized under 

subsection (a), not less than $4,000,000 for each fiscal year shall be made available for the Regional Field Verification Program of the Department. 

(4) OFF-STREAM PUMPED STORAGE HYDROPOWER.—Of the funds authorized 

under subsection (a), such sums as may be necessary shall be made available 

for demonstration projects of off-stream pumped storage hydropower. 

(f) CONSULTATION.—In carrying out this subtitle, the Secretary, in consultation 

with the Secretary of Agriculture, shall demonstrate the use of advanced wind 

power technology, including combined use with coal gasification; biomass; geothermal energy systems; and other renewable energy technologies to assist in delivering electricity to rural and remote locations. 

§ 919. Bioenergy programs 

(a) DEFINITIONS.—For the purposes of this section: 

(1) The term ‘‘agricultural byproducts’’ includes waste products, including 

poultry fat and poultry waste. 

(2) The term ‘‘cellulosic biomass’’ means any portion of a crop containing 

lignocellulose or hemicellulose, including barley grain, grapeseed, forest 

thinnings, rice bran, rice hulls, rice straw, soybean matter, and sugarcane baVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00093 Fmt 6659 Sfmt 6621 E:\HR\OC\HR215P1.XXX HR215P1
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gasse, or any crop grown specifically for the purpose of producing cellulosic feedstocks. 

(b) PROGRAM.—The Secretary shall conduct a program of study for bioenergy, including— 

(1) biopower energy systems; 

(2) biofuels; 

(3) bio-based products; 

(4) integrated biorefineries that may produce biopower, biofuels, and biobased products; 

(5) cross-cutting research and development in feedstocks and enzymes; and 

(6) economic analysis. 

(c) BIOFUELS AND BIO-BASED PRODUCTS.—The goals of the biofuels and bio-based 

products programs shall be to promote, in partnership with industry— 

(1) advanced biochemical and thermochemical conversion technologies capable 

of making biofuels that are price-competitive with gasoline or diesel in either 

internal combustion engines or fuel cell-powered vehicles, and bio-based products from a variety of feedstocks, including grains, cellulosic biomass, and other 

agricultural byproducts; and 

(2) advanced biotechnology processes capable of making biofuels and bio-based 

products with emphasis on development of biorefinery technologies using enzyme-based processing systems. 

§ 920. Concentrating solar power study program 

(a) IN GENERAL.—The Secretary shall conduct a program of study to evaluate the 

potential of concentrating solar power for hydrogen production, including cogeneration approaches for both hydrogen and electricity. Such program shall take advantage of existing facilities to the extent possible and shall include— 

(1) development of optimized technologies that are common to both electricity 

and hydrogen production; 

(2) evaluation of thermochemical cycles for hydrogen production at the temperatures attainable with concentrating solar power; 

(3) evaluation of materials issues for the thermochemical cycles described in 

paragraph (2); 

(4) system architectures and economics studies; and 

(5) coordination with activities in the Advanced Reactor Hydrogen Cogeneration Project on high temperature materials, thermochemical cycles, and economic issues. 

(b) ASSESSMENT.—In carrying out the program under this section, the Secretary 

shall— 

(1) assess conflicting guidance on the economic potential of concentrating 

solar power for electricity production received from the National Research Council report entitled ‘‘Renewable Power Pathways: A Review of the U.S. Department of Energy’s Renewable Energy Programs’’ in 2000 and subsequent Department-funded reviews of that report; and 

(2) provide an assessment of the potential impact of the technology before, or 

concurrent with, submission of the fiscal year 2008 budget. 

(c) REPORT.—Not later than 5 years after the date of enactment of this Act, the 

Secretary shall provide a report to Congress on the economic and technical potential 

for electricity or hydrogen production, with or without cogeneration, with concentrating solar power. 

§ 921. Miscellaneous projects 

The Secretary may conduct studies for— 

(1) ocean energy, including wave energy; and 

(2) the combined use of renewable energy technologies with one another and 

with other energy technologies, including the combined use of wind power and 

coal gasification technologies. 

§ 922. Renewable energy in public buildings 

(a) TECHNOLOGY TRANSFER PROGRAM.—The Secretary shall establish a program 

for the transfer of innovative technologies for solar and other renewable energy 

sources in buildings owned or operated by a State or local government, and for the 

dissemination of information resulting from an assessment of such program to interested parties. 

(b) LIMIT ON FEDERAL FUNDING.—The Secretary shall provide under this section 

no more than 40 percent of the incremental costs of the solar or other renewable 

energy source project funded. 

(c) REQUIREMENT.—As part of the application for awards under this section, the 

Secretary shall require all applicants— 

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(1) to demonstrate a continuing commitment to the use of solar and other renewable energy sources in buildings they own or operate; and 

(2) to state how they expect any award to further their transition to the significant use of renewable energy. 

§ 923. University biodiesel program 

(a) IN GENERAL.—The Secretary shall establish a program regarding the feasibility of the operation of diesel electric power generators, using biodiesel fuels, with 

ratings as high as B100 at a university electric generation facility. The program 

shall examine— 

(1) heat rates of diesel fuels with large quantities of cellulosic content; 

(2) the reliability of operation of various fuel blends; 

(3) performance in cold or freezing weather; 

(4) stability of fuel after extended storage; and 

(5) other criteria, as determined by the Secretary. 

(b) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to the Secretary $400,000 to carry out subsection (a). Such funds shall remain available until expended. 

Subtitle D—Nuclear Energy 

§ 929. Alternatives to industrial radioactive sources 

(a) STUDY.—The Secretary shall conduct a study and provide a report to Congress 

not later than August 1, 2006. The study shall— 

(1) survey industrial applications of large radioactive sources, including welllogging sources; 

(2) review current domestic and international Department, Department of Defense, Department of State, and commercial programs to manage and dispose 

of radioactive sources; 

(3) discuss disposal options and practices for currently deployed or future 

sources and, if deficiencies are noted in existing disposal options or practices for 

either deployed or future sources, recommend options to remedy deficiencies; 

and 

(4) develop a program plan for research and development to develop alternatives to large industrial sources that reduce safety, environmental, or proliferation risks to either workers using the sources or the public. 

(b) PROGRAM.—The Secretary shall establish a research and development program 

to implement the program plan developed under subsection (a)(4). The program 

shall include miniaturized particle accelerators for well-logging or other industrial 

applications and portable accelerators for production of short-lived radioactive materials at an industrial site. 

§ 930. Geological isolation of spent fuel 

The Secretary shall conduct a study to determine the feasibility of deep borehole 

disposal of spent nuclear fuel and high-level radioactive waste. The study shall emphasize geological, chemical, and hydrological characterization of, and design of engineered structures for, deep borehole environments. Not later than 1 year after the 

date of enactment of this Act, the Secretary shall transmit the study to Congress. 

Subtitle E—Fossil Energy 

PART I—STUDIES AND PROGRAM SUPPORT 

§ 931. Fossil energy 

(a) IN GENERAL.—The following sums are authorized to be appropriated to the 

Secretary for fossil energy activities, including activities authorized under this part: 

(1) For fiscal year 2006, $530,000,000. 

(2) For fiscal year 2007, $556,000,000. 

(3) For fiscal year 2008, $583,000,000. 

(4) For fiscal year 2009, $611,000,000. 

(5) For fiscal year 2010, $626,000,000. 

(b) ALLOCATIONS.—From amounts authorized under subsection (a), the following 

sums are authorized: 

(1) For activities under section 932(b)(2), $28,000,000 for each of the fiscal 

years 2006 through 2010. 

(2) For activities under section 934— 

(A) for fiscal year 2006, $12,000,000; 

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(B) for fiscal year 2007, $15,000,000; and 

(C) for each of fiscal years 2008 through 2010, $20,000,000. 

(3) For activities under section 935— 

(A) for fiscal year 2006, $259,000,000; 

(B) for fiscal year 2007, $272,000,000; 

(C) for fiscal year 2008, $285,000,000; 

(D) for fiscal year 2009, $298,000,000; and 

(E) for fiscal year 2010, $308,000,000. 

(4) For the Office of Arctic Energy under section 3197 of the Floyd D. Spence 

National Defense Authorization Act for Fiscal Year 2001 (42 U.S.C. 7144d), 

$25,000,000 for each of fiscal years 2006 through 2010. (5) For activities under section 933, $4,000,000 for fiscal year 2006 and $2,000,000 for each of fiscal years 2007 through 2010. 

(c) EXTENDED AUTHORIZATION.—There are authorized to be appropriated to the 

Secretary for the Office of Arctic Energy under section 3197 of the Floyd D. Spence 

National Defense Authorization Act for Fiscal Year 2001 (42 U.S.C. 7144d), 

$25,000,000 for each of fiscal years 2009 through 2012. 

(d) LIMITS ON USE OF FUNDS.— (1) NO FUNDS FOR CERTAIN PROGRAMS.—None of the funds authorized under 

this section may be used for Fossil Energy Environmental Restoration or Import/Export Authorization. 

(2) INSTITUTIONS OF HIGHER EDUCATION.—Of the funds authorized under subsection (b)(2), not less than 20 percent of the funds appropriated for each fiscal 

year shall be dedicated to activities carried out at institutions of higher education. 

§ 932. Oil and gas studies 

(a) OIL AND GAS STUDIES.—The Secretary shall conduct a program of studies on 

oil and gas, including— 

(1) exploration and production; 

(2) gas hydrates; 

(3) reservoir life and extension; 

(4) transportation and distribution infrastructure; 

(5) ultraclean fuels; 

(6) heavy oil and oil shale; 

(7) related environmental research; and 

(8) compressed natural gas marine transport. 

(b) FUEL CELLS.— (1) IN GENERAL.—The Secretary shall conduct a program of studies on fuel 

cells for low-cost, high-efficiency, fuel-flexible, modular power systems. 

(2) IMPROVED MANUFACTURING PRODUCTION AND PROCESSES.—The studies 

under paragraph (1) shall include fuel cell technology for commercial, residential, and transportation applications, and distributed generation systems, utilizing improved manufacturing production and processes. 

(c) NATURAL GAS AND OIL DEPOSITS REPORT.—Not later than 2 years after the 

date of enactment of this Act, and every 2 years thereafter, the Secretary of the Interior, in consultation with other appropriate Federal agencies, shall transmit a report to Congress of the latest estimates of natural gas and oil reserves, reserves 

growth, and undiscovered resources in Federal and State waters off the coast of 

Louisiana and Texas. 

(d) INTEGRATED CLEAN POWER AND ENERGY.— (1) NATIONAL CENTER OR CONSORTIUM OF EXCELLENCE.—The Secretary shall 

establish a national center or consortium of excellence in clean energy and 

power generation to address the Nation’s critical dependence on energy and the 

need to reduce emissions. 

(2) PROGRAM.—The center or consortium shall conduct a program integrating 

the following focus areas: 

(A) Efficiency and reliability of gas turbines for power generation. 

(B) Reduction in emissions from power generation. 

(C) Promotion of energy conservation issues. 

(D) Effectively utilizing alternative fuels and renewable energy. 

(E) Advanced materials technology for oil and gas exploration and utilization in harsh environments. 

(F) Education on energy and power generation issues. 

§ 933. Technology transfer 

The Secretary shall establish a competitive program to award a contract to a nonprofit entity for the purpose of transferring technologies developed with public 

funds. The entity selected under this section shall have experience in offshore oil 

and gas technology management, in the transfer of technologies developed with pubVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00096 Fmt 6659 Sfmt 6621 E:\HR\OC\HR215P1.XXX HR215P1
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lic funds to the offshore and maritime industry, and in management of an offshore 

and maritime industry consortium. The program consortium selected under section 

942 shall not be eligible for selection under this section. When appropriate, the Secretary shall consider utilizing the entity selected under this section when implementing the activities authorized by section 975. 

§ 934. Coal mining technologies 

(a) ESTABLISHMENT.—The Secretary shall carry out a program of studies on coal 

mining technologies. The Secretary shall cooperate with appropriate Federal agencies, coal producers, trade associations, equipment manufacturers, institutions of 

higher education with mining engineering departments, and other relevant entities. 

(b) PROGRAM.—The activities carried out under this section shall— 

(1) be guided by the mining priorities identified by the Mining Industry of the 

Future Program and in the recommendations from relevant reports of the National Academy of Sciences on mining technologies; and 

(2) include activities exploring minimization of contaminants in mined coal 

that contribute to environmental concerns. 

§ 935. Coal and related technologies program 

(a) IN GENERAL.—In addition to the programs authorized under title IV, the Secretary shall conduct a program of technology to study coal and power systems, including programs to facilitate production and generation of coal-based power 

through— 

(1) innovations for existing plants; 

(2) integrated gasification combined cycle; 

(3) advanced combustion systems; 

(4) turbines for synthesis gas derived from coal; 

(5) carbon capture and sequestration; 

(6) coal-derived transportation fuels and chemicals; 

(7) solid fuels and feedstocks; 

(8) advanced studies; 

(9) advanced separation technologies; and 

(10) a joint project for permeability enhancement in coals for natural gas production and carbon dioxide sequestration. 

(b) COST AND PERFORMANCE GOALS.—In carrying out programs authorized by this 

section, the Secretary shall identify cost and performance goals for coal-based technologies that would permit the continued cost-competitive use of coal for electricity 

generation, as chemical feedstocks, and as transportation fuel in 2007, 2015, and the 

years after 2020. In establishing such cost and performance goals, the Secretary 

shall— 

(1) consider activities and studies undertaken to date by industry in cooperation with the Department in support of such assessment; 

(2) consult with interested entities, including coal producers, industries using 

coal, organizations to promote coal and advanced coal technologies, environmental organizations, and organizations representing workers; 

(3) not later than 120 days after the date of enactment of this Act, publish 

in the Federal Register proposed draft cost and performance goals for public 

comments; and 

(4) not later than 180 days after the date of enactment of this Act and every 

4 years thereafter, submit to Congress a report describing final cost and performance goals for such technologies that includes a list of technical milestones 

as well as an explanation of how programs authorized in this section will not 

duplicate the activities authorized under the Clean Coal Power Initiative authorized under subtitle A of title IV. 

§ 936. Complex Well Technology Testing Facility 

The Secretary, in coordination with industry leaders in extended research drilling 

technology, shall establish a Complex Well Technology Testing Facility at the Rocky 

Mountain Oilfield Testing Center to increase the range of extended drilling technologies. 

PART II—ULTRA-DEEPWATER AND UNCONVENTIONAL 

NATURAL GAS AND OTHER PETROLEUM RESOURCES 

§ 941. Program authority 

(a) IN GENERAL.—The Secretary shall carry out a program under this part regarding technologies for ultra-deepwater and unconventional natural gas and other petroleum resource exploration and production, including addressing the technology 

98 

challenges for small producers, safe operations, and environmental mitigation (including reduction of greenhouse gas emissions and sequestration of carbon). 

(b) PROGRAM ELEMENTS.—The program under this part shall address the following areas, including improving safety and minimizing environmental impacts of 

activities within each area: 

(1) Ultra-deepwater technology, including drilling to formations in the Outer 

Continental Shelf to depths greater than 15,000 feet. 

(2) Ultra-deepwater architecture. 

(3) Unconventional natural gas and other petroleum resource exploration and 

production technology, including the technology challenges of small producers. 

(c) LIMITATION ON LOCATION OF FIELD ACTIVITIES.—Field activities under the program under this part shall be carried out only— 

(1) in— 

(A) areas in the territorial waters of the United States not under any 

Outer Continental Shelf moratorium as of September 30, 2002; 

(B) areas onshore in the United States on public land administered by the 

Secretary of the Interior available for oil and gas leasing, where consistent 

with applicable law and land use plans; and 

(C) areas onshore in the United States on State or private land, subject 

to applicable law; and 

(2) with the approval of the appropriate Federal or State land management 

agency or private land owner. 

(d) CONSULTATION WITH SECRETARY OF THE INTERIOR.—In carrying out this part, 

the Secretary shall consult regularly with the Secretary of the Interior. 

§ 942. Ultra-deepwater Program 

(a) IN GENERAL.—The Secretary shall carry out the activities under section 941(a), 

to maximize the use of the ultra-deepwater natural gas and other petroleum resources of the United States by increasing the supply of such resources, through reducing the cost and increasing the efficiency of exploration for and production of 

such resources, while improving safety and minimizing environmental impacts. 

(b) ROLE OF THE SECRETARY.—The Secretary shall have ultimate responsibility 

for, and oversight of, all aspects of the program under this section. 

(c) ROLE OF THE PROGRAM CONSORTIUM.— 

(1) IN GENERAL.—The Secretary may contract with a consortium to— 

(A) manage awards pursuant to subsection (f)(4); 

(B) make recommendations to the Secretary for project solicitations; 

(C) disburse funds awarded under subsection (f) as directed by the Secretary in accordance with the annual plan under subsection (e); and 

(D) carry out other activities assigned to the program consortium by this 

section. 

(2) LIMITATION.—The Secretary may not assign any activities to the program 

consortium except as specifically authorized under this section. 

(3) CONFLICT OF INTEREST.— 

(A) PROCEDURES.—The Secretary shall establish procedures— 

(i) to ensure that each board member, officer, or employee of the program consortium who is in a decision-making capacity under subsection 

(f)(3) or (4) shall disclose to the Secretary any financial interests in, or 

financial relationships with, applicants for or recipients of awards 

under this section, including those of his or her spouse or minor child, 

unless such relationships or interests would be considered to be remote 

or inconsequential; and 

(ii) to require any board member, officer, or employee with a financial 

relationship or interest disclosed under clause (i) to recuse himself or 

herself from any review under subsection (f)(3) or oversight under subsection (f)(4) with respect to such applicant or recipient. 

(B) FAILURE TO COMPLY.—The Secretary may disqualify an application or 

revoke an award under this section if a board member, officer, or employee 

has failed to comply with procedures required under subparagraph (A)(ii). 

(d) SELECTION OF THE PROGRAM CONSORTIUM.— 

(1) IN GENERAL.—The Secretary shall select the program consortium through 

an open, competitive process. 

(2) MEMBERS.—The program consortium may include corporations, trade associations, institutions of higher education, National Laboratories, or other research institutions. After submitting a proposal under paragraph (4), the program consortium may not add members without the consent of the Secretary. 

(3) TAX STATUS.—The program consortium shall be an entity that is exempt 

from tax under section 501(c)(3) of the Internal Revenue Code of 1986. 

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(4) SCHEDULE.—Not later than 180 days after the date of enactment of this 

Act, the Secretary shall solicit proposals from eligible consortia to perform the 

duties in subsection (c)(1), which shall be submitted not later than 360 days 

after the date of enactment of this Act. The Secretary shall select the program 

consortium not later than 18 months after such date of enactment. 

(5) APPLICATION.—Applicants shall submit a proposal including such information as the Secretary may require. At a minimum, each proposal shall— 

(A) list all members of the consortium; 

(B) fully describe the structure of the consortium, including any provisions relating to intellectual property; and 

(C) describe how the applicant would carry out the activities of the program consortium under this section. 

(6) CRITERION.—The Secretary shall consider the amount of the fee an applicant proposes to receive under subsection (g) in selecting a consortium under 

this section. 

(e) ANNUAL PLAN.— (1) IN GENERAL.—The program under this section shall be carried out pursuant to an annual plan prepared by the Secretary in accordance with paragraph 

(2). 

(2) DEVELOPMENT.— (A) SOLICITATION OF RECOMMENDATIONS.—Before drafting an annual plan 

under this subsection, the Secretary shall solicit specific written recommendations from the program consortium for each element to be addressed in the plan, including those described in paragraph (4). The Secretary may request that the program consortium submit its recommendations in the form of a draft annual plan. 

(B) SUBMISSION OF RECOMMENDATIONS; OTHER COMMENT.—The Secretary 

shall submit the recommendations of the program consortium under subparagraph (A) to the Ultra-Deepwater Advisory Committee established 

under section 945(a) for review, and such Advisory Committee shall provide 

to the Secretary written comments by a date determined by the Secretary. 

The Secretary may also solicit comments from any other experts. 

(C) CONSULTATION.—The Secretary shall consult regularly with the program consortium throughout the preparation of the annual plan. 

(3) PUBLICATION.—The Secretary shall transmit to Congress and publish in 

the Federal Register the annual plan, along with any written comments received under paragraph (2)(A) and (B). 

(4) CONTENTS.—The annual plan shall describe the ongoing and prospective 

activities of the program under this section and shall include— 

(A) a list of any solicitations for awards that the Secretary plans to issue 

to carry out research, development, demonstration, or commercial application activities, including the topics for such work, who would be eligible to 

apply, selection criteria, and the duration of awards; and 

(B) a description of the activities expected of the program consortium to 

carry out subsection (f)(4). 

(5) ESTIMATES OF INCREASED ROYALTY RECEIPTS.—The Secretary, in consultation with the Secretary of the Interior, shall provide an annual report to Congress with the President’s budget on the estimated cumulative increase in Federal royalty receipts (if any) resulting from the implementation of this part. The 

initial report under this paragraph shall be submitted in the first President’s 

budget following the completion of the first annual plan required under this 

subsection. 

(f) AWARDS.— 

(1) IN GENERAL.—The Secretary shall make awards to carry out activities 

under the program under this section. The program consortium shall not be eligible to receive such awards, but members of the program consortium may receive such awards. 

(2) PROPOSALS.—The Secretary shall solicit proposals for awards under this 

subsection in such manner and at such time as the Secretary may prescribe, 

in consultation with the program consortium. 

(3) REVIEW.—The Secretary shall make awards under this subsection through 

a competitive process, which shall include a review by individuals selected by 

the Secretary. Such individuals shall include, for each application, Federal officials, the program consortium, and non-Federal experts who are not board 

members, officers, or employees of the program consortium or of a member of 

the program consortium. 

(4) OVERSIGHT.— 

(A) IN GENERAL.—The program consortium shall oversee the implementation of awards under this subsection, consistent with the annual plan under 

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subsection (e), including disbursing funds and monitoring activities carried 

out under such awards for compliance with the terms and conditions of the 

awards. 

(B) EFFECT.—Nothing in subparagraph (A) shall limit the authority or responsibility of the Secretary to oversee awards, or limit the authority of the 

Secretary to review or revoke awards. 

(C) PROVISION OF INFORMATION.—The Secretary shall provide to the program consortium the information necessary for the program consortium to 

carry out its responsibilities under this paragraph. 

(g) ADMINISTRATIVE COSTS.— 

(1) IN GENERAL.—To compensate the program consortium for carrying out its 

activities under this section, the Secretary shall provide to the program consortium funds sufficient to administer the program. This compensation may include a management fee consistent with Department of Energy contracting 

practices and procedures. 

(2) ADVANCE.—The Secretary shall advance funds to the program consortium 

upon selection of the consortium, which shall be deducted from amounts to be 

provided under paragraph (1). 

(h) AUDIT.—The Secretary shall retain an independent, commercial auditor to determine the extent to which funds provided to the program consortium, and funds 

provided under awards made under subsection (f), have been expended in a manner 

consistent with the purposes and requirements of this part. The auditor shall transmit a report annually to the Secretary, who shall transmit the report to Congress, 

along with a plan to remedy any deficiencies cited in the report. 

§ 943. Unconventional natural gas and other petroleum resources Program 

(a) IN GENERAL.—The Secretary shall carry out activities under subsection 

941(b)(3), to maximize the use of the onshore unconventional natural gas and other 

petroleum resources of the United States, by increasing the supply of such resources, through reducing the cost and increasing the efficiency of exploration for 

and production of such resources, while improving safety and minimizing environmental impacts. 

(b) AWARDS.— 

(1) IN GENERAL.—The Secretary shall carry out this section through awards 

to consortia made through an open, competitive process. As a condition of award 

of funds, qualified consortia shall— 

(A) demonstrate capability and experience in unconventional onshore natural gas or other petroleum technologies; 

(B) provide a research plan that demonstrates how additional natural gas 

or oil production will be achieved; and 

(C) at the request of the Secretary, provide technical advice to the Secretary for the purposes of developing the annual plan required under subsection (e). 

(2) PRODUCTION POTENTIAL.—The Secretary shall seek to ensure that the 

number and types of awards made under this subsection have reasonable potential to lead to additional oil and natural gas production on Federal lands. 

(3) SCHEDULE.—To carry out this subsection, not later than 180 days after the 

date of enactment of this Act, the Secretary shall solicit proposals from consortia, which shall be submitted not later than 360 days after the date of enactment of this Act. The Secretary shall select the first group of research consortia 

to receive awards under this subsection not later than 18 months after such 

date of enactment. 

(c) AUDIT.—The Secretary shall retain an independent, commercial auditor to determine the extent to which funds provided under awards made under this section 

have been expended in a manner consistent with the purposes and requirements of 

this part. The auditor shall transmit a report annually to the Secretary, who shall 

transmit the report to Congress, along with a plan to remedy any deficiencies cited 

in the report. 

(d) FOCUS AREAS FOR AWARDS.— 

(1) UNCONVENTIONAL RESOURCES.—Awards from allocations under section 

949(d)(2) shall focus on areas including advanced coalbed methane, deep drilling, natural gas production from tight sands, natural gas production from gas 

shales, stranded gas, innovative exploration and production techniques, enhanced recovery techniques, and environmental mitigation of unconventional 

natural gas and other petroleum resources exploration and production. 

(2) SMALL PRODUCERS.—Awards from allocations under section 949(d)(3) shall 

be made to consortia consisting of small producers or organized primarily for 

the benefit of small producers, and shall focus on areas including complex geology involving rapid changes in the type and quality of the oil and gas reservoirs 

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across the reservoir; low reservoir pressure; unconventional natural gas reservoirs in coalbeds, deep reservoirs, tight sands, or shales; and unconventional 

oil reservoirs in tar sands and oil shales. 

(e) ANNUAL PLAN.— 

(1) IN GENERAL.—The program under this section shall be carried out pursuant to an annual plan prepared by the Secretary in accordance with paragraph 

(2). 

(2) DEVELOPMENT.— 

(A) WRITTEN RECOMMENDATIONS.—Before drafting an annual plan under 

this subsection, the Secretary shall solicit specific written recommendations 

from the consortia receiving awards under subsection (b) and the Unconventional Resources Technology Advisory Committee for each element to be 

addressed in the plan, including those described in subparagraph (D). 

(B) CONSULTATION.—The Secretary shall consult regularly with the consortia throughout the preparation of the annual plan. 

(C) PUBLICATION.—The Secretary shall transmit to Congress and publish 

in the Federal Register the annual plan, along with any written comments 

received under subparagraph (A). 

(D) CONTENTS.—The annual plan shall describe the ongoing and prospective activities under this section and shall include a list of any solicitations 

for awards that the Secretary plans to issue to carry out activities, including the topics for such work, who would be eligible to apply, selection criteria, and the duration of awards. 

(3) ESTIMATES OF INCREASED ROYALTY RECEIPTS.—The Secretary, in consultation with the Secretary of the Interior, shall provide an annual report to Congress with the President’s budget on the estimated cumulative increase in Federal royalty receipts (if any) resulting from the implementation of this part. The 

initial report under this paragraph shall be submitted in the first President’s 

budget following the completion of the first annual plan required under this 

subsection. 

§ 944. Additional requirements for awards 

(a) DEMONSTRATION PROJECTS.—An application for an award under this part for 

a demonstration project shall describe with specificity the intended commercial use 

of the technology to be demonstrated. 

(b) FLEXIBILITY IN LOCATING DEMONSTRATION PROJECTS.—Subject to the limitation in section 941(c), a demonstration project under this part relating to an ultradeepwater technology or an ultra-deepwater architecture may be conducted in deepwater depths. 

(c) INTELLECTUAL PROPERTY AGREEMENTS.—If an award under this part is made 

to a consortium (other than the program consortium), the consortium shall provide 

to the Secretary a signed contract agreed to by all members of the consortium describing the rights of each member to intellectual property used or developed under 

the award. 

(d) TECHNOLOGY TRANSFER.—2.5 percent of the amount of each award made 

under this part shall be designated for technology transfer and outreach activities 

under this title. 

(e) COST SHARING REDUCTION FOR INDEPENDENT PRODUCERS.—In applying the 

cost sharing requirements under section 972 to an award under this part the Secretary may reduce or eliminate the non-Federal requirement if the Secretary determines that the reduction is necessary and appropriate considering the technological 

risks involved in the project. 

§ 945. Advisory committees 

(a) ULTRA-DEEPWATER ADVISORY COMMITTEE.— 

(1) ESTABLISHMENT.—Not later than 270 days after the date of enactment of 

this Act, the Secretary shall establish an advisory committee to be known as 

the Ultra-Deepwater Advisory Committee. 

(2) MEMBERSHIP.—The advisory committee under this subsection shall be 

composed of members appointed by the Secretary including— 

(A) individuals with extensive experience or operational knowledge of offshore natural gas and other petroleum exploration and production; 

(B) individuals broadly representative of the affected interests in ultradeepwater natural gas and other petroleum production, including interests 

in environmental protection and safe operations; 

(C) no individuals who are Federal employees; and 

(D) no individuals who are board members, officers, or employees of the 

program consortium. 

(3) DUTIES.—The advisory committee under this subsection shall— 

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(A) advise the Secretary on the development and implementation of programs under this part related to ultra-deepwater natural gas and other petroleum resources; and 

(B) carry out section 942(e)(2)(B). 

(4) COMPENSATION.—A member of the advisory committee under this subsection shall serve without compensation but shall receive travel expenses in accordance with applicable provisions under subchapter I of chapter 57 of title 5, 

United States Code. 

(b) UNCONVENTIONAL RESOURCES TECHNOLOGY ADVISORY COMMITTEE.— 

(1) ESTABLISHMENT.—Not later than 270 days after the date of enactment of 

this Act, the Secretary shall establish an advisory committee to be known as 

the Unconventional Resources Technology Advisory Committee. 

(2) MEMBERSHIP.—The advisory committee under this subsection shall be 

composed of members appointed by the Secretary including— 

(A) a majority of members who are employees or representatives of independent producers of natural gas and other petroleum, including small producers; 

(B) individuals with extensive research experience or operational knowledge of unconventional natural gas and other petroleum resource exploration and production; 

(C) individuals broadly representative of the affected interests in unconventional natural gas and other petroleum resource exploration and production, including interests in environmental protection and safe operations; 

and 

(D) no individuals who are Federal employees. 

(3) DUTIES.—The advisory committee under this subsection shall advise the 

Secretary on the development and implementation of activities under this part 

related to unconventional natural gas and other petroleum resources. 

(4) COMPENSATION.—A member of the advisory committee under this subsection shall serve without compensation but shall receive travel expenses in accordance with applicable provisions under subchapter I of chapter 57 of title 5, 

United States Code. 

(c) PROHIBITION.—No advisory committee established under this section shall 

make recommendations on funding awards to particular consortia or other entities, 

or for specific projects. 

§ 946. Limits on participation 

An entity shall be eligible to receive an award under this part only if the Secretary finds— 

(1) that the entity’s participation in the program under this part would be in 

the economic interest of the United States; and 

(2) that either— 

(A) the entity is a United States-owned entity organized under the laws 

of the United States; or 

(B) the entity is organized under the laws of the United States and has 

a parent entity organized under the laws of a country that affords— 

(i) to United States-owned entities opportunities, comparable to those 

afforded to any other entity, to participate in any cooperative research 

venture similar to those authorized under this part; 

(ii) to United States-owned entities local investment opportunities 

comparable to those afforded to any other entity; and 

(iii) adequate and effective protection for the intellectual property 

rights of United States-owned entities. 

§ 947. Sunset 

The authority provided by this part shall terminate on September 30, 2014. 

§ 948. Definitions 

In this part: 

(1) DEEPWATER.—The term ‘‘deepwater’’ means a water depth that is greater 

than 200 but less than 1,500 meters. 

(2) INDEPENDENT PRODUCER OF OIL OR GAS.— 

(A) IN GENERAL.—The term ‘‘independent producer of oil or gas’’ means 

any person that produces oil or gas other than a person to whom subsection 

(c) of section 613A of the Internal Revenue Code of 1986 does not apply by 

reason of paragraph (2) (relating to certain retailers) or paragraph (4) (relating to certain refiners) of section 613A(d) of such Code. 

(B) RULES FOR APPLYING PARAGRAPHS (2) AND (4) OF SECTION 613A(d).—For 

purposes of subparagraph (A), paragraphs (2) and (4) of section 613A(d) of 

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the Internal Revenue Code of 1986 shall be applied by substituting ‘‘calendar year’’ for ‘‘taxable year’’ each place it appears in such paragraphs. 

(3) PROGRAM CONSORTIUM.—The term ‘‘program consortium’’ means the consortium selected under section 942(d). 

(4) REMOTE OR INCONSEQUENTIAL.—The term ‘‘remote or inconsequential’’ has 

the meaning given that term in regulations issued by the Office of Government 

Ethics under section 208(b)(2) of title 18, United States Code. 

(5) SMALL PRODUCER.—The term ‘‘small producer’’ means an entity organized 

under the laws of the United States with production levels of less than 1,000 

barrels per day of oil equivalent. 

(6) ULTRA-DEEPWATER.—The term ‘‘ultra-deepwater’’ means a water depth 

that is equal to or greater than 1,500 meters. 

(7) ULTRA-DEEPWATER ARCHITECTURE.—The term ‘‘ultra-deepwater architecture’’ means the integration of technologies for the exploration for, or production 

of, natural gas or other petroleum resources located at ultra-deepwater depths. 

(8) ULTRA-DEEPWATER TECHNOLOGY.—The term ‘‘ultra-deepwater technology’’ 

means a discrete technology that is specially suited to address 1 or more challenges associated with the exploration for, or production of, natural gas or other 

petroleum resources located at ultra-deepwater depths. 

(9) UNCONVENTIONAL NATURAL GAS AND OTHER PETROLEUM RESOURCE.—The 

term ‘‘unconventional natural gas and other petroleum resource’’ means natural 

gas and other petroleum resource located onshore in an economically inaccessible geological formation, including resources of small producers. 

§ 949. Funding 

(a) IN GENERAL.— 

(1) OIL AND GAS LEASE INCOME.—For each of fiscal years 2005 through 2014, 

from any Federal royalties, rents, and bonuses derived from Federal onshore 

and offshore oil and gas leases issued under the Outer Continental Shelf Lands 

Act and the Mineral Leasing Act which are deposited in the Treasury, and after 

distribution of any such funds as described in subsection (c), $50,000,000 shall 

be deposited into the Ultra-Deepwater and Unconventional Natural Gas and 

Other Petroleum Research Fund (in this section referred to as the Fund). For 

purposes of this section, the term ‘‘royalties’’ excludes proceeds from the sale of 

royalty production taken in kind and royalty production that is transferred 

under section 27(a)(3) of the Outer Continental Shelf Lands Act (43 U.S.C. 

1353(a)(3)). 

(2) AUTHORIZATION OF APPROPRIATIONS.—In addition to amounts described in 

paragraph (1), there are authorized to be appropriated to the Secretary, to be 

deposited in the Fund, $150,000,000 for each of the fiscal years 2005 through 

2014, to remain available until expended. 

(b) OBLIGATIONAL AUTHORITY.—Monies in the Fund shall be available to the Secretary for obligation under this part without fiscal year limitation, to remain available until expended. 

(c) PRIOR DISTRIBUTIONS.—The distributions described in subsection (a) are those 

required by law— 

(1) to States and to the Reclamation Fund under the Mineral Leasing Act (30 

U.S.C. 191(a)); and 

(2) to other funds receiving monies from Federal oil and gas leasing programs, 

including— 

(A) any recipients pursuant to section 8(g) of the Outer Continental Shelf 

Lands Act (43 U.S.C. 1337(g)); 

(B) the Land and Water Conservation Fund, pursuant to section 2(c) of 

the Land and Water Conservation Fund Act of 1965 (16 U.S.C. 4601–5(c)); 

(C) the Historic Preservation Fund, pursuant to section 108 of the National Historic Preservation Act (16 U.S.C. 470h); and 

(D) the Secure Energy Reinvestment Fund. 

(d) ALLOCATION.—Amounts obligated from the Fund under this section in each fiscal year shall be allocated as follows: 

(1) 50 percent shall be for activities under section 942. 

(2) 35 percent shall be for activities under section 943(d)(1). 

(3) 10 percent shall be for activities under section 943(d)(2). 

(4) 5 percent shall be for research under section 941(d). 

(e) FUND.—There is hereby established in the Treasury of the United States a separate fund to be known as the ‘‘Ultra-Deepwater and Unconventional Natural Gas 

and Other Petroleum Research Fund’’. 

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Subtitle F—Energy Sciences 

§ 953. Plan for Fusion Energy Sciences Program 

(a) DECLARATION OF POLICY.—It shall be the policy of the United States to conduct a program of activities to ensure that the United States is competitive with 

other nations in providing fusion energy for its own needs and the needs of other 

nations. 

(b) PLANNING.— 

(1) IN GENERAL.—Not later than 180 days after the date of enactment of this 

Act, the Secretary shall present to Congress a plan, with proposed cost estimates, budgets, and potential international partners, for the implementation of 

the policy described in subsection (a). 

(2) COSTS AND SCHEDULES.—Such plan shall also address the status of and, 

to the degree possible, costs and schedules for— 

(A) the design and implementation of international or national facilities 

for the testing of fusion materials; and 

(B) the design and implementation of international or national facilities 

for the testing and development of key fusion technologies. 

§ 954. Spallation Neutron Source 

(a) DEFINITION.—For the purposes of this section, the term ‘‘Spallation Neutron 

Source’’ means Department Project 99–E–334, Oak Ridge National Laboratory, Oak 

Ridge, Tennessee. 

(b) REPORT.—The Secretary shall report on the Spallation Neutron Source as part 

of the Department’s annual budget submission, including a description of the 

achievement of milestones, a comparison of actual costs to estimated costs, and any 

changes in estimated project costs or schedule. 

(c) LIMITATIONS.—The total amount obligated by the Department, including prior 

year appropriations, for the Spallation Neutron Source shall not exceed— 

(1) $1,192,700,000 for costs of construction; 

(2) $219,000,000 for other project costs; and 

(3) $1,411,700,000 for total project cost. 

§ 962. Nitrogen fixation 

The Secretary shall conduct studies on biological nitrogen fixation, including plant 

genomics research relevant to the development of commercial crop varieties with enhanced nitrogen fixation efficiency and ability. 

Subtitle G—Energy and Environment 

§ 966. Waste reduction and use of alternatives 

(a) GRANT AUTHORITY.—The Secretary may make a single grant to a qualified institution to examine burning post-consumer carpet in cement kilns as an alternative 

energy source. The purposes of the grant shall include determining— 

(1) how post-consumer carpet can be burned without disrupting kiln operations; 

(2) the extent to which overall kiln emissions may be reduced; 

(3) the emissions of air pollutants and other relevant environmental impacts; 

and 

(4) how this process provides benefits to both cement kiln operations and carpet suppliers. 

(b) QUALIFIED INSTITUTION.—For the purposes of subsection (a), a qualified institution is an institution of higher education with demonstrated expertise in the fields 

of fiber recycling and logistical modeling of carpet waste collection and preparation. 

(c) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated 

to the Secretary for carrying out this section $500,000. 

§ 967. Report on fuel cell test center 

(a) REPORT.—Not later than 1 year after the date of enactment of this Act, the 

Secretary shall transmit to Congress a report on the results of a study of the establishment of a test center for next-generation fuel cells at an institution of higher 

education that has available a continuous source of hydrogen and access to the electric transmission grid. Such report shall include a conceptual design for such test 

center and a projection of the costs of establishing the test center. 

(b) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated 

to the Secretary for carrying out this section $500,000. 

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§ 968. Arctic Engineering Research Center 

(a) IN GENERAL.—The Secretary of Energy (referred to in this section as the ‘‘Secretary’’) in consultation with the Secretary of Transportation and the United States 

Arctic Research Commission shall provide annual grants to a university located adjacent to the Arctic Energy Office of the Department of Energy, to establish and operate a university research center to be headquartered in Fairbanks and to be 

known as the ‘‘Arctic Engineering Research Center’’ (referred to in this section as 

the ‘‘Center’’). 

(b) PURPOSE.—The purpose of the Center shall be to conduct research on, and develop improved methods of, construction and use of materials to improve the overall 

performance of roads, bridges, residential, commercial, and industrial structures, 

and other infrastructure in the Arctic region, with an emphasis on developing— 

(1) new construction techniques for roads, bridges, rail, and related transportation infrastructure and residential, commercial, and industrial infrastructure 

that are capable of withstanding the Arctic environment and using limited energy resources as efficiently as possible; 

(2) technologies and procedures for increasing road, bridge, rail, and related 

transportation infrastructure and residential, commercial, and industrial infrastructure safety, reliability, and integrity in the Arctic region; 

(3) new materials and improving the performance and energy efficiency of existing materials for the construction of roads, bridges, rail, and related transportation infrastructure and residential, commercial, and industrial infrastructure 

in the Arctic region; and 

(4) recommendations for new local, regional, and State permitting and building codes to ensure transportation and building safety and efficient energy use 

when constructing, using, and occupying such infrastructure in the Arctic region. 

(c) OBJECTIVES.—The Center shall carry out— 

(1) basic and applied research in the subjects described in subsection (b), the 

products of which shall be judged by peers or other experts in the field to advance the body of knowledge in road, bridge, rail, and infrastructure engineering in the Arctic region; and 

(2) an ongoing program of technology transfer that makes research results 

available to potential users in a form that can be implemented. 

(d) AMOUNT OF GRANT.—For each of fiscal years 2005 through 2010, the Secretary 

shall provide a grant in the amount of $3,000,000 to the institution specified in subsection (a) to carry out this section. 

(e) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated 

to carry out this section $3,000,000 for each of fiscal years 2005 through 2010. 

§ 970. Western Michigan demonstration project 

The Administrator of the Environmental Protection Agency, in consultation with 

the State of Michigan and affected local officials, shall conduct a demonstration 

project to address the effect of transported ozone and ozone precursors in Southwestern Michigan. The demonstration program shall address projected nonattainment areas in Southwestern Michigan that include counties with design values for 

ozone of less than .095 based on years 2000 to 2002 or the most current 3-year period of air quality data. The Administrator shall assess any difficulties such areas 

may experience in meeting the 8 hour national ambient air quality standard for 

ozone due to the effect of transported ozone or ozone precursors into the areas. The 

Administrator shall work with State and local officials to determine the extent of 

ozone and ozone precursor transport, to assess alternatives to achieve compliance 

with the 8 hour standard apart from local controls, and to determine the timeframe 

in which such compliance could take place. The Administrator shall complete this 

demonstration project no later than 2 years after the date of enactment of this section and shall not impose any requirement or sanction that might otherwise apply 

during the pendency of the demonstration project. 

§ 971. Low-cost hydrogen propulsion and infrastructure 

(a) PROGRAM.—The Secretary of Energy shall— 

(1) establish a program with respect to the feasibility of using hydrogen propulsion in light-weight vehicles and the integration of the associated hydrogen 

production infrastructure using off-the-shelf components; and 

(2) identify universities and institutions that— 

(A) have expertise in operating and testing vehicles fueled by hydrogen, 

methane, and other fuels; 

(B) have expertise in integrating off-the-shelf components to minimize 

cost; and 

106 

(C) within two years can test a vehicle based on an existing commercially 

available platform with a curb weight of not less than 2,000 pounds before 

modifications, that— 

(i) operates solely on hydrogen gas; 

(ii) can travel a minimum of 300 miles under normal road conditions; 

and 

(iii) uses hydrogen produced from water using only solar energy. 

(b) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated 

to the Secretary of Energy for carrying out this section $200,000 for fiscal year 2006. 

Such sums shall remain available until expended. 

§ 972. Carbon-based fuel cell development 

(a) GRANT AUTHORITY.—The Secretary of Energy is authorized to make a single 

grant to a qualified institution to design and fabricate a 5-kilowatt prototype coalbased fuel cell with the following performance objectives: 

(1) A current density of 600 milliamps per square centimeter at a cell voltage 

of 0.8 volts. 

(2) An operating temperature range not to exceed 900 degrees celsius. 

(b) QUALIFIED INSTITUTION.—For the purposes of subsection (a), a qualified institution is a research-intensive institution of higher education with demonstrated expertise in the development of carbon-based fuel cells allowing the direct use of high 

sulfur content coal as fuel, and which has produced a laboratory-scale carbon-based 

fuel cell with a proven current density of 100 milliamps per square centimeter at 

a voltage of 0.6 volts. 

(c) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated 

to the Secretary of Energy for carrying out this section $850,000 for fiscal year 2006. 

Subtitle H—International Cooperation 

§ 981. United States-Israel cooperation 

(a) FINDINGS.—The Congress finds that— 

(1) on February 1, 1996, United States Secretary of Energy Hazel R. O’Leary 

and Israeli Minister of Energy and Infrastructure Gonen Segev signed the 

Agreement between the Department of Energy of the United States of America 

and the Ministry of Energy and Infrastructure of Israel Concerning Energy Cooperation, to establish a framework for collaboration between the United States 

and Israel in energy research and development activities; 

(2) the Agreement entered into force in February 2000; 

(3) in February 2005, the Agreement was automatically renewed for one additional 5-year period pursuant to Article X of the Agreement; and 

(4) under the Agreement, the United States and Israel may cooperate in energy research and development in a variety of alternative and advanced energy 

sectors. 

(b) REPORT TO CONGRESS.—(1) The Secretary of Energy shall report to the Committee on Energy and Commerce of the House of Representatives and the Committee on Energy and Natural Resources of the Senate on— 

(A) how the United States and Israel have cooperated on energy research and 

development activities under the Agreement; 

(B) projects initiated pursuant to the Agreement; and 

(C) plans for future cooperation and joint projects under the Agreement. 

(2) The report shall be submitted no later than three months after the date of enactment of this Act. 

(c) SENSE OF CONGRESS.—It is the sense of the Congress that energy cooperation 

between the Governments of the United States and Israel is mutually beneficial in 

the development of energy technology. 

TITLE X—DEPARTMENT OF ENERGY 

MANAGEMENT 

§ 1001. Additional Assistant Secretary position 

(a) ADDITIONAL ASSISTANT SECRETARY POSITION TO ENABLE IMPROVED MANAGEMENT OF NUCLEAR ENERGY ISSUES.— 

(1) IN GENERAL.—Section 203(a) of the Department of Energy Organization 

Act (42 U.S.C. 7133(a)) is amended by striking ‘‘six Assistant Secretaries’’ and 

inserting ‘‘7 Assistant Secretaries’’. 

107 

(2) SENSE OF CONGRESS.—It is the sense of Congress that the leadership for 

departmental missions in nuclear energy should be at the Assistant Secretary 

level. 

(b) TECHNICAL AND CONFORMING AMENDMENTS.— 

(1) TITLE 5.—Section 5315 of title 5, United States Code, is amended by striking ‘‘Assistant Secretaries of Energy (6)’’ and inserting ‘‘Assistant Secretaries of 

Energy (7)’’. 

(2) DEPARTMENT OF ENERGY ORGANIZATION ACT.—The table of contents for the 

Department of Energy Organization Act (42 U.S.C. 7101 note) is amended— 

(A) by striking ‘‘Section 209’’ and inserting ‘‘Sec. 209’’; 

(B) by striking ‘‘213.’’ and inserting ‘‘Sec. 213.’’; 

(C) by striking ‘‘214.’’ and inserting ‘‘Sec. 214.’’; 

(D) by striking ‘‘215.’’ and inserting ‘‘Sec. 215.’’; and 

(E) by striking ‘‘216.’’ and inserting ‘‘Sec. 216.’’. 

§ 1002. Other transactions authority 

Section 646 of the Department of Energy Organization Act (42 U.S.C. 7256) is 

amended by adding at the end the following: 

‘‘(g)(1) In addition to other authorities granted to the Secretary under law, the 

Secretary may enter into other transactions on such terms as the Secretary may 

deem appropriate in furtherance of research, development, or demonstration functions vested in the Secretary. Such other transactions shall not be subject to the 

provisions of section 9 of the Federal Nonnuclear Energy Research and Development 

Act of 1974 (42 U.S.C. 5908) or section 152 of the Atomic Energy Act of 1954 (42 

U.S.C. 2182). 

‘‘(2)(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 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, meritbased 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 makes a written determination that the use of a standard contract, grant, or cooperative agreement for the 

project is not feasible or appropriate. 

‘‘(3)(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 under paragraph (1) to the party submitting the information; 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. 

‘‘(4) 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). Such guidelines shall be published in the Federal Register for public comment under rulemaking procedures of the Department. 

‘‘(5) The authority of the Secretary under this subsection may be delegated only 

to an officer of the Department who is appointed by the President by and with the 

advice and consent of the Senate and may not be delegated to any other person. 

‘‘(6)(A) Not later than September 31, 2006, the Comptroller General of the United 

States shall report to Congress on the Department’s use of the authorities granted 

under this section, including the ability to attract nontraditional government contractors and whether additional safeguards are needed with respect to the use of 

such authorities. 

‘‘(B) In this section, the term ‘nontraditional Government contractor’ has the same 

meaning as the term ‘nontraditional defense contractor’ as defined in section 845(e) 

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of the National Defense Authorization Act for Fiscal Year 1994 (Public Law 103– 

160; 10 U.S.C. 2371 note).’’. 

§ 1003. University collaboration 

Not later than 2 years after the date of enactment of this Act, the Secretary of 

Energy shall transmit to the Congress a report that examines the feasibility of promoting collaborations between major universities and other colleges and universities 

in grants, contracts, and cooperative agreements made by the Secretary for energy 

projects. For purposes of this section, major universities are schools listed by the 

Carnegie Foundation as Doctoral Research Extensive Universities. The Secretary 

shall also consider providing incentives to increase the inclusion of small institutions of higher education, including minority-serving institutions, in energy grants, 

contracts, and cooperative agreements. 

§ 1004. Sense of Congress 

It is the sense of the Congress that— 

(1) the Secretary of Energy should develop and implement more stringent procurement and inventory controls, including controls on the purchase card program, to prevent waste, fraud, and abuse of taxpayer funds by employees and 

contractors of the Department of Energy; and 

(2) the Department’s Inspector General should continue to closely review purchase card purchases and other procurement and inventory practices at the Department. 

TITLE XII—ELECTRICITY 

§ 1201. Short title 

This title may be cited as the ‘‘Electric Reliability Act of 2005’’. 

Subtitle A—Reliability Standards 

§ 1211. Electric reliability standards 

(a) IN GENERAL.—Part II of the Federal Power Act (16 U.S.C 824 et seq.) is 

amended by adding at the end the following: 

‘‘SEC. 215. ELECTRIC RELIABILITY. 

‘‘(a) DEFINITIONS.—For purposes of this section: 

‘‘(1) The term ‘bulk-power system’ means— 

‘‘(A) facilities and control systems necessary for operating an interconnected electric energy transmission network (or any portion thereof); 

and 

‘‘(B) electric energy from generation facilities needed to maintain transmission system reliability. 

The term does not include facilities used in the local distribution of electric energy. 

‘‘(2) The terms ‘Electric Reliability Organization’ and ‘ERO’ mean the organization certified by the Commission under subsection (c) the purpose of which 

is to establish and enforce reliability standards for the bulk-power system, subject to Commission review. 

‘‘(3) The term ‘reliability standard’ means a requirement, approved by the 

Commission under this section, to provide for reliable operation of the bulkpower system. The term includes requirements for the operation of existing 

bulk-power system facilities, including cybersecurity protection, and the design 

of planned additions or modifications to such facilities to the extent necessary 

to provide for reliable operation of the bulk-power system, but the term does 

not include any requirement to enlarge such facilities or to construct new transmission capacity or generation capacity. 

‘‘(4) The term ‘reliable operation’ means operating the elements of the bulkpower system within equipment and electric system thermal, voltage, and stability limits so that instability, uncontrolled separation, or cascading failures of 

such system will not occur as a result of a sudden disturbance, including a 

cybersecurity incident, or unanticipated failure of system elements. 

‘‘(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 such components may adversely affect the ability of the operators 

of other components within the system to maintain reliable operation of the facilities within their control. 

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‘‘(6) The term ‘transmission organization’ means a Regional Transmission Organization, Independent System Operator, independent transmission provider, 

or other transmission organization finally approved by the Commission for the 

operation of transmission facilities. 

‘‘(7) The term ‘regional entity’ means an entity having enforcement authority 

pursuant to subsection (e)(4). 

‘‘(8) The term ‘cybersecurity incident’ means a malicious act or suspicious 

event that disrupts, or was an attempt to disrupt, the operation of those programmable electronic devices and communication networks including hardware, 

software and data that are essential to the reliable operation of the bulk power 

system. 

‘‘(b) JURISDICTION AND APPLICABILITY.—(1) The Commission shall have jurisdiction, within the United States, over the ERO certified by the Commission under 

subsection (c), any regional entities, and all users, owners and operators of the bulkpower system, including but not limited to the entities described in section 201(f), 

for purposes of approving reliability standards established under this section and 

enforcing compliance with this section. All users, owners and operators of the bulkpower system shall comply with reliability standards that take effect under this section. 

‘‘(2) The Commission shall issue a final rule to implement the requirements of this 

section not later than 180 days after the date of enactment of this section. 

‘‘(c) CERTIFICATION.—Following the issuance of a Commission rule under subsection (b)(2), any person may submit an application to the Commission for certification as the Electric Reliability Organization. The Commission may certify 1 such 

ERO if the Commission determines that such ERO— 

‘‘(1) has the ability to develop and enforce, subject to subsection (e)(2), reliability standards that provide for an adequate level of reliability of the bulkpower system; and 

‘‘(2) has established rules that— 

‘‘(A) assure its independence of the users and owners and operators of the 

bulk-power system, while assuring fair stakeholder representation in the 

selection of its directors and balanced decisionmaking in any ERO committee or subordinate organizational structure; 

‘‘(B) allocate equitably reasonable dues, fees, and other charges among 

end users for all activities under this section; 

‘‘(C) provide fair and impartial procedures for enforcement of reliability 

standards through the imposition of penalties in accordance with subsection 

(e) (including limitations on activities, functions, or operations, or other appropriate sanctions); 

‘‘(D) provide for reasonable notice and opportunity for public comment, 

due process, openness, and balance of interests in developing reliability 

standards and otherwise exercising its duties; and 

‘‘(E) provide for taking, after certification, appropriate steps to gain recognition in Canada and Mexico. 

The total amount of all dues, fees, and other charges collected by the ERO in 

each of the fiscal years 2006 through 2015 and allocated under subparagraph 

(B) shall not exceed $50,000,000. 

‘‘(d) RELIABILITY STANDARDS.—(1) The Electric Reliability Organization shall file 

each reliability standard or modification to a reliability standard that it proposes 

to be made effective under this section with the Commission. 

‘‘(2) The Commission may approve, by rule or order, a proposed reliability standard or modification to a reliability standard if it determines that the standard is 

just, reasonable, not unduly discriminatory or preferential, and in the public interest. The Commission shall give due weight to the technical expertise of the Electric 

Reliability Organization with respect to the content of a proposed standard or modification to a reliability standard and to the technical expertise of a regional entity 

organized on an Interconnection-wide basis with respect to a reliability standard to 

be applicable within that Interconnection, but shall not defer with respect to the effect of a standard on competition. A proposed standard or modification shall take 

effect upon approval by the Commission. 

‘‘(3) The Electric Reliability Organization shall rebuttably presume that a proposal 

from a regional entity organized on an Interconnection-wide basis for a reliability 

standard or modification to a reliability standard to be applicable on an Interconnection-wide basis is just, reasonable, and not unduly discriminatory or preferential, 

and in the public interest. 

‘‘(4) The Commission shall remand to the Electric Reliability Organization for further consideration a proposed reliability standard or a modification to a reliability 

standard that the Commission disapproves in whole or in part. 

110 

‘‘(5) The Commission, upon its own motion or upon complaint, may order the Electric Reliability Organization to submit to the Commission a proposed reliability 

standard or a modification to a reliability standard that addresses a specific matter 

if the Commission considers such a new or modified reliability standard appropriate 

to carry out this section. 

‘‘(6) The final rule adopted under subsection (b)(2) shall include fair processes for 

the identification and timely resolution of any conflict between a reliability standard 

and any function, rule, order, tariff, rate schedule, or agreement accepted, approved, 

or ordered by the Commission applicable to a transmission organization. Such transmission organization shall continue to comply with such function, rule, order, tariff, 

rate schedule or agreement accepted approved, or ordered by the Commission 

until— 

‘‘(A) the Commission finds a conflict exists between a reliability standard and 

any such provision; 

‘‘(B) the Commission orders a change to such provision pursuant to section 

206 of this part; and 

‘‘(C) the ordered change becomes effective under this part. 

If the Commission determines that a reliability standard needs to be changed as a 

result of such a conflict, it shall order the ERO to develop and file with the Commission a modified reliability standard under paragraph (4) or (5) of this subsection. 

‘‘(e) ENFORCEMENT.—(1) The ERO may impose, subject to paragraph (2), a penalty 

on a user or owner or operator of the bulk-power system for a violation of a reliability standard approved by the Commission under subsection (d) if the ERO, after 

notice and an opportunity for a hearing— 

‘‘(A) finds that the user or owner or operator has violated a reliability standard approved by the Commission under subsection (d); and 

‘‘(B) files notice and the record of the proceeding with the Commission. 

‘‘(2) A penalty imposed under paragraph (1) may take effect not earlier than the 

31st day after the ERO files with the Commission notice of the penalty and the 

record of proceedings. Such penalty shall be subject to review by the Commission, 

on its own motion or upon application by the user, owner or operator that is the 

subject of the penalty filed within 30 days after the date such notice is filed with 

the Commission. Application to the Commission for review, or the initiation of review by the Commission on its own motion, shall not operate as a stay of such penalty unless the Commission otherwise orders upon its own motion or upon application by the user, owner or operator that is the subject of such penalty. In any proceeding to review a penalty imposed under paragraph (1), the Commission, after notice and opportunity for hearing (which hearing may consist solely of the record before the ERO and opportunity for the presentation of supporting reasons to affirm, 

modify, or set aside the penalty), shall by order affirm, set aside, reinstate, or modify the penalty, and, if appropriate, remand to the ERO for further proceedings. The 

Commission shall implement expedited procedures for such hearings. 

‘‘(3) On its own motion or upon complaint, the Commission may order compliance 

with a reliability standard and may impose a penalty against a user or owner or 

operator of the bulk-power system if the Commission finds, after notice and opportunity for a hearing, that the user or owner or operator of the bulk-power system 

has engaged or is about to engage in any acts or practices that constitute or will 

constitute a violation of a reliability standard. 

‘‘(4) The Commission shall issue regulations authorizing the ERO to enter into an 

agreement to delegate authority to a regional entity for the purpose of proposing reliability standards to the ERO and enforcing reliability standards under paragraph 

(1) if— 

‘‘(A) the regional entity is governed by— 

‘‘(i) an independent board; 

‘‘(ii) a balanced stakeholder board; or 

‘‘(iii) a combination independent and balanced stakeholder board. 

‘‘(B) the regional entity otherwise satisfies the provisions of subsection (c)(1) 

and (2); and 

‘‘(C) the agreement promotes effective and efficient administration of bulkpower system reliability. 

The Commission may modify such delegation. The ERO and the Commission shall 

rebuttably presume that a proposal for delegation to a regional entity organized on 

an Interconnection-wide basis promotes effective and efficient administration of 

bulk-power system reliability and should be approved. Such regulation may provide 

that the Commission may assign the ERO’s authority to enforce reliability standards under paragraph (1) directly to a regional entity consistent with the requirements of this paragraph. 

111 

‘‘(5) The Commission may take such action as is necessary or appropriate against 

the ERO or a regional entity to ensure compliance with a reliability standard or any 

Commission order affecting the ERO or a regional entity. 

‘‘(6) Any penalty imposed under this section shall bear a reasonable relation to 

the seriousness of the violation and shall take into consideration the efforts of such 

user, owner, or operator to remedy the violation in a timely manner. 

‘‘(f) CHANGES IN ELECTRIC RELIABILITY ORGANIZATION RULES.—The Electric Reliability Organization shall file with the Commission for approval any proposed rule 

or proposed rule change, accompanied by an explanation of its basis and purpose. 

The Commission, upon its own motion or complaint, may propose a change to the 

rules of the ERO. A proposed rule or proposed rule change shall take effect upon 

a finding by the Commission, after notice and opportunity for comment, that the 

change is just, reasonable, not unduly discriminatory or preferential, is in the public 

interest, and satisfies the requirements of subsection (c). 

‘‘(g) RELIABILITY REPORTS.—The ERO shall conduct periodic assessments of the reliability and adequacy of the bulk-power system in North America. 

‘‘(h) COORDINATION WITH CANADA AND MEXICO.—The President is urged to negotiate international agreements with the governments of Canada and Mexico to provide for effective compliance with reliability standards and the effectiveness of the 

ERO in the United States and Canada or Mexico. 

‘‘(i) SAVINGS PROVISIONS.—(1) The ERO shall have authority to develop and enforce compliance with reliability standards for only the bulk-power system. 

‘‘(2) This section does not authorize the ERO or the Commission to order the construction of additional generation or transmission capacity or to set and enforce 

compliance with standards for adequacy or safety of electric facilities or services. 

‘‘(3) Nothing in this section shall be construed to preempt any authority of any 

State to take action to ensure the safety, adequacy, and reliability of electric service 

within that State, as long as such action is not inconsistent with any reliability 

standard, except that the State of New York may establish rules that result in 

greater reliability within that State, as long as such action does not result in lesser 

reliability outside the State than that provided by the reliability standards. 

‘‘(4) Within 90 days of the application of the Electric Reliability Organization or 

other affected party, and after notice and opportunity for comment, the Commission 

shall issue a final order determining whether a State action is inconsistent with a 

reliability standard, taking into consideration any recommendation of the ERO. 

‘‘(5) The Commission, after consultation with the ERO and the State taking action, may stay the effectiveness of any State action, pending the Commission’s 

issuance of a final order. 

‘‘(j) REGIONAL ADVISORY BODIES.—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 their electric load served within the region. A regional advisory body 

shall be composed of 1 member from each participating State in the region, appointed by the Governor of each State, and may include representatives of agencies, 

States, and provinces outside the United States. A regional advisory body may provide advice to the Electric Reliability Organization, a regional entity, or the Commission regarding the governance of an existing or proposed regional entity within 

the same region, whether a standard proposed to apply within the region is just, 

reasonable, not unduly discriminatory or preferential, and in the public interest, 

whether fees proposed to be assessed within the region are just, reasonable, not unduly discriminatory or preferential, and in the public interest and any other responsibilities requested by the Commission. The Commission may give deference to the 

advice of any such regional advisory body if that body is organized on an Interconnection-wide basis. 

‘‘(k) ALASKA AND HAWAII.—The provisions of this section do not apply to Alaska 

or Hawaii.’’. 

(b) STATUS OF ERO.—The Electric Reliability Organization certified by the Federal Energy Regulatory Commission under section 215(c) of the Federal Power Act 

and any regional entity delegated enforcement authority pursuant to section 

215(e)(4) of that Act are not departments, agencies, or instrumentalities of the 

United States Government. 

(c) LIMITATION ON ANNUAL APPROPRIATIONS.—There is authorized to be appropriated not more than $50,000,000 per year for fiscal years 2006 through 2015 for 

all activities under the amendment made by subsection (a). 

112 

Subtitle B—Transmission Infrastructure Modernization 

§ 1221. Siting of interstate electric transmission facilities 

(a) AMENDMENT OF FEDERAL POWER ACT.—Part II of the Federal Power Act is 

amended by adding at the end the following: 

‘‘SEC. 216. SITING OF INTERSTATE ELECTRIC TRANSMISSION FACILITIES. 

‘‘(a) DESIGNATION OF NATIONAL INTEREST ELECTRIC TRANSMISSION CORRIDORS.— 

‘‘(1) TRANSMISSION CONGESTION STUDY.—Within 1 year after the enactment of 

this section, and every 3 years thereafter, the Secretary of Energy, in consultation with affected States, shall conduct a study of electric transmission congestion. After considering alternatives and recommendations from interested parties, including an opportunity for comment from affected States, the Secretary 

shall issue a report, based on such 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. The Secretary shall conduct the study and issue the report in 

consultation with any appropriate regional entity referenced in section 215 of 

this Act. 

‘‘(2) CONSIDERATIONS.—In determining whether to designate a national interest electric transmission corridor referred to in paragraph (1) under this section, 

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 

‘‘(E) the designation would enhance national defense and homeland security. 

‘‘(b) CONSTRUCTION PERMIT.—Except as provided in subsection (i), the Commission 

is authorized, after notice and an opportunity for hearing, to issue a permit or 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 is without 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 pursuant to applicable law seeking approval 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; 

and 

‘‘(5) the proposed construction or modification is consistent with sound national energy policy and will enhance energy independence. 

‘‘(c) PERMIT APPLICATIONS.—Permit applications under subsection (b) shall be 

made in writing to the Commission. The Commission shall issue rules setting forth 

113 

the form of the application, the information to be contained in the application, and 

the manner of service of notice of the permit application upon interested persons. 

‘‘(d) COMMENTS.—In any proceeding before the Commission under subsection (b), 

the Commission shall afford each State in which a transmission facility covered by 

the permit is or will be located, each affected Federal agency and Indian tribe, private property owners, and other interested persons, a reasonable opportunity to 

present their views and recommendations with respect to the need for and impact 

of a facility covered by the permit. 

‘‘(e) RIGHTS-OF-WAY.—In the case of a permit under subsection (b) for electric 

transmission facilities to be located on property other than property owned by the 

United States or a State, if the permit holder cannot acquire by contract, or is unable to agree with the owner of the property to the compensation to be paid for, the 

necessary right-of-way to construct or modify such transmission facilities, the permit 

holder may acquire the right-of-way by the exercise of the right of eminent domain 

in the district court of the United States for the district in which the property concerned is located, or in the appropriate court of the State in which the property is 

located. The practice and procedure in any action or proceeding for that purpose in 

the district court of the United States shall conform as nearly as may be with the 

practice and procedure in similar action or proceeding in the courts of the State 

where the property is situated. 

‘‘(f) STATE LAW.—Nothing in this section shall preclude any person from constructing or modifying any transmission facility pursuant to State law. 

‘‘(g) COMPENSATION.—Any exercise of eminent domain authority pursuant to this 

section shall be considered a taking of private property for which just compensation 

is due. Just compensation shall be an amount equal to the full fair market value 

of the property taken on the date of the exercise of eminent domain authority, except that the compensation shall exceed fair market value if necessary to make the 

landowner whole for decreases in the value of any portion of the land not subject 

to eminent domain. Any parcel of land acquired by eminent domain under this subsection shall be transferred back to the owner from whom it was acquired (or his 

heirs or assigns) if the land is not used for the construction or modification of electric transmission facilities within a reasonable period of time after the acquisition. 

Other than construction, modification, operation, or maintenance of electric transmission facilities and related facilities, property acquired under subsection (e) may 

not be used for any purpose (including use for any heritage area, recreational trail, 

or park) without the consent of the owner of the parcel from whom the property was 

acquired (or the owner’s heirs or assigns). 

‘‘(h) COORDINATION OF FEDERAL AUTHORIZATIONS FOR TRANSMISSION AND DISTRIBUTION FACILITIES.— 

‘‘(1) LEAD AGENCY.—If an applicant, or prospective applicant, for a Federal authorization related to an electric transmission or distribution facility so requests, the Department of Energy (DOE) shall act as the lead agency for purposes of coordinating all applicable Federal authorizations and related environmental reviews of the facility. For purposes of this subsection, the term ‘Federal 

authorization’ means any authorization required under Federal law in order to 

site a transmission or distribution facility, including but not limited to such permits, special use authorizations, certifications, opinions, or other approvals as 

may be required, whether issued by a Federal or a State agency. To the maximum extent practicable under applicable Federal law, the Secretary of Energy 

shall coordinate this Federal authorization and review process with any Indian 

tribes, multi-State entities, and State agencies that are responsible for conducting any separate permitting and environmental reviews of the facility, to 

ensure timely and efficient review and permit decisions. 

‘‘(2) AUTHORITY TO SET DEADLINES.—As lead agency, the Department of Energy, in consultation with agencies responsible for Federal authorizations and, 

as appropriate, with Indian tribes, multi-State entities, and State agencies that 

are willing to coordinate their own separate permitting and environmental reviews with the Federal authorization and environmental reviews, shall establish 

prompt and binding intermediate milestones and ultimate deadlines for the review of, and Federal authorization decisions relating to, the proposed facility. 

The Secretary of Energy shall ensure that once an application has been submitted with such data as the Secretary considers necessary, all permit decisions 

and related environmental reviews under all applicable Federal laws shall be 

completed within 1 year or, if a requirement of another provision of Federal law 

makes this impossible, as soon thereafter as is practicable. The Secretary of Energy also shall provide an expeditious pre-application mechanism for prospective applicants to confer with the agencies involved to have each such agency 

determine and communicate to the prospective applicant within 60 days of 

114 

when the prospective applicant submits a request for such information concerning— 

‘‘(A) the likelihood of approval for a potential facility; and 

‘‘(B) key issues of concern to the agencies and public. 

‘‘(3) CONSOLIDATED ENVIRONMENTAL REVIEW AND RECORD OF DECISION.—As 

lead agency head, the Secretary of Energy, in consultation with the affected 

agencies, shall prepare a single environmental review document, which shall be 

used as the basis for all decisions on the proposed project under Federal law. 

The document may be an environmental assessment or environmental impact 

statement under the National Environmental Policy Act of 1969 if warranted, 

or such other form of analysis as may be warranted. The Secretary of Energy 

and the heads of other agencies shall streamline the review and permitting of 

transmission and distribution facilities within corridors designated under section 503 of the Federal Land Policy and Management Act (43 U.S.C. 1763) by 

fully taking into account prior analyses and decisions relating to the corridors. 

Such document shall include consideration by the relevant agencies of any applicable criteria or other matters as required under applicable laws. 

‘‘(4) APPEALS.—In the event that any agency has denied a Federal authorization required for a transmission or distribution facility, or has failed to act by 

the deadline established by the Secretary pursuant to this section for deciding 

whether to issue the authorization, the applicant or any State in which the facility would be located may file an appeal with the Secretary, who shall, in consultation with the affected agency, review the denial or take action on the pending application. Based on the overall record and in consultation with the affected agency, the Secretary may then either issue the necessary authorization 

with any appropriate conditions, or deny the application. The Secretary shall 

issue a decision within 90 days of the filing of the appeal. In making a decision 

under this paragraph, the Secretary shall comply with applicable requirements 

of Federal law, including any requirements of the Endangered Species Act, the 

Clean Water Act, the National Forest Management Act, the National Environmental Policy Act of 1969, and the Federal Land Policy and Management Act. 

‘‘(5) CONFORMING REGULATIONS AND MEMORANDA OF UNDERSTANDING.—Not 

later than 18 months after the date of enactment of this section, the Secretary 

of Energy shall issue any regulations necessary to implement this subsection. 

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 Memoranda of Understanding to ensure the timely and 

coordinated review and permitting of electricity transmission and distribution 

facilities. 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 DOE regulations and any Memoranda. Interested Indian tribes, multi-State entities, and 

State agencies may enter such Memoranda of Understanding. 

‘‘(6) DURATION AND RENEWAL.—Each Federal land use authorization for an 

electricity transmission or distribution facility shall be issued— 

‘‘(A) for a duration, as determined by the Secretary of Energy, commensurate with the anticipated use of the facility, and 

‘‘(B) with appropriate authority to manage the right-of-way for reliability 

and environmental protection. 

Upon the expiration of any such authorization (including an authorization 

issued prior to enactment of this section), the authorization shall be reviewed 

for renewal taking fully into account reliance on such electricity infrastructure, 

recognizing its importance for public health, safety and economic welfare and 

as a legitimate use of Federal lands. 

‘‘(7) MAINTAINING AND ENHANCING THE TRANSMISSION INFRASTRUCTURE.—In 

exercising the responsibilities under this section, the Secretary of Energy shall 

consult regularly with the Federal Energy Regulatory Commission (FERC), 

FERC-approved electric reliability organizations (including related regional entities), and FERC-approved Regional Transmission Organizations and Independent System Operators. 

‘‘(i) INTERSTATE COMPACTS.—The consent of Congress is hereby given for 3 or 

more contiguous States to enter into an interstate compact, subject to approval by 

Congress, establishing regional transmission siting agencies to facilitate siting of future electric energy transmission facilities within such States and to carry out the 

electric energy transmission siting responsibilities of such States. The Secretary of 

Energy may provide technical assistance to regional transmission siting agencies established under this subsection. Such 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 faVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00114 Fmt 6659 Sfmt 6621 E:\HR\OC\HR215P1.XXX HR215P1
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cilities on property owned by the United States). The Commission shall have no authority to issue a permit for the construction or modification of electric transmission 

facilities within a State that is a party to a compact, unless the members of a 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) SAVINGS CLAUSE.—Nothing in this section shall be construed to affect any requirement of the environmental laws of the United States, including, but not limited 

to, the National Environmental Policy Act of 1969. Subsection (h)(4) of this section 

shall not apply to any Congressionally-designated components of the National Wilderness Preservation System, the National Wild and Scenic Rivers System, or the 

National Park system (including National Monuments therein). 

‘‘(k) ERCOT.—This section shall not apply within the area referred to in section 

212(k)(2)(A).’’. 

(b) REPORTS TO CONGRESS ON CORRIDORS AND RIGHTS OF WAY ON FEDERAL

LANDS.—The Secretary of the Interior, the Secretary of Energy, the Secretary of Agriculture, and the Chairman of the Council on Environmental Quality shall, within 

90 days of the date of enactment of this subsection, submit a joint report to Congress identifying each of the following: 

(1) All existing designated transmission and distribution corridors on Federal 

land and the status of work related to proposed transmission and distribution 

corridor designations under Title V of the Federal Land Policy and Management 

Act (43 U.S.C. 1761 et. Seq.), the schedule for completing such work, any impediments to completing the work, and steps that Congress could take to expedite the process. 

(2) The number of pending applications to locate transmission and distribution facilities on Federal lands, key information relating to each such facility, 

how long each application has been pending, the schedule for issuing a timely 

decision as to each facility, and progress in incorporating existing and new such 

rights-of-way into relevant land use and resource management plans or their 

equivalent. 

(3) The number of existing transmission and distribution rights-of-way on 

Federal lands that will come up for renewal within the following 5, 10, and 15 

year periods, and a description of how the Secretaries plan to manage such renewals. 

§ 1222. Third-party finance 

(a) EXISTING FACILITIES.—The Secretary of Energy (hereinafter in this section referred to as the ‘‘Secretary’’), acting through the Administrator of the Western Area 

Power Administration (hereinafter in this section referred to as ‘‘WAPA’’), or 

through the Administrator of the Southwestern Power Administration (hereinafter 

in this section referred to as ‘‘SWPA’’), or both, may design, develop, construct, operate, maintain, or own, or participate with other entities in designing, developing, 

constructing, operating, maintaining, or owning, an electric power transmission facility and related facilities (‘‘Project’’) needed to upgrade existing transmission facilities owned by SWPA or WAPA if the Secretary of Energy, in consultation with the 

applicable Administrator, determines that the proposed Project— 

(1)(A) is located in a national interest electric transmission corridor designated under section 216(a) of the Federal Power Act and will reduce congestion of electric transmission in interstate commerce; or 

(B) is necessary to accommodate an actual or projected increase in demand 

for electric transmission capacity; 

(2) is consistent with— 

(A) transmission needs identified, in a transmission expansion plan or 

otherwise, by the appropriate Regional Transmission Organization or Independent System Operator (as defined in the Federal Power Act), if any, or 

approved regional reliability organization; and 

(B) efficient and reliable operation of the transmission grid; and 

(3) would be operated in conformance with prudent utility practice. 

(b) NEW FACILITIES.—The Secretary, acting through WAPA or SWPA, or both, 

may design, develop, construct, operate, maintain, or own, or participate with other 

entities in designing, developing, constructing, operating, maintaining, or owning, a 

new electric power transmission facility and related facilities (‘‘Project’’) located 

within any State in which WAPA or SWPA operates if the Secretary, in consultation 

with the applicable Administrator, determines that the proposed Project— 

(1)(A) is located in an area designated under section 216(a) of the Federal 

Power Act and will reduce congestion of electric transmission in interstate commerce; or 

(B) is necessary to accommodate an actual or projected increase in demand 

for electric transmission capacity; 

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(2) is consistent with— 

(A) transmission needs identified, in a transmission expansion plan or 

otherwise, by the appropriate Regional Transmission Organization or Independent System Operator, if any, or approved regional reliability organization; and 

(B) efficient and reliable operation of the transmission grid; 

(3) will be operated in conformance with prudent utility practice; 

(4) will be operated by, or in conformance with the rules of, the appropriate 

(A) Regional Transmission Organization or Independent System Operator, if 

any, or (B) if such an organization does not exist, regional reliability organization; and 

(5) will not duplicate the functions of existing transmission facilities or proposed facilities which are the subject of ongoing or approved siting and related 

permitting proceedings. 

(c) OTHER FUNDS.— (1) IN GENERAL.—In carrying out a Project under subsection (a) or (b), the 

Secretary may accept and use funds contributed by another entity for the purpose of carrying out the Project. 

(2) AVAILABILITY.—The contributed funds shall be available for expenditure 

for the purpose of carrying out the Project— 

(A) without fiscal year limitation; and 

(B) as if the funds had been appropriated specifically for that Project. 

(3) ALLOCATION OF COSTS.—In carrying out a Project under subsection (a) or 

(b), any costs of the Project not paid for by contributions from another entity 

shall be collected through rates charged to customers using the new transmission capability provided by the Project and allocated equitably among these 

project beneficiaries using the new transmission capability. 

(d) RELATIONSHIP TO OTHER LAWS.—Nothing in this section affects any requirement of— 

(1) any Federal environmental law, including the National Environmental 

Policy Act of 1969 (42 U.S.C. 4321 et seq.); 

(2) any Federal or State law relating to the siting of energy facilities; or 

(3) any existing authorizing statutes. 

(e) SAVINGS CLAUSE.—Nothing in this section shall constrain or restrict an Administrator in the utilization of other authority delegated to the Administrator of 

WAPA or SWPA. 

(f) SECRETARIAL DETERMINATIONS.—Any determination made pursuant to subsections (a) or (b) shall be based on findings by the Secretary using the best available data. 

(g) MAXIMUM FUNDING AMOUNT.—The Secretary shall not accept and use more than $100,000,000 under subsection (c)(1) for the period encompassing fiscal years 

2006 through 2015. 

§ 1223. Transmission system monitoring 

Within 6 months after the date of enactment of this Act, the Secretary of Energy 

and the Federal Energy Regulatory Commission shall study and report to Congress 

on the steps which must be taken to establish a system to make available to all 

transmission system owners and Regional Transmission Organizations (as defined 

in the Federal Power Act) within the Eastern and Western Interconnections realtime information on the functional status of all transmission lines within such Interconnections. In such study, the Commission shall assess technical means for implementing such transmission information system and identify the steps the Commission or Congress must take to require the implementation of such system. 

§ 1224. Advanced transmission technologies 

(a) AUTHORITY.—The Federal Energy Regulatory Commission, in the exercise of 

its authorities under the Federal Power Act and the Public Utility Regulatory Policies Act of 1978, shall encourage the deployment of advanced transmission technologies. 

(b) DEFINITION.—For the purposes of this section, the term ‘‘advanced transmission technologies’’ means technologies that increase the capacity, efficiency, or 

reliability of existing or new transmission facilities, including, but not limited to— 

(1) high-temperature lines (including superconducting cables); 

(2) underground cables; 

(3) advanced conductor technology (including advanced composite conductors, 

high-temperature low-sag conductors, and fiber optic temperature sensing conductors); 

(4) high-capacity ceramic electric wire, connectors, and insulators; 

(5) optimized transmission line configurations (including multiple phased 

transmission lines); 

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(6) modular equipment; 

(7) wireless power transmission; 

(8) ultra-high voltage lines; 

(9) high-voltage DC technology; 

(10) flexible AC transmission systems; 

(11) energy storage devices (including pumped hydro, compressed air, superconducting magnetic energy storage, flywheels, and batteries); 

(12) controllable load; 

(13) distributed generation (including PV, fuel cells, microturbines); 

(14) enhanced power device monitoring; 

(15) direct system state sensors; 

(16) fiber optic technologies; 

(17) power electronics and related software (including real time monitoring 

and analytical software); and 

(18) any other technologies the Commission considers appropriate. 

(c) OBSOLETE OR IMPRACTICABLE TECHNOLOGIES.—The Commission is authorized 

to cease encouraging the deployment of any technology described in this section on 

a finding that such technology has been rendered obsolete or otherwise impracticable to deploy. 

§ 1225. Electric transmission and distribution programs 

(a) ELECTRIC TRANSMISSION AND DISTRIBUTION PROGRAM.—The Secretary of Energy (hereinafter in this section referred to as the ‘‘Secretary’’) acting through the 

Director of the Office of Electric Transmission and Distribution shall establish a 

comprehensive research, development, demonstration and commercial application 

program to promote improved reliability and efficiency of electrical transmission and 

distribution systems. This program shall include— 

(1) advanced energy delivery and storage technologies, materials, and systems, including new transmission technologies, such as flexible alternating current transmission systems, composite conductor materials and other technologies that enhance reliability, operational flexibility, or power-carrying capability; 

(2) advanced grid reliability and efficiency technology development; 

(3) technologies contributing to significant load reductions; 

(4) advanced metering, load management, and control technologies; 

(5) technologies to enhance existing grid components; 

(6) the development and use of high-temperature superconductors to— 

(A) enhance the reliability, operational flexibility, or power-carrying capability of electric transmission or distribution systems; or 

(B) increase the efficiency of electric energy generation, transmission, distribution, or storage systems; 

(7) integration of power systems, including systems to deliver high-quality 

electric power, electric power reliability, and combined heat and power; 

(8) supply of electricity to the power grid by small scale, distributed and residential-based power generators; 

(9) the development and use of advanced grid design, operation and planning 

tools; 

(10) any other infrastructure technologies, as appropriate; and 

(11) technology transfer and education. 

(b) PROGRAM PLAN.—Not later than 1 year after the date of the enactment of this 

legislation, the Secretary, in consultation with other appropriate Federal agencies, 

shall prepare and transmit to Congress a 5-year program plan to guide activities 

under this section. In preparing the program plan, the Secretary may consult with 

utilities, energy services providers, manufacturers, institutions of higher education, 

other appropriate State and local agencies, environmental organizations, professional and technical societies, and any other persons the Secretary considers appropriate. 

(c) IMPLEMENTATION.—The Secretary shall consider implementing this program 

using a consortium of industry, university and national laboratory participants. 

(d) REPORT.—Not later than 2 years after the transmittal of the plan under subsection (b), the Secretary shall transmit a report to Congress describing the progress 

made under this section and identifying any additional resources needed to continue 

the development and commercial application of transmission and distribution infrastructure technologies. 

(e) POWER DELIVERY RESEARCH INITIATIVE.— 

(1) IN GENERAL.—The Secretary shall establish a research, development, demonstration, and commercial application initiative specifically focused on power 

delivery utilizing components incorporating high temperature superconductivity. 

(2) GOALS.—The goals of this initiative shall be to— 

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(A) establish facilities to develop high temperature superconductivity 

power applications in partnership with manufacturers and utilities; 

(B) provide technical leadership for establishing reliability for high temperature superconductivity power applications including suitable modeling 

and analysis; 

(C) facilitate commercial transition toward direct current power transmission, storage, and use for high power systems utilizing high temperature 

superconductivity; and 

(D) facilitate the integration of very low impedance high temperature 

superconducting wires and cables in existing electric networks to improve 

system performance, power flow control and reliability. 

(3) REQUIREMENTS.—The initiative shall include— 

(A) feasibility analysis, planning, research, and design to construct demonstrations of superconducting links in high power, direct current and controllable alternating current transmission systems; 

(B) public-private partnerships to demonstrate deployment of high temperature superconducting cable into testbeds simulating a realistic transmission grid and under varying transmission conditions, including actual 

grid insertions; and 

(C) testbeds developed in cooperation with national laboratories, industries, and universities to demonstrate these technologies, prepare the technologies for commercial introduction, and address cost or performance roadblocks to successful commercial use. 

(4) AUTHORIZATION OF APPROPRIATIONS.—For purposes of carrying out this 

subsection, there are authorized to be appropriated— 

(A) for fiscal year 2006, $15,000,000; 

(B) for fiscal year 2007, $20,000,000; 

(C) for fiscal year 2008, $30,000,000; 

(D) for fiscal year 2009, $35,000,000; and 

(E) for fiscal year 2010, $40,000,000. 

§ 1226. Advanced Power System Technology Incentive Program 

(a) PROGRAM.—The Secretary of Energy is authorized to establish an Advanced 

Power System Technology Incentive Program to support the deployment of certain 

advanced power system technologies and to improve and protect certain critical governmental, industrial, and commercial processes. Funds provided under this section 

shall be used by the Secretary to make incentive payments to eligible owners or operators of advanced power system technologies to increase power generation through 

enhanced operational, economic, and environmental performance. Payments under 

this section may only be made upon receipt by the Secretary of an incentive payment application establishing an applicant as either— 

(1) a qualifying advanced power system technology facility; or 

(2) a qualifying security and assured power facility. 

(b) INCENTIVES.—Subject to availability of funds, a payment of 1.8 cents per kilowatt-hour shall be paid to the owner or operator of a qualifying advanced power system technology facility under this section for electricity generated at such facility. 

An additional 0.7 cents per kilowatt-hour shall be paid to the owner or operator of 

a qualifying security and assured power facility for electricity generated at such facility. Any facility qualifying under this section shall be eligible for an incentive payment for up to, but not more than, the first 10,000,000 kilowatt-hours produced in 

any fiscal year. 

(c) ELIGIBILITY.—For purposes of this section: 

(1) QUALIFYING ADVANCED POWER SYSTEM TECHNOLOGY FACILITY.—The term 

‘‘qualifying advanced power system technology facility’’ means a facility using 

an advanced fuel cell, turbine, or hybrid power system or power storage system 

to generate or store electric energy. 

(2) QUALIFYING SECURITY AND ASSURED POWER FACILITY.—The term ‘‘qualifying security and assured power facility’’ means a qualifying advanced power 

system technology facility determined by the Secretary of Energy, in consultation with the Secretary of Homeland Security, to be in critical need of secure, 

reliable, rapidly available, high-quality power for critical governmental, industrial, or commercial applications. 

(d) AUTHORIZATION.—There are authorized to be appropriated to the Secretary of 

Energy for the purposes of this section, $10,000,000 for each of the fiscal years 2006 

through 2012. 

§ 1227. Office of Electric Transmission and Distribution 

(a) CREATION OF AN OFFICE OF ELECTRIC TRANSMISSION AND DISTRIBUTION.—Title 

II of the Department of Energy Organization Act (42 U.S.C. 7131 et seq.) (as amendVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00118 Fmt 6659 Sfmt 6621 E:\HR\OC\HR215P1.XXX HR215P1
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ed by section 502(a) of this Act) is amended by inserting the following after section 

217, as added by title V of this Act: 

‘‘SEC. 218. OFFICE OF ELECTRIC TRANSMISSION AND DISTRIBUTION. 

‘‘(a) ESTABLISHMENT.—There is established within the Department an Office of 

Electric Transmission and Distribution. This Office shall be headed by a Director, 

subject to the authority of the Secretary. The Director shall be appointed by the Secretary. The Director shall be compensated at the annual rate prescribed for level 

IV of the Executive Schedule under section 5315 of title 5, United States Code. 

‘‘(b) DIRECTOR.—The Director shall— 

‘‘(1) coordinate and develop a comprehensive, multi-year strategy to improve 

the Nation’s electricity transmission and distribution; 

‘‘(2) implement or, where appropriate, coordinate the implementation of, the 

recommendations made in the Secretary’s May 2002 National Transmission 

Grid Study; 

‘‘(3) oversee research, development, and demonstration to support Federal energy policy related to electricity transmission and distribution; 

‘‘(4) grant authorizations for electricity import and export pursuant to section 

202(c), (d), (e), and (f) of the Federal Power Act (16 U.S.C. 824a); 

‘‘(5) perform other functions, assigned by the Secretary, related to electricity 

transmission and distribution; and 

‘‘(6) develop programs for workforce training in power and transmission engineering.’’. 

(b) CONFORMING AMENDMENTS.—(1) The table of contents of the Department of 

Energy Organization Act (42 U.S.C. 7101 note) is amended by inserting after the 

item relating to section 217 the following new item: 

‘‘Sec. 218. Office of Electric Transmission and Distribution.’’. 

(2) Section 5315 of title 5, United States Code, is amended by inserting after the 

item relating to ‘‘Inspector General, Department of Energy.’’ the following: 

‘‘Director, Office of Electric Transmission and Distribution, Department of Energy.’’. 

Subtitle C—Transmission Operation Improvements 

§ 1231. Open nondiscriminatory access 

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

after section 211 the following new section: 

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

‘‘(a) TRANSMISSION SERVICES.—Subject to section 212(h), the Commission may, by 

rule or order, require an unregulated transmitting utility to provide transmission 

services— 

‘‘(1) at rates that are comparable to those that the unregulated transmitting 

utility charges itself; and 

‘‘(2) on terms and conditions (not relating to rates) that are comparable to 

those under which such unregulated transmitting utility provides transmission 

services to itself and that are not unduly discriminatory or preferential. 

‘‘(b) EXEMPTION.—The Commission shall exempt from any rule or order under this 

section any unregulated transmitting utility that— 

‘‘(1) sells no more than 4,000,000 megawatt hours of electricity per year; or 

‘‘(2) does not own or operate any transmission facilities that are necessary for 

operating an interconnected transmission system (or any portion thereof); or 

‘‘(3) meets other criteria the Commission determines to be in the public interest. 

‘‘(c) LOCAL DISTRIBUTION FACILITIES.—The requirements of subsection (a) shall 

not apply to facilities used in local distribution. 

‘‘(d) EXEMPTION TERMINATION.—Whenever the Commission, after an evidentiary 

hearing held upon 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 (b) unreasonably impairs the 

continued reliability of an interconnected transmission system, it shall revoke the 

exemption granted to that transmitting utility. 

‘‘(e) APPLICATION TO UNREGULATED TRANSMITTING UTILITIES.—The rate changing 

procedures applicable to public utilities under subsections (c) and (d) of section 205 

are applicable to unregulated transmitting utilities for purposes of this section. 

‘‘(f) REMAND.—In exercising its authority under paragraph (1) of subsection (a), 

the Commission may remand transmission rates to an unregulated transmitting 

120 

utility for review and revision where necessary to meet the requirements of subsection (a). 

‘‘(g) OTHER REQUESTS.—The provision of transmission services under subsection 

(a) does not preclude a request for transmission services under section 211. 

‘‘(h) 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 (26 U.S.C. 141). 

‘‘(i) TRANSFER OF CONTROL OF TRANSMITTING FACILITIES.—Nothing in this section 

authorizes the Commission to require an unregulated transmitting utility to transfer control or operational control of its transmitting facilities to an RTO or any other 

Commission-approved independent transmission organization designated to provide 

nondiscriminatory transmission access. 

‘‘(j) DEFINITION.—For purposes of 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).’’. 

§ 1232. Sense of Congress on Regional Transmission Organizations 

It is the sense of Congress that, in order to promote fair, open access to electric 

transmission service, benefit retail consumers, facilitate wholesale competition, improve efficiencies in transmission grid management, promote grid reliability, remove 

opportunities for unduly discriminatory or preferential transmission practices, and 

provide for the efficient development of transmission infrastructure needed to meet 

the growing demands of competitive wholesale power markets, all transmitting utilities in interstate commerce should voluntarily become members of Regional Transmission Organizations as defined in section 3 of the Federal Power Act. 

§ 1233. Regional Transmission Organization applications progress report 

Not later than 120 days after the date of enactment of this section, the Federal 

Energy Regulatory Commission shall submit to Congress a report containing each 

of the following: 

(1) A list of all regional transmission organization applications filed at the 

Commission pursuant to subpart F of part 35 of title 18, Code of Federal Regulations (in this section referred to as ‘‘Order No. 2000’’), including an identification of each public utility and other entity included within the proposed membership of the regional transmission organization. 

(2) A brief description of the status of each pending regional transmission organization application, including a precise explanation of how each fails to comply with the minimal requirements of Order No. 2000 and what steps need to 

be taken to bring each application into such compliance. 

(3) For any application that has not been finally approved by the Commission, 

a detailed description of every aspect of the application that the Commission 

has determined does not conform to the requirements of Order No. 2000. 

(4) For any application that has not been finally approved by the Commission, 

an explanation by the Commission of why the items described pursuant to paragraph (3) constitute material noncompliance with the requirements of the Commission’s Order No. 2000 sufficient to justify denial of approval by the Commission. 

(5) For all regional transmission organization applications filed pursuant to 

the Commission’s Order No. 2000, whether finally approved or not— 

(A) a discussion of that regional transmission organization’s efforts to 

minimize rate seams between itself and— 

(i) other regional transmission organizations; and 

(ii) entities not participating in a regional transmission organization; 

(B) a discussion of the impact of such seams on consumers and wholesale 

competition; and 

(C) a discussion of minimizing cost-shifting on consumers. 

§ 1234. Federal utility participation in Regional Transmission Organizations 

(a) DEFINITIONS.—For purposes of this section— 

(1) APPROPRIATE FEDERAL REGULATORY AUTHORITY.—The term ‘‘appropriate 

Federal regulatory authority’’ means— 

(A) with respect to a Federal power marketing agency (as defined in the 

Federal Power Act), the Secretary of Energy, except that the Secretary may 

designate the Administrator of a Federal power marketing agency to act as 

the appropriate Federal regulatory authority with respect to the transmission system of that Federal power marketing agency; and 

121 

(B) with respect to the Tennessee Valley Authority, the Board of Directors of the Tennessee Valley Authority. 

(2) FEDERAL UTILITY.—The term ‘‘Federal utility’’ means a Federal power 

marketing agency or the Tennessee Valley Authority. 

(3) TRANSMISSION SYSTEM.—The term ‘‘transmission system’’ means electric 

transmission facilities owned, leased, or contracted for by the United States and 

operated by a Federal utility. 

(b) TRANSFER.—The appropriate Federal regulatory authority is authorized to 

enter into a contract, agreement or other arrangement transferring control and use 

of all or part of the Federal utility’s transmission system to an RTO or ISO (as defined in the Federal Power Act), approved by the Federal Energy Regulatory Commission. Such contract, agreement or arrangement shall include— 

(1) performance standards for operation and use of the transmission system 

that the head of the Federal utility determines necessary or appropriate, including standards that assure recovery of all the Federal utility’s costs and expenses 

related to the transmission facilities that are the subject of the contract, agreement or other arrangement; consistency with existing contracts and third-party 

financing arrangements; and consistency with said Federal utility’s statutory 

authorities, obligations, and limitations; 

(2) provisions for monitoring and oversight by the Federal utility of the RTO’s 

or ISO’s fulfillment of the terms and conditions of the contract, agreement or 

other arrangement, including a provision for the resolution of disputes through 

arbitration or other means with the regional transmission organization or with 

other participants, notwithstanding the obligations and limitations of any other 

law regarding arbitration; and 

(3) a provision that allows the Federal utility to withdraw from the RTO or 

ISO and terminate the contract, agreement or other arrangement in accordance 

with its terms. 

Neither this section, actions taken pursuant to it, nor any other transaction of a 

Federal utility using an RTO or ISO shall confer upon the Federal Energy Regulatory Commission jurisdiction or authority over the Federal utility’s electric generation assets, electric capacity or energy that the Federal utility is authorized by law 

to market, or the Federal utility’s power sales activities. 

(c) EXISTING STATUTORY AND OTHER OBLIGATIONS.— 

(1) SYSTEM OPERATION REQUIREMENTS.—No statutory provision requiring or 

authorizing a Federal utility to transmit electric power or to construct, operate 

or maintain its transmission system shall be construed to prohibit a transfer 

of control and use of its transmission system pursuant to, and subject to all requirements of subsection (b). 

(2) OTHER OBLIGATIONS.—This subsection shall not be construed to— 

(A) suspend, or exempt any Federal utility from, any provision of existing 

Federal law, including but not limited to any requirement or direction relating to the use of the Federal utility’s transmission system, environmental 

protection, fish and wildlife protection, flood control, navigation, water delivery, or recreation; or 

(B) authorize abrogation of any contract or treaty obligation. 

(3) REPEAL.—Section 311 of title III of Appendix B of the Act of October 27, 

2000 (P.L. 106–377, section 1(a)(2); 114 Stat. 1441, 1441A–80; 16 U.S.C. 824n) 

is repealed. 

§ 1235. Standard market design 

(a) REMAND.—The Commission’s proposed rulemaking entitled ‘‘Remedying Undue 

Discrimination through Open Access Transmission Service and Standard Electricity 

Market Design’’ (Docket No. RM01–12–000) (‘‘SMD NOPR’’) is remanded to the 

Commission for reconsideration. No final rule mandating a standard electricity market design pursuant to the proposed rulemaking, including any rule or order of general applicability within the scope of the proposed rulemaking, may be issued before 

October 31, 2006, or take effect before December 31, 2006. Any final rule issued by 

the Commission pursuant to the proposed rulemaking shall be preceded by a second 

notice of proposed rulemaking issued after the date of enactment of this Act and 

an opportunity for public comment. 

(b) SAVINGS CLAUSE.—This section shall not be construed to modify or diminish 

any authority or obligation the Commission has under this Act, the Federal Power 

Act, or other applicable law, including, but not limited to, any authority to— 

(1) issue any rule or order (of general or particular applicability) pursuant to 

any such authority or obligation; or 

(2) act on a filing or filings by 1 or more transmitting utilities for the voluntary formation of a Regional Transmission Organization or Independent System Operator (as defined in the Federal Power Act) (and related market strucVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00121 Fmt 6659 Sfmt 6621 E:\HR\OC\HR215P1.XXX HR215P1
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tures or rules) or voluntary modification of an existing Regional Transmission 

Organization or Independent System Operator (and related market structures 

or rules). 

§ 1236. Native load service obligation 

Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended by adding 

at the end the following: 

‘‘SEC. 217. NATIVE LOAD SERVICE OBLIGATION. 

‘‘(a) MEETING SERVICE OBLIGATIONS.—(1) 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 such generation facilities or such purchased 

energy to meet such service obligation, 

is entitled to use such firm transmission rights, or, equivalent tradable or financial 

transmission rights, in order to deliver such output or purchased energy, or the output of other generating facilities or purchased energy to the extent deliverable using 

such rights, to the extent required to meet its service obligation. 

‘‘(2) To the extent that all or a portion of the service obligation covered by such 

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. Subsequent 

transfers to another load-serving entity, or back to the original load-serving entity, 

shall be entitled to the same rights. 

‘‘(3) The Commission shall exercise its authority 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 their service obligations, 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. 

‘‘(b) ALLOCATION OF TRANSMISSION RIGHTS.—Nothing in subsections (a)(1) and (a) 

(2) of this section shall affect any existing or future methodology employed by an 

RTO or ISO for allocating or auctioning transmission rights if such RTO or ISO 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 an RTO or ISO never allocated financial 

transmission rights on its system that pertained to a period before January 1, 2005, 

with respect to any application by such RTO or ISO that would change its methodology the Commission shall exercise its authority in a manner consistent with the 

Act and the policies expressed in subsections (a)(1) and (a)(2) 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. 

‘‘(c) CERTAIN TRANSMISSION RIGHTS.—The Commission may exercise authority 

under this Act to make transmission rights not used to meet an obligation covered 

by subsection (a) available to other entities in a manner determined by the Commission to be just, reasonable, and not unduly discriminatory or preferential. 

‘‘(d) OBLIGATION TO BUILD.—Nothing in this Act shall relieve a load-serving entity 

from any obligation under State or local law to build transmission or distribution 

facilities adequate to meet its service obligations. 

‘‘(e) CONTRACTS.—Nothing in this section shall provide a basis for abrogating any 

contract or service agreement for firm transmission service or rights in effect as of 

the date of the enactment of this subsection. If an ISO in the Western Interconnection had allocated financial transmission rights prior to the date of enactment of 

this section but had not done so with respect to one or more load-serving entities’ 

firm transmission rights held under contracts to which the preceding sentence applies (or held by reason of ownership of transmission facilities), such load-serving 

entities may not be required, without their consent, to convert such firm transmission rights to tradable or financial rights, except where the load-serving entity 

has voluntarily joined the ISO as a participating transmission owner (or its successor) in accordance with the ISO tariff. 

‘‘(f) 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 such facilities, 

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protections for transmission service comparable to those provided to load-serving entities pursuant to this section. 

‘‘(g) 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 (a)(3) in Commission-approved RTOs and ISOs with organized electricity markets. 

‘‘(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 its jurisdiction. 

‘‘(j) EFFECT OF EXERCISING RIGHTS.—An entity that lawfully exercises rights 

granted under subsection (a) shall not be considered by such action as engaging in 

undue discrimination or preference under this Act. 

‘‘(k) TVA AREA.—For purposes of subsection (a)(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 deemed to hold firm transmission rights for the transmission of such power. 

‘‘(l) DEFINITIONS.—For purposes of 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 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 of the foregoing, or a corporation which is wholly owned, directly or indirectly, by any 1 

or more of the foregoing, competent to carry on the business of developing, 

transmitting, utilizing or distributing power.’’. 

§ 1237. Study on the benefits of economic dispatch 

(a) STUDY.—The Secretary of Energy, in coordination and consultation with the 

States, shall conduct a study on— 

(1) the procedures currently used by electric utilities to perform economic dispatch; 

(2) identifying possible revisions to those procedures to improve the ability of 

nonutility generation resources to offer their output for sale for the purpose of 

inclusion in economic dispatch; and 

(3) the potential benefits to residential, commercial, and industrial electricity 

consumers nationally and in each state if economic dispatch procedures were revised to improve the ability of nonutility generation resources to offer their output for inclusion in economic dispatch. 

(b) DEFINITION.—The term ‘‘economic dispatch’’ when used in this section means 

the operation of generation facilities to produce energy at the lowest cost to reliably 

serve consumers, recognizing any operational limits of generation and transmission 

facilities. 

(c) REPORT TO CONGRESS AND THE STATES.—Not later than 90 days after the date 

of enactment of this Act, and on a yearly basis following, the Secretary of Energy 

shall submit a report to Congress and the States on the results of the study conducted under subsection (a), including recommendations to Congress and the States 

for any suggested legislative or regulatory changes. 

Subtitle D—Transmission Rate Reform 

§ 1241. Transmission infrastructure investment 

Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended by adding 

at the end the following: 

‘‘SEC. 218. TRANSMISSION INFRASTRUCTURE INVESTMENT. 

‘‘(a) RULEMAKING REQUIREMENT.—Within 1 year after the enactment of this section, the Commission shall establish, by rule, incentive-based (including, but not 

limited to performance-based) rate treatments for the transmission of electric energy 

in interstate commerce by public utilities for the purpose of benefiting consumers 

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by ensuring reliability and reducing the cost of delivered power by reducing transmission congestion. Such 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 facilities for the transmission of electric energy 

in interstate commerce; 

‘‘(2) provide a return on equity that attracts new investment in transmission 

facilities (including related transmission technologies); 

‘‘(3) encourage deployment of transmission technologies and other measures 

to increase the capacity and efficiency of existing transmission facilities and improve the operation of such facilities; and 

‘‘(4) allow recovery of all prudently incurred costs necessary to comply with 

mandatory reliability standards issued pursuant to section 215 of this Act. 

The Commission may, from time to time, revise such rule. 

‘‘(b) ADDITIONAL INCENTIVES FOR RTO PARTICIPATION.—In the rule issued under 

this section, the Commission shall, to the extent within its jurisdiction, provide for 

incentives to each transmitting utility or electric utility that joins a Regional Transmission Organization or Independent System Operator. Incentives provided by the 

Commission pursuant to such rule shall include— 

‘‘(1) recovery of all prudently incurred costs to develop and participate in any 

proposed or approved RTO, ISO, or independent transmission company; 

‘‘(2) recovery of all costs previously approved by a State commission which exercised jurisdiction over the transmission facilities prior to the utility’s participation in the RTO or ISO, including costs necessary to honor preexisting transmission service contracts, in a manner which does not reduce the revenues the 

utility receives for transmission services for a reasonable transition period after 

the utility joins the RTO or ISO; 

‘‘(3) recovery as an expense in rates of the costs prudently incurred to conduct 

transmission planning and reliability activities, including the costs of participating in RTO, ISO and other regional planning activities and design, study 

and other precertification costs involved in seeking permits and approvals for 

proposed transmission facilities; 

‘‘(4) a current return in rates for construction work in progress for transmission facilities and full recovery of prudently incurred costs for constructing 

transmission facilities; 

‘‘(5) formula transmission rates; and 

‘‘(6) a maximum 15 year accelerated depreciation on new transmission facilities for rate treatment purposes. 

The Commission shall ensure that any costs recoverable pursuant to this subsection 

may be recovered by such utility through the transmission rates charged by such 

utility or through the transmission rates charged by the RTO or ISO that provides 

transmission service to such utility. 

‘‘(c) JUST AND REASONABLE RATES.—All rates approved under the rules adopted 

pursuant to this section, including any revisions to such rules, are subject to the 

requirement of sections 205 and 206 that all rates, charges, terms, and conditions 

be just and reasonable and not unduly discriminatory or preferential.’’. 

Subtitle E—Amendments to PURPA 

§ 1251. Net metering and additional standards 

(a) ADOPTION OF STANDARDS.—Section 111(d) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by adding at the end the following: 

‘‘(11) NET METERING.—Each electric utility shall make available upon request 

net metering service to any electric consumer that the electric utility serves. For 

purposes of this paragraph, the term ‘net metering service’ means service to an 

electric consumer under which electric energy generated by that electric consumer from an eligible on-site generating facility and delivered to the local distribution facilities may be used to offset electric energy provided by the electric 

utility to the electric consumer during the applicable billing period. 

‘‘(12) FUEL SOURCES.—Each electric utility shall develop a plan to minimize 

dependence on 1 fuel source and to ensure that the electric energy it sells to 

consumers is generated using a diverse range of fuels and technologies, including renewable technologies. 

‘‘(13) FOSSIL FUEL GENERATION EFFICIENCY.—Each electric utility shall develop and implement a 10-year plan to increase the efficiency of its fossil fuel 

generation.’’. 

(b) COMPLIANCE.— 

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(1) TIME LIMITATIONS.—Section 112(b) of the Public Utility Regulatory Policies 

Act of 1978 (16 U.S.C. 2622(b)) is amended by adding at the end the following: 

‘‘(3)(A) Not later than 2 years after the enactment of this paragraph, each State 

regulatory authority (with respect to each electric utility for which it has ratemaking authority) and each nonregulated electric utility shall commence the consideration referred to in section 111, or set a hearing date for such consideration, with 

respect to each standard established by paragraphs (11) through (13) of section 

111(d). 

‘‘(B) Not later than 3 years after the date of the enactment of this paragraph, each 

State regulatory authority (with respect to each electric utility for which it has ratemaking authority), and each nonregulated electric utility, shall complete the consideration, and shall make the determination, referred to in section 111 with respect 

to each standard established by paragraphs (11) through (13) of section 111(d).’’. 

(2) FAILURE TO COMPLY.—Section 112(c) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(c)) is amended by adding at the end the following: 

‘‘In the case of each standard established by paragraphs (11) through (13) of section 

111(d), the reference contained in this subsection to the date of enactment of this 

Act shall be deemed to be a reference to the date of enactment of such paragraphs 

(11) through (13).’’. 

(3) PRIOR STATE ACTIONS.— 

(A) IN GENERAL.—Section 112 of the Public Utility Regulatory Policies Act 

of 1978 (16 U.S.C. 2622) is amended by adding at the end the following: 

‘‘(d) PRIOR STATE ACTIONS.—Subsections (b) and (c) of this section shall not apply 

to the standards established by paragraphs (11) through (13) of section 111(d) in the 

case of any electric utility in a State if, before the enactment of this subsection— 

‘‘(1) the State has implemented for such utility the standard concerned (or a 

comparable standard); 

‘‘(2) the State regulatory authority for such State or relevant nonregulated 

electric utility has conducted a proceeding to consider implementation of the 

standard concerned (or a comparable standard) for such utility; or 

‘‘(3) the State legislature has voted on the implementation of such standard 

(or a comparable standard) for such utility.’’. 

(B) CROSS REFERENCE.—Section 124 of such Act (16 U.S.C. 2634) is 

amended by adding the following at the end thereof: ‘‘In the case of each 

standard established by paragraphs (11) through (13) of section 111(d), the 

reference contained in this subsection to the date of enactment of this Act 

shall be deemed to be a reference to the date of enactment of such paragraphs (11) through (13).’’. 

SEC. 1252. SMART METERING. 

(a) IN GENERAL.—Section 111(d) of the Public Utility Regulatory Policies Act of 

1978 (16 U.S.C. 2621(d)) is amended by adding at the end the following: 

‘‘(14) 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 timebased rate schedule shall enable the electric consumer to manage energy 

use and cost through advanced metering and communications technology. 

‘‘(B) The types of time-based rate schedules that may be offered under the 

schedule referred to in subparagraph (A) include, among others— 

‘‘(i) time-of-use pricing whereby electricity prices are set for a specific 

time period on an advance or forward basis, typically not changing 

more often than twice a year, based on the utility’s cost of generating 

and/or purchasing such electricity at the wholesale level for the benefit 

of the consumer. Prices paid for energy consumed during these periods 

shall be pre-established and known to consumers in advance of such 

consumption, allowing them to vary their demand and usage in response to such prices and manage their energy costs by shifting usage 

to a lower cost period or reducing their consumption overall; 

‘‘(ii) critical peak pricing whereby time-of-use prices are in effect except for certain peak days, when prices may reflect the costs of generating and/or purchasing electricity at the wholesale level and when consumers may receive additional discounts for reducing peak period energy consumption; 

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‘‘(iii) real-time pricing whereby electricity prices are set for a specific 

time period on an advanced or forward basis, reflecting the utility’s cost 

of generating and/or purchasing electricity at the wholesale level, and 

may change as often as hourly; and 

‘‘(iv) credits for consumers with large loads who enter into pre-established peak load reduction agreements that reduce a utility’s planned 

capacity obligations. 

‘‘(C) Each electric utility subject to subparagraph (A) shall provide each 

customer requesting a time-based rate with a time-based meter capable of 

enabling the utility and customer to offer and receive such rate, respectively. 

‘‘(D) For purposes of implementing this paragraph, any reference contained in this section to the date of enactment of the Public Utility Regulatory Policies Act of 1978 shall be deemed to be a reference to the date 

of enactment of this paragraph. 

‘‘(E) In a State that permits third-party marketers to sell electric energy 

to retail electric consumers, such consumers shall be entitled to receive the 

same time-based metering and communications device and service as a retail electric consumer of the electric utility. 

‘‘(F) 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).’’. 

(b) STATE INVESTIGATION OF DEMAND RESPONSE AND TIME-BASED METERING.— 

Section 115 of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2625) 

is amended as follows: 

(1) By inserting in subsection (b) after the phrase ‘‘the standard for time-ofday rates established by section 111(d)(3)’’ the following: ‘‘and the standard for 

time-based metering and communications established by section 111(d)(14)’’. 

(2) By inserting in subsection (b) after the phrase ‘‘are likely to exceed the 

metering’’ the following: ‘‘and communications’’. 

(3) By adding the at the end the following: 

‘‘(i) TIME-BASED METERING AND COMMUNICATIONS.—In making a determination 

with respect to the standard established by section 111(d)(14), the investigation requirement of section 111(d)(14)(F) shall be as follows: Each State regulatory authority shall conduct an investigation and issue a decision whether or not it is appropriate for electric utilities to provide and install time-based meters and communications devices for each of their customers which enable such customers to participate 

in time-based pricing rate schedules and other demand response programs.’’. 

(c) FEDERAL ASSISTANCE ON DEMAND RESPONSE.—Section 132(a) of the Public 

Utility Regulatory Policies Act of 1978 (16 U.S.C. 2642(a)) is amended by striking 

‘‘and’’ at the end of paragraph (3), striking the period at the end of paragraph (4) 

and inserting ‘‘; and’’, and by adding the following at the end thereof: 

‘‘(5) technologies, techniques, and rate-making methods related to advanced 

metering and communications and the use of these technologies, techniques and 

methods in demand response programs.’’. 

(d) FEDERAL GUIDANCE.—Section 132 of the Public Utility Regulatory Policies Act 

of 1978 (16 U.S.C. 2642) is amended by adding the following at the end thereof: 

‘‘(d) DEMAND RESPONSE.—The Secretary shall be responsible for— 

‘‘(1) educating consumers on the availability, advantages, and benefits of advanced metering and communications technologies, including the funding of 

demonstration or pilot projects; 

‘‘(2) working with States, utilities, other energy providers and advanced metering and communications experts to identify and address barriers to the adoption of demand response programs; and 

‘‘(3) not later than 180 days after the date of enactment of the Energy Policy 

Act of 2005, providing Congress with a report that identifies and quantifies the 

national benefits of demand response and makes a recommendation on achieving specific levels of such benefits by January 1, 2007.’’. 

(e) DEMAND RESPONSE AND REGIONAL COORDINATION.— 

(1) IN GENERAL.—It is the policy of the United States to encourage States to 

coordinate, on a regional basis, State energy policies to provide reliable and affordable demand response services to the public. 

(2) TECHNICAL ASSISTANCE.—The Secretary of Energy shall provide technical 

assistance to States and regional organizations formed by 2 or more States to 

assist them in— 

(A) identifying the areas with the greatest demand response potential; 

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(B) identifying and resolving problems in transmission and distribution 

networks, including through the use of demand response; 

(C) developing plans and programs to use demand response to respond to 

peak demand or emergency needs; and 

(D) identifying specific measures consumers can take to participate in 

these demand response programs. 

(3) REPORT.—Not later than 1 year after the date of enactment of the Energy 

Policy Act of 2005, the Commission shall prepare and publish an annual report, 

by appropriate region, that assesses demand response resources, including those 

available from all consumer classes, and which identifies and reviews— 

(A) saturation and penetration rate of advanced meters and communications technologies, devices and systems; 

(B) existing demand response programs and time-based rate programs; 

(C) the annual resource contribution of demand resources; 

(D) the potential for demand response as a quantifiable, reliable resource 

for regional planning purposes; 

(E) steps taken to ensure that, in regional transmission planning and operations, demand resources are provided equitable treatment as a quantifiable, reliable resource relative to the resource obligations of any load-serving entity, transmission provider, or transmitting party; and 

(F) regulatory barriers to improved customer participation in demand response, peak reduction and critical period pricing programs. 

(f) FEDERAL ENCOURAGEMENT OF DEMAND RESPONSE DEVICES.—It is the policy of 

the United States that time-based pricing and other forms of demand response, 

whereby electricity customers are provided with electricity price signals and the 

ability to benefit by responding to them, shall be encouraged, the deployment of 

such technology and devices that enable electricity customers to participate in such 

pricing and demand response systems shall be facilitated, and unnecessary barriers 

to demand response participation in energy, capacity and ancillary service markets 

shall be eliminated. It is further the policy of the United States that the benefits 

of such demand response that accrue to those not deploying such technology and devices, but who are part of the same regional electricity entity, shall be recognized. 

(g) TIME LIMITATIONS.—Section 112(b) of the Public Utility Regulatory Policies Act 

of 1978 (16 U.S.C. 2622(b)) is amended by adding at the end the following: 

‘‘(4)(A) Not later than 1 year after the enactment of this paragraph, each 

State regulatory authority (with respect to each electric utility for which it has 

ratemaking authority) and each nonregulated electric utility shall commence 

the consideration referred to in section 111, or set a hearing date for such consideration, with respect to the standard established by paragraph (14) of section 

111(d). 

‘‘(B) Not later than 2 years after the date of the enactment of this paragraph, 

each State regulatory authority (with respect to each electric utility for which 

it has ratemaking authority), and each nonregulated electric utility, shall complete the consideration, and shall make the determination, referred to in section 

111 with respect to the standard established by paragraph (14) of section 

111(d).’’. 

(h) FAILURE TO COMPLY.—Section 112(c) of the Public Utility Regulatory Policies 

Act of 1978 (16 U.S.C. 2622(c)) is amended by adding at the end the following: 

‘‘In the case of the standard established by paragraph (14) of section 111(d), the reference contained in this subsection to the date of enactment of this Act shall be 

deemed to be a reference to the date of enactment of such paragraph (14).’’. 

(i) PRIOR STATE ACTIONS REGARDING SMART METERING STANDARDS.— 

(1) IN GENERAL.—Section 112 of the Public Utility Regulatory Policies Act of 

1978 (16 U.S.C. 2622) is amended by adding at the end the following: 

‘‘(e) PRIOR STATE ACTIONS.—Subsections (b) and (c) of this section shall not apply 

to the standard established by paragraph (14) of section 111(d) in the case of any 

electric utility in a State if, before the enactment of this subsection— 

‘‘(1) the State has implemented for such utility the standard concerned (or a 

comparable standard); 

‘‘(2) the State regulatory authority for such State or relevant nonregulated 

electric utility has conducted a proceeding to consider implementation of the 

standard concerned (or a comparable standard) for such utility within the previous 3 years; or 

‘‘(3) the State legislature has voted on the implementation of such standard 

(or a comparable standard) for such utility within the previous 3 years.’’. 

(2) CROSS REFERENCE.—Section 124 of such Act (16 U.S.C. 2634) is amended 

by adding the following at the end thereof: ‘‘In the case of the standard established by paragraph (14) of section 111(d), the reference contained in this subVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00127 Fmt 6659 Sfmt 6621 E:\HR\OC\HR215P1.XXX HR215P1
128 

section to the date of enactment of this Act shall be deemed to be a reference 

to the date of enactment of such paragraph (14).’’. 

SEC. 1253. COGENERATION AND SMALL POWER PRODUCTION PURCHASE AND SALE REQUIREMENTS. 

(a) TERMINATION OF MANDATORY PURCHASE AND SALE REQUIREMENTS.—Section 

210 of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 824a–3) is 

amended by adding at the end the following: 

‘‘(m) TERMINATION OF MANDATORY PURCHASE AND SALE REQUIREMENTS.— ‘‘(1) OBLIGATION TO PURCHASE.—After the date of enactment of this subsection, no electric utility shall be required to enter into a new contract or obligation to purchase electric energy from a qualifying cogeneration facility or a 

qualifying small power production facility under this section if the Commission 

finds that the qualifying cogeneration facility or qualifying small power production facility has nondiscriminatory access to— 

‘‘(A)(i) independently administered, auction-based day ahead and real 

time wholesale markets for the sale of electric energy; and (ii) wholesale 

markets for long-term sales of capacity and electric energy; or 

‘‘(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 sufficient notice to potentially affected 

qualifying cogeneration facilities and qualifying small power production facilities, and an opportunity for comment, the Commission shall make a final determination within 90 days of such application regarding whether the conditions 

set forth in 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. 

129 

‘‘(5) OBLIGATION TO SELL.—After the date of enactment of this subsection, no 

electric utility shall be required to enter into a new contract or obligation to sell 

electric energy to a qualifying cogeneration facility or a qualifying small power 

production facility under this section if the Commission finds that— 

‘‘(A) competing retail electric suppliers are willing and able to sell and deliver electric energy to the qualifying cogeneration facility or qualifying 

small power production facility; and 

‘‘(B) the electric utility is not required by State law to sell electric energy 

in its service territory. 

‘‘(6) NO EFFECT ON EXISTING RIGHTS AND REMEDIES.—Nothing in this subsection affects the rights or remedies of any party under any contract or obligation, in effect or pending approval before the appropriate State regulatory authority or non-regulated electric utility on the date of enactment of this subsection, to purchase electric energy or capacity from or to sell electric energy 

or capacity to a qualifying cogeneration facility or qualifying small power production facility under this Act (including the right to recover costs of purchasing 

electric energy or capacity). 

‘‘(7) RECOVERY OF COSTS.—(A) The Commission shall issue and enforce such 

regulations as are necessary to ensure that an electric utility that purchases 

electric energy or capacity from a qualifying cogeneration facility or qualifying 

small power production facility in accordance with any legally enforceable obligation entered into or imposed under this section recovers all prudently incurred costs associated with the purchase. 

‘‘(B) A regulation under subparagraph (A) shall be enforceable in accordance 

with the provisions of law applicable to enforcement of regulations under the 

Federal Power Act (16 U.S.C. 791a et seq.). 

‘‘(n) 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 paragraph (1)(A) of this subsecvtion shall be applicable only to facilities that seek to sell electric energy pursuant to section 210 

of this Act. For all other purposes, except as specifically provided in subsection 

(m)(2)(A), qualifying facility status shall be determined in accordance with the rules 

and regulations of this Act. 

‘‘(2) 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).’’. 

(b) ELIMINATION OF OWNERSHIP LIMITATIONS.— 

(1) QUALIFYING SMALL POWER PRODUCTION FACILITY.—Section 3(17)(C) of the 

Federal Power Act (16 U.S.C. 796(17)(C)) is amended to read as follows: 

‘‘(C) ‘qualifying small power production facility’ means a small power production facility that the Commission determines, by rule, meets such requirements (including requirements respecting fuel use, fuel efficiency, and 

reliability) as the Commission may, by rule, prescribe;’’. 

(2) QUALIFYING COGENERATION FACILITY.—Section 3(18)(B) of the Federal 

Power Act (16 U.S.C. 796(18)(B)) is amended to read as follows: 

‘‘(B) ‘qualifying cogeneration facility’ means a cogeneration facility that 

the Commission determines, by rule, meets such requirements (including 

requirements respecting minimum size, fuel use, and fuel efficiency) as the 

Commission may, by rule, prescribe;’’. 

130 

SEC. 1254. INTERCONNECTION. 

(a) ADOPTION OF STANDARDS.—Section 111(d) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2621 (d) ) is amended by adding at the end the following: 

‘‘(16) INTERCONNECTION.—Each electric utility shall make available, upon request, interconnection service to any electric consumer that the electric utility 

serves. For purposes of this paragraph, the term ‘interconnection service’ means 

service to an electric consumer under which an on-site generating facility on the 

consumer’s premises shall be connected to the local distribution facilities. Interconnection services shall be offered based upon the standards developed by the 

Institute of Electrical and Electronics Engineers: IEEE Standard 1547 for Interconnecting Distributed Resources with Electric Power Systems, as they may be 

amended from time to time. In addition, agreements and procedures shall be 

established whereby the services are offered shall promote current best practices of interconnection for distributed generation, including but not limited to 

practices stipulated in model codes adopted by associations of state regulatory 

agencies. All such agreements and procedures shall be just and reasonable, and 

not unduly discriminatory or preferential.’’. 

(b) COMPLIANCE.— 

(1) TIME LIMITATIONS.—Section 112(b) of the Public Utility Regulatory Policies 

Act of 1978 (16 U.S.C. 2622(b)) is amended by adding at the end the following: 

‘‘(5)(A) Not later than one year after the enactment of this paragraph, each 

State regulatory authority (with respect to each electric utility for which it has 

ratemaking authority) and each nonregulated utility shall commence the consideration referred to in section 111, or set a hearing date for consideration, with 

respect to the standard established by paragraph (16) of section 111(d). 

‘‘(B) Not later than two years after the date of the enactment of the this paragraph, each State regulatory authority (with respect to each electric utility for 

which it has ratemaking authority), and each nonregulated electric utility, shall 

complete the consideration, and shall make the determination, referred to in 

section 111 with respect to each standard established by paragraph (16) of section 111(d).’’. 

(2) FAILURE TO COMPLY.—Section 112 (d) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622 (c)) is amended by adding at the end the following: ‘‘In the case of the standard established by paragraph (16), the reference 

contained in this subsection to the date of enactment of this Act shall be 

deemed to be a reference to the date of enactment of paragraph (16).’’. 

(3) PRIOR STATE ACTIONS.— 

(A) IN GENERAL.—Section 112 of the Public Utility Regulatory Policies Act 

of 1978 (16 U.S.C. 2622) is amended by adding at the end the following: 

‘‘(f) PRIOR STATE ACTIONS.—Subsections (b) and (c) of this section shall not apply 

to the standards established by paragraph (16) of section 111(d) in the case of any 

electric utility in a State if, before the enactment of this subsection— 

‘‘(1) the State has implemented for such utility the standard concerned (or a 

comparable standard); 

‘‘(2) the State regulatory authority for such State or relevant nonregulated 

electric utility has conducted a proceeding to consider implementation of the 

standard concerned (or a comparable standard) for such utility; or 

‘‘(3) the State legislature has voted on the implementation of such standard 

(or a comparable standard) for such utility.’’. 

(B) CROSS REFERENCE.—Section 124 of such Act (16 U.S.C. 2634) is 

amended by adding the following at the end thereof: ‘‘In the case of each 

standard established by paragraph (16) of section 111(d), the reference contained in this subsection to the date of enactment of the Act shall be 

deemed to be a reference to the date of enactment of paragraph (16).’’. 

Subtitle F—Repeal of PUHCA 

SEC. 1261. SHORT TITLE. 

This subtitle may be cited as the ‘‘Public Utility Holding Company Act of 2005’’. 

SEC. 1262. DEFINITIONS. 

For purposes of this subtitle: 

(1) AFFILIATE.—The term ‘‘affiliate’’ of a company means any company, 5 percent or more of the outstanding voting securities of which are owned, controlled, 

or held with power to vote, directly or indirectly, by such company. 

(2) ASSOCIATE COMPANY.—The term ‘‘associate company’’ of a company means 

any company in the same holding company system with such company. 

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(3) COMMISSION.—The term ‘‘Commission’’ means the Federal Energy Regulatory Commission. 

(4) COMPANY.—The term ‘‘company’’ means a corporation, partnership, association, joint stock company, business trust, or any organized group of persons, 

whether incorporated or not, or a receiver, trustee, or other liquidating agent 

of any of the foregoing. 

(5) ELECTRIC UTILITY COMPANY.—The term ‘‘electric utility company’’ means 

any company that owns or operates facilities used for the generation, transmission, or distribution of electric energy for sale. 

(6) EXEMPT WHOLESALE GENERATOR AND FOREIGN UTILITY COMPANY.—The 

terms ‘‘exempt wholesale generator’’ and ‘‘foreign utility company’’ have the 

same meanings as in sections 32 and 33, respectively, of the Public Utility Holding Company Act of 1935 (15 U.S.C. 79z–5a, 79z–5b), as those sections existed 

on the day before the effective date of this subtitle. 

(7) GAS UTILITY COMPANY.—The term ‘‘gas utility company’’ means any company that owns or operates facilities used for distribution at retail (other than 

the distribution only in enclosed portable containers or distribution to tenants 

or employees of the company operating such facilities for their own use and not 

for resale) of natural or manufactured gas for heat, light, or power. 

(8) HOLDING COMPANY.—The term ‘‘holding company’’ means— 

(A) any company that directly or indirectly owns, controls, or holds, with 

power to vote, 10 percent or more of the outstanding voting securities of a 

public-utility company or of a holding company of any public-utility company; and 

(B) any person, determined by the Commission, after notice and opportunity for hearing, to exercise directly or indirectly (either alone or pursuant to an arrangement or understanding with 1 or more persons) such a 

controlling influence over the management or policies of any public-utility 

company or holding company as to make it necessary or appropriate for the 

rate protection of utility customers with respect to rates that such person 

be subject to the obligations, duties, and liabilities imposed by this subtitle 

upon holding companies. 

(9) HOLDING COMPANY SYSTEM.—The term ‘‘holding company system’’ means 

a holding company, together with its subsidiary companies. 

(10) JURISDICTIONAL RATES.—The term ‘‘jurisdictional rates’’ means rates accepted or established by the Commission for the transmission of electric energy 

in interstate commerce, the sale of electric energy at wholesale in interstate 

commerce, the transportation of natural gas in interstate commerce, and the 

sale in interstate commerce of natural gas for resale for ultimate public consumption for domestic, commercial, industrial, or any other use. 

(11) NATURAL GAS COMPANY.—The term ‘‘natural gas company’’ means a person engaged in the transportation of natural gas in interstate commerce or the 

sale of such gas in interstate commerce for resale. 

(12) PERSON.—The term ‘‘person’’ means an individual or company. 

(13) PUBLIC UTILITY.—The term ‘‘public utility’’ means any person who owns 

or operates facilities used for transmission of electric energy in interstate commerce or sales of electric energy at wholesale in interstate commerce. 

(14) PUBLIC-UTILITY COMPANY.—The term ‘‘public-utility company’’ means an 

electric utility company or a gas utility company. 

(15) STATE COMMISSION.—The term ‘‘State commission’’ means any commission, board, agency, or officer, by whatever name designated, of a State, municipality, or other political subdivision of a State that, under the laws of such 

State, has jurisdiction to regulate public utility companies. 

(16) SUBSIDIARY COMPANY.—The term ‘‘subsidiary company’’ of a holding company means— 

(A) any company, 10 percent or more of the outstanding voting securities 

of which are directly or indirectly owned, controlled, or held with power to 

vote, by such holding company; and 

(B) any person, the management or policies of which the Commission, 

after notice and opportunity for hearing, determines to be subject to a controlling influence, directly or indirectly, by such holding company (either 

alone or pursuant to an arrangement or understanding with 1 or more 

other persons) so as to make it necessary for the rate protection of utility 

customers with respect to rates that such person be subject to the obligations, duties, and liabilities imposed by this subtitle upon subsidiary companies of holding companies. 

(17) VOTING SECURITY.—The term ‘‘voting security’’ means any security presently entitling the owner or holder thereof to vote in the direction or management of the affairs of a company. 

132 

SEC. 1263. REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935. 

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

SEC. 1264. FEDERAL ACCESS TO BOOKS AND RECORDS. 

(a) IN GENERAL.—Each holding company and each associate company thereof shall 

maintain, and shall make available to the Commission, such books, accounts, memoranda, and other records as the Commission determines are relevant to costs incurred by a public utility or natural gas company that is an associate company of 

such holding company and necessary or appropriate for the protection of utility customers with respect to jurisdictional rates. 

(b) AFFILIATE COMPANIES.—Each affiliate of a holding company or of any subsidiary company of a holding company shall maintain, and shall make available to 

the Commission, such books, accounts, memoranda, and other records with respect 

to any transaction with another affiliate, as the Commission determines are relevant to costs incurred by a public utility or natural gas company that is an associate company of such holding company and necessary or appropriate for the protection of utility customers with respect to jurisdictional rates. 

(c) HOLDING COMPANY SYSTEMS.—The Commission may examine the books, accounts, memoranda, and other records of any company in a holding company system, or any affiliate thereof, as the Commission determines are relevant to costs incurred by a public utility or natural gas company within such holding company system and necessary or appropriate for the protection of utility customers with respect 

to jurisdictional rates. 

(d) CONFIDENTIALITY.—No member, officer, or employee of the Commission shall 

divulge any fact or information that may come to his or her knowledge during the 

course of examination of books, accounts, memoranda, or other records as provided 

in this section, except as may be directed by the Commission or by a court of competent jurisdiction. 

SEC. 1265. STATE ACCESS TO BOOKS AND RECORDS. 

(a) IN GENERAL.—Upon the written request of a State commission having jurisdiction to regulate a public-utility company in a holding company system, the holding 

company or any associate company or affiliate thereof, other than such public-utility 

company, wherever located, shall produce for inspection books, accounts, memoranda, and other records that— 

(1) have been identified in reasonable detail in a proceeding before the State 

commission; 

(2) the State commission determines are relevant to costs incurred by such 

public-utility company; and 

(3) are necessary for the effective discharge of the responsibilities of the State 

commission with respect to such proceeding. 

(b) LIMITATION.—Subsection (a) does not apply to any person that is a holding 

company solely by reason of ownership of 1 or more qualifying facilities under the 

Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2601 et seq.). 

(c) CONFIDENTIALITY OF INFORMATION.—The production of books, accounts, memoranda, and other records under subsection (a) shall be subject to such terms and 

conditions as may be necessary and appropriate to safeguard against unwarranted 

disclosure to the public of any trade secrets or sensitive commercial information. 

(d) EFFECT ON STATE LAW.—Nothing in this section shall preempt applicable 

State law concerning the provision of books, accounts, memoranda, and other 

records, or in any way limit the rights of any State to obtain books, accounts, memoranda, and other records under any other Federal law, contract, or otherwise. 

(e) COURT JURISDICTION.—Any United States district court located in the State in 

which the State commission referred to in subsection (a) is located shall have jurisdiction to enforce compliance with this section. 

SEC. 1266. EXEMPTION AUTHORITY. 

(a) RULEMAKING.—Not later than 90 days after the effective date of this subtitle, 

the Commission shall issue a final rule to exempt from the requirements of section 

1264 (relating to Federal access to books and records) any person that is a holding 

company, solely with respect to 1 or more— 

(1) qualifying facilities under the Public Utility Regulatory Policies Act of 

1978 (16 U.S.C. 2601 et seq.); 

(2) exempt wholesale generators; or 

(3) foreign utility companies. 

(b) OTHER AUTHORITY.—The Commission shall exempt a person or transaction 

from the requirements of section 1264 (relating to Federal access to books and 

records) if, upon application or upon the motion of the Commission— 

133 

(1) the Commission finds that the books, accounts, memoranda, and other 

records of any person are not relevant to the jurisdictional rates of a public utility or natural gas company; or 

(2) the Commission finds that any class of transactions is not relevant to the 

jurisdictional rates of a public utility or natural gas company. 

SEC. 1267. AFFILIATE TRANSACTIONS. 

(a) COMMISSION AUTHORITY UNAFFECTED.—Nothing in this subtitle shall limit the 

authority of the Commission under the Federal Power Act (16 U.S.C. 791a et seq.) 

to require that jurisdictional rates are just and reasonable, including the ability to 

deny or approve the pass through of costs, the prevention of cross-subsidization, and 

the issuance of such rules and regulations as are necessary or appropriate for the 

protection of utility consumers. 

(b) RECOVERY OF COSTS.—Nothing in this subtitle shall preclude the Commission 

or a State commission from exercising its jurisdiction under otherwise applicable 

law to determine whether a public-utility company, public utility, or natural gas 

company may recover in rates any costs of an activity performed by an associate 

company, or any costs of goods or services acquired by such public-utility company 

from an associate company. 

SEC. 1268. APPLICABILITY. 

Except as otherwise specifically provided in this subtitle, no provision of this subtitle shall apply to, or be deemed to include— 

(1) the United States; 

(2) a State or any political subdivision of a State; 

(3) any foreign governmental authority not operating in the United States; 

(4) any agency, authority, or instrumentality of any entity referred to in paragraph (1), (2), or (3); or 

(5) any officer, agent, or employee of any entity referred to in paragraph (1), 

(2), (3), or (4) acting as such in the course of his or her official duty. 

SEC. 1269. EFFECT ON OTHER REGULATIONS. 

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

SEC. 1270. ENFORCEMENT. 

The Commission shall have the same powers as set forth in sections 306 through 

317 of the Federal Power Act (16 U.S.C. 825e–825p) to enforce the provisions of this 

subtitle. 

SEC. 1271. SAVINGS PROVISIONS. 

(a) IN GENERAL.—Nothing in this subtitle, or otherwise in the Public Utility Holding Company Act of 1935, or rules, regulations, or orders thereunder, prohibits a 

person from engaging in or continuing to engage in activities or transactions in 

which it is legally engaged or authorized to engage on the date of enactment of this 

Act, if that person continues to comply with the terms (other than an expiration 

date or termination date) of any such authorization, whether by rule or by order. 

(b) EFFECT ON OTHER COMMISSION AUTHORITY.—Nothing in this subtitle limits 

the authority of the Commission under the Federal Power Act (16 U.S.C. 791a et 

seq.) or the Natural Gas Act (15 U.S.C. 717 et seq.). 

SEC. 1272. IMPLEMENTATION. 

Not later than 12 months after the date of enactment of this subtitle, the Commission shall— 

(1) issue such regulations as may be necessary or appropriate to implement 

this subtitle (other than section 1265, relating to State access to books and 

records); and 

(2) submit to Congress detailed recommendations on technical and conforming 

amendments to Federal law necessary to carry out this subtitle and the amendments made by this subtitle. 

SEC. 1273. TRANSFER OF RESOURCES. 

All books and records that relate primarily to the functions transferred to the 

Commission under this subtitle shall be transferred from the Securities and Exchange Commission to the Commission. 

SEC. 1274. EFFECTIVE DATE. 

(a) IN GENERAL.—Except for section 1272 (relating to implementation), this subtitle shall take effect 12 months after the date of enactment of this subtitle. 

(b) COMPLIANCE WITH CERTAIN RULES.—If the Commission approves and makes 

effective any final rulemaking modifying the standards of conduct governing entities 

that own, operate, or control facilities for transmission of electricity in interstate 

134 

commerce or transportation of natural gas in interstate commerce prior to the effective date of this subtitle, any action taken by a public-utility company or utility 

holding company to comply with the requirements of such rulemaking shall not subject such public-utility company or utility holding company to any regulatory requirement applicable to a holding company under the Public Utility Holding Company Act of 1935 (15 U.S.C. 79 et seq.). 

SEC. 1275. SERVICE ALLOCATION. 

(a) FERC REVIEW.—In the case of non-power goods or administrative or management services provided by an associate company organized specifically for the purpose of providing such goods or services to any public utility in the same holding 

company system, at the election of the system or a State commission having jurisdiction over the public utility, the Commission, after the effective date of this subtitle, shall review and authorize the allocation of the costs for such goods or services 

to the extent relevant to that associate company in order to assure that each allocation is appropriate for the protection of investors and consumers of such public utility. 

(b) COST ALLOCATION.—Nothing in this section shall preclude the Commission or 

a State commission from exercising its jurisdiction under other applicable law with 

respect to the review or authorization of any costs allocated to a public utility in 

a holding company system located in the affected State as a result of the acquisition 

of non-power goods or administrative and management services by such public utility from an associate company organized specifically for that purpose. 

(c) RULES.—Not later than 6 months after the date of enactment of this Act, the 

Commission shall issue rules (which rules shall be effective no earlier than the effective date of this subtitle) to exempt from the requirements of this section any 

company in a holding company system whose public utility operations are confined 

substantially to a single State and any other class of transactions that the Commission finds is not relevant to the jurisdictional rates of a public utility. 

(d) PUBLIC UTILITY.—As used in this section, the term ‘‘public utility’’ has the 

meaning given that term in section 201(e) of the Federal Power Act. 

SEC. 1276. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated such funds as may be necessary to carry 

out this subtitle. 

SEC. 1277. CONFORMING AMENDMENTS TO THE FEDERAL POWER ACT. 

(a) CONFLICT OF JURISDICTION.—Section 318 of the Federal Power Act (16 U.S.C. 

825q) is repealed. 

(b) DEFINITIONS.—(1) Section 201(g)(5) of the Federal Power Act (16 U.S.C. 

824(g)(5)) is amended by striking ‘‘1935’’ and inserting ‘‘2005’’. 

(2) Section 214 of the Federal Power Act (16 U.S.C. 824m) is amended by striking 

‘‘1935’’ and inserting ‘‘2005’’. 

Subtitle G—Market Transparency, Enforcement, 

and Consumer Protection 

SEC. 1281. MARKET TRANSPARENCY RULES. 

Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended by adding 

at the end the following: 

‘‘SEC. 220. MARKET TRANSPARENCY RULES. 

‘‘(a) IN GENERAL.—Not later than 180 days after the date of enactment of this section, the Commission shall issue rules establishing an electronic information system 

to provide the Commission and the public with access to such information as is necessary or appropriate to facilitate price transparency and participation in markets 

subject to the Commission’s jurisdiction under this Act. Such systems shall provide 

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 on a timely 

basis. The Commission shall have authority to obtain such information from any 

electric utility or transmitting utility, including any entity described in section 

201(f). 

‘‘(b) EXEMPTIONS.—The Commission shall exempt from disclosure information it 

determines would, if disclosed, be detrimental to the operation of an effective market or jeopardize system security. This section shall not apply to transactions for 

the purchase or sale of wholesale electric energy or transmission services within the 

area described in section 212(k)(2)(A). In determining the information to be made 

available under this section and time to make such information available, the ComVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00134 Fmt 6659 Sfmt 6621 E:\HR\OC\HR215P1.XXX HR215P1
135 

mission shall seek to ensure that consumers and competitive markets are protected 

from the adverse effects of potential collusion or other anti-competitive behaviors 

that can be facilitated by untimely public disclosure of transaction-specific information. 

‘‘(c) COMMODITY FUTURES TRADING COMMISSION.—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.). 

‘‘(d) SAVINGS PROVISION.—In exercising its authority under this section, the Commission shall not— 

‘‘(1) compete with, or displace from the market place, any price publisher; or 

‘‘(2) regulate price publishers or impose any requirements on the publication 

of information.’’. 

SEC. 1282. MARKET MANIPULATION. 

Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended by adding 

at the end the following: 

‘‘SEC. 221. PROHIBITION ON FILING FALSE INFORMATION. 

‘‘No person or other 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 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 such Federal 

agency. 

‘‘SEC. 222. PROHIBITION ON ROUND TRIP TRADING. 

‘‘(a) PROHIBITION.—No person or other entity (including an entity described in section 201(f)) shall willfully and knowingly enter into any contract or other arrangement to execute a ‘round trip trade’ for the purchase or sale of electric energy at 

wholesale. 

‘‘(b) DEFINITION.—For the purposes of this section, the term ‘round trip trade’ 

means a transaction, or combination of transactions, in which a person or any other 

entity— 

‘‘(1) enters into a contract or other arrangement to purchase from, or sell to, 

any other person or other entity electric energy at wholesale; 

‘‘(2) simultaneously with entering into the contract or arrangement described 

in paragraph (1), arranges a financially offsetting trade with such other person 

or entity for the same such electric energy, at the same location, price, quantity 

and terms so that, collectively, the purchase and sale transactions in themselves 

result in no financial gain or loss; and 

‘‘(3) enters into the contract or arrangement with a specific intent to fraudulently affect reported revenues, trading volumes, or prices.’’. 

SEC. 1283. ENFORCEMENT. 

(a) COMPLAINTS.—Section 306 of the Federal Power Act (16 U.S.C. 825e) is 

amended as follows: 

(1) By inserting ‘‘electric utility,’’ after ‘‘Any person,’’. 

(2) By inserting ‘‘, transmitting utility,’’ after ‘‘licensee’’ each place it appears. 

(b) REVIEW OF COMMISSION ORDERS.—Section 313(a) of the Federal Power Act (16 

U.S.C. 8251) is amended by inserting ‘‘electric utility,’’ after ‘‘person,’’ in the first 

2 places it appears and by striking ‘‘any person unless such person’’ and inserting 

‘‘any entity unless such entity’’. 

(c) INVESTIGATIONS.—Section 307(a) of the Federal Power Act (16 U.S.C. 825f(a)) 

is amended as follows: 

(1) By inserting ‘‘, electric utility, transmitting utility, or other entity’’ after 

‘‘person’’ each time it appears. 

(2) By striking the period at the end of the first sentence and inserting the 

following: ‘‘or in obtaining information about the sale of electric energy at 

wholesale in interstate commerce and the transmission of electric energy in 

interstate commerce.’’. 

(d) CRIMINAL PENALTIES.—Section 316 of the Federal Power Act (16 U.S.C. 825o) 

is amended— 

(1) in subsection (a), by striking ‘‘$5,000’’ and inserting ‘‘$1,000,000’’, and by 

striking ‘‘two years’’ and inserting ‘‘5 years’’; 

(2) in subsection (b), by striking ‘‘$500’’ and inserting ‘‘$25,000’’; and 

(3) by striking subsection (c). 

(e) CIVIL PENALTIES.—Section 316A of the Federal Power Act (16 U.S.C. 825o–1) 

is amended as follows: 

(1) In subsections (a) and (b), by striking ‘‘section 211, 212, 213, or 214’’ each 

place it appears and inserting ‘‘Part II’’. 

136 

(2) In subsection (b), by striking ‘‘$10,000’’ and inserting ‘‘$1,000,000’’. 

SEC. 1284. REFUND EFFECTIVE DATE. 

Section 206(b) of the Federal Power Act (16 U.S.C. 824e(b)) is amended as follows: 

(1) By striking ‘‘the date 60 days after the filing of such complaint nor later 

than 5 months after the expiration of such 60-day period’’ in the second sentence and inserting ‘‘the date of the filing of such complaint nor later than 5 

months after the filing of such complaint’’. 

(2) By striking ‘‘60 days after’’ in the third sentence and inserting ‘‘of’’. 

(3) By striking ‘‘expiration of such 60-day period’’ in the third sentence and 

inserting ‘‘publication date’’. 

(4) By striking the fifth sentence and inserting the following: ‘‘If no final decision is rendered by the conclusion of the 180-day period commencing upon initiation of a proceeding pursuant to this section, the Commission shall state the 

reasons why it has failed to do so and shall state its best estimate as to when 

it reasonably expects to make such decision.’’. 

SEC. 1285. REFUND AUTHORITY. 

Section 206 of the Federal Power Act (16 U.S.C. 824e) is amended by adding the 

following new subsection at the end thereof: 

‘‘(e)(1) Except as provided in paragraph (2), if an entity described in section 201(f) 

voluntarily makes a short-term sale of electric energy and the sale violates Commission rules in effect at the time of the sale, such entity shall be subject to the Commission’s refund authority under this section with respect to such violation. 

‘‘(2) This section shall not apply to— 

‘‘(A) any entity that sells less than 8,000,000 megawatt hours of electricity per 

year; or 

‘‘(B) any electric cooperative. 

‘‘(3) For purposes of this subsection, the term ‘short-term sale’ means an agreement for the sale of electric energy at wholesale in interstate commerce that is for 

a period of 31 days or less (excluding monthly contracts subject to automatic renewal). 

‘‘(4) The Commission shall have refund authority under subsection (e)(1) with respect to a voluntary short-term sale of electric energy by the Bonneville Power Administration (in this section ‘Bonneville’) only if the sale is at an unjust and unreasonable rate and, in that event, may order a refund only for short-term sales made 

by Bonneville 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 Bonneville. 

‘‘(5) With respect to any Federal power marketing agency or the Tennessee Valley 

Authority, the Commission shall not assert or exercise any regulatory authority or 

powers under subsection (e)(1) other than the ordering of refunds to achieve a just 

and reasonable rate.’’. 

SEC. 1286. SANCTITY OF CONTRACT. 

(a) IN GENERAL.—The Federal Energy Regulatory Commission (in this section, 

‘‘the Commission’’) shall have no authority to abrogate or modify any provision of 

an executed contract or executed contract amendment described in subsection (b) 

that has been entered into or taken effect, except upon a finding that failure to take 

such action would be contrary to the public interest. 

(b) LIMITATION.—Except as provided in subsection (c), this section shall apply only 

to a contract or contract amendment— 

(1) executed on or after the date of enactment of this Act; and 

(2) entered into— 

(A) for the purchase or sale of electric energy under section 205 of the 

Federal Power Act (16 U.S.C. 824d) where the seller has been authorized 

by the Commission to charge market-based rates; or 

(B) under section 4 of the Natural Gas Act (15 U.S.C. 717c) where the 

natural gas company has been authorized by the Commission to charge 

market-based rates for the service described in the contract. 

(c) EXCLUSION.—This section shall not apply to an executed contract or executed 

contract amendment that expressly provides for a standard of review other than the 

public interest standard. 

(d) SAVINGS PROVISION.—With respect to contracts to which this section does not 

apply, nothing in this section alters existing law regarding the applicable standard 

of review for a contract subject to the jurisdiction of the Commission. 

137 

SEC. 1287. CONSUMER PRIVACY AND UNFAIR TRADE PRACTICES. 

(a) PRIVACY.—The Federal Trade Commission may issue rules protecting the privacy of electric consumers from the disclosure of consumer information obtained in 

connection with the sale or delivery of electric energy to electric consumers. 

(b) SLAMMING.—The Federal Trade Commission may issue rules prohibiting the 

change of selection of an electric utility except with the informed consent of the electric consumer or if approved by the appropriate State regulatory authority. 

(c) CRAMMING.—The Federal Trade Commission may issue rules prohibiting the 

sale of goods and services to an electric consumer unless expressly authorized by 

law or the electric consumer. 

(d) RULEMAKING.—The Federal Trade Commission shall proceed in accordance 

with section 553 of title 5, United States Code, when prescribing a rule under this 

section. 

(e) STATE AUTHORITY.—If the Federal Trade Commission determines that a 

State’s regulations provide equivalent or greater protection than the provisions of 

this section, such State regulations shall apply in that State in lieu of the regulations issued by the Commission under this section. 

(f) DEFINITIONS.—For purposes of this section: 

(1) STATE REGULATORY AUTHORITY.—The term ‘‘State regulatory authority’’ 

has the meaning given that term in section 3(21) of the Federal Power Act (16 

U.S.C. 796(21)). 

(2) ELECTRIC CONSUMER AND ELECTRIC UTILITY.—The terms ‘‘electric consumer’’ and ‘‘electric utility’’ have the meanings given those terms in section 3 

of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2602). 

Subtitle H—Merger Reform 

SEC. 1291. MERGER REVIEW REFORM AND ACCOUNTABILITY. 

(a) MERGER REVIEW REFORM.—Within 180 days after the date of enactment of 

this Act, the Secretary of Energy, in consultation with the Federal Energy Regulatory Commission and the Attorney General of the United States, shall prepare, 

and transmit to Congress each of the following: 

(1) A study of the extent to which the authorities vested in the Federal Energy Regulatory Commission under section 203 of the Federal Power Act are duplicative of authorities vested in— 

(A) other agencies of Federal and State Government; and 

(B) the Federal Energy Regulatory Commission, including under sections 

205 and 206 of the Federal Power Act. 

(2) Recommendations on reforms to the Federal Power Act that would eliminate any unnecessary duplication in the exercise of regulatory authority or unnecessary delays in the approval (or disapproval) of applications for the sale, 

lease, or other disposition of public utility facilities. 

(b) MERGER REVIEW ACCOUNTABILITY.—Not later than 1 year after the date of enactment of this Act and annually thereafter, with respect to all orders issued within 

the preceding year that impose a condition on a sale, lease, or other disposition of 

public utility facilities under section 203(b) of the Federal Power Act, the Federal 

Energy Regulatory Commission shall transmit a report to Congress explaining each 

of the following: 

(1) The condition imposed. 

(2) Whether the Commission could have imposed such condition by exercising 

its authority under any provision of the Federal Power Act other than under 

section 203(b). 

(3) If the Commission could not have imposed such condition other than 

under section 203(b), why the Commission determined that such condition was 

consistent with the public interest. 

SEC. 1292. ELECTRIC UTILITY MERGERS. 

(a) AMENDMENT.—Section 203(a) of the Federal Power Act (16 U.S.C. 824b(a)) is 

amended to read as follows: 

‘‘(a)(1) No public utility shall, without first having secured an order of the Commission authorizing it to do so— 

‘‘(A) sell, lease, or otherwise dispose of the whole of its facilities subject to the 

jurisdiction of the Commission, or any part thereof of a value in excess of 

$10,000,000; 

‘‘(B) merge or consolidate, directly or indirectly, such facilities or any part 

thereof with those of any other person, by any means whatsoever; or 

‘‘(C) purchase, acquire, or take any security with a value in excess of 

$10,000,000 of any other public utility. 

138 

‘‘(2) No holding company in a holding company system that includes a public 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 public utility or a holding company in a holding company system that 

includes a public utility 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. 

‘‘(4) After notice and opportunity for hearing, the Commission shall approve the 

proposed disposition, consolidation, acquisition, or change in control, if it finds that 

the proposed transaction will be consistent with the public interest. In evaluating 

whether a transaction will be consistent with the public interest, the Commission 

shall consider whether the proposed transaction— 

‘‘(A) will adequately protect consumer interests; 

‘‘(B) will be consistent with competitive wholesale markets; 

‘‘(C) will impair the financial integrity of any public utility that is a party to 

the transaction or an associate company of any party to the transaction; and 

‘‘(D) satisfies such other criteria as the Commission considers consistent with 

the public interest. 

‘‘(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.’’. 

(b) EFFECTIVE DATE.—The amendments made by this section shall take effect 12 

months after the date of enactment of this section. 

Subtitle I—Definitions 

SEC. 1295. DEFINITIONS. 

(a) ELECTRIC UTILITY.—Section 3(22) of the Federal Power Act (16 U.S.C. 796(22)) 

is amended to read as follows: 

‘‘(22) ELECTRIC UTILITY.—The term ‘electric utility’ means any person or Federal or State agency (including any entity described in section 201(f)) that sells 

electric energy; such term includes the Tennessee Valley Authority and each 

Federal power marketing administration.’’. 

(b) TRANSMITTING UTILITY.—Section 3(23) of the Federal Power Act (16 U.S.C. 

796(23)) is amended to read as follows: 

‘‘(23) TRANSMITTING UTILITY.—The term ‘transmitting utility’ means an entity, 

including any entity described in section 201(f), that owns, operates, or controls 

facilities used for the transmission of electric energy— 

‘‘(A) in interstate commerce; or 

‘‘(B) for the sale of electric energy at wholesale.’’. 

(c) ADDITIONAL DEFINITIONS.—Section 3 of the Federal Power Act (16 U.S.C. 796) 

is amended by adding at the end the following: 

‘‘(26) ELECTRIC COOPERATIVE.—The term ‘electric cooperative’ means a cooperatively owned electric utility. 

‘‘(27) RTO.—The term ‘Regional Transmission Organization’ or ‘RTO’ means 

an entity of sufficient regional scope approved by the Commission to exercise 

operational or functional control of facilities used for the transmission of electric 

energy in interstate commerce and to ensure nondiscriminatory access to such 

facilities. 

‘‘(28) ISO.—The term ‘Independent System Operator’ or ‘ISO’ means an entity 

approved by the Commission to exercise operational or functional control of faVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00138 Fmt 6659 Sfmt 6621 E:\HR\OC\HR215P1.XXX HR215P1
139 

cilities used for the transmission of electric energy in interstate commerce and 

to ensure nondiscriminatory access to such facilities.’’. 

(d) COMMISSION.—For the purposes of this title, the term ‘‘Commission’’ means the 

Federal Energy Regulatory Commission. 

(e) APPLICABILITY.—Section 201(f) of the Federal Power Act (16 U.S.C. 824(f)) is 

amended by adding after ‘‘political subdivision of a state,’’ the following: ‘‘an electric 

cooperative that has financing under the Rural Electrification Act of 1936 (7 U.S.C. 

901 et seq.) or that sells less than 4,000,000 megawatt hours of electricity per 

year,’’. 

Subtitle J—Technical and Conforming 

Amendments 

SEC. 1297. CONFORMING AMENDMENTS. 

The Federal Power Act is amended as follows: 

(1) Section 201(b)(2) of such Act (16 U.S.C. 824(b)(2)) is amended as follows: 

(A) In the first sentence by striking ‘‘210, 211, and 212’’ and inserting 

‘‘203(a)(2), 206(e), 210, 211, 211A, 212, 215, 216, 217, 218, 219, 220, 221, 

and 222’’. 

(B) In the second sentence by striking ‘‘210 or 211’’ and inserting 

‘‘203(a)(2), 206(e), 210, 211, 211A, 212, 215, 216, 217, 218, 219, 220, 221, 

and 222’’. 

(C) Section 201(b)(2) of such Act is amended by striking ‘‘The’’ in the first 

place it appears and inserting ‘‘Notwithstanding section 201(f), the’’ and in 

the second sentence after ‘‘any order’’ by inserting ‘‘or rule’’. 

(2) Section 201(e) of such Act is amended by striking ‘‘210, 211, or 212’’ and 

inserting ‘‘206(e), 206(f), 210, 211, 211A, 212, 215, 216, 217, 218, 219, 220, 221, 

and 222’’. 

(3) Section 206 of such Act (16 U.S.C. 824e) is amended as follows: 

(A) In subsection (b), in the seventh sentence, by striking ‘‘the public utility to make’’. 

(B) In the first sentence of subsection (a), by striking ‘‘hearing had’’ and 

inserting ‘‘hearing held’’. 

(4) Section 211(c) of such Act (16 U.S.C. 824j(c)) is amended by— 

(A) striking ‘‘(2)’’; 

(B) striking ‘‘(A)’’ and inserting ‘‘(1)’’ 

(C) striking ‘‘(B)’’ and inserting ‘‘(2)’’; and 

(D) striking ‘‘termination of modification’’ and inserting ‘‘termination or 

modification’’. 

(5) Section 211(d)(1) of such Act (16 U.S.C. 824j(d)(1)) is amended by striking 

‘‘electric utility’’ the second time it appears and inserting ‘‘transmitting utility’’. 

(6) Section 315 (c) of such Act (16 U.S.C. 825n(c)) is amended by striking 

‘‘subsection’’ and inserting ‘‘section’’. 

Subtitle K—Economic Dispatch 

SEC. 1298. ECONOMIC DISPATCH. 

Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended by adding 

at the end the following: 

‘‘SEC. 223. JOINT BOARD ON ECONOMIC DISPATCH. 

‘‘(a) IN GENERAL.—The Commission shall convene a joint board pursuant to section 209 of this Act to study the issue of security constrained economic dispatch for 

a market region. 

‘‘(b) MEMBERSHIP.—The Commission shall request each State to nominate a representative for such joint board. 

‘‘(c) POWERS.—The board’s sole authority shall be to consider issues relevant to 

what constitutes ‘security constrained economic dispatch’ and how such a mode of 

operating an electric energy system affects or enhances the reliability and affordability of service to customers. 

‘‘(d) REPORT TO THE CONGRESS.—The board shall issue a report on these matters 

within one year of enactment of this section, including any consensus recommendations for statutory or regulatory reform.’’. 

140 

TITLE XIV—MISCELLANEOUS 

Subtitle C—Other Provisions 

SEC. 1441. CONTINUATION OF TRANSMISSION SECURITY ORDER. 

Department of Energy Order No. 202–03–2, issued by the Secretary of Energy on 

August 28, 2003, shall remain in effect unless rescinded by Federal statute. 

SEC. 1442. REVIEW OF AGENCY DETERMINATIONS. 

Section 7 of the Natural Gas Act (15 U.S.C. 717f) is amended by adding at the 

end the following: 

‘‘(i)(1) The United States Court of Appeals for the District of Columbia Circuit 

shall have original and exclusive jurisdiction over any civil action— 

‘‘(A) for review of any order or action of any Federal or State administrative 

agency or officer to issue, condition, or deny any permit, license, concurrence, 

or approval issued under authority of any Federal law, other than the Coastal 

Zone Management Act of 1972 (16 U.S.C. 1451 et seq.), required for the construction of a natural gas pipeline for which a certificate of public convenience 

and necessity is issued by the Commission under this section; 

‘‘(B) alleging unreasonable delay by any Federal or State administrative agency or officer in entering an order or taking other action described in subparagraph (A); or 

‘‘(C) challenging any decision made or action taken under this subsection. 

‘‘(2)(A) If the Court finds that the order, action, or failure to act is not consistent 

with the public convenience and necessity (as determined by the Commission under 

this section), or would prevent the construction and operation of natural gas facilities authorized by the certificate of public convenience and necessity, the permit, license, concurrence, or approval that is the subject of the order, action, or failure to 

act shall be deemed to have been issued subject to any conditions set forth in the 

reviewed order or action that the Court finds to be consistent with the public convenience and necessity. 

‘‘(B) For purposes of paragraph (1)(B), the failure of an agency or officer to issue 

any such permit, license, concurrence, or approval within the later of 1 year after 

the date of filing of an application for the permit, license, concurrence, or approval 

or 60 days after the date of issuance of the certificate of public convenience and necessity under this section, shall be considered to be unreasonable delay unless the 

Court, for good cause shown, determines otherwise. 

‘‘(C) The Court shall set any action brought under paragraph (1) for expedited consideration.’’. 

SEC. 1443. ATTAINMENT DATES FOR DOWNWIND OZONE NONATTAINMENT AREAS. 

Section 181 of the Clean Air Act (42 U.S.C.7511) is amended by adding the following new subsection at the end thereof: 

‘‘(d) EXTENDED ATTAINMENT DATE FOR CERTAIN DOWNWIND AREAS.— 

‘‘(1) DEFINITIONS.—(A) The term ‘upwind area’ means an area that— 

‘‘(i) significantly contributes to nonattainment in another area, hereinafter referred to as a ‘downwind area’; and 

‘‘(ii) is either— 

‘‘(I) a nonattainment area with a later attainment date than the 

downwind area, or 

‘‘(II) an area in another State that the Administrator has found to 

be significantly contributing to nonattainment in the downwind area in 

violation of section 110(a)(2)(D) and for which the Administrator has 

established requirements through notice and comment rulemaking to 

eliminate the emissions causing such significant contribution. 

‘‘(B) The term ‘current classification’ means the classification of a downwind 

area under this section at the time of the determination under paragraph (2). 

‘‘(2) EXTENSION.—If the Administrator— 

‘‘(A) determines that any area is a downwind area with respect to a particular national ambient air quality standard for ozone; and 

‘‘(B) approves a plan revision for such area as provided in paragraph (3) 

prior to a reclassification under subsection (b)(2)(A), 

the Administrator, in lieu of such reclassification, shall extend the attainment 

date for such downwind area for such standard in accordance with paragraph 

(5). 

‘‘(3) REQUIRED APPROVAL.—In order to extend the attainment date for a downwind area under this subsection, the Administrator must approve a revision of 

141 

the applicable implementation plan for the downwind area for such standard 

that— 

‘‘(A) complies with all requirements of this Act applicable under the current classification of the downwind area, including any requirements applicable to the area under section 172(c) for such standard; and 

‘‘(B) includes any additional measures needed to demonstrate attainment 

by the extended attainment date provided under this subsection. 

‘‘(4) PRIOR RECLASSIFICATION DETERMINATION.—If, no more than 18 months 

prior to the date of enactment of this subsection, the Administrator made a reclassification determination under subsection (b)(2)(A) for any downwind area, 

and the Administrator approves the plan revision referred to in paragraph (3) 

for such area within 12 months after the date of enactment of this subsection, 

the reclassification shall be withdrawn and the attainment date extended in accordance with paragraph (5) upon such approval. The Administrator shall also 

withdraw a reclassification determination under subsection (b)(2)(A) made after 

the date of enactment of this subsection and extend the attainment date in accordance with paragraph (5) if the Administrator approves the plan revision referred to in paragraph (3) within 12 months of the date the reclassification determination under subsection (b)(2)(A) is issued. In such instances the ‘current 

classification’ used for evaluating the revision of the applicable implementation 

plan under paragraph (3) shall be the classification of the downwind area under 

this section immediately prior to such reclassification. 

‘‘(5) EXTENDED DATE.—The attainment date extended under this subsection 

shall provide for attainment of such national ambient air quality standard for 

ozone in the downwind area as expeditiously as practicable but no later than 

the date on which the last reductions in pollution transport necessary for attainment in the downwind area are required to be achieved by the upwind area 

or areas.’’. 

SEC. 1444. ENERGY PRODUCTION INCENTIVES. 

(a) IN GENERAL.—A State may provide to any entity— 

(1) a credit against any tax or fee owed to the State under a State law, or 

(2) any other tax incentive, 

determined by the State to be appropriate, in the amount calculated under and in 

accordance with a formula determined by the State, for production described in subsection (b) in the State by the entity that receives such credit or such incentive. 

(b) ELIGIBLE ENTITIES.—Subsection (a) shall apply with respect to the production 

in the State of— 

(1) electricity from coal mined in the State and used in a facility, if such production meets all applicable Federal and State laws and if such facility uses 

scrubbers or other forms of clean coal technology, 

(2) electricity from a renewable source such as wind, solar, or biomass, or 

(3) ethanol. 

(c) EFFECT ON INTERSTATE COMMERCE.—Any action taken by a State in accordance with this section with respect to a tax or fee payable, or incentive applicable, 

for any period beginning after the date of the enactment of this Act shall— 

(1) be considered to be a reasonable regulation of commerce; and 

(2) not be considered to impose an undue burden on interstate commerce or 

to otherwise impair, restrain, or discriminate, against interstate commerce. 

SEC. 1446. REGULATION OF CERTAIN OIL USED IN TRANSFORMERS. 

Notwithstanding any other provision of law, or rule promulgated by the Environmental Protection Agency, vegetable oil made from soybeans and used in electric 

transformers as thermal insulation shall not be regulated as an oil as defined under 

section 2(a)(1)(A) of the Edible Oil Regulatory Reform Act (33 U.S.C. 2720(a)(1)(A)). 

SEC. 1447. RISK ASSESSMENTS. 

Subtitle B of title XXX of the Energy Policy Act of 1992 is amended by adding 

at the end the following new section: 

‘‘SEC. 3022. RISK ASSESSMENT. 

‘‘Federal agencies conducting assessments of risks to human health and the environment from energy technology, production, transport, transmission, distribution, 

storage, use, or conservation activities shall use sound and objective scientific practices in assessing such risks, shall consider the best available science (including peer 

reviewed studies), and shall include a description of the weight of the scientific evidence concerning such risks.’’. 

SEC. 1448. OXYGEN-FUEL. 

(a) PROGRAM.—The Secretary of Energy shall establish a program on oxygen-fuel 

systems. If feasible, the program shall include renovation of at least one existing 

142 

large unit and one existing small unit, and construction of one new large unit and 

one new small unit. Cost sharing shall not be required. 

(b) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated 

to the Secretary for carrying out this section— (1) $100,000,000 for fiscal year 2006; 

(2) $100,000,000 for fiscal year 2007; and 

(3) $100,000,000 for fiscal year 2008. 

(c) DEFINITIONS.—For purposes of this section— 

(1) the term ‘‘large unit’’ means a unit with a generating capacity of 100 

megawatts or more; 

(2) the term ‘‘oxygen-fuel systems’’ means systems that utilize fuel efficiency 

benefits of oil, gas, coal, and biomass combustion using substantially pure oxygen, with high flame temperatures and the exclusion of air from the boiler, in 

industrial or electric utility steam generating units; and 

(3) the term ‘‘small unit’’ means a unit with a generating capacity in the 10– 

50 megawatt range. 

SEC. 1449. PETROCHEMICAL AND OIL REFINERY FACILITY HEALTH ASSESSMENT. 

(a) ESTABLISHMENT.—The Secretary of Energy shall conduct a study of direct and 

significant health impacts to persons resulting from living in proximity to petrochemical and oil refinery facilities. The Secretary shall consult with the Director of 

the National Cancer Institute and other Federal Government bodies with expertise 

in the field it deems appropriate in the design of such study. The study shall be 

conducted according to sound and objective scientific practices and present the 

weight of the scientific evidence. The Secretary shall obtain scientific peer review 

of the draft study. 

(b) REPORT TO CONGRESS.—The Secretary shall transmit the results of the study 

to Congress within 6 months of the enactment of this section. 

(c) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated 

to the Secretary for activities under this section such sums as are necessary for the 

completion of the study. 

TITLE XV—ETHANOL AND MOTOR FUELS 

Subtitle A—General Provisions 

SEC. 1501. RENEWABLE CONTENT OF MOTOR VEHICLE FUEL. 

(a) IN GENERAL.—Section 211 of the Clean Air Act (42 U.S.C. 7545) is amended— 

(1) by redesignating subsection (o) as subsection (q); and 

(2) by inserting after subsection (n) the following: 

‘‘(o) RENEWABLE FUEL PROGRAM.— 

‘‘(1) DEFINITIONS.—In this section: 

‘‘(A) ETHANOL.—(i) The term ‘cellulosic biomass ethanol’ means ethanol 

derived from any lignocellulosic or hemicellulosic matter that is available 

on a renewable or recurring basis, including— 

‘‘(I) dedicated energy crops and trees; 

‘‘(II) wood and wood residues; 

‘‘(III) plants; 

‘‘(IV) grasses; 

‘‘(V) agricultural residues; and 

‘‘(VI) fibers. 

‘‘(ii) The term ‘waste derived ethanol’ means ethanol derived from— 

‘‘(I) animal wastes, including poultry fats and poultry wastes, and 

other waste materials; or 

‘‘(II) municipal solid waste. 

‘‘(B) RENEWABLE FUEL.— 

‘‘(i) IN GENERAL.—The term ‘renewable fuel’ means motor vehicle fuel 

that— 

‘‘(I)(aa) is produced from grain, starch, oilseeds, or other biomass; 

or 

‘‘(bb) is natural gas produced from a biogas source, including a 

landfill, sewage waste treatment plant, feedlot, or other place 

where decaying organic material is found; and 

‘‘(II) is used to replace or reduce the quantity of fossil fuel 

present in a fuel mixture used to operate a motor vehicle. 

‘‘(ii) INCLUSION.—The term ‘renewable fuel’ includes cellulosic biomass ethanol, waste derived ethanol, and biodiesel (as defined in secVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00142 Fmt 6659 Sfmt 6621 E:\HR\OC\HR215P1.XXX HR215P1
143 

tion 312(f) of the Energy Policy Act of 1992 (42 U.S.C. 13220(f)) and 

any blending components derived from renewable fuel (provided that 

only the renewable fuel portion of any such blending component shall 

be considered part of the applicable volume under the renewable fuel 

program established by this subsection). 

‘‘(C) SMALL REFINERY.—The term ‘small refinery’ means a refinery for 

which average aggregate daily crude oil throughput for the calendar year 

(as determined by dividing the aggregate throughput for the calendar year 

by the number of days in the calendar year) does not exceed 75,000 barrels. 

‘‘(2) RENEWABLE FUEL PROGRAM.— 

‘‘(A) IN GENERAL.—Not later than 1 year after the enactment of this subsection, the Administrator shall promulgate regulations ensuring that 

motor vehicle fuel sold or dispensed to consumers in the contiguous United 

States, on an annual average basis, contains the applicable volume of renewable fuel as specified in subparagraph (B). Regardless of the date of promulgation, such regulations shall contain compliance provisions for refiners, 

blenders, and importers, as appropriate, to ensure that the requirements of 

this section are met, but shall not restrict where renewable fuel can be 

used, or impose any per-gallon obligation for the use of renewable fuel. If 

the Administrator does not promulgate such regulations, the applicable percentage referred to in paragraph (4), on a volume percentage of gasoline 

basis, shall be 2.2 in 2005. 

‘‘(B) APPLICABLE VOLUME.— 

‘‘(i) CALENDAR YEARS 2005 THROUGH 2012.—For the purpose of subparagraph (A), the applicable volume for any of calendar years 2005 

through 2012 shall be determined in accordance with the following 

table: 

‘‘(ii) CALENDAR YEAR 2013 AND THEREAFTER.—For the purpose of subparagraph (A), the applicable volume for calendar year 2013 and each 

calendar year thereafter shall be equal to the product obtained by multiplying— 

‘‘(I) the number of gallons of gasoline that the Administrator estimates will be sold or introduced into commerce in the calendar 

year; and 

‘‘(II) the ratio that— 

‘‘(aa) 5.0 billion gallons of renewable fuels; bears to 

‘‘(bb) the number of gallons of gasoline sold or introduced 

into commerce in calendar year 2012. 

‘‘(3) NON-CONTIGUOUS STATE OPT-IN.—Upon the petition of a non-contiguous 

State, the Administrator may allow the renewable fuel program established by 

subtitle A of title XV of the Energy Policy Act of 2005 to apply in such noncontiguous State at the same time or any time after the Administrator promulgates regulations under paragraph (2). The Administrator may promulgate or 

revise regulations under paragraph (2), establish applicable percentages under 

paragraph (4), provide for the generation of credits under paragraph (6), and 

take such other actions as may be necessary to allow for the application of the 

renewable fuels program in a non-contiguous State. 

‘‘(4) APPLICABLE PERCENTAGES.— 

‘‘(A) PROVISION OF ESTIMATE OF VOLUMES OF GASOLINE SALES.—Not later 

than October 31 of each of calendar years 2005 through 2011, the Administrator of the Energy Information Administration shall provide to the Administrator of the Environmental Protection Agency an estimate of the volumes of gasoline that will be sold or introduced into commerce in the 

United States during the following calendar year. 

‘‘(B) DETERMINATION OF APPLICABLE PERCENTAGES.— 

‘‘(i) IN GENERAL.—Not later than November 30 of each of the calendar 

years 2005 through 2011, based on the estimate provided under subparagraph (A), the Administrator shall determine and publish in the 

Federal Register, with respect to the following calendar year, the renewable fuel obligation that ensures that the requirements of paragraph (2) are met. 

‘‘(ii) REQUIRED ELEMENTS.—The renewable fuel obligation determined 

for a calendar year under clause (i) shall— 

‘‘(I) be applicable to refiners, blenders, and importers, as appropriate; 

‘‘(II) be expressed in terms of a volume percentage of gasoline 

sold or introduced into commerce; and 

144 

‘‘(III) subject to subparagraph (C)(i), consist of a single applicable 

percentage that applies to all categories of persons specified in subclause (I). 

‘‘(C) ADJUSTMENTS.—In determining the applicable percentage for a calendar year, the Administrator shall make adjustments— 

‘‘(i) to prevent the imposition of redundant obligations to any person 

specified in subparagraph (B)(ii)(I); and 

‘‘(ii) to account for the use of renewable fuel during the previous calendar year by small refineries that are exempt under paragraph (11). 

‘‘(5) EQUIVALENCY.—For the purpose of paragraph (2), 1 gallon of either cellulosic biomass ethanol or waste derived ethanol— 

‘‘(A) shall be considered to be the equivalent of 1.5 gallon of renewable 

fuel; or 

‘‘(B) if the cellulostic biomass ethanol or waste derived ethanol is derived 

from agricultural residue or wood residue or is an agricultural byproduct 

(as that term is used in section 919 of the Energy Policy Act of 2005), shall 

be considered to be the equivalent of 2.5 gallons of renewable fuel. 

‘‘(6) CREDIT PROGRAM.— ‘‘(A) IN GENERAL.—The regulations promulgated to carry out this subsection shall provide for the generation of an appropriate amount of credits 

by any person that refines, blends, or imports gasoline that contains a 

quantity of renewable fuel that is greater than the quantity required under 

paragraph (2). Such regulations shall provide for the generation of an appropriate amount of credits for biodiesel fuel. If a small refinery notifies the 

Administrator that it waives the exemption provided paragraph (11), the 

regulations shall provide for the generation of credits by the small refinery 

beginning in the year following such notification. 

‘‘(B) USE OF CREDITS.—A person that generates credits under subparagraph (A) may use the credits, or transfer all or a portion of the credits to 

another person, for the purpose of complying with paragraph (2). 

‘‘(C) LIFE OF CREDITS.—A credit generated under this paragraph shall be 

valid to show compliance— 

‘‘(i) in the calendar year in which the credit was generated or the 

next calendar year; or 

‘‘(ii) in the calendar year in which the credit was generated or next 

two consecutive calendar years if the Administrator promulgates regulations under paragraph (7). 

‘‘(D) INABILITY TO PURCHASE SUFFICIENT CREDITS.—The regulations promulgated to carry out this subsection shall include provisions allowing any 

person that is unable to generate or purchase sufficient credits to meet the 

requirements under paragraph (2) to carry forward a renewable fuel deficit 

provided that, in the calendar year following the year in which the renewable fuel deficit is created, such person shall achieve compliance with the 

renewable fuel requirement under paragraph (2), and shall generate or purchase additional renewable fuel credits to offset the renewable fuel deficit 

of the previous year. 

‘‘(7) SEASONAL VARIATIONS IN RENEWABLE FUEL USE.— 

‘‘(A) STUDY.—For each of the calendar years 2005 through 2012, the Administrator of the Energy Information Administration shall conduct a study 

of renewable fuels blending to determine whether there are excessive seasonal variations in the use of renewable fuels. 

‘‘(B) REGULATION OF EXCESSIVE SEASONAL VARIATIONS.—If, for any calendar year, the Administrator of the Energy Information Administration, 

based on the study under subparagraph (A), makes the determinations 

specified in subparagraph (C), the Administrator shall promulgate regulations to ensure that 35 percent or more of the quantity of renewable fuels 

necessary to meet the requirement of paragraph (2) is used during each of 

the periods specified in subparagraph (D) of each subsequent calendar year. 

‘‘(C) DETERMINATIONS.—The determinations referred to in subparagraph 

(B) are that— 

‘‘(i) less than 35 percent of the quantity of renewable fuels necessary 

to meet the requirement of paragraph (2) has been used during one of 

the periods specified in subparagraph (D) of the calendar year; 

‘‘(ii) a pattern of excessive seasonal variation described in clause (i) 

will continue in subsequent calendar years; and 

‘‘(iii) promulgating regulations or other requirements to impose a 35 

percent or more seasonal use of renewable fuels will not prevent or 

interfere with the attainment of national ambient air quality standards 

or significantly increase the price of motor fuels to the consumer. 

145 

‘‘(D) PERIODS.—The two periods referred to in this paragraph are— 

‘‘(i) April through September; and 

‘‘(ii) January through March and October through December. 

‘‘(E) EXCLUSIONS.—Renewable fuels blended or consumed in 2005 in a 

State which has received a waiver under section 209(b) shall not be included in the study in subparagraph (A). 

‘‘(8) WAIVERS.— ‘‘(A) IN GENERAL.—The Administrator, in consultation with the Secretary 

of Agriculture and the Secretary of Energy, may waive the requirement of 

paragraph (2) in whole or in part on petition by one or more States by reducing the national quantity of renewable fuel required under this subsection— 

‘‘(i) based on a determination by the Administrator, after public notice and opportunity for comment, that implementation of the requirement would severely harm the economy or environment of a State, a 

region, or the United States; or 

‘‘(ii) based on a determination by the Administrator, after public notice and opportunity for comment, that there is an inadequate domestic 

supply or distribution capacity to meet the requirement. 

‘‘(B) PETITIONS FOR WAIVERS.—The Administrator, in consultation with 

the Secretary of Agriculture and the Secretary of Energy, shall approve or 

disapprove a State petition for a waiver of the requirement of paragraph 

(2) within 90 days after the date on which the petition is received by the 

Administrator. 

‘‘(C) TERMINATION OF WAIVERS.—A waiver granted under subparagraph 

(A) shall terminate after 1 year, but may be renewed by the Administrator 

after consultation with the Secretary of Agriculture and the Secretary of 

Energy. 

‘‘(9) STUDY AND WAIVER FOR INITIAL YEAR OF PROGRAM.—Not later than 180 

days after the enactment of this subsection, the Secretary of Energy shall complete for the Administrator a study assessing whether the renewable fuels requirement under paragraph (2) will likely result in significant adverse consumer impacts in 2005, on a national, regional, or State basis. Such study shall 

evaluate renewable fuel supplies and prices, blendstock supplies, and supply 

and distribution system capabilities. Based on such study, the Secretary shall 

make specific recommendations to the Administrator regarding waiver of the requirements of paragraph (2), in whole or in part, to avoid any such adverse impacts. Within 270 days after the enactment of this subsection, the Administrator shall, consistent with the recommendations of the Secretary, waive, in 

whole or in part, the renewable fuels requirement under paragraph (2) by reducing the national quantity of renewable fuel required under this subsection 

in 2005. This paragraph shall not be interpreted as limiting the Administrator’s 

authority to waive the requirements of paragraph (2) in whole, or in part, under 

paragraph (8) or paragraph (10), pertaining to waivers. 

‘‘(10) ASSESSMENT AND WAIVER.—The Administrator, in consultation with the 

Secretary of Energy and the Secretary of Agriculture, shall evaluate the requirement of paragraph (2) and determine, prior to January 1, 2007, and prior 

to January 1 of any subsequent year in which the applicable volume of renewable fuel is increased under paragraph (2)(B), whether the requirement of paragraph (2), including the applicable volume of renewable fuel contained in paragraph (2)(B) should remain in effect, in whole or in part, during 2007 or any 

year or years subsequent to 2007. In evaluating the requirement of paragraph 

(2) and in making any determination under this section, the Administrator shall 

consider the best available information and data collected by accepted methods 

or best available means regarding— 

‘‘(A) the capacity of renewable fuel producers to supply an adequate 

amount of renewable fuel at competitive prices to fulfill the requirement of 

paragraph (2); 

‘‘(B) the potential of the requirement of paragraph (2) to significantly 

raise the price of gasoline, food (excluding the net price impact on the requirement in paragraph (2) on commodities used in the production of ethanol), or heating oil for consumers in any significant area or region of the 

country above the price that would otherwise apply to such commodities in 

the absence of such requirement; 

‘‘(C) the potential of the requirement of paragraph (2) to interfere with 

the supply of fuel in any significant gasoline market or region of the country, including interference with the efficient operation of refiners, blenders, 

importers, wholesale suppliers, and retail vendors of gasoline, and other 

motor fuels; and 

146 

‘‘(D) the potential of the requirement of paragraph (2) to cause or promote 

exceedances of Federal, State, or local air quality standards. 

If the Administrator determines, by clear and convincing information, after public notice and the opportunity for comment, that the requirement of paragraph 

(2) would have significant and meaningful adverse impact on the supply of fuel 

and related infrastructure or on the economy, public health, or environment of 

any significant area or region of the country, the Administrator may waive, in 

whole or in part, the requirement of paragraph (2) in any one year for which 

the determination is made for that area or region of the country, except that 

any such waiver shall not have the effect of reducing the applicable volume of 

renewable fuel specified in paragraph (2)(B) with respect to any year for which 

the determination is made. In determining economic impact under this paragraph, the Administrator shall not consider the reduced revenues available from 

the Highway Trust Fund (section 9503 of the Internal Revenue Code of 1986) 

as a result of the use of ethanol. 

‘‘(11) SMALL REFINERIES.— ‘‘(A) IN GENERAL.—The requirement of paragraph (2) shall not apply to 

small refineries until the first calendar year beginning more than 5 years 

after the first year set forth in the table in paragraph (2)(B)(i). Not later 

than December 31, 2007, the Secretary of Energy shall complete for the Administrator a study to determine whether the requirement of paragraph (2) 

would impose a disproportionate economic hardship on small refineries. For 

any small refinery that the Secretary of Energy determines would experience a disproportionate economic hardship, the Administrator shall extend 

the small refinery exemption for such small refinery for no less than two 

additional years. 

‘‘(B) ECONOMIC HARDSHIP.— 

‘‘(i) EXTENSION OF EXEMPTION.—A small refinery may at any time petition the Administrator for an extension of the exemption from the requirement of paragraph (2) for the reason of disproportionate economic 

hardship. In evaluating a hardship petition, the Administrator, in consultation with the Secretary of Energy, shall consider the findings of 

the study in addition to other economic factors. 

‘‘(ii) DEADLINE FOR ACTION ON PETITIONS.—The Administrator shall 

act on any petition submitted by a small refinery for a hardship exemption not later than 90 days after the receipt of the petition. 

‘‘(C) CREDIT PROGRAM.—If a small refinery notifies the Administrator that 

it waives the exemption provided by this Act, the regulations shall provide 

for the generation of credits by the small refinery beginning in the year following such notification. 

‘‘(D) OPT-IN FOR SMALL REFINERS.—A small refinery shall be subject to 

the requirements of this section if it notifies the Administrator that it 

waives the exemption under subparagraph (A). 

‘‘(12) ETHANOL MARKET CONCENTRATION ANALYSIS.— 

‘‘(A) ANALYSIS.— 

‘‘(i) IN GENERAL.—Not later than 180 days after the date of enactment of this subsection, and annually thereafter, the Federal Trade 

Commission shall perform a market concentration analysis of the ethanol production industry using the Herfindahl-Hirschman Index to determine whether there is sufficient competition among industry participants to avoid price setting and other anticompetitive behavior. 

‘‘(ii) SCORING.—For the purpose of scoring under clause (i) using the 

Herfindahl-Hirschman Index, all marketing arrangements among industry participants shall be considered. 

‘‘(B) REPORT.—Not later than December 1, 2005, and annually thereafter, 

the Federal Trade Commission shall submit to Congress and the Administrator a report on the results of the market concentration analysis performed under subparagraph (A)(i).’’. 

(b) PENALTIES AND ENFORCEMENT.—Section 211(d) of the Clean Air Act (42 U.S.C. 

7545(d)) is amended as follows: 

(1) In paragraph (1)— 

(A) in the first sentence, by striking ‘‘or (n)’’ each place it appears and 

inserting ‘‘(n), or (o)’’; and 

(B) in the second sentence, by striking ‘‘or (m)’’ and inserting ‘‘(m), or (o)’’. 

(2) In the first sentence of paragraph (2), by striking ‘‘and (n)’’ each place it 

appears and inserting ‘‘(n), and (o)’’. 

(c) SURVEY OF RENEWABLE FUEL MARKET.— 

(1) SURVEY AND REPORT.—Not later than December 1, 2006, and annually 

thereafter, the Administrator of the Environmental Protection Agency (in conVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00146 Fmt 6659 Sfmt 6621 E:\HR\OC\HR215P1.XXX HR215P1
147 

sultation with the Secretary of Energy acting through the Administrator of the 

Energy Information Administration) shall— 

(A) conduct, with respect to each conventional gasoline use area and each 

reformulated gasoline use area in each State, a survey to determine the 

market shares of— 

(i) conventional gasoline containing ethanol; 

(ii) reformulated gasoline containing ethanol; 

(iii) conventional gasoline containing renewable fuel; and 

(iv) reformulated gasoline containing renewable fuel; and 

(B) submit to Congress, and make publicly available, a report on the results of the survey under subparagraph (A). 

(2) RECORDKEEPING AND REPORTING REQUIREMENTS.—The Administrator of 

the Environmental Protection Agency (hereinafter in this subsection referred to 

as the ‘‘Administrator’’) may require any refiner, blender, or importer to keep 

such records and make such reports as are necessary to ensure that the survey 

conducted under paragraph (1) is accurate. The Administrator, to avoid duplicative requirements, shall rely, to the extent practicable, on existing reporting and 

recordkeeping requirements and other information available to the Administrator including gasoline distribution patterns that include multistate use areas. 

(3) APPLICABLE LAW.—Activities carried out under this subsection shall be 

conducted in a manner designed to protect confidentiality of individual responses. 

SEC. 1502. FUELS SAFE HARBOR. 

(a) IN GENERAL.—Notwithstanding any other provision of Federal or State law, 

no renewable fuel, as defined by section 211(o)(1) of the Clean Air Act, or methyl 

tertiary butyl ether (hereinafterin this section referred to as ‘‘MTBE’’), used or intended to be used as a motor vehicle fuel, nor any motor vehicle fuel containing such 

renewable fuel or MTBE, shall be deemed a defective product by virtue of the fact 

that it is, or contains, such a renewable fuel or MTBE, if it does not violate a control 

or prohibition imposed by the Administrator of the Environmental Protection Agency (hereinafter in this section referred to as the ‘‘Administrator’’) under section 211 

of such Act, and the manufacturer is in compliance with all requests for information 

under subsection (b) of such section 211 of such Act. If the safe harbor provided by 

this section does not apply, the existence of a claim of defective product shall be determined under otherwise applicable law. Nothing in this subsection shall be construed to affect the liability of any person for environmental remediation costs, 

drinking water contamination, negligence for spills or other reasonably foreseeable 

events, public or private nuisance, trespass, breach of warranty, breach of contract, 

or any other liability other than liability based upon a claim of defective product. 

(b) EFFECTIVE DATE.—This section shall be effective as of September 5, 2003, and 

shall apply with respect to all claims filed on or after that date. 

SEC. 1503. FINDINGS AND MTBE TRANSITION ASSISTANCE. 

(a) FINDINGS.—Congress finds that— 

(1) since 1979, methyl tertiary butyl ether (hereinafter in this section referred 

to as ‘‘MTBE’’) has been used nationwide at low levels in gasoline to replace 

lead as an octane booster or anti-knocking agent; 

(2) Public Law 101–549 (commonly known as the ‘‘Clean Air Act Amendments 

of 1990’’) (42 U.S.C. 7401 et seq.) established a fuel oxygenate standard under 

which reformulated gasoline must contain at least 2 percent oxygen by weight; 

(3) at the time of the adoption of the fuel oxygen standard, Congress was 

aware that significant use of MTBE would result from the adoption of that 

standard, and that the use of MTBE would likely be important to the cost-effective implementation of that program; 

(4) Congress was aware that gasoline and its component additives can and 

do leak from storage tanks; 

(5) the fuel industry responded to the fuel oxygenate standard established by 

Public Law 101–549 by making substantial investments in— 

(A) MTBE production capacity; and 

(B) systems to deliver MTBE-containing gasoline to the marketplace; 

(6) having previously required oxygenates like MTBE for air quality purposes, 

Congress has— 

(A) reconsidered the relative value of MTBE in gasoline; 

(B) decided to establish a date certain for action by the Environmental 

Protection Agency to prohibit the use of MTBE in gasoline; and 

(C) decided to provide for the elimination of the oxygenate requirement 

for reformulated gasoline and to provide for a renewable fuels content requirement for motor fuel; and 

148 

(7) it is appropriate for Congress to provide some limited transition assistance— 

(A) to merchant producers of MTBE who produced MTBE in response to 

a market created by the oxygenate requirement contained in the Clean Air 

Act; and 

(B) for the purpose of mitigating any fuel supply problems that may result from the elimination of the oxygenate requirement for reformulated 

gasoline and from the decision to establish a date certain for action by the 

Environmental Protection Agency to prohibit the use of MTBE in gasoline. 

(b) PURPOSES.—The purpose of this section is to provide assistance to merchant 

producers of MTBE in making the transition from producing MTBE to producing 

other fuel additives. 

(c) MTBE MERCHANT PRODUCER CONVERSION ASSISTANCE.—Section 211(c) of the 

Clean Air Act (42 U.S.C. 7545(c)) is amended by adding at the end the following: 

‘‘(5) MTBE MERCHANT PRODUCER CONVERSION ASSISTANCE.— 

‘‘(A) IN GENERAL.— 

‘‘(i) GRANTS.—The Secretary of Energy, in consultation with the Administrator, may make grants to merchant producers of methyl tertiary 

butyl ether (hereinafter in this subsection referred to as ‘MTBE’) in the 

United States to assist the producers in the conversion of eligible production facilities described in subparagraph (C) to the production of isooctane, iso-octene, alkylates, or renewable fuels. 

‘‘(ii) DETERMINATION.—The Administrator, in consultation with the 

Secretary of Energy, may determine that transition assistance for the 

production of iso-octane, iso-octene, alkylates, or renewable fuels is inconsistent with the provisions of subparagraph (B) and, on that basis, 

may deny applications for grants authorized by this paragraph. 

‘‘(B) FURTHER GRANTS.—The Secretary of Energy, in consultation with the 

Administrator, may also further make grants to merchant producers of 

MTBE in the United States to assist the producers in the conversion of eligible production facilities described in subparagraph (C) to the production 

of such other fuel additives (unless the Administrator determines that such 

fuel additives may reasonably be anticipated to endanger public health or 

the environment) that, consistent with this subsection— 

‘‘(i) have been registered and have been tested or are being tested in 

accordance with the requirements of this section; and 

‘‘(ii) will contribute to replacing gasoline volumes lost as a result of 

amendments made to subsection (k) of this section by section 1504(a) 

and 1506 of the Energy Policy Act of 2005. 

‘‘(C) ELIGIBLE PRODUCTION FACILITIES.—A production facility shall be eligible to receive a grant under this paragraph if the production facility— 

‘‘(i) is located in the United States; and 

‘‘(ii) produced MTBE for consumption before April 1, 2003 and ceased 

production at any time after the date of enactment of this paragraph. 

‘‘(D) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to carry out this paragraph $250,000,000 for each of fiscal years 

2005 through 2012, to remain available until expended.’’. 

SEC. 1504. USE OF MTBE. 

(a) IN GENERAL.—Subject to subsections (e) and (f), not later than December 31, 

2014, the use of methyl tertiary butyl ether (hereinafter in this section referred to 

as ‘‘MTBE’’) in motor vehicle fuel in any State other than a State described in subsection (c) is prohibited. 

(b) REGULATIONS.—The Administrator of the Environmental Protection Agency 

(hereafter referred to in this section as the ‘‘Administrator’’) shall promulgate regulations to effect the prohibition in subsection (a). 

(c) STATES THAT AUTHORIZE USE.—A State described in this subsection is a State 

in which the Governor of the State submits a notification to the Administrator authorizing the use of MTBE in motor vehicle fuel sold or used in the State. 

(d) PUBLICATION OF NOTICE.—The Administrator shall publish in the Federal Register each notice submitted by a State under subsection (c). 

(e) TRACE QUANTITIES.—In carrying out subsection (a), the Administrator may 

allow trace quantities of MTBE, not to exceed 0.5 percent by volume, to be present 

in motor vehicle fuel in cases that the Administrator determines to be appropriate. 

(f) LIMITATION.—The Administrator, under authority of subsection (a), shall not 

prohibit or control the production of MTBE for export from the United States or for 

any other use other than for use in motor vehicle fuel. 

149 

(g) EFFECT ON STATE LAW.—The amendments made by this title have no effect 

regarding any available authority of States to limit the use of methyl tertiary butyl 

ether in motor vehicle fuel. 

SEC. 1505. NATIONAL ACADEMY OF SCIENCES REVIEW AND PRESIDENTIAL DETERMINATION. 

(a) NAS REVIEW.—Not later than May 31, 2013, the Secretary shall enter into an 

arrangement with the National Academy of Sciences to review the use of methyl tertiary butyl ether (hereafter referred to in this section as ‘‘MTBE’’) in fuel and fuel 

additives. The review shall only use the best available scientific information and 

data collected by accepted methods or the best available means. The review shall 

examine the use of MTBE in fuel and fuel additives, significant beneficial and detrimental effects of this use on environmental quality or public health or welfare including the costs and benefits of such effects, likely effects of controls or prohibitions 

on MTBE regarding fuel availability and price, and other appropriate and reasonable actions that are available to protect the environment or public health or welfare from any detrimental effects of the use of MTBE in fuel or fuel additives. The 

review shall be peer-reviewed prior to publication and all supporting data and analytical models shall be available to the public. The review shall be completed no 

later than May 31, 2014. 

(b) PRESIDENTIAL DETERMINATION.—No later than June 30, 2014, the President 

may make a determination that restrictions on the use of MTBE to be implemented 

pursuant to section 1504 shall not take place and that the legal authority contained 

in section 1504 to prohibit the use of MTBE in motor vehicle fuel shall become null 

and void. 

SEC. 1506. ELIMINATION OF OXYGEN CONTENT REQUIREMENT FOR REFORMULATED GASOLINE. 

(a) ELIMINATION.— 

(1) IN GENERAL.—Section 211(k) of the Clean Air Act (42 U.S.C. 7545(k)) is 

amended as follows: 

(A) In paragraph (2)— 

(i) in the second sentence of subparagraph (A), by striking ‘‘(including 

the oxygen content requirement contained in subparagraph (B))’’; 

(ii) by striking subparagraph (B); and 

(iii) by redesignating subparagraphs (C) and (D) as subparagraphs 

(B) and (C), respectively. 

(B) In paragraph (3)(A), by striking clause (v). 

(C) In paragraph (7)— 

(i) in subparagraph (A)— 

(I) by striking clause (i); and 

(II) by redesignating clauses (ii) and (iii) as clauses (i) and (ii), 

respectively; and 

(ii) in subparagraph (C)— 

(I) by striking clause (ii). 

(II) by redesignating clause (iii) as clause (ii). 

(2) EFFECTIVE DATE.—The amendments made by paragraph (1) take effect 270 

days after the date of enactment of this Act, except that such amendments shall 

take effect upon such date of enactment in any State that has received a waiver 

under section 209(b) of the Clean Air Act. 

(b) MAINTENANCE OF TOXIC AIR POLLUTANT EMISSION REDUCTIONS.—Section 

211(k)(1) of the Clean Air Act (42 U.S.C. 7545(k)(1)) is amended as follows: 

(1) By striking ‘‘Within 1 year after the enactment of the Clean Air Act 

Amendments of 1990,’’ and inserting the following: 

‘‘(A) IN GENERAL.—Not later than November 15, 1991,’’. 

(2) By adding at the end the following: 

‘‘(B) MAINTENANCE OF TOXIC AIR POLLUTANT EMISSIONS REDUCTIONS FROM

REFORMULATED GASOLINE.— 

‘‘(i) DEFINITIONS.—In this subparagraph the term ‘PADD’ means a 

Petroleum Administration for Defense District. 

‘‘(ii) REGULATIONS REGARDING EMISSIONS OF TOXIC AIR POLLUTANTS.— 

Not later than 270 days after the date of enactment of this subparagraph the Administrator shall establish, for each refinery or importer, 

standards for toxic air pollutants from use of the reformulated gasoline 

produced or distributed by the refinery or importer that maintain the 

reduction of the average annual aggregate emissions of toxic air pollutants for reformulated gasoline produced or distributed by the refinery 

or importer during calendar years 1999 and 2000, determined on the 

basis of data collected by the Administrator with respect to the refinery 

or importer. 

150 

‘‘(iii) STANDARDS APPLICABLE TO SPECIFIC REFINERIES OR IMPORT- ERS.— ‘‘(I) APPLICABILITY OF STANDARDS.—For any calendar year, the 

standards applicable to a refinery or importer under clause (ii) 

shall apply to the quantity of gasoline produced or distributed by 

the refinery or importer in the calendar year only to the extent 

that the quantity is less than or equal to the average annual quantity of reformulated gasoline produced or distributed by the refinery or importer during calendar years 1999 and 2000. 

‘‘(II) APPLICABILITY OF OTHER STANDARDS.—For any calendar 

year, the quantity of gasoline produced or distributed by a refinery 

or importer that is in excess of the quantity subject to subclause 

(I) shall be subject to standards for toxic air pollutants promulgated under subparagraph (A) and paragraph (3)(B). 

‘‘(iv) CREDIT PROGRAM.—The Administrator shall provide for the 

granting and use of credits for emissions of toxic air pollutants in the 

same manner as provided in paragraph (7). 

‘‘(v) REGIONAL PROTECTION OF TOXICS REDUCTION BASELINES.— ‘‘(I) IN GENERAL.—Not later than 60 days after the date of enactment of this subparagraph, and not later than April 1 of each calendar year that begins after that date of enactment, the Administrator shall publish in the Federal Register a report that specifies, 

with respect to the previous calendar year— 

‘‘(aa) the quantity of reformulated gasoline produced that is 

in excess of the average annual quantity of reformulated gasoline produced in 1999 and 2000; and 

‘‘(bb) the reduction of the average annual aggregate emissions of toxic air pollutants in each PADD, based on retail survey data or data from other appropriate sources. 

‘‘(II) EFFECT OF FAILURE TO MAINTAIN AGGREGATE TOXICS REDUCTIONS.—If, in any calendar year, the reduction of the average annual aggregate emissions of toxic air pollutants in a PADD fails to 

meet or exceed the reduction of the average annual aggregate emissions of toxic air pollutants in the PADD in calendar years 1999 

and 2000, the Administrator, not later than 90 days after the date 

of publication of the report for the calendar year under subclause 

(I), shall— 

‘‘(aa) identify, to the maximum extent practicable, the reasons for the failure, including the sources, volumes, and characteristics of reformulated gasoline that contributed to the failure; and 

‘‘(bb) promulgate revisions to the regulations promulgated 

under clause (ii), to take effect not earlier than 180 days but 

not later than 270 days after the date of promulgation, to provide that, notwithstanding clause (iii)(II), all reformulated gasoline produced or distributed at each refinery or importer shall 

meet the standards applicable under clause (ii) not later than 

April 1 of the year following the report in subclause (II) and 

for subsequent years. 

‘‘(vi) REGULATIONS TO CONTROL HAZARDOUS AIR POLLUTANTS FROM

MOTOR VEHICLES AND MOTOR VEHICLE FUELS.—Not later than July 1, 

2005, the Administrator shall promulgate final regulations to control 

hazardous air pollutants from motor vehicles and motor vehicle fuels, 

as provided for in section 80.1045 of title 40, Code of Federal Regulations (as in effect on the date of enactment of this subparagraph).’’. 

(c) CONSOLIDATION IN REFORMULATED GASOLINE REGULATIONS.—Not later than 

180 days after the date of enactment of this Act, the Administrator of the Environmental Protection Agency shall revise the reformulated gasoline regulations under 

subpart D of part 80 of title 40, Code of Federal Regulations, to consolidate the regulations applicable to VOC-Control Regions 1 and 2 under section 80.41 of that title 

by eliminating the less stringent requirements applicable to gasoline designated for 

VOC-Control Region 2 and instead applying the more stringent requirements applicable to gasoline designated for VOC-Control Region 1. 

(d) SAVINGS CLAUSE.—Nothing in this section is intended to affect or prejudice either any legal claims or actions with respect to regulations promulgated by the Administrator of the Environmental Protection Agency (hereinafter in this subsection 

referred to as the ‘‘Administrator’’) prior to the date of enactment of this Act regarding emissions of toxic air pollutants from motor vehicles or the adjustment of standards applicable to a specific refinery or importer made under such prior regulations 

151 

and the Administrator may apply such adjustments to the standards applicable to 

such refinery or importer under clause (iii)(I) of section 211(k)(1)(B) of the Clean Air 

Act, except that— 

(1) the Administrator shall revise such adjustments to be based only on calendar years 1999–2000; and 

(2) for adjustments based on toxic air pollutant emissions from reformulated 

gasoline significantly below the national annual average emissions of toxic air 

pollutants from all reformulated gasoline, the Administrator may revise such 

adjustments to take account of the scope of Federal or State prohibitions on the 

use of methyl tertiary butyl ether imposed after the date of the enactment of 

this paragraph, except that any such adjustment shall require such refiner or 

importer, to the greatest extent practicable, to maintain the reduction achieved 

during calendar years 1999–2000 in the average annual aggregate emissions of 

toxic air pollutants from reformulated gasoline produced or distributed by the 

refinery or importer; Provided, that any such adjustment shall not be made at 

a level below the average percentage of reductions of emissions of toxic air pollutants for reformulated gasoline supplied to PADD I during calendar years 

1999–2000. 

SEC. 1507. ANALYSES OF MOTOR VEHICLE FUEL CHANGES. 

Section 211 of the Clean Air Act (42 U.S.C. 7545) is amended by inserting after 

subsection (o) the following: 

‘‘(p) ANALYSES OF MOTOR VEHICLE FUEL CHANGES AND EMISSIONS MODEL.— 

‘‘(1) ANTI-BACKSLIDING ANALYSIS.— 

‘‘(A) DRAFT ANALYSIS.—Not later than 4 years after the date of enactment 

of this subsection, the Administrator shall publish for public comment a 

draft analysis of the changes in emissions of air pollutants and air quality 

due to the use of motor vehicle fuel and fuel additives resulting from implementation of the amendments made by subtitle A of title XV of the Energy 

Policy Act of 2005. 

‘‘(B) FINAL ANALYSIS.—After providing a reasonable opportunity for comment but not later than 5 years after the date of enactment of this paragraph, the Administrator shall publish the analysis in final form. 

‘‘(2) EMISSIONS MODEL.—For the purposes of this subsection, as soon as the 

necessary data are available, the Administrator shall develop and finalize an 

emissions model that reasonably reflects the effects of gasoline characteristics 

or components on emissions from vehicles in the motor vehicle fleet during calendar year 2005.’’. 

SEC. 1508. DATA COLLECTION. 

Section 205 of the Department of Energy Organization Act (42 U.S.C. 7135) is 

amended by adding at the end the following: 

‘‘(m) RENEWABLE FUELS SURVEY.—(1) In order to improve the ability to evaluate 

the effectiveness of the Nation’s renewable fuels mandate, the Administrator shall 

conduct and publish the results of a survey of renewable fuels demand in the motor 

vehicle fuels market in the United States monthly, and in a manner designed to 

protect the confidentiality of individual responses. In conducting the survey, the Administrator shall collect information both on a national and regional basis, including 

each of the following: 

‘‘(A) The quantity of renewable fuels produced. 

‘‘(B) The quantity of renewable fuels blended. 

‘‘(C) The quantity of renewable fuels imported. 

‘‘(D) The quantity of renewable fuels demanded. 

‘‘(E) Market price data. 

‘‘(F) Such other analyses or evaluations as the Administrator finds is necessary to achieve the purposes of this section. 

‘‘(2) The Administrator shall also collect or estimate information both on a national and regional basis, pursuant to subparagraphs (A) through (F) of paragraph 

(1), for the 5 years prior to implementation of this subsection. 

‘‘(3) This subsection does not affect the authority of the Administrator to collect 

data under section 52 of the Federal Energy Administration Act of 1974 (15 U.S.C. 

790a).’’. 

SEC. 1509. REDUCING THE PROLIFERATION OF STATE FUEL CONTROLS. 

(a) EPA APPROVAL OF STATE PLANS WITH FUEL CONTROLS.—Section 211(c)(4)(C) 

of the Clean Air Act (42 U.S.C. 7545(c)(4)(C)) is amended by adding at the end the 

following: ‘‘The Administrator shall not approve a control or prohibition respecting 

the use of a fuel or fuel additive under this subparagraph unless the Administrator, 

after consultation with the Secretary of Energy, publishes in the Federal Register 

a finding that, in the Administrator’s judgment, such control or prohibition will not 

152 

cause fuel supply or distribution interruptions or have a significant adverse impact 

on fuel producibility in the affected area or contiguous areas.’’. 

(b) STUDY.—The Administrator of the Environmental Protection Agency (hereinafter in this subsection referred to as the ‘‘Administrator’’), in cooperation with the 

Secretary of Energy, shall undertake a study of the projected effects on air quality, 

the proliferation of fuel blends, fuel availability, and fuel costs of providing a preference for each of the following: 

(A) Reformulated gasoline referred to in subsection (k) of section 211 of the 

Clean Air Act. 

(B) A low RVP gasoline blend that has been certified by the Administrator 

as having a Reid Vapor Pressure of 7.0 pounds per square inch (psi). 

(C) A low RVP gasoline blend that has been certified by the Administrator 

as having a Reid Vapor Pressure of 7.8 pounds per square inch (psi). 

In carrying out such study, the Administrator shall obtain comments from affected 

parties. The Administrator shall submit the results of such study to the Congress 

not later than 18 months after the date of enactment of this Act, together with any 

recommended legislative changes. 

SEC. 1510. FUEL SYSTEM REQUIREMENTS HARMONIZATION STUDY. 

(a) STUDY.— 

(1) IN GENERAL.—The Administrator of the Environmental Protection Agency 

(hereinafter in this section referred to as the ‘‘Administrator’’) and the Secretary 

of Energy shall jointly conduct a study of Federal, State, and local requirements 

concerning motor vehicle fuels, including— 

(A) requirements relating to reformulated gasoline, volatility (measured 

in Reid vapor pressure), oxygenated fuel, and diesel fuel; and 

(B) other requirements that vary from State to State, region to region, or 

locality to locality. 

(2) REQUIRED ELEMENTS.—The study shall assess— 

(A) the effect of the variety of requirements described in paragraph (1) 

on the supply, quality, and price of motor vehicle fuels available to consumers in various States and localities; 

(B) the effect of the requirements described in paragraph (1) on achievement of— 

(i) national, regional, and local air quality standards and goals; and 

(ii) related environmental and public health protection standards and 

goals; 

(C) the effect of Federal, State, and local motor vehicle fuel regulations, 

including multiple motor vehicle fuel requirements, on— 

(i) domestic refineries; 

(ii) the fuel distribution system; and 

(iii) industry investment in new capacity; 

(D) the effect of the requirements described in paragraph (1) on emissions 

from vehicles, refineries, and fuel handling facilities; 

(E) the feasibility of developing national or regional motor vehicle fuel 

slates for the 48 contiguous States that, while improving air quality at the 

national, regional and local levels consistent with the attainment of national ambient air quality standards, could— 

(i) enhance flexibility in the fuel distribution infrastructure and improve fuel fungibility; 

(ii) reduce price volatility and costs to consumers and producers; 

(iii) provide increased liquidity to the gasoline market; and 

(iv) enhance fuel quality, consistency, and supply; 

(F) the feasibility of providing incentives to promote cleaner burning 

motor vehicle fuel; and 

(G) the extent to which improvements in air quality and any increases 

or decreases in the price of motor fuel can be projected to result from the 

Environmental Protection Agency’s Tier II requirements for conventional 

gasoline and vehicle emission systems, the reformulated gasoline program, 

the renewable content requirements established by this subtitle, State programs regarding gasoline volatility, and any other requirements imposed by 

States or localities affecting the composition of motor fuel. 

(b) REPORT.— 

(1) IN GENERAL.—Not later than December 31, 2007, the Administrator and 

the Secretary of Energy shall submit to Congress a report on the results of the 

study conducted under subsection (a). 

(2) RECOMMENDATIONS.— 

153 

(A) IN GENERAL.—The report under this subsection shall contain recommendations for legislative and administrative actions that may be 

taken— 

(i) to improve air quality; 

(ii) to reduce costs to consumers and producers; and 

(iii) to increase supply liquidity. 

(B) REQUIRED CONSIDERATIONS.—The recommendations under subparagraph (A) shall take into account the need to provide advance notice of required modifications to refinery and fuel distribution systems in order to 

ensure an adequate supply of motor vehicle fuel in all States. 

(3) CONSULTATION.—In developing the report under this subsection, the Administrator and the Secretary of Energy shall consult with— 

(A) the Governors of the States; 

(B) automobile manufacturers; 

(C) motor vehicle fuel producers and distributors; and 

(D) the public. 

SEC. 1511. COMMERCIAL BYPRODUCTS FROM MUNICIPAL SOLID WASTE AND CELLULOSIC 

BIOMASS LOAN GUARANTEE PROGRAM. 

(a) DEFINITION OF MUNICIPAL SOLID WASTE.—In this section, the term ‘‘municipal 

solid waste’’ has the meaning given the term ‘‘solid waste’’ in section 1004 of the 

Solid Waste Disposal Act (42 U.S.C. 6903). 

(b) ESTABLISHMENT OF PROGRAM.—The Secretary of Energy (hereinafter in this 

section referred to as the ‘‘Secretary’’) shall establish a program to provide guarantees of loans by private institutions for the construction of facilities for the processing and conversion of municipal solid waste and cellulosic biomass into fuel ethanol and other commercial byproducts. 

(c) REQUIREMENTS.—The Secretary may provide a loan guarantee under subsection (b) to an applicant if— 

(1) without a loan guarantee, credit is not available to the applicant under 

reasonable terms or conditions sufficient to finance the construction of a facility 

described in subsection (b); 

(2) the prospective earning power of the applicant and the character and 

value of the security pledged provide a reasonable assurance of repayment of 

the loan to be guaranteed in accordance with the terms of the loan; and 

(3) the loan bears interest at a rate determined by the Secretary to be reasonable, taking into account the current average yield on outstanding obligations 

of the United States with remaining periods of maturity comparable to the maturity of the loan. 

(d) CRITERIA.—In selecting recipients of loan guarantees from among applicants, 

the Secretary shall give preference to proposals that— 

(1) meet all applicable Federal and State permitting requirements; 

(2) are most likely to be successful; and 

(3) are located in local markets that have the greatest need for the facility 

because of— 

(A) the limited availability of land for waste disposal; 

(B) the availability of sufficient quantities of cellulosic biomass; or 

(C) a high level of demand for fuel ethanol or other commercial byproducts of the facility. 

(e) MATURITY.—A loan guaranteed under subsection (b) shall have a maturity of 

not more than 20 years. 

(f) TERMS AND CONDITIONS.—The loan agreement for a loan guaranteed under 

subsection (b) shall provide that no provision of the loan agreement may be amended or waived without the consent of the Secretary. 

(g) ASSURANCE OF REPAYMENT.—The Secretary shall require that an applicant for 

a loan guarantee under subsection (b) provide an assurance of repayment in the 

form of a performance bond, insurance, collateral, or other means acceptable to the 

Secretary in an amount equal to not less than 20 percent of the amount of the loan. 

(h) GUARANTEE FEE.—The recipient of a loan guarantee under subsection (b) shall 

pay the Secretary an amount determined by the Secretary to be sufficient to cover 

the administrative costs of the Secretary relating to the loan guarantee. 

(i) FULL FAITH AND CREDIT.—The full faith and credit of the United States is 

pledged to the payment of all guarantees made under this section. Any such guarantee made by the Secretary shall be conclusive evidence of the eligibility of the 

loan for the guarantee with respect to principal and interest. The validity of the 

guarantee shall be incontestable in the hands of a holder of the guaranteed loan. 

(j) REPORTS.—Until each guaranteed loan under this section has been repaid in 

full, the Secretary shall annually submit to Congress a report on the activities of 

the Secretary under this section. 

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(k) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated 

such sums as are necessary to carry out this section. 

(l) TERMINATION OF AUTHORITY.—The authority of the Secretary to issue a loan 

guarantee under subsection (b) terminates on the date that is 10 years after the 

date of enactment of this Act. 

SEC. 1512. CELLULOSIC BIOMASS AND WASTE-DERIVED ETHANOL CONVERSION ASSISTANCE. 

Section 211 of the Clean Air Act (42 U.S.C. 7545) is amended by adding at the 

end the following: 

‘‘(r) CELLULOSIC BIOMASS AND WASTE-DERIVED ETHANOL CONVERSION ASSIST- ANCE.— 

‘‘(1) IN GENERAL.—The Secretary of Energy may provide grants to merchant 

producers of cellulosic biomass ethanol and waste-derived ethanol in the United 

States to assist the producers in building eligible production facilities described 

in paragraph (2) for the production of ethanol. 

‘‘(2) ELIGIBLE PRODUCTION FACILITIES.—A production facility shall be eligible 

to receive a grant under this subsection if the production facility— 

‘‘(A) is located in the United States; and 

‘‘(B) uses cellulosic biomass or waste-derived feedstocks derived from agricultural residues, wood residues, municipal solid waste, or agricultural byproducts as that term is used in section 919 of the Energy Policy Act of 

2005. 

‘‘(3) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated the following amounts to carry out this subsection: ‘‘(A) $100,000,000 for fiscal year 2005. 

‘‘(B) $250,000,000 for fiscal year 2006. 

‘‘(C) $400,000,000 for fiscal year 2007.’’. 

SEC. 1513. BLENDING OF COMPLIANT REFORMULATED GASOLINES. 

Section 211 of the Clean Air Act (42 U.S.C. 7545) is amended by adding at the 

end the following: 

‘‘(s) BLENDING OF COMPLIANT REFORMULATED GASOLINES.— ‘‘(1) IN GENERAL.—Notwithstanding subsections (h) and (k) and subject to the 

limitations in paragraph (2) of this subsection, it shall not be a violation of this 

subtitle for a gasoline retailer, during any month of the year, to blend at a retail location batches of ethanol-blended and non-ethanol-blended reformulated 

gasoline, provided that— 

‘‘(A) each batch of gasoline to be blended has been individually certified 

as in compliance with subsections (h) and (k) prior to being blended; 

‘‘(B) the retailer notifies the Administrator prior to such blending, and 

identifies the exact location of the retail station and the specific tank in 

which such blending will take place; 

‘‘(C) the retailer retains and, as requested by the Administrator or the 

Administrator’s designee, makes available for inspection such certifications 

accounting for all gasoline at the retail outlet; and 

‘‘(D) the retailer does not, between June 1 and September 15 of each year, 

blend a batch of VOC-controlled, or ‘summer’, gasoline with a batch of nonVOC-controlled, or ‘winter’, gasoline (as these terms are defined under subsections (h) and (k)). 

‘‘(2) LIMITATIONS.— 

‘‘(A) FREQUENCY LIMITATION.—A retailer shall only be permitted to blend 

batches of compliant reformulated gasoline under this subsection a maximum 

of two blending periods between May 1 and September 15 of each calendar year. 

‘‘(B) DURATION OF BLENDING PERIOD.—Each blending period authorized under 

subparagraph (A) shall extend for a period of no more than 10 consecutive calendar days. 

‘‘(3) SURVEYS.—A sample of gasoline taken from a retail location that has 

blended gasoline within the past 30 days and is in compliance with subparagraphs (A), (B), (C), and (D) of paragraph (1) shall not be used in a VOC survey 

mandated by 40 C.F.R. Part 80. 

‘‘(4) STATE IMPLEMENTATION PLANS.—A State shall be held harmless and shall 

not be required to revise its State implementation plan under section 110 to account for the emissions from blended gasoline authorized under paragraph (1). 

‘‘(5) PRESERVATION OF STATE LAW.—Nothing in this subsection shall— 

‘‘(A) preempt existing State laws or regulations regulating the blending 

of compliant gasolines; or 

‘‘(B) prohibit a State from adopting such restrictions in the future. 

‘‘(6) REGULATIONS.—The Administrator shall promulgate, after notice and 

comment, regulations implementing this subsection within one year after the 

date of enactment of this subsection. 

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‘‘(7) EFFECTIVE DATE.—This subsection shall become effective 15 months after 

the date of its enactment and shall apply to blended batches of reformulated 

gasoline on or after that date, regardless of whether the implementing regulations required by paragraph (6) have been promulgated by the Administrator 

by that date. 

‘‘(8) LIABILITY.—No person other than the person responsible for blending 

under this subsection shall be subject to an enforcement action or penalties 

under subsection (d) solely arising from the blending of compliant reformulated 

gasolines by the retailers. 

‘‘(9) FORMULATION OF GASOLINE.—This subsection does not grant authority to 

the Administrator or any State (or any subdivision thereof) to require reformulation of gasoline at the refinery to adjust for potential or actual emissions increases due to the blending authorized by this subsection.’’. 

Subtitle B—Underground Storage Tank 

Compliance 

SEC. 1521. SHORT TITLE. 

This subtitle may be cited as the ‘‘Underground Storage Tank Compliance Act of 

2005’’. 

SEC. 1522. LEAKING UNDERGROUND STORAGE TANKS. 

(a) IN GENERAL.—Section 9004 of the Solid Waste Disposal Act (42 U.S.C. 6991c) 

is amended by adding at the end the following: 

‘‘(f) TRUST FUND DISTRIBUTION.— 

‘‘(1) IN GENERAL.— 

‘‘(A) AMOUNT AND PERMITTED USES OF DISTRIBUTION.—The Administrator 

shall distribute to States not less than 80 percent of the funds from the 

Trust Fund that are made available to the Administrator under section 

9014(2)(A) for each fiscal year for use in paying the reasonable costs, incurred under a cooperative agreement with any State for— 

‘‘(i) corrective actions taken by the State under section 9003(h)(7)(A); 

‘‘(ii) necessary administrative expenses, as determined by the Administrator, that are directly related to State fund or State assurance programs under subsection (c)(1); or 

‘‘(iii) enforcement, by a State or a local government, of State or local 

regulations pertaining to underground storage tanks regulated under 

this subtitle. 

‘‘(B) USE OF FUNDS FOR ENFORCEMENT.—In addition to the uses of funds 

authorized under subparagraph (A), the Administrator may use funds from 

the Trust Fund that are not distributed to States under subparagraph (A) 

for enforcement of any regulation promulgated by the Administrator under 

this subtitle. 

‘‘(C) PROHIBITED USES.—Funds provided to a State by the Administrator 

under subparagraph (A) shall not be used by the State to provide financial 

assistance to an owner or operator to meet any requirement relating to underground storage tanks under subparts B, C, D, H, and G of part 280 of 

title 40, Code of Federal Regulations (as in effect on the date of enactment 

of this subsection). 

‘‘(2) ALLOCATION.— 

‘‘(A) PROCESS.—Subject to subparagraphs (B) and (C), in the case of a 

State with which the Administrator has entered into a cooperative agreement under section 9003(h)(7)(A), the Administrator shall distribute funds 

from the Trust Fund to the State using an allocation process developed by 

the Administrator. 

‘‘(B) DIVERSION OF STATE FUNDS.—The Administrator shall not distribute 

funds under subparagraph (A)(iii) of subsection (f)(1) to any State that has 

diverted funds from a State fund or State assurance program for purposes 

other than those related to the regulation of underground storage tanks 

covered by this subtitle, with the exception of those transfers that had been 

completed earlier than the date of enactment of this subsection. 

‘‘(C) REVISIONS TO PROCESS.—The Administrator may revise the allocation 

process referred to in subparagraph (A) after— 

‘‘(i) consulting with State agencies responsible for overseeing corrective action for releases from underground storage tanks; and 

‘‘(ii) taking into consideration, at a minimum, each of the following: 

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‘‘(I) The number of confirmed releases from federally regulated 

leaking underground storage tanks in the States. 

‘‘(II) The number of federally regulated underground storage 

tanks in the States. 

‘‘(III) The performance of the States in implementing and enforcing the program. 

‘‘(IV) The financial needs of the States. 

‘‘(V) The ability of the States to use the funds referred to in subparagraph (A) in any year. 

‘‘(3) DISTRIBUTIONS TO STATE AGENCIES.—Distributions from the Trust Fund 

under this subsection shall be made directly to a State agency that— 

‘‘(A) enters into a cooperative agreement referred to in paragraph (2)(A); 

or 

‘‘(B) is enforcing a State program approved under this section.’’. 

(b) WITHDRAWAL OF APPROVAL OF STATE FUNDS.—Section 9004(c) of the Solid 

Waste Disposal Act (42 U.S.C. 6991c(c)) is amended by inserting the following new 

paragraph at the end thereof: 

‘‘(6) WITHDRAWAL OF APPROVAL.—After an opportunity for good faith, collaborative efforts to correct financial deficiencies with a State fund, the Administrator may withdraw approval of any State fund or State assurance program 

to be used as a financial responsibility mechanism without withdrawing approval of a State underground storage tank program under section 9004(a).’’. 

(c) ABILITY TO PAY.—Section 9003(h)(6) of the Solid Waste Disposal Act (42 U.S.C. 

6591a(h)(6)) is amended by adding the following new subparagraph at the end 

thereof: 

‘‘(E) INABILITY OR LIMITED ABILITY TO PAY.— 

‘‘(i) IN GENERAL.—In determining the level of recovery effort, or 

amount that should be recovered, the Administrator (or the State pursuant to paragraph (7)) shall consider the owner or operator’s ability 

to pay. An inability or limited ability to pay corrective action costs must 

be demonstrated to the Administrator (or the State pursuant to paragraph (7)) by the owner or operator. 

‘‘(ii) CONSIDERATIONS.—In determining whether or not a demonstration is made under clause (i), the Administrator (or the State pursuant 

to paragraph (7)) shall take into consideration the ability of the owner 

or operator to pay corrective action costs and still maintain its basic 

business operations, including consideration of the overall financial condition of the owner or operator and demonstrable constraints on the 

ability of the owner or operator to raise revenues. 

‘‘(iii) INFORMATION.—An owner or operator requesting consideration 

under this subparagraph shall promptly provide the Administrator (or 

the State pursuant to paragraph (7)) with all relevant information 

needed to determine the ability of the owner or operator to pay corrective action costs. 

‘‘(iv) ALTERNATIVE PAYMENT METHODS.—The Administrator (or the 

State pursuant to paragraph (7)) shall consider alternative payment 

methods as may be necessary or appropriate if the Administrator (or 

the State pursuant to paragraph (7)) determines that an owner or operator cannot pay all or a portion of the costs in a lump sum payment. 

‘‘(v) MISREPRESENTATION.—If an owner or operator provides false information or otherwise misrepresents their financial situation under 

clause (ii), the Administrator (or the State pursuant to paragraph (7)) 

shall seek full recovery of the costs of all such actions pursuant to the 

provisions of subparagraph (A) without consideration of the factors in 

subparagraph (B).’’. 

SEC. 1523. INSPECTION OF UNDERGROUND STORAGE TANKS. 

(a) INSPECTION REQUIREMENTS.—Section 9005 of the Solid Waste Disposal Act (42 

U.S.C. 6991d) is amended by inserting the following new subsection at the end 

thereof: 

‘‘(c) INSPECTION REQUIREMENTS.— 

‘‘(1) UNINSPECTED TANKS.—In the case of underground storage tanks regulated under this subtitle that have not undergone an inspection since December 

22, 1998, not later than 2 years after the date of enactment of this subsection, 

the Administrator or a State that receives funding under this subtitle, as appropriate, shall conduct on-site inspections of all such tanks to determine compliance with this subtitle and the regulations under this subtitle (40 C.F.R. 280) 

or a requirement or standard of a State program developed under section 9004. 

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‘‘(2) PERIODIC INSPECTIONS.—After completion of all inspections required 

under paragraph (1), the Administrator or a State that receives funding under 

this subtitle, as appropriate, shall conduct on-site inspections of each underground storage tank regulated under this subtitle at least once every 3 years 

to determine compliance with this subtitle and the regulations under this subtitle (40 C.F.R. 280) or a requirement or standard of a State program developed 

under section 9004. The Administrator may extend for up to one additional year 

the first 3-year inspection interval under this paragraph if the State demonstrates that it has insufficient resources to complete all such inspections within the first 3-year period. 

‘‘(3) INSPECTION AUTHORITY.—Nothing in this section shall be construed to diminish the Administrator’s or a State’s authorities under section 9005(a).’’. 

(b) STUDY OF ALTERNATIVE INSPECTION PROGRAMS.—The Administrator of the Environmental Protection Agency, in coordination with a State, shall gather information on compliance assurance programs that could serve as an alternative to the inspection programs under section 9005(c) of the Solid Waste Disposal Act (42 U.S.C. 

6991d(c)) and shall, within 4 years after the date of enactment of this Act, submit 

a report to the Congress containing the results of such study. 

SEC. 1524. OPERATOR TRAINING. 

(a) IN GENERAL.—Section 9010 of the Solid Waste Disposal Act (42 U.S.C. 6991i) 

is amended to read as follows: 

‘‘SEC. 9010. OPERATOR TRAINING. 

‘‘(a) GUIDELINES.— ‘‘(1) IN GENERAL.—Not later than 2 years after the date of enactment of the 

Underground Storage Tank Compliance Act of 2005, in consultation and cooperation with States and after public notice and opportunity for comment, the 

Administrator shall publish guidelines that specify training requirements for— 

‘‘(A) persons having primary responsibility for on-site operation and maintenance of underground storage tank systems; 

‘‘(B) persons having daily on-site responsibility for the operation and 

maintenance of underground storage tanks systems; and 

‘‘(C) daily, on-site employees having primary responsibility for addressing 

emergencies presented by a spill or release from an underground storage 

tank system. 

‘‘(2) CONSIDERATIONS.—The guidelines described in paragraph (1) shall take 

into account— 

‘‘(A) State training programs in existence as of the date of publication of 

the guidelines; 

‘‘(B) training programs that are being employed by tank owners and tank 

operators as of the date of enactment of the Underground Storage Tank 

Compliance Act of 2005; 

‘‘(C) the high turnover rate of tank operators and other personnel; 

‘‘(D) the frequency of improvement in underground storage tank equipment technology; 

‘‘(E) the nature of the businesses in which the tank operators are engaged; 

‘‘(F) the substantial differences in the scope and length of training needed 

for the different classes of persons described in subparagraphs (A), (B), and 

(C) of paragraph (1); and 

‘‘(G) such other factors as the Administrator determines to be necessary 

to carry out this section. 

‘‘(b) STATE PROGRAMS.— 

‘‘(1) IN GENERAL.—Not later than 2 years after the date on which the Administrator publishes the guidelines under subsection (a)(1), each State that receives funding under this subtitle shall develop State-specific training requirements that are consistent with the guidelines developed under subsection (a)(1). 

‘‘(2) REQUIREMENTS.—State requirements described in paragraph (1) shall— 

‘‘(A) be consistent with subsection (a); 

‘‘(B) be developed in cooperation with tank owners and tank operators; 

‘‘(C) take into consideration training programs implemented by tank owners and tank operators as of the date of enactment of this section; and 

‘‘(D) be appropriately communicated to tank owners and operators. 

‘‘(3) FINANCIAL INCENTIVE.—The Administrator may award to a State that develops and implements requirements described in paragraph (1), in addition to 

any funds that the State is entitled to receive under this subtitle, not more than 

$200,000, to be used to carry out the requirements. 

‘‘(c) TRAINING.—All persons that are subject to the operator training requirements 

of subsection (a) shall— 

158 

‘‘(1) meet the training requirements developed under subsection (b); and 

‘‘(2) repeat the applicable requirements developed under subsection (b), if the 

tank for which they have primary daily on-site management responsibilities is 

determined to be out of compliance with— 

‘‘(A) a requirement or standard promulgated by the Administrator under 

section 9003; or 

‘‘(B) a requirement or standard of a State program approved under section 9004.’’. 

(b) STATE PROGRAM REQUIREMENT.—Section 9004(a) of the Solid Waste Disposal 

Act (42 U.S.C. 6991c(a)) is amended by striking ‘‘and’’ at the end of paragraph (7), 

by striking the period at the end of paragraph (8) and inserting ‘‘; and’’, and by adding the following new paragraph at the end thereof: 

‘‘(9) State-specific training requirements as required by section 9010.’’. 

(c) ENFORCEMENT.—Section 9006(d)(2) of such Act (42 U.S.C. 6991e) is amended 

as follows: 

(1) By striking ‘‘or’’ at the end of subparagraph (B). 

(2) By adding the following new subparagraph after subparagraph (C): 

‘‘(D) the training requirements established by States pursuant to section 9010 

(relating to operator training); or’’. 

(d) TABLE OF CONTENTS.—The item relating to section 9010 in table of contents 

for the Solid Waste Disposal Act is amended to read as follows: 

‘‘Sec. 9010. Operator training.’’. 

SEC. 1525. REMEDIATION FROM OXYGENATED FUEL ADDITIVES. 

Section 9003(h) of the Solid Waste Disposal Act (42 U.S.C. 6991b(h)) is amended 

as follows: 

(1) In paragraph (7)(A)— 

(A) by striking ‘‘paragraphs (1) and (2) of this subsection’’ and inserting 

‘‘paragraphs (1), (2), and (12)’’ ; and 

(B) by striking ‘‘and including the authorities of paragraphs (4), (6), and 

(8) of this subsection’’ and inserting ‘‘and the authority under sections 9011 

and 9012 and paragraphs (4), (6), and (8),’’. 

(2) By adding at the end the following: 

‘‘(12) REMEDIATION OF OXYGENATED FUEL CONTAMINATION.— 

‘‘(A) IN GENERAL.—The Administrator and the States may use funds 

made available under section 9014(2)(B) to carry out corrective actions with 

respect to a release of a fuel containing an oxygenated fuel additive that 

presents a threat to human health or welfare or the environment. 

‘‘(B) APPLICABLE AUTHORITY.—The Administrator or a State shall carry 

out subparagraph (A) in accordance with paragraph (2), and in the case of 

a State, in accordance with a cooperative agreement entered into by the Administrator and the State under paragraph (7).’’. 

SEC. 1526. RELEASE PREVENTION, COMPLIANCE, AND ENFORCEMENT. 

(a) RELEASE PREVENTION AND COMPLIANCE.—Subtitle I of the Solid Waste Disposal Act (42 U.S.C. 6991 et seq.) is amended by adding at the end the following: 

‘‘SEC. 9011. USE OF FUNDS FOR RELEASE PREVENTION AND COMPLIANCE. 

‘‘Funds made available under section 9014(2)(D) from the Trust Fund may be used 

to conduct inspections, issue orders, or bring actions under this subtitle— 

‘‘(1) by a State, in accordance with a grant or cooperative agreement with the 

Administrator, of State regulations pertaining to underground storage tanks 

regulated under this subtitle; and 

‘‘(2) by the Administrator, for tanks regulated under this subtitle (including 

under a State program approved under section 9004).’’. 

(b) GOVERNMENT-OWNED TANKS.—Section 9003 of the Solid Waste Disposal Act 

(42 U.S.C. 6991b) is amended by adding at the end the following: 

‘‘(i) GOVERNMENT-OWNED TANKS.— 

‘‘(1) STATE COMPLIANCE REPORT.—(A) Not later than 2 years after the date of 

enactment of this subsection, each State that receives funding under this subtitle shall submit to the Administrator a State compliance report that— 

‘‘(i) lists the location and owner of each underground storage tank described in subparagraph (B) in the State that, as of the date of submission 

of the report, is not in compliance with section 9003; and 

‘‘(ii) specifies the date of the last inspection and describes the actions that 

have been and will be taken to ensure compliance of the underground storage tank listed under clause (i) with this subtitle. 

‘‘(B) An underground storage tank described in this subparagraph is an underground storage tank that is— 

‘‘(i) regulated under this subtitle; and 

159 

‘‘(ii) owned or operated by the Federal, State, or local government. 

‘‘(C) The Administrator shall make each report, received under subparagraph 

(A), available to the public through an appropriate media. 

‘‘(2) FINANCIAL INCENTIVE.—The Administrator may award to a State that develops a report described in paragraph (1), in addition to any other funds that 

the State is entitled to receive under this subtitle, not more than $50,000, to 

be used to carry out the report. 

‘‘(3) NOT A SAFE HARBOR.—This subsection does not relieve any person from 

any obligation or requirement under this subtitle.’’. 

(c) PUBLIC RECORD.—Section 9002 of the Solid Waste Disposal Act (42 U.S.C. 

6991a) is amended by adding at the end the following: 

‘‘(d) PUBLIC RECORD.— ‘‘(1) IN GENERAL.—The Administrator shall require each State that receives 

Federal funds to carry out this subtitle to maintain, update at least annually, 

and make available to the public, in such manner and form as the Administrator shall prescribe (after consultation with States), a record of underground 

storage tanks regulated under this subtitle. 

‘‘(2) CONSIDERATIONS.—To the maximum extent practicable, the public record 

of a State, respectively, shall include, for each year— 

‘‘(A) the number, sources, and causes of underground storage tank releases in the State; 

‘‘(B) the record of compliance by underground storage tanks in the State 

with— 

‘‘(i) this subtitle; or 

‘‘(ii) an applicable State program approved under section 9004; and 

‘‘(C) data on the number of underground storage tank equipment failures 

in the State.’’. 

(d) INCENTIVE FOR PERFORMANCE.—Section 9006 of the Solid Waste Disposal Act 

(42 U.S.C. 6991e) is amended by adding at the end the following: 

‘‘(e) INCENTIVE FOR PERFORMANCE.—Both of the following may be taken into account in determining the terms of a civil penalty under subsection (d): 

‘‘(1) The compliance history of an owner or operator in accordance with this 

subtitle or a program approved under section 9004. 

‘‘(2) Any other factor the Administrator considers appropriate.’’. 

(e) TABLE OF CONTENTS.—The table of contents for such subtitle I is amended by 

adding the following new item at the end thereof: 

‘‘Sec. 9011. Use of funds for release prevention and compliance.’’. 

SEC. 1527. DELIVERY PROHIBITION. 

(a) IN GENERAL.—Subtitle I of the Solid Waste Disposal Act (42 U.S.C. 6991 et 

seq.) is amended by adding at the end the following: 

‘‘SEC. 9012. DELIVERY PROHIBITION. 

‘‘(a) REQUIREMENTS.— ‘‘(1) PROHIBITION OF DELIVERY OR DEPOSIT.—Beginning 2 years after the date 

of enactment of this section, it shall be unlawful to deliver to, deposit into, or 

accept a regulated substance into an underground storage tank at a facility 

which has been identified by the Administrator or a State implementing agency 

to be ineligible for fuel delivery or deposit. 

‘‘(2) GUIDANCE.—Within 1 year after the date of enactment of this section, the 

Administrator and States that receive funding under this subtitle shall, in consultation with the underground storage tank owner and product delivery industries, for territory for which they are the primary implementing agencies, publish guidelines detailing the specific processes and procedures they will use to 

implement the provisions of this section. The processes and procedures include, 

at a minimum— 

‘‘(A) the criteria for determining which underground storage tank facilities are ineligible for delivery or deposit; 

‘‘(B) the mechanisms for identifying which facilities are ineligible for delivery or deposit to the underground storage tank owning and fuel delivery 

industries; 

‘‘(C) the process for reclassifying ineligible facilities as eligible for delivery 

or deposit; and 

‘‘(D) a delineation of, or a process for determining, the specified geographic areas subject to paragraph (4). 

‘‘(3) DELIVERY PROHIBITION NOTICE.— 

‘‘(A) ROSTER.—The Administrator and each State implementing agency 

that receives funding under this subtitle shall establish within 24 months 

after the date of enactment of this section a Delivery Prohibition Roster 

listing underground storage tanks under the Administrator’s or the State’s 

160 

jurisdiction that are determined to be ineligible for delivery or deposit pursuant to paragraph (2). 

‘‘(B) NOTIFICATION.—The Administrator and each State, as appropriate, 

shall make readily known, to underground storage tank owners and operators and to product delivery industries, the underground storage tanks listed on a Delivery Prohibition Roster by: 

‘‘(i) posting such Rosters, including the physical location and street 

address of each listed underground storage tank, on official web sites 

and, if the Administrator or the State so chooses, other electronic 

means; 

‘‘(ii) updating these Rosters periodically; and 

‘‘(iii) installing a tamper-proof tag, seal, or other device blocking the 

fill pipes of such underground storage tanks to prevent the delivery of 

product into such underground storage tanks. 

‘‘(C) ROSTER UPDATES.—The Administrator and the State shall update the 

Delivery Prohibition Rosters as appropriate, but not less than once a month 

on the first day of the month. 

‘‘(D) TAMPERING WITH DEVICE.— ‘‘(i) PROHIBITION.—It shall be unlawful for any person, other than an 

authorized representative of the Administrator or a State, as appropriate, to remove, tamper with, destroy, or damage a device installed 

by the Administrator or a State, as appropriate, under subparagraph 

(B)(iii) of this subsection. 

‘‘(ii) CIVIL PENALTIES.—Any person violating clause (i) of this sub- paragraph shall be subject to a civil penalty not to exceed $10,000 for 

each violation. 

‘‘(4) LIMITATION.— ‘‘(A) RURAL AND REMOTE AREAS.—Subject to subparagraph (B), the Administrator or a State shall not include an underground storage tank on a 

Delivery Prohibition Roster under paragraph (3) if an urgent threat to public health, as determined by the Administrator, does not exist and if such 

a delivery prohibition would jeopardize the availability of, or access to, fuel 

in any rural and remote areas. 

‘‘(B) APPLICABILITY OF LIMITATION.—The limitation under subparagraph 

(A) shall apply only during the 180-day period following the date of a determination by the Administrator or the appropriate State that exercising the 

authority of paragraph (3) is limited by subparagraph (A). 

‘‘(b) EFFECT ON STATE AUTHORITY.—Nothing in this section shall affect the authority of a State to prohibit the delivery of a regulated substance to an underground storage tank. 

‘‘(c) DEFENSE TO VIOLATION.—A person shall not be in violation of subsection (a)(1) 

if the underground storage tank into which a regulated substance is delivered is not 

listed on the Administrator’s or the appropriate State’s Prohibited Delivery Roster 

7 calendar days prior to the delivery being made.’’. 

(b) ENFORCEMENT.—Section 9006(d)(2) of such Act (42 U.S.C. 6991e(d)(2)) is 

amended as follows: 

(1) By adding the following new subparagraph after subparagraph (D): 

‘‘(E) the delivery prohibition requirement established by section 9012,’’. 

(2) By adding the following new sentence at the end thereof: ‘‘Any person 

making or accepting a delivery or deposit of a regulated substance to an underground storage tank at an ineligible facility in violation of section 9012 shall 

also be subject to the same civil penalty for each day of such violation.’’. 

(c) TABLE OF CONTENTS.—The table of contents for such subtitle I is amended by 

adding the following new item at the end thereof: 

‘‘Sec. 9012. Delivery prohibition.’’. 

SEC. 1528. FEDERAL FACILITIES. 

Section 9007 of the Solid Waste Disposal Act (42 U.S.C. 6991f) is amended to read 

as follows: 

‘‘SEC. 9007. FEDERAL FACILITIES. 

‘‘(a) IN GENERAL.—Each department, agency, and instrumentality of the executive, 

legislative, and judicial branches of the Federal Government (1) having jurisdiction 

over any underground storage tank or underground storage tank system, or (2) engaged in any activity resulting, or which may result, in the installation, operation, 

management, or closure of any underground storage tank, release response activities 

related thereto, or in the delivery, acceptance, or deposit of any regulated substance 

to an underground storage tank or underground storage tank system shall be subject to, and comply with, all Federal, State, interstate, and local requirements, both 

substantive and procedural (including any requirement for permits or reporting or 

161 

any provisions for injunctive relief and such sanctions as may be imposed by a court 

to enforce such relief), respecting underground storage tanks in the same manner, 

and to the same extent, as any person is subject to such requirements, including 

the payment of reasonable service charges. The Federal, State, interstate, and local 

substantive and procedural requirements referred to in this subsection include, but 

are not limited to, all administrative orders and all civil and administrative penalties and fines, regardless of whether such penalties or fines are punitive or coercive in nature or are imposed for isolated, intermittent, or continuing violations. The 

United States hereby expressly waives any immunity otherwise applicable to the 

United States with respect to any such substantive or procedural requirement (including, but not limited to, any injunctive relief, administrative order or civil or administrative penalty or fine referred to in the preceding sentence, or reasonable 

service charge). The reasonable service charges referred to in this subsection include, but are not limited to, fees or charges assessed in connection with the processing and issuance of permits, renewal of permits, amendments to permits, review 

of plans, studies, and other documents, and inspection and monitoring of facilities, 

as well as any other nondiscriminatory charges that are assessed in connection with 

a Federal, State, interstate, or local underground storage tank regulatory program. 

Neither the United States, nor any agent, employee, or officer thereof, shall be immune or exempt from any process or sanction of any State or Federal Court with 

respect to the enforcement of any such injunctive relief. No agent, employee, or officer of the United States shall be personally liable for any civil penalty under any 

Federal, State, interstate, or local law concerning underground storage tanks with 

respect to any act or omission within the scope of the official duties of the agent, 

employee, or officer. An agent, employee, or officer of the United States shall be subject to any criminal sanction (including, but not limited to, any fine or imprisonment) under any Federal or State law concerning underground storage tanks, but 

no department, agency, or instrumentality of the executive, legislative, or judicial 

branch of the Federal Government shall be subject to any such sanction. The President may exempt any underground storage tank of any department, agency, or instrumentality in the executive branch from compliance with such a requirement if 

he determines it to be in the paramount interest of the United States to do so. No 

such exemption shall be granted due to lack of appropriation unless the President 

shall have specifically requested such appropriation as a part of the budgetary process and the Congress shall have failed to make available such requested appropriation. Any exemption shall be for a period not in excess of one year, but additional 

exemptions may be granted for periods not to exceed one year upon the President’s 

making a new determination. The President shall report each January to the Congress all exemptions from the requirements of this section granted during the preceding calendar year, together with his reason for granting each such exemption. 

‘‘(b) REVIEW OF AND REPORT ON FEDERAL UNDERGROUND STORAGE TANKS.— 

‘‘(1) REVIEW.—Not later than 12 months after the date of enactment of the 

Underground Storage Tank Compliance Act of 2005, each Federal agency that 

owns or operates 1 or more underground storage tanks, or that manages land 

on which 1 or more underground storage tanks are located, shall submit to the 

Administrator, the Committee on Energy and Commerce of the United States 

House of Representatives, and the Committee on the Environment and Public 

Works of the United States Senate a compliance strategy report that— 

‘‘(A) lists the location and owner of each underground storage tank described in this paragraph; 

‘‘(B) lists all tanks that are not in compliance with this subtitle that are 

owned or operated by the Federal agency; 

‘‘(C) specifies the date of the last inspection by a State or Federal inspector of each underground storage tank owned or operated by the agency; 

‘‘(D) lists each violation of this subtitle respecting any underground storage tank owned or operated by the agency; 

‘‘(E) describes the operator training that has been provided to the operator and other persons having primary daily on-site management responsibility for the operation and maintenance of underground storage tanks 

owned or operated by the agency; and 

‘‘(F) describes the actions that have been and will be taken to ensure compliance for each underground storage tank identified under subparagraph 

(B). 

‘‘(2) NOT A SAFE HARBOR.—This subsection does not relieve any person from 

any obligation or requirement under this subtitle.’’. 

SEC. 1529. TANKS ON TRIBAL LANDS. 

(a) IN GENERAL.—Subtitle I of the Solid Waste Disposal Act (42 U.S.C. 6991 et 

seq.) is amended by adding the following at the end thereof: 

162 

‘‘SEC. 9013. TANKS ON TRIBAL LANDS. 

‘‘(a) STRATEGY.—The Administrator, in coordination with Indian tribes, shall, not 

later than 1 year after the date of enactment of this section, develop and implement 

a strategy— 

‘‘(1) giving priority to releases that present the greatest threat to human 

health or the environment, to take necessary corrective action in response to releases from leaking underground storage tanks located wholly within the boundaries of— 

‘‘(A) an Indian reservation; or 

‘‘(B) any other area under the jurisdiction of an Indian tribe; and 

‘‘(2) to implement and enforce requirements concerning underground storage 

tanks located wholly within the boundaries of— 

‘‘(A) an Indian reservation; or 

‘‘(B) any other area under the jurisdiction of an Indian tribe. 

‘‘(b) REPORT.—Not later than 2 years after the date of enactment of this section, 

the Administrator shall submit to Congress a report that summarizes the status of 

implementation and enforcement of this subtitle in areas located wholly within— 

‘‘(1) the boundaries of Indian reservations; and 

‘‘(2) any other areas under the jurisdiction of an Indian tribe. 

The Administrator shall make the report under this subsection available to the public. 

‘‘(c) NOT A SAFE HARBOR.—This section does not relieve any person from any obligation or requirement under this subtitle. 

‘‘(d) STATE AUTHORITY.—Nothing in this section applies to any underground storage tank that is located in an area under the jurisdiction of a State, or that is subject to regulation by a State, as of the date of enactment of this section.’’. 

(b) TABLE OF CONTENTS.—The table of contents for such subtitle I is amended by 

adding the following new item at the end thereof: 

‘‘Sec. 9013. Tanks on Tribal lands.’’. 

SEC. 1530. ADDITIONAL MEASURES TO PROTECT GROUNDWATER. 

(a) IN GENERAL.—Section 9003 of the Solid Waste Disposal Act (42 U.S.C. 6991b) 

is amended by adding the following new subsection at the end: 

‘‘(i) ADDITIONAL MEASURES TO PROTECT GROUNDWATER FROM CONTAIMINATION.— 

The Administrator shall require each State that receives funding under this subtitle 

to require one of the following: 

‘‘(1) TANK AND PIPING SECONDARY CONTAINMENT.—(A) Each new underground 

storage tank, or piping connected to any such new tank, installed after the effective date of this subsection, or any existing underground storage tank, or existing piping connected to such existing tank, that is replaced after the effective 

date of this subsection, shall be secondarily contained and monitored for leaks 

if the new or replaced underground storage tank or piping is within 1,000 feet 

of any existing community water system or any existing potable drinking water 

well. 

‘‘(B) In the case of a new underground storage tank system consisting of one 

or more underground storage tanks and connected by piping, subparagraph (A) 

shall apply to all underground storage tanks and connected pipes comprising 

such system. 

‘‘(C) In the case of a replacement of an existing underground storage tank or 

existing piping connected to the underground storage tank, subparagraph (A) 

shall apply only to the specific underground storage tank or piping being replaced, not to other underground storage tanks and connected pipes comprising 

such system. 

‘‘(D) Each installation of a new motor fuel dispenser system, after the effective date of this subsection, shall include under-dispenser spill containment if 

the new dispenser is within 1,000 feet of any existing community water system 

or any existing potable drinking water well. 

‘‘(E) This paragraph shall not apply to repairs to an underground storage 

tank, piping, or dispenser that are meant to restore a tank, pipe, or dispenser 

to operating condition 

‘‘(F) As used in this subsection: 

‘‘(i) The term ‘secondarily contained’ means a release detection and prevention system that meets the requirements of 40 CFR 280.43(g), but shall 

not include under-dispenser spill containment or control systems. 

‘‘(ii) The term ‘underground storage tank’ has the meaning given to it in 

section 9001, except that such term does not include tank combinations or 

more than a single underground pipe connected to a tank. 

‘‘(iii) The term ‘installation of a new motor fuel dispenser system’ means 

the installation of a new motor fuel dispenser and the equipment necessary 

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to connect the dispenser to the underground storage tank system, but does 

not mean the installation of a motor fuel dispenser installed separately 

from the equipment need to connect the dispenser to the underground storage tank system. 

‘‘(G) The Administrator may issue regulations or guidelines implementing the 

requirements of this subsection. 

‘‘(2) EVIDENCE OF FINANCIAL RESPONSIBILITY AND CERTIFICATION.— 

‘‘(A) MANUFACTURER AND INSTALLER FINANCIAL RESPONSIBILITY.—A person that manufactures an underground storage tank or piping for an underground storage tank system or that installs an underground storage tank 

system is required to maintain evidence of financial responsibility under 

section 9003(d) in order to provide for the costs of corrective actions directly 

related to releases caused by improper manufacture or installation unless 

the person can demonstrate themselves to be already covered as an owner 

or operator of an underground storage tank under section 9003. 

‘‘(B) INSTALLER CERTIFICATION.—The Administrator and each State that 

receives funding under this subtitle, as appropriate, shall require that a 

person that installs an underground storage tank system is— 

‘‘(i) certified or licensed by the tank and piping manufacturer; 

‘‘(ii) certified or licensed by the Administrator or a State, as appropriate; 

‘‘(iii) has their underground storage tank system installation certified 

by a registered professional engineer with education and experience in 

underground storage tank system installation; 

‘‘(iv) has had their installation of the underground storage tank inspected and approved by the Administrator or the State, as appropriate; 

‘‘(v) compliant with a code of practice developed by a nationally recognized association of independent testing laboratory and in accordance 

with the manufacturers instructions; or 

‘‘(vi) compliant with another method that is determined by the Administrator or a State, as appropriate, to be no less protective of human 

health and the environment.’’. 

(b) EFFECTIVE DATE.—This subsection shall take effect 18 months after the date 

of enactment of this subsection 

(c) PROMULGATION OF REGULATIONS OR GUIDELINES.—The Administrator shall 

issue regulations or guidelines implementing the requirements of this subsection, including guidance to differentiate between the terms ‘‘repair’’ and ‘‘replace’’ for the 

purposes of section 9003(i)(1) of the Solid Waste Disposal Act. 

(d) PENALTIES.—Section 9006(d)(2) of such Act (42 U.S.C. 6991e(d)(2)) is amended 

by adding the following new subparagraph after subparagraph (C): 

‘‘(D) the requirements establishd in section 9003(i),’’. 

SEC. 1531. AUTHORIZATION OF APPROPRIATIONS. 

(a) IN GENERAL.—Subtitle I of the Solid Waste Disposal Act (42 U.S.C. 6991 et 

seq.) is amended by adding at the end the following: 

‘‘SEC. 9014. AUTHORIZATION OF APPROPRIATIONS. 

‘‘There are authorized to be appropriated to the Administrator the following 

amounts: 

‘‘(1) To carry out subtitle I (except sections 9003(h), 9005(c), 9011 and 9012) 

$50,000,000 for each of fiscal years 2005 through 2009. 

‘‘(2) From the Trust Fund, notwithstanding section 9508(c)(1) of the Internal 

Revenue Code of 1986: 

‘‘(A) to carry out section 9003(h) (except section 9003(h)(12)) $200,000,000 

for each of fiscal years 2005 through 2009; 

‘‘(B) to carry out section 9003(h)(12), $200,000,000 for each of fiscal years 

2005 through 2009; 

‘‘(C) to carry out sections 9004(f) and 9005(c) $100,000,000 for each of fiscal years 2005 through 2009; and 

‘‘(D) to carry out sections 9011 and 9012 $55,000,000 for each of fiscal 

years 2005 through 2009.’’. 

(b) TABLE OF CONTENTS.—The table of contents for such subtitle I is amended by 

adding the following new item at the end thereof: 

‘‘Sec. 9014. Authorization of appropriations.’’. 

SEC. 1532. CONFORMING AMENDMENTS. 

(a) IN GENERAL.—Section 9001 of the Solid Waste Disposal Act (42 U.S.C. 6991) 

is amended as follows: 

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(1) By striking ‘‘For the purposes of this subtitle—’’ and inserting ‘‘In this subtitle:’’. 

(2) By redesignating paragraphs (1), (2), (3), (4), (5), (6), (7), and (8) as paragraphs (10), (7), (4), (3), (8), (5), (2), and (6), respectively. 

(3) By inserting before paragraph (2) (as redesignated by paragraph (2) of this 

subsection) the following: 

‘‘(1) INDIAN TRIBE.— ‘‘(A) IN GENERAL.—The term ‘Indian tribe’ means any Indian tribe, band, 

nation, or other organized group or community that is recognized as being 

eligible for special programs and services provided by the United States to 

Indians because of their status as Indians. 

‘‘(B) INCLUSIONS.—The term ‘Indian tribe’ includes an Alaska Native village, as defined in or established under the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.).’’. 

(4) By inserting after paragraph (8) (as redesignated by paragraph (2) of this 

subsection) the following: 

‘‘(9) TRUST FUND.—The term ‘Trust Fund’ means the Leaking Underground 

Storage Tank Trust Fund established by section 9508 of the Internal Revenue 

Code of 1986.’’. 

(b) CONFORMING AMENDMENTS.—The Solid Waste Disposal Act (42 U.S.C. 6901 

and following) is amended as follows: 

(1) Section 9003(f) (42 U.S.C. 6991b(f)) is amended— 

(A) in paragraph (1), by striking ‘‘9001(2)(B)’’ and inserting ‘‘9001(7)(B)’’; 

and 

(B) in paragraphs (2) and (3), by striking ‘‘9001(2)(A)’’ each place it appears and inserting ‘‘9001(7)(A)’’. 

(2) Section 9003(h) (42 U.S.C. 6991b(h)) is amended in paragraphs (1), (2)(C), 

(7)(A), and (11) by striking ‘‘Leaking Underground Storage Tank Trust Fund’’ 

each place it appears and inserting ‘‘Trust Fund’’. 

(3) Section 9009 (42 U.S.C. 6991h) is amended— 

(A) in subsection (a), by striking ‘‘9001(2)(B)’’ and inserting ‘‘9001(7)(B)’’; 

and 

(B) in subsection (d), by striking ‘‘section 9001(1) (A) and (B)’’ and inserting ‘‘subparagraphs (A) and (B) of section 9001(10)’’. 

SEC. 1533. TECHNICAL AMENDMENTS. 

The Solid Waste Disposal Act is amended as follows: 

(1) Section 9001(4)(A) (42 U.S.C. 6991(4)(A)) is amended by striking 

‘‘sustances’’ and inserting ‘‘substances’’. 

(2) Section 9003(f)(1) (42 U.S.C. 6991b(f)(1)) is amended by striking ‘‘subsection (c) and (d) of this section’’ and inserting ‘‘subsections (c) and (d)’’. 

(3) Section 9004(a) (42 U.S.C. 6991c(a)) is amended by striking ‘‘in 9001(2)(A) 

or (B) or both’’ and inserting ‘‘in subparagraph (A) or (B) of section 9001(7)’’. 

(4) Section 9005 (42 U.S.C. 6991d) is amended— 

(A) in subsection (a), by striking ‘‘study taking’’ and inserting ‘‘study, taking’’; 

(B) in subsection (b)(1), by striking ‘‘relevent’’ and inserting ‘‘relevant’’; 

and 

(C) in subsection (b)(4), by striking ‘‘Evironmental’’ and inserting ‘‘Environmental’’. 

Subtitle C—Boutique Fuels 

SEC. 1541. REDUCING THE PROLIFERATION OF BOUTIQUE FUELS. 

(a) TEMPORARY WAIVERS DURING SUPPLY EMERGENCIES.—Section 211(c)(4)(C) of 

the Clean Air Act (42 U.S.C. 7545(c)(4)(C)) is amended by inserting ‘‘(i)’’ after ‘‘(C)’’ 

and by adding the following new clauses at the end thereof: 

‘‘(ii) The Administrator may temporarily waive a control or prohibition respecting 

the use of a fuel or fuel additive required or regulated by the Administrator pursuant to subsection (c), (h), (i), (k), or (m) of this section or prescribed in an applicable 

implementation plan under section 110 approved by the Administrator under clause 

(i) of this subparagraph if, after consultation with, and concurrence by, the Secretary of Energy, the Administrator determines that— 

‘‘(I) extreme and unusual fuel or fuel additive supply circumstances exist in 

a State or region of the Nation which prevent the distribution of an adequate 

supply of the fuel or fuel additive to consumers; 

‘‘(II) such extreme and unusual fuel and fuel additive supply circumstances 

are the result of a natural disaster, an Act of God, a pipeline or refinery equipVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00164 Fmt 6659 Sfmt 6621 E:\HR\OC\HR215P1.XXX HR215P1
165 

ment failure, or another event that could not reasonably have been foreseen or 

prevented and not the lack of prudent planning on the part of the suppliers of 

the fuel or fuel additive to such State or region; and 

‘‘(III) it is in the public interest to grant the waiver (for example, when a 

waiver is necessary to meet projected temporary shortfalls in the supply of the 

fuel or fuel additive in a State or region of the Nation which cannot otherwise 

be compensated for). 

‘‘(iii) If the Administrator makes the determinations required under clause (ii), 

such a temporary extreme and unusual fuel and fuel additive supply circumstances 

waiver shall be permitted only if— 

‘‘(I) the waiver applies to the smallest geographic area necessary to address 

the extreme and unusual fuel and fuel additive supply circumstances; 

‘‘(II) the waiver is effective for a period of 20 calendar days or, if the Administrator determines that a shorter waiver period is adequate, for the shortest 

practicable time period necessary to permit the correction of the extreme and 

unusual fuel and fuel additive supply circumstances and to mitigate impact on 

air quality; 

‘‘(III) the waiver permits a transitional period, the exact duration of which 

shall be determined by the Administrator, after the termination of the temporary waiver to permit wholesalers and retailers to blend down their wholesale 

and retail inventory; 

‘‘(IV) the waiver applies to all persons in the motor fuel distribution system; 

and 

‘‘(V) the Administrator has given public notice to all parties in the motor fuel 

distribution system, and local and State regulators, in the State or region to be 

covered by the waiver. 

The term ‘motor fuel distribution system’ as used in this clause shall be defined by 

the Administrator through rulemaking. 

‘‘(iv) Within 180 days of the date of enactment of this clause, the Administrator 

shall promulgate regulations to implement clauses (ii) and (iii). 

‘‘(v) Nothing in this subparagraph shall— 

‘‘(I) limit or otherwise affect the application of any other waiver authority of 

the Administrator pursuant to this section or pursuant to a regulation promulgated pursuant to this section; and 

‘‘(II) subject any State or person to an enforcement action, penalties, or liability solely arising from actions taken pursuant to the issuance of a waiver under 

this subparagraph.’’. 

(b) LIMIT ON NUMBER OF BOUTIQUE FUELS.—Section 211(c)(4)(C) of the Clean Air 

Act (42 U.S.C. 7545(c)(4)), as amended by subsection (a), is further amended by adding at the end the following: 

‘‘(vi)(I) The Administrator shall have no authority, when considering a State implementation plan or a State implementation plan revision, to approve under this 

paragraph any fuel included in such plan or revision if the effect of such approval 

increases the total number of fuels approved under this paragraph as of September 

1, 2004, in all State implementation plans. 

‘‘(II) The Administrator, in consultation with the Secretary of Energy, shall determine the total number of fuels approved under this paragraph as of September 1, 

2004, in all State implementation plans and shall publish a list of such fuels, including the states and Petroleum Administration for Defense District in which they are 

used, in the Federal Register for public review and comment no later than 90 days 

after enactment. 

‘‘(III) The Administrator shall remove a fuel from the list published under subclause (II) if a fuel ceases to be included in a State implementation plan or if a fuel 

in a State implementation plan is identical to a Federal fuel formulation implemented by the Administrator, but the Administrator shall not reduce the total number of fuels authorized under the list published under subclause (II). 

‘‘(IV) Subclause (I) shall not limit the Administrator’s authority to approve a control or prohibition respecting any new fuel under this paragraph in a State implementation plan or revision to a State implementation plan if such new fuel: 

‘‘(aa) completely replaces a fuel on the list published under subclause (II); or 

‘‘(bb) does not increase the total number of fuels on the list published under 

subclause (II) as of September 1, 2004. 

In the event that the total number of fuels on the list published under subclause 

(II) at the time of the Administrator’s consideration of a control or prohibition respecting a new fuel is lower than the total number of fuels on such list as of September 1, 2004, the Administrator may approve a control or prohibition respecting 

a new fuel under this subclause if the Administrator, after consultation with the 

Secretary of Energy, publishes in the Federal Register after notice and comment a 

finding that, in the Administrator’s judgment, such control or prohibition respecting 

166 

a new fuel will not cause fuel supply or distribution interruptions or have a significant adverse impact on fuel producibility in the affected area or contiguous areas. 

‘‘(V) The Administrator shall have no authority under this paragraph, when considering any particular State’s implementation plan or a revision to that State’s implementation plan, to approve any fuel unless that fuel was, as of the date of such 

consideration, approved in at least one State implementation plan in the applicable 

Petroleum Administration for Defense District. However, the Administrator may approve as part of a State implementation plan or State implementation plan revision 

a fuel with a summertime Reid Vapor Pressure of 7.0 psi. In no event shall such 

approval by the Administrator cause an increase in the total number of fuels on the 

list published under subclause (II). 

‘‘(VI) Nothing in this clause shall be construed to have any effect regarding any 

available authority of States to require the use of any fuel additive registered in accordance with subsection (b), including any fuel additive registered in accordance 

with subsection (b) after the enactment of this subclause.’’. 

(c) STUDY AND REPORT TO CONGRESS ON BOUTIQUE FUELS.— 

(1) JOINT STUDY.—The Administrator of the Environmental Protection Agency 

and the Secretary of Energy shall undertake a study of the effects on air quality, on the number of fuel blends, on fuel availability, on fuel fungibility, and 

on fuel costs of the State plan provisions adopted pursuant to section 

211(c)(4)(C) of the Clean Air Act (42 U.S.C. 7545(c)(4)(C)). 

(2) FOCUS OF STUDY.—The primary focus of the study required under paragraph (1) shall be to determine how to develop a Federal fuels system that 

maximizes motor fuel fungibility and supply, preserves air quality standards, 

and reduces motor fuel price volatility that results from the proliferation of boutique fuels, and to recommend to Congress such legislative changes as are necessary to implement such a system. The study should include the impacts on 

overall energy supply, distribution, and use as a result of the legislative 

changes recommended. 

(3) RESPONSIBILITY OF ADMINISTRATOR.—In carrying out the study required by 

this section, the Administrator shall coordinate obtaining comments from affected parties interested in the air quality impact assessment portion of the 

study. The Administrator shall use sound and objective science practices, shall 

consider the best available science, and shall consider and include a description 

of the weight of the scientific evidence. 

(4) RESPONSIBILITY OF SECRETARY.—In carrying out the study required by this 

section, the Secretary shall coordinate obtaining comments from affected parties 

interested in the fuel availability, number of fuel blends, fuel fungibility and 

fuel costs portion of the study. 

(5) REPORT TO CONGRESS.—The Administrator and the Secretary jointly shall 

submit the results of the study required by this section in a report to the Congress not later than 12 months after the date of the enactment of this Act, together with any recommended regulatory and legislative changes. Such report 

shall be submitted to the Committee on Energy and Commerce of the House of 

Representatives and the Committee on Environment and Public Works of the 

Senate. 

(6) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated jointly to the Administrator and the Secretary $500,000 for the completion of the study required under this subsection. 

(d) DEFINITIONS.—In this section: 

(1) The term ‘‘Administrator’’ means the Administrator of the Environmental 

Protection Agency. 

(2) The term ‘‘Secretary’’ means the Secretary of Energy. 

(3) The term ‘‘fuel’’ means gasoline, diesel fuel, and any other liquid petroleum product commercially known as gasoline and diesel fuel for use in highway 

and nonroad motor vehicles. 

(4) The term ‘‘a control or prohibition respecting a new fuel’’ means a control 

or prohibition on the formulation, composition, or emissions characteristics of a 

fuel that would require the increase or decrease of a constituent in gasoline or 

diesel fuel. 

TITLE XVI—STUDIES 

SEC. 1601. STUDY ON INVENTORY OF PETROLEUM AND NATURAL GAS STORAGE. 

(a) DEFINITION.—For purposes of this section ‘‘petroleum’’ means crude oil, motor 

gasoline, jet fuel, distillates, and propane. 

167 

(b) STUDY.—The Secretary of Energy shall conduct a study on petroleum and natural gas storage capacity and operational inventory levels, nationwide and by major 

geographical regions. 

(c) CONTENTS.—The study shall address— 

(1) historical normal ranges for petroleum and natural gas inventory levels; 

(2) historical and projected storage capacity trends; 

(3) estimated operation inventory levels below which outages, delivery slowdown, rationing, interruptions in service, or other indicators of shortage begin 

to appear; 

(4) explanations for inventory levels dropping below normal ranges; and 

(5) the ability of industry to meet United States demand for petroleum and 

natural gas without shortages or price spikes, when inventory levels are below 

normal ranges. 

(d) REPORT TO CONGRESS.—Not later than 1 year after the date of enactment of 

this Act, the Secretary of Energy shall submit a report to Congress on the results 

of the study, including findings and any recommendations for preventing future supply shortages. 

SEC. 1605. STUDY OF ENERGY EFFICIENCY STANDARDS. 

The Secretary of Energy shall contract with the National Academy of Sciences for 

a study, to be completed within 1 year after the date of enactment of this Act, to 

examine whether the goals of energy efficiency standards are best served by measurement of energy consumed, and efficiency improvements, at the actual site of energy consumption, or through the full fuel cycle, beginning at the source of energy 

production. The Secretary shall submit the report to Congress. 

SEC. 1606. TELECOMMUTING STUDY. 

(a) STUDY REQUIRED.—The Secretary, in consultation with the Commission, the 

Director of the Office of Personnel Management, the Administrator of General Services, and the Administrator of NTIA, shall conduct a study of the energy conservation implications of the widespread adoption of telecommuting by Federal employees 

in the United States. 

(b) REQUIRED SUBJECTS OF STUDY.—The study required by subsection (a) shall 

analyze the following subjects in relation to the energy saving potential of telecommuting by Federal employees: 

(1) Reductions of energy use and energy costs in commuting and regular office 

heating, cooling, and other operations. 

(2) Other energy reductions accomplished by telecommuting. 

(3) Existing regulatory barriers that hamper telecommuting, including barriers to broadband telecommunications services deployment. 

(4) Collateral benefits to the environment, family life, and other values. 

(c) REPORT REQUIRED.—The Secretary shall submit to the President and Congress 

a report on the study required by this section not later than 6 months after the date 

of enactment of this Act. Such report shall include a description of the results of 

the analysis of each of the subject described in subsection (b). 

(d) DEFINITIONS.—As used in this section: 

(1) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Energy. 

(2) COMMISSION.—The term ‘‘Commission’’ means the Federal Communications Commission. 

(3) NTIA.—The term ‘‘NTIA’’ means the National Telecommunications and Information Administration of the Department of Commerce. 

(4) TELECOMMUTING.—The term ‘‘telecommuting’’ means the performance of 

work functions using communications technologies, thereby eliminating or substantially reducing the need to commute to and from traditional worksites. 

(5) FEDERAL EMPLOYEE.—The term ‘‘Federal employee’’ has the meaning provided the term ‘‘employee’’ by section 2105 of title 5, United States Code. 

SEC. 1607. LIHEAP REPORT. 

Not later than 1 year after the date of enactment of this Act, the Secretary of 

Health and Human Services shall transmit to Congress a report on how the LowIncome Home Energy Assistance Program could be used more effectively to prevent 

loss of life from extreme temperatures. In preparing such report, the Secretary shall 

consult with appropriate officials in all 50 States and the District of Columbia. 

SEC. 1608. OIL BYPASS FILTRATION TECHNOLOGY. 

The Secretary of Energy and the Administrator of the Environmental Protection 

Agency shall— 

(1) conduct a joint study of the benefits of oil bypass filtration technology in 

reducing demand for oil and protecting the environment; 

(2) examine the feasibility of using oil bypass filtration technology in Federal 

motor vehicle fleets; and 

168 

(3) include in such study, prior to any determination of the feasibility of using 

oil bypass filtration technology, the evaluation of products and various manufacturers. 

SEC. 1609. TOTAL INTEGRATED THERMAL SYSTEMS. 

The Secretary of Energy shall— 

(1) conduct a study of the benefits of total integrated thermal systems in reducing demand for oil and protecting the environment; and 

(2) examine the feasibility of using total integrated thermal systems in Department of Defense and other Federal motor vehicle fleets. 

SEC. 1610. UNIVERSITY COLLABORATION. 

Not later than 2 years after the date of enactment of this Act, the Secretary of 

Energy shall transmit to Congress a report that examines the feasibility of promoting collaborations between large institutions of higher education and small institutions of higher education through grants, contracts, and cooperative agreements 

made by the Secretary for energy projects. The Secretary shall also consider providing incentives for the inclusion of small institutions of higher education, including minority-serving institutions, in energy research grants, contracts, and cooperative agreements. 

SEC. 1611. RELIABILITY AND CONSUMER PROTECTION ASSESSMENT. 

Not later than 5 years after the date of enactment of this Act, and each 5 years 

thereafter, the Federal Energy Regulatory Commission shall assess the effects of the 

exemption of electric cooperatives and government-owned utilities from Commission 

regulation under section 201(f) of the Federal Power Act. The assessment shall include any effects on— 

(1) reliability of interstate electric transmission networks; 

(2) benefit to consumers, and efficiency, of competitive wholesale electricity 

markets; 

(3) just and reasonable rates for electricity consumers; and 

(4) the ability of the Commission to protect electricity consumers. 

If the Commission finds that the 201(f) exemption results in adverse effects on consumers or electric reliability, the Commission shall make appropriate recommendations to Congress pursuant to section 311 of the Federal Power Act. 

SEC. 1612. REPORT ON ENERGY INTEGRATION WITH LATIN AMERICA. 

The Secretary of Energy shall submit an annual report to the Committee on Energy and Commerce of the United States House of Representatives and to the Committee on Energy and Natural Resources of the United States Senate concerning the 

status of energy export development in Latin America and efforts by the Secretary 

and other departments and agencies of the United States to promote energy integration with Latin America. The report shall contain a detailed analysis of the status 

of energy export development in Mexico and a description of all significant efforts 

by the Secretary and other departments and agencies to promote a constructive relationship with Mexico regarding the development of that nation’s energy capacity. 

In particular this report shall outline efforts the Secretary and other departments 

and agencies have made to ensure that regulatory approval and oversight of United 

States/Mexico border projects that result in the expansion of Mexican energy capacity are effectively coordinated across departments and with the Mexican government. 

SEC. 1613. LOW-VOLUME GAS RESERVOIR STUDY. 

(a) STUDY.—The Secretary of Energy shall make a grant to an organization of oil 

and gas producing States, specifically those containing significant numbers of marginal oil and natural gas wells, for conducting an annual study of low-volume natural gas reservoirs. Such organization shall work with the State geologist of each 

State being studied. 

(b) CONTENTS.—The studies under this section shall— 

(1) determine the status and location of marginal wells and gas reservoirs; 

(2) gather the production information of these marginal wells and reservoirs; 

(3) estimate the remaining producible reserves based on variable pipeline 

pressures; 

(4) locate low-pressure gathering facilities and pipelines; 

(5) recommend incentives which will enable the continued production of these 

resources; 

(6) produce maps and literature to disseminate to States to promote conservation of natural gas reserves; and 

(7) evaluate the amount of natural gas that is being wasted through the practice of venting or flaring of natural gas produced in association with crude oil 

well production. 

169 

(c) DATA ANALYSIS.—Data development and analysis under this section shall be 

performed by an institution of higher education with GIS capabilities. If the organization receiving the grant under subsection (a) does not have GIS capabilities, such 

organization shall contract with one or more entities with— 

(1) technological capabilities and resources to perform advanced image processing, GIS programming, and data analysis; and 

(2) the ability to— 

(A) process remotely sensed imagery with high spatial resolution; 

(B) deploy global positioning systems; 

(C) process and synthesize existing, variable-format gas well, pipeline, 

gathering facility, and reservoir data; 

(D) create and query GIS databases with infrastructure location and attribute information; 

(E) write computer programs to customize relevant GIS software; 

(F) generate maps, charts, and graphs which summarize findings from 

data research for presentation to different audiences; and 

(G) deliver data in a variety of formats, including Internet Map Server 

for query and display, desktop computer display, and access through 

handheld personal digital assistants. 

(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated 

to the Secretary of Energy for carrying out this section— 

(1) $1,500,000 for fiscal year 2006; and 

(2) $450,000 for each of the fiscal years 2007 through 2010. 

(e) DEFINITIONS.—For purposes of this section, the term ‘‘GIS’’ means geographic 

information systems technology that facilitates the organization and management of 

data with a geographic component. 

PURPOSE AND SUMMARY

Daily life in America requires energy that is abundant, affordable and reliable. Energy is fundamental to prosperity and general 

welfare, both for this Nation and its families. Energy security is 

critical in a world of growing demand and regional political instability. Dependence on any single source of energy, especially from 

a foreign country, leaves America vulnerable to price shocks and 

supply shortages. 

The purpose of the H.R. 1640, ‘‘The Energy Policy Act of 2005’’ 

is to promote energy conservation and increase the availability of 

energy supplies nationwide. This legislation makes a significant 

and meaningful contribution toward ensuring America’s continued 

welfare and security by providing for its long-term energy needs. 

Energy production and environmental protection are non-exclusive national goals. In recent decades, technological advances have 

made energy development and use more efficient and less environmentally harmful. Building on this trend, the Energy Policy Act of 

2005 encourages energy production and demand reduction by promoting new technology, more efficient processes, and greater public 

awareness. 

The Energy Policy Act of 2005 addresses a wide range of issues 

related to energy production, generation, transportation, and consumption. It accelerates market penetration for clean coal technologies, encourages the use of alternative transportation fuels, 

changes the reformulated gasoline program, and promotes energy 

conservation and efficiency. The legislation also is designed to improve the hydropower licensing process and provide incentives to 

expand use of nuclear energy. Finally, H.R. 1640 addresses the 

need for investment in electric transmission capacity, as well as 

improvements to competitive wholesale electricity markets, along 

with a number of other attempts to modernize the electricity industry. 

170 

BACKGROUND AND NEED FOR LEGISLATION

According to the Energy Information Administration, U.S. energy 

consumption will increasingly outpace energy production over the 

next 20 years. Total U.S. energy consumption is projected to grow 

35% by 2025, from 98.2 quadrillion BTU to 133.2 quadrillion BTU. 

Computers, electronic equipment, appliances, telecommunications, 

and transportation will account for the bulk of this growth. Meeting this demand requires combining increased energy production 

with more efficient use of existing energy supplies. 

Energy intensity, the amount of energy it takes to produce one 

dollar of gross domestic product, has steadily declined in the 

United States over the past three decades. Thus, while the economy has grown by 126% since 1970, energy consumption has increased by only 30%. These gains are largely the result of advances 

not only in technology, but also the improved management and application of that technology. As consumer choice is a driver of energy efficiency, Federal programs such as energy labels and Energy 

Star enable consumers to make energy-conscious purchasing decisions. Furthermore, the Department of Energy (DOE) established 

energy conservation standards on a variety of consumer, commercial, and industrial products have resulted in substantial increases 

in energy efficiency. By investing in the future and procuring energy efficient products, Federal and state governments promote energy efficiency by better managing their inherently large energy demands. A variety of Federal grant programs, such as weatherization assistance and state energy programs, have spurred significant 

progress in energy efficiency at all levels of government. If the Nation is to meet its energy needs in the coming decades, continued 

advances in energy efficiency and conservation will play a significant part. 

Nuclear energy provides 20% of the Nation’s electricity. There 

are 103 operating commercial nuclear reactors in the United 

States, most of these located east of the Mississippi River. It has 

been over 25 years since the Nuclear Regulatory Commission 

(NRC) issued a license to construct a new nuclear power plant. As 

recently as a few years ago, it was thought that most of the existing fleet of nuclear reactors would be closed over the next 30 years. 

However, the industry has expressed a renewed interest in extending the licenses of existing nuclear plants, as well as constructing 

a new generation of advanced nuclear plants as an emission-free 

alternative to other fuels. 

According to the Energy Information Administration (EIA) Annual Energy Outlook 2005, the U.S. consumes over 20 million barrels of petroleum each day, 67% of which is used for transportation 

needs. Over the next 20 years, oil imports are expected to rise from 

a current 56% share to 68% of total demand; natural gas imports 

are expected to increase from 15% to 28% over the same time. The 

domestic petroleum refining industry is operating at 95% of capacity. Due to a lack of capacity, refined product imports are expected 

to grow from 7.9% to 10.7% of total refined product by 2025. The 

Strategic Petroleum Reserve (SPR) was established in 1975 to ‘‘diminish the vulnerability of the United States to the effects of a severe energy supply interruption, and provide limited protection 

from the short-term consequences of interruptions in supplies of peVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00170 Fmt 6659 Sfmt 6602 E:\HR\OC\HR215P1.XXX HR215P1
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troleum products.’’ The SPR has four sites used for crude oil storage, with an aggregated crude oil storage capacity of 727 million 

barrels. The Energy Policy Act of 2005 urges the Secretary of Energy to fill the SPR up to the 1 billion barrel level already authorized by Congress. 

Hydropower is the largest source of renewable energy in the U.S. 

and provides about 7% of the electricity consumed in the U.S. according to the EIA. Over the next 15 years, more than half of this 

Nation’s hydroelectric power projects (roughly 30,000 megawatts) 

must be relicensed. Current law gives the Federal resources agencies (U.S. Fish and Wildlife Service, U.S. Forest Service, and National Marine Fisheries Service) authority to impose mandatory 

conditions on hydroelectric power licenses issued by the Federal 

Energy Regulatory Commission (FERC). One of the areas identified 

by current and prospective licensees to improve the licensing process is requiring agencies to consider alternative conditions proposed by a licensee. Current law does not require agencies to consider alternative conditions that may be less costly (in dollars or 

energy lost) while not compromising environmental protection. 

The United States presently generates just over half of its total 

electric power by burning coal, relying largely on domestic resources that constitute an estimated 25% of the world’s total recoverable reserves of coal. Coal also represents over 94% of the Nation’s proven fossil energy reserves. Despite this abundance of recoverable resources and the Nation’s historical reliance on coal for 

electric power generation, plans to build new coal-fired generation 

face obstacles. A number of factors contribute to this situation, including the high capital and operating costs of currently available 

clean coal technology along with uncertainty over future environmental requirements. The Clean Coal Technology Demonstration 

Program (CCT) has sought to address this situation and demonstrate the feasibility of new coal-generation technology and processes. As of 2005, 32 CCT projects had been completed and an additional 3 projects were in process. Two of these projects are in the 

operation phase and an integrated gasification combined cycle 

(IGCC) project is in its design phase. 

Investment in electric transmission expansion has not kept pace 

with electricity demand. Moreover, transmission system reliability 

is suspect as demonstrated by the blackout that hit the Northeast 

and Midwest in August of 2003. Legislation is needed to address 

the issues of transmission capacity, operation, and reliability. In 

addition, state regulatory approval delays siting of new transmission lines by many years. Even if a project is completed, there 

is uncertainty as to whether utilities will be able to recover all of 

their investment, which hinders new transmission construction. 

Measures proposed, such as repealing the Public Utility Holding 

Company Act, would facilitate needed investment in the transmission sector. 

Taken together, these issues highlight the need to promote innovation, conservation, and new domestic energy supplies. Reliable 

sources of energy will secure millions of jobs and make America 

less dependent on the outcomes of global conflicts. Ultimately, a 

comprehensive energy policy will provide better security for American families and a higher quality of life. 

172 

HEARINGS

The Full Committee on Energy and Commerce held a hearing entitled ‘‘The Department of Energy’s Fiscal Year 2006 Budget Proposal and the Energy Policy Act of 2005: Ensuring Jobs for Our Future with Secure and Reliable Energy’’ on February 9, 2005. The 

Committee received testimony from The Honorable Samuel W. 

Bodman, Secretary, U.S. Department of Energy. 

The Subcommittee on Energy and Air Quality held the first in 

a series of hearings on a comprehensive national energy policy on 

February 10, 2005. The Subcommittee received testimony from: 

The Honorable David K. Garman, Assistant Secretary, Office of Energy Efficiency and Renewable Energy, U.S. Department of Energy; 

Ms. Cynthia Marlette, General Counsel, Federal Energy Regulatory 

Commission; Mr. Luis Reyes, Executive Director for Operations, 

Nuclear Regulatory Commission; Mr. Guy F. Caruso, Administrator, Energy Information Administration; The Honorable Marilyn 

Showalter, President, National Association of Regulatory Utility 

Commissioners; The Honorable Frank H. Murkowski, Governor, 

State of Alaska; The Honorable Victor Carrillo, Chairman, Railroad 

Commission of Texas; Mr. Thomas R. Kuhn, President, Edison 

Electric Institute; Ms. Lynne H. Church, President, Electric Power 

Supply Association; Mr. Alan Richardson, President and CEO, 

American Public Power Association; Mr. Ed Hansen, General Manager, Snohomish County Public Utility District; Mr. Glenn English, 

CEO, National Rural Electric Cooperative Association; Ms. Kateri 

Callahan, President, Alliance to Save Energy; Mr. Marty Kanner, 

President, Kanner & Associates; Mr. Mark Cooper, Research Director, Consumer Federation of America; and Mr. Steven Nadel, Executive Director, American Council for an Energy-Efficient Economy. 

The Subcommittee on Energy and Air Quality held its second 

hearing on a comprehensive national energy policy on February 16, 

2005. The Subcommittee received testimony from Mr. Red 

Cavaney, President, American Petroleum Institute; Mr. Bob 

Dinneen, President and CEO, Renewable Fuels Association; Mr. 

Bob Slaughter, President, National Petrochemical & Refiners Association; Mr. Erik Olson, Senior Attorney, Natural Resources Defense Council; Mr. Lee O. Fuller, Vice President of Government Relations, Independent Petroleum Association of America; Mr. Laurence M. Downes, Chairman, American Gas Association; Mr. Gerald Norlander, Executive Director, Public Utility Law Project, National Association of State Utility Consumer Advocates; Mr. David 

Hamilton, Director, Global Warming and Energy Programs, Sierra 

Club; Mr. Donald F. Santa, Jr., President, Interstate Natural Gas 

Association; Mr. John Kane, Senior Vice President, Government Affairs, Nuclear Energy Institute; Mr. Navin Nayak, Environmental 

Advocate, U.S. Public Interest Research Group; Mr. James H. Hancock, Jr., Chair, Legislative Affairs Committee, National Hydropower Association; Mr. Andrew Fahlund, Vice President for Restoration and Protection, American Rivers; Mr. John E. Shelk, Senior Vice President, Government Affairs, National Mining Association; Mr. Alan Nogee, Director, Clean Energy Program, Union of 

Concerned Scientists; and, Mr. Rhone Resch, President, Solar Energy Industries Association. 

173 

COMMITTEE CONSIDERATION

On Tuesday, April 5, 2005, Wednesday, April 6, 2005, Tuesday 

April 12, 2005, and, Wednesday April 13, 2005, the Full Committee 

met in open markup session and ordered a Committee Print reported to the House, as amended, by a record vote of 39 yeas and 

16 nays. A request by Mr. Barton to allow a report to be filed on 

a bill to be introduced by Mr. Barton, and that the actions of the 

Committee be deemed as actions on that bill, was agreed to by 

unanimous consent. 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. The following are 

the recorded votes taken on amendments offered to the measure, 

including the names of those Members voting for and against. A 

motion by Mr. Barton to order the Committee Print reported to the 

House, as amended, was agreed to by a record vote of 39 yeas and 

16 nays. 

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COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee held legislative and oversight 

hearings and made findings that are reflected in this report. 

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

The goal of the Energy Policy Act of 2005 is to enhance energy 

conservation and increase the supply of various energy sources for 

the American people. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee finds that H.R. 1640, the 

Energy Policy Act of 2005, would result in no new or increased 

budget authority, entitlement authority, or tax expenditures or revenues. 

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, April 19, 2005. 

Hon. JOE BARTON, 

Chairman, Committee on Energy and Commerce, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 1640, the Energy Policy 

Act of 2005. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Lisa Cash Driskill. 

Sincerely, 

ELIZABETH M. ROBINSON

(For Douglas Holtz-Eakin, Director). 

Enclosure. 

H.R. 1640—Energy Policy Act of 2005 

Summary: H.R. 1640 would authorize funding for several programs aimed at energy production, conservation, and research and 

development. It would authorize the use of energy savings performance contracts (ESPCs), make several changes to the regulatory 

framework governing the nation’s electricity system, reauthorize 

the Low-Income Home Energy Assistance Program (LIHEAP), and 

207 

establish a program for hydrogen and other alternative fuel-powered cars. 

Most of the bill’s estimated costs would stem from changes in 

spending subject to appropriation. We estimate that implementing 

H.R. 1640 would cost $5.4 billion in 2006, and $33.5 billion over 

the 2006–2010 period, assuming appropriation of the necessary 

amounts. 

CBO estimates that enacting H.R. 1640 also would increase direct spending by $159 million in 2006, by $1.2 billion over the 

2006–2010 period, and by $1.7 billion over the 2006–2015 period. 

CBO estimates that enacting the bill would increase revenues by 

$38 million in 2006, by $190 million over the 2006–2010 period, 

and by $380 million over the 2006–2015 period. 

H.R. 1640 contains numerous mandates as defined in the Unfunded Mandates Reform Act (UMRA) that would affect both intergovernmental and private-sector entities. Based on its review of the 

bill, CBO expects that the mandates (new requirements, limits on 

existing rights, and preemptions) contained in the bill’s titles on 

motor fuels (title XV), nuclear energy (title VI), electricity (title 

XII), and energy efficiency (title I) would have the greatest impact 

on state and local governments and private-sector entities. 

CBO estimates that the cost of complying with intergovernmental mandates, in aggregate, could be significant and likely 

would exceed the threshold established in UMRA ($62 million in 

2005, adjusted annually for inflation) at some point over the next 

five years because we expect that future damage awards for state 

and local governments under the bill’s safe harbor provision would 

likely be reduced. That provision would shield manufacturers of 

motor fuels and other persons from liability for claims based on defective product relating to motor fuels containing methyl tertiary 

butyl ether or renewable fuel. 

CBO cannot determine whether the aggregate cost of the privatesector mandates in the bill would exceed the threshold established 

in UMRA primarily for two reasons. First, some of the requirements established by the bill would hinge on future regulatory action, about which information is not available. Second, UMRA does 

not specify whether CBO should measure the cost of extending a 

mandate relative to the mandate’s current costs or assume that the 

mandate will expire and measure the costs of the mandate’s extension as if the requirement were new. The bill would extend the existing mandate that requires licensees to pay fees to offset roughly 

90 percent of the Nuclear Regulatory Commission’s (NRC’s) annual 

appropriation. Measured against the costs that would be incurred 

if current law remains in place, the cost to the private sector of extending this mandate would exceed the annual threshold established in UMRA ($123 million in 2005, adjusted annually for inflation). 

Estimated Cost to the Federal Government: The estimated budgetary impact of H.R. 1640 is shown in Table 1. The costs of this 

legislation fall within budget functions 270 (energy), 300 (natural 

resources and environment), 350 (agriculture), and 800 (general 

government). 

208 

TABLE 1.—ESTIMATED BUDGETARY IMPACT OF H.R. 1640 

By fiscal year, in millions of dollars— 

2006 2007 2008 2009 2010 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 

Estimated Authorization Level ...................................................................... 11,256 11,723 6,759 6,224 5,756 

Estimated Outlays ......................................................................................... 5,359 8,551 6,956 6,466 6,130 

CHANGES IN DIRECT SPENDING 

Estimated Budget Authority .......................................................................... 214 450 300 150 100 

Estimated Outlays ......................................................................................... 159 378 343 160 120 

CHANGES IN REVENUES 

Estimated Revenues ...................................................................................... 38 38 38 38 38 

Basis of Estimate: For this estimate, CBO assumes that H.R. 

1640 will be enacted near the end of fiscal year 2005. Additionally, 

CBO assumes that the full estimated amounts will be appropriated 

for each year and that spending will follow historical rates for ongoing activities. Table 2 details the components of estimated spending subject to appropriation under H.R. 1640. (Table 3, provided 

later, details the bill’s direct spending effects.) 

TABLE 2.—ESTIMATED EFFECTS ON H.R. 1640 ON SPENDING SUBJECT TO APPROPRIATION 

By fiscal year, in millions of dollars— 

2005 2006 2007 2008 2009 2010 

SPENDING SUBJECT TO APPROPRIATION 

Discretionary Spending Under Current Law: 

Authorization Level 1 ............................................................ 4,604 0 0 0 0 0 

Estimated Outlays ............................................................... 4,104 1,736 434 91 29 29 

Proposed Changes: 

Specified Authorization Level .............................................. 0 10,890 11,302 6,311 5,893 5,367 

Estimated Outlays ............................................................... 0 5,140 8,228 6,629 6,107 5,729 

Estimated Authorizations: 

Energy Conservation Measures (Title I): 

Estimated Authorization Level ........................... 0 74 95 88 72 72 

Estimated Outlays ............................................. 0 61 95 88 73 72 

Renewable Energy Production Incentive (Title II): 

Estimated Authorization Level ........................... 0 100 23 13 8 27 

Estimated Outlays ............................................. 0 70 46 16 10 21 

Loan Guarantees for Coal Projects (Title IV): 

Estimated Authorization Level ........................... 0 1 125 125 75 75 

Estimated Outlays ............................................. 0 1 10 30 64 105 

Energy Development on Indian Land (Title V): 

Estimated Authorization Level ........................... 0 83 98 93 83 73 

Estimated Outlays ............................................. 0 31 63 90 94 86 

Nuclear Energy Provisions (Title VI): 

Estimated Authorization Level ........................... 0 45 71 71 86 86 

Estimated Outlays ............................................. 0 42 72 71 86 86 

Loan Guarantees for Ethanol Production (Title XV): 

Estimated Authorization Level ........................... 0 50 0 50 0 50 

Estimated Outlays ............................................. 0 5 25 25 25 25 

Other Provisions: 

Estimated Authorization Level ........................... 0 13 9 8 8 7 

Estimated Outlays ............................................. 0 10 12 8 8 7 

Subtotal, Estimated Authorizations: 

Estimated Authorization Level ........................... 0 366 421 448 331 389 

Estimated Outlays ............................................. 0 219 323 327 359 402 

Total Proposed Changes: 

Estimated Authorization Level .................................... 0 11,256 11,723 6,759 6,224 5,756 

Estimated Outlays ...................................................... 0 5,359 8,551 6,956 6,466 6,130 

Discretionary Spending Under H.R. 1640: 

Estimated Authorization Level ............................................. 4,604 11,256 11,723 6,759 6,224 5,756 

209 

TABLE 2.—ESTIMATED EFFECTS ON H.R. 1640 ON SPENDING SUBJECT TO APPROPRIATION— 

Continued 

By fiscal year, in millions of dollars— 

2005 2006 2007 2008 2009 2010 

Estimated Outlays ............................................................... 4,104 7,095 8,985 7,047 6,495 6,159 

1 The 2005 amount is the sum appropriated for that year for energy research and development programs and for LIHEAP. 

Spending subject to appropriation—overview 

H.R. 1640 contains several provisions that specify amounts authorized to be appropriated for the Low-Income Home Energy Assistance Program (LIHEAP), energy research and development programs, and energy conservation. Additionally, the bill would authorize unspecified amounts to be appropriated for incentives to 

use renewable energy, loan guarantees for certain types of energy 

facilities, and several other energy programs, studies, and reports. 

Assuming appropriation of the necessary amounts, CBO estimates 

that implementing these provisions would cost $5.4 billion in 2006 

and $33.5 billion over the 2006–2010 period. The following two sections detail the costs of specified and estimated authorizations. (A 

discussion of direct spending and revenue effects follows the next 

two sections.) 

Spending subject to appropriation: specified authorizations 

CBO estimates that implementing the bill’s programs with speci- fied authorizations would cost about $32 billion over the 2006–2010 

period. That estimate assumes that all amounts authorized to be 

appropriated for these programs—about $40 billion over the next 

five years—will be provided each year. 

Low-Income Home Energy Assistance Program (LIHEAP). 

LIHEAP is the largest program that would be authorized by the 

legislation. The bill would authorize funding of $5.1 billion for each 

of the next two years. Assuming appropriation of the authorized 

amounts, CBO estimates that implementing this provision would 

cost about $7.9 billion over the 2006–2010 period. 

Under current law, a total of $2.2 billion was appropriated for 

fiscal year 2005. These funds’ include $1.9 billion for the basic formula grant for states to provide energy assistance for low-income 

households, and $300 million for additional energy assistance for 

emergency needs. Implementing H.R. 1640 would increase the authorization for the basic formula grant for states to $5.1 billion in 

fiscal year 2006 and extend this authorized level through fiscal 

year 2007. The extension of the basic formula grant would automatically extend the authorization of emergency funding through 

fiscal year 2007 at $600 million per year. The emergency funds are 

made available only after a formal request by the President that 

includes a designation of the amount requested as an emergency 

requirement as defined in the Balanced Budget and Emergency 

Deficit Control Act. 

Other Specified Program Authorizations. The bill also would specifically authorize funds ‘‘to be appropriated for several other energy-related programs. CBO estimates that over the 2006–2010 period implementing H.R. 1640 would cost: 

• Nearly $2 billion for the Department of Energy’s (DOE’s) 

energy conservation programs (title I); 

210 

• $1.5 billion for renewable energy grants and research 

projects (title II); • $1.4 billion to research and demonstrate new technologies 

that use coal (title IV); • $390 million for research on nuclear energy technologies, 

including a new program to research, develop, design, construct, and operate an Advanced Reactor Hydrogen Cogeneration Project (title VI); • $1.4 billion for research and demonstration of vehicles that 

use alternative transportation fuels (title VII); • $3.4 billion for research, development, and demonstration 

of hydrogen-based fuel technologies and infrastructure for hydrogen fuels (title VIII); • $9.5 billion to research energy efficiency technologies, renewable energy sources, fossil energy development, and other 

energy sources and new technologies (title IX); • $400 million for research and regulation to enhance the reliability of the nation’s electricity system as well as incentive 

payments for advanced power technologies (title XII); • $300 million for research, construction, and support of 

electricity generation units using oxygen-fuel technology (title 

XIV); and • $3.8 billion for grants to fund clean up of the motor fuel 

additive methyl tertiary butyl ether (MTBE), to assist producers in eliminating the use of the additive, and to research 

other fuel additives (title XV). 

Spending subject to appropriation: estimated authorizations 

(g) Based on information from DOE, the Environmental Protection Agency (EPA), other affected agencies, and industry sources, 

CBO estimates that H.R. 1640 would authorize the appropriation 

of an additional $366 million in 2006 and $2 billion over the 2006– 

2010 period. Key components of this estimate are described below. 

Energy Conservation at Federal Agencies. H.R. 1640 would 

amend several energy conservation goals and requirements that 

apply to the federal government. CBO estimates that implementing 

those provisions would cost $389 million over the 2006–2010 period, subject to appropriation of the necessary amounts. Most of 

those goals, such as reducing energy use by 2 percent per year relative to 2003 consumption and purchasing energy-efficient products 

when economical, are being pursued under current executive orders. Where practical, the bill would require that hourly electricity 

meters be installed at all federal buildings by 2012. Such meters 

would provide data at least once daily and measure hourly consumption of electricity. The data would be available to facility energy managers. 

Based on information from the Department of Energy, we assume that it would only be economical to meter 20 percent of the 

government’s inventory of 500,000 buildings and that installing 

meters would cost, on average, $4,000 per building. We assume 

that meters would be installed in 20,000 buildings per year until 

2012, when the project would be complete. We estimate that implementing the metering provisions of H.R. 1640 would cost $57 million in 2006 and $323 million over the 2006–2010 period. CBO estimates that other requirements in this title, such as monitoring the 

211 

equipment installed using energy savings performance contracts, 

and establishing new programs and rules for making products 

more energy efficient, would cost $66 million over the next five 

years. 

Based on experience in the private sector, metering the hourly 

electricity use of buildings can lead to reduced energy consumption 

and reduce costs enough to recoup the cost of installing meters 

within two to four years. It is possible that this requirement could 

lead to a future reduction in appropriations for federal building energy use, but any such savings would depend on how metering information is used by federal agencies. Additionally, metering can 

reveal where energy use is high, but capital investment and other 

changes in how federal buildings consume energy would likely be 

needed to achieve savings. In any case, any savings are not likely 

to be significant over the next five years because most of the new 

metering and required capital investment would not be completed 

until the end of that period or after 2010. 

Renewable Energy Production Incentive (REPI). The REPI program currently provides cash payments to public utilities and electric cooperatives that generate energy using renewable sources. 

The payment is based on the annual kilowatt-hours of electricity 

generated using qualified renewable energy sources. Section 202 of 

the bill would reauthorize the REPI program for an additional 20 

years, and make Indian tribes eligible for the program. Annual 

funding appropriated for the program has not kept pace with applications for payment from eligible utilities. Specifically, eligible utilities have generated electricity from renewable resources since 

1994 in an amount that qualifies for about $76 million in REPI 

payments that have not been appropriated. Based on information 

from DOE, CBO estimates that fully funding this program, including the backlog of applications, would cost $70 million in 2006 and 

$163 million over the 2006–2010 period. 

Loan Guarantees for Coal Projects. Title IV would authorize 

DOE to guarantee loans for coal gasification power plants. Assuming appropriation of the necessary amounts, CBO estimates that 

implementing this provision would cost about $210 million over the 

2006–2010 period. 

Under credit reform procedures, funds must be appropriated in 

advance to cover the subsidy cost of such loan guarantees, measured on a present-value basis. The costs of such subsidies could 

vary widely depending on the terms of the contracts and the financial and technical risk associated with the different types of 

projects. According to Standard and Poors, the cumulative default 

risk for projects rated as speculative investments can range from 

about 20 percent to almost 60 percent, depending on a project’s 

cash flows and contractual terms. Subsidy costs also are affected by 

amounts recovered by the government in the event of default, 

which in turn depend on the value of the security backing the guarantee as well as contractual protections. 

H.R. 1640 would authorize DOE to guarantee loans for gasification projects that use coal and petroleum coke as feedstocks. Section 412 would allow DOE to provide a loan guarantee for a 400 

megawatt project that uses integrated gasification combined-cycle 

technology and sells power in deregulated energy markets at competitive rates without subsidies from ratepayers. Section 414 would 

212 

authorize the department to guarantee loans for five or more 

projects that use petroleum coke gasification technology. Neither 

provision sets any limits on the amount or terms of the loan guarantees. 

Gasification projects would require large capital investments, 

ranging from over $500 million for a 400 megawatt gasification 

plant to $800 million or more for a plant that would produce power 

and possibly other fuels using petroleum coke. Such gasification 

technologies are not new—they have been tested and deployed to 

some extent in other countries—but they have not been economically competitive in the United States. Profitability would depend 

on numerous factors, including future electricity and fuel prices; 

the price, quality, and availability of feedstocks; and various regulatory approvals. 

For this estimate, CBO assumes that DOE would guarantee investments totaling about $2 billion over the next five years, which 

would allow for the planning and construction of the coal gasification plant and at least two petroleum coke facilities. Given the 

current outlook for energy prices, CBO expects that the credit risk 

of gasification loans would likely fall within the middle of the range 

for speculative investments, but the risk of default could be higher 

or lower depending on the contract terms. CBO estimates that loan 

guarantees under this section would involve a 20 percent subsidy 

(on average), assuming only modest recoveries in the absence of 

any statutory requirements for collateral. Thus, we estimate that 

implementing this provision would cost $210 million over the 2006– 

2010 period, assuming appropriation of the necessary amounts. Additional outlays of $190 million would occur after 2010 as construction progressed on such projects. 

Indian Energy Programs. Title V would authorize the Department of the Interior (DOI) to provide grants and loans to Indian 

tribes for energy resource development projects. That title also 

would authorize DOE to provide competitive grants for energy development projects on Indian land and to establish an Office of Indian Energy Policy and Programs. In total, CBO estimates that 

these programs would cost $31 million in 2006, and $364 million 

over the 2006–2010 period. 

DOI Grants and Loans. The bill would authorize DOI to provide 

loans and grants to Indian tribes for energy resource development 

and to provide grants to Indian tribes and tribal consortia for the 

development of tribal energy resources, feasibility studies, and the 

enforcement of tribal laws to protect the environment. Based on information from DOI, CBO estimates that such grants and loans 

would cost about $20 million in 2006 and $170 million over the 

2006–2010 period. 

DOE Loan Guarantees. Title V would authorize the Secretary of 

Energy to guarantee up to $2 billion in loans for energy projects 

on Indian lands. Based on information from the Council of Energy 

Resource Tribes, CBO expects that DOE would provide loan guarantees for a variety of projects on Indian lands, including electricity 

transmission lines, fossil fuel electricity generation, and renewable 

fuels. CBO expects that the subsidy cost of loans guaranteed under 

this program could range from 2 or 3 percent for routine conventional projects to 50 percent or more for unproven technologies. 

213 

For this estimate, CBO assumes that about half of the program 

would provide loan guarantees for electricity transmission lines, 

which should pose relatively little credit risk under standard contract terms. We assume that the remaining half would be divided 

between fossil fuel electricity generation and renewable fuels. 

Under these assumptions, we estimate that the average subsidy 

cost for loans guaranteed under the program would be 10 percent. 

CBO expects that loans would be disbursed over the next 10 years, 

and we estimate that the loan guarantee program would cost $3 

million in 2006 and $136 million over the 2006–2010 period, assuming appropriation of the necessary amounts for the estimated 

subsidy costs. 

DOE Grants. This title would authorize DOE to distribute grants 

to Indian tribes under two new programs. One would help tribes 

with regulatory aspects of their energy resources while the other 

would help tribes to develop tribal energy resource agreements 

through leases, business agreements, and rights-of-way. CBO estimates that the cost for grants and administration of the programs 

would average about $9 million annually. 

Office of Indian Energy Policy and Programs. The bill also would 

authorize DOE to establish a new office that would be responsible 

for various grant and loan programs authorized under title V. 

Based on information from DOE, CBO estimates that the salaries, 

expenses, benefits, space, and travel costs of the DOE employees 

that would administer such programs would be about $3 million 

annually. 

Nuclear Energy Provisions. Section 638 would allow the Department of Energy to create a national stockpile of low-enriched uranium. Title VI would amend the Nuclear Regulatory Commission’s 

authority to collect fees, and modify its security and licensing programs. CBO estimates that implementing those provisions would 

cost $357 million over the 2006–2010 period, subject to appropriation of the necessary amounts. 

Uranium Stockpile. The stockpile would constitute a reserve supply of low-enriched uranium that could be used by commercial nuclear power plants, but could only be sold or transferred under certain restrictions and conditions. The bill would allow DOE to obtain 

material for the stockpile from highly enriched uranium recovered 

from dismantled nuclear warheads from Russia and naturally 

mined or enriched uranium from U.S. companies. 

For this estimate, CBO assumes that DOE would purchase about 

1.5 tons of highly enriched uranium from Russia each year over the 

2006–2010 period for delivery to and storage by DOE at one or 

more national stockpile sites. The highly enriched uranium would 

be converted to low-enriched uranium by Russia prior to purchase 

by DOE. The conversion process involves diluting the highly enriched uranium with natural uranium. After conversion, DOE 

would receive about 50 tons of low-enriched uranium a year that 

would be held as a long-term reserve. Obtaining that amount is 

similar to what DOE proposed to the Congress in 2003. 

Assuming that negotiations between the United States and Russia to purchase the low-enriched uranium might take up to a year, 

CBO estimates that DOE would only purchase 25 tons of low-enriched uranium in 2006 but would make additional purchases of 50 

tons a year over the 2007–2010 period. CBO estimates that the cost 

214 

for the roughly 50 tons of low-enriched uranium would total about 

$60 million a year over the 2007–2010 period. This amount includes the costs for the dilution services (about $30 million), the 

costs for the natural uranium (about $30 million), and shipping 

costs (less than $1 million). The unit of measurement for the dilution services is commonly referred to as a separative work unit or 

SWU. Based on information provided by industry, CBO estimates 

that it would take about 275,000 SWUs to convert 1.5 tons of highly enriched uranium to 50 tons of low-enriched uranium. Assuming 

a market price of about $110 per SWU, CBO estimates that the 

cost for diluting the highly enriched uranium would total about $30 

million a year. 

Based on conversion factors provided by industry, roughly one 

million pounds of natural uranium would be used in the dilution 

process to produce 50 tons of low-enriched uranium. Assuming a 

market price of roughly $30,000 per pound, CBO estimates that the 

cost of the natural uranium would total another $30 million a year 

over the 2006–2010 period. 

Thus, CBO estimates that the costs to obtain the low-enriched 

uranium would total $30 million in 2006 and $270 million over the 

2006–2010 period. CBO estimates that there would be no significant costs to store the low-enriched uranium because there is sufficient storage capacity at existing DOE sites, such as the Savannah 

River Site in South Carolina and the Paducah Plant in Kentucky. 

Nuclear Regulatory Commission Fees, and Security and Licensing Programs. H.R. 1640 would require the Nuclear Regulatory 

Commission update its security programs for the facilities it regulates, establish that it would be the licensing and regulatory authority for the Advanced Reactor Hydrogen Co-generation Project 

established under the bill, and change the fee collection system currently used by the agency. Based on information from NRC, CBO 

estimates that these provisions would cost $12 million in 2006 and 

$87 million over the 2006–2010 period. 

Security Programs. The bill would require that NRC update and 

initiate several studies, rulemakings, and programs related to security at the nation’s nuclear power plants. It would require NRC to 

study the potential threats to nuclear facilities posed by terrorists 

and update security rules based on those findings; update the ‘‘design basis threat’’—the attack scenario nuclear facilities must be 

capable of defeating; require federal security coordinators in each 

of the NRC’s four regions; establish a training program for federal 

agencies, the National Guard, and state and local law enforcement 

and emergency personnel; establish a system to ensure the secure 

transfer of nuclear materials; and issue rulemakings related to 

fingerprinting employees of nuclear facilities, safeguarding classified information, and weapons in nuclear facilities. Overall, CBO 

estimates that these requirements would cost $8 million in 2006 

and $37 million over the 2006–2010 period. 

Advanced Reactor Hydrogen Co-generation Project Licensing. 

H.R. 1640 also would require that the NRC license and regulate 

the Advanced Reactor Hydrogen Co-generation project established 

in section 654 of the bill. Based on information from the NRC, CBO 

assumes the agency would need significant additional resources to 

review site permits, reactor design, and the license applications 

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ized appropriations are provided to DOE to implement this program on the timeline outlined in the bill, CBO estimates that 

NRC’s licensing and regulatory activities related to the project 

would cost $2 million in 2006 and $40 million over the 2006–2010 

period. 

NRC Fee Collection. Under current law, the NRC collects fees 

from its private licensees that offset its annual appropriation. Such 

fee collection includes the cost of issuing licenses to some government agencies. In 2005, the NRC was authorized to collect 90 percent of most of its appropriation (CBO estimates such fee collections will total $537 million for the fiscal year). Under current law, 

fee collections are authorized at 33 percent of the agency’s budget 

for each year after 2005. H.R. 1640 would set fee collection at 90 

percent of most of the agency’s budget after 2005, establish that licensees not be charged fees for homeland security activities, and 

require that government agencies pay their licensing and regulatory activity fees, rather than the private sector. The authority 

to increase future fee assessments would result in lower net appropriations for the NRC. Currently, NRC charges private licensees 

about $2 million per year for licenses issued to government agencies. Because under H.R. 1640 those fees would come from appropriated funds rather than the private sector, the government would 

incur a net cost relative to current law to pay them. We estimate 

that such additional costs would be $2 million in 2006 and $10 million over the 2006–2010 period. 

Loan Guarantees for Ethanol Production. Section 1511 would authorize loan guarantees for the construction of facilities to produce 

ethanol or other commercial byproducts from agricultural residue 

or municipal solid waste, subject to certain terms and conditions. 

The bill would not limit the volume or portion of the loans that 

could be guaranteed, but it would set criteria for project approval, 

require certain levels of collateral, impose a fee for administrative 

costs, and terminate the program after 10 years. 

CBO expects that projects would be debt-financed and sponsors 

would recover costs through the sale of ethanol and other recyclable materials. The technology used to process ethanol from such 

sources is new and not well proven. In addition, prices for the 

plants’ output—ethanol and recycled glass, metal, and paper—have 

a history of fluctuating widely. Moreover, the profitability of these 

projects also would depend on the cost of purchased feedstock and, 

for solid waste facilities, on revenues from ‘‘tipping fees’’ (i.e., those 

fees charged by the plant to accept municipal solid-waste feedstock). According to DOE, a plant’s reliance on feedstock from these 

sources would increase the credit risk because prices for feedstock 

can become competitive if demand for such products increases. 

Likewise, revenues from tipping fees may also fluctuate. 

Based on information from DOE, CBO expects that the department would guarantee loans for three projects over the next five 

years, each with a total construction cost of about $250 million. 

The types of credit risks associated with producing and marketing 

ethanolrelated products differ from those for gasification facilities, 

but CBO expects that the net subsidy rates for both programs 

would be about the same. Thus, CBO estimates that loans guaranteed under section 1511 would have about a 20 percent subsidy, requiring about $150 million in appropriated funds in the subsidy 

216 

costs, with outlays of about $105 million over the 2006–2010 period, assuming appropriation of the necessary amounts. 

Electricity Regulations. Title XII would require the Federal Energy Regulatory Commission (FERC) to establish several new rules 

for managing the nation’s electricity system and governing the 

business practices of the electricity industry. Such rules would affect transmission services, construction and siting permits for 

building new transmission lines, and the reliability of the nation’s 

electricity transmission infrastructure. The bill also would repeal 

the Public Utility Holding Company Act of 1935, require FERC to 

take over certain regulatory procedures currently undertaken by 

the Securities and Exchange Commission, and amend the Public 

Utilities Regulatory Policies Act. 

Based on information from FERC, CBO estimates that imple- menting these provisions would cost $11 million in 2006 and $47 

million over the 2006–2010 period. Such costs would cover additional data processing and storage, additional staff, and travel related to the agency’s new duties. Because FERC recovers 100 percent of its costs through user fees, such additional costs would be 

offset by an equal change in fees that the commission charges. 

Hence, these provisions would have no net budgetary impact. 

Other Provisions. H.R. 1640 includes several provisions that 

would authorize various new studies, reports, and activities related 

to energy consumption and production. These provisions would require federal agencies to: • Coodinate permitting of new refineries in the United 

States; • Study and report to the Congress on air emissions, aviation fuels, and credits for alternative-fueled vehicles; • Report to the Congress on the degree of energy dependence 

by the United States; • Participate in an ozone demonstration project; • Issue regulations on certain unfair trade and consumer 

privacy issues; 

• Conduct annual surveys on the market share of renewable 

fuels; and 

• Prepare several other reports on energy resources and efficiency. 

Based on information from the agencies that would be responsible for implementing these provisions, CBO estimates that these 

activities would cost $10 million in 2006 and $45 million over the 

2006–2010 period, subject to the availability of appropriated funds. 

Direct spending and revenues 

H.R. 1640 has five provisions that would have a measurable impact on direct spending and revenues. The estimated effects of 

these provisions are shown in Table 3. The bill would provide permanent authorization for the use of energy savings performance 

contracts and cap their use at $500 million; establish an Electric 

Reliability Organization (ERO) to manage the reliability of the nation’s electricity system; establish a research and development program to drill for ultra-deep water natural gas and unconventional 

petroleum resources; allow the Western Area and Southwestern 

Power Administrations to accept up to $100 million in financing 

from private sources for electricity transmission projects; and direct 

217

the Department of Energy to reimburse private contractors for certain employee benefits. The bill also would establish a specified 

minimum level of renewable fuel content for motor fuels sold by refiners, blenders, or importers, but CBO estimates this provision 

would have a negligible effect on direct spending.

CBO estimates that enacting H.R. 1640 would increase direct spending by $159 million in 2006 and $1.7 billion over the 2006–

2015 period. We estimate that enacting the bill would increase net 

revenues by $38 million in 2006 and by $380 million over the 

2006–2015 period. In addition, we estimate that new civil penalties 

imposed by the bill would result in an increase in revenues of less 

than $500,000 annually.

TABLE 3.—ESTIMATED DIRECT SPENDING AND REVENUE EFFECTS OF H.R. 1640

By fiscal year, in millions of dollars—

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

CHANGES IN DIRECT SPENDING

Energy Savings Performance Contracts: 

Estimated Budget Authority ..................... 0 300 200 0 0 0 0 0 0 0

Estimated Outlays .................................... 0 255 215 30 0 0 0 0 0 0

Electric Reliability Organization (ERO): 

Estimated Budget Authority ..................... 50 50 50 50 50 50 50 50 50 50

Estimated Outlays .................................... 50 50 50 50 50 50 50 50 50 50

Ultra-deep Water Natural Gas and Unconventional Petroleum Resources: 

Estimated Budget Authority ..................... 100 50 50 50 50 50 50 50 50 0

Estimated Outlays .................................... 45 63 58 50 50 50 50 50 50 28

Financing of Federal Electricity Transmissions 

Projects: 

Estimated Budget Authority ..................... 0 50 0 50 0 0 0 0 0 0

Estimated Outlays .................................... 0 10 20 30 20 20 0 0 0 0

DOE Payment for Employee Benefits: 

Estimated Budget Authority ..................... 64 0 0 0 0 0 0 0 0 0

Estimated Outlays .................................... 64 0 0 0 0 0 0 0 0 0

Total Changes in Direct Spending 

Under H.R. 1640: 

Estimated Budget Authority 214 450 300 150 100 100 100 100 100 50

Estimated Outlays ............. 159 378 343 160 120 120 100 100 100 78

CHANGES IN REVENUES

Fees charged by ERO on Electricity Consumers: 

Estimated Revenues 1 .............................. 38 38 38 38 38 38 38 38 38 38

1 Net of income and payroll tax offsets. 

Energy Savings Performance Contracts (ESPCs). Section 105 

would permanently extend the authority to enter into ESPCs but 

would cap total payments under such contracts at $500 million and 

specify that only DOE, the Department of Defense, and the Department of Veterans Affairs would be eligible to use such contracts, 

beginning on October 1, 2006. CBO estimates that such agencies 

would quickly use this authority up to the authorized amount, and 

thus, the provision would increase direct spending by $500 million 

over the 2007–2009 period. 

ESPCs enable federal agencies to enter into long-term contracts 

with an energy savings , company (ESCO), for the acquisition of 

energy-efficient equipment, such as new windows, lighting, and 

heating, ventilation, and air conditioning systems. Using such 

equipment can reduce the energy costs for a facility, and the savings from reduced utility payments can be used to pay the conVerDate jul 14 2003 05:21 Aug 10, 2005 Jkt 022752 PO 00000 Frm 00217 Fmt 6659 Sfmt 6602 E:\HR\OC\HR215P1.XXX HR215P1
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tractor for the equipment over time. Because the government does 

not pay for the equipment at the time it is acquired, the ESCO borrows money from a nonfederal lender to finance the acquisition and 

installation of the equipment. When it signs the ESPC, the government commits to paying for the full cost of the equipment, as well 

as the interest costs on the ESCO’s borrowing for the project. Since 

the ESCO faces higher borrowing costs than the U.S. Treasury, 

total interest payments for the equipment acquisition will be higher than if the government financed the acquisition of the equipment directly with appropriated funds. 

The obligation to make payments for the equipment and the financing costs is incurred when the government signs the ESPC. 

Under the current authority, agencies can use ESPCs to acquire 

new equipment, paying over a period of up to 25 years, without an 

appropriation for the full amount of the purchase price. Thus, consistent with governmentwide accounting principles, CBO believes 

that the budget should reflect that commitment as new obligations 

at the time that an ESPC is signed, and the authority to enter into 

these contracts without budget authority for the full amount of the 

purchase price constitutes direct spending. 

CBO’s estimate of direct spending reflects an amount equal to 

the cost of the energy conservation measures as installed, plus the 

portion of borrowing costs attributable to contract interest rates 

that exceed U.S. Treasury interest rates. (Borrowing costs equivalent to the amount of Treasury interest that would be paid if the 

equipment were financed with appropriated funds are not counted 

against this authority, consistent with the budget scorekeeping of 

regular interest costs associated with federal spending. That is, 

Treasury interest effects are not counted as a direct cost or savings 

to any particular legislative provision.) 

Electric Reliability Organization. H.R. 1640 would authorize the 

Federal Energy Regulatory Commission to exercise authority over 

the reliability of the nation’s electricity transmission system 

through the establishment of an Electric Reliability Organization 

(ERO). Under the bill, FERC would select an organization to become the ERO based on several criteria, including the ability of the 

organization to charge fees to end users of the electricity system to 

cover its costs. CBO believes the ERO’s collections and spending 

should be included in the federal budget because this new entity 

would conduct inherently governmental activities that could not be 

undertaken by a purely private organization. 

H.R. 1640 would cap the amount of dues, fees, and other charges 

collected by the ERO at $50 million per year, until 2015. Thus, we 

estimate that spending by the ERO would total $50 million in 2006 

and $500 million over the next 10 years. 

Because the ERO and the regional organizations created by it 

would be governmental in nature, CBO believes that the collection 

of these fees should be recorded as revenues in the budget. The increased revenue from the assessments would be offset by 25 percent to reflect reduced receipts of income and payroll taxes. The assessments would add to the costs of the industry, which would be 

expected to pass them forward to consumers in higher prices. As 

consumers spend less in other sectors of the economy, wages and 

profits—and resulting income and payroll taxes—would shrink accordingly. CBO estimates that net revenues collected by an ERO 

219 

and its regional organizations would total $38 million in 2006, $190 

million over the 2006–2010 period, and $380 million over the 2006– 

2015 period. 

Currently, the federal power marketing administrations, including the Tennessee Valley Authority and the Bonneville Power Administration, pay dues to the regional affiliates of the North American Electric Reliability Council (NERC). We would expect that 

those payments would continue and would increase under the new 

regulatory scheme established by the ERO. Any increase in those 

fees would be offset by changes in the rates charged to customers 

of the federal agencies. 

Ultra-deep Water Natural Gas and Unconventional Petroleum 

Resources. H.R. 1640 would provide $50 million per year over the 

2005–2014 period to establish a new program to research and develop drilling technologies in waters greater than 1,500 meters on 

the Outer Continental Shelf and for unconventional petroleum resources onshore, such as gas shales or natural gas in tight sand. 

If successful, such research could eventually lead to greater oil and 

gas production (and royalty collections) from federal lands. The program would be funded from royalties, rents, and bonuses received 

by the government for oil and gas drilling on federal land. Such 

funds are currently deposited into the Treasury and are available 

for appropriation. CBO estimates that the new program would cost 

$45 million in 2006 and $494 million over the 2006–2015 period. 

Financing of Federal Electricity Transmission Projects. Section 

1222 of the bill would authorize DOE’s Western Area and Southwestern Power Administrations to accept up to $100 million to assist in the design, development, construction, and operation of 

transmission projects that would contribute to reducing congestion 

on existing electricity lines. CBO considers such financing to be 

equivalent to incurring new federal debt, and thus the spending of 

such borrowed amounts should be recorded in the budget as direct 

spending. We estimate that such spending would cost $10 million 

in 2007 and $100 million over the 2007–2015 period. 

DOE Payments for Employee Benefits. Section 640 of the bill 

would require DOE to ensure that employees of its contractors at 

certain facilities maintain their retirement and health benefits. 

Currently, DOE is changing contractors for infrastructure and environmental remediation activities at its Portsmouth and Paducah 

facilities. Employees working under current contracts are not guaranteed continuity of benefits under the new contracts. This section 

would require the department to ensure that such employees maintain their benefits. Based on information from DOE and the potential new contractor, up to 500 employees would be eligible for continued benefits under this provision. Based on previous payments 

to contractors under similar circumstances, we expect that DOE 

would make an immediate transfer of funds to the new contractor 

for the estimated future benefits related to pensions, medical, dental, and life insurance benefits for each employee. Based on information from DOE, CBO estimates that this provision would increase direct spending by $64 million in 2006. 

Renewable Fuels Mandate. CBO estimates that enacting title XV 

of H.R. 1640 would not have any significant effect on direct spending or revenues over the 2006–2015 period. 

220 

Section 1501 of the bill would require that motor fuels sold by 

a refiner, blender, or importer contain specified amounts of renewable fuel. The required volume of renewable fuel would start at 3.1 

billion gallons in 2005 and escalate to 5 billion gallons for 2012 and 

increase at the growth in gasoline consumption thereafter. Those 

amounts are generally less than the amounts of renewable fuels 

that CBO projects will be used for several years. The bill also 

would amend the Clean Air Act to eliminate the requirement for 

gasoline that is sold in certain regions of the country to contain 2 

percent oxygen by weight. This provision might lower demand for 

gasoline oxygenates (including ethanol), because the mandated use 

of renewable fuels is below CBO’s baseline for the use of fuels. 

However, the bill also provides for the generation of credits towards meeting the renewable fuel requirement, which can be used 

to satisfy future years’ requirements. Because of the ability of a refiner, blender, or importer to save ethanol-use credits generated in 

one year to satisfy requirements in a future year, CBO does not expect that the use of renewable fuels would be significantly affected. 

Accordingly, the costs of federal programs to support farm prices 

and provide income support would not be significantly affected, 

with these levels of renewable fuel requirements. 

Civil Penalties. H.R. 1640 also could affect governmental receipts 

and direct spending by establishing and increasing certain civil and 

criminal penalties. CBO estimates that any resulting increase in 

receipts and spending would be less than $500,000 annually. Such 

penalties would be established for violations of regulations relating 

to: • Violations of the Price-Anderson Act, • Nuclear safety at nonprofit institutions, • Willful destruction of a nuclear facility, • The reliability of the nation’s electricity system, • Market trading of electricity, and • The sale of renewable fuels. 

Intergovernmental and private-sector impact: H.R. 1640 contains 

numerous mandates as defined in UMRA that would affect both 

intergovernmental and private-sector entities. 

CBO estimates that the cost of complying with intergovernmental mandates, in aggregate, could be significant and likely 

would exceed the threshold established in UMRA ($62 million in 

2005, adjusted annually for inflation) at some point over the next 

five years because we expect that future damage awards for state 

and local governments under the bill’s safe harbor provision would 

likely be reduced. That provision would shield the motor fuels industry from liability under certain conditions. 

CBO cannot determine whether the aggregate cost of the privatesector mandates in the bill would exceed the threshold established 

in UMRA, primarily for two reasons. First, some of the requirements established by the bill would hinge on future regulatory action about which information is not available. Second, UMRA does 

not specify whether CBO should measure the cost of extending a 

mandate relative to the mandate’s current costs or assume that the 

mandate will expire and measure the costs of the mandate’s extension as if the requirement were new. The bill would extend the existing mandate that requires licensees to pay fees to offset roughly 

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priation. Measured against the costs that would be incurred if current law remains in place, the cost to the private sector of extending this mandate would exceed the annual threshold established in 

UMRA ($123 million in 2005, adjusted annually for inflation). 

Based on its review of the bill, CBO expects that the mandates 

(new requirements, limits on existing rights, and preemptions) contained in the bill’s titles on motor fuels (title XV), nuclear energy 

(title VI), electricity (title XII), and energy efficiency (title I) would 

have the greatest impact on state and local governments and private-sector entities. 

Ethanol and motor fuels (Title XV) 

Safe Harbor. Section 1502 would shield manufacturers of motor 

fuels and other persons from liability for claims based on defective 

product relating to motor vehicle fuel containing methyl tertiary 

butyl ether or renewable fuel. That protection would be in effect as 

long as the fuel is in compliance with other applicable federal requirements. The provision would impose both an intergovernmental 

and private-sector mandate as it would limit existing rights to seek 

compensation under current law. (The provision would not affect 

other causes of action such as nuisance or negligence.) 

Uunder current law, plaintiffs in existing and future cases may 

stand to receive significant amounts in damage awards, based, at 

least in part, on claims of defective product. Because section 1502 

would apply to all such claims filed on or after September 5, 2003, 

it would affect more than 100 existing claims filed by local communities, states, and some private companies against oil companies. 

Individual Judgments and settlements for similar lawsuits over the 

past several years have ranged from several million dollars to well 

over $100 million. Based on the size of damages already awarded 

and on information from industry experts, CBO anticipates that 

precluding existing and future claims based on defective product 

would reduce the size of judgments in favor of state and local governments over the next five years. CBO estimates that those reductions would exceed the threshold established in UMRA in at least 

one of those years. Because significantly fewer such cases are pending for private-sector claimants, CBO does not have a sufficient 

basis for estimating expected reductions in damage awards for the 

private sector. 

Renewable Fuels Standard. Section 1501 would require domestic 

refiners, blenders, and importers of gasoline to ensure that gasoline 

sold or dispensed to consumers in the contiguous United States 

contains a minimum volume of renewable fuels. The required volume of renewable fuel would start at 3.1 billion gallons in 2005 and 

increase to 5.0 billion gallons by 2012. Section 1501 also would 

allow refineries, blenders, and importers to accumulate and trade 

credits for quantities of renewable fuels. Excess credits from one 

year could be used in the next. CBO expects that the motor fuels 

industry would be able to meet the renewable fuels requirement in 

the first five years that the mandate is in effect (2005 through 

2009) without significant additional costs to the industry. 

MTBE Ban. Section 1504 would ban the use of methyl tertiary 

butyl ether (MTBE) in gasoline effective no later than December 

31, 2014. At the same time, the bill would allow any state to authorize MTBE use in motor fuels by notifying the EPA. A nationVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00221 Fmt 6659 Sfmt 6602 E:\HR\OC\HR215P1.XXX HR215P1
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wide ban with states opting to continue use of MTBE may not be 

fundamentally different from the current situation in which states 

impose their own local bans. Therefore, it is possible that MTBE 

use would not be greatly affected by the ban under the bill. Moreover, CBO anticipates that the renewable fuels standard established in section 1501 could, on its own, greatly reduce incentives 

to use MTBE. 

CBO cannot determine in which states, if any, the federal MTBE 

ban would be more constraining than the renewable fuel standard 

and, therefore, cannot determine the cost of the mandate. In states 

where the federal ban would be more constraining, the ban could 

impose costs on refiners and merchant producers. Gasoline refiners 

would need to replace MTBE with higher-cost blendstocks, and 

merchant producers would likely convert their operations to the 

production of less-profitable blendstocks, such as alkylates or isooctane. The bill would authorize appropriations of $250 million annually for fiscal years 2005 through 2012 for federal transition 

grants to merchant producers to convert their facilities. 

Seasonal Variation in Renewable Fuel Use. Section 1501 would 

direct the Energy Information Administration (EIA) to determine if 

there are excessive seasonal variations in the amount of renewable 

fuel blended into gasoline. Refiners might have an incentive to use 

more of the annual requirement for renewable fuel (mostly ethanol) 

in the winter months, when evaporative emissions from gasoline 

are less of a concern. Sharp seasonal changes in the demand for 

ethanol could lead to large swings in ethanol and gasoline prices. 

If EIA determines that there are excessive seasonal fluctuations, 

EPA would impose regulations requiring that at least 35 percent 

of the renewable fuel standard be blended into gasoline in summer 

months and another 35 percent be blended in winter months. At 

this time EPA does not have any information on excessive seasonal 

variation in renewable fuel use, but expects that such requirements 

will not be likely. In the event that a determination by EIA triggers additional EPA regulations, the duty to comply with those regulations would constitute a private-sector mandate. 

VOC Region Consolidation. Section 1506 would consolidate the 

regional regulations that limit the emissions of volatile organic 

compounds (VOCs) from gasoline, by applying the more stringent 

standards for gasoline sold in the southern United States to gasoline sold in the northern United States. Applying the more-stringent standards would impose a private-sector mandate. According 

to industry experts, the difference in the stringency of the two 

standards is small, and therefore, the mandate is not likely to increase industry costs. 

Boutique Fuels. Section 1541 would require EPA to promulgate 

a list of boutique fuels approved by the federal government. The 

Clean Air Act allows individual states to implement their own 

clean fuel programs to address local or regional concerns about air 

quality. The term ‘‘boutique fuels’’ refers to the various specialized 

gasoline blends made to meet those air quality standards. Section 

1541 would limit the total number of fuels on the approved list and 

would prohibit the addition of new fuels to the list without the removal of an older fuel. The federal list of fuels would supersede any 

list currently allowed under state implementation plans. In effect, 

the section would require any refinery currently producing a bouVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00222 Fmt 6659 Sfmt 6602 E:\HR\OC\HR215P1.XXX HR215P1
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tique fuel that is not on the federal list of boutique fuels to cease 

production of that fuel. According to various industry contacts, 

most refineries are capable of producing the fuels that are slated 

to be on the initial list of boutique fuels. CBO estimates that the 

costs associated with any retooling necessary to comply with the 

provisions of this section would be minimal, if any. 

Underground Storage Tank (UST) Compliance for States. Section 

1524 would require the EPA to specify training requirements for 

operators of USTs and would require states to develop and implement a training strategy for UST operators that is consistent with 

the EPA requirements. The bill also would require each state and 

tribe to develop an implementation report that lists each publicly 

owned underground storage tank out of compliance with regulations, past actions taken toward listed tanks, and future steps that 

will be taken to bring those tanks into compliance. CBO estimates 

that the cost of these requirements could be significant, but that 

states would be eligible for grants from EPA to implement them. 

In states where the EPA oversees regulation of USTs directly, 

this provision would constitute a private-sector mandate on private 

owners of USTs. Currently, only USTs in Idaho are regulated directly by the EPA. While CBO has no information on what training 

the EPA may require, the industry does not expect the requirements to differ greatly from existing industry and state training requirements. CBO anticipates that the cost of the private-sector 

mandate would not be large. 

Additional Groundwater Protection Requirements. Section 1530 

would direct the EPA to require states that receive federal funding 

for UST programs to impose new groundwater protection requirements on manufacturers and installers of USTs. This would constitute a private-sector mandate, since states receiving grants must 

implement the new requirements and the EPA is expected to impose these requirements regardless of the states’ action. CBO has 

no information at this time on how the requirements would be implemented and, therefore, cannot determine the cost of the mandate. 

Nuclear matters (Title VI) 

Increase in the Annual Premium. Under current law, in the 

event that losses from a nuclear incident exceed the required 

amount of private insurance, NRC licensees (both public and private) are assessed a charge to cover the shortfall in damage coverage. Section 603 would increase the maximum annual premium 

from $10 million to $15 million. CBO has determined that raising 

the maximum annual premium would increase the costs of existing 

mandates and would thereby impose both intergovernmental and 

private-sector mandates under UMRA. Because the probability of a 

nuclear accident resulting in losses exceeding the amount of private insurance coverage is low, CBO estimates that the annual 

costs for public and private entities of complying with the mandates (in expected value terms) would not be substantial over the 

next five years. 

Security Upgrades and Background Checks. Sections 661 and 

666 would direct the NRC to issue new security regulations for the 

operation of nuclear facilities and the transport of nuclear materials. The duty to comply with the new regulations governing nuVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00223 Fmt 6659 Sfmt 6602 E:\HR\OC\HR215P1.XXX HR215P1
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clear material transport and facility operations would constitute 

both private-sector and intergovernmental mandates. Under section 

661, the rules governing the operation of nuclear facilities would be 

based upon future study by the NRC and consultation with other 

federal, state, and local agencies and the private sector. At this 

time, the agency could not give any indication as to the scope of 

the new regulations. Consequently, CBO cannot determine the 

costs of compliance. However, based on the small number of public 

nuclear facilities and the security upgrades that have already occurred in response to the events of September 11, 2001, CBO expects that the cost of these requirements would not be large for 

state and local governments. 

In addition, the bill would require fingerprinting of additional individuals connected with nuclear facilities as part of criminal background checks done through the U.S. Attorney General’s Office. 

The increased costs for those background checks would be the responsibility of the licensee. The duty to pay the increased cost 

would be both a private-sector and intergovernmental mandate 

under UMRA, but the cost of the mandate would be small. 

NRC User Fees and Annual Charges. Under current law, the 

NRC is authorized to collect annual fees from its licensees (public 

and private) to offset 90 percent of a major portion of its general 

fund appropriation. CBO estimates that those collections would 

amount about $500 million in fiscal year 2005. Those fee collections 

include the cost of issuing licenses to some federal agencies. The 

NRC’s authority to collect that level of fees expires at the end of 

fiscal year 2005. When that authority expires, the NRC will be authorized to collect annual fees up to only 33 percent of its budget. 

Section 668 would extend the NRC’s current authority to charge 

annual fees to offset 90 percent of its net appropriation indefinitely. 

The duty to pay such an increase in fees would be a mandate as 

defined in UMRA. 

The total amount of fees collected under this provision would depend on the level of future appropriations. Assuming appropriations in the amount authorized for 2005, CBO estimates that extending the fees could result in additional collections of roughly 

$300 million in 2006 from industries regulated by the NRC (primarily electric utilities) and similar amounts for fiscal years 2007 

through 2010. CBO estimates that most of the annual fees would 

be paid by private, investor-owned nuclear utilities (less than 5 

percent would be paid by nonfederal, publicly owned utilities.) 

In the case of a mandate that has not yet expired, UMRA does 

not specify whether CBO should measure the cost of the extension 

relative to the mandate’s current costs or assume that the mandate 

will expire and that it must measure the costs of the mandate’s extension as if the requirement were new. Measured against the costs 

that would be incurred if current law remains in place and the annual fee declines, the total cost to the private sector of extending 

this mandate could be close to $300 million annually, beginning in 

fiscal year 2006. Measured that way, the cost of the mandate would 

exceed the annual threshold for the private sector as defined in 

UMRA. By contrast, measured against the fees paid for fiscal year 

2005, the mandate would impose no additional costs on the private 

sector because the fees under the bill would not differ much from 

those currently in effect. In any case, CBO estimates that the total 

225 

costs to state, local, and tribal governments would be small relative 

to the threshold for intergovernmental mandates. 

Electricity (Title XII) 

Mandatory Reliability Standards. The bill would require users of 

the bulk-power system to comply with standards issued by the 

newly established Electric Reliability Organization as designated 

by the Federal Energy Regulatory Commission. Those users include 

intergovernmental entities such as municipally owned utilities as 

well as private-sector entities, including utilities, nonutility generators, and marketers. Currently, the North American Electric Reliability Council, a voluntary organization, promotes electricity reliability. According to several industry experts, almost all public and 

private-sector users of the bulk power system voluntarily comply 

with standards issued by NERC. The mandate would impose no 

significant additional costs in the short term relative to current 

practice since the ERO is not expected to significantly change current standards. In the future, market conditions may prompt the 

ERO to impose stricter standards to maintain reliability. In that 

case, costs for users of the bulk power system—that could otherwise elect to disregard NERC standards under current law—could 

increase substantially. 

Mandatory Assessments. The bill would direct the ERO to assess 

fees and dues to cover the costs of implementing and enforcing 

ERO standards. Although there is some uncertainty as to how 

those fees would be assessed, the most likely scenario is that the 

ERO would assess fees on its members, which is the current practice of NERC. As NERC members include both public and private 

entities, such fees would constitute intergovernmental and private 

sector mandates as defined in UMRA. 

The bill would cap the amount of fees and other charges collected by the ERO at $50 million per year. Based on information from 

NERC, the membership fees collected in 2004 amounted to about 

$50 million. Consequently, CBO estimates that the increment in 

fee collections for the proposed compliance, monitoring, and enforcement activities under the bill would be negligible, if any. 

Based on industry data, CBO assumes that roughly 80 percent to 

85 percent of the collections would be borne by the private sector 

and another 10 percent to 14 percent would be borne by state and 

local government entities. The remainder would be paid by federally owned entities. 

Regulatory Fees. The bill would require FERC to assume certain 

regulatory procedures that are currently under the jurisdiction of 

the Securities and Exchange Commission. Under current law, 

FERC has the authority to collect fees from investor-owned utility 

companies to offset its costs. The duty to pay those fee increases 

would impose a private-sector mandate on those entities. Based on 

information from FERC, CBO expects that investor-owned utilities 

would have to pay $11 million in 2006 and $47 million over the 

2006–2010 period. 

Requirements for State Review. Sections 1251, 1252, and 1254 

would require state regulators to review the use of net metering, 

time-based metering, demand response systems, and interconnection services before permitting electric utilities to implement these 

federal standards. The sections contain intergovernmental manVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00225 Fmt 6659 Sfmt 6602 E:\HR\OC\HR215P1.XXX HR215P1
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dates because they would increase states’ responsibilities under the 

existing mandates in the Public Utilities Regulatory Policies Act. 

However, CBO estimates that the states’ costs to review additional 

standards would not be significant. 

Energy efficiency (Title I) 

Section 133 would direct the Secretary of Energy to prescribe energy conservation standards restricting standby mode energy consumption of household appliances. According to industry sources 

and DOE, up to 9,000 types of household appliances could be affected by this provision, and further, many such products may require significant modification to meet the standard for energy consumption in standby mode. DOE could not say how they would implement this provision, and CBO cannot determine the products 

that would be affected. Therefore, we cannot estimate the incremental cost to the industry of meeting such requirements. 

If DOE applies standards to the majority of products potentially 

affected, costs to industry could be substantial. The magnitude of 

the costs also depend on the stringency of new standards that 

would affect the appliance manufacturers. For example, the bill 

would require DOE to apply new energy conservation standards to 

certain furnaces. Roughly three million oil, gas, and electric furnaces would have to comply with the new standards. According to 

a DOE report, the incremental costs to manufacturers of improving 

energy efficiency could range from $5 to $175 per unit depending 

on the level of the standard that must be met. If the DOE applies 

relatively high efficiency standards to the appliances covered under 

the bill, the incremental costs to the industry could be large, and 

thus could exceed UMRA’s threshold for private-sector mandates. 

Preemptions of State and local authority 

In addition to the mandates discussed above, H.R. 1640 contains 

several explicit preemptions of state and local authority. Such preemptions are considered intergovernmental mandates under 

UMRA. CBO estimates that those preemptions would not impose 

significant additional costs on state, local, or tribal governments as 

regulators: 

• Section 110 would extend an existing intergovernmental 

mandate by changing when daylight-saving time (DST) begins 

and ends. Under current law, states are required to follow federal guidelines for DST and may only opt-out by passing legislation. 

• Section 133 would create national standards for the energy 

efficiency of ceiling fans and would supercede existing state 

standards. Currently two states—California and Maryland— 

have more strict standards and five other states have legislation pending; those standards would be preempted. 

• Section 663 would preempt state laws restricting the use 

and transport of certain firearms. That provision would expand 

an existing NRC duty and allow the commission to authorize 

certain security employees to use and transport several types 

of firearms, regardless of state or local regulations. 

• Section 1211 would preempt the authority of states to take 

action to ensure the safety, adequacy, and reliability of electric 

227

service within that state if those actions are inconsistent with 

federal reliability standards. 

• Section 1221 would authorize FERC to issue construction 

permits for electric transmission facilities in ‘‘interstate congestion areas’’ when a state has not acted on or has rejected a permit request. 

• Section 1502 would preempt state liability laws as they relate to renewable fuels and MTBE. 

Estimate prepared by: Federal Costs: Energy Savings Performance Contracts: Lisa Cash Driskill and David Newman. Uranium 

Stockpile: Kathleen Gramp and Ray Hall. Loan Guarantees for 

Coal Projects: Kathy Gramp. LIHEAP: Mathew Kapuscinski. Indian Energy: Mike Waters. EPA Provisions and Loan Guarantee 

for Ethanol Production: Susanne Mehlman. Trade and Consumer 

Privacy: Melissa Zimmerman. All Other Federal Costs: Lisa Cash 

Driskill. 

Revenues: Annabelle Bartsch. 

Impact on State, Local, and Tribal Governments: Theresa Gullo, 

Melissa Merrell, and Sarah Puro. 

Impact on the Private Sector: Craig Cammarata, Jean Talarico, 

Selena Caldera and Paige Piper/Bach. 

Estimate approved by: Peter H. Fontaine, Deputy Assistant Director for Budget Analysis, and G. Thomas Woodward, Assistant 

Director for Tax Analysis.

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office 

pursuant to section 423 of the Unfunded Mandates Reform Act. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds that the Constitutional authority for this legislation is provided in Article I, section 8, clause 

3, which grants Congress the power to regulate commerce with foreign nations, among the several States, and with the Indian tribes. 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act. 

228 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

TITLE I—ENERGY EFFICIENCY 

Subtitle A—Federal Programs 

Section 101. Energy and water saving measures in congressional 

buildings 

Section 101 directs the Architect of the Capitol to develop a plan 

for Congressional buildings to comply with energy efficiency standards applicable to other Federal buildings. This section also requires the Architect to submit an annual report to Congress on energy conservation programs being implemented and to commission 

a study of Capitol Complex energy infrastructure to identify opportunities for energy efficiency gains and increased use of unconventional and renewable energy resources. Section 101 authorizes 

$2,000,000 per year from 2006 through 2010 to be appropriated to 

carry out the section. 

Section 102. Energy management requirements 

Section 102 amends current law, which requires federal agencies 

to consume 20 percent less energy per square foot in federal buildings in fiscal year 2000 than in fiscal year 1985, by requiring a 20 

percent reduction in energy use from year 2003 levels by the year 

2015. Energy performance requirements for 2016 to 2025 are to be 

recommended by the Secretary before 2015. This section further 

provides for exclusions from these requirements under specified 

conditions and directs the Secretary to issue guidelines that establish criteria for excluding buildings from these requirements. In addition, section 102 authorizes agencies to retain funds appropriated 

for energy expenditures that are not spent because of energy savings in agency buildings and to use those retained funds for energy 

efficiency and unconventional and renewable energy projects. 

Section 103. Energy use measurement and accountability 

Section 103 requires metering or sub-metering of Federal buildings by October 1, 2012, using advanced meters to the maximum 

extent practicable. The Secretary of Energy, in consultation with 

the Defense Department and the General Services Administration 

(GSA), and others, shall establish guidelines for the implementation of this requirement. The guidelines shall consider the costs 

and benefits of metering and shall establish a prioritized schedule 

for the types and locations of buildings to be metered. The guidelines may also establish exclusions from the requirement where energy consumption is de minimis. 

Section 104. Procurement of energy efficient products 

Section 104 directs federal agencies and Congress to purchase, 

with specified exceptions, energy-consuming products that meet the 

energy efficiency criteria of the Energy Star program or have been 

designated as energy efficient by the Federal Energy Management 

program (FEMP). This section also directs the Secretary of Energy 

to designate a standard for certain premium efficient electric motors after considering the recommendations of associated electric 

motor manufacturers and energy efficiency groups. In purchasing 

229

energy efficient products under this section, agencies are directed 

to select motors designated by the Secretary as meeting certain criteria. 

Section 105. Energy Savings Performance Contracts 

Section 105 makes the authority for the Departments of Energy, 

Defense and Veterans Affairs (the ‘‘federal agencies’’), to enter into 

energy savings performance contracts (ESPCs), which sunsets at 

the end of fiscal year 2006, permanent by repealing the sunset provision. In addition, this section provides for a cap of 100 ESPCs 

with payments no more than $500,000,000, and a condition that 

the federal agencies appoint coordinators to monitor the caps. Section 105 defines ‘‘energy or water conservation measure,’’ among 

other terms. Finally, section 105 provides for a report to Congress 

identifying obstacles that prevent the full utilization of the ESPC 

program and opportunities to increase program flexibility and effectiveness. 

Section 107. Voluntary commitments to reduce industrial energy intensity 

Section 107 provides for voluntary commitments to reduce industrial energy intensity. This section authorizes the Secretary of Energy to enter into agreements with industry to reduce significantly 

energy intensity. Industry participants would receive public recognition of their achievements. 

Section 108. Advanced Building Efficiency Testbed 

Section 108 directs the Secretary of Energy to establish an Advanced Building Efficiency Testbed program to enable energy efficient building technologies. A qualifying university in partnership 

with other qualifying universities and entities shall lead the program. Funding is authorized at $6 million for each of fiscal years 

2006 through 2008. 

Section 109. Federal building performance standards 

Section 109 directs the Secretary of Energy to establish new energy efficiency performance standards for new federal buildings. 

The standards shall require that new buildings achieve energy consumption levels at least 30 percent below specified building codes 

and incorporate sustainable design principles. 

Section 110. Daylight savings 

Section 110 changes the start of daylight savings time from the 

first Sunday in April to the first Sunday in March and it changes 

the end of daylight savings time from the last Sunday in October 

to the last Sunday in November. 

Subtitle B—Energy Assistance and State Programs 

Section 121. Low Income Home Energy Assistance Program 

Section 121 authorizes $5.1 billion for LIHEAP for each of fiscal 

years 2005 through 2007. It also expands the program to include 

renewable fuels, including biomass. 

230 

Section 122. Weatherization assistance 

For weatherization assistance (to aid low-income families in improving energy efficiency of their homes), the section authorizes 

$500 million for fiscal year 2006, $600 million for 2007, and $700 

million for 2008. It also changes the definition of ‘‘low income’’ from 

at or below 125% of poverty level to at or below 150% of poverty 

level. 

Section 123. State energy programs 

Section 123 authorizes $100 million for each of fiscal years 2006 and 2007 and $125 million for fiscal year 2008 for state energy programs. Section 123 also provides for a process for revisions to state 

energy conservation plans. It further requires that state energy 

conservation plans contain a goal of an improvement of 25% in 

state energy efficiency by 2012 as compared to 1990 levels. 

Section 124. Energy efficient appliance rebate programs 

Section 124 directs the Secretary of Energy to allocate funds to 

States with energy efficient appliance rebate programs that meet 

certain standards. $50,000,000 is authorized to be appropriated for 

such programs for each of fiscal years 2006 through 2010. 

Section 125. Energy efficient public buildings 

Section 125 authorizes the Secretary of Energy to make grants 

to States to assist local governments, including school districts, to 

improve the energy efficiency of public buildings. The grants are 

primarily intended for architectural, design and energy efficiency 

services that will result in new and renovated buildings that 

achieve energy efficiency results that exceed by 30% certain requirements set forth in the section. Funding of $30 million for the 

program is authorized for fiscal years 2006 through 2010, with the 

qualification that not more than 10 percent of appropriated funds 

shall be used for administration of the program. 

Section 126. Low income community energy efficiency pilot program 

Section 126 authorizes the Secretary of Energy to make grants 

to local governments, community development organizations, and 

Indian tribes for energy efficiency, renewable energy and distributed energy projects in low-income urban and rural communities. 

This section authorizes $20,000,000 for each fiscal year 2006 

through 2008. 

Subtitle C—Energy Efficient Products 

Section 131. Energy Star Program 

Section 131 authorizes the Energy Star Program, a program previously established by administrative actions by DOE and the Environmental Protection Agency (EPA) to identify and promote energy efficient products and buildings. The section establishes a 

statutory foundation for continued operation of the Energy Star 

Program and instructs the two agencies to further their partnership in promoting and designating Energy Star products. This section provides that responsibilities under the Energy Star Program, 

including responsibilities for particular product categories, shall be 

allocated consistent with agreements between the agencies, such as 

231 

are currently in place and directs the agencies to promote the Energy Star program, protect its integrity, establish new standards, 

seek input on those standards, provide reasonable notice and adequate lead times for now standards. 

Section 132. HVAC maintenance consumer education program 

Section 132 directs the Secretary of Energy to carry out a program to educate homeowners and small business owners on the energy savings benefits resulting from maintenance of air conditioning, heating and ventilating systems by professional or licensed 

contractors. The Secretary is directed to carry out the program in 

cooperation with the Administrator of the EPA and other appropriate entities including energy efficiency organizations, industry 

trade associations, and industry members. This section also directs 

the Administrator of the Small Business Administration, in consultation with the Secretary of Energy and the Administrator of 

EPA to implement a program, building on the existing Energy Star 

for Small Business Program, to assist small businesses to become 

more energy efficient. 

Section 133. Energy conservation standards for additional products 

Section 133 defines terms, provides for test procedures, and establishes minimum energy efficiency standards for seven products 

(exit signs, torchiere lamps, low-voltage dry-type transformers, traffic signals, unit heaters, medium base compact fluorescent lamps, 

and ceiling fans). This section requires DOE rulemakings to develop efficiency standards for three products (ceiling fans, vending 

machines, and commercial refrigerators and freezers). Section 133 

also requires an expedited rulemaking for standby energy use in 

battery chargers and external power supplies; and, requires a process to determine whether efficiency standards should be established for the standby mode of other appliances. 

Section 134. Energy labeling 

Section 134 provides for Federal Trade Commission (FTC) 

rulemakings to determine effectiveness of the existing FTC labeling 

program and authorizes the Secretary of Energy or the FTC, as appropriate, to establish labels for products newly covered by the 

DOE consumer products energy conservation program under the 

Energy Policy and Conservation Act, as amended by this Act. 

Section 135. Preemption 

Section 135 preempts state ceiling fan and ceiling fan light kit 

standards. 

Section 136. State consumer product energy efficiency standards 

Section 136 provides that Federal preemption of state energy efficiency standards will not apply before a Federal standard is set or 

three years after the date that a Federal standard was required to 

be established or revised. 

232 

Subtitle D—Public Housing 

Section 145. Grants for energy-conserving improvements for assisted 

housing 

Section 145 provides for grants for energy and water conserving 

fixtures and fittings in assisted housing. 

Section 147. Energy-efficient appliances 

Section 147 requires public housing agencies to purchase energy 

efficient appliances that are Energy Star or FEMP rated products. 

Section 149. Energy strategy for HUD 

Section 149 requires the Secretary of Housing and Urban Development to develop and implement an integrated strategy to reduce 

utility expenses at public and assisted housing and to report to 

Congress within one year and regularly thereafter on status of implementing the strategy. 

TITLE II—RENEWABLE ENERGY 

Subtitle A—General Provisions 

Section 201. Assessment of renewable energy resources 

Section 201 requires the Secretary of Energy to review available 

assessments of certain renewable energy resources in the United 

States, and to prepare an annual report on the same. Funding of 

$10 million per year is authorized for fiscal years 2006 through 

2010. 

Section 202. Renewable energy production incentive 

Section 202 reauthorizes the Renewable Energy Production Incentive (REPI), which provides payments for production of certain 

renewables. This section also expands the program to include landfill gas, livestock methane, and ocean power. 

Section 203. Federal purchase requirement 

Section 203 requires that the Secretary of Energy seek to ensure, 

to the extent economically feasible and technically practical, that 

the Federal Government purchase renewable energy in the following amounts: not less than 3% in fiscal years 2007 through 

2009, not less than 5% in fiscal years 2010 through 2012, and not 

less than 7.5% in fiscal year 2013 and after. This section expands 

the program to include ocean power. 

Section 204. Insular areas energy security 

Section 204 requires the Secretary of the Interior, in consultation 

with the Secretary of Energy and the head of government of each 

insular area, to develop plans to protect the insular area’s electric 

transmission infrastructure from damage due to hurricanes and typhoons. It also authorizes the Secretary of Interior to make grants 

to eligible projects. The section has an authorization of $5 million 

per fiscal year. 

233 

Section 205. Use of photovoltaic energy in public buildings 

Section 205 allows the Secretary of Energy to establish a photovoltaic commercialization program with the objective of promoting 

the use of and installing photovoltaic solar systems on new and existing public buildings. This section authorizes $50 million for each 

of the fiscal years 2006 through 2010 to promote and install such 

systems, and it further authorizes $10 million for each of the fiscal 

years 2006 through 2010 to evaluate such systems. 

Section 206. Grants to improve the commercial value of forest biomass for electric energy, useful heat, transportation fuels, petroleum-based product substitutes, and other commercial purposes 

Section 206 authorizes either the Secretary of Agriculture or the Secretary of the Interior to make grants up to $500,000 to businesses that use forest biomass to generate electricity, sensible heat, 

transportation fuels or petroleum substitutes. 

Section 207. Biobased products 

Section 207 amends the Farm Security and Rural Investment Act 

of 2002 to include degradable products. 

Section 208. Renewable energy security 

Section 208 authorizes the Secretary of Energy to provide incentives in the form of rebates to consumers for the installation of renewable energy systems in their homes and small businesses. Renewable energy systems include solar, wind, geothermal, and biomass power production systems. It authorizes $150 million for fiscal years 2006 and 2007, $200 million for fiscal year 2008, and 

$250 million for fiscal years 2009 and 2010. 

Subtitle C—Hydroelectric 

PART I—ALTERNATIVE CONDITIONS

Section 231. Alternative conditions and fishways 

Section 231 amends the Federal Power Act to give licensees the 

right to an agency trial-type hearing of any disputed issues of material fact whenever the Secretary of the resource agency determines a condition or fishway is required for a hydroelectric license. 

Section 231 also adds a new section 33 to the Federal Power Act, 

requiring the relevant Secretary to accept alternatives to conditions 

or fishways proposed by a licensee, if such alternatives meet the 

standards in the bill. The new section requires the Secretary to 

provide a written statement for the record containing specific information with respect to each condition, fishway, or alternative. Further, the new section allows the Commission to refer disputes regarding conditions, fishways, and alternatives to the Commission’s 

Dispute Resolution Service, which may then issue non-binding advisory opinions. 

PART II—ADDITIONAL HYDROPOWER

Section 241. Hydroelectric production incentives 

Section 241 provides that the Secretary of Energy shall make incentive payments of 1.8 cents per kWh (to be adjusted for inflation) 

for electric energy produced at qualified hydroelectric facilities put 

234

into service at existing dams or conduits within 10 years of the 

date of enactment of the section. Incentive payments may not exceed $750,000 per year to any one facility. The section authorizes 

$10 million for fiscal years 2006 through 2015 for the program. 

Section 242. Hydroelectric efficiency improvement 

Section 242 authorizes the Secretary of Energy to make limited 

incentive payments to owners or operators of existing hydroelectric 

facilities to improve the efficiency of such facilities by at least 3 

percent. The section authorizes $10 million for each of the fiscal 

years 2006 through 2015 for the program. 

Section 243. Small hydroelectric power projects 

Section 243 amends the Public Utility Regulatory Policies Act of 

1978 to make newer small hydroelectric power projects eligible for 

low-interest Federal loans and other programs. 

Section 244. Increased hydroelectric generation at existing Federal 

facilities 

Section 244 directs the Secretary of Energy and the Secretary of 

the Interior, in consultation with the Secretary of the Army, to conduct studies of opportunities to increase hydropower production 

and operational efficiency at Federal dams. 

Section 245. Shift of project loads to off-peak periods 

Section 245 directs the Secretary of the Interior to review the 

pumping of water for irrigation by the Bureau of Reclamation and, 

with consent of irrigation customers, adjust such pumping so as to 

minimize pumping during periods of peak electric consumption. 

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 and the Northeast Home Heating Oil Reserve, requires that 

the Secretary of Energy fill the Strategic Petroleum Reserve to its 

authorized capacity as expeditiously as practicable, and makes 

technical amendments. 

Section 302. National Oilheat Research Alliance 

Section 302 authorizes the National Oilheat Research Alliance 

until 2009. 

Section 303. Site selection 

Section 303 requires the Secretary of Energy within one year of 

enactment to complete a proceeding to select, from sites the Secretary has previously studied, sites necessary to enable acquisition 

of the Strategic Petroleum Reserve’s authorized capacity. 

Section 304. Suspension of Strategic Petroleum Reserve deliveries 

Section 304 requires the Secretary of Energy to suspend deliveries of royalty-in-kind oil to the Strategic Petroleum Reserve until 

235

the price of oil falls below $40 per barrel for two consecutive weeks 

on the New York Mercantile Exchange. 

Subtitle B—Production Incentives 

Section 320. Liquefaction or gasification natural gas terminals 

Section 320 provides that no person may construct, expand or operate a liquefaction or gasification natural gas terminal without an 

authorizing order from the Federal Energy Regulatory Commission 

(FERC). Section 320 makes clear that FERC has preemptive authority to site liquefaction or gasification natural gas terminals to 

the extent the terminal involves foreign or interstate commerce. 

The defined term ‘‘liquefaction or gasification natural gas terminal’’ 

is generally intended to be inclusive of all facilities required to provide terminal services and includes any natural gas pipeline connecting the terminal’s natural gas supply up to but not including 

a pipeline subject to the jurisdiction of the Commission under section 7 of the Natural Gas Act or an intrastate natural gas pipeline 

(any pipeline that provides natural gas supply to non-terminal 

owners or customers). 

This section is also intended to provide a statutory framework for 

the efficient approval of a proposed liquefaction or gasification natural gas terminal. For any proposed terminal, FERC is to be the 

lead agency for the purposes of the National Environmental Policy 

Act of 1969 and coordinating all applicable Federal authorizations 

required. FERC is required to establish a schedule for all administrative proceedings required under authority of Federal law, accommodating the applicable schedules established by Federal law. This 

section also requires FERC to maintain a complete consolidated 

record of all decisions made or actions taken by FERC or any agency acting pursuant to Federal law regarding a proposed terminal 

and any administrative appeal or review of Federal authority for 

such terminal shall use this record developed by FERC. This section also provides that the court of original and exclusive jurisdiction for all claims brought under Section 3(d) of the Natural Gas 

Act shall be the United States Court of Appeals for the District of 

Columbia Circuit. 

Section 320 also requires FERC to consult with the State commission of the state in which the liquefaction or gasification natural gas terminal is located regarding local safety considerations 

during the authorization process. This section provides further authority for the State commission to perform safety and security inspections of any terminal after the terminal is operational provided 

that the State commission has given notice to FERC that it intends 

to perform such inspections and provided any such inspections follow Federal safety and security rules and regulations. 

In addition, this section provides that any FERC authorizing 

order for a liquefaction or gasification natural gas terminal issued 

after the Act’s enactment but before January 1, 2011, shall not be 

conditioned on: (i) a requirement that the terminal be offered to 

persons other than the applicant or an affiliate thereof or (ii) any 

regulation of the terminal’s rates, charges, terms, or conditions of 

service.

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Section 327. Hydraulic fracturing 

Section 327 excludes hydraulic fracturing from the definition of 

underground injection as set forth in the Safe Drinking Water Act. 

Section 330. Appeals relating to pipeline construction or offshore 

mineral development projects 

Section 330 provides that any Federal administrative agency proceeding under Section 319 of the Coastal Zone Management Act 

(CZMA) that is an appeal or review of Federal authority for an 

interstate natural gas pipeline construction project, shall use the 

record developed by FERC. This section also provides that any Federal administrative agency proceeding under Section 319 of the 

Coastal Zone Management Act (CZMA) that is an appeal or review 

of Federal authority for an energy project, including projects to explore, develop, or produce mineral resources in the Outer Continental Shelf shall use the record developed by the lead Federal 

agency for the project. 

This section also provides a sense of Congress that all Federal 

and State agencies with jurisdiction over interstate natural gas 

pipelines coordinate their proceedings within the timeframes established by FERC. 

Section 333. Natural gas market transparency 

Section 333 requires the FERC to issue rules within 180 days of 

the Act’s enactment directing all entities subject to FERC jurisdiction timely report to FERC information about the availability and 

prices of natural gas sold at wholesale in interstate commerce, such 

information to be evaluated by FERC for price transparency and 

accuracy. FERC enforcement of the section is subject to a 3-year 

statute of limitations. 

This section also provides that FERC, in exercising its authority 

pursuant to the section, shall not regulate, impose requirements 

on, compete with, or displace price publishers and further cannot 

condition access to interstate pipeline transportation upon the reporting requirements authorized under this section. 

Further, this section provides that the reporting requirements of 

this section shall not apply to natural gas produced and sold by a 

producer or those with de minimis market presence. 

Subtitle C—Access to Federal Land 

Section 344. Consultation regarding oil and gas leasing on public 

land 

Section 344 directs the Secretary of Interior and Secretary of Agriculture to enter into a Memorandum of Understanding regarding 

procedures for processing oil and gas lease applications, coordinating planning and environmental compliance efforts and the use 

of lease stipulations. 

This section further requires the Secretaries to construct a joint 

data system capable of tracking lease requests and applications. 

237 

Section 346. Compliance with Executive Order 13211; actions concerning regulations that significantly affect energy supply, distribution, or use 

Section 346 requires compliance with Presidential Executive 

Order 13211, when Federal agency action would have an significant adverse effect on the supply of domestic energy resources from 

Federal public land. 

Section 350. Energy facility rights-of-way and corridors on Federal 

land 

Section 350 requires a joint report to Congress on existing rightsof-way and designated and de facto corridors for oil and gas pipelines and electric transmission and distribution lines on Federal 

land. 

This section also requires an analysis of opportunities for expanding capacity within such rights-of-way and corridors and a 

plan for sharing that information with those involved in the siting, 

subject to limitations for national security. 

Further, section 350 provides a 2-year deadline for designation of 

corridors across Federal lands in the eleven contiguous Western 

States for transmission rights-of-way and pipelines and provides 4 

years for an evaluation of the merits of identifying and proposing 

corridors across federal lands in all other states. 

In addition, this section sets forth a definition for corridors. 

Section 355. Encouraging Great Lakes oil and gas drilling ban 

Section 355 encourages no Federal or State permit or lease to be 

issued for new oil and gas slant, directional, or offshore drilling in 

one or more of the Great Lakes. 

Section 358. Federal coalbed methane regulation 

Section 358 allows any State currently on the list of Affected 

States established under section 1339(b) of the Energy Policy Act 

of 1992 to be removed from the list if appropriate action for removal is taken within 3 years of enactment of the Act. 

Subtitle D—Refining Revitalizaton 

Section 371. Short title 

Section 371 establishes the short title as the ‘‘United States Refinery Revitalization Act of 2005.’’ 

Section 372. Findings 

Section 372 includes the findings. 

Section 373. Purpose 

Section 373 establishes the purpose. 

Section 374. Designation of Refinery Revitalization Zones 

Section 374 directs the Secretary of Energy to designate as a Refinery Revitalization Zone any area that: (1) has experienced mass 

layoffs at manufacturing facilities or contains an idle refinery; and, 

(2) has an unemployment rate that exceeds the national average by 

at 10 percent of the national average, as set forth at the time of 

designation as a Refinery Revitalization Zone. 

238 

Section 375. Memorandum of understanding 

Section 375 directs the Secretary of Energy and the Administrator of the Environmental Protection Agency (EPA) to enter into 

a memorandum of understanding for the purposes of the subtitle. 

Section 376. State environmental permitting assistance 

Section 376 directs the Secretary of Energy and the Administrator of EPA to designate one or more employees to any Qualified 

State with technical and legal expertise relating to the siting and 

operation of refineries. 

Section 377. Coordination and expeditious review of permitting 

process 

Section 377 designates DOE as lead agency for coordinating Federal authorizations and related environmental reviews of a proposed refinery facility. It directs the DOE, as lead agency, to prepare a single environmental review document to be used as the 

basis for all decisions on the proposed refinery facility. The section 

also sets forth an appeals process through the Secretary of Energy 

in the event the Federal authorization required to site and construct a refinery facility has been either denied, or an agency has 

failed to act by the deadline established by the Secretary. Any appeal of the Secretary’s determination must be filed with the United 

States Court of Appeals for the District of Columbia. Section 377 

directs the Secretary of Energy to issue regulations necessary to 

implement the subtitle. 

Section 378. Compliance with all environmental regulations required 

Section 378 provides that nothing in the subtitle shall be construed to waive the applicability of environmental laws and regulations to any refinery facility. 

Section 379. Definitions 

Section 379 provides definitions for certain terms. 

TITLE IV—COAL 

Subtitle A—Clean Coal Power Initiative 

Section 401. Authorization of appropriations 

Section 401 authorizes $200 million for each fiscal year 2006 

through 2014. The Secretary of Energy is required to submit a report that consists of a 10-year plan for the Clean Coal Power Initiative. The Report is to include an assessment of whether aggregate 

funding levels are appropriate, a description of how proposals will 

be solicited and evaluated, including a list of projects expected to 

be undertaken, a list of technical milestones, and a description of 

the manner in which the program will avoid problems described by 

the Government Accountability Office. 

Section 402. Project criteria 

Section 402 establishes technical and financial criteria for the 

Clean Coal Power Initiative regarding gasification projects and 

other projects funded under the Initiative. Subsection (f) specifies 

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that the use of a certain technology by any facility assisted under 

this subtitle or the achievement of certain emission reduction levels 

by any such facility will not result in that technology or emission 

reduction level being considered achievable, achievable in practice, 

or ‘‘adequately demonstrated’’ for purposes of sections 111, 169 or 

171 of the Clean Air Act. 

Section 403. Report 

Section 403 requires the Secretary of Energy to transmit regular 

reports to Congress concerning technical milestones established in 

the program and the status of projects funded under the program. 

Section 404. Clean coal centers of excellence 

Section 404 authorizes competitive, merit-based grants for the establishment of Centers of Excellence for Energy Systems of the Future. 

Subtitle B—Coal Power Projects 

Section 411. Coal technology loan 

Section 411 authorizes $125 million for a coal technology loan to 

the owner of an experimental plant constructed under an agreement with DOE. 

Section 412. Coal gasification 

Section 412 authorizes the Secretary to provide loan guarantees 

for a 400MW project using integrated gasification combined cycle 

technology to produce power at competitive rates in deregulated 

markets not subsidized by ratepayers. 

Section 414. Petroleum coke gasification 

Section 414 authorizes the Secretary of Energy to provide loan 

guarantees for 5 petroleum coke gasification polygeneration 

projects. 

Section 416. Electron scrubbing demonstration 

Section 416 directs the Secretary of Energy to use $5 million to 

initiate a project to demonstrate the viability of high-energy electron scrubbing technology on commercial scale electric generation 

using high-sulfur coal. 

Subtitle D—Coal and Related Programs 

Section 441. Clean air coal program 

Section 441 amends the Energy Policy Act of 1992 by directing 

the Secretary of Energy to establish a program to enhance the deployment of fully developed and commercially demonstrated clean 

coal technologies including pollution control equipment. The section 

authorizes for pollution control projects $300,000,000 for fiscal year 

2006, $100,000,000 for fiscal year 2007, $40,000,000 for fiscal year 

2008, $30,000,000 for fiscal year 2009, and $30,000,000 for fiscal 

year 2010. Further, section 441 authorizes for generation projects 

$250,000,000 for fiscal year 2007, $350,000,000 for fiscal year 2008, 

$400,000,000 for each fiscal year 2009 through 2012, and 

$300,000,000 for fiscal year 2013. Air pollution control projects are 

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to facilitate compliance with Federal and State environmental regulations. Generation projects are required to meet thermal efficiency milestones that increase over the lifetime of the program. 

This section requires financial assistance be provided only to those 

financially viable, for projects that achieve overall cost reductions 

and increase the cost competitiveness of coal. Subsection (f) specifies that the use of a certain technology by any facility assisted 

under this subtitle or the achievement of certain emission reduction levels by any such facility will not result in that technology or 

emission reduction level being considered achievable, achievable in 

practice, or ‘‘adequately demonstrated’’ for purposes of sections 111, 

169 or 171 of the Clean Air Act. 

TITLE V—INDIAN ENERGY 

Section 501. Short title 

Section 501 establishes the short title for title V as the ‘‘Indian 

Tribal Energy Development and Self-Determination Act of 2005.’’ 

Section 502. Office of Indian Energy Policy and Programs 

Section 502 establishes within DOE an Office of Indian Energy 

Policy and Programs. 

Section 503. Indian energy 

Section 503 provides a complete new substitute for title 26 of the 

Energy Policy Act of 1992. New sections 2602 and 2603 authorize 

the Secretary of the Interior to provide grants to tribes to develop 

and utilize their energy resources and to enhance the legal and administrative ability of tribes to manage their resources. New section 2604 establishes a process by which an Indian tribe, upon 

demonstrating its technical and financial resources, could negotiate 

and execute energy resource development leases, agreements and 

rights-of-way with third parties without first obtaining the approval of the Secretary of the Interior. New section 2605 directs the 

Secretary of the Interior to review activities authorized under the 

Indian Mineral Development Act. 

Section 504. Four Corners transmission line project 

Section 504 makes Dine Power Authority, a Navajo Nation enterprise, eligible for funding under this title. 

Section 505. Energy efficiency in federally assisted housing 

Section 505 requires the Secretary of Housing and Urban Development to promote energy conservation in housing located on Indian lands. 

Section 506. Consultation with Indian tribes 

Section 506 requires the Secretaries of the Interior and Energy 

to involve and consult with the Tribes as appropriate and to the 

maximum extent practicable. 

241 

TITLE VI—NUCLEAR MATTERS 

Subtitle A—Price-Anderson Act Amendments 

Section 601. Short title 

Section 601 provides the short title of the legislation, the ‘‘PriceAnderson Reauthorization Act of 2005.’’ 

Section 602. Extension of indemnification authority 

Section 602 extends Price-Anderson indemnification authority, to 

December 31, 2025, for Nuclear Regulatory Commission (NRC) licensees, Department of Energy (DOE) contractors, and DOE nonprofit educational institutions. 

Section 603. Maximum assessment 

Section 603 provides an inflation adjustment for the maximum 

premium assessment from $10 million to $15 million. Both the annual and maximum premium will be adjusted for inflation going 

forward from August 20, 2003, not less than once every five years. 

Section 604. Department of Energy liability limit 

Section 604 sets the limitation on aggregate public liability for 

DOE contractors for a single nuclear incident. This section establishes the amount of indemnification of DOE contractors at $10 billion, subject to adjustment for inflation, for all persons indemnified 

in connection with the contract, and for each nuclear incident. 

Section 605. Incidents outside the United States 

Section 605 increases the amount of indemnification and liability 

limit for incidents outside of the United States from $100,000,000 

to $500,000,000 for DOE contractors. 

Section 606. Reports 

Section 606 requires the NRC and DOE, by December 31, 2021, 

to submit detailed reports to Congress concerning the Price-Anderson Act and related matters, such as the availability of private insurance. 

Section 607. Inflation adjustment 

Section 607 creates a new July 1, 2003 baseline for future inflation adjustments to the $10 billion DOE indemnification amount 

created in section 604, and requires an inflation adjustment not 

less than once every five years going forward from July 1, 2003. 

Section 608. Treatment of modular reactors 

Section 608 allows a combination of two or more modular reactors each with a rated capacity between 100 and 300 megawatts, 

and built at the same site, to be considered one facility for purposes 

of indemnification under section 170 of the Atomic Energy Act. 

This new definition of ‘‘facility’’ in this section applies only for purposes of section 170 financial protection requirements. 

242 

Section 609. Applicability 

Section 609 ensures that the amendments made by sections 603, 

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

the date of enactment of the Act. 

Section 610. Prohibition on assumption by United States Government of liability for certain foreign accidents 

Section 610 prevents any instrumentality of the United States 

Government from entering into any arrangement that would impose liability on any instrumentality of the United States Government for nuclear accidents that occur in any country identified by 

the Secretary of State as a sponsor of terrorist activities, including 

countries known to have repeatedly provided support for acts of 

international terrorism. 

Section 611. Civil penalties 

Section 611 ends the automatic remission of civil penalties for 

nonprofit institutions listed in section 234A(d) of the Atomic Energy Act. This section also ends the Secretary’s authority to determine whether nonprofit educational institutions should receive 

automatic remission of any civil penalty issued under section 234A. 

Civil penalties are limited to the amount of any earned fee paid to 

the contractor under the contract under which the nuclear safety 

violation occurs, as determined by the Secretary. 

Section 612. Financial accountability 

Section 612 authorizes the Attorney General to bring an action 

to recover from a DOE contractor, subcontractor, or supplier 

amounts paid by the Federal government under an indemnity 

agreement for public liability resulting from conduct which constitutes intentional misconduct of any corporate officer, manager, 

or superintendent of the DOE contractor, subcontractor, or supplier. The Attorney General, however, may not recover an amount 

exceeding the amount of profit derived by the defendant under the 

contract. DOE cannot reimburse the contractor of the amount recovered. This provision does not apply to any nonprofit entity conducting activities under the DOE contract. DOE is required to define the terms ‘‘profit’’ and ‘‘nonprofit entity’’ in a rulemaking to be 

completed within 180 days after enactment. 

Subtitle B—General Nuclear Matters 

Section 621. Licenses 

Section 621 provides that the initial period of a combined construction and operating license for a production or utilization facility, as authorized by the Energy Policy Act of 1992 (P.L. 102–486, 

106 Stat. 2776), may not exceed 40 years from the date on which 

the NRC finds that the acceptance criteria for such license required 

under section 185(b) of the Atomic Energy Act of 1954 (42 U.S.C. 

2235) have been met. 

Section 622. NRC training program 

Section 622 establishes a training and fellowship program to address shortages of individuals with critical nuclear safety reguVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00242 Fmt 6659 Sfmt 6602 E:\HR\OC\HR215P1.XXX HR215P1
243 

latory skills. For fiscal years 2005 through 2009, $1 million per 

year is authorized to be appropriated to carry out this program. 

Section 623. Cost recovery from government agencies 

Section 623 authorizes the Commission to assess and collect fees 

from other Federal agencies in return for services rendered by the 

NRC, rather than recovering these costs through the annual fees 

assessed to all NRC licensees. The replacement of section 483a 

with section 9701 is a correction to the proper United State Code 

reference. 

Section 624. Elimination of pension offset 

Section 624 allows retired NRC employees with critical skills to 

receive full pay from NRC for any consulting services. 

Section 625. Antitrust review 

Section 625 eliminates the Atomic Energy Act section 105 antitrust review provisions for any application for a utilization facility 

or production facility under section 103 or 104 b. of that Act that 

is filed on or after the date of enactment of this section. 

Section 626. Decommissioning 

Section 626 clarifies that NRC’s general authorities listed in section 161 of the Atomic Energy Act include the authority to ensure 

sufficient funds are available for the decommissioning of any production or utilization facility listed under section 104 or 104 b. of 

that Act. 

Section 627. Limitation on legal fee reimbursement 

Section 627 limits DOE from reimbursing the legal fees of its 

contractors subsequent to an adverse determination or judgment 

against a contractor for acts of whistleblower retaliation. If the adverse determination is later reversed, DOE may reimburse the contractor’s legal fees. 

Section 629. Report on feasibility of developing commercial nuclear 

energy generation facilities at existing Department of Energy 

sites 

Section 629 requires the Secretary of Energy to report to Congress within 1 year on the feasibility of developing commercial nuclear energy generation facilities at DOE sites. 

Section 630. Uranium sales 

Section 630 authorizes DOE to sell or transfer its uranium inventories, in any form owned by DOE, in amounts not to exceed 3 million pounds in fiscal years 2005 through 2009, 5 million pounds in 

fiscal year 2010 or 2011, 7 million pounds in fiscal year 2012, and 

10 million pounds in fiscal year 2013 or thereafter. This section 

also authorizes DOE to transfer uranium to the United States Enrichment Corporation (USEC). Further, section 630 authorizes 

DOE to terminate, waive, or modify its June 17, 2002 Agreement 

with USEC. 

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Section 631. Cooperative research and development and special 

demonstration projects for the uranium mining industry 

Section 631 authorizes $10,000,000 per year for three years beginning in 2006, for cooperative, cost-shared, agreements between 

DOE and domestic uranium producers to develop in site leaching 

mining technologies, and low cost environmental restoration technologies. The funding is also provided for competitively selected 

demonstration projects with domestic uranium producers for enhanced production, restoration of well fields, and decommissioning 

and decontamination activities. 

Section 632. Whistleblower protection 

Section 632 expands the definition of employer under section 

211(a)(2) of the Energy Reorganization Act (ERA) to include all 

contractor and subcontractor employees of the NRC. Any such employees that experience an act of discrimination related to activities 

covered under 211(a)(1) of the ERA may file a complaint with the 

Secretary of Labor. This section also provides whistleblowers with 

the opportunity to bring the complaint directly to Federal district 

court if the Secretary of Labor has failed to issue a final order 

within 540 days from the date the complaint is filed. 

Section 633. Medical isotope production 

Section 633 sets out conditions under which the NRC can license 

the export of highly enriched uranium used in foreign reactors for 

medical isotope production. NRC is required to review the adequacy of physical security of the materials in transport, and impose 

additional security requirements if necessary. 

Section 634. Fernald byproduct material 

Section 634 designates certain wastes stored at Fernald as Atomic Energy Act 11e.(2) byproduct material. DOE may dispose of the 

material in a facility regulated by the NRC or an NRC Agreement 

State. 

Section 635. Safe disposal of greater-than-class c radioactive waste 

Section 635 requires the Secretary of Energy to designate an office within the Department with responsibility to establish a facility for safely disposing of waste with concentrations of radionuclides that exceed the limits established by NRC for Class C radioactive waste. The section also requires the Secretary develop a 

comprehensive plan for permanent disposal of these wastes, including a disposal facility. 

Section 636. Prohibition on nuclear exports to countries that sponsor 

terrorism 

Section 636 restricts the export or transfer of nuclear materials 

and equipment or sensitive nuclear technology to any country 

whose government has been identified by the Secretary of State as 

engaged in state sponsorship of terrorist activities. The President 

may waive these restrictions under certain criteria listed in the 

section. 

245 

Section 638. National uranium stockpile 

Section 638 authorizes the Secretary of Energy to create a national low-enriched uranium stockpile intended to enhance national 

energy security, and reduce global proliferation threats. 

Section 639. Nuclear Regulatory Commission meetings 

Section 639 makes available to the public, upon request, a transcript of discussions involving a quorum of NRC Commissioners 

who gather to discuss official Commission business. This provision 

requires that NRC make a recording of such meetings, and provide 

notice to the public within 15 days after such meetings. NRC is further required to promptly make a transcript available to the public, 

upon request, to the extent that public disclosure of the transcript 

is not subject to an exemption or prohibition under applicable law. 

Section 640. Employee benefits 

Section 640 ensures the protection of workers’ rights with respect 

to pension and welfare benefits of employees currently working for 

a Department of Energy (DOE) contractor (or its first or second tier 

subcontractors), or the United States Enrichment Corporation 

(USEC) at the Portsmouth, Ohio or Paducah, Kentucky facilities. 

This section provides that when DOE changes its contractors at the 

facilities, or when hourly employees transfer from USEC to a DOE 

contractor, the employees do not lose their accrued service credit or 

rights to transfer into the DOE contractors’ Multiple Employer 

Pension Plan or the Multiple Employer Welfare Arrangement (retiree health care plan). 

The section provides the Secretary of Energy with 30 days to 

make all necessary modifications to contracts and benefit plan documents to the extent appropriations are provided in advance for 

this purpose, or are otherwise available. 

Subtitle C—Additional Hydrogen Provisions 

Section 651. Hydrogen production programs 

Section 651 authorizes research, development, design, construction and operation of an advanced reactor hydrogen cogeneration 

project. The Idaho National Laboratory is the lead lab for the 

project. The section also authorizes the establishment of 5 projects 

to demonstrate the commercial production of hydrogen at existing 

nuclear power plants, including one demonstration project at a national laboratory or institute of higher education. Section 651 also 

requires NRC prioritize licensing of a utilization facility that is collocated with a hydrogen production facility. The section requires 

NRC issue a final decision approving or disapproving a license to 

construct and operate a utilization facility within 3 years after submission of such application, if the application references an NRC 

certified reactor design and an early site permit. 

Section 652. Definitions 

Section 652 provides definitions for purposes of the subtitle. 

246 

Subtitle D—Nuclear Security 

Section 661. Nuclear facility threats 

Section 661 requires the President to conduct a study to identify 

the types of threats that pose an appreciable risk to the security 

of the various classes of NRC-licensed facilities. In preparing the 

study, the President is to consult with the NRC and other governmental and nongovernmental entities. The study must consider (1) 

the events of September 11, 2001; (2) physical, cyber, biochemical, 

and other terrorist threats; (3) the potential for attack on facilities 

and spent fuel shipments by multiple coordinated teams of a large 

number of individuals; (4) the potential for assistance in an attack 

from several employees at the facility; (5) the potential for suicide 

attacks; (6) the potential for water-based and air-based threats; (7) 

the potential use of explosive devices of considerable size and other 

modern weaponry; (8) the potential for attacks by persons with a 

sophisticated knowledge of facility operations; (9) the potential for 

fires of long duration; (10) the potential for attacks on spent fuel 

shipments; (11) the adequacy of planning to protect public health 

and safety; and, (12) the potential for diversion of nuclear materials. 

Within 180 days after enactment, the President is to submit a report to Congress and the NRC. The Report must summarize the 

types of threats identified and must classify each type of threat as 

either involving attacks and destructive acts, including sabotage, 

directed against the facility by an enemy of the United States or 

otherwise falling under the responsibilities of the Federal Government, or involving the type of risks that the NRC licensees should 

be responsible for guarding against. Following submission of the report, the President is required to transmit a report to Congress 

within 90 days on actions taken, or to be taken, to address the 

types of threats identified in the President’s report as involving attacks and destructive acts, including sabotage, directed against the 

facility by an enemy of the United States or otherwise falling under 

the responsibilities of the Federal Government. The NRC may 

issue rules revising the design basis threat, to ensure that licensees 

address the threats identified in the President’s report as involving 

the type of risks that the NRC licensees should be responsible for 

guarding against. The NRC may promulgate such regulations not 

later than 180 days after the President transmits his initial report 

to the Commission and Congress. The NRC shall establish an operational safeguards response and evaluation program to ensure that 

protection and response capabilities are periodically tested. The 

NRC shall assign Federal security coordinators for each region of 

the Commission. The President shall establish a program to provide training for Federal agencies, the National Guard, and state 

and local law enforcement and emergency response agencies in responding to threats against nuclear facilities. 

Section 662. Fingerprinting for criminal history record checks 

Section 662 expands the class of persons that are required 

fingerprinting for criminal history record checks under section 149 

of the Atomic Energy Act. Persons required to conduct 

fingerprinting include NRC licensees and certificate holders, applicants for an NRC license or certificate, and any person that notifies 

247 

NRC in writing of an intent to file an application for licensing, certification, or approval of a product or activity subject to regulation 

by NRC. Biometric methods may be used in place of fingerprinting 

if approved by the Attorney General and NRC. 

Section 663. Use of firearms by security personnel of licensees and 

certificate holders of the commission 

Section 663 authorizes guards at certain facilities licensed or certified by NRC to carry and use certain weapons, ammunition, or 

devices where necessary to discharge the security personnel’s official duties. Guards are subject to background checks by the Attorney General. 

Section 664. Unauthorized introduction of dangerous weapons 

Section 664 expands current law authorizing the NRC to regulate 

the introduction of dangerous weapons at its own facilities to include facilities licensed or certified by the Commission. 

Section 665. Sabotage of nuclear facilities or fuel 

Section 665 amends current law prescribing penalties for sabotage or attempted sabotage of nuclear facilities by expanding the 

type of facilities covered and increasing existing fines and other 

penalties. 

Section 666. Secure transfer of nuclear materials 

Section 666 directs the Nuclear Regulatory Commission (NRC) to 

establish a system to ensure that shipments of certain radioactive 

materials carry a manifest describing the type and amount of materials being transported and individuals receiving or accompanying such shipments are subject to background checks. 

Section 667. Department of homeland security consultation 

Section 667 requires NRC to consult with the Department of 

Homeland Security concerning the potential vulnerabilities of the 

location of the proposed utilization facility to terrorist attack. 

Section 668. Authorization of appropriations 

Section 668 makes permanent NRC’s 90 percent fee recovery requirement for user fees established in the Omnibus Budget Reconciliation Act of 1990. The section also provides for the exclusion 

of NRC appropriations for homeland security activities (except 

fingerprinting and background checks required by section 149 of 

the Atomic Energy Act) from the annual fee collected from licensees and certificate holders. 

TITLE VII—VEHICLES AND FUELS 

Subtitle A—Existing Programs 

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

Section 701 amends the Energy Policy and Conservation Act (42 

U.S.C. 6374(a)(3)(E)) by requiring dual fueled vehicles to operate 

on alternative fuels unless the Secretary determines that an agency 

qualifies for a waiver. A waiver may be granted if the alternative 

fuel is not reasonably available to retail purchasers, or the cost of 

248 

the alternative fuel is unreasonably more expensive compared to 

gasoline. The Secretary shall monitor compliance by all fleets and 

shall report annually to Congress on its achievement. 

Section 704. Incremental cost allocation 

Section 704 amends the Energy Policy and Conservation Act to 

require the General Services Administration to allocate the incremental costs of the alternative fuel vehicles across the entire fleet 

of vehicles in order to encourage the purchase of new alternative 

fueled vehicles in the federal fleet. 

Section 705. Lease condensates 

Section 705(a) amends the Energy Policy Act of 1992 to allow 

mixtures containing 50 percent or more by volume of lease condensate or fuels extracted from lease condensate to be considered an 

‘‘alternative fuel’’ as well as a ‘‘replacement fuel’’, and defines the 

term ‘‘lease condensate. 

Section 705(b) provides lease condensate fuel use credits under 

the Energy Policy Act of 1992. The language allows one credit for 

a fleet or covered person for each qualifying volume of lease condensate containing at least 50 percent lease condensate or fuels extracted from lease condensate. Section 705(b) requires the Secretary to issue a regulation establishing requirements and procedures to implement the credits and shall include a determination 

of an appropriate qualifying volume for lease condensate, but it 

may not be less than 1,125 gallons. Section 705(b) applies unless 

the Secretary finds that the use of lease condensate as an alternative fuel would adversely affect public health or safety or ambient air quality or the environment. Finally, section 705(c) provides 

for an emergency exemption for vehicles used in emergency repair 

of transmission lines and in the restoration of electricity service following power outages. 

Section 706. Review of Energy Policy Act of 1992 programs 

Section 706(a) requires the Secretary to complete a study to determine the effect that Titles III, IV, and V of the Energy Policy 

Act of 1992 have on the development of alternative fueled vehicle 

technology, the availability of that technology in the market, and 

the cost of alternative fueled vehicles. Section 706(b) requires the 

Secretary to identify the number of alternative fueled vehicles acquired by fleets required to make such purchases, the quantity, by 

type, of alternative fuel actually used in such vehicles, the quantity 

of petroleum displaced by the use of alternative fueled vehicles, the 

direct and indirect costs of compliance, the existence of obstacles 

preventing compliance, and the projected impact of this Act. Section 706(c) requires the Secretary to transmit this study to Congress with any recommendations. 

Section 707. Report concerning compliance with alternative fueled 

vehicle purchasing requirements 

Section 707 amends the Energy Policy Act of 1992 (42 U.S.C. 

13218(b)(1)) by extending the date of compliance to February 15, 

2006. 

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Subtitle B—Hybrid Vehicles, Advanced Vehicles, and Fuel Cell 

Buses 

PART I—HYBRID VEHICLES

Section 711. Hybrid vehicles 

Section 711 directs the Secretary to accelerate efforts directed toward the improvement of batteries and other rechargeable energy 

storage systems, power electronics, hybrid systems integration, and 

other hybrid vehicles technologies. 

Section 712. Hybrid retrofit and electric conversion program 

Section 712 requires the Administrator of the EPA to establish 

a competitive grant program for the installation of hybrid retrofit 

and electric conversion technologies for combustion engine vehicles. 

Eligible grant recipients are to include local or state entities, forprofit or nonprofit corporations, and contracting entities that service combustion engine vehicles for the eligible recipients. The section authorizes $20,000,000 for fiscal year 2005, $35,000,000 for fiscal year 2006, $45,000,000 for fiscal year 2007, and sums as are 

necessary for fiscal years 2008 and 2009. 

PART II—ADVANCED VEHICLES

Section 721. Definitions 

Section 721 provides definitions for purposes of the subtitle. 

Section 722. Pilot program 

Section 722 directs the Secretary of Energy, in consultation with 

the Secretary of Transportation, to establish a competitive grant 

program, administered through DOE Clean Cities Program, to provide up to 15 geographically dispersed project grants to State and 

local governments or metropolitan transportation authorities for acquisition of alternative fueled vehicles, hybrid vehicles, or fuel cell 

vehicles, including the necessary infrastructure to support such vehicles. The section provides various selection criteria and grant requirements. 

Section 723. Reports to Congress 

Section 723 requires a report to Congress, from the Secretary of 

Energy, identifying grant recipients, grant applicants, and other information. 

Section 724. Authorization of appropriations 

Section 724 authorizes $200,000 for this program to remain 

available until expended. 

PART III—FUEL CELL BUSES

Section 731. Fuel cell transit bus demonstration 

Section 731 directs the Secretary of Energy to establish a program to make competitive, merit-based awards for 5-year projects 

to demonstrate not more than 25 fuel cell transit buses and the 

necessary infrastructure in 5 geographically dispersed localities. In 

the selection of projects under the program, preference is given to 

projects most likely to mitigate congestion and improve air quality. 

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Subtitle C—Clean School Buses 

Section 741. Definitions 

Section 741 provides definitions for purposes of the subtitle. 

Section 742. Program for replacement of certain school buses with 

clean school buses 

Section 742 establishes a competitive program, within the EPA, 

for the awarding to eligible entities, grants for the replacement of 

existing school buses manufactured before model year 1991 with alternative fuel school buses and ultra-low sulfur diesel school buses. 

Grants may be made to state or local governments, contract entities that provide bus services for public schools, or a nonprofit 

school transportation association that has notified and received the 

approval of a school system served by the buses. Emissions standards are specified for the different types of buses qualified to participate in the program. This section authorizes $45,000,000 in fiscal year 2005, $65,000,000 in fiscal year 2006, $90,000,000 in fiscal 

year 2007, and such sums as necessary in fiscal years 2008 and 

2009. 

Section 743. Diesel retrofit program 

Section 743 establishes a competitive program, within the EPA, 

for the awarding to eligible entities, grants for the installation of 

retrofit technologies for diesel school buses manufactured in model 

year 1991 or later. Grants may be awarded to state or local governments, contract entities that provide bus services for public schools, 

or a nonprofit school transportation association that has notified 

and received the approval of a school system served by the buses. 

This section provides that in making awards of grants under this 

program the Administrator shall give preference to proposals that 

achieve the greatest reductions in emissions or involve the use of 

emissions control retrofit technology on diesel school buses operating solely on ultra-low sulfur diesel fuel. Section 743 authorizes 

$20,000,000 for fiscal year 2005, $35,000,000 for fiscal year 2006, 

$45,000,000 for fiscal year 2007, and such sums as necessary in fiscal years 2008 and 2009. 

Section 744. Fuel cell school buses 

Section 744 instructs DOE to establish a program for cooperative 

agreements with private sector fuel cell bus developers and local 

governments to facilitate the use of fuel cell-powered buses. 

Subtitle D—Miscellaneous 

Section 751. Railroad efficiency 

Section 751 directs the Secretary of Energy to establish a costshared public-private research partnership with the goal of developing and demonstrating locomotive technologies that increase fuel 

economy, reduce emissions and lower costs. The section authorizes 

$25,000,000 for fiscal year 2005, $35,000,000 for fiscal year 2007, 

and $50,000,000 for fiscal year 2008 for this purpose. 

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Section 752. Mobile emissions reductions trading and crediting 

Section 752 requires the EPA to report on the Agency’s experience with the trading of mobile source emission reduction credits 

and evaluate how resolution of issues in mobile trading could be 

utilized in other projects. 

Section 753. Aviation fuel conservation and emissions 

Section 753 instructs the EPA and the Federal Aviation Administration to conduct a joint study of the impact of aircraft emissions 

on air quality in nonattainment areas and to identify ways to promote fuel conservation measures for aviation to enhance fuel efficiency and reduce emissions. 

Section 754. Diesel fueled vehicles 

Section 754 requires the Secretary of Energy to accelerate efforts 

to improve diesel combustion and after-treatment technologies with 

a goal of, not later than 2010, developing technologies that meet 

compliance with ‘‘Tier 2’’ emission standards, the heavy duty emissions standards and the development of next generation low-emission, high efficiency diesel engine technologies. 

Section 757. Biodiesel engine testing program 

Section 757 instructs the Secretary of Energy to initiate a partnership with diesel engine, diesel fuel injection system, and diesel 

vehicle manufacturers along with diesel and biodiesel fuel providers to include biodiesel testing in advanced diesel engine and 

fuel system technology. The program is to include testing to determine the impact of biodiesel from different sources on current and 

future emissions control technologies. This section authorizes 

$5,000,000 for each of fiscal years 2006 through 2010. 

Section 759. Ultra-efficient engine technology for aircraft 

Section 759 requires the Secretary of Energy to enter into a cooperative agreement with the National Aeronautics and Space Administration (NASA) for the development of ultra efficient engine 

technology for aircraft. This section instructs the Secretary to establish specific performance objectives, and authorizes $45,000,000 

for each of the fiscal years 2006 through 2010. 

Subtitle E—Automobile Efficiency 

Section 771. Authorization of appropriations for implementation 

and enforcement of fuel economy standards 

Section 771 authorizes the National Highway Traffic Safety Ad- ministration (NHTSA) an additional $2 million to implement and 

enforce fuel economy standards for fiscal years 2006 through 2008. 

Section 772. Revised considerations for decisions on maximum feasible average fuel economy 

Section 772 adds two new factors NHTSA must consider when 

setting the maximum feasible fuel economy, including the effects of 

fuel economy standards on passenger automobiles, nonpassenger 

automobiles, and occupant safety, and the effects of compliance 

with average fuel economy standards on levels of automobile industry employment in the United States. 

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Section 773. Extension of maximum fuel economy increase for alternative fueled vehicles 

Section 773 extends the sunset date for Corporate Average Fuel 

Economy (CAFE) credits currently available for dual fueled vehicles. Section 773 extends the maximum 1.2 CAFE credit to model 

year 2010 and if the Secretary, pursuant to existing law and regulation, extends the CAFE credit program for an additional four 

years, the 0.9 CAFE credit for dual fueled vehicles is extended to 

2014. 

Section 774. Study of feasibility and effects of reducing use of fuel 

for automobiles 

Section 774 directs NHTSA, within 30 days of the date of enactment of this bill, to study the feasibility and effects of reducing, by 

a significant percentage, fuel consumption by automobiles by model 

year 2012. This study must examine, and recommend alternatives 

to, the CAFE program, examine how automobile makers can contribute toward achieving the fuel savings, examine the potential of 

fuel cell technology, and how fuel cell technology may contribute towards achieving the fuel consumption reduction discussed in this 

section. In addition, the study must examine the effects of fuel consumption reductions on gasoline supplies, the automobile industry, 

including sales of automobiles manufactured in the United States, 

vehicle safety, and air quality. The report must be completed not 

later than one year after enactment of this bill. 

TITLE XIII—HYDROGEN 

Section 801. Definitions 

Section 801 includes the definitions. 

Section 802. Plan 

Section 802 requires the Secretary of Energy to work with other 

federal agencies to prepare a comprehensive interagency coordination plan for activities under the title. This plan may be provided 

as part of the President’s annual budget submission. Section 802 

requires the Secretary of Energy to submit a report within one year 

of enactment, and biennially thereafter, on the status of the programs under this title. 

Section 803. Programs 

Section 803(a) requires the Secretary of Energy to work with the 

private sector to conduct activities to address the production of hydrogen from sources including fossil fuels, hydrogen-carrier fuels, 

renewable energy resources, and nuclear energy, the use of hydrogen for commercial, industrial, and residential uses, the safe delivery of hydrogen, advanced vehicle technologies, storage of hydrogen, development of safe durable, affordable, and efficient fuel cells, 

development of codes and standards, public education, and the ability of the domestic automobile manufacturers to manufacture commercially available competitive hybrid technologies, such as batteries, in the United States. 

Section 803(b) sets out the goals for the hydrogen program. The 

goals for vehicles include a commitment by automakers to offer a 

safe, affordable and viable hydrogen fuel cell vehicle by 2015 in the 

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mass market, and to enable production, delivery, and acceptance of 

hydrogen-powered vehicles that have a range of 300 miles, have 

improved performance and ease of driving; meet all safety and performance technologies, and have higher fuel economy, lower emissions and equal or improved fuel system crash integrity and occupant protection. 

Section 802(b) also includes hydrogen infrastructure goals that 

must include a commitment by 2015 to enable the deployment by 

2020 of infrastructure to provide safe and convenient refueling, improved overall efficiency, widespread availability of hydrogen 

through production, delivery, and storage, hydrogen for fuel cells, 

and other technologies. Finally, section 803(b) sets goals for fuel 

cells to be used in portable, stationary and transportation applications. 

Section 803(c) requires the Secretary to fund a limited number 

of demonstration projects that involve using hydrogen at existing 

facilities, depend on hydrogen to carry out essential activities, lead 

to the replication of hydrogen technologies into the market, include 

vehicle, portable, and stationary demonstrations of fuel cells and 

hydrogen technologies, raise public awareness, facilitate identification of best technologies, address distributed generation using renewable sources, and address applications of rural or remote locations. 

Section 803(d) requires the Secretary of Energy to work with the 

private sector to conduct a program to facilitate deployment of hydrogen energy and energy infrastructure, fuel cells, and advanced 

vehicle technologies. 

Section 803(e) requires the Secretary to use a competitive, meritbased review process that may be carried out by funding nationally 

recognized universities or national laboratory research centers. For 

research and development, the Secretary shall require a 20 percent 

financial commitment from nonfederal sources. For demonstration 

and commercial application projects, the Secretary shall require at 

least a 50 percent financial commitment from nonfederal sources. 

This figure may be reduced upon a determination that the reduction is necessary and appropriate in light of the technological risks 

and objectives of this title. 

Section 803(g) states that Section 623 of the Energy Policy Act 

of 1992 (42 U.S.C. 13293) governs the protection of information. 

Section 804. Interagency task force 

Section 804 requires the creation of an interagency task force, to 

be chaired by the Secretary, within 120 days after enactment. 

Other agencies represented on the task force shall include the Office of Science and Technology Policy within the Executive Office 

of the President, Department of Transportation, Department of Defense, Department of Commerce, EPA, National Aeronautics and 

Space Administration, and other federal agencies as are necessary. 

The duties of the task force shall include coordinating the implementation of the interagency plan and work towards deployment of 

safe, economical and environmentally sound infrastructure, fuel 

cells in government applications, and distributed power generation, 

uniform hydrogen codes and standards, and vehicle hydrogen fuel 

system integrity safety performance. The task force shall also coordinate interagency information sharing to further the developVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00253 Fmt 6659 Sfmt 6602 E:\HR\OC\HR215P1.XXX HR215P1
254 

ment of hydrogen technologies through fostering exchange of generic, nonproprietary information, developing an inventory and assessment of hydrogen, fuel cell and other advanced technologies, integrating technical information, promoting a hydrogen marketplace, and conducting education programs. 

Section 805. Advisory Committee 

Section 805 requires the creation of an ‘‘Advisory Committee’’ to 

advise the Secretary of Energy on the programs and activities 

under the title comprised of between 12–25 members from industry, academia, government, professional groups, and any other appropriate organizations. The Committee shall review and make recommendations to the Secretary on the implementation of the programs, the safety, economical, and environmental consequences of 

the technologies, and the plan under section 802. The Secretary 

shall consider, but need not adopt, the recommendations from the 

Advisory Committee. The Secretary shall complete a biannual report to Congress describing the recommendations made by the Advisory Committee. 

Section 806. External review 

Section 806(a) requires the Secretary to enter into an arrangement with the National Academy of Sciences (NAS) to review the 

plan prepared under section 802. The Secretary shall transmit the 

NAS review to Congress along with a plan to implement the review’s recommendations or an explanation of the reasons that a 

recommendation will not be implemented. 

Section 806(b) requires the Secretary to enter into an arrangement with the NAS to review the programs under section 803 during the fourth year following the date of enactment of this Act. The 

Secretary shall transmit this review to Congress along with a plan 

to implement the review’s recommendations or an explanation of 

the reasons that a recommendation will not be implemented. 

Section 807. Miscellaneous provisions 

Section 807(a) allows the Secretary to represent the United 

States with respect to activities and programs under this title, in 

coordination with the Department of Transportation, the National 

Institute of Standards and Technology, and other relevant agencies 

before governments and nongovernmental organizations. Section 

807(b) states that nothing in this title shall be construed to alter 

the regulatory authority of the Department. 

Section 808. Savings clause 

Section 808 states that nothing in this title shall be construed to 

affect the authority of the Secretary of Transportation for specific 

programs. 

Section 809. Authorization of appropriations 

Section 809 authorizes appropriations of $546,000,000 in fiscal 

year 2006, $750,000,000 in fiscal year 2007, $850,000,000 in fiscal 

year 2008, $900,000,000 in fiscal year 2009, and, $1,000,000,000 in 

fiscal year 2010. 

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Section 810. Solar and wind technologies 

Section 810(a) requires the Secretary to (1) prepare a detailed 

roadmap to carry out the demonstration projects listed in the section and for implementing the recommendations related to solar 

energy technologies in the report under subsection (c); (2) provide 

for five solar projects in diverse geographic areas to demonstrate 

the production of hydrogen from solar facilities, including one at a 

national laboratory or institution of higher education; (3) establish 

a research and development program to develop concentrating solar 

power devices for the production of electricity and hydrogen, and 

to evaluate the use of thermochemical cycles for hydrogen production at temperatures attainable with solar power devices; (4) coordinate with the DOE Office of Nuclear Energy, Science, and 

Technology on high temperature materials, thermochemical cycles, 

and economic issues related to solar energy; (5) provide for the construction and operation of new solar power devices or solar cogeneration facilities which produce hydrogen with electricity; (6) support existing facilities and research programs for solar power; and, 

(7) establish a program to research and develop methods that use 

electricity from photovoltaic devices for the onsite production of hydrogen, evaluate the economies of small-scale electrolysis for hydrogen, and to research the potential for modular photovoltaic devices 

to develop hydrogen infrastructure, security, and the benefits of hydrogen infrastructure. 

Section 810(b) requires the Secretary to (1) prepare a detailed 

roadmap to carry out the demonstration projects listed in the section and for implementing the recommendations related to wind 

energy technologies in the report under subsection (c); and (2) provide for five wind projects in diverse geographic areas to demonstrate the production of hydrogen from wind facilities, including 

one at a national laboratory or institution of higher education. 

Section 810(c) requires the Secretary to support research programs at institutions of higher education to develop solar and wind 

energy technologies to produce hydrogen. The programs shall (1) 

enhance fellowship and faculty assistance; (2) provide fundamental 

research; (3) encourage collaborative research among all researchers; (4) support communication and outreach; and, (5) to be located 

in diverse geographic areas and be located at part B institutions, 

minority institutions, and institutions at higher education in States 

participating in the Experimental Program to Stimulate Competitive Research of the DOE. 

Section 810(d) requires the Secretary to develop sabbatical, fellowship, and visiting scientist programs to encourage national laboratories and higher education institutions to share and exchange 

personnel. 

Section 810(e) includes definitions for the section. 

TITLE IX—STUDIES AND PROGRAM SUPPORT 

Section 901. Goals 

Section 901 establishes goals for the studies and program support activities in Act. The section requires the Secretary of Energy 

(hereinafter referred to as ‘‘the Secretary’’) to publish 5-year performance goals with budget submissions for certain energy areas. 

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Section 902. Definitions 

Section 902 defines terms. 

Subtitle A—Energy Efficiency 

Section 904. Energy efficiency 

Section 904 authorizes appropriations for fiscal years 2006–2010 

for energy efficiency activities including those set out in the subtitle. 

Section 905. Next generation lighting initiative 

Section 905 directs the Secretary to carry out a Next Generation 

Lighting Initiative for advanced solid-state lighting technologies 

based on white light emitting diodes to achieve greater energy efficiency in lighting. 

Section 906. National building performance initiative 

Section 906 directs the President to establish an interagency 

group to develop National Building Performance Initiative to help 

develop more energy efficient buildings. 

Section 907. Secondary electric vehicle battery use program 

Section 907 requires the Secretary to establish a program of 

study of the secondary use of electric vehicle batteries. 

Section 908. Energy efficiency study initiative 

Section 908 requires the Secretary to establish an Energy Efficiency Science Initiative to award competitive grants. 

Section 909. Electric motor control technology 

Section 909 requires the Secretary to conduct a program of study 

on advanced control devices to improve the energy efficiency of certain electric motors. 

Subtitle B—Distributed Energy and Electric Energy Systems 

Section 911. Distributed energy and electric energy systems 

Section 911 authorizes appropriations for fiscal years 2006–2010 

for distributed energy and electric systems activities, including 

those set forth in the subtitle. The section contains specific authorization language for micro-generation energy technology. 

Section 913. High power density industry program 

Section 913 requires the Secretary to establish a comprehensive 

program of study to improve energy efficiency of high power density facilities. 

Section 916. Reciprocating power 

Section 916 requires the Secretary to establish a program of 

study concerning reciprocating power engines. 

Section 917. Advanced portable power devices 

Section 917 requires the Secretary to establish a program concerning models for advanced portable power device and provides a 

specific authorization of appropriations for this purpose. 

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Subtitle C—Renewable Energy 

Section 918. Renewable energy 

Section 918 authorizes appropriations for fiscal years 2006–2010 

for distributed energy and electric systems activities, including 

those set forth in the subtitle. 

Section 919. Bioenergy programs 

Section 919 requires the Secretary to conduct a program of study 

regarding bioenergy, including biofuels. 

Section 920. Concentrating solar power study program 

Section 920 requires the Secretary to conduct a program of study 

to evaluate the potential of concentrating solar power for hydrogen 

production. 

Section 921. Miscellaneous projects 

Section 921 provides that the Secretary may study ocean energy, 

including wave energy, and the combined use of renewable energy 

technologies. 

Section 922. Renewable energy in public buildings 

Section 922 requires the Secretary to establish a program for the 

transfer of innovative technologies for solar and other renewable 

energy sources in public buildings. 

Section 923. University biodiesel program 

Section 923 requires the Secretary to establish a program regarding the feasibility of the operation of diesel electric power generators. 

Subtitle D—Nuclear Energy 

Section 929. Alternatives to industrial radioactive sources 

Section 929 requires the Secretary to conduct a study and provide a report to Congress by 2006 concerning industrial applications of large radioactive sources and both existing programs and 

alternatives for their disposal. The section also requires the Secretary to establish research and development program regarding 

such alternatives. 

Section 930. Geological isolation of spent fuel 

Section 930 requires the Secretary to conduct a study to determine the feasibility of deep borehole disposal of spent nuclear fuel. 

Subtitle E—Fossil Energy 

PART I—STUDIES AND PROGRAM SUPPORT

Section 931. Fossil energy 

Section 931 authorizes appropriations for fiscal years 2006–2010 

for fossil energy activities, including activities authorized under 

this Part. 

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Section 932. Oil and gas studies 

Section 932 requires the Secretary to conduct programs of studies concerning certain oil and gas-related issues and fuel cells. This 

section also requires reports to Congress concerning estimates of 

natural gas and oil reserves. Further, section 932 requires the Secretary to establish a national center or consortium for excellence in 

clean energy and power generation. 

Section 933. Technology transfer 

Section 933 requires the Secretary to establish a competitive program to a nonprofit entity for the purpose of transferring technologies developed with public funds. 

Section 934. Coal mining technologies 

Section 934 requires the Secretary to establish a program of 

studies on coal mining technologies. 

Section 935. Coal and related technologies program 

Section 935 requires the Secretary to establish a program of 

studies on coal and power systems and to address cost and performance goals. 

Section 936. Complex well technology testing facility 

Section 936 requires the Secretary to establish a complex well 

technology testing facility to increase the range of extended drilling 

technologies. 

PART II—ULTRA-DEEPWATER AND UNCONVENTIONAL NATURAL GAS

AND OTHER PETROLEUM RESOURCES

Section 941. Program authority 

Section 941 mandates the Secretary to carry out a program regarding technologies for ultra-deepwater and unconventional natural gas and other petroleum resource exploration and production. 

Section 942. Ultra-deepwater program 

Section 942 directs the Secretary to implement section 941 goals 

to maximize ultra-deep water natural gas and other petroleum resources, while minimizing costs and improving safety and environmental impacts. It also provides for the oversight and operation of 

awards for the ultra-deepwater program. 

Section 943. Unconventional natural gas and other petroleum resources program 

Section 943 provides for the oversight and operation of the unconventional natural gas and other petroleum resources program. 

Section 944. Additional requirements for awards 

Section 944 provides for the requirements for any awards granted pursuant to this part. 

Section 945. Advisory committees 

Section 945 provides for an Ultra-Deepwater Advisory Committee 

and an Unconventional Resources Technology Advisory Committee. 

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Section 946. Limits on participation 

Section 946 provides limitations for any awards granted pursuant to this part. 

Section 947. Sunset 

Section 947 provides that the authority provided for by the part 

sunsets on September 31, 2014. 

Section 948. Definitions 

Section 948 provides definitions for certain terms. 

Section 949. Funding 

Section 949 establishes and authorizes funding for fiscal year 

2005 for the Ultra-Deepwater and Unconventional Natural Gas and 

Other Petroleum Research Fund. 

Subtitle F—Energy Sciences 

Section 953. Plan for Fusion Energy Sciences Program 

Section 953 declares a policy of the United States to conduct a 

program of activities to ensure the United States is competitive 

with other nations in fusion energy and requires the Secretary to 

implement a plan for this policy. 

Section 954. Spallation neutron source 

Section 954 requires the Secretary to report on the Spallation 

Neutron Source project as part of the budget submission. 

Section 962. Nitrogen fixation 

Section 962 requires the Secretary to conduct studies on nitrogen 

fixation. 

Subtitle G—Energy and Environment 

Section 966. Waste reduction and use of alternatives 

Section 966 provides authorization for a single grant to examine 

burning post-consumer carpet in cement kilns as an alternative energy source. 

Section 967. Report on fuel cell test center 

Section 967 requires the Secretary to report to Congress regarding a test center for next-generation fuel cells. 

Section 968. Arctic Engineering Research Center 

Section 968 authorizes the Secretary to provide annual grants to 

a university research center concerning infrastructure in the Arctic 

region. 

Section 970. Western Michigan demonstration project 

Section 970 requires the Administrator of the EPA to conduct a 

demonstration project to address the effect of transported ozone 

and ozone precursors in Southwestern Michigan. 

260 

Section 971. Low-cost hydrogen propulsion and infrastructure 

Section 971 requires the Secretary to establish a program with 

respect to using hydrogen propulsion in light-weight vehicles. 

Section 972. Carbon-based fuel cell development 

Section 972 authorizes the Secretary to provide a single grant to 

design and fabricate a 5-kilowatt prototype coal-based fuel cell. 

Subtitle H—International Cooperation 

Section 981. United States-Israel coordination 

Section 981 requires the Secretary to report on cooperation between the United States and Israel in energy research and development activities. 

TITLE X—DEPARTMENT OF ENERGY MANAGEMENT 

Section 1001. Additional Assistant Secretary position 

Section 1001 creates a new Assistant Secretary of Energy, and 

expresses the sense of Congress that the new position be used to 

improve management of nuclear energy at DOE. 

Section 1002. Other transactions authority 

Section 1002 grants the Secretary of Energy authority to enter 

into other transactions as appropriate to further research, development, or demonstration goals of the Department. 

Section 1003. University collaboration 

Section 1003 directs the Secretary of Energy to report to Congress on the feasibility of promoting collaboration between major 

universities and other colleges and universities on energy projects. 

Section 1004. Sense of Congress 

Section 1004 expresses the sense of Congress that the Secretary 

of Energy should implement more stringent controls on the DOE 

purchase card program to prevent waste and fraud. 

TITLE XII—ELECTRICITY 

Section 1201. Short title 

Section 1201 establishes the short title for title XII as the ‘‘Electric Reliability Act of 2005.’’ 

Subtitle A—Reliability Standards 

Section 1211. Electric reliability standards 

Section 1211 provides for the establishment of mandatory, enforceable electric reliability standards, including cybersecurity protection, for the bulk-power system. The section provides that FERC 

shall have jurisdiction, within the United States, over an Electric 

Reliability Organization (ERO), certain regional entities, and all 

users, owners and operators of the bulk-power system for purposes 

of approving mandatory, enforceable reliability standards. FERC 

may certify an ERO that meets certain requirements. The certified 

ERO shall propose reliability standards for FERC approval. Section 

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1211 provides for a rebuttable presumption that a proposal from a 

regional entity organized on an Interconnection-wide basis for a reliability standard or modification to a reliability standard to be applicable on an Interconnection-wide basis is just, reasonable, and 

not unduly discriminatory or preferential, and in the public interest. The section also provides for fair processes for resolution of any 

conflict between a reliability standard, or implementation thereof, 

and any function, rule, order, tariff, rate schedule, or agreement accepted, approved, or ordered by FERC applicable to a transmission 

organization. In addition, this section provides for enforcement of 

FERC-approved reliability standards. The section also limits direct 

spending by the ERO to $50 million per year and provides an authorization for an additional $50 million per year. The President is 

urged to negotiate related international agreements with the governments of Canada and Mexico to provide for effective compliance 

with reliability standards and the effectiveness of the ERO in the 

United States and Canada or Mexico. The section also includes savings provisions relating to the scope of the provision and State authority. Finally, section 1211 provides that FERC shall establish a 

regional advisory body to provide advice regarding certain matters. 

FERC may give deference to the advice of any such regional advisory body if that body is organized on an Interconnection-wide 

basis. 

Subtitle B—Transmission Infrastructure Modernization 

Section 1221. Siting of interstate electric transmission facilities 

Section 1221 expedites the construction of critical transmission 

lines identified by the DOE. The section provides that for such 

lines, persons may obtain a permit from FERC and exercise eminent domain if, after one year, a state, or other approval authority, 

is unable or refuses to site the line. If such line crosses Federal 

land and an applicant so requests, DOE is designated as the lead 

agency for coordinating Federal review and permitting processes, 

including establishing deadlines, coordination with states and 

tribes, and consolidating environmental reviews into a single record 

to serve as the basis for decisions. If a Federal agency denies an 

application or fails to comply with a timeframe established by 

DOE, an applicant or state may appeal to DOE to review the denial and take action within 90 days. States are authorized to form 

voluntary compacts to facilitate transmission siting. The section directs the Federal government to study the use of existing corridors 

on Federal land and the potential to establish new corridors and 

report to Congress. The Committee intends this report to go the 

House Committees on Energy and Commerce and Resources. Section 1211 also requires Federal land management agencies to develop a Memorandum of Understanding to coordinate permitting 

decisions and environmental reviews. 

Section 1222. Third-party finance 

Section 1222 allows the Secretary of Energy, acting through the 

Administrators of the Western Area Power Administration (WAPA) 

or the Southwest Power Administration (SWPA), to participate 

with other parties to design, develop, construct, operate, maintain 

or own upgrades to existing transmission facilities owned by WAPA 

262 

or SWPA or new transmission facilities if those facilities are needed to meet actual or projected increases in demand and meet certain other conditions. The section also allows the Secretary of Energy to use funds contributed by a third party for the purposes of 

this section. 

Section 1223. Transmission system monitoring 

Section 1223 provides that within six months of the date of enactment, the Secretary of Energy and the FERC shall submit a report to Congress on the steps that must be taken to provide all 

transmission owners and Regional Transmission Organizations 

real-time information on the status of the transmission system. 

Section 1224. Advanced transmission technologies 

Section 1224 provides that the FERC shall encourage the deployment of advanced transmission technologies. 

Section 1225. Electric transmission and distribution programs 

Section 1225 provides that the Secretary of Energy shall establish a comprehensive program to promote improved reliability and 

efficiency of electrical transmission and distribution systems. Within one year of enactment, the Secretary of Energy shall submit a 

five-year program plan to Congress and provide status reports 

within two years of transmitting the program plan. In addition, the 

Secretary of Energy shall establish an initiative specifically focused 

on power delivery utilizing components incorporating high-temperature superconductivity. The section authorizes $15 million for 

fiscal year 2006, $20 million for fiscal year 2007, $30 million for fiscal year 2008, $35 million for fiscal year 2009, and $40 million for 

fiscal year 2010. 

Section 1226. Advanced Power System Technology Incentive Program 

Section 1226 authorizes the Secretary of Energy to establish an 

Advanced Power System Technology Incentive Program to support, 

through incentives, the deployment of certain advanced power system technologies to increase power generation through enhanced 

operational, economic and environmental performance. The section 

authorizes $10 million for each of the fiscal years 2006 through 

2012. 

Section 1227. Office of Electric Transmission and Distribution 

Section 1227 authorizes the creation within DOE an Office of 

Electric Transmission and Distribution. 

Subtitle C—Transmission Operation Improvements 

Section 1231. Open nondiscriminatory access 

Section 1231 grants FERC partial jurisdiction over the interstate 

transmission of currently non-regulated utilities (municipallyowned utilities, rural electric cooperatives, and Federal utilities) to 

improve the operation of competitive wholesale markets in interstate commerce. 

263 

Section 1232. Sense of Congress on Regional Transmission Organizations 

Section 1232 provides that it is the sense of Congress, for the 

reasons enumerated, that all transmitting utilities in interstate 

commerce should voluntarily become a member of a Regional 

Transmission Organization. 

Section 1233. Regional Transmission Organization applications 

progress report 

Section 1233 provides that FERC shall provide a report to Congress on all regional transmission organization applications submitted to FERC and the status of such applications. The report 

shall also include a discussion of the impact of the regional transmission organization on consumers, other entities, wholesale competition, and rates. 

Section 1234. Federal utility participation in Regional Transmission Organizations 

Section 1234 permits appropriate Federal regulatory authorities 

(Federal power marketing agencies and the Tennessee Valley Authority) to join a Regional Transmission Organization or an Independent System Operator. The section does not grant FERC any 

other authority over the Federal utility. 

Section 1235. Standard market design 

Section 1235 remands to FERC its Standard Electricity Market 

Design Order, RM01–12–00, and prohibits FERC from issuing a 

final rule in that docket before October 31, 2006, or issuing a final 

rule that takes effect before December 31, 2006. 

Section 1236. Native load service obligation 

Section 1236 requires FERC to ensure that load serving entities 

serving electricity consumers are entitled to use their transmission 

facilities or equivalent transmission rights to serve ‘‘native load,’’ 

i.e., to meet certain service obligations and certain contractual obligations. The section clarifies that reservation of transmission capacity for native load shall not be considered unduly discriminatory 

or preferential under the Federal Power Act. Section 1236 states 

that the section shall not affect the allocation of transmission 

rights by certain transmission organizations under certain conditions and that nothing in this section provides a basis to abrogate 

existing contracts or service agreements for firm transmission service. The section also provides that FERC will issue a rule or order 

enabling load serving entities to secure firm transmission rights (or 

equivalent financial or tradable rights), on a long-term basis for 

long-term power supply arrangements in FERC-approved RTOs or 

ISOs with organized electricity markets. 

Section 1237. Study on the benefits of economic dispatch 

Section 1237 requires the Secretary of Energy, in coordination 

and consultation with the states, to conduct a study on the procedures and potential benefits of economic dispatch, and report to the 

Congress and the States on the results of the study on a regular 

basis. 

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Subtitle D—Transmission Rate Reform 

Section 1241. Transmission infrastructure investment 

Section 1241 promotes needed investment in transmission by requiring FERC to issue a rule establishing just and reasonable incentive-based and performance-based transmission rates, and incentives for joining a Regional Transmission Organization or Independent System Operator. 

Subtitle E—Amendments to PURPA 

Section 1251. Net metering and additional standards

Section 1251 requires each state and non-regulated electric utility to consider whether to require each electric utility to make 

available upon request net metering service as set forth under Section 111 of the Public Utilities Regulatory Policies Act of 1978 

(PURPA). The section requires state regulatory authorities to consider standards for such service with certain exceptions. 

Section 1252. Smart metering 

Section 1252 requires each state and non-regulated electric utility to consider whether to require each electric utility to make 

available upon request time-based metering service as set forth 

under Section 111 of PURPA. The section requires state regulatory 

authorities to consider standards for such service, including time of 

use, critical peak and real-time pricing, and peak load reduction 

plans with customers with large electric loads with certain exceptions. The Secretary of Energy shall provide technical assistance on 

demand response. 

Section 1253. Cogeneration and small power production purchase 

and sale requirements 

Section 1253 amends section 210 of PURPA by (1) adding conditions under which the mandatory purchase obligation of utilities 

may be relieved; (2) establishes procedures for utilities to apply to 

the Commission for relief if such conditions are met, and for qualifying facilities, state agencies, or other affected persons to apply for 

reinstatement of the purchase obligation; (3) terminates a utility’s 

obligation to sell electricity to qualifying facilities under certain 

conditions; (4) protects existing contracts or certain pending contracts; and, (5) directs the Commission to issue and enforce regulations to ensure that electric utilities collect the costs associated 

with contracts under section 210. 

The section directs the Commission to revise the rules for new 

qualifying cogeneration facilities eligible for the purchase requirements under Section 210 of the Federal Power Act to ensure the 

thermal energy output of the facility is used in a productive and 

beneficial manner, the total energy output of such facilities is used 

predominantly for commercial or industrial processes and not intended predominantly for sale to an electric utility, and the continuing progress in the development of efficient electric energy generating technology. It also clarifies that the rule revisions do not 

apply to existing qualifying small power production facilities or existing qualifying cogeneration facilities. 

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Finally, section 1253(b) eliminates existing ownership restrictions on qualifying small power production facilities and qualifying 

cogeneration facilities. 

Section 1254. Interconnection 

Section 1254 provides that states and non-regulated electric utilities will consider standards for the interconnection of onsite generation to the local electric distribution grid as set forth under Section 111(d) of PURPA with certain exceptions. 

Subtitle F—Repeal of PUHCA 

Section 1261. Short title 

Section 1261 establishes the short title of subtitle F as the ‘‘Public Utility Holding Company Act of 2005.’’ 

Section 1262. Definitions 

Section 1262 defines certain terms used in this subtitle. 

Section 1263. Repeal of the Public Utility Holding Company Act of 

1935

Section 1263 repeals the Public Utility Holding Company Act of 

1935 (PUHCA). 

Section 1264. Federal access to books and records 

Section 1264 directs holding companies and associate companies 

to maintain and make available to FERC such books and other 

records as it deems relevant to costs and necessary or appropriate 

for the protection of utility customers with respect to jurisdictional 

rates. Subsection (b) directs affiliates and subsidiaries of holding 

companies to maintain and make available to FERC books and 

other records with respect to transactions with other affiliates. 

Subsection (c) contains similar requirements with respect to books 

and other records for any company in a holding company system 

and affiliates thereof. Subsection (d) requires FERC to protect the 

confidentiality of books and other records acquired under this section, except as may be directed by FERC or a court of competent 

jurisdiction. 

Section 1265. State access to books and records 

Section 1265 gives state commissions access to certain books and 

other records if they meet specific requirements. Upon written request by the state commission with jurisdiction to regulate a public 

utility in a holding company system, the holding company, associate or affiliate company is directed to produce for inspection 

books and other records that have been identified in reasonable detail by the state commission, determined by the state commission 

to be relevant to costs incurred by the public utility, and necessary 

for the effective discharge of the responsibilities of the state commission with respect to such proceedings. Subsection (b) exempts 

from this requirement any person that is a holding company solely 

by reason of ownership of one or more qualifying facilities under 

the Public Utility Regulatory Policies Act of 1978. Subsection (c) 

protects trade secrets and other sensitive commercial information 

from unwarranted disclosure to the public. Subsection (d) protects 

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existing state law concerning books and other records, and provides 

that nothing in this section limits the existing rights of any state 

to obtain books and other records under Federal law, contract, or 

otherwise. Subsection (e) gives a United States district court in the 

State referred to in Subsection (a) jurisdiction to enforce this section. 

Section 1266. Exemption authority 

Section 1266 directs FERC to exempt certain companies from the 

requirements of section 1264. 

Section 1267. Affiliate transactions 

Section 1267 provides that nothing in this subtitle shall limit the 

existing authority of FERC under the Federal Power Act to ensure 

that rates are just and reasonable, and, to whatever extent FERC 

already has authority, to approve or deny the pass through of costs 

and to prevent cross-subsidization. Subsection (b) provides that 

nothing in this subtitle shall preclude FERC or a state commission 

under otherwise applicable law from allowing recovery of costs in 

jurisdictional rates. 

Section 1268. Applicability 

Section 1268 prohibits application of this subtitle to the Federal 

government, states, and foreign governments, except as otherwise 

specifically provided. 

Section 1269. Effect on other regulations 

Section 1269 provides that nothing in this subtitle precludes 

FERC or a state commission from exercising its jurisdiction under 

otherwise applicable law to protect utility consumers. 

Section 1270. Enforcement 

Section 1270 specifies the powers available to FERC to enforce 

this subtitle. 

Section 1271. Savings provisions 

Section 1271 provides that nothing in the subtitle prohibits a 

person from engaging in certain activities that were authorized 

prior to the date of enactment, so long as they continue comply 

with the terms of their authorization, nor limits the authority of 

FERC under the Federal Power Act or the Natural Gas Act. 

Section 1272. Implementation 

Section 1272 directs FERC, within 12 months, to promulgate regulations necessary to implement this subtitle and submit to Congress recommendations for technical or conforming amendments. 

Section 1273. Transfer of resources 

Section 1273 provides for the transfer of all books and records related to the functions of FERC under this subtitle from the Securities and Exchange Commission to FERC. 

Section 1274. Effective date 

Section 1274 provides that this subtitle shall take effect 12 

months after the date of enactment, with certain exceptions. 

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Section 1275. Service allocation 

Section 1275 provides that FERC, at the request of the holding 

company system or state commission, shall review and authorize 

cost allocations for non-power goods or administrative or management services provided by an associate company that was organized specifically for providing such goods or services. Nothing in 

this section precludes FERC or a state commission from exercising 

its authority under other applicable laws. FERC is required to 

issue rules exempting companies that operate substantially within 

one state, and certain other transactions. 

Section 1276. Authorization of appropriations 

Section 1276 authorizes to be appropriated such sums as necessary to carry out this subtitle. 

Section 1277. Conforming amendments to the Federal Power Act 

Section 1277 makes conforming amendments to the Federal 

Power Act. 

Subtitle G—Market Transparency, Enforcement, and Consumer 

Protection 

Section 1281. Market transparency rules 

Section 1281 directs FERC to establish rules establishing an 

electronic information system to improve transparency in wholesale 

electric power markets. FERC shall have the authority to obtain 

the information it needs from any electric or transmitting utility. 

Section 1282. Market manipulation 

Section 1282 prohibits filing false information and round-trip (or 

‘‘wash’’) trades of electric power with intent to fraudulently affect 

revenues, trading volumes or prices. 

Section 1283. Enforcement 

Section 1283 increases criminal and civil penalties for violations 

of the Federal Power Act. The section extends the applicability of 

such penalties to violations of any provision of Part II of the Federal Power Act. It also expands sections 306, 307, and 313 of the 

Federal Power Act. 

Section 1284. Refund effective date 

Section 1284 changes the refund effective date from 60 days after 

complaint to the date of complaint for FERC-ordered refunds under 

section 206 of the Federal Power Act. 

Section 1285. Refund authority 

Section 1285 provides that certain short-term market sales of 

wholesale power by certain non-FERC jurisdictional entities are 

subject to FERC-ordered refunds for sales above just and reasonable rates. 

Section 1286. Sanctity of contract 

Section 1286 provides that FERC, before abrogating or modifying 

certain market-based rate contracts, must meet a public interest 

standard, unless the contract expressly provides for a different 

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standard. This provision applies only prospectively (i.e., to contracts executed on or after the date of enactment). 

Section 1287. Consumer privacy and unfair trade practices 

Section 1287 authorizes the Federal Trade Commission to establish rules regarding consumer privacy. The section also allows the 

Federal Trade Commission to establish rules prohibiting ‘‘slamming’’ and ‘‘cramming’’ in retail electricity markets. 

Subtitle H—Merger Reform 

Section 1291. Merger review reform and accountability 

Subsection (a) of section 1291 directs the Secretary of Energy, in 

consultation with FERC and the Department of Justice, to report 

to Congress on (1) duplicative authorities vested in FERC under 

section 203 of the Federal Power Act; and (2) recommendations on 

reforms to the Federal Power Act to eliminate unnecessary duplication. Subsection (b) directs FERC to report annually to Congress on 

conditions imposed on mergers and other dispositions of property 

reviewed under section 203. 

Section 1292. Electric utility mergers 

Section 1292 amends the Federal Power Act by increasing the 

limit that triggers a FERC merger proceeding from $50,000 to $10 

million. It also provides for FERC review of certain holding company mergers. The section also provides standards that FERC is to 

apply to determine whether a merger is in the public interest and 

directs FERC to issue a rule on certain classes of mergers that may 

be reviewed expeditiously. 

Subtitle I—Definitions 

Section 1295. Definitions 

Section 1295 amends or provides specific definitions used in the 

Federal Power Act. 

Subtitle J—Technical and Conforming Amendments 

Section 1297. Conforming amendments 

Section 1297 provides amendments to the Federal Power Act to 

conform to this title. 

Subtitle K—Economic Dispatch 

Section 1298. Economic dispatch 

Section 1298 requires FERC to establish a joint board with the 

States to study the issue of security constrained economic dispatch 

for a market region. The joint board must report to Congress its 

findings and any consensus recommendations within one year. 

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TITLE XIV—MISCELLANEOUS 

Subtitle C—Other Provisions 

Section 1441. Continuation of transmission security order 

Section 1441 provides that Department of Energy Order No. 202– 

03–2 concerning the cross sound cable shall remain in effect unless 

rescinded by Federal statute. 

Section 1442. Review of agency determinations 

Section 1442 provides the court of original and exclusive jurisdiction for all claims brought under Section 7 of the Natural Gas Act 

shall be the United States Court of Appeals for the District of Columbia Circuit. 

Section 1443. Attainment dates for downwind ozone nonattainment 

areas 

Section 1443 amends the Clean Air Act by granting the Administrator of the EPA the authority to extend the attainment date in 

lieu of reclassification if the Administrator determines another area 

significantly contributes to nonattainment in the downwind area 

and all other conditions of the section are met. In addition, in order 

to be granted an attainment date extension, Section 1443 also requires that a State submit a SIP revision that complies with all applicable requirements that exist for the area’s current classification 

and that includes any additional measures needed to demonstrate 

attainment by the extended attainment date. In such a case, where 

all the required conditions of the section are met, the Administrator shall grant the extension. Furthermore, any attainment date 

that is extended must provide for attainment as expeditiously as 

practicable, but in no case later than the date on which the last 

reductions in pollution transport necessary for attainment are required to be achieved in the contributing upwind area. 

Section 1444. Energy production incentives 

Section 1444 provides that a state may provide state tax incentives to any entity for production in state of electricity from coal 

mined within the state (where any such electricity generation facility uses scrubbers or other forms of clean coal technology), renewable sources such as wind, solar, or biomass or ethanol. Any action 

taken by a state pursuant to this section is not to be considered 

an undue burden on interstate commerce. 

Section 1446. Regulation of certain oil used in transformers 

Section 1446 provides that soybean oil used in transformers as 

thermal insulation shall not be regulated like petroleum oil. 

Section 1447. Risk assessment 

Section 1447 requires that Federal agencies conducting assessments of risk to human health and the environment from energy 

technology, production, transport, transmission, distribution, storage, use, or conservation activities shall use sound and objective 

scientific practices in assessing such risks, shall consider the best 

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clude a description of the weight of the scientific evidence concerning such risks. 

Section 1448. Oxygen-fuel 

Section 1448 requires the Secretary to establish a program on oxygen fuels systems and provides authorization of appropriations for 

this activity. 

Section 1449. Petrochemical and oil refinery facility health assessment 

Section 1449 requires the Secretary to conduct a study of direct 

and significant health impacts to persons resulting from living in 

proximity to petrochemical and oil refining facilities based on 

sound and objective scientific practices. 

TITLE XV—ETHANOL AND MOTOR FUELS 

Subtitle A—Genral Provisions 

Section 1501. Renewable content of motor vehicle fuel 

Section 1501 establishes a renewable content requirement for 

gasoline sold or dispensed to consumers in the contiguous United 

States. Starting in 2005, the total volume of such gasoline must 

contain an ‘‘applicable volume’’ of renewable fuel, determined on a 

yearly basis. This volume is 3.1 billion gallons in 2005, rising in 

steps to 5.0 billion gallons in 2012. After 2012 the amount of the 

requirement will be adjusted each year to account for growth in the 

volume of gasoline sold or dispensed. Under this section, 1 gallon 

of cellulosic biomass ethanol or waste derived ethanol is equivalent 

to 1.5 gallons of renewable fuel for purposes of meeting the renewable content requirement. Cellulosic biomass ethanol or waste derived ethanol derived from agricultural residue or wood residue or 

is an agricultural byproduct is equivalent to 2.5 gallons of renewable fuel. A credit program, which allows for the transfer of renewable fuel credits, is also established. 

Section 1501 allows for waivers of the renewable fuel requirement, in whole or in part, in any one year upon the petition of one 

or more states. The section also requires a study before the initiation of the renewable fuels requirement in 2005 and allows for a 

waiver of the initial year of the requirement if there are significant 

adverse consumer impacts on a national, regional, or state basis. 

The section requires a determination by the Administrator of the 

EPA, in consultation with the Secretary of Energy and the Secretary of Agriculture, prior to each increase in the renewable content requirement, whether there is sufficient renewable fuel production capacity, potential for increases in the price of gasoline, 

food, or heating oil, the potential for supply disruptions, and the 

potential for exceedances of air quality standards. The Administrator may waive in whole or in part, the renewable fuel requirement if there is a significant adverse impact. The section also provides for an extension of the renewable fuel requirement for small 

refineries. 

In addition, section 1501 requires the Federal Trade Commission 

to perform a market concentration analysis and report annually, 

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more, the EPA in consultation with the Energy Information Administration shall annually conduct a survey of the market shares of 

conventional gasoline and reformulated gasoline containing ethanol 

or renewable fuel. 

Section 1502. Fuels safe harbor 

Section 1502 provides for a fuels safe harbor for renewable fuel, 

methyl tertiary butyl ether (MTBE) used or intended to be used as 

a motor vehicle fuel, and motor vehicle fuel containing such renewable fuel or MTBE. This safe harbor applies only to the product 

being deemed defective by virtue of the fact that it is or contains, 

such renewable fuel or MTBE. This safe harbor is not applicable 

to other liability among which is included, environmental remediation costs, drinking water contamination, public or private nuisance and trespass. 

Section 1503. Findings and MTBE transition assistance 

Section 1503 includes findings and authorization for transition 

assistance to MTBE eligible production facilities. The section authorizes $250,000,000 for each of fiscal years 2005 through 2012. 

This assistance is to aid in the transition from MTBE production 

to the production of other fuel additives or renewable fuels. 

Section 1504. Use of MTBE 

Section 1504 proscribes the use of MTBE, no later than 2014, in 

motor vehicle fuel. 

Section 1505. National Academy of Sciences review and presidential 

determination 

Section 1505 requires the National Academy of Sciences to review the use of MTBE in fuel and fuel additives. The review is to 

examine the effects of MTBE use on environmental quality and 

public health, including the costs and benefits and the effect of prohibitions on the use of MTBE on fuel availability and price. After 

the completion of this review the President may make a determination that restrictions on the use of MTBE as provided for in section 

1504, shall not take place. 

Section 1506. Elimination of oxygen content requirement for reformulated gasoline 

Section 1506 eliminates the oxygenate requirement for reformulated gasoline. The elimination of the requirement is effective 270 

days after enactment for all states except, California, which is 

granted elimination from the requirement upon date of enactment. 

Further, the section provides for the maintenance of toxic air pollutant emissions reductions. Not later than 270 days after enactment the Administrator of the EPA shall establish standards for 

each refinery or importer based on a baseline for calendar years 

1999 and 2000. Certain reformulated gasoline regulations are consolidated under the section. 

Section 1507. Analyses of motor vehicle fuel changes 

Section 1507 requires that the Administrator of the EPA conduct 

an ‘‘antibacksliding analysis’’ of the changes in emissions of air pollutants and air quality due to the use of motor vehicle fuel and fuel 

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additives resulting from the implementation of the amendments 

made by general provisions of this title. 

Section 1508. Data collection 

Section 1508 amends the Department of Energy Organization 

Act by requiring the Administrator of the Energy Information 

Agency to conduct and publish the results of a survey of renewable 

fuels demand in the motor fuels market in order to evaluate the 

effectiveness of the new renewable fuels requirement. 

Section 1509. Reducing the proliferation of state fuel controls 

Section 1509 limits the authority of the Administrator of the 

EPA to approve under Section 211(c)(4)(C) of the Clean Air Act any 

control or prohibition regarding a fuel or fuel additive unless the 

Administrator, after consultation with DOE, publishes in the Federal Register a finding that such approval will not cause fuel supply or distribution interruptions or have a significant adverse impact on fuel producibility in the affected area or contiguous areas. 

The section also outlines a study, by EPA in cooperation with DOE, 

of the projected effects on air quality, the proliferation of fuel 

blends, fuel availability, and fuels costs of providing preference 

treatment to certain fuel blends. 

Section 1510. Fuel system requirements harmonization study 

Section 1510 requires a joint study by the Administrator of the 

EPA and the Secretary of Energy of the Federal, state, and local 

requirements concerning motor fuels and the effect of these requirements on the supply, quality and price of motor fuels. 

Section 1511. Commercial byproducts from municipal solid waste 

and cellulosic biomass loan guarantee program 

Section 1511 provides the Secretary of Energy the authority, for 

a 10–year period, to establish a program to provide loan guarantees 

by private institutions for the construction of facilities for the processing and conversion of municipal solid waste and cellulosic biomass into fuel ethanol and other commercial byproducts. 

Section 1512. Cellulosic biomass and waste-derived ethanol conversion assistance 

Section 1512 amends the Clean Air Act by providing the Secretary of Energy with the authority to provide grants to United 

States merchant producers of cellulosic biomass ethanol and wastederived ethanol to build ethanol production facilities. 

Section 1513. Blending of compliant reformulated gasolines 

Section 1513 amends the Clean Air Act to cite that under specified circumstances it shall not be a violation of the Act for a gasoline retailer to blend at a retail location batches of ethanol-blended 

and non-ethanol blended reformulated gasoline. 

Subtitle B—Underground Storage Tank Compliance 

Section 1521. Short title 

Section 1521 establishes the short title as the ‘‘Underground 

Storage Tank Compliance Act of 2005.’’ 

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Section 1522. Leaking underground storage tanks 

Section 1522 amends the Solid Waste Disposal Act to direct the 

Administrator of EPA to distribute to the states at least 80 percent 

of the funds from the Underground Storage Tank Trust Fund for 

use in paying the reasonable costs for state enforcement efforts pertaining to underground storage tanks. In addition, this section establishes guidelines for revisions to the funding allocation process 

that the Administrator may revise after consulting with state agencies responsible for overseeing corrective actions for releases from 

underground storage tanks. 

In seeking a cost recovery action, under this section the Administrator (or state) shall consider the owner or operator’s ability to pay 

by weighing the ability of the owner or operator to pay all corrective action costs and still maintain its basic business operations, including consideration of the overall financial condition of the owner 

or operator and demonstrable constraints on the ability of the 

owner or operator to raise revenues. In requesting consideration 

under these provisions, the owner or operator shall promptly provide the Administrator (or state) with all relevant information 

needed to determine the owner’s ability to pay corrective action 

costs. The Administrator may allow for alternative payment methods as may be necessary or appropriate, if the Administrator (or 

state) determines that the owner or operator cannot pay all or a 

portion of the costs in a lump sum payment. Owners and operators 

are to be held fully accountable in the cases of misrepresentation 

or fraud and the Administrator (or state) is authorized to seek full 

recovery of all the costs from the corrective action without consideration of the factors in this section. 

Section 1523. Inspection of underground storage tanks 

Section 1523 prescribes inspection requirements for underground 

storage tanks. This section requires every state conduct routine inspections of every underground storage tank (UST) every three 

years. The section allows the states no more than an initial 2–year 

‘‘grace period’’ to start their inspection programs. During this 2– 

year period, the provisions establish that the states must eliminate 

their backlog of un-inspected tank systems that have been out of 

compliance with federal regulations issued 16 years ago. 

After the conclusion of the ‘‘grace period,’’ the section also requires states conduct on-site inspections of every underground storage tank located within their state that is regulated under Subtitle 

I of the Solid Waste Disposal Act at least once every three (3) 

years. The section allows the state to contract with third-party inspectors to carry out these inspections. 

The section allows a state to petition the EPA for a one-time 

grant of a one-year extension to the first mandatory three (3) year 

inspection cycle in order to meet the requirement of inspecting all 

tanks. 

Section 1524. Operator training 

Section 1524 instructs the Administrator of the EPA, with the cooperation of the states, to publish guidelines for use by the states 

that specify training requirements for persons having primary responsibility for on-site operation and maintenance of underground 

storage tanks, persons having daily on-site responsibility for the 

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operation and maintenance of underground storage tanks, and 

daily on-site employees having primary responsibility for addressing emergencies presented by a spill or release from an underground storage tank system. 

Section 1525. Remediation from oxygenated fuel additives 

Section 1525 creates a new dedicated authorization of Federal 

LUST Trust Fund dollars to be used to carry out corrective actions 

with respect to release of a fuel containing an oxygenated fuel additive that presents a threat to human health or welfare or the environment. Oxygenated fuel additives include, but is not limited to, 

MTBE, ethanol, ethyl tertiary butyl ether (ETBE), tertiary amyl 

methyl ether (TAME), and di isopropyl ether (DIPE). 

Section 1526. Release prevention, compliance, and enforcement 

Section 1526 authorizes funds to be used to conduct inspections, 

issue orders, or bring actions under this subtitle by a state and to 

carry out state regulations pertaining to underground storage 

tanks under this subtitle, or by the EPA Administrator, for tanks 

regulated under this subtitle. The section establishes right-to-know 

reporting requirements for all government-owned tanks. In these 

reports, the states submit to the Administrator a list identifying 

the location and owner of each underground storage tank that is 

not in compliance with section 9003 of the Solid Waste Disposal 

Act, specifies the date of the last inspection, and describes the actions that have been and will be taken to ensure compliance of the 

underground storage tank with this subtitle. The Administrator 

shall require each state that receives Federal funds to make available to the public a record of underground storage tanks under this 

subtitle. The Administrator shall prescribe, after consultation with 

the states, the best manner and form to make available and maintain this record, considering the most practical and efficient means 

to maintain its intended purpose. This section also establishes incentives for performance measures that may be taken into consideration in determining the terms of a civil penalty under Section 

9006 of the Solid Waste Disposal Act. 

Section 1527. Delivery prohibition 

Section 1527 makes it unlawful two years after the date of enactment to deliver to, deposit into, or accept a regulated substance 

into an underground storage tank at a facility that has been identified as ineligible for fuel delivery or deposit. EPA and states that 

receive funding under this subtitle must publish guidelines detailing the different process and procedures they will use to implement 

the delivery prohibition. For each state that receives funding from 

the Leaking Underground Storage Tank program, the section also 

mandates the use of state-managed Delivery Prohibition Rosters 

that would be posted and updated on state websites for gasoline 

marketers and petroleum delivery services to reference in order to 

have notice of which tanks are ineligible for fuel delivery. The section provides protection to those persons from violations of the prohibition if notice of ineligibility was not posted on the website. In 

addition, the section requires the use of a device, such as a lockout tag as a physical manifestation of a states’ prohibition of delivery, deposit, or acceptance of fuel at an underground storage tank 

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system and prescribes civil penalties for persons that damage or 

seek an unauthorized removal of this lockout tag. 

Section 1528. Federal facilities 

Section 1528 requires Federal agencies with jurisdiction over underground storage tanks or systems, or engaged in any activity 

that may result in specified actions regarding such tanks or regulated substances related to them, including release response activities, to comply with all Federal, state, interstate, and local regulatory programs. Specifically, these agencies must report to Congress on their compliance with UST requirements. The section also 

expressly waives claims of sovereign immunity with respect to substantive or procedural state and local requirements, including all 

administrative orders, all civil and administrative penalties and 

fines, injunctive relief, and reasonable service charges. The section 

continues the President’s authority to exempt any Federal tank 

from compliance with such requirements when the exemption is in 

the ‘‘paramount interests of the United States.’’ 

Section 1529. Tanks on tribal lands 

Section 1529 instructs the EPA Administrator, in coordination 

with Indian tribes, to develop and implement a strategy, giving priority to releases that present the greatest threat to human health 

or the environment, to implement and take necessary corrective actions in response to releases from leaking underground storage 

tanks on tribal lands, and to report within two years to Congress 

on the status of these programs on tribal lands. 

Section 1530. Additional measures to protect groundwater 

Section 1530 requires a state to choose between either secondary 

containment requirements or installer and manufacturer financial 

responsibility requirements as an additional means of protecting 

groundwater against leaks from underground storage tanks. If a 

state chooses secondary containment, any new installation of an 

underground storage tank that is within 1,000 feet of a community 

water system or potable water well must be secondarily contained. 

In addition, any tank or piping that is replaced on an underground 

storage tank that is within 1,000 feet of a community water system 

or potable water well must be secondarily contained. Repairs to an 

underground storage tank system or dispenser do not trigger any 

secondary containment requirements. 

If a state chooses installer and manufacturer certification, as 

well as financial responsibility requirements, this section requires 

tank installers and manufacturers to follow professional guidelines 

for tank products or comply with one of the new statutory requirements that are similar to subsections (d) and (e) of 40 CFR 280.20. 

In addition, this section requires installers and manufacturers to 

maintain evidence of financial assurance to help pay corrective action costs that are directly relatable to a faulty tank part or installation. 

Section 1531. Authorization of appropriations 

Section 1531 authorizes $50 million per fiscal year from 2005– 

2009 from the General Treasury to cover administrative expenses 

and those areas in the bill that are not specifically authorized to 

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receive direct appropriations from the Leaking Underground Storage Tank Trust Fund. In addition, from the Leaking Underground 

Storage Tank Trust Fund, $1 billion (or $200 million per year) is 

authorized for cleanups of releases from leaking underground storage tanks, $1 billion (or $200 million per year) is authorized for the 

cleanup of releases of oxygenated fuel additives from leaking underground storage tanks, $500 million (or $100 million per year) for 

on-site inspections and enforcement, and $275 million (or $55 million per year) for delivery prohibition and State tank program disclosure and operator training improvements. 

Section 1532. Conforming amendments 

Section 1532 provides amendments to the Solid Waste disposal 

Act to conform to this title. 

Section 1533. Technical amendments 

Section 1533 provides amendments to the Solid Waste disposal 

Act to conform to this title. 

Subtitle C—Boutique Fuels 

Section 1541. Reducing the proliferation of boutique fuels 

Section 1541 amends the Clean Air Act to authorize the Administrator of the EPA, in consultation with the Secretary of Energy, to 

temporarily waive requirements during fuel supply emergencies. In 

addition, section 1541 requires the Administrator to publish a list 

of existing boutique fuels. This section requires that the Administrator when approving a State Implementation Plan may not approve a fuel that would increase the total number of fuels approved 

as of September 1, 2004, but may approve a new fuel in a State 

Implementation Plan if it completely replaces a fuel on the list. The 

Administrator and the Secretary of Energy must determine that 

approval of a new fuel will not cause fuel supply interruptions or 

a significant adverse impact on fuel producibility. This section directs that the Administrator shall remove a fuel from the list under 

specified circumstances but shall not reduce the total number of 

fuels authorized under the list. In addition, the Administrator shall 

not approve any fuel in a State’s Implementation Plan unless that 

fuel was approved in at least one state in the petitioning State’s 

Petroleum Administration for Defense District. 

Section 1541 requires the Administrator and the Secretary of Energy to study jointly and report to Congress the effects on air quality, the number of fuel blends, fuel fungibility, and fuel costs of 

State Implementation Plans adopted pursuant to the Clean Air 

Act. This section authorizes a joint appropriation of $500,000 to the 

EPA and DOE for completion of the required study. 

TITLE XVI—STUDIES 

Section 1601. Study on inventory of petroleum and natural gas storage 

Section 1601 directs the Secretary of Energy to conduct a study 

on petroleum and natural gas storage capacity and operational inventory levels across the country. This section also requires the 

Secretary to report to Congress within a year with results of the 

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study and recommendations for preventing future supply shortages. 

Section 1605. Study of energy efficiency standards 

Section 1605 directs Secretary of Energy to study whether energy 

efficiency standards should focus on the site of consumption or 

more generally beginning at production and throughout the entire 

fuel cycle. 

Section 1606. Telecommuting study 

Section 1606 requires the Secretary of Energy, along with FERC, 

the Director of the Office of Personnel Management, the Administrator of General Services and the Administrator of NTIA to conduct a study into the energy conservation implications from more 

widespread adoption of telecommuting by Federal employees. 

Section 1607. LIHEAP report 

Section 1607 directs the Secretary of Health and Human Services 

to transmit to Congress, within one year, a study on how Low-Income Home Energy Assistance Program funds could be more effectively used to prevent loss of life from extreme temperatures. 

Section 1608. Oil bypass filtration technology 

Section 1608 directs the Secretary of Energy and the Administrator of the EPA to conduct a study into the benefits and feasibility of oil bypass filtration technology in reducing demand for oil 

and protecting the environment. 

Section 1609. Total integrated thermal systems 

Section 1609 directs the Secretary of Energy to conduct a study 

into the benefits and feasibility of total integrated thermal systems 

in reducing demand for oil and protecting the environment. 

Section 1610. University collaboration 

Section 1610 directs the Secretary of Energy to transmit a report 

to Congress examining the feasibility of promoting collaboration between large and small institutions of higher learning through 

grants, contracts and cooperative agreements in energy projects. 

Section 1611. Reliability and consumer protection assessment 

Section 1611 directs FERC to assess the effects of exempting 

electric cooperatives and federally-owned utilities from FERC regulation under Section 201(f) of the Federal Power Act on transmission grid reliability, benefits to customers and efficiency, just 

and reasonable rates, and ability of FERC to protect electricity consumers. If FERC finds that these exemptions create adverse effects 

on customers and electric reliability, it shall make recommendations to Congress pursuant to Section 311 of the Federal Power 

Act. 

Section 1612. Report on energy integration with Latin America 

Section 1612 directs the Secretary of Energy to report to Congress on the status of energy export development in Latin America 

and efforts by the Secretary and other departments and agencies 

278 

of the United States to promote energy integration with Latin 

America. 

Section 1613. Low-volume gas reservoir study 

Section 1613 directs the Secretary of Energy to make a grant to 

an organization of oil and gas producing States, specifically those 

containing significant numbers of marginal oil and natural gas 

wells, for conducting a study of low-volume natural gas reservoirs. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

existing law in which no change is proposed is shown in roman): 

NATIONAL ENERGY CONSERVATION POLICY ACT 

* * * * * * * 

TITLE I—GENERAL PROVISIONS 

SEC. 101. SHORT TITLE AND TABLE OF CONTENTS. 

(a) * * * 

(b) TABLE OF CONTENTS.— 

TITLE I—GENERAL PROVISIONS 

Sec. 101. Short title and table of contents. 

* * * * * * * 

TITLE V—FEDERAL ENERGY INITIATIVES 

* * * * * * * 

PART 3—FEDERAL ENERGY MANAGEMENT

Sec. 541. Findings. 

* * * * * * * 

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

Sec. 553. Federal procurement of energy efficient products. 

PART 4—FEDERAL PHOTOVOLTAIC UTILIZATION

Sec. 561. Short title of part. 

* * * * * * * 

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

* * * * * * * 

PART 4—MISCELLANEOUS 

SEC. 251. ENERGY–CONSERVING IMPROVEMENTS FOR ASSISTED 

HOUSING. 

(a) * * * 

(b) GRANTS.—(1) The Secretary of Housing and Urban Development is authorized to make grants to finance energy conserving improvements (as defined in subparagraph (2) of the last paragraph 

of section 2(a) of the National Housing Act) to projects which are 

øfinanced with loans¿ assisted under section 202 of the Housing 

Act of 1959, which are eligible multifamily housing projects (as 

279 

such term is defined in section 512 of the Multifamily Assisted 

Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f 

note)) and are subject to mortgage restructuring and rental assistance sufficiency plans under such Act, or which are subject to mortgages insured under section 221(d)(3) or section 236 of the National 

Housing Act. Such improvements may also include the installation 

of energy and water conserving 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. 

The Secretary shall make assistance available under this subsection on a priority basis to those projects which are in financial 

difficulty as a result of high energy costs. In carrying out the program authorized by this subsection, the Secretary shall issue regulations requiring that any grant made under this subsection shall 

be made only on the condition that the recipient of such grant shall 

take steps (prescribed by the Secretary) to assure that the benefits 

derived from such grants in terms of lower energy costs shall accrue to tenants in the form of lower operating subsidy if such a 

subsidy is being paid to such recipient. 

* * * * * * * 

TITLE V—FEDERAL ENERGY INITIATIVE 

* * * * * * * 

PART 3—FEDERAL ENERGY MANAGEMENT 

* * * * * * * 

SEC. 543. ENERGY MANAGEMENT REQUIREMENTS. 

(a) ENERGY PERFORMANCE REQUIREMENT FOR FEDERAL BUILD- INGS.—(1) Subject to paragraph (2), each agency shall apply energy 

conservation measures to, and shall improve the design for the construction of, øits Federal buildings so that the energy consumption 

per gross square foot of its Federal buildings in use during the fiscal year 1995 is at least 10 percent less than the energy consumption per gross square foot of its Federal buildings in use during the 

fiscal year 1985 and so that the energy consumption per gross 

square foot of its Federal buildings in use during the fiscal year 

2000 is at least 20 percent less than the energy consumption per 

gross square foot of its Federal buildings in use during fiscal year 

1985.¿ the Federal buildings of the agency (including each industrial or laboratory facility) so that the energy consumption per gross 

square foot of the Federal buildings of the agency in fiscal years 

2006 through 2015 is reduced, as compared with the energy consumption per gross square foot of the Federal buildings of the agency in fiscal year 2003, by the percentage specified in the following 

table: 

Fiscal Year Percentage reduction 

2006 .................................................................................................................. 2

2007 .................................................................................................................. 4

2008 .................................................................................................................. 6

2009 .................................................................................................................. 8

2010 .................................................................................................................. 10

280 

Fiscal Year Percentage reduction 

2011 .................................................................................................................. 12

2012 .................................................................................................................. 14

2013 .................................................................................................................. 16

2014 .................................................................................................................. 18

2015 .................................................................................................................. 20. 

* * * * * * * 

(3) Not later than December 31, 2014, the Secretary shall review 

the results of the implementation of the energy performance requirement established under paragraph (1) and submit to Congress recommendations concerning energy performance requirements for fiscal years 2016 through 2025. 

* * * * * * * 

(c) EXCLUSIONS.—(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) 

An agency may exclude, from the energy performance requirement 

for a fiscal year established under subsection (a) and the energy 

management requirement established under subsection (b), any Federal building or collection of Federal buildings, if the head of the 

agency finds that— 

(i) compliance with those requirements would be impracticable; 

(ii) the agency has completed and submitted all federally required energy management reports; 

(iii) the agency has achieved compliance with the energy efficiency requirements of this Act, the Energy Policy Act of 1992, 

Executive orders, and other Federal law; and 

(iv) the agency has implemented all practicable, life cycle 

cost-effective projects with respect to the Federal building or collection of Federal buildings to be excluded. 

(B) A finding of impracticability under subparagraph (A)(i) shall 

be based on— 

(i) the energy intensiveness of activities carried out in the 

Federal building or collection of Federal buildings; or 

(ii) the fact that the Federal building or collection of Federal 

buildings is used in the performance of a national security function. 

(2) Each agency shall identify and list, in each report made 

under section 548(a), the Federal buildings designated by it for 

such exclusion. The Secretary shall review such findings for consistency with the 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 

281 

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) DEADLINE.—By October 1, 2012, in accordance with 

guidelines established by the Secretary under paragraph (2), all 

Federal buildings shall, for the purposes of efficient use of energy and reduction in the cost of electricity used in such buildings, be metered or submetered. Each agency shall use, to the 

maximum extent practicable, advanced meters or advanced metering devices that provide data at least daily and that measure 

at least hourly consumption of electricity in the Federal buildings of the agency. Such data shall be incorporated into existing 

Federal energy tracking systems and made available to Federal 

facility energy managers. 

(2) GUIDELINES.— 

(A) IN GENERAL.—Not later than 180 days after the date 

of enactment of this subsection, the Secretary, in consultation with the Department of Defense, the General Services 

Administration, representatives from the metering industry, 

utility industry, energy services industry, energy efficiency 

industry, energy efficiency advocacy organizations, national 

laboratories, universities, and Federal facility energy managers, shall establish guidelines for agencies to carry out 

paragraph (1). 

(B) REQUIREMENTS FOR GUIDELINES.—The guidelines 

shall— 

(i) take into consideration— 

(I) the cost of metering and submetering and the 

reduced cost of operation and maintenance expected to result from metering and submetering; 

(II) the extent to which metering and submetering are expected to result in increased potential for energy management, increased potential for 

energy savings and energy efficiency improvement, 

and cost and energy savings due to utility contract 

aggregation; and 

(III) the measurement and verification protocols 

of the Department of Energy; 

(ii) include recommendations concerning the amount 

of funds and the number of trained personnel necessary 

to gather and use the metering information to track 

and reduce energy use; 

(iii) establish priorities for types and locations of 

buildings to be metered and submetered based on costeffectiveness and a schedule of 1 or more dates, not 

later than 1 year after the date of issuance of the 

guidelines, on which the requirements specified in 

paragraph (1) shall take effect; and 

(iv) establish exclusions from the requirements specified in paragraph (1) based on the de minimis quantity 

282 

of energy use of a Federal building, industrial process, 

or structure. 

(3) PLAN.—Not later than 6 months after the date guidelines 

are established under paragraph (2), in a report submitted by 

the agency under section 548(a), each agency shall submit to the 

Secretary a plan describing how the agency will implement the 

requirements of paragraph (1), including (A) how the agency 

will designate personnel primarily responsible for achieving the 

requirements and (B) demonstration by the agency, complete 

with documentation, of any finding that advanced meters or advanced metering devices, as defined in paragraph (1), are not 

practicable. 

* * * * * * * 

SEC. 546. INCENTIVES FOR AGENCIES. 

(a) * * * 

* * * * * * * 

(e) RETENTION OF ENERGY AND WATER SAVINGS.—An agency may 

retain any funds appropriated to that agency for energy expenditures, water expenditures, or wastewater treatment expenditures, at 

buildings subject to the requirements of section 543(a) and (b), that 

are not made because of energy savings or water savings. Except as 

otherwise provided by law, such funds may be used only for energy 

efficiency, water conservation, or unconventional and renewable energy resources projects. 

* * * * * * * 

SEC. 548. REPORTS. 

(a) * * * 

(b) REPORTS TO THE PRESIDENT AND CONGRESS.—The Secretary 

shall report, not later than April 2 of each year, with respect to 

each fiscal year beginning after the date of the enactment of this 

subsection, to the President and Congress— 

(1) * * * 

* * * * * * * 

SEC. 550. SURVEY OF ENERGY SAVING POTENTIAL. 

(a) * * * 

* * * * * * * 

(d) REPORT.—As soon as practicable after the completion of the 

project carried out under this section, the Secretary shall transmit 

a report of the findings and conclusions of the project to the Committee on Energy and Natural Resources and the Committee on 

Governmental Affairs of the Senate, the Committee on Energy and 

Commerce, the Committee on Government Operations, and the 

Committee on Public Works and Transportation of the House of 

Representatives, and the agencies who own the buildings involved 

in such project. Such report shall include an analysis of the probability of each agency achieving øthe 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). 

* * * * * * * 

283 

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

(a) IN GENERAL.—The Architect of the Capitol— 

(1) shall develop, update, and implement a cost-effective energy conservation and management plan (referred to in this section as the ‘‘plan’’) for all facilities administered by Congress 

(referred to in this section as ‘‘congressional buildings’’) to meet 

the energy performance requirements for Federal buildings established under section 543(a)(1); and 

(2) shall submit the plan to Congress, not later than 180 days 

after the date of enactment of this section. 

(b) PLAN REQUIREMENTS.—The plan shall include— 

(1) a description of the life cycle cost analysis used to determine the cost-effectiveness of proposed energy efficiency projects; 

(2) a schedule of energy surveys to ensure complete surveys of 

all congressional buildings every 5 years to determine the cost 

and payback period of energy and water conservation measures; 

(3) a strategy for installation of life cycle cost-effective energy 

and water conservation measures; 

(4) the results of a study of the costs and benefits of installation of submetering in congressional buildings; and 

(5) information packages and ‘‘how-to’’ guides for each Member and employing authority of Congress that detail simple, 

cost-effective methods to save energy and taxpayer dollars in the 

workplace. 

(c) ANNUAL REPORT.—The Architect of the Capitol shall submit to 

Congress annually a report on congressional energy management 

and conservation programs required under this section that describes in detail— 

(1) energy expenditures and savings estimates for each facility; 

(2) energy management and conservation projects; and 

(3) future priorities to ensure compliance with this section. 

SEC. 553. FEDERAL PROCUREMENT OF ENERGY EFFICIENT PRODUCTS. 

(a) DEFINITIONS.—In this section: 

(1) AGENCY.—The term ‘‘agency’’ has the meaning given that 

term in section 7902(a) of title 5, United States Code. 

(2) ENERGY STAR PRODUCT.—The term ‘‘Energy Star product’’ 

means a product that is rated for energy efficiency under an 

Energy Star program. 

(3) ENERGY STAR PROGRAM.—The term ‘‘Energy Star program’’ means the program established by section 324A of the 

Energy Policy and Conservation Act. 

(4) FEMP DESIGNATED PRODUCT.—The term ‘‘FEMP designated product’’ means a product that is designated under the 

Federal Energy Management Program of the Department of Energy as being among the highest 25 percent of equivalent products for energy efficiency. 

(b) PROCUREMENT OF ENERGY EFFICIENT PRODUCTS.— 

(1) REQUIREMENT.—To meet the requirements of an agency 

for an energy consuming product, the head of the agency shall, 

except as provided in paragraph (2), procure— 

(A) an Energy Star product; or 

(B) a FEMP designated product. 

284 

(2) EXCEPTIONS.—The head of an agency is not required to 

procure an Energy Star product or FEMP designated product 

under paragraph (1) if the head of the agency finds in writing 

that— 

(A) an Energy Star product or FEMP designated product 

is not cost-effective over the life of the product taking energy 

cost savings into account; or 

(B) no Energy Star product or FEMP designated product 

is reasonably available that meets the functional requirements of the agency. 

(3) PROCUREMENT PLANNING.—The head of an agency shall 

incorporate into the specifications for all procurements involving energy consuming products and systems, including guide 

specifications, project specifications, and construction, renovation, and services contracts that include provision of energy consuming products and systems, and into the factors for the evaluation of offers received for the procurement, criteria for energy 

efficiency that are consistent with the criteria used for rating 

Energy Star products and for rating FEMP designated products. 

(c) LISTING OF ENERGY EFFICIENT PRODUCTS IN FEDERAL CATA- LOGS.—Energy Star products and FEMP designated products shall 

be clearly identified and prominently displayed in any inventory or 

listing of products by the General Services Administration or the 

Defense Logistics Agency. The General Services Administration or 

the Defense Logistics Agency shall supply only Energy Star products 

or FEMP designated products for all product categories covered by 

the Energy Star program or the Federal Energy Management Program, except in cases where the agency ordering a product specifies 

in writing that no Energy Star product or FEMP designated product is available to meet the buyer’s functional requirements, or that 

no Energy Star product or FEMP designated product is cost-effective for the intended application over the life of the product, taking 

energy cost savings into account. 

(d) SPECIFIC PRODUCTS.—(1) In the case of electric motors of 1 to 

500 horsepower, agencies shall select only premium efficient motors 

that meet a standard designated by the Secretary. The Secretary 

shall designate such a standard not later than 120 days after the 

date of the enactment of this section, after considering the recommendations of associated electric motor manufacturers and energy efficiency groups. 

(2) All Federal agencies are encouraged to take actions to maximize the efficiency of air conditioning and refrigeration equipment, 

including appropriate cleaning and maintenance, including the use 

of any system treatment or additive that will reduce the electricity 

consumed by air conditioning and refrigeration equipment. Any 

such treatment or additive must be— 

(A) determined by the Secretary to be effective in increasing 

the efficiency of air conditioning and refrigeration equipment 

without having an adverse impact on air conditioning performance (including cooling capacity) or equipment useful life; 

(B) determined by the Administrator of the Environmental 

Protection Agency to be environmentally safe; and 

(C) shown to increase seasonal energy efficiency ratio (SEER) 

or energy efficiency ratio (EER) when tested by the National InVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00284 Fmt 6659 Sfmt 6603 E:\HR\OC\HR215P1.XXX HR215P1
285 

stitute of Standards and Technology according to Department 

of Energy test procedures without causing any adverse impact 

on the system, system components, the refrigerant or lubricant, 

or other materials in the system. 

Results of testing described in subparagraph (C) shall be published 

in the Federal Register for public review and comment. For purposes of this section, a hardware device or primary refrigerant shall 

not be considered an additive. 

(e) REGULATIONS.—Not later than 180 days after the date of the 

enactment of this section, the Secretary shall issue guidelines to 

carry out this section. 

* * * * * * * 

SEC. 570. USE OF PHOTOVOLTAIC ENERGY IN PUBLIC BUILDINGS. 

(a) PHOTOVOLTAIC ENERGY COMMERCIALIZATION PROGRAM.— 

(1) IN GENERAL.—The Secretary may establish a photovoltaic 

energy commercialization program for the procurement and installation of photovoltaic solar electric systems for electric production in new and existing public buildings. 

(2) PURPOSES.—The purposes of the program shall be to accomplish the following: 

(A) To accelerate the growth of a commercially viable 

photovoltaic industry to make this energy system available 

to the general public as an option which can reduce the national consumption of fossil fuel. 

(B) To reduce the fossil fuel consumption and costs of the 

Federal Government. 

(C) To attain the goal of installing solar energy systems 

in 20,000 Federal buildings by 2010, as contained in the 

Federal Government’s Million Solar Roof Initiative of 1997. 

(D) To stimulate the general use within the Federal Government of life-cycle costing and innovative procurement 

methods. 

(E) To develop program performance data to support policy decisions on future incentive programs with respect to 

energy. 

(3) ACQUISITION OF PHOTOVOLTAIC SOLAR ELECTRIC SYSTEMS.— 

(A) IN GENERAL.—The program shall provide for the acquisition of photovoltaic solar electric systems and associated storage capability for use in public buildings. 

(B) ACQUISITION LEVELS.—The acquisition of photovoltaic 

electric systems shall be at a level substantial enough to 

allow use of low-cost production techniques with at least 

150 megawatts (peak) cumulative acquired during the 5 

years of the program. 

(4) ADMINISTRATION.—The Secretary shall administer the 

program and shall— 

(A) issue such rules and regulations as may be appropriate to monitor and assess the performance and operation 

of photovoltaic solar electric systems installed pursuant to 

this subsection; 

(B) develop innovative procurement strategies for the acquisition of such systems; and 

286 

(C) transmit to Congress an annual report on the results 

of the program. 

(b) PHOTOVOLTAIC SYSTEMS EVALUATION PROGRAM.— (1) IN GENERAL.—Not later than 60 days after the date of enactment of this section, the Secretary shall establish a photovoltaic solar energy systems evaluation program to evaluate 

such photovoltaic solar energy systems as are required in public 

buildings. 

(2) PROGRAM REQUIREMENT.—In evaluating photovoltaic 

solar energy systems under the program, the Secretary shall ensure that such systems reflect the most advanced technology. 

(c) AUTHORIZATION OF APPROPRIATIONS.— 

(1) PHOTOVOLTAIC ENERGY COMMERCIALIZATION PROGRAM.— 

There are authorized to be appropriated to carry out subsection 

(a) $50,000,000 for each of fiscal years 2006 through 2010. 

Such sums shall remain available until expended. 

(2) PHOTOVOLTAIC SYSTEMS EVALUATION PROGRAM.—There 

are authorized to be appropriated to carry out subsection (b) 

$10,000,000 for each of fiscal years 2006 through 2010. Such 

sums shall remain available until expended. 

* * * * * * * 

TITLE VIII—ENERGY SAVINGS 

PERFORMANCE CONTRACTS 

SEC. 801. AUTHORITY TO ENTER INTO CONTRACTS. 

(a) IN GENERAL.—(1) * * * 

(2)(A) * * * 

* * * * * * * 

(E) All Federal agencies combined may not, after the date of enactment of the Energy Policy Act of 2005, enter into more than a 

total of 100 contracts under this title. Payments made by the Federal Government under all contracts permitted by this subparagraph combined shall not exceed a total of $500,000,000. Each Federal agency shall appoint a coordinator for Energy Savings Performance Contracts with the responsibility to monitor the number of 

such contracts for that Federal agency and the investment value of 

each contract. The coordinators for each Federal agency shall meet 

monthly to ensure that the limits specified in this subparagraph on 

the number of contracts and the payments made for the contracts 

are not exceeded. 

* * * * * * * 

ø(c) SUNSET AND REPORTING REQUIREMENTS.—The authority to 

enter into new contracts under this section shall cease to be effective on October 1, 2006.¿ 

* * * * * * * 

SEC. 804. DEFINITIONS. 

For purposes of this title, the following definitions apply: 

ø(1) The term ‘‘Federal agency’’ means each authority of the 

Government of the United States, whether or not it is within 

or subject to review by another agency.¿ 

287 

(1) The term ‘‘Federal agency’’ means the Department of Defense, the Department of Veterans Affairs, and the Department 

of Energy. 

* * * * * * * 

SECTION 310 OF THE LEGISLATIVE BRANCH 

APPROPRIATIONS ACT, 1999 

øSEC. 310. The 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 the enactment of this Act; 

ø(2) shall submit to Congress no later than 10 months after 

the enactment of this Act a comprehensive energy conservation 

and management plan which includes life cycle costs methods 

to determine the cost-effectiveness of proposed energy efficiency projects; 

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 management 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 

* * * * * * * 

288 

TITLE III—ENERGY CONSERVATION STANDARDS FOR NEW 

BUILDINGS 

* * * * * * * 

SEC. 305. FEDERAL BUILDING ENERGY EFFICIENCY STANDARDS. 

(a)(1) * * * 

(2) The standards established under paragraph (1) shall— 

(A) contain energy saving and renewable energy specifications that meet or exceed the energy saving and renewable energy specifications of øCABO Model Energy Code, 1992¿ the 

2003 International Energy Conservation Code (in the case of 

residential buildings) or ASHRAE Standard 90.1–1989 (in the 

case of commercial buildings); 

* * * * * * * 

(3) REVISED FEDERAL BUILDING ENERGY EFFICIENCY PERFORMANCE STANDARDS.— 

(A) IN GENERAL.—Not later than 1 year after the date of enactment of this paragraph, the Secretary of Energy shall establish, by rule, revised Federal building energy efficiency performance standards that require that— 

(i) if life-cycle cost-effective, for new Federal buildings— 

(I) such buildings be designed so as to achieve energy 

consumption levels at least 30 percent below those of 

the version current as of the date of enactment of this 

paragraph of the ASHRAE Standard or the International Energy Conservation Code, as appropriate; 

and 

(II) sustainable design principles are applied to the 

siting, design, and construction of all new and replacement buildings; and 

(ii) where water is used to achieve energy efficiency, water 

conservation technologies shall be applied to the extent they 

are life-cycle cost effective. 

(B) ADDITIONAL REVISIONS.—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 of Energy shall determine, based on 

the cost-effectiveness of the requirements under the amendments, whether the revised standards established under this 

paragraph should be updated to reflect the amendments. 

(C) STATEMENT ON COMPLIANCE OF NEW BUILDINGS.—In the 

budget request of the Federal agency for each fiscal year and 

each report submitted by the Federal agency under section 

548(a) of the National Energy Conservation Policy Act (42 

U.S.C. 8258(a)), the head of each Federal agency shall include— 

(i) a list of all new Federal buildings owned, operated, or 

controlled by the Federal agency; and 

(ii) a statement concerning whether the Federal buildings 

meet or exceed the revised standards established under this 

paragraph. 

289 

TITLE IV—ENERGY CONSERVATION AND RENEWABLERESOURCE ASSISTANCE FOR EXISTING BUILDINGS 

* * * * * * * 

PART A—WEATHERIZATION ASSISTANCE FOR LOW-INCOME PERSONS

* * * * * * * 

DEFINITIONS

SEC. 412. As used in this part: 

(1) * * * 

* * * * * * * 

(7) The term ‘‘low-income’’ means that income in relation to 

family size which (A) is at or below ø125¿ 150 percent of the 

poverty level determined in accordance with criteria established by the Director of the Office of Management and Budget, 

except that the Administrator may establish a higher level if 

the Administrator, after consulting with the Secretary of Agriculture and the Director of the Community Services Administration, determines that such a higher level is necessary to 

carry out the purposes of this part and is consistent with the 

eligibility criteria established for the weatherization program 

under section 222(a)(12) of the Economic Opportunity Act of 

1964, (B) is the basis on which cash assistance payments have 

been paid during the preceding 12-month period under titles 

IV and XVI of the Social Security Act or applicable State or 

local law, or (C) if a State elects, is the basis for eligibility for 

assistance under the Low-Income Home Energy Assistance Act 

of 1981 (42 U.S.C. 8621), provided that such basis is at least 

ø125¿ 150 percent of the poverty level determined in accordance with criteria established by the Director of the Office of 

Management and Budget. 

* * * * * * * 

LIMITATIONS

SEC. 415. (a) * * * 

* * * * * * * 

(c)(1) Except as provided øin paragraph (3)¿ in paragraphs (3) 

and (4), the expenditure of financial assistance provided under this 

part for labor, weatherization materials, and related matters shall 

not exceed an average of $2,500 per dwelling unit weatherized in 

that State. Labor, weatherization materials, and related matter includes, but is not limited to— 

(A) * * * 

* * * * * * * 

(3) Beginning with fiscal year 2000, the ø$2,500 per dwelling 

unit average provided in paragraph (1)¿ dwelling unit averages 

provided in paragraphs (1) and (4) shall be adjusted annually by 

increasing the average amount by an amount equal to— 

(A) * * * 

* * * * * * * 

290 

(4) The expenditure of financial assistance provided under this 

part for labor, weatherization materials, and related matters for a 

renewable energy system shall not exceed an average of $3,000 per 

dwelling unit. 

(5)(A) The Secretary shall by regulations— 

(i) establish the criteria which are to be used in prescribing 

performance and quality standards under paragraph (6)(A)(ii) 

or in specifying any form of renewable energy under paragraph 

(6)(A)(i)(I); and 

(ii) establish a procedure under which a manufacturer of an 

item may request the Secretary to certify that the item will be 

treated, for purposes of this paragraph, as a renewable energy 

system. 

(B) The Secretary shall make a final determination with respect 

to any request filed under subparagraph (A)(ii) within 1 year after 

the filing of the request, together with any information required to 

be filed with such request under subparagraph (A)(ii). 

(C) Each month the Secretary shall publish a report of any request under subparagraph (A)(ii) which has been denied during the 

preceding month and the reasons for the denial. 

(D) The Secretary shall not specify any form of renewable energy 

under paragraph (6)(A)(i)(I) unless the Secretary determines that— 

(i) there will be a reduction in oil or natural gas consumption 

as a result of such specification; 

(ii) such specification will not result in an increased use of 

any item which is known to be, or reasonably suspected to be, 

environmentally hazardous or a threat to public health or safety; and 

(iii) available Federal subsidies do not make such specification unnecessary or inappropriate (in the light of the most advantageous allocation of economic resources). 

(6) In this subsection— 

(A) the term ‘‘renewable energy system’’ means a system 

which— 

(i) when installed in connection with a dwelling, transmits or uses— 

(I) solar energy, energy derived from the geothermal 

deposits, energy derived from biomass, or any other 

form of renewable energy which the Secretary specifies 

by regulations, for the purpose of heating or cooling 

such dwelling or providing hot water or electricity for 

use within such dwelling; or 

(II) wind energy for nonbusiness residential purposes; 

(ii) meets the performance and quality standards (if any) 

which have been prescribed by the Secretary by regulations; 

(iii) in the case of a combustion rated system, has a thermal efficiency rating of at least 75 percent; and 

(iv) in the case of a solar system, has a thermal efficiency 

rating of at least 15 percent; and 

(B) the term ‘‘biomass’’ means any organic matter that is 

available on a renewable or recurring basis, including agricultural crops and trees, wood and wood wastes and residues, 

291 

plants (including aquatic plants), grasses, residues, fibers, and 

animal wastes, municipal wastes, and other waste materials. 

* * * * * * * 

AUTHORIZATION OF APPROPRIATIONS

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¿ 

$500,000,000 for fiscal year 2006, $600,000,000 for fiscal year 2007, 

and $700,000,000 for fiscal year 2008. 

* * * * * * * 

SECTION 3 OF THE UNIFORM TIME ACT OF 1966 

SEC. 3. (a) During the period commencing at 2 o’clock antemeridian on the first Sunday of øApril¿ March of each year and 

ending at 2 o’clock antemeridian on the last Sunday of øOctober¿ 

November of each year, the standard time of each zone established 

by the Act of March 19, 1918 (15 U.S.C. 261–264), as modified by 

the Act of March 4, 1921 (15 U.S.C. 265), shall be advanced one 

hour and such time as so advanced shall for the purposes of such 

Act of March 19, 1918, as so modified, be the standard time of such 

zone during such period; however, (1) any State that lies entirely 

within one time zone may by law exempt itself from the provisions 

of this subsection providing for the advancement of time, but only 

if that law provides that the entire State (including all political 

subdivisions thereof) shall observe the standard time otherwise applicable during that period, and (2) any State with parts thereof in 

more than one time zone may by law exempt either the entire 

State as provided in (1) or may exempt the entire area of the State 

lying within any time zone. 

* * * * * * * 

LOW-INCOME HOME ENERGY ASSISTANCE ACT OF 1981 

TITLE XXVI—LOW-INCOME HOME ENERGY ASSISTANCE 

SHORT TITLE

SEC. 2601. This title may be cited as the ‘‘Low-Income Home Energy Assistance Act of 1981’’. 

HOME ENERGY GRANTS AUTHORIZED

SEC. 2602. (a) * * * 

(b) There are authorized to be appropriated to carry out the provisions of this title (other than section 2607A), $2,000,000,000 for 

each of fiscal years 1995 through 1999, such sums as may be necessary for each of fiscal years 2000 and 2001, øand $2,000,000,000 

for each of fiscal years 2002 through 2004¿ and $5,100,000,000 for 

each of fiscal years 2005 through 2007. The authorizations of approVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00291 Fmt 6659 Sfmt 6601 E:\HR\OC\HR215P1.XXX HR215P1
292 

priations contained in this subsection are subject to the program 

year provisions of subsection (c). 

* * * * * * * 

RENEWABLE FUELS

SEC. 2612. In providing assistance pursuant to this title, a State, 

or any other person with which the State makes arrangements to 

carry out the purposes of this title, may purchase renewable fuels, 

including biomass. 

ENERGY POLICY AND CONSERVATION ACT 

Be it enacted by the Senate and House of Representatives of the 

United States of America in Congress assembled, That this Act may 

be cited as the ‘‘Energy Policy and Conservation Act’’. 

TABLE OF CONTENTS 

Sec. 2. Statement of purposes. 

* * * * * * * 

TITLE I—MATTERS RELATED TO DOMESTIC SUPPLY AVAILABILITY 

* * * * * * * 

øPART D—EXPIRATION

øSec. 181. Expiration.¿ 

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. 

øPART D—EXPIRATION

øSec. 281. Expiration.¿ 

PART C—SUMMER FILL AND FUEL BUDGETING PROGRAMS

Sec. 273. Summer fill and fuel budgeting programs. 

TITLE III—IMPROVING ENERGY EFFICIENCY 

* * * * * * * 

PART B—ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS OTHER THAN

AUTOMOBILES

* * * * * * * 

Sec. 324A. Energy Star program. 

* * * * * * * 

TITLE I—MATTERS RELATED TO DOMESTIC SUPPLY 

AVAILABILITY 

* * * * * * * 

293 

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. 

* * * * * * * 

PART D—NORTHEAST HOME HEATING OIL RESERVE

* * * * * * * 

CONDITIONS FOR RELEASE; PLAN

SEC. 183. (a) * * * 

(b) DEFINITION.—For purposes of this section a ‘‘dislocation in the 

heating oil market’’ shall be deemed to occur only when— 

(1) The price differential between crude oil, as reflected in an 

industry daily publication such as ‘‘Platt’s Oilgram Price Report’’ or ‘‘Oil Daily’’ and No. 2 heating oil, as reported in the 

Energy Information Administration’s retail price data for the 

Northeast, increases øby more tan 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 

* * * * * * * 

øAUTHORIZATION OF APPROPRIATIONS

øSEC. 186. There are authorized to be appropriated such sums as 

may be necessary to implement this part.¿ 

øPART E—EXPIRATION

øEXPIRATION

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 

* * * * * * * 

294 

PART C—SUMMER FILL AND FUEL BUDGETING 

PROGRAMS 

SEC. 273. SUMMER FILL AND FUEL BUDGETING PROGRAMS. 

(a) * * * 

* * * * * * * 

ø(e) INAPPLICABILITY OF EXPIRATION PROVISION.—Section 281 

does not apply to this section.¿ 

øPART D—EXPIRATION

øSEC. 281. Except as otherwise provided in title II, all authority 

under any provision of title II (other than a provision of such title 

amending another law) and any rule, regulation, or order issued 

pursuant to such authority, shall expire at midnight, September 

30, 2008, but such expiration shall not affect any action or pending 

proceedings, civil or criminal, not finally determined on such date, 

nor any action or proceeding based upon any act committed prior 

to midnight, September 30, 2008.¿ 

TITLE III—IMPROVING ENERGY EFFICIENCY 

PART B—ENERGY CONSERVATION PROGRAM FOR CONSUMER

PRODUCTS OTHER THAN AUTOMOBILES

DEFINITIONS

SEC. 321. For purposes of this part: 

(1) * * * 

* * * * * * * 

(30)(A) * * * 

* * * * * * * 

(S) 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 lampø.¿ but does not include any lamp specifically designed to be used for special purpose applications and 

that is unlikely to be used in general purpose applications such 

as those described in subparagraph (D), and also does not include any lamp not described in subparagraph (D) that is excluded by the Secretary, by rule, because the lamp is designed 

for special applications and is unlikely to be used in general 

purpose applications. 

* * * * * * * 

(32) The term ‘‘battery charger’’ means a device that charges 

batteries for consumer products and includes battery chargers 

embedded in other consumer products. 

(33) The term ‘‘commercial refrigerators, freezers, and refrigerator-freezers’’ means refrigerators, freezers, or refrigeratorfreezers that— 

(A) are not consumer products regulated under this Act; 

and 

295 

(B) incorporate most components involved in the vaporcompression cycle and the refrigerated compartment in a 

single package. 

(34) The term ‘‘external power supply’’ means an external 

power supply circuit that is used to convert household electric 

current into either DC current or lower-voltage AC current to 

operate a consumer product. 

(35) The term ‘‘illuminated exit sign’’ means a sign that— 

(A) is designed to be permanently fixed in place to identify an exit; and 

(B) consists of an electrically powered integral light 

source that illuminates the legend ‘‘EXIT’’ and any directional indicators and provides contrast between the legend, 

any directional indicators, and the background. 

(36)(A) Except as provided in subparagraph (B), 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) transformers with multiple voltage taps, with the 

highest voltage tap equaling at least 20 percent more than 

the lowest voltage tap; 

(ii) transformers, such as those commonly known as drive 

transformers, rectifier transformers, auto-transformers, 

Uninterruptible Power System transformers, impedance 

transformers, regulating transformers, sealed and nonventilating transformers, machine tool transformers, welding 

transformers, grounding transformers, or testing transformers, that are designed to be used in a special purpose 

application and are unlikely to be used in general purpose 

applications; 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. 

(37) 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. 

(38) The term ‘‘standby mode’’ means the lowest power consumption mode that— 

(A) cannot be switched off or influenced by the user; and 

(B) may persist for an indefinite time when an appliance 

is connected to the main electricity supply and used in accordance with the manufacturer’s instructions, 

as defined on an individual product basis by the Secretary. 

(39) The term ‘‘torchiere’’ means a portable electric lamp with 

a reflector bowl that directs light upward so as to give indirect 

illumination. 

296 

(40) The term ‘‘traffic signal module’’ means a standard 8- 

inch (200mm) or 12-inch (300mm) traffic signal indication, consisting of a light source, a lens, and all other parts necessary 

for operation, that communicates movement messages to drivers 

through red, amber, and green colors. 

(41) 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. 

(42) The term ‘‘unit heater’’ means a self-contained fan-type 

heater designed to be installed within the heated space, except 

that such term does not include a warm air furnace. 

(43) The term ‘‘ceiling fan’’ means a non-portable device that 

is suspended from a ceiling for circulating air via the rotation 

of fan blades. 

(44) The term ‘‘ceiling fan light kit’’ means equipment designed to provide light from a ceiling fan which can be— 

(A) integral, such that the equipment is attached to the 

ceiling fan prior to the time of retail sale; or 

(B) attachable, such that at the time of retail sale the 

equipment is not physically attached to the ceiling fan, but 

may be included inside the ceiling fan package at the time 

of sale or sold separately for subsequent attachment to the 

fan. 

* * * * * * * 

TEST PROCEDURES

SEC. 323. (a) * * * 

(b) AMENDED AND NEW PROCEDURES.—(1) * * * 

* * * * * * * 

(9) Test procedures for illuminated exit signs shall be based on 

the test method used under Version 2.0 of the Energy Star program 

of the Environmental Protection Agency for illuminated exit signs. 

(10) Test procedures for 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). The Secretary may review and revise this test procedure. For purposes of section 346(a), this test procedure shall be deemed to be 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 be technologically feasible and economically justified, and would result in significant energy savings. 

(11) Test procedures for traffic signal modules shall be based on 

the test method used under the Energy Star program of the Environmental Protection Agency for traffic signal modules, as in effect 

on the date of enactment of this paragraph. 

(12) Test procedures for medium base compact fluorescent lamps 

shall be based on the test methods used under the August 9, 2001, 

version of the Energy Star program of the Environmental Protection 

Agency and Department of Energy for compact fluorescent lamps. 

Covered products shall meet all test requirements for regulated parameters in section 325(bb). However, covered products may be marVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00296 Fmt 6659 Sfmt 6603 E:\HR\OC\HR215P1.XXX HR215P1
297 

keted prior to completion of lamp life and lumen maintenance at 40 

percent of rated life testing provided manufacturers document engineering predictions and analysis that support expected attainment 

of lumen maintenance at 40 percent rated life and lamp life time. 

(13) The Secretary shall, not later than 18 months after the date 

of enactment of this paragraph, prescribe testing requirements for 

ceiling fans and ceiling fan light kits. 

* * * * * * * 

(f) ADDITIONAL CONSUMER AND COMMERCIAL PRODUCTS.—The 

Secretary shall, not later than 24 months after the date of enactment of this subsection, prescribe testing requirements for suspended ceiling fans, refrigerated bottled or canned beverage vending 

machines, and commercial refrigerators, freezers, and refrigeratorfreezers. Such testing requirements shall be based on existing test 

procedures used in industry to the extent practical and reasonable. 

In the case of suspended ceiling fans, such test procedures shall include efficiency at both maximum output and at an output no more 

than 50 percent of the maximum output. 

LABELING

SEC. 324. (a) IN GENERAL.—(1) * * * 

(2)(A) * * * 

* * * * * * * 

(F) Not later than 3 months after the date of enactment of this 

subparagraph, the Commission shall initiate a rulemaking to consider the effectiveness of the current consumer products labeling program in assisting consumers in making purchasing decisions and 

improving energy efficiency and to consider changes to the labeling 

rules that would improve the effectiveness of consumer product labels. Such rulemaking shall be completed not later than 2 years 

after the date of enactment of this subparagraph. 

(G)(i) Not later than 18 months after date of enactment of this 

subparagraph, the Commission shall prescribe by rule, pursuant to 

this section, labeling requirements for the electricity used by ceiling 

fans to circulate air in a room. 

(ii) The rule prescribed under clause (i) shall apply to products 

manufactured after the later of— 

(I) January 1, 2009; or 

(II) the date that is 60 days after the final rule is prescribed. 

* * * * * * * 

(5) The Secretary or the Commission, as appropriate, may, for 

covered products referred to in subsections (u) through (aa) of section 325, prescribe, by rule, pursuant to this section, labeling requirements for such products after a test procedure has been set 

pursuant to section 323. 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 upon the date of enactment of this paragraph. 

* * * * * * * 

298 

SEC. 324A. ENERGY STAR PROGRAM. 

There is established at 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 efficiency 

standards. Responsibilities under the program shall be divided between the Department of Energy and the Environmental Protection 

Agency consistent with the terms of agreements between the 2 agencies. The Administrator and the Secretary shall— 

(1) promote Energy Star compliant technologies as the preferred technologies in the marketplace for achieving energy efficiency and to reduce pollution; 

(2) work to enhance public awareness of the Energy Star 

label, including special outreach to small businesses; 

(3) preserve the integrity of the Energy Star label; 

(4) solicit comments from interested parties prior to establishing or revising an Energy Star product category, specification, or criterion (or effective dates for any of the foregoing); 

(5) upon 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 an explanation of 

such changes and, where appropriate, responses to comments 

submitted by interested parties; and 

(6) provide appropriate lead time (which shall be 9 months, 

unless the Agency or Department determines otherwise) prior to 

the 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. 

ENERGY CONSERVATION STANDARDS

SEC. 325. (a) * * * 

* * * * * * * 

(f) STANDARDS FOR FURNACES.—(1) * * * 

* * * * * * * 

(3)(A) * * * 

* * * * * * * 

(D) Notwithstanding any provision of this Act, the Secretary may 

consider, and prescribe, if the requirements of subsection (o) of this 

section are met, energy efficiency or energy use standards for electricity used for purposes of circulating air through duct work. 

* * * * * * * 

(u) BATTERY CHARGER AND EXTERNAL POWER SUPPLY ELECTRIC

ENERGY CONSUMPTION.— 

(1) INITIAL RULEMAKING.—(A) The Secretary shall, within 18 

months after the date of enactment of this subsection, prescribe 

by notice and comment, definitions and test procedures for the 

power use of battery chargers and external power supplies. In 

establishing these test procedures, the Secretary shall consider, 

among other factors, existing definitions and test procedures 

299 

used for measuring energy consumption in standby mode and 

other modes and assess the current and projected future market 

for battery chargers and external power supplies. This assessment shall include estimates of the significance of potential energy savings from technical improvements to these products and 

suggested product classes for standards. Prior to the end of this 

time period, the Secretary shall hold a scoping workshop to discuss and receive comments on plans for developing energy conservation standards for energy use for these products. 

(B) The Secretary shall, within 3 years after the date of enactment of this subsection, issue a final rule that determines 

whether energy conservation standards shall be issued for battery chargers and external power supplies or classes thereof. For 

each product class, any such standards shall be set at the lowest level of energy use that— 

(i) meets the criteria and procedures of subsections (o), 

(p), (q), (r), (s), and (t); and 

(ii) will result in significant overall annual energy savings, considering both standby mode and other operating 

modes. 

(2) REVIEW OF STANDBY ENERGY USE IN COVERED PRODUCTS.—In determining pursuant to section 323 whether test 

procedures and energy conservation standards pursuant to this 

section should be revised, the Secretary shall consider, for covered products that are major sources of standby mode energy 

consumption, whether to incorporate standby mode into such 

test procedures and energy conservation standards, taking into 

account, among other relevant factors, standby mode power consumption compared to overall product energy consumption. 

(3) RULEMAKING.—The Secretary shall not propose a standard under this section unless the Secretary has issued applicable test procedures for each product pursuant to section 323. 

(4) EFFECTIVE DATE.—Any standard issued under this subsection shall be applicable to products manufactured or imported 3 years after the date of issuance. 

(5) VOLUNTARY PROGRAMS.—The Secretary and the Administrator shall collaborate and develop programs, including programs pursuant to section 324A (relating to Energy Star Programs) and other voluntary industry agreements or codes of 

conduct, that are designed to reduce standby mode energy use. 

(v) SUSPENDED CEILING FANS, VENDING MACHINES, AND COMMERCIAL REFRIGERATORS, FREEZERS, AND REFRIGERATOR-FREEZERS.—The Secretary shall not later than 36 months after the date 

on which testing requirements are prescribed by the Secretary pursuant to section 323(f), prescribe, by rule, energy conservation standards for suspended ceiling fans, refrigerated bottled or canned beverage vending machines, and commercial refrigerators, freezers, and 

refrigerator-freezers. In establishing standards under this subsection, the Secretary shall use the criteria and procedures contained in subsections (o) and (p). Any standard prescribed under 

this subsection shall apply to products manufactured 3 years after 

the date of publication of a final rule establishing such standard. 

(w) ILLUMINATED EXIT SIGNS.—Illuminated exit signs manufactured on or after January 1, 2006, shall meet the Version 2.0 EnVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00299 Fmt 6659 Sfmt 6603 E:\HR\OC\HR215P1.XXX HR215P1
300 

ergy Star Program performance requirements for illuminated exit 

signs prescribed by the Environmental Protection Agency. 

(x) TORCHIERES.—Torchieres manufactured on or after January 1, 

2006— 

(1) shall consume not more than 190 watts of power; and 

(2) shall not be capable of operating with lamps that total 

more than 190 watts. 

(y) LOW VOLTAGE DRY-TYPE DISTRIBUTION TRANSFORMERS.—The 

efficiency of low voltage dry-type distribution transformers 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). 

(z) TRAFFIC SIGNAL MODULES.—Traffic signal modules manufactured on or after January 1, 2006, shall meet the performance requirements used under the Energy Star program of the Environmental Protection Agency for traffic signals, as in effect on the date 

of enactment of this subsection, and shall be installed with compatible, electrically connected signal control interface devices and conflict monitoring systems. 

(aa) UNIT HEATERS.—Unit heaters manufactured on or after the 

date that is 3 years after the date of enactment of this subsection 

shall be equipped with an intermittent ignition device and shall 

have either power venting or an automatic flue damper. 

(bb) MEDIUM BASE COMPACT FLUORESCENT LAMPS.—Bare lamp 

and covered lamp (no reflector) medium base compact fluorescent 

lamps 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: minimum initial efficacy; lumen maintenance at 

1000 hours; lumen maintenance at 40 percent of rated life; rapid 

cycle stress test; and lamp life. 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. The Secretary may, by rule, revise these requirements or establish other requirements considering energy savings, cost effectiveness, and consumer satisfaction. 

(cc) EFFECTIVE DATE.—Section 327 shall apply— 

(1) to products for which standards are to be established 

under subsections (u) and (v) on the date on which a final rule 

is issued by the Department of Energy, except that any State or 

local standards prescribed or enacted for any such product 

prior to the date on which such final rule is issued shall not 

be preempted until the standard established under subsection 

(u) or (v) for that product takes effect; and 

(2) to products for which standards are established under 

subsections (w) through (bb) on the date of enactment of those 

subsections, except that any State or local standards prescribed 

or enacted prior to the date of enactment of those subsections 

301 

shall not be preempted until the standards established under 

subsections (w) through (bb) take effect. 

(dd) CEILING FANS.— 

(1) FEATURES.—All ceiling fans manufactured on or after 

January 1, 2006, shall have the following features: 

(A) Lighting controls operate independently from fan 

speed controls. 

(B) Adjustable speed controls (either more than 1 speed 

or variable speed). 

(C) The capability of reversible fan action, except for fans 

sold for industrial applications, outdoor applications, and 

where safety standards would be violated by the use of the 

reversible mode. The Secretary may promulgate regulations 

to define in greater detail the exceptions provided under 

this subparagraph but may not substantively expand the 

exceptions. 

(2) REVISED STANDARDS.— 

(A) IN GENERAL.—Notwithstanding any provision of this 

Act, if the requirements of subsections (o) and (p) are met, 

the Secretary may consider and prescribe energy efficiency 

or energy use standards for electricity used by ceiling fans 

to circulate air in a room. 

(B) SPECIAL CONSIDERATION.—If the Secretary sets such 

standards, the Secretary shall consider— 

(i) exempting or setting different standards for certain product classes for which the primary standards 

are not technically feasible or economically justified; 

and 

(ii) establishing separate exempted product classes 

for highly decorative fans for which air movement performance is a secondary design feature. 

(C) APPLICATION.—Any air movement standard prescribed under this subsection shall apply to products manufactured on or after the date that is 3 years after the date 

of publication of a final rule establishing the standard. 

* * * * * * * 

EFFECT ON OTHER LAW

SEC. 327. (a) * * * 

* * * * * * * 

(h) CEILING FANS.—Effective on January 1, 2006, this section 

shall apply to and supersede all State and local standards prescribed or enacted for ceiling fans and ceiling fan light kits. 

(h) LIMITATION ON PREEMPTION.—Subsections (a) and (b) shall 

not apply with respect to State regulation of energy consumption or 

water use of any covered product during any period of time— 

(1) after the date which is 3 years after a Federal standard 

is required by law to be established or revised, but has not been 

established or revised; and 

(2) before the date on which such Federal standard is established or revised. 

* * * * * * * 

302 

CONSUMER EDUCATION

SEC. 337. (a) * * * 

* * * * * * * 

(c) HVAC MAINTENANCE.—For the purpose of ensuring that installed air conditioning and heating systems operate at their 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 resulting from properly conducted maintenance 

of air conditioning, heating, and ventilating systems. The Secretary 

shall carry out the program in a cost-shared manner in cooperation 

with the Administrator of the Environmental Protection Agency and 

such other entities as the Secretary considers appropriate, including 

industry trade associations, industry members, and energy efficiency 

organizations. 

(d) SMALL BUSINESS EDUCATION AND ASSISTANCE.—The Administrator of the Small Business Administration, in consultation with 

the Secretary of Energy and the Administrator of the Environmental 

Protection Agency, shall develop and coordinate a Government-wide 

program, building on the existing Energy Star for Small Business 

Program, to assist small businesses to become more energy efficient, 

understand the cost savings obtainable through efficiencies, and 

identify financing options for energy efficiency upgrades. The Secretary and the Administrator of the Small Business Administration 

shall make the program information available directly to small 

businesses and through other Federal agencies, including the Federal Emergency Management Program and the Department of Agriculture. 

* * * * * * * 

PART D—STATE ENERGY CONSERVATION PLANS

* * * * * * * 

STATE ENERGY CONSERVATION PLANS

SEC. 362. (a) * * * 

* * * * * * * 

(g) The Secretary shall, at least once every 3 years, invite the Governor of each State to review and, if necessary, revise the energy conservation plan of such State submitted under subsection (b) or (e). 

Such reviews should consider the energy conservation plans of other 

States within the region, and identify opportunities and actions carried out in pursuit of common energy conservation goals. 

* * * * * * * 

øSTATE 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.¿ 

303 

STATE ENERGY EFFICIENCY GOALS

SEC. 364. Each State energy conservation plan with respect to 

which assistance is made available under this part on or after the 

date of enactment of the Energy Policy Act of 2005 shall contain a 

goal, consisting of an improvement of 25 percent or more in the efficiency of use of energy in the State concerned in calendar year 2012 

as compared to calendar year 1990, and may contain interim goals. 

GENERAL PROVISIONS

SEC. 365. (a) * * * 

* * * * * * * 

(f) For the purpose of carrying out this part, there are authorized 

to be appropriated øfor fiscal years 1999 through 2003 such sums 

as may be necessary¿ $100,000,000 for each of the 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.—(1) * * * 

* * * * * * * 

(3)(A) * * * 

* * * * * * * 

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 such requirement for vehicles operated by the agency in a particular geographic area in which— 

(I) the alternative fuel otherwise required to be used in the vehicle is not reasonably available to retail purchasers of the fuel, 

as certified to the Secretary by the head of the agency; or 

(II) the cost of the alternative fuel otherwise required to be 

used in the vehicle is unreasonably more expensive compared to 

gasoline, as certified to the Secretary by the head of the agency. 

(ii) The Secretary shall monitor compliance with this subparagraph by all such fleets and shall report annually to Congress on 

the extent to which the requirements of this subparagraph are being 

achieved. The report shall include information on annual reductions 

achieved from the use of petroleum-based fuels and the problems, if 

any, encountered in acquiring alternative fuels. 

* * * * * * * 

ENERGY POLICY ACT OF 1992 

SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

(a) * * * 

304 

(b) TABLE OF CONTENTS.— 

TITLE I—ENERGY EFFICIENCY 

Subtitle A—Buildings 

Sec. 101. Building energy efficiency standards. 

* * * * * * * 

TITLE III—ALTERNATIVE FUELS—GENERAL 

Sec. 301. Definitions. 

* * * * * * * 

Sec. 313. Lease condensate use credits. 

* * * * * * * 

TITLE XXVI—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. Indian mineral development review. 

* * * * * * * 

TITLE XXXI—CLEAN AIR COAL PROGRAM 

Sec. 3101. Findings; purposes; definitions. 

Sec. 3102. Authorization of program. 

Sec. 3103. Authorization of appropriations. 

Sec. 3104. Air pollution control project criteria. 

Sec. 3105. Criteria for generation projects. 

Sec. 3106. Financial criteria. 

Sec. 3107. Federal share. 

Sec. 3108. Applicability. 

* * * * * * * 

TITLE I—ENERGY EFFICIENCY 

* * * * * * * 

Subtitle G—Miscellaneous 

* * * * * * * 

SEC. 172. DISTRICT HEATING AND COOLING PROGRAMS. 

(a) IN GENERAL.—The Secretary, in consultation with appropriate 

industry organizations, shall conduct a study to— 

(1) * * * 

* * * * * * * 

(3) evaluate the cost-effectiveness, including the economic 

value referred to in paragraph (2), of cogenerated district heating and cooling technologies compared to other alternatives for 

generating or conserving electricity; øand¿ 

305 

(4) assess and make recommendations for reducing institutional and other constraints on the implementation of district 

heating and cooling systemsø.¿; and 

(5) evaluate the use of renewable energy systems (as such 

term is defined in section 415(c) of the Energy Conservation and 

Production Act (42 U.S.C. 6865(c))) in residential buildings. 

(b) REPORT.—Not later than 2 years after the date of the enactment of øthis Act¿ the Energy Policy Act of 2005, the Secretary 

shall transmit to the Congress a report containing the findings, 

conclusions and recommendations, if any, of the Secretary for carrying out Federal, State, and local programs as a result of the 

study conducted under subsection (a). 

* * * * * * * 

TITLE III—ALTERNATIVE FUELS— 

GENERAL 

SEC. 301. DEFINITIONS. 

For purposes of this title, title IV, and title V (unless otherwise 

specified)— 

(1) * * * 

(2) the term ‘‘alternative fuel’’ means methanol, denatured 

ethanol, and other alcohols; mixtures containing 85 percent or 

more (or such other percentage, but not less than 70 percent, 

as determined by the Secretary, by rule, to provide for requirements relating to cold start, safety, or vehicle functions) by volume of methanol, denatured ethanol, and other alcohols with 

gasoline or other fuels; natural gas, including liquid fuels domestically produced from natural gas; liquefied petroleum gas; 

mixtures containing 50 percent or more by volume of lease condensate or fuels extracted from lease condensate; hydrogen; 

coal-derived liquid fuels; fuels (other than alcohol) derived from 

biological materials; electricity (including electricity from solar 

energy); and any other fuel the Secretary determines, by rule, 

is substantially not petroleum and would yield substantial energy security benefits and substantial environmental benefits; 

* * * * * * * 

(9) the term ‘‘fleet’’ means a group of 20 or more light duty 

motor vehicles, used primarily in a metropolitan statistical 

area or consolidated metropolitan statistical area, as established by the Bureau of the Census, with a 1980 population of 

more than 250,000, that are centrally fueled or capable of 

being centrally fueled and are owned, operated, leased, or otherwise controlled by a governmental entity or other person who 

owns, operates, leases, or otherwise controls 50 or more such 

vehicles, by any person who controls such person, by any person controlled by such person, and by any person under common control with such person, except that such term does not 

include— 

(A) * * * 

* * * * * * * 

306 

(E) emergency motor vehicles, including vehicles directly 

used in the emergency repair of transmission lines and in 

the restoration of electricity service following power outages, 

as determined by the Secretary; 

* * * * * * * 

(13) the term ‘‘motor vehicle’’ has the meaning given such 

term under section 216(2) of the Clean Air Act (42 U.S.C. 

7550(2)); øand¿ 

(14) the term ‘‘replacement fuel’’ means the portion of any 

motor fuel that is methanol, ethanol, or other alcohols, natural 

gas, liquefied petroleum gas, mixtures containing 50 percent or 

more by volume of lease condensate or fuels extracted from lease 

condensate, hydrogen, coal derived liquid fuels, fuels (other 

than alcohol) derived from biological materials, electricity (including electricity from solar energy), ethers, or any other fuel 

the Secretary determines, by rule, is substantially not petroleum and would yield substantial energy security benefits and 

substantial environmental benefitsø.¿; and 

(15) the term ‘‘lease condensate’’ means a mixture, primarily 

of pentanes and heavier hydrocarbons, that is recovered as a 

liquid from natural gas in lease separation facilities. 

* * * * * * * 

SEC. 303. MINIMUM FEDERAL FLEET REQUIREMENT. 

(a) * * * 

* * * * * * * 

(c) ALLOCATION OF INCREMENTAL COSTS.—The General Services 

Administration and any other Federal agency that procures motor 

vehicles for distribution to other Federal agencies 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. 

* * * * * * * 

SEC. 310. REPORTS. 

(a) * * * 

(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— 

(A) * * * 

* * * * * * * 

SEC. 313. LEASE CONDENSATE USE CREDITS. 

(a) IN GENERAL.—Subject to subsection (d), the Secretary shall allocate 1 credit under this section to a fleet or covered person for each 

qualifying volume of the lease condensate component of fuel containing at least 50 percent lease condensate, or fuels extracted from 

lease condensate, after the date of enactment of this section for use 

by the fleet or covered person in vehicles owned or operated by the 

fleet or covered person that weigh more than 8,500 pounds gross vehicle weight rating. 

307 

(b) REQUIREMENTS.—A credit allocated under this section— 

(1) shall be subject to the same exceptions, authority, documentation, and use of credits that are specified for qualifying 

volumes of biodiesel in section 312; and 

(2) shall not be considered a credit under section 508. 

(c) REGULATION.— (1) IN GENERAL.—Subject to subsection (d), not later than 

January 1, 2006, after the collection of appropriate information 

and data that consider usage options, uses in other industries, 

products, or processes, potential volume capacities, costs, air 

emissions, and fuel efficiencies, the Secretary shall issue a regulation establishing requirements and procedures for the implementation of this section. 

(2) QUALIFYING VOLUME.—The regulation shall include a determination of an appropriate qualifying volume for lease condensate, except that in no case shall the Secretary determine 

that the qualifying volume for lease condensate is less than 

1,125 gallons. 

(d) APPLICABILITY.—This section applies unless the Secretary 

finds that the use of lease condensate as an alternative fuel would 

adversely affect public health or safety or ambient air quality or the 

environment. 

* * * * * * * 

TITLE XII—RENEWABLE ENERGY 

* * * * * * * 

SEC. 1212. RENEWABLE ENERGY PRODUCTION INCENTIVE. 

(a) INCENTIVE PAYMENTS.—For electric energy generated and 

sold by a qualified renewable energy facility during the incentive 

period, the Secretary shall make, subject to the availability of appropriations, incentive payments to the owner or operator of such 

facility. The amount of such payment made to any such owner or 

operator shall be as determined under subsection (e). Payments 

under this section may only be made upon receipt by the Secretary 

of an incentive payment application which establishes that the applicant is eligible to receive such payment øand which satisfies 

such other requirements as the Secretary deems necessary. Such 

application shall be in such form, and shall be submitted at such 

time, as the Secretary shall establish.¿. If there are insufficient appropriations to make full payments for electric production from all 

qualified renewable energy facilities in any given year, the Secretary 

shall assign 60 percent of appropriated funds for that year to facilities that use solar, wind, geothermal, or closed-loop (dedicated energy crops) biomass technologies to generate electricity, and assign 

the remaining 40 percent to other projects. The Secretary may, after 

transmitting to Congress an explanation of the reasons therefor, 

alter the percentage requirements of the preceding sentence. 

(b) QUALIFIED RENEWABLE ENERGY FACILITY.—For purposes of 

this section, a qualified renewable energy facility is a facility which 

is owned by 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 nonVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00307 Fmt 6659 Sfmt 6601 E:\HR\OC\HR215P1.XXX HR215P1
308 

profit 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, livestock methane, ocean (tidal, wave, current, and thermal), or geothermal energy, except that— 

(1) * * * 

* * * * * * * 

(c) ELIGIBILITY WINDOW.—Payments may be made under this 

section only for electricity generated from a qualified renewable energy facility first used øduring the 10-fiscal year period beginning 

with the first full fiscal year occurring after the enactment of this 

section¿ after October 1, 2005, and before October 1, 2015. 

* * * * * * * 

(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, livestock methane, 

ocean (tidal, wave, current, and thermal), or geothermal energy 

during the payment period referred to in subsection (d). For 

any facility, the amount of such payment shall be 1.5 cents per 

kilowatt hour, adjusted as provided in paragraph (2). 

(f) SUNSET.—No payment may be made under this section to any 

facility after øthe expiration of the 20-fiscal year period beginning 

with the first full fiscal year occurring after the enactment of this 

section¿ September 30, 2025, 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.— (1) IN GENERAL.—Subject to paragraph (2), there are authorized to be appropriated such sums as may be necessary to carry 

out this section for fiscal years 2005 through 2025. 

(2) AVAILABILITY OF FUNDS.—Funds made available under 

paragraph (1) shall remain available until expended. 

* * * * * * * 

TITLE XXVI—INDIAN ENERGY 

SEC. 2601. DEFINITIONS. 

For purposes of 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— 

309 

(A) any land located within the boundaries of an Indian 

reservation, pueblo, or rancheria; 

(B) any land not located within the boundaries of an Indian reservation, pueblo, or rancheria, the title to which is 

held— 

(i) in trust by the United States for the benefit of an 

Indian tribe or an individual Indian; 

(ii) by an Indian tribe or an individual Indian, subject to restriction against alienation under laws of the 

United States; or 

(iii) by a dependent Indian community; and 

(C) land that is owned by an Indian tribe and was conveyed by the United States to a Native Corporation pursuant to the Alaska Native Claims Settlement Act (43 U.S.C. 

1601 et seq.), or that was conveyed by the United States to 

a Native Corporation in exchange for such land. 

(3) The term ‘‘Indian reservation’’ includes— 

(A) an Indian reservation in existence in any State or 

States as of the date of enactment of this paragraph; 

(B) a public domain Indian allotment; and 

(C) a dependent Indian community located within the 

borders of the United States, regardless of whether the community is located— 

(i) on original or acquired territory of the community; or 

(ii) within or outside the boundaries of any particular State. 

(4) 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), except that the term ‘‘Indian 

tribe’’, for the purpose of paragraph (11) and sections 2603(b)(3) 

and 2604, shall not include any Native Corporation. 

(5) The term ‘‘integration of energy resources’’ means any 

project or activity that promotes the location and operation of 

a facility (including any pipeline, gathering system, transportation system or facility, or electric transmission or distribution 

facility) on or near Indian land to process, refine, generate electricity from, or otherwise develop energy resources on, Indian 

land. 

(6) The term ‘‘Native Corporation’’ has the meaning given the 

term in section 3 of the Alaska Native Claims Settlement Act 

(43 U.S.C. 1602). 

(7) The term ‘‘organization’’ means a partnership, joint venture, limited liability company, or other unincorporated association or entity that is established to develop Indian energy resources. 

(8) The term ‘‘Program’’ means the Indian energy resource development program established under section 2602(a). 

(9) The term ‘‘Secretary’’ means the Secretary of the Interior. 

(10) The term ‘‘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 authorized by section 2602. 

310 

(11) 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 which 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. 

(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; 

(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 may develop, in consultation with Indian 

tribes, a formula for providing grants under this subsection. 

(B) In providing a grant under this subsection, the Director 

shall give priority to an application received from an Indian 

311 

tribe with inadequate electric service (as determined by the Director). 

(4) The Secretary of Energy may issue such regulations as 

necessary to carry out this subsection. 

(5) There are 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 paragraph (3), 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 not more than 

90 percent of the unpaid principal and interest due on any loan 

made to any Indian tribe for energy development. 

(2) 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. 

(3) The aggregate outstanding amount guaranteed by the Secretary of Energy at any time under this subsection shall not exceed $2,000,000,000. 

(4) The Secretary of Energy may issue such regulations as the 

Secretary of Energy determines are necessary to carry out this 

subsection. 

(5) There are authorized to be appropriated such sums as are 

necessary to carry out this subsection, to remain available until 

expended. 

(6) Not later than 1 year from the date of enactment of this 

section, the Secretary of Energy shall report to Congress on the 

financing requirements of Indian tribes for energy development 

on Indian land. 

(d) FEDERAL AGENCIES-INDIAN ENERGY PREFERENCE.— 

(1) In purchasing electricity or any other energy product or 

byproduct, a Federal agency or department may give preference 

to an energy and resource production enterprise, partnership, 

consortium, corporation, or other type of business organization 

the majority of the interest in which is owned and controlled by 

1 or more Indian tribes. 

(2) In carrying out this subsection, a Federal agency or department shall not— 

(A) pay more than the prevailing market price for an energy product or byproduct; or 

(B) obtain less than prevailing market terms and conditions. 

SEC. 2603. 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) by an Indian tribe for the development of a tribal energy 

resource inventory or tribal energy resource on Indian land; 

(2) by an Indian tribe for the development of a feasibility 

study or other report necessary to the development of energy resources on Indian land; 

312 

(3) by an Indian tribe (other than an Indian Tribe in Alaska 

except the Metlakatla Indian Community) for the development 

and enforcement of tribal laws (including regulations) relating 

to tribal energy resource development and the development of 

technical infrastructure to protect the environment under applicable law; or 

(4) 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 

(5) 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.—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 upon the request of an Indian tribe, the Indian tribe shall have 

available scientific and technical information and expertise, for use 

in the Indian tribe’s regulation, development, and management of 

energy resources on Indian land. The Secretary may fulfill this responsibility either directly, through the use of Federal officials, or 

indirectly, by providing financial assistance to the 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.—Subject to the provisions of this section— 

(1) an Indian tribe may, at its discretion, 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 Indian tribe’s energy mineral resources 

located on tribal land; and 

(B) construction or operation of an electric generation, 

transmission, or distribution facility located on tribal land 

or a facility to process or refine energy resources developed 

on tribal land; and 

(2) such 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 subVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00312 Fmt 6659 Sfmt 6603 E:\HR\OC\HR215P1.XXX HR215P1
313 

section (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 the provisions required 

by 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 Indian tribe’s 

activities under such 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 pursuant to the 

provisions of this section shall be valid unless the lease, business 

agreement, or right-of-way is authorized by the provisions of a tribal 

energy resource agreement approved by the Secretary under subsection (e)(2). 

(e) TRIBAL ENERGY RESOURCE AGREEMENTS.— 

(1) On issuance of regulations 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 180 days after the date on which the 

Secretary receives a tribal energy resource agreement submitted 

by an Indian tribe under paragraph (1), or not later than 60 

days after the Secretary receives a revised tribal energy resource 

agreement submitted by an Indian tribe under paragraph 

(4)(C), (or such later date as may be 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; 

314 

(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; 

(VIII) identify final approval authority; 

(IX) provide for public notification of final approvals; 

(X) establish a process for consultation with any affected States concerning off-reservation impacts, if any, 

identified pursuant to the provisions required 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, in the event 

that any of its provisions violates an express term or 

requirement set forth in the tribal energy resource 

agreement pursuant to which it was executed— 

(aa) such provision shall be null and void; and 

(bb) if the Secretary determines such provision to 

be material, the Secretary shall have the authority 

to 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 adopted pursuant to 

this subsection; and 

(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 pursuant to paragraph (7)(B). 

(C) Tribal energy resource agreements submitted under paragraph (1) shall establish, and include provisions to ensure compliance with, an environmental review process that, with respect 

to a lease, business agreement, or right-of-way under this section, provides for— 

315 

(i) the identification and evaluation of all significant environmental impacts (as compared with a no-action alternative), including effects on cultural resources; 

(ii) the identification of proposed mitigation; 

(iii) a process for ensuring that the public is informed of 

and has an opportunity to comment on the environmental 

impacts of the proposed action before tribal approval of the 

lease, business agreement, or right-of-way; and 

(iv) sufficient administrative support and technical capability to carry out the environmental review process. 

(D) A tribal energy resource agreement negotiated between the 

Secretary and an Indian tribe in accordance with this subsection shall include— 

(i) provisions requiring the Secretary to conduct a periodic review and evaluation to monitor the performance of 

the Indian tribe’s activities associated with the development 

of energy resources under the tribal energy resource agreement; and 

(ii) when such review and evaluation result 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 appropriate actions determined 

by the Secretary to be necessary to protect such asset, which 

actions may include reassumption of responsibility for activities associated with the development of energy resources 

on tribal land until the violation and conditions that gave 

rise to such jeopardy have been corrected. 

(E) The periodic review and evaluation described in subparagraph (D) shall be conducted on an annual basis, except that, 

after the third such 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 required by 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). The Secretary’s review of a 

tribal energy resource agreement under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) shall be limited to the direct effects of that approval. 

(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 

or grants a right-of-way in accordance with a tribal energy resource agreement approved under this subsection, the Indian 

tribe shall, in accordance with the process and requirements set 

316 

forth in the Secretary’s regulations adopted pursuant to 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 

Indian tribe’s rights under, the lease, business agreement, 

or right-of-way. 

(6)(A) For purposes of the activities to be undertaken by the 

Secretary pursuant to this section, the Secretary shall— 

(i) carry out such activities in a manner consistent 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 have a trust obligation to 

ensure that the rights and interests of an Indian tribe are protected in the event that— 

(i) any other party to any such lease, business agreement, 

or right-of-way violates any applicable provision of Federal 

law or the terms of any lease, business agreement, or rightof-way under this section; or 

(ii) any provision in such lease, business agreement, or 

right-of-way violates any express provision or requirement 

set forth in the tribal energy resource agreement pursuant 

to which the lease, business agreement, or right-of-way was 

executed. 

(D) Notwithstanding subparagraph (B), the United States 

shall not be liable to any party (including any Indian tribe) for 

any of the negotiated terms of, or any losses 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). For the purpose of this subparagraph, the term ‘‘negotiated 

terms’’ means any terms or provisions that are negotiated by an 

Indian tribe and any other party or parties to a lease, business 

agreement, or right-of-way entered into pursuant to an approved tribal energy resource agreement. 

(7)(A) In this paragraph, the term ‘‘interested party’’ means 

any person or entity the interests of which have sustained or 

317 

will sustain a significant 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 tribal remedies, and in accordance 

with the process and requirements set forth in regulations 

adopted by the Secretary pursuant to paragraph (8), an interested party may submit to the Secretary a petition to review 

compliance of 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 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, as alleged in 

the petition. 

(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 (D), if the Secretary determines 

that the Indian tribe is not in compliance with the tribal energy 

resource agreement as alleged in the petition, the Secretary 

shall take such action as is necessary to ensure compliance with 

the provisions of the tribal energy resource agreement, which 

action may include— 

(I) temporarily suspending some or all activities under a 

lease, business agreement, or right-of-way under this section until the Indian tribe or such activities are in compliance with the provisions of the approved tribal energy resource agreement; or 

(II) rescinding approval of all or part of the tribal energy 

resource agreement, and if all of such agreement is rescinded, reassuming the responsibility for approval of any 

future leases, business agreements, or rights-of-way described in subsections (a) and (b). 

(D) Prior to seeking to ensure compliance with the provisions 

of the tribal energy resource agreement of an Indian tribe under 

subparagraph (C)(iii), the Secretary shall— 

(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 

(C)(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. 

(E) An Indian tribe described in subparagraph (D) shall retain all rights to appeal as provided in regulations issued by 

the Secretary. 

(8) Not later than 1 year after the date of enactment of the 

Indian Tribal Energy Development and Self-Determination Act 

318 

of 2005, the Secretary shall issue regulations that implement 

the provisions of this subsection, including— 

(A) criteria to be used in determining the capacity of an 

Indian tribe described in 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 leases, business agreements, and 

rights-of-way described in this subsection; 

(C) provisions setting forth 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 defining 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 environment 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.) and the 

National Environmental Policy Act of 1969 (42 U.S.C. 4321 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 implement the provisions 

of 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 the provisions of this section. 

SEC. 2605. INDIAN MINERAL DEVELOPMENT REVIEW. 

(a) IN GENERAL.—The Secretary shall conduct a review of all activities being conducted under the Indian Mineral Development Act 

of 1982 (25 U.S.C. 2101 et seq.) as of that date. 

(b) REPORT.—Not later than 1 year after the date of enactment of 

the Indian Tribal Energy Development and Self-Determination Act 

of 2005, the Secretary shall submit to Congress a report that includes— 

(1) the results of the review; 

(2) recommendations to ensure that Indian tribes have the opportunity to develop Indian energy resources; and 

(3) an analysis of the barriers to the development of energy 

resources on Indian land (including legal, fiscal, market, and 

319 

other barriers), along with recommendations for the removal of 

those barriers. 

* * * * * * * 

TITLE XXX—MISCELLANEOUS 

* * * * * * * 

Subtitle B—Other Miscellaneous 

Provisions 

* * * * * * * 

SEC. 3022. RISK ASSESSMENT. 

Federal agencies conducting assessments of risks to human health 

and the environment from energy technology, production, transport, 

transmission, distribution, storage, use, or conservation activities 

shall use sound and objective scientific practices in assessing such 

risks, shall consider the best available science (including peer reviewed studies), and shall include a description of the weight of the 

scientific evidence concerning such risks. 

TITLE XXXI—CLEAN AIR COAL 

PROGRAM 

SEC. 3101. FINDINGS; PURPOSES; DEFINITIONS. 

(a) FINDINGS.—The Congress finds that— 

(1) new environmental regulations present additional challenges for coal-fired electrical generation in the private marketplace; and 

(2) the Department of Energy, in cooperation with industry, 

has already fully developed and commercialized several new 

clean-coal technologies that will allow the clean use of coal. 

(b) PURPOSES.—The purposes of this title are to— 

(1) promote national energy policy and energy security, diversity, and economic competitiveness benefits that result from the 

increased use of coal; 

(2) mitigate financial risks, reduce the cost, and increase the 

marketplace acceptance of the new clean coal technologies; and 

(3) advance the deployment of pollution control equipment to 

meet the current and future obligations of coal-fired generation 

units regulated under the Clean Air Act (42 U.S.C. 7402 and 

following). 

SEC. 3102. AUTHORIZATION OF PROGRAM. 

The Secretary shall carry out a program to facilitate production 

and generation of coal-based power and the installation of pollution 

control equipment. 

SEC. 3103. AUTHORIZATION OF APPROPRIATIONS. 

(a) POLLUTION CONTROL PROJECTS.—There are authorized to be 

appropriated to the Secretary $300,000,000 for fiscal year 2006, 

$100,000,000 for fiscal year 2007, $40,000,000 for fiscal year 2008, 

$30,000,000 for fiscal year 2009, and $30,000,000 for fiscal year 

320 

2010, to remain available until expended, for carrying out the program for pollution control projects, which may include— 

(1) pollution control equipment and processes for the control 

of mercury air emissions; 

(2) pollution control equipment and processes for the control 

of nitrogen dioxide air emissions or sulfur dioxide emissions; 

(3) pollution control equipment and processes for the mitigation or collection of more than one pollutant; 

(4) advanced combustion technology for the control of at least 

two pollutants, including mercury, particulate matter, nitrogen 

oxides, and sulfur dioxide, which may also be designed to improve the energy efficiency of the unit; and 

(5) advanced pollution control equipment and processes designed to allow use of the waste byproducts or other byproducts 

of the equipment or an electrical generation unit designed to 

allow the use of byproducts. 

Funds appropriated under this subsection which are not awarded 

before fiscal year 2012 may be applied to projects under subsection 

(b), in addition to amounts authorized under subsection (b). 

(b) GENERATION PROJECTS.—There are authorized to be appropriated to the Secretary $250,000,000 for fiscal year 2007, 

$350,000,000 for fiscal year 2008, $400,000,000 for fiscal year 2009, 

$400,000,000 for fiscal year 2010, $400,000,000 for fiscal year 2011, 

$400,000,000 for fiscal year 2012, and $300,000,000 for fiscal year 

2013, to remain available until expended, for generation projects 

and air pollution control projects. Such projects may include— 

(1) coal-based electrical generation equipment and processes, 

including gasification combined cycle or other coal-based generation equipment and processes; 

(2) associated environmental control equipment, that will be 

cost-effective and that is designed to meet anticipated regulatory 

requirements; 

(3) coal-based electrical generation equipment and processes, 

including gasification fuel cells, gasification coproduction, and 

hybrid gasification/combustion projects; and 

(4) advanced coal-based electrical generation equipment and 

processes, including oxidation combustion techniques, ultrasupercritical boilers, and chemical looping, which the Secretary 

determines will be cost-effective and could substantially contribute to meeting anticipated environmental or energy needs. 

(c) LIMITATION.—Funds placed at risk during any fiscal year for 

Federal loans or loan guarantees pursuant to this title may not exceed 30 percent of the total funds obligated under this title. 

SEC. 3104. AIR POLLUTION CONTROL PROJECT CRITERIA. 

The Secretary shall pursuant to authorizations contained in section 3103 provide funding for air pollution control projects designed 

to facilitate compliance with Federal and State environmental regulations, including any regulation that may be established with respect to mercury. 

SEC. 3105. CRITERIA FOR GENERATION PROJECTS. 

(a) CRITERIA.—The Secretary shall establish criteria on which selection of individual projects described in section 3103(b) should be 

based. The Secretary may modify the criteria as appropriate to reflect improvements in equipment, except that the criteria shall not 

321 

be modified to be less stringent. These selection criteria shall include— 

(1) prioritization of projects whose installation is likely to result in significant air quality improvements in nonattainment 

air quality areas; 

(2) prioritization of projects that result in the repowering or 

replacement of older, less efficient units; 

(3) documented broad interest in the procurement of the 

equipment and utilization of the processes used in the projects 

by electrical generator owners or operators; 

(4) equipment and processes beginning in 2006 through 2011 

that are projected to achieve an thermal efficiency of— 

(A) 40 percent for coal of more than 9,000 Btu per pound 

based on higher heating values; 

(B) 38 percent for coal of 7,000 to 9,000 Btu per pound 

based on higher heating values; and 

(C) 36 percent for coal of less than 7,000 Btu per pound 

based on higher heating values, 

except that energy used for coproduction or cogeneration shall 

not be counted in calculating the thermal efficiency under this 

paragraph; and 

(5) equipment and processes beginning in 2012 and 2013 that 

are projected to achieve an thermal efficiency of— 

(A) 45 percent for coal of more than 9,000 Btu per pound 

based on higher heating values; 

(B) 44 percent for coal of 7,000 to 9,000 Btu per pound 

based on higher heating values; and 

(C) 40 percent for coal of less than 7,000 Btu per pound 

based on higher heating values, 

except that energy used for coproduction or cogeneration shall 

not be counted in calculating the thermal efficiency under this 

paragraph. 

(b) SELECTION.—(1) In selecting the projects, up to 25 percent of 

the projects selected may be either coproduction or cogeneration or 

other gasification projects, but at least 25 percent of the projects 

shall be for the sole purpose of electrical generation, and priority 

should be given to equipment and projects less than 600 MW to foster and promote standard designs. 

(2) The Secretary shall give priority to projects that have been developed and demonstrated that are not yet cost competitive, and for 

coal energy generation projects that advance efficiency, environmental performance, or cost competitiveness significantly beyond the 

level of pollution control equipment that is in operation on a full 

scale. 

SEC. 3106. FINANCIAL CRITERIA. 

(a) IN GENERAL.—The Secretary shall only provide financial assistance to projects that meet the requirements of sections 3103 and 

3104 and are likely to— 

(1) achieve overall cost reductions in the utilization of coal to 

generate useful forms of energy; and 

(2) improve the competitiveness of coal in order to maintain 

a diversity of domestic fuel choices in the United States to meet 

electricity generation requirements. 

(b) CONDITIONS.—The Secretary shall not provide a funding 

award under this title unless— 

322 

(1) the award recipient is financially viable without the receipt of additional Federal funding; and 

(2) the recipient provides sufficient information to the Secretary for the Secretary to ensure that the award funds are 

spent efficiently and effectively. 

(c) EQUAL ACCESS.—The Secretary shall, to the extent practical, 

utilize cooperative agreement, loan guarantee, and direct Federal 

loan mechanisms designed to ensure that all electrical generation 

owners have equal access to these technology deployment incentives. 

The Secretary shall develop and direct a competitive solicitation 

process for the selection of technologies and projects under this title. 

SEC. 3107. FEDERAL SHARE. 

The Federal share of the cost of a coal or related technology 

project funded by the Secretary under this title shall not exceed 50 

percent. For purposes of this title, Federal funding includes only appropriated funds. 

SEC. 3108. APPLICABILITY. 

No technology, or level of emission reduction, shall be treated as 

adequately demonstrated for purposes of section 111 of the Clean 

Air Act (42 U.S.C. 7411), achievable for purposes of section 169 of 

the Clean Air Act (42 U.S.C. 7479), or achievable in practice for 

purposes of section 171 of the Clean Air Act (42 U.S.C. 7501) solely 

by reason of the use of such technology, or the achievement of such 

emission reduction, by one or more facilities receiving assistance 

under this title. 

* * * * * * * 

SECTION 604 OF THE ACT OF DECEMBER 24, 1980 

AN ACT to authorize appropriations for certain insular areas of the United States, 

and for other purposes. 

SEC. 604. (a) The Congress finds that— 

(1) * * * 

* * * * * * * 

(4) appropriate technologies are presently available to develop the renewable energy resources of these insular areas 

but that comprehensive energy plans have not been adequately 

developed to meet the energy demands of these areas from renewable energy resourcesø.¿; 

(5) electric power transmission and distribution lines in insular areas are inadequate to withstand damage caused by the 

hurricanes and typhoons which frequently occur in insular 

areas and such damage often costs millions of dollars to repair; 

and 

(6) the refinement of renewable energy technologies since the 

publication of the 1982 Territorial Energy Assessment prepared 

pursuant to subsection (c) reveals the need to reassess the state 

of energy production, consumption, infrastructure, reliance on 

imported energy, opportunities for energy conservation and increased energy efficiency, and indigenous sources in regard to 

the insular areas. 

* * * * * * * 

323 

ø(e) Within tow years from the date of enactment of this Act, the 

Secretary of Energy or any administrative official who may succeed 

him shall submit the comprehensive energy plan for each insular 

area to the Congress.¿ 

(e)(1) The Secretary of the Interior, in consultation with the Secretary of Energy and the head of government of each insular area, 

shall update the plans required under subsection (c) by— 

(A) updating the contents required by subsection (c); 

(B) drafting long-term energy plans for such insular areas 

with the objective of reducing, to the extent feasible, their reliance on energy imports by the year 2012, increasing energy conservation and energy efficiency, and maximizing, to the extent 

feasible, use of indigenous energy sources; and 

(C) drafting long-term energy transmission line plans for 

such insular areas with the objective that the maximum percentage feasible of electric power transmission and distribution 

lines in each insular area be protected from damage caused by 

hurricanes and typhoons. 

(2) Not later than December 31, 2007, the Secretary of the Interior 

shall submit to Congress the updated plans for each insular area 

required by this subsection. 

* * * * * * * 

(g) FINANCIAL ASSISTANCE.—(1) * * * 

* * * * * * * 

ø(4) Notwithstanding the requirements of section 501(d) of Public 

Law 95–134 (48 U.S.C. 1469a(d)), the Secretary shall require at 

least 20 percent of the costs of any project under this subsection 

to be provided from non-Federal sources. Such cost sharing may be 

in the form of in-kind services, donated equipment, or any combination thereof.¿ 

(4) POWER LINE GRANTS FOR INSULAR AREAS.— 

(A) IN GENERAL.—The Secretary of the Interior is authorized to make grants to governments of insular areas of the 

United States to carry out eligible projects to protect electric 

power transmission and distribution lines in such insular 

areas from damage caused by hurricanes and typhoons. 

(B) ELIGIBLE PROJECTS.—The Secretary may award 

grants under subparagraph (A) only to governments of insular areas of the United States that submit written project 

plans to the Secretary for projects that meet the following 

criteria: 

(i) The project is designed to protect electric power 

transmission and distribution lines located in 1 or 

more of the insular areas of the United States from 

damage caused by hurricanes and typhoons. 

(ii) The project is likely to substantially reduce the 

risk of future damage, hardship, loss, or suffering. 

(iii) The project addresses 1 or more problems that 

have been repetitive or that pose a significant risk to 

public health and safety. 

(iv) The project is not likely to cost more than the 

value of the reduction in direct damage and other negative impacts that the project is designed to prevent or 

324 

mitigate. The cost benefit analysis required by this criterion shall be computed on a net present value basis. 

(v) The project design has taken into consideration 

long-term changes to the areas and persons it is designed to protect and has manageable future maintenance and modification requirements. 

(vi) The project plan includes an analysis of a range 

of options to address the problem it is designed to prevent or mitigate and a justification for the selection of 

the project in light of that analysis. 

(vii) The applicant has demonstrated to the Secretary 

that the matching funds required by subparagraph (D) 

are available. 

(C) PRIORITY.—When making grants under this paragraph, the Secretary shall give priority to grants for 

projects which are likely to— 

(i) have the greatest impact on reducing future disaster losses; and 

(ii) best conform with plans that have been approved 

by the Federal Government or the government of the insular area where the project is to be carried out for development or hazard mitigation for that insular area. 

(D) MATCHING REQUIREMENT.—The Federal share of the 

cost for a project for which a grant is provided under this 

paragraph shall not exceed 75 percent of the total cost of 

that project. The non-Federal share of the cost may be provided in the form of cash or services. 

(E) TREATMENT OF FUNDS FOR CERTAIN PURPOSES.— 

Grants provided under this paragraph shall not be considered as income, a resource, or a duplicative program when 

determining eligibility or benefit levels for Federal major 

disaster and emergency assistance. 

(F) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to carry out this paragraph 

$5,000,000 for each fiscal year beginning after the date of 

the enactment of this paragraph. 

* * * * * * * 

SECTION 9002 OF THE FARM SECURITY AND RURAL 

INVESTMENT ACT OF 2002 

SEC. 9002. FEDERAL PROCUREMENT OF BIOBASED PRODUCTS. 

(a) * * * 

* * * * * * * 

(c) PROCUREMENT PREFERENCE.—(1) Except as provided in paragraph (2), after the date specified in applicable guidelines prepared 

pursuant to subsection (e) of this section, each Federal agency 

which procures any items designated in such guidelines shall, in 

making procurement decisions, give preference to such items composed of the highest percentage of biobased products practicable or 

such items that comply with the regulations issued under section 

103 of Public Law 100–556 (42 U.S.C. 6914b–1), consistent with 

325 

maintaining a satisfactory level of competition, considering such 

guidelines. 

* * * * * * * 

SECTION 203 OF THE BIOMASS ENERGY AND ALCOHOL 

FUELS ACT OF 1980 

DEFINITIONS

SEC. 203. As used in this title— 

(1) * * * 

ø(2)(A) The term ‘‘biomass’’ means any organic matter which 

is available on a renewable basis, including agricultural crops 

and agricultural wastes and residues, wood and wood wastes 

and residues, animal wastes, municipal wastes, and aquatic 

plants. 

ø(B) For purposes of subtitle A, such term does not include 

municipal wastes; and for purposes of subtitle C, such term 

does not include aquatic plants and municipal wastes.¿ 

(2) The term ‘‘biomass’’ means any organic matter that is 

available on a renewable or recurring basis, including agricultural crops and trees, wood and wood wastes and residues, 

plants (including aquatic plants), grasses, residues, fibers, and 

animal wastes, municipal wastes, and other waste materials. 

* * * * * * * 

FEDERAL POWER ACT 

* * * * * * * 

PART I 

* * * * * * * 

SEC. 3. The words defined in this section shall have the following 

meanings for purpose of this Act, to wit: 

(1) * * * 

* * * * * * * 

(17)(A) * * * 

* * * * * * * 

ø(C) ‘‘qualifying small power production facility’’ means a small 

power production facility— 

ø(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 

ø(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 requireVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00325 Fmt 6659 Sfmt 6603 E:\HR\OC\HR215P1.XXX HR215P1
326 

ments respecting fuel use, fuel efficiency, and reliability) as 

the Commission may, by rule, prescribe; 

* * * * * * * 

(18)(A) * * * 

ø(B) ‘‘qualifying cogeneration facility’’ means a cogeneration facility which— 

ø(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 

ø(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.—The term ‘‘electric utility’’ means any 

person or Federal or State agency (including any entity described in section 201(f)) that sells electric energy; such term includes the Tennessee Valley Authority and each Federal power 

marketing administration. 

(23) TRANSMITTING UTILITY.—The term ‘‘transmitting utility’’ 

means an entity, including any entity described in section 

201(f), that owns, operates, or controls facilities used for the 

transmission of electric energy— 

(A) in interstate commerce; or 

(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 to exercise operational or functional control 

of facilities used for the transmission of electric energy in interstate commerce and to ensure nondiscriminatory access to such 

facilities. 

(28) ISO.—The term ‘‘Independent System Operator’’ or ‘‘ISO’’ 

means an entity approved by the Commission to exercise operational or functional control of facilities used for the transVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00326 Fmt 6659 Sfmt 6603 E:\HR\OC\HR215P1.XXX HR215P1
327 

mission of electric energy in interstate commerce and to ensure 

nondiscriminatory access to such facilities. 

SEC. 4. The Commission is hereby authorized and empowered— 

(a) * * * 

* * * * * * * 

(e) To issue licenses to citizens of the United States, or to any 

association of such citizens, or to any corporation organized under 

the laws of the United States or any State thereof, or to any State 

or municipality for the purpose of constructing, operating, and 

maintaining dams, water conduits, reservoirs, power houses, transmission lines, or other project works necessary or convenient for 

the development and improvement of navigation and for the development, transmission, and utilization of power across, along, from 

or in any of the streams or other bodies of water over which Congress has jurisdiction under its authority to regulate commerce 

with foreign nations and among the several States, or upon any 

part of the public lands and reservations of the United States (including the Territories), or for the purpose of utilizing the surplus 

water or water power from any Government dam, except as herein 

provided: Provided, That licenses shall be issued within any reservation only after a finding by the Commission that the 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 shall be entitled to a determination on 

the record, after opportunity for an expedited agency trial-type hearing of any disputed issues of material fact, with respect to such conditions. Such hearing may be conducted in accordance with procedures established by agency regulation 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. Whenever the 

contemplated improvement is, in the judgment of the Commission, 

desirable and justified in the public interest for the purpose of improving or developing a waterway or waterways for the use or benefit of interstate or foreign commerce, a finding to that effect shall 

be made by the Commission and shall become a part of the records 

of the Commission: Provided further, That in case the Commission 

shall find that any Government dam may be advantageously used 

by the United States for public purposes in addition to navigation, 

no license therefor shall be issued until two years after it shall 

have reported to Congress the facts and conditions relating thereto, 

except that this provision shall not apply to any Government dam 

constructed prior to June 10, 1920: And provided further, That 

upon the filing of any application for a license which has not been 

preceded by a preliminary permit under subsection (f) of this section, notice shall be given and published as required by the proviso 

of said subsection. In deciding whether to issue any license under 

this Part for any project, the Commission, in addition to the power 

and development purposes for which licenses are issued, shall give 

equal consideration to the purposes of energy conservation, the proVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00327 Fmt 6659 Sfmt 6601 E:\HR\OC\HR215P1.XXX HR215P1
328 

tection, mitigation of damage to, and enhancement of, fish and 

wildlife (including related spawning grounds and habitat), the protection of recreational opportunities, and the preservation of other 

aspects of environmental quality. 

* * * * * * * 

SEC. 18. The Commission shall require the construction, maintenance, and operation by a licensee at its own expense of such lights 

and signals as may be directed by the Secretary of the Department 

in which the Coast Guard is operating, and such fishways as may 

be prescribed by the Secretary of Commerce. The license applicant 

shall be entitled to a determination on the record, after opportunity 

for an expedited agency trial-type hearing of any disputed issues of 

material fact, with respect to such fishways. Such hearing may be 

conducted in accordance with procedures established by agency regulation 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. 33. ALTERNATIVE CONDITIONS AND PRESCRIPTIONS. 

(a) ALTERNATIVE CONDITIONS.—(1) Whenever any person applies 

for a license for any project works within any reservation of the 

United States, and the Secretary of the department under whose supervision such reservation falls (referred to in this subsection as ‘‘the 

Secretary’’) deems a condition to such license to be necessary under 

the first proviso of section 4(e), the license applicant may propose an 

alternative condition. 

(2) Notwithstanding the first proviso of section 4(e), the Secretary 

shall accept the proposed alternative condition referred to in paragraph (1), and the Commission shall include in the license such alternative condition, if the Secretary determines, based on substantial evidence provided by the license applicant or otherwise available to the Secretary, that such alternative condition— 

(A) provides for the adequate protection and utilization of the 

reservation; and 

(B) will either— 

(i) cost less to implement; or 

(ii) result in improved operation of the project works for 

electricity production, 

as compared to the condition initially deemed necessary by the 

Secretary. 

(3) The Secretary shall submit into the public record of the Commission proceeding with any condition under section 4(e) or alternative condition it accepts under this section, a written statement 

explaining the basis for such condition, and reason for not accepting 

any alternative condition under this section. The written statement 

329 

must demonstrate that the Secretary gave equal consideration to the 

effects of the condition adopted and alternatives not accepted on energy supply, distribution, cost, and use; flood control; navigation; 

water supply; and air quality (in addition to the preservation of 

other aspects of environmental quality); based on such information 

as may be available to the Secretary, including information voluntarily provided in a timely manner by the applicant and others. The 

Secretary shall also submit, together with the aforementioned written statement, all studies, data, and other factual information available to the Secretary and relevant to the Secretary’s decision. 

(4) Nothing in this section shall prohibit other interested parties 

from proposing alternative conditions. 

(5) If the Secretary does not accept an applicant’s alternative condition under this section, and the Commission finds that the Secretary’s condition would be inconsistent with the purposes of this 

part, or other applicable law, the Commission may refer the dispute 

to the Commission’s Dispute Resolution Service. The Dispute Resolution Service shall consult with the Secretary and the Commission 

and issue a non-binding advisory within 90 days. The Secretary 

may accept the Dispute Resolution Service advisory unless the Secretary finds that the recommendation will not provide for the adequate protection and utilization of the reservation. The Secretary 

shall submit the advisory and the Secretary’s final written determination into the record of the Commission’s proceeding. 

(b) ALTERNATIVE PRESCRIPTIONS.—(1) Whenever the Secretary of 

the Interior or the Secretary of Commerce prescribes a fishway 

under section 18, the license applicant or licensee may propose an 

alternative to such prescription to construct, maintain, or operate a 

fishway. 

(2) Notwithstanding section 18, the Secretary of the Interior or the 

Secretary of Commerce, as appropriate, shall accept and prescribe, 

and the Commission shall require, the proposed alternative referred 

to in paragraph (1), if the Secretary of the appropriate department 

determines, based on substantial evidence provided by the licensee 

or otherwise available to the Secretary, that such alternative— 

(A) will be no less protective than the fishway initially prescribed by the Secretary; and 

(B) will either— 

(i) cost less to implement; or 

(ii) result in improved operation of the project works for 

electricity production, 

as compared to the fishway initially deemed necessary by the 

Secretary. 

(3) The Secretary concerned shall submit into the public record of 

the Commission proceeding with any prescription under section 18 

or alternative prescription it accepts under this section, a written 

statement explaining the basis for such prescription, and reason for 

not accepting any alternative prescription under this section. The 

written statement must demonstrate that the Secretary gave equal 

consideration to the effects of the condition adopted and alternatives 

not accepted on energy supply, distribution, cost, and use; flood control; navigation; water supply; and air quality (in addition to the 

preservation of other aspects of environmental quality); based on 

such information as may be available to the Secretary, including information voluntarily provided in a timely manner by the applicant 

330 

and others. The Secretary shall also submit, together with the aforementioned written statement, all studies, data, and other factual information available to the Secretary and relevant to the Secretary’s 

decision. 

(4) Nothing in this section shall prohibit other interested parties 

from proposing alternative prescriptions. 

(5) If the Secretary concerned does not accept an applicant’s alternative prescription under this section, and the Commission finds 

that the Secretary’s prescription would be inconsistent with the purposes of this part, or other applicable law, the Commission may 

refer the dispute to the Commission’s Dispute Resolution Service. 

The Dispute Resolution Service shall consult with the Secretary and 

the Commission and issue a non-binding advisory within 90 days. 

The Secretary may accept the Dispute Resolution Service advisory 

unless the Secretary finds that the recommendation will be less protective than the fishway initially prescribed by the Secretary. The 

Secretary shall submit the advisory and the Secretary’s final written 

determination into the record of the Commission’s proceeding. 

* * * * * * * 

PART II—REGULATION OF ELECTRIC UTILITY COMPANIES 

ENGAGED IN INTERSTATE COMMERCE 

DECLARATION OF POLICY; APPLICATION OF PART; DEFINITIONS

SECTION 201. (a) * * * 

(b)(1) * * * 

(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, and 222 shall apply to the entities described in such provisions, and such entities shall be subject 

to the jurisdiction of the Commission for purposes of carrying out 

such provisions and for purposes of applying the enforcement authorities of this Act with respect to such provisions. Compliance 

with any order or rule of the Commission under the provisions of 

section ø210 or 211¿ 203(a)(2), 206(e), 210, 211, 211A, 212, 215, 

216, 217, 218, 219, 220, 221, and 222, shall not make an electric 

utility or other entity subject to the jurisdiction of the Commission 

for any purposes other than the purposes specified in the preceding 

sentence. 

* * * * * * * 

(e) The term ‘‘public utility’’ when used in this Part or in the Part 

next following means any person who owns or operates facilities 

subject to the jurisdiction of the Commission under this Part (other 

than facilities subject to such jurisdiction solely by reason of section ø210, 211, or 212¿ 206(e), 206(f), 210, 211, 211A, 212, 215, 216, 

217, 218, 219, 220, 221, and 222). 

(f) No provision in this Part shall apply to, or be deemed to include, the United States, a State or any political subdivision of a 

state, an electric cooperative that has financing under the Rural 

Electrification Act of 1936 (7 U.S.C. 901 et seq.) or that sells less 

than 4,000,000 megawatt hours of electricity per year, 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, 

331 

employee of any of the foregoing acting as such in the course of his 

official duty, unless such provision makes specific reference thereto. 

(g) BOOKS AND RECORDS.—(1) * * * 

* * * * * * * 

(5) As used in this subsection the terms ‘‘affiliate’’, ‘‘associate 

company’’, ‘‘electric utility company’’, ‘‘holding company’’, ‘‘subsidiary company’’, and ‘‘exempt wholesale generator’’ shall have the 

same meaning as when used in the Public Utility Holding Company Act of ø1935¿ 2005. 

* * * * * * * 

DISPOSITION OF PROPERTY; CONSOLIDATION; PURCHASE OF

SECURITIES

SEC. 203. ø(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; or 

(C) purchase, acquire, or take any security with a value in ex- cess of $10,000,000 of any other public utility. 

(2) No holding company in a holding company system that includes a public 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 public utility or a holding company in a holding company system that includes a public utility 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. 

(4) After notice and opportunity for hearing, the Commission shall 

approve the proposed disposition, consolidation, acquisition, or 

change in control, if it finds that the proposed transaction will be 

332 

consistent with the public interest. In evaluating whether a transaction will be consistent with the public interest, the Commission 

shall consider whether the proposed transaction— 

(A) will adequately protect consumer interests; 

(B) will be consistent with competitive wholesale markets; 

(C) will impair the financial integrity of any public utility 

that is a party to the transaction or an associate company of 

any party to the transaction; and 

(D) satisfies such other criteria as the Commission considers 

consistent with the public interest. 

(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 upon its own motion or upon complaint, shall find 

that any rate, charges, or classification demanded, observed, 

charged, or collected by any public utility for any transmission or 

sale subject to the jurisdiction of the Commission, or that any rule, 

regulation, practice, or contract affecting such rate, charge, or classification is unjust, unreasonable, unduly discriminatory or preferential, the Commission shall determine the just and reasonable 

rate, charge, classification, rule, regulation, practice, or contract to 

be thereafter observed and in force, and shall fix the same by 

order. 

(b) Whenever the Commission institutes a proceeding under this 

section, the Commission shall establish a refund effective date. In 

the case of a proceeding instituted on complaint, the refund effective date shall not be earlier than 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 intenVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00332 Fmt 6659 Sfmt 6601 E:\HR\OC\HR215P1.XXX HR215P1
333 

tion 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 

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 effective date through a date fifteen 

months after such refund effective date, in excess of those which 

would have been paid under the just and reasonable rate, charge, 

classification, rule, regulation, practice, or contract which the Commission orders to be thereafter observed and in force: Provided, 

That if the proceeding is not concluded within fifteen months after 

the refund effective date and if the Commission determines at the 

conclusion of the proceeding that the proceeding was not resolved 

within the fifteen-month period primarily because of dilatory behavior by the public utility, the Commission may order refunds of 

any or all amounts paid for the period subsequent to the refund effective date and prior to the conclusion of the proceeding. The refunds shall be made, with interest, to those persons who have paid 

those rates or charges which are the subject of the proceeding. 

* * * * * * * 

(e)(1) Except as provided in paragraph (2), if an entity described 

in section 201(f) voluntarily makes a short-term sale of electric energy and the sale violates Commission rules in effect at the time of 

the sale, such entity shall be subject to the Commission’s refund authority under this section with respect to such violation. 

(2) This section shall not apply to— 

(A) any entity that sells less than 8,000,000 megawatt hours 

of electricity per year; or 

(B) any electric cooperative. 

(3) For purposes of this subsection, the term ‘‘short-term sale’’ 

means an agreement for the sale of electric energy at wholesale in 

interstate commerce that is for a period of 31 days or less (excluding 

monthly contracts subject to automatic renewal). 

(4) The Commission shall have refund authority under subsection 

(e)(1) with respect to a voluntary short-term sale of electric energy 

by the Bonneville Power Administration (in this section ‘‘Bonneville’’) only if the sale is at an unjust and unreasonable rate and, 

in that event, may order a refund only for short-term sales made by 

Bonneville at rates that are higher than the highest just and reasonVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00333 Fmt 6659 Sfmt 6603 E:\HR\OC\HR215P1.XXX HR215P1
334 

able 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 Bonneville. 

(5) With respect to any Federal power marketing agency or the 

Tennessee Valley Authority, the Commission shall not assert or exercise any regulatory authority or powers under subsection (e)(1) 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) * * * 

* * * * * * * 

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

(a) TRANSMISSION SERVICES.—Subject to section 212(h), the Commission may, by rule or order, require an unregulated transmitting 

utility to provide transmission services— 

(1) at rates that are comparable to those that the unregulated 

transmitting utility charges itself; and 

(2) on terms and conditions (not relating to rates) that are 

comparable to those under which such unregulated transmitting utility provides transmission services to itself and that are 

not unduly discriminatory or preferential. 

(b) EXEMPTION.—The Commission shall exempt from any rule or 

order under this section any unregulated transmitting utility that— 

335 

(1) sells no more than 4,000,000 megawatt hours of electricity 

per year; or 

(2) does not own or operate any transmission facilities that 

are necessary for operating an interconnected transmission system (or any portion thereof); or 

(3) meets other criteria the Commission determines to be in 

the public interest. 

(c) LOCAL DISTRIBUTION FACILITIES.—The requirements of subsection (a) shall not apply to facilities used in local distribution. 

(d) EXEMPTION TERMINATION.—Whenever the Commission, after 

an evidentiary hearing held upon 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 (b) unreasonably impairs 

the continued reliability of an interconnected transmission system, 

it shall revoke the exemption granted to that transmitting utility. 

(e) APPLICATION TO UNREGULATED TRANSMITTING UTILITIES.— 

The rate changing procedures applicable to public utilities under 

subsections (c) and (d) of section 205 are applicable to unregulated 

transmitting utilities for purposes of this section. 

(f) REMAND.—In exercising its authority under paragraph (1) of 

subsection (a), the Commission may remand transmission rates to 

an unregulated transmitting utility for review and revision where 

necessary to meet the requirements of subsection (a). 

(g) OTHER REQUESTS.—The provision of transmission services 

under subsection (a) does not preclude a request for transmission 

services under section 211. 

(h) 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 (26 U.S.C. 141). 

(i) TRANSFER OF CONTROL OF TRANSMITTING FACILITIES.—Nothing in this section authorizes the Commission to require an unregulated transmitting utility to transfer control or operational control 

of its transmitting facilities to an RTO or any other Commissionapproved independent transmission organization designated to provide nondiscriminatory transmission access. 

(j) DEFINITION.—For purposes of 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). 

* * * * * * * 

SEC. 214. SALES BY EXEMPT WHOLESALE GENERATORS. 

No rate or charge received by an exempt wholesale generator for 

the sale of electric energy shall be lawful under section 205 if, after 

notice and opportunity for hearing, the Commission finds that such 

rate or charge results from the receipt of any undue preference or 

advantage from an electric utility which is an associate company 

or an affiliate of the exempt wholesale generator. For purposes of 

this section, the terms ‘‘associate company’’ and ‘‘affiliate’’ shall 

have the same meaning as provided in section 2(a) of the Public 

Utility Holding Company Act of ø1935¿ 2005. 

336 

SEC. 215. ELECTRIC RELIABILITY. 

(a) DEFINITIONS.—For purposes of this section: 

(1) The term ‘‘bulk-power system’’ means— 

(A) facilities and control systems necessary for operating 

an interconnected electric energy transmission network (or 

any portion thereof); and 

(B) electric energy from generation facilities needed to 

maintain transmission system reliability. 

The term does not include facilities used in the local distribution of electric energy. 

(2) The terms ‘‘Electric Reliability Organization’’ and ‘‘ERO’’ 

mean the organization certified by the Commission under subsection (c) the purpose of which is to establish and enforce reliability standards for the bulk-power system, subject to Commission review. 

(3) The term ‘‘reliability standard’’ means a requirement, approved by the Commission under this section, to provide for reliable operation of the bulk-power system. The term includes requirements for the operation of existing bulk-power system facilities, including cybersecurity protection, and the design of 

planned additions or modifications to such facilities to the extent necessary to provide for reliable operation of the bulk-power 

system, but the term does not include any requirement to enlarge such facilities or to construct new transmission capacity 

or generation capacity. 

(4) The term ‘‘reliable operation’’ means operating the elements of the bulk-power system within equipment and electric 

system thermal, voltage, and stability limits so that instability, 

uncontrolled separation, or cascading failures of such system 

will not occur as a result of a sudden disturbance, including a 

cybersecurity incident, or unanticipated failure of system elements. 

(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 such components 

may adversely affect the ability of the operators of other components within the system to maintain reliable operation of the facilities within their control. 

(6) The term ‘‘transmission organization’’ means a Regional 

Transmission Organization, Independent System Operator, 

independent transmission provider, or other transmission organization finally approved by the Commission for the operation 

of transmission facilities. 

(7) The term ‘‘regional entity’’ means an entity having enforcement authority pursuant to subsection (e)(4). 

(8) The term ‘‘cybersecurity incident’’ means a malicious act 

or suspicious event that disrupts, or was an attempt to disrupt, 

the operation of those programmable electronic devices and 

communication networks including hardware, software and 

data that are essential to the reliable operation of the bulk 

power system. 

(b) JURISDICTION AND APPLICABILITY.—(1) The Commission shall 

have jurisdiction, within the United States, over the ERO certified 

by the Commission under subsection (c), any regional entities, and 

all users, owners and operators of the bulk-power system, including 

337 

but not limited to the entities described in section 201(f), for purposes of approving reliability standards established under this section and enforcing compliance with this section. All users, owners 

and operators of the bulk-power system shall comply with reliability 

standards that take effect under this section. 

(2) The Commission shall issue a final rule to implement the requirements of this section not later than 180 days after the date of 

enactment of this section. 

(c) CERTIFICATION.—Following the issuance of a Commission rule 

under subsection (b)(2), any person may submit an application to 

the Commission for certification as the Electric Reliability Organization. The Commission may certify 1 such ERO if the Commission 

determines that such ERO— 

(1) has the ability to develop and enforce, subject to subsection (e)(2), reliability standards that provide for an adequate 

level of reliability of the bulk-power system; and 

(2) has established rules that— 

(A) assure its independence of the users and owners and 

operators of the bulk-power system, while assuring fair 

stakeholder representation in the selection of its directors 

and balanced decisionmaking in any ERO committee or 

subordinate organizational structure; 

(B) allocate equitably reasonable dues, fees, and other 

charges among end users for all activities under this section; 

(C) provide fair and impartial procedures for enforcement 

of reliability standards through the imposition of penalties 

in accordance with subsection (e) (including limitations on 

activities, functions, or operations, or other appropriate 

sanctions); 

(D) provide for reasonable notice and opportunity for 

public comment, due process, openness, and balance of interests in developing reliability standards and otherwise exercising its duties; and 

(E) provide for taking, after certification, appropriate 

steps to gain recognition in Canada and Mexico. 

The total amount of all dues, fees, and other charges collected 

by the ERO in each of the fiscal years 2006 through 2015 and 

allocated under subparagraph (B) shall not exceed $50,000,000. 

(d) RELIABILITY STANDARDS.—(1) The Electric Reliability Organization shall file each reliability standard or modification to a reliability standard that it proposes to be made effective under this section with the Commission. 

(2) The Commission may approve, by rule or order, a proposed reliability standard or modification to a reliability standard if it determines that the standard is just, reasonable, not unduly discriminatory or preferential, and in the public interest. The Commission 

shall give due weight to the technical expertise of the Electric Reliability Organization with respect to the content of a proposed standard or modification to a reliability standard and to the technical expertise of a regional entity organized on an Interconnection-wide 

basis with respect to a reliability standard to be applicable within 

that Interconnection, but shall not defer with respect to the effect of 

a standard on competition. A proposed standard or modification 

shall take effect upon approval by the Commission. 

338 

(3) The Electric Reliability Organization shall rebuttably presume 

that a proposal from a regional entity organized on an Interconnection-wide basis for a reliability standard or modification to a reliability standard to be applicable on an Interconnection-wide basis 

is just, reasonable, and not unduly discriminatory or preferential, 

and in the public interest. 

(4) The Commission shall remand to the Electric Reliability Organization for further consideration a proposed reliability standard or 

a modification to a reliability standard that the Commission disapproves in whole or in part. 

(5) The Commission, upon its own motion or upon complaint, may 

order the Electric Reliability Organization to submit to the Commission a proposed reliability standard or a modification to a reliability standard that addresses a specific matter if the Commission 

considers such a new or modified reliability standard appropriate 

to carry out this section. 

(6) The final rule adopted under subsection (b)(2) shall include 

fair processes for the identification and timely resolution of any conflict between a reliability standard and any function, rule, order, 

tariff, rate schedule, or agreement accepted, approved, or ordered by 

the Commission applicable to a transmission organization. Such 

transmission organization shall continue to comply with such function, rule, order, tariff, rate schedule or agreement accepted approved, or ordered by the Commission until— 

(A) the Commission finds a conflict exists between a reliability standard and any such provision; 

(B) the Commission orders a change to such provision pursuant to section 206 of this part; and 

(C) the ordered change becomes effective under this part. 

If the Commission determines that a reliability standard needs to 

be changed as a result of such a conflict, it shall order the ERO to 

develop and file with the Commission a modified reliability standard under paragraph (4) or (5) of this subsection. 

(e) ENFORCEMENT.—(1) The ERO may impose, subject to paragraph (2), a penalty on a user or owner or operator of the bulkpower system for a violation of a reliability standard approved by 

the Commission under subsection (d) if the ERO, after notice and 

an opportunity for a hearing— 

(A) finds that the user or owner or operator has violated a reliability standard approved by the Commission under subsection (d); and 

(B) files notice and the record of the proceeding with the Commission. 

(2) A penalty imposed under paragraph (1) may take effect not 

earlier than the 31st day after the ERO files with the Commission 

notice of the penalty and the record of proceedings. Such penalty 

shall be subject to review by the Commission, on its own motion or 

upon application by the user, owner or operator that is the subject 

of the penalty filed within 30 days after the date such notice is filed 

with the Commission. Application to the Commission for review, or 

the initiation of review by the Commission on its own motion, shall 

not operate as a stay of such penalty unless the Commission otherwise orders upon its own motion or upon application by the user, 

owner or operator that is the subject of such penalty. In any proceeding to review a penalty imposed under paragraph (1), the ComVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00338 Fmt 6659 Sfmt 6603 E:\HR\OC\HR215P1.XXX HR215P1
339 

mission, after notice and opportunity for hearing (which hearing 

may consist solely of the record before the ERO and opportunity for 

the presentation of supporting reasons to affirm, modify, or set aside 

the penalty), shall by order affirm, set aside, reinstate, or modify the 

penalty, and, if appropriate, remand to the ERO for further proceedings. The Commission shall implement expedited procedures for 

such hearings. 

(3) On its own motion or upon complaint, the Commission may 

order compliance with a reliability standard and may impose a penalty against a user or owner or operator of the bulk-power system 

if the Commission finds, after notice and opportunity for a hearing, 

that the user or owner or operator of the bulk-power system has engaged or is about to engage in any acts or practices that constitute 

or will constitute a violation of a reliability standard. 

(4) The Commission shall issue regulations authorizing the ERO 

to enter into an agreement to delegate authority to a regional entity 

for the purpose of proposing reliability standards to the ERO and 

enforcing reliability standards under paragraph (1) if— 

(A) the regional entity is governed by— 

(i) an independent board; 

(ii) a balanced stakeholder board; or 

(iii) a combination independent and balanced stakeholder board. 

(B) the regional entity otherwise satisfies the provisions of 

subsection (c)(1) and (2); and 

(C) the agreement promotes effective and efficient administration of bulk-power system reliability. 

The Commission may modify such delegation. The ERO and the 

Commission shall rebuttably presume that a proposal for delegation 

to a regional entity organized on an Interconnection-wide basis promotes effective and efficient administration of bulk-power system reliability and should be approved. Such regulation may provide that 

the Commission may assign the ERO’s authority to enforce reliability standards under paragraph (1) directly to a regional entity 

consistent with the requirements of this paragraph. 

(5) The Commission may take such action as is necessary or appropriate against the ERO or a regional entity to ensure compliance 

with a reliability standard or any Commission order affecting the 

ERO or a regional entity. 

(6) Any penalty imposed under this section shall bear a reasonable relation to the seriousness of the violation and shall take into 

consideration the efforts of such user, owner, or operator to remedy 

the violation in a timely manner. 

(f) CHANGES IN ELECTRIC RELIABILITY ORGANIZATION RULES.— 

The Electric Reliability Organization shall file with the Commission 

for approval any proposed rule or proposed rule change, accompanied by an explanation of its basis and purpose. The Commission, 

upon its own motion or complaint, may propose a change to the 

rules of the ERO. A proposed rule or proposed rule change shall 

take effect upon a finding by the Commission, after notice and opportunity for comment, that the change is just, reasonable, not unduly discriminatory or preferential, is in the public interest, and 

satisfies the requirements of subsection (c). 

340 

(g) RELIABILITY REPORTS.—The ERO shall conduct periodic assessments of the reliability and adequacy of the bulk-power system 

in North America. 

(h) COORDINATION WITH CANADA AND MEXICO.—The President is 

urged to negotiate international agreements with the governments of 

Canada and Mexico to provide for effective compliance with reliability standards and the effectiveness of the ERO in the United 

States and Canada or Mexico. 

(i) SAVINGS PROVISIONS.—(1) The ERO shall have authority to develop and enforce compliance with reliability standards for only the 

bulk-power system. 

(2) This section does not authorize the ERO or the Commission 

to order the construction of additional generation or transmission 

capacity or to set and enforce compliance with standards for adequacy or safety of electric facilities or services. 

(3) Nothing in this section shall be construed to preempt any authority of any State to take action to ensure the safety, adequacy, 

and reliability of electric service within that State, as long as such 

action is not inconsistent with any reliability standard, except that 

the State of New York may establish rules that result in greater reliability within that State, as long as such action does not result in 

lesser reliability outside the State than that provided by the reliability standards. 

(4) Within 90 days of the application of the Electric Reliability 

Organization or other affected party, and after notice and opportunity for comment, the Commission shall issue a final order determining whether a State action is inconsistent with a reliability 

standard, taking into consideration any recommendation of the 

ERO. 

(5) The Commission, after consultation with the ERO and the 

State taking action, may stay the effectiveness of any State action, 

pending the Commission’s issuance of a final order. 

(j) REGIONAL ADVISORY BODIES.—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 their electric load served 

within the region. A regional advisory body shall be composed of 1 

member from each participating State in the region, appointed by 

the Governor of each State, and may include representatives of 

agencies, States, and provinces outside the United States. A regional 

advisory body may provide advice to the Electric Reliability Organization, a regional entity, or the Commission regarding the governance of an existing or proposed regional entity within the same region, whether a standard proposed to apply within the region is 

just, reasonable, not unduly discriminatory or preferential, and in 

the public interest, whether fees proposed to be assessed within the 

region are just, reasonable, not unduly discriminatory or preferential, and in the public interest and any other responsibilities requested by the Commission. The Commission may give deference to 

the advice of any such regional advisory body if that body is organized on an Interconnection-wide basis. 

(k) ALASKA AND HAWAII.—The provisions of this section do not 

apply to Alaska or Hawaii. 

341 

SEC. 216. SITING OF INTERSTATE ELECTRIC TRANSMISSION FACILITIES. 

(a) DESIGNATION OF NATIONAL INTEREST ELECTRIC TRANSMISSION CORRIDORS.— 

(1) TRANSMISSION CONGESTION STUDY.—Within 1 year after 

the enactment of this section, and every 3 years thereafter, the 

Secretary of Energy, in consultation with affected States, shall 

conduct a study of electric transmission congestion. After considering alternatives and recommendations from interested parties, including an opportunity for comment from affected States, 

the Secretary shall issue a report, based on such 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. The Secretary shall conduct the study and issue the 

report in consultation with any appropriate regional entity referenced in section 215 of this Act. 

(2) CONSIDERATIONS.—In determining whether to designate a 

national interest electric transmission corridor referred to in 

paragraph (1) under this section, 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 

(E) the designation would enhance national defense and 

homeland security. 

(b) CONSTRUCTION PERMIT.—Except as provided in subsection (i), 

the Commission is authorized, after notice and an opportunity for 

hearing, to issue a permit or 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 is without 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 pursuant to applicable law seeking apVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00341 Fmt 6659 Sfmt 6603 E:\HR\OC\HR215P1.XXX HR215P1
342 

proval 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; and 

(5) the proposed construction or modification is consistent 

with sound national energy policy and will enhance energy 

independence. 

(c) PERMIT APPLICATIONS.—Permit applications under subsection 

(b) shall be made in writing to the Commission. The Commission 

shall issue rules setting forth the form of the application, the information to be contained in the application, and the manner of service 

of notice of the permit application upon interested persons. 

(d) COMMENTS.—In any proceeding before the Commission under 

subsection (b), the Commission shall afford each State in which a 

transmission facility covered by the permit is or will be located, 

each affected Federal agency and Indian tribe, private property 

owners, and other interested persons, a reasonable opportunity to 

present their views and recommendations with respect to the need 

for and impact of a facility covered by the permit. 

(e) RIGHTS-OF-WAY.—In the case of a permit under subsection (b) 

for electric transmission facilities to be located on property other 

than property owned by the United States or a State, if the permit 

holder cannot acquire by contract, or is unable to agree with the 

owner of the property to the compensation to be paid for, the necessary right-of-way to construct or modify such transmission facilities, the permit holder may acquire the right-of-way by the exercise 

of the right of eminent domain in the district court of the United 

States for the district in which the property concerned is located, or 

in the appropriate court of the State in which the property is located. The practice and procedure in any action or proceeding for 

that purpose in the district court of the United States shall conform 

as nearly as may be with the practice and procedure in similar action or proceeding in the courts of the State where the property is 

situated. 

(f) STATE LAW.—Nothing in this section shall preclude any person 

from constructing or modifying any transmission facility pursuant 

to State law. 

(g) COMPENSATION.—Any exercise of eminent domain authority 

pursuant to this section shall be considered a taking of private property for which just compensation is due. Just compensation shall be 

an amount equal to the full fair market value of the property taken 

on the date of the exercise of eminent domain authority, except that 

the compensation shall exceed fair market value if necessary to 

make the landowner whole for decreases in the value of any portion 

of the land not subject to eminent domain. Any parcel of land acVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00342 Fmt 6659 Sfmt 6603 E:\HR\OC\HR215P1.XXX HR215P1
343 

quired by eminent domain under this subsection shall be transferred back to the owner from whom it was acquired (or his heirs 

or assigns) if the land is not used for the construction or modification of electric transmission facilities within a reasonable period of 

time after the acquisition. Other than construction, modification, operation, or maintenance of electric transmission facilities and related facilities, property acquired under subsection (e) may not be 

used for any purpose (including use for any heritage area, recreational trail, or park) without the consent of the owner of the parcel from whom the property was acquired (or the owner’s heirs or 

assigns). 

(h) COORDINATION OF FEDERAL AUTHORIZATIONS FOR TRANSMISSION AND DISTRIBUTION FACILITIES.— 

(1) LEAD AGENCY.—If an applicant, or prospective applicant, 

for a Federal authorization related to an electric transmission 

or distribution facility so requests, the Department of Energy 

(DOE) shall act as the lead agency for purposes of coordinating 

all applicable Federal authorizations and related environmental reviews of the facility. For purposes of this subsection, 

the term ‘‘Federal authorization’’ means any authorization required under Federal law in order to site a transmission or distribution facility, including but not limited to such permits, special use authorizations, certifications, opinions, or other approvals as may be required, whether issued by a Federal or a State 

agency. To the maximum extent practicable under applicable 

Federal law, the Secretary of Energy shall coordinate this Federal authorization and review process with any Indian tribes, 

multi-State entities, and State agencies that are responsible for 

conducting any separate permitting and environmental reviews 

of the facility, to ensure timely and efficient review and permit 

decisions. 

(2) AUTHORITY TO SET DEADLINES.—As lead agency, the Department of Energy, in consultation with agencies responsible 

for Federal authorizations and, as appropriate, with Indian 

tribes, multi-State entities, and State agencies that are willing 

to coordinate their own separate permitting and environmental 

reviews with the Federal authorization and environmental reviews, shall establish prompt and binding intermediate milestones and ultimate deadlines for the review of, and Federal authorization decisions relating to, the proposed facility. The Secretary of Energy shall ensure that once an application has been 

submitted with such data as the Secretary considers necessary, 

all permit decisions and related environmental reviews under 

all applicable Federal laws shall be completed within 1 year or, 

if a requirement of another provision of Federal law makes this 

impossible, as soon thereafter as is practicable. The Secretary of 

Energy also shall provide an expeditious pre-application mechanism for prospective applicants to confer with the agencies involved to have each such agency determine and communicate to 

the prospective applicant within 60 days of when the prospective applicant submits a request for such information concerning— 

(A) the likelihood of approval for a potential facility; and 

(B) key issues of concern to the agencies and public. 

344 

(3) CONSOLIDATED ENVIRONMENTAL REVIEW AND RECORD OF

DECISION.—As lead agency head, the Secretary of Energy, in 

consultation with the affected agencies, shall prepare a single 

environmental review document, which shall be used as the 

basis for all decisions on the proposed project under Federal 

law. The document may be an environmental assessment or environmental impact statement under the National Environmental Policy Act of 1969 if warranted, or such other form of 

analysis as may be warranted. The Secretary of Energy and the 

heads of other agencies shall streamline the review and permitting of transmission and distribution facilities within corridors 

designated under section 503 of the Federal Land Policy and 

Management Act (43 U.S.C. 1763) by fully taking into account 

prior analyses and decisions relating to the corridors. Such document shall include consideration by the relevant agencies of 

any applicable criteria or other matters as required under applicable laws. 

(4) APPEALS.—In the event that any agency has denied a Federal authorization required for a transmission or distribution 

facility, or has failed to act by the deadline established by the 

Secretary pursuant to this section for deciding whether to issue 

the authorization, the applicant or any State in which the facility would be located may file an appeal with the Secretary, who 

shall, in consultation with the affected agency, review the denial or take action on the pending application. Based on the 

overall record and in consultation with the affected agency, the 

Secretary may then either issue the necessary authorization 

with any appropriate conditions, or deny the application. The 

Secretary shall issue a decision within 90 days of the filing of 

the appeal. In making a decision under this paragraph, the 

Secretary shall comply with applicable requirements of Federal 

law, including any requirements of the Endangered Species Act, 

the Clean Water Act, the National Forest Management Act, the 

National Environmental Policy Act of 1969, and the Federal 

Land Policy and Management Act. 

(5) CONFORMING REGULATIONS AND MEMORANDA OF UNDERSTANDING.—Not later than 18 months after the date of enactment of this section, the Secretary of Energy shall issue any regulations necessary to implement this subsection. 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 Memoranda of Understanding to ensure the timely and coordinated review and permitting of electricity transmission and distribution facilities. 

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 DOE regulations and any Memoranda. Interested Indian tribes, multi-State entities, and State 

agencies may enter such Memoranda of Understanding. 

(6) DURATION AND RENEWAL.—Each Federal land use authorization for an electricity transmission or distribution facility 

shall be issued— 

345 

(A) for a duration, as determined by the Secretary of Energy, commensurate with the anticipated use of the facility, 

and 

(B) with appropriate authority to manage the right-ofway for reliability and environmental protection. 

Upon the expiration of any such authorization (including an 

authorization issued prior to enactment of this section), the authorization shall be reviewed for renewal taking fully into account reliance on such electricity infrastructure, recognizing its 

importance for public health, safety and economic welfare and 

as a legitimate use of Federal lands. 

(7) MAINTAINING AND ENHANCING THE TRANSMISSION INFRA- STRUCTURE.—In exercising the responsibilities under this section, the Secretary of Energy shall consult regularly with the 

Federal Energy Regulatory Commission (FERC), FERC-approved electric reliability organizations (including related regional entities), and FERC-approved Regional Transmission 

Organizations and Independent System Operators. 

(i) INTERSTATE COMPACTS.—The consent of Congress is hereby 

given for 3 or more contiguous States to enter into an interstate 

compact, subject to approval by Congress, establishing regional 

transmission siting agencies to facilitate siting of future electric energy transmission facilities within such States and to carry out the 

electric energy transmission siting responsibilities of such States. 

The Secretary of Energy may provide technical assistance to regional transmission siting agencies established under this subsection. Such 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). The Commission shall have no authority to issue a permit 

for the construction or modification of electric transmission facilities 

within a State that is a party to a compact, unless the members of 

a 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) SAVINGS CLAUSE.—Nothing in this section shall be construed 

to affect any requirement of the environmental laws of the United 

States, including, but not limited to, the National Environmental 

Policy Act of 1969. Subsection (h)(4) of this section shall not apply 

to any Congressionally-designated components of the National Wilderness Preservation System, the National Wild and Scenic Rivers 

System, or the National Park system (including National Monuments therein). 

(k) ERCOT.—This section shall not apply within the area referred 

to in section 212(k)(2)(A). 

SEC. 217. NATIVE LOAD SERVICE OBLIGATION. 

(a) MEETING SERVICE OBLIGATIONS.—(1) 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 

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346 

ice, holds firm transmission rights for delivery of the output of 

such generation facilities or such purchased energy to meet such 

service obligation, 

is entitled to use such firm transmission rights, or, equivalent 

tradable or financial transmission rights, in order to deliver such 

output or purchased energy, or the output of other generating facilities or purchased energy to the extent deliverable using such rights, 

to the extent required to meet its service obligation. 

(2) To the extent that all or a portion of the service obligation covered by such 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. 

Subsequent transfers to another load-serving entity, or back to the 

original load-serving entity, shall be entitled to the same rights. 

(3) The Commission shall exercise its authority 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 their service obligations, 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. 

(b) ALLOCATION OF TRANSMISSION RIGHTS.—Nothing in subsections (a)(1) and (a) (2) of this section shall affect any existing or 

future methodology employed by an RTO or ISO for allocating or 

auctioning transmission rights if such RTO or ISO 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 an RTO or ISO never allocated financial transmission 

rights on its system that pertained to a period before January 1, 

2005, with respect to any application by such RTO or ISO that 

would change its methodology the Commission shall exercise its authority in a manner consistent with the Act and the policies expressed in subsections (a)(1) and (a)(2) 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. 

(c) CERTAIN TRANSMISSION RIGHTS.—The Commission may exercise authority under this Act to make transmission rights not used 

to meet an obligation covered by subsection (a) available to other entities in a manner determined by the Commission to be just, reasonable, and not unduly discriminatory or preferential. 

(d) OBLIGATION TO BUILD.—Nothing in this Act shall relieve a 

load-serving entity from any obligation under State or local law to 

build transmission or distribution facilities adequate to meet its 

service obligations. 

(e) CONTRACTS.—Nothing in this section shall provide a basis for 

abrogating any contract or service agreement for firm transmission 

service or rights in effect as of the date of the enactment of this subsection. If an ISO in the Western Interconnection had allocated financial transmission rights prior to the date of enactment of this 

section but had not done so with respect to one or more load-serving 

347 

entities’ firm transmission rights held under contracts to which the 

preceding sentence applies (or held by reason of ownership of transmission facilities), such load-serving entities may not be required, 

without their consent, to convert such firm transmission rights to 

tradable or financial rights, except where the load-serving entity has 

voluntarily joined the ISO as a participating transmission owner 

(or its successor) in accordance with the ISO tariff. 

(f) 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 such facilities, protections for 

transmission service comparable to those provided to load-serving 

entities pursuant to this section. 

(g) 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 (a)(3) in 

Commission-approved RTOs and ISOs with organized electricity 

markets. 

(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 its jurisdiction. 

(j) EFFECT OF EXERCISING RIGHTS.—An entity that lawfully exercises rights granted under subsection (a) shall not be considered by 

such action as engaging in undue discrimination or preference 

under this Act. 

(k) TVA AREA.—For purposes of subsection (a)(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 deemed to hold 

firm transmission rights for the transmission of such power. 

(l) DEFINITIONS.—For purposes of 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 

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 of the foregoing, or a corporation which 

is wholly owned, directly or indirectly, by any 1 or more of the 

foregoing, competent to carry on the business of developing, 

transmitting, utilizing or distributing power. 

SEC. 218. TRANSMISSION INFRASTRUCTURE INVESTMENT. 

(a) RULEMAKING REQUIREMENT.—Within 1 year after the enactment of this section, the Commission shall establish, by rule, incentive-based (including, but not limited to performance-based) rate 

348 

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. Such 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 

facilities for the transmission of electric energy in interstate 

commerce; 

(2) provide a return on equity that attracts new investment in 

transmission facilities (including related transmission technologies); 

(3) encourage deployment of transmission technologies and 

other measures to increase the capacity and efficiency of existing transmission facilities and improve the operation of such facilities; and 

(4) allow recovery of all prudently incurred costs necessary to 

comply with mandatory reliability standards issued pursuant 

to section 215 of this Act. 

The Commission may, from time to time, revise such rule. 

(b) ADDITIONAL INCENTIVES FOR RTO PARTICIPATION.—In the rule 

issued under this section, the Commission shall, to the extent within 

its jurisdiction, provide for incentives to each transmitting utility or 

electric utility that joins a Regional Transmission Organization or 

Independent System Operator. Incentives provided by the Commission pursuant to such rule shall include— 

(1) recovery of all prudently incurred costs to develop and 

participate in any proposed or approved RTO, ISO, or independent transmission company; 

(2) recovery of all costs previously approved by a State commission which exercised jurisdiction over the transmission facilities prior to the utility’s participation in the RTO or ISO, including costs necessary to honor preexisting transmission service contracts, in a manner which does not reduce the revenues 

the utility receives for transmission services for a reasonable 

transition period after the utility joins the RTO or ISO; 

(3) recovery as an expense in rates of the costs prudently incurred to conduct transmission planning and reliability activities, including the costs of participating in RTO, ISO and other 

regional planning activities and design, study and other 

precertification costs involved in seeking permits and approvals 

for proposed transmission facilities; 

(4) a current return in rates for construction work in progress 

for transmission facilities and full recovery of prudently incurred costs for constructing transmission facilities; 

(5) formula transmission rates; and 

(6) a maximum 15 year accelerated depreciation on new 

transmission facilities for rate treatment purposes. 

The Commission shall ensure that any costs recoverable pursuant to 

this subsection may be recovered by such utility through the transmission rates charged by such utility or through the transmission 

rates charged by the RTO or ISO that provides transmission service 

to such utility. 

(c) JUST AND REASONABLE RATES.—All rates approved under the 

rules adopted pursuant to this section, including any revisions to 

349 

such rules, are subject to the requirement of sections 205 and 206 

that all rates, charges, terms, and conditions be just and reasonable 

and not unduly discriminatory or preferential. 

SEC. 220. MARKET TRANSPARENCY RULES. 

(a) IN GENERAL.—Not later than 180 days after the date of enactment of this section, the Commission shall issue rules establishing 

an electronic information system to provide the Commission and the 

public with access to such information as is necessary or appropriate to facilitate price transparency and participation in markets 

subject to the Commission’s jurisdiction under this Act. Such systems shall provide 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 on a 

timely basis. The Commission shall have authority to obtain such 

information from any electric utility or transmitting utility, including any entity described in section 201(f). 

(b) EXEMPTIONS.—The Commission shall exempt from disclosure 

information it determines would, if disclosed, be detrimental to the 

operation of an effective market or jeopardize system security. This 

section shall not apply to transactions for the purchase or sale of 

wholesale electric energy or transmission services within the area 

described in section 212(k)(2)(A). In determining the information to 

be made available under this section and time 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 anti-competitive behaviors that 

can be facilitated by untimely public disclosure of transaction-specific information. 

(c) COMMODITY FUTURES TRADING COMMISSION.—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.). 

(d) SAVINGS PROVISION.—In exercising its authority under this 

section, the Commission shall not— 

(1) compete with, or displace from the market place, any price 

publisher; or 

(2) regulate price publishers or impose any requirements on 

the publication of information. 

SEC. 221. PROHIBITION ON FILING FALSE INFORMATION. 

No person or other 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 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 

such Federal agency. 

SEC. 222. PROHIBITION ON ROUND TRIP TRADING. 

(a) PROHIBITION.—No person or other entity (including an entity 

described in section 201(f)) shall willfully and knowingly enter into 

any contract or other arrangement to execute a ‘‘round trip trade’’ 

for the purchase or sale of electric energy at wholesale. 

350 

(b) DEFINITION.—For the purposes of this section, the term ‘‘round 

trip trade’’ means a transaction, or combination of transactions, in 

which a person or any other entity— 

(1) enters into a contract or other arrangement to purchase 

from, or sell to, any other person or other entity electric energy 

at wholesale; 

(2) simultaneously with entering into the contract or arrangement described in paragraph (1), arranges a financially offsetting trade with such other person or entity for the same such 

electric energy, at the same location, price, quantity and terms 

so that, collectively, the purchase and sale transactions in themselves result in no financial gain or loss; and 

(3) enters into the contract or arrangement with a specific intent to fraudulently affect reported revenues, trading volumes, 

or prices. 

SEC. 223. JOINT BOARD ON ECONOMIC DISPATCH. 

(a) IN GENERAL.—The Commission shall convene a joint board 

pursuant to section 209 of this Act to study the issue of security constrained economic dispatch for a market region. 

(b) MEMBERSHIP.—The Commission shall request each State to 

nominate a representative for such joint board. 

(c) POWERS.—The board’s sole authority shall be to consider 

issues relevant to what constitutes ‘‘security constrained economic 

dispatch’’ and how such a mode of operating an electric energy system affects or enhances the reliability and affordability of service to 

customers. 

(d) REPORT TO THE CONGRESS.—The board shall issue a report on 

these matters within one year of enactment of this section, including 

any consensus recommendations for statutory or regulatory reform. 

PART III—LICENSEES AND PUBLIC UTILITIES; 

PROCEDURAL AND ADMINISTRATIVE PROVISIONS 

* * * * * * * 

COMPLAINTS

SEC. 306. Any person, electric utility, State, municipality, or 

State commission complaining of anything done or omitted to be 

done by any licensee, transmitting utility, or public utility in contravention of the provisions of this Act may apply to the Commission by petition which shall briefly state the facts, whereupon a 

statement of the complaint thus made shall be forwarded by the 

Commission to such licensee, transmitting utility, or public utility, 

who shall be called upon to satisfy the complaint or to answer the 

same in writing within a reasonable time to be specified by the 

Commission. If such licensee, transmitting utility, or public utility 

shall not satisfy the complaint within the time specified or there 

shall appear to be any reasonable ground for investigating such 

complaint, it shall be the duty of the Commission to investigate the 

matters complained of in such manner and by such means as it 

shall find proper. 

351 

INVESTIGATIONS BY COMMISSION; ATTENDANCE OF WITNESSES; 

DEPOSITIONS

SEC. 307. (a) The Commission may investigate any facts, conditions, practices, or matters which it may find necessary or proper 

in order to determine whether any person, electric utility, transmitting utility, or other entity has violated or is about to violate any 

provisions of this Act or any rule, regulation, or order thereunder, 

or to aid in the enforcement of the provisions of this Act or in prescribing rules or regulations thereunder, or in obtaining information to serve as a basis for recommending further legislation concerning the matters to which this Act relates or in obtaining information about the sale of electric energy at wholesale in interstate 

commerce and the transmission of electric energy in interstate commerce. The Commission may permit any person, electric utility, 

transmitting utility, or other entity to file with it a statement in 

writing under oath or otherwise, as it shall determine, as to any 

or all facts and circumstances concerning a matter which may be 

the subject of investigation. The Commission, in its discretion, may 

publish or make available to State commissions information concerning any such subject. 

* * * * * * * 

REHEARINGS; COURT REVIEW OF ORDERS

SEC. 313. (a) Any person, electric utility, State, municipality, or 

State commission aggrieved by an order issued by the Commission 

in a proceeding under this Act to which such person, 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 orders 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), the 

Commission may at any time, upon reasonable notice and in such 

manner as it shall deem proper, modify or set aside, in whole or 

in part, any finding or order made or issued by it under the provisions of this act. 

* * * * * * * 

GENERAL FORFEITURE PROVISION; VENUE

SEC. 315. (a) * * * 

* * * * * * * 

(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. 

352 

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¿ 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, 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. Such penalty shall be assessed by the Commission, after notice and opportunity for public hearing, in accordance with the 

same provisions as are applicable under section 31(d) in the case 

of civil penalties assessed under section 31. In determining the 

amount of a proposed penalty, the Commission shall take into consideration the seriousness of the violation and the efforts of such 

person to remedy the violation in a timely manner. 

* * * * * * * 

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 requirement of the Public Utility Holding Company Act of 1935 or of a 

rule, regulation, or other thereunder and to a requirement of this 

Act or of a rule, regulation, or order thereunder, the requirement 

of the Public Utility Holding Company Act of 1935 shall apply to 

such person, and such person shall not be subject to the requirement of this Act, or of any rule, regulation, or order thereunder, 

with respect to the same subject matter, unless the Securities and 

Exchange Commission has exempted such person from such requirement of the Public Utility Holding Company Act of 1935, in 

353 

which case the requirements of this Act shall apply to such person.¿ 

* * * * * * * 

PUBLIC UTILITY REGULATORY POLICIES ACT OF 1978 

* * * * * * * 

TITLE I—RETAIL REGULATORY 

POLICIES FOR ELECTRIC UTILITIES 

* * * * * * * 

Subtitle B—Standards For Electric 

Utilities 

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

(a) * * * 

* * * * * * * 

(d) ESTABLISHMENT.—The following Federal standards are hereby 

established: 

(1) * * * 

* * * * * * * 

(11) 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. 

(16) INTERCONNECTION.—Each electric utility shall make 

available, upon request, interconnection service to any electric 

consumer that the electric utility serves. For purposes of this 

paragraph, the term ‘‘interconnection service’’ means service to 

an electric consumer under which an on-site generating facility 

on the consumer’s premises shall be connected to the local distribution facilities. Interconnection services shall be offered 

based upon the standards developed by the Institute of Electrical and Electronics Engineers: IEEE Standard 1547 for 

Interconnecting Distributed Resources with Electric Power SysVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00353 Fmt 6659 Sfmt 6603 E:\HR\OC\HR215P1.XXX HR215P1
354 

tems, as they may be amended from time to time. In addition, 

agreements and procedures shall be established whereby the 

services are offered shall promote current best practices of interconnection for distributed generation, including but not limited 

to practices stipulated in model codes adopted by associations 

of state regulatory agencies. All such agreements and procedures shall be just and reasonable, and not unduly discriminatory or preferential. 

SEC. 112. OBLIGATIONS TO CONSIDER AND DETERMINE. 

(a) * * * 

(b) TIME LIMITATIONS.—(1) * * * 

* * * * * * * 

(3)(A) Not later than 2 years after the enactment of this paragraph, each State regulatory authority (with respect to each electric 

utility for which it has ratemaking authority) and each nonregulated electric utility shall commence the consideration referred to in 

section 111, or set a hearing date for such consideration, with respect to each standard established by paragraphs (11) through (13) 

of section 111(d). 

(B) Not later than 3 years after the date of the enactment of this 

paragraph, each State regulatory authority (with respect to each 

electric utility for which it has ratemaking authority), and each 

nonregulated electric utility, shall complete the consideration, and 

shall make the determination, referred to in section 111 with respect 

to each standard established by paragraphs (11) through (13) of section 111(d). 

(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 one year after the enactment of this 

paragraph, each State regulatory authority (with respect to each 

electric utility for which it has ratemaking authority) and each 

nonregulated utility shall commence the consideration referred 

to in section 111, or set a hearing date for consideration, with 

respect to the standard established by paragraph (16) of section 

111(d). 

(B) Not later than two years after the date of the enactment 

of the this paragraph, each State regulatory authority (with respect to each electric utility for which it has ratemaking authority), and each nonregulated electric utility, shall complete the 

consideration, and shall make the determination, referred to in 

section 111 with respect to each standard established by paragraph (16) of section 111(d). 

355 

(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). 

(d) PRIOR STATE ACTIONS.—Subsections (b) and (c) of this section 

shall not apply to the standards established by paragraphs (11) 

through (13) of section 111(d) in the case of any electric utility in 

a State if, before the enactment of this subsection— 

(1) the State has implemented for such utility the standard 

concerned (or a comparable standard); 

(2) the State regulatory authority for such State or relevant 

nonregulated electric utility has conducted a proceeding to consider implementation of the standard concerned (or a comparable standard) for such utility; or 

(3) the State legislature has voted on the implementation of 

such standard (or a comparable standard) for such utility. In 

the case of the standard established by paragraph (16), the reference contained in this subsection to the date of enactment of 

this Act shall be deemed to be a reference to the date of enactment of paragraph (16). 

(e) PRIOR STATE ACTIONS.—Subsections (b) and (c) of this section 

shall not apply to the standard established by paragraph (14) of section 111(d) in the case of any electric utility in a State if, before the 

enactment of this subsection— 

(1) the State has implemented for such utility the standard 

concerned (or a comparable standard); 

(2) the State regulatory authority for such State or relevant 

nonregulated electric utility has conducted a proceeding to consider implementation of the standard concerned (or a comparable standard) for such utility within the previous 3 years; 

or 

(3) the State legislature has voted on the implementation of 

such standard (or a comparable standard) for such utility within the previous 3 years. 

(f) PRIOR STATE ACTIONS.—Subsections (b) and (c) of this section 

shall not apply to the standards established by paragraphs (16) 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 conVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00355 Fmt 6659 Sfmt 6603 E:\HR\OC\HR215P1.XXX HR215P1
356 

sider 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. 

* * * * * * * 

Subtitle C—Intervention and Judicial 

Review 

* * * * * * * 

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 

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) 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 each standard established by paragraph 

(16) of section 111(d), the reference contained in this subsection to 

the date of enactment of the Act shall be deemed to be a reference 

to the date of enactment of paragraph (16). 

* * * * * * * 

Subtitle D—Administrative Provisions 

* * * * * * * 

SEC. 132. RESPONSIBILITIES OF SECRETARY OF ENERGY. 

(a) AUTHORITY.—The Secretary may periodically notify the State 

regulatory authorities, and electric utilities identified pursuant to 

section 102(c)— 

(1) * * * 

* * * * * * * 

(3) methods for determining cost of service; 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 

357 

(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, 2007. 

* * * * * * * 

TITLE II—CERTAIN FEDERAL ENERGY 

REGULATORY COMMISSION AND DEPARTMENT OF ENERGY AUTHORITIES 

* * * * * * * 

SEC. 210. COGENERATION AND SMALL, POWER PRODUCTION. 

(a) * * * 

* * * * * * * 

(m) TERMINATION OF MANDATORY PURCHASE AND SALE 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 opVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00357 Fmt 6659 Sfmt 6603 E:\HR\OC\HR215P1.XXX HR215P1
358 

portunity 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 sufficient notice to potentially affected qualifying cogeneration facilities and qualifying small power production facilities, and an 

opportunity for comment, the Commission shall make a final 

determination within 90 days of such application regarding 

whether the conditions set forth in 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. 

359 

(5) OBLIGATION TO SELL.—After the date of enactment of this 

subsection, no electric utility shall be required to enter into a 

new contract or obligation to sell electric energy to a qualifying 

cogeneration facility or a qualifying small power production facility under this section if the Commission finds that— 

(A) competing retail electric suppliers are willing and 

able to sell and deliver electric energy to the qualifying cogeneration facility or qualifying small power production facility; and 

(B) the electric utility is not required by State law to sell 

electric energy in its service territory. 

(6) NO EFFECT ON EXISTING RIGHTS AND REMEDIES.—Nothing 

in this subsection affects the rights or remedies of any party 

under any contract or obligation, in effect or pending approval 

before the appropriate State regulatory authority or non-regulated electric utility on the date of enactment of this subsection, 

to purchase electric energy or capacity from or to sell electric energy or capacity to a qualifying cogeneration facility or qualifying small power production facility under this Act (including 

the right to recover costs of purchasing electric energy or capacity). 

(7) RECOVERY OF COSTS.—(A) The Commission shall issue 

and enforce such regulations as are necessary to ensure that an 

electric utility that purchases electric energy or capacity from a 

qualifying cogeneration facility or qualifying small power production facility in accordance with any legally enforceable obligation entered into or imposed under this section recovers all 

prudently incurred costs associated with the purchase. 

(B) A regulation under subparagraph (A) shall be enforceable 

in accordance with the provisions of law applicable to enforcement of regulations under the Federal Power Act (16 U.S.C. 

791a et seq.). 

(n) 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 paragraph (1)(A) of this 

subsecvtion shall be applicable only to facilities that seek to sell 

electric energy pursuant to section 210 of this Act. For all other purposes, except as specifically provided in subsection (m)(2)(A), qualifying facility status shall be determined in accordance with the 

rules and regulations of this Act. 

360 

(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 IV—SMALL HYDROELECTRIC 

POWER PROJECTS 

* * * * * * * 

SEC. 408. DEFINITIONS. 

(a) For purposes of this title, the term— 

(1) * * * 

* * * * * * * 

(6) ‘‘existing dam’’ means any dam, the construction of which 

was completed on or before øApril 20, 1977¿ March 4, 2003, 

and which does not require any construction or enlargement of 

impoundment structures (other than repairs or reconstruction) 

in connection with the installation of any small hydroelectric 

power project; 

* * * * * * * 

SECTION 713 OF THE ENERGY ACT OF 2000 

SEC. 713. SUNSET. 

This title shall cease to be effective as of the date that is ø4¿ 9 

years after the date on which the Alliance is established. 

NATURAL GAS ACT 

* * * * * * * 

NECESSITY FOR REGULATION OF NATURAL GAS COMPANIES

SECTION 1. (a) * * * 

(b) The provisions of this Act shall apply to the transportation of 

natural gas in interstate commerce, to the sale in interstate commerce of natural gas for resale for ultimate public consumption for 

domestic, commercial, industrial, or any other use, and to natural 

gas companies engaged in such transportation or sale, and to the 

importation or exportation of natural gas in foreign commerce and 

to persons engaged in such importation or exportation, but shall not 

apply to any other transportation or sale of natural gas or to the 

361 

local distribution of natural gas or to the facilities used for such 

distribution or to the production or gathering of natural gas. 

* * * * * * * 

SEC. 2. When used in this Act, unless the context otherwise requires— 

(1) * * * 

* * * * * * * 

(11) ‘‘Liquefaction or gasification natural gas terminal’’ includes all facilities located onshore or in State waters that are 

used to receive, unload, load, store, transport, gasify, liquefy, or 

process natural gas that is imported to the United States from 

a foreign country, exported to a foreign country from the United 

States, or transported in interstate commerce by waterborne 

tanker, but does not include— 

(A) waterborne tankers used to deliver natural gas to or 

from any such facility; or 

(B) any pipeline or storage facility subject to the jurisdiction of the Commission under section 7. 

EXPORTATION OR IMPORTATION OF NATURAL GAS; LIQUEFACTION OR

GASIFICATION NATURAL GAS TERMINALS

SEC. 3. (a) * * * 

* * * * * * * 

(d) AUTHORIZATION FOR CONSTRUCTION, EXPANSION, OR OPERATION OF LIQUEFACTION OR GASIFICATION NATURAL GAS TERMINALS.— 

(1) COMMISSION AUTHORIZATION REQUIRED.—No person shall 

construct, expand, or operate a liquefaction or gasification natural gas terminal without an order from the Commission authorizing such person to do so. 

(2) AUTHORIZATION PROCEDURES.— 

(A) NOTICE AND HEARING.—Upon the filing of any application to construct, expand, or operate a liquefaction or 

gasification natural gas terminal, the Commission shall— 

(i) set the matter for hearing; 

(ii) give reasonable notice of the hearing to all interested persons, including the State commission of the 

State in which the liquefaction or gasification natural 

gas terminal is located; 

(iii) decide the matter in accordance with this subsection; and 

(iv) issue or deny the appropriate order accordingly. 

(B) DESIGNATION AS LEAD AGENCY.— 

(i) IN GENERAL.—The Commission shall act as the 

lead agency for the purposes of coordinating all applicable Federal authorizations and for the purposes of 

complying with the National Environmental Policy Act 

of 1969 (42 U.S.C. 4312 et seq.) for a liquefaction or 

gasification natural gas terminal. 

(ii) OTHER AGENCIES.—Each Federal agency considering an aspect of the construction, expansion, or operation of a liquefaction or gasification natural gas terVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00361 Fmt 6659 Sfmt 6603 E:\HR\OC\HR215P1.XXX HR215P1
362 

minal shall cooperate with the Commission and comply 

with the deadlines established by the Commission. 

(C) SCHEDULE.— 

(i) COMMISSION AUTHORITY TO SET SCHEDULE.—The 

Commission shall establish a schedule for all Federal 

and State administrative proceedings required under 

authority of Federal law to construct, expand, or operate a liquefaction or gasification natural gas terminal. 

In establishing the schedule, the Commission shall— 

(I) ensure expeditious completion of all such proceedings; and 

(II) accommodate the applicable schedules established by Federal law for such proceedings. 

(ii) FAILURE TO MEET SCHEDULE.—If a Federal or 

State administrative agency does not complete a proceeding for an approval that is required before a person may construct, expand, or operate the liquefaction 

or gasification natural gas terminal, in accordance 

with the schedule established by the Commission under 

this subparagraph, and if— 

(I) a determination has been made by the Court 

pursuant to section 19(d) that such delay is unreasonable; and 

(II) the agency has failed to act on any remand 

by the Court within the deadline set by the Court, 

that approval may be conclusively presumed by the 

Commission. 

(D) EXCLUSIVE RECORD.—The Commission shall, with the 

cooperation of Federal and State administrative agencies 

and officials, maintain a complete consolidated record of 

all decisions made or actions taken by the Commission or 

by a Federal administrative agency or officer (or State administrative agency or officer acting under delegated Federal authority) with respect to the construction, expansion, 

or operation of a liquefaction or gasification natural gas 

terminal. Such record shall be the exclusive record for any 

Federal administrative proceeding that is an appeal or review of any such decision made or action taken. 

(E) STATE AND LOCAL SAFETY CONSIDERATIONS.— 

(i) IN GENERAL.—The Commission shall consult with 

the State commission of the State in which the liquefaction or gasification natural gas terminal is located 

regarding State and local safety considerations prior to 

issuing an order pursuant to this subsection and consistent with the schedule established under subparagraph (C). 

(ii) STATE SAFETY INSPECTIONS.—The State commission of the State in which a liquefaction or gasification 

natural gas terminal is located may, after the terminal 

is operational, conduct safety inspections with respect 

to the liquefaction or gasification natural gas terminal 

if— 

(I) the State commission provides written notice 

to the Commission of its intention to do so; and 

363 

(II) the inspections will be carried out in conformance with Federal regulations and guidelines. 

Enforcement of any safety violation discovered by a 

State commission pursuant to this clause shall be carried out by Federal officials. The Commission shall 

take appropriate action in response to a report of a violation not later that 90 days after receiving such report. 

(iii) STATE AND LOCAL SAFETY CONSIDERATIONS.— For the purposes of this subparagraph, State and local 

safety considerations include— 

(I) the kind and use of the facility; 

(II) the existing and projected population and 

demographic characteristics of the location; 

(III) the existing and proposed land use near the 

location; 

(IV) the natural and physical aspects of the location; 

(V) the medical, law enforcement, and fire prevention capabilities near the location that can respond at the facility; and 

(VI) the feasibility of remote siting. 

(3) ISSUANCE OF COMMISSION ORDER.— (A) IN GENERAL.—The Commission shall issue an order 

authorizing, in whole or in part, the construction, expansion, or operation covered by the application to any qualified applicant— 

(i) unless the Commission finds such actions or operations will not be consistent with the public interest; 

and 

(ii) if the Commission has found that the applicant 

is— 

(I) able and willing to carry out the actions and 

operations proposed; and 

(II) willing to conform to the provisions of this 

Act and any requirements, rules, and regulations 

of the Commission set forth under this Act. 

(B) TERMS AND CONDITIONS.—The Commission may by 

its order grant an application, in whole or in part, with 

such modification and upon such terms and conditions as 

the Commission may find necessary or appropriate. 

(C) LIMITATIONS ON TERMS AND CONDITIONS TO COMMISSION ORDER.— 

(i) IN GENERAL.—Any Commission order issued pursuant to this subsection before January 1, 2011, shall 

not be conditioned on— 

(I) a requirement that the liquefaction or gasification natural gas terminal offer service to persons 

other than the person, or any affiliate thereof, securing the order; or 

(II) any regulation of the liquefaction or gasification natural gas terminal’s rates, charges, terms, 

or conditions of service. 

(ii) INAPPLICABLE TO TERMINAL EXIT PIPELINE.— 

Clause (i) shall not apply to any pipeline subject to the 

364 

jurisdiction of the Commission under section 7 exiting 

a liquefaction or gasification natural gas terminal. 

(iii) EXPANSION OF REGULATED TERMINAL.—An order 

issued under this paragraph that relates to an expansion of an existing liquefaction or gasification natural 

gas terminal, where any portion of the existing terminal continues to be subject to Commission regulation 

of rates, charges, terms, or conditions of service, may 

not result in— 

(I) subsidization of the expansion by regulated 

terminal users; 

(II) degradation of service to the regulated terminal users; or 

(III) undue discrimination against the regulated 

terminal users. 

(iv) EXPIRATION.—This subparagraph shall cease to 

have effect on January 1, 2021. 

(4) DEFINITION.—For the purposes of this subsection, the term 

‘‘Federal authorization’’ means any authorization required 

under Federal law in order to construct, expand, or operate a 

liquefaction or gasification natural gas terminal, including 

such permits, special use authorizations, certifications, opinions, or other approvals as may be required, whether issued by 

a Federal or State agency. 

* * * * * * * 

EXTENSION OF FACILITIES; ABANDONMENT OF SERVICE

SEC. 7. (a) * * * 

* * * * * * * 

(i)(1) The United States Court of Appeals for the District of Columbia Circuit shall have original and exclusive jurisdiction over 

any civil action— 

(A) for review of any order or action of any Federal or State 

administrative agency or officer to issue, condition, or deny any 

permit, license, concurrence, or approval issued under authority 

of any Federal law, other than the Coastal Zone Management 

Act of 1972 (16 U.S.C. 1451 et seq.), required for the construction of a natural gas pipeline for which a certificate of public 

convenience and necessity is issued by the Commission under 

this section; 

(B) alleging unreasonable delay by any Federal or State administrative agency or officer in entering an order or taking 

other action described in subparagraph (A); or 

(C) challenging any decision made or action taken under this 

subsection. 

(2)(A) If the Court finds that the order, action, or failure to act 

is not consistent with the public convenience and necessity (as determined by the Commission under this section), or would prevent the 

construction and operation of natural gas facilities authorized by 

the certificate of public convenience and necessity, the permit, license, concurrence, or approval that is the subject of the order, action, or failure to act shall be deemed to have been issued subject 

to any conditions set forth in the reviewed order or action that the 

365 

Court finds to be consistent with the public convenience and necessity. 

(B) For purposes of paragraph (1)(B), the failure of an agency or 

officer to issue any such permit, license, concurrence, or approval 

within the later of 1 year after the date of filing of an application 

for the permit, license, concurrence, or approval or 60 days after the 

date of issuance of the certificate of public convenience and necessity 

under this section, shall be considered to be unreasonable delay unless the Court, for good cause shown, determines otherwise. 

(C) The Court shall set any action brought under paragraph (1) 

for expedited consideration. 

* * * * * * * 

REHEARING; COURT REVIEW OF ORDERS

SEC. 19. (a) * * * 

* * * * * * * 

(d) JUDICIAL REVIEW.— 

(1) IN GENERAL.—The United States Court of Appeals for the 

District of Columbia Circuit shall have original and exclusive 

jurisdiction over any civil action— 

(A) for review of any order, action, or failure to act of any 

Federal or State administrative agency to issue, condition, 

or deny any permit, license, concurrence, or approval required under Federal law for the construction, expansion, 

or operation of a liquefaction or gasification natural gas 

terminal; 

(B) alleging unreasonable delay, in meeting a schedule 

established under section 3(d)(2)(C) or otherwise, by any 

Federal or State administrative agency in entering an order 

or taking other action described in subparagraph (A); or 

(C) challenging any decision made or action taken by the 

Commission under section 3(d). 

(2) COMMISSION ACTION.—For any action described in this 

subsection, the Commission shall file with the Court the consolidated record maintained under section 3(d)(2)(D). 

(3) COURT ACTION.—If the Court finds under paragraph 

(1)(A) or (B) that an order, action, failure to act, or delay is inconsistent with applicable Federal law, and would prevent the 

construction, expansion, or operation of a liquefaction or gasification natural gas terminal, the order or action shall be deemed 

to have been issued or taken, subject to any conditions established by the Federal or State administrative agency upon remand from the Court, such conditions to be consistent with the 

order of the Court. If the Court remands the order or action to 

the Federal or State agency, the Court shall set a reasonable 

deadline for the agency to act on remand. 

(4) UNREASONABLE DELAY.—For the purposes of paragraph 

(1)(B), the failure of an agency to issue a permit, license, concurrence, or approval within the later of— 

(A) 1 year after the date of filing of an application for the 

permit, license, concurrence, or approval; or 

(B) 60 days after the date of issuance of the order under 

section 3(d), 

366 

shall be considered unreasonable delay unless the Court, for 

good cause shown, determines otherwise. 

(5) EXPEDITED REVIEW.—The Court shall set any action 

brought under this subsection for expedited consideration. 

* * * * * * * 

SEC. 24. NATURAL GAS MARKET TRANSPARENCY. 

(a) AUTHORIZATION.—(1) Not later than 180 days after the date 

of enactment of the Energy Policy Act of 2005, the Federal Energy 

Regulatory Commission shall issue rules directing all entities subject to the Commission’s jurisdiction as provided under this Act to 

timely report information about the availability and prices of natural gas sold at wholesale in interstate commerce to the Commission and price publishers. 

(2) The Commission shall evaluate the data for adequate price 

transparency and accuracy. 

(3) Rules issued under this subsection requiring the reporting of 

information to the Commission that may become publicly available 

shall be limited to aggregate data and transaction-specific data that 

are otherwise required by the Commission to be made public. 

(4) In exercising its authority under this section, the Commission 

shall not— 

(A) compete with, or displace from the market place, any price 

publisher; or 

(B) regulate price publishers or impose any requirements on 

the publication of information. 

(b) TIMELY ENFORCEMENT.—No person shall be subject to any 

penalty under this section with respect to a violation occurring more 

than 3 years before the date on which the Federal Energy Regulatory Commission seeks to assess a penalty. 

(c) LIMITATION ON COMMISSION AUTHORITY.—(1) The Commission 

shall not condition access to interstate pipeline transportation upon 

the reporting requirements authorized under this section. 

(2) Natural gas sales by a producer that are attributable to volumes of natural gas produced by such producer shall not be subject 

to the rules issued pursuant to this section. 

(3) The Commission shall not require natural gas producers, processors, or users who have a de minimis market presence to participate in the reporting requirements provided in this section. 

SEC. ø24¿ 25. This act may be cited as the ‘‘Natural Gas Act.’’ 

* * * * * * * 

SECTION 1421 OF THE SAFE DRINKING WATER ACT 

REGULATIONS FOR STATE PROGRAMS

SEC. 1421. (a) * * * 

* * * * * * * 

(d) For purposes of this part: 

ø(1) The term ‘‘underground injection’’ means the subsurface 

emplacement of fluids by well injection. Such term does not include the underground injection of natural gas for purposes of 

storage.¿ 

367 

(1) UNDERGROUND INJECTION.—The term ‘‘underground injection’’— 

(A) means the subsurface emplacement of fluids by well 

injection; and 

(B) excludes— 

(i) the underground injection of natural gas for purposes of storage; and 

(ii) the underground injection of fluids or propping 

agents pursuant to hydraulic fracturing operations related to oil or gas production activities. 

* * * * * * * 

SECTION 202 OF THE NATIVE AMERICAN HOUSING AND 

SELF-DETERMINATION ACT OF 1996 

SEC. 202. ELIGIBLE AFFORDABLE HOUSING ACTIVITIES. 

Affordable housing activities under this title are activities, in accordance with the requirements of this title, to develop or to support affordable housing for rental or homeownership, or 

to provide housing services with respect to affordable housing, 

through the following 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 

* * * * * * * 

ATOMIC ENERGY ACT OF 1954 

TABLE OF CONTENTS

* * * * * * * 

CHAPTER 14. GENERAL AUTHORITY

Sec. 161. General provisions. 

* * * * * * * 

Sec. 170C. Secure transfer of nuclear materials. 

* * * * * * * 

TITLE I—ATOMIC ENERGY 

* * * * * * * 

CHAPTER 10. ATOMIC ENERGY LICENSES 

* * * * * * * 

SEC. 103. COMMERCIAL LICENSES.— 

368 

a. * * * 

* * * * * * * 

c. Each such license shall be issued for a specified period, as determined by the Commission, depending on the type of activity to 

be licensed, but not exceeding forty years from the authorization to 

commence operations, and may be renewed upon the expiration of 

such period. 

* * * * * * * 

g. The Commission shall give priority to the licensing of a utilization facility that is collocated with a hydrogen production facility. 

The Commission shall issue a final decision approving or disapproving the issuance of a license to construct and operate a utilization facility not later than the expiration of 3 years after the date 

of the submission of such application, if the application references 

a Commission-certified design and an early site permit, unless the 

Commission determines that the applicant has proposed material 

and substantial changes to the design or the site design parameters. 

* * * * * * * 

SEC. 105. ANTITRUST PROVISIONS.— 

a. * * * 

* * * * * * * 

c. (1) * * * 

* * * * * * * 

(9) APPLICABILITY.—This subsection does not apply to an application for a license to construct or operate a utilization facility or production facility under section 103 or 104 b. that is filed on or after 

the date of enactment of this paragraph. 

* * * * * * * 

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) * * * 

* * * * * * * 

b.(1) Notwithstanding any other provision of law, including specifically section 121 of this Act, and except as provided in paragraphs (2) and (3), no nuclear materials and equipment or sensitive 

nuclear technology, including items and assistance authorized by 

section 57 b. of this Act and regulated under part 810 of title 10, 

Code of Federal Regulations, and nuclear-related items on the Commerce Control List maintained under part 774 of title 15 of the 

Code of Federal Regulations, shall be exported or reexported, or 

transferred or retransferred whether directly or indirectly, and no 

Federal agency shall issue any license, approval, or authorization 

for the export or reexport, or transfer, or retransfer, whether directly 

or indirectly, of these items or assistance (as defined in this paragraph) to any country whose government has been identified by the 

Secretary of State as engaged in state sponsorship of terrorist activiVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00368 Fmt 6659 Sfmt 6603 E:\HR\OC\HR215P1.XXX HR215P1
369 

ties (specifically including any country the government of which has 

been determined by the Secretary of State under section 620A(a) of 

the Foreign Assistance Act of 1961 (22 U.S.C. 2371(a)), section 

6(j)(1) of the Export Administration Act of 1979 (50 U.S.C. App. 

2405(j)(1)), or section 40(d) of the Arms Export Control Act (22 

U.S.C. 2780(d)) to have repeatedly provided support for acts of 

international terrorism). 

(2) This subsection shall not apply to exports, reexports, transfers, 

or retransfers of radiation monitoring technologies, surveillance 

equipment, seals, cameras, tamper-indication devices, nuclear detectors, monitoring systems, or equipment necessary to safely store, 

transport, or remove hazardous materials, whether such items, services, or information are regulated by the Department of Energy, the 

Department of Commerce, or the Nuclear Regulatory Commission, 

except to the extent that such technologies, equipment, seals, cameras, devices, detectors, or systems are available for use in the design or construction of nuclear reactors or nuclear weapons. 

(3) The President may waive the application of paragraph (1) to 

a country if the President determines and certifies to Congress that 

the waiver will not result in any increased risk that the country receiving the waiver will acquire nuclear weapons, nuclear reactors, 

or any materials or components of nuclear weapons and— 

(A) the government of such country has not within the preceding 12-month period willfully aided or abetted the international proliferation of nuclear explosive devices to individuals 

or groups or willfully aided and abetted an individual or 

groups in acquiring unsafeguarded nuclear materials; 

(B) in the judgment of the President, the government of such 

country has provided adequate, verifiable assurances that it 

will cease its support for acts of international terrorism; 

(C) the waiver of that paragraph is in the vital national security interest of the United States; or 

(D) such a waiver is essential to prevent or respond to a serious radiological hazard in the country receiving the waiver that 

may or does threaten public health and safety. 

* * * * * * * 

SEC. 134. FURTHER RESTRICTIONS ON EXPORTS.— 

øa. The Commission¿ a. IN GENERAL.—Except as provided in subsection b., 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— 

(1) * * * 

* * * * * * * 

b. MEDICAL ISOTOPE PRODUCTION.— 

(1) DEFINITIONS.—In this subsection: 

(A) HIGHLY ENRICHED URANIUM.—The term ‘‘highly enriched uranium’’ means uranium enriched to include concentration of U–235 above 20 percent. 

(B) MEDICAL ISOTOPE.—The term ‘‘medical isotope’’ includes Molybdenum 99, Iodine 131, Xenon 133, and other 

radioactive materials used to produce a radiopharmaceutical for diagnostic, therapeutic procedures or for research and development. 

370 

(C) RADIOPHARMACEUTICAL.—The term ‘‘radiopharmaceutical’’ means a radioactive isotope that— 

(i) contains byproduct material combined with chemical or biological material; and 

(ii) is designed to accumulate temporarily in a part 

of the body for therapeutic purposes or for enabling the 

production of a useful image for use in a diagnosis of 

a medical condition. 

(D) RECIPIENT COUNTRY.—The term ‘‘recipient country’’ 

means Canada, Belgium, France, Germany, and the Netherlands. 

(2) LICENSES.—The Commission may issue a license authorizing the export (including shipment to and use at intermediate 

and ultimate consignees specified in the license) to a recipient 

country of highly enriched uranium for medical isotope production if, in addition to any other requirements of this Act (except 

subsection a.), the Commission determines that— 

(A) a recipient country that supplies an assurance letter 

to the United States Government in connection with the 

consideration by the Commission of the export license application has informed the United States Government that 

any intermediate consignees and the ultimate consignee 

specified in the application are required to use the highly 

enriched uranium solely to produce medical isotopes; and 

(B) the highly enriched uranium for medical isotope production will be irradiated only in a reactor in a recipient 

country that— 

(i) uses an alternative nuclear reactor fuel; or 

(ii) is the subject of an agreement with the United 

States Government to convert to an alternative nuclear 

reactor fuel when alternative nuclear reactor fuel can 

be used in the reactor. 

(3) REVIEW OF PHYSICAL PROTECTION REQUIREMENTS.— 

(A) IN GENERAL.—The Commission shall review the adequacy of physical protection requirements that, as of the 

date of an application under paragraph (2), are applicable 

to the transportation and storage of highly enriched uranium for medical isotope production or control of residual 

material after irradiation and extraction of medical isotopes. 

(B) IMPOSITION OF ADDITIONAL REQUIREMENTS.—If the 

Commission determines that additional physical protection 

requirements are necessary (including a limit on the quantity of highly enriched uranium that may be contained in 

a single shipment), the Commission shall impose such requirements as license conditions or through other appropriate means. 

(4) FIRST REPORT TO CONGRESS.— 

(A) NAS STUDY.—The Secretary shall enter into an arrangement with the National Academy of Sciences to conduct a study to determine— 

(i) the feasibility of procuring supplies of medical isotopes from commercial sources that do not use highly 

enriched uranium; 

371 

(ii) the current and projected demand and availability of medical isotopes in regular current domestic 

use; 

(iii) the progress that is being made by the Department of Energy and others to eliminate all use of highly enriched uranium in reactor fuel, reactor targets, 

and medical isotope production facilities; and 

(iv) the potential cost differential in medical isotope 

production in the reactors and target processing facilities if the products were derived from production systems that do not involve fuels and targets with highly 

enriched uranium. 

(B) FEASIBILITY.—For the purpose of this subsection, the 

use of low enriched uranium to produce medical isotopes 

shall be determined to be feasible if— 

(i) low enriched uranium targets have been developed 

and demonstrated for use in the reactors and target 

processing facilities that produce significant quantities 

of medical isotopes to serve United States needs for 

such isotopes; 

(ii) sufficient quantities of medical isotopes are available from low enriched uranium targets and fuel to 

meet United States domestic needs; and 

(iii) the average anticipated total cost increase from 

production of medical isotopes in such facilities without use of highly enriched uranium is less than 10 percent. 

(C) REPORT BY THE SECRETARY.—Not later than 5 years 

after the date of enactment of the Energy Policy Act of 

2005, the Secretary shall submit to Congress a report 

that— 

(i) contains the findings of the National Academy of 

Sciences made in the study under subparagraph (A); 

and 

(ii) discloses the existence of any commitments from 

commercial producers to provide domestic requirements 

for medical isotopes without use of highly enriched 

uranium consistent with the feasibility criteria described in subparagraph (B) not later than the date 

that is 4 years after the date of submission of the report. 

(5) SECOND REPORT TO CONGRESS.—If the study of the National Academy of Sciences determines under paragraph 

(4)(A)(i) that the procurement of supplies of medical isotopes 

from commercial sources that do not use highly enriched uranium is feasible, but the Secretary is unable to report the existence of commitments under paragraph (4)(C)(ii), not later than 

the date that is 6 years after the date of enactment of the Energy Policy Act of 2005, the Secretary shall submit to Congress 

a report that describes options for developing domestic supplies 

of medical isotopes in quantities that are adequate to meet domestic demand without the use of highly enriched uranium consistent with the cost increase described in paragraph (4)(B)(iii). 

(6) CERTIFICATION.—At such time as commercial facilities 

that do not use highly enriched uranium are capable of meeting 

372 

domestic requirements for medical isotopes, within the cost increase described in paragraph (4)(B)(iii) and without impairing 

the reliable supply of medical isotopes for domestic utilization, 

the Secretary shall submit to Congress a certification to that effect. 

(7) SUNSET PROVISION.—After the Secretary submits a certification under paragraph (6), the Commission shall, by rule, terminate its review of export license applications under this subsection. 

øb.¿ c. As used in this section— 

(1) * * * 

* * * * * * * 

CHAPTER 12. CONTROL OF INFORMATION 

* * * * * * * 

SEC. 149. FINGERPRINTING FOR CRIMINAL HISTORY RECORD

CHECKS.— øa. The Nuclear Regulatory Commission (in this section referred to as the ‘‘Commission’’) shall require each licensee or applicant for a license to operate a utilization facility under section 103 

or 104 b. to fingerprint each individual who is permitted 

unescorted access to the facility or is permitted access to safeguards information under section 147. All fingerprints obtained by 

a licensee or applicant as required in the preceding sentence¿ 

a. IN GENERAL.— (1) REQUIREMENTS.— (A) IN GENERAL.—The Commission shall require each individual or entity— 

(i) that is licensed or certified to engage in an activity subject to regulation by the Commission; 

(ii) that has filed an application for a license or certificate to engage in an activity subject to regulation by 

the Commission; or 

(iii) that has notified the Commission, in writing, of 

an intent to file an application for licensing, certification, permitting, or approval of a product or activity 

subject to regulation by the Commission, 

to fingerprint each individual described in subparagraph 

(B) before the individual is permitted unescorted access or 

access, whichever is applicable, as described in subparagraph (B). 

(B) INDIVIDUALS REQUIRED TO BE FINGERPRINTED.—The 

Commission shall require to be fingerprinted each individual who— 

(i) is permitted unescorted access to— 

(I) a utilization facility; or 

(II) radioactive material or other property subject to regulation by the Commission that the Commission determines to be of such significance to the 

public health and safety or the common defense 

and security as to warrant fingerprinting and 

background checks; or 

(ii) is permitted access to safeguards information 

under section 147. 

373 

(2) SUBMISSION TO THE ATTORNEY GENERAL.—All fingerprints 

obtained by an individual or entity as required in paragraph 

(1) shall be submitted to the Attorney General of the United 

States through the Commission for identification and a criminal history records check. øThe costs of any identification and 

records check conducted pursuant to the preceding sentence 

shall be paid by the licensee or applicant.¿ 

(3) COSTS.—The costs of any identification and records check 

conducted pursuant to paragraph (1) shall be paid by the individual or entity required to conduct the fingerprinting under 

paragraph (1)(A). øNotwithstanding any other provision of law, 

the Attorney General may provide all the results of the search 

of the Commission, and, in accordance with regulations prescribed under this section, the Commission may provide such 

results to the licensee or applicant submitting such fingerprints.¿ 

(4) PROVISION TO INDIVIDUAL OR ENTITY REQUIRED TO CON- DUCT FINGERPRINTING.—Notwithstanding any other provision 

of law, the Attorney General may provide all the results of the 

search to the Commission, and, in accordance with regulations 

prescribed under this section, the Commission may provide 

such results to the individual or entity required to conduct the 

fingerprinting under paragraph (1)(A). 

* * * * * * * 

c. For purposes of administering this section, the Commission 

shall prescribeø, subject to public notice and comment, regulations—¿ requirements— 

(1) * * * 

(2) to establish the conditions for use of information received 

from the Attorney General, in order— 

(A) * * * 

(B) to ensure that such information is used solely for the 

purpose of determining whether an individual shall be permitted øunescorted access to the facility of a licensee or 

applicant¿ unescorted access to a utilization facility, radioactive material, or other property described in subsection 

a.(1)(B) or shall be permitted access to safeguards information under section 147; 

d. USE OF OTHER BIOMETRIC METHODS.—The Commission may 

satisfy any requirement for a person to conduct fingerprinting under 

this section using any other biometric method for identification approved for use by the Attorney General, after the Commission has 

approved the alternative method by rule. 

øc.¿ e. * * * 

* * * * * * * 

CHAPTER 14. GENERAL AUTHORITY 

SEC. 161. GENERAL PROVISIONS.—In the performance of its functions the Commission is authorized to— 

a. * * * 

* * * * * * * 

i. prescribe such regulations or orders as it may deem necessary (1) to protect Restricted Data received by any person in 

374 

connection with any activity authorized pursuant to this Act, 

(2) to guard against the loss or diversion of any special nuclear 

material acquired by any person pursuant to section 53 or produced by any person in connection with any activity authorized 

pursuant to this Act, to prevent any use or disposition thereof 

which the Commission may determine to be inimical to the 

common defense and security, including regulations or orders 

designating activities, involving quantities of special nuclear 

material which in the opinion of the Commission are important 

to the common defense and security, that may be conducted 

only by persons whose character, associations, and loyalty shall 

have been investigated under standards and specifications established by the Commission and as to whom the Commission 

shall have determined that permitting each such person to conduct the activity will not be inimical to the common defense 

and security, øand¿ (3) to govern any activity authorized pursuant to this Act, including standards and restrictions governing the design, location, and operation of facilities used in 

the conduct of such activity, in order to protect health and to 

minimize danger to life or property, and (4) to ensure that sufficient funds will be available for the decommissioning of any 

production or utilization facility licensed under section 103 or 

104 b., including standards and restrictions governing the control, maintenance, use, and disbursement by any former licensee 

under this Act that has control over any fund for the decommissioning of the facility; 

* * * * * * * 

w. prescribe and collect from any other Government agency, 

which applies øfor or is issued a license for a utilization facility 

designed to produce electrical or heat energy pursuant to section 103 or 104 b., or which operates any facility regulated or 

certified under section 1701 or 1702¿ to the Commission for, or 

is issued by the Commission, a license or certificate, any fee, 

charge, or price which it may require, in accordance with the 

provisions of section ø483a¿ 9701 of title 31 of the United 

States Code or any other lawø, of applicants for, or holders of, 

such licenses or certificates¿. 

* * * * * * * 

y. Exempt from the application of sections 8344 and 8468 of title 

5, United States Code, an annuitant who was formerly an employee 

of the Commission who is hired by the Commission as a consultant, 

if the Commission finds that the annuitant has a skill that is critical to the performance of the duties of the Commission. 

(z)(1) notwithstanding section 922(o), (v), and (w) of title 18, 

United States Code, or any similar provision of any State law 

or any similar rule or regulation of a State or any political subdivision of a State prohibiting the transfer or possession of a 

handgun, a rifle or shotgun, a short-barreled shotgun, a shortbarreled rifle, a machinegun, a semiautomatic assault weapon, 

ammunition for the foregoing, or a large capacity ammunition 

feeding device, authorize security personnel of licensees and certificate holders of the Commission (including employees of contractors of licensees and certificate holders) to receive, possess, 

375 

transport, import, and use 1 or more of those weapons, ammunition, or devices, if the Commission determines that— 

(A) such authorization is necessary to the discharge of the 

security personnel’s official duties; and 

(B) the security personnel— 

(i) are not otherwise prohibited from possessing or receiving a firearm under Federal or State laws pertaining to possession of firearms by certain categories 

of persons; 

(ii) have successfully completed requirements established through guidelines implementing this subsection 

for training in use of firearms and tactical maneuvers; 

(iii) are engaged in the protection of— 

(I) facilities owned or operated by a Commission 

licensee or certificate holder that are designated by 

the Commission; or 

(II) radioactive material or other property owned 

or possessed by a person that is a licensee or certificate holder of the Commission, or that is being 

transported to or from a facility owned or operated 

by such a licensee or certificate holder, and that 

has been determined by the Commission to be of 

significance to the common defense and security or 

public health and safety; and 

(iv) are discharging their official duties. 

(2) Such receipt, possession, transportation, importation, or 

use shall be subject to— 

(A) chapter 44 of title 18, United States Code, except for 

section 922(a)(4), (o), (v), and (w); 

(B) chapter 53 of title 26, United States Code, except for 

section 5844; and 

(C) a background check by the Attorney General, based 

on fingerprints and including a check of the system established under section 103(b) of the Brady Handgun Violence 

Prevention Act (18 U.S.C. 922 note) to determine whether 

the person applying for the authority is prohibited from 

possessing or receiving a firearm under Federal or State 

law. 

(3) This subsection shall become effective upon the issuance 

of guidelines by the Commission, with the approval of the Attorney General, to govern the implementation of this subsection. 

(4) In this subsection, the terms ‘‘handgun’’, ‘‘rifle’’, ‘‘shotgun’’, 

‘‘firearm’’, ‘‘ammunition’’, ‘‘machinegun’’, ‘‘semiautomatic assault weapon’’, ‘‘large capacity ammunition feeding device’’, 

‘‘short-barreled shotgun’’, and ‘‘short-barreled rifle’’ shall have 

the meanings given those terms in section 921(a) of title 18, 

United States Code. 

* * * * * * * 

SEC. 170. INDEMNIFICATION AND LIMITATION OF LIABILITY.— a. * * * 

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 

376 

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 

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 100,000 electrical kilowatts or more but not more 

than 300,000 electrical kilowatts, with a combined rated capacity of 

not more than 1,300,000 electrical kilowatts. 

377 

c. INDEMNIFICATION OF øLICENSES¿ LICENSEES by Nuclear Regulatory Commission.—The Commission shall, with respect to licenses issued between August 30, 1954, and December 31, ø2003¿ 

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 December 31, ø2003¿ 2025, the requirements of this subsection shall 

apply to any license issued for such facility subsequent to December 31, ø2003¿ 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 December 31, ø2006¿ 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 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.¿ 

378 

(2) In an agreement of indemnification entered into under paragraph (1), the Secretary— 

(A) may require the contractor to provide and maintain financial protection of such a type and in such amounts as the Secretary shall determine to be appropriate to cover public liability 

arising out of or in connection with the contractual activity; 

and 

(B) shall indemnify the persons indemnified against such liability above the amount of the financial protection required, in 

the amount of $10,000,000,000 (subject to adjustment for inflation under subsection t.), in the aggregate, for all persons indemnified in connection with the contract and for each nuclear 

incident, including such legal costs of the contractor as are approved by the Secretary. 

(3) All agreements of indemnification under which the Department of Energy (or its predecessor agencies) may be required to indemnify any person under this section shall be deemed to be amended, on the date of enactment of the Price-Anderson Amendments Act 

of 2005, to reflect the amount of indemnity for public liability and 

any applicable financial protection required of the contractor under 

this subsection. 

* * * * * * * 

(5) In the case of nuclear incidents occurring outside the United 

States, the amount of the indemnity provided by the Secretary 

under this subsection shall not exceed 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) * * * 

(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 

* * * * * * * 

(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 

379 

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; 

(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 

* * * * * * * 

(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, 

380 

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. 

u. PROHIBITION ON ASSUMPTION OF LIABILITY FOR CERTAIN FOR- EIGN INCIDENTS.—Notwithstanding this section or any other provision of law, no officer of the United States or of any department, 

agency, or instrumentality of the United States Government may 

enter into any contract or other arrangement, or into any amendment or modification of a contract or other arrangement, the purpose or effect of which would be to directly or indirectly impose liability on the United States Government, or any department, agency, or instrumentality of the United States Government, or to otherwise directly or indirectly require an indemnity by the United States 

Government, for nuclear incidents occurring in connection with the 

design, construction, or operation of a production facility or utilization facility in any country whose government has been identified by 

the Secretary of State as engaged in state sponsorship of terrorist 

activities (specifically including any country the government of 

which, as of September 11, 2001, had been determined by the Secretary of State under section 620A(a) of the Foreign Assistance Act 

of 1961 (22 U.S.C. 2371(a)), section 6(j)(1) of the Export Administration Act of 1979 (50 U.S.C. App. 2405(j)(1)), or section 40(d) of the 

Arms Export Control Act (22 U.S.C. 2780(d)) to have repeatedly provided support for acts of international terrorism). This subsection 

shall not apply to nuclear incidents occurring as a result of missions, carried out under the direction of the Secretary of Energy, the 

Secretary of Defense, or the Secretary of State, that are necessary to 

safely secure, store, transport, or remove nuclear materials for nuclear safety or nonproliferation purposes. 

v. FINANCIAL ACCOUNTABILITY.—(1) Notwithstanding subsection 

d., the Attorney General may bring an action in the appropriate 

United States district court to recover from a contractor of the Secretary (or subcontractor or supplier of such contractor) amounts 

paid by the Federal Government under an agreement of indemnification under subsection d. for public liability resulting from conduct which constitutes intentional misconduct of any corporate officer, manager, or superintendent of such contractor (or subcontractor 

or supplier of such contractor). 

(2) The Attorney General may recover under paragraph (1) an 

amount not to exceed the amount of the profit derived by the defendant from the contract. 

(3) No amount recovered from any contractor (or subcontractor or supplier of such contractor) under paragraph (1) may 

be reimbursed directly or indirectly by the Department of Energy. 

(4) Paragraph (1) shall not apply to any nonprofit entity conducting activities under contract for the Secretary. 

(5) No waiver of a defense required under this section shall 

prevent a defendant from asserting such defense in an action 

brought under this subsection. 

381 

(6) The Secretary shall, by rule, define the terms ‘‘profit’’ and 

‘‘nonprofit entity’’ for purposes of this subsection. Such rulemaking shall be completed not later than 180 days after the 

date of the enactment of this subsection. 

* * * * * * * 

SEC. 170C. SECURE TRANSFER OF NUCLEAR MATERIALS. 

a. The Nuclear Regulatory Commission shall establish a system 

to ensure that materials described in subsection b., when transferred or received in the United States by any party pursuant to an 

import or export license issued pursuant to this Act, are accompanied by a manifest describing the type and amount of materials 

being transferred or received. Each individual receiving or accompanying the transfer of such materials shall be subject to a security 

background check conducted by appropriate Federal entities. 

b. Except as otherwise provided by the Commission by regulation, 

the materials referred to in subsection a. are byproduct materials, 

source materials, special nuclear materials, high-level radioactive 

waste, spent nuclear fuel, transuranic waste, and low-level radioactive waste (as defined in section 2(16) of the Nuclear Waste Policy 

Act of 1982 (42 U.S.C. 10101(16))). 

* * * * * * * 

CHAPTER 18. ENFORCEMENT 

* * * * * * * 

SEC. 229, TRESPASS UPON COMMISSION INSTALLATIONS.— a. The Commission is authorized to issue regulations relating to the entry upon or carrying, transporting, or otherwise 

introducing or causing to be introduced any dangerous weapons, explosive, or other dangerous instrument or material likely to produce substantial injury or damage to persons or property, into or upon any facility, installation, or real property 

subject to the jurisdiction, administration, or in the custody of 

the Commission. Every such regulation of the Commission 

shall be posted conspicuously at the location involved or subject 

to the licensing authority of the Commission or to certification 

by the Commission under this Act or any other Act. 

* * * * * * * 

SEC. 234A. CIVIL MONETARY PENALTIES FOR VIOLATIONS OF DEPARTMENT OF ENERGY SAFETY REGULATIONS.—a. * * * 

b. (1) * * * 

(2) In determining the amount of any civil penalty under this 

subsection, the Secretary shall take into account the nature, circumstances, extent, and gravity of the violation or violations and, 

with respect to the violator, ability to pay, effect on ability to continue to do business, any history of prior such violations, the degree of culpability, and such other matters as justice may require. 

øIn implementing this section, the Secretary shall determine by 

rule whether nonprofit educational institutions should receive automatic remission of any penalty under this section.¿ 

* * * * * * * 

ød. The provisions of this section shall not apply to: 

382 

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 an Telegraph Company and its subsidiaries (and any subcontractors or suppliers thereto) for activities associated with Sandia National Laboratories;¿ 

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 1-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 

supplier inures to the benefit of any natural person or for-profit artificial person. 

* * * * * * * 

SEC. 236. SABOTAGE OF NUCLEAR FACILITIES OR FUEL.— a. Any person who intentionally and willfully destroys or causes 

physical damage to— 

(1) * * * 

(2) any nuclear waste østorage facility¿ storage, treatment, or 

disposal facility licensed under this Act; 

(3) any nuclear fuel for øsuch a utilization facility¿ a utilization facility licensed under this Act, or any spent nuclear fuel 

from such a facility; øor¿ 

(4) any uranium enrichment øfacility licensed¿, uranium 

conversion, or nuclear fuel fabrication facility licensed or certified by the Nuclear Regulatory Commissionø,¿; 

(5) any production, utilization, waste storage, waste treatment, waste disposal, uranium enrichment, uranium conversion, or nuclear fuel fabrication facility subject to licensing or 

certification under this Act during construction of the facility, 

if the destruction or damage caused or attempted to be caused 

could adversely affect public health and safety during the operation of the facility; 

(6) any primary facility or backup facility from which a radiological emergency preparedness alert and warning system is 

activated; or 

(7) any radioactive material or other property subject to regulation by the Nuclear Regulatory Commission that, before the 

date of the offense, the Nuclear Regulatory Commission determines, by order or regulation published in the Federal Register, 

is of significance to the public health and safety or to common 

defense and security. 

or attempts or conspires to do such an act, shall be fined not more 

than ø$10,000 or imprisoned for not more than 20 years, or both, 

and, if death results to any person, shall be imprisoned for any 

term of years or for life¿ $1,000,000 or imprisoned for up to life 

without parole. b. Any person who intentionally and willfully causes an interruption of normal operation of any such facility through the unauthorVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00382 Fmt 6659 Sfmt 6601 E:\HR\OC\HR215P1.XXX HR215P1
383 

ized use of or tampering with the machinery, components, or controls of any such facility, or attempts or conspires to do such an 

act, shall be fined not more than ø$10,000 or imprisoned for not 

more than 20 years, or both, and, if death results to any person, 

shall be imprisoned for any term of years or for life¿ $1,000,000 or 

imprisoned for up to life without parole. 

* * * * * * * 

ENERGY REORGANIZATION ACT OF 1974 

* * * * * * * 

TITLE II—NUCLEAR REGULATORY COMMISSION; NUCLEAR 

WHISTLEBLOWER PROTECTION 

* * * * * * * 

SEC. 211. (a)(1) * * * 

(2) For purposes of this section, the term ‘‘employer’’ includes— 

(A) a licensee of the Commission or of an agreement State 

under section 274 of the Atomic Energy Act of 1954 (42 U.S.C. 

2021); 

(B) an applicant for a license from the Commission or such 

an agreement State; 

(C) a contractor or subcontractor of such a licensee or applicant; øand¿ 

(D) a contractor or subcontractor of the Department of Energy that is indemnified by the Department under section 170 

d. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)), but 

such term shall not include any contractor or subcontractor 

covered by Executive Order No. 12344ø.¿; and 

(E) a contractor or subcontractor of the Commission. 

* * * * * * * 

(b)(1) * * * 

* * * * * * * 

(4) If the Secretary has not issued a final decision within 540 

days after the filing of a complaint under paragraph (1), and 

there is no showing that such delay is due to the bad faith of 

the person seeking relief under this paragraph, such person 

may bring an action at law or equity for de novo review in the 

appropriate district court of the United States, which shall have 

jurisdiction over such an action without regard to the amount 

in controversy. 

* * * * * * * 

LIMITATION ON LEGAL FEE REIMBURSEMENT

SEC. 212. The Department of Energy shall not, except as required 

under a contract entered into before the date of enactment of this 

section, reimburse any contractor or subcontractor of the Department for any legal fees or expenses incurred with respect to a complaint subsequent to— 

(1) an adverse determination on the merits with respect to 

such complaint against the contractor or subcontractor by the 

Director of the Department of Energy’s Office of Hearings and 

384 

Appeals pursuant to part 708 of title 10, Code of Federal Regulations, or by a Department of Labor Administrative Law Judge 

pursuant to section 211 of this Act; or 

(2) an adverse final judgment by any State or Federal court 

with respect to such complaint against the contractor or subcontractor for wrongful termination or retaliation due to the making of disclosures protected under chapter 12 of title 5, United 

States Code, section 211 of this Act, or any comparable State 

law, 

unless the adverse determination or final judgment is reversed upon 

further administrative or judicial review. 

* * * * * * * 

USEC PRIVATIZATION ACT 

* * * * * * * 

SEC. 3110. EMPLOYEE PROTECTIONS. 

(a) CONTRACTOR EMPLOYEES.—(1) * * * 

* * * * * * * 

(8) CONTINUITY OF BENEFITS.—Not later than 30 days after the 

date of enactment of this paragraph, the Secretary shall implement 

such actions as are necessary to ensure that any employee who— 

(A) is involved in providing infrastructure or environmental 

remediation services at the Portsmouth, Ohio, or the Paducah, 

Kentucky, Gaseous Diffusion Plant; 

(B) has been an employee of the Department of Energy’s predecessor management and integrating contractor (or its first or 

second tier subcontractors), or of the Corporation, at the Portsmouth, Ohio, or the Paducah, Kentucky, facility; and 

(C) was eligible as of April 1, 2005, to participate in or transfer into the Multiple Employer Pension Plan or the associated 

multiple employer retiree health care benefit plans, as defined 

in those plans, 

shall continue to be eligible to participate in or transfer into such 

pension or health care benefit plans. 

SEC. 3112. URANIUM TRANSFERS AND SALES. 

(a) * * * 

* * * * * * * 

ø(d) INVENTORY SALES.—(1) In addition to the transfers authorized under subsections (c) and (e), the Secretary may, from time to 

time, sell natural and low-enriched uranium (including low-enriched uranium derived from highly enriched uranium) from the 

Department of Energy’s stockpile. 

ø(2) Except as provided in subsections (b), (c), and (e), no sale 

or transfer of natural or low-enriched uranium shall be made unless— 

ø(A) the President determines that the material is not necessary for national security needs, 

ø(B) the Secretary determines that the sale of the material 

will not have an adverse material impact on the domestic uranium mining, conversion, or enrichment industry, taking into 

385 

account the sales of uranium under the Russian HEU Agreement and the Suspension Agreement, and 

ø(C) the price paid to the Secretary will not be less than the 

fair market value of the material. 

ø(e) GOVERNMENT TRANSFERS.—Notwithstanding subsection 

(d)(2), the Secretary may transfer or sell enriched uranium— 

ø(1) to a Federal agency if the material is transferred for the 

use of the receiving agency without any resale or transfer to 

another entity and the material does not meet commercial 

specifications; 

ø(2) to any person for national security purposes, as determined by the Secretary; or 

ø(3) to any State or local agency or nonprofit, charitable, or 

educational institution for use other than the generation of 

electricity for commercial use. 

ø(f) SAVINGS PROVISION.—Nothing in this subchapter shall be 

read to modify the terms of the Russian HEU Agreement.¿ 

(3) The Secretary may transfer to the Corporation, notwithstanding subsections (b)(2) and (d), natural uranium in amounts 

sufficient to fulfill the Department of Energy’s commitments under 

Article 4(B) of the Agreement between the Department and the Corporation dated June 17, 2002. 

(d) INVENTORY SALES.—(1) In addition to the transfers and sales 

authorized under subsections (b) and (c) and under paragraph (5) 

of this subsection, the United States Government may transfer or 

sell uranium in any form subject to paragraphs (2), (3), and (4). 

(2) Except as provided in subsections (b) and (c) and paragraph 

(5) of this subsection, no sale or transfer of uranium shall be made 

under this subsection by the United States Government unless— 

(A) the President determines that the material is not necessary for national security needs and the sale or transfer has 

no adverse impact on implementation of existing government-togovernment agreements; 

(B) the price paid to the appropriate Federal agency, if the 

transaction is a sale, will not be less than the fair market value 

of the material; and 

(C) the sale or transfer to commercial nuclear power end 

users is made pursuant to a contract of at least 3 years’ duration. 

(3) Except as provided in paragraph (5), the United States Government shall not make any transfer or sale of uranium in any form 

under this subsection that would cause the total amount of uranium 

transferred or sold pursuant to this subsection that is delivered for 

consumption by commercial nuclear power end users to exceed— 

(A) 3,000,000 pounds of U3 O8 equivalent in fiscal year 2005, 

2006, 2007, 2008, or 2009; 

(B) 5,000,000 pounds of U3O8 equivalent in fiscal year 2010 

or 2011; 

(C) 7,000,000 pounds of U3O8 equivalent in fiscal year 2012; 

and 

(D) 10,000,000 pounds of U3O8 equivalent in fiscal year 2013 

or any fiscal year thereafter. 

(4) Except for sales or transfers under paragraph (5), for the purposes of this subsection, the recovery of uranium from uranium 

bearing materials transferred or sold by the United States GovernVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00385 Fmt 6659 Sfmt 6603 E:\HR\OC\HR215P1.XXX HR215P1
386 

ment to the domestic uranium industry shall be the preferred method of making uranium available. The recovered uranium shall be 

counted against the annual maximum deliveries set forth in this 

section, when such uranium is sold to end users. 

(5) The United States Government may make the following sales 

and transfers: 

(A) Sales or transfers to a Federal agency if the material is 

transferred for the use of the receiving agency without any resale or transfer to another entity and the material does not meet 

commercial specifications. 

(B) Sales or transfers to any person for national security purposes, as determined by the Secretary. 

(C) Sales or transfers to any State or local agency or nonprofit, charitable, or educational institution for use other than 

the generation of electricity for commercial use. 

(D) Sales or transfers to the Department of Energy research 

reactor sales program. 

(E) Sales or transfers, at fair market value, for emergency 

purposes in the event of a disruption in supply to commercial 

nuclear power end users in the United States. 

(F) Sales or transfers, at fair market value, for use in a commercial reactor in the United States with nonstandard fuel requirements. 

(G) Sales or transfers provided for under law for use by the 

Tennessee Valley Authority in relation to the Department of Energy’s highly enriched uranium or tritium programs. 

(6) For purposes of this subsection, the term ‘‘United States Government’’ does not include the Tennessee Valley Authority. 

(e) SAVINGS PROVISION.—Nothing in this subchapter modifies the 

terms of the Russian HEU Agreement. 

(f) SERVICES.—Notwithstanding any other provision of this section, if the Secretary determines that the Corporation has failed, or 

may fail, to perform any obligation under the Agreement between 

the Department of Energy and the Corporation dated June 17, 2002, 

and as amended thereafter, which failure could result in termination of the Agreement, the Secretary shall notify Congress, in such 

a manner that affords Congress an opportunity to comment, prior 

to a determination by the Secretary whether termination, waiver, or 

modification of the Agreement is required. The Secretary is authorized to take such action as he determines necessary under the Agreement to terminate, waive, or modify provisions of the Agreement to 

achieve its purposes. 

* * * * * * * 

SEC. 3118. NATIONAL URANIUM STOCKPILE. 

(a) STOCKPILE CREATION.—The Secretary of Energy may create a 

national low-enriched uranium stockpile with the goals to— 

(1) enhance national energy security; and 

(2) reduce global proliferation threats. 

(b) SOURCE OF MATERIAL.—The Secretary shall obtain material 

for the stockpile from— 

(1) material derived from blend-down of Russian highly enriched uranium derived from weapons materials; and 

(2) domestically mined and enriched uranium. 

387 

(c) LIMITATION ON SALES OR TRANSFERS.—Sales or transfer of 

materials in the stockpile shall occur pursuant to section 3112. 

* * * * * * * 

NUCLEAR WASTE POLICY ACT OF 1982 

* * * * * * * 

TITLE I—DISPOSAL AND STORAGE OF HIGH-LEVEL RADIOACTIVE WASTE, SPENT NUCLEAR FUEL, AND LOW-LEVEL 

RADIOACTIVE WASTE 

* * * * * * * 

SUBTITLE D—LOW-LEVEL RADIOACTIVE WASTE

* * * * * * * 

SAFE DISPOSAL OF GREATER-THAN-CLASS C RADIOACTIVE WASTE

SEC. 152. (a) DESIGNATION OF RESPONSIBILITY.—The Secretary 

shall designate an Office within the Department to have the responsibility for activities needed to develop a new, or use an existing, facility for safely disposing of all low-level radioactive waste with concentrations of radionuclides that exceed the limits established by the 

Commission for Class C radioactive waste (referred to in this section as ‘‘GTCC waste’’). 

(b) COMPREHENSIVE PLAN.—The Secretary shall develop a comprehensive plan for permanent disposal of GTCC waste which includes plans for a disposal facility. This plan shall be transmitted 

to Congress in a series of reports, including the following: 

(1) REPORT ON SHORT-TERM PLAN.—Not later than 180 days 

after the date of enactment of this section, the Secretary shall 

submit to Congress a plan describing the Secretary’s operational strategy for continued recovery and storage of GTCC 

waste until a permanent disposal facility is available. 

(2) UPDATE OF 1987 REPORT.— 

(A) IN GENERAL.—Not later than 1 year after the date of 

enactment of this section, the Secretary shall submit to 

Congress an update of the Secretary’s February 1987 report 

submitted to Congress that made comprehensive recommendations for the disposal of GTCC waste. 

(B) CONTENTS.—The update under this paragraph shall 

contain— 

(i) a detailed description and identification of the 

GTCC waste that is to be disposed; 

(ii) a description of current domestic and international programs, both Federal and commercial, for 

management and disposition of GTCC waste; 

(iii) an identification of the Federal and private options and costs for the safe disposal of GTCC waste; 

(iv) an identification of the options for ensuring that, 

wherever possible, generators and users of GTCC waste 

bear all reasonable costs of waste disposal; 

(v) an identification of any new statutory authority 

required for disposal of GTCC waste; and 

388 

(vi) in coordination with the Environmental Protection Agency and the Commission, an identification of 

any new regulatory guidance needed for the disposal of 

GTCC waste. 

(3) REPORT ON COST AND SCHEDULE FOR COMPLETION OF EN- VIRONMENTAL IMPACT STATEMENT AND RECORD OF DECISION.— Not later than 180 days after the date of submission of the update required under paragraph (2), the Secretary shall submit 

to Congress a report containing an estimate of the cost and 

schedule to complete a draft and final environmental impact 

statement and to issue a record of decision for a permanent disposal facility, utilizing either a new or existing facility, for 

GTCC waste. 

* * * * * * * 

TITLE III—OTHER PROVISIONS RELATING TO RADIOACTIVE 

WASTE 

* * * * * * * 

FERNALD BYPRODUCT MATERIAL

SEC. 307. Notwithstanding any other law, the material in the concrete silos at the Fernald uranium processing facility managed on 

the date of enactment of this section by the Department shall be considered byproduct material (as defined by section 11 e.(2) of the 

Atomic Energy Act of 1954 (42 U.S.C. 2014(e)(2))). The Department 

may dispose of the material in a facility regulated by the Commission or by an Agreement State. If the Department disposes of the 

material in such a facility, the Commission or the Agreement State 

shall regulate the material as byproduct material under that Act. 

This material shall remain subject to the jurisdiction of the Department until it is received at a commercial, Commission-licensed, or 

Agreement State-licensed facility, at which time the material shall 

be subject to the health and safety requirements of the Commission 

or the Agreement State with jurisdiction over the disposal site. 

* * * * * * * 

SECTION 6101 OF THE OMNIBUS BUDGET 

RECONCILIATION ACT OF 1990 

SEC. 6101. NRC USER FEES AND ANNUAL CHARGES. 

(a) ANNUAL ASSESSMENT.— 

(1) IN GENERAL.—øExcept as provided in paragraph (3), the¿ 

The Nuclear Regulatory Commission (in this section referred to 

as the ‘‘Commission’’) shall annually assess and collect such 

fees and charges as are described in subsections (b) and (c). 

* * * * * * * 

ø(3) LAST ASSESSMENT OF ANNUAL CHARGES.—The last assessment of annual charges under subsection (c) shall be made 

not later than September 30, 2000.¿ 

* * * * * * * 

(c) ANNUAL CHARGES.— 

(1) * * * 

389 

(2) AGGREGATE AMOUNT OF CHARGES.— 

(A) IN GENERAL.—The aggregate amount of the annual 

charges collected from all licensees and certificate holders 

in a fiscal year shall equal an amount that approximates 

the percentages of the budget authority of the Commission 

for the fiscal year stated in subparagraph (B), less— 

(i) amounts collected under subsection (b) during the 

fiscal year; øand¿ 

(ii) amounts appropriated to the Commission from 

the Nuclear Waste Fund for the fiscal yearø.¿; 

(iii) amounts appropriated to the Commission for the 

fiscal year for implementation of section 3116 of the 

Ronald W. Reagan National Defense Authorization Act 

for Fiscal Year 2005; and 

(iv) amounts appropriated to the Commission for 

homeland security activities of the Commission for the 

fiscal year, except for the costs of fingerprinting and 

background checks required by section 149 of the Atomic Energy Act of 1954 (42 U.S.C. 2169) and the costs 

of conducting security inspections. 

(B) PERCENTAGES.—The percentages referred to in subparagraph (A) are— 

(i) * * * 

* * * * * * * 

ø(v) 90 percent for fiscal year 2005.¿ 

(v) 90 percent for fiscal year 2005 and each fiscal 

year thereafter. 

* * * * * * * 

SECTION 7601 OF THE CONSOLIDATED OMNIBUS 

BUDGET RECONCILIATION ACT OF 1985 

øSEC. 7601. NUCLEAR REGULATORY COMMISSION ANNUAL CHARGES. 

ø(1) IN GENERAL.—The Nuclear Regulatory Commission shall 

assess and collect annual charges from its licensees on a fiscal 

year basis, except that— 

ø(A) the maximum amount of the aggregate charges assessed pursuant to this paragraph in any fiscal year may 

not exceed an amount that, when added to other amounts 

collected by the Commission for such fiscal year under 

other provisions of law, is estimated to be equal to 33 percent of the costs incurred by the Commission with respect 

to such fiscal year, except as otherwise provided by law; 

and 

ø(B) any such charge assessed pursuant to this paragraph shall be reasonably related to the regulatory service 

provided by the Commission and shall fairly reflect the 

cost to the Commission of providing such service. 

ø(2) ESTABLISHMENT OF AMOUNT BY RULE.—The amount of 

the charges assessed pursuant to this paragraph shall be established by rule.¿ 

390 

TITLE 49, UNITED STATES CODE 

SUBTITLE VI—MOTOR VEHICLE AND DRIVER 

PROGRAMS 

* * * * * * * 

PART C—INFORMATION, STANDARDS, AND 

REQUIREMENTS 

* * * * * * * 

CHAPTER 329—AUTOMOBILE FUEL ECONOMY 

* * * * * * * 

§ 32902. Average fuel economy standards 

(a) * * * 

* * * * * * * 

ø(f) CONSIDERATIONS ON DECISIONS ON MAXIMUM FEASIBLE AVER- AGE FUEL ECONOMY.—When deciding maximum feasible average 

fuel economy under this section, the Secretary of Transportation 

shall consider technological feasibility, economic practicability, the 

effect of other motor vehicle standards of the Government on fuel 

economy, and the need of the United States to conserve energy.¿ 

(f) CONSIDERATIONS FOR DECISIONS ON MAXIMUM FEASIBLE AV- ERAGE FUEL ECONOMY.—When deciding maximum feasible average 

fuel economy under this section, the Secretary of Transportation 

shall consider the following matters: 

(1) Technological feasibility. 

(2) Economic practicability. 

(3) The effect of other motor vehicle standards of the Government on fuel economy. 

(4) The need of the United States to conserve energy. 

(5) The effects of fuel economy standards on passenger automobiles, nonpassenger automobiles, and occupant safety. 

(6) The effects of compliance with average fuel economy 

standards on levels of automobile industry employment in the 

United States. 

* * * * * * * 

§ 32905. Manufacturing incentives for alternative fuel automobiles 

(a) * * * 

(b) DUAL FUELED AUTOMOBILES.—Except as provided in subsection (d) of this section or section 32904(a)(2) of this title, for any 

model of dual fueled automobile manufactured by a manufacturer 

in model years ø1993–2004¿ 1993–2010, the Administrator of the 

Environmental Protection Agency shall measure the fuel economy 

for that model by dividing 1.0 by the sum of— 

(1) * * * 

* * * * * * * 

391 

(d) GASEOUS FUEL DUAL FUELED AUTOMOBILES.—For any model 

of gaseous fuel dual fueled automobile manufactured by a manufacturer in model years ø1993–2004¿ 1993–2010, the Administrator 

shall measure the fuel economy for that model by dividing 1.0 by 

the sum of— 

(1) * * * 

* * * * * * * 

(f) EXTENDING APPLICATION OF SUBSECTIONS (B) AND (D).—Not 

later than December 31, ø2001¿ 2007, the Secretary of Transportation shall— 

(1) extend by regulation the application of subsections (b) 

and (d) of this section for not more than 4 consecutive model 

years immediately after model year ø2004¿ 2010 and explain 

the basis on which the extension is granted; or 

* * * * * * * 

§ 32906. Maximum fuel economy increase for alternative 

fuel automobiles 

(a) MAXIMUM INCREASES.—(1)(A) For each of øthe model years 

1993–2004¿ model years 1993–2010 for each category of automobile 

(except an electric automobile), the maximum increase in average 

fuel economy for a manufacturer attributable to dual fueled automobiles is 1.2 miles a gallon. 

(B) If the application of section 32905(b) and (d) of this title is 

extended under section 32905(f) of this title, for each category of 

automobile (except an electric automobile) the maximum increase 

in average fuel economy for a manufacturer for each of øthe model 

years 2005–2008¿ model years 2011–2014 attributable to dual 

fueled automobiles is .9 mile a gallon. 

* * * * * * * 

DEPARTMENT OF ENERGY ORGANIZATION ACT 

TABLE OF CONTENTS 

Sec. 2. Definitions. 

* * * * * * * 

øSection¿ Sec. 209. Office of Science. 

* * * * * * * 

ø213. Establishment of policy for National Nuclear Security Administration. 

ø214. Establishment of security, counterintelligence, and intelligence policies. 

ø215. Office of Counterintelligence. 

ø216. Office of Intelligence.¿ 

Sec. 213. Establishment of policy for National Nuclear Security Administration. 

Sec. 214. Establishment of security, counterintelligence, and intelligence policies. 

Sec. 215. Office of Counterintelligence. 

Sec. 216. Office of Intelligence. 

Sec. 217. Office of Indian Energy Policy and Programs. 

Sec. 218. Office of Electric Transmission and Distribution. 

* * * * * * * 

TITLE II—ESTABLISHMENT OF THE DEPARTMENT 

* * * * * * * 

392 

ASSISTANT SECRETARIES

SEC. 203. (a) There shall be in the Department øsix Assistant 

Secretaries¿ 7 Assistant Secretaries, each of whom shall be appointed by the President, by and with the advice and consent of the 

Senate; who shall be compensated at the rate provided for at level 

IV of the Executive Schedule under section 5315 of title 5, United 

States Code; 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 Act. The functions which the Secretary shall assign to 

the Assistant Secretaries include, but are not limited to, the following: 

(1) * * * 

* * * * * * * 

ENERGY INFORMATION ADMINISTRATION

SEC. 205. (a) * * * 

* * * * * * * 

(m) RENEWABLE FUELS SURVEY.—(1) In order to improve the ability to evaluate the effectiveness of the Nation’s renewable fuels mandate, the Administrator shall conduct and publish the results of a 

survey of renewable fuels demand in the motor vehicle fuels market 

in the United States monthly, and in a manner designed to protect 

the confidentiality of individual responses. In conducting the survey, 

the Administrator shall collect information both on a national and 

regional basis, including each of the following: 

(A) The quantity of renewable fuels produced. 

(B) The quantity of renewable fuels blended. 

(C) The quantity of renewable fuels imported. 

(D) The quantity of renewable fuels demanded. 

(E) Market price data. 

(F) Such other analyses or evaluations as the Administrator 

finds is necessary to achieve the purposes of this section. 

(2) The Administrator shall also collect or estimate information 

both on a national and regional basis, pursuant to subparagraphs 

(A) through (F) of paragraph (1), for the 5 years prior to implementation of this subsection. 

(3) This subsection does not affect the authority of the Administrator to collect data under section 52 of the Federal Energy Administration Act of 1974 (15 U.S.C. 790a). 

* * * * * * * 

OFFICE OF INDIAN ENERGY POLICY AND PROGRAMS

SEC. 217. (a) ESTABLISHMENT.—There is established within the 

Department an Office of Indian Energy Policy and Programs (referred to in this section as the ‘‘Office’’). The Office shall be headed 

by a Director, who shall be appointed by the Secretary and compensated at a rate equal to that of level IV of the Executive Schedule 

under section 5315 of title 5, United States Code. 

(b) DUTIES OF DIRECTOR.—The Director, in accordance with Federal policies promoting Indian self-determination and the purposes 

of this Act, shall provide, direct, foster, coordinate, and implement 

393 

energy planning, education, management, conservation, and delivery programs of the Department that— 

(1) promote Indian tribal energy development, efficiency, and 

use; 

(2) reduce or stabilize energy costs; 

(3) enhance and strengthen Indian tribal energy and economic infrastructure relating to natural resource development 

and electrification; and 

(4) bring electrical power and service to Indian land and the 

homes of tribal members located on Indian lands or acquired, 

constructed, or improved (in whole or in part) with Federal 

funds. 

SEC. 218. OFFICE OF ELECTRIC TRANSMISSION AND DISTRIBUTION. 

(a) ESTABLISHMENT.—There is established within the Department 

an Office of Electric Transmission and Distribution. This Office 

shall be headed by a Director, subject to the authority of the Secretary. The Director shall be appointed by the Secretary. The Director shall be compensated at the annual rate prescribed for level IV 

of the Executive Schedule under section 5315 of title 5, United 

States Code. 

(b) DIRECTOR.—The Director shall— 

(1) coordinate and develop a comprehensive, multi-year strategy to improve the Nation’s electricity transmission and distribution; 

(2) implement or, where appropriate, coordinate the implementation of, the recommendations made in the Secretary’s May 

2002 National Transmission Grid Study; 

(3) oversee research, development, and demonstration to support Federal energy policy related to electricity transmission 

and distribution; 

(4) grant authorizations for electricity import and export pursuant to section 202(c), (d), (e), and (f) of the Federal Power Act 

(16 U.S.C. 824a); 

(5) perform other functions, assigned by the Secretary, related 

to electricity transmission and distribution; and 

(6) develop programs for workforce training in power and 

transmission engineering. 

* * * * * * * 

TITLE VI—ADMINISTRATIVE PROVISIONS 

* * * * * * * 

PART C—GENERAL ADMINISTRATIVE PROVISIONS

* * * * * * * 

CONTRACTS

SEC. 646. (a) * * * 

* * * * * * * 

(g)(1) In addition to other authorities granted to the Secretary 

under law, the Secretary may enter into other transactions on such 

terms as the Secretary may deem appropriate in furtherance of research, development, or demonstration functions vested in the Secretary. Such other transactions shall not be subject to the provisions 

394 

of section 9 of the Federal Nonnuclear Energy Research and Development Act of 1974 (42 U.S.C. 5908) or section 152 of the Atomic 

Energy Act of 1954 (42 U.S.C. 2182). 

(2)(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 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 

makes a written determination that the use of a standard contract, 

grant, or cooperative agreement for the project is not feasible or appropriate. 

(3)(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 under 

paragraph (1) to the party submitting the information; 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. 

(4) 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). Such guidelines shall be 

published in the Federal Register for public comment under rulemaking procedures of the Department. 

(5) The authority of the Secretary under this subsection may be 

delegated only to an officer of the Department who is appointed by 

the President by and with the advice and consent of the Senate and 

may not be delegated to any other person. 

(6)(A) Not later than September 31, 2006, the Comptroller General 

of the United States shall report to Congress on the Department’s 

use of the authorities granted under this section, including the ability to attract nontraditional government contractors and whether 

additional safeguards are needed with respect to the use of such authorities. 

(B) In this section, the term ‘‘nontraditional Government contractor’’ has the same meaning as the term ‘‘nontraditional defense 

contractor’’ as defined in section 845(e) of the National Defense AuVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00394 Fmt 6659 Sfmt 6603 E:\HR\OC\HR215P1.XXX HR215P1
395 

thorization Act for Fiscal Year 1994 (Public Law 103–160; 10 

U.S.C. 2371 note). 

* * * * * * * 

SECTION 5315 OF TITLE 5, UNITED STATES CODE 

§ 5315. Positions at level IV 

Level IV of the Executive Schedule applies to the following positions, for which the annual rate of basic pay shall be the rate determined with respect to such level under chapter 11 of title 2, as 

adjusted by section 5318 of this title: 

Deputy Administrator of General Services. 

* * * * * * * 

øAssistant Secretaries of Energy (6)¿ Assistant Secretaries of 

Energy (7). 

* * * * * * * 

Inspector General, Department of Energy. 

Director, Office of Electric Transmission and Distribution, 

Department of Energy. 

Director, Office of Indian Energy Policy and Programs, Department of Energy. 

* * * * * * * 

SECTION 311 OF THE ACT OF OCTOBER 27, 2000 

(Appendix B of Public Law 106–377) 

AN ACT Making appropriations for the Departments of Veterans Affairs and Housing and Urban Development, and for sundry independent agencies, boards, commissions, corporations, and offices for the fiscal year ending September 30, 2001, 

and for other purposes. 

øSEC. 311. Notwithstanding any other law, and without fiscal 

year limitation, each Federal Power Marketing Administration is 

authorized to engage in activities and solicit, undertake and review 

studies and proposals relating to the formation and operation of a 

regional transmission organization.¿ 

PUBLIC UTILITY REGULATORY POLICIES ACT OF 1978 

* * * * * * * 

TITLE I—RETAIL REGULATORY 

POLICIES FOR ELECTRIC UTILITIES 

* * * * * * * 

396 

Subtitle B—Standards For Electric 

Utilities 

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

(a) * * * 

* * * * * * * 

(d) ESTABLISHMENT.—The following Federal standards are hereby 

established: 

(1) * * * 

* * * * * * * 

(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. 

(B) The types of time-based rate schedules that may be offered under the schedule referred to in subparagraph (A) 

include, among others— 

(i) time-of-use pricing whereby electricity prices are 

set for a specific time period on an advance or forward 

basis, typically not changing more often than twice a 

year, based on the utility’s cost of generating and/or 

purchasing such electricity at the wholesale level for 

the benefit of the consumer. Prices paid for energy consumed during these periods shall be pre-established 

and known to consumers in advance of such consumption, allowing them to vary their demand and usage in 

response to such prices and manage their energy costs 

by shifting usage to a lower cost period or reducing 

their consumption overall; 

(ii) critical peak pricing whereby time-of-use prices 

are in effect except for certain peak days, when prices 

may reflect the costs of generating and/or purchasing 

electricity at the wholesale level and when consumers 

may receive additional discounts for reducing peak period energy consumption; 

(iii) real-time pricing whereby electricity prices are 

set for a specific time period on an advanced or forward basis, reflecting the utility’s cost of generating 

and/or purchasing electricity at the wholesale level, 

and may change as often as hourly; and 

(iv) credits for consumers with large loads who enter 

into pre-established peak load reduction agreements 

that reduce a utility’s planned capacity obligations. 

397 

(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). 

* * * * * * * 

SEC. 115. SPECIAL RULES FOR STANDARDS. 

(a) * * * 

(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. 

* * * * * * * 

398 

øPUBLIC UTILITY HOLDING COMPANY ACT OF 1935 

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 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00398 Fmt 6659 Sfmt 6601 E:\HR\OC\HR215P1.XXX HR215P1
399 

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 wide-spread the holding company becomes an agency 

which, unless regulated, is injurious to investors, consumers, and 

the general public; and it is hereby declared to be the policy of this 

title, in accordance with which policy all the provisions of this title 

shall be interpreted, to meet the problems and 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 

400 

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 

or operates facilities used for the distribution at retail (other 

than distribution only in enclosed portable containers, or distribution to tenants or employees of the company operating 

such facilities for their own use and not for resale) of natural 

or manufactured gas for heat, light, or power. The Commission, 

upon application, shall by order declare a company operating 

any such facilities not to be a gas utility company if the Commission finds that (A) such company is primarily engaged in 

one or more businesses other than the business of a gas utility 

company, and (B) by reason of the small amount of natural or 

manufactured gas distributed at retail by such company it is 

not necessary in the public interest or for the protection of investors or consumers that such company be considered a gas 

utility company for the purposes of this title. The filing of an 

application hereunder in good faith shall exempt such company 

(and the owner of the facilities operated by such company) 

401 

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. 

The Commission, upon application, shall by order declare that 

a company is not a holding company under clause (A) if the 

Commission finds that the applicant (i) does not, either alone 

or pursuant to an arrangement or understanding with one or 

more other persons, directly or indirectly control a public-utility or holding company either through one or more intermediary persons or by any means or device whatsoever, (ii) is 

not an intermediary company through which such control is exercised, and (iii) does not, directly or indirectly, exercise (either 

402 

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 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00402 Fmt 6659 Sfmt 6601 E:\HR\OC\HR215P1.XXX HR215P1
403 

ties, and liabilities imposed in this title upon subsidiary 

companies of holding companies. 

The Commission, upon application, shall by order declare that 

a company is not a subsidiary company of a specified holding 

company under clause (A) if the Commission finds that (i) the 

applicant is not controlled, directly or indirectly, by such holding company (either alone or pursuant to an arrangement or 

understanding with one or more other persons) either through 

one or more intermediary persons or by any means or device 

whatsoever, (ii) the applicant is not an intermediary company 

through which such control of another company is exercised, 

and (iii) the management or policies of the applicant are not 

subject to a controlling influence, directly or indirectly, by such 

holding company (either alone or pursuant to an arrangement 

or understanding with one or more other persons) so as to 

make it necessary or appropriate in the public interest or for 

the protection of investors or consumers that the applicant be 

subject to the obligations, duties, and liabilities imposed in this 

title upon subsidiary companies of holding companies. The filing of an application hereunder in good faith shall exempt the 

applicant from any obligation, duty, or liability imposed in this 

title upon the applicant as a subsidiary company of such specified holding company until the Commission has acted upon 

such application. Within a reasonable time after the receipt of 

any application hereunder, the Commission shall enter an 

order granting, or, after notice and opportunity for hearing, denying or otherwise disposing of, such application. As a condition to the entry of, and as a part of, any order granting such 

application, the Commission may require the applicant to 

apply periodically for a renewal of such order and to file such 

periodic or special reports regarding the affiliations or intercorporate relationships of the applicant as the Commission may 

find necessary or appropriate to enable it to determine whether 

in the case of the applicant the conditions specified in clauses 

(i), (ii), and (iii) are satisfied during the period for which such 

order is effective. The Commission, upon its own motion or 

upon application, shall revoke the order declaring such company not to be a subsidiary company whenever in its judgment 

any condition specified in clause (i), (ii), or (iii) is not satisfied 

in the case of such company, or modify the terms of such order 

whenever in its judgment such modification is necessary to ensure that in the case of such company the conditions specified 

in clauses (i), (ii), and (iii) are satisfied during the period for 

which such order is effective. Any action of the Commission 

under the preceding sentence shall be by order. Any application under this paragraph may be made by the holding company or the company in respect of which the order is to be entered, but as used in this paragraph the term ‘‘applicant’’ 

means only the company in respect of which the order is to be 

entered. 

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 comVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00403 Fmt 6659 Sfmt 6601 E:\HR\OC\HR215P1.XXX HR215P1
404 

pany thereof is a member company (as defined in paragraph 

(14) of this subsection). 

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’slength 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 

as a 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 

405 

to cast said specified per centum of the aggregate votes which 

the holders of all the outstanding voting securities of such company are entitled to cast in the direction or management of the 

affairs of such company. 

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 part 

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 publicutility 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 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00405 Fmt 6659 Sfmt 6601 E:\HR\OC\HR215P1.XXX HR215P1
406 

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 

407 

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 

a 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 

408 

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. 

øTRANSACTIONS 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 

409 

under section 5 on or before December 1, 1935 or the thirtieth day 

after such company becomes a holding company, whichever date is 

later. 

øREGISTRATION 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 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00409 Fmt 6659 Sfmt 6601 E:\HR\OC\HR215P1.XXX HR215P1
410 

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. 

øUNLAWFUL 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 

411 

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. 

As 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 

412 

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 

Commission by rules and regulations or order authorizes as 

413 

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 

the 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 unlawful for a registered holding company, or any subsidiary comVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00413 Fmt 6659 Sfmt 9001 E:\HR\OC\HR215P1.XXX HR215P1
414 

pany 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; 

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 

ø(3) such commercial paper and other securities, within such 

limitations, as the Commission may by rules and regulations 

415 

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 agreements, 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 relations 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; 

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 

416 

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 any 

business, such information concerning such business and the 

interest to be acquired, and the consideration to be paid, as the 

Commission may by rules and regulations or order prescribe as 

necessary or appropriate in the public interest or for the protection of investors or consumers. 

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 publicutility 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 

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. 

417 

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 practicable 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) 

as to impair the advantages of localized management, efficient operation, or the effectiveness of regulation. 

The Commission may permit as reasonably incidental, or economically necessary or appropriate to the operations of one or 

418 

more integrated public-utility systems the retention of an interest in any business (other than the business of a public-utility company as such) which the Commission shall find necessary or appropriate in the public interest or for the protection of investors or consumers and not detrimental to the proper functioning of such system or systems. 

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 inequitably distribute voting power among 

security holders, of such holding-company system. In carrying 

out the provisions of this paragraph the Commission shall require each registered holding company (and any company in 

the same holding-company system with such holding company) 

to take such action as the Commission shall find necessary in 

order that such holding company shall cease to be a holding 

company with respect to each of its subsidiary companies 

which itself has a subsidiary company which is a holding company. Except for the purpose of fairly and equitably distributing voting power among the security holders of such company, nothing in this paragraph shall authorize the Commission to require any change in the corporate structure or existence of any company which is not a holding company, or of any 

company whose principal business is that of a public-utility 

company. 

The Commission may by order revoke or modify any order previously made under this subsection, if, after notice and opportunity 

for hearing, it finds that the conditions upon which the order was 

predicated do not exist. Any order made under this subsection shall 

be subject to judicial review as provided in section 24. 

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 

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 

419 

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 

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 

420 

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 interestate commerce, or otherwise, any 

proxy, consent, authorization, power of attorney, deposit, or dissent 

in respect of any reorganization plan of a registered holding company or any subsidiary company thereof under this section, or otherwise, or in respect of any plan under this section for the divestment of control, securities, or other assets, or for the dissolution of 

any registered holding company or any subsidiary company thereof, 

unless— 

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 

to receive any extension of credit or indemnity, from any publicutility 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 

421 

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 

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. 

422 

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. 

The term ‘‘contribution’’ as used in this subsection includes any 

gift, subscription, loan, advance, or deposit of money or anything 

of value, and includes any contract, agreement, or promise, whether or not legally enforceable, to make a contribution. 

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 

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. 

423 

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. 

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 reveVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00423 Fmt 6659 Sfmt 9001 E:\HR\OC\HR215P1.XXX HR215P1
424 

nues 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 

take any step in the performance of any service, sales, or construction contract with any public-utility company, or for any such person, by use of the mails or any means or instrumentality of interstate commerce, or otherwise, to enter into or take any step in the 

performance of any service, sales, or construction contract with any 

public-utility company engaged in interstate commerce, or with any 

registered holding company or any subsidiary company of a registered holding company, in contravention of such rules and regulations or orders regarding reports, accounts, costs, maintenance of 

competitive conditions, disclosure of interest, duration of contracts, 

425 

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 

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. 

426 

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 every affiliate of a mutual service company as to any transaction of such affiliate which 

is subject to any provision of this title or any rule, regulation, or 

order thereunder, shall make, keep, and preserve for such periods, 

such accounts, cost-accounting procedures, correspondence, memoranda, papers, books, and other records, as the Commission deems 

necessary or appropriate in the public interest or for the protection 

of investors or consumers or for the enforcement of the provisions 

of this title or the rules, regulations, or orders thereunder. 

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, 

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 

427 

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 

1933, as amended, or the Securities Exchange Act of 1934, or otherwise at law or in equity; but no person permitted to maintain a 

suit for damages under the provisions of this title shall recover, 

through satisfaction of judgment in one or more actions, a total 

amount in excess of his actual damages on account of the act complained of. 

428 

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 

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 

429 

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 

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 

430 

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 

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 

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431 

ing 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 

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. 

432 

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 

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 

433 

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 

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 

434 

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, 

or offering for sale any security of a registered holding company or 

subsidiary company thereof, to represent or imply in any manner 

whatsoever that such security has been guaranteed, sponsored, or 

recommended for investment by the United States or any agency 

or officer thereof. 

øPENALTIES

øSEC. 29. Any person who willfully violates any provision of this 

title or any rule, regulation, or order thereunder (other than an 

order of the Commission under subsection (b), (d), (e), or (f) of section 11), or any person who willfully makes any statement or entry 

in an application, report, document, account, or record filed or kept 

or required to be filed or kept under the provisions of this title or 

any rule, regulation, or order thereunder, knowing such statement 

or entry to be false or misleading in any material respect, or any 

person who willfully destroys (except after such time as may be 

prescribed under any rules or regulations under this title), mutilates, alters, or by any means, or device falsifies any account, corVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00434 Fmt 6659 Sfmt 9001 E:\HR\OC\HR215P1.XXX HR215P1
435 

respondence, 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 

436 

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 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00436 Fmt 6659 Sfmt 9001 E:\HR\OC\HR215P1.XXX HR215P1
437 

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 COMPANIES.—Notwithstanding any provision of this Act and the Commission’s jurisdiction as provided under subsection (h) of this section, 

a registered holding company shall be permitted (without the need 

to apply for, or receive, approval from the Commission, and otherwise without condition under this Act) to acquire and hold the securities, or an interest in the business, of one or more exempt 

wholesale generators. 

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 

438 

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 

section, or an order issued by the Commission under this Act after 

439 

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. 

ø(l) RECIPROCAL ARRANGEMENTS PROHIBITED.—Reciprocal arrangements among companies that are not affiliates or associate 

440 

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 (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, determined that ratepayers of a 

public utility company are adequately insulated from the effects of diversification and the diversification would not impair 

the ability of the State commission to regulate effectively the 

operations of such company. 

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 

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. 

441 

ø(c) REGISTERED HOLDING COMPANIES.— ø(1) OWNERSHIP OF FOREIGN UTILITY COMPANIES BY REG- ISTERED 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 this 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 

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 

442 

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 public 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 public 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 

(f)(1); and 

ø(C) the transaction (aggregated with all other then-outstanding transactions exempted under this subsection) 

does not exceed 5 per centum of the then-outstanding total 

capitalization of the public utility. 

ø(g) PROHIBITION ON PLEDGING OR ENCUMBERING UTILITY AS- SETS.—No public utility company that is subject to the jurisdiction 

of a State commission with respect to its retail electric or gas rates 

shall pledge or encumber any utility assets or utility assets of any 

443 

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 business 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 

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. 

444 

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. 

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 

445 

information as the Commission, by rule, may prescribe concerning— 

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 any 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 

public utility company or assets of any subsidiary company thereof 

for the 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— 

446 

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 

products— 

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. 

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. 

447 

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. 

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. 

448 

øSHORT TITLE

øSEC. 36. This title may be cited as the ‘‘Public Utility Holding 

Company Act of 1935’’.¿ 

THE CLEAN AIR ACT 

* * * * * * * 

TITLE I—AIR POLLUTION PREVENTION AND CONTROL 

* * * * * * * 

PART D—PLAN REQUIREMENTS FOR NONATTAINMENT AREAS

* * * * * * * 

Subpart 2—Additional Provisions for Ozone 

Nonattainment Areas 

* * * * * * * 

SEC. 181. CLASSIFICATIONS AND ATTAINMENT DATES. 

(a) * * * 

* * * * * * * 

(d) EXTENDED ATTAINMENT DATE FOR CERTAIN DOWNWIND

AREAS.— 

(1) DEFINITIONS.—(A) The term ‘‘upwind area’’ means an 

area that— 

(i) significantly contributes to nonattainment in another 

area, hereinafter referred to as a ‘‘downwind area’’; and 

(ii) is either— 

(I) a nonattainment area with a later attainment 

date than the downwind area, or 

(II) an area in another State that the Administrator 

has found to be significantly contributing to nonattainment in the downwind area in violation of section 

110(a)(2)(D) and for which the Administrator has established requirements through notice and comment 

rulemaking to eliminate the emissions causing such 

significant contribution. 

(B) The term ‘‘current classification’’ means the classification 

of a downwind area under this section at the time of the determination under paragraph (2). 

(2) EXTENSION.—If the Administrator— 

(A) determines that any area is a downwind area with 

respect to a particular national ambient air quality standard for ozone; and 

(B) approves a plan revision for such area as provided in 

paragraph (3) prior to a reclassification under subsection 

(b)(2)(A), 

the Administrator, in lieu of such reclassification, shall extend 

the attainment date for such downwind area for such standard 

in accordance with paragraph (5). 

(3) REQUIRED APPROVAL.—In order to extend the attainment 

date for a downwind area under this subsection, the AdminisVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00448 Fmt 6659 Sfmt 6603 E:\HR\OC\HR215P1.XXX HR215P1
449 

trator must approve a revision of the applicable implementation 

plan for the downwind area for such standard that— 

(A) complies with all requirements of this Act applicable 

under the current classification of the downwind area, including any requirements applicable to the area under section 172(c) for such standard; and 

(B) includes any additional measures needed to demonstrate attainment by the extended attainment date provided under this subsection. 

(4) PRIOR RECLASSIFICATION DETERMINATION.—If, no more 

than 18 months prior to the date of enactment of this subsection, the Administrator made a reclassification determination under subsection (b)(2)(A) for any downwind area, and the 

Administrator approves the plan revision referred to in paragraph (3) for such area within 12 months after the date of enactment of this subsection, the reclassification shall be withdrawn and the attainment date extended in accordance with 

paragraph (5) upon such approval. The Administrator shall 

also withdraw a reclassification determination under subsection 

(b)(2)(A) made after the date of enactment of this subsection 

and extend the attainment date in accordance with paragraph 

(5) if the Administrator approves the plan revision referred to 

in paragraph (3) within 12 months of the date the reclassification determination under subsection (b)(2)(A) is issued. In such 

instances the ‘current classification’ used for evaluating the revision of the applicable implementation plan under paragraph 

(3) shall be the classification of the downwind area under this 

section immediately prior to such reclassification. 

(5) EXTENDED DATE.—The attainment date extended under 

this subsection shall provide for attainment of such national 

ambient air quality standard for ozone in the downwind area 

as expeditiously as practicable but no later than the date on 

which the last reductions in pollution transport necessary for 

attainment in the downwind area are required to be achieved 

by the upwind area or areas. 

* * * * * * * 

TITLE II—EMISSION STANDARDS FOR MOVING SOURCES 

PART A—MOTOR VEHICLE EMISSION AND FUEL STANDARDS

* * * * * * * 

REGULATION OF FUELS

SEC. 211. (a) * * * 

* * * * * * * 

(c)(1) * * * 

* * * * * * * 

(4)(A) * * * 

* * * * * * * 

(C)(i) A State may prescribe and enforce, for purposes of motor 

vehicle emission control, a control or prohibition respecting the use 

of a fuel or fuel additive in a motor vehicle or motor vehicle engine 

450 

if an applicable implementation plan for such State under section 

110 so provides. The Administrator may approve such provision in 

an implementation plan, or promulgate an implementation plan 

containing such a provision, only if he finds that the State control 

or prohibition is necessary to achieve the national primary or secondary ambient air quality standard which the plan implements. 

The Administrator may find that a State control or prohibition is 

necessary to achieve that standard if no other measures that would 

bring about timely attainment exist, or if other measures exist and 

are technically possible to implement, but are unreasonable or impracticable. The Administrator may make a finding of necessity 

under this subparagraph even if the plan for the area does not contain an approved demonstration of timely attainment. The Administrator shall not approve a control or prohibition respecting the use 

of a fuel or fuel additive under this subparagraph unless the Administrator, after consultation with the Secretary of Energy, publishes in the Federal Register a finding that, in the Administrator’s 

judgment, such control or prohibition will not cause fuel supply or 

distribution interruptions or have a significant adverse impact on 

fuel producibility in the affected area or contiguous areas. 

(ii) The Administrator may temporarily waive a control or prohibition respecting the use of a fuel or fuel additive required or regulated by the Administrator pursuant to subsection (c), (h), (i), (k), 

or (m) of this section or prescribed in an applicable implementation 

plan under section 110 approved by the Administrator under clause 

(i) of this subparagraph if, after consultation with, and concurrence 

by, the Secretary of Energy, the Administrator determines that— 

(I) extreme and unusual fuel or fuel additive supply circumstances exist in a State or region of the Nation which prevent the distribution of an adequate supply of the fuel or fuel 

additive to consumers; 

(II) such extreme and unusual fuel and fuel additive supply 

circumstances are the result of a natural disaster, an Act of 

God, a pipeline or refinery equipment failure, or another event 

that could not reasonably have been foreseen or prevented and 

not the lack of prudent planning on the part of the suppliers of 

the fuel or fuel additive to such State or region; and 

(III) it is in the public interest to grant the waiver (for example, when a waiver is necessary to meet projected temporary 

shortfalls in the supply of the fuel or fuel additive in a State 

or region of the Nation which cannot otherwise be compensated 

for). 

(iii) If the Administrator makes the determinations required 

under clause (ii), such a temporary extreme and unusual fuel and 

fuel additive supply circumstances waiver shall be permitted only 

if— 

(I) the waiver applies to the smallest geographic area necessary to address the extreme and unusual fuel and fuel additive supply circumstances; 

(II) the waiver is effective for a period of 20 calendar days or, 

if the Administrator determines that a shorter waiver period is 

adequate, for the shortest practicable time period necessary to 

permit the correction of the extreme and unusual fuel and fuel 

additive supply circumstances and to mitigate impact on air 

quality; 

451 

(III) the waiver permits a transitional period, the exact duration of which shall be determined by the Administrator, after 

the termination of the temporary waiver to permit wholesalers 

and retailers to blend down their wholesale and retail inventory; 

(IV) the waiver applies to all persons in the motor fuel distribution system; and 

(V) the Administrator has given public notice to all parties in 

the motor fuel distribution system, and local and State regulators, in the State or region to be covered by the waiver. 

The term ‘‘motor fuel distribution system’’ as used in this clause 

shall be defined by the Administrator through rulemaking. 

(iv) Within 180 days of the date of enactment of this clause, the 

Administrator shall promulgate regulations to implement clauses 

(ii) and (iii). 

(v) Nothing in this subparagraph shall— 

(I) limit or otherwise affect the application of any other waiver authority of the Administrator pursuant to this section or 

pursuant to a regulation promulgated pursuant to this section; 

and 

(II) subject any State or person to an enforcement action, penalties, or liability solely arising from actions taken pursuant to 

the issuance of a waiver under this subparagraph. 

(vi)(I) The Administrator shall have no authority, when considering a State implementation plan or a State implementation plan 

revision, to approve under this paragraph any fuel included in such 

plan or revision if the effect of such approval increases the total 

number of fuels approved under this paragraph as of September 1, 

2004, in all State implementation plans. 

(II) The Administrator, in consultation with the Secretary of Energy, shall determine the total number of fuels approved under this 

paragraph as of September 1, 2004, in all State implementation 

plans and shall publish a list of such fuels, including the states and 

Petroleum Administration for Defense District in which they are 

used, in the Federal Register for public review and comment no 

later than 90 days after enactment. 

(III) The Administrator shall remove a fuel from the list published under subclause (II) if a fuel ceases to be included in a State 

implementation plan or if a fuel in a State implementation plan is 

identical to a Federal fuel formulation implemented by the Administrator, but the Administrator shall not reduce the total number of 

fuels authorized under the list published under subclause (II). 

(IV) Subclause (I) shall not limit the Administrator’s authority to 

approve a control or prohibition respecting any new fuel under this 

paragraph in a State implementation plan or revision to a State implementation plan if such new fuel: 

(aa) completely replaces a fuel on the list published under 

subclause (II); or 

(bb) does not increase the total number of fuels on the list 

published under subclause (II) as of September 1, 2004. 

In the event that the total number of fuels on the list published 

under subclause (II) at the time of the Administrator’s consideration 

of a control or prohibition respecting a new fuel is lower than the 

total number of fuels on such list as of September 1, 2004, the Administrator may approve a control or prohibition respecting a new 

452 

fuel under this subclause if the Administrator, after consultation 

with the Secretary of Energy, publishes in the Federal Register after 

notice and comment a finding that, in the Administrator’s judgment, such control or prohibition respecting a new fuel will not 

cause fuel supply or distribution interruptions or have a significant 

adverse impact on fuel producibility in the affected area or contiguous areas. 

(V) The Administrator shall have no authority under this paragraph, when considering any particular State’s implementation 

plan or a revision to that State’s implementation plan, to approve 

any fuel unless that fuel was, as of the date of such consideration, 

approved in at least one State implementation plan in the applicable Petroleum Administration for Defense District. However, the Administrator may approve as part of a State implementation plan or 

State implementation plan revision a fuel with a summertime Reid 

Vapor Pressure of 7.0 psi. In no event shall such approval by the 

Administrator cause an increase in the total number of fuels on the 

list published under subclause (II). 

(VI) Nothing in this clause shall be construed to have any effect 

regarding any available authority of States to require the use of any 

fuel additive registered in accordance with subsection (b), including 

any fuel additive registered in accordance with subsection (b) after 

the enactment of this subclause. 

(5) MTBE MERCHANT PRODUCER CONVERSION ASSISTANCE.— 

(A) IN GENERAL.— 

(i) GRANTS.—The Secretary of Energy, in consultation with the Administrator, may make grants to merchant producers of methyl tertiary butyl ether (hereinafter in this subsection referred to as ‘‘MTBE’’) in the 

United States to assist the producers in the conversion 

of eligible production facilities described in subparagraph (C) to the production of iso-octane, iso-octene, 

alkylates, or renewable fuels. 

(ii) DETERMINATION.—The Administrator, in consultation with the Secretary of Energy, may determine 

that transition assistance for the production of iso-octane, iso-octene, alkylates, or renewable fuels is inconsistent with the provisions of subparagraph (B) and, on 

that basis, may deny applications for grants authorized 

by this paragraph. 

(B) FURTHER GRANTS.—The Secretary of Energy, in consultation with the Administrator, may also further make 

grants to merchant producers of MTBE in the United 

States to assist the producers in the conversion of eligible 

production facilities described in subparagraph (C) to the 

production of such other fuel additives (unless the Administrator determines that such fuel additives may reasonably 

be anticipated to endanger public health or the environment) that, consistent with this subsection— 

(i) have been registered and have been tested or are 

being tested in accordance with the requirements of 

this section; and 

(ii) will contribute to replacing gasoline volumes lost 

as a result of amendments made to subsection (k) of 

453 

this section by section 1504(a) and 1506 of the Energy 

Policy Act of 2005. 

(C) ELIGIBLE PRODUCTION FACILITIES.—A production facility shall be eligible to receive a grant under this paragraph if the production facility— 

(i) is located in the United States; and 

(ii) produced MTBE for consumption before April 1, 

2003 and ceased production at any time after the date 

of enactment of this paragraph. 

(D) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to carry out this paragraph 

$250,000,000 for each of fiscal years 2005 through 2012, to 

remain available until expended. 

(d) PENALTIES AND INJUNCTIONS.— (1) CIVIL PENALTIES.—Any person who violates subsection 

(a), (f), (g), (k), (l), (m), øor (n)¿ (n), or (o) of this section or the 

regulations prescribed under subsection (c), (h), (i), (k), (l), (m), 

øor (n)¿ (n), or (o) of this section or who fails to furnish any 

information or conduct any tests required by the Administrator 

under subsection (b) of this section shall be liable to the United 

States for a civil penalty of not more than the sum of $25,000 

for every day of such violation and the amount of economic 

benefit or savings resulting from the violation. Any violation 

with respect to a regulation prescribed under subsection (c), 

(k), (l), øor (m)¿ (m), or (o) of this section which establishes a 

regulatory standard based upon a multiday averaging period 

shall constitute a separate day of violation for each and every 

day in the averaging period. Civil penalties shall be assessed 

in accordance with subsections (b) and (c) of section 205. 

(2) INJUNCTIVE AUTHORITY.—The district courts of the United 

States shall have jurisdiction to restrain violations of subsections (a), (f), (g), (k), (l), (m), øand (n)¿ (n), and (o) of this 

section and of the regulations prescribed under subsections (c), 

(h), (i), (k), (l), (m), øand (n)¿ (n), and (o) of this section, to 

award other appropriate relief, and to compel the furnishing of 

information and the conduct of tests required by the Administrator under subsection (b) of this section. Actions to restrain 

such violations and compel such actions shall be brought by 

and in the name of the United States. In any such action, subpoenas for witnesses who are required to attend a district court 

in any district may run into any other district. 

* * * * * * * 

(k) REFORMULATED GASOLINE FOR CONVENTIONAL VEHICLES.— (1) EPA REGULATIONS.—øWithin 1 year after the enactment 

of the Clean Air Act Amendments of 1990,¿ 

(A) IN GENERAL.—Not later than November 15, 1991, the 

Administrator shall promulgate regulations under this section establishing requirements for reformulated gasoline to 

be used in gasoline-fueled vehicles in specified nonattainment areas. Such regulations shall require the greatest reduction in emissions of ozone forming volatile organic compounds (during the high ozone season) and emissions of 

toxic air pollutants (during the entire year) achievable 

through the reformulation of conventional gasoline, taking 

into consideration the cost of achieving such emission reVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00453 Fmt 6659 Sfmt 6601 E:\HR\OC\HR215P1.XXX HR215P1
454 

ductions, any nonair-quality and other air-quality related 

health and environmental impacts and energy requirements. 

(B) MAINTENANCE OF TOXIC AIR POLLUTANT EMISSIONS

REDUCTIONS FROM REFORMULATED GASOLINE.— 

(i) DEFINITIONS.—In this subparagraph the term 

‘‘PADD’’ means a Petroleum Administration for Defense District. 

(ii) REGULATIONS REGARDING EMISSIONS OF TOXIC

AIR POLLUTANTS.—Not later than 270 days after the 

date of enactment of this subparagraph the Administrator shall establish, for each refinery or importer, 

standards for toxic air pollutants from use of the reformulated gasoline produced or distributed by the refinery or importer that maintain the reduction of the average annual aggregate emissions of toxic air pollutants 

for reformulated gasoline produced or distributed by 

the refinery or importer during calendar years 1999 

and 2000, determined on the basis of data collected by 

the Administrator with respect to the refinery or importer. 

(iii) STANDARDS APPLICABLE TO SPECIFIC REFINERIES

OR IMPORTERS.— 

(I) APPLICABILITY OF STANDARDS.—For any calendar year, the standards applicable to a refinery 

or importer under clause (ii) shall apply to the 

quantity of gasoline produced or distributed by the 

refinery or importer in the calendar year only to 

the extent that the quantity is less than or equal to 

the average annual quantity of reformulated gasoline produced or distributed by the refinery or importer during calendar years 1999 and 2000. 

(II) APPLICABILITY OF OTHER STANDARDS.—For 

any calendar year, the quantity of gasoline produced or distributed by a refinery or importer that 

is in excess of the quantity subject to subclause (I) 

shall be subject to standards for toxic air pollutants promulgated under subparagraph (A) and 

paragraph (3)(B). 

(iv) CREDIT PROGRAM.—The Administrator shall provide for the granting and use of credits for emissions 

of toxic air pollutants in the same manner as provided 

in paragraph (7). 

(v) REGIONAL PROTECTION OF TOXICS REDUCTION

BASELINES.— 

(I) IN GENERAL.—Not later than 60 days after 

the date of enactment of this subparagraph, and 

not later than April 1 of each calendar year that 

begins after that date of enactment, the Administrator shall publish in the Federal Register a report that specifies, with respect to the previous calendar year— 

(aa) the quantity of reformulated gasoline 

produced that is in excess of the average anVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00454 Fmt 6659 Sfmt 6603 E:\HR\OC\HR215P1.XXX HR215P1
455 

nual quantity of reformulated gasoline produced in 1999 and 2000; and 

(bb) the reduction of the average annual aggregate emissions of toxic air pollutants in 

each PADD, based on retail survey data or 

data from other appropriate sources. 

(II) EFFECT OF FAILURE TO MAINTAIN AGGREGATE

TOXICS REDUCTIONS.—If, in any calendar year, the 

reduction of the average annual aggregate emissions of toxic air pollutants in a PADD fails to 

meet or exceed the reduction of the average annual 

aggregate emissions of toxic air pollutants in the 

PADD in calendar years 1999 and 2000, the Administrator, not later than 90 days after the date 

of publication of the report for the calendar year 

under subclause (I), shall— 

(aa) identify, to the maximum extent practicable, the reasons for the failure, including 

the sources, volumes, and characteristics of reformulated gasoline that contributed to the 

failure; and 

(bb) promulgate revisions to the regulations 

promulgated under clause (ii), to take effect 

not earlier than 180 days but not later than 

270 days after the date of promulgation, to 

provide that, notwithstanding clause (iii)(II), 

all reformulated gasoline produced or distributed at each refinery or importer shall meet 

the standards applicable under clause (ii) not 

later than April 1 of the year following the report in subclause (II) and for subsequent 

years. 

(vi) REGULATIONS TO CONTROL HAZARDOUS AIR POL- LUTANTS FROM MOTOR VEHICLES AND MOTOR VEHICLE

FUELS.—Not later than July 1, 2005, the Administrator 

shall promulgate final regulations to control hazardous 

air pollutants from motor vehicles and motor vehicle 

fuels, as provided for in section 80.1045 of title 40, 

Code of Federal Regulations (as in effect on the date of 

enactment of this subparagraph). 

(2) GENERAL REQUIREMENTS.—The regulations referred to in 

paragraph (1) shall require that reformulated gasoline comply 

with paragraph (3) and with each of the following requirements (subject to paragraph (7)): 

(A) NOx EMISSIONS.—The emissions of oxides of nitrogen 

(NOx) from baseline vehicles when using the reformulated 

gasoline shall be no greater than the level of such emissions from such vehicles when using baseline gasoline. If 

the Administrator determines that compliance with the 

limitation on emissions of oxides of nitrogen under the preceding sentence is technically infeasible, considering the 

other requirements applicable under this subsection to 

such gasoline, the Administrator may, as appropriate to 

ensure compliance with this subparagraph, adjust (or 

waive entirely), any other requirements of this paragraph 

456 

ø(including the oxygen content requirement contained in 

subparagraph (B))¿ or any requirements applicable under 

paragraph (3)(A). 

ø(B) OXYGEN CONTENT.—The oxygen content of the gasoline shall equal or exceed 2.0 percent by weight (subject to 

a testing tolerance established by the Administrator) except as otherwise required by this Act. The Administrator 

may waive, in whole or in part, the application of this subparagraph for any ozone nonattainment area upon a determination by the Administrator that compliance with such 

requirement would prevent or interfere with the attainment by the area of a national primary ambient air quality 

standard.¿ 

ø(C)¿ (B) BENZENE CONTENT.—The benzene content of 

the gasoline shall not exceed 1.0 percent by volume. 

ø(D)¿ (C) HEAVY METALS.—The gasoline shall have no 

heavy metals, including lead or manganese. The Administrator may waive the prohibition contained in this subparagraph for a heavy metal (other than lead) if the Administrator determines that addition of the heavy metal to 

the gasoline will not increase, on an aggregate mass or 

cancer-risk basis, toxic air pollutant emissions from motor 

vehicles. 

(3) MORE STRINGENT OF FORMULA OR PERFORMANCE STANDARDS.—The regulations referred to in paragraph (1) shall require compliance with the more stringent of either the requirements set forth in subparagraph (A) or the requirements of 

subparagraph (B) of this paragraph. For purposes of determining the more stringent provision, clause (i) and clause (ii) 

of subparagraph (B) shall be considered independently. 

(A) FORMULA.— (i) * * * 

* * * * * * * 

ø(v) OXYGEN CONTENT.—The oxygen content of the 

reformulated gasoline shall equal or exceed 2.0 percent by weight (subject to a testing tolerance established by the Administrator) except as otherwise required by this Act.¿ 

* * * * * * * 

(7) CREDITS.—(A) The regulations promulgated under this 

subsection shall provide for the granting of an appropriate 

amount of credits to a person who refines, blends, or imports 

and certifies a gasoline or slate of gasoline that— 

ø(i) has an oxygen content (by weight) that exceeds the 

minimum oxygen content specified in paragraph (2);¿ 

ø(ii)¿ (i) has an aromatic hydrocarbon content (by volume) that is less than the maximum aromatic hydrocarbon 

content required to comply with paragraph (3); or 

ø(iii)¿ (ii) has a benzene content (by volume) that is less 

than the maximum benzene content specified in paragraph 

(2). 

* * * * * * * 

457 

(C) The regulations promulgated under subparagraphs (A) 

and (B) shall ensure the enforcement of the requirements for 

the issuance, application, and transfer of the credits. Such regulations shall prohibit the granting or transfer of such credits 

for use with respect to any gasoline in a nonattainment area, 

to the extent the use of such credits would result in any of the 

following: 

(i) * * * 

ø(ii) An average gasoline oxygen content (by weight) for 

the nonattainment area (taking into account all gasoline 

sold for use in conventional gasoline-fueled vehicles in the 

nonattainment area) lower than the average gasoline oxygen content (by weight) that would occur in the absence of 

using any such credits.¿ 

ø(iii)¿ (ii) An average benzene content (by volume) for 

the nonattainment area (taking into account all gasoline 

sold for use in conventional gasoline-fueled vehicles in the 

nonattainment area) higher than the average benzene content (by volume) that would occur in the absence of using 

any such credits. 

* * * * * * * 

(o) RENEWABLE FUEL PROGRAM.— (1) DEFINITIONS.—In this section: 

(A) ETHANOL.—(i) The term ‘‘cellulosic biomass ethanol’’ 

means ethanol derived from any lignocellulosic or 

hemicellulosic matter that is available on a renewable or 

recurring basis, including— 

(I) dedicated energy crops and trees; 

(II) wood and wood residues; 

(III) plants; 

(IV) grasses; 

(V) agricultural residues; and 

(VI) fibers. 

(ii) The term ‘‘waste derived ethanol’’ means ethanol derived from— 

(I) animal wastes, including poultry fats and poultry 

wastes, and other waste materials; or 

(II) municipal solid waste. 

(B) RENEWABLE FUEL.— (i) IN GENERAL.—The term ‘‘renewable fuel’’ means 

motor vehicle fuel that— 

(I)(aa) is produced from grain, starch, oilseeds, 

or other biomass; or 

(bb) is natural gas produced from a biogas 

source, including a landfill, sewage waste treatment plant, feedlot, or other place where decaying 

organic material is found; and 

(II) is used to replace or reduce the quantity of 

fossil fuel present in a fuel mixture used to operate 

a motor vehicle. 

(ii) INCLUSION.—The term ‘‘renewable fuel’’ includes 

cellulosic biomass ethanol, waste derived ethanol, and 

biodiesel (as defined in section 312(f) of the Energy Policy Act of 1992 (42 U.S.C. 13220(f)) and any blending 

components derived from renewable fuel (provided that 

458 

only the renewable fuel portion of any such blending 

component shall be considered part of the applicable 

volume under the renewable fuel program established 

by this subsection). 

(C) SMALL REFINERY.—The term ‘‘small refinery’’ means 

a refinery for which average aggregate daily crude oil 

throughput for the calendar year (as determined by dividing the aggregate throughput for the calendar year by the 

number of days in the calendar year) does not exceed 

75,000 barrels. 

(2) RENEWABLE FUEL PROGRAM.— (A) IN GENERAL.—Not later than 1 year after the enactment of this subsection, the Administrator shall promulgate 

regulations ensuring that motor vehicle fuel sold or dispensed to consumers in the contiguous United States, on an 

annual average basis, contains the applicable volume of renewable fuel as specified in subparagraph (B). Regardless 

of the date of promulgation, such regulations shall contain 

compliance provisions for refiners, blenders, and importers, 

as appropriate, to ensure that the requirements of this section are met, but shall not restrict where renewable fuel can 

be used, or impose any per-gallon obligation for the use of 

renewable fuel. If the Administrator does not promulgate 

such regulations, the applicable percentage referred to in 

paragraph (4), on a volume percentage of gasoline basis, 

shall be 2.2 in 2005. 

(B) APPLICABLE VOLUME.— (i) CALENDAR YEARS 2005 THROUGH 2012.—For the 

purpose of subparagraph (A), the applicable volume for 

any of calendar years 2005 through 2012 shall be determined in accordance with the following table: 

Applicable volume of renewable fuel 

Calendar year (in billions of gallons) 

2005 .................................................................................................................. 3.1 

2006 .................................................................................................................. 3.3 

2007 .................................................................................................................. 3.5 

2008 .................................................................................................................. 3.8 

2009 .................................................................................................................. 4.1 

2010 .................................................................................................................. 4.4 

2011 .................................................................................................................. 4.7 

2012 .................................................................................................................. 5.0 

(ii) CALENDAR YEAR 2013 AND THEREAFTER.—For the 

purpose of subparagraph (A), the applicable volume for 

calendar year 2013 and each calendar year thereafter 

shall be equal to the product obtained by multiplying— 

(I) the number of gallons of gasoline that the Administrator estimates will be sold or introduced 

into commerce in the calendar year; and 

(II) the ratio that— 

(aa) 5.0 billion gallons of renewable fuels; 

bears to 

(bb) the number of gallons of gasoline sold 

or introduced into commerce in calendar year 

2012. 

(3) NON-CONTIGUOUS STATE OPT-IN.—Upon the petition of a 

non-contiguous State, the Administrator may allow the renewable fuel program established by subtitle A of title XV of the 

459 

Energy Policy Act of 2005 to apply in such non-contiguous State 

at the same time or any time after the Administrator promulgates regulations under paragraph (2). The Administrator may 

promulgate or revise regulations under paragraph (2), establish 

applicable percentages under paragraph (4), provide for the 

generation of credits under paragraph (6), and take such other 

actions as may be necessary to allow for the application of the 

renewable fuels program in a non-contiguous State. 

(4) APPLICABLE PERCENTAGES.— 

(A) PROVISION OF ESTIMATE OF VOLUMES OF GASOLINE

SALES.—Not later than October 31 of each of calendar years 

2005 through 2011, the Administrator of the Energy Information Administration shall provide to the Administrator 

of the Environmental Protection Agency an estimate of the 

volumes of gasoline that will be sold or introduced into 

commerce in the United States during the following calendar year. 

(B) DETERMINATION OF APPLICABLE PERCENTAGES.— 

(i) IN GENERAL.—Not later than November 30 of each 

of the calendar years 2005 through 2011, based on the 

estimate provided under subparagraph (A), the Administrator shall determine and publish in the Federal 

Register, with respect to the following calendar year, 

the renewable fuel obligation that ensures that the requirements of paragraph (2) are met. 

(ii) REQUIRED ELEMENTS.—The renewable fuel obligation determined for a calendar year under clause (i) 

shall— 

(I) be applicable to refiners, blenders, and importers, as appropriate; 

(II) be expressed in terms of a volume percentage 

of gasoline sold or introduced into commerce; and 

(III) subject to subparagraph (C)(i), consist of a 

single applicable percentage that applies to all categories of persons specified in subclause (I). 

(C) ADJUSTMENTS.—In determining the applicable percentage for a calendar year, the Administrator shall make 

adjustments— 

(i) to prevent the imposition of redundant obligations 

to any person specified in subparagraph (B)(ii)(I); and 

(ii) to account for the use of renewable fuel during 

the previous calendar year by small refineries that are 

exempt under paragraph (11). 

(5) EQUIVALENCY.—For the purpose of paragraph (2), 1 gallon 

of either cellulosic biomass ethanol or waste derived ethanol— 

(A) shall be considered to be the equivalent of 1.5 gallon 

of renewable fuel; or 

(B) if the cellulostic biomass ethanol or waste derived 

ethanol is derived from agricultural residue or wood residue or is an agricultural byproduct (as that term is used 

in section 919 of the Energy Policy Act of 2005), shall be 

considered to be the equivalent of 2.5 gallons of renewable 

fuel. 

(6) CREDIT PROGRAM.— 

460 

(A) IN GENERAL.—The regulations promulgated to carry 

out this subsection shall provide for the generation of an 

appropriate amount of credits by any person that refines, 

blends, or imports gasoline that contains a quantity of renewable fuel that is greater than the quantity required 

under paragraph (2). Such regulations shall provide for the 

generation of an appropriate amount of credits for biodiesel 

fuel. If a small refinery notifies the Administrator that it 

waives the exemption provided paragraph (11), the regulations shall provide for the generation of credits by the small 

refinery beginning in the year following such notification. 

(B) USE OF CREDITS.—A person that generates credits 

under subparagraph (A) may use the credits, or transfer all 

or a portion of the credits to another person, for the purpose 

of complying with paragraph (2). 

(C) LIFE OF CREDITS.—A credit generated under this 

paragraph shall be valid to show compliance— 

(i) in the calendar year in which the credit was generated or the next calendar year; or 

(ii) in the calendar year in which the credit was generated or next two consecutive calendar years if the Administrator promulgates regulations under paragraph 

(7). 

(D) INABILITY TO PURCHASE SUFFICIENT CREDITS.—The 

regulations promulgated to carry out this subsection shall 

include provisions allowing any person that is unable to 

generate or purchase sufficient credits to meet the requirements under paragraph (2) to carry forward a renewable 

fuel deficit provided that, in the calendar year following the 

year in which the renewable fuel deficit is created, such 

person shall achieve compliance with the renewable fuel requirement under paragraph (2), and shall generate or purchase additional renewable fuel credits to offset the renewable fuel deficit of the previous year. 

(7) SEASONAL VARIATIONS IN RENEWABLE FUEL USE.— (A) STUDY.—For each of the calendar years 2005 through 

2012, the Administrator of the Energy Information Administration shall conduct a study of renewable fuels blending 

to determine whether there are excessive seasonal variations 

in the use of renewable fuels. 

(B) REGULATION OF EXCESSIVE SEASONAL VARIATIONS.— 

If, for any calendar year, the Administrator of the Energy 

Information Administration, based on the study under subparagraph (A), makes the determinations specified in subparagraph (C), the Administrator shall promulgate regulations to ensure that 35 percent or more of the quantity of 

renewable fuels necessary to meet the requirement of paragraph (2) is used during each of the periods specified in 

subparagraph (D) of each subsequent calendar year. 

(C) DETERMINATIONS.—The determinations referred to in 

subparagraph (B) are that— 

(i) less than 35 percent of the quantity of renewable 

fuels necessary to meet the requirement of paragraph 

(2) has been used during one of the periods specified in 

subparagraph (D) of the calendar year; 

461 

(ii) a pattern of excessive seasonal variation described in clause (i) will continue in subsequent calendar years; and 

(iii) promulgating regulations or other requirements 

to impose a 35 percent or more seasonal use of renewable fuels will not prevent or interfere with the attainment of national ambient air quality standards or significantly increase the price of motor fuels to the consumer. 

(D) PERIODS.—The two periods referred to in this paragraph are— 

(i) April through September; and 

(ii) January through March and October through December. 

(E) EXCLUSIONS.—Renewable fuels blended or consumed 

in 2005 in a State which has received a waiver under section 209(b) shall not be included in the study in subparagraph (A). 

(8) WAIVERS.— 

(A) IN GENERAL.—The Administrator, in consultation 

with the Secretary of Agriculture and the Secretary of Energy, may waive the requirement of paragraph (2) in whole 

or in part on petition by one or more States by reducing the 

national quantity of renewable fuel required under this 

subsection— 

(i) based on a determination by the Administrator, 

after public notice and opportunity for comment, that 

implementation of the requirement would severely 

harm the economy or environment of a State, a region, 

or the United States; or 

(ii) based on a determination by the Administrator, 

after public notice and opportunity for comment, that 

there is an inadequate domestic supply or distribution 

capacity to meet the requirement. 

(B) PETITIONS FOR WAIVERS.—The Administrator, in consultation with the Secretary of Agriculture and the Secretary of Energy, shall approve or disapprove a State petition for a waiver of the requirement of paragraph (2) within 90 days after the date on which the petition is received 

by the Administrator. 

(C) TERMINATION OF WAIVERS.—A waiver granted under 

subparagraph (A) shall terminate after 1 year, but may be 

renewed by the Administrator after consultation with the 

Secretary of Agriculture and the Secretary of Energy. 

(9) STUDY AND WAIVER FOR INITIAL YEAR OF PROGRAM.—Not 

later than 180 days after the enactment of this subsection, the 

Secretary of Energy shall complete for the Administrator a 

study assessing whether the renewable fuels requirement under 

paragraph (2) will likely result in significant adverse consumer 

impacts in 2005, on a national, regional, or State basis. Such 

study shall evaluate renewable fuel supplies and prices, 

blendstock supplies, and supply and distribution system capabilities. Based on such study, the Secretary shall make specific 

recommendations to the Administrator regarding waiver of the 

requirements of paragraph (2), in whole or in part, to avoid any 

462 

such adverse impacts. Within 270 days after the enactment of 

this subsection, the Administrator shall, consistent with the recommendations of the Secretary, waive, in whole or in part, the 

renewable fuels requirement under paragraph (2) by reducing 

the national quantity of renewable fuel required under this subsection in 2005. This paragraph shall not be interpreted as limiting the Administrator’s authority to waive the requirements of 

paragraph (2) in whole, or in part, under paragraph (8) or 

paragraph (10), pertaining to waivers. 

(10) ASSESSMENT AND WAIVER.—The Administrator, in consultation with the Secretary of Energy and the Secretary of Agriculture, shall evaluate the requirement of paragraph (2) and 

determine, prior to January 1, 2007, and prior to January 1 of 

any subsequent year in which the applicable volume of renewable fuel is increased under paragraph (2)(B), whether the requirement of paragraph (2), including the applicable volume of 

renewable fuel contained in paragraph (2)(B) should remain in 

effect, in whole or in part, during 2007 or any year or years 

subsequent to 2007. In evaluating the requirement of paragraph 

(2) and in making any determination under this section, the 

Administrator shall consider the best available information and 

data collected by accepted methods or best available means regarding— 

(A) the capacity of renewable fuel producers to supply an 

adequate amount of renewable fuel at competitive prices to 

fulfill the requirement of paragraph (2); 

(B) the potential of the requirement of paragraph (2) to 

significantly raise the price of gasoline, food (excluding the 

net price impact on the requirement in paragraph (2) on 

commodities used in the production of ethanol), or heating 

oil for consumers in any significant area or region of the 

country above the price that would otherwise apply to such 

commodities in the absence of such requirement; 

(C) the potential of the requirement of paragraph (2) to 

interfere with the supply of fuel in any significant gasoline 

market or region of the country, including interference with 

the efficient operation of refiners, blenders, importers, 

wholesale suppliers, and retail vendors of gasoline, and 

other motor fuels; and 

(D) the potential of the requirement of paragraph (2) to 

cause or promote exceedances of Federal, State, or local air 

quality standards. 

If the Administrator determines, by clear and convincing information, after public notice and the opportunity for comment, 

that the requirement of paragraph (2) would have significant 

and meaningful adverse impact on the supply of fuel and related infrastructure or on the economy, public health, or environment of any significant area or region of the country, the Administrator may waive, in whole or in part, the requirement of 

paragraph (2) in any one year for which the determination is 

made for that area or region of the country, except that any 

such waiver shall not have the effect of reducing the applicable 

volume of renewable fuel specified in paragraph (2)(B) with respect to any year for which the determination is made. In determining economic impact under this paragraph, the AdminisVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00462 Fmt 6659 Sfmt 6603 E:\HR\OC\HR215P1.XXX HR215P1
463 

trator shall not consider the reduced revenues available from 

the Highway Trust Fund (section 9503 of the Internal Revenue 

Code of 1986) as a result of the use of ethanol. 

(11) SMALL REFINERIES.— (A) IN GENERAL.—The requirement of paragraph (2) shall 

not apply to small refineries until the first calendar year 

beginning more than 5 years after the first year set forth in 

the table in paragraph (2)(B)(i). Not later than December 

31, 2007, the Secretary of Energy shall complete for the Administrator a study to determine whether the requirement 

of paragraph (2) would impose a disproportionate economic 

hardship on small refineries. For any small refinery that 

the Secretary of Energy determines would experience a disproportionate economic hardship, the Administrator shall 

extend the small refinery exemption for such small refinery 

for no less than two additional years. 

(B) ECONOMIC HARDSHIP.— 

(i) EXTENSION OF EXEMPTION.—A small refinery may 

at any time petition the Administrator for an extension 

of the exemption from the requirement of paragraph (2) 

for the reason of disproportionate economic hardship. 

In evaluating a hardship petition, the Administrator, 

in consultation with the Secretary of Energy, shall consider the findings of the study in addition to other economic factors. 

(ii) DEADLINE FOR ACTION ON PETITIONS.—The Administrator shall act on any petition submitted by a 

small refinery for a hardship exemption not later than 

90 days after the receipt of the petition. 

(C) CREDIT PROGRAM.—If a small refinery notifies the 

Administrator that it waives the exemption provided by this 

Act, the regulations shall provide for the generation of credits by the small refinery beginning in the year following 

such notification. 

(D) OPT-IN FOR SMALL REFINERS.—A small refinery shall 

be subject to the requirements of this section if it notifies 

the Administrator that it waives the exemption under subparagraph (A). 

(12) ETHANOL MARKET CONCENTRATION ANALYSIS.— (A) ANALYSIS.— 

(i) IN GENERAL.—Not later than 180 days after the 

date of enactment of this subsection, and annually 

thereafter, the Federal Trade Commission shall perform a market concentration analysis of the ethanol 

production industry using the Herfindahl-Hirschman 

Index to determine whether there is sufficient competition among industry participants to avoid price setting 

and other anticompetitive behavior. 

(ii) SCORING.—For the purpose of scoring under 

clause (i) using the Herfindahl-Hirschman Index, all 

marketing arrangements among industry participants 

shall be considered. 

(B) REPORT.—Not later than December 1, 2005, and annually thereafter, the Federal Trade Commission shall submit to Congress and the Administrator a report on the reVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00463 Fmt 6659 Sfmt 6603 E:\HR\OC\HR215P1.XXX HR215P1
464 

sults of the market concentration analysis performed under 

subparagraph (A)(i). 

(p) ANALYSES OF MOTOR VEHICLE FUEL CHANGES AND EMISSIONS

MODEL.— 

(1) ANTI-BACKSLIDING ANALYSIS.— 

(A) DRAFT ANALYSIS.—Not later than 4 years after the 

date of enactment of this subsection, the Administrator 

shall publish for public comment a draft analysis of the 

changes in emissions of air pollutants and air quality due 

to the use of motor vehicle fuel and fuel additives resulting 

from implementation of the amendments made by subtitle 

A of title XV of the Energy Policy Act of 2005. 

(B) FINAL ANALYSIS.—After providing a reasonable opportunity for comment but not later than 5 years after the 

date of enactment of this paragraph, the Administrator 

shall publish the analysis in final form. 

(2) EMISSIONS MODEL.—For the purposes of this subsection, 

as soon as the necessary data are available, the Administrator 

shall develop and finalize an emissions model that reasonably 

reflects the effects of gasoline characteristics or components on 

emissions from vehicles in the motor vehicle fleet during calendar year 2005. 

ø(o)¿ (q) FUEL AND FUEL ADDITIVE IMPORTERS AND IMPORTATION.—For the purposes of this section, the term ‘‘manufacturer’’ 

includes an importer and the term ‘‘manufacture’’ includes importation. 

(r) CELLULOSIC BIOMASS AND WASTE-DERIVED ETHANOL CONVERSION ASSISTANCE.— 

(1) IN GENERAL.—The Secretary of Energy may provide 

grants to merchant producers of cellulosic biomass ethanol and 

waste-derived ethanol in the United States to assist the producers in building eligible production facilities described in 

paragraph (2) for the production of ethanol. 

(2) ELIGIBLE PRODUCTION FACILITIES.—A production facility 

shall be eligible to receive a grant under this subsection if the 

production facility— 

(A) is located in the United States; and 

(B) uses cellulosic biomass or waste-derived feedstocks 

derived from agricultural residues, wood residues, municipal solid waste, or agricultural byproducts as that term is 

used in section 919 of the Energy Policy Act of 2005. 

(3) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated the following amounts to carry out this 

subsection: 

(A) $100,000,000 for fiscal year 2005. 

(B) $250,000,000 for fiscal year 2006. 

(C) $400,000,000 for fiscal year 2007. 

(s) BLENDING OF COMPLIANT REFORMULATED GASOLINES.— 

(1) IN GENERAL.—Notwithstanding subsections (h) and (k) 

and subject to the limitations in paragraph (2) of this subsection, it shall not be a violation of this subtitle for a gasoline 

retailer, during any month of the year, to blend at a retail location batches of ethanol-blended and non-ethanol-blended reformulated gasoline, provided that— 

465 

(A) each batch of gasoline to be blended has been individually certified as in compliance with subsections (h) and (k) 

prior to being blended; 

(B) the retailer notifies the Administrator prior to such 

blending, and identifies the exact location of the retail station and the specific tank in which such blending will take 

place; 

(C) the retailer retains and, as requested by the Administrator or the Administrator’s designee, makes available for 

inspection such certifications accounting for all gasoline at 

the retail outlet; and 

(D) the retailer does not, between June 1 and September 

15 of each year, blend a batch of VOC-controlled, or ‘‘summer’’, gasoline with a batch of non-VOC-controlled, or ‘‘winter’’, gasoline (as these terms are defined under subsections 

(h) and (k)). 

(2) LIMITATIONS.— 

(A) FREQUENCY LIMITATION.—A retailer shall only be permitted to blend batches of compliant reformulated gasoline 

under this subsection a maximum of two blending periods between May 1 and September 15 of each calendar year. 

(B) DURATION OF BLENDING PERIOD.—Each blending period 

authorized under subparagraph (A) shall extend for a period of 

no more than 10 consecutive calendar days. 

(3) SURVEYS.—A sample of gasoline taken from a retail location that has blended gasoline within the past 30 days and is 

in compliance with subparagraphs (A), (B), (C), and (D) of 

paragraph (1) shall not be used in a VOC survey mandated by 

40 C.F.R. Part 80. 

(4) STATE IMPLEMENTATION PLANS.—A State shall be held 

harmless and shall not be required to revise its State implementation plan under section 110 to account for the emissions from 

blended gasoline authorized under paragraph (1). 

(5) PRESERVATION OF STATE LAW.—Nothing in this subsection 

shall— 

(A) preempt existing State laws or regulations regulating 

the blending of compliant gasolines; or 

(B) prohibit a State from adopting such restrictions in 

the future. 

(6) REGULATIONS.—The Administrator shall promulgate, 

after notice and comment, regulations implementing this subsection within one year after the date of enactment of this subsection. 

(7) EFFECTIVE DATE.—This subsection shall become effective 

15 months after the date of its enactment and shall apply to 

blended batches of reformulated gasoline on or after that date, 

regardless of whether the implementing regulations required by 

paragraph (6) have been promulgated by the Administrator by 

that date. 

(8) LIABILITY.—No person other than the person responsible 

for blending under this subsection shall be subject to an enforcement action or penalties under subsection (d) solely arising 

from the blending of compliant reformulated gasolines by the 

retailers. 

466 

(9) FORMULATION OF GASOLINE.—This subsection does not 

grant authority to the Administrator or any State (or any subdivision thereof) to require reformulation of gasoline at the refinery to adjust for potential or actual emissions increases due 

to the blending authorized by this subsection. 

SOLID WASTE DISPOSAL ACT 

TITLE II—SOLID WASTE DISPOSAL 

Subtitle A—General Provisions 

SHORT TITLE AND TABLE OF CONTENTS

SEC. 1001. This title (hereinafter in this title referred to as 

‘‘this Act’’), together with the following table of contents, may be 

cited as the ‘‘Solid Waste Disposal Act’’: 

Subtitle A—General Provisions 

Sec. 1001. Short title and table of contents. 

* * * * * * * 

Subtitle I—Regulation of Underground Storage Tanks 

Sec. 9001. Definitions. 

* * * * * * * 

Sec. 9010. Authorization of appropriations. 

Sec. 9010. Operator training. 

Sec. 9011. Use of funds for release prevention and compliance. 

Sec. 9012. Delivery prohibition. 

Sec. 9013. Tanks on Tribal lands. 

Sec. 9014. Authorization of appropriations. 

* * * * * * * 

Subtitle I—Regulation of Underground Storage Tanks 

DEFINITIONS AND EXEMPTIONS

SEC. 9001. øFor the purposes of this subtitle—¿ In this subtitle: 

(1) INDIAN TRIBE.— (A) IN GENERAL.—The term ‘‘Indian tribe’’ means any Indian tribe, band, nation, or other organized group or community that is recognized as being eligible for special programs and services provided by the United States to Indians because of their status as Indians. 

(B) INCLUSIONS.—The term ‘‘Indian tribe’’ includes an 

Alaska Native village, as defined in or established under 

the Alaska Native Claims Settlement Act (43 U.S.C. 1601 

et seq.). 

ø(7)¿ (2) The term ‘‘nonoperational storage tank’’ means any 

underground storage tank in which regulated substances will 

not be deposited or from which regulated substances will not 

be dispensed after the date of the enactment of the Hazardous 

and Solid Waste Amendments of 1984. 

ø(4)¿ (3) The term ‘‘operator’’ means any person in control of, 

or having responsibility for, the daily operation of the underground storage tank. 

ø(3)¿ (4) The term ‘‘owner’’ means— 

467 

(A) in the case of an underground storage tank in use on 

the date of enactment of the Hazardous and Solid Waste 

Amendments of 1984, or brought into use after that date, 

any person who owns an underground storage tank used 

for the storage, use, or dispensing of regulated øsustances¿ 

substances, and 

* * * * * * * 

ø(6)¿ (5) The term ‘‘person’’ has the same meaning as provided in section 1004(15), except that such term includes a consortium, a joint venture, and a commercial entity, and the 

United States Government. 

ø(8)¿ (6) The term ‘‘petroleum’’ means petroleum, including 

crude oil or any fraction thereof which is liquid at standard 

conditions of temperature and pressure (60 degrees Fahrenheit 

and 14.7 pounds per square inch absolute). 

ø(2)¿ (7) The term ‘‘regulated substance’’ means— 

(A) * * * 

* * * * * * * 

ø(5)¿ (8) The term ‘‘release’’ means any spilling, leaking, 

emitting, discharging, escaping, leaching, or disposing from an 

underground storage tank into ground water, surface water or 

subsurface soils. 

(9) TRUST FUND.—The term ‘‘Trust Fund’’ means the Leaking 

Underground Storage Tank Trust Fund established by section 

9508 of the Internal Revenue Code of 1986. 

ø(1)¿ (10) The term ‘‘underground storage tank’’ means any 

one or combination of tanks (including underground pipes connected thereto) which is used to contain an accumulation of 

regulated substances, and the volume of which (including the 

volume of the underground pipes connected thereto) is 10 per 

centum or more beneath the surface of the ground. Such term 

does not include any— 

(A) * * * 

* * * * * * * 

NOTIFICATION

SEC. 9002. (a) * * * 

* * * * * * * 

(d) PUBLIC RECORD.— 

(1) IN GENERAL.—The Administrator shall require each State 

that receives Federal funds to carry out this subtitle to maintain, update at least annually, and make available to the public, in such manner and form as the Administrator shall prescribe (after consultation with States), a record of underground 

storage tanks regulated under this subtitle. 

(2) CONSIDERATIONS.—To the maximum extent practicable, 

the public record of a State, respectively, shall include, for each 

year— 

(A) the number, sources, and causes of underground storage tank releases in the State; 

(B) the record of compliance by underground storage 

tanks in the State with— 

468 

(i) this subtitle; or 

(ii) an applicable State program approved under section 9004; and 

(C) data on the number of underground storage tank 

equipment failures in the State. 

RELEASE DETECTION, PREVENTION, AND CORRECTION REGULATIONS

SEC. 9003. (a) * * * 

* * * * * * * 

(f) EFFECTIVE DATES.—(1) Regulations issued pursuant to 

øsubsection (c) and (d) of this section¿ subsections (c) and (d), and 

standards issued pursuant to subsection (e) of this section, for underground storage tanks containing regulated substances defined 

in section ø9001(2)(B)¿ 9001(7)(B) (petroleum, including crude oil 

or any fraction thereof which is liquid at standard conditions of 

temperature and pressure) shall be effective not later than thirty 

months after the date of enactment of the Hazardous and Solid 

Waste Amendments of 1984. 

(2) Standards issued pursuant to subsection (e) of this section 

(entitled ‘‘New Tank Performance Standards’’) for underground 

storage tanks containing regulated substances defined in section 

ø9001(2)(A)¿ 9001(7)(A) shall be effective not later than thirty-six 

months after the date of enactment of the Hazardous and Solid 

Waste Amendments of 1984. 

(3) Regulations issued pursuant to subsection (c) of this section 

(entitled ‘‘Requirements’’) and standards issued pursuant to subsection (d) of this section (entitled ‘‘Financial Responsibility’’) for 

underground storage tanks containing regulated substances defined 

in section ø9001(2)(A)¿ 9001(7)(A) shall be effective not later than 

forty-eight months after the date of enactment of the Hazardous 

and Solid Waste Amendments of 1984. 

* * * * * * * 

(h) EPA RESPONSE PROGRAM FOR PETROLEUM.— 

(1) BEFORE REGULATIONS.—Before the effective date of regulations under subsection (c), the Administrator (or a State pursuant to paragraph (7)) is authorized to— 

(A) * * * 

* * * * * * * 

The corrective action undertaken or required by this paragraph 

shall be such as may be necessary to protect human health and 

the environment. The Administrator shall use funds in the 

øLeaking Underground Storage Tank Trust Fund¿ Trust Fund 

for payment of costs incurred for corrective action under subparagraph (B), enforcement action under subparagraph (A), 

and cost recovery under paragraph (6) of this subsection. Subject to the priority requirements of paragraph (3), the Administrator (or the State) shall give priority in undertaking such actions under subparagraph (B) to cases where the Administrator 

(or the State) cannot identify a solvent owner or operator of the 

tank who will undertake action properly. 

(2) AFTER REGULATIONS.—Following the effective date of regulations under subsection (c), all actions or orders of the Administrator (or a State pursuant to paragraph (7)) described in 

469 

paragraph (1) of this subsection shall be in conformity with 

such regulations. Following such effective date, the Administrator (or the State) may undertake corrective action with respect to any release of petroleum into the environment from an 

underground storage tank only if such action is necessary, in 

the judgment of the Administrator (or the State), to protect 

human health and the environment and one or more of the following situations exists: 

(A) * * * 

* * * * * * * 

(C) Corrective action costs at a facility exceed the 

amount of coverage required by the Administrator pursuant to the provisions of subsections (c) and (d)(5) of this 

section and, considering the class or category of underground storage tank from which the release occurred, expenditures from the øLeaking Underground Storage Tank 

Trust Fund¿ Trust Fund are necessary to assure an effective corrective action. 

* * * * * * * 

(6) RECOVERY OF COSTS.— (A) * * * 

* * * * * * * 

(E) INABILITY OR LIMITED ABILITY TO PAY.— (i) IN GENERAL.—In determining the level of recovery 

effort, or amount that should be recovered, the Administrator (or the State pursuant to paragraph (7)) shall 

consider the owner or operator’s ability to pay. An inability or limited ability to pay corrective action costs 

must be demonstrated to the Administrator (or the 

State pursuant to paragraph (7)) by the owner or operator. 

(ii) CONSIDERATIONS.—In determining whether or 

not a demonstration is made under clause (i), the Administrator (or the State pursuant to paragraph (7)) 

shall take into consideration the ability of the owner or 

operator to pay corrective action costs and still maintain its basic business operations, including consideration of the overall financial condition of the owner or 

operator and demonstrable constraints on the ability of 

the owner or operator to raise revenues. 

(iii) INFORMATION.—An owner or operator requesting 

consideration under this subparagraph shall promptly 

provide the Administrator (or the State pursuant to 

paragraph (7)) with all relevant information needed to 

determine the ability of the owner or operator to pay 

corrective action costs. 

(iv) ALTERNATIVE PAYMENT METHODS.—The Administrator (or the State pursuant to paragraph (7)) shall 

consider alternative payment methods as may be necessary or appropriate if the Administrator (or the State 

pursuant to paragraph (7)) determines that an owner 

or operator cannot pay all or a portion of the costs in 

a lump sum payment. 

470 

(iii) MISREPRESENTATION.—If an owner or operator 

provides false information or otherwise misrepresents 

their financial situation under clause (ii), the Administrator (or the State pursuant to paragraph (7)) shall 

seek full recovery of the costs of all such actions pursuant to the provisions of subparagraph (A) without consideration of the factors in subparagraph (B). 

* * * * * * * 

(7) STATE AUTHORITIES.— (A) GENERAL.—A State may exercise the authorities in 

øparagraphs (1) and (2) of this subsection¿ paragraphs (1), 

(2), and (12), subject to the terms and conditions of paragraphs (3), (5), (9), (10), and (11), øand including the authorities of paragraphs (4), (6), and (8) of this subsection¿ 

and the authority under sections 9011 and 9012 and paragraphs (4), (6), and (8), if— 

(i) the Administrator determines that the State has 

the capabilities to carry out effective corrective actions 

and enforcement activities; and 

(ii) the Administrator enters into a cooperative 

agreement with the State setting out the actions to be 

undertaken by the State. 

The Administrator may provide funds from the øLeaking 

Underground Storage Tank Trust Fund¿ Trust Fund for 

the reasonable costs of the State’s actions under the cooperative agreement. 

* * * * * * * 

(11) FACILITIES WITHOUT FINANCIAL RESPONSIBILITY.—At any 

facility where the owner or operator has failed to maintain evidence of financial responsibility in amounts at least equal to 

the amounts established by subsection (d)(5)(A) of this section 

(or a lesser amount if such amount is applicable to such facility 

as a result of subsection (d)(5)(B) of this section) for whatever 

reason the Administrator shall expend no monies from the 

øLeaking Underground Storage Tank Trust Fund¿ Trust Fund 

to clean up releases at such facility pursuant to the provisions 

of paragraph (1) or (2) of this subsection. At such facilities the 

Administrator shall use the authorities provided in subparagraph (A) of paragraph (1) and paragraph (4) of this subsection 

and section 9006 of this subtitle to order corrective action to 

clean up such releases. States acting pursuant to paragraph (7) 

of this subsection shall use the authorities provided in subparagraph (A) of paragraph (1) and paragraph (4) of this subsection to order corrective action to clean up such releases. 

Notwithstanding the provisions of this paragraph, the Administrator may use monies from the fund to take the corrective 

actions authorized by paragraph (5) of this subsection to protect human health at such facilities and shall seek full recovery of the costs of all such actions pursuant to the provisions 

of paragraph (6)(A) of this subsection and without consideration of the factors in paragraph (6)(B) of this subsection. 

Nothing in this paragraph shall prevent the Administrator (or 

a State pursuant to paragraph (7) of this subsection) from taking corrective action at a facility where there is no solvent 

471 

owner or operator or where immediate action is necessary to 

respond to an imminent and substantial endangerment of 

human health or the environment. 

(12) REMEDIATION OF OXYGENATED FUEL CONTAMINATION.— 

(A) IN GENERAL.—The Administrator and the States may 

use funds made available under section 9014(2)(B) to carry 

out corrective actions with respect to a release of a fuel containing an oxygenated fuel additive that presents a threat 

to human health or welfare or the environment. 

(B) APPLICABLE AUTHORITY.—The Administrator or a 

State shall carry out subparagraph (A) in accordance with 

paragraph (2), and in the case of a State, in accordance 

with a cooperative agreement entered into by the Administrator and the State under paragraph (7). 

(i) GOVERNMENT-OWNED TANKS.— 

(1) STATE COMPLIANCE REPORT.—(A) Not later than 2 years 

after the date of enactment of this subsection, each State that 

receives funding under this subtitle shall submit to the Administrator a State compliance report that— 

(i) lists the location and owner of each underground storage tank described in subparagraph (B) in the State that, 

as of the date of submission of the report, is not in compliance with section 9003; and 

(ii) specifies the date of the last inspection and describes 

the actions that have been and will be taken to ensure compliance of the underground storage tank listed under clause 

(i) with this subtitle. 

(B) An underground storage tank described in this subparagraph is an underground storage tank that is— 

(i) regulated under this subtitle; and 

(ii) owned or operated by the Federal, State, or local government. 

(C) The Administrator shall make each report, received under 

subparagraph (A), available to the public through an appropriate media. 

(2) FINANCIAL INCENTIVE.—The Administrator may award to 

a State that develops a report described in paragraph (1), in 

addition to any other funds that the State is entitled to receive 

under this subtitle, not more than $50,000, to be used to carry 

out the report. 

(3) NOT A SAFE HARBOR.—This subsection does not relieve any 

person from any obligation or requirement under this subtitle. 

(i) ADDITIONAL MEASURES TO PROTECT GROUNDWATER FROM

CONTAIMINATION.—The Administrator shall require each State that 

receives funding under this subtitle to require one of the following: 

(1) TANK AND PIPING SECONDARY CONTAINMENT.—(A) Each 

new underground storage tank, or piping connected to any such 

new tank, installed after the effective date of this subsection, or 

any existing underground storage tank, or existing piping connected to such existing tank, that is replaced after the effective 

date of this subsection, shall be secondarily contained and monitored for leaks if the new or replaced underground storage tank 

or piping is within 1,000 feet of any existing community water 

system or any existing potable drinking water well. 

472 

(B) In the case of a new underground storage tank system 

consisting of one or more underground storage tanks and connected by piping, subparagraph (A) shall apply to all underground storage tanks and connected pipes comprising such system. 

(C) In the case of a replacement of an existing underground 

storage tank or existing piping connected to the underground 

storage tank, subparagraph (A) shall apply only to the specific 

underground storage tank or piping being replaced, not to other 

underground storage tanks and connected pipes comprising 

such system. 

(D) Each installation of a new motor fuel dispenser system, 

after the effective date of this subsection, shall include underdispenser spill containment if the new dispenser is within 1,000 

feet of any existing community water system or any existing potable drinking water well. 

(E) This paragraph shall not apply to repairs to an underground storage tank, piping, or dispenser that are meant to restore a tank, pipe, or dispenser to operating condition 

(F) As used in this subsection: 

(i) The term ‘‘secondarily contained’’ means a release detection and prevention system that meets the requirements 

of 40 CFR 280.43(g), but shall not include under-dispenser 

spill containment or control systems. 

(ii) The term ‘‘underground storage tank’’ has the meaning given to it in section 9001, except that such term does 

not include tank combinations or more than a single underground pipe connected to a tank. 

(iii) The term ‘‘installation of a new motor fuel dispenser 

system’’ means the installation of a new motor fuel dispenser and the equipment necessary to connect the dispenser to the underground storage tank system, but does 

not mean the installation of a motor fuel dispenser installed separately from the equipment need to connect the 

dispenser to the underground storage tank system. 

(G) The Administrator may issue regulations or guidelines 

implementing the requirements of this subsection. 

(2) EVIDENCE OF FINANCIAL RESPONSIBILITY AND CERTIFICATION.— 

(A) MANUFACTURER AND INSTALLER FINANCIAL RESPONSIBILITY.—A person that manufactures an underground storage tank or piping for an underground storage tank system 

or that installs an underground storage tank system is required to maintain evidence of financial responsibility 

under section 9003(d) in order to provide for the costs of 

corrective actions directly related to releases caused by improper manufacture or installation unless the person can 

demonstrate themselves to be already covered as an owner 

or operator of an underground storage tank under section 

9003. 

(B) INSTALLER CERTIFICATION.—The Administrator and 

each State that receives funding under this subtitle, as appropriate, shall require that a person that installs an underground storage tank system is— 

473 

(i) certified or licensed by the tank and piping manufacturer; 

(ii) certified or licensed by the Administrator or a 

State, as appropriate; 

(iii) has their underground storage tank system installation certified by a registered professional engineer 

with education and experience in underground storage 

tank system installation; 

(iv) has had their installation of the underground 

storage tank inspected and approved by the Administrator or the State, as appropriate; 

(v) compliant with a code of practice developed by a 

nationally recognized association of independent testing laboratory and in accordance with the manufacturers instructions; or 

(vi) compliant with another method that is determined by the Administrator or a State, as appropriate, 

to be no less protective of human health and the environment. 

APPROVAL OF STATE PROGRAMS

SEC. 9004. (a) ELEMENTS OF STATE PROGRAM.—Beginning 30 

months after the date of enactment of the Hazardous and Solid 

Waste Amendments of 1984, any State may, submit an underground storage tank release detection, prevention, and correction 

program for review and approval by the Administrator. The program may cover tanks used to store regulated substances referred 

to øin 9001(2) (A) or (B) or both¿ in subparagraph (A) or (B) of section 9001(7). A State program may be approved by the Administrator under this section only if the State demonstrates that the 

State program includes the following requirements and standards 

and provides for adequate enforcement of compliance with such requirements and standards— 

(1) * * * 

* * * * * * * 

(7) standards of performance for new underground storage 

tanks; øand¿ 

(8) requirements— 

(A) * * * 

(B) for providing the information required on the form 

issued pursuant to section 9002(b)(2)ø.¿; and 

(9) State-specific training requirements as required by section 

9010. 

* * * * * * * 

(c) FINANCIAL RESPONSIBILITY.—(1) * * * 

* * * * * * * 

(6) WITHDRAWAL OF APPROVAL.—After an opportunity for good 

faith, collaborative efforts to correct financial deficiencies with 

a State fund, the Administrator may withdraw approval of any 

State fund or State assurance program to be used as a financial 

474 

responsibility mechanism without withdrawing approval of a 

State underground storage tank program under section 9004(a). 

* * * * * * * 

(f) TRUST FUND DISTRIBUTION.— 

(1) IN GENERAL.— 

(A) AMOUNT AND PERMITTED USES OF DISTRIBUTION.— 

The Administrator shall distribute to States not less than 

80 percent of the funds from the Trust Fund that are made 

available to the Administrator under section 9014(2)(A) for 

each fiscal year for use in paying the reasonable costs, incurred under a cooperative agreement with any State for— 

(i) corrective actions taken by the State under section 

9003(h)(7)(A); 

(ii) necessary administrative expenses, as determined 

by the Administrator, that are directly related to State 

fund or State assurance programs under subsection 

(c)(1); or 

(iii) enforcement, by a State or a local government, of 

State or local regulations pertaining to underground 

storage tanks regulated under this subtitle. 

(B) USE OF FUNDS FOR ENFORCEMENT.—In addition to 

the uses of funds authorized under subparagraph (A), the 

Administrator may use funds from the Trust Fund that are 

not distributed to States under subparagraph (A) for enforcement of any regulation promulgated by the Administrator under this subtitle. 

(C) PROHIBITED USES.—Funds provided to a State by the 

Administrator under subparagraph (A) shall not be used by 

the State to provide financial assistance to an owner or operator to meet any requirement relating to underground 

storage tanks under subparts B, C, D, H, and G of part 280 

of title 40, Code of Federal Regulations (as in effect on the 

date of enactment of this subsection). 

(2) ALLOCATION.— 

(A) PROCESS.—Subject to subparagraphs (B) and (C), in 

the case of a State with which the Administrator has entered into a cooperative agreement under section 

9003(h)(7)(A), the Administrator shall distribute funds 

from the Trust Fund to the State using an allocation process developed by the Administrator. 

(B) DIVERSION OF STATE FUNDS.—The Administrator 

shall not distribute funds under subparagraph (A)(iii) of 

subsection (f)(1) to any State that has diverted funds from 

a State fund or State assurance program for purposes other 

than those related to the regulation of underground storage 

tanks covered by this subtitle, with the exception of those 

transfers that had been completed earlier than the date of 

enactment of this subsection. 

(C) REVISIONS TO PROCESS.—The Administrator may revise the allocation process referred to in subparagraph (A) 

after— 

(i) consulting with State agencies responsible for 

overseeing corrective action for releases from underground storage tanks; and 

475 

(ii) taking into consideration, at a minimum, each of 

the following: 

(I) The number of confirmed releases from federally regulated leaking underground storage tanks 

in the States. 

(II) The number of federally regulated underground storage tanks in the States. 

(III) The performance of the States in implementing and enforcing the program. 

(IV) The financial needs of the States. 

(V) The ability of the States to use the funds referred to in subparagraph (A) in any year. 

(3) DISTRIBUTIONS TO STATE AGENCIES.—Distributions from 

the Trust Fund under this subsection shall be made directly to 

a State agency that— 

(A) enters into a cooperative agreement referred to in 

paragraph (2)(A); or 

(B) is enforcing a State program approved under this section. 

* * * * * * * 

INSPECTIONS, MONITORING, TESTING, AND CORRECTIVE ACTION

SEC. 9005. (a) FURNISHING INFORMATION.—For the purposes of 

developing or assisting in the development of any regulation, conducting any østudy taking¿ study, taking any corrective action, or 

enforcing the provisions of this subtitle, any owner or operator of 

an underground storage tank (or any tank subject to study under 

section 9009 that is used for storing regulated substances) shall, 

upon request of any officer, employee or representative of the Environmental Protection Agency, duly designated by the Administrator, or upon request of any duly designated officer, employee, or 

representative of a State acting parsuant to subsection (h)(7) of section 9003 or with an approved program, furnish information relating to such tanks, their associated equipment, their contents, conduct monitoring or testing, permit such officer at all reasonable 

times to have access to, and to copy all records relating to such 

tanks and permit such officer to have access for corrective action. 

For the purposes of developing or assisting in the development of 

any regulation, conducting any study, taking corrective action, or 

enforcing the provisions of this subtitle, such officers, employees, or 

representatives are authorized— 

(1) * * * 

* * * * * * * 

(b) CONFIDENTIALITY.—(1) Any records, reports, or information 

obtained from any persons under this section shall be available to 

the public, except that upon a showing satisfactory to the Administrator (or the State, as the case may be) by any person that 

records, reports, or information, or a particular part thereof, to 

which the Administrator (or the State, as the case may be) or any 

officer, employee, or representative thereof has access under this 

section if made public, would divulge information entitled to protection under section 1905 of title 18 of the United States Code, such 

information or particular portion thereof shall be considered confidential in accordance with the purposes of that section, except 

476 

that such record, report, document, or information may be disclosed 

to other officers, employees, or authorized representatives of the 

United States concerned with carrying out this Act, or when 

ørelevent¿ relevant in any proceeding under this Act. 

* * * * * * * 

(4) Notwithstanding any limitation contained in this section or 

any other provision of law, all information reported to, or otherwise 

obtained, by the Administrator (or any representative of the Administrator) under this Act shall be made available, upon written 

request of any duly authorized committee of the Congress, to such 

committee (including records, reports, or information obtained by 

representatives of the øEvironmental¿ Environmental Protection 

Agency). 

(c) INSPECTION REQUIREMENTS.— 

(1) UNINSPECTED TANKS.—In the case of underground storage 

tanks regulated under this subtitle that have not undergone an 

inspection since December 22, 1998, not later than 2 years after 

the date of enactment of this subsection, the Administrator or 

a State that receives funding under this subtitle, as appropriate, shall conduct on-site inspections of all such tanks to determine compliance with this subtitle and the regulations under 

this subtitle (40 C.F.R. 280) or a requirement or standard of a 

State program developed under section 9004. 

(2) PERIODIC INSPECTIONS.—After completion of all inspections required under paragraph (1), the Administrator or a 

State that receives funding under this subtitle, as appropriate, 

shall conduct on-site inspections of each underground storage 

tank regulated under this subtitle at least once every 3 years to 

determine compliance with this subtitle and the regulations 

under this subtitle (40 C.F.R. 280) or a requirement or standard of a State program developed under section 9004. The Administrator may extend for up to one additional year the first 

3-year inspection interval under this paragraph if the State 

demonstrates that it has insufficient resources to complete all 

such inspections within the first 3-year period. 

(3) INSPECTION AUTHORITY.—Nothing in this section shall be 

construed to diminish the Administrator’s or a State’s authorities under section 9005(a). 

* * * * * * * 

FEDERAL ENFORCEMENT

SEC. 9006. (a) * * * 

* * * * * * * 

(d) CIVIL PENALTIES.—(1) * * * 

(2) Any owner or operator of an underground storage tank who 

fails to comply with— 

(A) any requirement or standard promulgated by the Administrator under section 9003; 

(B) any requirement or standard of a State program approved pursuant to section 9004; øor¿ 

* * * * * * * 

477 

(D) the training requirements established by States pursuant 

to section 9010 (relating to operator training); or 

(E) the delivery prohibition requirement established by section 

9012, 

(D) the requirements established in section 9003(i), shall be subject to a civil penalty not to exceed $10,000 for each 

tank for each day of violation. Any person making or accepting a 

delivery or deposit of a regulated substance to an underground storage tank at an ineligible facility in violation of section 9012 shall 

also be subject to the same civil penalty for each day of such violation. 

(e) INCENTIVE FOR PERFORMANCE.—Both of the following may be 

taken into account in determining the terms of a civil penalty under 

subsection (d): 

(1) The compliance history of an owner or operator in accordance with this subtitle or a program approved under section 

9004. 

(2) Any other factor the Administrator considers appropriate. 

øSEC. 9007. (a) APPLICATION OF SUBTITLE.—Each department, 

agency, and instrumentality of the executive, legislative, and judicial branches of the Federal Government having jurisdiction over 

any underground storage tank shall be subject to and comply with 

all Federal, State, interstate, and local requirements, applicable to 

such tank, both substantive and procedural, in the same manner, 

and to the same extent, as any other person is subject to such requirements, including payment of reasonable service charges. Neither the United States, nor any agent, employee, or officer thereof, 

shall be immune or exempt from any process or sanction of any 

State or Federal court with respect to the enforcement of any such 

injunctive relief. 

ø(b) PRESIDENTIAL EXEMPTION.—The President may exempt 

any underground storage tanks of any department, agency, or instrumentality in the executive branch from compliance with such 

a requirement if he determines it to be in the paramount interest 

of the United States to do so. No such exemption shall be granted 

due to lack of appropriation unless the President shall have specifically requested such appropriation as a part of the budgetary process and the Congress shall have failed to make available such requested appropriations. Any exemption shall be for a period not in 

excess of one year, but additional exemptions may be granted for 

periods not to exceed one year upon the President’s making a new 

determination. The President shall report each January to the Congress all exemptions from the requirements of this section granted 

during the preceding calendar year, together with his reason for 

granting each such exemption.¿ 

FEDERAL FACILITIES

SEC. 9007. FEDERAL FACILITIES. 

(a) IN GENERAL.—Each department, agency, and instrumentality 

of the executive, legislative, and judicial branches of the Federal 

Government (1) having jurisdiction over any underground storage 

tank or underground storage tank system, or (2) engaged in any activity resulting, or which may result, in the installation, operation, 

management, or closure of any underground storage tank, release 

response activities related thereto, or in the delivery, acceptance, or 

478 

deposit of any regulated substance to an underground storage tank 

or underground storage tank system shall be subject to, and comply 

with, all Federal, State, interstate, and local requirements, both 

substantive and procedural (including any requirement for permits 

or reporting or any provisions for injunctive relief and such sanctions as may be imposed by a court to enforce such relief), respecting 

underground storage tanks in the same manner, and to the same extent, as any person is subject to such requirements, including the 

payment of reasonable service charges. The Federal, State, interstate, and local substantive and procedural requirements referred to 

in this subsection include, but are not limited to, all administrative 

orders and all civil and administrative penalties and fines, regardless of whether such penalties or fines are punitive or coercive in nature or are imposed for isolated, intermittent, or continuing violations. The United States hereby expressly waives any immunity otherwise applicable to the United States with respect to any such substantive or procedural requirement (including, but not limited to, 

any injunctive relief, administrative order or civil or administrative 

penalty or fine referred to in the preceding sentence, or reasonable 

service charge). The reasonable service charges referred to in this 

subsection include, but are not limited to, fees or charges assessed 

in connection with the processing and issuance of permits, renewal 

of permits, amendments to permits, review of plans, studies, and 

other documents, and inspection and monitoring of facilities, as well 

as any other nondiscriminatory charges that are assessed in connection with a Federal, State, interstate, or local underground storage 

tank regulatory program. Neither the United States, nor any agent, 

employee, or officer thereof, shall be immune or exempt from any 

process or sanction of any State or Federal Court with respect to the 

enforcement of any such injunctive relief. No agent, employee, or officer of the United States shall be personally liable for any civil penalty under any Federal, State, interstate, or local law concerning 

underground storage tanks with respect to any act or omission within the scope of the official duties of the agent, employee, or officer. 

An agent, employee, or officer of the United States shall be subject 

to any criminal sanction (including, but not limited to, any fine or 

imprisonment) under any Federal or State law concerning underground storage tanks, but no department, agency, or instrumentality 

of the executive, legislative, or judicial branch of the Federal Government shall be subject to any such sanction. The President may 

exempt any underground storage tank of any department, agency, or 

instrumentality in the executive branch from compliance with such 

a requirement if he determines it to be in the paramount interest of 

the United States to do so. No such exemption shall be granted due 

to lack of appropriation unless the President shall have specifically 

requested such appropriation as a part of the budgetary process and 

the Congress shall have failed to make available such requested appropriation. Any exemption shall be for a period not in excess of one 

year, but additional exemptions may be granted for periods not to 

exceed one year upon the President’s making a new determination. 

The President shall report each January to the Congress all exemptions from the requirements of this section granted during the preceding calendar year, together with his reason for granting each 

such exemption. 

479 

(b) REVIEW OF AND REPORT ON FEDERAL UNDERGROUND STORAGE

TANKS.— 

(1) REVIEW.—Not later than 12 months after the date of enactment of the Underground Storage Tank Compliance Act of 

2005, each Federal agency that owns or operates 1 or more underground storage tanks, or that manages land on which 1 or 

more underground storage tanks are located, shall submit to 

the Administrator, the Committee on Energy and Commerce of 

the United States House of Representatives, and the Committee 

on the Environment and Public Works of the United States Senate a compliance strategy report that— 

(A) lists the location and owner of each underground 

storage tank described in this paragraph; 

(B) lists all tanks that are not in compliance with this 

subtitle that are owned or operated by the Federal agency; 

(C) specifies the date of the last inspection by a State or 

Federal inspector of each underground storage tank owned 

or operated by the agency; 

(D) lists each violation of this subtitle respecting any underground storage tank owned or operated by the agency; 

(E) describes the operator training that has been provided to the operator and other persons having primary 

daily on-site management responsibility for the operation 

and maintenance of underground storage tanks owned or 

operated by the agency; and 

(F) describes the actions that have been and will be taken 

to ensure compliance for each underground storage tank 

identified under subparagraph (B). 

(2) NOT A SAFE HARBOR.—This subsection does not relieve any 

person from any obligation or requirement under this subtitle. 

* * * * * * * 

STUDY OF UNDERGROUND STORAGE TANKS

SEC. 9009. (a) PETROLEUM TANKS.—Not later than twelve 

months after the date of enactment of the Hazardous and Solid 

Waste Amendments of 1984, the Administrator shall complete a 

study of underground storage tanks used for the storage of regulated substances defined in section ø9001(2)(B)¿ 9001(7)(B). 

* * * * * * * 

(d) FARM AND HEATING OIL TANKS.—Not later than thirty-six 

months after the date of enactment of the Hazardous and Solid 

Waste Amendments of 1984, the Administrator shall conduct a 

study regarding the tanks referred to in øsection 9001(1) (A) and 

(B)¿ subparagraphs (A) and (B) of section 9001(10). Such study 

shall include estimates of the number and location of such tanks 

and an analysis of the extent to which there may be releases or 

threatened releases from such tanks into the environment. 

* * * * * * * 

øAUTHORIZATION OF APPROPRIATIONS

øSEC. 9010. For authorization of appropriations to carry out 

this subtitle, see section 2007(g).¿ 

480 

SEC. 9010. OPERATOR TRAINING. 

(a) GUIDELINES.— 

(1) IN GENERAL.—Not later than 2 years after the date of enactment of the Underground Storage Tank Compliance Act of 

2005, in consultation and cooperation with States and after 

public notice and opportunity for comment, the Administrator 

shall publish guidelines that specify training requirements 

for— 

(A) persons having primary responsibility for on-site operation and maintenance of underground storage tank systems; 

(B) persons having daily on-site responsibility for the operation and maintenance of underground storage tanks systems; and 

(C) daily, on-site employees having primary responsibility 

for addressing emergencies presented by a spill or release 

from an underground storage tank system. 

(2) CONSIDERATIONS.—The guidelines described in paragraph 

(1) shall take into account— 

(A) State training programs in existence as of the date of 

publication of the guidelines; 

(B) training programs that are being employed by tank 

owners and tank operators as of the date of enactment of 

the Underground Storage Tank Compliance Act of 2005; 

(C) the high turnover rate of tank operators and other 

personnel; 

(D) the frequency of improvement in underground storage 

tank equipment technology; 

(E) the nature of the businesses in which the tank operators are engaged; 

(F) the substantial differences in the scope and length of 

training needed for the different classes of persons described in subparagraphs (A), (B), and (C) of paragraph 

(1); and 

(G) such other factors as the Administrator determines to 

be necessary to carry out this section. 

(b) STATE PROGRAMS.— 

(1) IN GENERAL.—Not later than 2 years after the date on 

which the Administrator publishes the guidelines under subsection (a)(1), each State that receives funding under this subtitle shall develop State-specific training requirements that are 

consistent with the guidelines developed under subsection (a)(1). 

(2) REQUIREMENTS.—State requirements described in paragraph (1) shall— 

(A) be consistent with subsection (a); 

(B) be developed in cooperation with tank owners and 

tank operators; 

(C) take into consideration training programs implemented by tank owners and tank operators as of the date 

of enactment of this section; and 

(D) be appropriately communicated to tank owners and 

operators. 

(3) FINANCIAL INCENTIVE.—The Administrator may award to 

a State that develops and implements requirements described in 

paragraph (1), in addition to any funds that the State is entiVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00480 Fmt 6659 Sfmt 6603 E:\HR\OC\HR215P1.XXX HR215P1
481 

tled to receive under this subtitle, not more than $200,000, to 

be used to carry out the requirements. 

(c) TRAINING.—All persons that are subject to the operator training requirements of subsection (a) shall— 

(1) meet the training requirements developed under subsection (b); and 

(2) repeat the applicable requirements developed under subsection (b), if the tank for which they have primary daily onsite management responsibilities is determined to be out of compliance with— 

(A) a requirement or standard promulgated by the Administrator under section 9003; or 

(B) a requirement or standard of a State program approved under section 9004. 

SEC. 9011. USE OF FUNDS FOR RELEASE PREVENTION AND COMPLIANCE. 

Funds made available under section 9014(2)(D) from the Trust 

Fund may be used to conduct inspections, issue orders, or bring actions under this subtitle— 

(1) by a State, in accordance with a grant or cooperative 

agreement with the Administrator, of State regulations pertaining to underground storage tanks regulated under this subtitle; and 

(2) by the Administrator, for tanks regulated under this subtitle (including under a State program approved under section 

9004). 

SEC. 9012. DELIVERY PROHIBITION. 

(a) REQUIREMENTS.— 

(1) PROHIBITION OF DELIVERY OR DEPOSIT.—Beginning 2 

years after the date of enactment of this section, it shall be unlawful to deliver to, deposit into, or accept a regulated substance into an underground storage tank at a facility which has 

been identified by the Administrator or a State implementing 

agency to be ineligible for fuel delivery or deposit. 

(2) GUIDANCE.—Within 1 year after the date of enactment of 

this section, the Administrator and States that receive funding 

under this subtitle shall, in consultation with the underground 

storage tank owner and product delivery industries, for territory 

for which they are the primary implementing agencies, publish 

guidelines detailing the specific processes and procedures they 

will use to implement the provisions of this section. The processes and procedures include, at a minimum— 

(A) the criteria for determining which underground storage tank facilities are ineligible for delivery or deposit; 

(B) the mechanisms for identifying which facilities are 

ineligible for delivery or deposit to the underground storage 

tank owning and fuel delivery industries; 

(C) the process for reclassifying ineligible facilities as eligible for delivery or deposit; and 

(D) a delineation of, or a process for determining, the 

specified geographic areas subject to paragraph (4). 

(3) DELIVERY PROHIBITION NOTICE.— (A) ROSTER.—The Administrator and each State implementing agency that receives funding under this subtitle 

482 

shall establish within 24 months after the date of enactment of this section a Delivery Prohibition Roster listing 

underground storage tanks under the Administrator’s or 

the State’s jurisdiction that are determined to be ineligible 

for delivery or deposit pursuant to paragraph (2). 

(B) NOTIFICATION.—The Administrator and each State, 

as appropriate, shall make readily known, to underground 

storage tank owners and operators and to product delivery 

industries, the underground storage tanks listed on a Delivery Prohibition Roster by: 

(i) posting such Rosters, including the physical location and street address of each listed underground 

storage tank, on official web sites and, if the Administrator or the State so chooses, other electronic means; 

(ii) updating these Rosters periodically; and 

(iii) installing a tamper-proof tag, seal, or other device blocking the fill pipes of such underground storage 

tanks to prevent the delivery of product into such underground storage tanks. 

(C) ROSTER UPDATES.—The Administrator and the State 

shall update the Delivery Prohibition Rosters as appropriate, but not less than once a month on the first day of 

the month. 

(D) TAMPERING WITH DEVICE.— (i) PROHIBITION.—It shall be unlawful for any person, other than an authorized representative of the Administrator or a State, as appropriate, to remove, tamper with, destroy, or damage a device installed by the 

Administrator or a State, as appropriate, under subparagraph (B)(iii) of this subsection. 

(ii) CIVIL PENALTIES.—Any person violating clause (i) 

of this subparagraph shall be subject to a civil penalty 

not to exceed $10,000 for each violation. 

(4) LIMITATION.— 

(A) RURAL AND REMOTE AREAS.—Subject to subparagraph (B), the Administrator or a State shall not include 

an underground storage tank on a Delivery Prohibition 

Roster under paragraph (3) if an urgent threat to public 

health, as determined by the Administrator, does not exist 

and if such a delivery prohibition would jeopardize the 

availability of, or access to, fuel in any rural and remote 

areas. 

(B) APPLICABILITY OF LIMITATION.—The limitation under 

subparagraph (A) shall apply only during the 180-day period following the date of a determination by the Administrator or the appropriate State that exercising the authority 

of paragraph (3) is limited by subparagraph (A). 

(b) EFFECT ON STATE AUTHORITY.—Nothing in this section shall 

affect the authority of a State to prohibit the delivery of a regulated 

substance to an underground storage tank. 

(c) DEFENSE TO VIOLATION.—A person shall not be in violation of 

subsection (a)(1) if the underground storage tank into which a regulated substance is delivered is not listed on the Administrator’s or 

the appropriate State’s Prohibited Delivery Roster 7 calendar days 

prior to the delivery being made. 

483 

SEC. 9013. TANKS ON TRIBAL LANDS. 

(a) STRATEGY.—The Administrator, in coordination with Indian 

tribes, shall, not later than 1 year after the date of enactment of this 

section, develop and implement a strategy— 

(1) giving priority to releases that present the greatest threat 

to human health or the environment, to take necessary corrective action in response to releases from leaking underground 

storage tanks located wholly within the boundaries of— 

(A) an Indian reservation; or 

(B) any other area under the jurisdiction of an Indian 

tribe; and 

(2) to implement and enforce requirements concerning underground storage tanks located wholly within the boundaries of— 

(A) an Indian reservation; or 

(B) any other area under the jurisdiction of an Indian 

tribe. 

(b) REPORT.—Not later than 2 years after the date of enactment 

of this section, the Administrator shall submit to Congress a report 

that summarizes the status of implementation and enforcement of 

this subtitle in areas located wholly within— 

(1) the boundaries of Indian reservations; and 

(2) any other areas under the jurisdiction of an Indian tribe. 

The Administrator shall make the report under this subsection 

available to the public. 

(c) NOT A SAFE HARBOR.—This section does not relieve any person 

from any obligation or requirement under this subtitle. 

(d) STATE AUTHORITY.—Nothing in this section applies to any underground storage tank that is located in an area under the jurisdiction of a State, or that is subject to regulation by a State, as of 

the date of enactment of this section. 

SEC. 9014. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated to the Administrator the 

following amounts: 

(1) To carry out subtitle I (except sections 9003(h), 9005(c), 9011 and 9012) $50,000,000 for each of fiscal years 2005 

through 2009. 

(2) From the Trust Fund, notwithstanding section 9508(c)(1) 

of the Internal Revenue Code of 1986: 

(A) to carry out section 9003(h) (except section 9003(h)(12)) $200,000,000 for each of fiscal years 2005 

through 2009; (B) to carry out section 9003(h)(12), $200,000,000 for 

each of fiscal years 2005 through 2009; (C) to carry out sections 9004(f) and 9005(c) $100,000,000 

for each of fiscal years 2005 through 2009; and (D) to carry out sections 9011 and 9012 $55,000,000 for 

each of fiscal years 2005 through 2009. 

(484) 

DISSENTING VIEWS 

DISSENTING VIEWS ON CLEAN AIR ACT ATTAINMENT DATE 

EXTENSIONS 

Section 1443 of the bill provides attainment date extensions for 

ozone nonattainment areas under section 181 of the Clean Air Act. 

Under this provision, an area may obtain an extension if another 

area makes a ‘‘significant contribution’’ to its nonattainment status. 

The extension may be granted until such time as the contributing 

area makes its ‘‘last reductions necessary for attainment in the 

downwind area.’’ 

This provision may no longer be necessary to address their originally intended purpose. It has not been examined in a legislative 

hearing, and the Environmental Protection Agency (EPA) has already stated that the provision needs to be ‘‘refined’’ in order to 

maintain consistency with EPA’s latest rule changes. The provision 

could result in sweeping changes to Clean Air policy and undermine ongoing efforts at EPA to attain ozone standards as soon as 

possible. The provision is opposed by national environmental organizations such as the American Lung Association, Public Citizen, 

Clean Air Task Force, Clear the Air, Earthjustice, Friends of the 

Earth, League of Conservation Voters, National Environmental 

Trust, Natural Resources Defense Council, the Sierra Club and 

U.S. PIRG. 

This provision was originally designed to address the possibility 

of ‘‘bump-ups’’ under section 181(b) of the Clean Air Act. Section 

181(b) provides that when an area fails to meet its attainment 

date, it is ‘‘bumped-up’’ to a higher classification. The result is that 

an area receives an extended attainment date, and must adopt additional control measures; no sanctions are triggered. This system 

was designed to provide an incentive for areas to meet their attainment deadlines, and it provides a remedy if they fail by requiring 

implementation of additional controls to ensure that the healthbased standards are ultimately attained. 

During the 1990s, an issue arose regarding whether it was equitable for areas that were affected by ‘‘overwhelming transport’’ to 

be ‘‘bumped-up’’ in accordance with section 181(b). EPA issued 

guidance documents and policies addressing this issue, once in 

1994 and once in 1998. These policies were eventually overturned 

in court. (See Sierra Club v. EPA 294 F.3d 155 (D.C. Cir. July 2, 

2002) (invalidating the extension for Washington, D.C.); Sierra 

Club v. EPA 314 F.3d 735 (5th Cir. Dec. 11th, 2002) (Baton Rouge); 

Sierra Club v. EPA 311 F.3d 853 (7th. Cir, November 25th, 2002) 

(St. Louis) and Sierra Club v. EPA Nos. 02–13486, 0213705, Slip 

op. June 17, 2003 (11th Cir.)). 

485 

On July 22, 2003, the Committee held an oversight hearing relating to the ‘‘bump-up’’ policy. Hearing Before the Subcommittee on 

Energy and Air Quality ‘‘Bump-Up’’ Policy Under Title I of the 

Clean Air Act, July 22, 2003, Serial No. 108–62. At that time, no 

legislative language had been introduced in the House. The language of section 1443 first appeared at Conference during the 

108th Congress. 

In the time since section 1443 was included in the Conference 

Report, two relevant events have occurred regarding ozone nonattainment under the Clean Air Act. On April 15, 2004, EPA redesignated all ozone nonattainment areas under the new 8-hour ozone 

standard, giving all areas (except those in California) new attainment dates of 2007, 2009, or 2010. In addition, on March 10, 2005, 

EPA issued its Clean Air Interstate Rule (CAIR). The CAIR rule 

found that 25 states east of the Mississippi make ‘‘significant contributions’’ to ozone nonattainment in other states. CAIR established a national ‘‘cap and trade’’ system with a final set of reductions required in 2015 (or beyond, due to banking). 

The effect of these developments is twofold. First, the need for 

legislative provisions to address potential ‘‘bump-ups’’ is greatly reduced, or possibly even eliminated, since many areas have received 

a lower classification and therefore face little threat of increased 

mandatory controls anytime in the near future. Moreover, no area 

will face a ‘‘bump-up’’ until 2007 at the earliest, and for many 

areas, ‘‘bump-up’’ cannot now occur until 2010 or beyond. 

The second, and potentially more significant, effect is that under 

the CAIR rule, EPA has found that areas across the eastern United 

States receive ‘‘significant contributions’’ of pollution from other 

areas. EPA has also established that the last set of transport reductions may not occur until 2015 (or later, due to banking). The 

combined effect of these changes is that section 1443 could apply 

to many more areas than it did in 2003 and the length of extensions to be granted is substantially increased as well. 

EPA was recently asked by the Senate Environment Committee 

about its views regarding section 1443. EPA responded on December 9, 2004, and stated that: ‘‘EPA continues to support the concept 

underlying the former attainment date extension policy. Because of 

differences between the 1-hour ozone implementation and 8-hour 

ozone implementation, the policy would need to be refined for purposes of 8-hour implementation.’’ December 9, 2004, Letter from 

EPA Associate Administrator Charles Ingebretson to Senator 

Thomas Carper, Response to Senator Jeffords at page 50. 

This provision needs to be examined much more carefully. It affects many areas with large populations at risk of increased health 

effects. It could have many unintended consequences, including 

substantially delaying local controls that would provide health benefits and are necessary for attainment. It seeks to address a problem that has largely been rendered moot. It may seriously undermine progress toward attainment of the new ozone standard. And 

it has little or nothing to do with energy policy. 

Changes of this magnitude should take place through the process 

of regular order, bringing to bear the advice and expertise of EPA 

and other interested parties regarding actual legislative language. 

That process has yet to take place with regard to section 1443. InVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00485 Fmt 6604 Sfmt 6604 E:\HR\OC\HR215P1.XXX HR215P1
486 

stead, the passage of time has altered the effect of this language 

in important ways and called into question the original justification 

for legislation. Before we pass major amendments to the Clean Air 

Act, we must at least comprehend their full meaning and determine if the changes are a necessary improvement on current law. 

This provision, and the host of policy issues that it raises, should 

not be passed by this Committee at this time. 

JOHN D. DINGELL. 

EDWARD J. MARKEY. 

SHERROD BROWN. 

FRANK PALLONE, Jr. 

HILDA L. SOLIS. 

ELIOT L. ENGEL. 

DIANA DEGETTE. 

LOIS CAPPS. 

BART STUPAK. 

ANNA G. ESHOO. 

TAMMY BALDWIN. 

TOM ALLEN. 

JIM DAVIS. 

JAY INSLEE. 

JAN SCHAKOWSKY. 

HENRY A. WAXMAN. 

(487) 

DISSENTING VIEWS ON TITLE III, OIL AND GAS 

PROVISIONS 

SECTION 320—LIQUEFACTION OR GASIFICATION NATURAL GAS

TERMINALS

The language in section 320 was not in last year’s House bill nor 

was it included in the conference report to H.R. 6 in the 108th Congress. This language made its debut in the Committee print on 

March 31, 2005. It has not been the subject of a hearing. 

Section 320 contains broad changes to the Natural Gas Act affecting both the Federal Energy Regulatory Commission (FERC) 

and the role of the states in Liquefied Natural Gas (LNG) issues. 

This section, among other things, modifies Section 3 of the Natural 

Gas Act to give FERC exclusive jurisdiction over the construction, 

expansion, or operation of LNG facilities; establishes an unreasonable delay/backstop standard that presumes approval by Federal 

and state agencies if they do not comply with FERC time lines; and 

defines unreasonable delay as one year after an application has 

been filed. The bill establishes the FERC record as the exclusive 

record for administrative proceedings, and makes the D.C. Circuit 

Court of Appeals the exclusive court for civil appeals of this section. 

Proponents of this provision argue that it allows a greater role 

for States by requiring FERC to consult with them prior to granting an order under the new section and by allowing States to inspect LNG facilities. It must be noted, however, that consultation 

is a loose standard that does not guarantee collaboration or cooperation. As for a State’s ability to conduct safety inspections, the 

bill requires the State to submit notification in writing to FERC, 

which raises the question of whether FERC has the ability to deny 

permission to inspect. The bill further requires that inspections by 

State officials ‘‘be carried out in conformance with Federal regulations and guidelines’’ which is undefined in the bill. 

The siting, construction, and expansion of LNG facilities is an 

issue of growing national importance, as well as controversy. The 

Committee would be well served by conducting extensive hearings 

so that all views may be expressed and examined before such 

sweeping legislative changes are made. 

Democrats, led by Representative Ed Markey (D–MA), offered an 

amendment to strike this section from the bill. The amendment 

was defeated by a vote of 18–35. 

SUBTITLE D—REFINING REVITALIZATION

Subtitle D contains language that is similar, but not identical, to 

a bill from the 108th Congress. The subtitle authorizes the Secretary of Energy to designate ‘‘refinery revitalization zones,’’ which 

are areas that have experienced mass layoffs or contain an idle reVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00487 Fmt 6604 Sfmt 6604 E:\HR\OC\HR215P1.XXX HR215P1
488 

finery and have an unemployment rate that exceeds the national 

average by 10 percent. 

The language establishes the Department of Energy (DOE) as 

the lead agency for an expedited permitting process that is defined 

as six months during which all Federal permit decisions and environmental reviews are to be completed. It directs that DOE maintain the exclusive record for all administrative proceedings, and establishes an appeals process for refinery applicants or States that 

allow an appeal to the Secretary of Energy, who may override the 

concerns of other Federal and State agencies and grant approval of 

a permit that had been denied. 

A version of the refinery revitalization provisions (H.R. 4517) 

was brought directly to the House floor last June during the ‘‘Energy Week.’’ H.R. 4517 passed the House as an amendment to the 

energy bill by a vote of 239–192 on June 16, 2004. On July 15, 

2004, after the bill passed the House, the Subcommittee on Energy 

and Air Quality held a hearing entitled ‘‘The Status of the U.S. Refining Industry.’’ 

Proponents of this provision argue that there are large numbers 

of closed or idle refineries seeking to reopen and that both these 

facilities and new refineries are having difficulties obtaining environmental permits. 

Following the July 2004 hearing, Ranking Member Dingell sent 

a letter to EPA Administrator Leavitt along with a list of over 200 

closed refineries. He asked the Administrator how many of these 

refineries had permit applications pending that would re-open or 

re-start these refineries. Three months later EPA provided the following response: 

Upon further review and consultation with the appropriate state and local agencies, we are not aware of any 

pending permits under the Clean Water Act, the Resource 

Conservation and Recovery Act, the Safe Drinking Water 

Act and the Toxic Substances Control Act for the restart 

of refineries on your list. 

A previous response indicated there were no permits pending 

under the Clean Air Act either. 

Proponents of this provision have also cited attempts by a facility 

in Yuma, Arizona, to receive a permit over the last ten years. 

Democratic committee staff obtained a chronology from the State of 

Arizona that revealed an initial permit was granted to the applicant in 1992 for a facility in Maricopa County, but the company 

chose not to construct for seven years. After several incomplete permit applications were submitted between 1999–2003, the facility 

announced in 2003 that it had decided to move to Yuma, Arizona. 

A complete permit application was submitted in July of 2004. That 

permit has now been granted, in less than a year. 

Since the bill defines the term ‘‘Federal Authorization’’ as ‘‘any 

authorization required under federal law,’’ it will allow the Secretary of Energy on appeal to override the decisions not only of the 

EPA Administrator and state officials under the federal environmental laws but also the Secretary of Defense and Secretary of Interior in the following circumstances: 

489 

• Military agency approvals if military facilities are involved; 

• Access permits by the Bureau of Land Management or the 

U.S. Army Corps of Engineers; 

• National Environmental Policy Act (NEPA) Compliance 

from a controlling agency such as the Bureau of Land Management; and 

• National Historic Preservation Act Compliance authorizations. 

This subtitle cites the year 1981 as the high-water mark for the 

number of refineries in the United States. In 1981, President 

Reagan ordered the elimination of the refinery allocation programs 

that favored small refiners, thus leading to several closures. 

Refinery companies themselves have mothballed refineries. A recent Government Accountability Office (GAO) report entitled ‘‘Energy Markets: Effects of Mergers and Market Concentration in U.S. 

Petroleum Industry’’ offers the following: 

Partially or fully vertically integrated oil companies 

have sold or mothballed some refineries. As a result, some 

of these companies now have only enough refinery capacity 

to supply their own branded needs . . . 

This highly concentrated market has resulted in higher prices. 

According to GAO: 

Mergers and increased market concentration generally 

led to higher U.S. wholesale gasoline prices. 

In addition, the Congressional Research Service has found that 

while a number of refineries have closed, the capacity of the industry has increased: 

Domestic refining capacity has increased incrementally 

since 1992, with total growth of about 7%. 

According to the Energy Information Administration (EIA) Annual Energy Outlook 2005 report released this past February: 

Distillation capacity is projected to grow from the 2003 

year-end level of 16.8 million barrels per day to 22.3 million barrels per day in 2025. 

EIA’s analysis also confirms that refining capacity will increase 

in all their projections and that refining costs are expected to ‘‘remain stable or decline.’’ EIA also notes that the price of ‘‘crude oil 

continues as the largest part of product prices.’’ 

Because of the obvious discrepancy between the facts and the 

claims of this provision’s proponents, Democrats, led by Rep. Hilda 

Solis (D–CA), offered a motion to strike this provision from the bill. 

The amendment was defeated by a vote of 22–27. 

SECTION 327—HYDRAULIC FRACTURING AND SAFE DRINKING WATER

Part C of the Safe Drinking Water Act (SDWA) is designed to 

protect underground drinking water sources from contamination 

caused by underground injection of fluids. In two separate decisions 

in 1997 and 2001 the United States Court of Appeals for the Eleventh Circuit concluded that hydraulic fracturing activities conVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00489 Fmt 6604 Sfmt 6602 E:\HR\OC\HR215P1.XXX HR215P1
490 

stitute injection under Part C of the SDWA and that wells used for 

the injection of hydraulic fracturing fluids should be regulated as 

Class II wells. No other Federal court has addressed the issue or 

concluded otherwise. 

Hydraulic fracturing is a technique used to enhance the recovery 

of methane gas from coalbeds. The Environmental Protection Agency (EPA) defines hydraulic fracturing as a ‘‘temporary and intermittent process in which fluids are injected underground at high 

pressures to create fractures in the coals seam that enhance the recovery of methane gas by creating pathways for the gas to flow to 

the surface.’’ 

The EPA conducted a narrowly focused study to address hydraulic fracturing of coal bed methane wells, but not all hydraulic fracturing practices. The final report released in June of 2004 did not 

find confirmed evidence that drinking water wells have been contaminated by hydraulic fracturing fluid injection into coal bed 

methane wells. The EPA Final Report, however, has become a 

source of controversy with its scope, objectivity, and conclusions 

challenged by a senior EPA engineer from Region 8. On March 11, 

2005, the EPA Inspector General announced that she would review 

the concerns being raised with the Final Report. 

Section 327 of the bill eliminates existing statutory authority 

under SDWA to ensure that hydraulic fracturing does not endanger 

underground sources of drinking water by removing hydraulic fracturing for oil and gas production activities from the term ‘‘underground injection’’ in Section 1421. This is very significant because 

virtually all people living in rural areas and more than 50 percent 

of all Americans rely on groundwater for their drinking water. 

The majority provision in Section 327 eliminates all EPA authority under the Safe Drinking Water Act to protect sources of drinking water from improper or harmful hydraulic fracturing practices 

now or in the future. It does not allow for a regulatory determination by the EPA based on the completed study and review by the 

National Academy of Sciences. Further, the majority action is 

taken without the benefit of any hearings on this matter by the 

Subcommittee on Environment and Hazardous Materials which has 

jurisdiction over Safe Drinking Water Act matters. 

The EPA’s initial findings indicated that the use of diesel fuel in 

fracturing fluids by some companies introduced the majority of constituents of concern to underground sources of drinking water. The 

EPA also stated that water-based alternatives exist and from an 

environmental perspective are preferable to the injection of diesel 

fuel in underground sources of drinking water. 

In the Final Report, EPA determined that, in some cases, constituents of potential concern are injected directly into underground 

sources of drinking water during the course of normal fracturing 

operations. The use of diesel fuel in fracturing fluids introduces 

benzene, toluene, ethly benzene, and xylenes into underground 

sources of drinking water. 

Given the concerns associated with the use of diesel fuel and the 

introduction of these contaminants into underground sources of 

drinking water, EPA entered into a Memorandum of Agreement 

with three major service companies to voluntarily eliminate diesel 

fuel from hydraulic fracturing fluids that are injected directly into 

491 

underground drinking water sources for coalbed methane production. 

Under this bill, however, EPA would have no residual authority 

to enforce this agreement under the Safe Drinking Water Act. 

Some have argued that the emergency powers authority of Section 1431 of the SDWA remains available. The emergency powers 

of Section 1431 do not, however, provide the necessary regulatory 

authority. The emergency power authority only applies on a caseby-case basis and requires an imminent and substantial 

endangerment to a person’s ‘‘health.’’ Section 1431 does not apply 

to protecting the environment such as underground aquifers that 

are sources of underground drinking water. 

Representative Diana DeGette (D–CO) offered an amendment to 

section 327. In summary, the DeGette amendment provided for: 

• An independent scientific review by the National Academy 

of Science; 

• A regulatory determination by the Administrator of the 

EPA; 

• Preservation of Federal authority to respond in the future 

where endangerment of underground sources of drinking water 

or adverse health effects are established; and • Prevention of lawsuits that would force state regulation 

under the Safe Drinking Water Act. 

This approach is based on a bipartisan staff agreement that was 

circulated for inclusion in the conference report in the 107th Congress. We believe this approach—preserving authority under the 

Safe Drinking Water Act to protect underground sources of drinking water but addressing industry fears of lawsuits that force regulation—is a far sounder public policy than the one set forth in Section 327 of the bill. Rep. DeGette’s amendment was defeated by a 

vote of 16 to 30. 

Representative Hilda Solis (D–CA) offered an amendment to ban 

the injection of diesel fuel into an underground source of drinking 

water. This amendment was defeated by a vote of 14 to 27. 

OTHER PROVISIONS

Representative Jim Davis (D–FL) offered an amendment to Section 330 that strikes the section that redefines the states’ role in 

the appeals process for consistency under the Coastal Zone Management Act. The bill limits the Secretary of Commerce’s review to 

the records of FERC only, impairing the state’s ability to present 

their views. The amendment was defeated by a vote of 19–29. 

Representative Bart Stupak (D–MI) also offered an amendment 

to prohibit any Federal or state permit or lease for new oil and gas 

slant, directional or offshore drilling in or under the Great Lakes. 

That amendment was adopted after Representative Mike Rogers 

(R–MI) weakened it with a substitute amendment that merely encourages States to ban drilling. The substitute mirrored language 

already in the bill. 

JOHN D. DINGELL. 

EDWARD J. MARKEY. 

SHERROD BROWN. 

FRANK PALLONE, Jr. 

492 

HILDA L. SOLIS. ELIOT L. ENGEL. DIANA DEGETTE. LOIS CAPPS. BART STUPAK. ANNA G. ESHOO. TAMMY BALDWIN. TOM ALLEN. JIM DAVIS. JAY INSLEE. JAN SCHAKOWSKY. HENRY A. WAXMAN. 

(493) 

DISSENTING VIEWS ON ELECTRICITY AND 

HYDROELECTRIC RELICENSING 

The bill reported by the Committee on Energy and Commerce is 

substantially similar to the flawed and ultimately failed energy bill 

conference report from the 108th Congress, with several notable 

new additions that regrettably did not add to the bill’s 

attractiveness. 

In both process and substance this bill and the product from the 

108th Congress stand in marked contrast to the bipartisan energy 

bill reported by the Committee in the 107th Congress when only 

five Democrats voted against it; this year 16 Democrats voted ‘‘no.’’ 

While this bill retained some portions of the widely-supported 

product from the 107th Congress, there are new provisions that 

were not contained in last year’s conference report and have not 

had the benefit of extensive legislative hearings. Democrats repeatedly made requests to the Republicans that extensive hearings be 

held preceding any markup. The Republicans responded with two 

days of wide-ranging hearings that by design could not allow members to fully explore the myriad of complex issues contained in the 

bill. 

While many of our Democratic colleagues take issue with a variety of provisions in this bill, these Dissenting Views will address 

two of the worst problems in the bill relating to electricity and hydroelectric relicensing. 

ELECTRICITY

The electricity provisions of Title XII exhibit both sins of commission and omission. They ignore the lessons of 2000–2001, when 

Enron and other unscrupulous power marketers manipulated electricity prices in west coast power markets and undermined the financial credibility of the utility industry. The title represents a victory for various special interests at the expense of citizens whom 

our federal energy laws are supposed to safeguard, and combines 

the worst of deregulation with favors to a select few. 

Despite the fact that millions of consumers were forced to pay inflated costs, the bill does nothing to ensure that they will receive 

refunds of overcharges resulting from purposeful withholding of 

electricity and related gaming of natural gas transportation markets. Nor does the bill reform current law to provide the Federal 

Energy Regulatory Commission (FERC) and the Securities and Exchange Commission (SEC) the tools and direction they need to prevent a repetition of this debacle. 

The title includes an incomprehensible ‘‘native load’’ provision altering FERC’s authority over interstate transmission lines, the full 

impact of which is unclear. Indeed, because this language was 

available only hours before being voted on in the Committee, members did not have the benefit of hearings, the Commission’s views, 

494 

or any other means of understanding whether it would benefit or 

harm consumers. 

The electricity title continues to hold hostage a crucial reform 

needed to help improve the reliability of our transmission system 

and prevent future blackouts. This section is one of the few consensus items in the title, and is supported by the Administration, 

FERC, consumer groups, and private industry. Sadly, though common sense suggests this provision should have been enacted immediately after the massive 2003 summer blackout, it remains enmeshed in this controversial comprehensive energy bill. Moreover, 

this bill adds a spending cap on reliability councils that threatens 

to make blackouts more likely. 

Among other objectionable features of Title XII is the outright repeal of the Public Utility Holding Company Act of 1935 (PUHCA), 

which is administered by the SEC. This law has operated for years 

to protect consumers and investors. Title XII fails to include appropriate compensatory protections to ensure that investors and consumers are not at the mercy of unconstrained market power. Its 

few ‘‘reforms’’ barely scratch the surface of what is needed to prevent the recurrence of market abuses that cost consumers billions 

of dollars in electricity overcharges and compromised the reliability 

of a system that once was without peer. 

The title displaces the traditional ‘‘just and reasonable’’ standard 

for modifying unfair contracts with a far less protective standard 

that will tie FERC’s hands and make it more difficult to modify 

agreements that harm consumers. 

Finally, the title includes transmission-siting provisions that preempt not only state decisions about whether new or expanded lines 

should be built, but also decisions by federal land agencies as to 

whether lines should be built in our national forests and other public lands. 

A far better alternative for electricity reform was proposed by the 

amendment offered by Ranking Member Dingell, similar to H.R. 

1272 that he sponsored along with Representatives Waxman, Markey, Boucher, and 13 other cosponsors from the Committee on Energy and Commerce during the 108th Congress. The amendment 

would protect consumers by setting aside deregulatory efforts such 

as PUHCA repeal, and instead instituting reforms to prevent the 

type of market manipulation practiced by Enron. A recent FERC 

report observed that the Commission has limited tools to deter 

fraud. This amendment would authorize the Commission to take 

preventative measures to ensure markets operate for the benefit of 

consumers rather than unscrupulous industry participants. 

The Dingell amendment also set aside divisive questions about 

industry ‘‘restructuring’’ in favor of targeted, sensible reforms. It 

banned fraudulent, manipulative, or deceptive practices in the sale 

and transmission of electricity, and in the sale and transportation 

of natural gas. It established audit trail requirements to improve 

FERC’s ability to conduct investigations and take enforcement actions, and provided for greater transparency by requiring the reporting of information about transactions or quotations involving 

the purchase and sale, and the transmission and transportation, of 

electric power and natural gas. 

495 

The amendment increased the Federal Power Act’s civil and 

criminal penalties to help deter future misconduct. It directed the 

SEC to review existing PUHCA exemptions, to prevent a future 

Enron from wrongly claiming ‘‘exempt’’ status permitting it to exploit investors and consumers. The amendment required FERC to 

issue rules against affiliate abuse and authorized the Commission 

to issue refunds for ‘‘unjust and unreasonable rates’’ from the date 

they were first charged. It reformed the market-based rate policy 

of FERC to ensure it lives up to the Federal Power Act’s requirement that electricity rates are ‘‘just and reasonable.’’ Finally, the 

amendment incorporated several of the provisions of the electricity 

title that helped consumers, most notably the reliability provisions. 

The amendment was defeated on a straight party-line vote. 

Title XII does not provide the reforms needed to prevent a future 

Enron disaster, and offers only thin and patently inadequate protections for consumers. In so doing, it both misses an opportunity 

to respond to recent abuses in electric markets and obviates the responsibility of Congress to stabilize this critical industry. 

Other Democratic amendments included an amendment by Representative Ed Markey (D–MA) to protect consumers and investors 

of utilities within holding companies deregulated by PUHCA repeal, and an amendment by Rep. Ted Strickland (D–OH) to strike 

caps on private spending needed to improve transmission reliability. Others would strike preemptive transmission siting provisions and a section making it harder for FERC to modify unjust 

contracts. An amendment by Rep. Anna Eshoo (D–CA) would have 

ensured that California consumers harmed during electricity market turmoil of 2000–2001 can receive refunds. An amendment by 

Representative Frank Pallone (D–NJ) would have established a renewable portfolio standard to help diversify our energy supplies. 

These amendments were all rejected, as well. 

HYDROELECTRIC RELICENSING

The provisions relating to hydroelectric relicensing found in Title 

II, Section 231, are identical to those included in the conference report that died in the 108th Congress. In the name of ‘‘reform’’ these 

provisions give preferential treatment to electric utilities at the expense of other legitimate parties to licensing proceedings including 

states, Indian tribes, conservationists, irrigators, ranchers, and 

sportsmen. 

The bill entitles utilities alone to request trial-type hearings before the resource agencies charged with protecting rivers, lands, 

and fish and wildlife. Other parties are not given this right. The 

bill entitles utilities alone the special right to offer alternatives to 

the resource protections required by the resource agencies, which 

the agencies must accept under certain conditions. These rights are 

not afforded to others with a legitimate interest in relicensing. The 

bill also requires the resource agencies to justify their mandatory 

conditions based on a laundry list of non-resource related issues 

that are beyond their expertise and are redundant, given the fact 

that the Federal Energy Regulatory Commission is charged with 

considering power development factors. 

These provisions place the concerns of power companies well 

above the needs of the general public and fly in the face of basic, 

496 

fundamental fairness. They also undermine an agreement between 

electric utilities and the Committee prior to passage of the Electric 

Consumers Protection Act of 1986. 

In the hearings conducted last month on this bill, and in a subsequent submission to Subcommittee on Energy and Air Quality 

Chairman Ralph Hall, the industry offered precious little evidence 

for the need for the changes contemplated by the bill beyond the 

vague concern that the process for relicensing is somehow broken. 

No evidence of widespread or excessive delays; no evidence of conditions being imposed without a basis in fact; no evidence of even 

a marginal loss of generation due to resource conditions. One is left 

with the distinct impression that the industry simply finds it bothersome that they have to protect the resources from which they derive their profit. 

The hearings did reveal that both the industry and conservationists support FERC’s administrative actions to make the licensing 

process less onerous. We learned that the agency has twice issued 

rulemakings, supported by all, that have led to less delay, less cost, 

and less litigation with regard to licensing. We have not given 

FERC’s most recent administrative reform—the Integrated Licensing Process (ILP)—adequate time to work, so that we may know if 

legislative changes are necessary. Yet in contravention of the facts, 

we have this language. 

Now of course, the industry thinks this language is just wonderful—and how could they not? They get all sorts of special considerations that are not given to other parties with legitimate standing. 

Democrats introduced letters last week in opposition to this language, including one with over 78 state and local conservation organizations, a letter from six prominent sportfishing organizations, 

as well as letters from the Yakima Indian Nation, the Nez Perce 

Tribe, and the Northwest Indian Fish Commission, and numerous 

other conservation and environmental groups opposed to this language. The Democrats are also in possession of past letters signed 

by no less than 25 state Attorneys General opposed to language 

that gives preferential treatment to license applicants, as well as 

a past letter from the Conference of Western Attorneys General opposed to trial-type hearing provisions similar to those in the bill 

and signed by Attorneys General from Arizona, Colorado, Montana, 

New Mexico, Oregon, and Washington. 

Despite the egregious nature of this title, Republicans rejected 

repeated attempts to give some voice to the concerns of states, Indian tribes, conservationists, and sportsmen. Republicans rejected 

a bipartisan compromise that had been included in the Committee’s energy bill in the 107th Congress. This compromise had been 

supported in writing by conservationists and the industry. 

Republicans also rejected two additional proffers designed to provide a more tolerable level of equality for all parties to a licensing 

proceeding, while avoiding unnecessary delay in the relicensing 

process. These offers were rejected without the benefit of thoughtful discussion. 

There are few things more precious than the natural resources 

endowed upon this country. By siding so completely with the industry, Republicans have endorsed the foolish and misguided view that 

497 

rivers are the special dominion of electric utilities and that the 

public at-large should be relegated to second-class status. 

JOHN D. DINGELL. 

EDWARD J. MARKEY. 

SHERROD BROWN. 

FRANK PALLONE, Jr. 

HILDA L. SOLIS. 

ELIOT L. ENGEL. 

DIANA DEGETTE. 

LOIS CAPPS. 

BART STUPAK. 

ANNA G. ESHOO. 

TAMMY BALDWIN. 

TOM ALLEN. 

JIM DAVIS. 

JAY INSLEE. 

JAN SCHAKOWSKY. 

HENRY A. WAXMAN. 

RICK BOUCHER. 

(498) 

DISSENTING VIEWS ON MTBE LIABILITY WAIVER AND 

RELATED ISSUES 

Sections 1502–1505 of the bill contain numerous provisions addressing methyl tertiary butyl ether or MTBE. These provisions include: (1) liability protection for defective product lawsuits; (2) a 

waivable prohibition on the use of MTBE by 2014; and (3) ‘‘transition assistance’’ for MTBE manufacturers. The ultimate effect of 

these provisions is to aid MTBE manufacturers and encourage further MTBE use at the expense of national, state, and local drinking 

water suppliers and taxpayers. These provisions are opposed by a 

wide range of state and local interest groups, including the National League of Cities, the U.S. Conference of Mayors, the National Association of Counties, the American Public Works Association, the American Water Works Association, the Association of 

Metropolitan Water Agencies, and the Association of California 

Water Agencies, among others. 

BACKGROUND ON MTBE 

MTBE is a gasoline additive developed by the oil industry in the 

1970s to replace octane lost as a result of the removal of lead from 

gasoline. MTBE can be produced from natural gas and petroleum 

by-products. From an air quality standpoint, MTBE is a relatively 

clean, toxics-free source of oxygen (and octane). 

In 1990, Congress created the Reformulated Gasoline (RFG) program under section 211(k) of the Clean Air Act. Under this provision, Congress required the use of Reformulated Gasoline (RFG) in 

10 specific ozone nonattainment areas and allowed other areas to 

‘‘opt in’’ to the RFG program. The Act specified that RFG must contain two percent oxygen by weight, which was thought to be helpful 

in reducing ozone precursors. The primary fuel additives used to 

meet the two percent oxygenate requirement have been MTBE and 

ethanol, which were also the principal oxygenates in use in 1990. 

As a result of the 1990 Clean Air Act Amendments, MTBE use increased dramatically. While it is fair to say that Congress was 

aware that MTBE use would increase substantially as a result of 

the two percent oxygenate mandate, nothing in the language of section 211(k) specifically mentions MTBE or prescribes a particular 

oxygenate. 

Courts have specifically ruled on the issue of whether Congress 

mandated MTBE and have determined that MTBE was not mandated (Oxygenated Fuels Ass’n Inc. v. Davis, 331 F.3d 665 (9th Cir. 

2003) (upholding California’s ban on MTBE and emphasizing 

CAA’s ‘‘neutrality’’ among oxygenates; Oxygenated Fuels Assoc. v. 

Davis, 163 F.Supp.2d 1182, 1188 (E.D.Cal.2001) (CAA ‘‘neither requires nor forbids the use of any particular oxygenate. Its ‘goal’ is 

to assure a particular oxygen content’’). 

499

In addition, Committee documents reach similar conclusions. A 

1995 memo from the Committee on Energy and Commerce staff 

written by Republican counsel involved in the 1990 Clean Air Act 

amendments states that: ‘‘the May 17th 1990 Report of the Committee on Energy and Commerce could not have been more clear 

. . . it is intended that this be a fuel neutral program . . . the committee intends no such preference . . . all should compete.’’ (Memorandum Re: June 7, 1995 Hearing on Implementation of the Reformulated Gasoline Program Under Title II of the Clean Air Act 

Amendments (June 5, 1995) at p. 9.) Other statements to similar 

effect include a letter to the Environmental Protection Agency 

(EPA) dated March 25, 1994, and signed by 115 Members of the 

U.S. House of Representatives, which favorably quotes a Senate 

letter for the proposition that ‘‘the Act is entirely fuel neutral and 

only requires achievement of the specified emissions reductions. 

The point can be no more clear.’’ (Letter to EPA Administrator 

Carol Browner, dated March 25, 1994, reprinted in Hearing before 

the Subcommittee on Oversight and Investigations, (103rd Cong.) 

June 22, 1994, Serial No. 103–155 at p. 239.) 

MTBE HAZARDS AND LIABILITY ISSUES

Although from the standpoint of air quality MTBE is a relatively 

clean, toxics-free source of oxygen and octane, MTBE’s properties 

pose special hazards to groundwater. MTBE contamination is not 

like ordinary gasoline contamination. MTBE moves very quickly 

through water and does not adhere to soil. A very small amount 

can contaminate large amounts of groundwater. According to the 

product safety bulletin of Lyondell Chemical, the largest producer 

of MTBE, every release into the environment has the potential for 

damaging groundwater supplies. Once in the groundwater, MTBE 

tends to migrate faster and farther than most other hydrocarbons 

. . . MTBE may not biodegrade as promptly as other gasoline components and may require additional and more costly remediation 

procedures.’’ 

In recent years, numerous suits have been filed against MTBE 

makers alleging defective product theories. These defective product 

theories center on the argument that MTBE makers knew about 

the contamination characteristics of MTBE and knowingly introduced a defective product. Records from these court proceedings indicate that MTBE manufacturers were aware of the characteristics 

of MTBE. 

When presented with these documents, a jury in California found 

that MTBE manufacturers acted ‘‘with malice in selling MTBE that 

was defective in design.’’ Ultimately this suit was settled for $68 

million, of which 75 percent was used directly for groundwater remediation. A similar suit was brought and settled in Santa Monica 

for a minimum of $300 million, with $212 million or more going to 

remediation. Since that time, numerous suits have been brought 

throughout the United States, most notably in New England and 

California. These suits demonstrate the very large amount of liability exposure that MTBE manufacturers face. MTBE cleanup costs 

are currently estimated by the water utilities to be between $12 

billion and $63 billion, with the most widely cited estimate being 

$29 billion. 

500 

The liability waiver in section 1502 is retroactively effective to 

September 5, 2003. This feature of the bill will eliminate many existing lawsuits filed after that date and prior to enactment. That 

feature alone is cause for serious concern. Given that the full extent of MTBE contamination is not yet known, however, and MTBE 

continues to be released into the environment, the retroactive portion of the liability wavier may not be its most significant feature, 

since it only applies to the subset of cases filed between September 

5, 2003, and enactment. 

The principal objection to the liability waiver relates to the prospective immunity that the waiver affords to all future MTBE contamination cases. Upon enactment of this legislation, the oxygenate 

mandate would be repealed and at that time there can no longer 

be any argument about an MTBE mandate. Nor does serious dispute remain today regarding the contamination characteristics of 

MTBE. Because the energy bill allows MTBE use until 2014, the 

liability waiver will allow MTBE manufacturers to use MTBE with 

immunity for nearly another decade. 

EXTENDING THE USE OF MTBE 

Also of significant concern is the very long phase-out time for 

MTBE. Section 1504 prohibits the use of MTBE ‘‘not later than December 31, 2014.’’ Under section 1505, however, the President may 

render such prohibition ‘‘null and void’’ at any time prior to December 31, 2014. No standards are set for such a determination. In a 

hearing before this Committee in 2001, a representative of the 

American Petroleum Institute (API) testified that phasing out 

MTBE in gasoline in four years would be a ‘‘virtual walk in the 

park.’’ (Hearing before the Subcommittee on Oversight and Investigations, Nov. 1, 2001, ‘‘Issues Concerning the Use of MTBE In Reformulated Gasoline,’’ Serial No. 107–73 at p. 63.) Given what we 

now know about MTBE in groundwater and its failure to biodegrade, even after a decade or more, allowing the use of MTBE 

until 2014 is inviting unnecessary damage to our drinking water 

supplies. 

PROVIDING $2 BILLION TO MTBE MAKERS

Finally, the $2 billion transition assistance program in section 

1503 represents an unjustifiable subsidy. Serious questions remain 

regarding the failure of the MTBE makers to inform Congress in 

1990 that MTBE would contaminate groundwater. Recent requests 

to the American Petroleum Institute to document any evidence that 

MTBE makers warned Congress during enactment of the Clean Air 

Act Amendments of 1990 were met with the following response: 

Now some 14 years after the passage of the CAAA, API 

does not have documentation of what API or its members 

may have brought to the attention of Congress regarding 

MTBE’s potential to contaminate groundwater prior to enactment of the 1990 Amendments. 

The slow phase-in of the MTBE prohibition in section 1504, and 

substantial questions regarding the MTBE makers role in creating 

this problem suggest that there is little justification for this ComVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00500 Fmt 6604 Sfmt 6604 E:\HR\OC\HR215P1.XXX HR215P1
501 

mittee to authorize giving $2 billion of taxpayer funds to MTBE 

makers. MTBE makers will not be forced to suddenly abandon 

their businesses, and it is notable that the substances that they 

will be given funds to ‘‘transition’’ into manufacturing (iso-octanes, 

iso-octenes and alkylates) were oxygenates available in 1990. 

CONCLUSION

The overall effect of these MTBE provisions is to transfer an 

enormous amount of potential liability from MTBE makers to consumers and providers of drinking water, to continue creating liability by failing to prohibit further use of MTBE as soon as possible, 

and to provide $2 billion dollars in corporate handouts to MTBE 

producers. 

JOHN D. DINGELL. 

EDWARD J. MARKEY. 

SHERROD BROWN. 

FRANK PALLONE, Jr. 

HILDA L. SOLIS. 

ELIOT L. ENGEL. 

DIANA DEGETTE. 

LOIS CAPPS. 

BART STUPAK. 

ANNA G. ESHOO. 

TAMMY BALDWIN. 

TOM ALLEN. 

JIM DAVIS. 

JAY INSLEE. 

JAN SCHAKOWSKY. 

HENRY A. WAXMAN. 

TED STRICKLAND. 

(502) 

DISSENTING VIEWS ON LEAKING UNDERGROUND STORAGE 

TANK AMENDMENTS TITLE XV, SUBTITLE B 

BACKGROUND

Throughout this country, states, local governments, and ratepayers face a crisis from the contamination of drinking water supplies from methyl tertiary butyl ether (MTBE) and other hazardous 

contaminants that are leaking from underground storage tank systems. MTBE, a fuel additive, is particularly troublesome in that it 

migrates quickly through the soil into groundwater and even small 

amounts can render the groundwater undrinkable. It is estimated 

by drinking water utilities that current MTBE cleanup costs alone 

run between $29–$40 billion. 

According to the Environmental Protection Agency (EPA) 2006 

Congressional Justification and Annual Performance plan, MTBE 

contamination can increase cleanup costs from 25 percent to more 

than 100 percent. EPA reports that states face multimillion-dollar 

cleanup costs at sites with widespread MTBE contamination such 

as Santa Monica, CA, Long Island, NY, Pascoag, RI, and Hopkins, 

SC. 

As of October 1, 2004, the backlog of sites that require remedial 

action was 129,828 sites. Thousands of new releases are being detected annually. In the past five years, confirmed new releases 

averaged 12,641 per year. EPA projects an average of 6,000 to 

12,000 new releases will be reported per year over the next 10 

years. 

In the mid-1980s, Congress created the Leaking Underground 

Storage Tank (LUST) program to provide technical standards and 

corrective action authority for underground storage tanks. In 1986, 

Congress created a trust fund for the program that is replenished 

primarily through a one-tenth of a cent per gallon federal tax on 

gasoline and other fuels. The Trust Fund had a balance of $2.147 

billion at the end of fiscal year 2004. 

As we reach the 20th anniversary of the program, we believe 

that Congress must seriously strengthen the program to improve 

the inspection and enforcement authorities available to EPA and 

the states, and act to require real preventive measures to keep 

MTBE and other contaminants from reaching our groundwater. 

Groundwater is the source of drinking water for half of the Nation’s population and for virtually all people living in rural areas. 

In addition, Congressional appropriations have been and continue to be seriously deficient, notwithstanding the large surplus in 

the Trust Fund. We are also aware that many state cleanup funds 

are insolvent or have stopped accepting new claims. 

Despite a request from all Democratic Members of the Subcommittee on Environment and Hazardous Materials, the Committee leadership refused to hold any legislative hearings on the 

503 

amendments to the leaking underground storage program contained in Subtitle B of Title XV. Committee Members were therefore denied the benefit of hearing from the state agencies and the 

EPA that administer and enforce the program. 

EPA budget documents and state reports, however, reveal the 

following: 

• Last year, completed cleanups nationwide declined 23 percent from 18,518 in FY2003 to 14,285 in FY2004. 

• Last year, the Republican-controlled Congress cut the 

LUST appropriation by $6 million or 8 percent (from $75 million in FY2004 to $69.4 million in FY2005). 

• Over the last five years the actual appropriation for the 

LUST program averaged only $72 million. 

• Of the total annual appropriation, approximately $58 million goes to the 50 states but only $19 million is actually used 

to clean up leaks of MTBE or other contaminants. 

• The Tennessee Department of Environment and Conservation reported on December 1, 2004, that ‘‘the problem facing 

the state is that the fund is insolvent.’’ 

• The Michigan Department of Environmental Quality reported in March 2003 that there are more than 4,000 facilities 

that will require public funding in the amount of $1.7 billion. 

Michigan’s state financial assurance fund is insolvent. • Eleven states—Alabama, North Carolina, Connecticut, 

California, Tennessee, Virginia, West Virginia, Ohio, Pennsylvania, Massachusetts, and Colorado—have state funds with 

outstanding claims that exceed their balance, according to a 

June 21, 2004, state survey. 

COMMITTEE CONSIDERATION

During Committee markup Democratic Members offered four 

amendments to cure deficiencies in the Committee Print and improve the LUST provisions. Two of the amendments were adopted: 

An amendment by Representative Hilda Solis (D–CA) to eliminate 

a limitation on the EPA’s ability to recover federal cleanup costs 

from liable tank owners and operators, and an amendment by Representative Tammy Baldwin (D–WI) to improve the operator training provisions. 

Two other important strengthening amendments, however, were 

rejected largely along partisan lines: 

Inspections: Section 1523 of the bill adds a new periodic inspection requirement for underground storage tanks. If a tank, however, was last inspected in 1999, under this bill the tank may not 

be required to be inspected again until 2010 or 2011, because the 

2-year and the 3-year deadline (with an opportunity for a one-year 

extension) run consecutively. This is weaker than the 2-year minimum inspection frequency recommended by the EPA and the 3- 

year minimum inspection requirement recommended by the Government Accountability Office. 

In its June 2000 Report to Congress on a Compliance Plan for 

the Underground Storage Tank Program, the EPA stated: 

Inspecting every facility within two years would rapidly 

improve the compliance rates in many states, and continVerDate Aug 04 2004 00:06 Aug 10, 2005 Jkt 022715 PO 00000 Frm 00503 Fmt 6604 Sfmt 6604 E:\HR\OC\HR215P1.XXX HR215P1
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ued biennial inspections would ensure continued diligence 

on the part of LUST owners and operators, thus increasing 

the probability of sustaining high compliance rates. EPA 

believes the two-year cycle provides the best compromise 

between effectiveness and practicality. 

Representative Lois Capps (D–CA) offered an amendment to require a three-year mandatory inspection requirement, which was 

defeated by a vote of 24 to 29. 

Secondary Containment: Representative Bart Stupak (D–MI) offered an amendment to require new or replacement underground 

storage tank systems to be secondarily contained if they are within 

1,000 feet of existing community water systems or an existing potable drinking water well or other sensitive area as determined by 

the EPA administrator or a state implementing agency. Under the 

amendment, EPA is required to issue implementing regulations or 

guidelines and states retain authority to establish more stringent 

requirements. 

More than twenty states already require secondary containment 

in various circumstances. Many states like Texas require secondary 

containment for sensitive hydrogeologic formations. Secondary containment helps achieve rapid detection of leaks and prevents contamination of drinking water supplies. A recent EPA study of underground storage tank facilities in Florida found that tanks with 

secondary containment were four to ten times less likely to leak 

into the environment. 

Secondary containment is not new technology or a novel concept. 

According to the Petroleum Equipment Institute, on average, 56 

percent of all tank owners will install a secondary containment system when building a new station or upgrading an existing tank 

system in states that do not now require secondary containment. 

During the Committee proceedings, Representative Vito Fossella 

(R–NY) offered a substitute amendment to the Stupak amendment. 

Under the substitute, the EPA Administrator must require a state 

to adopt secondary containment similar in scope to the Stupak 

amendment (except for coverage of sensitive areas) or impose financial responsibility requirements on manufacturers and installers of 

tanks that will require evidence of financial responsibility of at 

least $1 million as a minimum for each occurrence with an appropriate aggregate requirement. 

Overall the Fossella amendment fails to require secondary containment and sets up a curious choice between secondary containment to prevent leaks and new financial responsibility requirements to provide costs of corrective action. We also opposed the 

provisions of the Fossella amendment contained in Section 

1530(a)(i)(1) for failing to allow the states the flexibility to designate ‘‘sensitive areas’’ where secondary containment can be required to protect drinking water supplies or other sensitive ecological areas. 

In addition, we opposed the provisions of the Fossella amendment contained in Section 1530(a)(i)(2) as a recipe for litigation and 

delay. There is no provision that allows cleanups to go forward 

while disputes between tank owners and operators and manufacturers and installers are litigating. At best, unnecessary uncertainty is created in the cleanup process. Further, the Committee 

505 

has no evidence before it in a legislative hearing record that manufacturers and installers bear the principal or even major responsibility for the leaking tanks. Indeed, we doubt that any manufacturer or installer anywhere in the country was aware that the 

Committee majority intended to subject them to such a requirement. The Fossella amendment appears to be an ill-considered effort to shift the culpability of petroleum marketers and convenience 

store owners with leaking tanks onto manufacturers and installers, 

many of who are small business owners. The Committee adopted 

the Fossella amendment by a vote of 27 to 25. 

We also have strong concerns about the preemptive effect of Section 1527 (adding Section 9012(a)(3)) on the 24 state laws that, according to the Government Accountability Office, already provide 

for fuel delivery prohibition with some form of red tag or green tag 

system. Section 1527 would deny federal funding to the state fuel 

delivery prohibition programs currently in operation. 

We regret that the jurisdictional Subcommittee on Environment 

and Hazardous Materials did not hold a proper legislative hearing 

on the LUST provisions and that there were not bipartisan agreements on the important inspection, fuel delivery prohibition, and 

secondary containment provisions. 

JOHN D. DINGELL. 

EDWARD J. MARKEY. 

SHERROD BROWN. 

FRANK PALLONE, Jr. 

HILDA L. SOLIS. 

ELIOT L. ENGEL. 

DIANA DEGETTE. 

LOIS CAPPS. 

BART STUPAK. 

ANNA G. ESHOO. 

TAMMY BALDWIN. 

TOM ALLEN. 

JIM DAVIS. 

JAY INSLEE. 

JAN SCHAKOWSKY. 

HENRY A. WAXMAN. 

EDOLPHUS TOWNS. 

BOBBY L. RUSH. 

ALBERT R. WYNN. 

(506) 

ADDITIONAL DISSENTING VIEWS OF MR. MARKEY OF 

MASSACHUSETTS 

In addition to the concerns I have about other objectionable provisions of the bill approved by the Committee, I would also like to 

lay out my concerns about the Deal Amendment to Title I. This 

amendment would preempt state energy efficiency standards for 

ceiling fans. Unlike other provisions in the bill setting efficiency 

standards for various products and equipment, the Deal Amendment will not actually save energy. Instead, it actually nullifies 

ceiling fan efficiency requirements that have already been adopted 

in Maryland and California, and would negate the legislation now 

pending in at least 5 other states to adopt similar efficiency measures. 

Having stripped the states of their ability to establish meaningful efficiency standards for ceiling fans, what does the Deal Amendment offer in its place? Essentially nothing. Its language setting requirements on fan controls and switches is virtually meaningless, 

since it purports to require features that nearly all new fans sold 

today already employ. 

In reality, the principal factors affecting the energy consumption 

of ceiling fans are the efficiency of air circulation and the efficiency 

of lighting. For ceiling fans with lights, the greatest opportunities 

for efficiency improvements relate to lighting—perhaps 90% of potential energy savings. 

Regarding air circulation, the Deal Amendment authorizes, but 

does not require, the Secretary to adopt an efficiency standard in 

the future. DOE has already missed legal deadlines for nearly two 

dozen standards it is currently required to set—a matter addressed 

by the amendment that I offered to the bill during the Committee’s 

markup. 

The fact of the matter is that an optional standard is really no 

standard at all. Regarding the efficiency of ceiling fan lighting— 

90% of potential energy savings—the Secretary is given no new authority or direction whatsoever. This provision takes the responsibility for regulating ceiling fan lighting away from the states while 

doing nothing with it at the federal level—a classic example of 

what has previously been termed a ‘‘non-standard standard.’’ Back 

in the 1980s, the Energy Department was successfully sued for its 

attempts to put in place such no-standard standards. Congress 

then stepped in and passed bipartisan legislation to direct DOE to 

adopted specific standards. Now, with the adoption of the Deal 

amendment, Congress is going backwards. 

The Deal Amendment contrasts sharply with the ceiling fan provisions of H.R. 6 in the 108th Congress. There, the Secretary was 

directed to set ceiling fan standards, standards could address both 

air circulation and lighting, and states were not preempted until a 

federal standard was actually adopted. 

507 

In one other respect, the Deal Amendment is quite different from 

the other energy efficiency standards in the bill, and indeed, from 

all other appliance efficiency standards enacted by Congress in the 

last two decades. Until now, Congress has embraced proposed efficiency standards when presented by diverse stakeholders, whose 

endorsements have indicated at least a rough consensus on performance metrics and timetables. We have declined to act where 

technical or financial issues remained hotly contested. There is no 

consensus in support of the Deal Amendment, and the committee’s 

endorsement of such a one-sided proposal sets a poor precedent 

that threatens to derail progress in energy efficiency for years to 

come. 

I strongly oppose this language and urge that it be deleted from 

the bill as it moves forward. 

EDWARD J. MARKEY. 

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