89–006

107TH CONGRESS REPT. 107–162 " ! HOUSE OF REPRESENTATIVES 1st Session Part 1

ENERGY ADVANCEMENT AND CONSERVATION ACT OF 2001

JULY 25, 2001.—Committed to the Committee of the Whole House on the State of

the Union and ordered to be printed

Mr. TAUZIN, from the Committee on Energy and Commerce,

submitted the following

REPORT

together with

ADDITIONAL VIEWS

[To accompany H.R. 2587]

The Committee on Energy and Commerce, to whom was referred

the bill (H.R. 2587) to enhance energy conservation, provide for security and diversity in the energy supply for the American people,

and for other purposes, having considered the same, report favorably thereon with an amendment and recommend that the bill as

amended do pass.

CONTENTS

Page

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

Purpose and Summary ............................................................................................ 46

Background and Need for Legislation .................................................................... 46

Hearings ................................................................................................................... 49

Committee Consideration ........................................................................................ 52

Committee Votes ...................................................................................................... 52

Committee Oversight Findings ............................................................................... 71

Statement of General Performance Goals and Objectives .................................... 71

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 71

Committee Cost Estimate ....................................................................................... 71

Congressional Budget Office Estimate ................................................................... 71

Federal Mandates Statement ................................................................................. 71

Advisory Committee Statement .............................................................................. 71

Constitutional Authority Statement ...................................................................... 71

Applicability to Legislative Branch ........................................................................ 71

Exchange of Committee Correspondence ............................................................... 72

Section-by-Section Analysis of the Legislation ...................................................... 73

Changes in Existing Law Made by the Bill, as Reported ..................................... 91

Additional Views ...................................................................................................... 135
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AMENDMENT

The amendment is as follows:

Strike all after the enacting clause and insert the following:

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

(a) SHORT TITLE.—This Act may be cited as the ‘‘Energy Advancement and Conservation Act of 2001’’.

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

Sec. 1. Short title and table of contents.

TITLE I—ENERGY CONSERVATION

Subtitle A—Reauthorization of Federal Energy Conservation Programs

Sec. 101. Authorization of appropriations.

Subtitle B—Federal Leadership in Energy Conservation

Sec. 121. Federal facilities and national energy security.

Sec. 122. Enhancement and extension of authority relating to Federal energy savings performance contracts.

Sec. 123. Clarification and enhancement of authority to enter utility incentive programs for energy savings.

Sec. 124. Federal central air conditioner and heat pump efficiency.

Sec. 125. Federal Energy Bank.

Sec. 126. Advanced building efficiency testbed.

Sec. 127. Use of interval data in Federal buildings.

Sec. 128. Review of Energy Savings Performance Contract Program.

Sec. 129. Capitol complex.

Subtitle C—State Programs

Sec. 131. Amendments to State energy programs.

Sec. 132. Reauthorization of energy conservation program for schools and hospitals.

Sec. 133. Amendments to Weatherization Assistance Program.

Sec. 134. LIHEAP.

Sec. 135. High performance public buildings.

Subtitle D—Energy Efficiency for Consumer Products

Sec. 141. Energy Star program.

Sec. 142. Labeling of energy efficient appliances.

Sec. 143. Appliance standards.

Subtitle E—Energy Efficient Vehicles

Sec. 151. High occupancy vehicle exception.

Sec. 152. Railroad efficiency.

Sec. 153. Biodiesel fuel use credits.

Sec. 154. Mobile to stationary source trading.

Subtitle F—Other Provisions

Sec. 161. Review of regulations to eliminate barriers to emerging energy technology.

Sec. 162. Advanced idle elimination systems.

Sec. 163. Study of benefits and feasibility of oil bypass filtration technology.

Sec. 164. Gas flare study.

Sec. 165. Telecommuting study.

TITLE II—AUTOMOBILE FUEL ECONOMY

Sec. 201. Average fuel economy standards for nonpassenger automobiles.

Sec. 202. Consideration of prescribing different average fuel economy standards for nonpassenger automobiles.

Sec. 203. Dual fueled automobiles.

Sec. 204. Fuel economy of the Federal fleet of automobiles.

Sec. 205. Hybrid vehicles and alternative vehicles.

Sec. 206. Federal fleet petroleum-based nonalternative fuels.

Sec. 207. Study of feasibility and effects of reducing use of fuel for automobiles.

TITLE III—NUCLEAR ENERGY

Subtitle A—General Provisions

Sec. 301. Budget status of Nuclear Waste Fund.

Sec. 302. License period.

Sec. 303. Cost recovery from Government agencies.

Sec. 304. Depleted uranium hexafluoride.

Sec. 305. Nuclear Regulatory Commission meetings.

Subtitle B—Domestic Uranium Fuel Cycle

Sec. 311. Portsmouth cold standby.

Sec. 312. Paducah funding.

Sec. 313. Research and development.

Sec. 314. Short-term reliability of domestic uranium enrichment capacity.

Sec. 315. Cooperative research and development and special demonstration projects for the uranium mining industry.

Sec. 316. Maintenance of a viable domestic uranium conversion industry.

Sec. 317. Prohibition of commercial sales of uranium by the United States until 2009.

Sec. 318. Paducah decontamination and decommissioning plan.
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TITLE IV—HYDROELECTRIC ENERGY

Sec. 401. Alternative conditions and fishways.

Sec. 402. FERC data on hydroelectric licensing.

TITLE V—CLEAN COAL

Sec. 501. Short title.

Sec. 502. Findings.

Subtitle A—Accelerated Clean Coal Power Production Program

Sec. 511. Definitions.

Sec. 512. Cost and performance goals.

Sec. 513. Study.

Sec. 514. Production and generation of coal-based power.

Sec. 515. Authorization of appropriations.

Sec. 516. Clean coal power initiative.

Sec. 517. Financial assistance.

Subtitle B—Credit for Emission Reductions and Efficiency Improvements in Existing Coal-Based Electricity

Generation Facilities

Sec. 521. Credit for investment in qualifying clean coal technology.

Sec. 522. Credit for production from a qualifying clean coal technology unit.

Subtitle C—Incentives for Early Commercial Applications of Advanced Clean Coal Technologies

Sec. 531. Credit for investment in qualifying advanced clean coal technology.

Sec. 532. Credit for production from qualifying advanced clean coal technology.

Sec. 533. Risk pool for qualifying advanced clean coal technology.

Subtitle D—Treatment of Certain Governmental and Other Entities

Sec. 541. Credits for certain organizations and governmental units.

TITLE VI—FUELS

Sec. 601. Tank draining during transition to summertime RFG.

Sec. 602. Gasoline blendstock requirements.

Sec. 603. Boutique fuels.

Sec. 604. Funding for MTBE contamination.

TITLE VII—RENEWABLE ENERGY

Sec. 701. Assessment of renewable energy resources.

Sec. 702. Renewable energy production incentive.

TITLE VIII—PIPELINE INTEGRITY

Subtitle A—Pipeline Integrity

Sec. 801. Program for pipeline integrity research, development, and demonstration.

Sec. 802. Pipeline Integrity Technical Advisory Committee.

Sec. 803. Authorization of appropriations.

Subtitle B-Other Pipeline Provisions

Sec. 811. Prohibition on certain pipeline route.

Sec. 812. Historic pipelines.

TITLE IX—MISCELLANEOUS PROVISIONS

Sec. 901. Waste reduction and use of alternatives.

Sec. 902. Annual report on United States energy independence.

Sec. 903. Study of aircraft emissions.

TITLE I—ENERGY CONSERVATION

Subtitle A—Reauthorization of Federal Energy

Conservation Programs

SEC. 101. AUTHORIZATION OF APPROPRIATIONS.

Section 660 of the Department of Energy Organization Act (42 U.S.C. 7270) is

amended as follows:

(1) By inserting ‘‘(a)’’ before ‘‘Appropriations’’.

(2) By inserting at the end the following new subsection:

‘‘(b) There are hereby authorized to be appropriated to the Department of Energy

for fiscal year 2002, $950,000,000; for fiscal year 2003, $1,000,000,000; for fiscal

year 2004, $1,050,000,000; for fiscal year 2005, $1,100,000,000; and for fiscal year

2006, $1,150,000,000, to carry out energy efficiency activities under the following

laws, such sums to remain available until expended:

‘‘(1) Energy Policy and Conservation Act, including section 256(d)(42 U.S.C.

6276(d)) (promote export of energy efficient products), sections 321 through 346

(42 U.S.C. 6291–6317) (appliances program).
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‘‘(2) Energy Conservation and Production Act, including sections 301 through

308 (42 U.S.C. 6831–6837) (energy conservation standards for new buildings). ‘‘(3) National Energy Conservation Policy Act, including sections 541–551 (42

U.S.C. 8251–8259) (Federal Energy Management Program). ‘‘(4) Energy Policy Act of 1992, including sections 103 (42 U.S.C. 13458) (energy efficient lighting and building centers), 121 (42 U.S.C. 6292 note) (energy

efficiency labeling for windows and window systems), 125 (42 U.S.C. 6292 note)

(energy efficiency information for commercial office equipment), 126 (42 U.S.C.

6292 note) (energy efficiency information for luminaires), 131 (42 U.S.C. 6348)

(energy efficiency in industrial facilities), and 132 (42 U.S.C. 6349) (process-oriented industrial energy efficiency).’’.

Subtitle B—Federal Leadership in Energy

Conservation

SEC. 121. FEDERAL FACILITIES AND NATIONAL ENERGY SECURITY.

(a) PURPOSE.—Section 542 of the National Energy Conservation Policy Act (42

U.S.C. 8252) is amended by inserting ‘‘, and generally to promote the production,

supply, and marketing of energy efficiency products and services and the production,

supply, and marketing of unconventional and renewable energy resources’’ after ‘‘by

the Federal Government’’. (b) ENERGY MANAGEMENT REQUIREMENTS.—Section 543 of the National Energy

Conservation Policy Act (42 U.S.C. 8253) is amended as follows:

(1) In subsection (a)(1), by striking ‘‘during the fiscal year 1995’’ and all that

follows through the end and inserting ‘‘during—

‘‘(1) fiscal year 1995 is at least 10 percent;

‘‘(2) fiscal year 2000 is at least 20 percent;

‘‘(3) fiscal year 2005 is at least 30 percent;

‘‘(4) fiscal year 2010 is at least 35 percent;

‘‘(5) fiscal year 2015 is at least 40 percent; and

‘‘(6) fiscal year 2020 is at least 45 percent,

less than the energy consumption per gross square foot of its Federal buildings in

use during fiscal year 1985. To achieve the reductions required by this paragraph,

an agency shall make maximum practicable use of energy efficiency products and

services and unconventional and renewable energy resources, using guidelines

issued by the Secretary under subsection (d) of this section.’’.

(2) In subsection (d), by inserting ‘‘Such guidelines shall include appropriate

model technical standards for energy efficiency and unconventional and renewable energy resources products and services. Such standards shall reflect, to the

extent practicable, evaluation of both currently marketed and potentially marketable products and services that could be used by agencies to improve energy

efficiency and increase unconventional and renewable energy resources.’’ after

‘‘implementation of this part.’’.

(3) By adding at the end the following new subsection:

‘‘(e) STUDIES.—To assist in developing the guidelines issued by the Secretary

under subsection (d) and in furtherance of the purposes of this section, the Secretary

shall conduct studies to identify and encourage the production and marketing of energy efficiency products and services and unconventional and renewable energy resources. To conduct such studies, there are authorized to be appropriated to the Secretary $20,000,000 for each of the fiscal years 2003 through 2010.’’.

(c) DEFINITION.—Section 551 of the National Energy Conservation Policy Act (42

U.S.C. 8259) is amended as follows:

(1) By striking ‘‘and’’ at the end of paragraph (8).

(2) By striking the period at the end of paragraph (9) and inserting ‘‘; and’’.

(3) By adding at the end the following new paragraph:

‘‘(10) the term ‘unconventional and renewable energy resources’ includes renewable energy sources, hydrogen, fuel cells, cogeneration, combined heat and

power, heat recovery (including by use of a Stirling heat engine), and distributed generation.’’.

(d) EXCLUSIONS FROM REQUIREMENT.—The National Energy Conservation Policy

Act (42 U.S.C. 7201 and following) is amended as follows:

(1) In section 543(a)—

(A) by striking ‘‘(1) Subject to paragraph (2)’’ and inserting ‘‘Subject to

subsection (c)’’; and

(B) by striking ‘‘(2) An agency’’ and all that follows through ‘‘such exclusion.’’.

(2) By amending subsection (c) of such section 543 to read as follows:
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‘‘(c) EXCLUSIONS.—(1) A Federal building may be excluded from the requirements

of subsections (a) and (b) only if— ‘‘(A) the President declares the building to require exclusion for national security reasons; and ‘‘(B) the agency responsible for the building has— ‘‘(i) completed and submitted all federally required energy management

reports; and ‘‘(ii) achieved compliance with the energy efficiency requirements of this

Act, the Energy Policy Act of 1992, Executive Orders, and other Federal

law; ‘‘(iii) implemented all practical, life cycle cost-effective projects in the excluded building. ‘‘(2) The President shall only declare buildings described in paragraph (1)(A) to

be excluded, not ancillary or nearby facilities that are not in themselves national

security facilities.’’. (3) In section 548(b)(1)(A)— (A) by striking ‘‘copy of the’’; and

(B) by striking ‘‘sections 543(a)(2) and 543(c)(3)’’ and inserting ‘‘section

543(c)’’. (e) ACQUISITION REQUIREMENT.—Section 543(b) of such Act is amended— (1) in paragraph (1), by striking ‘‘(1) Not’’ and inserting ‘‘(1) Except as provided in paragraph (5), not’’; and

(2) by adding at the end the following new paragraph:

‘‘(5)(A)(i) Agencies shall select only Energy Star products when available when acquiring energy-using products. For product groups where Energy Star labels are not

yet available, agencies shall select products that are in the upper 25 percent of energy efficiency as designated by FEMP. The Secretary of Energy shall develop guidelines within 180 days after the enactment of this paragraph for exemptions to this

section when equivalent products do not exist, are impractical, or do not meet the

agency mission requirements.

‘‘(ii) The Administrator of the General Services Administration and the Secretary

of Defense (acting through the Defense Logistics Agency), with assistance from the

Administrator of the Environmental Protection Agency and the Secretary of Energy,

shall create clear catalogue listings that designate Energy Star products in both

print and electronic formats. After any existing federal inventories are exhausted,

Administrator of the General Services Administration and the Secretary of Defense

(acting through the Defense Logistics Agency) shall only replace inventories with

energy-using products that are Energy Star, products that are rated in the top 25

percent of energy efficiency, or products that are exempted as designated by FEMP

and defined in clause (i).

‘‘(iii) Agencies shall incorporate energy-efficient criteria consistent with Energy

Star and other FEMP designated energy efficiency levels into all guide specifications

and project specifications developed for new construction and renovation, as well as

into product specification language developed for Basic Ordering Agreements, Blanket Purchasing Agreements, Government Wide Acquisition Contracts, and all other

purchasing procedures.

‘‘(iv) The legislative branch shall be subject to this subparagraph to the same extent and in the same manner as are the Federal agencies referred to in section

521(1).

‘‘(B) Not later than 6 months after the date of the enactment of this paragraph,

the Secretary of Energy shall establish guidelines defining the circumstances under

which an agency shall not be required to comply with subparagraph (A). Such circumstances may include the absence of Energy Star products, systems, or designs

that serve the purpose of the agency, issues relating to the compatibility of a product, system, or design with existing buildings or equipment, and excessive cost compared to other available and appropriate products, systems, or designs.

‘‘(C) Subparagraph (A) shall apply to agency acquisitions occurring on or after October 1, 2002.’’.

(f) METERING.—Section 543 of such Act (42 U.S.C. 8254) is amended by adding

at the end the following new subsection:

‘‘(f) METERING.—(1) By October 1, 2004, all Federal buildings including buildings

owned by the legislative branch and the Federal court system and other energyusing structures shall be metered or submetered in accordance with guidelines established by the Secretary under paragraph (2).

‘‘(2) Not later than 6 months after the date of the enactment of this subsection,

the Secretary, in consultation with representatives from the metering industry, energy services industry, national laboratories, colleges of higher education, and federal facilities energy managers, shall establish guidelines for agencies to carry out

paragraph (1). Such guidelines shall take into consideration each of the following:
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‘‘(A) Cost.

‘‘(B) Resources, including personnel, required to maintain, interpret, and report on data so that the meters are continually reviewed.

‘‘(C) Energy management potential.

‘‘(D) Energy savings.

‘‘(E) Utility contract aggregation.

‘‘(F) Savings from operations and maintenance.

‘‘(3) Any building excluded under subsection (c) shall be individually metered or

submetered as the Secretary determines necessary.’’.

(g) RETENTION OF ENERGY SAVINGS.—Section 546 of such Act (42 U.S.C. 8256) is

amended by adding at the end the following new subsection:

‘‘(e) RETENTION OF ENERGY SAVINGS.—An agency may retain any funds appropriated to that agency for energy expenditures, at buildings subject to the requirements of section 543(a) and (b), that are not made because of energy savings. Such

funds may be used only for energy efficiency or unconventional and renewable energy resources projects.’’.

(h) REPORTS.—Section 548 of such Act (42 U.S.C. 8258) is amended as follows:

(1) In subsection (a)—

(A) by inserting ‘‘in accordance with guidelines established by and’’ after

‘‘to the Secretary,’’;

(B) by striking ‘‘and’’ at the end of paragraph (1);

(C) by striking the period at the end of paragraph (2) and inserting a

semicolon; and

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

‘‘(3) an energy emergency response plan developed by the agency;

‘‘(4) the quantity, and a description of, products, systems, and designs acquired by the agency that are not acquired as provided in section 543(b)(5)(A);

and

‘‘(5) the percentage of the Agency’s capital expenditures that are used for energy efficiency and unconventional and renewable energy resources capital improvements.’’.

(2) In subsection (b)—

(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) all information transmitted to the Secretary under subsection (a).’’.

(3) By amending subsection (c) to read as follows:

‘‘(c) AGENCY REPORTS TO CONGRESS.—Each agency shall annually report to the

Congress, as part of the agency’s annual budget request, on all of the agency’s activities implementing any Federal energy management requirement.’’.

(i) INSPECTOR GENERAL ENERGY AUDITS.—Section 160(c) of the Energy Policy Act

of 1992 (42 U.S.C. 8262f(c)) is amended by striking ‘‘is encouraged to conduct periodic’’ and inserting ‘‘shall conduct periodic’’.

(j) FEDERAL ENERGY MANAGEMENT REVIEWS.—Section 543 of the National Energy

Conservation Policy Act (42 U.S.C. 8253) is amended by adding at the end the following:

‘‘(g) PRIORITY RESPONSE REVIEWS.—Each agency shall—

‘‘(1) not later than 9 months after the date of the enactment of this subsection, undertake a comprehensive review of all practicable measures for—

‘‘(A) increasing energy and water conservation, and

‘‘(B) using renewable energy sources; and

‘‘(2) not later than 180 days after completing the review, implement measures

to achieve not less than 50 percent of the potential efficiency and renewable

savings identified in the review.’’.

SEC. 122. ENHANCEMENT AND EXTENSION OF AUTHORITY RELATING TO FEDERAL ENERGY

SAVINGS PERFORMANCE CONTRACTS.

(a) COST SAVINGS FROM OPERATION AND MAINTENANCE EFFICIENCIES IN REPLACEMENT FACILITIES.—Section 801(a) of the National Energy Conservation Policy Act

(42 U.S.C. 8287(a)) is amended by adding at the end the following new paragraph:

‘‘(3)(A) In the case of an energy savings contract or energy savings performance

contract providing for energy savings through the construction and operation of one

or more buildings or facilities to replace one or more existing buildings or facilities,

benefits ancillary to the purpose of such contract under paragraph (1) may include

savings resulting from reduced costs of operation and maintenance at such replacement buildings or facilities when compared with costs of operation and maintenance

at the buildings or facilities being replaced, established through a methodology set

forth in the contract.
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‘‘(B) Notwithstanding paragraph (2)(B), aggregate annual payments by an agency

under an energy savings contract or energy savings performance contract referred

to in subparagraph (A) may take into account (through the procedures developed

pursuant to this section) savings resulting from reduced costs of operation and

maintenance as described in that subparagraph.’’. (b) EXPANSION OF DEFINITION OF ENERGY SAVINGS TO INCLUDE WATER AND RE- PLACEMENT FACILITIES.— (1) ENERGY SAVINGS.—Section 804(2) of the National Energy Conservation

Policy Act (42 U.S.C. 8287c(2)) is amended to read as follows: ‘‘(2)(A) The term ‘energy savings’ means a reduction in the cost of energy or

water, from a base cost established through a methodology set forth in the contract, used in an existing federally owned building or buildings or other federally owned facilities as a result of— ‘‘(i) the lease or purchase of operating equipment, improvements, altered

operation and maintenance, or technical services; ‘‘(ii) the increased efficient use of existing energy sources by solar and

ground source geothermal resources, cogeneration or heat recovery (including by the use of a Stirling heat engine), excluding any cogeneration process

for other than a federally owned building or buildings or other federally

owned facilities; or ‘‘(iii) the increased efficient use of existing water sources. ‘‘(B) The term ‘energy savings’ also means, in the case of a replacement building or facility described in section 801(a)(3), a reduction in the cost of energy,

from a base cost established through a methodology set forth in the contract,

that would otherwise be utilized in one or more existing federally owned buildings or other federally owned facilities by reason of the construction and operation of the replacement building or facility.’’. (2) ENERGY SAVINGS CONTRACT.—Section 804(3) of the National Energy Conservation Policy Act (42 U.S.C. 8287c(3)) is amended to read as follows: ‘‘(3) The terms ‘energy savings contract’ and ‘energy savings performance contract’ mean a contract which provides for— ‘‘(A) the performance of services for the design, acquisition, installation,

testing, operation, and, where appropriate, maintenance and repair, of an

identified energy or water conservation measure or series of measures at

one or more locations; or ‘‘(B) energy savings through the construction and operation of one or

more buildings or facilities to replace one or more existing buildings or facilities.’’. (3) ENERGY OR WATER CONSERVATION MEASURE.—Section 804(4) of the National Energy Conservation Policy Act (42 U.S.C. 8287c(4)) is amended to read

as follows: ‘‘(4) The term ‘energy or water conservation measure’ means— ‘‘(A) an energy conservation measure, as defined in section 551(4) (42

U.S.C. 8259(4)); or ‘‘(B) a water conservation measure that improves water efficiency, is life

cycle cost effective, and involves water conservation, water recycling or

reuse, improvements in operation or maintenance efficiencies, retrofit activities, or other related activities, not at a Federal hydroelectric facility.’’. (4) CONFORMING AMENDMENT.—Section 801(a)(2)(C) of the National Energy

Conservation Policy Act (42 U.S.C. 8287(a)(2)(C)) is amended by inserting ‘‘or water’’ after ‘‘financing energy’’. (c) EXTENSION OF AUTHORITY.—Section 801(c) of the National Energy Conservation Policy Act (42 U.S.C. 8287(c)) is repealed.

(d) CONTRACTING AND AUDITING.—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 new subparagraph: ‘‘(E) A Federal agency shall engage in contracting and auditing to implement energy savings performance contracts as necessary and appropriate to ensure compliance with the requirements of this Act, particularly the energy efficiency requirements of section 543.’’.

SEC. 123. CLARIFICATION AND ENHANCEMENT OF AUTHORITY TO ENTER UTILITY INCENTIVE

PROGRAMS FOR ENERGY SAVINGS.

Section 546(c) of the National Energy Conservation Policy Act (42 U.S.C. 8256(c))

is amended as follows:

(1) In paragraph (3) by adding at the end the following: ‘‘Such a utility incentive program may include a contract or contract term designed to provide for

cost-effective electricity demand management, energy efficiency, or water conservation.’’.

(2) By adding at the end of the following new paragraphs:
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‘‘(6) A utility incentive program may include a contract or contract term for a reduction in the energy, from a base cost established through a methodology set forth

in such a contract, that would otherwise be utilized in one or more federally owned

buildings or other federally owned facilities by reason of the construction or operation of one or more replacement buildings or facilities, as well as benefits ancillary

to the purpose of such contract or contract term, including savings resulting from

reduced costs of operation and maintenance at new or additional buildings or facilities when compared with the costs of operation and maintenance at existing buildings or facilities. ‘‘(7) Federal agencies are encouraged to participate in State or regional demand

side reduction programs, including those operated by wholesale market institutions

such as independent system operators, regional transmission organizations and

other entities. The availability of such programs, and the savings resulting from

such participation, should be included in the evaluation of energy options for Federal facilities.’’.

SEC. 124. FEDERAL CENTRAL AIR CONDITIONER AND HEAT PUMP EFFICIENCY.

(a) REQUIREMENT.—Federal agencies shall be required to acquire central air conditioners and heat pumps that meet or exceed the standards established under subsection (b) or (c) in the case of all central air conditioners and heat pumps acquired

after the date of enactment of this Act.

(b) STANDARDS.—The standards referred to in subsection (a) are the following:

(1) For air-cooled air conditioners with cooling capacities of less than 65,000

Btu/hour, a Seasonal Energy Efficiency Ratio of 12.0.

(2) For air-source heat pumps with cooling capacities less than 65,000 Btu/

hour, a Seasonal Energy Efficiency Ratio of 12 SEER, and a Heating Seasonal

Performance Factor of 7.4.

(c) MODIFIED STANDARDS.—The Secretary of Energy may establish, after appropriate notice and comment, revised standards providing for reduced energy consumption or increased energy efficiency of central air conditioners and heat pumps

acquired by the Federal Government, but may not establish standards less rigorous

than those established by subsection (b).

(d) DEFINITIONS.—For purposes of this section, the terms ‘‘Energy Efficiency

Ratio’’, ‘‘Seasonal Energy Efficiency Ratio’’, ‘‘Heating Seasonal Performance Factor’’, and ‘‘Coefficient of Performance’’ have the meanings used for those terms in Appendix M to Subpart B of Part 430 of title 10 of the Code of Federal Regulations, as

in effect on May 24, 2001.

(e) EXEMPTIONS.—An agency shall be exempt from the requirements of this section with respect to air conditioner or heat pump purchases for particular uses

where the agency head determines that purchase of a air conditioner or heat pump

for such use would be impractical. A finding of impracticability shall be based on

whether—

(1) the energy savings pay-back period for such purchase would be less than

10 years;

(2) space constraints or other technical factors would make compliance with

this section cost-prohibitive; or

(3) in the case of the Departments of Defense and Energy, compliance with

this section would be inconsistent with the proper discharge of national security

functions.

SEC. 125. FEDERAL ENERGY BANK.

(a) DEFINITIONS.—In this section:

(1) AGENCY.—The term ‘‘agency’’ means each of the following:

(A) An Executive agency (as defined in section 105 of title 5, United

States Code, except that the term also includes the United States Postal

Service and the United States Patent and Trademark Office).

(B) Congress and any other entity in the legislative branch.

(C) A court and any other entity in the judicial branch.

(2) BANK.—The term ‘‘Bank’’ means the Federal Energy Bank established by

subsection (b).

(3) ENERGY EFFICIENCY PROJECT.—The term ‘‘energy efficiency project’’ means

a project that assists an agency in meeting or exceeding the energy efficiency

requirements of—

(A) part 3 of title V of the National Energy Conservation Policy Act (42

U.S.C. 8251 et seq.);

(B) subtitle F of title I of the Energy Policy Act of 1992 and the amendments made by that subtitle (106 Stat. 2843); and

(C) applicable Executive orders, including Executive Order Nos. 12759

and 13123.

Such term shall include water conservation and renewable energy projects.
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(4) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Energy.

(5) TOTAL UTILITY PAYMENTS.—The term ‘‘total utility payments’’ means payments made to supply electricity, natural gas, water, and any other form of energy to provide the heating, ventilation, air conditioning, lighting, and other energy needs of an agency facility.

(b) ESTABLISHMENT OF BANK.— (1) IN GENERAL.—There is established in the Treasury of the United States

a trust fund to be known as the ‘‘Federal Energy Bank’’, consisting of— (A) such amounts as are appropriated to the Bank under subsection (f);

(B) such amounts as are transferred to the Bank under paragraph (2);

(C) such amounts as are repaid to the Bank under subsection (c)(2)(D);

and

(D) any interest earned on investment of amounts in the Bank under

paragraph (3).

(2) TRANSFERS TO BANK.— (A) IN GENERAL.—At the beginning of each of fiscal years 2002, 2003, and

2004, each agency shall transfer to the Secretary of the Treasury, for deposit in the Bank, an amount equal to 5 percent of the total utility payments paid by the agency in the preceding fiscal year.

(B) UTILITIES PAID FOR AS PART OF RENTAL PAYMENTS.—The Secretary

shall by regulation establish a formula by which the appropriate portion of

a rental payment that covers the cost of utilities shall be considered to be

a utility payment for the purposes of subparagraph (A).

(3) INVESTMENT OF FUNDS.—The Secretary of the Treasury shall invest such

portion of funds in the Bank as is not, in the Secretary’s judgment, required

to meet current withdrawals. Investments may be made only in interest-bearing

obligations of the United States.

(c) LOANS FROM THE BANK.—

(1) IN GENERAL.—The Secretary of the Treasury shall transfer from the Bank

to the Secretary such amounts as are appropriated to carry out the loan program under paragraph (2).

(2) LOAN PROGRAM.—

(A) IN GENERAL.—In accordance with subsection (d), the Secretary, in consultation with the Secretary of Defense, Administrator of the General Services Administration and the Office of Administration and Budget within the

Executive Office of the President, shall establish a program to loan

amounts from the Bank to any agency that submits an application satisfactory to the Secretary in order to finance an energy efficiency project. The

Bank is authorized to begin operation in fiscal year 2003 and receive and

approve funding for energy efficiency projects subject to funding availability

in fiscal year 2003.

(B) PERFORMANCE CONTRACTING FUNDING.—The Secretary shall not make

a loan under this section for a project for which funding is available and

is acceptable to the requesting agency under title VIII of the National Energy Conservation Policy Act (42 U.S.C. 8287 et seq.).

(C) PURPOSES OF LOAN.—

(i) IN GENERAL.—A loan under this section may be made to pay the

costs of—

(I) an energy efficiency project identification and design of an energy efficiency project, and energy metering plans and equipment

for purposes of new and existing building energy systems and

verifications of energy savings of an energy savings performance

contract; or

(II) development and administration of an energy savings performance contract or utility energy service agreement.

(ii) LIMITATION.—An agency may use not more than 15 percent of the

amount of a loan under clause (i)(I) to pay the costs of administration

and proposal development (including data collection and energy surveys).

(D) REPAYMENTS.—

(i) IN GENERAL.—An agency shall repay to the Bank the principal

amount of the energy efficiency project loan plus interest at a rate determined by the President, in consultation with the Secretary and the

Secretary of the Treasury. The repayment period shall be 10 years in

the case of water conservation and renewable energy projects.

(ii) WAIVER.—The Secretary may waive the requirement of clause (i)

if the Secretary determines that payment of interest by an agency is

not required to sustain the needs of the Bank in making energy efficiency project loans.
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(E) AGENCY ENERGY BUDGETS.—Until a loan is repaid, an agency budget

submitted to Congress for a fiscal year shall not be reduced by the value

of energy savings accrued as a result of the energy conservation measure

implemented with funds from the Bank.

(F) AVAILABILITY OF FUNDS.—An agency shall not rescind or reprogram

funds made available by this section. Funds loaned to an agency shall be

retained by the agency until expended, without regard to fiscal year limitation.

(d) SELECTION CRITERIA.— (1) IN GENERAL.—The Secretary shall establish criteria for the selection of energy efficiency projects to be awarded loans in accordance with paragraph (2).

(2) SELECTION CRITERIA.—The Secretary may make loans only for energy efficiency projects that— (A) are technically feasible;

(B) are determined to be cost-effective using life cycle cost methods established by the Secretary by regulation;

(C) include a measurement and management component to— (i) commission energy savings for new Federal facilities; and

(ii) monitor and improve energy efficiency management at existing

Federal facilities;

(D) have a project payback period of 10 years or less; and

(E) gives funding priority to projects with the quickest payback and least

total cost.

(e) REPORTS AND AUDITS.— (1) REPORTS TO THE SECRETARY.—Not later than 1 year after the installation of an energy efficiency project that has a total cost of more than $1,000,000, and

each year thereafter, an agency shall submit to the Secretary a report that— (A) states whether the project meets or fails to meet the energy savings

projections for the project; and

(B) for each project that fails to meet the energy savings projections,

states the reasons for the failure and describes proposed remedies.

(2) AUDITS.—The Secretary may audit any energy efficiency project financed

with funding from the Bank to assess the project’s performance.

(3) REPORTS TO CONGRESS.—At the end of each fiscal year, the Secretary shall

submit to the Committee on Energy and Commerce of the House of Representatives and the Committee on Energy and Natural Resources of the Senate a report on the operations of the Bank, including a statement of the total receipts

into the Bank, and the total expenditures from the Bank to each agency.

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

such sums as may be necessary for each of the fiscal years 2002 through 2008 to

carry out this section.

SEC. 126. ADVANCED BUILDING EFFICIENCY TESTBED.

(a) ESTABLISHMENT.—The Secretary of Energy 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 government and industry building

efficiency concepts, and demonstrate the ability of next generation buildings to support individual and organizational productivity and health as well as flexibility and

technological change to improve environmental sustainability.

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

a university having demonstrated experience with the application of intelligent

workplaces and advanced building systems in improving the quality of built environments. Such university shall also have the ability to combine the expertise from

more than 12 academic fields, including 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 $18,000,000 for fiscal year 2002,

to remain available until expended, of which $6,000,000 shall be provided to the

lead university described in subsection (b), and the remainder shall be provided

equally to each of the other participants referred to in subsection (b).

SEC. 127. USE OF INTERVAL DATA IN FEDERAL BUILDINGS.

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

amended by adding at the end the following new subsection:

‘‘(h) USE OF INTERVAL DATA IN FEDERAL BUILDINGS.—Not later than January 1,

2003, each agency shall utilize, to the maximum extent practicable, for the purposes
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of efficient use of energy and reduction in the cost of electricity consumed in its Federal buildings, interval consumption data that measure on a real time or daily basis

consumption of electricity in its Federal buildings. To meet the requirements of this

subsection each agency shall prepare and submit at the earliest opportunity pursuant to section 548(a) to the Secretary, a plan describing how the agency intends to

meet such requirements, including how it will designate personnel primarily responsible for achieving such requirements, and otherwise implement this subsection.’’.

SEC. 128. REVIEW OF ENERGY SAVINGS PERFORMANCE CONTRACT PROGRAM.

Within 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, and energy efficiency services covered. The Secretary shall report these findings to the Committee on Energy and Commerce of the

House of Representatives and the Committee on Energy and Natural Resources of

the Senate, and shall implement identified administrative and regulatory changes

to increase program flexibility and effectiveness to the extent that such changes are

consistent with statutory authority.

SEC. 129. CAPITOL COMPLEX.

(a) 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.

(b) AUTHORIZATION.—There is authorized to be appropriated to the Architect of

the Capitol to carry out this section, not more than $2,000,000 for fiscal years after

the enactment of this Act.

Subtitle C—State Programs

SEC. 131. AMENDMENTS TO 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 three 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 by inserting ‘‘Each State energy conservation plan with respect to which assistance is made available under this part

on or after the date of the enactment of Energy Advancement and Conservation Act

of 2001, 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 the calendar year 2010

as compared to the calendar year 1990, and may contain interim goals.’’ after ‘‘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 ‘‘$75,000,000 for fiscal

year 2002, $100,000,000 for fiscal years 2003 and 2004, $125,000,000 for fiscal year

2005’’.

SEC. 132. REAUTHORIZATION OF ENERGY CONSERVATION PROGRAM FOR SCHOOLS AND HOSPITALS.

Section 397 of the Energy Policy and Conservation Act (42 U.S.C. 6371f) is

amended by striking ‘‘2003’’ and inserting ‘‘2010’’.

SEC. 133. AMENDMENTS TO WEATHERIZATION ASSISTANCE PROGRAM.

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 ‘‘$250,000,000 for fiscal year 2002, $325,000,000 for fiscal year

2003, $400,000,000 for fiscal year 2004, and $500,000,000 for fiscal year 2005’’.
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SEC. 134. LIHEAP.

(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 the first

sentence and inserting the following: ‘‘There are authorized to be appropriated to

carry out the provisions of this title (other than section 2607A), $3,400,000,000 for

each of fiscal years 2001 through 2005.’’.

(b) GAO STUDY.—The Comptroller General of the United States shall conduct a

study to determine—

(1) the extent to which Low-Income Home Energy Assistance (LIHEAP) and

other government energy subsidies paid to consumers discourage energy conservation and energy efficiency investments; and

(2) the extent to which the goals of conservation and assistance for low income households could be simultaneously achieved through cash income supplements that do not specifically target energy, thereby maintaining incentives for

wise use of expensive forms of energy, or through other means.

SEC. 135. HIGH PERFORMANCE PUBLIC BUILDINGS.

(a) PROGRAM ESTABLISHMENT AND ADMINISTRATION.—

(1) ESTABLISHMENT.—There is established in the Department of Energy the

High Performance Public Buildings Program (in this section referred to as the

‘‘Program’’).

(2) IN GENERAL.—The Secretary of Energy may, through the Program, make

grants—

(A) to assist units of local government in the production, through construction or renovation of buildings and facilities they own and operate, of

high performance public buildings and facilities that are healthful, productive, energy efficient, and environmentally sound;

(B) to State energy offices to administer the program of assistance to

units of local government pursuant to this section; and

(C) to State energy offices to promote participation by units of local government in the Program.

(3) GRANTS TO ASSIST UNITS OF LOCAL GOVERNMENT.—Grants under paragraph (2)(A) for new public buildings shall be used to achieve energy efficiency

performance that reduces energy use at least 30 percent below that of a public

building constructed in compliance with standards prescribed in Chapter 8 of

the 2000 International Energy Conservation Code, or a similar State code intended to achieve substantially equivalent results. Grants under paragraph

(2)(A) for existing public buildings shall be used to achieve energy efficiency performance that reduces energy use below the public building baseline consumption, assuming a 3-year, weather-normalized average for calculating such baseline. Grants under paragraph (2)(A) shall be made to units of local government

that have—

(A) demonstrated a need for such grants in order to respond appropriately to increasing population or to make major investments in renovation of public buildings; and

(B) made a commitment to use the grant funds to develop high performance public buildings in accordance with a plan developed and approved

pursuant to paragraph (5)(A).

(4) OTHER GRANTS.—

(A) GRANTS FOR ADMINISTRATION.—Grants under paragraph (2)(B) shall

be used to evaluate compliance by units of local government with the requirements of this section, and in addition may be used for—

(i) distributing information and materials to clearly define and promote the development of high performance public buildings for both

new and existing facilities;

(ii) organizing and conducting programs for local government personnel, architects, engineers, and others to advance the concepts of

high performance public buildings;

(iii) obtaining technical services and assistance in planning and designing high performance public buildings; and

(iv) collecting and monitoring data and information pertaining to the

high performance public building projects.

(B) GRANTS TO PROMOTE PARTICIPATION.—Grants under paragraph (2)(C)

may be used for promotional and marketing activities, including facilitating

private and public financing, promoting the use of energy service companies, working with public building users, and communities, and coordinating public benefit programs.

(5) IMPLEMENTATION.—
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(A) PLANS.—A grant under paragraph (2)(A) shall be provided only to a

unit of local government that, in consultation with its State office of energy,

has developed a plan that the State energy office determines to be feasible

and appropriate in order to achieve the purposes for which such grants are

made.

(B) SUPPLEMENTING GRANT FUNDS.—State energy offices shall encourage

qualifying units of local government to supplement their grant funds with

funds from other sources in the implementation of their plans.

(b) ALLOCATION OF FUNDS.—

(1) IN GENERAL.—Except as provided in paragraph (3), funds appropriated to

carry out this section shall be provided to State energy offices.

(2) PURPOSES.—Except as provided in paragraph (3), funds appropriated to

carry out this section shall be allocated as follows:

(A) Seventy percent shall be used to make grants under subsection

(a)(2)(A).

(B) Fifteen percent shall be used to make grants under subsection

(a)(2)(B).

(C) Fifteen percent shall be used to make grants under subsection

(a)(2)(C).

(3) OTHER FUNDS.—The Secretary of Energy may retain not to exceed

$300,000 per year from amounts appropriated under subsection (c) to assist

State energy offices in coordinating and implementing the Program. Such funds

may be used to develop reference materials to further define the principles and

criteria to achieve high performance public buildings.

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

to the Secretary of Energy to carry out this section such sums as may be necessary

for each of the fiscal years 2002 through 2010.

(d) REPORT TO CONGRESS.—The Secretary of Energy shall conduct a biennial review of State actions implementing this section, and the Secretary shall report to

Congress on the results of such reviews. In conducting such reviews, the Secretary

shall assess the effectiveness of the calculation procedures used by the States in establishing eligibility of units of local government for funding under this section, and

may assess other aspects of the State program to determine whether they have been

effectively implemented.

(e) DEFINITIONS.—For purposes of this section:

(1) HIGH PERFORMANCE PUBLIC BUILDING.—The term ‘‘high performance public

building’’ means a public building which, in its design, construction, operation,

and maintenance, maximizes use of unconventional and renewable energy resources and energy efficiency practices, is cost-effective on a life cycle basis,

uses affordable, environmentally preferable, durable materials, enhances indoor

environmental quality, protects and conserves water, and optimizes site potential.

(2) RENEWABLE ENERGY.—The term ‘‘renewable energy’’ means energy produced by solar, wind, geothermal, hydroelectric, or biomass power.

(3) UNCONVENTIONAL AND RENEWABLE ENERGY RESOURCES.—The term ‘‘unconventional and renewable energy resources’’ means renewable energy, hydrogen,

fuel cells, cogeneration, combined heat and power, heat recovery (including by

use of a Stirling heat engine), and distributed generation.

Subtitle D—Energy Efficiency for Consumer

Products

SEC. 141. ENERGY STAR PROGRAM.

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

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

‘‘SEC. 324A. ENERGY STAR PROGRAM.

‘‘(a) IN GENERAL.—There is established at the Department of Energy and the Environmental Protection Agency a program to identify and promote energy-efficient

products and buildings in order to reduce energy consumption, improve energy security, and reduce pollution through labeling of products and buildings that meet the

highest energy efficiency standards. Responsibilities under the program shall be divided between the Department of Energy and the Environmental Protection Agency

consistent with the terms of agreements between the two agencies. The Administrator and the Secretary shall—

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

in the marketplace for achieving energy efficiency and to reduce pollution;
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‘‘(2) work to enhance public awareness of the Energy Star label; and

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

For the purposes of carrying out this section, there is authorized to be appropriated

for fiscal years 2002 through 2006 such sums as may be necessary, to remain available until expended. ‘‘(b) STUDY OF CERTAIN PRODUCTS AND BUILDINGS.—Within 180 days after the

date of enactment of this section, the Secretary and the Administrator, consistent

with the terms of agreements between the two agencies, shall determine whether

the Energy Star label should be extended to additional products and buildings, including the following: ‘‘(1) Air cleaners.

‘‘(2) Ceiling fans.

‘‘(3) Light commercial heating and cooling products.

‘‘(4) Reach-in refrigerators and freezers.

‘‘(5) Telephony.

‘‘(6) Vending machines.

‘‘(7) Residential water heaters.

‘‘(8) Refrigerated beverage merchandisers.

‘‘(9) Commercial ice makers.

‘‘(10) School buildings.

‘‘(11) Retail buildings.

‘‘(12) Health care facilities.

‘‘(13) Homes.

‘‘(14) Hotels and other commercial lodging facilities.

‘‘(15) Restaurants and other food service facilities.

‘‘(16) Solar water heaters.

‘‘(17) Building-integrated photovoltaic systems.

‘‘(18) Reflective pigment coatings.

‘‘(19) Windows.

‘‘(20) Boilers.

‘‘(21) Devices to extend the life of motor vehicle oil. ‘‘(c) COOL ROOFING.—In determining whether the Energy Star label should be extended to roofing products, the Secretary and the Administrator shall work with the

roofing products industry to determine the appropriate solar reflective index of roofing products.’’. (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. 142. LABELING OF ENERGY EFFICIENT APPLIANCES.

(a) STUDY.—Section 324(e) of the Energy Policy and Conservation Act (42 U.S.C.

6294(e)) is amended as follows:

(1) By inserting ‘‘(1)’’ before ‘‘The Secretary, in consultation’’. (2) By redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively.

(3) By adding the following new paragraph at the end: ‘‘(2) The Secretary shall make recommendations to the Commission within 180

days of the date of enactment of this paragraph regarding labeling of consumer

products that are not covered products in accordance with this section, where such

labeling is likely to assist consumers in making purchasing decisions and is technologically and economically feasible.’’. (b) NONCOVERED PRODUCTS.—Section 324(a)(2) of the Energy Policy and Conservation Act (42 U.S.C. 6294(a)(2)) is amended by adding the following at the end: ‘‘(F) Not later than one year after the date of enactment of this subparagraph, the

Commission shall initiate a rulemaking to prescribe labeling rules under this section applicable to consumer products that are not covered products if it determines

that labeling of such products is likely to assist consumers in making purchasing

decisions and is technologically and economically feasible. ‘‘(G) Not later than three 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

label that would improve the effectiveness of the label. Such rulemaking shall be

completed within 15 months of the date of enactment of this subparagraph.’’.

SEC. 143. APPLIANCE STANDARDS.

(a) STANDARDS FOR HOUSEHOLD APPLIANCES IN STANDBY MODE.—Section 325 of

the Energy Policy and Conservation Act (42 U.S.C. 6295) is amended by adding at

the end the following:
15

‘‘(u) STANDBY MODE ELECTRIC ENERGY CONSUMPTION BY HOUSEHOLD APPLI- ANCES.—(1) In this subsection: ‘‘(A) The term ‘household appliance’ means any device that uses household

electric current and operates in a standby mode except digital televisions, digital set top boxes, and digital video recorders. ‘‘(B) The term ‘standby mode’ means a mode in which a household appliance

consumes the least amount of electric energy that the household appliance is

capable of consuming without being completely switched off. ‘‘(2)(A) Except as provided in subparagraph (B), a household appliance that is

manufactured in, or imported for sale in, the United States on or after the date that

is 2 years after the date of enactment of this subsection shall not consume in standby mode more than 1 watt. ‘‘(B)(i) A household appliance model that, as of the date of enactment of this subsection, is recognized under the Energy Star program administered by the Administrator of the Environmental Protection Agency and the Secretary shall have until

January 1, 2005, to meet the standard under subparagraph (A). ‘‘(ii) In the case of analog televisions, the Secretary shall prescribe, on or after the

date that is 2 years after the date of enactment of this subsection, in accordance

with subsections (o) and (p) of section 325, an energy conservation standard that

is technologically feasible and economically justified under section 325(o)(2)(A) (in

lieu of the 1 watt standard under subparagraph (A)).

‘‘(3)(A) A manufacturer or importer of a household appliance may submit to the

Secretary an application for an exemption of the household appliance from the

standard under paragraph (2).

‘‘(B) The Secretary shall grant an exemption for a household appliance for which

an application is made under subparagraph (A) if the applicant provides evidence

showing that, and the Secretary determines that—

‘‘(i) it is not technically feasible to modify the household appliance to enable

the household appliance to meet the standard;

‘‘(ii) the standard is incompatible with an energy efficiency standard applicable to the household appliance under another subsection; or

‘‘(iii) the cost of electricity that a typical consumer would save in operating

the household appliance meeting the standard would not equal the increase in

the price of the household appliance that would be attributable to the modifications that would be necessary to enable the household appliance to meet the

standard by the earlier of—

‘‘(I) the date that is 7 years after the date of purchase of the household

appliance; or

‘‘(II) the end of the useful life of the household appliance.

‘‘(C) If the Secretary determines that it is not technically feasible to modify a

household appliance to meet the standard under paragraph (2), the Secretary shall

establish a different standard for the household appliance in accordance with the

criteria under subsection (l).

‘‘(4)(A) Not later than 1 year after the date of enactment of this subsection, the

Secretary shall establish a test procedure for determining the amount of consumption of power by a household appliance operating in standby mode.

‘‘(B) In establishing the test procedure, the Secretary shall consider—

‘‘(i) international test procedures under development;

‘‘(ii) test procedures used in connection with the Energy Star program; and

‘‘(iii) test procedures used for measuring power consumption in standby mode

in other countries.

‘‘(5) FURTHER REDUCTION OF STANDBY POWER CONSUMPTION.—The Secretary shall

provide technical assistance to manufacturers in achieving further reductions in

standby mode electric energy consumption by household appliances.

‘‘(v) STANDBY MODE ELECTRIC ENERGY CONSUMPTION BY DIGITAL TELEVISIONS,

DIGITAL SET TOP BOXES, AND DIGITAL VIDEO RECORDERS.—The Secretary shall initiate on January 1, 2007 a rulemaking to prescribe, in accordance with subsections

(o) and (p), an energy conservation standard of standby mode electric energy consumption by digital television sets, digital set top boxes, and digital video recorders.

The Secretary shall issue a final rule prescribing such standards not later than 18

months thereafter. In determining whether a standard under this section is technologically feasible and economically justified under section 325(o)(2)(A), the Secretary

shall consider the potential effects on market penetration by digital products covered under this section, and shall consider any recommendations by the FCC regarding such effects.’’.

(2) Section 325(n)(1) of the Energy Policy and Conservation Act (42 U.S.C.

6295(n)(1)) is amended by striking ‘‘(11), and in paragraphs (13) and’’.

(b) STANDARDS FOR NONCOVERED PRODUCTS.—Section 325(m) of the Energy Policy

and Conservation Act (42 U.S.C. 6295(m)) is amended as follows:
16

(1) Inserting ‘‘(1)’’ before ‘‘After’’. (2) Inserting the following at the end:

(2) ‘‘Not later than one year after the date of enactment of the Energy Advancement and Conservation Act of 2001, the Secretary shall conduct a rulemaking to determine whether consumer products not classified as a covered product under section 322(a)(1) through (18) meet the criteria of section 322(b)(1). If the Secretary

finds that a consumer product not classified as a covered product meets the criteria

of section 322(b)(1), he shall prescribe, in accordance with subsections (o) and (p),

an energy conservation standard for such consumer product, if such standard is reasonably probable to be technologically feasible and economically justified within the

meaning of subsection (o)(2)(A).’’. (c) CONSUMER EDUCATION ON ENERGY EFFICIENCY BENEFITS OF AIR CONDI- TIONING, HEATING AND VENTILATION MAINTENANCE.—Section 337 of the Energy Policy and Conservation Act (42 U.S.C. 6307) is amended by adding the following new

subsection after subsection (b): ‘‘(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, within 180 days of the date of enactment of this subsection, develop

and implement a public education campaign to educate homeowners and small business owners concerning the energy savings resulting from regularly scheduled maintenance of air conditioning, heating, and ventilating systems. In developing and implementing this campaign, the Secretary shall consider support by the Department

of public education programs sponsored by trade and professional or energy efficiency organizations. The public service information shall provide sufficient information to allow consumers to make informed choices from among professional, licensed

(where State or local licensing is required) contractors. There are authorized to be

appropriated to carry out this subsection $5,000,000 for fiscal years 2002 and 2003

in addition to amounts otherwise appropriated in this part.’’.

(d) EFFICIENCY STANDARDS FOR FURNACE FANS, CEILING FANS, AND COLD DRINK

VENDING MACHINES..—

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

U.S.C. 6291) is amended by adding the following at the end thereof:

‘‘(32) The term ‘residential furnace fan’ means an electric fan installed as part

of a furnace for purposes of circulating air through the system air filters, the

heat exchangers or heating elements of the furnace, and the duct work.

‘‘(33) The terms ‘residential central air conditioner fan’ and ‘heat pump circulation fan’ mean an electric fan installed as part of a central air conditioner

or heat pump for purposes of circulating air through the system air filters, the

heat exchangers of the air conditioner or heat pump, and the duct work.

‘‘(34) The term ‘suspended ceiling fan’ means a fan intended to be mounted

to a ceiling outlet box, ceiling building structure, or to a vertical rod suspended

from the ceiling, and which as blades which rotate below the ceiling and consists of an electric motor, fan blades (which rotate in a direction parallel to the

floor), an optional lighting kit, and one or more electrical controls (integral or

remote) governing fan speed and lighting operation.

‘‘(35) The term ‘refrigerated bottled or canned beverage vending machine’

means a machine that cools bottled or canned beverages and dispenses them

upon payment.’’.

(2) TESTING REQUIREMENTS.—Section 323 of the Energy Policy and Conservation Act (42 U.S.C. 6293) is amended by adding the following at the end thereof:

‘‘(f) ADDITIONAL CONSUMER PRODUCTS.—The Secretary shall within 18 months

after the date of enactment of this subsection prescribe testing requirements for residential furnace fans, residential central air conditioner fans, heat pump circulation

fans, suspended ceiling fans, and refrigerated bottled or canned beverage vending

machines. Such testing requirements shall be based on existing test procedures used

in industry to the extent practical and reasonable. In the case of residential furnace

fans, residential central air conditioner fans, heat pump circulation fans, and 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.’’.

(3) STANDARDS FOR ADDITIONAL CONSUMER PRODUCTS.—Section 325 of the Energy Policy and Conservation Act (42 U.S.C. 6295) is amended by adding the

following at the end thereof:

‘‘(w) RESIDENTIAL FURNACE FANS, CENTRAL AIR AND HEAT PUMP CIRCULATION

FANS, SUSPENDED CEILING FANS, AND VENDING MACHINES.—(1) The Secretary shall,

within 18 months after the date of enactment of this subsection, assess the current

and projected future market for residential furnace fans, residential central air conditioner and heat pump circulation fans, suspended ceiling fans, and refrigerated

bottled or canned beverage vending machines. This assessment shall include an examination of the types of products sold, the number of products in use, annual sales
17

of these products, energy used by these products sold, the number of products in

use, annual sales of these products, energy used by these products, estimates of the

potential energy savings from specific technical improvements to these products,

and an examination of the cost-effectiveness of these improvements. Prior to the end

of this time period, the Secretary shall hold an initial scoping workshop to discuss

and receive input to plans for developing minimum efficiency standards for these

products. ‘‘(2) The Secretary shall within 24 months after the date on which testing requirements are prescribed by the Secretary pursuant to section 323(f), prescribe, by rule,

energy conservation standards for residential furnace fans, residential central air

conditioner and heat pump circulation fans, suspended ceiling fans, and refrigerated

bottled or canned beverage vending machines. In establishing these standards, the

Secretary shall use the criteria and procedures contained in subsections (l) and (m).

Any standard prescribed under this section shall apply to products manufactured

36 months after the date such rule is published.’’. (4) LABELING.—Section 324(a) of the Energy Policy and Conservation Act (42

U.S.C. 6294(a)) is amended by adding the following at the end thereof: ‘‘(5) The Secretary shall within 6 months after the date on which energy conservation standards are prescribed by the Secretary for covered products referred to in

section 325(w), prescribe, by rule, labeling requirements for such products. These requirements shall take effect on the same date as the standards prescribed pursuant

to section 325(w).’’. (5) COVERED PRODUCTS.—Section 322(a) of the Energy Policy and Conservation Act (42 U.S.C. 6292(a)) is amended by redesignating paragraph (19) as

paragraph (20) and by inserting after paragraph (18) the following: ‘‘(19) Beginning on the effective date for standards established pursuant to

subsection (v) of section 325, each product referred to in such subsection (v).’’.

Subtitle E—Energy Efficient Vehicles

SEC. 151. HIGH OCCUPANCY VEHICLE EXCEPTION.

(a) IN GENERAL.—Notwithstanding section 102(a)(1) of title 23, United States

Code, a State may, for the purpose of promoting energy conservation, permit a vehicle with fewer than 2 occupants to operate in high occupancy vehicle lanes if such

vehicle is a hybrid vehicle or is fueled by an alternative fuel.

(b) HYBRID VEHICLE DEFINED.—In this section, the term ‘‘hybrid vehicle’’ means

a motor vehicle—

(1) which draws propulsion energy from onboard sources of stored energy

which are both—

(A) an internal combustion or heat engine using combustible fuel; and

(B) a rechargeable energy storage system;

(2) which, in the case of a passenger automobile or light truck—

(A) for 2002 and later model vehicles, has received a certificate of conformity under section 206 of the Clean Air Act (42 U.S.C. 7525) and meets

or exceeds the equivalent qualifying California low emission vehicle standard under section 243(e)(2) of the Clean Air Act (42 U.S.C. 7583(e)(2)) for

that make and model year; and

(B) for 2004 and later model vehicles, has received a certificate that such

vehicle meets the Tier II emission level established in regulations prescribed by the Administrator of the Environmental Protection Agency under

section 202(i) of the Clean Air Act (42 U.S.C. 7521(i)) for that make and

model year vehicle; and

(3) which is made by a manufacturer.

(c) ALTERNATIVE FUEL DEFINED.—In this section, the term ‘‘alternative fuel’’ has

the meaning such term has under section 301(2) of the Energy Policy Act of 1992

(42 U.S.C. 13211(2)).

SEC. 152. RAILROAD EFFICIENCY.

(a) LOCOMOTIVE TECHNOLOGY DEMONSTRATION.—The Secretary of Energy shall

establish a public-private research partnership with railroad carriers, locomotive

manufacturers, and a world-class research and test center dedicated to the advancement of railroad technology, efficiency, and safety that is owned by the Federal Railroad Administration and operated in the private sector, for the development and

demonstration of locomotive technologies that increase fuel economy, reduce emissions, improve safety, and lower costs.

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

to the Secretary of Energy $25,000,000 for fiscal year 2002, $30,000,000 for fiscal

year 2003, and $35,000,000 for fiscal year 2004 for carrying out this section.
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SEC. 153. BIODIESEL FUEL USE CREDITS.

Section 312(c) of the Energy Policy Act of 1992 (42 U.S.C. 13220(c)) is amended— (1) by striking ‘‘NOT’’ in the subsection heading; and

(2) by striking ‘‘not’’.

SEC. 154. MOBILE TO STATIONARY SOURCE TRADING.

Within 90 days after the enactment of this section, the Administrator of the Environmental Protection Agency is directed to commence a review of the Agency’s policies regarding the use of mobile to stationary source trading of emission credits

under the Clean Air Act to determine whether such trading can provide both nonattainment and attainment areas with additional flexibility in achieving and maintaining healthy air quality and increasing use of alternative fuel and advanced technology vehicles, thereby reducing United States dependence on foreign oil.

Subtitle F—Other Provisions

SEC. 161. REVIEW OF REGULATIONS TO ELIMINATE BARRIERS TO EMERGING ENERGY TECHNOLOGY.

(a) IN GENERAL.—Each Federal agency shall carry out a review of its regulations

and standards to determine those that act as a barrier to market entry for emerging

energy-efficient technologies, including, but not limited to, fuel cells, combined heat

and power, and distributed generation (including small-scale renewable energy).

(b) REPORT TO CONGRESS.—No later than 18 months after the date of enactment

of this section, each agency shall provide a report to Congress and the President

detailing all regulatory barriers to emerging energy-efficient technologies, along

with actions the agency intends to take, or has taken, to remove such barriers.

(c) PERIODIC REVIEW.—Each agency shall subsequently review its regulations and

standards in the manner specified in this section no less frequently than every 5

years, and report their findings to Congress and the President. Such reviews shall

include a detailed analysis of all agency actions taken to remove existing barriers

to emerging energy technologies.

SEC. 162. ADVANCED IDLE ELIMINATION SYSTEMS.

(a) DEFINITIONS.— (1) ADVANCED IDLE ELIMINATION SYSTEM.—The term ‘‘advanced idle elimination system’’ means a device or system of devices that is installed at a truck

stop or other location (for example, a loading, unloading, or transfer facility)

where vehicles (such as trucks, trains, buses, boats, automobiles, and recreational vehicles) are parked and that is designed to provide to the vehicle the

services (such as heat, air conditioning, and electricity) that would otherwise require the operation of the auxiliary or drive train engine or both while the vehicle is stationary and parked.

(2) EXTENDED IDLING.—The term ‘‘extended idling’’ means the idling of a

motor vehicle for a period greater than 60 minutes.

(b) RECOGNITION OF BENEFITS OF ADVANCED IDLE ELIMINATION SYSTEMS.—Within

90 days after the date of enactment of this subsection, the Administrator of the Environmental Protection Agency is directed to commence a review of the Agency’s mobile source air emissions models used under the Clean Air Act to determine whether

such models accurately reflect the emissions resulting from extended idling of

heavy-duty trucks and other vehicles and engines, and shall update those models

as the Administrator deems appropriate. Additionally, within 90-days after the date

of enactment of this subsection, the Administrator shall commence a review as to

the appropriate emissions reductions credit that should be allotted under the Clean

Air Act for the use of advanced idle elimination systems, and whether such credits

should be subject to an emissions trading system, and shall revise Agency regulations and guidance as the Administrator deems appropriate.

SEC. 163. STUDY OF BENEFITS AND FEASIBILITY OF OIL BYPASS FILTRATION TECHNOLOGY.

(a) STUDY.—The Secretary of Energy and the Administrator of the Environmental

Protection Agency shall jointly conduct a study of oil bypass filtration technology in

motor vehicle engines. The study shall analyze and quantify the potential benefits

of such technology in terms of reduced demand for oil and the potential environmental benefits of the technology in terms of reduced waste and air pollution. The

Secretary and the Administrator shall also examine the feasibility of using such

technology in the Federal motor vehicle fleet.

(b) REPORT.—Not later than 6 months after the enactment of this Act, the Secretary of Energy and the Administrator of the Environmental Protection Agency

shall jointly submit a report containing the results of the study conducted under

subsection (a) to the Committee on Energy and Commerce of the United States
19

House of Representatives and to the Committee on Energy and Natural Resources

of the United States Senate.

SEC. 164. GAS FLARE STUDY.

(a) STUDY.—The Secretary of Energy shall conduct a study of the economic feasibility of installing small cogeneration facilities utilizing excess gas flares at petrochemical facilities to provide reduced electricity costs to customers living within 3

miles of the petrochemical facilities. The Secretary shall solicit public comment to

assist in preparing the report required under subsection (b).

(b) REPORT.—Not later than 18 months after the date of the enactment of this Act,

the Secretary of Energy shall transmit a report to the Congress on the results of

the study conducted under subsection (a).

SEC. 165. TELECOMMUTING STUDY.

(a) STUDY REQUIRED.—The Secretary, in consultation with Commission, and the

NTIA, shall conduct a study of the energy conservation implications of the widespread adoption of telecommuting 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:

(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 the 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.

TITLE II—AUTOMOBILE FUEL ECONOMY

SEC. 201. AVERAGE FUEL ECONOMY STANDARDS FOR NONPASSENGER AUTOMOBILES.

Section 32902(a) of title 49, United States Code, is amended—

(1) by inserting ‘‘(1)’’ after ‘‘NONPASSENGER AUTOMOBILES.—’’; and

(2) by adding at the end the following:

‘‘(2) The Secretary shall prescribe under paragraph (1) average fuel economy

standards for automobiles (except passenger automobiles) manufactured in model

years 2004 through 2010 that are calculated to ensure that the aggregate amount

of gasoline projected to be used in those model years by automobiles to which the

standards apply is at least 5 billion gallons less than the aggregate amount of gasoline that would be used in those model years by such automobiles if they achieved

only the fuel economy required under the average fuel economy standard that applies under this subsection to automobiles (except passenger automobiles) manufactured in model year 2002.’’.

SEC. 202. CONSIDERATION OF PRESCRIBING DIFFERENT AVERAGE FUEL ECONOMY STANDARDS FOR NONPASSENGER AUTOMOBILES.

(a) IN GENERAL.—The Secretary of Transportation shall, in prescribing average

fuel economy standards under section 32902(a) of title 49, United States Code, for

automobiles (except passenger automobiles) manufactured in model year 2004, consider the potential benefits of—

(1) establishing a weight-based system for automobiles, that is based on the

inertia weight, curb weight, gross vehicle weight rating, or another appropriate

measure of such automobiles; and

(2) prescribing different fuel economy standards for automobiles that are subject to the weight-based system.

(b) SPECIFIC CONSIDERATIONS.—In implementing this section the Secretary—
20

(1) shall consider any recommendations made in the National Academy of

Sciences study completed pursuant to the Department of Transportation and

Related Agencies Appropriations Act, 2000 (Public Law 106–346; 114 Stat. 2763

et seq.); and

(2) shall evaluate the merits of any weight-based system in terms of motor

vehicle safety, energy conservation, and competitiveness of and employment in

the United States automotive sector, and if a weight-based system is established by the Secretary a manufacturer may trade credits between or among the

automobiles (except passenger automobiles) manufactured by the manufacturer.

SEC. 203. DUAL FUELED AUTOMOBILES.

(a) PURPOSES.—The purposes of this section are—

(1) to extend the manufacturing incentives for dual fueled automobiles, as set

forth in subsections (b) and (d) of section 32905 of title 49, United States Code,

through the 2008 model year; and

(2) to similarly extend the limitation on the maximum average fuel economy

increase for such automobiles, as set forth in subsection (a)(1) of section 32906

of title 49, United States Code.

(b) AMENDMENTS.—

(1) MANUFACTURING INCENTIVES.—Section 32905 of title 49, United States

Code, is amended as follows:

(A) Subsections (b) and (d) are each amended by striking ‘‘model years

1993–2004’’ and inserting ‘‘model years 1993–2008’’.

(B) Subsection (f) is amended by striking ‘‘Not later than December 31,

2001, the Secretary’’ and inserting ‘‘Not later than December 31, 2005, the

Secretary’’.

(C) Subsection (f)(1) is amended by striking ‘‘model year 2004’’ and inserting ‘‘model year 2008’’.

(D) Subsection (g) is amended by striking ‘‘Not later than September 30,

2000’’ and inserting ‘‘Not later than September 30, 2004’’.

(2) MAXIMUM FUEL ECONOMY INCREASE.—Subsection (a)(1) of section 32906 of

title 49, United States Code, is amended as follows:

(A) Subparagraph (A) is amended by striking ‘‘the model years 1993–

2004’’ and inserting ‘‘model years 1993–2008’’.

(B) Subparagraph (B) is amended by striking ‘‘the model years 2005–

2008’’ and inserting ‘‘model years 2009–2012’’.

SEC. 204. FUEL ECONOMY OF THE FEDERAL FLEET OF AUTOMOBILES.

Section 32917 of title 49, United States Code, is amended to read as follows:

‘‘§ 32917. Standards for executive agency automobiles

‘‘(a) BASELINE AVERAGE FUEL ECONOMY.—The head of each executive agency shall

determine, for all automobiles in the agency’s fleet of automobiles that were leased

or bought as a new vehicle in fiscal year 1999, the average fuel economy for such

automobiles. For the purposes of this section, the average fuel economy so determined shall be the baseline average fuel economy for the agency’s fleet of automobiles.

‘‘(b) INCREASE OF AVERAGE FUEL ECONOMY.—The head of an executive agency

shall manage the procurement of automobiles for that agency in such a manner

that—

‘‘(1) not later than September 30, 2003, the average fuel economy of the new

automobiles in the agency’s fleet of automobiles is not less than 1 mile per gallon higher than the baseline average fuel economy determined under subsection

(a) for that fleet; and

‘‘(2) not later than September 30, 2005, the average fuel economy of the new

automobiles in the agency’s fleet of automobiles is not less than 3 miles per gallon higher than the baseline average fuel economy determined under subsection

(a) for that fleet.

‘‘(c) CALCULATION OF AVERAGE FUEL ECONOMY.—Average fuel economy shall be

calculated for the purposes of this section in accordance with guidance which the

Secretary of Transportation shall prescribe for the implementation of this section.

‘‘(d) DEFINITIONS.—In this section:

‘‘(1) The term ‘automobile’ does not include any vehicle designed for combatrelated missions, law enforcement work, or emergency rescue work.

‘‘(2) The term ‘executive agency’ has the meaning given that term in section

105 of title 5.

‘‘(3) The term ‘new automobile’, with respect to the fleet of automobiles of an

executive agency, means an automobile that is leased for at least 60 consecutive

days or bought, by or for the agency, after September 30, 1999.’’.
21

SEC. 205. HYBRID VEHICLES AND ALTERNATIVE VEHICLES.

(a) IN GENERAL.—Section 303(b)(1) of the Energy Policy Act of 1992 is amended

by adding the following at the end: ‘‘Of the total number of vehicles acquired by a

Federal fleet in fiscal years 2004 and 2005, at least 5 percent of the vehicles in addition to those covered by the preceding sentence shall be alternative fueled vehicles

or hybrid vehicles and in fiscal year 2006 and thereafter at least 10 percent of the

vehicles in addition to those covered by the preceding sentence shall be alternative

fueled vehicles or hybrid vehicles.’’.

(b) DEFINITION.—Section 301 of such Act is amended by striking ‘‘and’’ at the end

of paragraph (13), by striking the period at the end of paragraph (14) and inserting

‘‘; and’’ and by adding at the end the following:

‘‘(15) The term ‘hybrid vehicle’ means a motor vehicle which draws propulsion energy from onboard sources of stored energy which are both—

‘‘(A) an internal combustion or heat engine using combustible fuel; and

‘‘(B) a rechargeable energy storage system.’’.

SEC. 206. FEDERAL FLEET PETROLEUM-BASED NONALTERNATIVE FUELS.

(a) IN GENERAL.—Title III of the Energy Policy Act of 1992 (42 U.S.C. 13212 et

seq.) is amended as follows:

(1) By adding at the end thereof the following:

‘‘SEC. 313. CONSERVATION OF PETROLEUM-BASED FUELS BY THE FEDERAL GOVERNMENT

FOR LIGHT-DUTY MOTOR VEHICLES.

‘‘(a) PURPOSES.—The purposes of this section are to complement and supplement

the requirements of section 303 of this Act that Federal fleets, as that term is defined in section 303(b)(3), acquire in the aggregate a minimum percentage of alternative fuel vehicles, to encourage the manufacture and sale or lease of such vehicles

nationwide, and to achieve, in the aggregate, a reduction in the amount of the petroleum-based fuels (other than the alternative fuels defined in this title) used by new

light-duty motor vehicles acquired by the Federal Government in model years 2004

through 2010 and thereafter.

‘‘(b) IMPLEMENTATION.—In furtherance of such purposes, such Federal fleets in the

aggregate shall reduce the purchase of petroleum-based nonalternative fuels for

such fleets beginning October 1, 2003, through September 30, 2009, from the

amount purchased for such fleets over a comparable period since enactment of this

Act, as determined by the Secretary, through the annual purchase, in accordance

with section 304, and the use of alternative fuels for the light-duty motor vehicles

of such Federal fleets, so as to achieve levels which reflect total reliance by such

fleets on the consumptive use of alternative fuels consistent with the provisions of

section 303(b) of this Act. The Secretary shall, within 120 days after the enactment

of this section, promulgate, in consultation with the Administrator of the General

Services Administration and the Director of the Office of Management and Budget

and such other heads of entities referenced in section 303 within the executive

branch as such Director may designate, standards for the full and prompt implementation of this section by such entities. The Secretary shall monitor compliance

with this section and such standards by all such fleets and shall report annually

to the Congress, based on reports by the heads of such fleets, on the extent to which

the requirements of this section and such standards are being achieved. The report

shall include information on annual reductions achieved of petroleum-based fuels

and the problems, if any, encountered in acquiring alternative fuels and in requiring

their use.’’.

(2) By amending section 304(b) of such Act to read as follows:

‘‘(b) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to the Secretary or, as appropriate, the head of each Federal fleet subject

to the provisions of this section and section 313 of this Act, such sums as may be

necessary to achieve the purposes of section 313(a) and the provisions of this section. Such sums shall remain available until expended.’’.

(b) CLERICAL AMENDMENT.—The table of contents in section 1(b) of such Act is

amended by adding at the end of the items relating to title III the following:

‘‘Sec. 313. Conservation of petroleum-based fuels by the Federal Government for light-duty motor vehicles.’’.

SEC. 207. 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 Secretary of Transportation shall enter into an arrangement with the National Academy of Sciences under which the Academy shall study the feasibility and

effects of reducing by model year 2010, by a significant percentage, the use of fuel

for automobiles.

(b) SUBJECTS OF STUDY.—The study under this section shall include—
22

(1) examination of, and recommendation of alternatives to, the policy under

current Federal law of establishing average fuel economy standards for automobiles and requiring each automobile manufacturer to comply with average

fuel economy standards that apply to the automobiles it manufactures;

(2) examination of how automobile manufacturers could contribute toward

achieving the reduction referred to in subsection (a);

(3) examination of the potential of fuel cell technology in motor vehicles in

order to determine the extent to which such technology may contribute to

achieving the reduction referred to in subsection (a); and

(4) examination of the effects of the reduction referred to in subsection (a)

on—

(A) gasoline supplies;

(B) the automobile industry, including sales of automobiles manufactured

in the United States;

(C) motor vehicle safety; and

(D) air quality.

(c) REPORT.—The Secretary shall require the National Academy of Sciences to

submit to the Secretary and the Congress a report on the findings, conclusion, and

recommendations of the study under this section by not later than 1 year after the

date of the enactment of this Act.

TITLE III—NUCLEAR ENERGY

Subtitle A—General Provisions

SEC. 301. BUDGET STATUS OF NUCLEAR WASTE FUND.

(a) IN GENERAL.—Notwithstanding any other provision of law, the receipts and

disbursements of the Nuclear Waste Fund established under section 302 of the Nuclear Waste Policy Act of 1982 (42 U.S.C. 10222) shall not be counted as new budget

authority, outlays, receipts, or deficit or surplus for purposes of—

(1) the budget of the United States Government as submitted by the President;

(2) the congressional budget; or

(3) the Balanced Budget and Emergency Deficit Control Act of 1985.

(b) EFFECT ON PAYGO SCORECARD.—Upon the enactment of this Act, the Director

of the Office of Management and Budget shall not make any estimates of changes

in direct spending outlays and receipts under section 252(d) of the Balanced Budget

and Emergency Deficit Control Act of 1985 resulting from the enactment of subsection (a) of this section.

SEC. 302. LICENSE PERIOD.

Section 103 c. of the Atomic Energy Act of 1954 (42 U.S.C. 2133(c)) is amended—

(1) by striking ‘‘c. Each such’’ and inserting the following:

‘‘c. LICENSE PERIOD.—

‘‘(1) IN GENERAL.—Each such’’; and

(2) by adding at the end the following:

‘‘(2) COMBINED LICENSES.—In the case of a combined construction and operating license issued under section 185 b., the initial duration of the license may

not exceed 40 years from the date on which the Commission finds, before operation of the facility, that the acceptance criteria required by section 185 b. are

met.’’.

SEC. 303. COST RECOVERY FROM GOVERNMENT AGENCIES.

Section 161 w. of the Atomic Energy Act of 1954 (42 U.S.C. 2201(w)) is amended—

(1) by striking ‘‘for or is issued’’ and all that follows through ‘‘1702’’ and inserting ‘‘to the Commission for, or is issued by the Commission, a license or certificate’’;

(2) by striking ‘‘483a’’ and inserting ‘‘9701’’; and

(3) by striking ‘‘, of applicants for, or holders of, such licenses or certificates’’.

SEC. 304. DEPLETED URANIUM HEXAFLUORIDE.

Section 1(b) of Public Law 105–204 is amended by striking ‘‘fiscal year 2002’’ and

inserting ‘‘fiscal year 2005’’.

SEC. 305. 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 Commis-
23

sion 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.

Subtitle B—Domestic Uranium Fuel Cycle

SEC. 311. PORTSMOUTH COLD STANDBY.

The Secretary of Energy (in this subtitle referred to as the ‘‘Secretary’’) may use,

without need for further appropriations, funds from the United States Enrichment

Corporation Fund established under section 1308 of the Atomic Energy Act of 1954

(other than amounts reserved under Public Law 105–204) for the implementation

of cold standby status at the Portsmouth Gaseous Diffusion Plant, consistent with

the plan required under section 314(b), in the following amounts:

(1) $36,000,000 for fiscal year 2002.

(2) $43,000,000 for fiscal year 2003.

(3) $43,000,000 for fiscal year 2004.

(4) $47,000,000 for fiscal year 2005.

SEC. 312. PADUCAH FUNDING.

The Secretary may use, without need for further appropriations, funds from the

United States Enrichment Corporation Fund established under section 1308 of the

Atomic Energy Act of 1954 (other than amounts reserved under Public Law 105–

204) for the Paducah Gaseous Diffusion Plant for activities that do not duplicate the

transfer and storage operations at the Portsmouth Gaseous Diffusion Plant,

$169,000,000 for the period encompassing fiscal years 2002 through 2005.

SEC. 313. RESEARCH AND DEVELOPMENT.

(a) PLAN.—Not later than 5 months after the date of the enactment of this Act,

the Secretary shall transmit to the Congress a detailed research and development

plan with respect to advanced gas centrifuge technology for uranium enrichment.

(b) ELEMENTS.—The plan required under subsection (a) shall—

(1) identify the technical obstacles to the deployment of an advanced gas centrifuge technology that will be cost competitive with advanced gas centrifuge

technologies deployed in other nations, and propose a strategy to overcome

those obstacles;

(2) include plans for the construction of a pilot facility at a Department of Energy-owned Gaseous Diffusion Plant, and for full-scale deployment of advanced

gas centrifuge technology, as necessary to move gas centrifuge technology for

uranium enrichment from the laboratory to the marketplace, taking into

consideration—

(A) confirmation of technical performance; and

(B) initiation of preliminary plant design and engineering that validates

economic projections and considers cost effectiveness, accessibility to infrastructure, turnover activities, schedule, financing mechanisms, and risks of

construction;

(3) provide a process to validate and demonstrate commercial feasibility, if the

pilot facility described in paragraph (2) is not constructed;

(4) set forth a schedule to ensure full-scale deployment, and a strategy to provide a reliable and economical domestic source of uranium enrichment services

until such full-scale deployment is completed;

(5) evaluate the relative merits of full-scale deployment by—

(A) private sector companies;

(B) a government-owned corporation;

(C) a partnership between the private and public sectors; and

(D) the Department of Energy,

using facilities and property at the Portsmouth Gaseous Diffusion Plant or the

Paducah Gaseous Diffusion Plant; and

(6) provide for a competitive process for deployment of the full-scale technology, and assignment of rights to use Department of Energy patents if the

Department of Energy does not deploy the technology.

(c) PUBLIC COMMENT.—Not later than 3 months after the date of the enactment

of this Act, the Secretary shall make available a draft version of the plan for a public comment period of 30 days.

(d) IMPLEMENTATION.—One month after the plan is transmitted to the Congress

under subsection (a), the Secretary shall begin to implement the plan.

(e) FUNDING.—
24

(1) AUTHORIZATION OF APPROPRIATIONS.—For the purposes of implementing

the plan developed under this section, the Secretary may use, without need for

further appropriations, the following amounts from the United States Enrichment Corporation Fund established under section 1308 of the Atomic Energy

Act of 1954 (other than amounts reserved under Public Law 105–204):

(A) $27,000,000 for fiscal year 2002.

(B) $40,000,000 for fiscal year 2003.

(C) $58,000,000 for fiscal year 2004.

(D) $67,000,000 for fiscal year 2005.

(E) $62,000,000 for fiscal year 2006.

(2) PLAN.—The Secretary may use, without need for further appropriations,

funds from the United States Enrichment Corporation Fund established under

section 1308 of the Atomic Energy Act of 1954 (other than amounts reserved

under Public Law 105–204) to pay the costs of developing the plan under this

section.

SEC. 314. SHORT-TERM RELIABILITY OF DOMESTIC URANIUM ENRICHMENT CAPACITY.

(a) CRITERIA.—Not later than 4 months after the date of the enactment of this

Act, the Secretary shall prepare, and make available for a 30-day period of public

comment, draft criteria for determining when the hot restart of facilities at the

Portsmouth Gaseous Diffusion Plant may be necessary, if supplies of nuclear fuel

are disrupted or anticipated to be disrupted, to mitigate the impacts on—

(1) the supply of nuclear fuel to power plants in the United States; and

(2) uranium enrichment supply contracts with foreign utilities for which the

United States Government is liable for performance in the event of nonperformance by the United States Enrichment Corporation or its successors, or where

the United States has obligations under Federal law or treaty.

(b) PLAN.—Not later than 6 months after the date of the enactment of this Act,

the Secretary shall prepare, and make available for a 30-day period of public comment, a plan for the hot restart of facilities at the Portsmouth Gaseous Diffusion

Plant. Such plan shall—

(1) incorporate the criteria developed under subsection (a);

(2) provide for uranium enrichment capabilities of up to 3,000,000 separative

work units per year;

(3) ensure the capability of producing both higher assay (up to 10 percent U

235) and lower assay (0.7 percent to 4.95 percent U 235) fuels;

(4) include options for the use of the Department of Energy’s inventory of natural uranium;

(5) provide for the retention of sufficient R–114 refrigerant to operate the

Portsmouth Gaseous Diffusion Plant for 15 years or until there is equivalent

replacement uranium enrichment capacity deployed in the United States; and

(6) include cost estimates for hot restart and annual operating costs of the

facility.

(c) TRANSMITTAL TO CONGRESS.—Not later than 8 months after the date of the enactment of this Act, the Secretary shall transmit to the Congress the plan described

in subsection (b), including the criteria developed under subsection (a).

(d) FUNDING.—The Secretary may use, without need for further appropriations,

funds from the United States Enrichment Corporation Fund established under section 1308 of the Atomic Energy Act of 1954 (other than amounts reserved under

Public Law 105–204) to pay the costs of developing the criteria and plan under this

section.

SEC. 315. 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 $10,000,000 for each of fiscal years 2002, 2003, and 2004 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 in-
25

clude any producer that has not produced uranium from domestic reserves on or

after July 30, 1998.

SEC. 316. MAINTENANCE OF A VIABLE DOMESTIC URANIUM CONVERSION INDUSTRY.

There are authorized to be appropriated to the Secretary $800,000 for contracting

with the Nation’s sole remaining uranium converter for the purpose of performing

research and development to improve the environmental and economic performance

of United States uranium conversion operations.

SEC. 317. PROHIBITION OF COMMERCIAL SALES OF URANIUM BY THE UNITED STATES UNTIL

2009.

Section 3112 of the USEC Privatization Act (42 U.S.C. 2297h–10) is amended by

adding at the end the following new subsection: ‘‘(g) PROHIBITION ON SALES.—Notwithstanding any other provision of law, the

United States Government shall not sell or transfer any uranium (including natural

uranium concentrates, natural uranium hexafluoride, enriched uranium, depleted

uranium, or uranium in any other form) through March 23, 2009 (except sales or

transfers for use by the Tennessee Valley Authority in relation to the Department

of Energy’s HEU or Tritium programs, or the Department or Energy research reactor sales program, or any depleted uranium hexaflouride to be transferred to a designated Department of Energy contractor in conjunction with the planned construction of the Depleted Uranium Hexaflouride conversion plants in Portsmouth, Ohio,

and Paducah, Kentucky, or for emergency purposes in the event of a disruption in

supply to end users in the United States). The aggregate of sales or transfers of uranium by the United States Government after March 23, 2009, shall not exceed

3,000,000 pounds U3O8 per calendar year.’’.

SEC. 318. PADUCAH DECONTAMINATION AND DECOMMISSIONING PLAN.

The Secretary of Energy shall prepare and submit a plan to Congress within 180

days after the date of the enactment of this Act that establishes scope, cost, schedule, sequence of activities, and contracting strategy for— (1) the decontamination and decommissioning of the Department of Energy’s surplus buildings and facilities at the Paducah Gaseous Diffusion Plant that

have no future anticipated reuse; and

(2) the remediation of Department of Energy Material Storage Areas at the

Paducah Gaseous Diffusion Plant.

Such plan shall inventory all surplus facilities and buildings, and identify and rank

health and safety risks associated with such facilities and buildings. Such plan shall

inventory all Department of Energy Material Storage Areas, and identify and rank

health and safety risks associated with such Department of Energy Material Storage Areas. The Department of Energy shall incorporate these risk factors in designing the sequence and schedule for the plan. Such plan shall identify funding requirements that are in addition to the expected outlays included in the Department

of Energy’s Environmental Management Plan for the Paducah Gaseous Diffusion

Plan.

TITLE IV—HYDROELECTRIC ENERGY

SEC. 401. ALTERNATIVE CONDITIONS AND FISHWAYS.

(a) ALTERNATIVE MANDATORY CONDITIONS.—Section 4 of the Federal Power Act

(16 U.S.C. 797) is amended by adding at the end the following:

‘‘(h)(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 deems a condition to such license to be necessary

under the first proviso of subsection (e), the license applicant or any other party to

the licensing proceeding may propose an alternative condition.

‘‘(2) Notwithstanding the first proviso of subsection (e), the Secretary of the department under whose supervision the reservation falls 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 of the appropriate department determines, based on substantial evidence provided by the party proposing

such alternative condition, that the alternative condition—

‘‘(A) provides no less protection for the reservation than provided by the condition deemed necessary 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 condition deemed necessary by the Secretary.
26

‘‘(3) Within one year after the enactment of this subsection, each Secretary concerned shall, by rule, establish a process to expeditiously resolve conflicts arising

under this subsection.’’.

(b) ALTERNATIVE FISHWAYS.—Section 18 of the Federal Power Act (16 U.S.C. 811)

is amended by—

(1) inserting ‘‘(a)’’ before the first sentence; and

(2) adding at the end the following:

‘‘(b)(1) Whenever the Commission shall require a licensee to construct, maintain,

or operate a fishway prescribed by the Secretary of the Interior or the Secretary of

Commerce under this section, the licensee or any other party to the proceeding may

propose an alternative to such prescription to construct, maintain, or operate a

fishway.

‘‘(2) Notwithstanding subsection (a), 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

party proposing such alternative, that the alternative—

‘‘(A) will be no less effective 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 prescribed by the Secretary.

‘‘(3) Within one year after the enactment of this subsection, the Secretary of the

Interior and the Secretary of Commerce shall each, by rule, establish a process to

expeditiously resolve conflicts arising under this subsection.’’

SEC. 402. FERC DATA ON HYDROELECTRIC LICENSING.

(a) DATA COLLECTION PROCEDURES.—The Federal Energy Regulatory Commission

shall revise its procedures regarding the collection of data in connection with the

Commission’s consideration of hydroelectric licenses under the Federal Power Act.

Such revised data collection procedures shall be designed to provide the Commission

with complete and accurate information concerning the time and costs to parties involved in the licensing process. Such data shall be available for each significant

stage in the licensing process and shall be designed to identify projects with similar

characteristics so that analyses can be made of the time and costs involved in licensing proceedings based upon the different characteristics of those proceedings.

(b) REPORTS.—Within 6 months after the date of enactment of this Act, the Commission shall notify the Committee on Energy and Commerce of the United States

House of Representatives and the Committee on Energy and Natural Resources of

the United States Senate of the progress made by the Commission under subsection

(a), and within one year after such date of enactment, the Commission shall submit

a report to such Committees specifying the measures taken by the Commission pursuant to subsection (a).

TITLE V—CLEAN COAL

SEC. 501. SHORT TITLE.

This title may be cited as the ‘‘National Electricity and Environmental Improvement Act’’.

SEC. 502. FINDINGS.

Congress finds that—

(1) reliable, affordable, increasingly clean electricity will continue to power

the growing United States economy;

(2) an increasing use of electrotechnologies, the desire for continuous environmental improvement, a more competitive electricity market, and concerns about

rising energy prices add importance to the need for reliable, affordable, increasingly clean electricity;

(3) coal, which, as of the date of enactment of this Act, accounts for more than 1⁄2 of all electricity generated in the United States, is the most abundant fossil

energy resource of the United States;

(4) coal comprises more than 85 percent of all fossil resources in the United

States and exists in quantities sufficient to supply the United States for 250

years at current usage rates;

(5) investments in electricity generating facility emissions control technology

over the past 30 years have reduced the aggregate emissions of pollutants from
27

coal-based generating facilities by 21 percent, even as coal use for electricity

generation has nearly tripled;

(6) continuous improvement in efficiency and environmental performance

from electricity generating facilities would allow continued use of coal and preserve less abundant energy resources for other energy uses;

(7) new methods and equipment for converting coal into electricity can effectively eliminate health-threatening emissions and improve efficiency by as much

as 50 percent, but initial deployment of new coal generation methods and equipment entails significant risk that generators may be unable to accept in a newly

competitive electricity market; and

(8) continued environmental improvement in coal-based generation and increasing the production and supply of power generation facilities with less air

emissions, with the ultimate goal of near-zero emissions, is important and desirable.

Subtitle A—Accelerated Clean Coal Power

Production Program

SEC. 511. DEFINITIONS.

In this subtitle:

(1) COST AND PERFORMANCE GOALS.—The term ‘‘cost and performance goals’’

means the cost and performance goals established under section 512.

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

SEC. 512. COST AND PERFORMANCE GOALS.

(a) IN GENERAL.—The Secretary shall perform an assessment that establishes cost

and performance goals with respect to various coal-based electric generation facilities, power production strategies, and other efforts that would permit the continued

cost-competitive use of coal for electricity generation, as chemical feedstocks, and as

transportation fuel in 2007, 2015, and 2020.

(b) CONSULTATION.—In establishing the cost and performance goals, the Secretary

shall consult with representatives of—

(1) the United States coal industry;

(2) State coal development agencies;

(3) the electric utility industry;

(4) railroads and other transportation industries;

(5) manufacturers of advanced coal-based equipment;

(6) organizations representing workers;

(7) organizations formed to—

(A) promote the use of coal;

(B) further the goals of environmental protection; and

(C) promote the production and generation of coal-based power from advanced facilities; and

(8) other appropriate Federal and State agencies.

(c) TIMING.—The Secretary shall—

(1) not later than 120 days after the date of enactment of this Act, issue a

set of draft cost and performance goals for public comment; and

(2) not later than 180 days after the date of enactment of this Act, after taking into consideration any public comments received, submit to Congress the

final cost and performance goals.

SEC. 513. STUDY.

(a) IN GENERAL.—Not later than 1 year after the date of enactment of this Act,

and once every 2 years thereafter through 2016, the Secretary, in cooperation with

the Secretary of the Interior and the Administrator of the Environmental Protection

Agency, shall transmit to the Congress a report containing the results of a study

to—

(1) identify methods and equipment that, by themselves or in combination

with other efforts, may be capable of achieving the cost and performance goals;

(2) assess the costs that would be incurred by, and the period of time that

would be required for, the production of power generation methods and equipment that, by themselves or in combination with other methods and equipment,

contribute to the achievement of the cost and performance goals;

(3) develop recommendations for the Department of Energy, in cooperation

with industry, to develop and implement methods and equipment that, by themselves or in combination with other efforts, achieve the production and generation of coal-based power meeting the cost and performance goals; and
28

(4) develop recommendations for additional authorities required to achieve the

cost and performance goals.

(b) EXPERT ADVICE.—In carrying out this section, the Secretary shall give due

weight to the expert advice of representatives of the entities described in section

512(b).

SEC. 514. PRODUCTION AND GENERATION OF COAL-BASED POWER.

(a) IN GENERAL.—The Secretary shall carry out a program to facilitate production

and generation of coal-based power through methods and equipment under—

(1) this subtitle;

(2) the Federal Nonnuclear Energy Research and Development Act of 1974

(42 U.S.C. 5901 et seq.);

(3) the Energy Reorganization Act of 1974 (42 U.S.C. 5801 et seq.); and

(4) title XIII of the Energy Policy Act of 1992 (42 U.S.C. 13331 et seq.).

(b) CONDITIONS.—The program described in subsection (a) shall be designed to

achieve the cost and performance goals.

SEC. 515. AUTHORIZATION OF APPROPRIATIONS.

(a) IN GENERAL.—There are authorized to be appropriated to the Secretary to

carry out sections 512, 513, and 514, $100,000,000 for each of the fiscal years 2002

through 2012, to remain available until expended.

(b) CONDITIONS OF AUTHORIZATION.—The authorization of appropriations under

subsection (a)—

(1) shall be in addition to authorizations of appropriations in effect on the

date of enactment of this Act; and

(2) shall not be a cap on Department of Energy fossil energy research and development and clean coal technology appropriations.

SEC. 516. CLEAN COAL POWER INITIATIVE.

(a) IN GENERAL.—The Secretary shall establish a clean coal power initiative to facilitate the production and generation of power from advanced coal-based methods

and equipment applicable to new or existing power plants, including coproduction

plants.

(b) REQUIREMENTS.—The methods and equipment to be addressed under the

initiative—

(1) shall be methods and equipment that, by themselves or in combination

with other methods and equipment, advance efficiency and environmental performance, and increase the supply of power and promote cost competitiveness,

well beyond that which is in operation or has been demonstrated as of the date

of enactment of this Act; and

(2) may include methods and equipment that have not previously been envisioned for the production and generation of coal-based power.

(c) PLAN.—Not later than 120 days after the date of enactment of this Act, the

Secretary shall transmit to Congress a plan to carry out subsection (a) that includes

a description of—

(1) the program elements and management structure to be used;

(2) milestones to be achieved with respect to the production and generation

of coal-based power methods and equipment; and

(3) the activities proposed to be conducted at facilities that serve or are located at new or existing coal-based electric generation units having at least 50

megawatts nameplate rating, including improvements to allow the units to

achieve 1 or more of the following:

(A) An overall design efficiency improvement of not less than 3 percent

as compared with the efficiency of the unit as operated as of the date of

enactment of this Act and before any retrofit, repowering, replacement, or

installation.

(B) A significant improvement in, or new alternative method or equipment to enhance, the environmental performance related to the control of

sulfur dioxide, nitrogen oxide, or mercury in a manner that is different and

well below the cost of activities at facilities that are in operation or have

been in operation as of the date of enactment of this Act.

(C) A means of recycling or reusing a significant portion of coal combustion or gasification wastes or byproducts produced by coal-based generating

units, excluding practices that are generally available as of the date of enactment of this Act.

(D) A means to capture, separate, and reuse or dispose of carbon dioxide

that is different and well below the cost of methods and equipment that are

in operation or have been in operation as of the date of enactment of this

Act.
29

SEC. 517. FINANCIAL ASSISTANCE.

(a) IN GENERAL.—Not later than 180 days after the date on which the Secretary

transmits to Congress the plan under section 516(c), the Secretary shall solicit proposals for projects that serve or are located at new or existing facilities designed

to achieve 1 or more of the levels of performance set forth in section 516(c)(3).

(b) PROJECT CRITERIA.—A solicitation under subsection (a) may include solicitation of a proposal for a project to demonstrate—

(1) an overall design efficiency improvement of not less 3 percentage points

as compared with the efficiency of the unit as operated as of the date of enactment of this Act and with no increase in the potential to emit sulfur dioxide,

nitrogen oxide, particulate matter, mercury, or carbon monoxide;

(2) a reduction of emissions to a level of not more than—

(A)(i) in the case of sulfur dioxide—

(I) in the case of coal with a potential combustion concentration sulfur emission of 1.2 or more pounds per million British thermal units

of heat input, 5 percent of the potential combustion concentration sulfur dioxide emissions; or

(II) in the case of a coal with a potential combustion concentration

of less than 1.2 pounds of per million British thermal units of heat

input, 15 percent of the potential combustion concentration of sulfur dioxide emissions;

(ii) in the case of nitrogen oxide—

(I) in the case of a boiler other than a cyclone-fired boiler, emissions

of 0.1 pound per million British thermal units of heat; or

(II) in the case of a cyclone-fired boiler, 15 percent of the uncontrolled

nitrogen oxide emissions from the boiler; or

(iii) in the case of particulate matter, emissions of 0.02 pound per million

British thermal units of heat input; or

(B) the emission levels for the pollutants identified in subparagraph (A)

that are specified in the new source performance standards of the Clean Air

Act (42 U.S.C. 7411) in effect at the time of construction, installation, or

retrofitting of the advanced coal-based method or equipment for the category of source if they are lower than the levels specified in subparagraph

(A); or

(3) the production of coal combustion byproducts that are capable of obtaining

economic values significantly greater than byproducts produced as of the date

of enactment of this Act with no increase in the potential to emit sulfur dioxide,

nitrogen oxide, particulate matter, mercury, or carbon monoxide.

(c) FINANCIAL ASSISTANCE.—The Secretary shall provide financial assistance to

projects that 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;

(3) achieve, in a cost-effective manner, 1 or more of the criteria described in

the solicitation; and

(4) demonstrate methods and equipment that are applicable to 25 percent of

the electricity generating facilities that use coal as the primary feedstock as of

the date of enactment of this Act.

(d) FEDERAL SHARE.—The Federal share of the cost of a project funded under this

section shall not exceed 50 percent.

(e) FUNDING.—To carry out this section, the Secretary may use any unobligated

funds available to the Secretary and any funds obligated to any project selected

under the clean coal technology program that become unobligated.

Subtitle B—Credit for Emission Reductions and

Efficiency Improvements in Existing Coal-Based

Electricity Generation Facilities

SEC. 521. CREDIT FOR INVESTMENT IN QUALIFYING CLEAN COAL TECHNOLOGY.

(a) ALLOWANCE OF QUALIFYING CLEAN COAL TECHNOLOGY UNIT CREDIT.—Section

46 of the Internal Revenue Code of 1986 (relating to amount of credit) is amended

by striking ‘‘and’’ at the end of paragraph (2), by striking the period at the end of

paragraph (3) and inserting ‘‘, and’’, and by adding at the end the following:

‘‘(4) the qualifying clean coal technology unit credit.’’.
30

(b) AMOUNT OF QUALIFYING CLEAN COAL TECHNOLOGY UNIT CREDIT.—Subpart E

of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to rules for computing investment credit) is amended by inserting after section

48 the following:

‘‘SEC. 48A. QUALIFYING CLEAN COAL TECHNOLOGY UNIT CREDIT.

‘‘(a) IN GENERAL.—For purposes of section 46, the qualifying clean coal technology

unit credit for any taxable year is an amount equal to 10 percent of the qualified

investment in a qualifying system of continuous emission control for such taxable

year.

‘‘(b) QUALIFYING SYSTEM OF CONTINUOUS EMISSION CONTROL.—

‘‘(1) IN GENERAL.—For purposes of subsection (a), the term ‘qualifying system

of continuous emission control’ means a system of the taxpayer which—

‘‘(A) serves, is added to, or retrofits an existing coal-based electricity generation unit, the construction, installation, or retrofitting of which is completed by the taxpayer (but only with respect to that portion of the basis

which is properly attributable to such construction, installation, or retrofitting),

‘‘(B) reduces the discharge into the atmosphere of 1 or more of the following pollutants to not more than—

‘‘(i) 5 percent of the potential combustion concentration sulfur dioxide

emissions for a coal with a potential combustion concentration sulfur

emission of 1.2 lb/million btu of heat input or greater,

‘‘(ii) 15 percent of the potential combustion concentration sulfur dioxide emissions for a coal with a potential combustion concentration sulfur emission of less than 1.2 lb/million Btu of heat input,

‘‘(iii) nitrogen oxide emissions of 0.l lb per million Btu of heat input

from other than cyclone-fired boilers,

‘‘(iv) 15 percent of the uncontrolled nitrogen oxide emissions from cyclone-fired boilers,

‘‘(v) particulate emission of 0.02 lb per million Btu of heat input, and

‘‘(vi) the emission levels specified in the new source performance

standards of the Clean Air Act (42 U.S.C. 7411) in force at the time

of construction, installation or retrofitting of the qualifying system of

continuous emission control for the category of source if such level is

lower than the levels specified in clause (i), (ii), (iii), (iv), or (v),

‘‘(C) is depreciable under section 167,

‘‘(D) has a useful life of not less than 4 years, and

‘‘(E) is located in the United States.

‘‘(2) SPECIAL RULE FOR SALE-LEASEBACKS.—For purposes of subparagraph (A)

of paragraph (1), in the case of a unit which—

‘‘(A) is originally placed in service by a person, and

‘‘(B) is sold and leased back by such person, or is leased to such person,

within 3 months after the date such unit was originally placed in service,

for a period of not less than 12 years,

such unit shall be treated as originally placed in service not earlier than the

date on which such property is used under the leaseback (or lease) referred to

in subparagraph (B). The preceding sentence shall not apply to any property if

the lessee and lessor of such property make an election under this sentence.

Such an election, once made, may be revoked only with the consent of the Secretary.

‘‘(c) EXISTING COAL-BASED ELECTRICITY GENERATION UNIT.—For purposes of subsection (a), the term ‘existing coal-based electricity generating unit’ means, with respect to any taxable year, a steam generator-turbine unit which uses coal to produce

75 percent or more of its output as electricity and was operated commercially before

the effective date of this section.

‘‘(d) LIMIT ON QUALIFYING CLEAN COAL TECHNOLOGY UNIT CREDIT.—For purposes

of subsection (a), the credit shall be applicable to not more than the first

$100,000,000 of qualifying investment in a qualifying system of continuous emission

control at any 1 existing coal-based electricity generating unit.

‘‘(e) QUALIFIED INVESTMENT.—For purposes of subsection (a), the term ‘qualified

investment’ means, with respect to any taxable year, the basis of a qualifying system of continuous emission control placed in service by the taxpayer during such

taxable year.

‘‘(f) QUALIFIED PROGRESS EXPENDITURES.—

‘‘(1) INCREASE IN QUALIFIED INVESTMENT.—In the case of a taxpayer who has

made an election under paragraph (5), the amount of the qualified investment

of such taxpayer for the taxable year (determined under subsection (e) without

regard to this subsection) shall be increased by an amount equal to the aggre-
31

gate of each qualified progress expenditure for the taxable year with respect to

progress expenditure property. ‘‘(2) PROGRESS EXPENDITURE PROPERTY DEFINED.—For purposes of this subsection, the term ‘progress expenditure property’ means any property being constructed by or for the taxpayer and which it is reasonable to believe will qualify

as a qualifying system of continuous emission control which is being constructed

by or for the taxpayer when it is placed in service. ‘‘(3) QUALIFIED PROGRESS EXPENDITURES DEFINED.—For purposes of this

subsection— ‘‘(A) SELF-CONSTRUCTED PROPERTY.—In the case of any self-constructed

property, the term ‘qualified progress expenditures’ means the amount

which, for purposes of this subpart, is properly chargeable (during such taxable year) to capital account with respect to such property. ‘‘(B) NONSELF-CONSTRUCTED PROPERTY.—In the case of nonself-constructed property, the term ‘qualified progress expenditures’ means the

amount paid during the taxable year to another person for the construction

of such property. ‘‘(4) OTHER DEFINITIONS.—For purposes of this subsection— ‘‘(A) SELF-CONSTRUCTED PROPERTY.—The term ‘self-constructed property’ means property for which it is reasonable to believe that more than half

of the construction expenditures will be made directly by the taxpayer.

‘‘(B) NONSELF-CONSTRUCTED PROPERTY.—The term ‘nonself-constructed

property’ means property which is not self-constructed property.

‘‘(C) CONSTRUCTION, ETC.—The term ‘construction’ includes reconstruction

and erection, and the term ‘constructed’ includes reconstructed and erected.

‘‘(D) ONLY CONSTRUCTION OF QUALIFYING SYSTEM OF CONTINUOUS EMISSION CONTROL TO BE TAKEN INTO ACCOUNT.—Construction shall be taken

into account only if, for purposes of this subpart, expenditures therefor are

properly chargeable to capital account with respect to the property.

‘‘(5) ELECTION.—An election under this subsection may be made at such time

and in such manner as the Secretary may by regulations prescribe. Such an

election shall apply to the taxable year for which made and to all subsequent

taxable years. Such an election, once made, may not be revoked except with the

consent of the Secretary.

‘‘(g) COORDINATION WITH OTHER CREDITS.—This section shall not apply to any

property with respect to which the rehabilitation credit under section 47 or the energy credit under section 48 is allowed unless the taxpayer elects to waive the application of such credit to such property.

‘‘(h) TERMINATION.—This section shall not apply with respect to any qualified investment made more than 10 years after the effective date of this section.’’.

(c) RECAPTURE.—Section 50(a) of the Internal Revenue Code of 1986 (relating to

other special rules) is amended by adding at the end the following:

‘‘(6) SPECIAL RULES RELATING TO QUALIFYING SYSTEM OF CONTINUOUS EMISSION CONTROL.—For purposes of applying this subsection in the case of any

credit allowable by reason of section 48A, the following shall apply:

‘‘(A) GENERAL RULE.—In lieu of the amount of the increase in tax under

paragraph (1), the increase in tax shall be an amount equal to the investment tax credit allowed under section 38 for all prior taxable years with

respect to a qualifying system of continuous emission control (as defined by

section 48A(b)(1)) multiplied by a fraction whose numerator is the number

of years remaining to fully depreciate under this title the qualifying system

of continuous emission control disposed of, and whose denominator is the

total number of years over which such unit would otherwise have been subject to depreciation. For purposes of the preceding sentence, the year of disposition of the qualifying system of continuous emission control property

shall be treated as a year of remaining depreciation.

‘‘(B) PROPERTY CEASES TO QUALIFY FOR PROGRESS EXPENDITURES.—Rules

similar to the rules of paragraph (2) shall apply in the case of qualified

progress expenditures for a qualifying system of continuous emission control under section 48A, except that the amount of the increase in tax under

subparagraph (A) of this paragraph shall be substituted in lieu of the

amount described in such paragraph (2).

‘‘(C) APPLICATION OF PARAGRAPH.—This paragraph shall be applied separately with respect to the credit allowed under section 38 regarding a qualifying system of continuous emission control.’’.

(d) TRANSITIONAL RULE.—Section 39(d) of the Internal Revenue Code of 1986 (relating to transitional rules) is amended by adding at the end the following:

‘‘(11) NO CARRYBACK OF SECTION 48A CREDIT BEFORE EFFECTIVE DATE.—No

portion of the unused business credit for any taxable year which is attributable
32

to the qualifying clean coal technology unit credit determined under section 48A

may be carried back to a taxable year ending before the date of enactment of

section 48A.’’.

(e) TECHNICAL AMENDMENTS.—

(1) Section 49(a)(1)(C) of the Internal Revenue Code of 1986 is amended by

striking ‘‘and’’ at the end of clause (ii), by striking the period at the end of

clause (iii) and inserting ‘‘, and’’, and by adding at the end the following:

‘‘(iv) the portion of the basis of any qualifying system of continuous

emission control attributable to any qualified investment (as defined by

section 48A(e)).’’.

(2) Section 50(a)(4) of such Code is amended by striking ‘‘and (2)’’ and inserting ‘‘, (2), and (6)’’.

(3) Section 50(c) of such Code is amended by adding at the end the following:

‘‘(6) NONAPPLICATION.—Paragraphs (1) and (2) shall not apply to any qualifying clean coal technology unit credit under section 48A.’’.

(4) The table of sections for subpart E of part IV of subchapter A of chapter

1 of such Code is amended by inserting after the item relating to section 48 the

following:

‘‘Sec. 48A. Qualifying clean coal technology unit credit.’’.

(f) EFFECTIVE DATE.—The amendments made by this section shall apply to periods after December 31, 2001, under rules similar to the rules of section 48(m) of

the Internal Revenue Code of 1986 (as in effect on the day before the date of enactment of the Revenue Reconciliation Act of 1990).

SEC. 522. CREDIT FOR PRODUCTION FROM A QUALIFYING CLEAN COAL TECHNOLOGY UNIT.

(a) CREDIT FOR PRODUCTION FROM A QUALIFYING CLEAN COAL TECHNOLOGY

UNIT.—Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue

Code of 1986 (relating to business related credits) is amended by adding at the end

the following:

‘‘SEC. 45G. CREDIT FOR PRODUCTION FROM A QUALIFYING CLEAN COAL TECHNOLOGY UNIT.

‘‘(a) GENERAL RULE.—For purposes of section 38, the qualifying clean coal technology production credit of any taxpayer for any taxable year is equal to the product

of—

‘‘(1) the applicable amount of clean coal technology production credit, multiplied by

‘‘(2) the kilowatt hours of electricity produced by the taxpayer during such

taxable year at a qualifying clean coal technology unit during the 10-year period

beginning on the date the unit was returned to service after retrofit,

repowering, or replacement.

‘‘(b) APPLICABLE AMOUNT.—

‘‘(1) IN GENERAL.—For purposes of this section, the applicable amount of clean

coal technology production credit is equal to $0.0034.

‘‘(2) INFLATION ADJUSTMENT FACTOR.—For calendar years after 2001, the applicable amount of clean coal technology production credit shall be adjusted by

multiplying such amount by the inflation adjustment factor for the calendar

year in which the amount is applied. If any amount as increased under the preceding sentence is not a multiple of 0.01 cent, such amount shall be rounded

to the nearest multiple of 0.01 cent.

‘‘(c) DEFINITIONS AND SPECIAL RULES.—For purposes of this section—

‘‘(1) QUALIFYING CLEAN COAL TECHNOLOGY UNIT.—The term ‘qualifying clean

coal technology unit’ means a unit of the taxpayer which—

‘‘(A) is an existing coal-based electricity generating steam generator-turbine unit,

‘‘(B) has a nameplate capacity rating of not more than 300,000 kilowatts,

and

‘‘(C) has been retrofitted, repowered, or replaced with a clean coal technology within 10 years after the effective date of this section.

‘‘(2) CLEAN COAL TECHNOLOGY.—The term ‘clean coal technology’ means technology which—

‘‘(A) uses coal to produce 50 percent or more of its thermal output as electricity, including advanced pulverized coal or atmospheric fluidized bed

combustion, pressurized fluidized bed combustion, integrated gasification

combined cycle, or any other technology for the production of electricity,

‘‘(B) has a design heat rate not less than 500 Btu/kWh below that of the

existing unit before it is retrofit, repowered, or replaced with the qualifying

clean coal technology,

‘‘(C) has a maximum design heat rate of not more than 9,500 Btu/kWh

when the design coal has a heat content of more than 9,000 Btu per pound,
33

‘‘(D) has a maximum design heat rate of not more than 10,500 Btu/kWh

when the design coal has a heat content of 9,000 Btu per pound or less,

and

‘‘(E) reduces the discharge into the atmosphere of 1 or more of the following pollutants to not more than—

‘‘(i) 5 percent of the potential combustion concentration sulfur dioxide

emissions for a coal with a potential combustion concentration sulfur

emission of 1.2 lb/million btu of heat input or greater,

‘‘(ii) 15 percent of the potential combustion concentration sulfur dioxide emissions for a coal with a potential combustion concentration sulfur emission of less than 1.2 lb/million Btu of heat input,

‘‘(iii) nitrogen oxide emissions of 0.1 lb per million Btu of heat input

from other than cyclone-fired boilers,

‘‘(iv) 15 percent of the uncontrolled nitrogen oxide emissions from cyclone-fired boilers,

‘‘(v) particulate emissions of 0.02 lb per million Btu of heat input, and

‘‘(vi) the emission levels specified in the new source performance

standards of the Clean Air Act (42 U.S.C. 7411) in effect at the time

of construction, installation or retrofitting of the qualifying clean coal

technology unit for the category of source if such level is lower than the

levels specified in clause (i), (ii), (iii), (iv), or (v).

‘‘(3) APPLICATION OF CERTAIN RULES.—The rules of paragraphs (3), (4), and (5)

of section 45 shall apply.

‘‘(4) INFLATION ADJUSTMENT FACTOR.—The term ‘inflation adjustment factor’

means, with respect to a calendar year, a fraction the numerator of which is

the GDP implicit price deflator for the preceding calendar year and the denominator of which is the GDP implicit price deflator for the calendar year 2001.

‘‘(5) GDP IMPLICIT PRICE DEFLATOR.—The term ‘GDP implicit price deflator’

means the most recent revision of the implicit price deflator for the gross domestic product as computed by the Department of Commerce before March 15

of the calendar year.

‘‘(d) COORDINATION WITH OTHER CREDITS.—This section shall not apply to any

property with respect to which the qualifying clean coal technology unit credit under

section 48A is allowed unless the taxpayer elects to waive the application of such

credit to such property.’’.

(b) CREDIT TREATED AS BUSINESS CREDIT.—Section 38(b) of the Internal Revenue

Code of 1986 is amended by striking ‘‘plus’’ at the end of paragraph (14), by striking

the period at the end of paragraph (15) and inserting ‘‘, plus’’, and by adding at the

end the following:

‘‘(16) the qualifying clean coal technology production credit determined under

section 45G(a).’’.

(c) TRANSITIONAL RULE.—Section 39(d) of the Internal Revenue Code of 1986 (relating to transitional rules), as amended by section 201(d), is amended by adding

at the end the following:

‘‘(12) NO CARRYBACK OF SECTION 45G CREDIT BEFORE EFFECTIVE DATE.—No

portion of the unused business credit for any taxable year which is attributable

to the qualifying clean coal technology production credit determined under section 45G may be carried back to a taxable year ending before the date of enactment of section 45G.’’.

(d) CLERICAL AMENDMENT.—The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding

at the end the following:

‘‘Sec. 45G. Credit for production from a qualifying clean coal technology unit.’’.

(e) EFFECTIVE DATE.—The amendments made by this section shall apply to production after the date of enactment of this Act.

Subtitle C—Incentives for Early Commercial Applications of Advanced Clean Coal Technologies

SEC. 531. CREDIT FOR INVESTMENT IN QUALIFYING ADVANCED CLEAN COAL TECHNOLOGY.

(a) ALLOWANCE OF QUALIFYING ADVANCED CLEAN COAL TECHNOLOGY FACILITY

CREDIT.—Section 46 of the Internal Revenue Code of 1986 (relating to amount of

credit), as amended by section 201(a), is amended by striking ‘‘and’’ at the end of

paragraph (3), by striking the period at the end of paragraph (4) and inserting ‘‘,

and’’, and by adding at the end the following:

‘‘(5) the qualifying advanced clean coal technology facility credit.’’.
34

(b) AMOUNT OF QUALIFYING ADVANCED CLEAN COAL TECHNOLOGY FACILITY CREDIT.—Subpart E of part IV of subchapter A of chapter 1 of the Internal Revenue Code

of 1986 (relating to rules for computing investment credit), as amended by section

521(b), is amended by inserting after section 48A the following:

‘‘SEC. 48B. QUALIFYING ADVANCED CLEAN COAL TECHNOLOGY FACILITY CREDIT.

‘‘(a) IN GENERAL.—For purposes of section 46, the qualifying advanced clean coal

technology facility credit for any taxable year is an amount equal to 10 percent of

the qualified investment in a qualifying advanced clean coal technology facility for

such taxable year.

‘‘(b) QUALIFYING ADVANCED CLEAN COAL TECHNOLOGY FACILITY.—

‘‘(1) IN GENERAL.—For purposes of subsection (a), the term ‘qualifying advanced clean coal technology facility’ means a facility of the taxpayer which—

‘‘(A)(i)(I) original use of which commences with the taxpayer, or

‘‘(II) is a retrofitted or repowered conventional technology facility, the retrofitting or repowering of which is completed by the taxpayer (but only with

respect to that portion of the basis which is properly attributable to such

retrofitting or repowering), or

‘‘(ii) is acquired through purchase (as defined by section 179(d)(2)),

‘‘(B) is depreciable under section 167,

‘‘(C) has a useful life of not less than 4 years,

‘‘(D) is located in the United States, and

‘‘(E) uses qualifying advanced clean coal technology.

‘‘(2) SPECIAL RULE FOR SALE-LEASEBACKS.—For purposes of subparagraph (A)

of paragraph (1), in the case of a facility which—

‘‘(A) is originally placed in service by a person, and

‘‘(B) is sold and leased back by such person, or is leased to such person,

within 3 months after the date such facility was originally placed in service,

for a period of not less than 12 years,

such facility shall be treated as originally placed in service not earlier than the

date on which such property is used under the leaseback (or lease) referred to

in subparagraph (B). The preceding sentence shall not apply to any property if

the lessee and lessor of such property make an election under this sentence.

Such an election, once made, may be revoked only with the consent of the Secretary.

‘‘(c) QUALIFYING ADVANCED CLEAN COAL TECHNOLOGY.—For purposes of paragraph (1)—

‘‘(1) IN GENERAL.—The term ‘qualifying advanced clean coal technology’

means, with respect to clean coal technology—

‘‘(A) which has—

‘‘(i) multiple applications, with a combined capacity of not more than

5,000 megawatts (4,000 megawatts before 2009), of advanced pulverized coal or atmospheric fluidized bed combustion technology—

‘‘(I) installed as a new, retrofit, or repowering application,

‘‘(II) operated between 2000 and 2012, and

‘‘(III) having a design net heat rate of not more than 9,500 Btu

per kilowatt hour when the design coal has a heat content of more

than 9,000 Btu per pound, or a design net heat rate of not more

than 9,900 Btu per kilowatt hour when the design coal has a heat

content of 9,000 Btu per pound or less,

‘‘(ii) multiple applications, with a combined capacity of not more than

1,000 megawatts (500 megawatts before 2009 and 750 megawatts before 2013), of pressurized fluidized bed combustion technology—

‘‘(I) installed as a new, retrofit, or repowering application,

‘‘(II) operated between 2000 and 2016, and

‘‘(III) having a design net heat rate of not more than 8,400 Btu

per kilowatt hour when the design coal has a heat content of more

than 9,000 Btu per pound, or a design net heat rate of not more

than 9,900 Btu’s per kilowatt hour when the design coal has a heat

content of 9,000 Btu per pound or less, and

‘‘(iii) multiple applications, with a combined capacity of not more

than 2,000 megawatts (1,000 megawatts before 2009 and 1,500

megawatts before 2013), of integrated gasification combined cycle technology, with or without fuel or chemical co-production—

‘‘(I) installed as a new, retrofit, or repowering application,

‘‘(II) operated between 2000 and 2016,

‘‘(III) having a design net heat rate of not more than 8,550 Btu

per kilowatt hour when the design coal has a heat content of more

than 9,000 Btu per pound, or a design net heat rate of not more
35

than 9,900 Btu per kilowatt hour when the design coal has a heat

content of 9,000 Btu per pound or less, and ‘‘(IV) having a net thermal efficiency on any fuel or chemical coproduction of not less than 39 percent (higher heating value), or ‘‘(iv) multiple applications, with a combined capacity of not more than

2,000 megawatts (1,000 megawatts before 2009 and 1,500 megawatts

before 2013) of technology for the production of electricity— ‘‘(I) installed as a new, retrofit, or repowering application,

‘‘(II) operated between 2000 and 2016, and

‘‘(III) having a carbon emission rate which is not more than 85

percent of conventional technology, and ‘‘(B) which reduces the discharge into the atmosphere of 1 or more of the

following pollutants to not more than— ‘‘(i) 5 percent of the potential combustion concentration sulfur dioxide

emissions for a coal with a potential combustion concentration sulfur

emission of 1.2 lb/million btu of heat input or greater, ‘‘(ii) 15 percent of the potential combustion concentration sulfur dioxide emissions for a coal with a potential combustion concentration sulfur emission of less than 1.2 lb/million Btu of heat input, ‘‘(iii) nitrogen oxide emissions of 0.1 lb per million Btu of heat input

from other than cyclone-fired boilers,

‘‘(iv) 15 percent of the uncontrolled nitrogen oxide emissions from cyclone-fired boilers,

‘‘(v) particulate emissions of 0.02 lb per million Btu of heat input, and

‘‘(vi) the emission levels specified in the new source performance

standards of the Clean Air Act (42 U.S.C. 7411) in effect at the time

of retrofitting, repowering, or replacement of the qualifying clean coal

technology unit for the category of source if such level is lower than the

levels specified in clause (i), (ii), (iii), (iv), or (v).

‘‘(2) EXCEPTIONS.—Such term shall not include any projects receiving or

scheduled to receive funding under the Clean Coal Technology Program, or the

Power Plant Improvement administered by the Secretary of the Department of

Energy or a Qualifying Clean Coal Technology Unit as defined in section

45G(c)(1).

‘‘(d) CLEAN COAL TECHNOLOGY.—The term ‘clean coal technology’ means advanced

technology which uses coal to produce 75 percent or more of its thermal output as

electricity including advanced pulverized coal or atmospheric fluidized bed combustion, pressurized fluidized bed combustion, integrated gasification combined cycle

with or without fuel or chemical co-production, and any other technology for the production of electricity which exceeds the performance of conventional technology.

‘‘(e) CONVENTIONAL TECHNOLOGY.—The term ‘conventional technology’ means—

‘‘(1) coal-fired combustion technology with a design net heat rate of not less

than 9,500 Btu per kilowatt hour (HHV) and a carbon equivalents emission rate

of not more than 0.54 pounds of carbon per kilowatt hour when the design coal

has a heat content of more than 9,000 Btu per pound,

‘‘(2) coal-fired combustion technology with a design net heat rate of not less

than 10,500 Btu per kilowatt hour (HHV) and a carbon equivalents emission

rate of not more than 0.60 pounds of carbon per kilowatt hour when the design

coal has a heat content of 9,000 Btu per pound or less, or

‘‘(3) natural gas-fired combustion technology with a design net heat rate of

not less than 7,500 Btu per kilowatt hour (HHV) and a carbon equivalents emission rate of not more than 0.24 pounds of carbon per kilowatt hour.

‘‘(f) DESIGN NET HEAT RATE.—The design net heat rate shall be based on the design annual heat input to and the design annual net electrical output from the

qualifying advanced clean coal technology (determined without regard to such technology’s co-generation of steam).

‘‘(g) SELECTION CRITERIA.—Selection criteria for qualifying advanced clean coal

technology facilities—

‘‘(1) shall be established by the Secretary of Energy as part of a competitive

solicitation,

‘‘(2) shall include primary criteria of minimum design net heat rate, maximum design thermal efficiency, environmental performance, and lowest cost to

the government, and

‘‘(3) shall include supplemental criteria as determined appropriate by the Secretary of Energy.

‘‘(h) QUALIFIED INVESTMENT.—For purposes of subsection (a), the term ‘qualified

investment’ means, with respect to any taxable year, the basis of a qualifying advanced clean coal technology facility placed in service by the taxpayer during such

taxable year.
36

‘‘(i) QUALIFIED PROGRESS EXPENDITURES.—

‘‘(1) INCREASE IN QUALIFIED INVESTMENT.—In the case of a taxpayer who has

made an election under paragraph (5), the amount of the qualified investment

of such taxpayer for the taxable year (determined under subsection (c) without

regard to this section) shall be increased by an amount equal to the aggregate

of each qualified progress expenditure for the taxable year with respect to

progress expenditure property.

‘‘(2) PROGRESS EXPENDITURE PROPERTY DEFINED.—For purposes of this subsection, the term ‘progress expenditure property’ means any property being constructed by or for the taxpayer and which it is reasonable to believe will qualify

as a qualifying advanced clean coal technology facility which is being constructed by or for the taxpayer when it is placed in service.

‘‘(3) QUALIFIED PROGRESS EXPENDITURES DEFINED.—For purposes of this

subsection—

‘‘(A) SELF-CONSTRUCTED PROPERTY.—In the case of any self-constructed

property, the term ‘qualified progress expenditures’ means the amount

which, for purposes of this subpart, is properly chargeable (during such taxable year) to capital account with respect to such property.

‘‘(B) NONSELF-CONSTRUCTED PROPERTY.—In the case of nonself-constructed property, the term ‘qualified progress expenditures’ means the

amount paid during the taxable year to another person for the construction

of such property.

‘‘(4) OTHER DEFINITIONS.—For purposes of this subsection—

‘‘(A) SELF-CONSTRUCTED PROPERTY.—The term ‘self-constructed property’

means property for which it is reasonable to believe that more than half

of the construction expenditures will be made directly by the taxpayer.

‘‘(B) NONSELF-CONSTRUCTED PROPERTY.—The term ‘nonself-constructed

property’ means property which is not self-constructed property.

‘‘(C) CONSTRUCTION, ETC.—The term ‘construction’ includes reconstruction

and erection, and the term ‘constructed’ includes reconstructed and erected.

‘‘(D) ONLY CONSTRUCTION OF QUALIFYING ADVANCED CLEAN COAL TECHNOLOGY FACILITY TO BE TAKEN INTO ACCOUNT.—Construction shall be taken

into account only if, for purposes of this subpart, expenditures therefor are

properly chargeable to capital account with respect to the property.

‘‘(5) ELECTION.—An election under this subsection may be made at such time

and in such manner as the Secretary may by regulations prescribe. Such an

election shall apply to the taxable year for which made and to all subsequent

taxable years. Such an election, once made, may not be revoked except with the

consent of the Secretary.

‘‘(j) COORDINATION WITH OTHER CREDITS.—This section shall not apply to any

property with respect to which the rehabilitation credit under section 47 or the energy credit under section 48 is allowed unless the taxpayer elects to waive the application of such credit to such property.

‘‘(k) TERMINATION.—This section shall not apply with respect to any qualified investment made more than 10 years after the effective date of this section.’’.

(c) RECAPTURE.—Section 50(a) of the Internal Revenue Code of 1986 (relating to

other special rules), as amended by section 201(c), is amended by adding at the end

the following:

‘‘(7) SPECIAL RULES RELATING TO QUALIFYING ADVANCED CLEAN COAL TECHNOLOGY FACILITY.—For purposes of applying this subsection in the case of any

credit allowable by reason of section 48B, the following shall apply:

‘‘(A) GENERAL RULE.—In lieu of the amount of the increase in tax under

paragraph (1), the increase in tax shall be an amount equal to the investment tax credit allowed under section 38 for all prior taxable years with

respect to a qualifying advanced clean coal technology facility (as defined

by section 48B(b)(1)) multiplied by a fraction whose numerator is the number of years remaining to fully depreciate under this title the qualifying advanced clean coal technology facility disposed of, and whose denominator is

the total number of years over which such facility would otherwise have

been subject to depreciation. For purposes of the preceding sentence, the

year of disposition of the qualifying advanced clean coal technology facility

property shall be treated as a year of remaining depreciation.

‘‘(B) PROPERTY CEASES TO QUALIFY FOR PROGRESS EXPENDITURES.—Rules

similar to the rules of paragraph (2) shall apply in the case of qualified

progress expenditures for a qualifying advanced clean coal technology facility under section 48B, except that the amount of the increase in tax under

subparagraph (A) of this paragraph shall be substituted in lieu of the

amount described in such paragraph (2).
37

‘‘(C) APPLICATION OF PARAGRAPH.—This paragraph shall be applied separately with respect to the credit allowed under section 38 regarding a qualifying advanced clean coal technology facility.’’.

(d) TRANSITIONAL RULE.—Section 39(d) of the Internal Revenue Code of 1986 (relating to transitional rules), as amended by section 202(c), is amended by adding

at the end the following:

‘‘(13) NO CARRYBACK OF SECTION 48B CREDIT BEFORE EFFECTIVE DATE.—No

portion of the unused business credit for any taxable year which is attributable

to the qualifying advanced clean coal technology facility credit determined

under section 48B may be carried back to a taxable year ending before the date

of enactment of section 48B.’’.

(e) TECHNICAL AMENDMENTS.—

(1) Section 49(a)(1)(C) of the Internal Revenue Code of 1986, as amended by

section 521(e)(1), is amended by striking ‘‘and’’ at the end of clause (iii), by

striking the period at the end of clause (iv) and inserting ‘‘, and’’, and by adding

at the end the following:

‘‘(v) the portion of the basis of any qualifying advanced clean coal

technology facility attributable to any qualified investment (as defined

by section 48B(c)).’’.

(2) Section 50(a)(4) of such Code, is amended by striking ‘‘and (6)’’ and inserting ‘‘(6), and (7)’’.

(3) Section 50(c)(6) of such Code, is amended by inserting ‘‘or any advanced

clean coal technology facility credit under section 48B’’ after ‘‘section 48A’’.

(4) The table of sections for subpart E of part IV of subchapter A of chapter

1 of such Code, is amended by inserting after the item relating to section 48A

the following:

‘‘Sec. 48B. Qualifying advanced clean coal technology facility credit.’’.

(f) EFFECTIVE DATE.—The amendments made by this section shall apply to periods after December 31, 2001, under rules similar to the rules of section 48(m) of

the Internal Revenue Code of 1986 (as in effect on the day before the date of enactment of the Revenue Reconciliation Act of 1990).

SEC. 532. CREDIT FOR PRODUCTION FROM QUALIFYING ADVANCED CLEAN COAL TECHNOLOGY.

(a) CREDIT FOR PRODUCTION FROM QUALIFYING ADVANCED CLEAN COAL TECHNOLOGY.—Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue

Code of 1986 (relating to business related credits), as amended by section 522(a),

is amended by adding at the end the following:

‘‘SEC. 45H. CREDIT FOR PRODUCTION FROM QUALIFYING ADVANCED CLEAN COAL TECHNOLOGY.

‘‘(a) GENERAL RULE.—For purposes of section 38, the qualifying advanced clean

coal technology production credit of any taxpayer for any taxable year is equal to—

‘‘(1) the applicable amount of advanced clean coal technology production credit, multiplied by

‘‘(2) the sum of—

‘‘(A) the kilowatt hours of electricity, plus

‘‘(B) each 3,413 Btu of fuels or chemicals,

produced by the taxpayer during such taxable year at a qualifying advanced

clean coal technology facility during the 10-year period beginning on the date

the facility was originally placed in service.

‘‘(b) APPLICABLE AMOUNT.—For purposes of this section, the applicable amount of

advanced clean coal technology production credit with respect to production from a

qualifying advanced clean coal technology facility shall be determined as follows:

‘‘(1) Where the design coal has a heat content of more than 9,000 Btu per

pound:

‘‘(A) In the case of a facility originally placed in service before 2009, if—

‘‘The facility design net heat rate, Btu/kWh

(HHV) is equal to:

The applicable amount is:

For 1st 5 years

of such service

For 2d 5 years

of such service

Not more than 8,400 ............................................. $.0060 $.0038

More than 8,400 but not more than 8,550 .......... $.0025 $.0010

More than 8,550 but not more than 8,750 .......... $.0010 $.0010.
38

‘‘(B) In the case of a facility originally placed in service after 2008 and

before 2013, if—

‘‘The facility design net heat rate, Btu/kWh

(HHV) is equal to:

The applicable amount is:

For 1st 5 years

of such service

For 2d 5 years

of such service

Not more than 7,770 ............................................. $.0105 $.0090

More than 7,770 but not more than 8,125 .......... $.0085 $.0068

More than 8,125 but not more than 8,350 .......... $.0075 $.0055.

‘‘(C) In the case of a facility originally placed in service after 2012 and

before 2017, if—

‘‘The facility design net heat rate, Btu/kWh

(HHV) is equal to:

The applicable amount is:

For 1st 5 years

of such service

For 2d 5 years

of such service

Not more than 7,380 ............................................. $.0140 $.01

More than 7,380 but not more than 7,720 .......... $.0120 $.0090.

‘‘(2) Where the design coal has a heat content of not more than 9,000 Btu per

pound:

‘‘(A) In the case of a facility originally placed in service before 2009, if—

‘‘The facility design net heat rate, Btu/kWh

(HHV) is equal to:

The applicable amount is:

For 1st 5 years

of such service

For 2d 5 years

of such service

Not more than 8,500 ............................................. $.0060 $.0038

More than 8,500 but not more than 8,650 .......... $.0025 $.0010

More than 8,650 but not more than 8,750 .......... $.0010 $.0010.

‘‘(B) In the case of a facility originally placed in service after 2008 and

before 2013, if—

‘‘The facility design net heat rate, Btu/kWh

(HHV) is equal to:

The applicable amount is:

For 1st 5 years

of such service

For 2d 5 years

of such service

Not more than 8,000 ............................................. $.0105 $.009

More than 8,000 but not more than 8,250 .......... $.0085 $.0068

More than 8,250 but not more than 8,400 .......... $.0075 $.0055.

‘‘(C) In the case of a facility originally placed in service after 2012 and

before 2017, if—

‘‘The facility design net heat rate, Btu/kWh

(HHV) is equal to:

The applicable amount is:

For 1st 5 years

of such service

For 2d 5 years

of such service

Not more than 7,800 ............................................. $.0140 $.0115

More than 7,800 but not more than 7,950 .......... $.0120 $.0090.

‘‘(3) Where the clean coal technology facility is producing fuel or chemicals:

‘‘(A) In the case of a facility originally placed in service before 2009, if—
39

‘‘The facility design net thermal efficiency

(HHV) is equal to:

The applicable amount is:

For 1st 5 years

of such service

For 2d 5 years

of such service

Not less than 40.6 percent ................................... $.0060 $.0038

Less than 40.6 but not less than 40 percent ...... $.0025 $.0010

Less than 40 but not less than 39 percent ......... $.0010 $.0010.

‘‘(B) In the case of a facility originally placed in service after 2008 and

before 2013, if—

‘‘The facility design net thermal efficiency

(HHV) is equal to:

The applicable amount is:

For 1st 5 years

of such service

For 2d 5 years

of such service

Not less than 43.9 percent ................................... $.0105 $.009

Less than 43.9 but not less than 42 percent ...... $.0085 $.0068

Less than 42 but not less than 40.9 percent ...... $.0075 $.0055.

‘‘(C) In the case of a facility originally placed in service after 2012 and

before 2017, if—

‘‘The facility design net thermal efficiency

(HHV) is equal to:

The applicable amount is:

For 1st 5 years

of such service

For 2d 5 years

of such service

Not less than 44.2 percent ................................... $.0140 $.0115

Less than 44.2 but not less than 43.6 percent ... $.0120 $.0090.

‘‘(c) INFLATION ADJUSTMENT FACTOR.—For calendar years after 2001, each amount

in paragraphs (1), (2), and (3) shall be adjusted by multiplying such amount by the

inflation adjustment factor for the calendar year in which the amount is applied.

If any amount as increased under the preceding sentence is not a multiple of 0.01

cent, such amount shall be rounded to the nearest multiple of 0.01 cent.

‘‘(d) DEFINITIONS AND SPECIAL RULES.—For purposes of this section—

‘‘(1) IN GENERAL.—Any term used in this section which is also used in section

48B shall have the meaning given such term in section 48B.

‘‘(2) APPLICABLE RULES.—The rules of paragraphs (3), (4), and (5) of section

45 shall apply.

‘‘(3) INFLATION ADJUSTMENT FACTOR.—The term ‘inflation adjustment factor’

means, with respect to a calendar year, a fraction the numerator of which is

the GDP implicit price deflator for the preceding calendar year and the denominator of which is the GDP implicit price deflator for the calendar year 2001.

‘‘(4) GDP IMPLICIT PRICE DEFLATOR.—The term ‘GDP implicit price deflator’

means the most recent revision of the implicit price deflator for the gross domestic product as computed by the Department of Commerce before March 15

of the calendar year.’’.

(b) CREDIT TREATED AS BUSINESS CREDIT.—Section 38(b) of the Internal Revenue

Code of 1986, as amended by section 202(b), is amended by striking ‘‘plus’’ at the

end of paragraph (15), by striking the period at the end of paragraph (16) and inserting ‘‘, plus’’, and by adding at the end the following:

‘‘(17) the qualifying advanced clean coal technology production credit determined under section 45H(a).’’.

(c) TRANSITIONAL RULE.—Section 39(d) of the Internal Revenue Code of 1986 (relating to transitional rules), as amended by section 301(d), is amended by adding

at the end the following:

‘‘(14) NO CARRYBACK OF SECTION 45H CREDIT BEFORE EFFECTIVE DATE.—No

portion of the unused business credit for any taxable year which is attributable

to the qualifying advanced clean coal technology production credit determined

under section 45H may be carried back to a taxable year ending before the date

of enactment of section 45H.’’.
40

(d) CLERICAL AMENDMENT.—The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986, as amended by section

202(d), is amended by adding at the end the following:

‘‘Sec. 45H. Credit for production from qualifying advanced clean coal technology.’’.

(e) EFFECTIVE DATE.—The amendments made by this section shall apply to production after the date of enactment of this Act.

SEC. 533. RISK POOL FOR QUALIFYING ADVANCED CLEAN COAL TECHNOLOGY.

(a) ESTABLISHMENT.—The Secretary of the Treasury shall establish a financial

risk pool which shall be available to any United States owner of a qualifying advanced clean coal technology which has qualified for an advanced clean coal technology production credit (as defined in section 45H of the Internal Revenue Code

of 1986, as added by section 302) to offset for the first 3 years of the operation of

such technology the costs (not to exceed 5 percent of the total cost of installation)

for modifications resulting from the technology’s failure to achieve its design performance.

(b) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated

such sums as are necessary to carry out the purposes of this section.

Subtitle D—Treatment of Certain Governmental

and Other Entities

SEC. 541. CREDITS FOR CERTAIN ORGANIZATIONS AND GOVERNMENTAL UNITS.

Section 6401(b) of the Internal Revenue Code of 1986 (relating to excessive credits) is amended by adding at the end the following:

‘‘(3) CREDITS FOR CERTAIN ORGANIZATIONS AND GOVERNMENTAL UNITS.—

‘‘(A) ALLOWANCE OF CREDITS.—Any credit which would be allowable

under section 45G, 45H, 48A, or 48B with respect to a facility of an entity

whether or not such entity is exempt from tax, shall be treated as a credit

allowable under subpart C of part IV of subchapter A of chapter 1 of subtitle A to such entity if such entity is—

‘‘(i) an organization described in section 501(c)(12)(C) and exempt

from tax under section 501(a),

‘‘(ii) an organization described in section 1381(a)(2)(C),

‘‘(iii) a public utility (as defined in section 136(c)(2)(B)),

‘‘(iv) a State, the District of Columbia, or a possession of the United

States, or any political subdivision thereof, or

‘‘(v) the Tennessee Valley Authority.

‘‘(B) USE OF CREDIT.—

‘‘(i) TRANSFER OF CREDIT.—An entity described in clause (i), (ii), (iii),

or (iv) of subparagraph (A) may assign, trade, sell, or otherwise transfer any credit allowable to such entity under subparagraph (A) to any

other person or entity.

‘‘(ii) USE OF CREDIT AS AN OFFSET.—Notwithstanding any other provision of law, in the case of any entity described in clause (i) or (ii) of

subparagraph (A), any credit allowable to such entity under subparagraph (A) may be applied by such entity, without penalty, as a prepayment of any loan, debt or other obligation the entity has made, incurred

or guaranteed under the Rural Electrification Act of 1936 (7 U.S.C. 901

et seq.).

‘‘(iii) USE BY TVA.—

‘‘(I) IN GENERAL.—Notwithstanding any other provision of law, in

the case of an entity described in subparagraph (A)(v), any credit

allowable under subparagraph (A) to such entity may be applied as

a credit against the payments required to be made in any fiscal

year under section 15d(e) of the Tennessee Valley Authority Act of

1933 (16 U.S.C. 83ln–4(e)) as an annual return on the appropriations investment and an annual repayment sum.

‘‘(II) TREATMENT OF CREDITS.—The aggregate amount of credits

described in subparagraph (A) shall be treated in the same manner

and to the same extent as if such credits were a payment in cash

and shall be applied first against the annual return on the appropriations investment.

‘‘(III) CREDIT CARRYOVER.—With respect to any fiscal year, if the

aggregate amount of the credits described in subparagraph (A) exceeds the aggregate amount of payment obligations described in

subclause (I), the excess amount shall remain available for applica-
41

tion as credits against the amounts of such payment obligations in

succeeding fiscal years in the same manner as described in this

clause.

‘‘(C) CREDIT NOT INCOME.—Neither a transfer under clause (i) nor a use

under clause (ii) of subparagraph (B) of any credit allowable under subparagraph (A) shall result in income for purposes of section 501(c)(12).

‘‘(D) TRANSFER PROCEEDS TREATED AS ARISING FROM ESSENTIAL GOVERNMENT FUNCTION.—Any proceeds derived by an entity described in clause (iii)

or (iv) of subparagraph (A) from the transfer of any such credit under subparagraph (B)(I) shall be treated as arising from an essential government

function.

‘‘(E) TREATMENT OF UNRELATED PERSONS.—For purposes of this title,

sales among and between entities described in clauses (i), (ii), (iii), and (iv)

of subparagraph (A) shall be treated as sales between unrelated parties.’’.

TITLE VI—FUELS

SEC. 601. TANK DRAINING DURING TRANSITION TO SUMMERTIME RFG.

Not later than 60 days after the enactment of the Act, the Administrator of the

Environmental Protection Agency shall commence a rulemaking to determine

whether modifications to the regulations set forth in 40 C.F.R. Section 80.78 and

any associated regulations regarding the transition to high ozone season reformulated gasoline are necessary to ensure that the transition to high ozone season reformulated gasoline is conducted in a manner that minimizes disruptions to the general availability and affordability of gasoline, and maximizes flexibility with regard

to the draining and inventory management of gasoline storage tanks located at refineries, terminals, wholesale and retail outlets, consistent with the goals of the

Clean Air Act. The Administrator shall propose and take final action in such rulemaking to ensure that any modifications are effective and implemented at least 60

days prior to the beginning of the high ozone season for the year 2002.

SEC. 602. GASOLINE BLENDSTOCK REQUIREMENTS.

Not later than 60 days after the enactment of this Act, the Administrator of the

Environmental Protection Agency shall commence a rulemaking to determine

whether modifications to product transfer documentation, accounting, compliance

calculation, and other requirements contained in the regulations of the Administrator set forth in section 80.102 of title 40 of the Code of Federal Regulations relating to gasoline blendstocks are necessary to facilitate the movement of gasoline and

gasoline feedstocks among different regions throughout the country and to improve

the ability of petroleum refiners and importers to respond to regional gasoline shortages and prevent unreasonable short-term price increases. The Administrator shall

take into consideration the extent to which such requirements have been, or will be,

rendered unnecessary or inefficient by reason of subsequent environmental safeguards that were not in effect at the time the regulations in section 80.102 of title

40 of the Code of Federal Regulations were promulgated. The Administrator shall

propose and take final action in such rulemaking to ensure that any modifications

are effective and implemented at least 60 days prior to the beginning of the high

ozone season for the year 2002.

SEC. 603. BOUTIQUE FUELS.

(a) JOINT STUDY.—The Administrator of the Environmental Protection Agency and

the Secretary of Energy shall jointly conduct a study of all Federal, State, and local

requirements regarding motor vehicle fuels, including requirements relating to reformulated gasoline, volatility (Reid Vapor Pressure), oxygenated fuel, diesel fuel

and other requirements that vary from State to State, region to region, or locality

to locality. The study shall analyze—

(1) the effect of the variety of such requirements on the price of motor vehicle

fuels to the consumer;

(2) the availability and affordability of motor vehicle fuels in different States

and localities;

(3) the effect of Federal, State, and local regulations, including multiple fuel

requirements, on domestic refineries and the fuel distribution system;

(4) the effect of such requirements on local, regional, and national air quality

requirements and goals;

(5) the effect of such requirements on vehicle emissions;

(6) the feasibility of developing national or regional fuel specifications for the

contiguous United States that would—
42

(A) enhance flexibility in the fuel distribution infrastructure and improve

fuel fungibility;

(B) reduce price volatility and costs to consumers and producers;

(C) meet local, regional, and national air quality requirements and goals;

and

(D) provide increased gasoline market liquidity; and

(7) the extent to which the Environmental Protection Agency’s Tier II requirements for conventional gasoline may achieve in future years the same or similar

air quality results as State reformulated gasoline programs and State programs

regarding gasoline volatility (RVP).

(b) REPORT.—By December 31, 2001, the Administrator of the Environmental Protection Agency and the Secretary of Energy shall submit a report to the Congress

containing the results of the study conducted under subsection (a). Such report shall

contain recommendations for legislative and administrative actions that may be

taken to simplify the national distribution system for motor vehicle fuel, make such

system more cost-effective, and reduce the costs and increase the availability of

motor vehicle fuel to the end user while meeting the requirements of the Clean Air

Act. Such recommendations shall take into account the need to provide lead time

for refinery and fuel distribution system modifications necessary to assure adequate

fuel supply for all States.

SEC. 604. FUNDING FOR MTBE CONTAMINATION.

Notwithstanding any other provision of law, there is authorized to be appropriated to the Administrator of the Environmental Protection Agency from the Leaking Underground Storage Trust Fund not more than $200,000,000 to be used for

taking such action, limited to assessment, corrective action, inspection of underground storage tank systems, and groundwater monitoring in connection with

MTBE contamination, as the Administrator deems necessary to protect human

health and the environment from releases of methyl tertiary butyl ether (MTBE)

from underground storage tanks.

TITLE VII—RENEWABLE ENERGY

SEC. 701. ASSESSMENT OF RENEWABLE ENERGY RESOURCES.

(a) RESOURCE ASSESSMENT.—Not later than one year after the date of enactment

of this Act, and each year thereafter, the Secretary of Energy shall publish an assessment by the National Laboratories of all renewable energy resources available

within the United States.

(b) CONTENTS OF REPORT.—The report published under subsection (a) shall contain each of the following:

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

of solar, wind, biomass, geothermal, hydroelectric and other renewable energy

sources.

(2) Such other information as the Secretary of Energy 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.

SEC. 702. RENEWABLE ENERGY PRODUCTION INCENTIVE.

Section 1212 of the Energy Policy Act of 1992 (42 U.S.C. 13317) is amended as

follows:

(1) In subsection (a) by striking ‘‘and which satisfies’’ and all that follows

through ‘‘Secretary shall establish.’’ and inserting ‘‘. The Secretary shall establish other procedures necessary for efficient administration of the program. The

Secretary shall not establish any criteria or procedures that have the effect of

assigning to proposals a higher or lower priority for eligibility or allocation of

appropriated funds on the basis of the energy source proposed.’’.

(2) In subsection (b)—

(A) by striking ‘‘a State or any political’’ and all that follows through

‘‘nonprofit electrical cooperative’’ and inserting ‘‘an electricity-generating cooperative exempt from taxation under section 501(c)(12) or section

1381(a)(2)(C) of the Internal Revenue Code of 1986, a public utility described in section 115 of such Code, 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

(B) By inserting ‘‘landfill gas,’’ after ‘‘wind, biomass,’’.
43

(3) In subsection (c) by striking ‘‘during the 10-fiscal year period beginning

with the first full fiscal year occurring after the enactment of this section’’ and

inserting ‘‘before October 1, 2013’’. (4) In subsection (d) by inserting ‘‘or in which the Secretary finds that all necessary Federal and State authorizations have been obtained to begin construction of the facility’’ after ‘‘eligible for such payments’’. (5) In subsection (e)(1) by inserting ‘‘landfill gas,’’ after ‘‘wind, biomass,’’. (6) In subsection (f) by striking ‘‘the expiration of’’ and all that follows

through ‘‘of this section’’ and inserting ‘‘September 30, 2023’’. (7) In subsection (g)— (A) by striking ‘‘1993, 1994, and 1995’’ and inserting ‘‘2003 through 2023’’;

and

(B) by inserting ‘‘Funds may be appropriated pursuant to this subsection

to remain available until expended.’’ after ‘‘purposes of this section.’’.

TITLE VIII—PIPELINE INTEGRITY

Subtitle A—Pipeline Integrity

SEC. 801. PROGRAM FOR PIPELINE INTEGRITY RESEARCH, DEVELOPMENT, AND DEMONSTRATION.

(a) IN GENERAL.—The Secretary of Transportation, in coordination with the Secretary of Energy, and in consultation with the Federal Energy Regulatory Commission, shall develop and implement an accelerated cooperative program of research,

development, and demonstration to ensure the integrity of natural gas and hazardous liquid pipelines. This program shall include materials inspection techniques,

risk assessment methodology, and information systems surety.

(b) PURPOSE.—The purpose of the cooperative research program shall be to promote research, development, and demonstration to— (1) ensure long-term safety, reliability, and service life for existing pipelines;

(2) expand capabilities of internal inspection devices to identify and accurately measure defects and anomalies;

(3) develop inspection techniques for pipelines that cannot accommodate the

internal inspection devices;

(4) develop innovative techniques to measure the structural integrity of pipelines to prevent pipeline failures;

(5) develop improved materials and coatings for use in pipelines;

(6) improve the capability, reliability, and practicality of external leak detection devices;

(7) identify underground environments that might lead to shortened service

life;

(8) enhance safety in pipeline siting and land use;

(9) minimize the environmental impact of pipelines;

(10) demonstrate technologies that improve pipeline safety, reliability, and integrity;

(11) provide risk assessment tools for optimizing risk mitigation strategies;

and

(12) provide highly secure information systems for controlling the operation

of pipelines.

(c) AREAS.—In carrying out this subtitle, the Secretary of Transportation, in coordination with the Secretary of Energy, shall consider research, development, and

demonstration on natural gas, crude oil, and petroleum product pipelines for—

(1) early crack, defect, and damage detection, including real-time damage

monitoring;

(2) automated internal pipeline inspection sensor systems;

(3) land use guidance and set back management along pipeline rights-of-way

for communities;

(4) internal corrosion control;

(5) corrosion-resistant coatings;

(6) improved cathodic protection;

(7) inspection techniques where internal inspection is not feasible, including

measurement of structural integrity;

(8) external leak detection, including portable real-time video imaging technology, and the advancement of computerized control center leak detection systems utilizing real-time remote field data input;

(9) longer life, high strength, noncorrosive pipeline materials;

(10) assessing the remaining strength of existing pipes;
44

(11) risk and reliability analysis models, to be used to identify safety improvements that could be realized in the near term resulting from analysis of data

obtained from a pipeline performance tracking initiative;

(12) identification, monitoring, and prevention of outside force damage, including satellite surveillance; and

(13) any other areas necessary to ensuring the public safety and protecting

the environment.

(d) RESEARCH, DEVELOPMENT, AND DEMONSTRATION PROGRAM PLAN.—Within 240

days after the date of enactment of this Act, the Secretary of Transportation, in coordination with the Secretary of Energy, the Federal Energy Regulatory Commission, and the Pipeline Integrity Technical Advisory Committee, shall prepare and

submit to the Congress a 5-year program plan to guide activities under this subtitle.

In preparing the program plan, the Secretary shall consult with appropriate representatives of the natural gas, crude oil, and petroleum product pipeline industries

to select and prioritize appropriate project proposals. The Secretary may also seek

the advice of utilities, manufacturers, institutions of higher learning, Federal agencies, the pipeline research institutions, national laboratories, State pipeline safety

officials, environmental organizations, pipeline safety advocates, and professional

and technical societies.

(e) IMPLEMENTATION.—The Secretary of Transportation shall have primary responsibility for ensuring the five-year plan provided for in subsection (d) is implemented as intended by this subtitle.

(f) REPORTS TO CONGRESS.—The Secretary of Transportation shall report to the

Committee on Energy and Commerce and the Committee on Transportation and Infrastructure of the House of Representatives, and to the Committee on Energy and

Natural Resources and the Committee on Commerce, Science, and Transportation

of the Senate, annually as to the status and results to date of the implementation

of the program plan. The report shall include the activities of the Departments of

Transportation and Energy, the national laboratories, universities, and any other

research organizations, including industry research organizations.

SEC. 802. PIPELINE INTEGRITY TECHNICAL ADVISORY COMMITTEE.

(a) ESTABLISHMENT.—The Secretary of Transportation shall enter into appropriate

arrangements with the National Academy of Sciences to establish and manage the

Pipeline Integrity Technical Advisory Committee for the purpose of advising the

Secretary of Transportation and the Secretary of Energy on the development and

implementation of the five-year research, development, and demonstration program

plan under section 801(d). The Advisory Committee shall have an ongoing role in

evaluating the progress and results of the research, development, and demonstration carried out under this subtitle.

(b) MEMBERSHIP.—The National Academy of Sciences shall appoint the members

of the Pipeline Integrity Technical Advisory Committee after consultation with the

Secretary of Transportation and the Secretary of Energy. The Advisory Committee

shall also have 1 member from the Federal Energy Regulatory Commission. Members appointed to the Advisory Committee should have the necessary qualifications

to provide technical contributions to the purposes of the Advisory Committee.

SEC. 803. AUTHORIZATION OF APPROPRIATIONS.

(a) AUTHORIZATION FROM USER FEES.—There are authorized to be appropriated to

the Secretary of Transportation for carrying out this subtitle $3,000,000, which is

to be derived from user fees under section 60125 of title 49, United States Code,

for each of the fiscal years 2002 through 2006.

(b) DETECTION, PREVENTION, AND MITIGATION.—There are authorized to be appropriated to the Secretary of Transportation from the Oil Spill Liability Trust Fund

(26 U.S.C. 9509), $3,000,000 to carry out programs for detection, prevention, and

mitigation of oil spills authorized in this subtitle for each of the fiscal years 2002

through 2006.

(c) GENERAL AUTHORIZATION.—There are authorized to be appropriated to the Secretary of Energy for carrying out this subtitle such sums as may be necessary for

each of the fiscal years 2002 through 2006.

Subtitle B—Other Pipeline Provisions

SEC. 811. PROHIBITION ON CERTAIN PIPELINE ROUTE.

No license, permit, lease, right-of-way, authorization or other approval required

under Federal law for the construction of any pipeline to transport natural gas from

lands within the Prudhoe Bay oil and gas lease area may be granted for any pipeline that follows a route that traverses—
45

(1) the submerged lands (as defined by the Submerged Lands Act) beneath,

or the adjacent shoreline of, the Beaufort Sea; and

(2) enters Canada at any point north of 68 degrees North latitude.

SEC. 812. HISTORIC PIPELINES.

Section 7 of the Natural Gas Act (15 U.S.C. 717f) is amended by adding at the

end the following new subsection: ‘‘(i) Notwithstanding the National Historic Preservation Act, a transportation facility shall not be eligible for inclusion on the National Register of Historic Places

until the Commission has permitted the abandonment of the transportation facility

pursuant to subsection (b) of this section.’’.

TITLE IX—MISCELLANEOUS PROVISIONS

SEC. 901. WASTE REDUCTION AND USE OF ALTERNATIVES.

(a) GRANT AUTHORITY.—The Secretary of Energy is authorized to make a single

grant to a qualified institution to examine and develop the feasibility of burning

post-consumer carpet in cement kilns as an alternative energy source. The purposes

of the grant shall include determining— (1) how post-consumer carpet can be burned without disrupting kiln operations;

(2) the extent to which overall kiln emissions may be reduced; and

(3) how this process provides benefits to both cement kiln operations and carpet suppliers.

(b) QUALIFIED INSTITUTION.—For the purposes of subsection (a), a qualified institution is a research-intensive institution of higher learning 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 of Energy for carrying out this section $275,000 for fiscal year 2002,

to remain available until expended.

SEC. 902. ANNUAL REPORT ON UNITED STATES ENERGY INDEPENDENCE.

(a) REPORT.—The Secretary of Energy, in consultation with the heads of other relevant Federal agencies, shall include in each report under section 801(c) of the Department of Energy Organization Act a section which evaluates the progress the

United States has made toward obtaining the goal of not more than 50 percent dependence on foreign oil sources by 2010.

(b) ALTERNATIVES.—The information required under this section to be included in

the reports under section 801(c) of the Department of Energy Organization Act shall

include a specification of what legislative or administrative actions must be implemented to meet this goal and set forth a range of options and alternatives with a

cost/benefit analysis for each option or alternative together with an estimate of the

contribution each option or alternative could make to reduce foreign oil imports. The

Secretary shall solicit information from the public and request information from the

Energy Information Agency and other agencies to develop the information required

under this section. The information shall indicate, in detail, options and alternatives

to— (1) increase the use of renewable domestic energy sources, including conventional and nonconventional sources;

(2) conserve energy resources, including improving efficiencies and decreasing

consumption; and

(3) increase domestic production and use of oil, natural gas, nuclear, and coal,

including any actions necessary to provide access to, and transportation of,

these energy resources.

SEC. 903. STUDY OF AIRCRAFT EMISSIONS.

The Administrator of the Environmental Protection Agency, in consultation with

the Secretary of Transportation shall commence a study within 60 days after the

enactment of this Act to investigate the impact of aircraft emissions at all airports

located within areas that are considered to be in nonattainment for the national ambient air quality standard for ozone. As part of such study, the Administrator should

investigate all significant factors which may serve to increase air emission levels

from airports and use the most recent data available. Within 180 days of the enactment of this Act, the Administrator shall submit a 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 containing the

results of the study and recommendations with respect to a plan to maintain comprehensive data on aircraft emissions and methods by which such emissions may
46

be reduced in order to assist in the attainment of the national ambient air quality

standard for ozone.

PURPOSE AND SUMMARY

The purpose of H.R. 2587, the Energy Advancement and Conservation Act, is to promote increased energy conservation and increase the availability of energy supplies nationwide. Recent high

prices for energy underscore the importance of a comprehensive review of our Nation’s energy policies and objectives. The Energy Advancement and Conservation Act is the first step toward ensuring

our Nation’s continued welfare and security by providing for our

long-term energy needs.

Energy production and environmental protection are non-exclusive national goals. In recent decades, technological advances have

made energy development and use more efficient and less environmentally harmful. Building on this trend, the Energy Advancement

and Conservation Act encourages energy production and demand

reduction by promoting new technology, more efficient processes,

and improved public awareness.

The Energy Advancement and Conservation Act addresses a wide

range of issues related to energy generation, transportation, and

use. It provides for accelerated market penetration for clean coal

technologies, streamlined reformulated fuel programs, and promotion of energy conservation and efficiency, including increased

efficiency for light trucks. The bill also provides for improvements

in the hydropower licensing process and will remove barriers to expanded use of nuclear energy. Finally, the bill addresses several

issues related to interstate pipelines, along with a number of other,

miscellaneous energy-related issues.

BACKGROUND AND NEED FOR LEGISLATION

According to the Energy Information Administration, over the

next 20 years, growth in U.S. energy consumption will increasingly

outpace energy production. To meet our Nation’s projected demands for energy, legislation is needed to facilitate further development of new energy supplies and better management of energy use.

Numerous factors combine to increase energy supplies and improve

efficiency and conservation; these include, among others, technological achievement, consumer preference, manufacturer decisions,

construction design and techniques, and government action at the

Federal, state and local levels.

Conservation and increased energy efficiency allow us to manage

existing energy supplies better. Energy intensity, the amount of energy it takes to produce one dollar of gross domestic product, has

steadily declined in the United States over the past three decades.

During that period, the economy grew by 126 percent, while energy

consumption increased by only 30 percent. Whereas about half of

this decline in energy intensity is attributable to the switch from

a manufacturing to a service economy, the other half is attributable

to increased efficiency. Gains in energy efficiency over the past 30

years have largely been a result of advances in technology, along

with better management practices and better application of these

new technologies. Consumer choice is a driver of energy efficiency,

and Federal programs such as Energy Star energy labels help consumers make informed purchasing decisions. Federal and state
47

governments are large users of energy and promote energy efficiency by investing in research and procuring efficient products.

For example, the Energy Policy and Conservation Act (EPCA) directs the Secretary of Energy to establish minimum efficiency

standards for a number of appliances. These programs, and others

like them, combine to provide for more efficient use of existing energy supplies.

EPCA also directs the Secretary of Transportation to establish

corporate average fuel economy (CAFE) standards for non-passenger automobiles, which include sport utility vehicles, vans,

pickups, and minivans. As its name implies, the CAFE program

sets fuel efficiency standards for automobiles. CAFE is implemented through regulations promulgated by the Secretary of

Transportation through the National Highway Traffic Safety Administration (NHTSA). The CAFE standard for passenger automobiles is set by existing statute at 27.5 mpg. By regulation, the

Secretary of Transportation has set the CAFE standard for nonpassenger automobiles (light trucks) at 20.7 mpg. Compliance with

the standards is measured by calculating the harmonic average of

the fuel economies of a given manufacturer’s production. For passenger automobiles, domestically produced and imported vehicles

are measured separately. If our Nation is to meet its energy needs

in the coming decades, we must continue to make advances in energy efficiency and conservation.

Nuclear energy provides 20 percent of the Nation’s electricity.

The Nuclear Regulatory Commission (NRC) has not issued a license to construct a new nuclear power plant in 20 years. 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. Recently, however, several companies have expressed a renewed interest in extending licenses for existing nuclear plants, as well as

constructing a new generation of advanced nuclear plants that are

smaller, cheaper to build, and easier to operate.

There are several areas where legislation is needed to facilitate

the continued development of nuclear power. These include, among

others, addressing issues related to the disposal of nuclear waste,

clarification of NRC licensing rules, and providing the NRC additional authority to recover fees from Federal licensees. Additionally, domestic uranium fuel cycle industries (including uranium

mining, uranium conversion, and uranium enrichment industries)

have come under market pressure over the past decade, the result

of which threatens the viability of the domestic uranium industry.

The continued development of nuclear power may be determined,

in part, by the availability of domestic uranium fuel capacity.

Over the next 15 years, the Federal Energy Regulatory Commission (FERC) must consider relicensing more than half of our Nation’s hydroelectric power projects (roughly 28,000 megawatts) if

those projects are to continue in operation. Current law gives

states and the Federal resources agencies (U.S. Fish and Wildlife

Service, U.S. Forest Service, and National Marine Fisheries Service) authority to impose mandatory conditions on FERC-issued hydroelectric power licenses. The number of parties to the licensing

process, the competing interests and missions, and open-ended proceedings often contribute to the time and costs involved in obtaining a hydroelectric license from FERC.
48

One area identified to improve the licensing process is to require

agencies to consider alternative conditions proposed by a licensee.

Current law does not require resources agencies to consider alternative conditions that may cost less to implement in terms of dollars and energy lost, while providing for greater, or at a minimum

no less, environmental protection. Another area identified for improvement is FERC data collection on the time and costs involved

in obtaining a new license, which will lead to more efficient relicensing procedures.

The United States currently generates just over half (51 percent)

of its total electric power by burning coal, and contains an estimated 25 percent of the world’s total recoverable reserves of coal.

The EIA projects that the United States will largely maintain this

reliance on coal over the next two decades. While coal produces the

majority of our country’s electricity, few companies have plans for

building new coal-fired electric generation plants. This is due, in

part, to low natural gas prices over the past few years and uncertainty over future environmental requirements and market structures for electric power generation. The high capital costs and high

operating costs of currently available clean coal technology made

natural gas-fired generation the cost-effective choice for new power

plants in recent years. However, recent high natural gas prices and

increased projected demand for natural gas have some companies

reconsidering coal as an option. Additional advances in clean coal

technologies are needed to ensure that coal remains an affordable

source of electricity.

The Clean Air Act (CAA) generally provides for the regulation

and registration of fuels and fuel additives. The 1990 Clean Air Act

Amendments (1990 amendments) further provided for the creation

of reformulated gasoline (RFG) and required the sale of this fuel

in large urban areas that were experiencing the most serious ozone

pollution. The CAA contemplates that there can be differences in

fuels and fuel additives sold in different parts of the country. State

and local governments have enacted their own requirements for

fuels and fuel additives since the 1990 amendments were enacted.

This multiplicity of different fuels has been termed the ‘‘boutique

fuels’’ situation, and has been criticized as contributing to problems

in fuel distribution and price spikes that occur when fuel cannot be

easily moved from one area to the next. Federal legislation is needed to provide for a comprehensive review of Federal, state, and

local fuel requirements.

Renewable energy sources currently represent about 8 percent of

our Nation’s energy consumption. According to the EIA, half of this

amount (49 percent) is hydroelectric power, and roughly the other

half (44 percent) is biomass, mostly wood. Solar, wind and geothermal power make up the remainder, approximately 0.5 percent

of our Nation’s energy consumption. The Energy Policy Act of 1992

created the Renewable Energy Production Incentive (REPI) program to encourage energy production from renewable energy

projects owned by municipal utilities or other non-profit entities

that otherwise do not qualify for tax incentives for renewable energy production. REPI provides direct payment of 1.7 cents per kilowatt-hour to qualifying owners for each kilowatt-hour of electricity

produced at qualifying facilities. Payments are contingent upon

Congressional funding.
49

When implementing REPI, the Department of Energy established two tiers of technologies eligible for payment. Tier I technologies are paid in full and paid first with available funds. Tier

II technologies are paid pro rata with the remaining funds. Since

its inception, the number of REPI claims has exceeded available

funding. The largest producing projects in terms of electric power

produced tend to be Tier II technologies. The municipal utilities

and others eligible for payment under this program advocate for removal of the two-tiered approach.

Natural gas is the fastest growing source of energy in the United

States. Much of the demand for natural gas comes from new, more

efficient turbines used to generate electricity. Delivery of natural

gas from suppliers to end-users depends on a complex nationwide

system of pipelines. Pipelines are also used to transport oil, refined

products, and hazardous liquids throughout the country. Ensuring

the integrity of our Nation’s interstate pipelines is important to

guaranteeing the availability of affordable energy supplies, and the

Committee intends to consider legislation to improve the safety of

interstate pipelines in the near future.

HEARINGS

The Subcommittee on Energy and Air Quality held the first in

a series of hearings on a comprehensive national energy policy on

February 28, 2001. The hearing topic was natural gas, focusing on

ways to increase the supply and availability of natural gas to

American consumers. The Committee received testimony from: The

Honorable Curt Herbert, Jr., Chairman, Federal Energy Regulatory

Commission; Ms. Elizabeth Campbell, Energy Information Administration; Mr. Cuba Wadlington, President and Chief Executive Officer, Williams Gas Pipeline, on behalf of Interstate Natural Gas

Association of America; Mr. Jerry Jordon, Chairman, Jordon Energy, Incorporated, on behalf of Independent Petroleum Association

of America; Mr. Richard G. Reiten, President and Chief Executive

Officer, NW Natural, on behalf of the American Gas Association;

Mr. Andrew Littlefair, President, Pickens Fuel Corporation, on behalf of the Natural Gas Vehicle Coalition; Ms. Roberta A.

Luxbacher, Vice President-Americas, Exxon Mobile Gas Marketing

Company, on behalf of the Natural Gas Supply Association; Mr.

Walker Hendrix, Counsel, Kansas Citizens Utility Ratepayers

Board; Mr. Jack Hilliard, General Manager, Florence Utility, on behalf of the American Public Gas Association; Mr. Jas Gill, Vice

President, Manufacturing, CYTEC Industries, Incorporated, and

Mr. Patricio Silva, Project Attorney, Natural Resources Defense

Council.

The Subcommittee on Energy and Air Quality held the second in

a series of hearings on a comprehensive national energy policy on

March 14, 2001. The hearing topic was the future of coal power,

focusing on advances in clean coal technology. The Committee received testimony from: Ms. Mary Hutzler, Director, Office of Integrated Analysis and Forecasting, Energy Information Agency; U.S.

Department of Energy, Mr. Richard Abdoo, Chairman, President,

and Chief Executive Officer, Wisconsin Energy Corporation; Mr. J.

Brett Harvey, President and Chief Executive Officer, CONSOL Energy Incorporated; Mr. Cecil Roberts, President, United Mine

Workers of America; Dr. Roe-Hoan Yoon, Director, Virginia Center
50

for Coal and Minerals Processing, Virginia Polytechnic Institute

and State University; Mr. Bill Gregg, Director, Public Service Commission of West Virginia; Mr. Edwin Pinero, Director of Program

Operations, Pennsylvania Department of Environmental Protection; and Mr. Armond Cohen, Executive Director, Clean Air Task

Force.

The Subcommittee on Energy and Air Quality held the third in

a series of hearings on a comprehensive national energy policy on

March 27, 2001. The hearing topic was nuclear energy, focusing on

increases in efficiency and safety along with decreases in costs in

current nuclear generation and the future uses of nuclear power for

American consumers. The Committee received testimony from: The

Honorable Pete V. Domenici, U.S. Senator; Dr. William D. Travers,

Executive Director for Operations, U.S. Nuclear Regulatory Commission; Mr. William D. Magwood, Director, Office of Nuclear Energy, Science, and Technology, U.S. Department of Energy; Ms.

Mary J. Hutzler, Director, Office of Integrated Analysis and Forecasting, Energy Information Administration, U.S. Department of

Energy; Mr. C. Randy Hutchinson, Senior Vice President, Business

Development, Entergy Nuclear, on behalf of the Nuclear Energy Institute; Mr. A.C. Tollison, Jr., Executive Vice President, Institute

of Nuclear Power Operations; Mr. Ward Sproat, Vice President of

International Programs, Exelon Corporation; Mr. John R.

Longenecker, Longenecker & Associates, Inc.; and Ms. Anna

Aurilio, Legislative Director, U.S. Public Interest Research Group.

The Subcommittee on Energy and Air Quality held the fourth in

a series of hearings on a comprehensive national energy policy on

March 30, 2001. The hearing topic was crude oil and refined petroleum products, focusing on ways to increase the supply of crude oil

and conservation of petroleum products through energy efficient

technology. The Committee received testimony from: Mr. John

Cook, Director, Petroleum Products Division, Energy Information

Administration; Mr. Stephen D. Layton, President and Chief Executive Officer, Equinox Oil Company; Mr. Gregory C. King, Vice

President and General Counsel, Valero Energy Corporation; Mr.

Peter D’Arco, President, SJ Fuels; Mr. Thomas L. Robinson, Chief

Executive Officer, Robinson Oil Corporation; Mr. Richard Kassel,

Senior Attorney, Natural Resources Defense Council; and Mr. John

Paul Pitts, Oil Editor, Midland Reporter Telegram.

The Subcommittee on Energy and Air Quality held the fifth in

a series of hearings on a comprehensive national energy policy on

May 15, 2001. The hearing topic was consumer perspectives on energy policy, focusing on the Nation’s long-term energy needs and

ways to increase supply to meet new demand. The Committee received testimony from: Mr. John Cook, Director, Petroleum Products Division, Energy Information Administration, U.S. Department of Energy; Mr. Lee Ottenberg, President, Ottenberg’s Bakery;

Mr. James G. Parkel, President-Elect, American Association of Retired Persons; Mr. Mark McCutchen, President and General Manager, Tennessee Energy Acquisition Corporation; Mr. Mahlon Anderson, Director, Public Affairs, American Automobile Association:

Mid-Atlantic; Mr. Glen N. Buckley, Chief Economist and Director

of Agribusiness, CF Industries, Incorporated; and Mr. Johnny

Duke, National Director, Facilities Management, Kmart Corporation.
51

The Subcommittee on Energy and Air Quality held a hearing on

the National Energy Policy Report of the National Energy Policy

Development Group on June 13, 2001. The hearing focused on

President Bush’s proposal for a comprehensive approach to national energy policy, including reduction of demand and conservation of the current energy supply. The Committee received testimony from: The Honorable Spencer Abraham, Secretary, U.S. Department of Energy.

The Subcommittee on Energy and Air Quality held the sixth in

a series of hearings on a comprehensive national energy policy on

June 22, 2001. The hearing topic was energy efficiency and conservation, focusing on ways to improve National efforts to accelerate efficiency and conservation. The Committee received testimony from: The Honorable David Garman, Assistant Secretary for

Energy Efficiency and Renewable Energy, U.S. Department of Energy; Mr. Frederick H. Hoover, Jr., Director, Maryland Energy Administration, on behalf of the National Association of State Energy

Officials; Mr. Steven Nadel, Executive Director, American Council

for an Energy-Efficient Economy; Mr. Mark Wagner, Director,

Johnson Controls, Incorporated; Dr. Malcolm O’Hagan, President,

National Electrical Manufacturers Association; Ms. Josephine Cooper, President, Alliance of Automobile Manufacturers; Mr. David

Nemtzow, President, Alliance to Save Energy; Mr. Gary Swofford,

Vice President and Chief Operating Officer—Delivery, Puget Sound

Energy; Mr. Mark Rodgers, Chief Executive Officer, SmartSynch,

Incorporated; Dr. Dean Peterson, Center Leader, Superconductivity

Technology Center, Los Alamos National Laboratories; Mr. Patricio

Silva, Project Attorney, Natural Resources Defense Council; and

Mr. Jordan Clark, President, United Homeowners Association.

The Subcommittee on Energy and Air Quality held the seventh

in a series of hearings on a comprehensive national energy policy

on June 27, 2001. The hearing topic was nuclear energy and hydroelectric power and their role in meeting the long-term energy needs

of the United States. The Committee received testimony from: The

Honorable Richard A. Meserve, Chairman, U.S. Nuclear Regulatory

Commission; Mr. William D. Magwood, Director, Office of Nuclear

Energy, Science, and Technology, U.S. Department of Energy; Mr.

Marvin Fertel, Senior Vice President of Business Operations, Nuclear Energy Institute; Mr. Jack Skolds, Chief Operating Officer,

Exelon Nuclear; Mr. George Davis, Director of Government Programs and Nuclear Systems, Westinghouse Electric Company; Mr.

Laurence L. Parme, General Atomics; Dr. E. Allen Womack, President, BWX Technology, Inc., on behalf of Energy Contractors Price

Anderson Group; Mr. John Quattrocchi, Senior Vice President of

Underwriting, American Nuclear Insurers; Ms. Anna Aurilio, Legislative Director, U.S. Public Interest Research Group; The Honorable Curtis L. Hebert, Jr., Chairman, Federal Energy Regulatory

Commission, accompanied by Mr. J. Mark Robinson, Director, Office of Energy Projects, and Ms. Kristina Nygaard, Associate Counsel for Energy Projects, Office of General Counsel; Mr. Barry Hill,

Director, General Accounting Office, accompanied by Mr. Charles

S. Cotton, Assistant Director and Ms. Erin Barlow, Senior Analyst;

Mr. John Prescott, Vice President of Generation, Idaho Power Company; Ms. S. Elizabeth Birnbaum, Director of Government Affairs,
52

American Rivers; and Mr. Ronald Shems, Attorney, on behalf of the

Vermont Agency of Natural Resources.

COMMITTEE CONSIDERATION

On Tuesday, July 10, Wednesday, July 11, and Thursday, July

12, 2001, the Subcommittee on Energy and Air Quality met in open

markup session and approved a committee print, amended, by a

roll call vote of 29 yeas and 1 nay for Full Committee consideration, a quorum being present. On Tuesday, July 17, Wednesday,

July 18, and Thursday, July 19, 2001, the Full Committee met in

open markup session and favorably ordered reported the committee

print, amended, as a clean bill (H.R. 2587) to be introduced, by a

roll call vote of 50 yeas and 5 nays, a quorum being present.

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 the motion by Mr. Tauzin to order H.R.

2587 reported to the House, and on amendments offered to the

measure, including the names of those members voting for and

against.
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71

COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House

of Representatives, the Committee held oversight hearings and

made findings that are reflected in this report.

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

The goal of H.R. 2587 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. 2587, the

Energy Advancement and Conservation Act of 2001, would result

in no new or increased budget authority, entitlement authority, or

tax expenditures or revenues.

COMMITTEE COST ESTIMATE, CONGRESSIONAL BUDGET OFFICE

ESTIMATE, AND FEDERAL MANDATES STATEMENT

The Congressional Budget Office estimate required pursuant to

clause 3(c)(3) of rule XIII of the Rules of the House of Representatives section 402 of the Congressional Budget Act of 1974, and the

estimate of Federal mandates required pursuant to section 423 of

the Unfunded Mandates Reform Act were requested from the Congressional Budget Office, but were not prepared as of the date of

filing of this report. The Congressional Budget Office estimate and

accompanying materials will be contained in a supplemental report.

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the

Federal Advisory Committee Act were created by this legislation.

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House

of Representatives, the Committee finds that the Constitutional authority for this legislation is provided in Article I, section 8, clause

3, which grants Congress the power to regulate commerce with foreign nations, among the several States, and with the Indian tribes.

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the

terms and conditions of employment or access to public services or

accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act.
72

EXCHANGE OF COMMITTEE CORRESPONDENCE

COMMITTEE ON ENERGY AND COMMERCE,

Washington, DC, July 25, 2001.

Hon. JOHN A. BOEHNER,

Chairman, Committee on Education and the Workforce, House of

Representatives, Rayburn House Office Building, Washington,

DC.

DEAR CHAIRMAN BOEHNER: Thank you for your letter regarding

to H.R. 2587, the Energy Advancement and Conservation Act of

2001.

I appreciate your willingness not to seek a referral of H.S. 2587.

I agree that your decision to forgo action on the bill will not prejudice the Committee on Education and the Workforce with respect

to its jurisdictional prerogatives on this or similar legislation. Further, I recognize your right to request conferees on those provisions

within the Committee on Education and the Workforce’s jurisdiction should they be the subject of a House-Senate conference.

I will include your letter and this response in the Committee’s

report on H.R. 2587, and I look forward to working with you as we

bring comprehensive energy legislation to the Floor.

Sincerely,

W.J. ‘‘BILLY’’ TAUZIN,

Chairman.

COMMITTEE ON EDUCATION

AND THE WORKFORCE,

Washington, DC, July 24, 2001.

Hon. W.J. (BILLY) TAUZIN,

Chairman, Committee on Energy and Commerce,

Rayburn HOB, Washington, DC.

DEAR CHAIRMAN TAUZIN: Thank you for working with me regarding H.R. 2587, the Energy Advancement and Conservation Act,

which was referred to the Committee on the Committee on Energy

and Commerce, and in addition to the Committees on Ways and

Means, Science, Transportation and Infrastructure, the Budget,

and Education and the Workforce. As you know, the Committee on

Education and Workforce holds a jurisdictional interest in this legislation specifically provisions Section 134 dealing with the Low Income Home Energy Assistance Program (LIHEAP); I appreciate

your acknowledgment of that jurisdictional interest. I understand

the desire to have this legislation considered expeditiously by the

House; hence, I do not intend to hold a hearing or markup on this

legislation.

In agreeing to waive consideration by our Committee, I would expect you to agree that this procedural route should not be construed to prejudice the Committee on Education and the

Workforce’s jurisdictional interest and prerogatives on this or any

similar legislation and will not be considered as precedent for consideration of matters of jurisdictional interest to my Committee in

the future. I would also expect your support in my request to the

Speaker for the appointment of conferees from my Committee with

respect to matters within the jurisdiction of my Committee should
73

a conference with the Senate be convened on this or similar legislation.

I would appreciate your including our exchange of letters in your

Committee’s report to accompany H.R. 2587. Again, I thank you for

working with me in developing this legislation and I look forward

to working with you on these issues in the future.

Sincerely,

JOHN BOEHNER, Chairman.

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title and table of contents

Section 1 designates the act as the ‘‘Energy Advancement and

Conservation Act of 2001.’’

Title I—Energy Conservation

SUBTITLE A—REAUTHORIZATION OF FEDERAL ENERGY CONSERVATION

PROGRAMS

Section 101. Authorization of appropriations

Section 101 reauthorizes existing Federal energy conservation

programs administered by the Department of Energy, including the

Federal Energy Management Program (FEMP) and various regulatory programs for energy efficient products, appliances, and

buildings created under the Energy Policy and Conservation Act,

the Energy Conservation and Production Act, the National Energy

Conservation Policy Act, and the Energy Policy Act of 1992. The

section authorizes to be appropriated for such programs

$950,000,000 for fiscal year 2002, $1,000,000,000 for fiscal year

2003, $1,050,000,000 for fiscal year 2004, $1,100,000,000 for fiscal

year 2005, and $1,150,000,000 for fiscal year 2006.

SUBTITLE B—FEDERAL LEADERSHIP IN ENERGY CONSERVATION

Section 121. Federal facilities and national energy security

Section 121 expands the purposes of the Federal energy management provisions of the National Energy Conservation Policy Act

(NECPA) to include promoting the production, supply, and marketing of energy efficiency products and services and renewable energy sources. The section establishes new mandatory efficiency requirements for Federal buildings: 35 percent less energy consumption by 2010 and 45 percent by 2020, from a 1985 baseline. The

section also provides that unconventional and renewable energy resources should be used to help achieve these required increases,

and requires the Secretary of Energy to issue technical standards

and conduct studies to facilitate implementation of the requirement. Twenty million dollars in funding is authorized for such

studies for each fiscal year 2003 through 2010.

Under NECPA, Federal buildings are exempt from the energy

consumption reduction requirements under certain circumstances.

Section 121 modifies the exemption provisions of NECPA to provide

that a Federal building may be excluded from such requirements

if the President declares the building to require exclusion for national security reasons and the agency responsible for the building
74

has: submitted certain reports; otherwise achieved compliance with

the energy efficiency requirements under applicable Federal laws

and executive orders; and implemented all practical, life-cycle costeffective projects in the excluded building.

Section 121 also amends NECPA to establish certain additional

requirements applicable to acquisition of energy using products.

Specifically, the section requires agencies to select available Energy

Star products when acquiring new energy-using products. When

Energy Star labeled products are not available, agencies shall select products that are in the upper 25 percent of energy efficiency

as designated by FEMP. The Secretary of Energy is directed to develop guidelines for exemptions where the required products are

unavailable, impractical, or do not meet agency mission requirements. The Administrator of the General Services Administration

and the Secretary of Defense are directed to include Energy Star

designations in product catalogues and to replace inventories with

products that meet the requirements of the section or are exempted

pursuant to the section.

Agencies are further directed to incorporate Energy Star-consistent and other FEMP designated energy efficiency levels into

specifications for new construction and renovation, and in certain

ordering, purchasing, and acquisition agreements and procedures.

The Secretary of Energy is directed to establish guidelines for exemptions from such requirements. The legislative branch shall be

subject to the acquisition requirements established under this section. Section 121 also requires all Federal buildings, including legislative and judicial branch buildings, to be metered in accordance

with guidelines established by the Secretary of Energy.

This section further amends NECPA to provide that agencies

may retain funds appropriated for energy use saved as a result of

energy savings, but such funds may be used only for energy efficiency or unconventional and renewable energy resources projects.

NECPA is also amended to require agencies to report certain information to the Secretary of Energy and to Congress regarding its

energy management activities. Section 121 also amends the Energy

Policy Act of 1992 (EPAct) to require that the inspector general of

each agency conduct a periodic energy audit of the agency.

Section 121 further amends NECPA to require each agency to

undertake a comprehensive priority response review of all practicable measures for increasing energy and water conservation and

using renewable energy sources. The agency shall then implement

such practicable measures to achieve at least half of the potential

efficiency and renewable energy savings identified in the review.

Section 122. Enhancement and extension of authority relating to

Federal energy savings performance contracts

Section 122 expands the scope of Energy Savings Performance

Contracts (ESPCs) to include ‘‘replacement facilities’’ (i.e., new,

more efficient buildings) and water conservation measures. The

section removes the sunset on ESPC authority, which would otherwise expire in 2003.
75

Section 123. Clarification and enhancement of authority to enter

utility incentive programs for energy savings

Section 123 authorizes an agency, in the course of exercising its

authority to participate in a utility incentive program, to enter into

contracts for electricity demand management, energy efficiency, or

water conservation. The provision also expands the scope of such

authority to include contracts for energy savings from replacement

facilities and water conservation projects. Federal agencies are encouraged to participate in state or regional demand management

programs operated by regional transmission organizations or other

entities.

Section 124. Federal central air conditioner and heat pump efficiency

Section 124 requires that certain air conditioning and heat pump

units acquired by the Federal government meet or exceed certain

efficiency standards. This section (1) defines the minimum standard for air conditioners with cooling capacities of less than 65,000

Btu/hour as a Seasonal Energy Efficiency Ratio (SEER) of 12.0,

and (2) defines the minimum standard for heat pumps with cooling

capacities less than 65,000 Btu/hour as SEER 12, with a Heating

Seasonal Performance Factor of 7.4. An agency shall be exempt

from such requirement upon a finding of impracticability based

upon certain factors.

Section 125. Federal energy bank

Section 125 establishes a fund within the Federal government to

provide low-interest loans to Federal agencies to pay for energy efficiency and renewable energy projects. Funding is provided in part

by annual payments into the bank by Federal agencies in an

amount equal to 5 percent of each agency’s utility bill for the preceding fiscal year. Loans are limited to projects that meet certain

criteria, including a project payback period of 10 years or less. The

section authorizes such sums as may be necessary to implement

the section for fiscal years 2002 through 2008.

Section 126. Advanced building efficiency testbed

Section 126 directs the Secretary of Energy to establish a development, testing, and demonstration program to enable innovations

in energy efficient building technologies. The program shall be carried out by universities that meet certain qualifications.

Section 127. Use of interval data in Federal buildings

Section 127 requires each executive agency to use interval energy

consumption data in reducing energy consumption in Federal buildings.

Section 128. Review of Energy Savings Performance Contract Program

Section 128 directs the Secretary of Energy to review the Energy

Savings Performance Contract program to identify statutory, regulatory, and administrative obstacles to Federal agency utilization of

the program. The review shall identify areas for increasing program effectiveness, including auditing, measurement and

verification, accounting, contracting, and energy efficiency services.
76

The Secretary shall report findings to the House Committee on Energy and Commerce and the Senate Committee on Energy and Natural Resources and shall implement administrative and regulatory

changes to increase program flexibility and effectiveness to the extent consistent with existing statutory authority.

Section 129. Capitol Complex

Section 129 requires the Architect of the Capitol to commission

a study to evaluate the energy infrastructure of the Capital Complex to determine how it could become more energy efficient, using

unconventional and renewable energy resources, in a way that

would enable the Complex to have reliable utility services in the

event of power fluctuations, shortages, or outages. Section 129 authorizes for these purposes $2,000,000.

SUBTITLE C—STATE PROGRAMS

Section 131. Amendments to State energy programs

The Energy Policy and Conservation Act required the Secretary

of Energy to establish guidelines for Governors to submit a state

energy conservation feasibility report. The report details state efforts to achieve recommended statutory goals for energy conservation. Subsection (a) of Section 131 invites the Governors to revisit

their energy conservation report at least once every three years,

and consider regional energy conservation opportunities. Subsection (b) establishes new recommended state conservation goals

of 25 percent improved energy efficiency over 1990 levels by 2010.

Subsection (c) extends and increases the authorization for Federal

assistance with state energy conservation programs. Funds are authorized in the following amounts: $75,000,000 for fiscal year 2002;

$100,000,000 for fiscal years 2003 and 2004; and $125,000,000 for

fiscal year 2005.

Section 132. Reauthorization of energy conservation program for

schools and hospitals

The Energy Conservation Program for Schools and Hospitals establishes guidelines for states to conduct energy audits of schools

and hospitals, and provides financial assistance to implement energy conservation and efficiency measures based on those audits.

Section 132 extends the authorization for this program through

2010.

Section 133. Amendments to Weatherization Assistance Program

The Weatherization Assistance Program provides grants to improve the energy efficiency of low-income homes. Section 133 reauthorizes the program at increased funding levels as follows:

$250,000,000 for fiscal year 2002; $325,000,000 for fiscal year 2003;

$400,000,000 for fiscal year 2004; and $500,000,000 for fiscal year

2005.

Section 134. LIHEAP

The Low Income Home Energy Assistance Program (LIHEAP) assists low-income consumers in paying high energy bills. Section 134

reauthorizes the program (established under the Low Income Home

Energy Assistance Act of 1981) at a funding level of $3,400,000,000
77

for each of fiscal years 2001 through 2005, representing a 70 percent increase over total LIHEAP funding appropriated for fiscal

year 2000.

Section 135. High performance public buildings

Section 135 establishes within the Department of Energy a High

Performance Public Buildings Program to make grants to the

states to assist local governments in constructing and renovating

buildings to maximize energy efficiency and use of renewable energy. Such sums as may be necessary to implement the program

are authorized for fiscal years 2002 through 2010.

SUBTITLE D—ENERGY EFFICIENCY FOR CONSUMER PRODUCTS

Section 141. Energy Star program

The Energy Star Program is a regulatory program previously established by administrative actions of the Department of Energy

and the Environmental Protection Agency to identify and promote

energy efficient products and buildings. Subsection (a) of Section

141 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. Subsection (b) directs the Secretary of Energy to determine

whether the Energy Star label should be extended to cover certain

additional products and buildings. The section provides that responsibilities under the Energy Star Program, including responsibilities for particular product categories, shall be allocated consistent with agreements between the agencies, such as are currently in place but potentially including amendments to such

agreements as may be necessary or appropriate to carry out the

purposes of the program.

Section 142. Labeling of energy efficient appliances

The Energy Policy and Conservation Act requires the Federal

Trade Commission (FTC) to develop labels with information on energy consumption and operating costs for certain consumer products. Subsection (a) of Section 142 directs the Secretary of Energy

to recommend to the FTC additional products for labeling, where

such labeling is likely to assist consumers in making purchasing

decisions and is technologically and economically feasible. Subsection (b) directs the Commission to initiate a rulemaking to label

non-covered products if it determines that labeling of such products

is likely to assist consumers in making purchasing decisions and is

technologically and economically feasible. Subsection (b) also directs the FTC to initiate a rulemaking to consider the effectiveness

of the existing labeling program and to consider changes to the

label that would improve such effectiveness.

Section 143. Appliance standards

The Energy Policy and Conservation Act (EPCA) directs the Secretary of Energy to establish efficiency standards for certain products. Subsection (a) of Section 143 amends EPCA to direct the Secretary to establish an efficiency standard for standby mode electric

energy consumption by certain household appliances, with certain

exceptions, to take effect 2 years from enactment. The standard
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shall be 1 watt except where the product meets certain criteria related to technical infeasibility, compatibility with existing energy

conservation standards, and lack of cost savings compared to increase in product price. In the case of analog televisions, a standard established by the Secretary of Energy shall apply in lieu of

the 1 watt standard. In the case of digital televisions, digital set

top boxes, and digital video recorders, no standard is specified and

the rulemaking shall commence on January 1, 2007 and take effect

18 months thereafter.

Subsection (b) amends EPCA to direct the Secretary to conduct

a rulemaking to determine whether to establish energy conservation standards for non-covered products. If such products meet certain criteria, the Secretary shall prescribe a standard if such standard is reasonably probable to be technologically feasible and economically justified.

Subsection (c) directs the Secretary of Energy to establish an

education program to inform the public of the energy savings that

result from regular maintenance of heating, air conditioning and

ventilation systems. The Secretary is directed to consider supporting public education programs sponsored by trade and professional or energy efficiency organizations. Five million dollars are

authorized to carry out such public education programs.

Subsection (d) amends EPCA to direct the Secretary to establish

an energy conservation standard for furnace fans, central air and

heat pump circulation fans, ceilings fans, and cold drink vending

machines.

SUBTITLE E—ENERGY EFFICIENT VEHICLES

Section 151. High occupancy vehicle exception

Section 151 authorizes States to permit certain hybrid and alternative fueled vehicles to operate in high occupancy vehicle (HOV)

lanes, regardless of the number of passengers. The decision as to

whether to permit these vehicles to operate in HOV lanes is within

the discretion of the appropriate state authority. This section does

not change any current authority which states may have to impose

restrictions on HOV lane access based upon state laws, such as air

emissions laws.

Section 152. Railroad efficiency

Section 152 directs the Secretary of Energy to establish a publicprivate research partnership and a research and test center to advance locomotive technologies that increase fuel economy and reduce emissions. Funding for these activities are authorized as follows: $25,000,000 for fiscal year 2002; $30,000,000 for fiscal year

2003; and $35,000,000 for fiscal year 2004.

Section 153. Biodiesel fuel use credits

Section 153 removes a current restriction in the Energy Policy

Act that prevents credits earned for vehicle fleets using biodiesel

from being considered a credit under Section 508 of that Act. Section 153 does not change the existing limitation under Section

312(b)(2) of the Energy Policy Act that prevents a fleet or covered

person from using biodiesel credits to satisfy more than 50 percent

of the alternative fueled vehicle requirements of the Act.
79

Section 154. Mobile to stationary source trading

Section 154 directs the Administrator of the Environmental Protection Agency to commence a review of the Agency’s policies regarding the use of mobile to stationary source trading of emission

credits under the Clean Air Act to determine whether such trading

can provide additional flexibility in achieving and maintaining air

quality, and increase the use of alternative fuel and advanced technology vehicles.

SUBTITLE F—OTHER PROVISIONS

Section 161. Review of regulations to eliminate barriers to emerging

energy technology

Section 161 directs each Federal agency to review its regulations

and standards to identify barriers to market entry for emerging energy-efficient technologies. Each agency must then report to Congress and the President on such barriers identified and actions the

agency intends to take to remove such barriers. Each agency shall

also subsequently conduct a similar review and report at least

every 5 years.

Section 162. Advanced idle elimination systems

Section 162 directs the Environmental Protection Agency to review mobile source emissions models to ensure they accurately reflect the emissions resulting from extended idling of heavy-duty

trucks and other vehicles and to make appropriate changes to update such models. Section 162 also directs the Agency to commence

a review of the appropriate emissions reduction credit for use of advanced idle elimination systems and to revise associated regulations and guidance as appropriate.

Section 163. Study of benefits and feasibility of oil bypass filtration

technology

Section 163 directs the Secretary of Energy and the Administrator of the Environmental Protection Agency to conduct a joint

study of oil bypass filtration (OBF) technology in motor vehicle engines. Section 163 requires that the study analyze and quantify the

potential benefits of OBF technology in terms of reduced demand

for oil, and the potential environmental benefits of OBF technology

in terms of reduced waste and air pollution. Section 163 also requires that the Secretary and the Administrator examine the feasibility of using OBF in the Federal motor vehicle fleet.

Section 164. Gas flare study

Section 164 directs the Secretary of Energy to conduct a study

of the economic feasibility of installing small cogeneration facilities

utilizing excess gas flares at petrochemical facilities to provide reduced electricity costs to customers living within a certain distance

of such facilities. The Secretary shall take comments and prepare

and transmit a report on the results of the study to Congress.

Section 165. Telecommuting study

Section 165 directs the Secretary of Energy, in consultation with

the Federal Communications Commission and the National Telecommunications and Information Administration (of the Depart-
80

ment of Commerce) to conduct a study of certain energy conservation implications of the widespread adoption of telecommuting in

the United States, including identification of regulatory barriers to

telecommuting. The Secretary is directed to submit a report on the

study to the President and the Congress.

Title II—Automobile Fuel Economy

Section 201. Average fuel economy standards for non-passenger

automobiles

Section 201 adds a new paragraph to 49 U.S.C. 32902 that requires the Secretary of Transportation to set corporate average fuel

economy (CAFE) standards for light trucks manufactured in model

years 2004 through 2010 that are calculated to ensure that the aggregate amount of gasoline projected to be used by such vehicles

in those model years is at least 5 billion gallons less than the aggregate amount of gasoline that would be used by such vehicles in

those model years under the CAFE standard in place for light

trucks in model year 2002. As used in this Title, ‘‘non-passenger

automobiles’’ are ‘‘light trucks’’ which include sport utility vehicles,

minivans, vans, and pickup trucks with a gross vehicle weight rating of less than 8500 pounds. The mandate in this section for the

Secretary to increase the fuel economy standard for light trucks in

order to save an aggregate of at least 5 billion gallons of gasoline

in model years 2004 through 2010 is a fuel-savings ‘‘floor,’’ not a

‘‘ceiling.’’ Nothing in this section prevents the Secretary from requiring fuel savings in excess of 5 billion gallons. Further, this section makes no change to the existing requirement in 49 U.S.C.

32902(a) that, at least 18 months before the beginning of each

model year, the Secretary shall prescribe by regulation ‘‘the maximum feasible average fuel economy level that the Secretary decides the manufacturers can achieve in that model year’’ for light

trucks. To the extent this section conflicts with this requirement,

the five billion gallon mandate in this bill shall prevail. If a rulemaking directing a fuel economy increase in more than one model

year is necessary to ensure that the required fuel savings are

achieved, the Secretary should undertake such a rulemaking.

Section 202. Consideration of prescribing different average fuel

economy standards for non-passenger automobiles

Section 202 requires that the Secretary consider the potential

benefits of establishing a weight-based CAFE system for light

trucks manufactured in model year 2004, based on inertia weight,

curb weight, gross vehicle weight rating, or other appropriate

measure, and of prescribing different fuel economy standards for

such vehicles that are subject to the weight-based system. The Secretary must specifically consider the National Academy of Sciences

study to be completed pursuant to the Department of Transportation Appropriations Act (P.L. 106–346), and shall evaluate the

merits of a weight-based system in terms of vehicle safety, energy

conservation, competitiveness of the automobile industry, and employment in the automobile industry. If a weight-based system is

established by the Secretary for light trucks, then an automobile

manufacturer may trade credits between and among the classes of

light trucks it manufactures.
81

Section 203. Dual fueled automobiles

Section 203 extends the sunset date for CAFE credits currently

available for dual fueled vehicles. Section 203 extends the maximum 1.2 CAFE credit to model year 2008 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 2012.

Section 204. Fuel economy of the Federal fleet of automobiles

Section 204 replaces the current Federal fleet provisions contained in 49 U.S.C. 32917. Section 204 requires that, by September

30, 2003, the head of each Federal executive agency manage the

procurement of vehicles for each agency so that the average fuel

economy of new vehicles in each executive agency’s Federal fleet be

at least 1 mile per gallon higher than the baseline average fuel

economy of each executive agency’s fleet of vehicles that were

leased or bought in fiscal year 1999. By September 30, 2005, the

average fuel economy for each executive agency’s Federal fleet of

vehicles must be at least 3 miles per gallon higher than the baseline average fuel economy of the Federal fleet of vehicles each executive agency leased or bought in fiscal year 1999. This section does

not apply to vehicles used for combat-related missions, law enforcement work, or emergency rescue work.

Section 205. Hybrid vehicles and alternative vehicles

Section 205 supplements the current requirements in section 303

of the Energy Policy Act of 1992, which requires 75 percent of the

new vehicles acquired for a Federal fleet be alternative fueled vehicles. Section 205 mandates that of the total number of vehicles acquired by a Federal fleet in fiscal years 2004 and 2005, at least 5

percent of the vehicles, in addition to the 75 percent of new vehicle

purchases required by existing law to be alternative fueled vehicles, be hybrid electric vehicles or alternative fueled vehicles. In fiscal year 2006 and thereafter, the percentage of hybrid electric or

alternative fueled vehicles increases to 10 percent over and above

requirements of existing law.

Section 206. Federal fleet petroleum-based nonalternative fuels

Section 206 adds a new section at the end of Title III of the Energy Policy Act of 1992. Section 206 requires that Federal fleets of

light duty motor vehicles, in the aggregate, reduce the purchase of

petroleum-based nonalternative fuels beginning October 1, 2003,

and that by September 30, 2009, light duty motor vehicles in Federal fleets use only alternative fuels. Within 120 days after the

date of enactment of this bill, the Secretary, in consultation with

the Administrator of the General Services Administration and the

Director of the Office of Management and Budget, along with the

heads of other executive agencies referenced in section 303, shall

promulgate standards providing for the full and prompt implementation of this requirement. Thereafter, the Secretary shall monitor

progress made towards achieving the requirements of this section

and shall report annually to Congress concerning compliance. Such

sums as are necessary are authorized to achieve the purposes of

sections 304(b) and 313 of the Energy Policy Act of 1992.
82

Section 207. Study of feasibility and effects of reducing use of fuel

for automobiles

Section 207 requires the Secretary of Transportation, within 30

days of the date of enactment of this bill, to enter into an arrangement with the National Academy of Sciences to study the feasibility and effects of reducing, by a significant percentage, fuel consumption by automobiles by model year 2010. This study must include an examination of, and recommendation of alternatives to,

the current CAFE program, an examination of how automobile

makers can contribute toward achieving the significant fuel savings, an examination of the potential of fuel cell technology in

motor vehicles, and how fuel cell technology may contribute towards achieving the fuel consumption reduction discussed in this

section. In addition, the study must include an examination of 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 and submitted to the Secretary and to the Congress not later than one year after enactment of this bill.

Title III—Nuclear Energy

SUBTITLE A—GENERAL PROVISIONS

Section 301. Budget status of Nuclear Waste Fund

Section 301(a) moves the Nuclear Waste Fund off-budget. The

subsection provides that notwithstanding any other provision of

law, the receipts and disbursements of the Nuclear Waste Fund

shall not be counted as new budget authority, outlays, receipts, or

deficit or surplus for purposes of (1) the budget of the United

States Government as submitted by the President; (2) the Congressional budget; or (3) the Balanced Budget and Emergency Deficit

Control Act of 1985. This action will protect consumers by preventing the diversion of their fees to other Federal programs. Section 301(b) prohibits, upon enactment, the Director of the Office of

Management and Budget from making any estimate of the pay-asyou-go effects of subsection 301(a) of this section. The requirement

to estimate changes in direct spending outlays and receipts stems

from section 252(d) of the Balanced Budget and Emergency Deficit

Control Act of 1985.

The Nuclear Waste Policy Act of 1982 established the Nuclear

Waste Fund with a one mill fee on electricity generated and sold

by nuclear power plants. The 1982 Act provided that these fees

were to be used solely for the purpose of the nuclear waste program, and included express limitations on use of the Fund. Section

302(d) of the 1982 Act provides that ‘‘DOE may make expenditures

from the Waste Fund * * * only for purposes of radioactive waste

disposal activities * * *.’’ Subsection (d) provides a nonexclusive list

of some of these purposes. Although this list is nonexclusive, it is

clear that any expenditures from the Nuclear Waste Fund may be

made only by the Secretary of Energy, and ‘‘only for purposes of radioactive waste disposal activities.’’ Expenditures of fees paid by

consumers into the Nuclear Waste Fund for other Federal programs would violate the strict limitations in the Nuclear Waste

Policy Act of 1982, and invite further litigation.
83

Moving the Nuclear Waste Fund off-budget restores the nuclear

waste program to the status Congress intended when it enacted the

1982 Act. Section 302(c) of the Act established the Nuclear Waste

Fund as a separate fund in the Treasury of the United States, with

dedicated funding sources, the one mill fee, the one-time fees on

generation and sales preceding April 7, 1983, and contributions

from other Federal agencies that dispose of spent fuel and waste

in a repository. One reason Congress set up the Nuclear Waste

Fund as a separate fund with dedicated funding sources was to insulate the program from competition with other Federal programs

for funding. Unfortunately, budget laws enacted since the Nuclear

Waste Policy Act of 1982 have changed the status of the Nuclear

Waste Fund, forcing the program to compete with other Federal

programs for funding, despite the fact that the program had dedicated revenue sources.

Since enactment of the Nuclear Waste Policy Act of 1982, the

Nuclear Waste Fund has accumulated a large balance, approximately $9.5 billion at the end of September 2000. This is not unexpected. It was anticipated revenues would exceed expenditures in

the early years of the program, and the balance would be used

when costs rose sharply during repository construction. Unfortunately, because of budget rules it will prove difficult to access the

balance in the Nuclear Waste Fund at a time when revenue requirements are rising.

Significantly, moving the Nuclear Waste Fund off-budget does

not result in uncontrolled or unrestricted spending. The Secretary

may only make expenditures from the Nuclear Waste Fund subject

to appropriations. Thus, there is no uncontrolled or unrestrained

spending, and appropriators retain control of program expenditures.

Section 302. License period

Section 302 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 Commission finds that the acceptance criteria for such license

required under Section 185(b) of the Atomic Energy Act of 1954 (42

U.S.C. 2235) have been met. The intent of this section is to align

the beginning of the licensing period with the beginning of the facility’s operation.

Section 303. Cost recovery from Government agencies

Section 303 authorizes the Commission to assess and collect fees

from other Federal agencies in return for services rendered by the

NRC, rather than recovering these costs through the annual fees

assessed to all NRC licensees. Existing authority in section 161w

of the Atomic Energy Act (42 U.S.C. 2235) provides for cost recovery only in limited situations. This section authorizes full cost recovery for the entire range of services that the NRC provides to

other Federal agencies. The replacement of section 483a with section 9701 is a correction to the proper United State Code reference.
84

Section 304. Depleted uranium hexafluoride

Section 304 extends spending limitations created in P.L. 104–205

to ‘‘wall off’’ funds for the purposes of implementing the final plan

to convert depleted uranium hexafluoride at the Portsmouth and

Paducah Gaseous Diffusion plants from 2002 to 2005.

The Committee notes that the schedule for implementing the

final plan required in P.L. 104–205 has slipped significantly and

that a contract is not scheduled for award until late in calendar

year 2001. The Committee urges DOE to consider whether compliance with the National Environmental Policy Act can best be effectuated through an environmental assessment instead of a site specific environmental impact statement, to the extent allowed by current regulations.

Section 305. Nuclear Regulatory Commission meetings

Section 305 is intended to make available to the public, upon request, a transcript of discussions involving a quorum of NRC Commissioners who gather to discuss official Commission business.

This provision requires that NRC make a recording of such meetings, and provide notice to the public within 15 days after such

meetings. NRC is required to promptly make a transcript available

to the public, upon request, to the extent that public disclosure of

the transcript is not subject to an exemption or prohibition under

applicable law. A similar provision considered and reported by the

Committee in H.R. 2531 in the 106th Congress would have codified

the Commission’s 1977 rule implementing the Sunshine Act that

required the Commission open to the public any meeting of a

quorum of the Commissioners involving official Commission business. This provision does not alter the Commission’s new rule, implemented in 1999, which allows for certain discussions involving

a quorum of Commissioners to be conducted outside of the Sunshine Act’s definition of ‘‘meeting.’’ Although this section does not

impose a specific time limit for response by the Commission, the

NRC should develop a process for the prompt response to any public request for a transcript.

SUBTITLE B—DOMESTIC URANIUM FUEL CYCLE

Section 311. Portsmouth cold standby

Section 311 makes available $169 million from the United States

Enrichment Corporation Fund (USEC Fund) established under section 1308 of the Atomic Energy Act of 1954, without further appropriations, and at the discretion of the Secretary, to maintain the

Portsmouth Gaseous Diffusion plant (Portsmouth plant) in cold

standby, consistent with the hot restart plan developed pursuant to

Section 314(b), for fiscal years 2002 through 2005.

Section 312. Paducah funding

Section 312 makes available $169,000,000 from the USEC Fund,

without further appropriations, and at the discretion of the Secretary, for activities at the Paducah Gaseous Diffusion plant (Paducah plant), that do not duplicate the transfer and storage operations at the Portsmouth plant, for fiscal years 2002 through 2005.
85

Section 313. Research and development

Section 313 makes available $254,000,000 from the USEC fund,

without further appropriation, and at the discretion of the Secretary, to develop and implement a plan for an advanced gas centrifuge technology for uranium enrichment at either the Paducah

or Portsmouth plants.

Section 314. Short-term reliability of domestic uranium enrichment capacity

Section 314(a) requires the Secretary to develop draft criteria to

determine whether the hot restart of the Portsmouth plant may be

necessary, in order to mitigate against impacts associated with disruptions in commercial nuclear fuel supply or contract liabilities of

the U.S. Government in the event of non-performance by USEC,

Inc. Section 314(b) requires the Secretary to develop a separate

plan to effectuate the hot restart of Portsmouth in the event the

Secretary were to determine to hot restart the Portsmouth plant.

Section 315. Cooperative research and development and special

demonstration projects for the uranium by the United States

until 2009

Section 315 authorizes $10,000,000 per year for three years beginning in 2002, for cooperative, cost-shared, agreements between

DOE and domestic uranium producers to develop in situ 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 316. Maintenance of a viable domestic uranium conversion

industry

Section 316 authorizes $800,000 for the Secretary to contract

with Converdyn, Inc., the sole domestic uranium conversion service

provider, for performing research and development to improve the

environmental and economic performance of uranium conversion

operations.

Section 317. Prohibition of commercial sales of uranium by the

United States until 2009

Section 317 prohibits DOE from selling or transferring any of its

uranium inventories, in any form owned by DOE, through March

23, 2009, except for emergency supply in the event of a disruption

in domestic supply and for certain exceptions related to current

uranium sales or transfer commitments made by the Department.

Sales after March 23, 2009 are restricted to 3,000,000 pounds per

calendar year.

Section 318. Paducah decontamination and decommissioning plan

Section 318 requires the Secretary to prepare a plan to establish

the scope, cost, schedule, sequence of activities, and contracting

strategy for decontamination and decommissioning of surplus facilities and the remediation of material storage areas at the Paducah

plant. The purpose of the plan is to identify and prioritize health

and safety risks in these areas, and incorporate these factors in a
86

sequence and schedule for the plan. The plan also must identify

funding requirements.

Title IV—Hydroelectric Licensing

Section 401. Alternative conditions and fishways

Section 401 amends Part I of the Federal Power Act (FPA) to require that federal resource agencies consider alternatives to the

mandatory conditions and fishway prescriptions they would otherwise impose on hydroelectric power projects during a licensing proceeding.

Section 4(e) of the FPA provides, among other things, that licenses issued by the Federal Energy Regulatory Commission

(FERC) for projects that fall within a reservation are subject to and

shall contain such conditions as are deemed necessary by the Secretary of the Department with jurisdiction over the reservation for

its protection and utilization. Subsection (a)(1) establishes the right

of any party to a licensing proceeding to propose an alternative to

a Secretary’s proposed condition. Subsection (a)(2) requires the Secretary to adopt an alternative if the Secretary determines, based

upon substantial evidence provided by the party proposing the alternative, that the alternative would provide no less protection for

the reservation than the condition deemed necessary by the Secretary and the alternative would either cost less to implement or

result in improved operation of the project works for electricity production. Subsection (a)(3) directs each of the relevant Secretaries to

establish, within one year from enactment, a process within his department for resolving disputes arising out of actions taken pursuant to this subsection.

Section 18 of the FPA directs FERC to require a licensee, at its

own expense, to construct, maintain, and operate such fishways as

may be prescribed by the relevant Secretary. Subsection (b)(1) establishes the right of any party to a licensing proceeding to propose

an alternative to a prescription to construct, maintain, or operate

a fishway. Subsection (b)(2) requires that the appropriate Secretary

accept (and FERC subsequently require) an alternative to his prescription if the Secretary determines, based upon substantial evidence provided by the party proposing the alternative, the alternative would be no less effective than the Secretary’s initial

fishway prescription and the alternative would either cost less to

implement or result in improved operation of the project works for

electricity production. Subsection (b)(3) directs each of the relevant

Secretaries to establish, within one year from enactment, a process

within his department for resolving disputes arising out of actions

taken pursuant to this Subsection.

Section 402. FERC data on hydroelectric licensing

This section requires the FERC to revise its data collection procedures regarding the hydroelectric licensing process to provide more

complete and accurate information on the time and costs involved

in the process. In testimony received by the Committee, the General Accounting Office (GAO) criticized FERC’s data collection and

management with regard to relicensing hydroelectric projects. This

section responds to the GAO testimony and the Committee directs

FERC to reform its procedures consistent with the GAO’s testi-
87

mony. Further, the Committee intends that the burden for implementing this section should fall upon FERC and should not unduly

increase the burden on licensees to collect and transmit information to FERC. Finally, the Committee notes that this provision neither constricts nor expands FERC’s authorities and responsibilities

under current law with regard to disclosure of proprietary or confidential information.

Title V—Clean Coal

Section 501. Short title

Section 501 provides for the short title of the title as the ‘‘National Electricity and Environmental Improvement Act.’’

Section 502. Findings

Section 502 sets forth certain findings concerning clean coal technologies.

SUBTITLE A—ACCELERATED CLEAN COAL POWER PRODUCTION

PROGRAM

Subtitle A provides authorization for the Department of Energy

to develop accelerated programs for the production, supply and generation of electrical power by advanced clean coal methods and

equipment. It also requires DOE to assess the use of coal for chemical feedstocks and transportation fuel. Under the subtitle, DOE is

required to periodically report to Congress on methods and equipment that are able to meet cost and performance standards and to

carry out a program for generation of coal-based power that would

advance efficiency and environmental performance. DOE is further

authorized to fund projects meeting certain efficiency and environmental performance criteria up to a Federal share of 50 percent of

the cost of the project.

SUBTITLE B—CREDIT FOR EMISSION REDUCTIONS AND EFFICIENCY IM- PROVEMENTS IN EXISTING COAL-BASED ELECTRICITY GENERATION

FACILITIES

Subtitle B provides tax credits for emission reductions and efficiency improvements in existing coal-based generating facilities.

The subtitle provides a qualifying clean coal technology unit credit

in an amount equal to 10 percent of the qualified investment, up

to a limit of $100 million for emission control equipment at any one

electric generating plant. It also establishes a production tax credit

for the first 10 years of electricity output from existing coal-based

generating units that are repowered with qualifying systems.

SUBTITLE C—INCENTIVES FOR EARLY COMMERCIAL APPLICATIONS OF

ADVANCED CLEAN COAL TECHNOLOGIES

Subtitle C allows tax credits for electric generation from advanced clean coal technology programs. Credit for investment

under Section 531 is allowed in an amount equal to 10 percent of

the qualified investment. Credit for production under Section 532

is conditioned on the facility design heat rate and the year the facility is originally placed in service and is available during the first

10 years of operation. In subsequent years, the credit is conditioned

on improvements in efficiency. The subtitle also establishes a risk
88

pool to help defray the cost (up to 5 percent of the cost of installation) for any modifications necessary to achieve design performance

levels during the first 3 years of operation.

SUBTITLE D—TREATMENT OF CERTAIN GOVERNMENTAL AND OTHER

ENTITIES

Subtitle D creates refundable or offset tax credits for electric cooperatives and publicly owned utilities. It also establishes an offset

against payments required as an annual return on appropriations

by the Tennessee Valley Authority.

Title VI—Fuels

Section 601. Tank draining during transition to summertime RFG

Section 601 requires the Environmental Protection Agency (EPA)

to commence a rulemaking regarding the transition to high-ozone

season reformulated gasoline. EPA must evaluate whether the

transition to summertime RFG is conducted in a manner that minimizes disruptions to the availability and affordability of gasoline

and maximizes flexibility for gasoline storage tanks consistent with

the goals of the Clean Air Act. If regulatory changes are necessary,

EPA must take final action and ensure that new regulations are

effective and implemented at least 60 days before the beginning of

the high ozone season for next year. EPA may repeal, modify, or

take no action with respect to such rules consistent with Clean Air

Act authority.

Section 602. Gasoline blendstock requirements

Section 602 requires EPA to commence a rulemaking to determine whether modifications to the Agency’s current gasoline

blendstock regulations are necessary to facilitate the movement of

gasoline and gasoline feedstocks among different regions throughout the country and to improve the ability of petroleum refiners

and importers to respond to regional gasoline shortages and price

increases. EPA is required to consider whether subsequent environmental requirements that were not in effect at the time these regulations were promulgated may have rendered these regulations unnecessary or inefficient. If regulatory changes are necessary, EPA

must take final action and ensure that new regulations are effective and implemented at least 60 days before the beginning of the

high ozone season for next year. EPA may repeal, modify, or take

no action with respect to such consistent with Clean Air Act authority.

Section 603. Boutique fuels

Section 603 requires EPA and the Department of Energy to conduct a joint study of all Federal, state and local fuel requirements.

This review includes not only the RFG program, but the wintertime

oxygenated program, diesel fuel and local regulations on gasoline

volatility. The review will look at the price and availability of fuels

to the consumer, the effect of multiple fuel requirements on the

fuel distribution system, the effect of multiple fuel requirements on

air quality and vehicle emissions and the feasibility of developing

national or regional fuel specifications. Under section 603, EPA and

DOE are also directed to examine whether new Tier II standards
89

will achieve some of the same air quality results as the state RFG

and state volatility programs. For all section 603 requirements,

EPA and DOE are required to report back to Congress in 90 days

with recommendations regarding regulatory and legislative actions

that can be taken to simplify the national fuel supply system and

reduce costs to the consumer while meeting the requirements of the

Clean Air Act. These recommendations must take into account the

necessary lead time for refinery and fuel distribution system modifications.

Section 604. Funding for MTBE contamination

Section 604 authorizes $200,000,000 from the Leaking Underground Storage Trust Fund for assessment, corrective action, inspection and monitoring activities with respect to releases of methyl tertiary butyl ether (MTBE) from underground storage tanks.

Title VII—Renewable Energy

Section 701. Assessment of renewable energy resources

Section 701 directs the Secretary of Energy to publish an annual

assessment by the National Laboratories of all renewable energy

resources available within the United States. The report shall include a detailed inventory of resources and other information useful in developing renewable energy resources.

Section 702. Renewable energy production incentive

Section 702 makes several changes to the Renewable Energy Production Incentive (REPI) program established by Section 1212 of

the Energy Policy Act of 1992. REPI provides for payments of 1.7

cents per kilowatt-hour to qualifying generators for electricity produced from renewable energy sources. Generators are eligible for

payment during the first 10 years of operation. Under current

REPI regulations, Tier I technologies (wind, solar, geothermal and

closed-loop biomass) are paid in full and paid first. Tier II technologies (typically waste-to-energy technologies) are paid proportionately out of the remaining funds. Section 702 eliminates the

two-tiered payment system, treating all qualifying technologies the

same, and expands the statutory definition of ‘‘Qualified Renewable

Energy Facilities’’ to include landfill gas technologies. Further, it

expands the class of eligible payment recipients to include Indian

tribal governments. Finally, it expands the payments to the next

generation of renewable energy projects, since the initial 10 year’s

class of eligible projects was due to expire in 2003.

Title VIII—Pipeline Integrity

SUBTITLE A—PIPELINE INTEGRITY

Section 801. Program for pipeline integrity research, development,

and demonstration

Section 801 directs the Secretary of Transportation, in coordination with the Secretary of Energy and in consultation with the Federal Energy Regulatory Commission, to develop and implement an

accelerated cooperative research and development program to ensure the integrity of natural gas and hazardous liquid pipelines.
90

Section 802. Pipeline Integrity Technical Advisory Committee

Section 802 establishes in law a Pipeline Integrity Technical

Management Council, defines its purposes, and provides for appointments to the Council. Subsection (a) requires the Secretary of

Transportation to arrange with the National Academy of Sciences

for the establishment and management of the Pipeline Integrity

Technical Advisory Committee and to prepare, along with the Committee, in coordination with the Secretary of Energy, and submit

to Congress a five-year research and development program plan.

Subsection (b) directs the National Academy of Sciences to appoint members to the Pipeline Integrity Technical Advisory Committee after consultation with the Secretaries of Transportation

and Energy. It further provides that the Committee’s membership

shall include at least one member of the Federal Energy Regulatory Commission.

Section 803. Authorization of appropriations

Section 803 authorizes the appropriation of funds in fiscal years

2002 through 2006 to carry out the purposes of the subtitle. Subsection (a) authorizes the appropriation of $3,000,000 annually to

the Secretary of Transportation to be derived from the collection of

pipeline safety user fees. Subsection (b) authorizes the appropriation of an additional $3,000,000 per year to the Secretary of Transportation from the Oil Spill Liability Trust Fund for activities related to detection, prevention and mitigation of oil spills. Subsection (c) authorizes the Secretary of Energy to expend such sums

as may be necessary and specifies that the funding be derived from

general revenues.

SUBTITLE B—OTHER PIPELINE PROVISIONS

Section 811. Prohibition on certain pipeline route

Section 811 will expedite construction of a natural gas pipeline

from Prudhoe Bay, Alaska, to markets in the United States by prohibiting the Federal Energy Regulatory Commission (FERC) and

other federal agencies from considering further a northern alternative to the route designated by the President pursuant to the

Alaska Natural Gas Transportation Act of 1976 (ANGTA). By removing from consideration this northern route, the Committee expects stakeholders to focus their efforts on completing expeditiously

the project authorized under ANGTA and related legislation.

Section 812. Historic pipelines

Section 812 amends the Natural Gas Act to provide that a natural gas pipelines facility regulated by the Federal Energy Regulatory Commission (FERC) is not eligible for inclusion on the National Register of Historic Places until the Commission has certified the abandonment of the facility pursuant to Section 7 of the

Act. The language adopted by the Committee nullifies the eligibility of transportation facilities regulated by FERC as of the date

of enactment, regardless of whether the facility previously qualified

as eligible for inclusion on the Register.
91

Title IX—Miscellaneous Provisions

Section 901. Waste reduction and use of alternatives

Section 901 authorizes the Secretary of Energy to make a single grant of $275,000 to examine and develop the feasibility of burning

post-consumer carpet in cement kilns as an alternative energy

source. Section 901 establishes that 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; and (3) how this process provides

benefits to both cement operations and carpet suppliers. Section

901 also requires that the grant is to be made to a research-intensive institution of higher learning with demonstrated expertise in

the fields of fiber recycling and logistical modeling of carpet waste

collection and preparation.

Section 902. Annual report on United States energy independence

Section 902 of the bill directs the Secretary of Energy, in consultation with the heads of other relevant Federal agencies, to include in each biannual report, required under section 801 of the

Department of Energy Organization Act, an evaluation of the

progress of the United States has made towards a goal of not more

than 50 percent dependence on foreign oil sources by 2010. The

evaluation must identify legislative and administrative actions

needed to implement the goal, as well as certain information on options for meeting the goal, including greater use of renewable energy, increased conservation, and increased domestic production

and use of oil, natural gas, nuclear, and coal.

Section 903. Study of aircraft emissions

Section 903 directs the Administrator of the Environmental Protection Agency, in consultation with the Secretary of Transportation, to commence a study to investigate the impact of aircraft

emissions at all airports located within areas that are in nonattainment for the national ambient air quality standard for ozone. Such

areas include large metropolitan areas, including New York City.

Section 903 requires that, within 180 days after enactment of the

section, the Administrator shall submit a report to the Committee

on Energy and Commerce and the Senate Committee on Energy

and Natural Resources containing the results of the study and recommendations with respect to a plan to maintain comprehensive

data on aircraft emissions and methods by which such emissions

may be reduced in order to assist in the attainment of the national

air quality standard for ozone.

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):

ATOMIC ENERGY ACT OF 1954

* * * * * * *
92

TITLE I—ATOMIC ENERGY

* * * * * * *

CHAPTER 10. ATOMIC ENERGY LICENSES

* * * * * * *

SEC. 103. COMMERCIAL LICENSES.— a. * * *

* * * * * * *

øc. Each such¿ c. LICENSE PERIOD.— (1) IN GENERAL.—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, and may be renewed upon the expiration of such period.

(2) COMBINED LICENSES.—In the case of a combined construction and operating license issued under section 185 b., the initial duration of the license may not exceed 40 years from the

date on which the Commission finds, before operation of the facility, that the acceptance criteria required by section 185 b. are

met.

* * * * * * *

CHAPTER 14. GENERAL AUTHORITY

SEC. 161. GENERAL PROVISIONS.—In the performance of its functions the Commission is authorized to—

a. * * *

* * * * * * *

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¿.

* * * * * * *

ACT OF JULY 21, 1998

(Public Law 105–204)

AN ACT To require the Secretary of Energy to submit to Congress a plan to ensure

that all amounts accrued on the books of the United States Enrichment Corporation for the disposition of depleted uranium hexafluoride will be used to treat and

recycle depleted uranium hexafluoride.

SECTION 1. UNITED STATES ENRICHMENT CORPORATION.

(a) * * *

(b) LIMITATION.—Notwithstanding the privatization of the United

States Enrichment Corporation and notwithstanding any other provision of law (including the repeal of chapters 22 through 26 of the
93

Atomic Energy Act of 1954 (42 U.S.C. 2297 et seq.) made by section

3116(a)(1) of the United States Enrichment Corporation Privatization Act (104 Stat. 1321–349), no amounts described in subsection

(a) shall be withdrawn from the United States Enrichment Corporation Fund established by section 1308 of the Atomic Energy

Act of 1954 (42 U.S.C. 2297b–7) or the Working Capital Account established under section 1316 of the Atomic Energy Act of 1954 (42

U.S.C. 2297b–15) until the date that is 1 year after the date on

which the President submits to Congress the budget request for fiscal year ø2002¿ 2005.

* * * * * * *

SECTION 3112 OF THE USEC PRIVATIZATION ACT

SEC. 3112. URANIUM TRANSFERS AND SALES.

(a) * * *

* * * * * * *

(g) PROHIBITION ON SALES.—Notwithstanding any other provision

of law, the United States Government shall not sell or transfer any

uranium (including natural uranium concentrates, natural uranium hexafluoride, enriched uranium, depleted uranium, or uranium in any other form) through March 23, 2009 (except sales or

transfers for use by the Tennessee Valley Authority in relation to the

Department of Energy’s HEU or Tritium programs, or the Department or Energy research reactor sales program, or any depleted uranium hexaflouride to be transferred to a designated Department of

Energy contractor in conjunction with the planned construction of

the Depleted Uranium Hexaflouride conversion plants in Portsmouth, Ohio, and Paducah, Kentucky, or for emergency purposes in

the event of a disruption in supply to end users in the United

States). The aggregate of sales or transfers of uranium by the

United States Government after March 23, 2009, shall not exceed

3,000,000 pounds U3O8 per calendar year.

* * * * * * *

FEDERAL POWER ACT

* * * * * * *

SEC. 4. The Commission is hereby authorized and empowered—

(a) * * *

* * * * * * *

(h)(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 deems a condition to such license to be necessary under the

first proviso of subsection (e), the license applicant or any other

party to the licensing proceeding may propose an alternative condition.

(2) Notwithstanding the first proviso of subsection (e), the Secretary of the department under whose supervision the reservation

falls shall accept the proposed alternative condition referred to in

paragraph (1), and the Commission shall include in the license such
94

alternative condition, if the Secretary of the appropriate department

determines, based on substantial evidence provided by the party

proposing such alternative condition, that the alternative

condition—

(A) provides no less protection for the reservation than provided by the condition deemed necessary 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 condition deemed necessary by the Secretary.

(3) Within one year after the enactment of this subsection, each

Secretary concerned shall, by rule, establish a process to expeditiously resolve conflicts arising under this subsection.

* * * * * * *

SEC. 18. (a) 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

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.

(b)(1) Whenever the Commission shall require a licensee to construct, maintain, or operate a fishway prescribed by the Secretary

of the Interior or the Secretary of Commerce under this section, the

licensee or any other party to the proceeding may propose an alternative to such prescription to construct, maintain, or operate a

fishway.

(2) Notwithstanding subsection (a), 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

party proposing such alternative, that the alternative—

(A) will be no less effective 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 prescribed by the Secretary.

(3) Within one year after the enactment of this subsection, the Secretary of the Interior and the Secretary of Commerce shall each, by
95

rule, establish a process to expeditiously resolve conflicts arising

under this subsection.

* * * * * * *

INTERNAL REVENUE CODE OF 1986

Subtitle A—Income Taxes

* * * * * * *

CHAPTER 1—NORMAL TAXES AND SURTAXES

* * * * * * *

Subchapter A—Determination of Tax Liability

* * * * * * *

PART IV—CREDITS AGAINST TAX

* * * * * * *

Subpart D—Business Related Credits

Sec. 38. General business credit.

* * * * * * *

Sec. 45G. Credit for production from a qualifying clean coal technology unit.

Sec. 45H. Credit for production from qualifying advanced clean

coal technology.

* * * * * * *

SEC. 38. GENERAL BUSINESS CREDIT.

(a) * * *

(b) CURRENT YEAR BUSINESS CREDIT.—For purposes of this subpart, the amount of the current year business credit is the sum of

the following credits determined for the taxable year:

(1) * * *

* * * * * * *

(14) in the case of an eligible employer (as defined in section

45E(c)), the small employer pension plan startup cost credit determined under section 45E(a), øplus¿

(15) the employer-provided child care credit determined

under section 45Fø.¿,

(16) the qualifying clean coal technology production credit determined under section 45G(a), plus

(17) the qualifying advanced clean coal technology production

credit determined under section 45H(a).

* * * * * * *

SEC. 39. CARRYBACK AND CARRYFORWARD OF UNUSED CREDITS.

(a) * * *

* * * * * * *

(d) TRANSITIONAL RULES.—
96

(1) * * *

* * * * * * *

(11) NO CARRYBACK OF SECTION 48A CREDIT BEFORE EFFECTIVE DATE.—No portion of the unused business credit for any

taxable year which is attributable to the qualifying clean coal

technology unit credit determined under section 48A may be

carried back to a taxable year ending before the date of enactment of section 48A.

(12) NO CARRYBACK OF SECTION 45G CREDIT BEFORE EFFECTIVE DATE.—No portion of the unused business credit for any

taxable year which is attributable to the qualifying clean coal

technology production credit determined under section 45G may

be carried back to a taxable year ending before the date of enactment of section 45G.

(13) NO CARRYBACK OF SECTION 48B CREDIT BEFORE EFFECTIVE DATE.—No portion of the unused business credit for any

taxable year which is attributable to the qualifying advanced

clean coal technology facility credit determined under section

48B may be carried back to a taxable year ending before the

date of enactment of section 48B.

(14) NO CARRYBACK OF SECTION 45H CREDIT BEFORE EFFECTIVE DATE.—No portion of the unused business credit for any

taxable year which is attributable to the qualifying advanced

clean coal technology production credit determined under section 45H may be carried back to a taxable year ending before

the date of enactment of section 45H.

* * * * * * *

SEC. 45G. CREDIT FOR PRODUCTION FROM A QUALIFYING CLEAN

COAL TECHNOLOGY UNIT.

(a) GENERAL RULE.—For purposes of section 38, the qualifying

clean coal technology production credit of any taxpayer for any taxable year is equal to the product of—

(1) the applicable amount of clean coal technology production

credit, multiplied by

(2) the kilowatt hours of electricity produced by the taxpayer

during such taxable year at a qualifying clean coal technology

unit during the 10-year period beginning on the date the unit

was returned to service after retrofit, repowering, or replacement.

(b) APPLICABLE AMOUNT.—

(1) IN GENERAL.—For purposes of this section, the applicable

amount of clean coal technology production credit is equal to

$0.0034.

(2) INFLATION ADJUSTMENT FACTOR.—For calendar years

after 2001, the applicable amount of clean coal technology production credit shall be adjusted by multiplying such amount by

the inflation adjustment factor for the calendar year in which

the amount is applied. If any amount as increased under the

preceding sentence is not a multiple of 0.01 cent, such amount

shall be rounded to the nearest multiple of 0.01 cent.

(c) DEFINITIONS AND SPECIAL RULES.—For purposes of this

section—
97

(1) QUALIFYING CLEAN COAL TECHNOLOGY UNIT.—The term

‘‘qualifying clean coal technology unit’’ means a unit of the taxpayer which—

(A) is an existing coal-based electricity generating steam

generator-turbine unit,

(B) has a nameplate capacity rating of not more than

300,000 kilowatts, and

(C) has been retrofitted, repowered, or replaced with a

clean coal technology within 10 years after the effective date

of this section.

(2) CLEAN COAL TECHNOLOGY.—The term ‘‘clean coal technology’’ means technology which—

(A) uses coal to produce 50 percent or more of its thermal

output as electricity, including advanced pulverized coal or

atmospheric fluidized bed combustion, pressurized fluidized

bed combustion, integrated gasification combined cycle, or

any other technology for the production of electricity,

(B) has a design heat rate not less than 500 Btu/kWh

below that of the existing unit before it is retrofit, repowered, or replaced with the qualifying clean coal technology,

(C) has a maximum design heat rate of not more than

9,500 Btu/kWh when the design coal has a heat content of

more than 9,000 Btu per pound,

(D) has a maximum design heat rate of not more than

10,500 Btu/kWh when the design coal has a heat content

of 9,000 Btu per pound or less, and

(E) reduces the discharge into the atmosphere of 1 or

more of the following pollutants to not more than—

(i) 5 percent of the potential combustion concentration sulfur dioxide emissions for a coal with a potential

combustion concentration sulfur emission of 1.2 lb/

million btu of heat input or greater,

(ii) 15 percent of the potential combustion concentration sulfur dioxide emissions for a coal with a potential

combustion concentration sulfur emission of less than

1.2 lb/million Btu of heat input,

(iii) nitrogen oxide emissions of 0.1 lb per million

Btu of heat input from other than cyclone-fired boilers,

(iv) 15 percent of the uncontrolled nitrogen oxide

emissions from cyclone-fired boilers,

(v) particulate emissions of 0.02 lb per million Btu of

heat input, and

(vi) the emission levels specified in the new source

performance standards of the Clean Air Act (42 U.S.C.

7411) in effect at the time of construction, installation

or retrofitting of the qualifying clean coal technology

unit for the category of source if such level is lower

than the levels specified in clause (i), (ii), (iii), (iv), or

(v).

(3) APPLICATION OF CERTAIN RULES.—The rules of paragraphs (3), (4), and (5) of section 45 shall apply.

(4) INFLATION ADJUSTMENT FACTOR.—The term ‘‘inflation adjustment factor’’ means, with respect to a calendar year, a fraction the numerator of which is the GDP implicit price deflator
98

for the preceding calendar year and the denominator of which

is the GDP implicit price deflator for the calendar year 2001.

(5) GDP IMPLICIT PRICE DEFLATOR.—The term ‘‘GDP implicit

price deflator’’ means the most recent revision of the implicit

price deflator for the gross domestic product as computed by the

Department of Commerce before March 15 of the calendar year.

(d) COORDINATION WITH OTHER CREDITS.—This section shall not

apply to any property with respect to which the qualifying clean coal

technology unit credit under section 48A is allowed unless the taxpayer elects to waive the application of such credit to such property.

SEC. 45H. CREDIT FOR PRODUCTION FROM QUALIFYING ADVANCED

CLEAN COAL TECHNOLOGY.

(a) GENERAL RULE.—For purposes of section 38, the qualifying

advanced clean coal technology production credit of any taxpayer

for any taxable year is equal to—

(1) the applicable amount of advanced clean coal technology

production credit, multiplied by

(2) the sum of—

(A) the kilowatt hours of electricity, plus

(B) each 3,413 Btu of fuels or chemicals,

produced by the taxpayer during such taxable year at a qualifying advanced clean coal technology facility during the 10-year

period beginning on the date the facility was originally placed

in service.

(b) APPLICABLE AMOUNT.—For purposes of this section, the applicable amount of advanced clean coal technology production credit

with respect to production from a qualifying advanced clean coal

technology facility shall be determined as follows:

(1) Where the design coal has a heat content of more than

9,000 Btu per pound:

(A) In the case of a facility originally placed in service before 2009, if—

The facility design net heat rate, Btu/kWh

(HHV) is equal to:

The applicable amount is:

For 1st 5 years

of such service

For 2d 5 years

of such service

Not more than 8,400 ............................................. $.0060 $.0038

More than 8,400 but not more than 8,550 .......... $.0025 $.0010

More than 8,550 but not more than 8,750 .......... $.0010 $.0010.

(B) In the case of a facility originally placed in service

after 2008 and before 2013, if—

The facility design net heat rate, Btu/kWh

(HHV) is equal to:

The applicable amount is:

For 1st 5 years

of such service

For 2d 5 years

of such service

Not more than 7,770 ............................................. $.0105 $.0090

More than 7,770 but not more than 8,125 .......... $.0085 $.0068

More than 8,125 but not more than 8,350 .......... $.0075 $.0055.

(C) In the case of a facility originally placed in service

after 2012 and before 2017, if—
99

The facility design net heat rate, Btu/kWh

(HHV) is equal to:

The applicable amount is:

For 1st 5 years

of such service

For 2d 5 years

of such service

Not more than 7,380 ............................................. $.0140 $.01

More than 7,380 but not more than 7,720 .......... $.0120 $.0090.

(2) Where the design coal has a heat content of not more than

9,000 Btu per pound:

(A) In the case of a facility originally placed in service before 2009, if—

The facility design net heat rate, Btu/kWh

(HHV) is equal to:

The applicable amount is:

For 1st 5 years

of such service

For 2d 5 years

of such service

Not more than 8,500 ............................................. $.0060 $.0038

More than 8,500 but not more than 8,650 .......... $.0025 $.0010

More than 8,650 but not more than 8,750 .......... $.0010 $.0010.

(B) In the case of a facility originally placed in service

after 2008 and before 2013, if—

The facility design net heat rate, Btu/kWh

(HHV) is equal to:

The applicable amount is:

For 1st 5 years

of such service

For 2d 5 years

of such service

Not more than 8,000 ............................................. $.0105 $.009

More than 8,000 but not more than 8,250 .......... $.0085 $.0068

More than 8,250 but not more than 8,400 .......... $.0075 $.0055.

(C) In the case of a facility originally placed in service

after 2012 and before 2017, if—

The facility design net heat rate, Btu/kWh

(HHV) is equal to:

The applicable amount is:

For 1st 5 years

of such service

For 2d 5 years

of such service

Not more than 7,800 ............................................. $.0140 $.0115

More than 7,800 but not more than 7,950 .......... $.0120 $.0090.

(3) Where the clean coal technology facility is producing fuel

or chemicals:

(A) In the case of a facility originally placed in service before 2009, if—

The facility design net thermal efficiency (HHV)

is equal to:

The applicable amount is:

For 1st 5 years

of such service

For 2d 5 years

of such service

Not less than 40.6 percent .................................... $.0060 $.0038

Less than 40.6 but not less than 40 percent ........ $.0025 $.0010

Less than 40 but not less than 39 percent ........... $.0010 $.0010.
100

(B) In the case of a facility originally placed in service

after 2008 and before 2013, if—

The facility design net thermal efficiency (HHV)

is equal to:

The applicable amount is:

For 1st 5 years

of such service

For 2d 5 years

of such service

Not less than 43.9 percent .................................... $.0105 $.009

Less than 43.9 but not less than 42 percent ........ $.0085 $.0068

Less than 42 but not less than 40.9 percent ........ $.0075 $.0055.

(C) In the case of a facility originally placed in service

after 2012 and before 2017, if—

The facility design net thermal efficiency (HHV)

is equal to:

The applicable amount is:

For 1st 5 years

of such service

For 2d 5 years

of such service

Not less than 44.2 percent .................................... $.0140 $.0115

Less than 44.2 but not less than 43.6 percent ..... $.0120 $.0090.

(c) INFLATION ADJUSTMENT FACTOR.—For calendar years after

2001, each amount in paragraphs (1), (2), and (3) shall be adjusted

by multiplying such amount by the inflation adjustment factor for

the calendar year in which the amount is applied. If any amount

as increased under the preceding sentence is not a multiple of 0.01

cent, such amount shall be rounded to the nearest multiple of 0.01

cent.

(d) DEFINITIONS AND SPECIAL RULES.—For purposes of this

section—

(1) IN GENERAL.—Any term used in this section which is also

used in section 48B shall have the meaning given such term in

section 48B.

(2) APPLICABLE RULES.—The rules of paragraphs (3), (4), and

(5) of section 45 shall apply.

(3) INFLATION ADJUSTMENT FACTOR.—The term ‘‘inflation adjustment factor’’ means, with respect to a calendar year, a fraction the numerator of which is the GDP implicit price deflator

for the preceding calendar year and the denominator of which

is the GDP implicit price deflator for the calendar year 2001.

(4) GDP IMPLICIT PRICE DEFLATOR.—The term ‘‘GDP implicit

price deflator’’ means the most recent revision of the implicit

price deflator for the gross domestic product as computed by the

Department of Commerce before March 15 of the calendar year.

* * * * * * *

Subpart E—Rules for Computing Work Investment Credit

Sec. 46. Amount of credit.

* * * * * * *

Sec. 48A. Qualifying clean coal technology unit credit.

Sec. 48B. Qualifying advanced clean coal technology facility credit.

* * * * * * *
101

SEC. 46. AMOUNT OF CREDIT.

For purposes of section 38, the amount of the investment credit

determined under this section for any taxable year shall be the

sum of—

(1) the rehabilitation credit,

(2) the energy credit, øand¿

(3)the reforestation creditø.¿,

(4) the qualifying clean coal technology unit credit, and

(5) the qualifying advanced clean coal technology facility

credit.

* * * * * * *

SEC. 48A. QUALIFYING CLEAN COAL TECHNOLOGY UNIT CREDIT.

(a) IN GENERAL.—For purposes of section 46, the qualifying clean

coal technology unit credit for any taxable year is an amount equal

to 10 percent of the qualified investment in a qualifying system of

continuous emission control for such taxable year.

(b) QUALIFYING SYSTEM OF CONTINUOUS EMISSION CONTROL.—

(1) IN GENERAL.—For purposes of subsection (a), the term

‘‘qualifying system of continuous emission control’’ means a system of the taxpayer which—

(A) serves, is added to, or retrofits an existing coal-based

electricity generation unit, the construction, installation, or

retrofitting of which is completed by the taxpayer (but only

with respect to that portion of the basis which is properly

attributable to such construction, installation, or retrofitting),

(B) reduces the discharge into the atmosphere of 1 or

more of the following pollutants to not more than—

(i) 5 percent of the potential combustion concentration sulfur dioxide emissions for a coal with a potential

combustion concentration sulfur emission of 1.2 lb/

million btu of heat input or greater,

(ii) 15 percent of the potential combustion concentration sulfur dioxide emissions for a coal with a potential

combustion concentration sulfur emission of less than

1.2 lb/million Btu of heat input,

(iii) nitrogen oxide emissions of 0.l lb per million Btu

of heat input from other than cyclone-fired boilers,

(iv) 15 percent of the uncontrolled nitrogen oxide

emissions from cyclone-fired boilers,

(v) particulate emission of 0.02 lb per million Btu of

heat input, and

(vi) the emission levels specified in the new source

performance standards of the Clean Air Act (42 U.S.C.

7411) in force at the time of construction, installation

or retrofitting of the qualifying system of continuous

emission control for the category of source if such level

is lower than the levels specified in clause (i), (ii), (iii),

(iv), or (v),

(C) is depreciable under section 167,

(D) has a useful life of not less than 4 years, and

(E) is located in the United States.
102

(2) SPECIAL RULE FOR SALE-LEASEBACKS.—For purposes of

subparagraph (A) of paragraph (1), in the case of a unit

which—

(A) is originally placed in service by a person, and

(B) is sold and leased back by such person, or is leased

to such person, within 3 months after the date such unit

was originally placed in service, for a period of not less

than 12 years,

such unit shall be treated as originally placed in service not

earlier than the date on which such property is used under the

leaseback (or lease) referred to in subparagraph (B). The preceding sentence shall not apply to any property if the lessee and

lessor of such property make an election under this sentence.

Such an election, once made, may be revoked only with the consent of the Secretary.

(c) EXISTING COAL-BASED ELECTRICITY GENERATION UNIT.—For

purposes of subsection (a), the term ‘‘existing coal-based electricity

generating unit’’ means, with respect to any taxable year, a steam

generator-turbine unit which uses coal to produce 75 percent or

more of its output as electricity and was operated commercially before the effective date of this section.

(d) LIMIT ON QUALIFYING CLEAN COAL TECHNOLOGY UNIT CRED- IT.—For purposes of subsection (a), the credit shall be applicable to not more than the first $100,000,000 of qualifying investment in a

qualifying system of continuous emission control at any 1 existing

coal-based electricity generating unit.

(e) QUALIFIED INVESTMENT.—For purposes of subsection (a), the

term ‘‘qualified investment’’ means, with respect to any taxable year,

the basis of a qualifying system of continuous emission control

placed in service by the taxpayer during such taxable year.

(f) QUALIFIED PROGRESS EXPENDITURES.— (1) INCREASE IN QUALIFIED INVESTMENT.—In the case of a

taxpayer who has made an election under paragraph (5), the

amount of the qualified investment of such taxpayer for the taxable year (determined under subsection (e) without regard to

this subsection) shall be increased by an amount equal to the

aggregate of each qualified progress expenditure for the taxable

year with respect to progress expenditure property.

(2) PROGRESS EXPENDITURE PROPERTY DEFINED.—For purposes of this subsection, the term ‘‘progress expenditure property’’ means any property being constructed by or for the taxpayer and which it is reasonable to believe will qualify as a

qualifying system of continuous emission control which is being

constructed by or for the taxpayer when it is placed in service.

(3) QUALIFIED PROGRESS EXPENDITURES DEFINED.—For purposes of this subsection—

(A) SELF-CONSTRUCTED PROPERTY.—In the case of any

self-constructed property, the term ‘‘qualified progress expenditures’’ means the amount which, for purposes of this

subpart, is properly chargeable (during such taxable year)

to capital account with respect to such property.

(B) NONSELF-CONSTRUCTED PROPERTY.—In the case of

nonself-constructed property, the term ‘‘qualified progress

expenditures’’ means the amount paid during the taxable

year to another person for the construction of such property.
103

(4) OTHER DEFINITIONS.—For purposes of this subsection—

(A) SELF-CONSTRUCTED PROPERTY.—The term ‘‘self-constructed property’’ means property for which it is reasonable to believe that more than half of the construction expenditures will be made directly by the taxpayer.

(B) NONSELF-CONSTRUCTED PROPERTY.—The term

‘‘nonself-constructed property’’ means property which is not

self-constructed property.

(C) CONSTRUCTION, ETC.—The term ‘‘construction’’ includes reconstruction and erection, and the term ‘‘constructed’’ includes reconstructed and erected.

(D) ONLY CONSTRUCTION OF QUALIFYING SYSTEM OF CONTINUOUS EMISSION CONTROL TO BE TAKEN INTO ACCOUNT.—

Construction shall be taken into account only if, for purposes of this subpart, expenditures therefor are properly

chargeable to capital account with respect to the property.

(5) ELECTION.—An election under this subsection may be

made at such time and in such manner as the Secretary may

by regulations prescribe. Such an election shall apply to the taxable year for which made and to all subsequent taxable years.

Such an election, once made, may not be revoked except with

the consent of the Secretary.

(g) COORDINATION WITH OTHER CREDITS.—This section shall not

apply to any property with respect to which the rehabilitation credit

under section 47 or the energy credit under section 48 is allowed unless the taxpayer elects to waive the application of such credit to

such property.

(h) TERMINATION.—This section shall not apply with respect to

any qualified investment made more than 10 years after the effective

date of this section.

SEC. 48B. QUALIFYING ADVANCED CLEAN COAL TECHNOLOGY FACILITY CREDIT.

(a) IN GENERAL.—For purposes of section 46, the qualifying advanced clean coal technology facility credit for any taxable year is

an amount equal to 10 percent of the qualified investment in a

qualifying advanced clean coal technology facility for such taxable

year.

(b) QUALIFYING ADVANCED CLEAN COAL TECHNOLOGY FACILITY.—

(1) IN GENERAL.—For purposes of subsection (a), the term

‘‘qualifying advanced clean coal technology facility’’ means a facility of the taxpayer which—

(A)(i)(I) original use of which commences with the taxpayer, or

(II) is a retrofitted or repowered conventional technology

facility, the retrofitting or repowering of which is completed

by the taxpayer (but only with respect to that portion of the

basis which is properly attributable to such retrofitting or

repowering), or

(ii) is acquired through purchase (as defined by section

179(d)(2)),

(B) is depreciable under section 167,

(C) has a useful life of not less than 4 years,

(D) is located in the United States, and

(E) uses qualifying advanced clean coal technology.
104

(2) SPECIAL RULE FOR SALE-LEASEBACKS.—For purposes of

subparagraph (A) of paragraph (1), in the case of a facility

which—

(A) is originally placed in service by a person, and

(B) is sold and leased back by such person, or is leased

to such person, within 3 months after the date such facility

was originally placed in service, for a period of not less

than 12 years,

such facility shall be treated as originally placed in service not

earlier than the date on which such property is used under the

leaseback (or lease) referred to in subparagraph (B). The preceding sentence shall not apply to any property if the lessee and

lessor of such property make an election under this sentence.

Such an election, once made, may be revoked only with the consent of the Secretary.

(c) QUALIFYING ADVANCED CLEAN COAL TECHNOLOGY.—For purposes of paragraph (1)— (1) IN GENERAL.—The term ‘‘qualifying advanced clean coal

technology’’ means, with respect to clean coal technology— (A) which has— (i) multiple applications, with a combined capacity of

not more than 5,000 megawatts (4,000 megawatts before 2009), of advanced pulverized coal or atmospheric

fluidized bed combustion technology— (I) installed as a new, retrofit, or repowering application,

(II) operated between 2000 and 2012, and

(III) having a design net heat rate of not more

than 9,500 Btu per kilowatt hour when the design

coal has a heat content of more than 9,000 Btu per

pound, or a design net heat rate of not more than

9,900 Btu per kilowatt hour when the design coal

has a heat content of 9,000 Btu per pound or less,

(ii) multiple applications, with a combined capacity

of not more than 1,000 megawatts (500 megawatts before 2009 and 750 megawatts before 2013), of pressurized fluidized bed combustion technology—

(I) installed as a new, retrofit, or repowering application,

(II) operated between 2000 and 2016, and

(III) having a design net heat rate of not more

than 8,400 Btu per kilowatt hour when the design

coal has a heat content of more than 9,000 Btu per

pound, or a design net heat rate of not more than

9,900 Btu’s per kilowatt hour when the design coal

has a heat content of 9,000 Btu per pound or less,

and

(iii) multiple applications, with a combined capacity

of not more than 2,000 megawatts (1,000 megawatts

before 2009 and 1,500 megawatts before 2013), of integrated gasification combined cycle technology, with or

without fuel or chemical co-production—

(I) installed as a new, retrofit, or repowering application,

(II) operated between 2000 and 2016,
105

(III) having a design net heat rate of not more

than 8,550 Btu per kilowatt hour when the design

coal has a heat content of more than 9,000 Btu per

pound, or a design net heat rate of not more than

9,900 Btu per kilowatt hour when the design coal

has a heat content of 9,000 Btu per pound or less,

and

(IV) having a net thermal efficiency on any fuel

or chemical co-production of not less than 39 percent (higher heating value), or

(iv) multiple applications, with a combined capacity

of not more than 2,000 megawatts (1,000 megawatts

before 2009 and 1,500 megawatts before 2013) of technology for the production of electricity— (I) installed as a new, retrofit, or repowering application,

(II) operated between 2000 and 2016, and

(III) having a carbon emission rate which is not

more than 85 percent of conventional technology,

and

(B) which reduces the discharge into the atmosphere of 1

or more of the following pollutants to not more than— (i) 5 percent of the potential combustion concentration sulfur dioxide emissions for a coal with a potential

combustion concentration sulfur emission of 1.2 lb/

million btu of heat input or greater,

(ii) 15 percent of the potential combustion concentration sulfur dioxide emissions for a coal with a potential

combustion concentration sulfur emission of less than

1.2 lb/million Btu of heat input,

(iii) nitrogen oxide emissions of 0.1 lb per million

Btu of heat input from other than cyclone-fired boilers,

(iv) 15 percent of the uncontrolled nitrogen oxide

emissions from cyclone-fired boilers,

(v) particulate emissions of 0.02 lb per million Btu of

heat input, and

(vi) the emission levels specified in the new source

performance standards of the Clean Air Act (42 U.S.C.

7411) in effect at the time of retrofitting, repowering, or

replacement of the qualifying clean coal technology

unit for the category of source if such level is lower

than the levels specified in clause (i), (ii), (iii), (iv), or

(v).

(2) EXCEPTIONS.—Such term shall not include any projects

receiving or scheduled to receive funding under the Clean Coal

Technology Program, or the Power Plant Improvement administered by the Secretary of the Department of Energy or a Qualifying Clean Coal Technology Unit as defined in section

45G(c)(1).

(d) CLEAN COAL TECHNOLOGY.—The term ‘‘clean coal technology’’ means advanced technology which uses coal to produce 75 percent

or more of its thermal output as electricity including advanced pulverized coal or atmospheric fluidized bed combustion, pressurized

fluidized bed combustion, integrated gasification combined cycle

with or without fuel or chemical co-production, and any other tech-
106

nology for the production of electricity which exceeds the performance of conventional technology.

(e) CONVENTIONAL TECHNOLOGY.—The term ‘‘conventional technology’’ means— (1) coal-fired combustion technology with a design net heat

rate of not less than 9,500 Btu per kilowatt hour (HHV) and a

carbon equivalents emission rate of not more than 0.54 pounds

of carbon per kilowatt hour when the design coal has a heat

content of more than 9,000 Btu per pound,

(2) coal-fired combustion technology with a design net heat

rate of not less than 10,500 Btu per kilowatt hour (HHV) and

a carbon equivalents emission rate of not more than 0.60

pounds of carbon per kilowatt hour when the design coal has

a heat content of 9,000 Btu per pound or less, or

(3) natural gas-fired combustion technology with a design net

heat rate of not less than 7,500 Btu per kilowatt hour (HHV)

and a carbon equivalents emission rate of not more than 0.24

pounds of carbon per kilowatt hour.

(f) DESIGN NET HEAT RATE.—The design net heat rate shall be

based on the design annual heat input to and the design annual net

electrical output from the qualifying advanced clean coal technology

(determined without regard to such technology’s co-generation of

steam).

(g) SELECTION CRITERIA.—Selection criteria for qualifying advanced clean coal technology facilities— (1) shall be established by the Secretary of Energy as part of

a competitive solicitation,

(2) shall include primary criteria of minimum design net heat

rate, maximum design thermal efficiency, environmental performance, and lowest cost to the government, and

(3) shall include supplemental criteria as determined appropriate by the Secretary of Energy.

(h) QUALIFIED INVESTMENT.—For purposes of subsection (a), the

term ‘‘qualified investment’’ means, with respect to any taxable year,

the basis of a qualifying advanced clean coal technology facility

placed in service by the taxpayer during such taxable year.

(i) QUALIFIED PROGRESS EXPENDITURES.— (1) INCREASE IN QUALIFIED INVESTMENT.—In the case of a

taxpayer who has made an election under paragraph (5), the

amount of the qualified investment of such taxpayer for the taxable year (determined under subsection (c) without regard to

this section) shall be increased by an amount equal to the aggregate of each qualified progress expenditure for the taxable

year with respect to progress expenditure property.

(2) PROGRESS EXPENDITURE PROPERTY DEFINED.—For purposes of this subsection, the term ‘‘progress expenditure property’’ means any property being constructed by or for the taxpayer and which it is reasonable to believe will qualify as a

qualifying advanced clean coal technology facility which is

being constructed by or for the taxpayer when it is placed in

service.

(3) QUALIFIED PROGRESS EXPENDITURES DEFINED.—For purposes of this subsection— (A) SELF-CONSTRUCTED PROPERTY.—In the case of any

self-constructed property, the term ‘‘qualified progress ex-
107

penditures’’ means the amount which, for purposes of this

subpart, is properly chargeable (during such taxable year)

to capital account with respect to such property.

(B) NONSELF-CONSTRUCTED PROPERTY.—In the case of

nonself-constructed property, the term ‘‘qualified progress

expenditures’’ means the amount paid during the taxable

year to another person for the construction of such property.

(4) OTHER DEFINITIONS.—For purposes of this subsection— (A) SELF-CONSTRUCTED PROPERTY.—The term ‘‘self-constructed property’’ means property for which it is reasonable to believe that more than half of the construction expenditures will be made directly by the taxpayer.

(B) NONSELF-CONSTRUCTED PROPERTY.—The term ‘‘nonself-constructed property’’ means property which is not

self-constructed property.

(C) CONSTRUCTION, ETC..—The term ‘‘construction’’ includes reconstruction and erection, and the term ‘‘constructed’’ includes reconstructed and erected.

(D) ONLY CONSTRUCTION OF QUALIFYING ADVANCED

CLEAN COAL TECHNOLOGY FACILITY TO BE TAKEN INTO AC- COUNT.—Construction shall be taken into account only if,

for purposes of this subpart, expenditures therefor are properly chargeable to capital account with respect to the property.

(5) ELECTION.—An election under this subsection may be

made at such time and in such manner as the Secretary may

by regulations prescribe. Such an election shall apply to the taxable year for which made and to all subsequent taxable years.

Such an election, once made, may not be revoked except with

the consent of the Secretary.

(j) COORDINATION WITH OTHER CREDITS.—This section shall not

apply to any property with respect to which the rehabilitation credit

under section 47 or the energy credit under section 48 is allowed unless the taxpayer elects to waive the application of such credit to

such property.

(k) TERMINATION.—This section shall not apply with respect to

any qualified investment made more than 10 years after the effective

date of this section.

* * * * * * *

SEC. 49. AT-RISK RULES.

(a) GENERAL RULE.—

(1) CERTAIN NONRECOURSE FINANCING EXCLUDED FROM CREDIT BASE.—

(A) * * *

* * * * * * *

(C) CREDIT BASE DEFINED.—For purposes of this paragraph, the term ‘‘credit base’’ means—

(i) the portion of the basis of any qualified rehabilitated building attributable to qualified rehabilitation

expenditures,

(ii) the basis of any energy property, øand¿

(iii) the amortizable basis of any qualified timber

propertyø.¿,
108

(iv) the portion of the basis of any qualifying system

of continuous emission control attributable to any

qualified investment (as defined by section 48A(e)), and

(v) the portion of the basis of any qualifying advanced clean coal technology facility attributable to

any qualified investment (as defined by section 48B(c)).

* * * * * * *

SEC. 50. OTHER SPECIAL RULES.

(a) RECAPTURE IN CASE OF DISPOSITIONS, ETC. — (1) * * *

* * * * * * *

(4) SUBSECTION NOT TO APPLY IN CERTAIN CASES.—Paragraphs (1) øand (2)¿, (2), (6), and (7) shall not apply to— (A) * * *

* * * * * * *

(6) SPECIAL RULES RELATING TO QUALIFYING SYSTEM OF CON- TINUOUS EMISSION CONTROL.—For purposes of applying this

subsection in the case of any credit allowable by reason of section 48A, the following shall apply:

(A) GENERAL RULE.—In lieu of the amount of the increase

in tax under paragraph (1), the increase in tax shall be an

amount equal to the investment tax credit allowed under

section 38 for all prior taxable years with respect to a

qualifying system of continuous emission control (as defined by section 48A(b)(1)) multiplied by a fraction whose

numerator is the number of years remaining to fully depreciate under this title the qualifying system of continuous

emission control disposed of, and whose denominator is the

total number of years over which such unit would otherwise

have been subject to depreciation. For purposes of the preceding sentence, the year of disposition of the qualifying

system of continuous emission control property shall be

treated as a year of remaining depreciation.

(B) PROPERTY CEASES TO QUALIFY FOR PROGRESS EXPENDITURES.—Rules similar to the rules of paragraph (2)

shall apply in the case of qualified progress expenditures

for a qualifying system of continuous emission control

under section 48A, except that the amount of the increase

in tax under subparagraph (A) of this paragraph shall be

substituted in lieu of the amount described in such paragraph (2).

(C) APPLICATION OF PARAGRAPH.—This paragraph shall

be applied separately with respect to the credit allowed

under section 38 regarding a qualifying system of continuous emission control.

(7) SPECIAL RULES RELATING TO QUALIFYING ADVANCED

CLEAN COAL TECHNOLOGY FACILITY.—For purposes of applying

this subsection in the case of any credit allowable by reason of

section 48B, the following shall apply:

(A) GENERAL RULE.—In lieu of the amount of the increase

in tax under paragraph (1), the increase in tax shall be an

amount equal to the investment tax credit allowed under

section 38 for all prior taxable years with respect to a
109

qualifying advanced clean coal technology facility (as defined by section 48B(b)(1)) multiplied by a fraction whose

numerator is the number of years remaining to fully depreciate under this title the qualifying advanced clean coal

technology facility disposed of, and whose denominator is

the total number of years over which such facility would

otherwise have been subject to depreciation. For purposes of

the preceding sentence, the year of disposition of the qualifying advanced clean coal technology facility property shall

be treated as a year of remaining depreciation.

(B) PROPERTY CEASES TO QUALIFY FOR PROGRESS EX- PENDITURES.—Rules similar to the rules of paragraph (2)

shall apply in the case of qualified progress expenditures

for a qualifying advanced clean coal technology facility

under section 48B, except that the amount of the increase

in tax under subparagraph (A) of this paragraph shall be

substituted in lieu of the amount described in such paragraph (2).

(C) APPLICATION OF PARAGRAPH.—This paragraph shall

be applied separately with respect to the credit allowed

under section 38 regarding a qualifying advanced clean

coal technology facility.

(c) BASIS ADJUSTMENT TO INVESTMENT CREDIT PROPERTY.— (1) * * *

* * * * * * *

(6) NONAPPLICATION.—Paragraphs (1) and (2) shall not apply

to any qualifying clean coal technology unit credit under section

48A or any advanced clean coal technology facility credit under

section 48B.

* * * * * * *

Subtitle F—Procedure and Administration

* * * * * * *

CHAPTER 65—ABATEMENTS, CREDITS, AND REFUNDS

* * * * * * *

Subchapter A—Procedure in General

* * * * * * *

SEC. 6401. AMOUNTS TREATED AS OVERPAYMENTS.

(a) * * *

(b) EXCESSIVE CREDITS.—

(1) * * *

* * * * * * *

(3) CREDITS FOR CERTAIN ORGANIZATIONS AND GOVERNMENTAL UNITS.—

(A) ALLOWANCE OF CREDITS.—Any credit which would be

allowable under section 45G, 45H, 48A, or 48B with respect

to a facility of an entity whether or not such entity is exempt from tax, shall be treated as a credit allowable under
110

subpart C of part IV of subchapter A of chapter 1 of subtitle

A to such entity if such entity is— (i) an organization described in section 501(c)(12)(C)

and exempt from tax under section 501(a),

(ii) an organization described in section

1381(a)(2)(C),

(iii) a public utility (as defined in section

136(c)(2)(B)),

(iv) a State, the District of Columbia, or a possession

of the United States, or any political subdivision thereof, or

(v) the Tennessee Valley Authority.

(B) USE OF CREDIT.— (i) TRANSFER OF CREDIT.—An entity described in

clause (i), (ii), (iii), or (iv) of subparagraph (A) may assign, trade, sell, or otherwise transfer any credit allowable to such entity under subparagraph (A) to any

other person or entity.

(ii) USE OF CREDIT AS AN OFFSET.—Notwithstanding

any other provision of law, in the case of any entity described in clause (i) or (ii) of subparagraph (A), any

credit allowable to such entity under subparagraph (A)

may be applied by such entity, without penalty, as a

prepayment of any loan, debt or other obligation the

entity has made, incurred or guaranteed under the

Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.).

(iii) USE BY TVA.— (I) IN GENERAL.—Notwithstanding any other

provision of law, in the case of an entity described

in subparagraph (A)(v), any credit allowable under

subparagraph (A) to such entity may be applied as

a credit against the payments required to be made

in any fiscal year under section 15d(e) of the Tennessee Valley Authority Act of 1933 (16 U.S.C.

83ln–4(e)) as an annual return on the appropriations investment and an annual repayment sum.

(II) TREATMENT OF CREDITS.—The aggregate

amount of credits described in subparagraph (A)

shall be treated in the same manner and to the

same extent as if such credits were a payment in

cash and shall be applied first against the annual

return on the appropriations investment.

(III) CREDIT CARRYOVER.—With respect to any

fiscal year, if the aggregate amount of the credits

described in subparagraph (A) exceeds the aggregate amount of payment obligations described in

subclause (I), the excess amount shall remain

available for application as credits against the

amounts of such payment obligations in succeeding

fiscal years in the same manner as described in

this clause.

(C) CREDIT NOT INCOME.—Neither a transfer under

clause (i) nor a use under clause (ii) of subparagraph (B)

of any credit allowable under subparagraph (A) shall result

in income for purposes of section 501(c)(12).
111

(D) TRANSFER PROCEEDS TREATED AS ARISING FROM ES- SENTIAL GOVERNMENT FUNCTION.—Any proceeds derived by

an entity described in clause (iii) or (iv) of subparagraph

(A) from the transfer of any such credit under subparagraph (B)(I) shall be treated as arising from an essential

government function.

(E) TREATMENT OF UNRELATED PERSONS.—For purposes

of this title, sales among and between entities described in

clauses (i), (ii), (iii), and (iv) of subparagraph (A) shall be

treated as sales between unrelated parties.

* * * * * * *

SECTION 660 OF THE DEPARTMENT OF ENERGY

ORGANIZATION ACT

AUTHORIZATION OF APPROPRIATIONS

SEC. 660. (a) Appropriations to carry out the provisions of this

Act shall be subject to annual authorization.

(b) There are hereby authorized to be appropriated to the Depart- ment of Energy for fiscal year 2002, $950,000,000; for fiscal year

2003, $1,000,000,000; for fiscal year 2004, $1,050,000,000; for fiscal

year 2005, $1,100,000,000; and for fiscal year 2006, $1,150,000,000,

to carry out energy efficiency activities under the following laws,

such sums to remain available until expended:

(1) Energy Policy and Conservation Act, including section

256(d)(42 U.S.C. 6276(d)) (promote export of energy efficient

products), sections 321 through 346 (42 U.S.C. 6291–6317) (appliances program).

(2) Energy Conservation and Production Act, including sections 301 through 308 (42 U.S.C. 6831–6837) (energy conservation standards for new buildings).

(3) National Energy Conservation Policy Act, including sections 541–551 (42 U.S.C. 8251–8259) (Federal Energy Management Program).

(4) Energy Policy Act of 1992, including sections 103 (42

U.S.C. 13458) (energy efficient lighting and building centers),

121 (42 U.S.C. 6292 note) (energy efficiency labeling for windows and window systems), 125 (42 U.S.C. 6292 note) (energy

efficiency information for commercial office equipment), 126 (42

U.S.C. 6292 note) (energy efficiency information for luminaires),

131 (42 U.S.C. 6348) (energy efficiency in industrial facilities),

and 132 (42 U.S.C. 6349) (process-oriented industrial energy efficiency).

* * * * * * *

NATIONAL ENERGY CONSERVATION POLICY ACT

* * * * * * *

TITLE V—FEDERAL ENERGY INITIATIVE

* * * * * * *
112

PART 3—FEDERAL ENERGY MANAGEMENT

* * * * * * *

SEC. 542. PURPOSE.

It is the purpose of this part to promote the conservation and the

efficient use of energy and water, and the use of renewable energy

sources, by the Federal Government , and generally to promote the

production, supply, and marketing of energy efficiency products and

services and the production, supply, and marketing of unconventional and renewable energy resources.

SEC. 543. ENERGY MANAGEMENT REQUIREMENTS.

(a) ENERGY PERFORMANCE REQUIREMENT FOR FEDERAL BUILD- INGS.—ø(1) Subject to paragraph (2)¿ Subject to subsection (c), each

agency shall apply energy conservation measures to, and shall improve the design for the construction of, its Federal buildings so

that the energy consumption per gross square foot of its Federal

buildings in use øduring 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.¿ during— (1) fiscal year 1995 is at least 10 percent;

(2) fiscal year 2000 is at least 20 percent;

(3) fiscal year 2005 is at least 30 percent;

(4) fiscal year 2010 is at least 35 percent;

(5) fiscal year 2015 is at least 40 percent; and

(6) fiscal year 2020 is at least 45 percent,

less than the energy consumption per gross square foot of its Federal

buildings in use during fiscal year 1985. To achieve the reductions

required by this paragraph, an agency shall make maximum practicable use of energy efficiency products and services and unconventional and renewable energy resources, using guidelines issued by

the Secretary under subsection (d) of this section.

ø(2) An agency may exclude from the requirements of paragraph

(1) any building, and the associated energy consumption and gross

square footage, in which energy intensive activities are carried out.

Each agency shall identify and list in each report made under section 548(a) the buildings designated by it for such exclusion.¿

(b) ENERGY MANAGEMENT REQUIREMENT FOR FEDERAL AGEN- CIES.—ø(1) Not¿ (1) Except as provided in paragraph (5), not later

than January 1, 2005, each agency shall, to the maximum extent

practicable, install in Federal buildings owned by the United States

all energy and water conservation measures with payback periods

of less than 10 years, as determined by using the methods and procedures developed pursuant to section 544.

* * * * * * *

(5)(A)(i) Agencies shall select only Energy Star products when

available when acquiring energy-using products. For product groups

where Energy Star labels are not yet available, agencies shall select

products that are in the upper 25 percent of energy efficiency as designated by FEMP. The Secretary of Energy shall develop guidelines

within 180 days after the enactment of this paragraph for exemp-
113

tions to this section when equivalent products do not exist, are impractical, or do not meet the agency mission requirements.

(ii) The Administrator of the General Services Administration and

the Secretary of Defense (acting through the Defense Logistics Agency), with assistance from the Administrator of the Environmental

Protection Agency and the Secretary of Energy, shall create clear

catalogue listings that designate Energy Star products in both print

and electronic formats. After any existing federal inventories are exhausted, Administrator of the General Services Administration and

the Secretary of Defense (acting through the Defense Logistics Agency) shall only replace inventories with energy-using products that

are Energy Star, products that are rated in the top 25 percent of energy efficiency, or products that are exempted as designated by

FEMP and defined in clause (i).

(iii) Agencies shall incorporate energy-efficient criteria consistent

with Energy Star and other FEMP designated energy efficiency levels into all guide specifications and project specifications developed

for new construction and renovation, as well as into product specification language developed for Basic Ordering Agreements, Blanket

Purchasing Agreements, Government Wide Acquisition Contracts,

and all other purchasing procedures.

(iv) The legislative branch shall be subject to this subparagraph

to the same extent and in the same manner as are the Federal agencies referred to in section 521(1).

(B) Not later than 6 months after the date of the enactment of this

paragraph, the Secretary of Energy shall establish guidelines defining the circumstances under which an agency shall not be required

to comply with subparagraph (A). Such circumstances may include

the absence of Energy Star products, systems, or designs that serve

the purpose of the agency, issues relating to the compatibility of a

product, system, or design with existing buildings or equipment,

and excessive cost compared to other available and appropriate

products, systems, or designs.

(C) Subparagraph (A) shall apply to agency acquisitions occurring on or after October 1, 2002.

ø(c) EXCLUSIONS.—(1) An agency may exclude, from the energy

consumption requirements for the year 2000 established under subsection (a) and the requirements of subsection (b)(1), any Federal

building or collection of Federal buildings, and the associated energy consumption and gross square footage, if the head of such

agency finds that compliance with such requirements would be impractical. A finding of impracticability shall be based on the energy

intensiveness of activities carried out in such Federal buildings or

collection of Federal buildings, the type and amount of energy consumed, the technical feasibility of making the desired changes, and,

in the cases of the Departments of Defense and Energy, the unique

character of certain facilities operated by such Departments.

ø(2) Each agency shall identify and list, in each report made

under section 548(a), the Federal buildings designated by it for

such exclusion. The Secretary shall review such findings for consistency with the impracticability standards set forth in paragraph

(1), and may within 90 days after receipt of the findings, reverse

a finding of impracticability. In the case of any such reversal, the

agency shall comply with the energy consumption requirements for

the building concerned.¿
114

(c) EXCLUSIONS.—(1) A Federal building may be excluded from

the requirements of subsections (a) and (b) only if— (A) the President declares the building to require exclusion for

national security reasons; and

(B) the agency responsible for the building has— (i) completed and submitted all federally required energy

management reports; and

(ii) achieved compliance with the energy efficiency requirements of this Act, the Energy Policy Act of Executive

Orders, and other Federal law;

(iii) implemented all practical, life cycle cost-effective

projects in the excluded building.

(2) The President shall only declare buildings described in paragraph (1)(A) to be excluded, not ancillary or nearby facilities that

are not in themselves national security facilities.

(d) IMPLEMENTATION STEPS.—The Secretary shall consult with

the Secretary of Defense and the Administrator of General Services

in developing guidelines for the implementation of this part. Such

guidelines shall include appropriate model technical standards for

energy efficiency and unconventional and renewable energy resources products and services. Such standards shall reflect, to the

extent practicable, evaluation of both currently marketed and potentially marketable products and services that could be used by agencies to improve energy efficiency and increase unconventional and

renewable energy resources. To meet the requirements of this section, each agency shall— (1) * * *

* * * * * * *

(e) STUDIES.—To assist in developing the guidelines issued by the

Secretary under subsection (d) and in furtherance of the purposes

of this section, the Secretary shall conduct studies to identify and

encourage the production and marketing of energy efficiency products and services and unconventional and renewable energy resources. To conduct such studies, there are authorized to be appropriated to the Secretary $20,000,000 for each of the fiscal years 2003

through 2010.

(f) METERING.—(1) By October 1, 2004, all Federal buildings including buildings owned by the legislative branch and the Federal

court system and other energy-using structures shall be metered or

submetered in accordance with guidelines established by the Secretary under paragraph (2).

(2) Not later than 6 months after the date of the enactment of this

subsection, the Secretary, in consultation with representatives from

the metering industry, energy services industry, national laboratories, colleges of higher education, and federal facilities energy

managers, shall establish guidelines for agencies to carry out paragraph (1). Such guidelines shall take into consideration each of the

following:

(A) Cost.

(B) Resources, including personnel, required to maintain, interpret, and report on data so that the meters are continually

reviewed.

(C) Energy management potential.

(D) Energy savings.

(E) Utility contract aggregation.
115

(F) Savings from operations and maintenance.

(3) Any building excluded under subsection (c) shall be individually metered or submetered as the Secretary determines necessary.

(g) PRIORITY RESPONSE REVIEWS.—Each agency shall— (1) not later than 9 months after the date of the enactment

of this subsection, undertake a comprehensive review of all

practicable measures for— (A) increasing energy and water conservation, and

(B) using renewable energy sources; and

(2) not later than 180 days after completing the review, implement measures to achieve not less than 50 percent of the potential efficiency and renewable savings identified in the review.

(h) USE OF INTERVAL DATA IN FEDERAL BUILDINGS.—Not later

than January 1, 2003, each agency shall utilize, to the maximum

extent practicable, for the purposes of efficient use of energy and reduction in the cost of electricity consumed in its Federal buildings,

interval consumption data that measure on a real time or daily

basis consumption of electricity in its Federal buildings. To meet the

requirements of this subsection each agency shall prepare and submit at the earliest opportunity pursuant to section 548(a) to the Secretary, a plan describing how the agency intends to meet such requirements, including how it will designate personnel primarily responsible for achieving such requirements, and otherwise implement

this subsection.

* * * * * * *

SEC. 546. INCENTIVES FOR AGENCIES.

(a) * * *

* * * * * * *

(c) UTILITY INCENTIVE PROGRAMS.—(1) * * *

* * * * * * *

(3) Each agency is encouraged to enter into negotiations with

electric, water, and gas utilities to design cost-effective demand

management and conservation incentive programs to address the

unique needs of facilities utilized by such agency. Such a utility incentive program may include a contract or contract term designed

to provide for cost-effective electricity demand management, energy

efficiency, or water conservation.

* * * * * * *

(6) A utility incentive program may include a contract or contract

term for a reduction in the energy, from a base cost established

through a methodology set forth in such a contract, that would otherwise be utilized in one or more federally owned buildings or other

federally owned facilities by reason of the construction or operation

of one or more replacement buildings or facilities, as well as benefits

ancillary to the purpose of such contract or contract term, including

savings resulting from reduced costs of operation and maintenance

at new or additional buildings or facilities when compared with the

costs of operation and maintenance at existing buildings or facilities.

(7) Federal agencies are encouraged to participate in State or regional demand side reduction programs, including those operated

by wholesale market institutions such as independent system operators, regional transmission organizations and other entities. The
116

availability of such programs, and the savings resulting from such

participation, should be included in the evaluation of energy options

for Federal facilities.

* * * * * * *

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

funds appropriated to that agency for energy expenditures, at buildings subject to the requirements of section 543(a) and (b), that are

not made because of energy savings. Such funds may be used only

for energy efficiency or unconventional and renewable energy resources projects.

* * * * * * *

SEC. 548. REPORTS.

(a) REPORTS TO THE SECRETARY.—Each agency shall transmit a

report to the Secretary, in accordance with guidelines established

by and at times specified by the Secretary but at least annually,

with complete information on its activities under this part, including information on—

(1) the agency’s progress in achieving the goals established

by section 543; øand¿

(2) the procedures being used by the agency pursuant to section 546(a)(2), the number of contracts entered into by such

agency under title VIII of this Act, the energy and cost savings

that have resulted from such contracts, the use of such cost

savings under section 546(c), and any problem encountered in

entering into such contracts and otherwise implementing section 546ø.¿;

(3) an energy emergency response plan developed by the agency;

(4) the quantity, and a description of, products, systems, and

designs acquired by the agency that are not acquired as provided in section 543(b)(5)(A); and

(5) the percentage of the agency’s capital expenditures that

are used for energy efficiency and unconventional and renewable energy resources capital improvements.

(b) REPORTS TO 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

Congress—

(1) on all activities carried out under this part and on the

progress made toward achievement of the objectives of this

part, including—

(A) a øcopy of the¿ list of the exclusions made under

øsections 543(a)(2) and 543(c)(3)¿ section 543(c);

* * * * * * *

(3) the extent and nature of interagency exchange of information concerning the conservation and efficient utilization of

energy; øand¿

(4) the information required under section 161(d) of the Energy Policy Act of 1992ø.¿; and

(5) all information transmitted to the Secretary under subsection (a).

* * * * * * *
117

ø(c) OTHER REPORT.—The Secretary, in consultation with the Administrator of General Services, shall— ø(1) conduct a study and evaluate legal, institutional, and

other constraints to connecting buildings owned or leased by

the Federal Government to district heating and district cooling

systems; and

ø(2) not later than 18 months after the date of the enactment of this subsection, transmit to the Congress a report containing the findings and conclusions of such study, including

recommendations for the development of streamlined processes

for the consideration of connecting buildings owned or leased

by the Federal Government to district heating and cooling systems.¿

(c) AGENCY REPORTS TO CONGRESS.—Each agency shall annually

report to the Congress, as part of the agency’s annual budget request, on all of the agency’s activities implementing any Federal energy management requirement.

* * * * * * *

SEC. 551. DEFINITIONS.

For the purposes of this part—

(1) * * *

* * * * * * *

(8) the term ‘‘renewable energy sources’’ includes, but is not

limited to, sources such as agriculture and urban waste, geothermal energy, solar energy, and wind energy; øand¿

(9) the term ‘‘Secretary’’ means the Secretary of Energyø.¿;

and

(10) the term ‘‘unconventional and renewable energy resources’’ includes renewable energy sources, hydrogen, fuel cells,

cogeneration, combined heat and power, heat recovery (including by use of a Stirling heat engine), and distributed generation.

* * * * * * *

TITLE VIII—ENERGY SAVINGS

PERFORMANCE CONTRACTS

SEC. 801. AUTHORITY TO ENTER INTO CONTRACTS.

(a) IN GENERAL.—(1) * * *

(2)(A)***

* * * * * * *

(C) Federal agencies may incur obligations pursuant to such contracts to finance energy or water conservation measures provided

guaranteed savings exceed the debt service requirements.

* * * * * * *

(E) A Federal agency shall engage in contracting and auditing to

implement energy savings performance contracts as necessary and

appropriate to ensure compliance with the requirements of this Act,

particularly the energy efficiency requirements of section 543.

(3)(A) In the case of an energy savings contract or energy savings

performance contract providing for energy savings through the con-
118

struction and operation of one or more buildings or facilities to replace one or more existing buildings or facilities, benefits ancillary

to the purpose of such contract under paragraph (1) may include

savings resulting from reduced costs of operation and maintenance

at such replacement buildings or facilities when compared with

costs of operation and maintenance at the buildings or facilities

being replaced, established through a methodology set forth in the

contract.

(B) Notwithstanding paragraph (2)(B), aggregate annual payments by an agency under an energy savings contract or energy savings performance contract referred to in subparagraph (A) may take

into account (through the procedures developed pursuant to this section) savings resulting from reduced costs of operation and maintenance as described in that subparagraph.

* * * * * * *

ø(c) SUNSET AND REPORTING REQUIREMENTS.—The authority to

enter into new contracts under this section shall cease to be effective on October 1, 2003.¿

* * * * * * *

SEC. 804. DEFINITIONS.

For purposes of this title, the following definitions apply:

(1) * * *

ø(2) The term ‘‘energy savings’’ means a reduction in the cost

of energy, from a base cost established through a methodology

set forth in the contract, utilized in an existing federally owned

building or buildings or other federally owned facilities as a result of—

ø(A) the lease or purchase of operating equipment, improvements, altered operation and maintenance, or technical services; or

ø(B) the increased efficient use of existing energy

sources by cogeneration or heat recovery, excluding any cogeneration process for other than a federally owned building or buildings or other federally owned facilities.

ø(3) The terms ‘‘energy savings contract’’ and ‘‘energy savings performance contract’’ mean a contract which provides for

the performance of services for the design, acquisition, installation, testing, operation, and, where appropriate, maintenance

and repair, of an identified energy conservation measure or series of measures at one or more locations. Such contracts—

ø(A) may provide for appropriate software licensing

agreements; and

ø(B) shall, with respect to an agency facility that is a

public building as such term is defined in section 13(1) of

the Public Buildings Act of 1959 (40 U.S.C. 612(1)), be in

compliance with the prospectus requirements and procedures of section 7 of the Public Buildings Act of 1959 (40

U.S.C. 606).

ø(4) The term ‘‘energy conservation measures’’ has the meaning given such term in section 551(4).¿

(2)(A) The term ‘‘energy savings’’ means a reduction in the

cost of energy or water, from a base cost established through a

methodology set forth in the contract, used in an existing feder-
119

ally owned building or buildings or other federally owned facilities as a result of— (i) the lease or purchase of operating equipment, improvements, altered operation and maintenance, or technical

services;

(ii) the increased efficient use of existing energy sources

by solar and ground source geothermal resources, cogeneration or heat recovery (including by the use of a Stirling heat

engine), excluding any cogeneration process for other than

a federally owned building or buildings or other federally

owned facilities; or

(iii) the increased efficient use of existing water sources.

(B) The term ‘‘energy savings’’ also means, in the case of a replacement building or facility described in section 801(a)(3), a

reduction in the cost of energy, from a base cost established

through a methodology set forth in the contract, that would otherwise be utilized in one or more existing federally owned buildings or other federally owned facilities by reason of the construction and operation of the replacement building or facility.

(3) The terms ‘‘energy savings contract’’ and ‘‘energy savings

performance contract’’ mean a contract which provides for— (A) the performance of services for the design, acquisition,

installation, testing, operation, and, where appropriate,

maintenance and repair, of an identified energy or water

conservation measure or series of measures at one or more

locations; or

(B) energy savings through the construction and operation of one or more buildings or facilities to replace one

or more existing buildings or facilities.

(4) The term ‘‘energy or water conservation measure’’ means— (A) an energy conservation measure, as defined in section

551(4) (42 U.S.C. 8259(4)); or

(B) a water conservation measure that improves water efficiency, is life cycle cost effective, and involves water conservation, water recycling or reuse, improvements in operation or maintenance efficiencies, retrofit activities, or other

related activities, not at a Federal hydroelectric facility.

* * * * * * *

ENERGY POLICY ACT OF 1992

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Act of 1992’’.

(b) TABLE OF CONTENTS.—

TITLE I—ENERGY EFFICIENCY

Subtitle A—Buildings

Sec. 101. Building energy efficiency standards.

* * * * * * *

TITLE III—ALTERNATIVE FUELS—GENERAL

* * * * * * *
120

Sec. 313. Conservation of petroleum-based fuels by the Federal Government for

light-duty motor vehicles.

* * * * * * *

TITLE I—ENERGY EFFICIENCY

* * * * * * *

Subtitle F—Federal Agency Energy

Management

* * * * * * *

SEC. 160. INSPECTOR GENERAL REVIEW AND AGENCY ACCOUNTABILITY.

(a) * * *

* * * * * * *

(c) INSPECTOR GENERAL REVIEW.—Each Inspector General established under section 2 of the Inspector General Act of 1978 (5

U.S.C. App.) øis encouraged to conduct periodic¿ shall conduct periodic reviews of agency compliance with part 3 of title V of the National Energy Conservation Policy Act, the provisions of this subtitle, and other laws relating to energy consumption. Such reviews

shall not be inconsistent with the performance of the required duties of the Inspector General’s office.

* * * * * * *

TITLE III—ALTERNATIVE FUELS—

GENERAL

SEC. 301. DEFINITIONS.

For purposes of this title, title IV, and title V (unless otherwise

specified)—

(1) * * *

* * * * * * *

(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, 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 ‘‘hybrid vehicle’’ means a motor vehicle which

draws propulsion energy from onboard sources of stored energy

which are both—

(A) an internal combustion or heat engine using combustible

fuel; and
121

(B) a rechargeable energy storage system.

* * * * * * *

SEC. 303. MINIMUM FEDERAL FLEET REQUIREMENT.

(a) * * *

(b) PERCENTAGE REQUIREMENTS.—(1) Of the total number of vehicles acquired by a Federal fleet, at least—

(A) * * *

* * * * * * *

shall be alternative fueled vehicles. Of the total number of vehicles

acquired by a Federal fleet in fiscal years 2004 and 2005, at least

5 percent of the vehicles in addition to those covered by the preceding sentence shall be alternative fueled vehicles or hybrid vehicles and in fiscal year 2006 and thereafter at least 10 percent of the

vehicles in addition to those covered by the preceding sentence shall

be alternative fueled vehicles or hybrid vehicles.

* * * * * * *

SEC. 304. REFUELING.

(a) * * *

ø(b) AUTHORIZATION OF APPROPRIATIONS.—There are authorized

to be appropriated to the Secretary for carrying out this section

such sums as may be necessary for fiscal years 1993 through 1998,

to remain available until expended.¿

(b) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to

be appropriated to the Secretary or, as appropriate, the head of each

Federal fleet subject to the provisions of this section and section 313

of this Act, such sums as may be necessary to achieve the purposes

of section 313(a) and the provisions of this section. Such sums shall

remain available until expended.

* * * * * * *

SEC. 312. BIODIESEL FUEL USE CREDITS.

(a) * * *

* * * * * * *

(c) CREDIT øNOT¿ A SECTION 508 CREDIT.—A credit under this

section shall ønot¿ be considered a credit under section 508.

SEC. 313. CONSERVATION OF PETROLEUM-BASED FUELS BY THE FEDERAL GOVERNMENT FOR LIGHT-DUTY MOTOR VEHICLES.

(a) PURPOSES.—The purposes of this section are to complement

and supplement the requirements of section 303 of this Act that Federal fleets, as that term is defined in section 303(b)(3), acquire in

the aggregate a minimum percentage of alternative fuel vehicles, to

encourage the manufacture and sale or lease of such vehicles nationwide, and to achieve, in the aggregate, a reduction in the amount

of the petroleum-based fuels (other than the alternative fuels defined

in this title) used by new light-duty motor vehicles acquired by the

Federal Government in model years 2004 through 2010 and thereafter.

(b) IMPLEMENTATION.—In furtherance of such purposes, such Federal fleets in the aggregate shall reduce the purchase of petroleumbased nonalternative fuels for such fleets beginning October 1, 2003,

through September 30, 2009, from the amount purchased for such

fleets over a comparable period since enactment of this Act, as deter-
122

mined by the Secretary, through the annual purchase, in accordance

with section 304, and the use of alternative fuels for the light-duty

motor vehicles of such Federal fleets, so as to achieve levels which

reflect total reliance by such fleets on the consumptive use of alternative fuels consistent with the provisions of section 303(b) of this

Act. The Secretary shall, within 120 days after the enactment of this

section, promulgate, in consultation with the Administrator of the

General Services Administration and the Director of the Office of

Management and Budget and such other heads of entities referenced

in section 303 within the executive branch as such Director may designate, standards for the full and prompt implementation of this

section by such entities. The Secretary shall monitor compliance

with this section and such standards by all such fleets and shall report annually to the Congress, based on reports by the heads of such

fleets, on the extent to which the requirements of this section and

such standards are being achieved. The report shall include information on annual reductions achieved of petroleum-based fuels and

the problems, if any, encountered in acquiring alternative fuels and

in requiring their use.

* * * * * * *

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.¿. The Secretary shall establish other procedures necessary for efficient administration of the

program. The Secretary shall not establish any criteria or procedures that have the effect of assigning to proposals a higher or lower

priority for eligibility or allocation of appropriated funds on the

basis of the energy source proposed.

(b) QUALIFIED RENEWABLE ENERGY FACILITY.—For purposes of

this section, a qualified renewable energy facility is a facility which

is owned by øa State or any political subdivision of a State (or an

agency, authority, or instrumentality of a State or a political subdivision), by any corporation or association which is wholly owned,

directly or indirectly, by one or more of the foregoing, or by a nonprofit electrical cooperative¿ an electricity-generating cooperative exempt from taxation under section 501(c)(12) or section 1381(a)(2)(C)

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

section 115 of such Code, 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 subdivi-
123

sion thereof, and which generates electric energy for sale in, or affecting, interstate commerce using solar, wind, biomass, landfill

gas, or geothermal energy, except that— (1) * * *

* * * * * * *

(c) ELIGIBILITY WINDOW.—Payments may be made under this

section only for electricity generated from a qualified renewable energy facility first used øduring the 10-fiscal year period beginning

with the first full fiscal year occurring after the enactment of this

section¿ before October 1, 2013.

(d) PAYMENT PERIOD.—A qualified renewable energy facility may

receive payments under this section for a 10-fiscal year period.

Such period shall begin with the fiscal year in which electricity

generated from the facility is first eligible for such or in which the

Secretary finds that all necessary Federal and State authorizations

have been obtained to begin construction of the facility payments.

(e) AMOUNT OF PAYMENT.—

(1) IN GENERAL.—Incentive payments made by the Secretary

under this section to the owner or operator of any qualified renewable energy facility shall be based on the number of kilowatt hours of electricity generated by the facility through the

use of solar, wind, biomass, landfill gas, or geothermal energy

during the payment period referred to in subsection (d). For

any facility, the amount of such payment shall be 1.5 cents per

kilowatt hour, adjusted as provided in paragraph (2).

* * * * * * *

(f) SUNSET.—No payment may be made under this section to any

facility after øthe expiration of the 20-fiscal year period beginning

with the first full fiscal year occurring after the enactment of this

section¿ September 30, 2023, and no payment may be made under

this section to any facility after a payment has been made with respect to such facility for a 10-fiscal year period.

(g) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to

be appropriated to the Secretary for fiscal years ø1993, 1994, and

1995¿ 2003 through 2023 such sums as may be necessary to carry

out the purposes of this section. Funds may be appropriated pursuant to this subsection to remain available until expended.

* * * * * * *

ENERGY POLICY AND CONSERVATION ACT

* * * * * * *

TITLE III—IMPROVING ENERGY EFFICIENCY

* * * * * * *

PART B—ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS OTHER THAN

AUTOMOBILES

Sec. 321. Definitions.

* * * * * * *

Sec. 324A. Energy Star program.

* * * * * * *
124

TITLE III—IMPROVING ENERGY EFFICIENCY

* * * * * * *

PART B—ENERGY CONSERVATION PROGRAM FOR CONSUMER

PRODUCTS OTHER THAN AUTOMOBILES

DEFINITIONS

SEC. 321. For purposes of this part:

(1) * * *

* * * * * * *

(32) The term ‘‘residential furnace fan’’ means an electric fan

installed as part of a furnace for purposes of circulating air

through the system air filters, the heat exchangers or heating

elements of the furnace, and the duct work.

(33) The terms ‘‘residential central air conditioner fan’’ and

‘‘heat pump circulation fan’’ mean an electric fan installed as

part of a central air conditioner or heat pump for purposes of

circulating air through the system air filters, the heat exchangers of the air conditioner or heat pump, and the duct work.

(34) The term ‘‘suspended ceiling fan’’ means a fan intended

to be mounted to a ceiling outlet box, ceiling building structure,

or to a vertical rod suspended from the ceiling, and which as

blades which rotate below the ceiling and consists of an electric

motor, fan blades (which rotate in a direction parallel to the

floor), an optional lighting kit, and one or more electrical controls (integral or remote) governing fan speed and lighting operation.

(35) The term ‘‘refrigerated bottled or canned beverage vending machine’’ means a machine that cools bottled or canned

beverages and dispenses them upon payment.

COVERAGE

SEC. 322. (a) IN GENERAL.—The following consumer products, excluding those consumer products designed solely for use in recreational vehicles and other mobile equipment, are covered products:

(1) * * *

* * * * * * *

(19) Beginning on the effective date for standards established

pursuant to subsection (w) of section 325, each product referred

to in such subsection (w).

ø(19)¿ (20) Any other type of consumer product which the

Secretary classifies as a covered product under subsection (b).

* * * * * * *

TEST PROCEDURES

SEC. 323. (a)***

* * * * * * *

(f) ADDITIONAL CONSUMER PRODUCTS.—The Secretary shall within 18 months after the date of enactment of this subsection prescribe

testing requirements for residential furnace fans, residential central

air conditioner fans, heat pump circulation fans, suspended ceiling
125

fans, and refrigerated bottled or canned beverage vending machines.

Such testing requirements shall be based on existing test procedures

used in industry to the extent practical and reasonable. In the case

of residential furnace fans, residential central air conditioner fans,

heat pump circulation fans, and 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 one year after the date of enactment of this subparagraph, the Commission shall initiate a rulemaking to prescribe

labeling rules under this section applicable to consumer products

that are not covered products if it determines that labeling of such

products is likely to assist consumers in making purchasing decisions and is technologically and economically feasible.

(G) Not later than three 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 label that

would improve the effectiveness of the label. Such rulemaking shall

be completed within 15 months of the date of enactment of this subparagraph.

* * * * * * *

(5) The Secretary shall within 6 months after the date on which

energy conservation standards are prescribed by the Secretary for

covered products referred to in section 325(w), prescribe, by rule, labeling requirements for such products. These requirements shall

take effect on the same date as the standards prescribed pursuant

to section 325(w).

* * * * * * *

(e) STUDY OF CERTAIN PRODUCTS.—(1) The Secretary, in consultation with the Commission, shall study consumer products for

which labeling rules under this section have not been proposed, in

order to determine ø(1)¿ (A) the aggregate energy consumption of

such products, and ø(2)¿ (B) whether the imposition of labeling requirements under this section would be feasible and useful to consumers in making purchasing decisions. The Secretary shall include the results of such study in the annual report under section

338.

(2) The Secretary shall make recommendations to the Commission

within 180 days of the date of enactment of this paragraph regarding labeling of consumer products that are not covered products in

accordance with this section, where such labeling is likely to assist

consumers in making purchasing decisions and is technologically

and economically feasible.

* * * * * * *
126

SEC. 324A. ENERGY STAR PROGRAM.

(a) IN GENERAL.—There is established at the Department of Energy and the Environmental Protection Agency a program to identify and promote energy-efficient products and buildings in order to

reduce energy consumption, improve energy security, and reduce

pollution through labeling of products and buildings that meet the

highest energy efficiency standards. Responsibilities under the program shall be divided between the Department of Energy and the

Environmental Protection Agency consistent with the terms of agreements between the two agencies. The Administrator and the Secretary shall—

(1) promote Energy Star compliant technologies as the preferred technologies in the marketplace for achieving energy efficiency and to reduce pollution;

(2) work to enhance public awareness of the Energy Star

label; and

(3) preserve the integrity of the Energy Star label.

For the purposes of carrying out this section, there is authorized to

be appropriated for fiscal years 2002 through 2006 such sums as

may be necessary, to remain available until expended.

(b) STUDY OF CERTAIN PRODUCTS AND BUILDINGS.—Within 180

days after the date of enactment of this section, the Secretary and

the Administrator, consistent with the terms of agreements between

the two agencies, shall determine whether the Energy Star label

should be extended to additional products and buildings, including

the following:

(1) Air cleaners.

(2) Ceiling fans.

(3) Light commercial heating and cooling products.

(4) Reach-in refrigerators and freezers.

(5) Telephony.

(6) Vending machines.

(7) Residential water heaters.

(8) Refrigerated beverage merchandisers.

(9) Commercial ice makers.

(10) School buildings.

(11) Retail buildings.

(12) Health care facilities.

(13) Homes.

(14) Hotels and other commercial lodging facilities.

(15) Restaurants and other food service facilities.

(16) Solar water heaters.

(17) Building-integrated photovoltaic systems.

(18) Reflective pigment coatings.

(19) Windows.

(20) Boilers.

(21) Devices to extend the life of motor vehicle oil.

(c) COOL ROOFING.—In determining whether the Energy Star

label should be extended to roofing products, the Secretary and the

Administrator shall work with the roofing products industry to determine the appropriate solar reflective index of roofing products.

* * * * * * *
127

ENERGY CONSERVATION STANDARDS

SEC. 325. (a)***

* * * * * * *

(m) FURTHER RULEMAKING.—(1) After issuance of the last final

rules required under subsections (b) through (i) of this section, the

Secretary may publish final rules to determine whether standards

for a covered product should be amended. An amendment prescribed under this subsection shall apply to products manufactured

after a date which is 5 years after— (A) * * *

* * * * * * *

(2) Not later than one year after the date of enactment of the Energy Advancement and Conservation Act of 2001, the Secretary shall

conduct a rulemaking to determine whether consumer products not

classified as a covered product under section 322(a)(1) through (18)

meet the criteria of section 322(b)(1). If the Secretary finds that a

consumer product not classified as a covered product meets the criteria of section 322(b)(1), he shall prescribe, in accordance with subsections (o) and (p), an energy conservation standard for such consumer product, if such standard is reasonably probable to be technologically feasible and economically justified within the meaning

of subsection (o)(2)(A).

(n) PETITION FOR AN AMENDED STANDARD.—(1) With respect to

each covered product described in paragraphs (1) through ø(11),

and in paragraphs (13) and¿ (14) of section 322(a), any person may

petition the Secretary to conduct a rulemaking to determine for a

covered product if the standards contained either in the last final

rule required under subsections (b) through (i) of this section or in

a final rule published under this section should be amended.

* * * * * * *

(u) STANDBY MODE ELECTRIC ENERGY CONSUMPTION BY HOUSEHOLD APPLIANCES.—(1) In this subsection:

(A) The term ‘‘household appliance’’ means any device that

uses household electric current and operates in a standby mode

except digital televisions, digital set top boxes, and digital video

recorders.

(B) The term ‘‘standby mode’’ means a mode in which a

household appliance consumes the least amount of electric energy that the household appliance is capable of consuming

without being completely switched off.

(2)(A) Except as provided in subparagraph (B), a household appliance that is manufactured in, or imported for sale in, the United

States on or after the date that is 2 years after the date of enactment

of this subsection shall not consume in standby mode more than 1

watt.

(B)(i) A household appliance model that, as of the date of enactment of this subsection, is recognized under the Energy Star program administered by the Administrator of the Environmental Protection Agency and the Secretary shall have until January 1, 2005,

to meet the standard under subparagraph (A).

(ii) In the case of analog televisions, the Secretary shall prescribe,

on or after the date that is 2 years after the date of enactment of

this subsection, in accordance with subsections (o) and (p) of section
128

325, an energy conservation standard that is technologically feasible

and economically justified under section 325(o)(2)(A) (in lieu of the

1 watt standard under subparagraph (A)).

(3)(A) A manufacturer or importer of a household appliance may

submit to the Secretary an application for an exemption of the

household appliance from the standard under paragraph (2).

(B) The Secretary shall grant an exemption for a household appliance for which an application is made under subparagraph (A) if

the applicant provides evidence showing that, and the Secretary determines that— (i) it is not technically feasible to modify the household appliance to enable the household appliance to meet the standard;

(ii) the standard is incompatible with an energy efficiency

standard applicable to the household appliance under another

subsection; or

(iii) the cost of electricity that a typical consumer would save

in operating the household appliance meeting the standard

would not equal the increase in the price of the household appliance that would be attributable to the modifications that would

be necessary to enable the household appliance to meet the

standard by the earlier of— (I) the date that is 7 years after the date of purchase of

the household appliance; or

(II) the end of the useful life of the household appliance.

(C) If the Secretary determines that it is not technically feasible

to modify a household appliance to meet the standard under paragraph (2), the Secretary shall establish a different standard for the

household appliance in accordance with the criteria under subsection (l).

(4)(A) Not later than 1 year after the date of enactment of this

subsection, the Secretary shall establish a test procedure for determining the amount of consumption of power by a household appliance operating in standby mode.

(B) In establishing the test procedure, the Secretary shall

consider—

(i) international test procedures under development;

(ii) test procedures used in connection with the Energy Star

program; and

(iii) test procedures used for measuring power consumption in

standby mode in other countries.

(5) FURTHER REDUCTION OF STANDBY POWER CONSUMPTION.—The

Secretary shall provide technical assistance to manufacturers in

achieving further reductions in standby mode electric energy consumption by household appliances.

(v) STANDBY MODE ELECTRIC ENERGY CONSUMPTION BY DIGITAL

TELEVISIONS, DIGITAL SET TOP BOXES, AND DIGITAL VIDEO RECORDERS.—The Secretary shall initiate on January 1, 2007 a rulemaking to prescribe, in accordance with subsections (o) and (p), an

energy conservation standard of standby mode electric energy consumption by digital television sets, digital set top boxes, and digital

video recorders. The Secretary shall issue a final rule prescribing

such standards not later than 18 months thereafter. In determining

whether a standard under this section is technologically feasible

and economically justified under section 325(o)(2)(A), the Secretary

shall consider the potential effects on market penetration by digital
129

products covered under this section, and shall consider any recommendations by the FCC regarding such effects.

(w) RESIDENTIAL FURNACE FANS, CENTRAL AIR AND HEAT PUMP

CIRCULATION FANS, SUSPENDED CEILING FANS, AND VENDING MA- CHINES.—(1) The Secretary shall, within 18 months after the date

of enactment of this subsection, assess the current and projected future market for residential furnace fans, residential central air conditioner and heat pump circulation fans, suspended ceiling fans,

and refrigerated bottled or canned beverage vending machines. This

assessment shall include an examination of the types of products

sold, the number of products in use, annual sales of these products,

energy used by these products sold, the number of products in use,

annual sales of these products, energy used by these products, estimates of the potential energy savings from specific technical improvements to these products, and an examination of the cost-effectiveness of these improvements. Prior to the end of this time period,

the Secretary shall hold an initial scoping workshop to discuss and

receive input to plans for developing minimum efficiency standards

for these products.

(2) The Secretary shall within 24 months after the date on which

testing requirements are prescribed by the Secretary pursuant to section 323(f), prescribe, by rule, energy conservation standards for residential furnace fans, residential central air conditioner and heat

pump circulation fans, suspended ceiling fans, and refrigerated bottled or canned beverage vending machines. In establishing these

standards, the Secretary shall use the criteria and procedures contained in subsections (l) and (m). Any standard prescribed under

this section shall apply to products manufactured 36 months after

the date such rule is published.

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, within 180 days of

the date of enactment of this subsection, develop and implement a

public education campaign to educate homeowners and small business owners concerning the energy savings resulting from regularly

scheduled maintenance of air conditioning, heating, and ventilating

systems. In developing and implementing this campaign, the Secretary shall consider support by the Department of public education

programs sponsored by trade and professional or energy efficiency

organizations. The public service information shall provide sufficient information to allow consumers to make informed choices from

among professional, licensed (where State or local licensing is required) contractors. There are authorized to be appropriated to

carry out this subsection $5,000,000 for fiscal years 2002 and 2003

in addition to amounts otherwise appropriated in this part.

* * * * * * *

PART D—STATE ENERGY CONSERVATION PLANS

* * * * * * *
130

STATE ENERGY CONSERVATION PLANS

SEC. 362. (a)***

* * * * * * *

(g) The Secretary shall, at least once every three years, invite the

Governor of each State to review and, if necessary, revise the energy

conservation plan of such State submitted under subsection (b) or

(e). Such reviews should consider the energy conservation plans of

other States within the region, and identify opportunities and actions carried out in pursuit of common energy conservation goals.

* * * * * * *

STATE ENERGY EFFICIENCY GOALS

SEC. 364. Each State energy conservation plan with respect to

which assistance is made available under this part on or after October 1, 1991, shall contain a goal, consisting of an improvement

of 10 percent or more in the efficiency of use of energy in the State

concerned in the calendar year 2000 as compared to the calendar

year 1990, and may contain interim goals. Each State energy conservation plan with respect to which assistance is made available

under this part on or after the date of the enactment of Energy Advancement and Conservation Act of 2001, 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 the calendar year 2010 as

compared to the 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¿ $75,000,000 for fiscal year 2002,

$100,000,000 for fiscal years 2003 and 2004, $125,000,000 for fiscal

year 2005.

* * * * * * *

PART G—ENERGY CONSERVATION PROGRAM FOR SCHOOLS AND

HOSPITALS

* * * * * * *

AUTHORIZATION OF APPROPRIATIONS

SEC. 397. For the purpose of carrying out this part, there are authorized to be appropriated for fiscal years 1999 through ø2003¿

2010 such sums as may be necessary.

* * * * * * *
131

SECTION 422 OF THE ENERGY CONSERVATION AND

PRODUCTION ACT

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¿

$250,000,000 for fiscal year 2002, $325,000,000 for fiscal year 2003,

$400,000,000 for fiscal year 2004, and $500,000,000 for fiscal year

2005.

SECTION 2602 OF THE LOW-INCOME ENERGY

ASSISTANCE ACT OF 1981

HOME ENERGY GRANTS AUTHORIZED

SEC. 2602. (a)

(b) øThere are authorized to be appropriated to carry out the pro- visions of this title (other than section 2607A), $2,000,000,000 for

each of fiscal years 1995 through 1999, such sums as may be necessary for each of fiscal years 2000 and 2001, and $2,000,000,000

for each of fiscal years 2002 through 2004.¿ There are authorized

to be appropriated to carry out the provisions of this title (other

than section 2607A), $3,400,000,000 for each of fiscal years 2001

through 2005. The authorizations of appropriations contained in

this subsection are subject to the program year provisions of subsection (c).

* * * * * * *

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) NON-PASSENGER AUTOMOBILES.—(1) At least 18 months before the beginning of each model year, the Secretary of Transportation shall prescribe by regulation average fuel economy standards

for automobiles (except passenger automobiles) manufactured by a

manufacturer in that model year. Each standard shall be the maximum feasible average fuel economy level that the Secretary de-
132

cides the manufacturers can achieve in that model year. The Secretary may prescribe separate standards for different classes of

automobiles.

(2) The Secretary shall prescribe under paragraph (1) average fuel

economy standards for automobiles (except passenger automobiles)

manufactured in model years 2004 through 2010 that are calculated

to ensure that the aggregate amount of gasoline projected to be used

in those model years by automobiles to which the standards apply

is at least 5 billion gallons less than the aggregate amount of gasoline that would be used in those model years by such automobiles

if they achieved only the fuel economy required under the average

fuel economy standard that applies under this subsection to automobiles (except passenger automobiles) manufactured in model year

2002.

* * * * * * *

§ 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 ømodel years 1993–2004¿ model years 1993–2008, the Administrator of the Environmental Protection Agency shall measure the

fuel economy for that model by dividing 1.0 by the sum of—

(1) * * *

* * * * * * *

(d) GASEOUS FUEL DUAL FUELED AUTOMOBILES.—For any model

of gaseous fuel dual fueled automobile manufactured by a manufacturer in ømodel years 1993–2004¿ model years 1993–2008, 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).—øNot

later than December 31, 2001, the Secretary¿ Not later than December 31, 2005, 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 ømodel year 2004¿ model year 2008

and explain the basis on which the extension is granted; or

* * * * * * *

(g) STUDY AND REPORT.—øNot later than September 30, 2000¿

Not later than September 30, 2004, the Secretary of Transportation,

in consultation with the Secretary of Energy and the Administrator, shall complete a study of the success of the policy of subsections (b) and (d) of this title, and submit to the Committees on

Commerce, Science, and Transportation and Governmental Affairs

of the Senate and the Committee on Commerce of the House of

Representatives a report on the results of the study, including preliminary conclusions on whether the application of subsections (b)

and (d) should be extended for up to 4 more model years. The study

and conclusions shall consider—
133

(1) * * *

* * * * * * *

§ 32906. Maximum fuel economy increase for alternative fuel

automobiles

(a) MAXIMUM INCREASES.—(1)(A) For each of øthe model years

1993–2004¿ model years 1993–2008 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 2009–2012 attributable to dual

fueled automobiles is .9 mile a gallon.

* * * * * * *

ø§ 32917. Standards for executive agency automobiles

ø(a) DEFINITION.—In this section, ‘‘executive agency’’ has the

same meaning given that term in section 105 of title 5.

ø(b) FLEET AVERAGE FUEL ECONOMY.—(1) The President shall

prescribe regulations that require passenger automobiles leased for

at least 60 consecutive days or bought by executive agencies in a

fiscal year to achieve a fleet average fuel economy (determined

under paragraph (2) of this subsection) for that year of at least the

greater of— ø(A) 18 miles a gallon; or

ø(B) the applicable average fuel economy standard under section 32902(b) or (c) of this title for the model year that includes

January 1 of that fiscal year.

ø(2) Fleet average fuel economy is— ø(A) the total number of passenger automobiles leased for at

least 60 consecutive days or bought by executive agencies in a

fiscal year (except automobiles designed for combat-related

missions, law enforcement work, or emergency rescue work);

divided by

ø(B) the sum of the fractions obtained by dividing the number of automobiles of each model leased or bought by the fuel

economy of that model.¿

§ 32917. Standards for executive agency automobiles

(a) BASELINE AVERAGE FUEL ECONOMY.—The head of each executive agency shall determine, for all automobiles in the agency’s fleet

of automobiles that were leased or bought as a new vehicle in fiscal

year 1999, the average fuel economy for such automobiles. For the

purposes of this section, the average fuel economy so determined

shall be the baseline average fuel economy for the agency’s fleet of

automobiles.

(b) INCREASE OF AVERAGE FUEL ECONOMY.—The head of an executive agency shall manage the procurement of automobiles for that

agency in such a manner that—

(1) not later than September 30, 2003, the average fuel economy of the new automobiles in the agency’s fleet of automobiles
134

is not less than 1 mile per gallon higher than the baseline average fuel economy determined under subsection (a) for that fleet;

and

(2) not later than September 30, 2005, the average fuel economy of the new automobiles in the agency’s fleet of automobiles

is not less than 3 miles per gallon higher than the baseline average fuel economy determined under subsection (a) for that

fleet.

(c) CALCULATION OF AVERAGE FUEL ECONOMY.—Average fuel

economy shall be calculated for the purposes of this section in accordance with guidance which the Secretary of Transportation shall

prescribe for the implementation of this section.

(d) DEFINITIONS.—In this section:

(1) The term ‘‘automobile’’ does not include any vehicle designed for combat-related missions, law enforcement work, or

emergency rescue work.

(2) The term ‘‘executive agency’’ has the meaning given that

term in section 105 of title 5.

(3) The term ‘‘new automobile’’, with respect to the fleet of

automobiles of an executive agency, means an automobile that

is leased for at least 60 consecutive days or bought, by or for

the agency, after September 30, 1999.

* * * * * * *

SECTION 7 OF THE NATURAL GAS ACT

EXTENSION OF FACILITIES; ABANDONMENT OF SERVICE

SEC. 7. (a) * * *

* * * * * * *

(i) Notwithstanding the National Historic Preservation Act, a

transportation facility shall not be eligible for inclusion on the National Register of Historic Places until the Commission has permitted the abandonment of the transportation facility pursuant to

subsection (b) of this section.
(135)

ADDITIONAL VIEWS

I want to begin my remarks by thanking Chairman Tauzin,

Ranking Member Dingell, Subcommittee Chairman Barton, and

Ranking Member Boucher—and their staffs—for putting so much

time and effort into producing this balanced, bipartisan bill. This

bill does not do everything that I would like to see done in helping

our nation to meet the energy demands of the 21st Century, but

it is a good first step.

As my colleagues are aware, for a number of years now I have

focused much of my attention on the need to improve the FERC hydroelectric licensing process. As such, I would like to say a few

words about the hydro licensing provisions in this bill.

Our nation is at an important crossroads regarding its hydro policy. We hear so much about the need for clean, reliable, cost-efficient energy sources, and yet our nation’s hydropower resource—

our largest renewable, emissions-free resource—remains threatened by a dysfunctional licensing process. Indeed, the record compiled in oversight and legislative hearings on this issue over the

previous two Congresses demonstrates that legislative reform of

the FERC hydroelectric relicensing process is needed—now more

than ever—if our nation is to preserve consumer access to clean,

reliable and cost-efficient hydropower.

The relicensing process suffers from dispersed decision-making

authority and an inability to balance competing values. The bottom

line is that costs, delays, and conflicting mandates inherent in the

process threaten generation capacity and operational flexibility

throughout the nation. As we lose megawatts and operational flexibility, we must rely on less efficient generation sources that both

cost more and produce greenhouse gas and other emissions.

Let me be clear. Sections 201 and 202 of the bill will not solve

all of the problems inherent in the licensing process. But if enacted

into law, they could be an effective and useful tool to encourage innovative approaches to regulations without sacrificing important

environmental outcomes. In that regard, this bill is an important

first step.

But there is much more that needs to be done. I remain committed to pursuing more comprehensive hydro licensing improvements, such as those contained in my legislation, H.R. 1832. I am

pleased that the majority and minority leadership of this Committee have made a commitment to revisit this issue later this

Congress, and I look forward to working with them to that end.

Before I conclude, I want to express my thanks to Congressmen

Wynn and Shadegg for their efforts in support of hydro licensing

reform. In addition, I want to thank Chairman Tauzin and Chairman Barton for their leadership in keeping this issue, and my legislation, at the forefront of the Committee agenda this Congress

and in each of the previous Congresses. And finally, I want to
136

thank Ranking Member Dingell for his good-faith effort over the

past year to seek solutions. I have long believed that the hydro licensing debate is a search for balance—a balance between the vital

energy values of hydropower and the need to fully protect the environment. It is this search for balance that has served this Committee well over the last few weeks, and that, I hope, will serve us

well going forward as we continue to tackle the important energy

issues before us.

Mr. Chairman, thank you.

EDOLPHUS TOWNS.
(137)

ADDITIONAL VIEWS OF HON. TOM BARRETT

I supported the Energy Advancement and Conservation Act. The

bill as reported by the Energy and Commerce Committee includes

modest but progressive enhancements to conservation and federal

energy management programs.

I am, however, concerned that the Energy and Air Quality Subcommittee and the full Energy and Commerce Committee have

failed to adopt the proposal I offered to promote energy efficiency

by requiring the federal government to buy energy-efficient central

air conditioners. This common-sense provision, adopted as part of

the bill’s original bipartisan Consensus Staff Draft, would direct

the federal government to lead by example and would demonstrate

to our constituents that we in Congress really mean what we say

about the importance of energy conservation.

The energy efficiency standards I proposed were developed as the

result of a rulemaking process in the State of California. By comparison to standards relying exclusively on Seasonal Energy Efficiency Ratio (SEER) measurements, which promote efficiency based

on seasonal averages, these standards offer additional benefits by

incorporating Energy Efficiency Ratio (EER) values that promote

efficiency even during peak demand times. This helps to ensure the

power grid’s reliability during peak load times, when demand management is needed most. In part because of its conservation and reliability benefits, my amendment is endorsed by environmental advocates including the Natural Resources Defense Council and the

American Council for an Energy Efficient Economy.

California selected these standards based not only on their environmental responsibility, but also on their practicality. California’s

analysis indicates that, of approximately 80 air conditioner manufacturers examined by the state, about one quarter offer models

meeting the proposed energy efficiency standard. This standard enjoys the support of Goodman Manufacturing, which makes air conditioners under several brand names, and is confident that American firms can compete in the market for energy-efficient air conditioners.

The proposed standards would save tax dollars in the long run,

by reducing federal agencies’ electricity bills. With energy efficiency

rebates available from electric power utility firms, they may even

allow the government to buy more energy-efficient air conditioners

that are also cheaper upfront. I had hoped that my colleagues on

both sides of the aisle would have agreed that it makes more sense

to direct our constituents’ tax dollars toward the provision of government services than toward the local power company’s bottom

line.

Perhaps most importantly, my amendment would send a clear

and unmistakable message that we in Congress really mean it

when we say that we support energy efficiency and conservation.
138

By adopting this amendment, the committee could have expressed

its commitment in the most tangible way possible in a free market

economy: by voting with our dollars. This approach tells the market

that America is serious about energy efficiency in a way no statement of principle or incentive program could.

By comparison, the air conditioner energy efficiency provision

adopted by the Energy and Air Quality Subcommittee is at best

disappointing and at worse counterproductive. The provision adopted with the backing of the Subcommittee’s leadership would have

no meaningful effect in promoting energy efficiency. It applies a

lower energy efficiency standard than the Consensus Staff Draft

language, and it applies that standard only to very small central

air conditioners. The only air conditioners covered by the Subcommittee-approved language are those with cooling capacities of

less than 65,000 BTUs per hour. The Chief Architect’s Office at the

General Services Administration confirmed that such air conditioners are not commonly used in commercial buildings like federal

buildings. Consequently, these standards would have almost no

practical effect.

Worse yet, by deleting the Consensus Staff Draft language in

favor of the provision supported by the Subcommittee leadership,

we are sending a message to environmental advocates and manufacturers that we are not serious about energy efficiency and conservation. The language adopted at subcommittee would apply to

federal government buildings an efficiency standard that is the

same as the standard proposed by the Bush Administration for consumer appliances. That proposed standard is already the subject of

well-founded litigation, and it may very likely be struck down by

the courts. This alarming possibility would mean that we in Congress have actually gone out of our way to set an energy efficiency

standard for federal procurement that trails behind the standard

applicable to mass-market consumer products. Again, I had hoped

that my colleagues on both sides of the aisle would have agreed

that the federal government should be setting an example for others to emulate, rather than defining our goals based on the lowest

common denominator.

‘‘The federal government should set a good example of conservation by reducing its own energy use’’ I could not agree more with

this sentiment, expressed by President George Bush and quoted in

the May 4, 2001, Washington Post. The language adopted at subcommittee does not live up to this commitment. The language I

drafted for inclusion in the Consensus Staff Draft would offer an

opportunity for the federal government to demonstrate true leadership.

I was encouraged that, during full committee consideration of the

bill, Chairman Tauzin and Ranking Member Dingell offered to

work together to address these concerns before the bill reaches the

House floor. I am hopeful that the House will be able to consider

a bill that would allow Congress to demonstrate that we will walk

the walk, as well as talk the talk, on energy efficiency and conservation.

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