U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1

86–873

" SENATE ! 108TH CONGRESS

1st Session 

REPORT

2003

108–43

Calendar No. 87

THE ENERGY POLICY ACT OF 2003

R E P O R T

OF THE

COMMITTEE ON 

ENERGY AND NATURAL RESOURCES 

UNITED STATES SENATE

TO ACCOMPANY

S. 1005

TOGETHER WITH

MINORITY VIEWS

MAY 6, 2003.—Ordered to be printed 


E:\Seals\Congress.#13
(II)

COMMITTEE ON ENERGY AND NATURAL RESOURCES 

(108th Congress) 

PETE V. DOMENICI, New Mexico, Chairman 

DON NICKLES, Oklahoma 

LARRY E. CRAIG, Idaho 

BEN NIGHTHORSE CAMPBELL, Colorado 

CRAIG THOMAS, Wyoming 

LAMAR ALEXANDER, Tennessee 

LISA MURKOWSKI, Alaska 

JAMES M. TALENT, Missouri 

CONRAD BURNS, Montana 

GORDON SMITH, Oregon 

JIM BUNNING, Kentucky 

JON KYL, Arizona 

JEFF BINGAMAN, New Mexico 

DANIEL K. AKAKA, Hawaii 

BYRON L. DORGAN, North Dakota 

BOB GRAHAM, Florida 

RON WYDEN, Oregon 

TIM JOHNSON, South Dakota 

MARY L. LANDRIEU, Louisiana 

EVAN BAYH, Indiana 

DIANNE FEINSTEIN, California 

CHARLES E. SCHUMER, New York 

MARIA CANTWELL, Washington 

ALEX FLINT, Staff Director 

JAMES P. BEIRNE, Chief Counsel 

ROBERT M. SIMON, Democratic Staff Director 

SAM E. FOWLER, Democratic Chief Counsel 

(III)

C O N T E N T S 

Page 

Purpose of the Measure ........................................................................................... 124

Summary of Major Provisions ................................................................................ 124

Background and Need ............................................................................................. 128

Legislative History .................................................................................................. 132

Committee Recommendation and Tabulation of Votes ......................................... 133

Section-by-Section Analysis .................................................................................... 134

Cost and Budgetary Considerations ....................................................................... 168

Regulatory Impact Evaluation ................................................................................ 168

Executive Communications ..................................................................................... 169

Minority Views ..................................................................................................... 170, 175

Changes in Existing Law ........................................................................................ 177

Mineral Leasing Act ......................................................................................... 177

Federal Power Act ............................................................................................ 179

Public Utility Holding Company Act of 1935 ................................................. 195

United States Housing Act of 1937 ................................................................. 247

Natural Gas Act ................................................................................................ 248

National Housing Act ....................................................................................... 248

Outer Continental Shelf Lands Act ................................................................ 251

Atomic Energy Act of 1954 .............................................................................. 256

Solid Waste Disposal Act ................................................................................. 262

Geothermal Steam Act ..................................................................................... 264

Housing and Community Development Act of 1974 ...................................... 266

Energy Policy and Conservation Act ............................................................... 267

Energy Conservation and Production Act ...................................................... 277

Alaska Natural Gas Transportation Act of 1976 ........................................... 278

Department of Energy Organization Act ........................................................ 278

Public Utility Regulatory Policies Act of 1978 ............................................... 285

National Energy Conservation Policy Act ...................................................... 290

Department of Energy Science Education Enhancement Act ....................... 299

Spark M. Matsunaga Hydrogen Research, Development, and Demonstration Act of 1990 ............................................................................................. 300

Cranston-Gonzalez National Affordable Housing Act ................................... 308

High-Performance Computing Act of 1991 ..................................................... 309

Energy Policy Act of 1992 ................................................................................ 311

HUD Demonstration Act of 1993 .................................................................... 338

North American Free Trade Agreement Implementation Act ...................... 338

USEC Privatization Act ................................................................................... 338

Native American Housing Assistance and Self-Determination Act ............. 341

Legislative Branch Appropriations Act, 1999 ................................................ 341

Energy Act of 2000 ........................................................................................... 342

Title 5, United States Code ............................................................................. 343

Title 23, United States Code ........................................................................... 343

Title 49, United States Code ........................................................................... 344

Calendar No. 87

108TH CONGRESS REPORT " SENATE ! 1st Session 108–43

THE ENERGY POLICY ACT OF 2003

MAY 6, 2003.—Ordered to be printed 

Mr. DOMENICI, from the Committee on Energy and Natural 

Resources, submitted the following 

R E P O R T 

TOGETHER WITH

MINORITY VIEWS 

[To accompany S. 1005] 

The Committee on Energy and Natural Resources, having considered the same, reports favorably thereon, an original bill (S. 1005) 

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

purposes, and recommends that the bill do pass. 

The text of the bill follows:

SECTION 1. SHORT TITLE. 

This Act may be cited as ‘‘The Energy Policy Act of 2003’’. 

SEC. 2. TABLE OF CONTENTS. 

The table of contents for this Act is as follows:

Sec. 1. Short title. 

Sec. 2. Table of contents. 

TITLE I—OIL AND GAS 

Subtitle A—Production Incentives 

Sec. 101. Permanent authority to operate the strategic petroleum reserve and other energy programs. 

Sec. 102. Study on inventory of petroleum and natural gas storage. 

Sec. 103. Program on oil and gas royalties in kind. 

Sec. 104. Marginal property production incentives. 

Sec. 105. Comprehensive inventory of OCS oil and natural gas resources. 

Sec. 106. Royalty relief for deep water production. 

Sec. 107. Alaska offshore royalty suspension. 

Sec. 108. Orphaned, abandoned, or idled wells on federal lands. 

Sec. 109. Incentives for natural gas production from deep wells in the shallow waters of the Gulf of Mexico. 

Sec. 110. Alternate energy-related uses on the outer continental shelf. 

Sec. 111. Coastal impact assistance. 

Sec. 112. National energy resource database. 

Sec. 113. Oil and gas lease acreage limitation. 

Sec. 114. Assessment of dependence of State of Hawaii on oil. 

Subtitle B—Access to Federal Lands 

Sec. 121. Office of Federal Energy Permit Coordination. 

Sec. 122. Pilot project to improve Federal permit coordination. 

Sec. 123. Federal onshore leasing programs for oil and gas. 

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Sec. 124. Estimates of oil and gas resources underlying onshore Federal lands. 

Sec. 125. Split-estate Federal oil and gas leasing and development practices. 

Sec. 126. Coordination of Federal agencies to establish priority energy transmission rights-of-way. 

Subtitle C—Alaska Natural Gas Pipeline 

Sec. 131. Short title. 

Sec. 132. Definitions. 

Sec. 133. Issuance of Certificate of Public Convenience and Necessity. 

Sec. 134. Environmental reviews. 

Sec. 135. Pipeline expansion. 

Sec. 136. Federal coordinator. 

Sec. 137. Judicial review. 

Sec. 138. State jurisdiction over in-state delivery of natural gas. 

Sec. 139. Study of alternative means of construction. 

Sec. 140. Clarification of ANGTA status and authorities. 

Sec. 141. Sense of Congress. 

Sec. 142. Participation of small business concerns. 

Sec. 143. Alaska Pipeline Construction Training Program. 

Sec. 144. Loan guarantees. 

Sec. 145. Sense of Congress on natural gas demand. 

TITLE II—COAL 

Subtitle A—Clean Coal Power Initiative 

Sec. 201. Authorization of appropriations. 

Sec. 202. Project criteria. 

Sec. 203. Reports. 

Sec. 204. Clean coal centers of excellence. 

Subtitle B—Federal Coal Leases 

Sec. 211. Repeal of the 160-acre limitation for coal leases. 

Sec. 212. Mining plans. 

Sec. 213. Payment of advance royalties under coal leases. 

Sec. 214. Elimination of deadline for submission of coal lease operation and reclamation plan. 

Sec. 215. Application of amendments. 

Subtitle C—Powder River Basin 

Sec. 221. Resolution of Federal resource development conflicts in the Powder River Basin. 

TITLE III—INDIAN ENERGY 

Sec. 301. Short title. 

Sec. 302. Office of Indian Energy Policy and Programs. 

Sec. 303. Indian energy. 

‘‘TITLE XXVI—INDIAN ENERGY 

‘‘Sec. 2601. Definitions. 

‘‘Sec. 2602. Indian Tribal energy resource development. 

‘‘Sec. 2603. Indian Tribal energy resource regulation. 

‘‘Sec. 2604. Leases, business agreements, and rights-of-way involving energy development or transmission. 

‘‘Sec. 2605. Federal power marketing administrations. 

‘‘Sec. 2606. Indian mineral development review. 

‘‘Sec. 2607. Wind and hydropower feasibility study. 

Sec. 304. Four Corners transmission line project. 

Sec. 305. Energy efficiency in federally assisted housing. 

Sec. 306. Consultation with Indian Tribes. 

TITLE IV—NUCLEAR 

Subtitle A—Price-Anderson Amendments Act 

Sec. 401. Short title. 

Sec. 402. Extension of indemnification authority. 

Sec. 403. Maximum assessment. 

Sec. 404. Department of Energy Liability Limit. 

Sec. 405. Incidents outside the United States. 

Sec. 406. Reports. 

Sec. 407. Inflation adjustment. 

Sec. 408. Treatment of modular reactors. 

Sec. 409. Applicability. 

Sec. 410. Civil penalties. 

Subtitle B—Deployment of Commercial Nuclear Plants 

Sec. 421. Short title. 

Sec. 422. Definitions. 

Sec. 423. Responsibilities of the Secretary of Energy. 

Sec. 424. Limitations. 

Sec. 425. Regulations. 

Subtitle C—Advanced Reactor Hydrogen Co-Generation Project 

Sec. 431. Project establishment. 

Sec. 432. Project definition. 

Sec. 433. Project management. 

Sec. 434. Project requirements. 

Sec. 435. Authorization of appropriations. 

Subtitle D—Miscellaneous Matters 

Sec. 441. Uranium sales and transfers. 

Sec. 442. Decommissioning Pilot Program. 

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TITLE V—RENEWABLE ENERGY 

Subtitle A—General Provisions 

Sec. 501. Assessment of renewable energy resources. 

Sec. 502. Renewable energy production incentive. 

Sec. 503. Renewable energy on Federal lands. 

Sec. 504. Federal purchase requirement. 

Sec. 505. Insular area renewable and energy efficiency plans. 

Subtitle B—Hydroelectric Relicensing 

Sec. 511. Alternative conditions and fishways. 

Subtitle C—Geothermal Energy 

Sec. 521. Competitive lease sale requirements. 

Sec. 522. Geothermal leasing and permitting on Federal lands. 

Sec. 523. Leasing and permitting on Federal lands withdrawn for military purposes. 

Sec. 524. Reinstatement of leases terminated for failure to pay rent. 

Sec. 525. Royalty reduction and relief. 

Sec. 526. Royalty exemption for direct use of low temperature geothermal energy resources. 

Subtitle D—Biomass Energy 

Sec. 531. Definitions. 

Sec. 532. Biomass Commercial Utilization Grant Program. 

Sec. 533. Improved Biomass Utilization Grant Program. 

Sec. 534. Report. 

TITLE VI—ENERGY EFFICIENCY 

Subtitle A—Federal Programs 

Sec. 601. Energy management requirements. 

Sec. 602. Energy use measurement and accountability. 

Sec. 603. Federal building performance standards. 

Sec. 604. Energy savings performance contracts. 

Sec. 605. Procurement of energy efficient products. 

Sec. 606. Congressional building efficiency. 

Sec. 607. Increased Federal use of recovered mineral components in federally funded projects involving procurement of cement or concrete. 

Sec. 608. Utility energy service contracts. 

Sec. 609. Study of energy efficiency standards. 

Subtitle B—State and Local Programs 

Sec. 611. Low Income Community Energy Efficiency Pilot Program. 

Sec. 612. Energy efficient public buildings. 

Sec. 613. Energy efficient appliance rebate programs. 

Subtitle C—Consumer Products 

Sec. 621. Energy conservation standards for additional products. 

Sec. 622. Energy labeling. 

Sec. 623. Energy Star Program. 

Sec. 624. HVAC Maintenance Consumer Education Program. 

Subtitle D—Public Housing 

Sec. 631. Capacity Building for energy-efficient, affordable housing. 

Sec. 632. Increase of CDBG public services cap for energy conservation and efficiency activities. 

Sec. 633. FHA mortgage insurance incentives for energy efficient housing. 

Sec. 634. Public Housing Capital Fund. 

Sec. 635. Grants for energy-conserving improvements for assisted housing. 

Sec. 636. North American Development Bank. 

Sec. 637. Energy-efficient appliances. 

Sec. 638. Energy efficiency standards. 

Sec. 639. Energy strategy for HUD. 

TITLE VII—TRANSPORTATION FUELS 

Subtitle A—Alternative Fuel Programs 

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

Sec. 702. Fuel use credits. 

Sec. 703. Neighborhood electric vehicles. 

Sec. 704. Credits for medium and heavy duty dedicated vehicles. 

Sec. 705. Alternative fuel infrastructure. 

Sec. 706. Incremental cost allocation. 

Sec. 707. Review of alternative fuel programs. 

Sec. 708. High occupancy vehicle exception. 

Sec. 709. Alternate compliance and flexibility. 

Subtitle B—Automobile Fuel Economy 

Sec. 711. Automobile fuel economy standards. 

Sec. 712. Dual-fueled automobiles. 

Sec. 713. Federal fleet fuel economy. 

Sec. 714. Railroad efficiency. 

Sec. 715. Reduction of engine idling in heavy-use vehicles. 

TITLE VIII—HYDROGEN 

Subtitle A—Basic Research Programs 

Sec. 801. Short title. 

4

Sec. 802. Matsunaga Act amendment. 

Sec. 803. Hydrogen transportation and fuel initiative. 

Sec. 804. Interagency Task Force and Coordination Plan. 

Sec. 805. Review by the National Academies. 

Subtitle B—Demonstration Programs

Sec. 811. Definitions. 

Sec. 812. Hydrogen Vehicle Demonstration Program. 

Sec. 813. Stationary Fuel Cell Demonstration Program. 

Sec. 814. Hydrogen demonstration programs in National Parks. 

Sec. 815. International Demonstration Program. 

Sec. 816. Tribal stationary hybrid power demonstration. 

Sec. 817. Distributed Generation Pilot Program. 

Subtitle C—Federal Programs 

Sec. 821. Public education and training. 

Sec. 822. Hydrogen transition strategic planning. 

Sec. 823. Minimum Federal fleet requirement. 

Sec. 824. Stationary fuel cell purchase requirement. 

Sec. 825. Department of Energy Strategy. 

TITLE IX—RESEARCH AND DEVELOPMENT 

Sec. 901. Short title. 

Sec. 902. Goals. 

Sec. 903. Definitions. 

Subtitle A—Energy Efficiency 

Sec. 911. Energy efficiency. 

Sec. 912. Next generation lighting initiative. 

Sec. 913. National building performance initiative. 

Sec. 914. Secondary Electric Vehicle Battery Use Program. 

Sec. 915. Energy efficiency science initiative. 

Subtitle B—Distributed Energy and Electric Energy Systems 

Sec. 921. Distributed energy and electric energy systems. 

Sec. 922. Hybrid distributed power systems. 

Sec. 923. High Power Density Industry Program. 

Sec. 924. Micro-cogeneration energy technology. 

Sec. 925. Distributed Energy Technology Demonstration Program. 

Sec. 926. Office of Electric Transmission and Distribution. 

Sec. 927. Electric transmission and distribution programs. 

Subtitle C—Renewable Energy 

Sec. 931. Renewable energy. 

Sec. 932. Bioenergy programs. 

Sec. 933. Biodiesel Engine Testing Program. 

Sec. 934. Concentrating Solar Power Research Program. 

Sec. 935. Miscellaneous projects. 

Subtitle D—Nuclear Energy 

Sec. 941. Nuclear energy. 

Sec. 942. Nuclear energy research programs. 

Sec. 943. Advanced fuel cycle initiative. 

Sec. 944. University nuclear science and engineering support. 

Sec. 945. Security of nuclear facilities. 

Sec. 946. Alternatives to industrial radioactive sources. 

Subtitle E—Fossil Energy 

Sec. 951. Fossil energy. 

Sec. 952. Oil and gas research programs. 

Sec. 953. Research and development for coal mining technologies. 

Sec. 954. Coal and Related Technologies Program. 

Sec. 955. Complex well technology testing facility. 

Subtitle F—Science 

Sec. 961. Science. 

Sec. 962. United States participation in ITER. 

Sec. 963. Spallation neutron source. 

Sec. 964. Support for science and energy facilities and infrastructure. 

Sec. 965. Catalysis Research Program. 

Sec. 966. Nanoscale science and engineering research. 

Sec. 967. Advanced scientific computing for energy missions. 

Sec. 968. Genomes to Life Program. 

Sec. 969. Fission and Fusion Energy Materials Research Program. 

Sec. 970. Energy-Water Supply Technologies Program. 

Subtitle G—Energy and Environment 

Sec. 971. United States-Mexico energy technology cooperation. 

Sec. 972. Coal technology loan. 

Subtitle H—Management 

Sec. 981. Availability of funds. 

Sec. 982. Cost sharing. 

Sec. 983. Merit review of proposals. 

Sec. 984. External technical review of departmental programs. 

5

Sec. 985. Improved coordination of technology transfer activities. 

Sec. 986. Technology Infrastructure Program. 

Sec. 987. Small business advocacy and assistance. 

Sec. 988. Mobility of scientific and technical personnel. 

Sec. 989. National Academy of Sciences report. 

Sec. 990. Outreach. 

Sec. 991. Competitive award of management contracts. 

Sec. 992. Reprogramming. 

Sec. 993. Construction with other laws. 

Sec. 994. Improved coordination and management of civilian science and technology programs. 

Sec. 995. Educational programs in science and mathematics. 

Sec. 996. Other transactions authority. 

Sec. 997. Report on research and development program evaluation methodologies. 

TITLE X—PERSONNEL AND TRAINING 

Sec. 1001. Workforce trends and traineeship grants. 

Sec. 1002. Research fellowships in energy research. 

Sec. 1003. Training guidelines for electric energy industry personnel. 

Sec. 1004. National Center on Energy Management and Building Technologies. 

Sec. 1005. Improved access to energy-related scientific and technical careers. 

Sec. 1006. National Power Plant Operations Technology and Education Center. 

Sec. 1007. Federal mine inspectors. 

TITLE XI—ELECTRICITY 

Sec. 1101. Definitions. 

Subtitle A—Reliability 

Sec. 1111. Electric reliability standards. 

Subtitle B—Regional Markets 

Sec. 1121. Implementation date for proposed rulemaking for standard market design. 

Sec. 1122. Sense of the Congress on regional transmission organizations. 

Sec. 1123. Federal utility participation in regional transmission organizations. 

Sec. 1124. Regional consideration of competitive wholesale markets. 

Subtitle C—Improving Transmission Access and Protecting Service Obligations 

Sec. 1131. Service obligation security and parity. 

Sec. 1132. Open non-discriminatory access. 

Sec. 1133. Transmission infrastructure investment. 

Subtitle D—Amendments to the Public Utility Regulatory Policies Act of 1978

Sec. 1141. Net metering. 

Sec. 1142. Smart metering. 

Sec. 1143. Adoption of additional standards. 

Sec. 1144. Technical assistance. 

Sec. 1145. Cogeneration and small power production purchase and sale requirements. 

Sec. 1146. Recovery of costs. 

Subtitle E—Provisions Regarding the Public Utility Holding Company Act of 1935

Sec. 1151. Definitions. 

Sec. 1152. Repeal of the Public Utility Holding Company Act of 1935. 

Sec. 1153. Federal access to books and records. 

Sec. 1154. State access to books and records. 

Sec. 1155. Exemption authority. 

Sec. 1156. Affiliate transactions. 

Sec. 1157. Applicability. 

Sec. 1158. Effect on other regulations. 

Sec. 1159. Enforcement. 

Sec. 1160. Savings provisions. 

Sec. 1161. Implementation. 

Sec. 1162. Transfer of resources. 

Sec. 1163. Effective date. 

Sec. 1164. Conforming amendment to the Federal Power Act. 

Subtitle F—Market Transparency, Anti-Manipulation and Enforcement

Sec. 1171. Market transparency rules. 

Sec. 1172. Market manipulation. 

Sec. 1173. Enforcement. 

Sec. 1174. Refund effective date. 

Subtitle G—Consumer Protections 

Sec. 1181. Consumer privacy. 

Sec. 1182. Unfair trade practices. 

Sec. 1183. Definitions. 

Subtitle H—Technical Amendments 

Sec. 1191. Technical Amendments.

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TITLE I—OIL AND GAS 

Subtitle A—Production Incentives 

SEC. 101. PERMANENT AUTHORITY TO OPERATE THE STRATEGIC PETROLEUM RESERVE AND 

OTHER ENERGY PROGRAMS. 

(a) AMENDMENT TO TITLE I OF THE ENERGY POLICY AND CONSERVATION ACT.—

Title I of the Energy Policy and Conservation Act (42 U.S.C. 6211 et seq.) is amended—

(1) by striking section 166 (42 U.S.C. 6246) and inserting—

‘‘AUTHORIZATION OF APPROPRIATIONS

‘‘SEC. 166. There are authorized to be appropriated to the Secretary such sums 

as may be necessary to carry out this part and part D, to remain available until 

expended.’’; 

(2) by striking section 186 (42 U.S.C. 6250(e)); and 

(3) by striking part E (42 U.S.C. 6251); relating to the expiration of title I 

of the Act). 

(b) AMENDMENT TO TITLE II OF THE ENERGY POLICY AND CONSERVATION ACT.—

Title II of the Energy Policy and Conservation Act (42 U.S.C. 6271 et seq.) is 

amended—

(1) by striking section 256(h) (42 U.S.C. 6276(h)) and inserting—

‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to the Secretary such sums as may be necessary to carry out this part, to 

remain available until expended.’’; 

(2) by inserting before section 273 (42 U.S.C. 6283) the following: 

‘‘PART C—SUMMER FILL AND FUEL BUDGETING PROGRAMS’’; 

(3) by striking section 273(e) (42 U.S.C. 6283(e)); relating to the expiration of 

summer fill and fuel budgeting programs); and 

(4) by striking part D (42 U.S.C. 6285); relating to the expiration of title II 

of the Act). 

(c) TECHNICAL AMENDMENTS.—The table of contents for the Energy Policy and 

Conservation Act is amended—

(1) by amending the items relating to part D of title I to read as follows:

‘‘PART D—NORTHEAST HOME HEATING OIL RESERVE

‘‘Sec. 181. Establishment. 

‘‘Sec. 182. Authority. 

‘‘Sec. 183. Conditions for release; plan. 

‘‘Sec. 184. Northeast Home Heating Oil Reserve Account. 

‘‘Sec. 185. Exemptions.’’;

(2) by amending the items relating to part C of title II to read as follows:

‘‘PART C—SUMMER FILL AND FUEL BUDGETING PROGRAMS

‘‘Sec. 273. Summer fill and fuel budgeting programs.’’;

and 

(3) by striking the items relating to part D of title II. 

(d) NORTHEAST HOME HEATING OIL.—Section 183(b)(1) of the Energy Policy and 

Conservation Act (42 U.S.C. 6250(b)(1)) is amended by striking all after ‘‘increases’’

through to ‘‘mid-October through March’’ and inserting ‘‘by more than 60 percent 

over its 5-year rolling average for the months of mid-October through March (considered as a heating season average)’’. 

SEC. 102. STUDY ON INVENTORY OF PETROLEUM AND NATURAL GAS STORAGE. 

(a) DEFINITION.—For purposes of this section ‘‘petroleum’’ means crude oil, motor 

gasoline, jet fuel, distillates and propane. 

(b) STUDY.—The Secretary of Energy shall conduct a study on petroleum and natural gas storage capacity and operational inventory levels, nationwide and by major 

geographical regions. 

(c) CONTENTS.—The study shall address—

(1) historical normal ranges for petroleum and natural gas inventory levels; 

(2) historical and projected storage capacity trends; 

(3) estimated operation inventory levels below which outages, delivery slowdown, rationing, interruptions in service or other indicators of shortage begin 

to appear; 

(4) explanations for inventory levels dropping below normal ranges; and 

(5) the ability of industry to meet U.S. demand for petroleum and natural gas 

without shortages or price spikes, when inventory levels are below normal 

ranges. 

7

(d) REPORT TO CONGRESS.—Not later than one year from enactment of this Act, 

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

study, including findings and any recommendations for preventing future supply 

shortages. 

SEC. 103. PROGRAM ON OIL AND GAS ROYALTIES IN KIND. 

(a) APPLICABILITY OF SECTION.—Notwithstanding any other provision of law, the 

provisions of this section shall apply to all royalties-in-kind accepted by the Secretary (referred to in this section as ‘‘Secretary’’) under any Federal oil or gas lease 

or permit under section 36 of the Mineral Leasing Act (30 U.S.C. 192), section 27 

of the Outer Continental Shelf Lands Act (43 U.S.C. 1353), or any other mineral 

leasing law beginning on the date of the enactment of this Act through September 

30, 2013. 

(b) TERMS AND CONDITIONS.—All royalty accruing to the United States under any 

Federal oil or gas lease or permit under the Mineral Leasing Act (30 U.S.C. 181 et 

seq.) or the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) shall, on 

the demand of the Secretary, be paid in oil or gas. If the Secretary makes such a 

demand, the following provisions apply to such payment: 

(1) Delivery by, or on behalf of, the lessee of the royalty amount and quality 

due under the lease satisfies the lessee’s royalty obligation for the amount delivered, except that transportation and processing reimbursements paid to, or deductions claimed by, the lessee shall be subject to review and audit. 

(2) Royalty production shall be placed in marketable condition by the lessee 

at no cost to the United States. 

(3) The Secretary may—

(A) sell or otherwise dispose of any royalty production taken in kind 

(other than oil or gas transferred under section 27(a)(3) of the Outer Continental Shelf Lands Act (43 U.S.C. 1353(a)(3)) for not less than the market 

price; and 

(B) transport or process (or both) any royalty production taken in kind. 

(4) The Secretary may, notwithstanding section 3302 of title 31, United States 

Code, retain and use a portion of the revenues from the sale of oil and gas royalties taken in kind that otherwise would be deposited to miscellaneous receipts, without regard to fiscal year limitation, or may use royalty production, 

to pay the cost of—

(A) transporting the royalty production; 

(B) processing the royalty production; 

(C) disposing of the royalty production; or 

(D) any combination of transporting, processing, and disposing of the royalty production. 

(5) The Secretary may not use revenues from the sale of oil and gas royalties 

taken in kind to pay for personnel, travel, or other administrative costs of the 

Federal Government. 

(6) Notwithstanding the provisions of paragraph 5, the Secretary may use a 

portion of the revenues from the sale of oil royalties taken in kind, without fiscal year limitation, to pay transportation costs, salaries, and other administrative costs directly related to filling the Strategic Petroleum Reserve. 

(c) REIMBURSEMENT OF COST.—If the lessee, pursuant to an agreement with the 

United States or as provided in the lease, processes the royalty gas or delivers the 

royalty oil or gas at a point not on or adjacent to the lease area, the Secretary 

shall—

(1) reimburse the lessee for the reasonable costs of transportation (not including gathering) from the lease to the point of delivery or for processing costs; or 

(2) allow the lessee to deduct such transportation or processing costs in reporting and paying royalties in value for other Federal oil and gas leases. 

(d) BENEFIT TO THE UNITED STATES REQUIRED.—The Secretary may receive oil or 

gas royalties in kind only if the Secretary determines that receiving such royalties 

provides benefits to the United States greater than or equal to those likely to have 

been received had royalties been taken in value. 

(e) REPORT TO CONGRESS.—

(1) No later than September 30, 2005, the Secretary shall provide a report 

to Congress that addresses—

(A) actions taken to develop businesses processes and automated systems 

to fully support the royalty-in-kind capability to be used in tandem with the 

royalty-in-value approach in managing Federal oil and gas revenue; and 

(B) future royalty-in-kind businesses operation plans and objectives. 

(2) For each of the fiscal years 2004 through 2013 in which the United States 

takes oil or gas royalties in kind from production in any State or from the Outer 

8

Continental Shelf, excluding royalties taken in kind and sold to refineries under 

subsections (h), the Secretary shall provide a report to Congress describing—

(A) the methodology or methodologies used by the Secretary to determine 

compliance with subsection (d), including performance standard for comparing amounts received by the United States derived from such royalties 

in kind to amount likely to have been received had royalties been taken in 

value; 

(B) an explanation of the evaluation that led the Secretary to take royalties in kind from a lease or group of leases, including the expected revenue 

effect of taking royalties in kind; 

(C) actual amounts received by the United States derived from taking 

royalties in kind and cost and savings incurred by the United States associated with taking royalties in kind, including but not limited to administrative savings and any new or increased administrative costs; and 

(D) an evaluation of other relevant public benefits or detriments associated with taking royalties in kind. 

(f) DEDUCTION OF EXPENSES.—

(1) Before making payments under section 35 of the Mineral Leasing Act (30 

U.S.C. 191) or section 8(g) of the Outer Continental Shelf Lands Act (43 U.S.C. 

1337(g)) of revenues derived from the sale of royalty production taken in kind 

from a lease, the Secretary of the Interior shall deduct amounts paid or deducted under subsections (b)(4) and (c), and shall deposit such amounts to miscellaneous receipts. 

(2) If the Secretary allows the lessee to deduct transportation or processing 

costs under subsection (c), the Secretary may not reduce any payments to recipients of revenues derived from any other Federal oil and gas lease as a consequence of that deduction. 

(g) CONSULTATION WITH STATES.—The Secretary shall consult—

(1) with a State before conducting a royalty in-kind program under this section within the State, and may delegate management of any portion of the Federal royalty in-kind program to such State except as otherwise prohibited by 

Federal law; and 

(2) annually with any State from which Federal oil or gas royalty is being 

taken in kind to ensure to the maximum extent practicable that the royalty inkind program provides revenues to the State greater than or equal to those likely to have been received had royalties been taken in value. 

(h) PROVISIONS FOR SMALL REFINERIES.—

(1) If the Secretary determines that sufficient supplies of crude oil are not 

available in the open market to refineries not having their own source of supply 

for crude oil, the Secretary may grant preference to such refineries in the sale 

of any royalty oil accruing or reserved to the United States under Federal oil 

and gas leases issued under any mineral leasing law, for processing or use in 

such refineries at private sale at not less than the market price. 

(2) In disposing of oil under this subsection, the Secretary may prorate such 

oil among such refineries in the area in which the oil is produced. 

(i) DISPOSITION TO FEDERAL AGENCIES.—

(1) Any royalty oil or gas taken by the Secretary in kind from onshore oil and 

gas leases may be sold at not less than market price to any department or agency of the United States. 

(2) Any royalty oil or gas taken in kind from Federal oil and gas leases on 

the outer Continental Shelf may be disposed of only under section 27 of the 

Outer Continental Shelf Lands Act (43 U.S.C. 1353). 

(j) PREFERENCE FOR FEDERAL LOW-INCOME ENERGY ASSISTANCE PROGRAMS.—In 

disposing of royalty oil or gas taken in kind under this section, the Secretary may 

grant a preference to any person, including any State or Federal agency, for the purpose of providing additional resources to any Federal low-income energy assistance 

program. 

SEC. 104. MARGINAL PROPERTY PRODUCTION INCENTIVES. 

(a) MARGINAL PROPERTY DEFINED.—Until such time as the Secretary of the Interior issues rules under subsection (e) that prescribe a different definition, for purposes of this section, the term ‘‘marginal property’’ means an onshore unit, 

communitization agreement, or lease not within a unit or communitization agreement that produces on average the combined equivalent of less than 15 barrels of 

oil per well per day or 90 million British thermal units of gas per well per day calculated based on the average over the three most recent production months, including only those wells that produce more than half the days in the three most recent 

production months. 

9

(b) CONDITIONS FOR REDUCTION OF ROYALTY RATE.—Until such time as the Secretary of the Interior promulgates rules under subsection (e) that prescribe different 

thresholds or standards, the Secretary shall reduce the royalty rate on—

(1) oil production from marginal properties as prescribed in subsection (c) 

when the spot price of West Texas Intermediate crude oil at Cushing, Oklahoma, is, on average, less than $15 per barrel for 90 consecutive trading days; 

and 

(2) gas production from marginal properties as prescribed in subsection (c) 

when the spot price of natural gas delivered at Henry Hub, Louisiana, is, on 

average, less than $2.00 per million British thermal units for 90 consecutive 

trading days. 

(c) REDUCED ROYALTY RATE.—

(1) When a marginal property meets the conditions specified in subsection (b), 

the royalty rate shall be the lesser of—

(A) 5 percent; or 

(B) the applicable rate under any other statutory or regulatory royalty relief provision that applies to the affected production. 

(2) The reduced royalty rate under this subsection shall be effective on the 

first day of the production month following the date on which the applicable 

price standard prescribed in subsection (b) is met. 

(d) TERMINATION OF REDUCED ROYALTY RATE.—A royalty rate prescribed in subsection (d)(1)(A) shall terminate—

(1) on oil production from a marginal property, on the first day of the production month following the date on which—

(A) the spot price of West Texas Intermediate crude oil at Cushing, Oklahoma, on average, exceeds $15 per barrel for 90 consecutive trading days, 

or 

(B) the property no longer qualifies as a marginal property under subsection (a); and 

(2) on gas production from a marginal property, on the first day of the production month following the date on which—

(A) the spot price of natural gas delivered at Henry Hub, Louisiana, on 

average, exceeds $2.00 per million British thermal units for 90 consecutive 

trading days, or 

(B) the property no longer qualifies as a marginal property under subsection (a). 

(e) RULES PRESCRIBING DIFFERENT RELIEF.—

(1) The Secretary of the Interior, after consultation with the Secretary of Energy, may by rule prescribe different parameters, standards, and requirements 

for, and a different degree or extent of, royalty relief for marginal properties in 

lieu of those prescribed in subsections (a) through (d). 

(2) The Secretary of the Interior, after consultation with the Secretary of Energy, and within 1 year after the date of enactment of this Act, shall, by rule,—

(A) prescribe standards and requirements for, and the extent of royalty 

relief for, marginal properties for oil and gas leases on the outer Continental Shelf; and 

(B) define what constitutes a marginal property on the outer Continental 

Shelf for purposes of this section. 

(3) In promulgating rules under this subsection, the Secretary of the Interior 

may consider—

(A) oil and gas prices and market trends; 

(B) production costs; 

(C) abandonment costs; 

(D) Federal and State tax provisions and their effects on production economics; 

(E) other royalty relief programs; and 

(F) other relevant matters. 

(f) SAVINGS PROVISION.—Nothing in this section shall prevent a lessee from receiving royalty relief or a royalty reduction pursuant to any other law or regulation that 

provides more relief than the amounts provided by this section. 

SEC. 105. COMPREHENSIVE INVENTORY OF OCS OIL AND NATURAL GAS RESOURCES. 

(a) IN GENERAL.—The Secretary of the Interior shall conduct an inventory and 

analysis of oil and natural gas resources beneath all of the waters of the United 

States Outer Continental Shelf (‘‘OCS’’). The inventory and analysis shall—

(1) use available data on oil and gas resources in areas offshore of Mexico and 

Canada that will provide information on trends of oil and gas accumulation in 

areas of the OCS; 

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(2) use any available technology, except drilling, but including 3-D seismic 

technology to obtain accurate resources estimates; 

(3) analyze how resource estimates in OCS areas have changed over time in 

regards to gathering geological and geophysical data, initial exploration, or full 

field development, including areas such as the deepwater and subsalt areas in 

the Gulf of Mexico; 

(4) estimate the effect that understated oil and gas resource inventories have 

on domestic energy investments; and 

(5) identify and explain how legislative, regulatory, and administrative programs or processes restrict or impede the development of identified resources 

and the extent that they affect domestic supply, such as moratoria, lease terms 

and conditions, operational stipulations and requirements, approval delays by 

the federal government and coastal states, and local zoning restrictions for onshore processing facilities and pipeline landings. 

(b) REPORTS.—The Secretary of Interior shall submit a report to the Congress on 

the inventory of estimates and the analysis of restrictions or impediments, together 

with any recommendations, within six months of the date of enactment of the section. The report shall be publicly available and updated at least every five years. 

SEC. 106. ROYALTY RELIEF FOR DEEP WATER PRODUCTION. 

(a) IN GENERAL.—For all tracts located in water depths of greater than 400 meters in the Western and Central Planning Area of the Gulf of Mexico, including that 

portion of the Eastern Planning Area of the Gulf of Mexico encompassing whole 

lease blocks lying west of 87 degrees, 30 minutes West longitude, any oil or gas 

lease sale under the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) occurring within 5 years after the date of the enactment of this Act shall use the bidding system authorized in section 8(a)(1)(H) of the Outer Continental Shelf Lands 

Act (43 U.S.C. 1337(a)(1)(H)), except that the suspension of royalties shall be set at 

a volume of not less than—

(1) 5 million barrels of oil equivalent for each lease in water depths of 400 

to 800 meters; 

(2) 9 million barrels of oil equivalent for each lease in water depths of 800 

to 1,600 meters; and 

(3) 12 million barrels of oil equivalent for each lease in water depths greater 

than 1,600 meters. 

SEC. 107. ALASKA OFFSHORE ROYALTY SUSPENSION. 

Section 8(a)(3)(B) of the Outer Continental Shelf Lands Act (43 U.S.C. 1337) is 

amended with the following: add ‘‘and in the Planning Areas offshore Alaska’’ after 

‘‘West longitude’’ and before ‘‘the Secretary’’. 

SEC. 108. ORPHANED, ABANDONED OR IDLED WELLS ON FEDERAL LANDS. 

(a) IN GENERAL.—The Secretary of the Interior, in cooperation with the Secretary 

of Agriculture, shall establish a program within 1 year after the date of enactment 

of this Act to remediate, reclaim, and close orphaned, abandoned, or idled oil and 

gas wells located on lands administered by the land management agencies within 

the Department of the Interior and Agriculture. The program shall—

(1) include a means of ranking orphaned, abandoned, or idled well sites for 

priority in remediation, reclamation and closure, based on public health and 

safety, potential environmental harm, and other land use priorities; 

(2) provide for identification and recovery of the costs of remediation, reclamation and closure from persons or other entities currently providing a bond or 

other financial assurance required under State or Federal law for an oil or gas 

well that is orphaned, abandoned or idled; and 

(3) provide for recovery from the persons or entities identified under paragraph (2), or their sureties or guarantors, of the costs of remediation, reclamation, and closure of such wells. 

(b) COOPERATION AND CONSULTATIONS.—In carrying out this program, the Secretary of the Interior shall work cooperatively with the Secretary of Agriculture and 

the States within which the Federal lands are located and consult with the Secretary of Energy and the Interstate Oil and Gas Compact Commission. 

(c) PLAN.—Within 1 year after the date of enactment of the section, the Secretary 

of the Interior, in cooperation with the Secretary of Agriculture, shall prepare a plan 

for carrying out the program established under subsection (a) and transmit copies 

of the plan to the Congress. 

(d) TECHNICAL ASSISTANCE PROGRAM FOR NON-FEDERAL LANDS.—

(1) The Secretary of Energy shall establish a program to provide technical assistance to the various oil and gas producing States to facilitate State efforts 

over a 10-year period to ensure a practical and economical remedy for environVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00014 Fmt 6659 Sfmt 6621 E:\HR\OC\SR043.XXX SR043
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mental problems caused by orphaned or abandoned oil and gas exploration or 

production well sites on State or private lands. 

(2) The Secretary shall work with the States, through the Interstate Oil and 

Gas Compact Commission, to assist the States in quantifying and mitigating environmental risks of onshore orphaned abandoned oil or gas wells on State and 

private lands. 

(3) The program shall include— (A) mechanisms to facilitate identification, if possible, of the persons or 

other entities currently providing a bond or other form of financial assurance required under State or Federal law for an oil or gas well that is orphaned or abandoned; 

(B) criteria for ranking orphaned or abandoned well sites based on factors 

such as public health and safety, potential environmental harm, and other 

land use priorities; and 

(C) information and training programs on best practices for remediation 

of different types of sites. 

(e) DEFINITION.—For purposes of this section, a well is idled if it has been nonoperational for 7 years and there is no anticipated beneficial use of the well. 

(f) AUTHORIZATION.—To carry out this section there is authorized to be appro- priated to the Secretary of the Interior $25,000,000 for each of the fiscal years 2004 

through 2008. Of the amounts authorized, $5,000,000 is authorized for activities 

under subsection (d). 

SEC. 109. INCENTIVES FOR NATURAL GAS PRODUCTION FROM DEEP WELLS IN THE SHALLOW 

WATERS OF THE GULF OF MEXICO. 

(a) ROYALTY INCENTIVE REGULATIONS.—Not later than 90 days after enactment, 

the Secretary of the Interior shall promulgate final regulations providing royalty incentives for natural gas produced from deep wells, as defined by the Secretary, on 

oil and gas leases issued under the Outer Continental Shelf Lands Act (43 U.S.C. 

1331 et seq.) and issued prior to January 1, 2001, in shallow waters of the Gulf of 

Mexico, wholly west of 87 degrees, 30 minutes West longitude that are less than 

200 meters deep. 

(b) ROYALTY INCENTIVE REGULATIONS FOR ULTRA DEEP GAS WELLS.—

(1) No later than 90 days after the date of enactment of this Act, in addition 

to any other regulations that may provide royalty incentives for natural gas produced from deep wells on oil and gas leases issued pursuant to the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.), the Secretary of the Interior 

shall promulgate new regulations granting royalty relief suspension volumes of 

not less than 35 billion cubic feet with respect to the production of natural gas 

from ‘‘ultra deep wells’’ on leases issued prior to January 1, 2001, in shallow 

waters less than 200 meters deep located in the Gulf of Mexico wholly west of 

87 degrees, 30 minutes West longitude. For purposes of this subsection, the 

term ‘‘ultra deep wells’’ means wells drilled with a perforated interval, the top 

of which is at least 20,000 feet true vertical depth below the datum at mean 

sea level. 

(2) The Secretary shall not grant the royalty incentives outlined in this subsection if the average annual NYNEX natural gas price exceeds for one full calendar year the threshold price of $5 per million Btu, adjusted from the year 

2000 for inflation. 

(3) This subsection shall have no force or effect after the end of the 5-year 

period beginning on the date of the enactment of this Act. 

SEC. 110. ALTERNATE ENERGY-RELATED USES ON THE OUTER CONTINENTAL SHELF. 

(a) AMENDMENT TO OUTER CONTINENTAL SHELF LANDS ACT.—Section 8 of the 

Outer Continental Shelf Lands Act (43 U.S.C. 1337) is amended by adding at the 

end the following new subsection: 

‘‘(p) EASEMENTS OR RIGHTS-OF-WAY FOR ENERGY AND RELATED PURPOSES.—

‘‘(1) The Secretary may grant an easement or right-of-way on the outer Continental Shelf for activities not otherwise authorized in this Act, the Deepwater 

Port Act of 1974 (33 U.S.C. 1501 et seq.), or the Ocean Thermal Energy Conversion Act of 1980 (42 U.S.C. 9101 et seq.), or other applicable law when such 

activities—

‘‘(A) support exploration, development, or production of oil or natural gas, 

except that such easements or rights-of-way shall not be granted in areas 

where oil and gas preleasing, leasing and related activities are prohibited 

by a Congressional moratorium or a withdrawal pursuant to section 12 of 

this Act; 

‘‘(B) support transportation of oil or natural gas; 

‘‘(C) produce or support production, transportation, or transmission of energy from sources other than oil and gas; or 

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‘‘(D) use facilities currently or previously used for activities authorized 

under this Act. ‘‘(2) The Secretary shall promulgate regulations to ensure that activities authorized under this subsection are conducted in a manner that provides for safety, protection of the environment, conservation of the natural resources of the 

outer Continental Shelf, appropriate coordination with other Federal agencies, 

and a fair return to the Federal government for any easement or right-of-way 

granted under this subsection. Such regulations shall establish procedures for— ‘‘(A) public notice and comment on proposals to be permitted pursuant to 

this subsection; ‘‘(B) consultation and review by State and local governments that may be 

impacted by activities to be permitted pursuant to this subsection; ‘‘(C) consideration of the coastal zone management program being developed or administered by an affected coastal State pursuant to section 305 

or section 306 of the Coastal Zone Management Act of 1972 (16 U.S.C. 

1454, 1455); and ‘‘(D) consultation with the Secretary of Defense and other appropriate 

agencies prior to the issuance of an easement or right-of-way under this 

subsection concerning issues related to national security and navigational 

obstruction. ‘‘(3) The Secretary shall require the holder of an easement or right-of-way 

granted under this subsection to furnish a surety bond or other form of security, 

as prescribed by the Secretary, and to comply with such other requirements as 

the Secretary may deem necessary to protect the interests of the United States. ‘‘(4) This subsection shall not apply to any area within the exterior boundaries 

of any unit of the National Park System, National Wildlife Refuge System, or 

National Marine Sanctuary System, or any National Monument. ‘‘(5) Nothing in this subsection shall be construed to amend or repeal, expressly by implication, the applicability of any other law, including but not limited to, the Coastal Zone Management Act (16 U.S.C. 1455 et seq.) or the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).’’. (b) CONFORMING AMENDMENT.—The text of the heading for section 8 of the Outer 

Continental Shelf Lands Act is amended to read as follows: ‘‘LEASES, EASEMENTS, AND RIGHTS-OF-WAY ON THE OUTER CONTINENTAL SHELF.’’. 

SEC. 111. COASTAL IMPACT ASSISTANCE. 

The Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) is amended by 

adding at the end: 

‘‘SEC. 32 COASTAL IMPACT ASSISTANCE FAIRNESS PROGRAM. 

‘‘(a) DEFINITIONS.—When used in this section: ‘‘(1) The term ‘coastal political subdivision’ means a county, parish, or any 

equivalent subdivision of a Producing Coastal State in all or part of which subdivision lies within the coastal zone (as defined in section 304(1) of the Coastal 

Zone Management Act (16 U.S.C. 1453(1))) and within a distance of 200 miles 

from the geographic center of any leased tract. 

‘‘(2) The term ‘coastal population’ means the population of all political subdivisions, as determined by the most recent official data of the Census Bureau, contained in whole or in part within the designated coastal boundary of a State 

as defined in a State’s coastal zone management program under the Coastal 

Zone Management Act (16 U.S.C. 1451 et seq.). 

‘‘(3) The term ‘Coastal State’ has the same meaning as provided by subsection 

304(4) of the Coastal Zone Management Act (16 U.S.C. 1453(4)). 

‘‘(4) The term ‘coastline’ has the same meaning as the term ‘coast line’ as defined in subsection 2(c) of the Submerged Lands Act (43 U.S.C. 1301(c)). 

‘‘(5) The term ‘distance’ means the minimum great circle distance, measured 

in statute miles. 

‘‘(6) The term ‘leased tract’ means a tract maintained under section 6 or 

leased under section 8 for the purpose of drilling for, developing, and producing 

oil and natural gas resources. 

‘‘(7) The term ‘Producing Coastal State’ means a Coastal State with a coastal 

seaward boundary within 200 miles from the geographic center of a leased tract 

other than a leased tract within any area of the Outer Continental Shelf where 

a moratorium on new leasing was in effect as of January 1, 2002 unless the 

lease was issued prior to the establishment of the moratorium and was in production on January 1, 2002. 

‘‘(8) The term ‘qualified Outer Continental Shelf revenues’ means all amounts 

received by the United States from each leased tract or portion of a leased tract 

lying seaward of the zone defined and governed by section 8(g) of this Act, or 

lying within such zone but to which section 8(g) does not apply, the geographic 

13

center of which lies within a distance of 200 miles from any part of the coastline 

of any Producing Coastal State, including bonus bids, rents, royalties (including 

payments for royalties taken in kind and sold), net profit share payments, and 

related late payment interest. Such term shall only apply to leases issued after 

January 1, 2003, and revenues from existing leases that occurs after January 

1, 2003. Such term does not include any revenues from a leased tract or portion 

of a leased tract that is included within any area of the Outer Continental Shelf 

where a moratorium on new leasing was in effect as of January 1, 2002, unless 

the lease was issued prior to the establishment of the moratorium and was in 

production on January 1, 2002. 

‘‘(9) The term ‘Secretary’ means the Secretary of the Interior. 

‘‘(b) AUTHORIZATION.—For fiscal years 2004 through 2009, an amount equal to not 

more than 12.5 percent of qualified Outer Continental Shelf revenues is authorized 

to be appropriated for the purposes of this section. 

‘‘(c) IMPACT ASSISTANCE PAYMENTS TO STATES AND POLITICAL SUBDIVISIONS.—The 

Secretary shall make payments from the amounts available under this section to 

Producing Coastal States with an approved Coastal Impact Assistance Plan, and to 

coastal political subdivisions as follows: 

‘‘(1) Of the amounts appropriated, the allocation for each Producing Coastal 

State shall be calculated based on the ratio of qualified Outer Continental Shelf 

revenues generated off the coastline of the Producing Coastal State to the qualified Outer Continental Shelf revenues generated off the coastlines of all Producing Coastal States for each fiscal year. Where there is more than one Producing Coastal State within 200 miles of a leased tract, the amount of each Producing Coastal State’s allocation for such leased tract shall be inversely proportional to the distance between the nearest point on the coastline of such State 

and the geographic center of each leased tract or portion of the leased tract (to 

the nearest whole mile) that is within 200 miles of that coastline, as determined 

by the Secretary. 

‘‘(2) Thirty-five percent of each Producing Coastal State’s allocable share as 

determined under paragraph (1) shall be paid directly to the coastal political 

subdivisions by the Secretary based on the following formula: 

‘‘(A) Twenty-five percent shall be allocated based on the ratio of such 

coastal political subdivision’s coastal population to the coastal population of 

all coastal political subdivisions in the Producing Coastal State. 

‘‘(B) Twenty-five percent shall be allocated based on the ratio of such 

coastal political subdivision’s coastline miles to the coastline miles of a 

coastal political subdivision in the Producing Coastal State except that for 

those coastal political subdivisions in the State of Louisiana without a 

coastline, the coastline for purposes of this element of the formula shall be 

the average length of the coastline of the remaining coastal subdivisions in 

the State. 

‘‘(C) Fifty percent shall be allocated based on the relative distance of such 

coastal political subdivision from any leased tract used to calculate the Producing Coastal State’s allocation using ratios that are inversely proportional to the distance between the point in the coastal political subdivision 

closest to the geographic center of each leased tract or portion, as determined by the Secretary, except that in the State of Alaska, the funds for 

this element of the formula shall be divided equally among the two closest 

coastal political subdivisions. For purposes of the calculations under this 

subparagraph, a leased tract or portion of a leased tract shall be excluded 

if the leased tract or portion is located in a geographic area where a moratorium on new leasing was in effect on January 1, 2002, unless the lease 

was issued prior to the establishment of the moratorium and was in production on January 1, 2002. 

‘‘(3) Any amount allocated to a Producing Coastal State or coastal political 

subdivision but not disbursed because of a failure to have an approved Coastal 

Impact Assistance Plan under this section shall be allocated equally by the Secretary among all other Producing Coastal States in a manner consistent with 

this subsection except that the Secretary shall hold in escrow such amount until 

the final resolution of any appeal regarding the disapproval of a plan submitted 

under this section. The Secretary may waive the provisions of this paragraph 

and hold a Producing Coastal State’s allocable share in escrow if the Secretary 

determines that such State is making a good faith effort to develop and submit, 

or update, a Coastal Impact Assistance Plan. 

‘‘(4) For purposes of this subsection, calculations of payments for fiscal years 

2004 through 2006 shall be made using qualified Outer Continental Shelf revenues received in fiscal year 2003, and calculations of payments for fiscal years 

14

2007 through 2009 shall be made using qualified Outer Continental Shelf revenues received in fiscal year 2006. 

‘‘(d) COASTAL IMPACT ASSISTANCE PLAN.—

‘‘(1) The Governor of each Producing Coastal State shall prepare, and submit 

to the Secretary, a Coastal Impact Assistance Plan. The Governor shall solicit 

local input and shall provide for public participation in the development of the 

plan. The plan shall be submitted to the Secretary by July 1, 2004. Amounts 

received by Producing Coastal States and coastal political subdivisions may be 

used only for the purposes specified in the Producing Coastal State’s Coastal 

Impact Assistance Plan. 

‘‘(2) The Secretary shall approve a plan under paragraph (1) prior to disbursement of amounts under this section. The Secretary shall approve the plan if the 

Secretary determines that the plan is consistent with the uses set forth in subsection (f) of this section and if the plan contains—

‘‘(A) the name of the State agency that will have the authority to represent and act for the State in dealing with the Secretary for purposes of 

this section; 

‘‘(B) a program for the implementation of the plan which describes how 

the amounts provided under this section will be used; 

‘‘(C) a contact for each political subdivision and description of how coastal 

political subdivisions will use amounts provided under this section, including a certification by the Governor that such uses are consistent with the 

requirements of this section; 

‘‘(D) certification by the Governor that ample opportunity has been accorded for public participation in the development and revision of the plan; 

and 

‘‘(E) measures for taking into account other relevant Federal resources 

and programs. 

‘‘(3) The Secretary shall approve or disapprove each plan or amendment within 90 days of its submission. 

‘‘(4) Any amendment to the plan shall be prepared in accordance with the requirements of this subsection and shall be submitted to the Secretary for approval or disapproval. 

‘‘(e) AUTHORIZED USES.—Producing Coastal States and coastal political subdivisions shall use amounts provided under this section, including any such amounts 

deposited in a State or coastal political subdivision administered trust fund dedicated to uses consistent with this subsection, in compliance with Federal and State 

law and only for one or more of the following purposes—

‘‘(1) projects and activities for the conservation, protection or restoration of 

coastal areas including wetlands; 

‘‘(2) mitigating damage to fish, wildlife or natural resources; 

‘‘(3) planning assistance and administrative costs of complying with the provisions of this section; 

‘‘(4) implementation of Federally approved marine, coastal, or comprehensive 

conservation management plans; and 

‘‘(5) mitigating impacts of Outer Continental Shelf activities through funding 

onshore infrastructure and public service needs. 

‘‘(f) COMPLIANCE WITH AUTHORIZED USES.—If the Secretary determines that any 

expenditure made by a Producing Coastal State or coastal political subdivision is 

not consistent with the uses authorized in subsection (e) of this section, the Secretary shall not disburse any further amounts under this section to that Producing 

Coastal State or coastal political subdivision until the amounts used for the inconsistent expenditure have been repaid or obligated for authorized uses.’’

SEC. 112. NATIONAL ENERGY RESOURCE DATABASE. 

(a) SHORT TITLE.—This section may be cited as the ‘‘National Energy Data Preservation Program Act of 2003’’. 

(b) PROGRAM.—The Secretary of the Interior (in this section, referred to as ‘‘Secretary’’) shall carry out a National Energy Data Preservation Program in accordance 

with this section—

(1) to archive geologic, geophysical, and engineering data and samples related 

to energy resources including oil, gas, coal, and geothermal resources; 

(2) to provide a national catalog of such archival material; and 

(3) to provide technical assistance related to the archival material. 

(c) ENERGY DATA ARCHIVE SYSTEM.—

(1) The Secretary shall establish, as a component of the program, an energy 

data archive system, which shall provide for the storage, preservation, and 

archiving of subsurface, and in limited cases surface, geological, geophysical and 

engineering data and samples. The Secretary, in consultation with the AssociaVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00018 Fmt 6659 Sfmt 6621 E:\HR\OC\SR043.XXX SR043
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tion of American State Geologists and interested members of the public, shall 

develop guidelines relating to the energy data archive system, including the 

types of data and samples to be preserved. 

(2) The system shall be comprised of State agencies and agencies within the 

Department of the Interior that maintain geological and geophysical data and 

samples regarding energy resources and that are designated by the Secretary 

in accordance with this subsection. The program shall provide for the storage 

of data and samples through data repositories operated by such agencies. 

(3) The Secretary may not designate a State agency as a component of the 

energy data archive system unless it is the agency that acts as the geological 

survey in the State. 

(4) The energy data archive system shall provide for the archiving of relevant 

subsurface data and samples obtained during energy exploration and production 

operations on Federal lands— (A) in the most appropriate repository designated under paragraph (2), 

with preference being given to archiving data in the State in which the data 

was collected; and 

(B) consistent with all applicable law and requirements relating to confidentiality and proprietary data. 

(5)(A) Subject to the availability of appropriations, the Secretary shall provide 

financial assistance to a State agency that is designated under paragraph (2) 

for providing facilities to archive energy material. 

(B) The Secretary, in consultation with the Association of American State Geologists and interested members of the public, shall establish procedures for 

providing assistance under this paragraph. The procedures shall be designed to 

ensure that such assistance primarily supports the expansion of data and material archives and the collection and preservation of new data and samples. 

(d) NATIONAL CATALOG.—

(1) As soon as practicable after the date of the enactment of this section, the 

Secretary shall develop and maintain, as a component of the program, a national catalog that identifies—

(A) energy data and samples available in the energy data archive system 

established under subsection (c); 

(B) the repository for particular material in such system; and 

(C) the means of accessing the material. 

(2) The Secretary shall make the national catalog accessible to the public on 

the site of the Survey on the World Wide Web, consistent with all applicable 

requirements related to confidentiality and proprietary data. 

(3) The Secretary may carry out the requirements of this subsection by contract or agreement with appropriate persons. 

(e) TECHNICAL ASSISTANCE.—

(1) Subject to the availability of appropriations, as a component of the Program, the Secretary shall provide financial assistance to any State agency designated under subsection (c)(2) to provide technical assistance to enhance 

unders tanding, interpretation, and use of materials archived in the energy data 

archive system established under subsection (c). 

(2) The Secretary, in consultation with the Association of American State Geologists and interested members of the public, shall develop a process, which 

shall involve the participation of representatives of relevant Federal and State 

agencies, for the approval of financial assistance to State agencies under this 

subsection. 

(f) COSTS.—

(1) The Federal share of the cost of an activity carried out with assistance 

under subsections (c) or (e) shall be no more than 50 percent of the total cost 

of that activity. 

(2) The Secretary—

(A) may accept private contributions of property and services for technical 

assistance and archive activities conducted under this section; and 

(B) may apply the value of such contributions to the non-Federal share 

of the costs of such technical assistance and archive activities. 

(g) REPORTS.—

(1) Within one year after the date of the enactment of this Act, the Secretary 

shall submit an initial report to the Congress setting forth a plan for the implementation of the program. 

(2) Not later than 90 days after the end of the first fiscal year beginning after 

the submission of the report under paragraph (1) and after the end of each fiscal year thereafter, the Secretary shall submit a report to the Congress describing the status of the program and evaluating progress achieved during the preceding fiscal year in developing and carrying out the program. 

16

(3) The Secretary shall consult with the Association of American State Geologists and interested members of the public in preparing the reports required by 

this subsection. 

(h) DEFINITIONS.—As used in this section, the term: 

(1) ‘‘Association of American State Geologists’’ means the organization of the 

chief executives of the State geological surveys. 

(2) ‘‘Secretary’’ means the Secretary of the Interior acting through the Director of the United States Geological Survey. 

(3) ‘‘Program’’ means the National Energy Data Preservation Program carried 

out under this section. 

(4) ‘‘Survey’’ means the United States Geological Survey. 

(i) MAINTENANCE OF STATE EFFORT.—It is the intent of the Congress that the 

States not use this section as an opportunity to reduce State resources applied to 

the activities that are the subject of the program. 

(j) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to the Secretary $30,000,000 for each of fiscal years 2003 through 2007 for carrying 

out this section. 

SEC. 113. OIL AND GAS LEASE ACREAGE LIMITATION. 

Section 27(d)(1) of the Mineral Leasing Act (30 U.S.C. 184(d)(1)) is amended by 

inserting after ‘‘acreage held in special tar sands area’’ the following: ‘‘as well as 

acreage under any lease any portion of which has been committed to a federally approved unit or cooperative plan or communitization agreement, or for which royalty, 

including compensatory royalty or royalty-in-kind, was paid in the preceding calendar year,’’. 

SEC. 114. ASSESSMENT OF DEPENDENCE OF STATE OF HAWAII ON OIL. 

(a) ASSESSMENT.—The Secretary of Energy shall assess the economic implication 

of the dependence of the State of Hawaii on oil as the principal source of energy 

for the State, including— (1) the short- and long-term prospects for crude oil supply disruption and 

price volatility and potential impacts on the economy of Hawaii; 

(2) the economic relationship between oil-fired generation of electricity from 

residual fuel and refined petroleum products consumed for ground, marine, and 

air transportation; 

(3) the technical and economic feasibility of increasing the contribution of renewable energy resources for generation of electricity, on an island-by-island 

basis, including— (A) siting and facility configuration; 

(B) environmental, operational, and safety considerations; 

(C) the availability of technology; 

(D) effects on the utility system including reliability; 

(E) infrastructure and transport requirements; 

(F) community support; and 

(G) other factors affecting the economic impact of such an increase and 

any effect on the economic relationship described in paragraph (2); 

(4) the technical and economic feasibility of using liquefied natural gas to displace residual fuel oil for electric generation, including neighbor island opportunities, and the effect of such displacement on the economic relationship described in paragraph (2) including—

(A) the availability of supply; 

(B) siting and facility configuration for onshore and offshore liquefied natural gas receiving terminals; 

(C) the factors described in subparagraphs (B) through (F) of paragraph 

(3); and 

(D) other economic factors; 

(5) the technical and economic feasibility of using renewable energy sources 

(including hydrogen) for ground, marine, and air transportation energy applications to displace the use of refined petroleum products, on an island-by-island 

basis, and the economic impact of such displacement on the relationship described in (2); and 

(6) an island-by-island approach to—

(A) the development of hydrogen from renewable resources; and 

(B) the application of hydrogen to the energy needs of Hawaii. 

(b) CONTRACTING AUTHORITY.—The Secretary of Energy may carry out the assessment under subsection (a) directly or, in whole or in part, through one or more contracts with qualified public or private entities. 

(c) REPORT.—Not later than 300 days after the date of enactment of this Act, the 

Secretary of Energy shall prepare, in consultation with agencies of the State of Hawaii and other stakeholders, as appropriate, and submit to Congress, as report deVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00020 Fmt 6659 Sfmt 6621 E:\HR\OC\SR043.XXX SR043
17

tailing the findings, conclusions, and recommendations resulting from the assessment. 

(d) APPROPRIATION.—They are authorized to be appropriated such sums as are 

necessary to carry out this section. 

Subtitle B—Access to Federal Lands 

SEC. 121. OFFICE OF FEDERAL ENERGY PERMIT COORDINATION. 

(a) ESTABLISHMENT.—The President shall establish the Office of Federal Energy 

Permit Coordination (in this section, referred to as ‘‘Office’’) within the Executive 

Office of the President in the same manner and mission as the White House Energy 

Projects Task Force established by Executive Order 13212. 

(b) STAFFING.—The Office shall be staffed by functional experts from relevant federal agencies and departments on a nonreimbursable basis to carry out the mission 

of this office. 

(c) REPORTING.—The Office shall provide an annual report to Congress, detailing 

the activities put in place to coordinate and expedite Federal decisions on energy 

projects. The report shall list accomplishments in improving the federal decision 

making process and shall include any additional recommendations or systemic 

changes needed to establish a more effective and efficient federal permitting process. 

SEC. 122. PILOT PROJECT TO IMPROVE FEDERAL PERMIT COORDINATION. 

(a) CREATION OF PILOT PROJECT.—The Secretary of the Interior (in this section, 

referred to as ‘‘Secretary’’) shall establish a Federal Permit Streamlining Pilot 

Project. The Secretary shall enter into a Memorandum of Understanding with the 

Secretary of Agriculture, Administrator of the Environmental Protection Agency, 

and the Chief of the Corps of Engineers within 90 days after enactment of this Act. 

The Secretary may also request that the Governors of Wyoming, Montana, Colorado, 

and New Mexico be signatories to the Memorandum of Understanding. 

(b) DESIGNATION OF QUALIFIED STAFF.—Once the Pilot Project has been established by the Secretary, all Federal signatory parties shall assign an employee on 

a nonreimbursable basis to each of the field offices identified in section (c), who has 

expertise in the regulatory issues pertaining to their office, including, as applicable, 

particular expertise in Endangered Species Act section 7 consultations and the preparation of Biological Opinions, Clean Water Act 404 permits, Clean Air Act regulatory matters, planning under the National Forest Management Act, and the preparation of analyses under the National Environmental Policy Act. Assigned staff 

shall report to the Bureau of Land Management (BLM) Field Managers in the offices to which they are assigned, and shall be responsible for all issues related to 

the jurisdiction of their home office or agency, and participate as part of the team 

of employees working on proposed energy projects, planning, and environmental 

analyses. 

(c) FIELD OFFICES.—The following BLM field offices shall serve as the Federal 

Permit Streamlining Pilot Project offices: 

(1) Rawlins, Wyoming; 

(2) Buffalo, Wyoming; 

(3) Miles City, Montana; 

(4) Farmington, New Mexico; 

(5) Carlsbad, New Mexico; and 

(6) Glenwood Springs, Colorado. 

(d) REPORTS.—The Secretary shall submit a report to the Congress 3 years following the date of enactment of this section, outlining the results of the pilot project 

to date and including a recommendation to the President as to whether the pilot 

project should be implemented nationwide. 

(e) ADDITIONAL PERSONNEL.—The Secretary shall assign to each of the BLM field 

offices listed in subsection (c) such additional personnel as is necessary to ensure 

the effective implementation of—

(1) the Pilot Project; and 

(2) other programs administered by such offices, including inspection and enforcement related to energy development on Federal lands, pursuant to the multiple use mandate of the Federal Land Policy and Management Act of 1976 (43 

U.S.C. 1701 et seq.). 

(f) SAVINGS PROVISION.—Nothing in this section shall affect the operation of any 

Federal or State law or any delegation of authority made by a Secretary or head 

of an agency whose employees are participating in the program provided for by this 

section. 

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

such sums as may be necessary to implement this section. 

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SEC. 123. FEDERAL ONSHORE LEASING PROGRAMS FOR OIL AND GAS. 

(a) TIMELY ACTION ON LEASES AND PERMITS.—To ensure timely action on oil and 

gas leases and applications for permits to drill on lands otherwise available for leasing, the Secretary of the Interior shall—

(1) ensure expeditious compliance with the requirements of section 102(2)(C) 

of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)); 

(2) improve consultation and coordination with the States; and 

(3) improve the collection, storage, and retrieval of information related to such 

leasing activities. 

(b) IMPROVED ENFORCEMENT.—The Secretary shall improve inspection and enforcement of oil and gas activities, including enforcement of terms and conditions 

in permits to drill. 

(c) AUTHORIZATION OF APPROPRIATIONS.—For each of the fiscal years 2004 through 

2007, in addition to amounts otherwise authorized to be appropriated for the purpose of carrying out section 17 of the Mineral Leasing Act (30 U.S.C. 226), there 

are authorized to be appropriated to the Secretary of the Interior—

(1) $40,000,000 for the purpose of carrying out paragraphs (1) through (3) of 

subsection (a); and 

(2) $20,000,000 for the purpose of carrying out subsection (b). 

SEC. 124. ESTIMATES OF OIL AND GAS RESOURCES UNDERLYING ONSHORE FEDERAL LANDS. 

Section 604 of the Energy Act of 2000 (42 U.S.C. 6217) is amended by striking 

‘‘(a) IN GENERAL’’ and all thereafter and inserting—

‘‘(a) IN GENERAL.—The Secretary of the Interior, in consultation with the Secretaries of Agriculture and Energy, shall conduct an inventory of all onshore Federal 

lands and take measures necessary to update and revise this inventory. The inventory shall identify for all Federal lands—

‘‘(1) the United States Geological Survey estimates of the oil and gas resources underlying these lands; 

‘‘(2) the extent and nature of any restrictions or impediments to the exploration, production and transportation of such resources, including—

‘‘(A) existing land withdrawals and the underlying purpose for each withdrawal; 

‘‘(B) restrictions or impediments affecting timeliness of granting leases; 

‘‘(C) post-lease restrictions or impediments such as conditions of approval, 

applications for permits to drill, applicable environmental permits; 

‘‘(D) permits or restrictions associated with transporting the resources; 

and 

‘‘(E) identification of the authority for each restriction or impediment together with the impact on additional processing or review time and potential remedies; and 

‘‘(3) the estimates of oil and gas resources not available for exploration and 

production by virtue of the restrictions identified above. 

‘‘(b) REPORTS.—The Secretary shall provide a progress report to the Congress by 

October 1, 2006 and shall complete the inventory by October 1, 2010. 

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

such sums as may be necessary to implement this section.’’. 

SEC. 125. SPLIT-ESTATE FEDERAL OIL AND GAS LEASING AND DEVELOPMENT PRACTICES. 

(a) REVIEW.—In consultation with affected private surface owners, oil and gas industry and other interested parties, the Secretary of the Interior shall undertake 

a review of the current policies and practices with respect to management of Federal 

subsurface oil and gas development activities and their effects on the privately 

owned surface. This review shall include—

(1) a comparison of the rights and responsibilities under existing mineral and 

land law for the owner of a Federal mineral lease, the private surface owners 

and the Department; 

(2) a comparison of the surface owner consent provisions in section 714 of the 

Surface Mining Control and Reclamation Act (30 U.S.C. 1304) concerning surface mining of Federal coal deposits and the surface owner consent provisions 

for oil and gas development, including coalbed methane production; and 

(3) recommendations for administrative or legislative action necessary to facilitate reasonable access for Federal oil and gas activities while addressing surface owner concerns and minimizing impacts to private surface. 

(b) REPORT.—The Secretary of the Interior shall report the results of such review 

to the Congress no later than 180 days after enactment of this section. 

SEC. 126. COORDINATION OF FEDERAL AGENCIES TO ESTABLISH PRIORITY ENERGY TRANSMISSION RIGHTS–OF–WAY. 

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

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(1) The term ‘‘utility corridor’’ means any linear strip of land across Federal 

lands of approved width, but limited by technological, environmental, and topographical factors for use by a utility facility. 

(2) The term ‘‘Federal authorization’’ means any authorization required under 

Federal law in order to site a utility facility, including but not limited to such 

permits, special use authorizations, certifications, opinions, or other approvals 

as may be required, issued by a Federal agency. 

(3) The term ‘‘Federal lands’’ means all lands owned by the United States, except—

(A) lands in the National Park System; 

(B) lands held in trust for an Indian or Indian tribe; and 

(C) lands on the Outer Continental Shelf. 

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

(5) The term ‘‘utility facility’’ means any privately, publicly, or cooperatively 

owned line, facility, or system (A) for the transportation of oil and natural gas, 

synthetic liquid or gaseous fuels, any refined product produced therefrom, or for 

transportation of products in support of production, or for storage and terminal 

facilities in connection therewith; or (B) for the generation, transmission and 

distribution of electric energy. 

(b) UTILITY CORRIDORS.—

(1) No later than 24 months after the date of enactment of this section, the 

Secretary of the Interior, with respect to public lands, and the Secretary of Agriculture, with respect to National Forest System lands, in consultation with the 

Secretary, shall—

(A) designate utility corridors pursuant to section 503 of the Federal 

Land Policy and Management Act (43 U.S.C. 1763) in the eleven contiguous 

Western States, as identified in section 103(o) of such Act (43 U.S.C. 

1702(o)); and 

(B) incorporate the utility corridors designated under paragraph (A) into 

the relevant departmental and agency land use and resource management 

plans or their equivalent. 

(2) The Secretary shall coordinate with the affected Federal agencies to jointly 

identify potential utility corridors on Federal lands in the other States and 

jointly develop a schedule for the designation, environmental review and incorporation of such utility corridors into relevant departmental and agency land 

use and resource management plans or their equivalent. 

(c) FEDERAL PERMIT COORDINATION.—The Secretary, in consultation with the Secretary of the Interior, the Secretary of Agriculture, and the Secretary of Defense, 

shall develop a memorandum of understanding (‘‘MOU’’) for the purpose of coordinating all applicable Federal authorizations and environmental reviews related to 

a proposed or existing utility facility. To the maximum extent practicable under applicable law, the Secretary shall coordinate the process developed in the MOU with 

any Indian tribes, multi-State entities, and State agencies that are responsible for 

conducting any separate permitting and environmental reviews of the affected utility facility to ensure timely review and permit decisions. The MOU shall provide 

for—

(1) the coordination among affected Federal agencies to ensure that the necessary Federal authorizations are conducted concurrently with applicable State 

siting processes and are considered within a specific time frame to be identified 

in the MOU; 

(2) an agreement among the affected Federal agencies to prepare a single environmental review document to be used as the basis for all Federal authorization decisions; and 

(3) a process to expedite applications to construct or modify utility facilities 

within utility corridors. 

Subtitle C—Alaska Natural Gas Pipeline 

SEC. 131. SHORT TITLE. 

This subtitle may be cited as the ‘‘Alaska Natural Gas Pipeline Act’’. 

SEC. 132. DEFINITIONS. 

In this subtitle, the following definitions apply: 

(1) The term ‘‘Alaska natural gas’’ means natural gas derived from the area 

of the State of Alaska lying north of 64 degrees North latitude. 

(2) The term ‘‘Alaska natural gas transportation project’’ means any natural 

gas pipeline system that carries Alaska natural gas to the border between Alaska and Canada (including related facilities subject to the jurisdiction of the 

Commission) that is authorized under either—

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(A) the Alaska Natural Gas Transportation Act of 1976 (15 U.S.C. 719 

et seq.); or 

(B) section 133. 

(3) The term ‘‘Alaska natural gas transportation system’’ means the Alaska 

natural gas transportation project authorized under the Alaska Natural Gas 

Transportation Act of 1976 and designated and described in section 2 of the 

President’s decision. 

(4) The term ‘‘Commission’’ means the Federal Energy Regulatory Commission. 

(5) The term ‘‘President’s decision’’ means the decision and report to Congress 

on the Alaska natural gas transportation system issued by the President on 

September 22, 1977, pursuant to section 7 of the Alaska Natural Gas Transportation Act of 1976 (15 U.S.C. 719(e) and approved by Public Law 95–158 (91 

Stat. 1268). 

SEC. 133. ISSUANCE OF CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY. 

(a) AUTHORITY OF THE COMMISSION.—Notwithstanding the provisions of the Alaska Natural Gas Transportation Act of 1976 (15 U.S.C. 719 et seq.), the Commission 

may, pursuant to section 7(c) of the Natural Gas Act (15 U.S.C. 717f(c)), consider 

and act on an application for the issuance of a certificate of public convenience and 

necessity authorizing the construction and operation of an Alaska natural gas transportation project other than the Alaska natural gas transportation system. 

(b) ISSUANCE OF CERTIFICATE.—

(1) The Commission shall issue a certificate of public convenience and necessity authorizing the construction and operation of an Alaska natural gas transportation project under this section if the applicant has satisfied the requirements of section 7(e) of the Natural Gas Act (15 U.S.C. 717f(e)). 

(2) In considering an application under this section, the Commission shall 

presume that—

(A) a public need exists to construct and operate the proposed Alaska natural gas transportation project; and 

(B) sufficient downstream capacity will exist to transport the Alaska natural gas moving through such project to markets in the contiguous United 

States. 

(c) EXPEDITED APPROVAL PROCESS.—The Commission shall issue a final order 

granting or denying any application for a certificate of public convenience and necessity under section 7(c) of the Natural Gas Act (15 U.S.C. 717f(c)) and this section 

not more than 60 days after the issuance of the final environmental impact statement for that project pursuant to section 134. 

(d) PROHIBITION ON CERTAIN PIPELINE ROUTE.—No license, permit, lease, rightof-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—

(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. 

(e) OPEN SEASON.—Except where an expansion is ordered pursuant to section 135, 

initial or expansion capacity on any Alaska natural gas transportation project shall 

be allocated in accordance with procedures to be established by the Commission in 

regulations governing the conduct of open seasons for such project. Such procedures 

shall include the criteria for and timing of any open seasons; promote competition 

in the exploration, development, and production of Alaska natural gas; and, for any 

open season for capacity beyond the initial capacity, provide the opportunity for the 

transportation of natural gas other than from the Prudhoe Bay and Point Thompson 

units. The Commission shall issue such regulations not later than 120 days after 

the date of enactment of this Act. 

(f) PROJECTS IN THE CONTIGUOUS UNITED STATES.—Applications for additional or 

expanded pipeline facilities that may be required to transport Alaska natural gas 

from Canada to markets in the contiguous United States may be made pursuant to 

the Natural Gas Act. To the extent such pipeline facilities include the expansion of 

any facility constructed pursuant to the Alaska Natural Gas Transportation Act of 

1976, the provisions of that Act shall continue to apply. 

(g) STUDY OF IN-STATE NEEDS.—The holder of the certificate of public convenience 

and necessity issued, modified, or amended by the Commission for an Alaska natural gas transportation project shall demonstrate that it has conducted a study of 

Alaska in-State needs, including tie-in points along the Alaska natural gas transportation project for in-State access. 

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(h) ALASKA ROYALTY GAS.—The Commission, upon the request of the State of 

Alaska and after a hearing, may provide for reasonable access to the Alaska natural 

gas transportation project for the State of Alaska or its designee for the transportation of the State’s royalty gas for local consumption needs within the State; except 

that the rates of existing shippers of subscribed capacity on such project shall not 

be increased as a result of such access. 

(i) REGULATIONS.—The Commission may issue regulations to carry out the provisions of this section. 

SEC. 134. ENVIRONMENTAL REVIEWS. 

(a) COMPLIANCE WITH NEPA.—The issuance of a certificate of public convenience 

and necessity authorizing the construction and operation of any Alaska natural gas 

transportation project under section 133 shall be treated as a major Federal action 

significantly affecting the quality of the human environment within the meaning of 

section 102(2)(c) of the National Environmental Policy Act of 1969 (42 U.S.C. 

4332(2)(c)). 

(b) DESIGNATION OF LEAD AGENCY.—The Commission shall be the lead agency for 

purposes of complying with the National Environmental Policy Act of 1969, and 

shall be responsible for preparing the statement required by section 102(2)(c) of that 

Act (42 U.S.C. 4332(2)(c)) with respect to an Alaska natural gas transportation 

project under section 133. The Commission shall prepare a single environmental 

statement under this section, which shall consolidate the environmental reviews of 

all Federal agencies considering any aspect of the project. 

(c) OTHER AGENCIES.—All Federal agencies considering aspects of the construction 

and operation of an Alaska natural gas transportation project under section 133 

shall cooperate with the Commission, and shall comply with deadlines established 

by the Commission in the preparation of the statement under this section. The 

statement prepared under this section shall be used by all such agencies to satisfy 

their responsibilities under section 102(2)(c) of the National Environmental Policy 

Act of 1969 (42 U.S.C. 4332(2)(c)) with respect to such project. 

(d) EXPEDITED PROCESS.—The Commission shall issue a draft statement under 

this section not later than 12 months after the Commission determines the application to be complete and shall issue the final statement not later than 6 months after 

the Commission issues the draft statement, unless the Commission for good cause 

finds that additional time is needed. 

SEC. 135. PIPELINE EXPANSION. 

(a) AUTHORITY.—With respect to any Alaska natural gas transportation project, 

upon the request of one or more persons and after giving notice and an opportunity 

for a hearing, the Commission may order the expansion of such project if it determines that such expansion is required by the present and future public convenience 

and necessity. 

(b) REQUIREMENTS.—Before ordering an expansion, the Commission shall—

(1) approve or establish rates for the expansion service that are designed to 

ensure the recovery, on an incremental or rolled-in basis, of the cost associated 

with the expansion (including a reasonable rate of return on investment); 

(2) ensure that the rates as established do not require existing shippers on 

the Alaska natural gas transportation project to subsidize expansion shippers; 

(3) find that the proposed shipper will comply with, and the proposed expansion and the expansion of service will be undertaken and implemented based 

on, terms and conditions consistent with the then-effective tariff of the Alaska 

natural gas transportation project; 

(4) find that the proposed facilities will not adversely affect the financial or 

economic viability of the Alaska natural gas transportation project; 

(5) find that the proposed facilities will not adversely affect the overall operations of the Alaska natural gas transportation project; 

(6) find that the proposed facilities will not diminish the contract rights of existing shippers to previously subscribed certificated capacity; 

(7) ensure that all necessary environmental reviews have been completed; and 

(8) find that adequate downstream facilities exist or are expected to exist to 

deliver incremental Alaska natural gas to market. 

(c) REQUIREMENT FOR A FIRM TRANSPORTATION AGREEMENT.—Any order of the 

Commission issued pursuant to this section shall be null and void unless the person 

or persons requesting the order executes a firm transportation agreement with the 

Alaska natural gas transportation project within a reasonable period of time as 

specified in such order. 

(d) LIMITATION.—Nothing in this section shall be construed to expand or otherwise 

affect any authorities of the Commission with respect to any natural gas pipeline 

located outside the State of Alaska. 

22

(e) REGULATIONS.—The Commission may issue regulations to carry out the provisions of this section. 

SEC. 136. FEDERAL COORDINATOR. 

(a) ESTABLISHMENT.—There is established, as an independent office in the executive branch, the Office of the Federal Coordinator for Alaska Natural Gas Transportation Projects. 

(b) FEDERAL COORDINATOR.—The Office shall be headed by a Federal Coordinator 

for Alaska Natural Gas Transportation Projects, who shall— (1) be appointed by the President, by and with the advice and consent of the 

Senate; 

(2) for a term equal to the period required to design, permit and construct 

the project plus one year; and 

(3) be compensated at the rate prescribed for level III of the Executive Schedule (5 U.S.C. 5314). 

(c) DUTIES.—The Federal Coordinator shall be responsible for— (1) coordinating the expeditious discharge of all activities by Federal agencies 

with respect to an Alaska natural gas transportation project; and 

(2) ensuring the compliance of Federal agencies with the provisions of this 

subtitle. 

(d) REVIEWS AND ACTIONS OF OTHER FEDERAL AGENCIES.— (1) All reviews conducted and actions taken by any Federal officer or agency 

relating to an Alaska natural gas transportation project authorized under this 

section shall be expedited, in a manner consistent with completion of the necessary reviews and approvals by the deadlines set forth in this subtitle. 

(2) No Federal officer or agency shall have the authority to include terms and 

conditions that are permitted, but not required, by law on any certificate, rightof-way, permit, lease, or other authorization issued to an Alaska natural gas 

transportation project if the Federal Coordinator determines that the terms and 

conditions would prevent or impair in any significant respect the expeditious 

construction and operation, or an expansion, of the project. 

(3) Unless required by law, no Federal officer or agency shall add to, amend, 

or abrogate any certificate, right-of-way, permit, lease, or other authorization 

issued to an Alaska natural gas transportation project if the Federal Coordinator determines that such action would prevent or impair in any significant 

respect the expeditious construction and operation of, or an expansion of, the 

project. 

(4) The Federal Coordinator’s authority shall not include the ability to override— (A) the implementation or enforcement of regulations issued by the Commission pursuant to Section 133(e); or 

(B) an order by the Commission to expand the project pursuant to section 

135. 

(5) Nothing in this section shall give the Federal Coordinator the authority 

to impose additional terms, conditions or requirements beyond those imposed by 

the Commission or any agency with respect to construction and operation, or 

an expansion of, the project. 

(e) STATE COORDINATION.—The Federal Coordinator shall enter into a Joint Surveillance and Monitoring Agreement, approved by the President and the Governor 

of Alaska, with the State of Alaska similar to that in effect during construction of 

the Trans-Alaska Oil Pipeline to monitor the construction of the Alaska natural gas 

transportation project. The Federal Government shall have primary surveillance 

and monitoring responsibility where the Alaska natural gas transportation project 

crosses Federal lands and private lands, and the State government shall have primary surveillance and monitoring responsibility where the Alaska natural gas 

transportation project crosses State lands. 

(f) TRANSFER OF FEDERAL INSPECTOR FUNCTIONS AND AUTHORITY.—Upon appointment of the Federal Coordinator by the President, all of the functions and authority 

of the Office of Federal Inspector of Construction for the Alaska Natural Gas Transportation System vested in the Secretary of Energy pursuant to section 3012(b) of 

Public Law 102–486 (15 U.S.C. 719e(b)), including all functions and authority described and enumerated in the Reorganization Plan No. 1 of 1979 (44 Fed. Reg. 

33,663), Executive Order No. 12142 of June 21, 1979 (44 Fed. Reg. 36,927), and section 5 of the President’s decision, shall be transferred to the Federal Coordinator. 

SEC. 137. JUDICIAL REVIEW. 

(a) EXCLUSIVE JURISDICTION.—Except for review by the Supreme Court of the 

United States on writ of certiorari, the United States Court of Appeals for the District of Columbia Circuit shall have original and exclusive jurisdiction to determine—

23

(1) the validity of any final order or action (including a failure to act) of any 

Federal agency or officer under this subtitle; 

(2) the constitutionality of any provision of this subtitle, or any decision made 

or action taken under this subtitle; or 

(3) the adequacy of any environmental impact statement prepared under the 

National Environmental Policy Act of 1969 with respect to any action under this 

subtitle. 

(b) DEADLINE FOR FILING CLAIM.—Claims arising under this subtitle may be 

brought not later than 60 days after the date of the decision or action giving rise 

to the claim. 

(c) EXPEDITED CONSIDERATION.—The United States Court of Appeals for the District of Columbia Circuit shall set any action brought under subsection (a) for expedited consideration, taking into account the national interest of enhancing national 

energy security by providing access to the significant gas reserves in Alaska needed 

to meet the anticipated demand for natural gas. 

(d) AMENDMENT TO ANGTA.—Section 10(c) of the Alaska Natural Gas Transportation Act of 1976 (15 U.S.C. 719h) is amended by inserting after paragraph (1) the 

following: 

‘‘(2) The United States Court of Appeals for the District of Columbia Circuit 

shall set any action brought under this section for expedited consideration, taking into account the national interest described in section 2.’’. 

SEC. 138. STATE JURISDICTION OVER IN-STATE DELIVERY OF NATURAL GAS. 

(a) LOCAL DISTRIBUTION.—Any facility receiving natural gas from the Alaska natural gas transportation project for delivery to consumers within the State of Alaska 

shall be deemed to be a local distribution facility within the meaning of section 1(b) 

of the Natural Gas Act (15 U.S.C. 717(b)), and therefore not subject to the jurisdiction of the Commission. 

(b) ADDITIONAL PIPELINES.—Nothing in this subtitle, except as provided in section 

133(d), shall preclude or affect a future gas pipeline that may be constructed to deliver natural gas to Fairbanks, Anchorage, Matanuska-Susitna Valley, or the Kenai 

peninsula or Valdez or any other site in the State of Alaska for consumption within 

or distribution outside the State of Alaska. 

(c) RATE COORDINATION.—Pursuant to the Natural Gas Act, the Commission shall 

establish rates for the transportation of natural gas on the Alaska natural gas 

transportation project. In exercising such authority, the Commission, pursuant to 

section 17(b) of the Natural Gas Act (15 U.S.C. 717p(b)), shall confer with the State 

of Alaska regarding rates (including rate settlements) applicable to natural gas 

transported on and delivered from the Alaska natural gas transportation project for 

use within the State of Alaska. 

SEC. 139. STUDY OF ALTERNATIVE MEANS OF CONSTRUCTION. 

(a) REQUIREMENT OF STUDY.—If no application for the issuance of a certificate or 

amended certificate of public convenience and necessity authorizing the construction 

and operation of an Alaska natural gas transportation project has been filed with 

the Commission not later than 18 months after the date of enactment of this Act, 

the Secretary of Energy shall conduct a study of alternative approaches to the construction and operation of the project. 

(b) SCOPE OF STUDY.—The study shall consider the feasibility of establishing a 

Government corporation to construct an Alaska natural gas transportation project, 

and alternative means of providing Federal financing and ownership (including alternative combinations of Government and private corporate ownership) of the 

project. 

(c) CONSULTATION.—In conducting the study, the Secretary of Energy shall consult 

with the Secretary of the Treasury and the Secretary of the Army (acting through 

the Commanding General of the Corps of Engineers). 

(d) REPORT.—If the Secretary of Energy is required to conduct a study under subsection (a), the Secretary shall submit a report containing the results of the study, 

the Secretary’s recommendations, and any proposals for legislation to implement the 

Secretary’s recommendations to Congress. 

SEC. 140. CLARIFICATION OF ANGTA STATUS AND AUTHORITIES. 

(a) SAVINGS CLAUSE.—Nothing in this subtitle affects any decision, certificate, permit, right-of-way, lease, or other authorization issued under section 9 of the Alaska 

Natural Gas Transportation Act of 1976 (15 U.S.C. 719(g)) or any Presidential findings or waivers issued in accordance with that Act. 

(b) CLARIFICATION OF AUTHORITY TO AMEND TERMS AND CONDITIONS TO MEET

CURRENT PROJECT REQUIREMENTS.—Any Federal officer or agency responsible for 

granting or issuing any certificate, permit, right-of-way, lease, or other authorization under section 9 of the Alaska Natural Gas Transportation Act of 1976 (15 

24

U.S.C. 719(g)) may add to, amend, or abrogate any term or condition included in 

such certificate, permit, right-of-way, lease, or other authorization to meet current 

project requirements (including the physical design, facilities, and tariff specifications), so long as such action does not compel a change in the basic nature and general route of the Alaska natural gas transportation system as designated and described in section 2 of the President’s decision, or would otherwise prevent or impair 

in any significant respect the expeditious construction and initial operation of such 

transportation system. 

(c) UPDATED ENVIRONMENTAL REVIEWS.—The Secretary of Energy shall require 

the sponsor of the Alaska natural gas transportation system to submit such updated 

environmental data, reports, permits, and impact analyses as the Secretary determines are necessary to develop detailed terms, conditions, and compliance plans required by section 5 of the President’s decision. 

SEC. 141. SENSE OF CONGRESS. 

It is the sense of Congress that an Alaska natural gas transportation project will 

provide significant economic benefits to the United States and Canada. In order to 

maximize those benefits, Congress urges the sponsors of the pipeline project to 

make every effort to use steel that is manufactured or produced in North America 

and to negotiate a project labor agreement to expedite construction of the pipeline. 

SEC. 142. PARTICIPATION OF SMALL BUSINESS CONCERNS. 

(a) SENSE OF CONGRESS.—It is the sense of Congress that an Alaska natural gas 

transportation project will provide significant economic benefits to the United States 

and Canada. In order to maximize those benefits, Congress urges the sponsors of 

the pipeline project to maximize the participation of small business concerns in contracts and subcontracts awarded in carrying out the project. 

(b) STUDY.—

(1) The Comptroller General shall conduct a study on the extent to which 

small business concerns participate in the construction of oil and gas pipelines 

in the United States. 

(2) Not later that 1 year after the date of enactment of this Act, the Comptroller General shall transmit to Congress a report containing the results of the 

study. 

(3) The Comptroller General shall update the study at least once every 5 

years and transmit to Congress a report containing the results of the update. 

(4) After the date of completion of the construction of an Alaska natural gas 

transportation project, this subsection shall no longer apply. 

(c) SMALL BUSINESS CONCERN DEFINED.—In this section, the term ‘‘small business 

concern’’ has the meaning given such term in section 3(a) of the Small Business Act 

(15 U.S.C. 632(a)). 

SEC. 143. ALASKA PIPELINE CONSTRUCTION TRAINING PROGRAM. 

(a) ESTABLISHMENT OF PROGRAM.—The Secretary of Labor (in this section referred 

to as the ‘‘Secretary’’) may make grants to the Alaska Department of Labor and 

Workforce Development to—

(1) develop a plan to train, through the workforce investment system established in the State of Alaska under the Workforce Investment Act of 1998 (112 

Stat. 936 et seq.), adult and dislocated workers, including Alaska Natives, in 

urban and rural Alaska in the skills required to construct and operate an Alaska gas pipeline system; and 

(2) implement the plan developed pursuant to paragraph (1). 

(b) REQUIREMENTS FOR PLANNING GRANTS.—The Secretary may make a grant 

under subsection (a)(1) only if—

(1) the Governor of Alaska certifies in writing to the Secretary that there is 

a reasonable expectation that construction of an Alaska gas pipeline will commence within 3 years after the date of such certification; and 

(2) the Secretary of the Interior concurs in writing to the Secretary with the 

certification made under paragraph (1). 

(c) REQUIREMENTS FOR IMPLEMENTATION GRANTS.—The Secretary may make a 

grant under subsection (a)(2) only if—

(1) the Secretary has approved a plan developed pursuant to subsection (a)(1); 

(2) the Governor of Alaska requests the grant funds and certifies in writing 

to the Secretary that there is a reasonable expectation that the construction of 

an Alaska gas pipeline system will commence within 2 years after the date of 

such certification; and 

(3) the Secretary of the Interior concurs in writing to the Secretary with the 

certification made under paragraph (2) after considering—

(A) the status of necessary State and Federal permits; 

(B) the availability of financing for the pipeline project; and 

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(C) other relevant factors and circumstances. 

(d) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated 

to the Secretary such sums as may be necessary, but not to exceed $20,000,000, to 

carry out this section. 

SEC. 144. LOAN GUARANTEES. 

(a) AUTHORITY.—

(1) The Secretary may enter agreements with 1 or more holders of a certificate of public convenience and necessity issued under section 133(b) of this Act 

or section 9 of the Alaska Natural Gas Transportation Act of 1976 (15 U.S.C. 

719g) to issue Federal guarantee instruments with respect to loans and other 

debt obligations for a qualified infrastructure project. 

(2) Subject to the requirements of this section, the Secretary may also enter 

into agreements with 1 or more owners of the Canadian portion of a qualified 

infrastructure project to issue Federal guarantee instruments with respect to 

loans and other debt obligations for a qualified infrastructure project as though 

such owner were a holder described in paragraph (1). 

(3) The authority of the Secretary to issue Federal guarantee instruments 

under this section for a qualified infrastructure project shall expire on the date 

that is 2 years after the date on which the final certificate of public convenience 

and necessity (including any Canadian certificates of public convenience and necessity) is issued for the project. A final certificate shall be considered to have 

been issued when all certificates of public convenience and necessity have been 

issued that are required for the initial transportation of commercially economic 

quantities of natural gas from Alaska to the continental United States. 

(b) CONDITIONS.—

(1) The Secretary may issue a Federal guarantee instrument for a qualified 

infrastructure project only after a certificate of public convenience and necessity 

under section 133(b) of this Act or an amended certificate under section 9 of the 

Alaska Natural Gas Transportation Act of 1976 (15 U.S.C. 719g) has been 

issued for the project. 

(2) The Secretary may issue a Federal guarantee instrument under this section for a qualified infrastructure project only if the loan or other debt obligation guaranteed by the instrument has been issued by an eligible lender. 

(3) The Secretary shall not require as a condition of issuing a Federal guarantee instrument under this section any contractual commitment or other form 

of credit support of the sponsors (other than equity contribution commitments 

and completion guarantees), or any throughput or other guarantee from prospective shippers greater than such guarantees as shall be required by the 

project owners. 

(c) LIMITATIONS ON AMOUNTS.—

(1) The amount of loans and other debt obligations guaranteed under this section for a qualified infrastructure project shall not exceed 80 percent of the total 

capital costs of the project, including interest during construction. 

(2) The principal amount of loans and other debt obligations guaranteed 

under this section shall not exceed, in the aggregate, $18,000,000,000, which 

amount shall be indexed for United States dollar inflation from the date of enactment of this Act, as measured by the Consumer Price Index. 

(d) LOAN TERMS AND FEES.—

(1) The Secretary may issue Federal guarantee instruments under this section 

that take into account repayment profiles and grace periods justified by project 

cash flows and project-specific considerations. The term of any loan guaranteed 

under this section shall not exceed 30 years. 

(2) An eligible lender may assess and collect from the borrower such other 

fees and costs associated with the application and origination of the loan or 

other debt obligation as are reasonable and customary for a project finance 

transaction in the oil and gas sector. 

(e) REGULATIONS.—The Secretary may issue regulations to carry out this section. 

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

such sums as may be necessary to cover the cost of loan guarantees, as defined by 

section 502(5) of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5)). Such 

sums shall remain available until expended. 

(g) DEFINITIONS.—In this section, the following definitions apply: 

(1) The term ‘‘Consumer Price Index’’ means the Consumer Price Index for 

all-urban consumers, United States city average, as published by the Bureau of 

Labor Statistics, or if such index shall cease to be published, any successor 

index or reasonable substitute thereof. 

(2) The term ‘‘eligible lender’’ means any non-Federal qualified institutional 

buyer (as defined by section 230.144A(a) of title 17, Code of Federal Regulations 

26

(or any successor regulation), known as Rule 144A(a) of the Securities and Exchange Commission and issued under the Securities Act of 1933), including— (A) a qualified retirement plan (as defined in section 4974(c) of the Internal Revenue Code of 1986 (26 U.S.C. 4974(c)) that is a qualified institutional buyer; and 

(B) a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986 (26 U.S.C. 414(d)) that is a qualified institutional buyer. 

(3) The term ‘‘Federal guarantee instrument’’ means any guarantee or other 

pledge by the Secretary to pledge the full faith and credit of the United States 

to pay all of the principal and interest on any loan or other debt obligation entered into by a holder of a certificate of public convenience and necessity. 

(4) The term ‘‘qualified infrastructure project’’ means an Alaskan natural gas 

transportation project consisting of the design, engineering, finance, construction, and completion of pipelines and related transportation and production systems (including gas treatment plants), and appurtenances thereto, that are used 

to transport natural gas from the Alaska North Slope to the continental United 

States. 

(5) The term ‘‘Secretary’’ means the Secretary of Energy. 

SEC. 145. SENSE OF CONGRESS ON NATURAL GAS DEMAND. 

It is the sense of Congress that: 

(1) North American demand for natural gas will increase dramatically over 

the course of the next several decades. 

(2) Both the Alaska Natural Gas Pipeline and the McKenzie Delta Natural 

Gas project in Canada will be necessary to help meet the increased demand for 

natural gas in North America. 

(3) Federal and State officials should work together with officials in Canada 

to ensure both projects can move forward in a mutually beneficial fashion. 

(4) Federal and State officials should acknowledge that the smaller scope, 

fewer permitting requirements and lower cost of the McKenzie Delta project 

means it will most likely be completed before the Alaska Natural Gas Pipeline. 

(5) Lower 48 and Canadian natural gas production alone will not be able to 

meet all domestic demand in the coming decades. 

(6) As a result, natural gas delivered from Alaska’s North Slope will not displace or reduce the commercial viability of Canadian natural gas produced from 

the McKenzie Delta nor production from the Lower 48. 

TITLE II—COAL 

Subtitle A—Clean Coal Power Initiative 

SEC. 201. AUTHORIZATION OF APPROPRIATIONS. 

(a) CLEAN COAL POWER INITIATIVE.—There is authorized to be appropriated to the 

Secretary of Energy (in this subtitle, referred to as ‘‘Secretary’’) to carry out the activities authorized by this subtitle $200,000,000 for each of the fiscal years 2003 

through 2011, to remain available until expended. 

SEC. 202. PROJECT CRITERIA. 

(a) IN GENERAL.—The Secretary shall not provide funding under this subtitle for 

any project that does not advance efficiency, environmental performance, and cost 

competitiveness well beyond the level of technologies that are in operation or have 

been demonstrated as of the date of the enactment of this Act. 

(b) TECHNICAL CRITERIA FOR GASIFICATION.—In allocating the funds made available under section 201, the Secretary shall ensure that at least 80 percent of the 

funds are used for coal-based gasification technologies or coal-based projects that include gasification combined cycle, gasification fuel cells, gasification co-production, 

or hybrid gasification/combustion. The Secretary shall set technical milestones specifying emissions levels that coal gasification projects must be designed to and reasonably expected to achieve. The milestones shall get more restrictive through the life 

of the program. The milestones shall be designed to achieve by 2020 coal gasification projects able to—

(1) remove 99 percent of sulfur dioxide; 

(2) emit no more than .05 lbs of NOx per million BTU; 

(3) achieve substantial reductions in mercury emissions; and 

(4) achieve a thermal efficiency of—

(A) 60 percent for coal of more than 9,000 Btu; 

(B) 59 percent for coal of 7,000 to 9,000 Btu; and 

(C) 57 percent for coal of less than 7,000 Btu. 

(c) TECHNICAL CRITERIA FOR OTHER PROJECTS.—For projects not described in 

subsection (b), the Secretary shall set technical milestones specifying emissions 

27

levels that the projects must be designed to and reasonably expected to achieve. 

The milestones shall get more restrictive through the life of the program. The 

milestones shall be designed to achieve by 2010 projects able to—

(1) remove 97 percent of sulfur dioxide; 

(2) emit no more than .08 lbs of NOx per million BTU; 

(3) achieve substantial reductions in mercury emissions; and 

(4) achieve a thermal efficiency of—

(A) 45 percent for coal of more than 9,000 Btu; 

(B) 44 percent for coal of 7,000 to 9,000 Btu; and 

(C) 42 percent for coal of less than 7,000 Btu. 

(d) EXISTING UNITS.—In the case of projects at existing units, in lieu of the thermal efficiency requirements set forth in paragraphs (b)(4) and (c)(4), the projects 

shall be designed to achieve an overall thermal design efficiency improvement compared to the efficiency of the unit as operated, of not less than—

(1) 7 percent for coal of more than 9,000 Btu; 

(2) 6 percent for coal of 7,000 to 9,000 Btu; or 

(3) 4 percent for coal of less than 7,000 Btu. 

(e) PERMITTED USES.—In allocating funds made available in this section, the Secretary may allocate funds to projects that include, as part of the project, the separation and capture of carbon dioxide. 

(f) CONSULTATION.—Before setting the technical milestones under subsections (b) 

and (c), the Secretary shall consult with the Administrator of the Environmental 

Protection Agency and interested entities, including coal producers, industries using 

coal, organizations to promote coal or advanced coal technologies, environmental organizations, and organizations representing workers. 

(g) FINANCIAL CRITERIA.—The Secretary shall not provide a funding award under 

this title unless the recipient has documented to the satisfaction of the Secretary 

that—

(1) the award recipient is financially viable without the receipt of additional 

Federal funding; 

(2) the recipient will provide sufficient information to the Secretary for the 

Secretary to ensure that the award funds are spent efficiently and effectively; 

and 

(3) a market exists for the technology being demonstrated or applied, as evidenced by statements of interest in writing from potential purchasers of the 

technology. 

(h) FINANCIAL ASSISTANCE.—The Secretary shall provide financial assistance to 

projects that meet the requirements of this section and are likely to—

(1) achieve overall cost reductions in the utilization of coal to generate useful 

forms of energy; 

(2) improve the competitiveness of coal among various forms of energy; and 

(3) 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 the enactment of this Act. 

(i) FEDERAL SHARE.—The Federal share of the cost of a coal or related technology 

project funded by the Secretary shall not exceed 50 percent. 

(j) APPLICABILITY.—No technology, or level of emission reduction, shall be treated 

as adequately demonstrated for purposes of section 111 of the Clean Air Act, achievable for purposes of section 169 of that Act, or achievable in practice for purposes 

of section 171 of that Act solely by reason of the use of such technology, or the 

achievement of such emission reduction, by one or more facilities receiving assistance under this title. 

SEC. 203. REPORTS. 

(a) TEN-YEAR PLAN.—By September 30, 2004, the Secretary shall transmit to Congress a report, with respect to section 202(a), a 10-year plan containing—

(1) a detailed assessment of whether the aggregate funding levels provided 

under section 201 are appropriate funding levels for that program; 

(2) a detailed description of how proposals will be solicited and evaluated, including a list of all activities expected to be undertaken; 

(3) a detailed list of technical miles stones for each coal and related technology that will be pursued; and 

(4) a detailed description of how the program will avoid problems enumerated 

in General Accounting Office reports on the Clean Coal Technology Program, including problems that have resulted in unspent funds and projects that failed 

either financially or scientifically. 

(b) TECHNICAL MILESTONES.—Not later than 1 year after the date of the enactment of this Act, and once every 2 years thereafter through 2011, the Secretary, in 

28

consultation with other appropriate Federal agencies, shall transmit to the Congress, a report describing—

(1) the technical milestones set forth in section 212 and how those milestones 

ensure progress toward meeting the requirements of subsections (b) and (c) of 

section 212; and 

(2) the status of projects funded under this title. 

SEC. 204. CLEAN COAL CENTERS OF EXCELLENCE. 

As part of the program authorized in section 211, the Secretary shall award competitive, merit-based grants to universities for the establishment of Centers of Excellence for Energy Systems of the Future. The Secretary shall provide grants to 

universities that can show the greatest potential for advancing new clean coal technologies. 

Subtitle B—Federal Coal Leases 

SEC. 211. REPEAL OF THE 160-ACRE LIMITATION FOR COAL LEASES. 

Section 3 of the Mineral Leasing Act (30 U.S.C. 203) is amended by striking all 

the text in the first sentence after ‘‘upon’’ and inserting the following: ‘‘a finding by 

the Secretary that it (1) would be in the interest of the United States, (2) would 

not displace a competitive interest in the lands, and (3) would not include lands or 

deposits that can be developed as part of another potential or existing operation, secure modifications of the original coal lease by including additional coal lands or 

coal deposits contiguous or cornering to those embraced in such lease, but in no 

event shall the total area added by such modifications to an existing coal lease exceed 320 acres, or add acreage larger than that in the original lease.’’. 

SEC. 212. MINING PLANS. 

Section 2(d)(2) of the Mineral Leasing Act (30 U.S.C. 202a(2)) is amended—

(1) by inserting ‘‘(A)’’ after ‘‘(2)’’; and

(2) by adding at the end the following: 

‘‘(B) The Secretary may establish a period of more than forty years if the Secretary determines that the longer period will ensure the maximum economic recovery of a coal deposit, or the longer period is in the interest of the orderly, 

efficient, or economic development of a coal resource.’’. 

SEC. 213. PAYMENT OF ADVANCE ROYALTIES UNDER COAL LEASES. 

Section 7(b) of the Mineral Leasing Act of 1920 (30 U.S.C. 207(b)) is amended by 

striking all after ‘‘Secretary).’’ through to ‘‘a lease.’’ and inserting: ‘‘The aggregate 

number of years during the period of any lease for which advance royalties may be 

accepted in lieu of the condition of continued operation shall not exceed twenty. The 

amount of any production royalty paid for any year shall be reduced (but not below 

0) by the amount of any advance royalties paid under such lease to the extent that 

such advance royalties have not been used to reduce production royalties for a prior 

year.’’. 

SEC. 214. ELIMINATION OF DEADLINE FOR SUBMISSION OF COAL LEASE OPERATION AND 

RECLAMATION PLAN. 

Section 7(c) of the Mineral Leasing Act (30 U.S.C. 207(c)) is amended by striking 

‘‘and not later than three years after a lease is issued,’’. 

SEC. 215. APPLICATION OF AMENDMENTS. 

The amendments made by this Act apply with respect to any coal lease issued 

on or after the date of enactment of this Act, and, with respect to any coal lease 

issued before the date of enactment of this Act, upon the date of readjustment of 

the lease as provided for by section 7(a) of the Mineral Leasing Act, or upon request 

by the lessee, prior to such date. 

Subtitle C—Powder River Basin Shared Mineral Estates 

SEC. 221. RESOLUTION OF FEDERAL RESOURCE DEVELOPMENT CONFLICTS IN THE POWDER 

RIVER BASIN. 

The Secretary of the Interior shall—

(1) undertake a review of existing authorities to resolve conflicts between the 

development of Federal coal and the development of Federal and non-Federal 

coalbed methane in the Powder River Basin in Wyoming and Montana; and 

(2) not later than 6 months after the enactment of this Act, report to the Congress on alternatives to resolve these conflicts and identification of a preferred 

alternative with specific legislative language, if any, required to implement the 

preferred alternative. 

29

TITLE III—INDIAN ENERGY 

SEC. 301. SHORT TITLE. 

This title may be cited as the ‘‘Indian Tribal Energy Development and Self-Determination Act of 2003’’. 

SEC. 302. OFFICE OF INDIAN ENERGY POLICY AND PROGRAMS. 

(a) IN GENERAL.—Title II of the Department of Energy Organization Act (42 

U.S.C. 7131 et seq.) is amended by adding at the end the following: 

‘‘OFFICE OF INDIAN ENERGY POLICY AND PROGRAMS

‘‘SEC. 217. (a) ESTABLISHMENT.—There is established within the Department an 

Office of Indian Energy Policy and Programs (referred to in this section as the ‘Office’). The Office shall be headed by a Director, who shall be appointed by the Secretary and compensated at a rate equal to that of level IV of the Executive Schedule 

under section 5315 of title 5, United States Code. ‘‘(b) DUTIES OF DIRECTOR.—The Director shall in accordance with Federal policies 

promoting Indian self-determination and the purposes of this Act, provide, direct, 

foster, coordinate, and implement energy planning, education, management, conservation, and delivery programs of the Department that— ‘‘(1) promote Indian tribal energy development, efficiency, and use; 

‘‘(2) reduce or stabilize energy costs; 

‘‘(3) enhance and strengthen Indian tribal energy and economic infrastructure 

relating to natural resource development and electrification; and ‘‘(4) electrify Indian tribal land and the homes of tribal members. 

‘‘COMPREHENSIVE INDIAN ENERGY ACTIVITIES

‘‘SEC. 218. (a) INDIAN ENERGY EDUCATION PLANNING AND MANAGEMENT ASSIST- ANCE.—

‘‘(1) The Director shall establish programs within the Office of Indian Energy 

Policy and Programs to assist Indian tribes in meeting energy education, research and development, planning, and management needs. ‘‘(2) In carrying out this section, the Director may provide grants, on a competitive basis, to an Indian tribe or tribal consortium for use in carrying out— ‘‘(A) energy, energy efficiency, and energy conservation programs; 

‘‘(B) studies and other activities supporting tribal acquisition of energy 

supplies, services, and facilities; ‘‘(C) planning, construction, development, operation, maintenance, and 

improvement of tribal electrical generation, transmission, and distribution 

facilities located on Indian land; and ‘‘(D) development, construction, and interconnection of electric power 

transmission facilities located on Indian land with other electric transmission facilities. ‘‘(3)(A) The Director may develop, in consultation with Indian tribes, a formula for providing grants under this section. 

‘‘(B) In providing a grant under this subsection, the Director shall give priority to an application received from an Indian tribe with inadequate electric 

service (as determined by the Director). 

‘‘(4) The Secretary may promulgate such regulations as the Secretary determines are necessary to carry out this subsection. 

‘‘(5) There is authorized to be appropriated to carry out this section 

$20,000,000 for each of fiscal years 2004 through 2011. 

‘‘(b) LOAN GUARANTEE PROGRAM.—

‘‘(1) Subject to paragraph (3), the Secretary may provide loan guarantees (as 

defined in section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) 

for not more than 90 percent of the unpaid principal and interest due on any 

loan made to any Indian tribe for energy development. 

‘‘(2) A loan guaranteed under this subsection shall be made by—

‘‘(A) a financial institution subject to examination by the Secretary; or 

‘‘(B) an Indian tribe, from funds of the Indian tribe. 

‘‘(3) The aggregate outstanding amount guaranteed by the Secretary at any 

time under this subsection shall not exceed $2,000,000,000. 

‘‘(4) The Secretary may promulgate such regulations as the Secretary determines are necessary to carry out this subsection. 

‘‘(5) There are authorized to be appropriated such sums as are necessary to 

carry out this subsection, to remain available until expended. 

‘‘(6) Not later than 1 year from the date of enactment of this section, the Secretary shall report to the Congress on the financing requirements of Indian 

tribes for energy development on Indian land. 

30

‘‘(c) INDIAN ENERGY PREFERENCE.—

‘‘(1) In purchasing electricity or any other energy product or byproduct, a Federal agency or department may give preference to an energy and resource production enterprise, partnership, consortium, corporation, or other type of business organization the majority of the interest in which is owned and controlled 

by 1 or more Indian tribes. 

‘‘(2) In carrying out this subsection, a Federal agency or department shall 

not—

‘‘(A) pay more than the prevailing market price for an energy product or 

byproduct; and 

‘‘(B) obtain less than prevailing market terms and conditions.’’. 

(b) CONFORMING AMENDMENTS.—

(1) The table of contents of the Department of Energy Organization Act (42 

U.S.C. prec. 7101) is amended—

(A) in the item relating to section 209, by striking ‘‘Section’’ and inserting 

‘‘Sec.’’; and 

(B) by striking the items relating to sections 213 through 216 and inserting the following:

‘‘Sec. 213. Establishment of policy for National Nuclear Security Administration. 

‘‘Sec. 214. Establishment of security, counterintelligence, and intelligence policies. 

‘‘Sec. 215. Office of Counterintelligence. 

‘‘Sec. 216. Office of Intelligence. 

‘‘Sec. 217. Office of Indian Energy Policy and Programs. 

‘‘Sec. 218. Comprehensive Indian Energy Activities.’’.

(2) Section 5315 of title 5, United States Code, is amended by inserting ‘‘Director, Office of Indian Energy Policy and Programs, Department of Energy.’’

after ‘‘Inspector General, Department of Energy.’’. 

SEC. 303. INDIAN ENERGY. 

Title XXVI of the Energy Policy Act of 1992 (25 U.S.C. 3501 et seq.) is amended 

to read as follows: 

‘‘TITLE XXVI—INDIAN ENERGY 

‘‘SEC. 2601. DEFINITIONS. 

‘‘For purposes of this title: 

‘‘(1) The term ‘Director’ means the Director of the Office of Indian Energy Policy and Programs. 

‘‘(2) The term ‘Indian land’ means—

‘‘(A) any land located within the boundaries of an Indian reservation, 

pueblo, or rancheria; 

‘‘(B) any land not located within the boundaries of an Indian reservation, 

pueblo, or rancheria, the title to which is held—

‘‘(i) in trust by the United States for the benefit of an Indian tribe; 

‘‘(ii) by an Indian tribe, subject to restriction by the United States 

against alienation; or 

‘‘(iii) by a dependent Indian community; and 

‘‘(C) land conveyed to a Native Corporation under the Alaska Native 

Claims Settlement Act (43 U.S.C. 1601 et seq.). 

‘‘(3) The term ‘Indian reservation’ includes—

‘‘(A) an Indian reservation in existence in any State or States as of the 

date of enactment of this paragraph; 

‘‘(B) a public domain Indian allotment; 

‘‘(C) a former reservation in the State of Oklahoma; 

‘‘(D) a parcel of land owned by a Native Corporation under the Alaska 

Native Claims Settlement Act (43 U.S.C. 1601 et seq.); and 

‘‘(E) a dependent Indian community located within the borders of the 

United States, regardless of whether the community is located—

‘‘(i) on original or acquired territory of the community; or 

‘‘(ii) within or outside the boundaries of any particular State. 

‘‘(4) The term ‘Indian tribe’ has the meaning given the term in section 4 of 

the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b). 

‘‘(5) The term ‘Native Corporation’ has the meaning given the term in section 

3 of the Alaska Native Claims Settlement Act (43 U.S.C. 1602). 

‘‘(6) The term ‘organization’ means a partnership, joint venture, limited liability company, or other unincorporated association or entity that is established 

to develop Indian energy resources. 

‘‘(7) The term ‘Program’ means the Indian energy resource development program established under section 2602(a). 

‘‘(8) The term ‘Secretary’ means the Secretary of the Interior. 

31

‘‘(9) The term ‘tribal consortium’ means an organization that consists of 2 or 

more entities, at least 1 of which is an Indian tribe. 

‘‘(10) The term ‘tribal land’ means any land or interests in land owned by any 

Indian tribe, band, nation, pueblo, community, rancheria, colony or other group, 

title to which is held in trust by the United States or which is subject to a restriction against alienation imposed by the United States. 

‘‘(11) The term ‘vertical integration of energy resources’ means any project or 

activity that promotes the location and operation of a facility (including any 

pipeline, gathering system, transportation system or facility, or electric transmission facility), on or near Indian land to process, refine, generate electricity 

from, or otherwise develop energy resources on, Indian land. 

‘‘SEC. 2602. INDIAN TRIBAL ENERGY RESOURCE DEVELOPMENT. 

‘‘(a) IN GENERAL.—To assist Indian tribes in the development of energy resources 

and further the goal of Indian self-determination, the Secretary shall establish and 

implement an Indian energy resource development program to assist Indian tribes 

and tribal consortia in achieving the purposes of this title. 

‘‘(b) GRANTS AND LOANS.—In carrying out the program, the Secretary shall—

‘‘(1) provide development grants to Indian tribes and tribal consortia for use 

in developing or obtaining the managerial and technical capacity needed to develop energy resources on Indian land; 

‘‘(2) provide grants to Indian tribes and tribal consortia for use in carrying 

out projects to promote the vertical integration of energy resources, and to process, use, or develop those energy resources, on Indian land; and 

‘‘(3) provide low-interest loans to Indian tribes and tribal consortia for use in 

the promotion of energy resource development and vertical integration or energy 

resources on Indian land. 

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

to carry out this section such sums as are necessary for each of fiscal years 2004 

through 2014. 

‘‘SEC. 2603. INDIAN TRIBAL ENERGY RESOURCE REGULATION. 

‘‘(a) GRANTS.—The Secretary may provide to Indian tribes and tribal consortia, on 

an annual basis, grants for use in developing, administering, implementing, and enforcing tribal laws (including regulations) governing the development and management of energy resources on Indian land. 

‘‘(b) USE OF FUNDS.—Funds from a grant provided under this section may be used 

by an Indian tribe or tribal consortium for—

‘‘(1) the development of a tribal energy resource inventory or tribal energy resource on Indian land; 

‘‘(2) the development of a feasibility study or other report necessary to the development of energy resources on Indian land; 

‘‘(3) the development and enforcement of tribal laws and the development of 

technical infrastructure to protect the environment under applicable law; or 

‘‘(4) the training of employees that—

‘‘(A) are engaged in the development of energy resources on Indian land; 

or 

‘‘(B) are responsible for protecting the environment. 

‘‘(c) OTHER ASSISTANCE.—To the maximum extent practicable, the Secretary and 

the Secretary of Energy shall make available to Indian tribes and tribal consortia 

scientific and technical data for use in the development and management of energy 

resources on Indian land. 

‘‘SEC. 2604. LEASES, BUSINESS AGREEMENTS, AND RIGHTS-OF-WAY INVOLVING ENERGY DEVELOPMENT OR TRANSMISSION. 

‘‘(a) LEASES AND AGREEMENTS.—Subject to the provisions of this section—

‘‘(1) an Indian tribe may, at its discretion, enter into a lease or business 

agreement for the purpose of energy development, including a lease or business 

agreement for—

‘‘(A) exploration for, extraction of, processing of, or other development of 

energy resources on tribal land; and 

‘‘(B) construction or operation of an electric generation, transmission, or 

distribution facility located on tribal land; or a facility to process or refine 

energy resources developed on tribal land; and 

‘‘(2) a lease or business agreement described in paragraph (1) shall not require the approval of the Secretary under section 2103 of the Revised Statutes 

(25 U.S.C. 81) or any other provision of law, if—

‘‘(A) the lease or business agreement is executed in accordance with a 

tribal energy resource agreement approved by the Secretary under subsection (e); 

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‘‘(B) the term of the lease or business agreement does not exceed— ‘‘(i) 30 years; or 

‘‘(ii) in the case of a lease for the production of oil and gas resources, 

10 years and as long thereafter as oil or gas is produced in paying 

quantities; and ‘‘(C) the Indian tribe has entered into a tribal energy resource agreement 

with the Secretary, as described in subsection (e), relating to the development of energy resources on tribal land (including an annual trust asset 

evaluation of the activities of the Indian tribe conducted in accordance with 

the agreement). ‘‘(b) RIGHTS-OF-WAY FOR PIPELINES OR ELECTRIC TRANSMISSION OR DISTRIBUTION

LINES.—An Indian tribe may grant a right-of-way over tribal land for a pipeline or 

an electric transmission or distribution line without specific approval by the Secretary if—

‘‘(1) the right-of-way is executed in accordance with a tribal energy resource 

agreement approved by the Secretary under subsection (e); ‘‘(2) the term of the right-of-way does not exceed 30 years; 

‘‘(3) the pipeline or electric transmission or distribution line serves— ‘‘(A) an electric generation, transmission, or distribution facility located 

on tribal land; or ‘‘(B) a facility located on tribal land that processes or refines energy resources developed on tribal land; and 

‘‘(4) the Indian tribe has entered into a tribal energy resource agreement with 

the Secretary, as described in subsection (e), relating to the development of energy resources on tribal land (including an annual trust asset evaluation of the 

activities of the Indian tribe conducted in accordance with the agreement. 

‘‘(c) RENEWALS.—A lease or business agreement entered into or a right-of-way 

granted by an Indian tribe under this section may be renewed at the discretion of 

the Indian tribe in accordance with this section. 

‘‘(d) VALIDITY.—No lease, business agreement, or right-of-way under this section 

shall be valid unless the lease, business agreement, or right-of-way is authorized in 

accordance with tribal energy resource agreements approved by the Secretary under 

subsection (e). 

‘‘(e) TRIBAL ENERGY RESOURCE AGREEMENTS.—

‘‘(1) On promulgation of regulations under paragraph (9), an Indian tribe may 

submit to the Secretary for approval a tribal energy resource agreement governing leases, business agreements, and rights-of-way under this section. 

‘‘(2)(A) Not later than 180 days after the date on which the Secretary receives 

a tribal energy resource agreement submitted by an Indian tribe under paragraph (1) (or such later date as may be agreed to by the Secretary and the Indian tribe), the Secretary shall approve or disapprove the tribal energy resource 

agreement. 

‘‘(B) The Secretary shall approve a tribal energy resource agreement submitted under paragraph (1) if—

‘‘(i) the Secretary determines that the Indian tribe has demonstrated that 

the Indian tribe has sufficient capacity to regulate the development of energy resources of the Indian tribe; and 

‘‘(ii) the tribal energy resource agreement includes provisions that, with 

respect to a lease, business agreement, or right-of-way under this section—

‘‘(I) ensure the acquisition of necessary information from the applicant for the lease, business agreement, or right-of-way; 

‘‘(II) address the term of the lease or business agreement or the term 

of conveyance of the right-of-way; 

‘‘(III) address amendments and renewals; 

‘‘(IV) address consideration for the lease, business agreement, or 

right-of-way;

‘‘(V) address technical or other relevant requirements; 

‘‘(VI) establish requirements for environmental review in accordance 

with subparagraph (C); 

‘‘(VII) ensure compliance with all applicable environmental laws; 

‘‘(VIII) identify final approval authority; 

‘‘(IX) provide for public notification of final approvals; 

‘‘(X) establish a process for consultation with any affected States concerning potential off-reservation impacts associated with the lease, 

business agreement, or right-of-way; and 

‘‘(XI) describe the remedies for breach of the lease, agreement, or 

right-of-way. 

‘‘(C) Tribal energy resource agreements submitted under paragraph (1) shall 

establish, and include provisions to ensure compliance with, an environmental 

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review process that, with respect to a lease, business agreement, or right-of-way 

under this section, provides for—

‘‘(i) the identification and evaluation of all significant environmental impacts (as compared with a no-action alternative), including effects on cultural resources; 

‘‘(ii) the identification of proposed mitigation; 

‘‘(iii) a process for ensuring that the public is informed of and has an opportunity to comment on any proposed lease, business agreement, or rightof-way before tribal approval of the lease, business agreement, or right-ofway (or any amendment to or renewal of the lease, business agreement, or 

right-of-way); and 

‘‘(iv) sufficient administrative support and technical capability to carry 

out the environmental review process. 

‘‘(D) A tribal energy resource agreement negotiated between the Secretary 

and an Indian tribe in accordance with this subsection shall include—

‘‘(i) provisions requiring the Secretary to conduct an annual trust asset 

evaluation to monitor the performance of the activities of the Indian tribe 

associated with the development of energy resources on tribal land by the 

Indian tribe; and 

‘‘(ii) in the case of a finding by the Secretary of imminent jeopardy to a 

physical trust asset, provisions authorizing the Secretary to reassume responsibility for activities associated with the development of energy resources on tribal land. 

‘‘(3) The Secretary shall provide notice and opportunity for public comment 

on tribal energy resource agreements submitted under paragraph (1). 

‘‘(4) If the Secretary disapproves a tribal energy resource agreement submitted by an Indian tribe under paragraph (1), the Secretary shall—

‘‘(A) notify the Indian tribe in writing of the basis for the disapproval; 

‘‘(B) identify what changes or other actions are required to address the 

concerns of the Secretary; and 

‘‘(C) provide the Indian tribe with an opportunity to revise and resubmit 

the tribal energy resource agreement. 

‘‘(5) If an Indian tribe executes a lease or business agreement or grants a 

right-of-way in accordance with a tribal energy resource agreement approved 

under this subsection, the Indian tribe shall, in accordance with the process and 

requirements set forth in the Secretary’s regulations adopted pursuant to subsection (e)(9), provide to the Secretary—

‘‘(A) a copy of the lease, business agreement, or right-of-way document 

(including all amendments to and renewals of the document); and 

‘‘(B) in the case of a tribal energy resource agreement or a lease, business 

agreement, or right-of-way that permits payment to be made directly to the 

Indian tribe, documentation of those payments sufficient to enable the Secretary to discharge the trust responsibility of the United States as appropriate under applicable law. 

‘‘(6) The Secretary shall continue to have a trust obligation to ensure that the 

rights of an Indian tribe are protected in the event of a violation of the terms 

of any lease, business agreement or right-of-way by any other party to the lease, 

business agreement, or right-of-way. 

‘‘(7)(A) The United States shall not be liable for any loss or injury sustained 

by any party (including an Indian tribe or any member of an Indian tribe) to 

a lease, business agreement, or right-of-way executed in accordance with tribal 

energy resource agreements approved under this subsection. 

‘‘(B) On approval of a tribal energy resource agreement of an Indian tribe 

under paragraph (1), the Indian tribe shall be stopped from asserting a claim 

against the United States on the ground that Secretary should not have approved the Tribal energy resource agreement. 

‘‘(8)(A) In this paragraph, the term ’interested party’ means any person or entity the interests of which have sustained or will sustain a significant adverse 

impact as a result of the failure of an Indian tribe to comply with a tribal energy resource agreement of the Indian tribe approved by the Secretary under 

paragraph (2). 

‘‘(B) After exhaustion of tribal remedies, and in accordance with the process 

and requirements set forth in regulations adopted by the Secretary pursuant to 

subsection (e)(9), an interested party may submit to the Secretary a petition to 

review compliance of an Indian tribe with a tribal energy resource agreement 

of the Indian tribe approved under this subsection. 

‘‘(C) If the Secretary determines that an Indian tribe is not in compliance 

with a tribal energy resource agreement approved under this subsection, the 

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Secretary shall take such action as is necessary to compel compliance, including—

‘‘(i) suspending a lease, business agreement, or right-of-way under this 

section until an Indian tribe is in compliance with the approved tribal energy resource agreement; and 

‘‘(ii) rescinding approval of the tribal energy resource agreement and reassuming the responsibility for approval of any future leases, business 

agreements, or rights-of-way associated with an energy pipeline or distribution line described in subsections (a) and (b). 

‘‘(D) If the Secretary seeks to compel compliance of an Indian tribe with an 

approved tribal energy resource agreement under subparagraph (C)(ii), the Secretary shall—

‘‘(i) make a written determination that describes the manner in which the 

tribal energy resource agreement has been violated; 

‘‘(ii) provide the Indian tribe with a written notice of the violation together with the written determination; and 

‘‘(iii) before taking any action described in subparagraph (C)(ii) or seeking 

any other remedy, provide the Indian tribe with a hearing and a reasonable 

opportunity to attain compliance with the tribal energy resource agreement. 

‘‘(E)(i) An Indian tribe described in subparagraph (D) shall retain all rights 

to appeal as provided in regulations promulgated by the Secretary. 

‘‘(ii) The decision of the Secretary with respect to an appeal described in 

clause (i), after any agency appeal provided for by regulation, shall constitute 

a final agency action. 

‘‘(9) Not later than 180 days after the date of enactment of the Indian Tribal 

Energy Development and Self-Determination Act of 2003, the Secretary shall 

promulgate regulations that implement the provisions of this subsection, including—

‘‘(A) criteria to be used in determining the capacity of an Indian tribe described in paragraph (2)(B)(i), including the experience of the Indian tribe 

in managing natural resources and financial and administrative resources 

available for use by the Indian tribe in implementing the approved tribal 

energy resource agreement of the Indian tribe; and

‘‘(B) a process and requirements in accordance with which an Indian tribe 

may—

‘‘(i) voluntarily rescind an approved tribal energy resource agreement 

approved by the Secretary under this subsection; and 

‘‘(ii) return to the Secretary the responsibility to approve any future 

leases, business agreements, and rights-of-way described in this subsection. 

‘‘(f) NO EFFECT ON OTHER LAW.—Nothing in this section affects the application 

of—

‘‘(1) any Federal environmental law; 

‘‘(2) the Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 1201 

et seq.); or 

‘‘(3) except as otherwise provided in this title, the Indian Mineral Development Act of 1982 (25 U.S.C. 2101 et seq.). 

‘‘SEC. 2605. FEDERAL POWER MARKETING ADMINISTRATIONS. 

‘‘(a) DEFINITIONS.—In this section: 

‘‘(1) The term ‘Administrator’ means the Administrator of the Bonneville 

Power Administration and the Administrator of the Western Area Power Administration. 

‘‘(2) The term ‘power marketing administration’ means—

‘‘(A) the Bonneville Power Administration; 

‘‘(B) the Western Area Power Administration; and 

‘‘(C) any other power administration the power allocation of which is used 

by or for the benefit of an Indian tribe located in the service area of the 

administration. 

‘‘(b) ENCOURAGEMENT OF INDIAN TRIBAL ENERGY DEVELOPMENT.—Each Administrator shall encourage Indian tribal energy development by taking such actions as 

are appropriate, including administration of programs of the Bonneville Power Administration and the Western Area Power Administration, in accordance with this 

section. 

‘‘(c) ACTION BY THE ADMINISTRATOR.—In carrying out this section, and in accordance with existing law—

‘‘(1) each Administrator shall consider the unique relationship that exists between the United States and Indian tribes; 

35

‘‘(2) power allocations from the Western Area Power Administration to Indian 

tribes may be used to meet firming and reserve needs of Indian-owned energy 

projects on Indian land; 

‘‘(3) the Administrator of the Western Area Power Administration may purchase power from Indian tribes to meet the firming and reserve requirements 

of the Western Area Power Administration; and 

‘‘(4) each Administrator shall not pay more than the prevailing market price 

for an energy product nor obtain less than prevailing market terms and conditions. 

‘‘(d) ASSISTANCE FOR TRANSMISSION SYSTEM USE.—

‘‘(1) An Administrator may provide technical assistance to Indian tribes seeking to use the high-voltage transmission system for delivery of electric power. 

‘‘(2) The costs of technical assistance provided under paragraph (1) shall be 

funded by the Secretary of Energy using nonreimbursable funds appropriated 

for that purpose, or by the applicable Indian tribes. 

‘‘(e) POWER ALLOCATION STUDY.—Not later than 2 years after the date of enactment of the Indian Tribal Energy Development and Self-Determination Act of 2003, 

the Secretary of Energy shall submit to the Congress a report that—

‘‘(1) describes the use by Indian tribes of Federal power allocations of the 

Western Area Power Administration (or power sold by the Southwestern Power 

Administration) and the Bonneville Power Administration to or for the benefit 

of Indian tribes in service areas of those administrations; and 

‘‘(2) identifies—

‘‘(A) the quantity of power allocated to Indian tribes by the Western Area 

Power Administration; 

‘‘(B) the quantity of power sold to Indian tribes by other power marketing 

administrations; and 

‘‘(C) barriers that impede tribal access to and use of Federal power, including an assessment of opportunities to remove those barriers and improve the ability of power marketing administrations to facilitate the use 

of Federal power by Indian tribes. 

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

to carry out this section $750,000, which shall remain available until expended and 

shall not be reimbursable. 

‘‘SEC. 2606. INDIAN MINERAL DEVELOPMENT REVIEW. 

‘‘(a) IN GENERAL.—The Secretary shall conduct a review of all activities being conducted under the Indian Mineral Development Act of 1982 (25 U.S.C. 2101 et seq.) 

as of that date. 

‘‘(b) REPORT.—Not later than 1 year after the date of enactment of the Indian 

Tribal Energy Development and Self-Determination Act of 2003, the Secretary shall 

submit to the Congress a report that includes—

‘‘(1) the results of the review; 

‘‘(2) recommendations to ensure that Indian tribes have the opportunity to develop Indian energy resources; and 

‘‘(3) an analysis of the barriers to the development of energy resources on Indian land (including legal, fiscal, market, and other barriers), along with recommendations for the removal of those barriers. 

‘‘SEC. 2607. WIND AND HYDROPOWER FEASIBILITY STUDY. 

‘‘(a) STUDY.—The Secretary, in coordination with the Secretary of the Army and 

the Secretary of the Interior, shall conduct a study of the cost and feasibility of developing a demonstration project that would use wind energy generated by Indian 

tribes and hydropower generated by the Army Corps of Engineers on the Missouri 

River to supply firming power to the Western Area Power Administration. 

‘‘(b) SCOPE OF STUDY.—The study shall—

‘‘(1) determine the feasibility of the blending of wind energy and hydropower 

generated from the Missouri River dams operated by the Army Corps of Engineers; 

‘‘(2) review historical purchase requirements and projected purchase requirements for firming and the patterns of availability and use of firming energy; 

‘‘(3) assess the wind energy resource potential on tribal land and projected 

cost savings through a blend of wind and hydropower over a 30-year period; 

‘‘(4) determine seasonal capacity needs and associated transmission upgrades 

for integration of tribal wind generation; and 

‘‘(5) include an independent tribal engineer as a study team member. 

‘‘(c) REPORT.—Not later than 1 year after the date of enactment of this Act, the 

Secretary and Secretary of the Army shall submit to Congress a report that describes the results of the study, including—

36

‘‘(1) an analysis of the potential energy cost or benefits to the customers of 

the Western Area Power Administration through the blend of wind and hydropower; 

‘‘(2) an evaluation of whether a combined wind and hydropower system can 

reduce reservoir fluctuation, enhance efficient and reliable energy production, 

and provide Missouri River management flexibility; 

‘‘(3) recommendations for a demonstration project that could be carried out by 

the Western Area Power Administration in partnership with an Indian tribal 

government or tribal consortium to demonstrate the feasibility and potential of 

using wind energy produced on Indian land to supply firming energy to the 

Western Area Power Administration or any other Federal power marketing 

agency; and 

‘‘(4) an identification of—

‘‘(A) the economic and environmental costs or benefits to be realized 

through such a Federal-tribal partnership; and 

‘‘(B) the manner in which such a partnership could contribute to the energy security of the United States. 

‘‘(d) FUNDING.—

‘‘(1) There is authorized to be appropriated to carry out this section $500,000, 

to remain available until expended. 

‘‘(2) Costs incurred by the Secretary in carrying out this section shall be nonreimbursable.’’. 

SEC. 304. FOUR CORNERS TRANSMISSION LINE PROJECT. 

The Dine Power Authority, an enterprise of the Navajo Nation, shall be eligible 

to receive grants and other assistance as authorized by section 302 of this title and 

section 2602 of the Energy Policy Act of 1992, as amended by this title, for activities 

associated with the development of a transmission line from the Four Corners Area 

to southern Nevada, including related power generation opportunities. 

SEC. 305. ENERGY EFFICIENCY IN FEDERALLY ASSISTED HOUSING. 

(a) IN GENERAL.—The Secretary of Housing and Urban Development shall promote energy conservation in housing that is located on Indian land and assisted 

with Federal resources through—

(1) the use of energy-efficient technologies and innovations (including the procurement of energy-efficient refrigerators and other appliances); 

(2) the promotion of shared savings contracts; and 

(3) the use and implementation of such other similar technologies and innovations as the Secretary of Housing and Urban Development considers to be appropriate. 

(b) AMENDMENT.—Section 202(2) of the Native American Housing and Self-Determination Act of 1996 (25 U.S.C. 4132(2)) is amended by inserting ‘‘improvement to 

achieve greater energy efficiency,’’ after ‘‘planning,’’. 

SEC. 306. CONSULTATION WITH INDIAN TRIBES. 

In carrying out this Act and the amendments made by this Act, the Secretary of 

Energy and the Secretary shall, as appropriate and to the maximum extent practicable, involve and consult with Indian tribes in a manner that is consistent with 

the Federal trust and the government-to-government relationships between Indian 

tribes and the United States. 

TITLE IV—NUCLEAR MATTERS 

Subtitle A—Price-Anderson Amendments Act 

SEC. 401. SHORT TITLE. 

This subtitle may be cited as the ‘‘Price-Anderson Amendments Act of 2003’’. 

SEC. 402. EXTENSION OF INDEMNIFICATION AUTHORITY. 

(a) INDEMNIFICATION OF NUCLEAR REGULATORY COMMISSION LICENSEES.—Section 

170c. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(c)) is amended—

(1) in the subsection heading, by striking ‘‘LICENSES’’ and inserting ‘‘LICENSEES’’; 

(2) by striking ‘‘licenses issued between August 30, 1954, and December 31, 

2003’’ and inserting ‘‘licenses issued after August 30, 1954’’; and 

(3) by striking ‘‘With respect to any production or utilization facility for which 

a construction permit is issued between August 30, 1954, and December 31, 

2003, the requirements of this subsection shall apply to any license issued for 

such facility subsequent to December 31, 2003.’’

37

(b) INDEMNIFICATION OF DEPARTMENT OF ENERGY CONTRACTORS.—Section 

170d.(1)(A) of the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)(1)(A)) is amended 

by striking ‘‘, until December 31, 2004,’’. (c) INDEMNIFICATION OF NONPROFIT EDUCATIONAL INSTITUTIONS.—Section 170k. of 

the Atomic Energy Act of 1954 (42 U.S.C. 2210(k)) is amended— (1) by striking ‘‘licenses issued between August 30,1954, and August 1, 2002’’ and replacing it with ‘‘licenses issued after August 30, 1954’’; and 

(2) by striking ‘‘With respect to any production or utilization facility for which 

a construction permit is issued between August 30, 1954, and August 1, 2002, 

the requirements of this subsection shall apply to any license issued for such 

facility subsequent to August 1, 2002.’’

SEC. 403. MAXIMUM ASSESSMENT. 

Section 170 of the Atomic Energy Act of 1954 (42 U.S.C. 2210) is amended— (1) in the second proviso of the third sentence of subsection b.(l)— (A) by striking ‘‘$63,000,000’’ and inserting ‘‘$94,000,000’’; and 

(B) by striking ‘‘$10,000,000 in any 1 year’’ and inserting ‘‘$15,000,000 in 

any 1 year (subject to adjustment for inflation under subsection t.)’’; and 

(2) in subsection t.(1)— (A) by inserting ‘‘total and annual’’ after ‘‘amount of the maximum’’; 

(B) by striking ‘‘the date of the enactment of the Price-Anderson Amendments Act of 1988’’ and inserting ‘‘July 1, 2003’’; and 

(C) by striking ‘‘such date of enactment’’ and inserting ‘‘July 1, 2003’’. 

SEC. 404. DEPARTMENT OF ENERGY LIABILITY LIMIT. 

(a) INDEMNIFICATION OF DEPARTMENT OF ENERGY CONTRACTORS.—Section 170d. of 

the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)) is amended by striking paragraph (2) and inserting the following: ‘‘(2) In an agreement of indemnification entered into under paragraph (1), the 

Secretary— ‘‘(A) may require the contractor to provide and maintain financial protection of such a type and in such amounts as the Secretary shall determine 

to be appropriate to cover public liability arising out of or in connection 

with the contractual activity; and ‘‘(B) shall indemnify the persons indemnified against such liability above 

the amount of the financial protection required, in the amount of 

$10,000,000,000 (subject to adjustment for inflation under subsection t.), in 

the aggregate, for all persons indemnified in connection with the contract 

and for each nuclear incident, including such legal costs of the contractor 

as are approved by the Secretary.’’. 

(b) CONTRACT AMENDMENTS.—Section 170d. of the Atomic Energy Act of 1954 (42 

U.S.C. 2210(d)) is further amended by striking paragraph (3) and inserting the following—

‘‘(3) All agreements of indemnification under which the Department of Energy 

(or its predecessor agencies) may be required to indemnify any person under 

this section shall be deemed to be amended, on the date of enactment of the 

Price-Anderson Amendments Act of 2003, to reflect the amount of indemnity for 

public liability and any applicable financial protection required of the contractor 

under this subsection.’’. 

(c) LIABILITY LIMIT.—Section 170e.(1)(B) of the Atomic Energy Act of 1954 (42 

U.S.C. 2210(e)(1)(B)) is amended by—

(1) striking ‘‘the maximum amount of financial protection required under subsection b. or’’; and 

(2) striking ‘‘paragraph (3) of subsection d., whichever amount is more’’ and 

inserting ‘‘paragraph (2) of subsection d.’’. 

SEC. 405. INCIDENTS OUTSIDE THE UNITED STATES. 

(a) AMOUNT OF INDEMNIFICATION.—Section 170d.(5) of the Atomic Energy Act of 

1954 (42 U.S.C. 2210(d)(5)) is amended by striking ‘‘$100,000,000’’ and inserting 

‘‘$500,000,000’’. 

(b) LIABILITY LIMIT.—Section 170e.(4) of the Atomic Energy Act of 1954 (42 U.S.C. 

2210(e)(4)) is amended by striking ‘‘$100,000,000’’ and inserting ‘‘$500,000,000’’. 

SEC. 406. REPORTS. 

Section 170p. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(p)) is amended 

by striking ‘‘August 1, 1998’’ and inserting ‘‘August 1, 2013’’. 

SEC. 407. INFLATION ADJUSTMENT. 

Section 170t. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(t)) is amended—

(1) by redesignating paragraph (2) as paragraph (3); and 

(2) by adding after paragraph (1) the following: 

38

‘‘(2) The Secretary shall adjust the amount of indemnification provided under 

an agreement of indemnification under subsection d. not less than once during 

each 5-year period following July 1, 2003, in accordance with the aggregate percentage change in the Consumer Price Index since— ‘‘(A) that date, in the case of the first adjustment under this paragraph; or ‘‘(B) the previous adjustment under this paragraph.’’. 

SEC. 408. TREATMENT OF MODULAR REACTORS. 

Section 170 b. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(b)) is amended 

by adding at the end the following: ‘‘(5)(A) For purposes of this section only, the Commission shall consider a 

combination of facilities described in subparagraph (B) to be a single facility 

having a rated capacity of 100,000 electrical kilowatts or more. ‘‘(B) A combination of facilities referred to in subparagraph (A) is 2 or more 

facilities located at a single site, each of which has a rated capacity of 100,000 

electrical kilowatts or more but not more than 300,000 electrical kilowatts, with 

a combined rated capacity of not more than 1,300,000 electrical kilowatts.’’. 

SEC. 409. APPLICABILITY. 

The amendments made by sections 403, 404, and 405 do not apply to a nuclear 

incident that occurs before the date of the enactment of this Act. 

SEC. 410. CIVIL PENALTIES. 

(a) REPEAL OF AUTOMATIC REMISSION.—Section 234Ab.(2) of the Atomic Energy 

Act of 1954 (42 U.S.C. 2282a(b)(2)) is amended by striking the last sentence. 

(b) LIMITATION FOR NOT-FOR-PROFIT INSTITUTIONS.—Subsection d. of section 234A 

of the Atomic Energy Act of 1954 (42 U.S.C. 2282a(d)) is amended to read as follows: 

‘‘d.(1) Notwithstanding subsection a., in the case of any not-for-profit contractor, 

subcontractor, or supplier, the total amount of civil penalties paid under subsection 

a. may not exceed the total amount of fees paid within any one-year period (as determined by the Secretary) under the contract under which the violation occurs. 

‘‘(2) For purposes of this section, the term ‘‘not-for-profit’’ means that no part of 

the net earnings of the contractor, subcontractor, or supplier inures to the benefit 

of any natural person or for-profit artificial person.’’. 

(c) EFFECTIVE DATE.—The amendments made by this section shall not apply to 

any violation of the Atomic Energy Act of 1954 occurring under a contract entered 

into before the date of enactment of this section. 

Subtitle B—Deployment of New Nuclear Plants 

SEC. 421. SHORT TITLE. 

This subtitle may be cited as the ‘‘Nuclear Energy Finance Act of 2003’’. 

SEC. 422. DEFINITIONS. 

For purposes of this subtitle: 

(1) The term ‘‘advanced reactor design’’ means a nuclear reactor that enhances safety, efficiency, proliferation resistance, or waste reduction compared 

to commercial nuclear reactors in use in the United States on the date of enactment of this Act. 

(2) The term ‘‘eligible project costs’’ means all costs incurred by a project developer that are reasonably related to the development and construction of a 

project under this subtitle, including costs resulting from regulatory or licensing 

delays. 

(3) The term ‘‘financial assistance’’ means a loan guarantee, purchase agreement, or any combination of the foregoing. 

(4) The term ‘‘loan guarantee’’ means any guarantee or other pledge by the 

Secretary to pay all or part of the principal and interest on a loan or other debt 

obligation issued by a project developer and funded by a lender. 

(5) The term ‘‘project’’ means any commercial nuclear power facility for the 

production of electricity that uses one or more advanced reactor designs. 

(6) The term ‘‘project developer’’ means an individual, corporation, partnership, joint venture, trust, or other entity that is primarily liable for payment 

of a project’s eligible costs. 

(7) The term ‘‘purchase agreement’’ means a contract to purchase the electric 

energy produced by a project under this subtitle. 

(8) The term ‘‘Secretary’’ means the Secretary of Energy. 

SEC. 423. RESPONSIBILITIES OF THE SECRETARY.

(a) FINANCIAL ASSISTANCE.—Subject to the requirements of the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.), the Secretary may, subject to appropriations, 

39

make available to project developers for eligible project costs such financial assistance as the Secretary determines is necessary to supplement private-sector financing for projects if he determines that such projects are needed to contribute to energy security, fuel or technology diversity, or clean air attainment goals. The Secretary shall prescribe such terms and conditions for financial assistance as the Secretary deems necessary or appropriate to protect the financial interests of the 

United States. 

(b) REQUIREMENTS.—Approval criteria for financial assistance shall include—

(1) the creditworthiness of the project; 

(2) the extent to which financial assistance would encourage public-private 

partnerships and attract private-sector investment; 

(3) the likelihood that financial assistance would hasten commencement of the 

project; and 

(4) any other criteria the Secretary deems necessary or appropriate. 

(c) CONFIDENTIALITY.—The Secretary shall protect the confidentiality of any information that is certified by a project developer to be commercially sensitive. 

(d) FULL FAITH AND CREDIT.—All financial assistance provided by the Secretary 

under this subtitle shall be general obligations of the United States backed by its 

full faith and credit. 

SEC. 424. LIMITATIONS. 

(a) FINANCIAL ASSISTANCE.—The total financial assistance per project provided by 

this subtitle shall not exceed fifty percent of eligible project costs. 

(b) GENERATION.—The total electrical generation capacity of all projects provided 

by this subtitle shall not exceed 8,400 megawatts. 

SEC. 425. REGULATIONS. 

Not later than 12 months from the date of enactment of this Act, the Secretary 

shall issue regulations to implement this subtitle. 

Subtitle C—Advanced Reactor Hydrogen Co-Generation Project 

SEC. 431. PROJECT ESTABLISHMENT. 

The Secretary is directed to establish an Advanced Reactor Hydrogen Co-Generation Project. 

SEC. 432. PROJECT DEFINITION. 

The project shall conduct the research, development, design, construction, and operation of a hydrogen production co-generation testbed that, relative to the current 

commercial reactors, enhances safety features, reduces waste production, enhances 

thermal efficiencies, increases proliferation resistance, and has the potential for improved economics and physical security in reactor siting. This testbed shall be constructed so as to enable research and development on advanced reactors of the type 

selected and on alternative approaches for reactor-based production of hydrogen. 

SEC. 433. PROJECT MANAGEMENT. 

(a) MANAGEMENT.—The project shall be managed within the Department by the 

Office of Nuclear Energy Science and Technology. 

(b) LEAD LABORATORY.—The lead laboratory for the program, providing the site 

for the reactor construction, shall be the Idaho National Engineering and Environmental Laboratory (‘‘INEEL’’). 

(c) STEERING COMMITTEE.—The Secretary shall establish a national steering committee with membership from the national laboratories, universities, and industry 

to provide advice to the Secretary and the Director of the Office of Nuclear Energy, 

Science and Technology on technical and program management aspects of the 

project. 

(d) COLLABORATION.—Project activities shall be conducted at INEEL, other national laboratories, universities, domestic industry, and international partners. 

SEC. 434. PROJECT REQUIREMENTS. 

(a) RESEARCH AND DEVELOPMENT.—The project shall include planning, research 

and development, design, and construction of an advanced, next-generation, nuclear 

energy system suitable for enabling further research and development on advanced 

reactor technologies and alternative approaches for reactor-based generation of hydrogen. 

(1) The project shall utilize, where appropriate, extensive reactor test capabilities resident at INEEL. 

(2) The project shall be designed to explore technical, environmental, and economic feasibility of alternative approaches for reactor-based hydrogen production. 

40

(3) The industrial lead for the project must be a United States-based company. 

(b) INTERNATIONAL COLLABORATION.—The Secretary shall seek international cooperation, participation, and financial contribution in this program. 

(1) The project may contract for assistance from specialists or facilities from 

member countries of the Generation IV International Forum, the Russian Federation, or other international partners where such specialists or facilities provide access to cost-effective and relevant skills or test capabilities. 

(2) International activities shall be coordinated with the Generation IV International Forum. 

(3) The Secretary may combine this project with the Generation IV Nuclear 

Energy Systems Program. 

(c) DEMONSTRATION.—The overall project, which may involve demonstration of selected project objectives in a partner nation, must demonstrate both electricity and 

hydrogen production and may provide flexibility, where technically and economically 

feasible in the design and construction, to enable tests of alternative reactor core 

and cooling configurations. 

(d) PARTNERSHIPS.—The Secretary shall establish cost-shared partnerships with 

domestic industry or international participants for the research, development, design, construction and operation of the demonstration facility, and preference in determining the final project structure shall be given to an overall project which retains United States leadership while maximizing cost sharing opportunities and 

minimizing federal funding responsibilities. 

(e) TARGET DATE.—The Secretary shall select technologies and develop the project 

to provide initial testing of either hydrogen production or electricity generation by 

2010 or provide a report to Congress why this date is not feasible. 

(f) WAIVER OF CONSTRUCTION TIMELINES.—The Secretary is authorized to conduct 

the Advanced Reactor Hydrogen Co-Generation Project without the constraints of 

DOE Order 413.3 as deemed necessary to meet the specified operational date. 

(g) COMPETITION.—The Secretary may fund up to two teams for up to one year 

to develop detailed proposals for competitive evaluation and selection of a single proposal and concept for further progress. The Secretary shall define the format of the 

competitive evaluation of proposals. 

(h) USE OF FACILITIES.—Research facilities in industry, national laboratories, or 

universities either within the United States or with cooperating international partners may be used to develop the enabling technologies for the demonstration facility. 

Utilization of domestic university-based testbeds shall be encouraged to provide educational opportunities for student development. 

(i) ROLE OF NUCLEAR REGULATORY COMMISSION.—The Secretary shall seek active 

participation of the Nuclear Regulatory Commission throughout the project to develop risk-based criteria for any future commercial development of a similar reactor 

architecture. 

(j) REPORT.—A comprehensive project plan shall be developed no later than April 

30, 2004. The project plan shall be updated annually with each annual budget submission. 

SEC. 435. AUTHORIZATION OF APPROPRIATIONS. 

(a) RESEARCH, DEVELOPMENT AND DESIGN PROGRAMS.—The following sums are 

authorized to be appropriated to the Secretary for all activities under this subtitle 

except for reactor construction: (1) For fiscal year 2004, $35,000,000; 

(2) For each of fiscal years 2005–2008, $150,000,000; and 

(3) For fiscal years beyond 2008, such funds as are needed are authorized to 

be appropriated. 

(b) REACTOR CONSTRUCTION.—The following sum is authorized to be appropriated 

to the Secretary for all project-related construction activities, to be available until 

expended, $500,000,000. 

Subtitle D—Miscellaneous Matters 

SEC. 441. URANIUM SALES AND TRANSFERS. 

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

striking subsections (d) and (e) and inserting the following: ‘‘(d)(1)(A) The aggregate annual deliveries of uranium in any form (including natural uranium concentrates, natural uranium hexafluoride, enriched uranium, and 

depleted uranium) sold or transferred for commercial nuclear power end uses by the 

United States Government shall not exceed 3,000,000 pounds U3O8 equivalent per 

year through calendar year 2009. Such aggregate annual deliveries shall not exceed 

5,000,000 pounds U3O8 equivalent per year in calendar years 2010 and 2011. Such 

aggregate annual deliveries shall not exceed 7,000,000 pounds U3O8 equivalent in 

41

calendar year 2012. Such aggregate annual deliveries shall not exceed 10,000,000 

pounds U3O8 equivalent per year in calendar year 2013 and each year thereafter. 

Any sales or transfers by the United States Government to commercial end users 

shall be limited to long-term contracts of no less than 3 years duration. 

‘‘(B) The recovery and extraction of the uranium component from contaminated 

uranium bearing materials from United States Government sites by commercial entities shall be the preferred method of making uranium available under this subsection. The uranium component contained in such contaminated materials shall be 

counted against the annual maximum deliveries set forth in this section, provided 

that uranium is sold to end users. 

‘‘(C) Sales or transfers of uranium by the United States Government for the following purposes are exempt from the provisions of this paragraph—

‘‘(i) sales or transfers provided for under existing law for use by the Tennessee 

Valley Authority in relation to the Department of Energy’s high-enriched uranium or tritium programs; 

‘‘(ii) sales or transfers to the Department of Energy research reactor sales program; 

‘‘(iii) the transfer of up to 3,293 metric tons of uranium to the United States 

Enrichment Corporation to replace uranium that the Secretary transferred, 

prior to privatization of the United States Enrichment Corporation in July 

1998, to the Corporation on or about June 30, 1993, April 20, 1998, and May 

18, 1998, and that does not meet commercial specifications; 

‘‘(iv) the sale or transfer of any uranium for emergency purposes in the event 

of a disruption in supply to end users in the United States; 

‘‘(v) the sale or transfer of any uranium in fulfillment of the United States 

Government’s obligations to provide security of supply with respect to implementation of the Russian HEU Agreement; and 

‘‘(vi) the sale or transfer of any enriched uranium for use in an advanced commercial nuclear power plant in the United States with nonstandard fuel requirements. 

‘‘(D) The Secretary may transfer or sell enriched uranium to any person for national security purposes, as determined by the Secretary. 

‘‘(2) Except as provided in subsections (b) and (c), and in paragraph (1)(B), clauses 

(i) through (iii) of paragraph (1)(C), and paragraph (1)(D) of this subsection, no sale 

or transfer of uranium in any form shall be made by the United States Government 

unless—

‘‘(A) the President determines that the material is not necessary for national 

security needs; 

‘‘(B) the price paid to the Secretary, if the transaction is a sale, will not be 

less than the fair market value of the material, as determined at the time that 

such material is contracted for sale; 

‘‘(C) prior to any sale or transfer, the Secretary solicits the written views of 

the Department of State and the National Security Council with regard to 

whether such sale or transfer would have any adverse effect on national security interests of the United States, including interests related to the implementation of the Russian HEU Agreement; and 

‘‘(D) neither the Department of State nor the National Security Council objects to such sale or transfer. 

The Secretary shall endeavor to determine whether a sale or transfer is permitted 

under this paragraph within 30 days. The Secretary’s determinations pursuant to 

this paragraph shall be made available to interested members of the public prior 

to authorizing any such sale or transfer. 

‘‘(3) Within 1 year after the date of enactment of this subsection and annually 

thereafter the Secretary shall undertake an assessment for the purpose of reviewing 

available excess Government uranium inventories, and determining, consistent with 

the procedures and limitations established in this subsection, the level of inventory 

to be sold or transferred to end users. 

‘‘(4) Within 5 years after the date of enactment of this subsection and biennially 

thereafter the Secretary shall report to the Congress on the implementation of this 

subsection. The report shall include a discussion of all sales or transfers made by 

the United States Government, the impact of such sales or transfers on the domestic 

uranium industry, the spot market uranium price, and the national security interests of the United States, and any steps taken to remediate any adverse impacts 

of such sales or transfers. 

‘‘(5) For purposes of this subsection, the term ‘United States Government’ does not 

include the Tennessee Valley Authority.’’. 

42

SEC. 442. DECOMMISSIONING PILOT PROGRAM. 

(a) PILOT PROGRAM.—The Secretary shall establish a decommissioning pilot program to decommission and decontaminate the sodium-cooled fast breeder experimental test-site reactor located in northwest Arkansas in accordance with the decommissioning activities contained in the August 31, 1998 Department of Energy report on the reactor. 

(b) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to carry out this section $16,000,000. 

TITLE V—RENEWABLE ENERGY 

Subtitle A—General Provisions 

SEC. 501. ASSESSMENT OF RENEWABLE ENERGY RESOURCES. 

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

of this title, and each year thereafter, the Secretary of Energy shall review the 

available assessments of renewable energy resources within the United States, including solar, wind, biomass, ocean (tidal and thermal), geothermal, and hydroelectric energy resources, and undertake new assessments as necessary, taking into 

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

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

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

the assessment under subsection (a). The report shall contain— (1) a detailed inventory describing the available amount and characteristics 

of the renewable energy resources; and 

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

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

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

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

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

(c) AUTHORIZATION OF APPROPRIATIONS.—For the purposes of this section, there are authorized to be appropriated to the Secretary of Energy $10,000,000 for each 

of fiscal years 2004 through 2008. 

SEC. 502. RENEWABLE ENERGY PRODUCTION INCENTIVE. 

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

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

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

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

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

to the Congress an explanation of the reasons therefor, alter the percentage requirements of the preceding sentence.’’. (b) QUALIFIED RENEWABLE ENERGY FACILITY.—Section 1212(b) of the Energy Policy Act of 1992 (42 U.S.C. 13317(b)) is amended— (1) by striking ‘‘a State or any political’’ and all that follows through ‘‘non- profit electrical cooperative’’ and inserting ‘‘a not-for-profit electric cooperative, 

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

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

(2) by inserting ‘‘landfill gas,’’ after ‘‘wind, biomass,’’. (c) ELIGIBILITY WINDOW.—Section 1212(c) of the Energy Policy Act of 1992 (42 

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

with the first full fiscal year occurring after the enactment of this section’’ and inserting ‘‘after October 1, 2003, and before October 1, 2013’’. (d) AMOUNT OF PAYMENT.—Section 1212(e)(1) of the Energy Policy Act of 1992 (42 

U.S.C. 13317(e)(1)) is amended by inserting ‘‘landfill gas,’’ after ‘‘wind, biomass,’’. 

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

is amended by striking ‘‘the expiration of’’ and all that follows through ‘‘of this section’’ and inserting ‘‘September 30, 2023’’. 

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

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

43

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

2003 through 2023. ‘‘(2) AVAILABILITY OF FUNDS.—Funds made available under paragraph (1) 

shall remain available until expended.’’. 

SEC. 503. RENEWABLE ENERGY ON FEDERAL LANDS. 

(a) REPORT.—Within 24 months after the date of enactment of this Act, the Secretary of the Interior, in cooperation with the Secretary of Agriculture, shall develop 

and report to the Congress recommendations on opportunities to develop renewable 

energy on public lands under the jurisdiction of the Secretary of the Interior and 

National Forest System lands under the jurisdiction of the Secretary of Agriculture. 

The report shall include— (1) 5-year plans developed by the Secretary of the Interior and the Secretary 

of Agriculture, respectively, for encouraging the development of renewable energy consistent with applicable law and management plans; and 

(2) an analysis of— (A) the use of rights-of-way, leases, or other methods to develop renewable energy on such lands; 

(B) the anticipated benefits of grants, loans, tax credits, or other provisions to promote renewable energy development on such lands; and 

(C) any issues that the Secretary of the Interior or the Secretary of Agriculture have encountered in managing renewable energy projects on such 

lands, or believe are likely to arise in relation to the development of renewable energy on such lands; 

(3) a list, developed in consultation with the Secretary of Energy and the Secretary of Defense, of lands under the jurisdiction of the Department of Energy 

or Defense that would be suitable for development for renewable energy, and 

any recommended statutory and regulatory mechanisms for such development; 

and 

(4) any recommendations pertaining to the issues addressed in the report. 

(b) NATIONAL ACADEMY OF SCIENCES STUDY.— (1) Not later than 90 days after the date of the enactment of this section, the 

Secretary of the Interior shall contract with the National Academy of Sciences 

to— (A) study the potential for the development of wind, solar, and ocean 

(tidal and thermal) energy on the Outer Continental Shelf; 

(B) assess existing Federal authorities for the development of such resources; and 

(C) recommend statutory and regulatory mechanisms for such development. 

(2) The results of the study shall be transmitted to the Congress within 24 

months after the date of the enactment of this section. 

SEC. 504. FEDERAL PURCHASE REQUIREMENT. 

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

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

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

fiscal year, the following amounts shall be renewable energy—

(1) not less than 3 percent in fiscal years 2005 through 2007, 

(2) not less than 5 percent in fiscal years 2008 through 2010, and 

(3) not less than 7.5 percent in fiscal year 2011 and each fiscal year thereafter. 

(b) DEFINITION.—For purposes of this section—

(1) the term ‘‘biomass’’ means any solid, nonhazardous, cellulosic material 

that is derived from—

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

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

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

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

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

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

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

nutrients; or 

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

44

(2) the term ‘‘renewable energy’’ means electric energy generated from solar, 

wind, biomass, geothermal, municipal solid waste, or new hydroelectric generation capacity achieved from increased efficiency or additions of new capacity at 

an existing hydroelectric project. 

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

of this section, the amount of renewable energy shall be doubled if— (1) the renewable energy is produced and used on-site at a Federal facility; 

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

facility; or 

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

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

facility. 

(d) REPORT.—Not later than April 15, 2005, and every 2 years thereafter, the Secretary of Energy shall provide a report to the Congress on the progress of the Federal Government in meeting the goals established by this section. 

SEC. 505. INSULAR AREA RENEWABLE AND ENERGY EFFICIENCY PLANS. 

The Secretary of Energy shall update the energy surveys, estimates, and assessments for the insular areas of Puerto Rico, the Virgin Islands, Guam, American 

Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of the 

Marshall Islands, the Federated States of Micronesia, and the Republic of Palau undertaken pursuant to section 604 of Public Law 96–597 (48 U.S.C. 1492) and revise 

the comprehensive energy plan for the insular areas to reduce reliance on energy 

imports and increase use of renewable energy resources and energy efficiency opportunities. The update and revision shall by undertaken in consultation with the Secretary of the Interior and the chief executive officer of each insular area and shall 

be completed and submitted to Congress and to the chief executive officer of each 

insular area by December 31, 2005. 

Subtitle B—Hydroelectric Licensing 

SEC. 511. ALTERNATIVE CONDITIONS AND FISHWAYS. 

(a) FEDERAL RESERVATIONS.—Section 4(e) of the Federal Power Act (16 U.S.C. 

797(e)) is amended by inserting after ‘‘adequate protection and utilization of such 

reservation.’’ at the end of the first proviso the following: ‘‘The license applicant 

shall be entitled to a determination on the record, after opportunity for an agency 

trial-type hearing of any disputed issues of material fact, with respect to such conditions.’’. 

(b) FISHWAYS.—Section 18 of the Federal Power Act (16 U.S.C. 811) is amended 

by inserting after ‘‘and such fishways as may be prescribed by the Secretary of Commerce.’’ the following: ‘‘The license applicant shall be entitled to a determination on 

the record, after opportunity for an agency trial-type hearing of any disputed issues 

of material fact, with respect to such fishways.’’. 

(c) ALTERNATIVE CONDITIONS AND PRESCRIPTIONS.—Part I of the Federal Power 

Act (16 U.S.C. 791a et seq.) is amended by adding the following new section at the 

end thereof: 

‘‘SEC. 33. ALTERNATIVE CONDITIONS AND PRESCRIPTIONS. 

‘‘(a) ALTERNATIVE CONDITIONS.—

‘‘(1) Whenever any person applies for a license for any project works within 

any reservation of the United States, and the Secretary of the Department 

under whose supervision such reservation falls (referred to in this subsection as 

‘the Secretary’) deems a condition to such license to be necessary under the first 

proviso of section 4(e), the license applicant may propose an alternative condition. 

‘‘(2) Notwithstanding the first proviso of section 4(e), the Secretary shall accept the proposed alternative condition referred to in paragraph (1), and the 

Commission shall include in the license such alternative condition, if the Secretary determines, based on substantial evidence provided by the license applicant or otherwise available to the Secretary, that such alternative condition—

‘‘(A) provides for the adequate protection and utilization of the reservation; and 

‘‘(B) will either—

‘‘(i) cost less to implement; or 

‘‘(ii) result in improved operation of the project works for electricity 

production, as compared to the condition initially deemed necessary by 

the Secretary. 

‘‘(3) The Secretary concerned shall submit into the public record of the Commission proceeding with any condition under section 4(e) or alternative condition it accepts under this section, a written statement explaining the basis for 

45

such condition, and reason for not accepting any alternative condition under 

this section. The written statement must demonstrate that the Secretary gave 

equal consideration to the effects of the condition adopted and alternatives not 

accepted on energy supply, distribution, cost, and use; flood control; navigation; 

water supply; and air quality (in addition to the preservation of other aspects 

of environmental quality); based on such information as may be available to the 

Secretary, including information voluntarily provided in a timely manner by the 

applicant and others. The Secretary shall also submit, together with the aforementioned written statement, all studies, data, and other factual information 

available to the Secretary and relevant to the Secretary’s decision. 

‘‘(4) Nothing in this section shall prohibit other interested parties from proposing alternative conditions. 

‘‘(5) If the Secretary does not accept an applicant’s alternative condition under 

this section, and the Commission finds that the Secretary’s condition would be 

inconsistent with the purposes of this part, or other applicable law, the Commission may refer the dispute to the Commission’s Dispute Resolution Service. 

The Dispute Resolution Service shall consult with the Secretary and the Commission and issue a non-binding advisory within 90 days. The Secretary may 

accept the Dispute Resolution Service advisory unless the Secretary finds that 

the recommendation will not adequately protect the reservation. The Secretary 

shall submit the advisory and the Secretary’s final written determination into 

the record of the Commission’s proceeding. 

‘‘(b) ALTERNATIVE PRESCRIPTIONS.—

‘‘(1) Whenever the Secretary of the Interior or the Secretary of Commerce prescribes a fishway under section 18, the license applicant or licensee may propose 

an alternative to such prescription to construct, maintain, or operate a fishway. 

The alternative may include a fishway or an alternative to a fishway. 

‘‘(2) Notwithstanding section 18, the Secretary of the Interior or the Secretary 

of Commerce, as appropriate, shall accept and prescribe, and the Commission 

shall require, the proposed alternative referred to in paragraph (1), if the Secretary of the appropriate department determines, based on substantial evidence 

provided by the licensee or otherwise available to the Secretary, that such alternative—

‘‘(A) will be no less protective of the fish resources than the fishway initially prescribed by the Secretary; and 

‘‘(B) will either—

‘‘(i) cost less to implement; or 

‘‘(ii) result in improved operation of the project works for electricity 

production, as compared to the fishway initially deemed necessary by 

the Secretary. 

‘‘(3) The Secretary concerned shall submit into the public record of the Commission proceeding with any prescription under section 18 or alternative prescription it accepts under this section, a written statement explaining the basis 

for such prescription, and reason for not accepting any alternative prescription 

under this section. The written statement must demonstrate that the Secretary 

gave equal consideration to the effects of the condition adopted and alternatives 

not accepted on energy supply, distribution, cost, and use; flood control; navigation; water supply; and air quality (in addition to the preservation of other aspects of environmental quality); based on such information as may be available 

to the Secretary, including information voluntarily provided in a timely manner 

by the applicant and others. The Secretary shall also submit, together with the 

aforementioned written statement, all studies, data, and other factual information available to the Secretary and relevant to the Secretary’s decision. 

‘‘(4) Nothing in this section shall prohibit other interested parties from proposing alternative prescriptions. 

‘‘(5) If the Secretary concerned does not accept an applicant’s alternative prescription under this section, and the Commission finds that the Secretary’s prescription would be inconsistent with the purposes of this part, or other applicable law, the Commission may refer the dispute to the Commission’s Dispute 

Resolution Service. The Dispute Resolution Service shall consult with the Secretary and the Commission and issue a non-binding advisory within 90 days. 

The Secretary may accept the Dispute Resolution Service advisory unless the 

Secretary finds that the recommendation will not adequately protect the fish resources. The Secretary shall submit the advisory and the Secretary’s final written determination into the record of the Commission’s proceeding.’’. 

46

Subtitle C—Geothermal Energy 

SEC. 521. COMPETITIVE LEASE SALE REQUIREMENTS. 

(a) IN GENERAL.—Section 4 of the Geothermal Steam Act of 1970 (30 U.S.C. 1003) 

is amended by striking the text and inserting the following: ‘‘(a) NOMINATIONS.—The Secretary shall accept nominations at any time from 

companies and individuals of lands to be leased under this Act. ‘‘(b) COMPETITIVE LEASE SALE REQUIRED.—The Secretary shall hold a competitive 

lease sale at least once every 2 years for lands in a State in which there are nominations pending under subsection (a) where such lands are otherwise available for 

leasing. ‘‘(c) NONCOMPETITIVE LEASING.—The Secretary shall make available for a period 

of 2 years for noncompetitive leasing any tract for which a competitive lease sale 

is held, but for which the Secretary does not receive any bids in the competitive 

lease sale.’’. (b) PENDING LEASE APPLICATIONS.—It shall be a priority for the Secretary of the 

Interior and, with respect to National Forest lands, the Secretary of Agriculture, to 

ensure timely completion of administrative actions necessary to conduct competitive 

lease sales for lands with pending applications for geothermal leasing as of the date 

of enactment of this section where such lands are otherwise available for leasing. 

SEC. 522. GEOTHERMAL LEASING AND PERMITTING ON FEDERAL LANDS. 

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

section, the Secretary of the Interior and the Secretary of Agriculture shall enter 

into and submit to the Congress a memorandum of understanding in accordance 

with this section regarding leasing and permitting for geothermal development of 

public lands and National Forest System lands under their respective jurisdictions. 

(b) LEASE AND PERMIT APPLICATIONS.—The memorandum of understanding 

shall—

(1) identify known geothermal resources areas on lands included in the National Forest System and, when necessary, require review of management plans 

to consider leasing under the Geothermal Steam Act of 1970 (30 U.S.C. 1001 

et seq.) as a land use; and 

(2) establish an administrative procedure for processing geothermal lease applications, including lines of authority, steps in application processing, and time 

limits for application processing. 

(c) DATA RETRIEVAL SYSTEM.—The memorandum of understanding shall establish 

a joint data retrieval system that is capable of tracking lease and permit applications and providing to the applicant information as to their status within the Departments of the Interior and Agriculture, including an estimate of the time required for administrative action. 

SEC. 523. LEASING AND PERMITTING ON FEDERAL LANDS WITHDRAWN FOR MILITARY PURPOSES. 

Not later than 1 year after the date of the enactment of this Act, the Secretary 

of the Interior and the Secretary of Defense, in consultation with interested states, 

counties, representatives of the geothermal industry, and interested members of the 

public, shall submit to the Congress a joint report concerning leasing and permitting 

activities for geothermal energy on Federal lands withdrawn for military purposes. 

Such report shall—

(1) describe any differences, including differences in royalty structure and revenue sharing with states and counties, between—

(A) the implementation of the Geothermal Steam Act of 1970 (30 U.S.C. 

1001 et seq.) and other applicable Federal law by the Secretary of the Interior; and 

(B) the administration of geothermal leasing under section 2689 of title 

10, United States Code, by the Secretary of Defense; 

(2) identify procedures for interagency coordination to ensure efficient processing and administration of leases or contracts for geothermal energy on federal lands withdrawn for military purposes, consistent with the defense purposes of such withdrawals; and 

(3) provide recommendations for legislative or administrative actions that 

could facilitate program administration, including a common royalty structure. 

SEC. 524. REINSTATEMENT OF LEASES TERMINATED FOR FAILURE TO PAY RENT. 

Section 5(c) of the Geothermal Steam Act of 1970 (30 U.S.C. 1004(c)), is amended 

in the last sentence by inserting ‘‘or was inadvertent,’’ after ‘‘reasonable diligence,’’. 

SEC. 525. ROYALTY REDUCTION AND RELIEF. 

(a) RULEMAKING.—Within one year after the date of enactment of this Act, the 

Secretary shall promulgate a final regulation providing a methodology for deterVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00050 Fmt 6659 Sfmt 6621 E:\HR\OC\SR043.XXX SR043
47

mining the amount or value of the steam for purposes of calculating the royalty due 

to be paid on such production pursuant to section 5 of the Geothermal Steam Act 

of 1970 (30 U.S.C. 1004). The final regulation shall provide for a simplified methodology for calculating the royalty. In undertaking the rulemaking, the Secretary shall 

consider the use of a percent of revenue method and shall ensure that the final rule 

will result in the same level of royalty revenues as the regulation in effect on the 

date of enactment of this provision. 

(b) LOW TEMPERATURE DIRECT USE.—Notwithstanding the provisions of section 

5(a) of the Geothermal Steam Act of 1979 (30 U.S.C. 1004(a)), with respect to the 

direct use of low temperature geothermal resources for purposes other than the generation of electricity, the Secretary shall establish a schedule of fees and collect fees 

pursuant to such schedule in lieu of royalties based upon the total amount of geothermal resources used. The schedule of fees shall ensure that there is a fair return 

to the public for the use of the low temperature geothermal resource. With the consent of the lessee, the Secretary may modify the terms of a lease in existence on 

the date of enactment of this Act in order to reflect the provisions of this subsection. 

Subtitle D—Biomass Energy 

SEC. 531. DEFINITIONS. 

For the purposes of this subtitle: 

(1) The term ‘‘eligible operation’’ means a facility that is located within the 

boundaries of an eligible community and uses biomass from federal or Indian 

lands as a raw material to produce electric energy, sensible heat, transportation 

fuels, or substitutes for petroleum-based products. 

(2) The term ‘‘biomass’’ means pre-commercial thinnings of trees and woody 

plants, or non-merchantable material, from preventative treatments to reduce 

hazardous fuels, or reduce or contain disease or insect infestations. 

(3) The term ‘‘green ton’’ means 2,000 pounds of biomass that has not been 

mechanically or artificially dried. 

(4) The term ‘‘Secretary’’ means—

(A) with respect to lands within the National Forest System, the Secretary of Agriculture; or 

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

of the Interior and Indian lands, the Secretary of the Interior. 

(5) The term ‘‘eligible community’’ means any Indian Reservation, or any 

county, town, township, municipality, or other similar unit of local government 

that has a population of not more than 50,000 individuals and is determined 

by the Secretary to be located in an area near federal of Indian lands which 

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

which suffers from disease or insect infestation. 

(6) The term ‘‘Indian tribe’’ has the meaning given the term in section 4(e) 

of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 

450b(e)). 

(7) The term ‘‘person’’ includes—

(A) an individual; 

(B) a community; 

(C) an Indian tribe; 

(D) a small business or a corporation that is incorporated in the United 

States; or 

(E) a nonprofit organization. 

SEC. 532. BIOMASS COMMERCIAL UTILIZATION GRANT PROGRAM. 

(a) IN GENERAL.—The Secretary may make grants to any person that owns or operates an eligible operation to offset the costs incurred to purchase biomass for use 

by such eligible operation with priority given to operations using biomass from the 

highest risk areas. 

(b) LIMITATION.—No grant provided under this subsection shall be paid at a rate 

that exceeds $20 per green ton of biomass delivered. 

(c) RECORDS.—Each grant recipient shall keep such records as the Secretary may 

require to fully and correctly disclose the use of the grant funds and all transactions 

involved in the purchase of biomass. Upon notice by the Secretary, the grant recipient shall provide the Secretary reasonable access to examine the inventory and 

records of any eligible operation receiving grant funds. 

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

are authorized to be appropriated $12,500,000 each to the Secretary of the Interior 

and the Secretary of Agriculture for each fiscal year from 2004 through 2008, to remain available until expended. 

48

SEC. 533. IMPROVED BIOMASS UTILIZATION GRANT PROGRAM. 

(a) IN GENERAL.—The Secretary may make grants to persons in eligible communities to offset the costs of developing or researching proposals to improve the use 

of biomass or add value to biomass utilization. 

(b) SELECTION.—Grant recipients shall be selected based on the potential for the 

proposal to— (1) develop affordable thermal or electric energy resources for the benefit of 

an eligible community; 

(2) provide opportunities for the creation or expansion of small businesses 

within an eligible community; 

(3) create new job opportunities within an eligible community; and 

(4) reduce the hazardous fuels from the highest risk areas. 

(c) LIMITATION.—No grant awarded under this subsection shall exceed $500,000. 

(d) AUTHORIZATION OF APPROPRIATIONS.—For the purposes of this section, there are authorized to be appropriated $12,500,000 each to the Secretary of the Interior 

and the Secretary of Agriculture for each fiscal year from 2004 through 2008, to remain available until expended. 

SEC. 534. REPORT. 

Not later than 3 years after the date of enactment of this subtitle, the Secretary 

of the Interior and the Secretary of Agriculture shall jointly submit to the Congress 

a report that describes the interim results of the programs authorized under this 

subtitle. 

TITLE VI—ENERGY EFFICIENCY 

Subtitle A—Federal Programs 

SEC. 601. ENERGY MANAGEMENT REQUIREMENTS. 

(a) ENERGY REDUCTION GOALS.—Section 543(a)(1) of the National Energy Conservation Policy Act (42 U.S.C. 8253(a)(1)) is amended by striking ‘‘its Federal buildings so that’’ and all that follows through the end and inserting ‘‘the Federal buildings of the agency (including each industrial or laboratory facility) so that the energy consumption per gross square foot of the Federal buildings of the agency in 

fiscal years 2004 through 2013 is reduced, as compared with the energy consumption per gross square foot of the Federal buildings of the agency in fiscal year 2000, 

by the percentage specified in the following table:

‘‘Fiscal Year Percentage reduction 2004 ................................................................................................................................................................. 2 2005 ................................................................................................................................................................. 4 2006 ................................................................................................................................................................. 6 2007 ................................................................................................................................................................. 8 2008 ................................................................................................................................................................. 10 2009 ................................................................................................................................................................. 12 2010 ................................................................................................................................................................. 14 2011 ................................................................................................................................................................. 16 2012 ................................................................................................................................................................. 18 2013 ................................................................................................................................................................. 20.’’.

(b) EFFECTIVE DATE.—The energy reduction goals and baseline established in 

paragraph (1) of section 543(a) of the National Energy Conservation Policy Act, as 

amended by subsection (a) of this section, supersede all previous goals and baselines 

under such paragraph, and related reporting requirements. 

(c) REVIEW OF ENERGY PERFORMANCE REQUIREMENTS.—Section 543(a) of the National Energy Conservation Policy Act (42 U.S.C. 8253(a)) is further amended by 

adding at the end the following: 

‘‘(3) Not later than December 31, 2011, the Secretary shall review the results 

of the implementation of the energy performance requirement established under 

paragraph (1) and submit to Congress recommendations concerning energy performance requirements for fiscal years 2014 through 2022.’’. 

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

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

follows through the end and inserting—

‘‘(A) An agency may exclude, from the energy performance requirement for a 

fiscal year established under subsection (a) and the energy management requirement established under subsection (b), any Federal building or collection 

of Federal buildings, if the head of the agency finds that—

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

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

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

and other Federal law; and 

49

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

projects with respect to the Federal building or collection of Federal buildings to be excluded. 

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

on—

‘‘(i) the energy intensiveness of activities carried out in the Federal building or collection of Federal buildings; or 

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

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

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

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

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

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

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

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

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

the Secretary shall issue guidelines that establish criteria for exclusions under 

paragraph (1).’’. 

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

new subsection: 

‘‘(e) RETENTION OF ENERGY 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. Except 

as otherwise provided by law, such funds may be used only for energy efficiency or 

unconventional and renewable energy resources projects.’’. 

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

U.S.C. 8258(b)) is amended—

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

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

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

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

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

SEC. 602. ENERGY USE MEASUREMENT AND ACCOUNTABILITY. 

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

further amended by adding at the end the following: 

‘‘(e) METERING OF ENERGY USE.—

‘‘(1) DEADLINE.—By October 1, 2010, in accordance with guidelines established by the Secretary under paragraph (2), all Federal buildings shall, for the 

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

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

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

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

Federal facility energy managers. 

‘‘(2) GUIDELINES.—

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

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

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

industry, national laboratories, universities, and Federal facility energy 

managers, shall establish guidelines for agencies to carry out paragraph (1). 

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

‘‘(i) take into consideration—

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

of operation and maintenance expected to result from metering and 

submetering; 

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

to result in increased potential for energy management, increased 

potential for energy savings and energy efficiency improvement, 

and cost and energy savings due to utility contract aggregation; 

and 

50

‘‘(III) the measurement and verification protocols of the Department of Energy; ‘‘(ii) include recommendations concerning the amount of funds and 

the number of trained personnel necessary to gather and use the metering information to track and reduce energy use; ‘‘(iii) establish priorities for types and locations of buildings to be metered and submetered based on cost effectiveness and a schedule of one 

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

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

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

building, industrial process, or structure. ‘‘(3) PLAN.—No later than 6 months after the date guidelines are established 

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

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

implement the requirements of paragraph (1), including— ‘‘(A) how the agency will designate personnel primarily responsible for 

achieving the requirements; and ‘‘(B) demonstration by the agency, complete with documentation, of any 

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

paragraph (1), are not practicable.’’. 

SEC. 603. FEDERAL BUILDING PERFORMANCE STANDARDS. 

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

is amended— (1) in paragraph (2)(A), by striking ‘‘CABO Model Energy Code, 1992’’ and inserting ‘‘the 2000 International Energy Conservation Code’’; and 

(2) by adding at the end the following: 

‘‘(3) REVISED FEDERAL BUILDING ENERGY EFFICIENCY PERFORMANCE STAND- ARDS.—

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

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

Federal building energy efficiency performance standards that require that, 

if cost-effective, for new Federal buildings— ‘‘(i) such buildings be designed so as to achieve energy consumption 

levels at least 30 percent below those of the most recent version of the 

International Energy Conservation Code, as appropriate; and ‘‘(ii) sustainable design principles are applied to the siting, design, 

and construction of all new and replacement buildings. ‘‘(B) ADDITIONAL REVISIONS.—Not later than 1 year after the date of approval of amendments to ASHRAE Standard 90.1 or the 2000 International 

Energy Conservation Code, the Secretary of Energy shall determine, based 

on the cost-effectiveness of the requirements under the amendments, 

whether the revised standards established under this paragraph should be 

updated to reflect the amendments. 

‘‘(C) STATEMENT ON COMPLIANCE OF NEW BUILDINGS.—In the budget request of the Federal agency for each fiscal year and each report submitted 

by the Federal agency under section 548(a) of the National Energy Conservation Policy Act (42 U.S.C. 8258(a)), the head of each Federal agency 

shall include—

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

by the Federal agency; and 

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

exceed the revised standards established under this paragraph.’’. 

SEC. 604. ENERGY SAVINGS PERFORMANCE CONTRACTS. 

(a) PERMANENT EXTENSION.—Section 801(c) of the National Energy Conservation 

Policy Act (42 U.S.C. 8287(c)) is repealed. 

(b) 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 life-cycle 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. 

51

‘‘(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.’’. 

(c) 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) The term ‘energy savings’ means—

‘‘(A) 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 co-generation or heat recovery, excluding any co-generation 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; or 

‘‘(B) 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.’’. 

(d) 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, and, where appropriate, operation, 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. Such contracts 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).’’. 

(e) 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 lifecycle cost-effective, and involves water conservation, water recycling or 

reuse, more efficient treatment of wastewater or stormwater, improvements 

in operation or maintenance efficiencies, retrofit activities, or other related 

activities, not at a Federal hydroelectric facility.’’. 

(f) PILOT PROGRAM FOR NON-BUILDING APPLICATIONS.—

(1) The Secretary of Defense, and the heads of other interested Federal agencies, are authorized to enter into up to 10 energy savings performance contracts 

under Title VIII of the National Energy Conservation Policy Act (42 U.S.C. 8287 

et seq.) for the purpose of achieving energy or water savings, secondary savings, 

and benefits incidental to those purposes, in non-building applications, provided 

that the aggregate payments to be made by the Federal government under such 

contracts shall not exceed $100,000,000.

(2) The Secretary of Energy, in consultation with the Secretary of Defense 

and the heads of other interested Federal agencies, shall select projects that 

demonstrate the applicability and benefits of energy savings performance contracting to a range of non-building applications. 

(3) For the purposes of this subsection: 

(A) The term ‘‘non-building application’’ means— (i) any class of vehicles, devices, or equipment that is transportable 

under its own power by land, sea, or air that consumes energy from 

any fuel source for the purpose of such transportability, or to maintain 

a controlled environment within such vehicle, device, or equipment; or 

52

(ii) any Federally owned equipment used to generate electricity or 

transport water. 

(B) The term ‘‘secondary savings’’, means additional energy or cost savings that are a direct consequence of the energy or water savings that result from the financing and implementation of the energy savings performance contract, including, but not limited to, energy or cost savings that result from a reduction in the need for fuel delivery and logistical support, 

or the increased efficiency in the production of electricity. 

(4) Not later than 3 years after the date of enactment of this section, the Secretary of Energy shall report to the Congress on the progress and results of the 

projects funded pursuant to this section. Such report shall include a description 

of projects undertaken; the energy, water and cost savings, secondary savings 

and other benefits that resulted from such projects; and recommendations on 

whether the pilot program should be extended, expanded, or authorized permanently as a part of the program authorized under Title VIII of the National Energy Conservation Policy Act (42 U.S.C. 8287 et seq.). 

(5) Section 546(c)(3) of the National Energy Conservation Policy Act (42 

U.S.C. 8256) is amended by striking the word ‘‘facilities’’, and inserting the 

words ‘‘facilities, equipment and vehicles’’, in lieu thereof. 

(g) REVIEW.—Within 180 days after the date of the enactment of this section, the 

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

Contract program to identify statutory, regulatory, and administrative obstacles 

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

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

shall report these findings to 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. 605. PROCUREMENT OF ENERGY EFFICIENT PRODUCTS. 

(a) Part 3 of title V of the National Energy Conservation Policy Act is amended 

by adding at the end the following: 

‘‘SEC. 552. FEDERAL PROCUREMENT OF ENERGY EFFICIENT PRODUCTS. 

‘‘(a) DEFINITIONS.—In this section: ‘‘(1) The term ‘Energy Star product’ means a product that is rated for energy 

efficiency under an Energy Star program. ‘‘(2) The term ‘Energy Star program’ means the program established by section 324A of the Energy Policy and Conservation Act. 

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

4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403). 

‘‘(4) The term ‘FEMP designated product’ means a product that is designated 

under the Federal Energy Management Program of the Department of Energy 

as being among the highest 25 percent of equivalent products for energy efficiency. 

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

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

energy consuming product, the head of the executive agency shall, except as 

provided in paragraph (2), procure an Energy Star product or a FEMP designated product. 

‘‘(2) EXCEPTIONS.—The head of an executive agency is not required to procure 

an Energy Star product or FEMP designated product under paragraph (1) if the 

head of the executive agency finds in writing that—

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

or 

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

available that meets the functional requirements of the executive agency. 

‘‘(3) PROCUREMENT PLANNING.—The head of an executive agency shall incorporate into the specifications for all procurements involving energy consuming 

products and systems, including guide specifications, project specifications, and 

construction, renovation, and services contracts that include provision of energy 

consuming products and systems, and into the factors for the evaluation of offers received for the procurement, criteria for energy efficiency that are consistent with the criteria used for rating Energy Star products and for rating 

FEMP designated products. 

53

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

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

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

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

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

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

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

‘‘(d) DESIGNATION OF ELECTRIC MOTORS.—In the case of electric motors of 1 to 500 

horsepower, agencies shall select only premium efficient motors that meet a standard designated by the Secretary. The Secretary shall designate such a standard 

within 120 days after the date of the enactment of this section, after considering 

the recommendations of associated electric motor manufacturers and energy efficiency groups. 

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

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

(b) CONFORMING AMENDMENT.—The table of contents in section 1(b) of the National Energy Conservation Policy Act (42 U.S.C. 8201 note) is amended by inserting 

after the item relating to the end of the items relating to part 3 of title V the following:

‘‘Sec. 552. Federal procurement of energy efficient products.’’.

SEC. 606. CONGRESSIONAL BUILDING EFFICIENCY. 

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

is further amended by adding at the end: 

‘‘SEC. 553. ENERGY AND WATER SAVINGS MEASURES IN CONGRESSIONAL BUILDING. 

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

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

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

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

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

of enactment of this section. 

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

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

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

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

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

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

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

and taxpayer dollars in the workplace. 

‘‘(c) ANNUAL REPORT.—The Architect shall submit to Congress annually a report 

on congressional energy management and conservation programs required under 

this section that describes in detail—

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

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

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

(b) TABLE OF CONTENTS AMENDMENT.—The table of contents in section 1(b) of the 

National Energy Conservation Policy Act is amended by adding at the end of the 

items relating to part 3 of title V the following new item:

‘‘Sec. 553. Energy and water savings measures in congressional buildings.’’.

(c) REPEAL.—Section 310 of the Legislative Branch Appropriations Act, 1999 (40 

U.S.C. 166i), is repealed. 

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

energy infrastructure of the Capital Complex to determine how the infrastructure 

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

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

54

(e) AUTHORIZATION.—There are authorized to be appropriated to the Architect of the Capitol to carry out subsection (d), not more than $2,000,000 for fiscal year 

2004. 

SEC. 607. INCREASED USE OF RECOVERED MINERAL COMPONENT IN FEDERALLY FUNDED 

PROJECTS INVOLVING PROCUREMENT OF CEMENT OR CONCRETE. 

(a) AMENDMENT.—Subtitle F of the Solid Waste Disposal Act (42 U.S.C. 6961 et 

seq.) is amended by adding at the end the following new section: 

‘‘SEC. 6005. INCREASED USE OF RECOVERED MINERAL COMPONENT IN FEDERALLY FUNDED 

PROJECTS INVOLVING PROCUREMENT OF CEMENT OR CONCRETE. 

‘‘(a) DEFINITIONS.—In this section: ‘‘(1) AGENCY HEAD.—The term ‘agency head’ means— ‘‘(A) the Secretary of Transportation; and 

‘‘(B) the head of each other Federal agency that on a regular basis procures, or provides Federal funds to pay or assist in paying the cost of procuring, material for cement or concrete projects. ‘‘(2) CEMENT OR CONCRETE PROJECT.—The term ‘cement or concrete project’ means a project for the construction or maintenance of a highway or other 

transportation facility or a Federal, State, or local government building or other 

public facility that— ‘‘(A) involves the procurement of cement or concrete; and 

‘‘(B) is carried out in whole or in part using Federal funds. 

‘‘(3) RECOVERED MINERAL COMPONENT.—The term ‘recovered mineral component’ means—

‘‘(A) ground granulated blast furnace slag; 

‘‘(B) coal combustion fly ash; and 

‘‘(C) any other waste material or byproduct recovered or diverted from 

solid waste that the Administrator, in consultation with an agency head, 

determines should be treated as recovered mineral component under this 

section for use in cement or concrete projects paid for, in whole or in part, 

by the agency head. 

‘‘(b) IMPLEMENTATION OF REQUIREMENTS.—

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

section, the Administrator and each agency head shall take such actions as are 

necessary to implement fully all procurement requirements and incentives in effect as of the date of enactment of this section (including guidelines under section 6002) that provide for the use of cement and concrete incorporating recovered mineral component in cement or concrete projects. 

‘‘(2) PRIORITY.—In carrying out paragraph (1) an agency head shall give priority to achieving greater use of recovered mineral component in cement or concrete projects for which recovered mineral components historically have not 

been used or have been used only minimally. 

‘‘(3) CONFORMANCE.—The Administrator and each agency head shall carry out 

this subsection in accordance with section 6002. 

‘‘(c) FULL IMPLEMENTATION STUDY.—

‘‘(1) IN GENERAL.—The Administrator, in cooperation with the Secretary of 

Transportation and the Secretary of Energy, shall conduct a study to determine 

the extent to which current procurement requirements, when fully implemented 

in accordance with subsection (b), may realize energy savings and environmental benefits attainable with substitution of recovered mineral component in 

cement used in cement or concrete projects. 

‘‘(2) MATTERS TO BE ADDRESSED.—The study shall—

‘‘(A) quantify the extent to which recovered mineral components are being 

substituted for Portland cement, particularly as a result of current procurement requirements, and the energy savings and environmental benefits associated with that substitution; 

‘‘(B) identify all barriers in procurement requirements to fuller realization 

of energy savings and environmental benefits, including barriers resulting 

from exceptions from current law; and 

‘‘(C)(i) identify potential mechanisms to achieve greater substitution of recovered mineral component in types of cement or concrete projects for which 

recovered mineral components historically have not been used or have been 

used only minimally; 

‘‘(ii) evaluate the feasibility of establishing guidelines or standards for optimized substitution rates of recovered mineral component in those cement 

or concrete projects; and 

‘‘(iii) identify any potential environmental or economic effects that may 

result from greater substitution of recovered mineral component in those 

cement or concrete projects. 

55

‘‘(3) REPORT.—Not later than 30 months after the date of enactment of this 

section, the Administrator shall submit to the Committee on Appropriations and 

Committee on Environment and Public Works of the Senate and the Committee 

on Appropriations, Committee on Energy and Commerce, and Committee on 

Transportation and Infrastructure of the House of Representatives a report on 

the study. 

‘‘(d) ADDITIONAL PROCUREMENT REQUIREMENTS.—Unless the study conducted 

under subsection (c) identifies any effects or other problems described in subsection 

(c)(2)(C)(iii) that warrant further review or delay, the Administrator and each agency head shall, within 1 year of the release of the report in accordance with subsection (c)(3), take additional actions authorized under this section to establish procurement requirements and incentives that provide for the use of cement and concrete with increased substitution of recovered mineral component in the construction 

and maintenance of cement or concrete projects, so as to—

‘‘(1) realize more fully the energy savings and environmental benefits associated with increased substitution; and 

‘‘(2) eliminate barriers identified under subsection (c). 

‘‘(e) EFFECT OF SECTION.—Nothing in this section affects the requirements of section 6002 (including the guidelines and specifications for implementing those requirements).’’. 

(b) TABLE OF CONTENTS AMENDMENT.—The table of contents of the Solid Waste 

Disposal Act is amended by adding after the item relating to section 6004 the following new item:

‘‘Sec. 6005. Increased use of recovered mineral component in federally funded projects involving procurement 

of cement or concrete.’’.

SEC. 608. UTILITY ENERGY SERVICE CONTRACTS. 

Section 546(c)(1) of the National Energy Conservation Policy Act (42 U.S.C. 

8256(c)) is amended to read as follows: 

‘‘(1) Agencies are authorized and encouraged to participate in programs, including utility energy services contracts, conducted by gas, water and electric 

utilities and generally available to customers of such utilities, for the purposes 

of increased energy efficiency, water conservation or the management of electricity demand.’’. 

SEC. 609. STUDY OF ENERGY EFFICIENCY STANDARDS. 

The Secretary of Energy shall contract with the National Academy of Sciences for 

a study, to be completed within one year of enactment of this section, to examine 

whether the goals of energy efficiency standards are best served by measurement 

of energy consumed, and efficiency improvements, at the actual site of energy consumption, or through the full fuel cycle, beginning at the source of energy production. The Secretary shall submit the report of the Academy to the Congress. 

Subtitle B—State and Local Programs 

SEC. 611. LOW INCOME COMMUNITY ENERGY EFFICIENCY PILOT PROGRAM. 

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

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

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

conservation in low income rural and urban communities. 

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

for—

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

supplies; 

(2) energy efficiency projects and energy conservation programs; 

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

rural and urban communities; 

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

of buildings and facilities; and 

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

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

and power generation. 

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

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

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

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

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

United States to Indians because of their status as Indians. 

56

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

are authorized to be appropriated to the Secretary of Energy $20,000,000 for fiscal 

year 2004 and each fiscal year thereafter through fiscal year 2006. 

SEC. 612. ENERGY EFFICIENT PUBLIC BUILDINGS. 

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

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

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

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

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

compliance with standards prescribed in chapter 8 of the 2000 International Energy Conservation Code, or a similar State code intended to achieve substantially equivalent efficiency levels; or 

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

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

for calculating such baseline. 

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

shall—

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

require; and 

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

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

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

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

are authorized to be appropriated to the Secretary of Energy such sums as may be 

necessary for each of fiscal years 2003 through 2012. Not more than 30 percent of 

appropriated funds shall be used for administration. 

SEC. 613. ENERGY EFFICIENT APPLIANCE REBATE PROGRAMS. 

(a) DEFINITIONS.—In this section: 

(1) The term ‘‘eligible State’’ means a State that meets the requirements of 

subsection (b). 

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

(3) The term ‘‘residential Energy Star product’’ means a product for a residence that is rated for energy efficiency under the Energy Star program. 

(4) The term ‘‘State energy office’’ means the State agency responsible for developing State energy conservation plans under section 362 of the Energy Policy 

and Conservation Act (42 U.S.C. 6322). 

(5) The term ‘‘State program’’ means a State energy efficient appliance rebate 

program described in subsection (b)(1). 

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

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

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

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

containing such information as the Secretary may require; and 

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

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

out the State program. 

(c) AMOUNT OF ALLOCATIONS.—

(1) Subject to paragraph (2), for each fiscal year, the Secretary shall allocate 

to the State energy office of each eligible State to carry out subsection (d) an 

amount equal to the product obtained by multiplying the amount made available under subsection (f) for the fiscal year by the ratio that the population of 

the State in the most recent calendar year for which data are available bears 

to the total population of all eligible States in that calendar year. 

(2) For each fiscal year, the amounts allocated under this subsection shall be 

adjusted proportionately so that no eligible State is allocated a sum that is less 

than an amount determined by the Secretary. 

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

57

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

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

determined by the State energy office, taking into consideration— (1) the amount of the allocation to the State energy office under subsection 

(c); 

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

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

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

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

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

to carry out this section $50,000,000 for each of the fiscal years 2004 through 2008. 

Subtitle C—Consumer Products 

SEC. 621. ENERGY CONSERVATION STANDARDS FOR ADDITIONAL PRODUCTS. 

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

U.S.C. 6291) is amended—

(1) in subparagraph (30)(S), by striking the period and adding at the end the 

following: 

‘‘but does not include any lamps specifically designed to be used for special 

purpose applications, and also does not include any lamp not described in 

subparagraph (D) that is excluded by the Secretary, by rule.’’; and 

(2) by adding at the end the following: 

‘‘(32) The term ‘battery charger’ means a device that charges batteries for consumer products. 

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

means a refrigerator, freezer or refrigerator-freezer that—

‘‘(A) is not a consumer product regulated under this Act; and 

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

cycle and the refrigerated compartment in a single package. 

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

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

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

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

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

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

‘‘(36)(A) Except as provided in subparagraph (B), the term ‘low-voltage drytype transformer’ means a transformer that—

‘‘(i) has an input voltage of 600 volts or less; 

‘‘(ii) is air-cooled; 

‘‘(iii) does not use oil as a coolant; and 

‘‘(iv) is rated for operation at a frequency of 60 Hertz. 

‘‘(B) The term ‘low-voltage dry-type transformer’ does not include—

‘‘(i) transformers with multiple voltage taps, with the highest voltage tap 

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

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

rectifier transformers, auto-transformers, Uninterruptible Power System 

transformers, impedance transformers, harmonic transformers, regulating 

transformers, sealed and nonventilating transformers, machine tool transformers, welding transformers, grounding transformers, or testing transformers, that are designed to be used in a special purpose application and 

are unlikely to be used in general purpose applications; or 

‘‘(iii) any transformer not listed in clause (ii) that is excluded by the Secretary by rule because the transformer is designed for a special application 

and the application of standards to the transformer would not result in significant energy savings. 

‘‘(37)(A) Except as provided in subsection (B), the term ‘distribution transformer’ means a transformer that —

‘‘(i) has an input voltage of 34.5 kilovolts or less; 

‘‘(ii) has an output voltage of 600 volts or less; and 

‘‘(iii) is rated for operation at a frequency of 60 Hertz. 

‘‘(B) The term ‘distribution transformer’ does not include —

‘‘(i) transformers with multiple voltage taps, with the highest voltage tap 

equaling at least 15 percent more than the lowest voltage tap; 

58

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

rectifier transformers, autotransformers, Uninterruptible Power System 

transformers, impedance transformers, harmonic transformers, regulating 

transformers, sealed and nonventilating transformers, machine tool transformers, welding transformers, grounding transformers, or testing transformers, that are designed to be used in a special purpose application, and 

are unlikely to be used in general purpose applications; or ‘‘(iii) any transformer not listed in clause (ii) that is excluded by the Secretary by rule because the transformer is designed for a special application, 

is unlikely to be used in general purpose applications, and the application 

of standards to the transformer would not result in significant energy savings. ‘‘(38) The term ‘standby mode’ means the lowest amount of electric power 

used by a household appliance when not performing its active functions, as defined on an individual product basis by the Secretary. ‘‘(39) The term ‘torchiere’ means a portable electric lamp with a reflector bowl 

that directs light upward so as to give indirect illumination. ‘‘(40) The term ‘transformer’ means a device consisting of two or more coils 

of insulated wire that transfers alternating current by electromagnetic induction from one coil to another to change the original voltage or current value. ‘‘(41) The term ‘unit heater’ means a self-contained fan-type heater designed 

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

a warm air furnace. 

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

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

all other parts necessary for operation, that communicates movement messages 

to drivers through red, amber, and green colors.’’. 

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

(42 U.S.C. 6293) is amended—

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

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

method used under Version 2.0 of the Energy Star program of the Environmental Protection Agency for illuminated exit signs. 

‘‘(10) Test procedures for low voltage dry-type distribution transformers shall 

be based on the ‘Standard Test Method for Measuring the Energy Consumption 

of Distribution Transformers’ prescribed by the National Electrical Manufacturers Association (NEMA TP 2–1998). The Secretary may review and revise this 

test procedure. 

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

method used under the Energy Star program of the Environmental Protection 

Agency for traffic signal modules, as in effect on the date of enactment of this 

paragraph. 

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

based on the test methods used under the August 9, 2001 version of the Energy 

Star program of the Environmental Protection Agency and Department of Energy for compact fluorescent lamps. Covered products shall meet all test requirements for regulated parameters in section 325(bb). However, covered products may be marketed prior to completion of lamp life and lumen maintenance 

at 40% of rated life testing provided manufacturers document engineering predictions and analysis that support expected attainment of lumen maintenance 

at 40% rated life and lamp life time.’’; and 

(2) by adding at the end the following: 

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

within 24 months after the date of enactment of this subsection prescribe testing 

requirements for suspended ceiling fans, refrigerated bottled or canned beverage 

vending machines, and commercial refrigerators, freezers and refrigerator-freezers. 

Such testing requirements shall be based on existing test procedures used in industry to the extent practical and reasonable. In the case of suspended ceiling fans, 

such test procedures shall include efficiency at both maximum output and at an output no more than 50 percent of the maximum output.’’. 

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

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

‘‘(u) STANDBY MODE ELECTRIC ENERGY CONSUMPTION.—

‘‘(1) INITIAL RULEMAKING.—

‘‘(A) The Secretary shall, within 18 months after the date of enactment 

of this subsection, prescribe by notice and comment, definitions of standby 

mode and test procedures for the standby mode power use of battery chargers and external power supplies. In establishing these test procedures, the 

Secretary shall consider, among other factors, existing test procedures used 

59

for measuring energy consumption in standby mode and assess the current 

and projected future market for battery chargers and external power supplies. This assessment shall include estimates of the significance of potential energy savings from technical improvements to these products and suggested product classes for standards. Prior to the end of this time period, 

the Secretary shall hold a scoping workshop to discuss and receive comments on plans for developing energy conservation standards for standby 

mode energy use for these products. ‘‘(B) The Secretary shall, within 3 years after the date of enactment of 

this subsection, issue a final rule that determines whether energy conservation standards shall be promulgated for battery chargers and external 

power supplies or classes thereof. For each product class, any such standards shall be set at the lowest level of standby energy use that— ‘‘(i) meets the criteria of subsections (o), (p), (q), (r), (s) and (t); and 

‘‘(ii) will result in significant overall annual energy savings, considering both standby mode and other operating modes. ‘‘(2) DESIGNATION OF ADDITIONAL COVERED PRODUCTS.— ‘‘(A) Not later than 180 days after the date of enactment of this subsection, the Secretary shall publish for public comment and public hearing 

a notice to determine whether any non-covered products should be designated as covered products for the purpose of instituting a rulemaking 

under this section to determine whether an energy conservation standard 

restricting standby mode energy consumption, should be promulgated; except that any restriction on standby mode energy consumption shall be limited to major sources of such consumption. 

‘‘(B) In making the determinations pursuant to subparagraph (A) of 

whether to designate new covered products and institute rulemakings, the 

Secretary shall, among other relevant factors and in addition to the criteria 

in section 322(b), consider—

‘‘(i) standby mode power consumption compared to overall product energy consumption; and 

‘‘(ii) the priority and energy savings potential of standards which may 

be promulgated under this subsection compared to other required 

rulemakings under this section and the available resources of the Department to conduct such rulemakings. 

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

the Secretary shall issue a determination of any new covered products for 

which he intends to institute rulemakings on standby mode pursuant to 

this section and he shall state the dates by which he intends to initiate 

those rulemakings.

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

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

covered products which are major sources of standby mode energy consumption 

whether to incorporate standby mode into such test procedures and energy conservation standards, taking into account, among other relevant factors, the criteria for non-covered products in subparagraph (B) of paragraph (2) of this subsection. 

‘‘(4) RULEMAKING.—

‘‘(A) Any rulemaking instituted under this subsection or for covered products under this section which restricts standby mode power consumption 

shall be subject to the criteria and procedures for issuing energy conservation standards set forth in this section and the criteria set forth in subparagraph (B) of paragraph (2) of this subsection. 

‘‘(B) No standard can be proposed for new covered products or covered 

products in a standby mode unless the Secretary has promulgated applicable test procedures for each product pursuant to section 323. 

‘‘(C) The provisions of section 327 shall apply to new covered products 

which are subject to the rulemakings for standby mode after a final rule 

has been issued. 

‘‘(5) EFFECTIVE DATE.—Any standard promulgated under this subsection shall 

be applicable to products manufactured or imported 3 years after the date of 

promulgation. 

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

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

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

‘‘(v) SUSPENDED CEILING FANS, VENDING MACHINES, AND COMMERCIAL REFRIGERATORS, FREEZERS AND REFRIGERATOR-FREEZERS.—The Secretary shall within 36 

60

months after the date on which testing requirements are prescribed by the Secretary pursuant to section 323(f), prescribe, by rule, energy conservation standards 

for suspended ceiling fans, refrigerated bottled or canned beverage vending machines, and commercial refrigerators, freezers and refrigerator-freezers. In establishing standards under this subsection, the Secretary shall use the criteria and procedures contained in subsections (l) and (m). Any standard prescribed under this 

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

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

January 1, 2005 shall meet the Version 2.0 Energy Star Program performance requirements for illuminated exit signs prescribed by the Environmental Protection 

Agency. 

‘‘(x) TORCHIERES.—Torchieres manufactured on or after January 1, 2005—

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

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

watts. 

‘‘(y) DISTRIBUTION TRANSFORMERS.—The efficiency of low voltage dry-type transformers manufactured on or after January 1, 2005 shall be the Class I Efficiency 

Levels for distribution transformers specified in Table 4–2 of the ‘Guide for Determining Energy Efficiency for Distribution Transformers’ published by the National 

Electrical Manufacturers Association (NEMA TP–1–2002). 

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

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

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

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

electrically-connected signal control interface devices and conflict monitoring systems. 

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

three years after the date of enactment of the Energy Policy Act of 2003 shall be 

equipped with an intermittent ignition device and shall have either power venting 

or an automatic flue damper. 

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

(no reflector) medium base compact fluorescent lamps manufactured on or after January 1, 2005 shall meet the following requirements prescribed by the August 9, 2001 

version of the Energy Star Program Requirements for CFLs, Energy Star Eligibility 

Criteria, Energy-Efficiency Specification issued by the Environmental Protection 

Agency and Department of Energy: minimum initial efficacy; lumen maintenance at 

1000 hours; lumen maintenance at 40% of rated life; rapid cycle stress test; and 

lamp life. The Secretary may, by rule, establish requirements for color quality (CRI); 

power factor; operating frequency; and maximum allowable start time based on the 

requirements prescribed by the August 9, 2001 version of the Energy Star Program 

Requirements for CFLs. The Secretary may, by rule, revise these requirements or 

establish other requirements considering energy savings, cost effectiveness, and consumer satisfaction. 

‘‘(cc) EFFECTIVE DATE.—The provisions of section 327 shall apply—

‘‘(1) to products for which standards are to be set pursuant to subsection (v) 

of this section on the date on which a final rule is issued by the Department 

of Energy, except that any state or local standards prescribed or enacted for any 

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

preempted until the standard set pursuant to subsection (v) for that product 

takes effect; and 

‘‘(2) to products for which standards are set in subsections (w) through (bb) 

of this section on the date of enactment of the Energy Policy Act of 2003, except 

that any state or local standards prescribed or enacted prior to the date of enactment of the Energy Policy Act of 2003 shall not be preempted until the 

standards set in subsections (w) through (bb) take effect.’’. 

SEC. 622. ENERGY LABELING. 

(a) RULEMAKING ON EFFECTIVENESS OF CONSUMER PRODUCT LABELING.—Paragraph (2) of section 324(a) of the Energy Policy and Conservation Act (42 U.S.C. 

6294(a)(2)) is amended by adding at the end the following: 

‘‘(F) Not later than 3 months after the date of enactment of this subparagraph, the Commission shall initiate a rulemaking to consider the effectiveness of the current consumer products labeling program in assisting consumers in making purchasing decisions and improving energy efficiency 

and to consider changes to the labeling rules that would improve the effectiveness of consumer product labels. Such rulemaking shall be completed 

within 2 years after the date of enactment of this subparagraph.’’. 

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

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

‘‘(5) The Secretary or the Commission, as appropriate, may for covered products referred to in subsections (u) through (aa) of section 325, prescribe, by rule, 

pursuant to this section, labeling requirements for such products after a test 

procedure has been set pursuant to section 323. In the case of products to which 

TP–1 standards under section 325(y) apply, labeling requirements shall be 

based on the ‘Standard for the Labeling of Distribution Transformer Efficiency’

prescribed by the National Electrical Manufacturers Association (NEMA TP–3) 

as in effect upon the date of enactment of this Act.’’. 

SEC. 623. ENERGY STAR PROGRAM. 

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

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

‘‘SEC. 324A. ENERGY STAR PROGRAM. 

‘‘There is established at the Department of Energy and the Environmental Protection Agency a voluntary program to identify and promote energy-efficient products 

and buildings in order to reduce energy consumption, improve energy security, and 

reduce pollution through voluntary labeling of or other forms of communication 

about products and buildings that meet the highest energy efficiency standards. Responsibilities under the program shall be divided between the Department of Energy and the Environmental Protection Agency consistent with the terms of agreements between the 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, including special outreach to small businesses; 

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

‘‘(4) solicit the comments of interested parties in establishing a new Energy 

Star product category, specifications, or criteria, or in revising a product category, and upon adoption of a new or revised product category, specifications, 

or criteria, publish a notice of any changes in product categories, specifications 

or criteria along with an explanation of such changes, and, where appropriate, 

responses to comments submitted by interested parties; and 

‘‘(5) unless waived or reduced by mutual agreement between the Administrator, the Secretary, and the affected parties, provide not less than 12 months 

lead time prior to implementation of changes in product categories, specifications, or criteria as may be adopted pursuant to this section.’’. 

(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. 624. HVAC MAINTENANCE CONSUMER EDUCATION PROGRAM. 

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

‘‘(c) HVAC MAINTENANCE.—For the purpose of ensuring that installed air conditioning and heating systems operate at their maximum rated efficiency levels, the 

Secretary shall, within 180 days of the date of enactment of this subsection, carry 

out a program to educate homeowners and small business owners concerning the 

energy savings resulting from properly conducted maintenance of air conditioning, 

heating, and ventilating systems. The Secretary shall carry out the program in a 

cost-shared manner in cooperation with the Administrator of the Environmental 

Protection Agency and such other entities as the Secretary considers appropriate, 

including industry trade associations, industry members, and energy efficiency organizations. 

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

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

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

Business Program, to assist small business to become more energy efficient, understand the cost savings obtainable through efficiencies, and identify financing options 

for energy efficiency upgrades. The Secretary and the Administrator shall make the 

program information available directly to small businesses and through other Federal agencies, including the Federal Emergency Management Program, and the Department of Agriculture.’’. 

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Subtitle D—Public Housing 

SEC. 631. CAPACITY BUILDING FOR ENERGY-EFFICIENT, AFFORDABLE HOUSING. 

Section 4(b) of the HUD Demonstration Act of 1993 (42 U.S.C. 9816 note) is 

amended—

(1) in paragraph (1), by inserting before the semicolon at the end the following: ‘‘, including capabilities regarding the provision of energy efficient, affordable housing and residential energy conservation measures’’; and 

(2) in paragraph (2), by inserting before the semicolon the following: ‘‘, including such activities relating to the provision of energy efficient, affordable housing and residential energy conservation measures that benefit low-income families’’. 

SEC. 632. INCREASE OF CDBG PUBLIC SERVICES CAP FOR ENERGY CONSERVATION AND EFFICIENCY ACTIVITIES. 

Section 105(a)(8) of the Housing and Community Development Act of 1974 (42 

U.S.C. 5305(a)(8)) is amended—

(1) by inserting ‘‘or efficiency’’ after ‘‘energy conservation’’; 

(2) by striking ‘‘, and except that’’ and inserting ‘‘; except that’’; and 

(3) by inserting before the semicolon at the end the following: ‘‘; and except 

that each percentage limitation under this paragraph on the amount of assistance provided under this title that may be used for the provision of public services is hereby increased by 10 percent, but such percentage increase may be 

used only for the provision of public services concerning energy conservation or 

efficiency’’. 

SEC. 633. FHA MORTGAGE INSURANCE INCENTIVES FOR ENERGY EFFICIENT HOUSING. 

(a) SINGLE FAMILY HOUSING MORTGAGE INSURANCE.—Section 203(b)(2) of the National Housing Act (12 U.S.C. 1709(b)(2)) is amended, in the first undesignated and 

indented paragraph beginning after subparagraph (B)(iii) (relating to solar energy 

systems)—

(1) by inserting ‘‘or paragraph (10)’’ before the first comma; and 

(2) by striking ‘‘20 percent’’ and inserting ‘‘30 percent’’. 

(b) MULTIFAMILY HOUSING MORTGAGE INSURANCE.—Section 207(c) of the National 

Housing Act (12 U.S.C. 1713(c)) is amended, in the second undesignated paragraph 

beginning after paragraph (3) (relating to solar energy systems and residential energy conservation measures), by striking ‘‘20 percent’’ and inserting ‘‘30 percent’’. 

(c) COOPERATIVE HOUSING MORTGAGE INSURANCE.—Section 213(p) of the National 

Housing Act (12 U.S.C. 1715e(p)) is amended by striking ‘‘20 per centum’’ and inserting ‘‘30 percent’’. 

(d) REHABILITATION AND NEIGHBORHOOD CONSERVATION HOUSING MORTGAGE INSURANCE.—Section 220(d)(3)(B)(iii) of the National Housing Act (12 U.S.C. 

1715k(d)(3)(B)(iii)) is amended by striking ‘‘20 per centum’’ and inserting ‘‘30 percent’’. 

(e) LOW-INCOME MULTIFAMILY HOUSING MORTGAGE INSURANCE.—Section 221(k) of 

the National Housing Act (12 U.S.C. 1715l(k)) is amended by striking ‘‘20 per centum’’ and inserting ‘‘30 percent’’. 

(f) ELDERLY HOUSING MORTGAGE INSURANCE—The proviso at the end of section 

231(c)(2) of the National Housing Act (12 U.S.C. 1715v(c)(2)) is amended by striking 

‘‘20 per centum’’ and inserting ‘‘30 percent’’. 

(g) CONDOMINIUM HOUSING MORTGAGE INSURANCE.—Section 234(j) of the National 

Housing Act (12 U.S.C. 1715y(j)) is amended by striking ‘‘20 per centum’’ and inserting ‘‘30 percent’’. 

SEC. 634. PUBLIC HOUSING CAPITAL FUND. 

Section 9 of the United States Housing Act of 1937 (42 U.S.C. 1437g) is amended—

(1) in subsection (d)(1)—

(A) in subparagraph (I), by striking ‘‘and’’ at the end; 

(B) in subparagraph (J), by striking the period at the end and inserting 

a semicolon; and 

(C) by adding at the end the following new subparagraphs: 

‘‘(K) improvement of energy and water-use efficiency by installing fixtures 

and fittings that conform to the American Society of Mechanical Engineers/

American National Standards Institute standards A112.19.2–1998 and 

A112.18.1–2000, or any revision thereto, applicable at the time of installation, and by increasing energy efficiency and water conservation by such 

other means as the Secretary determines are appropriate; and 

‘‘(L) integrated utility management and capital planning to maximize energy conservation and efficiency measures.’’; and 

63

(2) in subsection (e)(2)(C)— (A) by striking ‘‘The’’ and inserting the following: ‘‘(i) IN GENERAL.—The’’; and 

(B) by adding at the end the following: ‘‘(ii) THIRD PARTY CONTRACTS.—Contracts described in clause (i) may 

include contracts for equipment conversions to less costly utility 

sources, projects with resident-paid utilities, and adjustments to frozen 

base year consumption, including systems repaired to meet applicable 

building and safety codes and adjustments for occupancy rates increased by rehabilitation. ‘‘(iii) TERM OF CONTRACT.—The total term of a contract described in 

clause (i) shall not exceed 20 years to allow longer payback periods for 

retrofits, including windows, heating system replacements, wall insulation, site-based generations, advanced energy savings technologies, including renewable energy generation, and other such retrofits.’’. 

SEC. 635. GRANTS FOR ENERGY-CONSERVING IMPROVEMENTS FOR ASSISTED HOUSING. 

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

8231(1)) is amended— (1) by striking ‘‘financed with loans’’ and inserting ‘‘assisted’’; 

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

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

are subject to mortgage restructuring and rental assistance sufficiency plans 

under such Act,’’; and 

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

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

and water conserving fixtures and fittings that conform to the American Society 

of Mechanical Engineers/American National Standards Institute standards 

A112.19.2–1998 and A112.18.1–2000, or any revision thereto, applicable at the 

time of installation.’’. 

SEC. 636. NORTH AMERICAN DEVELOPMENT BANK. 

Part 2 of subtitle D of title V of the North American Free Trade Agreement Implementation Act (22 U.S.C. 290m–290m–3) is amended by adding at the end the following: 

‘‘SEC. 545. SUPPORT FOR CERTAIN ENERGY POLICIES. 

‘‘Consistent with the focus of the Bank’s Charter on environmental infrastructure 

projects, the Board members representing the United States should use their voice 

and vote to encourage the Bank to finance projects related to clean and efficient energy, including energy conservation, that prevent, control, or reduce environmental 

pollutants or contaminants.’’. 

SEC. 637. ENERGY-EFFICIENT APPLIANCES. 

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

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

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

(as amended by this Act), unless the purchase of energy-efficient appliances is not 

cost-effective to the agency. 

SEC. 638. ENERGY EFFICIENCY STANDARDS. 

Section 109 of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 

12709) is amended—

(1) in subsection (a)—

(A) in paragraph (1)—

(i) by striking ‘‘1 year after the date of the enactment of the Energy 

Policy Act of 1992’’ and inserting ‘‘September 30, 2003’’; 

(ii) in subparagraph (A), by striking ‘‘and’’ at the end; 

(iii) in subparagraph (B), by striking the period at the end and inserting ‘‘; and’’; and 

(iv) by adding at the end the following: 

‘‘(C) rehabilitation and new construction of public and assisted housing 

funded by HOPE VI revitalization grants under section 24 of the United 

States Housing Act of 1937 (42 U.S.C. 1437v), where such standards are 

determined to be cost effective by the Secretary of Housing and Urban Development.’’; and 

(B) in paragraph (2), by striking ‘‘Council of American’’ and all that follows through ‘‘90.1–1989’)’’ and inserting ‘‘2000 International Energy Conservation Code’’; 

(2) in subsection (b)—

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(A) by striking ‘‘1 year after the date of the enactment of the Energy Policy Act of 1992’’ and inserting ‘‘September 30, 2003’’; and 

(B) by striking ‘‘CABO’’ and all that follows through ‘‘1989’’ and inserting 

‘‘the 2000 International Energy Conservation Code’’; and 

(3) in subsection (c)—

(A) in the heading, by striking ‘‘MODEL ENERGY CODE’’ and inserting 

‘‘INTERNATIONAL ENERGY CONSERVATION CODE’’; and 

(B) by striking ‘‘CABO’’ and all that follows through ‘‘1989’’ and inserting 

‘‘the 2000 International Energy Conservation Code’’. 

SEC. 639. ENERGY STRATEGY FOR HUD. 

The Secretary of Housing and Urban Development shall develop and implement 

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

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

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

shall submit a report to Congress, not later than one year after the date of the enactment of this Act, on the energy strategy and the actions taken by the Department of Housing and Urban Development to monitor the energy usage of public 

housing agencies and shall submit an update every two years thereafter on progress 

in implementing the strategy. 

TITLE VII—TRANSPORTATION FUELS 

Subtitle A—Alternative Fuel Programs 

SEC. 701. USE OF ALTERNATIVE FUELS BY DUAL-FUELED VEHICLES. 

Section 400AA(a)(3)(E) of the Energy Policy and Conservation Act (42 U.S.C. 

6374(a)(3)(E)) is amended to read as follows: 

‘‘(E)(i) Dual-fueled vehicles acquired pursuant to this section shall be operated on 

alternative fuels unless the Secretary determines that an agency qualifies for a 

waiver of such requirement for vehicles operated by the agency in a particular geographic area where—

‘‘(I) the alternative fuel otherwise required to be used in the vehicle is not 

reasonably available to retail purchasers of the fuel, as certified to the Secretary 

by the head of the agency; or 

‘‘(II) the cost of the alternative fuel otherwise required to be used in the vehicle is unreasonably more expensive compared to gasoline, as certified to the Secretary by the head of the agency. 

‘‘(ii) The Secretary shall monitor compliance with this subparagraph by all such 

fleets and shall report annually to the Congress on the extent to which the requirements of this subparagraph are being achieved. The report shall include information 

on annual reductions achieved from the use of petroleum-based fuels and the problems, if any, encountered in acquiring alternative fuels.’’. 

SEC. 702. FUEL USE CREDITS. 

(a) IN GENERAL.—Section 312 of the Energy Policy Act of 1992 (42 U.S.C. 13220) 

is amended to read as follows: 

‘‘SEC. 312. FUEL USE CREDITS. 

‘‘(a) ALLOCATION.—

‘‘(1) The Secretary shall allocate one credit under this section to a fleet or covered person for each qualifying volume of alternative fuel or biodiesel purchased 

for use in an on-road motor vehicle operated by the fleet that weighs more than 

8,500 pounds gross vehicle weight rating. 

‘‘(2) No credits shall be allocated under this section for purchase of an alternative fuel or biodiesel that is required by Federal or State law. 

‘‘(3) A fleet or covered person seeking a credit under this section shall provide 

written documentation to the Secretary supporting the allocation of a credit to 

such fleet or covered person under this section. 

‘‘(b) USE.—At the request of a fleet or covered person allocated a credit under subsection (a), the Secretary shall, for the year in which the purchase of a qualifying 

volume is made, treat that purchase as the acquisition of one alternative fueled vehicle the fleet or covered person is required to acquire under this title, title IV, or 

title V. 

‘‘(c) TREATMENT.—A credit provided to a fleet or covered person under this section 

shall be considered a credit under section 508. 

‘‘(d) ISSUANCE OF RULE.—Not later than 6 months after the date of enactment of 

this section, the Secretary shall issue a rule establishing procedures for the implementation of this section. 

65

‘‘(e) DEFINITIONS.—For the purposes of this section— ‘‘(1) the term ‘biodiesel’ means a diesel fuel substitute produced from non-petroleum renewable resources that meets the registration requirements for fuels 

and fuel additives established by the Environmental Protection Agency under 

section 211 of the Clean Air Act; and ‘‘(2) the term ‘qualifying volume’ means— ‘‘(A) in the case of biodiesel, when used as a component of fuel containing 

at least 20 percent biodiesel by volume, 450 gallons, or if the Secretary determines by rule that the average annual alternative fuel use in light duty 

vehicles by fleets and covered persons exceeds 450 gallons or gallon equivalents, the amount of such average annual alternative fuel use; or 

‘‘(B) in the case of an alternative fuel, the amount of such fuel determined 

by the Secretary to have an equivalent energy content to the amount of biodiesel defined as a qualifying volume pursuant to subparagraph (A).’’. 

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

Act of 1992 is amended by adding at the end of the items relating to title III the 

following new item:

‘‘Sec. 312. Fuel use credits.’’

SEC. 703. NEIGHBORHOOD ELECTRIC VEHICLES. 

Section 301 of the Energy Policy Act of 1992 (42 U.S.C. 13211) is amended—

(1) in paragraph (3), by striking ‘‘or a dual fueled vehicle’’ and inserting ‘‘, a 

dual fueled vehicle, or a neighborhood electric vehicle’’; 

(2) by striking ‘‘and’’ at the end of paragraph (13); 

(3) by striking the period at the end of paragraph (14) and inserting ‘‘; and’’; 

and 

(4) by adding at the end the following: 

‘‘(15) the term ‘neighborhood electric vehicle’ means a motor vehicle—

‘‘(A) which meets the definition of a low-speed vehicle, as such term is 

defined in part 571 of title 49, Code of Federal Regulations; 

‘‘(B) which meets the definition of a zero-emission vehicle, as such term 

is defined in section 86.1702–99 of title 40, Code of Federal Regulations; 

‘‘(C) which meets the requirements of Federal Motor Vehicle Safety 

Standard No. 500; and 

‘‘(D) which has a top speed of not greater than 25 miles per hour.’’. 

SEC. 704. CREDITS FOR MEDIUM AND HEAVY DUTY DEDICATED VEHICLES. 

Section 508 of the Energy Policy Act of 1992 (42 U.S.C. 13258) is amended by adding at the end the following: 

‘‘(e) CREDIT FOR PURCHASE OF MEDIUM AND HEAVY DUTY DEDICATED VEHICLES.—

‘‘(1) DEFINITIONS.—In this subsection: 

‘‘(A) The term ‘medium duty dedicated vehicle’ means a dedicated vehicle 

that has a gross vehicle weight rating of more than 8,500 pounds but not 

more than 14,000 pounds. 

‘‘(B) The term ‘heavy duty dedicated vehicle’ means a dedicated vehicle 

that has a gross vehicle weight rating of more than 14,000 pounds. 

‘‘(2) CREDITS FOR MEDIUM DUTY VEHICLES.—The Secretary shall issue 2 full 

credits to a fleet or covered person under this title, if the fleet or covered person 

acquires a medium duty dedicated vehicle. 

‘‘(3) CREDITS FOR HEAVY DUTY VEHICLES.—The Secretary shall issue 3 full 

credits to a fleet or covered person under this title, if the fleet or covered person 

acquires a heavy duty dedicated vehicle. 

‘‘(4) USE OF CREDITS.—At the request of a fleet or covered person allocated 

a credit under this subsection, the Secretary shall, for the year in which the 

acquisition of the dedicated vehicle is made, treat that credit as the acquisition 

of 1 alternative fueled vehicle that the fleet or covered person is required to acquire under this title.’’. 

SEC. 705. ALTERNATIVE FUEL INFRASTRUCTURE. 

Section 508 of the Energy Policy Act of 1992 (42 U.S.C. 13258) is further amended 

by adding at the end the following: 

‘‘(f) CREDIT FOR INVESTMENT IN ALTERNATIVE FUEL INFRASTRUCTURE.—

‘‘(1) DEFINITIONS.—In this subsection, the term ‘qualifying infrastructure’

means—

‘‘(A) equipment required to refuel or recharge alternative fueled vehicles; 

‘‘(B) facilities or equipment required to maintain, repair, or operate alternative fueled vehicles; and 

‘‘(C) such other activities the Secretary considers to constitute an appropriate expenditure in support of the operation, maintenance, or further 

widespread adoption of or utilization of alternative fueled vehicles. 

66

‘‘(2) ISSUANCE OF CREDITS.—The Secretary shall issue a credit to a fleet or 

covered person under this title for investment in qualifying infrastructure if the 

qualifying infrastructure is open to the general public during regular business 

hours. 

‘‘(3) AMOUNT.—For the purposes of credits under this subsection—

‘‘(A) 1 credit shall be equal to a minimum investment of $25,000 in cash 

or equivalent expenditure, as determined by the Secretary; and 

‘‘(B) except in the case of a Federal or State fleet, no part of the investment may be provided by Federal or State funds. 

‘‘(4) USE OF CREDITS—At the request of a fleet or covered person allocated a 

credit under this subsection, the Secretary shall, for the year in which the investment is made, treat that credit as the acquisition of 1 alternative fueled vehicle that the fleet or covered person is required to acquire under this title.’’. 

SEC. 706. INCREMENTAL COST ALLOCATION. 

Section 303(c) of the Energy Policy Act of 1992 (42 U.S.C. 13212(c) is amended 

by striking ‘‘may’’ and inserting ‘‘shall’’. 

SEC. 707. REVIEW OF ALTERNATIVE FUEL PROGRAMS. 

(a) IN GENERAL.—Not later than 1 year after the date of enactment of this section, 

the Secretary shall complete a study to determine the effect that titles III, IV and 

V of the Energy Policy Act of 1992 (42 U.S.C. 13211 et seq.) have had on the development of alternative fueled vehicle technology, its availability in the market, and 

the cost of light duty motor vehicles that are alternative fueled vehicles. 

(b) TOPICS.—As part of such study, the Secretary shall specifically identify—

(1) the number of alternative fueled vehicles acquired by fleets or covered persons required to acquire alternative fueled vehicles; 

(2) the amount, by type, of alternative fuel actually used in alternative fueled 

vehicles acquired by fleets or covered persons; 

(3) the amount of petroleum displaced by the use of alternative fuels in alternative fueled vehicles acquired by fleets or covered persons; 

(4) the cost of compliance with vehicle acquisition requirements by fleets or 

covered persons; and 

(5) the existence of obstacles preventing compliance with vehicle acquisition 

requirements and increased use of alternative fuel in alternative fueled vehicles 

acquired by fleets or covered persons. 

(c) REPORT.—Upon completion of the study, the Secretary shall submit to the Congress a report that describes the results of the study conducted under this section 

and includes any recommendations of the Secretary for legislative or administrative 

changes concerning the alternative fueled vehicle requirements under titles III, IV, 

and V of the Energy Policy Act of 1992 (42 U.S.C. 13211 et seq.). Such study shall 

be updated on a regular basis as deemed necessary by the Secretary. 

SEC. 708. HIGH OCCUPANCY VEHICLE EXCEPTION. 

Notwithstanding section 102(a)(1) of title 23, United States Code, a State may 

permit a vehicle with fewer than 2 occupants to operate in high occupancy vehicle 

lanes if such vehicle is a dedicated vehicle (as defined in section 301 of the Energy 

Policy Act of 1992 (42 U.S.C. 13211)). 

SEC. 709. ALTERNATIVE COMPLIANCE AND FLEXIBILITY. 

(a) ALTERNATIVE COMPLIANCE.—Title V of the Energy Policy Act of 1992 is amended by adding at the end the following: 

‘‘SEC. 515. ALTERNATIVE COMPLIANCE. 

‘‘(a) APPLICATION FOR WAIVER.—Any covered person subject to the requirements 

of section 501 and any State subject to the requirement of section 507(o) may petition the Secretary for a waiver of the applicable requirements of section 501 or 

507(o). 

‘‘(b) GRANT OF WAIVER.—The Secretary may grant a waiver of the requirements 

of section 501 or 507(o) upon a showing that the fleet owned, operated, leased, or 

otherwise controlled by the State or covered person—

‘‘(1) will achieve a reduction in its annual consumption of petroleum fuels 

equal to the reduction in consumption of petroleum that would result from compliance with section 501 or 507(o); and 

‘‘(2) is in compliance with all applicable vehicle emission standards established by the Administrator under the Clean Air Act. 

‘‘(c) REVOCATION OF WAIVER.—The Secretary shall revoke any waiver granted 

under this section if the State or covered person fails to comply with the requirements of subsection (b).’’. 

67

(b) CREDIT FOR HYBRID VEHICLES, DEDICATED ALTERNATIVE FUEL VEHICLES, AND

INFRASTRUCTURE.—Section 507 of the Energy Policy Act of 1992 (42 U.S.C. 13258) 

(as amended by section 705) is amended by adding at the end the following: 

‘‘(r) CREDITS FOR NEW QUALIFIED HYBRID MOTOR VEHICLES.—

‘‘(1) DEFINITIONS.—In this subsection: 

‘‘(A) 2000 MODEL YEAR CITY FUEL EFFICIENCY.—The term ‘2000 model 

year city fuel efficiency’, with respect to a motor vehicle, means fuel efficiency determined in accordance with the following tables: 

‘‘(i) In the case of a passenger automobile:

‘‘If vehicle inertia weight class is: The 2000 model year city fuel efficiency is: 

1,500 or 1,750 lbs 43.7 mpg

2,000 lbs 38.3 mpg

2,250 lbs 34.1 mpg

2,500 lbs 30.7 mpg

2,750 lbs 27.9 mpg

3,000 lbs 25.6 mpg

3,500 lbs 22.0 mpg

4,000 lbs 19.3 mpg

4,500 lbs 17.2 mpg

5,000 lbs 15.5 mpg

5,500 lbs 14.1 mpg

6,000 lbs 12.9 mpg

6,500 lbs 11.9 mpg

7,000 to 8,500 lbs 11.1 mpg.

‘‘(ii) In the case of a light truck:

‘‘If vehicle inertia weight class is: The 2000 model year city fuel efficiency is: 

1,500 or 1,750 lbs 37.6 mpg

2,000 lbs 33.7 mpg

2,250 lbs 30.6 mpg

2,500 lbs 28.0 mpg

2,750 lbs 25.9 mpg

3,000 lbs 24.1 mpg

3,500 lbs 21.3 mpg

4,000 lbs 19.0 mpg

4,500 lbs 17.3 mpg

5,000 lbs 15.8 mpg

5,500 lbs 14.6 mpg

6,000 lbs 13.6 mpg

6,500 lbs 12.8 mpg

7,000 to 8,500 lbs 12.0 mpg.

‘‘(B) ADMINISTRATOR.—The term ‘Administrator’ means the Administrator 

of the Environmental Protection Agency. 

‘‘(C) ENERGY STORAGE DEVICE.—The term ‘energy storage device’ means 

an onboard rechargeable energy storage system or similar storage device. 

‘‘(D) FUEL EFFICIENCY.—The term ‘fuel efficiency’ means the percentage 

increased fuel efficiency specified in table 1 in paragraph (2)(C) over the average 2000 model year city fuel efficiency of vehicles in the same weight 

class. 

‘‘(E) MAXIMUM AVAILABLE POWER.—The term ‘maximum available power’, 

with respect to a new qualified hybrid motor vehicle that is a passenger vehicle or light truck, means the quotient obtained by dividing—

‘‘(i) the maximum power available from the electrical storage device 

of the new qualified hybrid motor vehicle, during a standard 10-second 

pulse power or equivalent test; by 

‘‘(ii) the sum of—

‘‘(I) the maximum power described in clause (i); and 

‘‘(II) the net power of the internal combustion or heat engine, as 

determined in accordance with standards established by the Society of Automobile Engineers. 

‘‘(F) MOTOR VEHICLE.—The term ‘motor vehicle’ has the meaning given 

the term in section 216 of the Clean Air Act (42 U.S.C. 7550). 

‘‘(G) NEW QUALIFIED HYBRID MOTOR VEHICLE.—The term ‘new qualified 

hybrid motor vehicle’ means a motor vehicle that—

‘‘(i) draws propulsion energy from both—

‘‘(I) an internal combustion engine (or heat engine that uses combustible fuel); and 

‘‘(II) an energy storage device; 

‘‘(ii) in the case of a passenger automobile or light truck—

‘‘(I) in the case of a 2001 or later model vehicle, receives a certificate of conformity under the Clean Air Act (42 U.S.C. 7401 et seq.) 

and produces emissions at a level that is at or below the standard 

established by a qualifying California standard described in section 

243(e)(2) of the Clean Air Act (42 U.S.C. 7583(e)(2)) for that make 

and model year; and 

68

‘‘(II) in the case of a 2004 or later model vehicle, is certified by 

the Administrator as producing emissions at a level that is at or 

below the level established for Bin 5 vehicles in the Tier 2 regulations promulgated by the Administrator under section 202(i) of the 

Clean Air Act (42 U.S.C. 7521(i)) for that make and model year vehicle; and ‘‘(iii) employs a vehicle braking system that recovers waste energy to 

charge an energy storage device. ‘‘(H) VEHICLE INERTIA WEIGHT CLASS.—The term ‘vehicle inertia weight 

class’ has the meaning given the term in regulations promulgated by the 

Administrator for purposes of the administration of title II of the Clean Air 

Act (42 U.S.C. 7521 et seq.). ‘‘(2) ALLOCATION.— ‘‘(A) IN GENERAL.—The Secretary shall allocate a partial credit to a fleet 

or covered person under this title if the fleet or person acquires a new 

qualified hybrid motor vehicle that is eligible to receive a credit under each 

of the tables in subparagraph (C). ‘‘(B) AMOUNT.—The amount of a partial credit allocated under subparagraph (A) for a vehicle described in that subparagraph shall be equal to the 

sum of—

‘‘(i) the partial credits determined under table 1 in subparagraph (C); 

and ‘‘(ii) the partial credits determined under table 2 in subparagraph 

(C). ‘‘(C) TABLES.—The tables referred to in subparagraphs (A) and (B) are as 

follows:

‘‘Table 1

‘‘Partial credit for increased fuel 

efficiency: Amount of credit: 

At least 125% but less than 150% of 2000 model year city fuel efficiency ............................................... 0.14

At least 150% but less than 175% of 2000 model year city fuel efficiency ............................................... 0.21

At least 175% but less than 200% of 2000 model year city fuel efficiency ............................................... 0.28

At least 200% but less than 225% of 2000 model year city fuel efficiency ............................................... 0.35

At least 225% but less than 250% of 2000 model year city fuel efficiency ............................................... 0.50.

‘‘Table 2

‘‘Partial credit for ‘Maximum 

Available Power’: Amount of credit: 

At least 5% but less than 10% ...................................................................................................................... 0.125 At least 10% but less than 20% .................................................................................................................... 0.250 At least 20% but less than 30% .................................................................................................................... 0.375 At least 30% or more ..................................................................................................................................... 0.500.

‘‘(D) USE OF CREDITS.—At the request of a fleet or covered person allocated a credit under this subsection, the Secretary shall, for the year in 

which the acquisition of the qualified hybrid motor vehicle is made, treat 

that credit as the acquisition of 1 alternative fueled vehicle that the fleet 

or covered person is required to acquire under this title. 

‘‘(3) REGULATIONS.—The Secretary shall promulgate regulations under which 

any Federal fleet that acquires a new qualified hybrid motor vehicle will receive 

partial credits determined under the tables contained in paragraph (2)(C) for 

purposes of meeting the requirements of section 303. 

‘‘(s) CREDIT FOR SUBSTANTIAL CONTRIBUTION TOWARDS USE OF DEDICATED VEHICLES IN NONCOVERED FLEETS.—

‘‘(1) DEFINITIONS.—In this subsection: 

‘‘(A) DEDICATED VEHICLE.—The term ‘dedicated vehicle’ includes—

‘‘(i) a light, medium, or heavy duty vehicle; and 

‘‘(ii) a neighborhood electric vehicle. 

‘‘(B) MEDIUM OR HEAVY DUTY VEHICLE.—The term ‘medium or heavy duty 

vehicle’ includes a vehicle that—

‘‘(i) operates solely on alternative fuel; and 

‘‘(ii)(I) in the case of a medium duty vehicle, has a gross vehicle 

weight rating of more than 8,500 pounds but not more than 14,000 

pounds; or 

‘‘(II) in the case of a heavy duty vehicle, has a gross vehicle weight 

rating of more than 14,000 pounds. 

‘‘(C) SUBSTANTIAL CONTRIBUTION.—The term ‘substantial contribution’

(equal to 1 full credit) means not less than $15,000 in cash or in kind services, as determined by the Secretary. 

‘‘(2) ISSUANCE OF CREDITS.—The Secretary shall issue a credit to a fleet or 

covered person under this title if the fleet or person makes a substantial contribution toward the acquisition and use of dedicated vehicles by a person that 

69

owns, operates, leases, or otherwise controls a fleet that is not covered by this 

title. ‘‘(3) MULTIPLE CREDITS FOR MEDIUM AND HEAVY DUTY DEDICATED VEHICLES.— The Secretary shall issue 2 full credits to a fleet or covered person under this 

title if the fleet or person acquires a medium or heavy duty dedicated vehicle. ‘‘(4) USE OF CREDITS.—At the request of a fleet or covered person allocated 

a credit under this subsection, the Secretary shall, for the year in which the 

acquisition of the dedicated vehicle is made, treat that credit as the acquisition 

of 1 alternative fueled vehicle that the fleet or covered person is required to acquire under this title. ‘‘(5) LIMITATION.—Per vehicle credits acquired under this subsection shall not 

exceed the per vehicle credits allowed under this section to a fleet for qualifying 

vehicles in each of the weight categories (light, medium, or heavy duty). 

‘‘(t) CREDIT FOR SUBSTANTIAL INVESTMENT IN ALTERNATIVE FUEL INFRASTRUCTURE.—

‘‘(1) DEFINITIONS.—In this section, the term ‘qualifying infrastructure’

means—

‘‘(A) equipment required to refuel or recharge alternative fueled vehicles; 

‘‘(B) facilities or equipment required to maintain, repair, or operate alternative fueled vehicles; 

‘‘(C) training programs, educational materials, or other activities necessary to provide information regarding the operation, maintenance, or benefits associated with alternative fueled vehicles; and 

‘‘(D) such other activities the Secretary considers to constitute an appropriate expenditure in support of the operation, maintenance, or further 

widespread adoption of or utilization of alternative fueled vehicles. 

‘‘(2) ISSUANCE OF CREDITS.—The Secretary shall issue a credit to a fleet or 

covered person under this title for investment in qualifying infrastructure if the 

qualifying infrastructure is open to the general public during regular business 

hours. 

‘‘(3) AMOUNT.—For the purposes of credits under this subsection—

‘‘(A) 1 credit shall be equal to a minimum investment of $25,000 in cash 

or in kind services, as determined by the Secretary; and 

‘‘(B) except in the case of a Federal or State fleet, no part of the investment may be provided by Federal or State funds. 

‘‘(4) USE OF CREDITS.—At the request of a fleet or covered person allocated 

a credit under this subsection, the Secretary shall, for the year in which the 

investment is made, treat that credit as the acquisition of 1 alternative fueled 

vehicle that the fleet or covered person is required to acquire under this title.’’. 

(c) LEASE CONDENSATE FUELS.—Section 301 of the Energy Policy Act of 1992 (42 

U.S.C. 13211) is amended—

(1) in paragraph (2), by inserting ‘‘mixtures containing 50 percent or more by 

volume of lease condensate or fuels extracted from lease condensate;’’ after 

‘‘liquified petroleum gas;’’; 

(2) in paragraph (15), by inserting ‘‘mixtures containing 50 percent or more 

by volume of lease condensate or fuels extracted from lease condensate;’’ after 

‘‘liquified petroleum gas;’’; and 

(3) by adding at the end the following: 

‘‘(16) the term ‘lease condensate’ means a mixture, primarily of pentanes and 

heavier hydrocarbons, which is recovered as a liquid from natural gas in lease 

separation facilities.’’. 

Subtitle B—Automobile Fuel Economy 

SEC. 711. AUTOMOBILE FUEL ECONOMY STANDARDS. 

(a) TITLE 49 AMENDMENT.—Section 32902(f) of title 49, United States Code, is 

amended to read as follows: 

‘‘(f) CONSIDERATIONS.—When deciding maximum feasible average fuel economy 

under this section, the Secretary of Transportation shall consider the following matters: 

‘‘(1) technological feasibility; 

‘‘(2) economic practicability; 

‘‘(3) the effect of other motor vehicle standards of the Government on fuel 

economy; 

‘‘(4) the need of the United States to conserve energy; 

‘‘(5) the effects of fuel economy standards on motor vehicle and passenger 

safety; and 

‘‘(6) the effects of compliance with average fuel economy standards on levels 

of employment in the United States.’’. 

70

(b) CLARIFICATION OF AUTHORITY.—Section 32902(b) of title 49, United States 

Code, is amended by inserting before the period at the end the following: ‘‘or such 

other number as the Secretary prescribes under subsection (c)’’. (c) ENVIRONMENTAL ASSESSMENT.—When issuing final regulations setting forth increased average fuel economy standards under section 32902(a) or section 32902(c) 

of title 49, United States Code, the Secretary of Transportation shall also issue an 

environmental assessment of the effects of the increased standards on the environment under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). 

(d) AUTHORIZATION OF APPROPRIATIONS.—For the purposes of this section, there are authorized to be appropriated to the Secretary of Transportation $5,000,000 for 

each of fiscal years 2004 through 2008. 

SEC. 712. DUAL-FUELED AUTOMOBILES. 

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

is amended— (1) in subsections (b) and (d), by striking ‘‘1993–2004’’ and inserting ‘‘1993– 2008’’; 

(2) in subsection (f), by striking ‘‘2001’’ and inserting ‘‘2005’’; 

(3) in subsection (f)(1), by striking ‘‘2004’’ and inserting ‘‘2008’’; and 

(4) in subsection (g), by striking ‘‘September 30, 2000’’ and inserting ‘‘September 30, 2004’’. (b) MAXIMUM FUEL ECONOMY INCREASE.—Subsection (a)(1) of section 32906 of 

title 49, United States Code, is amended— (1) in subparagraph (A), by striking ‘‘the model years 1993–2004’’ and inserting ‘‘model years 1993–2008’’; and 

(2) in subparagraph (B), by striking ‘‘the model years 2005–2008’’ and inserting ‘‘model years 2009–2012’’. 

SEC. 713. FEDERAL FLEET FUEL ECONOMY. 

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 

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.’’. 

SEC. 714. RAILROAD EFFICIENCY. 

(a) ESTABLISHMENT.—The Secretary of Energy, in cooperation with the Secretary 

of Transportation and the Administrator of the Environmental Protection Agency, 

shall establish a cost-shared, public-private research partnership to develop and 

demonstrate railroad locomotive technologies that increase fuel economy, reduce 

emissions, and lower costs of operation. Such partnership shall involve the Federal 

Government, railroad carriers, locomotive manufacturers and equipment suppliers, 

and the Association of American Railroads. 

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

are authorized to be appropriated to the Secretary of Energy $25,000,000 for fiscal 

year 2004, $35,000,000 for fiscal year 2005, and $50,000,000 for fiscal year 2006. 

SEC. 715. REDUCTION OF ENGINE IDLING IN HEAVY-DUTY VEHICLES. 

(a) IDENTIFICATION.—Not later than 180 days after the date of enactment of this 

section, the Secretary of Energy, in consultation with the Secretary of Transportation and the Administrator of the Environmental Protection Agency, shall comVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00074 Fmt 6659 Sfmt 6621 E:\HR\OC\SR043.XXX SR043
71

mence a study to analyze the potential fuel savings and emissions reductions resulting from use of idling reduction technologies as they are applied to heavy-duty vehicles. Upon completion of the study, the Secretary of Energy shall, by rule, certify 

those idling reduction technologies with the greatest economic or technical feasibility and the greatest potential for fuel savings and emissions reductions, and publish a list of such certified technologies in the Federal Register. 

(b) VEHICLE WEIGHT EXEMPTION.—Section 127(a) of Title 23, United States Code, 

is amended by adding at the end the following: 

‘‘In order to promote reduction of fuel use and emissions due to engine idling, the 

maximum gross vehicle weight limit and the axle weight limit for any motor vehicle 

equipped with an idling reduction technology certified by the U.S. Department of 

Energy will be increased by an amount necessary to compensate for the additional 

weight of the idling reduction system, provided that the weight increase shall be no 

greater than 400 pounds.’’

(c) DEFINITIONS.—For the purposes of this section: 

(1) The term ‘‘idling reduction technology’’ means a device or system of devices utilized to reduce long-duration idling of a vehicle. 

(2) The term ‘‘heavy-duty vehicle’’ means a vehicle that has a gross vehicle 

weight rating greater than 8,500 pounds and is powered by a diesel engine. 

(3) The term ‘‘long-duration idling’’ means the operation of a main drive engine, for a period greater than 30 consecutive minutes, where the main drive 

engine is not engaged in gear. Such term does not apply to routine stoppages 

associated with traffic movement or congestion. 

TITLE VIII—HYDROGEN 

Subtitle A—Basic Research Programs 

SEC. 801. SHORT TITLE. 

This subtitle may be cited as the ‘‘George E. Brown, Jr. and Robert S. Walker Hydrogen Future Act of 2003’’. 

SEC. 802. MATSUNAGA ACT AMENDMENT. 

The Spark M. Matsunaga Hydrogen Research, Development, and Demonstration 

Act of 1990 (42 U.S.C. 12401 et seq.) is amended by striking sections 102 through 

109 and inserting the following: 

‘‘SEC. 102. DEFINITIONS. 

‘‘In this Act—

‘‘(1) the term ‘advisory committee’ means the Hydrogen and Fuel Cell Technical Advisory Committee established under section 107. 

‘‘(2) the term ‘Department’ means the Department of Energy. 

‘‘(3) the term ‘fuel cell’ means a device that directly converts the chemical energy of a fuel into electricity by an electrochemical process. 

‘‘(4) the term ‘infrastructure’ means the equipment, systems, or facilities used 

to produce, distribute, deliver, or store hydrogen. 

‘‘(5) the term ‘Secretary’ means the Secretary of Energy. 

‘‘SEC. 103. HYDROGEN RESEARCH AND DEVELOPMENT. 

‘‘(a) IN GENERAL.—The Secretary shall conduct a research and development program on technologies related to the production, distribution, storage, and use of hydrogen energy, fuel cells, and related infrastructure. 

‘‘(b) GOAL.—The goal of such program shall be to enable the safe, economic, and 

environmentally sound use of hydrogen energy, fuel cells, and related infrastructure 

for transportation, commercial, industrial, residential, and electric power generation 

applications. 

‘‘(c) FOCUS.—In carrying out activities under this section, the Secretary shall focus 

on critical technical issues including, but not limited to—

‘‘(1) the production of hydrogen from diverse energy sources, with emphasis 

on cost-effective production from renewable energy sources; 

‘‘(2) the delivery of hydrogen, including safe delivery in fueling stations and 

use of existing hydrogen pipelines; 

‘‘(3) the storage of hydrogen, including storage of hydrogen in surface transportation; 

‘‘(4) fuel cell technologies for transportation, stationary and portable applications, with emphasis on cost-reduction of fuel cell stacks; and 

‘‘(5) the use of hydrogen energy and fuel cells, including use in—

‘‘(A) isolated villages, islands, and areas in which other energy sources 

are not available or are very expensive; and 

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‘‘(B) foreign markets, particularly where an energy infrastructure is not 

well developed. 

‘‘(d) CODES AND STANDARDS.—The Secretary shall facilitate the development of domestic and international codes and standards and seek to resolve other critical regulatory and technical barriers preventing the introduction of hydrogen energy and 

fuel cells into the marketplace. 

‘‘(e) SOLICITATION.—The Secretary shall carry out the research and development 

activities authorized under this section through solicitation of proposals, and evaluation using competitive merit review. 

‘‘(f) COST SHARING.—The Secretary shall require a commitment from non-Federal 

sources of at least 20 percent of the cost of proposed research and development 

projects. The Secretary may reduce or eliminate the cost sharing requirement—

‘‘(1) if the Secretary determines that the research and development is of a 

basic or fundamental nature, or 

‘‘(2) for technical analyses, outreach activities, and educational programs that 

the Secretary does not expect to result in a marketable product. 

‘‘SEC. 104. DEMONSTRATION PROGRAMS. 

‘‘(a) REQUIREMENT.—In conjunction with activities conducted under section 103, 

the Secretary shall conduct demonstrations of hydrogen energy and fuel cell technologies in order to evaluate the commercial potential of such technologies. 

‘‘(b) SOLICITATION.—The Secretary shall carry out the demonstrations authorized 

under this section through solicitation of proposals, and evaluation using competitive merit review. 

‘‘(c) COST SHARING.—The Secretary shall require a commitment from non-Federal 

sources of at least 50 percent of the costs directly relating to a demonstration project 

under this section. The Secretary may reduce such non-Federal requirement if the 

Secretary determines that the reduction is appropriate considering the technological 

risks involved in the project. 

‘‘SEC. 105. TECHNOLOGY TRANSFER. 

‘‘The Secretary shall conduct programs to—

‘‘(1) transfer critical hydrogen energy and fuel cell technologies to the private 

sector in order to promote wider understanding of such technologies and wider 

use of research progress under this Act; 

‘‘(2) accelerate wider application of hydrogen energy and fuel cell technologies 

in foreign countries in order to increase the global market for the technologies 

and foster global development without harmful environmental effects; 

‘‘(3) foster the exchange of generic, nonproprietary information and technology 

developed pursuant to this Act, among industry, academia, and the Federal 

agencies; and 

‘‘(4) inventory and assess the technical and commercial viability of technologies related to production, distribution, storage, and use of hydrogen energy 

and fuel cells. 

‘‘SEC. 106. COORDINATION AND CONSULTATION. 

‘‘The Secretary shall have overall management responsibility for carrying out programs under this Act. In carrying out such programs, the Secretary—

‘‘(1) shall establish a central point for the coordination of all hydrogen energy 

and fuel cell research, development, and demonstration activities of the Department; 

‘‘(2) in carrying out the Secretary’s authorities pursuant to this Act, shall consult with other Federal agencies as appropriate, and may obtain the assistance 

of any Federal agency, on a reimbursable basis or otherwise and with the consent of such agency; 

‘‘(3) shall attempt to ensure that activities under this Act do not unnecessarily 

duplicate any available research and development results or displace or compete 

with privately funded hydrogen and fuel cell energy activities. 

‘‘SEC. 107. ADVISORY COMMITTEE. 

‘‘(a) ESTABLISHMENT.—There is hereby established the Hydrogen and Fuel Cell 

Technical Advisory Committee, to advise the Secretary on the programs under this 

Act. 

‘‘(b) MEMBERSHIP.—The advisory committee shall be comprised of not fewer than 

12 nor more than 25 members appointed by the Secretary based on their technical 

and other qualifications from domestic industry, automakers, universities, professional societies, Federal laboratories, financial institutions, and environmental and 

other organizations as the Secretary deems appropriate. The advisory committee 

shall have a chairperson, who shall be elected by the members from among their 

number. 

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‘‘(c) TERMS.—Members of the advisory committee shall be appointed for terms of 

3 years, with each term to begin not later than 3 months after the date of enactment of the Energy Policy Act of 2003, except that one-third of the members first 

appointed shall serve for 1 year, and one-third of the members first appointed shall 

serve for 2 years, as designated by the Secretary at the time of appointment. 

‘‘(d) REVIEW.—The advisory committee shall review and make any necessary recommendations to the Secretary on—

‘‘(1) implementation and conduct of programs under this Act; 

‘‘(2) economic, technological, and environmental consequences of the deployment of technologies related to production, distribution, storage, and use of hydrogen energy, and fuel cells; 

‘‘(3) means for resolving barriers to implementing hydrogen and fuel cell technologies; and 

‘‘(4) the coordination plan and any updates thereto prepared by the Secretary 

pursuant to section 108. 

‘‘(e) RESPONSE.—The Secretary shall consider any recommendations made by the 

advisory committee, and shall provide a response to the advisory committee within 

30 days after receipt of such recommendations. Such response shall either describe 

the implementation of the advisory committee’s recommendations or provide an explanation of the reasons that any such recommendations will not be implemented. 

‘‘(f) SUPPORT.—The Secretary shall provide such staff, funds and other support as 

may be necessary to enable the advisory committee to carry out its functions. In carrying out activities pursuant to this section, the advisory committee may also obtain 

the assistance of any Federal agency, on a reimbursable basis or otherwise and with 

the consent of such agency. 

‘‘SEC. 108. COORDINATION PLAN. 

‘‘(a) PLAN.—The Secretary, in consultation with other Federal agencies, shall prepare and maintain on an ongoing basis a comprehensive plan for activities under 

this Act. 

‘‘(b) DEVELOPMENT.—In developing such plan, the Secretary shall—

‘‘(1) consider the guidance of the National Hydrogen Energy Roadmap published by the Department in November 2002 and any updates thereto; 

‘‘(2) consult with the advisory committee; and 

‘‘(3) consult with interested parties from domestic industry, automakers, universities, professional societies, Federal laboratories, financial institutions, and 

environmental and other organizations as the Secretary deems appropriate. 

‘‘(c) CONTENTS.—At a minimum, the plan shall provide—

‘‘(1) an assessment of the effectiveness of the programs authorized under this 

Act, including a summary of recommendations of the advisory committee for improvements in such programs; 

‘‘(2) a description of proposed research, development, and demonstration activities planned by the Department for the next five years; 

‘‘(3) a description of the role Federal laboratories, institutions of higher education, small businesses, and other private sector firms are expected to play in 

such programs; 

‘‘(4) cost and performance milestones that will be used to evaluate the programs for the next five years; and 

‘‘(5) any significant technical, regulatory, and other hurdles that stand in the 

way of achieving such cost and performance milestones, and how the programs 

will address those hurdles; and 

‘‘(6) to the extent practicable, an analysis of Federal, State, local, and private 

sector hydrogen research, development, and demonstration activities to identify 

areas for increased intergovernmental and private-public sector collaboration. 

‘‘(d) REPORT.—Not later than January 1, 2005, and biennially thereafter, the Secretary shall transmit to Congress the comprehensive plan developed for the programs authorized under this Act, or any updates thereto. 

‘‘SEC. 109. AUTHORIZATION OF APPROPRIATIONS. 

‘‘There are authorized to be appropriated to carry out the purposes of this Act—

‘‘(1) such sums as may be necessary for fiscal years 1992 through 2003; 

‘‘(2) $105,000,000 for fiscal year 2004; 

‘‘(3) $150,000,000 for fiscal year 2005; 

‘‘(4) $175,000,000 for fiscal year 2006; 

‘‘(5) $200,000,000 for fiscal year 2007; and 

‘‘(6) $225,000,000 for fiscal year 2008.’’. 

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SEC. 803. HYDROGEN TRANSPORTATION AND FUEL INITIATIVE. 

(a) VEHICLE TECHNOLOGIES.—The Secretary shall carry out a research, development, demonstration, and commercial application program on advanced hydrogenpowered vehicle technologies. Such program shall address—

(1) engine and emission control systems; 

(2) energy storage, electric propulsion, and hybrid systems; 

(3) automotive materials; 

(4) hydrogen-carrier fuels; and 

(5) other advanced vehicle technologies. 

(b) HYDROGEN FUEL INITIATIVE.—In coordination with the program authorized in 

subsection (a), the Secretary of Energy, in partnership with the private sector, shall 

conduct a research, development, demonstration and commercial application program designed to enable the rapid and coordinated introduction of hydrogen-fueled 

vehicles and associated infrastructure into commerce. Such program shall address—

(1) production of hydrogen from diverse energy resources, including—

(A) renewable energy resources; 

(B) fossil fuels, in conjunction with carbon capture and sequestration; 

(C) hydrogen-carrier fuels; and 

(D) nuclear energy; 

(2) delivery of hydrogen or hydrogen-carrier fuels, including—

(A) transmission by pipeline and other distribution methods; and 

(B) safe, convenient, and economic refueling of vehicles, either at central 

refueling stations or through distributed on-site generation; 

(3) storage of hydrogen or hydrogen-carrier fuels, including development of 

materials for safe and economic storage in gaseous, liquid or solid forms at refueling facilities or onboard vehicles; 

(4) development of advanced vehicle technologies, such as efficient fuel cells 

and direct hydrogen combustion engines, and related component technologies 

such as advanced materials and control systems; and 

(5) development of necessary codes, standards, and safety practices to accompany the production, distribution, storage and use of hydrogen or hydrogen-carrier fuels in transportation. 

(c) MATSUNAGA ACT.—In carrying out programs and projects under subsections (a) 

and (b), the Secretary shall ensure that such programs and projects are consistent 

with, and do not unnecessarily duplicate, activities carried out under the programs 

authorized under the Spark M. Matsunaga Hydrogen Research, Development, and 

Demonstration Act of 1990 (42 U.S.C. 12401 et seq.). 

(d) ADVISORY COMMITTEE.—The Hydrogen and Fuel Cell Technical Advisory Committee authorized under section 107 of the Spark M. Matsunaga Hydrogen Research, Development, and Demonstration Act of 1990 (42 U.S.C. 12408), as amended 

in this title, shall also advise the Secretary on the programs and activities carried 

out under this section. 

(e) SOLICITATION.—The Secretary shall carry out the programs authorized under 

this section through solicitation of proposals, and evaluation using competitive merit 

review. 

(f) COST SHARING.—The Secretary shall require a commitment from non-Federal 

sources of at least 50 percent of the costs directly relating to a demonstration project 

under this section. The Secretary may reduce such non-Federal requirement if the 

Secretary determines that the reduction is appropriate considering the technological 

risks involved in the project. 

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

are authorized to be appropriated to the Secretary—

(1) for activities pursuant to subsection (a), to remain available until expended—

(A) $100,000,000 for each of fiscal years 2004 and 2005; 

(B) $110,000,000 for each of fiscal years 2006 and 2007; and 

(C) $120,000,000 for fiscal year 2008; and 

(2) for activities pursuant to subsection (b), to remain available until expended—

(A) $125,000,000 for fiscal year 2004; 

(B) $150,000,000 for fiscal year 2005; 

(C) $175,000,000 for fiscal year 2006; and 

(D) $200,000,000 for each of fiscal years 2007 and 2008. 

SEC. 804. INTERAGENCY TASK FORCE AND COORDINATION PLAN. 

(a) ESTABLISHMENT.—Not later than 120 days after the date of enactment of this 

Act, the Secretary shall establish an interagency task force to coordinate Federal 

hydrogen and fuel cell energy activities. 

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(b) COMPOSITION.—The task force shall be chaired by a designee of the Secretary, 

and shall include representatives of— (1) the Office of Science and Technology Policy; 

(2) the Department of Transportation; 

(3) the Department of Defense; 

(4) the Department of Commerce (including the National Institute for Standards and Technology); 

(5) the Environmental Protection Agency; 

(6) the National Aeronautics and Space Administration; 

(7) the Department of State; and 

(8) other Federal agencies as the Director considers appropriate. 

(c) COORDINATION PLAN.—The task force shall prepare a comprehensive coordination plan for Federal hydrogen and fuel cell energy activities, which shall include 

a summary of such activities. 

(d) REPORT.—Not later than one year after it is established, the task force shall 

report to Congress on the coordination plan in subsection (c) and on the interagency 

coordination of Federal hydrogen and fuel cell energy activities. 

SEC. 805. REVIEW BY THE NATIONAL ACADEMIES. 

Not later than two years after the date of enactment of this Act, and every four 

years thereafter, the Secretary shall enter into a contract with the National Academies. Such contract shall require the National Academies to perform a review of 

the progress made through Federal hydrogen and fuel cell energy programs and activities, including the need for modified or additional programs, and to report to the 

Congress on the results of such review. There are authorized to be appropriated to 

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

section.

Subtitle B—Demonstration Programs 

SEC. 811. DEFINITIONS. 

For the purposes of this subtitle and subtitle C: 

(1) The term ‘‘fuel cell’’ means a device that directly converts the chemical energy of a fuel into electricity by an electrochemical process. 

(2) The term ‘‘hydrogen-carrier fuel’’ means any hydrocarbon fuel that is capable of being thermochemically processed or otherwise reformed to produce hydrogen. 

(3) The term ‘‘infrastructure’’ means the equipment, systems, or facilities used 

to produce, distribute, deliver, or store hydrogen or hydrogen-carrier fuels. 

(4) The term ‘‘institution of higher education’’ has the meaning given that 

term in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)). 

(5) The term ‘‘Secretary’’ means the Secretary of Energy. 

SEC. 812. HYDROGEN VEHICLE DEMONSTRATION PROGRAM. 

(a) IN GENERAL.—The Secretary shall establish a program for demonstration and 

commercial application of hydrogen-powered vehicles and associated hydrogen fueling infrastructure in a variety of transportation-related applications, including—

(1) fuel cell vehicles in light-duty vehicle fleets; 

(2) heavy-duty fuel cell on-road and off-road vehicles, including mass transit 

buses; 

(3) use of hydrogen-powered vehicles and hydrogen fueling infrastructure (including multiple hydrogen refueling stations) along major transportation routes 

or in entire regions; and 

(4) other similar projects as the Secretary may deem necessary to contribute 

to the rapid demonstration and deployment of hydrogen-based technologies in 

widespread use for transportation. 

(b) ELIGIBILITY.—Federal, state, tribal, and local governments, academic and other 

non-profit organizations, private entities, and consortia of these entities shall be eligible for these projects. 

(c) SELECTION.—In selecting projects under this section, the Secretary shall—

(1) consult with Federal, State, local and private fleet managers to identify 

potential projects where hydrogen-powered vehicles may be placed into service; 

(2) identify not less than 10 sites at which to carry out projects under this 

program, 2 of which must be based at Federal facilities; and 

(3) select projects based on the following factors—

(A) geographic diversity; 

(B) a diverse set of operating environments, duty cycles, and likely weather conditions; 

(C) the interest and capability of the participating agencies, entities, or 

fleets; 

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(D) the availability and appropriateness of potential sites for refueling infrastructure and for maintenance of the vehicle fleet; 

(E) the existence of traffic congestion in the area expected to be served 

by the hydrogen-powered vehicles; 

(F) proximity to non-attainment areas as defined in section 171 of the 

Clean Air Act (42 U.S.C. 7501); and 

(G) such other criteria as the Secretary determines to be appropriate in 

order to carry out the purposes of the program. 

(d) INFRASTRUCTURE.—In funding projects under this section, the Secretary shall 

also support the installation of refueling infrastructure at sites necessary for success 

of the project, giving preference to those infrastructure projects that include co-production of both—

(1) hydrogen for use in transportation; and 

(2) electricity that can be consumed on site. 

(e) OPERATION AND MAINTENANCE PERIOD.—Vehicles purchased for projects under 

this section shall be operated and maintained by the participating agencies or entities in regular duty cycles for a period of not less than 12 months. 

(f) TRAINING AND TECHNICAL SUPPORT.—In funding proposals under this section, 

the Secretary shall also provide funding for training and technical support as may 

be necessary to assure the success of such projects, including training and technical 

support in—

(1) the installation, operation, and maintenance of fueling infrastructure; 

(2) the operation and maintenance of fuel cell vehicles; and 

(3) data collection necessary to monitor project performance. 

(g) COST-SHARING.—Except as otherwise provided, the Secretary shall require a 

commitment from non-Federal sources of at least 50 percent of the costs directly relating to a demonstration project under this section. The Secretary may reduce such 

non-Federal requirement if the Secretary determines that the reduction is appropriate considering the technological risks involved in the project. 

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

are authorized to be appropriated to the Secretary $50,000,000 for each of fiscal 

years 2006 through 2010, to remain available until expended. 

SEC. 813. STATIONARY FUEL CELL DEMONSTRATION PROGRAM. 

(a) IN GENERAL.—The Secretary shall establish a program for demonstration and 

commercial application of hydrogen fuel cells in stationary applications, including—

(1) fuel cells for use in residential and commercial buildings; 

(2) portable fuel cells, including auxiliary power units in trucks; 

(3) small form and micro fuel cells of 20 watts or less; 

(4) distributed generation systems with fuel cells using renewable energy; and 

(5) other similar projects as the Secretary may deem necessary to contribute 

to the rapid demonstration and deployment of hydrogen-based technologies in 

widespread use. 

(b) COMPETITIVE EVALUATION.—Proposals submitted in response to solicitations 

issued pursuant to this section shall be evaluated on a competitive basis using peer 

review. The Secretary is not required to make an award under this section in the 

absence of a meritorious proposal. 

(c) PREFERENCE.—The Secretary shall give preference, in making an award under 

this section, to proposals that—

(1) are submitted jointly from consortia that include two or more participants 

from institutions of higher education, industry, State, tribal, or local governments, and Federal laboratories; and 

(2) that reflect proven experience and capability with technologies relevant to 

the projects proposed. 

(d) TRAINING AND TECHNICAL SUPPORT.—In funding proposals under this section, 

the Secretary shall also provide funding for training and technical support as may 

be necessary to assure the success of such projects, including training and technical 

support in the installation, operation, and maintenance of fuel cells and the collection of data to monitor project performance. 

(e) COST–SHARING.—Except as otherwise provided, the Secretary shall require a 

commitment from non-Federal sources of at least 50 percent of the costs directly relating to a demonstration project under this section. The Secretary may reduce such 

non-Federal requirement if the Secretary determines that the reduction is appropriate considering the technological risks involved in the project. 

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

are authorized to be appropriated to the Secretary $50,000,000 for each of fiscal 

years 2006 through 2010, to remain available until expended. 

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SEC. 814. HYDROGEN DEMONSTRATION PROGRAMS IN NATIONAL PARKS. 

(a) STUDY.—Not later than 1 year after the date of enactment of this section, the 

Secretary of the Interior and the Secretary of Energy shall jointly study and report 

to Congress on—

(1) the energy needs and uses at National Parks; and 

(2) the potential for fuel cell and other hydrogen-based technologies to meet 

such energy needs in—

(A) stationary applications, including power generation, combined heat 

and power for buildings and campsites, and standby and backup power systems; and 

(B) transportation-related applications, including support vehicles, passenger vehicles and heavy-duty trucks and buses. 

(b) PILOT PROJECTS.—Based on the results of the study conducted under subsection (a), the Secretary of the Interior shall fund not fewer than 3 pilot projects 

in national parks to provide for demonstration of fuel cells or other hydrogen-based 

technologies in those applications where the greatest potential for such use in National Parks has been identified. Such pilot projects shall be geographically distributed throughout the United States. 

(c) DEFINITION.—For the purpose of this section, the term ‘‘National Parks’’ means 

those areas of land and water now or hereafter administered by the Secretary of 

the Interior through the National Park Service for park, monument, historic, parkway, recreational, or other purposes. 

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

to the Secretary of the Interior $1,000,000 for fiscal year 2004, and $15,000,000 for 

fiscal year 2005, to remain available until expended. 

SEC. 815. INTERNATIONAL DEMONSTRATION PROGRAM. 

(a) IN GENERAL.—The Secretary, in consultation with the Administrator of the 

U.S. Agency for International Development, shall conduct demonstrations of fuel 

cells and associated hydrogen fueling infrastructure in countries other than the 

United States, particularly in areas where an energy infrastructure is not already 

well developed. 

(b) ELIGIBLE TECHNOLOGIES.—The program may demonstrate—

(1) fuel cell vehicles in light-duty vehicle fleets; 

(2) heavy-duty fuel cell on-road and off-road vehicles; 

(3) stationary fuel cells in residential and commercial buildings; or 

(4) portable fuel cells, including auxiliary power units in trucks. 

(c) PARTICIPANTS.—

(1) ELIGIBILITY.—Foreign nations, non-profit organizations, and private companies shall be eligible for these pilot projects. 

(2) COOPERATION.—Eligible entities may perform the projects in cooperation 

with United States non-profit organizations and private companies. 

(3) COST-SHARING.—The Secretary may require a commitment from participating private companies and from participating foreign countries. 

(d) AUTHORIZATION OF APPROPRIATIONS.—For activities conducted under this section, there are authorized to be appropriated to the Secretary $25,000,000 for each 

of fiscal years 2006 through 2010, to remain available until expended. 

SEC. 816. TRIBAL STATIONARY HYBRID POWER DEMONSTRATION. 

(a) IN GENERAL.—Not later than 1 year after the date of enactment of this Act, 

the Secretary, in cooperation with Indian tribes, shall develop and transmit to Congress a strategy for a demonstration and commercial application program to develop 

hybrid distributed power systems on Indian lands that combine—

(1) one renewable electric power generating technology of 2 megawatts or less 

located near the site of electric energy use; and 

(2) fuel cell power generation suitable for use in distributed power systems. 

(b) DEFINITION.—For the purposes of this section, the terms ‘‘Indian tribe’’ and 

‘‘Indian land’’ have the meaning given such terms under title XXVI of the Energy 

Policy Act of 1992 (25 U.S.C. 3501 et seq.), as amended by this Act. 

(c) AUTHORIZATION OF APPROPRIATIONS.—For activities under this section, there 

are authorized to be appropriated to the Secretary of Energy $1,000,000 for fiscal 

year 2005, and $5,000,000 for each of fiscal years 2006 through 2008. 

SEC. 817. DISTRIBUTED GENERATION PILOT PROGRAM. 

(a) ESTABLISHMENT.—The Secretary shall support a demonstration program to develop, deploy, and commercialize distributed generation systems to significantly reduce the cost of producing hydrogen from renewable energy for use in fuel cells. 

Such program shall provide the necessary infrastructure to test these distributed 

generation technologies at pilot scales in a real-world environment. 

78

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

to the Secretary of Energy, to remain available until expended, for the purposes of 

carrying out this section— (1) $10,000,000 for fiscal year 2004; 

(2) $15,000,000 for fiscal year 2005; and 

(3) $20,000,000 for each of fiscal years 2006 through 2008. 

Subtitle C—Federal Programs 

SEC. 821. PUBLIC EDUCATION AND TRAINING. 

(a) EDUCATION.—The Secretary shall conduct a public education program designed 

to increase public interest in and acceptance of hydrogen energy and fuel cell technologies. 

(b) TRAINING.—The Secretary shall conduct a program to promote universitybased training in critical skills for research in, production of, and use of hydrogen 

energy and fuel cell technologies. Such program may include research fellowships 

at institutions of higher education, centers of excellence in critical technologies, internships in industry, and such other measures as the Secretary deems appropriate. 

(c) AUTHORIZATION OF APPROPRIATIONS.—For activities pursuant to this section, there are authorized to be appropriated to the Secretary $7,000,000 for each of fiscal 

years 2004 through 2008. 

SEC. 822. HYDROGEN TRANSITION STRATEGIC PLANNING. 

(a) IN GENERAL.—Not later than September 30, 2004, the head of each federal agency with annual outlays of greater than $20,000,000 shall submit to the Director 

of the Office of Management and Budget and to the Congress a hydrogen transition 

strategic plan containing a comprehensive assessment of how the transition to a hydrogen-based economy could to assist the mission, operation and regulatory program 

of the agency. 

(b) CONTENTS.—At a minimum, each plan shall contain— (1) a description of areas within the agency’s control where using hydrogen 

and/or fuel cells could benefit the operation of the agency, assist in the implementation of its regulatory functions or enhance the agency’s mission; and 

(2) a description of any agency management practices, procurement policies, 

regulations, policies, or guidelines that may inhibit the agency’s transition to 

use of fuel cells and hydrogen as an energy source. 

(c) DURATION AND REVISION.—The strategic plan shall cover a period of not less 

than the five years following the fiscal year in which it is submitted, and shall be 

updated and revised at least every three years. 

SEC. 823. MINIMUM FEDERAL FLEET REQUIREMENT. 

(a) Section 303(b) of the Energy Policy Act of 1992 (42 U.S.C. 13212(b)) is amended by adding at the end the following: 

‘‘(4) HYDROGEN VEHICLES.—

‘‘(A) Of the number of vehicles acquired under paragraph (1)(D) by a Federal fleet of 100 or more vehicles, not less than—

‘‘(i) 5 percent in fiscal years 2006 and 2007; 

‘‘(ii) 10 percent in fiscal years 2008 and 2009; 

‘‘(iii) 15 percent in fiscal years 2010 and 2011; and 

‘‘(iv) 20 percent in fiscal years 2012 and thereafter, 

shall be hydrogen-powered vehicles that meet standards for performance, 

reliability, cost, and maintenance established by the Secretary. 

‘‘(B) The Secretary may establish a lesser percentage, or waive the requirement under subparagraph (A) for any fiscal year entirely, if hydrogenpowered vehicles meeting the standards set by the Secretary pursuant to 

subparagraph (A) are not available at a purchase price that is less than 150 

percent of the purchase price of other comparable alternative fueled vehicles. 

‘‘(C) The Secretary may by rule, delay the implementation of the requirements under subparagraph (A) in the event that the Secretary determines 

that hydrogen-powered vehicles are not commercially or economically available, or that fuel for such vehicles is not commercially or economically 

available. 

‘‘(D) The Secretary, in consultation with the Administrator of General 

Services, may for reasons of refueling infrastructure use and cost optimization, elect to allocate the acquisitions necessary to achieve the requirements 

in subparagraph (A) to certain Federal fleets in lieu of requiring each Federal fleet to achieve the requirements in subparagraph (A).’’. 

(b) REFUELING.—Section 304 of the Energy Policy Act of 1992 (42 U.S.C. 13213) 

is amended—

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(1) by redesignating subsection (b) as subsection (c); 

(2) in the second sentence of subsection (a), by striking ‘‘If publicly’’ and inserting the following: 

‘‘(b) COMMERCIAL ARRANGEMENTS.—

‘‘(1) IN GENERAL.—If publicly’’; and 

(3) in subsection (b) (as designated by paragraph (2)), by adding at the end 

the following: 

‘‘(2) MANDATORY ARRANGEMENTS.—

‘‘(A) IN GENERAL.—In a case in which publicly available fueling facilities 

are not convenient or accessible to the locations of 2 or more Federal fleets 

for which hydrogen-powered vehicles are required to be purchased under 

section 303(b)(4), the Federal agency for which the Federal fleets are maintained (or the Federal agencies for which the Federal fleets are maintained, 

acting jointly under a memorandum of agreement providing for cost sharing) shall enter into a commercial arrangement as provided in paragraph 

(1). 

‘‘(B) SUNSET.—Subparagraph (A) ceases to be effective at the end of fiscal 

year 2013.’’. 

SEC. 824. STATIONARY FUEL CELL PURCHASE REQUIREMENT. 

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

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

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

fiscal year, the following amounts shall be generated by fuel cells—

(1) not less than 1 percent in fiscal years 2006 through 2008; 

(2) not less than 2 percent in fiscal years 2009 and 2010; and 

(3) not less than 3 percent in fiscal year 2011 and each fiscal year thereafter. 

(b) COMPLIANCE.—In complying with the requirements of subsection (a), Federal 

agencies are encouraged to—

(1) use innovative purchasing practices; 

(2) use fuel cells at the site of electricity usage and in combined heat and 

power applications; and 

(3) use fuel cells in stand alone power functions, such as but not limited to 

battery power and backup power. 

(c) DEFINITIONS.—For purposes of this section—

(1) the term ‘‘fuel cells’’ means an integrated system comprised of a fuel cell 

stack assembly and balance of plant components that converts a fuel into electricity using an electrochemical means; and 

(2) the term ‘‘electrical energy’’ includes on and off grid power, including premium power applications, standby power applications and electricity generation. 

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

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

years 2004, $70,000,000 for fiscal year 2005, and $100,000,000 for each of fiscal 

years 2006 and thereafter. 

SEC. 825. DEPARTMENT OF ENERGY STRATEGY. 

Not later than 1 year after the date of enactment of this Act, the Secretary shall 

publish and transmit to Congress a plan identifying critical technologies, enabling 

strategies and applications, technical targets, and associated timeframes that support the commercialization of hydrogen-fueled fuel cell vehicles. 

TITLE IX—RESEARCH AND DEVELOPMENT 

SEC. 901. SHORT TITLE. 

This Title may be cited as the ‘‘Energy Research, Development, Demonstration, 

and Commercial Application Act of 2003’’. 

SEC. 902. GOALS. 

(a) IN GENERAL.—In order to achieve the purposes of this title, the Secretary shall 

conduct a balanced set of programs of energy research, development, demonstration, 

and commercial application, focused on—

(1) increasing the efficiency of all energy intensive sectors through conservation and improved technologies, 

(2) promoting diversity of energy supply, 

(3) decreasing the nation’s dependence on foreign energy supplies, 

(4) improving United States energy security, and 

(5) decreasing the environmental impact of energy-related activities. 

(b) GOALS.—The Secretary shall publish measurable cost and performance-based 

goals with each annual budget submission in at least the following areas: 

(1) energy efficiency for buildings, energy-consuming industries, and vehicles; 

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(2) electric energy generation (including distributed generation), transmission, 

and storage; 

(3) renewable energy technologies including wind power, photovoltaics, solar 

thermal systems, geothermal energy, hydrogen-fueled systems, biomass-based 

systems, biofuels, and hydropower; 

(4) fossil energy including power generation, onshore and offshore oil and gas 

resource recovery, and transportation; and 

(5) nuclear energy including programs for existing and advanced reactors, and 

education of future specialists. 

(c) PUBLIC COMMENT.—The Secretary shall provide mechanisms for input on the 

annually published goals from industry, university, and other public sources. 

(d) EFFECT OF GOALS.—Nothing in subsection (a) or the annually published goals 

creates any new authority for any Federal agency, or may be used by a Federal 

agency to support the establishment of regulatory standards or regulatory requirements. 

SEC. 903. DEFINITIONS. 

For purposes of this title: 

(1) The term ‘‘Department’’ means the Department of Energy. 

(2) The term ‘‘departmental mission’’ means any of the functions vested in the 

Secretary of Energy by the Department of Energy Organization Act (42 U.S.C. 

7101 et seq.) or other law. 

(3) The term ‘‘institution of higher education’’ has the meaning given that 

term in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)). 

(4) The term ‘‘National Laboratory’’ means any of the following laboratories 

owned by the Department: 

(A) Ames Laboratory. 

(B) Argonne National Laboratory. 

(C) Brookhaven National Laboratory. 

(D) Fermi National Accelerator Laboratory. 

(E) Idaho National Engineering and Environmental Laboratory. 

(F) Lawrence Berkeley National Laboratory. 

(G) Lawrence Livermore National Laboratory. 

(H) Los Alamos National Laboratory. 

(I) National Energy Technology Laboratory. 

(J) National Renewable Energy Laboratory. 

(K) Oak Ridge National Laboratory. 

(L) Pacific Northwest National Laboratory. 

(M) Princeton Plasma Physics Laboratory. 

(N) Sandia National Laboratories. 

(O) Stanford Linear Accelerator Center. 

(P) Thomas Jefferson National Accelerator Facility. 

(5) The term ‘‘nonmilitary energy laboratory’’ means the laboratories listed in 

(4) with the exclusion of (4)(G), (4)(H), and (4)(N). 

(6) The term ‘‘Secretary’’ means the Secretary of Energy. 

(7) The term ‘‘single-purpose research facility’’ means any of the primarily single-purpose entities owned by the Department or any other organization of the 

Department designated by the Secretary. 

Subtitle A—Energy Efficiency 

SEC. 911. ENERGY EFFICIENCY. 

(a) IN GENERAL.—The following sums are authorized to be appropriated to the 

Secretary for energy efficiency and conservation research, development, demonstration, and commercial application activities, including activities authorized under 

this subtitle: 

(1) for fiscal year 2004, $616,000,000; 

(2) for fiscal year 2005, $695,000,000; 

(3) for fiscal year 2006, $772,000,000; 

(4) for fiscal year 2007, $865,000,000; and 

(5) for fiscal year 2008, $920,000,000. 

(b) ALLOCATIONS.—From amounts authorized under subsection (a), the following 

sums are authorized: 

(1) For activities under section 912—

(A) for fiscal year 2004, $20,000,000; and 

(B) for fiscal year 2005, $30,000,000. 

(2) For activities under section 914—

(A) for fiscal year 2004, $4,000,000; and 

(B) for each of fiscal years 2005 through 2008, $7,000,000. 

(3) For activities under section 915—

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(A) for fiscal year 2004, $20,000,000; 

(B) for fiscal year 2005, $25,000,000; 

(C) for fiscal year 2006, $30,000,000; 

(D) for fiscal year 2007, $35,000,000; and 

(E) for fiscal year 2008, $40,000,000. 

(c) EXTENDED AUTHORIZATION.—There are authorized to be appropriated to the 

Secretary for activities under section 912, $50,000,000 for each of fiscal years 2006 

through 2013. 

(d) None of the funds authorized to be appropriated under this section may be 

used for—

(1) the promulgation and implementation of energy efficiency regulations; 

(2) the Weatherization Assistance Program under part A of title IV of the Energy Conservation and Production Act; 

(3) the State Energy Program under part D of title III of the Energy Policy 

and Conservation Act; or 

(4) the Federal Energy Management Program under part 3 of title V of the 

National Energy Conservation Policy Act. 

SEC. 912. NEXT GENERATION LIGHTING INITIATIVE. 

(a) IN GENERAL.—The Secretary shall carry out a Next Generation Lighting Initiative in accordance with this section to support research, development, demonstration, and commercial application activities related to advanced solid-state lighting 

technologies based on white light emitting diodes. 

(b) OBJECTIVES.—The objectives of the initiative shall be to develop advanced 

solid-state organic and inorganic lighting technologies based on white light emitting 

diodes that, compared to incandescent and fluorescent lighting technologies, are 

longer lasting; more energy-efficient; cost-competitive and have less environmental 

impact. 

(c) INDUSTRY ALLIANCE.—The Secretary shall, within 3 months from the date of 

enactment of this section, competitively select an Industry Alliance to represent participants who are private, for-profit firms which, as a group, are broadly representative of United States solid state lighting research, development, infrastructure, and 

manufacturing expertise as a whole. 

(d) RESEARCH.—

(1) The Secretary shall carry out the research activities of the Next Generation Lighting Initiative through competitively awarded grants to researchers, 

including Industry Alliance participants, national laboratories and institutions 

of higher education. 

(2) The Secretary shall annually solicit from the Industry Alliance—

(A) comments to identify solid-state lighting technology needs; 

(B) assessment of the progress of the Initiative’s research activities; and 

(C) assistance in annually updating solid-state lighting technology roadmaps. 

(3) The information and roadmaps under (2) shall be available to the public. 

(e) DEVELOPMENT, DEMONSTRATION, AND COMMERCIAL APPLICATION.—The Secretary shall carry out a development, demonstration, and commercial application 

program for the Next Generation Lighting Initiative through competitively selected 

awards. The Secretary may give preference to participants of the Industry Alliance 

selected pursuant to subsection (c). 

(f) COST SHARING.—The Secretary shall require cost sharing according to 42 

U.S.C. 13542. 

(g) INTELLECTUAL PROPERTY.—The Secretary may require, in accordance with the 

authorities provided in 35 U.S.C. 202(a)(ii), 42 U.S.C. 2182 and 42 U.S.C. 5908, that 

for any new invention from subsection (d)—

(1) that the Industry Alliance members who are active participants in research, development and demonstration activities related to the advanced solidstate lighting technologies that are the subject of this legislation shall be granted first option to negotiate with the invention owner, at least in the field of 

solid-state lighting, non-exclusive licenses and royalties on terms that are reasonable under the circumstances; 

(2) that the invention owner must offer to negotiate licenses with the Industry 

Alliance participants cited in (1), in good faith, for at least 1 year after U.S. 

patents are issued on any such new invention; and 

(3) such other terms as the Secretary determines are required to promote accelerated commercialization of inventions made under the Initiative. 

(h) NATIONAL ACADEMY REVIEW.—The Secretary shall enter into an arrangement 

with the National Academy of Sciences to conduct periodic reviews of the Next Generation Lighting Initiative. 

(i) DEFINITIONS.—As used in this section: 

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(1) The term ‘‘advanced solid-state lighting’’ means a semiconducting device 

package and delivery system that produces white light using externally applied 

voltage. 

(2) The term ‘‘research’’ includes research on the technologies, materials and 

manufacturing processes required for white light emitting diodes. 

(3) The term ‘‘Industry Alliance’’ means an entity selected by the Secretary 

under subsection (c). 

(4) The term ‘‘white light emitting diode’’ means a semiconducting package, 

utilizing either organic or inorganic materials, that produces white light using 

externally applied voltage. 

SEC. 913. NATIONAL BUILDING PERFORMANCE INITIATIVE. 

(a) INTERAGENCY GROUP.—Not later than 90 days after the date of enactment of 

this Act, the Director of the Office of Science and Technology Policy shall establish 

an interagency group to develop, in coordination with the advisory committee established under subsection (e), a National Building Performance Initiative (in this section referred to as the ‘‘Initiative’’). The interagency group shall be co-chaired by appropriate officials of the Department and the Department of Commerce, who shall 

jointly arrange for the provision of necessary administrative support to the group. 

(b) INTEGRATION OF EFFORTS.—The Initiative shall integrate Federal, State, and 

voluntary private sector efforts to reduce the costs of construction, operation, maintenance, and renovation of commercial, industrial, institutional, and residential 

buildings. 

(c) PLAN.—Not later than 1 year after the date of enactment of this Act, the interagency group shall submit to Congress a plan for carrying out the appropriate Federal role in the Initiative. The plan shall include—

(1) research, development, demonstration, and commercial application of systems and materials for new construction and retrofit relating to the building envelope and building system components; and 

(2) the collection, analysis, and dissemination of research results and other 

pertinent information on enhancing building performance to industry, government entities, and the public. 

(d) DEPARTMENT OF ENERGY ROLE.—Within the Federal portion of the Initiative, 

the Department shall be the lead agency for all aspects of building performance related to use and conservation of energy. 

(e) ADVISORY COMMITTEE.—The Director of the Office of Science and Technology 

Policy shall establish an advisory committee to—

(1) analyze and provide recommendations on potential private sector roles and 

participation in the Initiative; and 

(2) review and provide recommendations on the plan described in subsection 

(c). 

(f) CONSTRUCTION.—Nothing in this section provides any Federal agency with new 

authority to regulate building performance. 

SEC. 914. SECONDARY ELECTRIC VEHICLE BATTERY USE PROGRAM. 

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

(1) The term ‘‘battery’’ means an energy storage device that previously has 

been used to provide motive power in a vehicle powered in whole or in part by 

electricity. 

(2) The term ‘‘associated equipment’’ means equipment located where the batteries will be used that is necessary to enable the use of the energy stored in 

the batteries. 

(b) PROGRAM.—The Secretary shall establish and conduct a research, development, demonstration, and commercial application program for the secondary use of 

batteries. Such program shall be—

(1) designed to demonstrate the use of batteries in secondary applications, including utility and commercial power storage and power quality; 

(2) structured to evaluate the performance, including useful service life and 

costs, of such batteries in field operations, and the necessary supporting infrastructure, including reuse and disposal of batteries; and 

(3) coordinated with ongoing secondary battery use programs at the National 

Laboratories and in industry. 

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

Act, the Secretary shall solicit proposals to demonstrate the secondary use of batteries and associated equipment and supporting infrastructure in geographic locations throughout the United States. The Secretary may make additional solicitations 

for proposals if the Secretary determines that such solicitations are necessary to 

carry out this section. 

(d) SELECTION OF PROPOSALS.—

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(1) The Secretary shall, not later than 90 days after the closing date established by the Secretary for receipt of proposals under subsection (c), select up 

to 5 proposals which may receive financial assistance under this section once 

the Department is in receipt of appropriated funds. 

(2) In selecting proposals, the Secretary shall consider diversity of battery 

type, geographic and climatic diversity, and life-cycle environmental effects of 

the approaches. 

(3) No one project selected under this section shall receive more than 25 percent of the funds authorized for this Program. 

(4) The Secretary shall consider the extent of involvement of State or local 

government and other persons in each demonstration project to optimize use of 

federal resources. 

(5) The Secretary may consider such other criteria as the Secretary considers 

appropriate. 

(e) CONDITIONS.—The Secretary shall require that—

(1) relevant information be provided to the Department, the users of the batteries, the proposers, and the battery manufacturers; and 

(2) the proposer provide at least 50 percent of the costs associated with the 

proposal. 

SEC. 915. ENERGY EFFICIENCY SCIENCE INITIATIVE. 

(a) ESTABLISHMENT.—The Secretary shall establish an Energy Efficiency Science 

Initiative to be managed by the Assistant Secretary in the Department with responsibility for energy conservation under section 203(a)(9) of the Department of Energy 

Organization Act (42 U.S.C. 7133(a)(9)), in consultation with the Director of the Office of Science, for grants to be competitively awarded and subject to peer review 

for research relating to energy efficiency. 

(b) REPORT.—The Secretary shall submit to the Congress, along with the President’s annual budget request under section 1105(a) of title 31, United States Code, 

a report on the activities of the Energy Efficiency Science Initiative, including a description of the process used to award the funds and an explanation of how the research relates to energy efficiency. 

Subtitle B—Distributed Energy and Electric Energy Systems 

SEC. 921. DISTRIBUTED ENERGY AND ELECTRIC ENERGY SYSTEMS. 

(a) IN GENERAL.—

(1) The following sums are authorized to be appropriated to the Secretary for 

distributed energy and electric energy systems activities, including activities authorized under this subtitle: 

(A) for fiscal year 2004, $190,000,000; 

(B) for fiscal year 2005, $200,000,000; 

(C) for fiscal year 2006, $220,000,000; 

(D) for fiscal year 2007, $240,000,000; and 

(E) for fiscal year 2008, $260,000,000. 

(2) For the Initiative in subsection 927(e), there are authorized to be appropriated—

(A) for fiscal year 2004, $15,000,000; 

(B) for fiscal year 2005, $20,000,000; 

(C) for fiscal year 2006, $30,000,000; 

(D) for fiscal year 2007, $35,000,000; and 

(E) for fiscal year 2008, $40,000,000. 

(b) MICRO-COGENERATION ENERGY TECHNOLOGY.—From amounts authorized 

under subsection (a), $20,000,000 for each of fiscal years 2004 and 2005 shall be 

available for activities under section 924. 

SEC. 922. HYBRID DISTRIBUTED POWER SYSTEMS. 

Not later than 1 year after the date of enactment of this Act, the Secretary shall 

develop and transmit to the Congress a strategy for a comprehensive research, development, demonstration, and commercial application program to develop hybrid 

distributed power systems that combine—

(1) one or more renewable electric power generation technologies of 10 

megawatts or less located near the site of electric energy use; and 

(2) nonintermittent electric power generation technologies suitable for use in 

a distributed power system. 

SEC. 923. HIGH POWER DENSITY INDUSTRY PROGRAM. 

The Secretary shall establish a comprehensive research, development, demonstration, and commercial application program to improve energy efficiency of high power 

density facilities, including data centers, server farms, and telecommunications faVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00087 Fmt 6659 Sfmt 6621 E:\HR\OC\SR043.XXX SR043
84

cilities. Such program shall consider technologies that provide significant improvement in thermal controls, metering, load management, peak load reduction, or the 

efficient cooling of electronics. 

SEC. 924. MICRO-COGENERATION ENERGY TECHNOLOGY. 

The Secretary shall make competitive, merit-based grants to consortia for the development of micro-cogeneration energy technology. The consortia shall explore the 

use of small-scale combined heat and power in residential heating appliances, the 

use of excess power to operate other appliances within the residence and supply of 

excess generated power to the power grid. 

SEC. 925. DISTRIBUTED ENERGY TECHNOLOGY DEMONSTRATION PROGRAM. 

The Secretary, within the sums authorized under section 921(a)(1), may provide 

financial assistance to coordinating consortia of interdisciplinary participants for 

demonstrations designed to accelerate the utilization of distributed energy technologies, such as fuel cells, microturbines, reciprocating engines, thermally activated 

technologies, and combined heat and power systems, in highly energy intensive commercial applications. 

SEC. 926. OFFICE OF ELECTRIC TRANSMISSION AND DISTRIBUTION. 

(a) CREATION OF AN OFFICE OF ELECTRIC TRANSMISSION AND DISTRIBUTION.—Title 

II of the Department of Energy Organization Act is amended by inserting the following after section 217 (42 U.S.C. 7144d): 

‘‘OFFICE OF ELECTRIC TRANSMISSION AND DISTRIBUTION

‘‘SEC. 218. (a) There is established within the Department an Office of Electric 

Transmission and Distribution. This Office shall be headed by a Director, who shall 

be appointed by the Secretary. The Director shall be compensated at the annual rate 

prescribed for level IV of the Executive Schedule under section 5315 of title 5, 

United States Code. 

‘‘(b) The Director shall—

‘‘(1) coordinate and develop a comprehensive, multi-year strategy to improve 

the Nation’s electricity transmission and distribution; 

‘‘(2) ensure that the recommendations of the Secretary’s National Transmission Grid Study are implemented; 

‘‘(3) carry out the research, development, and demonstration functions; 

‘‘(4) grant authorizations for electricity import and export; 

‘‘(5) perform other electricity transmission and distribution-related functions 

assigned by the Secretary; and 

‘‘(6) develop programs for workforce training in power and transmission engineering.’’. 

(b) CONFORMING AMENDMENTS.—

(1) The table of contents of the Department of Energy Act is amended by inserting after the item relating to section 217 the following new item:

‘‘218. Office of Electric Transmission and Distribution.’’.

(2) Section 5315 of title 5, United States Code, is amended by inserting ‘‘Director, Office of Electric Transmission and Distribution, Department of Energy.’’

after ‘‘Inspector General, Department of Energy.’’. 

SEC. 927. ELECTRIC TRANSMISSION AND DISTRIBUTION PROGRAMS. 

(a) DEMONSTRATION PROGRAM.—The Secretary, acting through the Director of the 

Office of Electric Transmission and Distribution, shall establish a comprehensive research, development, and demonstration program to ensure the reliability, efficiency, and environmental integrity of electrical transmission and distribution systems. This program shall include—

(1) advanced energy and energy storage technologies, materials, and systems, 

giving priority to new transmission technologies, including composite conductor 

materials and other technologies that enhance reliability, operational flexibility, 

or power-carrying capability; 

(2) advanced grid reliability and efficiency technology development; 

(3) technologies contributing to significant load reductions; 

(4) advanced metering, load management, and control technologies; 

(5) technologies to enhance existing grid components; 

(6) the development and use of high-temperature superconductors to—

(A) enhance the reliability, operational flexibility, or power-carrying capability of electric transmission or distribution systems; or 

(B) increase the efficiency of electric energy generation, transmission, distribution, or storage systems; 

(7) integration of power systems, including systems to deliver high-quality 

electric power, electric power reliability, and combined heat and power; 

85

(8) supply of electricity to the power grid by small scale, distributed and residential-based power generators; 

(9) the development and use of advanced grid design, operation and planning 

tools; 

(10) any other infrastructure technologies, as appropriate; and 

(11) technology transfer and education. 

(b) PROGRAM PLAN.—Not later than 1 year after the date of the enactment of this 

legislation, the Secretary, in consultation with other appropriate Federal agencies, 

shall prepare and transmit to Congress a 5-year program plan to guide activities 

under this section. In preparing the program plan, the Secretary shall consult with 

utilities, energy services providers, manufacturers, institutions of higher education, 

other appropriate State and local agencies, environmental organizations, professional and technical societies, and any other persons the Secretary considers appropriate. 

(c) IMPLEMENTATION.—The Secretary shall consider implementing this program 

using a consortium of industry, university and national laboratory participants. 

(d) REPORT.—Not later than 2 years after the transmittal of the plan under subsection (b), the Secretary shall transmit a report to Congress describing the progress 

made under this section and identifying any additional resources needed to continue 

the development and commercial application of transmission and distribution infrastructure technologies. 

(e) POWER DELIVERY RESEARCH INITIATIVE.—The Secretary shall establish a research, development and demonstration initiative specifically focused on power delivery utilizing components incorporating high temperature superconductivity. 

(1) Goals of this Initiative shall be to—

(A) establish world-class facilities to develop high temperature superconductivity power applications in partnership with manufacturers and 

utilities; 

(B) provide technical leadership for establishing reliability for high temperature superconductivity power applications including suitable modeling 

and analysis; 

(C) facilitate commercial transition toward direct current power transmission, storage, and use for high power systems utilizing high temperature 

superconductivity; and 

(D) facilitate the integration of very low impedance high temperature 

superconducting wires and cables in existing electric networks to improve 

system performance, power flow control and reliability. 

(2) The Initiative shall include—

(A) feasibility analysis, planning, research, and design to construct demonstrations of superconducting links in high power, direct current and controllable alternating current transmission systems; 

(B) public-private partnerships to demonstrate deployment of high temperature superconducting cable into testbeds simulating a realistic transmission grid and under varying transmission conditions, including actual 

grid insertions; and 

(C) testbeds developed in cooperation with national laboratories, industries, and universities to demonstrate these technologies, prepare the technologies for commercial introduction, and address cost or performance roadblocks to successful commercial use. 

(f) TRANSMISSION AND DISTRIBUTION GRID PLANNING AND OPERATIONS INITIATIVE.—The Secretary shall establish a research, development and demonstration initiative specifically focused on tools needed to plan, operate and expand the transmission and distribution grids in the presence of competitive market mechanisms 

for energy, load demand, customer response and ancillary services. Goals of this Initiative shall be to—

(1) develop and utilize a geographically distributed Center, consisting of research universities and national laboratories, with expertise and facilities to develop the underlying theory and software for power system application, and to 

assure commercial development in partnership with software vendors and utilities; 

(2) provide technical leadership in engineering and economic analysis for reliability and efficiency of power systems planning and operations in the presence 

of competitive markets for electricity; 

(3) model, simulate and experiment with new market mechanisms and operating practices to understand and optimize such new methods before actual use; 

and 

(4) provide technical support and technology transfer to electric utilities and 

other participants in the domestic electric industry and marketplace. 

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Subtitle C—Renewable Energy 

SEC. 931. RENEWABLE ENERGY. 

(a) IN GENERAL.—The following sums are authorized to be appropriated to the 

Secretary for renewable energy research, development, demonstration, and commercial application activities, including activities authorized under this subtitle: (1) for fiscal year 2004, $480,000,000; 

(2) for fiscal year 2005, $550,000,000; 

(3) for fiscal year 2006, $610,000,000; 

(4) for fiscal year 2007, $659,000,000; and 

(5) for fiscal year 2008, $710,000,000. 

(b) BIOENERGY.—From the amounts authorized under subsection (a), the following 

sums are authorized to be appropriated to carry out section 932: (1) for fiscal year 2004, $135,425,000; 

(2) for fiscal year 2005, $155,600,000; 

(3) for fiscal year 2006, $167,650,000; 

(4) for fiscal year 2007, $180,000,000; and 

(5) for fiscal year 2008, $192,000,000. 

(c) BIODIESEL ENGINE TESTING.—From amounts authorized under subsection (a), 

$5,000,000 is authorized to be appropriated in each of fiscal years 2004 and 2008 

to carry out section 933. 

(d) CONCENTRATING SOLAR POWER.—From amounts authorized under subsection 

(a), the following sums are authorized to be appropriated to carry out section 934: (1) for fiscal year 2004, $20,000,000; 

(2) for fiscal year 2005, $40,000,000; and 

(3) for each of fiscal years 2006, 2007 and 2008, $50,000,000. 

(e) LIMITS ON USE OF FUNDS.— (1) None of the funds authorized to be appropriated under this section may 

be used for Renewable Support and Implementation. (2) Of the funds authorized under subsection (b), not less than $5,000,000 for 

each fiscal year shall be made available for grants to Historically Black Colleges 

and Universities, Tribal Colleges, and Hispanic-Serving Institutions. 

(f) CONSULTATION.—In carrying out this section, the Secretary, in consultation 

with the Secretary of Agriculture, shall demonstrate the use of advanced wind 

power technology, including combined use with coal gasification; biomass; geothermal energy systems; and other renewable energy technologies to assist in delivering electricity to rural and remote locations. 

SEC. 932. BIOENERGY PROGRAMS. 

(a) IN GENERAL.—The Secretary shall conduct a program of research, development, demonstration, and commercial application for bioenergy, including—

(1) biopower energy systems; 

(2) biofuels; 

(3) bioproducts; 

(4) integrated biorefineries that may produce biopower, biofuels and bioproducts; 

(5) cross-cutting research and development in feedstocks; and 

(6) economic analysis. 

(b) BIOFUELS AND BIOPRODUCTS.—The goals of the biofuels and bioproducts programs shall be to develop, in partnership with industry—

(1) advanced biochemical and thermo-chemical conversion technologies capable of making fuels from cellulosic feedstocks that are price-competitive with 

gasoline or diesel in either internal combustion engines or fuel cell-powered vehicles; and 

(2) advanced biotechnology processes capable of making biofuels and bioproducts with emphasis on development of biorefinery technologies using enzymebased processing systems. 

(c) DEFINITION.—For purposes of (b), the term ‘‘cellulosic feedstock’’ means any 

portion of a crop not normally used in food production or any non-food crop grown 

for the purpose of producing biomass feedstock. 

SEC. 933. BIODIESEL ENGINE TESTING PROGRAM. 

(a) IN GENERAL.—Not later that 180 days after enactment of this Act, the Secretary shall initiate a partnership with diesel engine, diesel fuel injection system, 

and diesel vehicle manufacturers and diesel and biodiesel fuel providers to include 

biodiesel testing in advanced diesel engine and fuel system technology. 

(b) SCOPE.—The study shall provide for testing to determine the impact of biodiesel on current and future emission control technologies, with emphasis on—

(1) the impact of biodiesel on emissions warranty, in-use liability, and antitampering provisions; 

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(2) the impact of long-term use of biodiesel on engine operations; 

(3) the options for optimizing these technologies for both emissions and performance when switching between biodiesel and diesel fuel; and 

(4) the impact of using biodiesel in these fueling systems and engines when 

used as a blend with 2006 Environmental Protection Agency-mandated diesel 

fuel containing a maximum of 15-parts-per-million sulfur content. 

(c) REPORT.—Not later than 2 years after the date of enactment, the Secretary 

shall provide an interim report to Congress on the findings of this study, including 

a comprehensive analysis of impacts from biodiesel on engine operation for both existing and expected future diesel technologies, and recommendations for ensuring 

optimal emissions reductions and engine performance with biodiesel. 

(d) DEFINITION.—For purposes of this section, the term ‘‘biodiesel’’ means a diesel 

fuel substitute produced from non-petroleum renewable resources that meets the 

registration requirements for fuels and fuel additives established by the Environmental Protection Agency under section 211 of the Clean Air Act (42 U.S.C. 7545) 

and that meets the American Society for Testing and Materials D6751-02a ‘‘Standard Specification for Biodiesel Fuel (B100) Blend Stock for Distillate Fuels’’. 

SEC. 934 CONCENTRATING SOLAR POWER RESEARCH PROGRAM. 

(a) IN GENERAL.—The Secretary shall conduct a program of research and development to evaluate the potential of concentrating solar power for hydrogen production, 

including co-generation approaches for both hydrogen and electricity. Such program 

shall take advantage of existing facilities to the extent possible and shall include— (1) development of optimized technologies that are common to both electricity 

and hydrogen production; 

(2) evaluation of thermo-chemical cycles for hydrogen production at the temperatures attainable with concentrating solar power; 

(3) evaluation of materials issues for the thermo-chemical cycles in (2); 

(4) system architectures and economics studies; and 

(5) coordination with activities in the Advanced Reactor Hydrogen Co-generation Project on high temperature materials, thermo-chemical cycle and economic 

issues. 

(b) ASSESSMENT.—In carrying out the program under this section, the Secretary 

is directed to assess conflicting guidance on the economic potential of concentrating 

solar power for electricity production received from the National Research Council 

report entitled ‘‘Renewable Power Pathways: A Review of the U.S. Department of 

Energy’s Renewable Energy Programs’’ in 2000 and subsequent DOE-funded reviews of that report and provide an assessment of the potential impact of this technology before, or concurrent with, submission of the fiscal year 2006 budget. 

(c) REPORT.—Not later than 5 years after the date of enactment of this section, 

the Secretary shall provide a report to Congress on the economic and technical potential for electricity or hydrogen production, with or without co-generation, with 

concentrating solar power, including the economic and technical feasibility of potential construction of a pilot demonstration facility suitable for commercial production 

of electricity and/or hydrogen from concentrating solar power. 

SEC. 935. MISCELLANEOUS PROJECTS. 

The Secretary shall conduct research, development, demonstration, and commercial application programs for—

(1) ocean energy, including wave energy; 

(2) the combined use of renewable energy technologies with one another and 

with other energy technologies, including the combined use of wind power and 

coal gasification technologies; and 

(3) renewable energy technologies for cogeneration of hydrogen and electricity. 

Subtitle D—Nuclear Energy 

SEC. 941. NUCLEAR ENERGY. 

(a) CORE PROGRAMS.—The following sums are authorized to be appropriated to the 

Secretary for nuclear energy research, development, demonstration, and commercial 

application activities, including activities authorized under this subtitle, other than 

those described in subsection (b): 

(1) for fiscal year 2004, $273,000,000; 

(2) for fiscal year 2005, $305,000,000; 

(3) for fiscal year 2006, $330,000,000; 

(4) for fiscal year 2007, $355,000,000; and 

(5) for fiscal year 2008, $495,000,000. 

(b) NUCLEAR INFRASTRUCTURE SUPPORT.—The following sums are authorized to be 

appropriated to the Secretary for activities under section 942(f): 

(1) for fiscal year 2004, $125,000,000; 

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(2) for fiscal year 2005, $130,000,000; 

(3) for fiscal year 2006, $135,000,000; 

(4) for fiscal year 2007, $140,000,000; and 

(5) for fiscal year 2008, $145,000,000. 

(c) ALLOCATIONS.—From amounts authorized under subsection (a), the following 

sums are authorized: 

(1) For activities under section 943—

(A) for fiscal year 2004, $140,000,000; 

(B) for fiscal year 2005, $145,000,000; 

(C) for fiscal year 2006, $150,000,000; 

(D) for fiscal year 2007, $155,000,000; and 

(E) for fiscal year 2008, $275,000,000. 

(2) For activities under section 944—

(A) for fiscal year 2004, $33,000,000; 

(B) for fiscal year 2005, $37,900,000; 

(C) for fiscal year 2006, $43,600,000; 

(D) for fiscal year 2007, $50,100,000; and 

(E) for fiscal year 2008, $56,000,000. 

(3) For activities under section 946, for each of fiscal years 2004 through 

2008, $6,000,000. 

(d) None of the funds authorized under this section may be used for decommissioning the Fast Flux Test Facility. 

SEC. 942. NUCLEAR ENERGY RESEARCH PROGRAMS. 

(a) NUCLEAR ENERGY RESEARCH INITIATIVE.—The Secretary shall carry out a Nuclear Energy Research Initiative for research and development related to nuclear 

energy. 

(b) NUCLEAR ENERGY PLANT OPTIMIZATION PROGRAM.—The Secretary shall carry 

out a Nuclear Energy Plant Optimization Program to support research and development activities addressing reliability, availability, productivity, component aging, 

safety and security of existing nuclear power plants. 

(c) NUCLEAR POWER 2010 PROGRAM.—The Secretary shall carry out a Nuclear 

Power 2010 Program, consistent with recommendations in the October 2001 report 

entitled ‘‘A Roadmap to Deploy New Nuclear Power Plants in the United States by 

2010’’ issued by the Nuclear Energy Research Advisory Committee of the Department. The Program shall include—

(1) utilization of the expertise and capabilities of industry, universities, and 

National Laboratories in evaluation of advanced nuclear fuel cycles and fuels 

testing; 

(2) consideration of a variety of reactor designs suitable for both developed 

and developing nations; 

(3) participation of international collaborators in research, development, and 

design efforts as appropriate; and 

(4) encouragement for university and industry participation. 

(d) GENERATION IV NUCLEAR ENERGY SYSTEMS INITIATIVE.—The Secretary shall 

carry out a Generation IV Nuclear Energy Systems Initiative to develop an overall 

technology plan and to support research and development necessary to make an informed technical decision about the most promising candidates for eventual commercial application. The Initiative shall examine advanced proliferation-resistant and 

passively safe reactor designs, including designs that—

(1) are economically competitive with other electric power generation plants; 

(2) have higher efficiency, lower cost, and improved safety compared to reactors in operation on the date of enactment of this Act; 

(3) use fuels that are proliferation resistant and have substantially reduced 

production of high-level waste per unit of output; and 

(4) use improved instrumentation. 

(e) REACTOR PRODUCTION OF HYDROGEN.—The Secretary shall carry out research 

to examine designs for high-temperature reactors capable of producing large-scale 

quantities of hydrogen using thermo-chemical processes. 

(f) NUCLEAR INFRASTRUCTURE SUPPORT.—The Secretary shall develop and implement a strategy for the facilities of the Office of Nuclear Energy, Science, and Technology and shall transmit a report containing the strategy along with the President’s budget request to the Congress for fiscal year 2006. Such strategy shall provide a cost-effective means for—

(1) maintaining existing facilities and infrastructure, as needed; 

(2) closing unneeded facilities; 

(3) making facility upgrades and modifications; and 

(4) building new facilities. 

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SEC. 943. ADVANCED FUEL CYCLE INITIATIVE. 

(a) IN GENERAL.—The Secretary, through the Director of the Office of Nuclear Energy, Science and Technology, shall conduct an advanced fuel recycling technology 

research and development program to evaluate proliferation-resistant fuel recycling 

and transmutation technologies which minimize environmental or public health and 

safety impacts as an alternative to aqueous reprocessing technologies deployed as 

of the date of enactment of this Act in support of evaluation of alternative national 

strategies for spent nuclear fuel and the Generation IV advanced reactor concepts, 

subject to annual review by the Secretary’s Nuclear Energy Research Advisory Committee or other independent entity, as appropriate. Opportunities to enhance 

progress of this program through international cooperation should be sought. 

(b) REPORTS.—The Secretary shall report on the activities of the advanced fuel recycling technology research and development program as part of the Department’s 

annual budget submission. 

SEC. 944. UNIVERSITY NUCLEAR SCIENCE AND ENGINEERING SUPPORT. 

(a) ESTABLISHMENT.—The Secretary shall support a program to invest in human 

resources and infrastructure in the nuclear sciences and engineering and related 

fields (including health physics and nuclear and radiochemistry), consistent with departmental missions related to civilian nuclear research and development. 

(b) DUTIES.—In carrying out the program under this section, the Secretary shall 

establish fellowship and faculty assistance programs, as well as provide support for 

fundamental research and encourage collaborative research among industry, national laboratories, and universities through the Nuclear Energy Research Initiative. The Secretary is encouraged to support activities addressing the entire fuel 

cycle through involvement of both the Offices of Nuclear Energy, Science and Technology and Civilian Radioactive Waste Management. The Secretary shall support 

communication and outreach related to nuclear science, engineering and nuclear 

waste management. 

(c) MAINTAINING UNIVERSITY RESEARCH AND TRAINING REACTORS AND ASSOCIATED

INFRASTRUCTURE.—Activities under this section may include—

(1) converting research reactors currently using high-enrichment fuels to lowenrichment fuels, upgrading operational instrumentation, and sharing of reactors among institutions of higher education; 

(2) providing technical assistance, in collaboration with the United States nuclear industry, in relicensing and upgrading training reactors as part of a student training program; and 

(3) providing funding for reactor improvements as part of a focused effort that 

emphasizes research, training, and education. 

(d) UNIVERSITY-NATIONAL LABORATORY INTERACTIONS.—The Secretary shall develop sabbatical fellowship and visiting scientist programs to encourage sharing of 

personnel between national laboratories and universities. 

(e) OPERATING AND MAINTENANCE COSTS.—Funding for a research project provided under this section may be used to offset a portion of the operating and maintenance costs of a research reactor at an institution of higher education used in the 

research project. 

SEC. 945. SECURITY OF NUCLEAR FACILITIES. 

The Secretary, through the Director of the Office of Nuclear Energy, Science and 

Technology shall conduct a research and development program on cost-effective 

technologies for increasing the safety of nuclear facilities from natural phenomena 

and the security of nuclear facilities from deliberate attacks. 

SEC. 946. ALTERNATIVES TO INDUSTRIAL RADIOACTIVE SOURCES. 

(a) SURVEY.—Not later than August 1, 2004, the Secretary shall provide to the 

Congress results of a survey of industrial applications of large radioactive sources. 

The survey shall—

(1) consider well-logging sources as one class of industrial sources; 

(2) include information on current domestic and international Department, 

Department of Defense, State Department and commercial programs to manage 

and dispose of radioactive sources; and 

(3) discuss available disposal options for currently deployed or future sources 

and, if deficiencies are noted for either deployed or future sources, recommend 

legislative options that Congress may consider to remedy identified deficiencies. 

(b) PLAN.—In conjunction with the survey in subsection (a), the Secretary shall 

establish a research and development program to develop alternatives to such 

sources that reduce safety, environmental, or proliferation risks to either workers 

using the sources or the public. Miniaturized particle accelerators for well-logging 

or other industrial applications and portable accelerators for production of shortlived radioactive materials at an industrial site shall be considered as part of the 

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research and development efforts. Details of the program plan shall be provided to 

the Congress by August 1, 2004. 

Subtitle E—Fossil Energy 

SEC. 951. FOSSIL ENERGY. 

(a) IN GENERAL.—The following sums are authorized to be appropriated to the 

Secretary for fossil energy research, development, demonstration, and commercial 

application activities, including activities authorized under this subtitle: 

(1) for fiscal year 2004, $523,000,000; 

(2) for fiscal year 2005, $542,000,000; 

(3) for fiscal year 2006, $558,000,000; 

(4) for fiscal year 2007, $585,000,000; and 

(5) for fiscal year 2008, $600,000,000. 

(b) ALLOCATIONS.—From amounts authorized under subsection (a), the following 

sums are authorized: 

(1) For activities under section 952(b)(2), $28,000,000 for each of the fiscal 

years 2004 through 2008. 

(2) For activities under section 953—

(A) for fiscal year 2004, $12,000,000; 

(B) for fiscal year 2005, $15,000,000; and 

(C) for each of fiscal years 2006 through 2008, $20,000,000. 

(3) For activities under section 954, to remain available until expended—

(A) for fiscal year 2004, $200,000,000; 

(B) for fiscal year 2005, $210,000,000; and 

(C) for fiscal year 2006, $220,500,000. 

(4) For the Office of Arctic Energy under section 3197 of the Floyd D. Spence 

National Defense Authorization Act for Fiscal Year 2001 (Public Law 106–398), 

$25,000,000 for each of fiscal years 2004 through 2008. 

(c) EXTENDED AUTHORIZATION.—There are authorized to be appropriated to the 

Secretary for the Office of Arctic Energy under section 3197 of the Floyd D. Spence 

National Defense Authorization Act for Fiscal Year 2001 (Public Law 106–398), 

$25,000,000 for each of fiscal years 2009 through 2012. 

(d) LIMITS ON USE OF FUNDS.—

(1) None of the funds authorized under this section may be used for Fossil 

Energy Environmental Restoration or Import/Export Authorization. 

(2) Of the funds authorized under subsection (b)(2), not less than 20 percent 

of the funds appropriated for each fiscal year shall be dedicated to research and 

development carried out at institutions of higher education. 

SEC. 952. OIL AND GAS RESEARCH PROGRAMS. 

(a) OIL AND GAS RESEARCH.—The Secretary shall conduct a program of research, 

development, demonstration, and commercial application on oil and gas, including—

(1) exploration and production; 

(2) gas hydrates; 

(3) reservoir life and extension; 

(4) transportation and distribution infrastructure; 

(5) ultraclean fuels; 

(6) heavy oil and oil shale; and 

(7) related environmental research. 

(b) FUEL CELLS.—

(1) The Secretary shall conduct a program of research, development, demonstration, and commercial application on fuel cells for low-cost, high-efficiency, 

fuel-flexible, modular power systems. 

(2) The demonstrations shall include fuel cell proton exchange membrane 

technology for commercial, residential, and transportation applications, and distributed generation systems, utilizing improved manufacturing production and 

processes. 

(c) NATURAL GAS AND OIL DEPOSITS REPORT.—Not later than 2 years after the 

date of the enactment of this Act, and every 2 years thereafter, the Secretary of the 

Interior, in consultation with other appropriate Federal agencies, shall transmit a 

report to the Congress of the latest estimates of natural gas and oil reserves, reserves growth, and undiscovered resources in Federal and State waters off the coast 

of Louisiana and Texas. 

(d) INTEGRATED CLEAN POWER AND ENERGY RESEARCH.—

(1) The Secretary shall establish a national center or consortium of excellence 

in clean energy and power generation, utilizing the resources of the existing 

Clean Power and Energy Research Consortium, to address the nation’s critical 

dependence on energy and the need to reduce emissions. 

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(2) The center or consortium will conduct a program of research, development, 

demonstration and commercial application on integrating the following six focus 

areas: 

(A) efficiency and reliability of gas turbines for power generation; 

(B) reduction in emissions from power generation; 

(C) promotion of energy conservation issues; 

(D) effectively utilizing alternative fuels and renewable energy; 

(E) development of advanced materials technology for oil and gas exploration and utilization in harsh environments; and 

(F) education on energy and power generation issues. 

SEC. 953. RESEARCH AND DEVELOPMENT FOR COAL MINING TECHNOLOGIES. 

(a) ESTABLISHMENT.—The Secretary shall carry out a program of research and development on coal mining technologies. The Secretary shall cooperate with appropriate Federal agencies, coal producers, trade associations, equipment manufacturers, institutions of higher education with mining engineering departments, and 

other relevant entities. 

(b) PROGRAM.—The research and development activities carried out under this 

section shall—

(1) be guided by the mining research and development priorities identified by 

the Mining Industry of the Future Program and in the recommendations from 

relevant reports of the National Academy of Sciences on mining technologies; 

(2) include activities exploring minimization of contaminants in mined coal 

that contribute to environmental concerns including development and demonstration of electromagnetic wave imaging ahead of mining operations; 

(3) develop and demonstrate coal bed electromagnetic wave imaging and 

radar techniques for horizontal drilling in order to increase methane recovery 

efficiency, prevent spoilage of domestic coal reserves and minimize water disposal associated with methane extraction; and 

(4) expand mining research capabilities at institutions of higher education. 

SEC. 954. COAL AND RELATED TECHNOLOGIES PROGRAM. 

(a) IN GENERAL.—In addition to the program authorized under Title II of this Act, 

the Secretary of Energy shall conduct a program of technology research, development and demonstration and commercial application for coal and power systems, including programs to facilitate production and generation of coal-based power 

through—

(1) innovations for existing plants; 

(2) integrated gasification combined cycle; 

(3) advanced combustion systems; 

(4) turbines for synthesis gas derived from coal; 

(5) carbon capture and sequestration research and development; 

(6) coal-derived transportation fuels and chemicals; 

(7) solid fuels and feedstocks; and 

(8) advanced coal-related research. 

(b) COST AND PERFORMANCE GOALS.—In carrying out programs authorized by this 

section, the Secretary shall identify cost and performance goals for coal-based technologies that would permit the continued cost-competitive use of coal for electricity 

generation, as chemical feedstocks, and as transportation fuel in 2007, 2015, and the 

years after 2020. In establishing such cost and performance goals, the Secretary 

shall—

(1) consider activities and studies undertaken to date by industry in cooperation with the Department of Energy in support of such assessment; 

(2) consult with interested entities, including coal producers, industries using 

coal, organizations to promote coal and advanced coal technologies, environmental organizations and organizations representing workers; 

(3) not later than 120 days after the date of enactment of this section, publish 

in the Federal Register proposed draft cost and performance goals for public 

comments; and 

(4) not later than 180 days after the date of enactment of this section and 

every four years thereafter, submit to Congress a report describing final cost 

and performance goals for such technologies that includes a list of technical 

milestones as well as an explanation of how programs authorized in this section 

will not duplicate the activities authorized under the Clean Coal Power Initiative authorized under Title II of this Act. 

SEC. 955. COMPLEX WELL TECHNOLOGY TESTING FACILITY. 

The Secretary of Energy, in coordination with industry leaders in extended research drilling technology, shall establish a Complex Well Technology Testing FacilVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00095 Fmt 6659 Sfmt 6621 E:\HR\OC\SR043.XXX SR043
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ity at the Rocky Mountain Oilfield Testing Center to increase the range of extended 

drilling technologies. 

Subtitle F—Science 

SEC. 961. SCIENCE. 

(a) IN GENERAL.—The following sums are authorized to be appropriated to the 

Secretary for research, development, demonstration, and commercial application activities of the Office of Science, including activities authorized under this subtitle, 

including the amounts authorized under the amendment made by section 

967(c)(2)(D), and including basic energy sciences, advanced scientific and computing 

research, biological and environmental research, fusion energy sciences, high energy 

physics, nuclear physics, and research analysis and infrastructure support: 

(1) for fiscal year 2004, $3,785,000,000; 

(2) for fiscal year 2005, $4,153,000,000; 

(3) for fiscal year 2006, $4,586,000,000; 

(4) for fiscal year 2007, $5,000,000,000; and 

(5) for fiscal year 2008, $5,400,000,000. 

(b) ALLOCATIONS.—From amounts authorized under subsection (a), the following 

sums are authorized: 

(1) For activities of the Fusion Energy Sciences Program, including activities 

under section 962—

(A) for fiscal year 2004, $335,000,000; 

(B) for fiscal year 2005, $349,000,000; 

(C) for fiscal year 2006, $362,000,000; 

(D) for fiscal year 2007, $377,000,000; and 

(E) for fiscal year 2008, $393,000,000. 

(2) For the Spallation Neutron Source—

(A) for construction in fiscal year 2004, $124,600,000; 

(B) for construction in fiscal year 2005, $79,800,000; 

(C) for completion of construction in fiscal year 2006, $41,100,000; and 

(D) for other project costs (including research and development necessary 

to complete the project, preoperations costs, and capital equipment related 

to construction), $103,279,000 for the period encompassing fiscal years 2003 

through 2006, to remain available until expended through September 30, 

2006. 

(3) For Catalysis Research activities under section 965—

(A) for fiscal year 2004, $33,000,000; 

(B) for fiscal year 2005, $35,000,000; 

(C) for fiscal year 2006, $36,500,000; 

(D) for fiscal year 2007, $38,200,000; and 

(E) for fiscal year 2008, $40,100,000. 

(4) For Nanoscale Science and Engineering Research activities under section 

966—

(A) for fiscal year 2004, $270,000,000; 

(B) for fiscal year 2005, $290,000,000; 

(C) for fiscal year 2006, $310,000,000; 

(D) for fiscal year 2007, $330,000,000; and 

(E) for fiscal year 2008, $375,000,000. 

(5) For activities under subsection 966(c), from the amounts authorized under 

subparagraph (4)—

(A) for fiscal year 2004, $135,000,000; 

(B) for fiscal year 2005, $150,000,000; 

(C) for fiscal year 2006, $120,000,000; 

(D) for fiscal year 2007, $100,000,000; and 

(E) for fiscal year 2008, $125,000,000. 

(6) For activities in the Genomes to Life Program under section 968—

(A) for fiscal year 2004, $100,000,000; 

(B) for fiscal year 2005, $170,000,000; 

(C) for fiscal year 2006, $325,000,000; 

(D) for fiscal year 2007, $415,000,000; and 

(E) for fiscal year 2008, $455,000,000. 

(7) For construction and ancillary equipment of the Genomes to Life User Facilities under section 968(d), of funds authorized under (6)—

(A) for fiscal year 2004, $16,000,000; 

(B) for fiscal year 2005, $70,000,000; 

(C) for fiscal year 2006, $175,000,000; 

(D) for fiscal year 2007, $215,000,000; and 

(E) for fiscal year 2008, $205,000,000. 

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(8) For activities in the Water Supply Technologies Program under section 970, $30,000,000 for each of fiscal years 2004 through 2008. 

(c) In addition to the funds authorized under subsection (b)(1), the following sums 

are authorized for construction costs associated with the ITER project under section 

962— (1) for fiscal year 2006, $55,000,000; 

(2) for fiscal year 2007, $95,000,000; and 

(3) for fiscal year 2008, $115,000,000. 

SEC. 962. UNITED STATES PARTICIPATION IN ITER. 

(a) PARTICIPATION.— (1) The Secretary of Energy is authorized to undertake full scientific and technological cooperation in the International Thermonuclear Experimental Reactor 

project (referred to in this title as ‘‘ITER’’). 

(2) In the event that ITER fails to go forward within a reasonable period of 

time, the Secretary shall send to Congress a plan, including costs and schedules, for implementing the domestic burning plasma experiment known as the 

Fusion Ignition Research Expriment. Such a plan shall be developed with full 

consultation with the Fusion Energy Sciences Advisory Committee and be reviewed by the National Research Council. 

(3) It is the intent of Congress that such sums shall be largely for work performed in the United States and that such work contributes the maximum 

amount possible to the U.S. scientific and technological base. 

(b) PLANNING.—

(1) Not later than 180 days of the date of enactment of this act, the Secretary 

shall present to Congress a plan, with proposed cost estimates, budgets and potential international partners, for the implementation of the goals of this section. The plan shall ensure that—

(A) existing fusion research facilities are more fully utilized; 

(B) fusion science, technology, theory, advanced computation, modeling 

and simulation are strengthened; 

(C) new magnetic and inertial fusion research facilities are selected based 

on scientific innovation, cost effectiveness, and their potential to advance 

the goal of practical fusion energy at the earliest date possible, and those 

that are selected are funded at a cost-effective rate; 

(D) communication of scientific results and methods between the fusion 

energy science community and the broader scientific and technology communities is improved; 

(E) inertial confinement fusion facilities are utilized to the extent practicable for the purpose of inertial fusion energy research and development; 

and 

(F) attractive alternative inertial and magnetic fusion energy approaches 

are more fully explored. 

(2) Such plan shall also address the status of and, to the degree possible, costs 

and schedules for—

(A) in coordination with the program in section 969, the design and implementation of international or national facilities for the testing of fusion 

materials; and 

(B) the design and implementation of international or national facilities 

for the testing and development of key fusion technologies. 

SEC. 963. SPALLATION NEUTRON SOURCE. 

(a) DEFINITION.—For the purposes of this section, the term ‘‘Spallation Neutron 

Source’’ means Department Project 9909E 09334, Oak Ridge National Laboratory, 

Oak Ridge, Tennessee. 

(b) REPORT.—The Secretary shall report on the Spallation Neutron Source as part 

of the Department’s annual budget submission, including a description of the 

achievement of milestones, a comparison of actual costs to estimated costs, and any 

changes in estimated project costs or schedule. 

(c) AUTHORIZATION OF APPROPRIATIONS.—The total amount obligated by the Department, including prior year appropriations, for the Spallation Neutron Source 

may not exceed—

(1) $1,192,700,000 for costs of construction; 

(2) $219,000,000 for other project costs; and 

(3) $1,411,700,000 for total project cost. 

SEC. 964. SUPPORT FOR SCIENCE AND ENERGY FACILITIES AND INFRASTRUCTURE. 

(a) FACILITY AND INFRASTRUCTURE POLICY.—The Secretary shall develop and implement a strategy for facilities and infrastructure supported primarily from the Office of Science, the Office of Energy Efficiency and Renewable Energy, the Office of 

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Fossil Energy, or the Office of Nuclear Energy, Science and Technology Programs 

at all national laboratories and single-purpose research facilities. Such strategy 

shall provide cost-effective means for— (1) maintaining existing facilities and infrastructure, as needed; 

(2) closing unneeded facilities; 

(3) making facility modifications; and 

(4) building new facilities. 

(b) REPORT.— (1) The Secretary shall prepare and transmit, along with the President’s budget request to the Congress for fiscal year 2006, a report containing the 

strategy developed under subsection (a). 

(2) For each national laboratory and single-purpose research facility, for the 

facilities primarily used for science and energy research, such report shall contain—(A) the current priority list of proposed facilities and infrastructure 

projects, including cost and schedule requirements; 

(B) a current ten-year plan that demonstrates the reconfiguration of its 

facilities and infrastructure to meet its missions and to address its longterm operational costs and return on investment; 

(C) the total current budget for all facilities and infrastructure funding; 

and 

(D) the current status of each facility and infrastructure project compared 

to the original baseline cost, schedule, and scope. 

SEC. 965. CATALYSIS RESEARCH PROGRAM. 

(a) ESTABLISHMENT.—The Secretary, through the Office of Science, shall support 

a program of research and development in catalysis science consistent with the Department’s statutory authorities related to research and development. The program 

shall include efforts to— (1) enable catalyst design using combinations of experimental and mechanistic methodologies coupled with computational modeling of catalytic reactions 

at the molecular level; 

(2) develop techniques for high throughput synthesis, assay, and characterization at nanometer and sub-nanometer scales in situ under actual operating conditions; 

(3) synthesize catalysts with specific site architectures; 

(4) conduct research on the use of precious metals for catalysis; and 

(5) translate molecular understanding to the design of catalytic compounds. 

(b) DUTIES OF THE OFFICE OF SCIENCE.—In carrying out this program, the Director of the Office of Science shall— (1) support both individual investigators and multidisciplinary teams of investigators to pioneer new approaches in catalytic design; 

(2) develop, plan, construct, acquire, share, or operate special equipment or 

facilities for the use of investigators in collaboration with national user facilities 

such as nanoscience and engineering centers; 

(3) support technology transfer activities to benefit industry and other users 

of catalysis science and engineering; and 

(4) coordinate research and development activities with industry and other 

federal agencies. 

(c) TRIENNIAL ASSESSMENT.—The National Academy of Sciences shall review the 

catalysis program every three years to report on gains made in the fundamental 

science of catalysis and its progress towards developing new fuels for energy production and material fabrication processes. 

SEC. 966. NANOSCALE SCIENCE AND ENGINEERING RESEARCH. 

(a) ESTABLISHMENT.—The Secretary, acting through the Office of Science, shall 

support a program of research, development, demonstration, and commercial application in nanoscience and nanoengineering. The program shall include efforts to further the understanding of the chemistry, physics, materials science, and engineering 

of phenomena on the scale of nanometers and to apply this knowledge to the Department’s mission areas. 

(b) DUTIES OF THE OFFICE OF SCIENCE.—In carrying out the program under this 

section, the Office of Science shall—

(1) support both individual investigators and teams of investigators, including 

multidisciplinary teams; 

(2) carry out activities under subsection (c); 

(3) support technology transfer activities to benefit industry and other users 

of nanoscience and nanoengineering; and 

(4) coordinate research and development activities with other DOE programs, 

industry and other Federal agencies. 

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(c) NANOSCIENCE AND NANOENGINEERING RESEARCH CENTERS AND MAJOR INSTRUMENTATION.—

(1) The Secretary shall carry out projects to develop, plan, construct, acquire, 

operate, or support special equipment, instrumentation, or facilities for investigators conducting research and development in nanoscience and 

nanoengineering. 

(2) Projects under paragraph (1) may include the measurement of properties 

at the scale of nanometers, manipulation at such scales, and the integration of 

technologies based on nanoscience or nanoengineering into bulk materials or 

other technologies. 

(3) Facilities under paragraph (1) may include electron microcharacterization 

facilities, microlithography facilities, scanning probe facilities, and related instrumentation. 

(4) The Secretary shall encourage collaborations among DOE programs, institutions of higher education, laboratories, and industry at facilities under this 

subsection. 

SEC. 967. ADVANCED SCIENTIFIC COMPUTING FOR ENERGY MISSIONS. 

(a) IN GENERAL.—The Secretary, acting through the Office of Science, shall support a program to advance the Nation’s computing capability across a diverse set 

of grand challenge, computationally based, science problems related to departmental 

missions. 

(b) DUTIES OF THE OFFICE OF SCIENCE.—In carrying out the program under this 

section, the Office of Science shall—

(1) advance basic science through computation by developing software to solve 

grand challenge science problems on new generations of computing platforms in 

collaboration with other DOE program offices; 

(2) enhance the foundations for scientific computing by developing the basic 

mathematical and computing systems software needed to take full advantage of 

the computing capabilities of computers with peak speeds of 100 teraflops or 

more, some of which may be unique to the scientific problem of interest; 

(3) enhance national collaboratory and networking capabilities by developing 

software to integrate geographically separated researchers into effective research teams and to facilitate access to and movement and analysis of large 

(petabyte) data sets; 

(4) maintain a robust scientific computing hardware infrastructure to ensure 

that the computing resources needed to address departmental missions are 

available; and 

(5) explore new computing approaches and technologies that promise to advance scientific computing including developments in quantum computing. 

(c) HIGH-PERFORMANCE COMPUTING ACT OF 1991 AMENDMENTS.—The High-Performance Computing Act of 1991 is amended—

(1) in section 4 (15 U.S.C. 5503)—

(A) in paragraph (3) by striking ‘‘means’’ and inserting ‘‘and ‘networking 

and information technology’ mean’’, and by striking ‘‘(including vector 

supercomputers and large scale parallel systems)’’; and 

(B) in paragraph (4), by striking ‘‘packet switched’’; and 

(2) in section 203 (15 U.S.C. 5523)—

(A) in subsection (a), by striking all after ‘‘As part of the’’ and inserting—

‘‘Networking and Information Technology Research and Development Program, the Secretary of Energy shall conduct basic and applied research in 

networking and information technology, with emphasis on supporting fundamental research in the physical sciences and engineering, and energy applications; providing supercomputer access and advanced communication 

capabilities and facilities to scientific researchers; and developing tools for 

distributed scientific collaboration.’’; 

(B) in subsection (b), by striking ‘‘Program’’ and inserting ‘‘Networking 

and Information Technology Research and Development Program’’; and 

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

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

to the Secretary of Energy to carry out the Networking and Information Technology 

Research and Development Program such sums as may be necessary for fiscal years 

2004 through 2008.’’. 

(d) COORDINATION.—The Secretary shall ensure that the program under this section is integrated and consistent with—

(1) the Accelerated Strategic Computing Initiative of the National Nuclear Security Administration; and 

(2) other national efforts related to advanced scientific computing for science 

and engineering. 

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SEC. 968. GENOMES TO LIFE PROGRAM. 

(a) ESTABLISHMENT.—The Secretary shall carry out a program of research, development, demonstration, and commercial application, to be known as the Genomes 

to Life Program, in systems biology and proteomics consistent with the Department’s statutory authorities. 

(b) PLANNING.—

(1) The Secretary shall prepare a program plan describing how knowledge 

and capabilities would be developed by the program and applied to Department 

missions relating to energy security, environmental cleanup, and national security. 

(2) The program plan will be developed in consultation with other relevant 

Department technology programs. 

(3) The program plan shall focus science and technology on long-term goals, 

including—

(A) contributing to U.S. independence from foreign energy sources, including production of hydrogen; 

(B) converting carbon dioxide to organic carbon; 

(C) advancing environmental cleanup; 

(D) providing the science and technology for new biotechnology industries; 

and 

(E) improving national security and combating bioterrorism. 

(4) The program plan shall establish specific short-term goals and update 

these goals with the Secretary’s annual budget submission. 

(c) PROGRAM EXECUTION.—In carrying out the program under this Act, the Secretary shall—

(1) support individual investigators and multidisciplinary teams of investigators; 

(2) subject to subsection (d), develop, plan, construct, acquire, or operate special equipment or facilities for the use of investigators conducting research, development, demonstration, or commercial application in systems biology and 

proteomics; 

(3) support technology transfer activities to benefit industry and other users 

of systems biology and proteomics; and 

(4) coordinate activities by the Department with industry and other federal 

agencies. 

(d) GENOMES TO LIFE USER FACILITIES AND ANCILLARY EQUIPMENT.—

(1) Within the funds authorized to be appropriated pursuant to this Act, the 

amounts specified under section 961(b)(7) shall, subject to appropriations, be 

available for projects to develop, plan, construct, acquire, or operate special 

equipment, instrumentation, or facilities for investigators conducting research, 

development, demonstration, and commercial application in systems biology and 

proteomics and associated biological disciplines. 

(2) Projects under paragraph (1) may include—

(A) the identification and characterization of multiprotein complexes; 

(B) characterization of gene regulatory networks; 

(C) characterization of the functional repertoire of complex microbial communities in their natural environments at the molecular level; and 

(D) development of computational methods and capabilities to advance 

understanding of complex biological systems and predict their behavior. 

(3) Facilities under paragraph (1) may include facilities, equipment, or instrumentation for—

(A) the production and characterization of proteins; 

(B) whole proteome analysis; 

(C) characterization and imaging of molecular machines; and 

(D) analysis and modeling of cellular systems. 

(4) The Secretary shall encourage collaborations among universities, laboratories and industry at facilities under this subsection. All facilities under this 

subsection shall have a specific mission of technology transfer to other institutions. 

SEC. 969. FISSION AND FUSION ENERGY MATERIALS RESEARCH PROGRAM. 

In the President’s fiscal year 2006 budget request, the Secretary shall establish 

a research and development program on material science issues presented by advanced fission reactors and the Department’s fusion energy program. The program 

shall develop a catalog of material properties required for these applications, develop theoretical models for materials possessing the required properties, benchmark models against existing data, and develop a roadmap to guide further research 

and development in this area. 

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SEC. 970. ENERGY-WATER SUPPLY TECHNOLOGIES PROGRAM. 

(a) ESTABLISHMENT.—There is established within the Office of Science, Office of 

Biological and Environmental Research, the ‘‘Energy-Water Supply Technologies 

Program,’’ to study energy-related issues associated with water resources and municipal waterworks and to study water supply issues related to energy production. 

(b) DEFINITIONS.— (1) The term ‘‘Foundation’’ means the American Water Works Association Research Foundation. 

(2) The term ‘‘Indian tribe’’ has the meaning given the term in section 4 of 

the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b). 

(3) The term ‘‘Program’’ means the Water Supply Technologies Program established by section 970(a). 

(c) PROGRAM AREAS.—The program shall conduct research and development, including—

(1) arsenic removal under subsection (d); 

(2) desalination research program under subsection (e); 

(3) the water and energy sustainability program under subsection (f); and 

(4) other energy-intensive water supply and treatment technologies and other 

technologies selected by the Secretary. 

(d) ARSENIC REMOVAL PROGRAM.— (1) As soon as practicable after the date of enactment of this Act, the Secretary shall enter into a contract with the Foundation to utilize the facilities, 

institutions and relationships established in the ‘‘Consolidated Appropriations 

Resolution, 2003’’ as described in Senate Report 107–220 that will carry out a 

research program to develop and demonstrate innovative arsenic removal technologies. 

(2) In carrying out the arsenic removal program, the Foundation shall, to the 

maximum extent practicable, conduct research on means of—

(A) reducing energy costs incurred in using arsenic removal technologies; 

(B) minimizing materials, operating, and maintenance costs incurred in 

using arsenic removal technologies; and 

(C) minimizing any quantities of waste (especially hazardous waste) that 

result from use of arsenic removal technologies. 

(3) The Foundation shall carry out peer-reviewed research and demonstration 

projects to develop and demonstrate water purification technologies. 

(4) In carrying out the arsenic removal program—

(A) demonstration projects will be implemented with municipal water system partners to demonstrate the applicability of innovative arsenic removal 

technologies in areas with different water chemistries representative of 

areas across the United States with arsenic levels near or exceeding EPA 

guidelines; and 

(B) not less than 40 percent of the funds of the Department used for demonstration projects under the arsenic removal program shall be expended 

on projects focused on needs of and in partnership with rural communities 

or Indian tribes. 

(5) The Foundation shall develop evaluations of cost effectiveness of arsenic 

removal technologies used in the program and an education, training, and technology transfer component for the program. 

(6) The Secretary shall consult with the Administrator of the Environmental 

Protection Agency to ensure that activities under the arsenic removal program 

are coordinated with appropriate programs of the Environmental Protection 

Agency and other federal agencies, state programs and academia. 

(7) Not later than 1 year after the date of commencement of the arsenic removal program, and annually thereafter, the Secretary shall submit to Congress 

a report on the results of the arsenic removal program. 

(e) DESALINATION PROGRAM.—

(1) The Secretary, in cooperation with the Commissioner of Reclamation, shall 

carry out a desalination research program in accordance with the desalination 

technology progress plan developed in Title II of the Energy and Water Development Appropriations Act, 2002 (115 Stat. 498), and described in Senate Report 

107–39 under the heading ‘‘WATER AND RELATED RESOURCES’’ in the ‘‘BUREAU OF RECLAMATION’’ section. 

(2) The desalination program shall—

(A) draw on the national laboratory partnership established with the Bureau of Reclamation to develop the January 2003 national Desalination and 

Water Purification Technology Roadmap for next-generation desalination 

technology; 

(B) focus on research relating to, and development and demonstration of, 

technologies that are appropriate for use in desalinating brackish groundVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00101 Fmt 6659 Sfmt 6621 E:\HR\OC\SR043.XXX SR043
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water, wastewater and other saline water supplies; disposal of residual 

brine or salt; and 

(C) consider the use of renewable energy sources. 

(3) Under the desalination program, funds made available may be used for 

construction projects, including completion of the National Desalination Research Center for brackish groundwater and ongoing facility operational costs. 

(4) The Secretary and the Commissioner of Reclamation shall jointly establish 

a steering committee for the desalination program. The steering committee shall 

be jointly chaired by 1 representative from this Program and 1 representative 

from the Bureau of Reclamation. 

(f) WATER AND ENERGY SUSTAINABILITY PROGRAM.—

(1) The Secretary shall carry out a research program to develop understanding and technologies to assist in ensuring that sufficient quantities of 

water are available to meet present and future requirements. 

(2) Under this program and in collaboration with other programs within the 

Department including those within the Offices of Fossil Energy and Energy Efficiency and Renewable Energy, the Secretary of the Interior, Army Corps of 

Engineers, Environmental Protection Agency, Department of Commerce, Department of Defense, state agencies, non-governmental agencies and academia, 

the Secretary shall assess the current state of knowledge and program activities 

concerning—

(A) future water resources needed to support energy production within 

the United States including but not limited to the water needs for hydropower and thermo-electric power generation; 

(B) future energy resources needed to support development of water purification and treatment including desalination and long-distance water conveyance; 

(C) reuse and treatment of water produced as a by-product of oil and gas 

extraction; 

(D) use of impaired and non-traditional water supplies for energy production and other uses; and 

(E) technologies to reduce water use in energy production. 

(3) In addition to the assessments in (2), the Secretary shall—

(A) develop a research plan defining the scientific and technology development needs and activities required to support long-term water needs and 

planning for energy sustainability, use of impaired water for energy production and other uses, and reduction of water use in energy production; 

(B) carry out the research plan required under (A) including development 

of numerical models, decision analysis tools, economic analysis tools, databases, planning methodologies and strategies; 

(C) implement at least three planning demonstration projects using the 

models, tools and planning approaches developed under subparagraph (B) 

and assess the viability of these tools at the scale of river basins with at 

least one demonstration involving an international border; and 

(D) transfer these tools to other federal agencies, state agencies, non-profit organizations, industry and academia for use in their energy and water 

sustainability efforts. 

(4) Not later than 1 year after the date of enactment of this Act, the Secretary 

shall submit to Congress a report on the water and energy sustainability program that describes the research elements described under paragraph (2), and 

makes recommendations for a management structure that optimizes use of Federal resources and programs. 

(g) COST SHARING.—

(1) Research projects under this section shall not require cost-sharing. 

(2) Each demonstration project carried out under the Program shall be carried 

out on a cost-shared basis, as determined by the Secretary. 

(3) With respect to a demonstration project, the Secretary may accept in-kind 

contributions, and waive the cost-sharing requirement in appropriate circumstances. 

Subtitle G—Energy and Environment 

SEC. 971. UNITED STATES-MEXICO ENERGY TECHNOLOGY COOPERATION. 

(a) PROGRAM.—The Secretary shall establish a research, development, demonstration, and commercial application program to be carried out in collaboration with entities in Mexico and the United States to promote energy efficient, environmentally 

sound economic development along the United States-Mexico border which minimizes public health risks from industrial activities in the border region. 

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(b) PROGRAM MANAGEMENT.—The program under subsection (a) shall be managed 

by the Department of Energy Carlsbad Environmental Management Field Office. 

(c) TECHNOLOGY TRANSFER.—In carrying out projects and activities under this section, the Secretary shall assess the applicability of technology developed under the 

Environmental Management Science Program of the Department. 

(d) INTELLECTUAL PROPERTY.—In carrying out this section, the Secretary shall 

comply with the requirements of any agreement entered into between the United 

States and Mexico regarding intellectual property protection. 

(e) AUTHORIZATION OF APPROPRIATIONS.—The following sums are authorized to be 

appropriated to the Secretary to carry out activities under this section: (1) For each of fiscal years 2004 and 2005, $5,000,000. 

(2) For each of fiscal years 2006, 2007, and 2008, $6,000,000. 

SEC. 972. COAL TECHNOLOGY LOAN. 

There are authorized to be appropriated to the Secretary $125,000,000 to provide 

a loan to the owner of the experimental plant constructed under United States Department of Energy cooperative agreement number DE–FC–22–91PC90544 on such 

terms and conditions as the Secretary determines, including interest rates and upfront payments. 

Subtitle H—Management 

SEC. 981. AVAILABILITY OF FUNDS. 

Funds authorized to be appropriated to the Department under this title shall remain available until expended. 

SEC. 982. COST SHARING. 

(a) RESEARCH AND DEVELOPMENT.—Except as otherwise provided in this title, for 

research and development programs carried out under this title, the Secretary shall 

require a commitment from non-Federal sources of at least 20 percent of the cost 

of the project. Cost sharing is not required for research and development of a basic 

or fundamental nature. 

(b) DEMONSTRATION AND COMMERCIAL APPLICATION.—Except as otherwise provided in this subtitle, the Secretary shall require at least 50 percent of the costs 

directly and specifically related to any demonstration or commercial application 

project under this subtitle to be provided from non-Federal sources. The Secretary 

may reduce the non-Federal requirement under this subsection if the Secretary determines that the reduction is necessary and appropriate considering the technological risks involved in the project and is necessary to meet the objectives of this 

title. 

(c) CALCULATION OF AMOUNT.—In calculating the amount of the non-Federal commitment under subsection (a) or (b), the Secretary may include personnel, services, 

equipment, and other resources. 

SEC. 983. MERIT REVIEW OF PROPOSALS. 

Awards of funds authorized under this title shall be made only after an impartial 

review of the scientific and technical merit of the proposals for such awards has 

been carried out by or for the Department. 

SEC. 984. EXTERNAL TECHNICAL REVIEW OF DEPARTMENTAL PROGRAMS. 

(a) NATIONAL ENERGY RESEARCH AND DEVELOPMENT ADVISORY BOARDS.— (1) The Secretary shall establish one or more advisory boards to review Department research, development, demonstration, and commercial application 

programs in energy efficiency, renewable energy, nuclear energy, and fossil energy. 

(2) The Secretary may designate an existing advisory board within the Department to fulfill the responsibilities of an advisory board under this subsection, and may enter into appropriate arrangements with the National Academy of Sciences to establish such an advisory board. 

(b) UTILIZATION OF EXISTING COMMITTEES.—The Secretary shall continue to use 

the scientific program advisory committees chartered under the Federal Advisory 

Committee Act by the Office of Science to oversee research and development programs under that Office. 

(c) MEMBERSHIP.—Each advisory board under this section shall consist of persons 

with appropriate expertise representing a diverse range of interests. 

(d) MEETINGS AND PURPOSES.—Each advisory board under this section shall meet 

at least semi-annually to review and advise on the progress made by the respective 

research, development, demonstration, and commercial application program or programs. The advisory board shall also review the measurable cost and performancebased goals for such programs as established under section 902, and the progress 

on meeting such goals. 

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(e) PERIODIC REVIEWS AND ASSESSMENTS.—The Secretary shall enter into appropriate arrangements with the National Academy of Sciences to conduct periodic reviews and assessments of the programs authorized by this title, the measurable cost 

and performance-based goals for such programs as established under section 902, 

if any, and the progress on meeting such goals. Such reviews and assessments shall 

be conducted every 5 years, or more often as the Secretary considers necessary, and 

the Secretary shall transmit to the Congress reports containing the results of all 

such reviews and assessments. 

SEC. 985. IMPROVED COORDINATION OF TECHNOLOGY TRANSFER ACTIVITIES. 

(a) TECHNOLOGY TRANSFER COORDINATOR.—The Secretary shall designate a Technology Transfer Coordinator to perform oversight of and policy development for 

technology transfer activities at the Department. The Technology Transfer Coordinator shall coordinate the activities of the Technology Transfer Working Group, 

shall oversee the expenditure of funds allocated to the Technology Transfer Working 

Group, and shall coordinate with each technology partnership ombudsman appointed under section 11 of the Technology Transfer Commercialization Act of 2000 

(42 U.S.C. 7261c). 

(b) TECHNOLOGY TRANSFER WORKING GROUP.—The Secretary shall establish a 

Technology Transfer Working Group, which shall consist of representatives of the 

National Laboratories and single-purpose research facilities, to— (1) coordinate technology transfer activities occurring at National Laboratories and single-purpose research facilities; 

(2) exchange information about technology transfer practices, including alternative approaches to resolution of disputes involving intellectual property rights 

and other technology transfer matters; and 

(3) develop and disseminate to the public and prospective technology partners 

information about opportunities and procedures for technology transfer with the 

Department, including those related to alternative approaches to resolution of 

disputes involving intellectual property rights and other technology transfer 

matters. 

(c) TECHNOLOGY TRANSFER RESPONSIBILITY.—Nothing in this section shall affect 

the technology transfer responsibilities of Federal employees under the StevensonWydler Technology Innovation Act of 1980. 

SEC. 986. TECHNOLOGY INFRASTRUCTURE PROGRAM. 

(a) ESTABLISHMENT.—The Secretary shall establish a Technology Infrastructure 

Program in accordance with this section. 

(b) PURPOSE.—The purpose of the Technology Infrastructure Program shall be to 

improve the ability of National Laboratories and single-purpose research facilities 

to support departmental missions by— (1) stimulating the development of technology clusters that can support departmental missions at the National Laboratories or single-purpose research facilities; 

(2) improving the ability of National Laboratories and single-purpose research 

facilities to leverage and benefit from commercial research, technology, products, processes, and services; and 

(3) encouraging the exchange of scientific and technological expertise between 

National Laboratories or single-purpose research facilities and entities that can 

support departmental missions at the National Laboratories or single-purpose 

research facilities, such as institutions of higher education; technology-related 

business concerns; nonprofit institutions; and agencies of State, tribal, or local 

governments. 

(c) PROJECTS.—The Secretary shall authorize the Director of each National Laboratory or single-purpose research facility to implement the Technology Infrastructure Program at such National Laboratory or facility through projects that meet the 

requirements of subsections (d) and (e). 

(d) PROGRAM REQUIREMENTS.—Each project funded under this section shall meet 

the following requirements:

(1) Each project shall include at least one of each of the following entities: 

a business; an institution of higher education; a nonprofit institution; and an 

agency of a State, local, or tribal government. 

(2) Not less than 50 percent of the costs of each project funded under this section shall be provided from non-Federal sources. The calculation of costs paid 

by the non-Federal sources to a project shall include cash, personnel, services, 

equipment, and other resources expended on the project after start of the 

project. Independent research and development expenses of Government contractors that qualify for reimbursement under section 3109205 0918(e) of the 

Federal Acquisition Regulations issued pursuant to section 25(c)(1) of the Office 

of Federal Procurement Policy Act (41 U.S.C. 421(c)(1)) may be credited towards 

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costs paid by non-Federal sources to a project, if the expenses meet the other 

requirements of this section. 

(3) All projects under this section shall be competitively selected using procedures determined by the Secretary. 

(4) Any participant that receives funds under this section may use generally 

accepted accounting principles for maintaining accounts, books, and records relating to the project. 

(5) No Federal funds shall be made available under this section for construction or any project for more than 5 years. 

(e) SELECTION CRITERIA.—

(1) The Secretary shall allocate funds under this section only if the Director 

of the National Laboratory or single-purpose research facility managing the 

project determines that the project is likely to improve the ability of the National Laboratory or single-purpose research facility to achieve technical success 

in meeting departmental missions. 

(2) The Secretary shall consider the following criteria in selecting a project 

to receive Federal funds—

(A) the potential of the project to promote the development of a commercially sustainable technology cluster following the period of Department investment, which will derive most of the demand for its products or services 

from the private sector, and which will support departmental missions at 

the participating National Laboratory or single-purpose research facility; 

(B) the potential of the project to promote the use of commercial research, 

technology, products, processes, and services by the participating National 

Laboratory or single-purpose research facility to achieve its mission or the 

commercial development of technological innovations made at the participating National Laboratory or single-purpose research facility; 

(C) the extent to which the project involves a wide variety and number 

of institutions of higher education, nonprofit institutions, and technology-related business concerns that can support the missions of the participating 

National Laboratory or single-purpose research facility and that will make 

substantive contributions to achieving the goals of the project; 

(D) the extent to which the project focuses on promoting the development 

of technology-related business concerns that are small businesses or involves such small businesses substantively in the project; and 

(E) such other criteria as the Secretary determines to be appropriate. 

(f) ALLOCATION.—In allocating funds for projects approved under this section, the 

Secretary shall provide—

(1) the Federal share of the project costs; and 

(2) additional funds to the National Laboratory or single-purpose research facility managing the project to permit the National Laboratory or single-purpose 

research facility to carry out activities relating to the project, and to coordinate 

such activities with the project. 

(g) REPORT TO CONGRESS.—Not later than July 1, 2006, the Secretary shall report 

to Congress on whether the Technology Infrastructure Program should be continued 

and, if so, how the program should be managed. 

(h) DEFINITIONS.—In this section: 

(1) The term ‘‘technology cluster’’ means a concentration of technology-related 

business concerns, institutions of higher education, or nonprofit institutions, 

that reinforce each other’s performance in the areas of technology development 

through formal or informal relationships. 

(2) The term ‘‘technology-related business concern’’ means a for-profit corporation, company, association, firm, partnership, or small business concern that 

conducts scientific or engineering research; develops new technologies; manufactures products based on new technologies; or performs technological services. 

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

to the Secretary for activities under this section $10,000,000 for each of fiscal years 

2004, 2005, and 2006. 

SEC. 987. SMALL BUSINESS ADVOCACY AND ASSISTANCE. 

(a) SMALL BUSINESS ADVOCATE.—The Secretary shall require the Director of each 

National Laboratory, and may require the Director of a single-purpose research facility, to designate a small business advocate to—

(1) increase the participation of small business concerns, including socially 

and economically disadvantaged small business concerns, in procurement, collaborative research, technology licensing, and technology transfer activities conducted by the National Laboratory or single-purpose research facility; 

(2) report to the Director of the National Laboratory or single-purpose research facility on the actual participation of small business concerns in procureVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00105 Fmt 6659 Sfmt 6621 E:\HR\OC\SR043.XXX SR043
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ment and collaborative research along with recommendations, if appropriate, on 

how to improve participation; 

(3) make available to small businesses training, mentoring, and information 

on how to participate in procurement and collaborative research activities; 

(4) increase the awareness inside the National Laboratory or single-purpose 

research facility of the capabilities and opportunities presented by small business concerns; and 

(5) establish guidelines for the program under subsection (b) and report on 

the effectiveness of such program to the Director of the National Laboratory or 

single-purpose research facility. 

(b) ESTABLISHMENT OF SMALL BUSINESS ASSISTANCE PROGRAM.—The Secretary 

shall require the Director of each National Laboratory, and may require the Director 

of a single-purpose research facility, to establish a program to provide small business concerns—

(1) assistance directed at making them more effective and efficient subcontractors or suppliers to the National Laboratory or single-purpose research 

facility; or 

(2) general technical assistance, the cost of which shall not exceed $10,000 per 

instance of assistance, to improve the small business concern’s products or services. 

(c) USE OF FUNDS.—None of the funds expended under subsection (b) may be used 

for direct grants to the small business concerns. 

(d) DEFINITIONS.—In this section: 

(1) The term ‘‘small business concern’’ has the meaning given such term in 

section 3 of the Small Business Act (15 U.S.C. 632). 

(2) The term ‘‘socially and economically disadvantaged small business concerns’’ has the meaning given such term in section 8(a)(4) of the Small Business 

Act (15 U.S.C. 637(a)(4)). 

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

to the Secretary for activities under this section $5,000,000 for each of fiscal years 

2004 through 2008. 

SEC. 988. MOBILITY OF SCIENTIFIC AND TECHNICAL PERSONNEL. 

Not later than 2 years after the date of enactment of this section, the Secretary 

shall transmit a report to the Congress identifying any policies or procedures of a 

contractor operating a National Laboratory or single-purpose research facility that 

create disincentives to the temporary transfer of scientific and technical personnel 

among the contractor-operated National Laboratories or contractor-operated singlepurpose research facilities and provide suggestions for improving inter-laboratory 

exchange of scientific and technical personnel. 

SEC. 989. NATIONAL ACADEMY OF SCIENCES REPORT. 

Not later than 90 days after the date of enactment of this Act, the Secretary shall 

enter into an arrangement with the National Academy of Sciences for the Academy 

to—

(1) conduct a study on—

(A) the obstacles to accelerating the research, development, demonstration, and commercial application cycle for energy technology; and 

(B) the adequacy of Department policies and procedures for, and oversight of, technology transfer-related disputes between contractors of the Department and the private sector; and 

(2) report to the Congress on recommendations developed as a result of the 

study. 

SEC. 990. OUTREACH. 

The Secretary shall ensure that each program authorized by this title includes an 

outreach component to provide information, as appropriate, to manufacturers, consumers, engineers, architects, builders, energy service companies, institutions of 

higher education, facility planners and managers, State and local governments, and 

other entities. 

SEC. 991. COMPETITIVE AWARD OF MANAGEMENT CONTRACTS. 

None of the funds authorized to be appropriated to the Secretary by this title may 

be used to award a management and operating contract for a nonmilitary energy 

laboratory of the Department unless such contract is competitively awarded or the 

Secretary grants, on a case-by-case basis, a waiver to allow for such a deviation. The 

Secretary may not delegate the authority to grant such a waiver and shall submit 

to the Congress a report notifying the Congress of the waiver and setting forth the 

reasons for the waiver at least 60 days prior to the date of the award of such a contract. 

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SEC. 992. REPROGRAMMING. 

(a) DISTRIBUTION REPORT.—Not later than 60 days after the date of the enactment 

of an Act appropriating amounts authorized under this title, the Secretary shall 

transmit to the appropriate authorizing committees of the Congress a report explaining how such amounts will be distributed among the authorizations contained 

in this title. 

(b) PROHIBITION.— (1) No amount identified under subsection (a) shall be reprogrammed if such 

reprogramming would result in an obligation which changes an individual distribution required to be reported under subsection (a) by more than 5 percent 

unless the Secretary has transmitted to the appropriate authorizing committees 

of the Congress a report described in subsection (c) and a period of 30 days has 

elapsed after such committees receive the report. 

(2) In the computation of the 30-day period described in paragraph (1), there 

shall be excluded any day on which either House of Congress is not in session 

because of an adjournment of more than 3 days to a day certain. 

(c) REPROGRAMMING REPORT.—A report referred to in subsection (b)(1) shall contain a full and complete statement of the action proposed to be taken and the facts 

and circumstances relied on in support of the proposed action. 

SEC. 993. CONSTRUCTION WITH OTHER LAWS. 

Except as otherwise provided in this title, the Secretary shall carry out the research, development, demonstration, and commercial application programs, projects, 

and activities authorized by this title in accordance with the applicable provisions 

of the Atomic Energy Act of 1954 (42 U.S.C. et seq.), the Federal Nonnuclear Research and Development Act of 1974 (42 U.S.C. 5901 et seq.), the Energy Policy Act 

of 1992 (42 U.S.C. 13201 et seq.), the Stevenson-Wydler Technology Innovation Act 

of 1980 (15 U.S.C. 3701 et seq.), chapter 18 of title 35, United States Code (commonly referred to as the Bayh-Dole Act), and any other Act under which the Secretary is authorized to carry out such activities. 

SEC. 994. IMPROVED COORDINATION AND MANAGEMENT OF CIVILIAN SCIENCE AND TECHNOLOGY PROGRAMS. 

(a) EFFECTIVE TOP-LEVEL COORDINATION OF RESEARCH AND DEVELOPMENT PRO- GRAMS.—Section 202(b) of the Department of Energy Organization Act (42 U.S.C. 

7132(b)) is amended to read as follows: ‘‘(b)(1) There shall be in the Department an Under Secretary for Energy and 

Science, who shall be appointed by the President, by and with the advice and consent of the Senate. The Under Secretary shall be compensated at the rate provided 

for at level III of the Executive Schedule under section 5314 of title 5, United States 

Code. ‘‘(2) The Under Secretary for Energy and Science shall be appointed from among 

persons who— ‘‘(A) have extensive background in scientific or engineering fields; and 

‘‘(B) are well qualified to manage the civilian research and development programs of the Department of Energy. ‘‘(3) The Under Secretary for Energy and Science shall— ‘‘(A) serve as the Science and Technology Advisor to the Secretary; 

‘‘(B) monitor the Department’s research and development programs in order 

to advise the Secretary with respect to any undesirable duplication or gaps in 

such programs; ‘‘(C) advise the Secretary with respect to the well-being and management of 

the multipurpose laboratories under the jurisdiction of the Department; ‘‘(D) advise the Secretary with respect to education and training activities required for effective short- and long-term basic and applied research activities of 

the Department; ‘‘(E) advise the Secretary with respect to grants and other forms of financial 

assistance required for effective short- and long-term basic and applied research 

activities of the Department; and ‘‘(F) exercise authority and responsibility over Assistant Secretaries carrying 

out energy research and development and energy technology functions under 

sections 203 and 209, as well as other elements of the Department assigned by 

the Secretary.’’. 

(b) RECONFIGURATION OF POSITION OF DIRECTOR OF THE OFFICE OF SCIENCE.—

(1) Section 209 of the Department of Energy Organization Act (41 U.S.C. 

7139) is amended to read as follows: 

‘‘OFFICE OF SCIENCE

‘‘SEC. 209. (a) There shall be within the Department an Office of Science, to be 

headed by an Assistant Secretary for Science, who shall be appointed by the PresiVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00107 Fmt 6659 Sfmt 6621 E:\HR\OC\SR043.XXX SR043
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dent, by and with the advice and consent of the Senate, and who shall be compensated at the rate provided for level IV of the Executive Schedule under section 

5315 of title 5, United States Code. 

‘‘(b) The Assistant Secretary for Science shall be in addition to the Assistant Secretaries provided for under section 203 of this Act. 

‘‘(c) It shall be the duty and responsibility of the Assistant Secretary for Science 

to carry out the fundamental science and engineering research functions of the Department, including the responsibility for policy and management of such research, 

as well as other functions vested in the Secretary which he may assign to the Assistant Secretary.’’. 

(2) Notwithstanding section 3345(b)(1) of title 5, United States Code, the 

President may designate the Director of the Office of Science immediately prior 

to the effective date of this Act to act in the office of the Assistant Secretary 

of Energy for Science until the office is filled as provided in section 209 of the 

Department of Energy Organization Act, as amended by paragraph (1). While 

so acting, such person shall receive compensation at the rate provided by this 

Act for the office of Assistant Secretary for Science. 

(c) ADDITIONAL ASSISTANT SECRETARY POSITION TO ENABLE IMPROVED MANAGEMENT OF NUCLEAR ENERGY ISSUES.—

(1) Section 203(a) of the Department of Energy Organization Act (42 U.S.C. 

7133(a)) is amended by striking ‘‘There shall be in the Department six Assistant 

Secretaries’’ and inserting ‘‘Except as provided in section 209, there shall be in 

the Department seven Assistant Secretaries’’. 

(2) It is the sense of the Congress that the leadership for departmental missions in nuclear energy should be at the Assistant Secretary level. 

(d) TECHNICAL AND CONFORMING AMENDMENTS.—

(1) Section 202 of the Department of Energy Organization Act (42 U.S.C. 

7132) is further amended by adding the following at the end: 

‘‘(d) There shall be in the Department an Under Secretary, who shall be appointed 

by the President, by and with the advice and consent of the Senate, and who shall 

perform such functions and duties as the Secretary shall prescribe, consistent with 

this section. The Under Secretary shall be compensated at the rate provided for 

level III of the Executive Schedule under section 5314 of title 5, United States Code. 

‘‘(e) There shall be in the Department a General Counsel, who shall be appointed 

by the President, by and with the advice and consent of the Senate, and who shall 

perform such functions and duties as the Secretary shall prescribe. The General 

Counsel shall be compensated at the rate provided for level IV of the Executive 

Schedule under section 5315 of title 5, United States Code.’’. 

(2) Section 5314 of title 5, United States Code, is amended by striking ‘‘Under 

Secretaries of Energy (2)’’ and inserting ‘‘Under Secretaries of Energy (3)’’. 

(3) Section 5315 of title 5, United States Code, is amended by—

(A) striking ‘‘Director, Office of Science, Department of Energy.’’; and 

(B) striking ‘‘Assistant Secretaries of Energy (6)’’ and inserting ‘‘Assistant 

Secretaries of Energy (8)’’. 

(4) The table of contents for the Department of Energy Organization Act (42 

U.S.C. 7101 note) is amended—

(A) by striking ‘‘Section 209’’ and inserting ‘‘Sec. 209’’; 

(B) by striking ‘‘213.’’ and inserting ‘‘Sec. 213.’’;

(C) by striking ‘‘214.’’ and inserting ‘‘Sec. 214.’’; 

(D) by striking ‘‘215.’’ and inserting ‘‘Sec. 215.’’; and 

(E) by striking ‘‘216.’’ and inserting ‘‘Sec. 216.’’. 

SEC. 995. EDUCATIONAL PROGRAMS IN SCIENCE AND MATHEMATICS. 

(a) Section 3165a of the Department of Energy Science Education Enhancement 

Act (42 U.S.C. 7381a) is amended by adding at the end: 

‘‘(14) Support competitive events for students, under supervision of teachers, 

designed to encourage student interest and knowledge in science and mathematics.’’

(b) Section 3169 of the Department of Energy Science Education Enhancement 

Act (42 U.S.C. 7381e), as redesignated by this Act, is amended by inserting before 

the period: ‘‘; and $40,000,000 for each of fiscal years 2004 through 2008.’’

SEC. 996. OTHER TRANSACTIONS AUTHORITY. 

Section 646 of the Department of Energy Organization Act (42 U.S.C. 7256) is 

amended by adding at the end the following: 

‘‘(g)(1) In addition to other authorities granted to the Secretary under law, the 

Secretary may enter into other transactions on such terms as the Secretary may 

deem appropriate in furtherance of research, development, or demonstration functions vested in the Secretary. Such other transactions shall not be subject to the 

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provisions of section 9 of the Federal Nonnuclear Energy Research and Development 

Act of 1974 (42 U.S.C. 5908). ‘‘(2)(A) The Secretary shall ensure that— ‘‘(i) to the maximum extent the Secretary determines practicable, no transaction entered into under paragraph (1) provides for research, development, or 

demonstration that duplicates research, development, or demonstration being 

conducted under existing projects carried out by the Department; ‘‘(ii) to the extent the Secretary determines practicable, the funds provided by 

the Government under a transaction authorized by paragraph (1) do not exceed 

the total amount provided by other parties to the transaction; and ‘‘(iii) to the extent the Secretary determines practicable, competitive, meritbased selection procedures shall be used when entering into transactions under 

paragraph (1). ‘‘(B) A transaction authorized by paragraph (1) may be used for a research, development, or demonstration project only if the Secretary determines the use of a 

standard contract, grant, or cooperative agreement for the project is not feasible or 

appropriate. ‘‘(3)(A) The Secretary shall protect from disclosure, including disclosure under section 552 of title 5, United States Code, for up to 5 years after the date the information is received by the Secretary— ‘‘(i) a proposal, proposal abstract, and supporting documents submitted to the 

Department in a competitive or noncompetitive process having the potential for 

resulting in an award to the party submitting the information entering into a 

transaction under paragraph (1); and ‘‘(ii) a business plan and technical information relating to a transaction authorized by paragraph (1) submitted to the Department as confidential business 

information. ‘‘(B) The Secretary may protect from disclosure, for up to 5 years after the information was developed, any information developed pursuant to a transaction under 

paragraph (1) which developed information is of a character that it would be protected from disclosure under section 552(b)(4) of title 5, United States Code, if obtained from a person other than a Federal agency. ‘‘(4) Not later than 90 days after the date of enactment of this section, the Secretary shall prescribe guidelines for using other transactions authorized by the 

amendment under subsection (a). Such guidelines shall be published in the Federal 

Register for public comment under rulemaking procedures of the Department. ‘‘(5) The authority of the Secretary under this subsection may be delegated only 

to an officer of the Department who is appointed by the President by and with the 

advice and consent of the Senate and may not be delegated to any other person.’’. 

SEC. 997. REPORT ON RESEARCH AND DEVELOPMENT PROGRAM EVALUATION METHODOLOGIES. 

Not later than 180 days after the date of enactment of this Act, the Secretary 

shall enter into appropriate arrangements with the National Academy of Sciences 

to investigate and report on the scientific and technical merits of any evaluation 

methodology currently in use or proposed for use in relation to the scientific and 

technical programs of the Department by the Secretary or other Federal official. Not 

later than 6 months after receiving the report of the National Academy, the Secretary shall submit such report to Congress, along with any other views or plans 

of the Secretary with respect to the future use of such evaluation methodology. 

TITLE X—PERSONNEL AND TRAINING 

SEC. 1001. WORKFORCE TRENDS AND TRAINEESHIP GRANTS. 

(a) WORKFORCE TRENDS.—

(1) The Secretary of Energy (in this title referred to as the ‘‘Secretary’’), in 

consultation with the Secretary of Labor and utilizing statistical data collected 

by the Secretary of Labor, shall monitor trends in the workforce of skilled technical personnel supporting energy technology industries, including renewable 

energy industries, companies developing and commercializing devices to increase energy efficiency, the oil and gas industry, the nuclear power industry, 

the coal industry, and other industrial sectors as the Secretary may deem appropriate. 

(2) The Secretary shall report to the Congress whenever the Secretary determines that significant national shortfalls of skilled technical personnel in one 

or more energy industry segments are forecast or have occurred. 

(b) TRAINEESHIP GRANTS FOR SKILLED TECHNICAL PERSONNEL.—The Secretary, in 

consultation with the Secretary of Labor, may establish grant programs in the appropriate offices of the Department of Energy to enhance training of skilled technical personnel for which a shortfall is determined under subsection (a). 

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(c) DEFINITION.—For purposes of this section, the term ‘‘skilled technical personnel’’ means journey and apprentice level workers who are enrolled in or have 

completed a State or federally recognized apprenticeship program and other skilled 

workers in energy technology industries. 

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

are authorized to be appropriated to the Secretary $20,000,000 for each of fiscal 

years 2004 through 2008, to remain available until expended. 

SEC. 1002. RESEARCH FELLOWSHIPS IN ENERGY RESEARCH. 

(a) POSTDOCTORAL FELLOWSHIPS.—The Secretary shall establish a program of fellowships to encourage outstanding young scientists and engineers to pursue 

postdoctoral research appointments in energy research and development at institutions of higher education of their choice. 

(b) DISTINGUISHED SENIOR RESEARCH FELLOWSHIPS.—The Secretary shall establish a program of fellowships to allow outstanding senior researchers in energy research and development and their research groups to explore research and development topics of their choosing for a fixed period of time. Awards under this program 

shall be made on the basis of past scientific or technical accomplishment and promise for continued accomplishment during the period of support, which shall not be 

less than 3 years. 

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

are authorized to be appropriated to the Secretary $40,000,000 for each of fiscal 

years 2004 through 2008, to remain available until expended. 

SEC. 1003. TRAINING GUIDELINES FOR ELECTRIC ENERGY INDUSTRY PERSONNEL. 

The Secretary of Labor, in consultation with the Secretary of Energy and jointly 

with the electric industry and recognized employee representatives, shall develop 

model personnel training guidelines to support electric system reliability and safety. 

The training guidelines shall, at a minimum—

(1) include training requirements for workers engaged in the construction, operation, inspection, and maintenance of electric generation, transmission, and 

distribution, including competency and certification requirements, and assessment requirements that include initial and ongoing evaluation of workers, recertification assessment procedures, and methods for examining or testing the 

qualification of individuals performing covered tasks; and 

(2) consolidate existing training guidelines on the construction, operation, 

maintenance, and inspection of electric generation, transmission, and distribution facilities, such as those established by the National Electric Safety Code 

and other industry consensus standards. 

SEC. 1004. NATIONAL CENTER ON ENERGY MANAGEMENT AND BUILDING TECHNOLOGIES. 

The Secretary shall support the establishment of a National Center on Energy 

Management and Building Technologies, to carry out research, education, and training activities to facilitate the improvement of energy efficiency and indoor air quality in industrial, commercial, and residential buildings. The National Center shall 

be established by—

(1) recognized representatives of employees in the heating, ventilation, and 

air-conditioning industry; 

(2) contractors that install and maintain heating, ventilation, and air-conditioning systems and equipment; 

(3) manufacturers of heating, ventilation, and air-conditioning systems and 

equipment; 

(4) representatives of the advanced building envelope industry, including design, windows, lighting, and insulation industries; and 

(5) other entities as the Secretary may deem appropriate. 

SEC. 1005. IMPROVED ACCESS TO ENERGY-RELATED SCIENTIFIC AND TECHNICAL CAREERS. 

(a) DEPARTMENT OF ENERGY SCIENCE EDUCATION PROGRAMS.—Section 3164 of the 

Department of Energy Science Education Enhancement Act (42 U.S.C. 7381a) is 

amended by adding at the end the following: 

‘‘(c) PROGRAMS FOR STUDENTS FROM UNDER-REPRESENTED GROUPS.—In carrying 

out a program under subsection (a), the Secretary shall give priority to activities 

that are designed to encourage students from under-represented groups to pursue 

scientific and technical careers.’’. 

(b) PARTNERSHIPS WITH HISTORICALLY BLACK COLLEGES AND UNIVERSITIES, HISPANIC-SERVICING INSTITUTIONS, AND TRIBAL COLLEGES.—The Department of Energy 

Science Education Enhancement Act (42 U.S.C. 7381 et seq.) is amended—

(1) by redesignating sections 3167 and 3168 as sections 3168 and 3169, respectively; and 

(2) by inserting after section 3166 the following: 

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‘‘SEC. 3167. PARTNERSHIPS WITH HISTORICALLY BLACK COLLEGES AND UNIVERSITIES, HISPANIC-SERVING INSTITUTIONS, AND TRIBAL COLLEGES. 

‘‘(a) DEFINITIONS.—In this section: ‘‘(1) HISPANIC-SERVING INSTITUTION.—The term ‘Hispanic-serving institution’ has the meaning given that term in section 502(a) of the Higher Education Act 

of 1965 (20 U.S.C. 1101a(a)). ‘‘(2) HISTORICALLY BLACK COLLEGE OR UNIVERSITY.— The term ‘historically 

Black college or university’ has the meaning given the term ‘part B institution’ in section 322 of the Higher Education Act of 1965 (20 U.S.C. 1061). ‘‘(3) NATIONAL LABORATORY.—The term ‘National Laboratory’ has the meaning 

given that term in section 903(5) of the Energy Policy Act of 2003. ‘‘(4) SCIENCE FACILITY.—The term ‘science facility’ has the meaning given the 

term ‘single-purpose research facility’ in section 903(8) of the Energy Policy Act 

of 2003. ‘‘(5) TRIBAL COLLEGE.—The term ‘tribal college’ has the meaning given the 

term ‘tribally controlled college or university’ in section 2(a) of the Tribally Controlled College or University Assistance Act of 1978 (25 U.S.C. 1801(a)). ‘‘(b) EDUCATION PARTNERSHIP.—The Secretary shall direct the Director of each 

National Laboratory, and may direct the head of any science facility, to increase the 

participation of historically Black colleges or universities, Hispanic-serving institutions, or tribal colleges in activities that increase the capacity of the historically 

Black colleges or universities, Hispanic-serving institutions, or tribal colleges to 

train personnel in science or engineering. 

‘‘(c) ACTIVITIES.—An activity under subsection (b) may include—

‘‘(1) collaborative research; 

‘‘(2) equipment transfer; 

‘‘(3) training activities conducted at a National Laboratory or science facility; 

and 

‘‘(4) mentoring activities conducted at a National Laboratory or science facility. 

‘‘(d) REPORT.—Not later than 2 years after the date of enactment of this section, 

the Secretary shall submit to the Congress a report on the activities carried out 

under this section.’’. 

SEC. 1006. NATIONAL POWER PLANT OPERATIONS TECHNOLOGY AND EDUCATION CENTER. 

(a) ESTABLISHMENT.—The Secretary shall support the establishment of a National 

Power Plant Operations Technology and Education Center (in this section referred 

to as the ‘‘Center’’), to address the need for training and educating certified operators for electric power generation plants. 

(b) ROLE.—The Center shall provide both training and continuing education relating to electric power generation plant technologies and operations. The Center shall 

conduct training and education activities on site and through Internet-based information technologies that allow for learning at remote sites. 

(c) CRITERIA FOR COMPETITIVE SELECTION.—The Secretary shall support the establishment of the Center at an institution of higher education with expertise in 

power plant technology and operation and with the ability to provide on-site as well 

as Internet-based training. 

SEC. 1007. FEDERAL MINE INSPECTORS. 

In light of projected retirements of Federal mine inspectors and the need for additional personnel, the Secretary of Labor shall hire, train, and deploy such additional 

skilled Federal mine inspectors as necessary to ensure the availability of skilled and 

experienced individuals and to maintain the number of Federal mine inspectors at 

or above the levels authorized by law or established by regulation. 

TITLE XI—ELECTRICITY 

SEC. 1101. DEFINITIONS. 

(a) ELECTRIC UTILITY.—Section 3(22) of the Federal Power Act (16 U.S.C. 796(22)) 

is amended to read as follows: 

‘‘(22) ‘electric utility’ means any person or Federal or State agency (including any 

municipality) that sells electric energy; such term includes the Tennessee Valley Authority and each Federal power marketing agency;’’. 

(b) TRANSMITTING UTILITY.—Section 3(23) of the Federal Power Act (16 U.S.C. 

796(23)) is amended to read as follows: 

‘‘(23) ‘transmitting utility’ means an entity, including any entity described in section 201(f), that owns or operates facilities used for the transmission of electric energy—

‘‘(A) in interstate commerce; or 

‘‘(B) for the sale of electric energy at wholesale;’’. 

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(c) ADDITIONAL DEFINITIONS.—At the end of section (3) of the Federal Power Act, 

add the following: ‘‘(26) ‘unregulated transmitting utility’ means an entity that— ‘‘(A) owns or operates facilities used for the transmission of electric energy in 

interstate commerce, and ‘‘(B) is an entity described in section 201(f) or a rural electric cooperative with 

financing from the Rural Utilities Service. ‘‘(27) ‘distribution utility’ means an electric utility that does not own or operate 

transmission facilities or an unregulated transmitting utility that provides 90 percent of the electric energy its transmits to customers at retail.’’ (d) For the purposes of this title, the term ‘‘the Commission’’ means the Federal 

Energy Regulatory Commission.

Subtitle A—Reliability 

Sec. 1111. ELECTRIC RELIABILITY STANDARDS. 

Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended by adding 

the following: 

‘‘ELECTRIC RELIABILITY

‘‘SEC. 215. (a) For the purposes of this section: 

‘‘(1) The term ‘bulk-power system’ means— ‘‘(A) facilities and control systems necessary for operating an interconnected electric energy transmission network (or any portion thereof); 

and ‘‘(B) electric energy from generation facilities needed to maintain transmission system reliability. 

The term does not include facilities used in the local distribution of electric energy. ‘‘(2) The terms ‘Electric Reliability Organization’ and ‘ERO’ mean the organization certified by the Commission under subsection (c), the purpose of which 

is to establish and enforce reliability standards for the bulk-power system, subject to Commission review. ‘‘(3) The term ‘reliability standard’ means a requirement, approved by the 

Commission under this section, to provide for reliable operation of the bulkpower system. The term includes requirements for the operation of existing 

bulk-power system components and the design of planned additions or modifications to such components to the extent necessary to provide for reliable operation of the bulk-power system, but the term does not include any requirement 

to enlarge such components or to construct new transmission capacity or generation capacity. ‘‘(4) The term ‘reliable operation’ means operating the components of the bulkpower system within equipment and electric system thermal, voltage, and stability limits so that instability, uncontrolled separation, or cascading failures of 

such system will not occur as a result of a sudden disturbance or unanticipated 

failure of system components. 

‘‘(5) The term ‘Interconnection’ means a geographic area in which the operation of bulk-power system components is synchronized such that the failure of 

one or more of such components may adversely affect the ability of the operators of other components within the system to maintain reliable operation of the 

portion of the system within their control. 

‘‘(6) The term ‘transmission organization’ means an RTO or other transmission organization finally approved by the Commission for the operation of 

transmission facilities. 

‘‘(7) The term ‘regional entity’ means an entity having enforcement authority 

pursuant to subsection (e)(4). 

‘‘(b) The Commission shall have jurisdiction, within the United States, over the 

ERO certified by the Commission under subsection (c), any regional entities, and all 

users, owners and operators of the bulk-power system, including the entities described in section 201(f), for purposes of approving reliability standards established 

under this section and enforcing compliance with this section. All users, owners and 

operators of the bulk-power system shall comply with reliability standards that take 

effect under this section. The Commission shall issue a final rule to implement the 

requirements of this section not later than 180 days after the date of enactment of 

this section. 

‘‘(c) Following the issuance of a Commission rule under subsection (b), any person 

may submit an application to the Commission for certification as the Electric Reliability Organization. The Commission may certify one such ERO if the Commission 

determines that such ERO—

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‘‘(1) has the ability to develop and enforce, subject to subsection (d)(2), reliability standards that provide for an adequate level of reliability of the bulkpower system; and ‘‘(2) has established rules that— ‘‘(A) assure its independence of the users and owners and operators of the 

bulk-power system, while assuring fair stakeholder representation in the 

selection of its directors and balanced decisionmaking in any ERO committee or subordinate organizational structure; ‘‘(B) allocate equitably reasonable dues, fees, and other charges among 

end users for all activities under this section; ‘‘(C) provide fair and impartial procedures for enforcement of reliability 

standards through the imposition of penalties in accordance with subsection 

(e) (including limitations on activities, functions, or operations, or other appropriate sanctions); ‘‘(D) provide for reasonable notice and opportunity for public comment, 

due process, openness, and balance of interests in developing reliability 

standards and otherwise exercising its duties; and ‘‘(E) provide for taking, after certification, appropriate steps to gain recognition in Canada and Mexico. ‘‘(d)(1) The ERO shall file each reliability standard or modification to a reliability 

standard that it proposes to be made effective under this section with the Commission. 

‘‘(2) The Commission may approve by rule or order a proposed reliability standard 

or modification to a reliability standard if it determines that the standard is just, 

reasonable, not unduly discriminatory or preferential, and in the public interest. 

The Commission shall give due weight to the technical expertise of the ERO with 

respect to the content of a proposed standard or modification to a reliability standard and to the technical expertise of a regional entity organized on an Interconnection-wide basis with respect to a reliability standard to be applicable within that 

Interconnection, but shall not defer with respect to the effect of a standard on competition. A proposed standard or modification shall take effect upon approval by the 

Commission. 

‘‘(3) The ERO shall rebuttably presume that a proposal from a regional entity organized on an Interconnection-wide basis for a reliability standard or modification 

to a reliability standard to be applicable on an Interconnection-wide basis is just, 

reasonable, and not unduly discriminatory or preferential, and in the public interest. 

‘‘(4) The Commission shall remand to the ERO for further consideration a proposed reliability standard or a modification to a reliability standard that the Commission disapproves in whole or in part. 

‘‘(5) The Commission, upon its own motion or upon complaint, may order the ERO 

to submit to the Commission a proposed reliability standard or a modification to a 

reliability standard that addresses a specific matter if the Commission considers 

such a new or modified reliability standard appropriate to carry out this section. 

‘‘(6) The final rule adopted under subsection (b) shall include fair processes for the 

identification and timely resolution of any conflict between a reliability standard 

and any function, rule, order, tariff, rate schedule, or agreement accepted, approved, 

or ordered by the Commission applicable to a transmission organization. Such transmission organization shall continue to comply with such function, rule, order, tariff, 

rate schedule or agreement accepted, approved, or ordered by the Commission 

until—

‘‘(A) the Commission finds a conflict exists between a reliability standard and 

any such provision; 

‘‘(B) the Commission orders a change to such provision pursuant to section 

206 of this part; and 

‘‘(C) the ordered change becomes effective under this part. 

If the Commission determines that a reliability standard needs to be changed as a 

result of such a conflict, it shall order the ERO to develop and file with the Commission a modified reliability standard under paragraph (4) or (5) of this subsection. 

‘‘(e)(1) The ERO may impose, subject to paragraph (2), a penalty on a user or 

owner or operator of the bulk-power system for a violation of a reliability standard 

approved by the Commission under subsection (d) if the ERO, after notice and an 

opportunity for a hearing—

‘‘(A) finds that the user or owner or operator has violated a reliability standard approved by the Commission under subsection (d); and 

‘‘(B) files notice and the record of the proceeding with the Commission. 

‘‘(2) A penalty imposed under paragraph (1) may take effect not earlier than the 

31st day after the ERO files with the Commission notice of the penalty and the 

record of proceedings. Such penalty shall be subject to review by the Commission, 

110

on its own motion or upon application by the user, owner or operator that is the 

subject of the penalty filed within 30 days after the date such notice is filed with 

the Commission. Application to the Commission for review, or the initiation of review by the Commission on its own motion, shall not operate as a stay of such penalty unless the Commission otherwise orders upon its own motion or upon application by the user, owner or operator that is the subject of such penalty. In any proceeding to review a penalty imposed under paragraph (1), the Commission, after notice and opportunity for hearing (which hearing may consist solely of the record before the ERO and opportunity for the presentation of supporting reasons to affirm, 

modify, or set aside the penalty), shall by order affirm, set aside, reinstate, or modify the penalty, and, if appropriate, remand to the ERO for further proceedings. The 

Commission shall implement expedited procedures for such hearings. ‘‘(3) On its own motion or upon complaint, the Commission may order compliance 

with a reliability standard and may impose a penalty against a user or owner or 

operator of the bulk-power system, if the Commission finds, after notice and opportunity for a hearing, that the user or owner or operator of the bulk-power system 

has engaged or is about to engage in any acts or practices that constitute or will 

constitute a violation of a reliability standard. ‘‘(4) The Commission shall establish regulations authorizing the ERO to enter into 

an agreement to delegate authority to a regional entity for the purpose of proposing 

reliability standards to the ERO and enforcing reliability standards under paragraph (1) if—

‘‘(A) the regional entity is governed by an independent board, a balanced 

stakeholder board, or a combination independent and balanced stakeholder 

board; 

‘‘(B) the regional entity otherwise satisfies the provisions of subsection (c)(1) 

and (2); and 

‘‘(C) the agreement promotes effective and efficient administration of bulkpower system reliability. The Commission may modify such delegation. The 

ERO and the Commission shall rebuttably presume that a proposal for delegation to a regional entity organized on an Interconnection-wide basis promotes 

effective and efficient administration of bulk-power system reliability and 

should be approved. Such regulation may provide that the Commission may assign the ERO’s authority to enforce reliability standards under paragraph (1) 

directly to a regional entity consistent with the requirements of this paragraph. 

‘‘(5) The Commission may take such action as is necessary or appropriate against 

the ERO or a regional entity to ensure compliance with a reliability standard or any 

Commission order affecting the ERO or a regional entity. 

‘‘(6) Any penalty imposed under this section shall bear a reasonable relation to 

the seriousness of the violation and shall take into consideration the efforts of such 

user, owner, or operator to remedy the violation in a timely manner. 

‘‘(f) The ERO shall file with the Commission for approval any proposed rule or 

proposed rule change, accompanied by an explanation of its basis and purpose. The 

Commission, upon its own motion or complaint, may propose a change to the rules 

of the ERO. A proposed rule or proposed rule change shall take effect upon a finding 

by the Commission, after notice and opportunity for comment, that the change is 

just, reasonable, not unduly discriminatory or preferential, is in the public interest, 

and satisfies the requirements of subsection (c). 

‘‘(g) The ERO shall conduct periodic assessments of the reliability and adequacy 

of the bulk-power system in North America. 

‘‘(h) The President is urged to negotiate international agreements with the governments of Canada and Mexico to provide for effective compliance with reliability 

standards and the effectiveness of the ERO in the United States and Canada or 

Mexico. 

‘‘(i)(1) The ERO shall have authority to develop and enforce compliance with reliability standards for only the bulk-power system. 

‘‘(2) This section does not authorize the ERO or the Commission to order the construction of additional generation or transmission capacity or to set and enforce 

compliance with standards for adequacy or safety of electric facilities or services. 

‘‘(3) Nothing in this section shall be construed to preempt any authority of any 

State to take action to ensure the safety, adequacy, and reliability of electric service 

within that State, as long as such action is not inconsistent with any reliability 

standard. 

‘‘(4) Within 90 days of the application of the ERO or other affected party, and 

after notice and opportunity for comment, the Commission shall issue a final order 

determining whether a State action is inconsistent with a reliability standard, taking into consideration any recommendation of the ERO. 

‘‘(5) The Commission, after consultation with the ERO, may stay the effectiveness 

of any State action, pending the Commission’s issuance of a final order. 

111

‘‘(j) The Commission shall establish a regional advisory body on the petition of at 

least two-thirds of the States within a region that have more than one-half of their 

electric load served within the region. A regional advisory body shall be composed 

of one member from each participating State in the region, appointed by the Governor of each State, and may include representatives of agencies, States, and provinces outside the United States. A regional advisory body may provide advice to the 

ERO, a regional entity, or the Commission regarding the governance of an existing 

or proposed regional entity within the same region, whether a standard proposed 

to apply within the region is just, reasonable, not unduly discriminatory or preferential, and in the public interest, whether fees proposed to be assessed within the 

region are just, reasonable, not unduly discriminatory or preferential, and in the 

public interest and any other responsibilities requested by the Commission. The 

Commission may give deference to the advice of any such regional advisory body if 

that body is organized on an Interconnection-wide basis. ‘‘(k) The provisions of this section do not apply to Alaska or Hawaii.’’. 

Subtitle B—Regional Markets 

SEC. 1121. IMPLEMENTATION DATE FOR PROPOSED RULEMAKING ON STANDARD MARKET 

DESIGN. 

The Commission’s proposed rulemaking entitled ‘‘Remedying Undue Discrimination through Open Access Transmission Service and Standard Electricity Market 

Design’’ (Docket No. RM01–12–000) is remanded to the Commission for reconsideration. No final rule pursuant to the proposed rulemaking, including any rule or 

order of general applicability within the scope of the proposed rulemaking, may be 

issued before July 1, 2005. Any final rule issued by the Commission pursuant to the 

proposed rulemaking, including any rule or order of general applicability within the 

scope of the proposed rulemaking, shall be proceeded by a notice of proposed rulemaking issued after the date of enactment of this Act and an opportunity for public 

comment. 

SEC. 1122. SENSE OF THE CONGRESS ON REGIONAL TRANSMISSION ORGANIZATIONS. 

It is the sense of Congress that, in order to promote fair, open access to electric 

transmission service, benefit retail consumers, facilitate wholesale competition, improve efficiencies in transmission grid management, promote grid reliability, remove 

opportunities for unduly discriminatory or preferential transmission practices, and 

provide for the efficient development of transmission infrastructure needed to meet 

the growing demands of competitive wholesale power markets, all transmitting utilities in interstate commerce should voluntarily become members of independently 

administered Regional Transmission Organizations (‘‘RTO’’) that have operational or 

functional control of facilities used for the transmission of electric energy in interstate commerce and do not own or control generation facilities used to supply electric energy for sale at wholesale. 

SEC. 1123. FEDERAL UTILITY PARTICIPATION IN REGIONAL TRANSMISSION ORGANIZATIONS. 

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

(1) The term ‘‘appropriate Federal regulatory authority’’ means—

(A) with respect to a Federal power marketing agency, the Secretary of 

Energy, except that the Secretary may designate the Administrator of a 

Federal power marketing agency to act as the appropriate Federal regulatory authority with respect to the transmission system of that Federal 

power marketing agency; and 

(B) with respect to the Tennessee Valley Authority, the Board of Directors of the Tennessee Valley Authority. 

(2) The term ‘‘Federal utility’’ means a Federal power marketing agency or 

the Tennessee Valley Authority. 

(3) The term ‘‘transmission system’’ means electric transmission facilities 

owned, leased, or contracted for by the United States and operated by a Federal 

utility. 

(b) TRANSFER.—

(1) The appropriate Federal regulatory authority is authorized to enter into 

a contract, agreement or other arrangement transferring control and use of all 

or part of the Federal utility’s transmission system to a Regional Transmission 

Organization (‘‘RTO’’). Such contract, agreement or arrangement shall be voluntary and include—

(A) performance standards for operation and use of the transmission system that the head of the Federal utility determines necessary or appropriate, including standards that assure recovery of all the Federal utility’s 

costs and expenses related to the transmission facilities that are the subject 

of the contract, agreement or other arrangement, consistency with existing 

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contracts and third-party financing arrangements, and consistency with 

said Federal utility’s statutory authorities, obligations, and limitations; 

(B) provisions for monitoring and oversight by the Federal utility of the 

RTO fulfillment of the terms and conditions of the contract, agreement or 

other arrangement, including a provision that may provide for the resolution of disputes through arbitration or other means with the RTO or with 

other participants, notwithstanding the obligations and limitations of any 

other law regarding arbitration; and 

(C) a provision that allows the Federal utility to withdraw from the RTO 

and terminate the contract, agreement or other arrangement in accordance 

with its terms. 

(2) Neither this section, actions taken pursuant to it, nor any other transaction of a Federal utility using an RTO shall serve to confer upon the Commission jurisdiction or authority over the Federal utility’s electric generation assets, 

electric capacity or energy that the Federal utility is authorized by law to market, or the Federal utility’s power sales activities. 

(c) EXISTING STATUTORY AND OTHER OBLIGATIONS.—

(1) Any statutory provision requiring or authorizing a Federal utility to transmit electric power, or to construct, operate or maintain its transmission system 

shall not be construed to prohibit a transfer of control and use of its transmission system pursuant to, and subject to all requirements of subsection (b). 

(2) This subsection shall not be construed to—

(A) suspend, or exempt any Federal utility from any provision of existing 

Federal law, including but not limited to any requirement or direction relating to the use of the Federal utility’s transmission system, environmental 

protection, fish and wildlife protection, flood control, navigation, water delivery, or recreation; or 

(B) authorize abrogation of any contract or treaty obligation. 

SEC. 1124. REGIONAL CONSIDERATION OF COMPETITIVE WHOLESALE MARKETS. 

(a) STATE REGULATORY COMMISSIONS.—Not later than 90 days after the date of 

enactment of this Act, the Commission shall convene regional discussions with State 

regulatory commissions, as defined in section 3(21) of the Federal Power Act. The 

regional discussions should address whether wholesale electric markets in each region are working effectively to provide reliable service to electric consumers in the 

region at the lowest reasonable cost. Priority should be given to discussions in regions that do not have, as of the date of enactment of this Act, a Regional Transmission Organization ‘‘(RTO’’). The regional discussions shall consider—

(1) the need for an RTO or other organizations in the region to provide nondiscriminatory transmission access and generation interconnection; 

(2) a process for regional planning of transmission facilities with State regulatory authority participation and for consideration of multi-state projects; 

(3) a means for ensuring that costs for all electric consumers, as defined in 

section 3(5) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 

2602(5)), and buyers of wholesale energy or capacity are reasonable and economically efficient; 

(4) a means for ensuring that all electric consumers, as defined in section 3(5) 

of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2602(5)), within 

the region maintain their ability to use the existing transmission system without incurring unreasonable additional costs in order to expand the transmission 

system for new customers; 

(5) whether the integrated transmission and electric power supply system can 

and should be operated in a manner that schedules and economically prioritizes 

all available electric generation resources, so as to minimize the costs of electric 

energy to all consumers (‘‘economic dispatch’’) and maintaining system reliability; 

(6) a means to provide transparent price signals to ensure efficient expansion 

of the electric system and efficiently manage transmission congestion; 

(7) eliminating in a reasonable manner, consistent with applicable State and 

Federal law, multiple, cumulative charges for transmission service across successive locations within a region (‘‘pancaked rates’’); 

(8) resolution of seams issues with neighboring regions and inter-regional coordination; 

(9) a means of providing information electronically to potential users of the 

transmission system; 

(10) implementation of a market monitor for the region with State regulatory 

authority and Commission oversight and establishment of rules and procedures 

that ensure that State regulatory authorities are provided access to market information and that provides for expedited consideration by the Commission of 

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any complaints concerning exercise of market power and the operation of wholesale markets; 

(11) a process by which to phase-in any proposed RTO or other organization 

designated to provide non-discriminatory transmission access so as to best meet 

the needs of a region, and, if relevant, shall take into account the special circumstances that may be found in the Western Interconnection related to the existence of transmission congestion, the existence of significant hydroelectric capacity, the participation of unregulated transmitting utilities, and the distances 

between generation and load; and, 

(12) a timetable to meet the objectives of this section. 

(b) REPORT.—Not later than 1 year after the date of enactment of this Act, the 

Commission shall report to Congress on the progress made in addressing the issues 

in subsection (a) of this section in discussions with the States. 

(c) SAVINGS.—Nothing in this section shall affect any discussions between the 

Commission and State or other retail regulatory authorities that are on-going prior 

to enactment of this Act. 

Subtitle C—Improving Transmission Access and Protecting Service 

Obligations 

SEC. 1131. SERVICE OBLIGATION SECURITY AND PARITY. 

The Federal Power Act (16 U.S.C. 824e) is amended by adding the following: 

‘‘SEC. 220. (a)(1) The Commission shall exercise its authority under this Act to ensure that any load-serving entity that, as of the date of enactment of this section—

‘‘(A) owns generation facilities, markets the output of federal generation facilities, or holds rights under one or more long-term contracts to purchase electric 

energy, for the purpose of meeting a service obligation, and 

‘‘(B) by reason of ownership of transmission facilities, or one or more contracts 

or service agreements for firm transmission service, holds firm transmission 

rights for delivery of the output of such generation facilities or such purchased 

energy to meet such service obligation, 

is entitled to use such firm transmission rights, or equivalent financial transmission 

rights, in order to deliver such output or purchased energy, or the output of other 

generating facilities or purchased energy to the extent deliverable using such rights, 

to meet its service obligation. 

‘‘(2) To the extent that all or a portion of the service obligation covered by such 

firm transmission rights is transferred to another load-serving entity, the successor 

load-serving entity shall be entitled to use the firm transmission rights associated 

with the transferred service obligation. Subsequent transfers to another load-serving 

entity, or back to the original load-serving entity, shall be entitled to the same 

rights. 

‘‘(3) The Commission shall exercise its authority under this Act in a manner that 

facilitates the planning and expansion of transmission facilities to meet the reasonable needs of load-serving entities to satisfy their service obligations. 

‘‘(b) Nothing in this section shall affect any methodology for the allocation of 

transmission rights by a Commission-approved entity that, prior to the date of enactment of this section, has been authorized by the Commission to allocate transmission rights. 

‘‘(c) Nothing in this Act shall relieve a load-serving entity from any obligation 

under State or local law to build transmission or distribution facilities adequate to 

meet its service obligations. 

‘‘(d) Nothing in this section shall provide a basis for abrogating any contract or 

service agreement for firm transmission service or rights in effect as of the date of 

the enactment of this subsection. 

‘‘(e) For purposes of this section: 

‘‘(1) The term ‘distribution utility’ means an electric utility that has a service 

obligation to end-users. 

‘‘(2) The term ‘load-serving entity’ means a distribution utility or an electric 

utility (including an entity described in section 201(f) or a rural cooperative) 

that has a service obligation to end-users or a distribution utility. 

‘‘(3) The term ‘service obligation’ means a requirement applicable to, or the 

exercise of authority granted to, an electric utility (including an entity described 

in section 201(f) or a rural cooperative) under Federal, State or local law or 

under long-term contracts to provide electric service to end-users or to a distribution utility. 

‘‘(f) Nothing in the section shall apply to an entity located in an area referred to 

in section 212(k)(2)(A).’’. 

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SEC. 1132. OPEN NON-DISCRIMINATORY ACCESS. 

Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended by inserting 

after section 211 the following: 

‘‘OPEN ACCESS BY UNREGULATED TRANSMITTING UTILITIES

‘‘SEC. 211A. (a) Subject to section 212(h), the Commission may, by rule or order, 

require an unregulated transmitting utility to provide transmission services—

‘‘(1) at rates that are comparable to those that the unregulated transmitting 

utility charges itself; and 

‘‘(2) on terms and conditions (not relating to rates) that are comparable to 

those under which such unregulated transmitting utility provides transmission 

services to itself and that are not unduly discriminatory or preferential. 

‘‘(b) The Commission shall exempt from any rule or order under this subsection 

any unregulated transmitting utility that—

‘‘(1) is a distribution utility that sells no more than 4,000,000 megawatt hours 

of electricity per year; or 

‘‘(2) does not own or operate any transmission facilities that are necessary for 

operating an interconnected transmission system (or any portion thereof); or 

‘‘(3) meets other criteria the Commission determines to be in the public interest. 

‘‘(c) Whenever the Commission, after a hearing held upon a complaint, finds any 

exemption granted pursuant to subsection (b) adversely affects the reliable and efficient operation of an interconnected transmission system, it may revoke the exemption. 

‘‘(d) The rate changing procedures applicable to public utilities under subsections 

(c) and (d) of section 205 are applicable to unregulated transmitting utilities for purposes of this section. 

‘‘(e) In exercising its authority under paragraph (1) of subsection (a), the Commission may remand transmission rates to an unregulated transmitting utility for review and revision where necessary to meet the requirements of subsection (a). 

‘‘(f) The provision of transmission services under subsection (a) does not preclude 

a request for transmission services under section 211. 

‘‘(g) The Commission may not require a State or municipality to take action under 

this section that constitutes a private business use for purposes of section 141 of 

the Internal Revenue Code of 1986 (26 U.S.C. 141). 

‘‘(h) Nothing in this Act authorizes the Commission to require an unregulated 

transmitting utility to transfer control or operational control of its transmitting facilities to an RTO or any other Commission-approved organization designated to 

provide non-discriminatory transmission access.’’. 

SEC. 1133. TRANSMISSION INFRASTRUCTURE INVESTMENT. 

Part II of the Federal Power Act is amended by adding the following: 

‘‘SUSTAINABLE TRANSMISSION NETWORKS RULEMAKING

‘‘SEC. 221. Within six months of enactment of this section, the Commission shall 

issue a final rule establishing transmission pricing policies applicable to all public 

utilities and policies for the allocation of costs associated with the expansion, modification or upgrade of existing interstate transmission facilities and for the interconnection of new transmission facilities for utilities and facilities which are not included within a Commission approved RTO. Consistent with section 205 of this Act, 

such rule shall, to the maximum extent practicable—

‘‘(1) promote capital investment in the economically efficient transmission systems; 

‘‘(2) encourage the construction of transmission and generation facilities in a 

manner which provides the lowest overall risk and cost to consumers; 

‘‘(3) encourage improved operation of transmission facilities and deployment 

of transmission technologies designed to increase capacity and efficiency of existing networks; 

‘‘(4) ensure that the costs of any transmission expansion or interconnection 

be allocated in such a way that all users of the affected transmission system 

bear the appropriate share of costs; and 

‘‘(5) ensure that parties who pay for facilities necessary for transmission expansion or interconnection receive appropriate compensation for those facilities.’’. 

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Subtitle D—Amendments to the Public Utility Regulatory Policies Act of 

1978

SEC. 1141. NET METERING. 

(a) ADOPTION OF STANDARD.—Section 111(d) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by adding at the end the following: ‘‘(11) NET METERING.— ‘‘(A) Each electric utility shall make available upon request net metering 

service to any electric consumer that the electric utility serves. ‘‘(B) For purposes of implementing this paragraph, any reference contained in this section to the date of enactment of the Public Utility Regulatory Policies Act of 1978 shall be deemed to be a reference to the date 

of enactment of this paragraph. 

‘‘(C) Notwithstanding subsections (b) and (c) of section 112, each State 

regulatory authority shall consider and make a determination concerning 

whether it is appropriate to implement the standard set out in subparagraph (A) not later than 1 year after the date of enactment of this paragraph.’’. 

(b) SPECIAL RULES FOR NET METERING.—Section 115 of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2625) is further amended by adding at the 

end the following: 

‘‘(i) NET METERING.—In undertaking the consideration and making the determination under section 111 with respect to the standard concerning net metering established by section 111(d)(13), the term net metering service shall mean a service provided in accordance with the following standards: 

‘‘(1) An electric utility—

‘‘(A) shall charge the owner or operator of an on-site generating facility 

rates and charges that are identical to those that would be charged other 

electric consumers of the electric utility in the same rate class; and 

‘‘(B) shall not charge the owner or operator of an on-site generating facility any additional standby, capacity, interconnection, or other rate or 

charge. 

‘‘(2) An electric utility that sells electric energy to the owner or operator of 

an on-site generating facility shall measure the quantity of electric energy produced by the on-site facility and the quantity of electric energy consumed by the 

owner or operator of an on-site generating facility during a billing period in accordance with reasonable metering practices. 

‘‘(3) If the quantity of electric energy sold by the electric utility to an on-site 

generating facility exceeds the quantity of electric energy supplied by the onsite generating facility to the electric utility during the billing period, the electric utility may bill the owner or operator for the net quantity of electric energy 

sold, in accordance with reasonable metering practices. 

‘‘(4) If the quantity of electric energy supplied by the on-site generating facility to the electric utility exceeds the quantity of electric energy sold by the electric utility to the on-site generating facility during the billing period—

‘‘(A) the electric utility may bill the owner or operator of the on-site generating facility for the appropriate charges for the billing period in accordance with paragraph (2); and 

‘‘(B) the owner or operator of the on-site generating facility shall be credited for the excess kilowatt-hours generated during the billing period, with 

the kilowatt-hour credit appearing on the bill for the following billing period. 

‘‘(5) An eligible on-site generating facility and net metering system used by 

an electric consumer shall meet all applicable safety, performance, reliability, 

and interconnection standards established by the National Electrical Code, the 

Institute of Electrical and Electronics Engineers, and Underwriters Laboratories. 

‘‘(6) The Commission, after consultation with State regulatory authorities and 

unregulated electric utilities and after notice and opportunity for comment, may 

adopt, by rule, additional control and testing requirements for on-site generating facilities and net metering systems that the Commission determines are 

necessary to protect public safety and system reliability. 

‘‘(7) For purposes of this subsection—

‘‘(A) The term ‘eligible on-site generating facility’ means a facility on the 

site of a residential electric consumer with a maximum generating capacity 

of 10 kilowatts or less that is fueled by solar energy, wind energy, or fuel 

cells; or a facility on the site of a commercial electric consumer with a maximum generating capacity of 500 kilowatts or less that is fueled solely by 

a renewable energy resource, landfill gas, or a high efficiency system. 

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‘‘(B) The term ‘renewable energy resource’ means solar, wind, biomass, or 

geothermal energy. 

‘‘(C) The term ‘high efficiency system’ means fuel cells or combined heat 

and power. 

‘‘(D) The term ‘net metering service’ means service to an electric consumer under which electric energy generated by that electric consumer 

from an eligible on-site generating facility and delivered to the local distribution facilities may be used to offset electric energy provided by the 

electric utility to the electric consumer during the applicable billing period.’’. 

SEC. 1142. SMART METERING. 

(a) IN GENERAL.—Section 111(d) of the Public Utilities Regulatory Policies Act of 

1978 (16 U.S.C. 2621(d)) is amended by adding at the end the following: 

‘‘(12) TIME-BASED METERING AND COMMUNICATIONS.—

‘‘(A) Each electric utility shall offer each of its customer classes, and provide individual customers upon customer request, a time-based rate schedule under which the rate charged by the electric utility varies during different time periods and reflects the variance in the costs of generating and 

purchasing electricity at the wholesale level. The time-based rate schedule 

shall enable the electric consumer to manage energy use and cost through 

advanced metering and communications technology. 

‘‘(B) The types of time-based rate schedules that may be offered under the 

schedule referred to in subparagraph (A) include, among others—

‘‘(i) time-of-use pricing whereby electricity prices are set for a specific 

time period on an advance or forward basis, typically not changing 

more often than twice a year. Prices paid for energy consumed during 

these periods shall be pre-established and known to consumers in advance of such consumption, allowing them to vary their demand and 

usage in response to such prices and manage their energy costs by 

shifting usage to a lower cost period or reducing their consumption 

overall; 

‘‘(ii) critical peak pricing whereby time-of-use prices are in effect except for certain peak days, when prices may reflect the costs of generating and purchasing electricity at the wholesale level and when consumers may receive additional discounts for reducing peak period energy consumption; and 

‘‘(iii) real-time pricing whereby electricity prices are set for a specific 

time period on an advanced or forward basis and may change as often 

as hourly. 

‘‘(C) Each electric utility subject to subparagraph (A) shall provide each 

customer requesting a time-based rate with a time-based meter capable of 

enabling the utility and customer to offer and receive such rate, respectively. 

‘‘(D) For purposes of implementing this paragraph, any reference contained in this section to the date of enactment of the Public Utility Regulatory Policies Act of 1978 shall be deemed to be a reference to the date 

of enactment of this paragraph. 

‘‘(E) In a State that permits third-party marketers to sell electric energy 

to retail electric consumers, such consumers shall be entitled to receive that 

same time-based metering and communications device and service as a retail electric consumer of the electric utility. 

‘‘(F) Notwithstanding subsections (b) and (c) of section 112, each State 

regulatory authority shall, not later than twelve (12) months after enactment of this paragraph conduct an investigation in accordance with section 

115(i) and issue a decision whether it is appropriate to implement the 

standards set out in subparagraphs (A) and (C).’’. 

(b) STATE INVESTIGATION OF DEMAND RESPONSE AND TIME-BASED METERING.—

Section 115 of the Public Utilities Regulatory Policies Act of 1978 (16 U.S.C. 2625) 

is amended by adding the at the end the following: 

‘‘(k) TIME-BASED METERING AND COMMUNICATIONS.—Each State regulatory authority shall conduct an investigation and issue a decision whether or not it is appropriate for electric utilities to provide and install time-based meters and communications devices for each of their customers which enable such customers to participate in time-based pricing rate schedules and other demand response programs.’’. 

(c) FEDERAL ASSISTANCE ON DEMAND RESPONSE.—Section 132(a) of the Public 

Utility Regulatory Polices Act of 1978 (16 U.S.C. 2642(a)) is amended by striking 

‘‘and’’ at the end of paragraph (3), striking the period at the end of paragraph (4) 

and inserting ‘‘; and’’, and by adding the following at the end thereof: 

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‘‘(5) technologies, techniques and rate-making methods related to advanced 

metering and communications and the use of these technologies, techniques and 

methods in demand response programs.’’. 

(d) FEDERAL GUIDANCE.—Section 132 of the Public Utility Regulatory Policies Act 

of 1978 (16 U.S.C. 2643) is amended by adding the following at the end thereof: 

‘‘(d) DEMAND RESPONSE.—The Secretary shall be responsible for—

‘‘(1) educating consumers on the availability, advantages and benefits of advanced metering and communications technologies, including the funding of 

demonstration or pilot projects; 

‘‘(2) working with States, utilities, other energy providers and advanced metering and communications experts to identify and address barriers to the adoption of demand response programs; and 

‘‘(3) not later than 180 days after the date of enactment of the Energy Policy 

Act of 2003, providing the Congress with a report that identifies and quantifies 

the national benefits of demand response and makes a recommendation on 

achieving specific levels of such benefits by January 1, 2005.’’. 

(e) DEMAND RESPONSE AND REGIONAL COORDINATION.—

(1) It is the policy of the United States to encourage States to coordinate, on 

a regional basis, State energy policies to provide reliable and affordable demand 

response services to the public. 

(2) The Secretary of Energy shall provide technical assistance to States and 

regional organizations formed by two or more States to assist them in—

(A) identifying the areas with the greatest demand response potential; 

(B) identifying and resolving problems in transmission and distribution 

networks, including through the use of demand response; and 

(C) developing plans and programs to use demand response to respond to 

peak demand or emergency needs. 

(3) Not later than 1 year after the date of enactment of this Act, the Commission shall prepare and publish an annual report, by appropriate region, that assesses demand response resources, including those available from all consumer 

classes, and which identifies and reviews—

(A) saturation and penetration rate of advanced meters and communications technologies, devices and systems; 

(B) existing demand response programs and time-based rate programs; 

(C) the annual resource contribution of demand resources; 

(D) the potential for demand response as a quantifiable, reliable resource 

for regional planning purposes; and 

(E) steps taken to ensure that, in regional transmission planning and operations, demand resources are provided equitable treatment as a quantifiable, reliable resource relative to the resource obligations of any load-serving entity, transmission provider, or transmitting party. 

(f) FEDERAL ENCOURAGEMENT OF DEMAND RESPONSE DEVICES.—It is the policy of 

the United States that time-based pricing and other forms of demand response, 

whereby electricity customers are provided with electricity price signals and the 

ability to benefit by responding to them, shall be encouraged and the deployment 

of such technology and devices that enable electricity customers to participate in 

such pricing and demand response systems shall be facilitated. 

SEC. 1143. ADOPTION OF ADDITIONAL STANDARDS. 

(a) ADOPTION OF STANDARDS.—Section 113(b) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2623(b)) is amended by adding at the end the following: 

‘‘(6) Each electric utility shall provide distributed generation, combined heat 

and power, and district heating and cooling systems competitive access to the 

local distribution grid and competitive pricing of service, and shall use simplified standard contracts for the interconnection of generating facilities that 

have a power production capacity of 250 kilowatts or less. 

‘‘(7) No electric utility may refuse to interconnect a generating facility with 

the distribution facilities of the electric utility if the owner or operator of the 

generating facility complies with technical standards adopted by the State regulatory authority and agrees to pay the costs established by such State regulatory authority. 

‘‘(8) Each electric utility shall develop a plan to minimize dependence on one 

fuel source and to ensure that the electric energy it sells to consumers is generated using a diverse range of fuels and technologies, including renewable 

technologies. 

‘‘(9) Each electric utility shall develop and implement a ten-year plan to increase the efficiency of its fossil fuel generation.’’. 

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(b) TIME FOR ADOPTING STANDARDS.—Section 113 of the Public Utility Regulatory 

Policies Act of 1978 (16 U.S.C. 2623) is further amended by adding at the end the 

following: 

‘‘(d) SPECIAL RULE.—For purposes of implementing paragraphs (6), (7), (8), and (9) 

of subsection (b), any reference contained in this section to the date of enactment 

of the Public Utility Regulatory Policies Act of 1978 shall be deemed to be a reference to the date of enactment of this subsection.’’. 

SEC. 1144. TECHNICAL ASSISTANCE. 

Section 132(c) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 

2642(c)) is amended to read as follows: 

‘‘(c) TECHNICAL ASSISTANCE FOR CERTAIN RESPONSIBILITIES.—The Secretary may 

provide such technical assistance as determined appropriate to assist State regulatory authorities and electric utilities in carrying out their responsibilities under 

section 111(d)(11) and paragraphs (6), (7), (8), and (9) of section 113(b).’’. 

SEC. 1145. COGENERATION AND SMALL POWER PRODUCTION PURCHASE AND SALE REQUIREMENTS. 

(a) TERMINATION OF MANDATORY PURCHASE AND SALE REQUIREMENTS.—Section 

210 of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 824a–3) is 

amended by adding at the end the following: 

‘‘(m) TERMINATION OF MANDATORY PURCHASE AND SALE REQUIREMENTS.—

‘‘(1) OBLIGATION TO PURCHASE.—After the date of enactment of this subsection, no electric utility shall be required to enter into a new contract or obligation to purchase electric energy from a qualifying cogeneration facility or a 

qualifying small power production facility under this section if the Commission 

finds that the qualifying cogeneration facility or qualifying small power production facility has access to an independently administered, auction-based day 

ahead and real time wholesale market for the sale of electric energy. 

‘‘(2) OBLIGATION TO SELL.—After the date of enactment of this subsection, no 

electric utility shall be required to enter into a new contract or obligation to sell 

electric energy to a qualifying cogeneration facility or a qualifying small power 

production facility under this section if competing retail electric suppliers are 

able to provide electric energy to the qualifying cogeneration facility or qualifying small power production facility. 

‘‘(3) NO EFFECT ON EXISTING RIGHTS AND REMEDIES.—Nothing in this subsection affects the rights or remedies of any party under any contract or obligation, in effect on the date of enactment of this subsection, to purchase electric 

energy or capacity from or to sell electric energy or capacity to a facility under 

this Act (including the right to recover costs of purchasing electric energy or capacity). 

‘‘(4) RECOVERY OF COSTS.—

‘‘(A) REGULATION.—The Commission shall promulgate such regulations as 

are necessary to ensure that an electric utility that purchases electric energy or capacity from a qualifying cogeneration facility or qualifying small 

power production facility in accordance with any legally enforceable obligation entered into or imposed under this section before the date of enactment 

of this subsection recovers all prudently incurred costs associated with the 

purchase. 

‘‘(B) ENFORCEMENT.—A regulation under subparagraph (A) shall be enforceable in accordance with the provisions of law applicable to enforcement 

of regulations under the Federal Power Act (16 U.S.C. 791a et seq.).’’. 

(b) ELIMINATION OF OWNERSHIP LIMITATIONS.—Section 3 of the Federal Power Act 

(16 U.S.C. 796) is amended—

(1) by striking paragraph (17)(C) and inserting the following: 

‘‘(C) ‘qualifying small power production facility’ means a small power production facility that the Commission determines, by rule, meets such requirements (including requirements respecting minimum size, fuel use, and 

fuel efficiency) as the Commission may, by rule, prescribe;’’; and 

(2) by striking paragraph (18)(B) and inserting the following: 

‘‘(B) ‘qualifying cogeneration facility’ means a cogeneration facility that 

the Commission determines, by rule, meets such requirements (including 

requirements respecting minimum size, fuel use, and fuel efficiency) as the 

Commission may, by rule, prescribe;’’. 

SEC. 1146. RECOVERY OF COSTS. 

(a) REGULATION.—To ensure recovery by any electric utility that purchases electricity or capacity from a qualifying facility pursuant to any legally enforceable obligation entered into or imposed under section 210 of the Public Utility Regulatory 

Policies Act of 1978 (16 U.S.C. 824a–3) before the date of enactment of this Act of 

119

all costs associated with the purchases, the Commission shall promulgate and enforce such regulations as are required to ensure that no utility shall be required directly or indirectly to absorb the costs associated with the purchases. 

(b) TREATMENT.—A regulation under subsection (a) shall be treated as a rule enforceable under the Federal Power Act (16 U.S.C. 791a et seq.). 

Subtitle E—Provisions Regarding the Public Utility Holding Company Act 

of 1935 

SEC. 1151. DEFINITIONS. 

For the purposes of this subtitle: 

(1) The term ‘‘affiliate’’ of a company means any company 5 percent or more 

of the outstanding voting securities of which are owned, controlled, or held with 

power to vote, directly or indirectly, by such company. 

(2) The term ‘‘associate company’’ of a company means any company in the 

same holding company system with such company. 

(3) The term ‘‘Commission’’ means the Federal Energy Regulatory Commission. 

(4) The term ‘‘company’’ means a corporation, partnership, association, joint 

stock company, business trust, or any organized group of persons, whether incorporated or not, or a receiver, trustee, or other liquidating agent of any of the 

foregoing. 

(5) The term ‘‘electric utility company’’ means any company that owns or operates facilities used for the generation, transmission, or distribution of electric 

energy for sale. 

(6) The terms ‘‘exempt wholesale generator’’ and ‘‘foreign utility company’’

have the same meanings as in sections 32 and 33, respectively, of the Public 

Utility Holding Company Act of 1935 (15 U.S.C. 79z–5, 79z–5b), as those sections existed on the day before the effective date of this subtitle. 

(7) The term ‘‘gas utility company’’ means any company that owns or operates 

facilities used for distribution at retail (other than the distribution only in enclosed portable containers or distribution to tenants or employees of the company operating such facilities for their own use and not for resale) of natural 

or manufactured gas for heat, light, or power. 

(8) The term ‘‘holding company’’ means—

(A) any company that directly or indirectly owns, controls, or holds, with 

power to vote, 10 percent or more of the outstanding voting securities of a 

public utility company or of a holding company of any public utility company; and 

(B) any person, determined by the Commission, after notice and opportunity for hearing, to exercise directly or indirectly (either alone or pursuant to an arrangement or understanding with one or more persons) such 

a controlling influence over the management or policies of any public utility 

company or holding company as to make it necessary or appropriate for the 

rate protection of utility customers with respect to rates that such person 

be subject to the obligations, duties, and liabilities imposed by this subtitle 

upon holding companies. 

(9) The term ‘‘holding company system’’ means a holding company, together 

with its subsidiary companies. 

(10) The term ‘‘jurisdictional rates’’ means rates established by the Commission for the transmission of electric energy in interstate commerce, the sale of 

electric energy at wholesale in interstate commerce, the transportation of natural gas in interstate commerce, and the sale in interstate commerce of natural 

gas for resale for ultimate public consumption for domestic, commercial, industrial, or any other use. 

(11) The term ‘‘natural gas company’’ means a person engaged in the transportation of natural gas in interstate commerce or the sale of such gas in interstate commerce for resale. 

(12) The term ‘‘person’’ means an individual or company. 

(13) The term ‘‘public utility’’ means any person who owns or operates facilities used for transmission of electric energy in interstate commerce or sales of 

electric energy at wholesale in interstate commerce. 

(14) The term ‘‘public utility company’’ means an electric utility company or 

a gas utility company. 

(15) The term ‘‘State commission’’ means any commission, board, agency, or 

officer, by whatever name designated, of a State, municipality, or other political 

subdivision of a State that, under the laws of such State, has jurisdiction to regulate public utility companies. 

(16) The term ‘‘subsidiary company’’ of a holding company means—

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(A) any company, 10 percent or more of the outstanding voting securities 

of which are directly or indirectly owned, controlled, or held with power to 

vote, by such holding company; and 

(B) any person, the management or policies of which the Commission, 

after notice and opportunity for hearing, determines to be subject to a controlling influence, directly or indirectly, by such holding company (either 

alone or pursuant to an arrangement or understanding with one or more 

other persons) so as to make it necessary for the rate protection of utility 

customers with respect to rates that such person be subject to the obligations, duties, and liabilities imposed by this subtitle upon subsidiary companies of holding companies. 

(17) The term ‘‘voting security’’ means any security presently entitling the 

owner or holder thereof to vote in the direction or management of the affairs 

of a company. 

SEC. 1152. REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935. 

The Public Utility Holding Company Act of 1935 (15 U.S.C. 79a et seq.) is repealed, effective 12 months after the date of enactment of this Act. 

SEC. 1153. FEDERAL ACCESS TO BOOKS AND RECORDS. 

(a) IN GENERAL.—Each holding company and each associate company thereof shall 

maintain, and shall make available to the Commission, such books, accounts, memoranda, and other records as the Commission determines are relevant to costs incurred by a public utility or natural gas company that is an associate company of 

such holding company and necessary or appropriate for the protection of utility customers with respect to jurisdictional rates. 

(b) AFFILIATE COMPANIES.—Each affiliate of a holding company or of any subsidiary company of a holding company shall maintain, and make available to the 

Commission, such books, accounts, memoranda, and other records with respect to 

any transaction with another affiliate, as the Commission determines are relevant 

to costs incurred by a public utility or natural gas company that is an associate company of such holding company and necessary or appropriate for the protection of 

utility customers with respect to jurisdictional rates. 

(c) HOLDING COMPANY SYSTEMS.—The Commission may examine the books, accounts, memoranda, and other records of any company in a holding company system, or any affiliate thereof, as the Commission determines are relevant to costs incurred by a public utility or natural gas company within such holding company system and necessary or appropriate for the protection of utility customers with respect 

to jurisdictional rates. 

(d) CONFIDENTIALITY.—No member, officer, or employee of the Commission shall 

divulge any fact or information that may come to his or her knowledge during the 

course of examination of books, accounts, memoranda, or other records as provided 

in this section, except as may be directed by the Commission or by a court of competent jurisdiction. 

SEC. 1154. STATE ACCESS TO BOOKS AND RECORDS. 

(a) IN GENERAL.—Upon the written request of a State commission having jurisdiction to regulate a public utility company in a holding company system, and subject 

to such terms and conditions as may be necessary and appropriate to safeguard 

against unwarranted disclosure to the public of any trade secrets or sensitive commercial information, a holding company or any associate company or affiliate thereof, wherever located, shall produce for inspection books, accounts, memoranda, and 

other records that—

(1) have been identified in reasonable detail in a proceeding before the State 

commission; 

(2) the State commission determines are relevant to costs incurred by such 

public utility company; and 

(3) are necessary for the effective discharge of the responsibilities of the State 

commission with respect to such proceeding. 

(b) EFFECT ON STATE LAW.—Nothing in this section shall preempt applicable 

State law concerning the provision of books, accounts, memoranda, or other records, 

or in any way limit the rights of any State to obtain books, accounts, memoranda, 

or other records, under Federal law, contract, or otherwise. 

(c) COURT JURISDICTION.—Any United States district court located in the State in 

which the State commission referred to in subsection (a) is located shall have jurisdiction to enforce compliance with this section. 

SEC. 1155. EXEMPTION AUTHORITY. 

(a) RULEMAKING.—Not later than 90 days after the date of enactment of this title, 

the Commission shall promulgate a final rule to exempt from the requirements of 

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section 203 any person that is a holding company, solely with respect to one or 

more—

(1) qualifying facilities under the Public Utility Regulatory Policies Act of 

1978; 

(2) exempt wholesale generators; or 

(3) foreign utility companies. 

(b) OTHER AUTHORITY.—If, upon application or upon its own motion, the Commission finds that the books, accounts, memoranda, and other records of any person are 

not relevant to the jurisdictional rates of a public utility company or natural gas 

company, or if the Commission finds that any class of transactions is not relevant 

to the jurisdictional rates of a public utility company, the Commission shall exempt 

such person or transaction from the requirements of section 203. 

SEC. 1156. AFFILIATE TRANSACTIONS. 

Nothing in this subtitle shall preclude the Commission or a State commission 

from exercising its jurisdiction under otherwise applicable law to determine whether 

a public utility company, public utility, or natural gas company may recover in rates 

any costs of an activity performed by an associate company, or any costs of goods 

or services acquired by such public utility company, public utility, or natural gas 

company from an associate company. 

SEC. 1157. APPLICABILITY. 

No provision of this subtitle shall apply to, or be deemed to include—

(1) the United States; 

(2) a State or any political subdivision of a State; 

(3) any foreign governmental authority not operating in the United States; 

(4) any agency, authority, or instrumentality of any entity referred to in paragraph (1), (2), or (3); or 

(5) any officer, agent, or employee of any entity referred to in paragraph (1), 

(2), or (3) acting as such in the course of such officer, agent, or employee’s official duty. 

SEC. 1158. EFFECT ON OTHER REGULATIONS. 

Nothing in this subtitle precludes the Commission or a State commission from exercising its jurisdiction under otherwise applicable law to protect utility customers. 

SEC. 1159. ENFORCEMENT. 

The Commission shall have the same powers as set forth in sections 306 through 

317 of the Federal Power Act (16 U.S.C. 825e–825p) to enforce the provisions of this 

subtitle. 

SEC. 1160. SAVINGS PROVISIONS. 

(a) IN GENERAL.—Nothing in this subtitle prohibits a person from engaging in or 

continuing to engage in activities or transactions in which it is legally engaged or 

authorized to engage on the date of enactment of this Act, if that person continues 

to comply with the terms of any such authorization, whether by rule or by order. 

(b) EFFECT ON OTHER COMMISSION AUTHORITY.—Nothing in this subtitle limits 

the authority of the Commission under the Federal Power Act (16 U.S.C. 791a and 

following) (including section 301 of that Act) or the Natural Gas Act (15 U.S.C. 717 

and following) (including section 8 of that Act). 

SEC. 1161. IMPLEMENTATION. 

Not later than 12 months after the date of enactment of this title, the Commission 

shall—

(1) promulgate such regulations as may be necessary or appropriate to implement this subtitle; and 

(2) submit to Congress detailed recommendations on technical and conforming 

amendments to Federal law necessary to carry out this subtitle and the amendments made by this subtitle. 

SEC. 1162. TRANSFER OF RESOURCES. 

All books and records that relate primarily to the functions transferred to the 

Commission under this subtitle shall be transferred from the Securities and Exchange Commission to the Commission. 

SEC. 1163. EFFECTIVE DATE. 

This subtitle shall take effect 12 months after the date of enactment of this title. 

SEC. 1164. CONFORMING AMENDMENT TO THE FEDERAL POWER ACT. 

Section 318 of the Federal Power Act (16 U.S.C. 825q) is repealed. 

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Subtitle F—Market Transparency, Anti-Manipulation and Enforcement 

SEC. 1171. MARKET TRANSPARENCY RULES. 

Part II of the Federal Power Act is amended by adding: 

‘‘MARKET TRANSPARENCY RULES

‘‘SEC. 222. (a) Not later than 180 days after the date of enactment of this section, 

the Commission shall issue rules establishing an electronic information system to 

provide the Commission and the public with access to such information as is necessary or appropriate to facilitate price transparency and participation in markets 

subject to the Commission’s jurisdiction. Such systems shall provide information 

about the availability and market price of wholesale electric energy and transmission services to the Commission, State commissions, buyers and sellers of wholesale electric energy, users of transmission services, and the public. The Commission 

shall have authority to obtain such information from any electric and transmitting 

utility, including any entity described in section 201(f). ‘‘(b) The Commission shall exempt from disclosure information it determines 

would, if disclosed, be detrimental to the operation of an effective market or jeopardize system security. This section shall not apply to an entity described in section 

212(k)(2)(B) with respect to transactions for the purchase or sale of wholesale electric energy and transmission services within the area described in section 

212(k)(2)(A).’’. 

SEC. 1172. MARKET MANIPULATION. 

Part II of the Federal Power Act is amended by the following: 

‘‘PROHIBITION ON FILING FALSE INFORMATION

‘‘SEC. 223. It shall be a violation of this Act for any person or any other entity 

(including entities described in section 201(f)) willfully and knowingly to report any 

information relating to the price of electricity sold at wholesale, which information 

the person or any other entity knew to be false at the time of the reporting, to any 

governmental entity with the intent to manipulate the data being compiled by such 

governmental entity.

‘‘PROHIBITION ON ROUND TRIP TRADING

‘‘SEC. 224. (a) It shall be a violation of this Act for any person or any other entity 

(including entities described in section 201(f)) willfully and knowingly to enter into 

any contract or other arrangement to execute a ‘round-trip trade’ for the purchase 

or sale of electric energy at wholesale. ‘‘(b) For the purposes of this section, the term ‘round trip trade’ means a transaction, or combination of transactions, in which a person or any other entity— ‘‘(1) enters into a contract or other arrangement to purchase from, or sell to, 

any other person or other entity electric energy at wholesale; ‘‘(2) simultaneously with entering into the contract or arrangement described 

in paragraph (1), arranges a financially offsetting trade with such other person 

or entity for the same such electric energy, at the same location, price, quantity 

and terms so that, collectively, the purchase and sale transactions in themselves 

result in no financial gain or loss; and 

‘‘(3) enters into the contract or arrangement with the intent to deceptively affect reported revenues, trading volumes, or prices.’’. 

SEC. 1173. ENFORCEMENT. 

(a) COMPLAINTS.—Section 306 of the Federal Power Act (16 U.S.C. 825e) is 

amended by—

(1) inserting ‘‘electric utility (including entities described in section 201(f) and 

rural cooperative entities),’’ after ‘‘Any person,’’; and 

(2) inserting ‘‘transmitting utility,’’ after ‘‘licensee’’ each place it appears. 

(b) INVESTIGATIONS.—Section 307(a) of the Federal Power Act (16 U.S.C. 825f(a)) 

is amended by inserting ‘‘or transmitting utility’’ after ‘‘any person’’ in the first sentence. 

(c) REVIEW OF COMMISSION ORDERS.—Section 313(a) of the Federal Power Act (16 

U.S.C. 8251) is amended by inserting ‘‘electric utility,’’ after ‘‘Any person,’’ in the 

first sentence. 

(d) CRIMINAL PENALTIES.—Section 316 of the Federal Power Act (16 U.S.C. 825o) 

is amended—

(1) in subsection (a), by striking ‘‘$5,000’’ and inserting ‘‘$1,000,000’’, and by 

striking ‘‘two years’’ and inserting ‘‘five years’’; 

(2) in subsection (b), by striking ‘‘$500’’ and inserting ‘‘$25,000’’; and 

(3) by striking subsection (c). 

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(e) CIVIL PENALTIES.—Section 316A of the Federal Power Act (16 U.S.C. 825o–1) 

is amended—

(1) in subsections (a) and (b), by striking ‘‘section 211, 212, 213, or 214’’ each 

place it appears and inserting ‘‘Part II’’; and 

(2) in subsection (b), by striking ‘‘$10,000’’ and inserting ‘‘$1,000,000’’. 

(f) GENERAL PENALTIES.—Section 21 of the Natural Gas Act (15 U.S.C. 717t) is 

amended—

(1) in subsection (a), by striking ‘‘$5,000’’ and inserting ‘‘$1,000,000’’, and by 

striking ‘‘two years’’ and inserting ‘‘five years’’; and 

(2) in subsection (b), by striking ‘‘$500’’ and inserting ‘‘$50,000’’. 

SEC. 1174. REFUND EFFECTIVE DATE. 

Section 206(b) of the Federal Power Act (16 U.S.C. 824e(b)) is amended by—

(1) striking ‘‘the date 60 days after the filing of such complaint nor later than 

5 months after the expiration of such 60-day period’’ in the second sentence and 

inserting ‘‘the date of the filing of such complaint nor later than 5 months after 

the filing of such complaint’’; 

(2) striking ‘‘60 days after’’ in the third sentence and inserting ‘‘of’’; 

(3) striking ‘‘expiration of such 60-day period’’ in the third sentence and inserting ‘‘publication date’’; and 

(4) striking the fifth sentence and inserting: ‘‘If no final decision is rendered 

by the conclusion of the 180-day period commencing upon initiation of a proceeding pursuant to this section, the Commission shall state the reasons why 

it has failed to do so and shall state its best estimate as to when it reasonably 

expects to make such decision.’’. 

Subtitle G—Consumer Protections 

SEC. 1181. CONSUMER PRIVACY. 

The Federal Trade Commission shall issue rules protecting the privacy of electric 

consumers from the disclosure of consumer information in connection with the sale 

or delivery of electric energy to a retail electric consumer. If the Federal Trade Commission determines that a State’s regulationsprovide equivalent or greater protection than the provisions of this section, such State regulations shall apply in that 

State in lieu of the regulations issued by the Commission under this section. 

SEC. 1182. UNFAIR TRADE PRACTICES. 

(a) SLAMMING.—The Federal Trade Commission shall issue rules prohibiting the 

change of selection of an electric utility except with the informed consent of the electric consumer or if determined by the appropriate State regulatory authority to be 

necessary to prevent loss of service. 

(b) CRAMMING.—The Federal Trade Commission shall issue rules prohibiting the 

sale of goods and services to an electric consumer unless expressly authorized by 

law or the electric consumer. 

(c) STATE AUTHORITY.—If the Federal Trade Commission determines that a 

State’s regulations provide equivalent or greater protection than the provisions of 

this section, such State regulations shall apply in that State in lieu of the regulations issued by the Commission under this section. 

SEC. 1183. DEFINITIONS. 

For purposes of this subtitle—

(1) ‘‘State regulatory authority’’ has the meaning given that term in section 

3(21) of the Federal Power Act (16 U.S.C. 796(21)). 

(2) ‘‘Electric consumer’’ and ‘‘electric utility’’ have the meanings given those 

terms in section 3 of the Public Utility Regulatory Policies Act of 1978 (16 

U.S.C. 2602). 

Subtitle H—Technical Amendments 

SEC. 1191. TECHNICAL AMENDMENTS. 

(a) Section 211(c) of the Federal Power Act (16 U.S.C. 824j(c)) is amended by—

(1) striking ‘‘(2)’’; 

(2) striking ‘‘(A)’’ and inserting ‘‘(1)’’; 

(3) striking ‘‘(B)’’ and inserting ‘‘(2)’’; and 

(4) striking ‘‘termination of modification’’ and inserting ‘‘termination or modification’’. 

(b) Section 211(d)(1) of the Federal Power Act (16 U.S.C. 824j(d)) is amended by 

striking ‘‘electric utility’’ the second time it appears and inserting ‘‘transmitting utility’’. 

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(c) Section 315 of the Federal Power Act (16 U.S.C. 825n) is amended by striking ‘‘subsection’’ and inserting ‘‘section’’.

PURPOSE OF THE MEASURE

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

conservation and efficiency efforts to enhance the security of the 

United States and decrease dependence on foreign sources of oil. 

SUMMARY OF MAJOR PROVISIONS

Title I—Oil and Gas. Title I provides a variety of production incentives, improves the Federal permitting process and expedites 

the construction of the Alaska Natural Gas Pipeline to increase domestic production of oil and gas supplies in order to meet the rising 

demand expected over the next 20 years. Subtitle A permanently 

authorizes the Strategic Petroleum Reserve, which will protect oil 

markets against severe supply disruptions. The subtitle provides financial relief to encourage development of deep water production 

and production from deep natural gas wells in the Central and 

Western Planning Areas and a portion of the Eastern Planning 

Area in the Gulf of Mexico, as well as provide royalty relief to marginal wells located on Federal lands and the Outer Continental 

Shelf in order to extend the life of wells that might be abandoned 

due to economic factors. In Alaska, the Secretary of the Interior is 

authorized to provide royalty relief to existing, non-producing offshore leases. Subtitle B includes several provisions that will improve access to Federal lands, as well as expedite the designation 

and approval of permits on multiple use designated lands and improve inspection and enforcement of existing permits. In an effort 

to improve energy infrastructure development, the Secretaries of 

the Interior and Agriculture are instructed to designate energy corridors on western lands that can be used for the deployment of energy transportation and transmission rights-of-way. Subtitle C authorizes the expedited certification and permitting of a natural gas 

pipeline to transport natural gas from Alaska to markets in the 

continental United States in order to meet rapidly growing demand 

for natural gas. Over 30 trillion cubic feet of Alaska natural gas 

have been discovered and developed, but has been stranded due to 

the risks involved in undertaking this enormous and costly construction project. The construction of a pipeline will stimulate further development of natural gas resources in Alaska. 

Title II—Coal. Title II contains provisions that provide critical 

research of our most abundant fossil resource, coal. The development of cleaner burning coal, as well as the improvement of Federal mining rules to provide operators the flexibility to optimize the 

recovery of existing and new coal production, are also included. 

Today, more than one-half of U.S. electricity is generated from low 

cost domestic coal and can play a greater role in meeting future demand. At current consumption rates, it would provide more than 

250 years of supply. The coal option needs to be preserved to ensure a diversity of supply, and affordable and reliable electricity. 

Subtitle A authorizes the Clean Coal Power Initiative, which provides $200 million annually to be applied toward clean coal research in coal based gasification technologies. The Secretary of Energy is charged with setting increasingly restrictive emission tarVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00128 Fmt 6659 Sfmt 6602 E:\HR\OC\SR043.XXX SR043
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gets over the life of the program to develop state-of-the-art technology. Subtitle B amends several provisions of the Mineral Leasing Act governing the Federal Coal Leasing Program, including 

those pertaining to lease modifications to avoid the bypass of coal, 

mining requirements for logical mining units, payment of advance 

royalties, and the deadline for submission of a coal lease operation 

and reclamation plan. Subtitle C authorizes the Secretary of the 

Interior to review the Department of Interior’s authority to resolve 

conflicts between the development of coal and coalbed methane 

from the same lease. 

Title III—Indian Energy. Title III, referred to as the Indian Tribal Energy Development and Self-Determination Act of 2003, assists 

Indian Tribes in the development of Indian energy resources by increasing Tribes’ internal capacity to develop their own resources by 

providing grants and technical assistance, and streamlining the approval process for Tribal leases, agreements, and rights-of-way so 

that outside parties have more incentive to partner with Tribes in 

developing energy resources. Included in this title are provisions 

creating an Office of Indian Energy Policy and Programs within the 

Department of Energy to support the development of tribal energy 

resources. Section 305 makes Dine Power Authority, a Navajo Nation enterprise, eligible for funding under this title. Section 306, directs the Secretary of Housing and Urban Development to promote 

energy efficiency for Indian housing. 

The title also provides a complete substitute for title 26 of the 

Energy Policy Act of 1992. Sections 2602 and 2603 authorizes the 

Secretary of the Interior to provide grants to tribes to develop and 

utilize their energy resources and to enhance the legal and administrative ability of tribes to manage their resources. Section 2604 

establishes a process by which an Indian tribe, upon demonstrating 

its technical and financial capacity, could negotiate and execute energy resource development leases, agreements and rights-of-way 

with third parties without first obtaining the approval of the Secretary of the Interior. Section 2605 authorizes WAPA to make 

power allocations to meet the firming and reserve needs of Indianowned energy projects and acquire power generated by Indian 

tribes for firming and reserve needs, so long as the rates and terms 

are competitive. Section 2606 authorizes the Secretary of the Interior to review activities authorized under the Indian Mineral Development Act. Section 2607 authorizes a study of wind and hydropower potential along the Missouri River. 

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

nuclear energy continues as a major component of the Nation’s energy supply. Price Anderson liability protection is permanently extended for both NRC licensees and DOE contractors, coverage is increased and indexed for inflation, and non-profit contractors of the 

Department are made subject to payment of penalties assessed for 

nuclear safety violations. The Secretary of Energy is authorized to 

provide loan guarantees and purchase agreements in financing new 

nuclear plants, if the plants are needed for energy security, to ensure fuel or technology diversity, or to attain clean air goals. The 

Secretary’s loan guarantee authority may extend to half of a 

project’s cost and up to 8400 megawatts of new plant construction 

are eligible for assistance. A research, development, and construction project is authorized for a new test reactor, to be constructed 

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at the Idaho National Engineering and Environmental Laboratory, 

to provide a national testbed for advanced reactor technologies and 

for co-generation of hydrogen by nuclear energy. This advanced test 

reactor must provide improved attributes over existing plants. Limits, with several listed exemptions, are imposed on future sales or 

transfers of government stockpiles of uranium, subject to tests that 

fair market value is received for sales and that national security 

is not adversely impacted. 

Title V—Renewable Energy. Title V provides for an ongoing assessment of renewable energy resources, extends existing authority 

for incentive programs for production of renewable electricity, requires an update of energy plans for insular areas, and requires 

the Federal government to purchase a set amount of electric energy 

from renewable resources. Subtitle B amends the Federal Power 

Act to require the consideration, and upon meeting certain requirements, adoption of applicant-proposed alternatives by Federal resource agencies in imposing mandatory conditions or fishway prescriptions on hydroelectric licenses.

Subtitle C updates the Geothermal Steam Act by amending the 

leasing provisions to replicate more closely aspects of the oil and 

gas leasing law by changing from a system in which the Federal 

Government determines where the high value geothermal prospects 

are located by designating ‘‘Known Geothermal Resource Areas’’ to 

a competitive leasing system as well as directing other actions for 

the purpose of facilitating new development of Geothermal Resources. 

The programs authorized in Subtitle D are designed to encourage 

the use of biomass from Federal or Indian lands to produce electric 

energy, transportation fuels, or substitutes for petroleum products, 

and to encourage removal of hazardous fuels from the highest risk 

areas on Federal and Indian lands and to develop new technology 

to use biomass. The programs are not intended to off-set the costs 

of the production of existing petroleum-based products, such as 

plastics. The grants are to be awarded to individuals in communities or Indian reservations that are located near an area that suffers from, or is at significant risk from, catastrophic wildfire, disease, or insect infestation. 

Title VI—Energy Efficiency. Title VI sets new performance requirements for the operations of Federal agencies and buildings, requires Federal agencies to procure only energy efficient products, 

and requires energy use metering in all Federal buildings. It permanently authorizes the Energy Savings Performance Contracting 

program, and authorizes pilot projects under such program for 

‘‘non-building’’ applications. The bill authorizes funding for new 

programs to expand state and local energy efficiency programs to 

improve efficiency in low-income communities and public buildings 

such as schools, hospitals and government facilities, and the bill 

provides for funding to States and local governments to encourage 

consumers to exchange existing appliances for new, more energy efficient units. The bill also sets by law energy efficiency standards 

for a number of new consumer products, and calls on the Department of Energy to initiate rulemaking processes to set standards 

for others. It requires the Federal Trade Commission to review and 

improve energy efficiency labeling programs, and authorizes funding for the Energy Star program and a consumer education proVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00130 Fmt 6659 Sfmt 6602 E:\HR\OC\SR043.XXX SR043
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gram on HVAC maintenance. The bill includes a number of 

changes to existing public housing law to enable improved energy 

efficiency in the construction and maintenance of public housing, 

improves Federal efficiency standards for public housing facilities, 

and requires public housing agencies to purchase energy efficient 

products. 

Title VII—Transportation Fuels. Title VII makes a number of 

changes to the alternative fuel vehicle mandate program applicable 

to Federal, State, local and fuel provider vehicle fleets pursuant to 

the Energy Policy Act of 1992. In particular, credits towards compliance with fleet mandates can be accrued for the actual use of alternative fuels, the purchase of neighborhood electric vehicles, investment in alternative fuel infrastructures, or equivalent contributions towards other fleets compliance with their mandates through 

the purchase of vehicles or fueling infrastructure. The bill requires 

a complete review of alternative fuel vehicle mandate programs, 

and enables States to enact regulations to allow alternative fuel vehicles to use High Occupancy Vehicle lanes regardless of the number of passengers carried. The bill removes the 50 percent cap on 

biodiesel credits. The bill requires the National Highway Transportation Safety Administration (NHTSA) to additionally consider the 

effects on passenger safety and employment levels in the U.S. auto 

industry when setting fuel economy standards, requires an analysis 

of proposed changes, and extends incentives for ‘‘dual-fuel’’ vehicles 

for another four years. It requires the Federal fleet to improve its 

fuel economy by 3 miles per gallon by 2005 relative to 1999 levels, 

authorizes funding for improved railroad efficiency programs, and 

authorizes a weight exemption of 400 lbs for heavy duty trucks 

that install approved devices to limit engine idling. 

Title VIII—Hydrogen. Title VIII reauthorizes and updates the 

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

research and development programs. The title also authorizes new 

research and development programs for hydrogen vehicle technologies (‘‘FreedomCAR’’) and for use as a transportation fuel. The 

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

vehicle fleets, stationary power applications (including by Indian 

tribes and as distributed generation facilities using renewable energy), national parks, and international projects. The title requires 

Federal agencies to consider how they can incorporate hydrogen 

and fuel cell technologies into their missions, and sets new mandates for displacement of Federal electric energy demand via fuel 

cells and use of hydrogen fueled vehicles in Federal fleets. 

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

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

and Environment, and Management. Authorizations are provided 

in each Subtitle for the programs described therein. Broad goals 

are established to guide the research and development activities of: 

diversifying energy supplies, increasing energy efficiency, decreasing dependence on foreign energy supplies, improving energy security, and decreasing environmental impact. The Secretary is annuVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00131 Fmt 6659 Sfmt 6602 E:\HR\OC\SR043.XXX SR043
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ally directed to publish specific goals in major program areas consistent with these broad goals. The Management section includes 

initiatives to improve technology transfer and small business interactions, to authorize funding for science education, and to create a 

new Undersecretary for Science and Energy. 

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

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

The bill requires establishment of training guidelines for electric 

energy industry personnel, establishment of centers for building 

technologies and power plant operations training, and increased activity by the Department of Energy to improve recruitment of 

under-represented groups into energy fields of education and employment. The Secretary of Labor is required to hire and train sufficient Federal mine operators to ensure safety of mining activities. 

Title XI—Electricity. Title XI will reduce regulatory uncertainty, 

promote transmission infrastructure development and security, and 

increase consumer protections. Subtitle A requires mandatory rules 

for operation to ensure transmission grid reliability. Subtitle B remands the proposed rulemaking on Standard Market Design to 

FERC and prohibits issuance of a final rule before July 1, 2005. 

Subtitle C protects transmission access for native load customers 

and authorizes FERC to exercise limited jurisdiction over unregulated transmitting utilities (like municipals and cooperatives) to ensure open access to the transmission grid. It also directs FERC to 

issue rules on transmission pricing policies and cost allocation for 

transmission expansion. Subtitle D amends the Public Utility Regulatory Policies Act of 1978 (PURPA). It prospectively repeals the 

mandatory purchase and sale from qualifying facilities requirements on electric utilities if there is a competitive market, meaning 

an independently administered, auction-based day ahead and real 

time market. Subtitle E repeals the Public Utility Holding Company Act of 1935 (PUHCA). Subtitle F addresses market transparency and manipulation and increases penalties for violations of 

the Federal Power Act and the Natural Gas Act. Subtitle G directs 

the Federal Trade Commission to promulgate rules to increase consumer protections. Subtitle H makes technical changes in the Federal Power Act. 

BACKGROUND AND NEED

Nearly five decades ago energy demand in the United States 

began exceeding domestic supply. That trend has increased over 

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

economy. Current Department of Energy projections indicate that 

the disparity between energy supply and demand will continue to 

grow. The widening gap between supply and demand, accompanied 

by reliance on foreign sources to close that gap, has created profound concerns in the Congress over the Nation’s energy security. 

The supply and demand gap places pressure on the market and 

leads to volatile prices, exacerbating economic problems. Coupled 

with those concerns is the recognition that meeting demand must 

be accomplished in an environmentally sound manner. A combination of energy production, conservation, efficiency, and development 

of new technologies is the bedrock of a sound energy policy aimed 

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at closing the supply and demand imbalance. Such a policy is necessary to ensure the country’s continued growth and prosperity and 

to protect our national security. 

PRODUCTION

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

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

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

deficit. Currently, the United States consumes roughly 19 million 

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

by 2.5 percent per year from 1999 to 2020, a higher pace than that 

forecast for energy demand as a whole. The growing demand for 

petroleum used in transportation is of particular concern to the 

United States for a number of reasons, including energy security 

issues related to increasing dependence on foreign oil, and environmental concerns over emissions of air pollutants and greenhouse 

gases resulting from increased oil usage. 

Projected growth in domestic production of natural gas and coal 

provides a limited counterbalance to the dismal oil outlook. Over 

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

1.3 percent per year, and coal by 0.9 percent per year. Natural gas 

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

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

the U.S. Even though production is expected to grow in the two 

sectors, demand for natural gas is projected to outpace supply, and 

neither fuel is able to offset the overall gap between energy supply 

and energy demand in the United States. 

Despite the growing dependence on imports, the Nation has a 

wealth of domestic resources that are currently untapped. The 

United States currently has an estimated 22.4 billion barrels of 

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

Alaska. A 1999 National Petroleum Council study found that the 

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

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

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

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

oil remain high, but domestic producers need additional incentives 

to encourage the development of available resources. 

Resource development on onshore Federal land administered by 

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

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

percent of its coal production; 20 percent of its wind power production; and 48 percent of its geothermal energy production. Oil and 

gas development on the OCS, administered by the Minerals Management Service (MMS), is projected to produce more than 25 percent of both the Nation’s oil and natural gas in 2003. In addition 

to traditional sources of energy, Federal lands provide significant 

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renewable resources, accounting for 17 percent of the Nation’s hydropower, 20 percent of its wind power, and 48 percent of its geothermal production. However, various regulatory restrictions and 

processes hinder full development of all of these resources. 

Production on Federal lands and in the OCS can be encouraged 

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

relief to increase their economic viability. Other energy sources 

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

In addition to their potential for providing new domestic energy 

production, Federal lands could also play an important role in developing a comprehensive interstate delivery system for the Nation’s energy supplies. Streamlining the permitting and siting of 

energy infrastructure investments on Federal lands will add to the 

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

There are abundant energy resources available for production on 

Indian Lands. Development of those resources must be encouraged. 

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

nuclear and hydroelectric power can provide significant levels of 

power with zero air emissions. While renewables can and must 

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

An important aspect of accessing available domestic energy supplies will be the assurance that supplies are able to reach the growing demand. A 1999 study published by the INGAA Foundation estimates that $47.7 billion in new investment in pipeline infrastructure is needed to deliver new gas supplies. Over 30 trillion cubic 

feet of natural gas have already been discovered in Prudhoe Bay 

in Alaska. At present, there is no viable means of moving the gas 

to market. As a result, oil producers have been reinjecting the gas 

into the formation for later use. Construction of a pipeline to bring 

this gas to markets in the lower 48 states would stimulate additional production of natural gas on the North Slope and other areas 

of Alaska. 

Siting difficulties for electric transmission lines is a major factor 

hindering expansion of the electric system. Better coordination 

among the States is needed on transmission siting. 

Recent instability in the electricity industry may also limit needed infrastructure investment. Lack of certainty as to the viability 

of market structures and the financial stability of market participants impedes access to and increases the cost of capital for the 

electricity sector. Delay or cancellation of a number of power plants 

and declining investment in transmission have raised concerns that 

shortages loom. The Energy Policy Act of 1992 facilitated the development of a competitive electric sector by allowing non-utility 

power producers to compete in wholesale markets. Utilities were 

required to open their transmission lines to these new competitors. 

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These changes in the law allowed development of the merchant 

generator and power marketer sectors. Only a few years ago, merchant generators and power marketers had soaring stock prices 

and held high expectations for strong returns. Today, the merchant 

industry is in a crisis and even the stocks of traditional utilities 

have declined measurably. Many companies have halted new power 

plant development. According to Platts, for the period of January 

2000 through July 2002, more than 90,000 MW of capacity were 

delayed and more than 86,000 MW of capacity were cancelled. Uncertainty in the marketplace about the rules and regulations that 

will govern generation and transmission facilities contributes to financial instability and endangers reliability of service. 

CONSERVATION AND EFFICIENCY

In addition to increasing domestic supplies of energy, reducing 

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

Administration, as energy prices increased between 1970 and 1986, 

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

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

shifts in the economy offset increasing energy demand. 

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

However, through the Federal Energy Management Program, the 

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

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

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

Preliminary FEMP data indicated that this goal was exceeded by 

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

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

2010 relative to 1990 levels. 

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

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

minimum energy efficiency standards for more than two dozen 

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

12 standards developed by the Department have saved consumers 

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

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

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

the significant energy savings potential in the future. Additional 

incentives are needed to encourage new development in these 

areas. 

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INNOVATION

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

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

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

nuclear technologies to improved conductivity of transmission lines 

to improved efficiency of light bulbs. 

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

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

technology needed for commercially viable hydrogen-powered fuel 

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

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

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

The production of hydrogen is currently inefficient when generated using any fuel source other than nuclear power. Nuclear cogeneration is a new opportunity for nuclear power, along with deployment of the next generation of nuclear reactors. New nuclear 

reactors offer the ability to provide energy security, add to fuel and 

technology diversity, and meet clean air goals. The next generation 

of reactors is safer and more efficient, and is vital to the nation’s 

energy supply. A new and aggressive program into innovative nuclear technologies can foster the development of a new generation 

of nuclear powerplants to meet future demand. 

Innovation for the future also includes improving on technologies 

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

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

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

research will ensure that new power plants meet high standards of 

economic viability and environmental protection. 

The Committee believes that the provisions contained in this legislation, especially when combined with provisions dealing with 

LIHEAP and weatherization that the Committee has approved and 

tax provisions to be offered from the Finance Committee, are the 

genesis for improving the national security of this Nation, enhancing the environment, strengthening self-government for Native 

American communities, decreasing dependence on foreign sources 

of energy, aiding the economy, and diversifying the energy base of 

the country. 

LEGISLATIVE HISTORY

During the 107th Congress, numerous measures were introduced 

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

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

Securing America’s Future Energy Act of 2001, as the primary legislative vehicle. The House of Representatives passed H.R. 4 on August 2, 2001 and it was placed on the Senate Calendar on September 4, 2001 without reference to Committee. The Senate considered comprehensive legislation in the context of Senate AmendVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00136 Fmt 6659 Sfmt 6602 E:\HR\OC\SR043.XXX SR043
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ment 2917, an amendment in the nature of a substitute, offered by 

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

517, the National Laboratories Partnership Improvement Act of 

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

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

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

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

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

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

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

During the 108th Congress, the Committee conducted several 

hearings examining various aspects of energy. On February 13, the 

Committee conducted a hearing on Oil Supply and Prices; on February 25 on Natural Gas Supply and Prices; on February 27 on Energy Production on Federal Lands; on March 4 on the Financial 

Condition of the Electricity Market; on March 6 on Energy Use in 

the Transportation Sector; on March 11 on Energy Efficiency and 

Conservation; and on March 27 on various legislative proposals 

dealing with Electricity. The Committee held business meetings on 

April 8, addressing title V—Renewable Energy, title VI—Energy 

Efficiency, title VIII—Hydrogen, title X—Personnel and Training, 

and title XIII—State Energy Programs; on April 9 to consider title 

I—Oil and Gas and title II—Coal; on April 10 to consider title IV— Nuclear Matters; on April 29 to consider title III—Indian Energy, 

title VII—Transportation Fuels, and title IX—Research and Development; and on April 30 to consider title XI—Electricity. On April 

30, 2003, the Committee voted to order an original bill reported to 

the Senate, including all titles except title XIII, which the Chairman intends to introduce as an amendment during floor consideration of a comprehensive energy bill. Also on April 30, Senator 

Domenici introduced S. 14, the Energy Policy Act of 2003, which 

includes the provisions of this measure as ordered reported. S. 14 

was placed directly on the Senate calendar. 

COMMITTEE RECOMMENDATIONS

The Senate Committee on Energy and Natural Resources, in 

open business section on May 1, 2003, by a majority vote of a 

quorum present recommends that the Senate pass S. , as described herein. 

The roll call vote on reporting the measure was 13 yeas, 10 nays 

as follows: 

YEAS NAYS 

Mr. Domenici Mr. Bingaman 

Mr. Nickles Mr. Akaka 

Mr. Craig Mr. Dorgan 1

Mr. Campbell 1 Mr. Graham 1

Mr. Thomas Mr. Wyden 

Mr. Alexander Mr. Johnson 

Ms. Murkowski 1 Mr. Bayh 1

Mr. Talent 1 Ms. Feinstein 1

Mr. Burns Mr. Schumer 1

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Mr. Smith Ms. Cantwell 

Mr. Bunning 1

Mr. Kyl 

Ms. Landrieu 

1 Indicates vote by proxy. 

SECTION-BY-SECTION ANALYSIS

TITLE I—OIL AND GAS 

Subtitle A—Oil and Natural Gas Production Incentives 

Section 101. Permanent Authority to Operate the Strategic Petroleum Reserve 

Section 101 permanently authorizes the Strategic Petroleum Reserve. 

Section 102. Study on Petroleum and Natural Gas Storage Capacity 

Section 102 requires the Secretary of Energy to undertake a review of national minimum operating working storage levels across 

the nation and prepare a report for Congress on the storage outlook 

and the minimum inventories the U.S. economy can function on 

without interruption or rationing. 

Section 103. Program on Oil and Gas Royalty-in-Kind 

Section 103 provides that all royalty accruing for oil or gas under 

a Federal lease issued pursuant to the Mineral Leasing Act or the 

Outer Continental Shelf Lands Act shall, on the demand of the Secretary, be paid in oil or gas beginning on the date of enactment 

through September 30, 2013. The section gives the Secretary the 

authority to retain and use a portion of the revenues generated 

from RIK sales to pay costs of transporting, processing, or disposing of the royalty production. The Secretary may receive royalties in kind only if the Secretary determines that doing so provides 

benefits to the United States greater than or equal to those likely 

to have been received had royalties been taken in value. 

Section 104. Marginal Well Production Incentives 

Section 104 defines ‘‘marginal property’’ with respect to Federal 

onshore oil and gas leases. It sets forth conditions for the reduction 

of the royalty rate on such properties, and sets the reduced royalty 

rate. The section provides authority for the Secretary of the Interior to prescribe different standards for royalty relief by regulation. 

It directs the Secretary to issue rules prescribing standards for royalty relief for marginal properties under federal oil and gas lease 

on the Outer Continental Shelf. 

Section 105. Inventory of OCS Resources 

Section 105 requires the Secretary to survey all OCS oil and gas 

resources currently in existing production areas and those under 

moratoria to develop an inventory of potential oil and gas resources 

of the U.S. The Secretary is directed to use data on resources in 

Canada and Mexico, as well as using any available technology (except for drilling which is explicitly prohibited), including 3–D seisVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00138 Fmt 6659 Sfmt 6602 E:\HR\OC\SR043.XXX SR043
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mic technology, to develop accurate domestic oil and gas resource 

estimates. 

Section 106. Royalty Relief for Deep Water Production 

Section 106 provides royalty relief to encourage the development 

of oil and gas resources located in water depth between 400–1,600 

meters in the Western and Central Gulf of Mexico Planning Areas 

and a specified portion of the Eastern Gulf of Mexico Planning 

Area. This section will provide the same level of royalty relief as 

currently in effect to all lease sales over the next five years. 

Section 107. Alaska Offshore Royalty Suspension 

Section 107 authorizes the Secretary of the Interior under the 

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

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

specified in the section. 

Section 108. Orphaned, Abandoned, or Idled Wells on Federal 

Lands 

Section 108 provides a five-year, $20,000,000 annual authorization to the Secretary of the Interior to develop a program to remediate, reclaim, and close, orphaned, abandoned, or idled wells on 

Federal lands administered by the Secretaries of the Interior and 

Agriculture. This section also establishes a technical assistance 

program to provide assistance to states in dealing with orphaned 

and abandoned wells on state and private lands. 

Section 109. Incentives for Natural Gas Production from Deep Wells 

in the Shallow Water of the Gulf of Mexico 

Section 109 directs the Secretary of the Interior to publish a final 

rule providing royalty incentives for shallow water, deep gas production on the Outer Continental Shelf in the Gulf of Mexico wholly west of 87 degrees, 30 minutes West longitude. 

Section 110. Alternate Energy-Related Uses on the Outer Continental Shelf 

Section 110 amends the Outer Continental Shelf Lands Act to 

provide authority to the Secretary of the Interior to grant easements and rights-of-way for energy and related purposes on the 

Outer Continental Shelf, as specified. The section does not allow 

the grant of easements or rights-of-way for activities that support 

the exploration, development, or production of oil and gas in areas 

where oil and gas preleasing, leasing and related activities are prohibited by a Congressional moratorium or a withdrawal pursuant 

to section 12 of the Outer Continental Shelf Lands Act. The authority does not apply to any area within the exterior boundaries of any 

unit of the National Park System, National Wildlife Refuge System, or National Marine Sanctuary System, or any National Monument. 

Section 111. Coastal Impact Assistance 

Section 111 authorizes the appropriation for fiscal years 2004 

through 2009 of an amount equal to 12.5 percent of qualified Outer 

Continental Shelf revenues for payments to Producing Coastal 

States with approved Coastal Impact Assistance Plans and political 

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subdivisions in accordance with a formula set forth in the section. 

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

to the coastal political subdivisions in the state. Amounts provided 

under the section must be used for projects and activities for the 

conservation, protection, or restoration of coastal areas, including 

wetlands, mitigating damage to fish, wildlife, or natural resources, 

planning assistance and administrative costs of complying with the 

provisions of this section, implementation of approved marine, 

coastal or conservation plans, and mitigating the impacts of Outer 

Continental Shelf activities through funding onshore infrastructure 

and public service needs. 

Section 112. National Energy Resource Database 

Section 112 directs the Secretary of the Interior to develop the 

National Energy Data Preservation Program, working in cooperation with the States. This program would archive geological, geophysical, and engineering data and samples related to oil and gas 

development. 

Section 113. Acreage Limitation 

Section 113 amends the Mineral Leasing Act provision relating 

to the limitation on the amount of acreage that can be held by a 

person under lease in any one state. 

Section 114. Hawaii Energy Assessment 

Section 114 requires the Secretary of Energy to assess the economic implication of the dependence of the State of Hawaii on oil 

as the principal source of energy for the State. 

Subtitle B—Access to Federal Lands 

Section 121. Office of Federal Energy Permit Coordination 

Section 121 authorizes the creation of the Office of Federal Energy Permit Coordination within the Executive Office of the President. The office will be staffed with experts from Federal agencies 

and departments as needed. The office is charged with preparing 

an annual report to Congress detailing activities put in place to coordinate and expedite Federal decisions on energy projects and 

making recommendations on regulatory improvements needed to 

improve the federal permitting process. 

Section 122. Pilot Program to Improve Federal Permit Coordination 

Section 122 requires the Secretary of the Interior to establish a 

Federal Permit Streamlining Pilot Project. Six Western offices of 

the Bureau of Land Management (BLM) are identified for participation in the project. The provision requires that relevant federal 

agencies deploy staff to work with BLM land managers as a team 

on all environmental permits and land use planning documents in 

order to coordinate and improve Federal decisionmaking with respect to the permits. Each office will prepare an annual report for 

submission to the President. The section directs the Secretary of 

the Interior to assign such additional personnel to the six BLM offices as necessary to ensure effective implementation of the Pilot 

Program and the other programs administered by the BLM offices 

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pursuant to the statutory mandate for the multiple use of public 

lands. 

Section 123. Onshore Federal Leasing 

Section 123 directs the Secretary of the Interior to ensure expeditious compliance with the requirements of the National Environmental Policy Act of 1969, improve consultation and coordination 

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

available for leasing. The section directs the Secretary to improve 

inspection and enforcement of oil and gas activities under the onshore oil and gas leasing program. The section authorizes additional appropriations for these purposes. 

Section 124. Estimate of Oil and Gas Resources Underlying Onshore Federal Lands 

Section 124 requires the Secretary of the Interior to expand the 

inventory of onshore Federal lands required in the Energy Act of 

2000, as specified. 

Section 125. Split Estate Federal Oil and Gas Leasing and Development Practices 

Section 125 requires the Secretary of the Interior to undertake 

a review of the policies and management practices of federal subsurface oil and gas development and the effects on privately-owned 

surface lands. 

Section 126. Coordination of Federal Agencies To Establish Priority 

Energy Transmission Rights-of-Way 

Section 126 requires the Secretary of the Interior, with respect 

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

National Forest System lands, to designate utility corridors in 

Western States and to incorporate such corridors into land use and 

resource management plans within 24 months following enactment 

of the section. The section also requires the Secretary of Energy to 

develop a memorandum of understanding with the Secretary of the 

Interior, the Secretary of Agriculture, and the Secretary of Defense 

to coordinate applicable Federal authorizations and environmental 

reviews related to a proposed or existing utility facility. 

Subtitle C—Alaska Natural Gas Pipeline 

Section 131. Short Title 

Section 131 designates the subtitle ‘‘The Alaska Natural Gas 

Pipeline Act’’. 

Section 132. Definitions 

Section 132 defines terms used in the subtitle. 

Section 133. Issuance of Certificate of Public Convenience and Necessity 

Section 133 stipulates several criteria on the Federal Energy 

Regulatory Commission’s (FERC) authority to issue a certificate of 

public convenience and necessity authorizing the construction, operation, expansion and regulation of the Alaska gas pipeline. The 

138

section finds that there is public need and sufficient downstream 

capacity. The section prohibits FERC from approving a Northern 

pipeline route through Canada. The section also requires that procedures governing the conduct of open seasons for capacity on an 

Alaska natural gas transportation project be established by FERC 

consistent with promoting competition in the exploration and production of natural gas in Alaska. The language clarifies that regular Natural Gas Act certificate procedures will apply to new or expanded projects to deliver Alaska gas from the end point of the 

project to the contiguous United States. FERC is authorized to provide for reasonable access to the pipeline for transportation of the 

Alaska royalty gas for local consumption. 

Section 134. Environmental Review 

Section 134 designates FERC as the lead agency for purposes of 

NEPA compliance; requires a single EIS which consolidates the environmental reviews of all Federal agencies concerning the project; 

requires all Federal agencies to meet deadlines established by 

FERC; and establishes an 18-month deadline for completion of the 

EIS. 

Section 135. Pipeline Expansion 

Section 135 establishes several criteria that must be met before 

FERC is authorized to permit expansion of the pipeline including 

that the expansion will not undermine the operation or financial 

stability of the pipeline. 

Section 136. Federal Coordinator 

Section 136 establishes the Office of the Federal Coordinator 

within the Executive branch. This position will serve at the pleasure of the President and be approved by the Senate. The Coordinator will serve a term that lasts one year beyond the completion 

of construction on the pipeline. The Federal Coordinator is authorized to overrule terms and conditions imposed by Federal agencies 

if they are not required by law and would significantly delay the 

construction of an Alaska pipeline, excluding specified FERC authorities. The section also directs the Federal Coordinator to work 

with the State of Alaska and transfers to the Federal Coordinator 

the functions and authority of the Office of Federal Inspector for 

the Alaska Natural Gas Transportation System. 

Section 137. Judicial Review 

Section 137 provides the U.S. Court of Appeals for the District 

of Columbia Circuit with exclusive jurisdiction over claims arising 

under this subtitle and provides a deadline for filing claims. It also 

provides for expedited consideration of claims arising under this 

subtitle or under the Alaska Natural Gas Transportation Act of 

1976.

Section 138. State Jurisdiction Over In-State Delivery of Natural 

Gas 

Section 138 restates existing law, which is that the State may 

regulate local distribution of natural gas. It clarifies that other 

pipelines in Alaska are not precluded by the provision banning a 

particular route in section 704(d). It restates existing law providing 

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the FERC jurisdiction over interstate pipeline rates and directs the 

FERC to confer with the State of Alaska as authorized under the 

Natural Gas Act regarding rates for transporting gas for use within 

the State. 

Section 139. Study of Alternative Means of Construction 

Section 139 requires the Secretary of Energy to conduct a study 

of alternative approaches to the construction and operation within 

18 months following enactment, unless an application for certificate 

of public convenience and necessity has been filed with FERC. 

Section 140. Clarification of ANGTA Status and Authorities 

This section is self-explanatory. 

Section 141. Sense of Congress 

Section 141 is a Sense of Congress urging pipeline sponsors to 

use North American steel and to negotiate a project labor agreement to expedite construction. 

Section 142. Participation of Small Business Concerns 

Section 143 is a Sense of Congress urging pipeline sponsors to 

maximize the participation of small business concerns in contracts. 

Requires the Comptroller to conduct a study to the extent small 

businesses participate in construction of the pipeline. 

Section 143. Alaska Pipeline Construction Training Program 

Section 143 authorizes the Secretary of Labor to make grants to 

the Alaska Department of Labor and Workforce Development to 

train dislocated workers, including Alaska Natives, in the construction and operation of the Alaska gas pipeline. Up to $20 million is 

authorized to carry out this section. 

Section 144. Loan Guarantees 

Section 144 authorizes the Secretary of Energy to enter into an 

agreement with one or more of the certificate holders authorizing 

the construction of the Alaska natural gas transportation project to 

provide a Federal loan guarantee up to 80 of the total capital costs 

and not to exceed $18 billion. 

Section 145. Sense of Congress on Natural Gas Demand 

Section 145 is a Sense of the Congress regarding future natural 

gas demand and need for additional production from Alaska, the 

continental U.S. and Canada. 

TITLE II—COAL 

Subtitle A—Clean Coal Power Initiative 

Section 201. Authorization of Appropriations 

Section 201 provides $200 million annually between 2003–2011. 

The section establishes emissions milestones for the advancement 

on technology eligible for funding, requires that 80 percent of the 

funding be used for gasification technologies, and requires the Secretary to submit a report to Congress regarding expenditure of 

funds on projects selected before September 30, 2004. 

140

Section 202. Project Criteria 

Section 202 requires the Secretary to fund gasification technologies, carbon separation and capture technologies, hybrid gasification/combustion and other technologies. All projects must demonstrate financial viability before they are eligible for funding assistance under this program. Federal assistance can not exceed 50 

percent of project funding. 

Section 203. Report to Congress 

Section 203 requires the Secretary of Energy to report to Congress on the assessment of the program and whether or not the 

technical milestones have been achieved. 

Section 204. Clean Coal Centers of Excellence 

Section 204 authorizes the Secretary of Energy to make competitive, merit-based grants to universities for research of clean coal 

technology. 

Subtitle B—Federal Coal Leases 

Section 211. Coal Lease Modification 

Section 211 authorizes the Secretary to add no more than 320 

contiguous or cornering acres to a coal lease upon finding that such 

lease modification would be in the interest of the United States, 

would not displace competitive interest in the lands, and would not 

include lands or deposits that can be developed as part of another 

potential or existing operation. 

Section 212. Mining Plans 

Section 212 provides that the Secretary, upon making certain determinations as specified, may establish a period of greater than 40 

years for the reserves of an entire logical mining unit to be mined. 

Section 213. Payment of Advanced Royalties 

Section 213 authorizes the Secretary to accept advance royalties 

in lieu of the condition of continued operation for not to exceed 

twenty years and eliminates the prohibition on using advance royalties paid during the initial twenty year term of a lease to reduce 

production royalties after the twentieth year of a lease. 

Section 214. Elimination of Deadline For Submission of Coal Lease 

Operation and Reclamation Plan 

Section 214 eliminates the deadline for submission of the coal 

lease operation and reclamation plan.

Section 215. Application of Amendments 

Section 215 pertains to the applicability of the amendments to a 

coal lease issued before the date of enactment of the Act. 

Subtitle C—Powder River Basin Share Mineral Estate 

Section 221. Resolution of Federal Resource Development Conflicts 

in the Powder River Basin 

Section 221 requires the Secretary of the Interior to review the 

Department authority to resolve a conflict between the developVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00144 Fmt 6659 Sfmt 6602 E:\HR\OC\SR043.XXX SR043
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ment of coal and coalbed methane from the same lease. The Secretary is required to report to Congress on a potential solution to 

this problem. 

TITLE III—INDIAN ENERGY 

Section 301. Short Title 

Section 301 designates Title III as ‘‘Indian Tribal Energy Development and Self-Determination Act of 2003. 

Section 302. Office of Indian Energy Policy and Programs 

Section 302 establishes an Office of Indian Energy Policy and 

Programs within the Department of Energy that is charged with 

improving the energy infrastructure to increase resource development, improve electrification, and lower energy costs on tribal land. 

This section authorizes $20 million in annual grant authority to 

the Director of this office to promote planning and development of 

energy infrastructure. In addition, $2 billion is authorized to provide loan guarantees for energy projects. 

Section 303. Indian Energy 

Section 303 amends title XXVI of the Energy Policy Act of 1992 

as follows: 

TITLE XXVI—INDIAN ENERGY 

Section 2601. Definitions 

Section 2601 defines terms used in the title. 

Section 2602. Indian Energy Resource Development 

Section 2602 authorizes the Secretary of Energy to provide tribes 

grants, and low-interest loans as well as technical assistance in developing energy resources located on Indian land and to expand a 

tribe’s technical and managerial abilities. 

Section 2603. Indian Tribal Energy Resource Regulation 

Section 2603 authorizes the Secretary of the Interior to provide 

grants in order to cultivate legal training and implementation of 

tribal laws governing the development of energy projects and protection of the environment. The section also provides funding for 

feasibility studies as necessary to help tribes develop their energy 

resources. 

Section 2604. Leases Involving Energy Development or Transmission 

Section 2604 authorizes tribes to enter into leases or business 

agreements and issue rights-of-way without Secretarial approval, 

so long as those leases, business agreements, or rights-of-way conform to regulations promulgated by the Secretary. It establishes a 

process by which a tribe must submit a plan governing leases and 

rights-of-way to the Secretary for approval. Prior to approval, the 

Secretary must be satisfied that the plan includes provisions regarding lease and contract terms, an environmental review process, 

and public notification and comment. The section also requires the 

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Secretary to conduct an annual trust asset evaluation as well as 

providing for compliance review of any energy resource agreement. 

Section 2605. Federal Power Marketing Administrations 

Section 2605 encourages the Administrators of the Bonneville 

Power Authority, and Western Area Power Authority to support Indian tribal energy development and clarifies their authority to purchase firm and replacement power from tribes and for tribes to use 

WAPA allocations for the same purpose. It also prohibits the Administrator from purchasing power supplies that exceed the prevailing market rates or terms. In addition, it requires the Secretary 

of Energy to review the power allocations made to tribes and any 

impediments to the use of PMA power by tribes. 

Section 2606. Indian Mineral Development Act Review 

Section 2606 directs the Secretary of the Interior to submit a report to the relevant Committees about possible barriers to energy 

development contained in the Indian Mineral Development Act, 

with suggestions for removing those impediments. 

Section 2607. Wind and Hydropower Feasibility Study 

Section 2607 requires the Secretary of Energy in cooperation 

with the Secretary of Interior and the Secretary of the Army to 

study the feasibility of developing a demonstration project to use 

wind energy generated by Indian tribes and hydropower generated 

by the Army Corps of Engineers on the Missouri River to supply 

firming power to Western Area Power Authority. 

Section 304. Four Corners Transmission Project 

Section 304 makes Dine Power Authority, of the Navajo Nation, 

eligible for funding under section 2602 and section 302 of this Act. 

Section 305. Energy Efficiency and Structures on Indian Lands 

Section 305 directs the Secretary of Housing and Urban Development to provide technical assistance to Tribes and other Tribal 

housing entities that will initiate and expand the use of energysaving technologies in new home construction and housing rehabilitation. 

Section 306. Consultation with Indian Tribes 

Section 306 requires the Secretary of Energy and Secretary of 

the Interior to consult with Indian Tribes in carrying out this Act.

TITLE IV—NUCLEAR MATTERS 

Subtitle A—Price-Anderson Act Amendments 

Section 401. Short Title 

Section 401 is self-explanatory. 

Section 402. Extension of Indemnification Authority 

The authorization period is indefinitely extended for indemnification provisions for Nuclear Regulatory Commission (NRC) licensees 

and Department of Energy (DOE) contractors. 

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Section 403. Maximum Assessment 

Section 403 increases the maximum annual assessment under 

the standard deferred premium on NRC licensees from $10 million 

to $15 million, and adjusts this number for inflation in the future. 

Section 404. Department of Energy Liability Limit 

Section 404 sets the total amount of indemnification for DOE 

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

the future. 

Section 405. Incidents Outside the United States 

This section increases the amount of indemnification for DOE 

contractors engaged in nuclear activities outside the United States 

from $100 million to $500 million. 

Section 406. Reports 

Section 406 requires DOE and NRC to issue a report to Congress 

on the status of the Price-Anderson program by August 2013. 

Section 407. Inflation Adjustment 

Section 407 requires the NRC to adjust for inflation the standard 

deferred premium for NRC licensees every five years. 

Section 408. Treatment of Modular Reactors 

Section 408 allows NRC to consider a combination of small modular reactors at one site to be a single facility for purposes of PriceAnderson indemnification. 

Section 409. Applicability 

Section 409 clarifies that these amendments do not apply to a 

nuclear incident that occurs before the date of their enactment. 

Section 410. Civil Penalties 

Section 410 ends the automatic remission of civil penalties for 

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

Subtitle B—Deployment of New Nuclear Plants 

Section 421. Short Title 

This section is self-explanatory. 

Section 422. Definitions 

This section is self-explanatory. 

Section 423. Responsibilities of the Secretary 

Section 423 allows the Secretary to provide financial assistance 

to supplement private sector financing for new nuclear power 

plants if it is determined that the plant is necessary to contribute 

to energy security, fuel or technology diversity, or clean air attainment goals. The Secretary prescribes terms and conditions for the 

program to protect the financial interests of the nation. Financial 

assistance shall not exceed 50 percent of the project costs. The total 

generating capacity eligible for assistance is 8400 megawatts. 

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Section 424. Regulations 

This section is self-explanatory. 

Subtitle C—Advanced Reactor Hydrogen Co-generation Project 

Section 431. Project Establishment 

This section is self-explanatory. 

Section 432. Project Definition 

Section 432 defines the Project to include research, development, 

design, construction and operation of a hydrogen production co-generation system using an advanced reactor to enable research and 

development on advanced reactors and on alternative approaches 

for hydrogen production. Any reactor studied must offer improved 

attributes over existing commercial reactors of: enhanced safety, reduced waste, enhanced efficiency, potential for enhanced economic 

viability and physical security, and increased proliferation resistance. 

Section 433. Project Management 

Section 433 designates the Idaho National Engineering and Environmental Laboratory (INEEL) as the lead laboratory and requires 

a national steering committee be established to guide the program. 

Section 434. Project Requirements 

Section 434 sets forth project requirements as follows: the industrial lead of the project must be a U.S. company, international cooperation must be sought, the overall project must demonstrate 

both electricity and hydrogen production, cost-shared partnerships 

with U.S. or international industry are encouraged, a system must 

be operational by 2010, the Secretary may waive DOE rule 413.3 

to expedite project progress, up to two teams may be funded to develop competing designs, use of university test facilities is encouraged, the NRC must be involved to develop risk-based criteria for 

future licensing actions, and a comprehensive program plan is to 

be produced and updated annually. Selection of the final project design must maximize cost-sharing opportunities and minimize federal expenditures. 

The Committee anticipates that other national laboratories will 

participate and share in the development of the reactor, which will 

be constructed in Idaho. 

Section 435. Authorization of Appropriations 

This section is self-explanatory. 

Subtitle D—Miscellaneous Matters 

Section 441. Uranium Sales and Transfers 

Section 441 limits annual deliveries of uranium from the government to 3,000,000,000 pounds of U3O8 equivalent annually through 

2009, to 5,000,000 pounds in 2010 and 2011, 7,000,000 pounds in 

2012, and 10,000,000 pounds in subsequent years. It requires sales 

to be conducted through long-term contracts and establishes a preference for government transfer to entities employing recovery and 

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rials. Exemptions to the policy are allowed for sales or transfers to 

TVA in support of the nation’s HEU or tritium needs, to research 

reactors, to replace up to 3,293 metric tons of the contaminated 

uranium provided to USEC prior to privatization, and to support 

an advanced commercial plant with nonstandard fuel requirements. A blanket exemption is provided for sale or transfer in response to an emergency resulting in disruption in supply of uranium to domestic users. Certification by the President is required 

prior to any sale or transfer to assure that the material is not 

needed for national security. The price paid to the Secretary for 

any sale cannot be less than fair market value. The Secretary must 

solicit views from the Department of State and National Security 

Council to assure that any sale will not adversely affect national 

security interests including implementation of the HEU arrangement. A report on implementation is required within 5 years, and 

biennially thereafter. 

Section 442. Decommissioning Pilot Program 

Section 442 establishes a pilot program to decommission and decontaminate the sodium-cooled fast breeder experimental test-site 

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

TITLE V—RENEWABLE ENERGY 

Subtitle A—General Provisions 

Section 501. Assessment of Renewable Energy Resources 

Section 501 requires DOE to carry out periodic assessments of 

renewable energy resources available in the United States, available infrastructure and other relevant information, and requires 

annual reports. 

Section 502. Renewable Energy Production Incentive 

Section 502 extends funding authorization for incentive programs 

for producing electricity from renewable energy sources, expands 

eligibility to cooperatives and municipal utilities, and includes 

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

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

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

geothermal, and closed-loop biomass. 

Section 503. Renewable Energy on Federal Lands 

Section 503 requires the Secretary of the Interior, in consultation 

with DOE and USDA, to develop recommendations on development 

of renewable energy on specified public lands, and report to Congress. The section also requires the Secretary of the Interior to contract with the National Academy of Sciences to study potential for 

renewable energy development in Outer Continental Shelf areas, 

and report to Congress. 

Section 504. Federal Purchase Requirement 

Section 504 requires the Federal Government to purchase not 

less than 3 percent renewable electric energy in fiscal years 2005 

through 2007, increasing to not less than 7.5 percent renewable 

electric energy in fiscal year 2011 and thereafter. The section also 

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provides double credit for renewable electric energy produced and 

used on-site at a Federal facility, as well as for renewable energy 

produced on Federal or Indian lands and used at a Federal facility. 

Section 505. Insular Area Renewable and Energy Efficiency Plans 

Section 505 requires the Secretary of Energy to update the energy surveys, estimates, and assessments in certain insular areas 

and is self-explanatory. 

Subtitle B—Hydroelectric Licensing 

Section 511. Alternative Conditions and Fishways 

Section 511 deals with alternatives to mandatory conditions or 

fishway prescriptions under sections 4(e) and 18 of the Federal 

Power Act and is self-explanatory. 

Subtitle C—Geothermal Energy 

Section 521. Competitive Lease Sale Requirements 

Section 521 directs the Secretary of the Interior to accept nominations for lands to be leased under the Geothermal Steam Act of 

1970. The provision requires the Secretary to hold a competitive 

lease sale at least once every two years in States where there are 

nominations pending and where such lands are otherwise available 

for leasing. The section provides for non-competitive leasing for a 

period of two years for lands for which a competitive sale was held 

but for which no competitive bids were received. The section addresses pending lease applications. 

Section 522. Geothermal Leasing and Permitting on Federal Lands 

Section 522 requires the Secretaries of the Interior and Agriculture to enter into a Memorandum of Understanding regarding 

leasing and permitting for geothermal development on Federal 

lands under their respective jurisdictions. The MOU must identify 

known geothermal resources areas, require a review of management plans where necessary, and establish procedures for application processing. The section requires the establishment of a joint 

data retrieval system.

Section 523. Leasing and Permitting on Federal Lands Withdrawn 

for Military Purposes 

Section 523 requires the Secretaries of the Interior and Defense 

to submit a joint report regarding differences in leasing and permitting procedures for geothermal development under the Geothermal Steam Act of 1970, administered by the Secretary of the 

Interior, and section 2689 of title 10, United States Code, administered by the Secretary of Defense, and procedures for interagency 

coordination. The report will also provide recommendations for legislative or administrative actions that could facilitate program administration, including a common royalty structure. 

Section 524. Reinstatement of Leases Terminated for Failure to Pay 

Rent 

Section 524 authorizes the Secretary to reinstate leases terminated after an inadvertent failure to pay rental payments. 

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Section 525. Royalty Reduction and Relief 

Section 525 requires the Secretary of the Interior to promulgate 

regulations that simplify the methodology of determining the royalties for geothermal production. The Secretary is required to consider the use of a percent of revenue method and to ensure that 

the final rule will result in the same level of royalty revenues as 

the regulation in effect on the date of enactment of the section. The 

section requires that with respect to the direct use of low temperature geothermal resources for purposes other than the generation 

of electricity, the Secretary establish a schedule of fees and collect 

fees pursuant to the schedule in lieu of a royalty. 

Subtitle D—Biomass Energy 

Section 531. Definitions 

This section is self-explanatory. 

Section 532. Biomass Commercial Utilization Program 

Section 532 authorizes a grant program to help offset the cost of 

purchasing certain biomass from Federal or Indian lands for electricity, heat, transportation fuels, or petroleum-based product substitutes. Grants are limited to no more than $20 per green ton of 

biomass delivered. 

Section 533. Improved Biomass Utilization Grant Program 

Section 533 authorizes grants to encourage the use of biomass 

within communities located near areas of Federal lands that are at 

significant risk to catastrophic wildfire, disease or insect infestation, with individual grants limited to no more than $500,000. 

Section 534. Report 

Three years after the date of enactment, the Secretaries of the 

Interior and Agriculture will prepare and submit a joint report to 

Congress that describes the interim results of the program. The report will include, at minimum, information identifying the amount 

and types of acres from which biomass was purchased with grant 

funds; a description of the types of biomass purchased with grant 

funds and the relative quantities of each type; the types of contracts utilized to transfer ownership of the biomass from federal or 

Indian ownership; the uses of the biomass; a description of the proposals for improved use of biomass and their results; a list of grant 

recipients; a list of eligible operations; a list of participating communities; and an evaluation of the economic and environmental 

benefits, if any, that result from the grants awarded under this 

subtitle. 

TITLE VI—ENERGY EFFICIENCY 

Subtitle A—Federal Programs 

Section 601. Energy Management Requirements 

Section 601 changes the baseline for measuring Federal energy 

performance from 1985 to 2000 and requires a 20 percent improvement over 2000 levels by 2013. The section provides exclusions 

from these requirements under certain conditions and directs the 

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Secretary to issue guidelines that establish criteria for excluding 

buildings from these requirements. Agencies are authorized to retain funds appropriated for energy expenditures that are not spent 

because of energy savings in agency buildings and to use those 

funds for energy efficiency and renewable energy projects. 

Section 602. Energy Use Measurement and Accountability 

Section 602 requires Federal buildings to be metered or sub-metered by October 1, 2010, using advanced meters, to the maximum 

extent practicable. Agencies must also develop plans to use realtime electricity consumption data to reduce energy costs and consumption. 

Section 603. Federal Building Performance Standards 

Section 603 directs the Secretary to establish new energy efficiency performance standards for new Federal buildings. Such 

standards shall require that new building achieve energy consumption levels at least 30 percent below specified building codes and 

incorporate sustainable design principles. 

Section 604. Energy Savings Performance Contracts 

Section 604 permanently extends existing authority provided to 

Federal agencies to contract with energy service companies to assume the capital costs of installing energy and water conservation 

equipment and renewable energy systems in Federal facilities or 

buildings, and recover costs and profit from associated energy cost 

savings over the term of the contract. The section expands use of 

Energy Savings Performance Contracts (ESPCs) to cover replacement of existing Federal buildings or facilities with new, more energy-efficient buildings or facilities and expands the definition of 

energy savings to include a reduction in water costs. The section 

also includes authorization for a pilot program for up to 10 ESPC 

contracts to be used for ‘‘non-building applications’’ such as vehicles 

or electric power generation, provided that the aggregate cost of 

projects under the pilot program does not exceed $100 million. 

Section 605. Procurement of Energy Efficient Products 

Section 605 directs agencies to procure, with specified exceptions, 

Energy Star or FEMP-designated energy efficient products and requires agencies to select only premium efficiency motors. 

Section 606. Congressional Building Efficiency 

Section 606 directs the Architect of the Capitol to develop an energy and water conservation plan for Congressional buildings to 

comply with energy efficiency standards applicable to other Federal 

buildings. 

Section 607. Increased Federal Use of Recovered Mineral Components 

Section 607 amends the Solid Waste Disposal Act to provide for 

increased use of recovered mineral components in Federally funded 

projects involving procurement of cement or concrete and requires 

the EPA Administrator to report to Congress on the potential energy savings and environmental benefits that may be realized from 

implementation of existing procurement requirements. 

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Section 608. Utility Energy Service Contracts 

Section 608 amends the National Energy Conservation Policy Act 

to encourage Federal agencies to participate in utility services programs to improve energy efficiency, conserve water, or manage 

electricity demand. 

Section 609. Study of Energy Efficiency Standards 

Section 609 requires the Secretary of Energy to contract with the 

National Academy of Sciences to study the means by which energy 

efficiency standards are determined and the relative merits of 

measurement of energy use and efficiency at the point of energy 

use versus over the full fuel cycle. 

Subtitle B—State and Local Programs 

Section 611. Low Income Community Energy Efficiency Pilot Program 

Section 611 authorizes $20 million for each of fiscal years 2004 

through 2006 to make grants to local governments, community development corporations, and Indian tribes for energy efficiency and 

renewable energy projects (including electric thermal storage technology) in low-income urban and rural communities. 

Section 612. Energy Efficient Public Buildings 

Section 612 authorizes the Secretary of Energy to make grants 

to States to assist local governments to improve energy efficiency 

and environmental quality of public buildings. The section also authorizes such sums as may be necessary for fiscal years 2003 

through 2012, with not more than 30 percent for administration. 

Section 613. Energy Efficient Appliance Rebate Programs 

Section 613 authorizes DOE to provide funds to States with rebate programs for consumers who exchange inefficient appliances 

for new, energy efficient units. 

Subtitle C—Consumer Products 

Section 621. Energy Conservation Standards for Additional Products 

Section 621 establishes test procedures for illuminated exit signs, 

low-voltage dry-type distribution transformers, traffic signal modules, and medium base compact fluorescent lamps; requires the 

Secretary of Energy to prescribe test procedures for ceiling fans, 

vending machines, commercial refrigerators and freezers and to 

prescribe definitions and test procedures for measurement of energy consumption of battery chargers and external power supplies 

in standby mode and, within three years, to determine whether to 

issue energy conservation standards for such products; and requires the Secretary to consider in a public hearing additional covered products to receive energy conservation standards limiting 

standby mode energy consumption. The section requires 

rulemakings to establish standards for three products and establishes standards for six others. It also provides that existing State 

and local standards for a product covered by this section are not 

preempted until the standard for such product goes into effect. 

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Section 622. Energy Labeling 

Section 622 directs the Federal Trade Commission to complete a 

rulemaking within two months to determine the effectiveness of 

the existing labeling FTC labeling program and directs the Secretary of Energy or the FTC to prescribe labeling requirements for 

battery chargers and external power supplies in standby mode, ceiling fans, vending machines, commercial refrigerators and freezers, 

exit signs, torchiere lamps, low-voltage dry-type distribution transformers, traffic signal modules, unit heaters, and medium base 

compact fluorescent lamps, if standards are set by rule or by statute in the previous section. 

Section 623. Energy Star Program 

Section 623 provides statutory authority for the Energy Star program at DOE and EPA; requires solicitation of comments from interested parties prior to establishment of new Energy Star categories, specifications or criteria, and publication of a notice of any 

changes to categories, specifications or criteria along with responses to such comments; allows 12 months of lead time before 

such changes take effect unless such time period is waived or reduced by mutual consent between EPA or DOE and the affected 

parties. 

Section 624. HVAC Maintenance Consumer Education Program 

Section 624 authorizes DOE, in cooperation with EPA, to carry 

out a cost-shared public education program on energy savings benefits of maintenance of air conditioning, heating and ventilation systems and authorizes the Small Business Administration to work 

with the DOE and EPA to provide energy efficiency information to 

small businesses. 

Subtitle D—Public Housing 

Section 631. Capacity Building for Energy-efficient, Affordable 

Housing 

Section 631 requires activities that provide energy efficient, affordable housing and residential energy conservation measures 

under the HUD Demonstration Act. 

Section 632. Increase of CDBG Public Services Cap for Energy Conservation and Efficiency Activities

Section 632 increases the amount of Community Development assistance for providing public services involving energy conservation 

or efficiency by 10 percent. 

Section 633. FHA Mortgage Insurance Incentives for Energy Efficient Housing 

Section 633 provides for additional 10 percent increase in property value covered by Federal Housing Administration mortgage insurance when a solar energy system is installed. 

Section 634. Public Housing Capital Fund 

Section 634 allows the Public Housing Capital Fund to include 

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

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contracts similar to Energy Savings Performance Contracts 

(ESPCs). 

Section 635. Grants for Energy-conserving Improvements for Assisted Housing 

Section 635 allows grants for multifamily housing projects to be 

used for improved energy efficiency. 

Section 636. North American Development Bank 

Section 636 amends NAFTA Implementation Act to encourage 

U.S. Board members to encourage the Bank to finance projects related to clean and efficient energy, including energy conservation. 

Section 637. Energy-efficient Appliances 

Section 637 requires public housing agencies to purchase Energy 

Star or FEMP-designated products where cost-effective. 

Section 638. Energy Efficiency Standards 

Section 638 updates efficiency standards used in Cranston-Gonzalez low-income housing programs to current best codes and practices. 

Section 639. Energy Strategy for HUD 

Section 639 requires HUD to develop and implement an integrated energy strategy for public and assisted housing and requires 

report to Congress and updates of report every two years. 

TITLE VII—TRANSPORTATION FUELS 

Subtitle A—Alternative Fuel Programs 

Section 701. Use of Alternative Fuels by Dual-fueled Vehicles 

Section 701 requires alternative-fueled vehicles acquired by Federal agencies to be operated on alternative fuel unless the Secretary determines that the alternative fuel is not reasonably available or unreasonably more expensive compared to gasoline. 

Section 702. Fuel Use Credits 

Section 702 amends the Energy Policy Act of 1992 to allow Federal fleets or covered persons to earn credits towards compliance 

with alternative fuel vehicle purchase mandates by using alternative fuels in medium- and heavy-duty vehicles. One credit is 

awarded for each volume used of alternative fuel equivalent in energy content to 450 gallons of biodiesel or greater amount if determined by rule. Credits are bankable from one year to the next, and 

tradeable to someone else. The 50 percent cap on use of fuel credits 

in any one year is removed. 

Section 703. Neighborhood Electric Vehicles 

Section 703 includes zero-emission, low-speed electric vehicles in 

the definition of alternative fuel vehicles under the Energy Policy 

Act of 1992, provided that such vehicles have a top speed not greater than 25 miles per hour. 

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Section 704. Credits for Medium and Heavy Duty Vehicles 

Section 704 allows Federal fleets or covered persons to earn multiple credits towards compliance with alternative fuel vehicle purchase mandates through the purchase of medium-duty vehicles 

(greater than 8,500 lbs. gross vehicle weight, 2 credits) or heavyduty vehicles (greater than 14,000 lbs. gross vehicle weight, 3 credits). 

Section 705. Alternative Fuel Infrastructure 

Section 705 allows Federal fleets or covered persons to earn credits towards compliance with alternative fuel vehicle purchase mandates through investment in alternative fuel infrastructure, including fueling stations and distribution lines. 

Section 706. Incremental Cost Allocation 

Section 706 requires the General Services Administration to allocate the incremental cost of alternative fueled vehicles compared to 

comparable gasoline vehicles across the entire fleet of motor vehicles distributed by the GSA, instead of on a vehicle-by-vehicle 

basis. 

Section 707. Review of Alternative Fuel Programs 

Section 707 requires the Secretary of Energy to conduct a study 

that determines the impact of alternative fuel vehicle programs in 

the Energy Policy Act of 1992 on development of technologies for 

use of alternative fuels, availability of fuel, and cost of alternative 

fueled vehicles. 

Section 708. High Occupancy Vehicle Exception 

Section 708 allows State highway agencies to establish procedures for allowing alternative fuel vehicles to utilize High Occupancy Vehicle lanes on highways regardless of the number of passengers carried. 

Section 709. Alternative Compliance 

Section 709 provides any person covered by section 501 and any 

State subject to the requirements of section 507(o) to opt out of the 

Energy Policy Act of 1992. The section also provides credits under 

the Energy Policy Act of 1992 for hybrid vehicles, dedicated alternative fuel vehicles and infrastructure and allows the blending of 

lease condensate gas liquids from natural gas wells with diesel fuel 

to manufacture an alternative fuel. 

Subtitle B—Automobile Fuel Economy 

Section 711. Automobile Fuel Economy Standards 

Section 711 requires the Secretary of Transportation to also consider effects on motor vehicle and passenger safety, and effects on 

levels of U.S. employment when setting fuel economy standards. 

The section also clarifies DOT authority to amend fuel economy 

standards for passenger cars and requires an environmental assessment under NEPA to be conducted for any changes in fuel 

economy standards. 

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Section 712. Dual Fueled Automobiles 

Section 712 extends for an additional four years the manufacturer incentives and maximum fuel economy increase allowable 

under the Corporate Average Fuel Economy program for the manufacture and sale of dual fueled automobiles. 

Section 713. Federal Fleet Fuel Economy 

Section 713 requires Federal agencies to increase fuel economy of 

new Federal fleet passenger cars and light trucks by at least 3 

miles per gallon by 2005 compared to year 1999 acquisitions. 

Section 714. Railroad Efficiency 

Section 714 requires establishment of a cost-shared public-private partnership to improve fuel economy, reduce emissions and 

lower costs of operation of railroad locomotives. It authorizes $25 

million in fiscal year 2004, $35 million in fiscal year 2005, and $50 

million in fiscal year 2006. 

Section 715. Reduction of Engine Idling in Heavy-Duty Vehicles 

Section 715 requires DOE, in consultation with DOT and EPA, 

to study potential technologies to reduce the idling of engines in 

heavy-duty vehicles and, upon completion of such study, publish a 

list of certified technologies in the Federal Register. It increases vehicle weight limits for heavy-duty vehicles to allow for installation 

of such technologies provided they are less than 400 pounds additional weight. 

TITLE VIII—HYDROGEN 

Subtitle A—Basic Research Programs 

Section 801. Short Title 

This section is self-explanatory. 

Section 802. Matsunaga Act Amendment 

Section 802 provides a complete substitute for the Spark M. Matsunaga Hydrogen Research, Development, and Demonstration Act 

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

Section 803. Hydrogen Transportation and Fuel Initiative 

Section 803 authorizes applied research, development, demonstration and commercial application activities on advanced hydrogen-powered vehicle technologies, and related activities needed 

to enable rapid and coordinated introduction of hydrogen-powered 

vehicles and associated infrastructure into commerce. Activities 

under these programs must be coordinated with basic research activities conducted under the Matsunaga Act. 

Section 804. Interagency Task Force and Coordination Plan 

Section 804 requires the Secretary of Energy to establish an 

interagency task force to coordinate Federal activities in the area 

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quires the task force to develop and submit to Congress a coordination plan within one year of establishment. 

Section 805. Review by the National Academies 

Section 805 requires the National Academies to review Federal 

hydrogen energy programs and activities within two years of enactment, and every four years thereafter. 

Subtitle B—Demonstration Programs 

Section 811. Definitions 

This section is self-explanatory. 

Section 812. Hydrogen Vehicle Demonstration Program 

Section 812 requires the Secretary of Energy to establish a demonstration and commercial application program for hydrogen-powered vehicles and associated hydrogen fueling infrastructure in a 

variety of applications, including fleets of light- and heavy-duty vehicles, transit buses, refueling corridors, and other similar projects. 

Section 813. Stationary Fuel Cell Demonstration Program 

Section 813 requires the Secretary of Energy to establish a demonstration and commercial application program for stationary hydrogen fuel cells, including applications in residential and commercial buildings, portable applications, small form and micro fuel 

cells, and for distributed generation from renewable energy and 

other similar projects. 

Section 814. Hydrogen Demonstrations in National Parks 

Section 814 requires the Secretary of the Interior and the Secretary of Energy to jointly study opportunities to use hydrogen fuel 

cells and other related technologies in national parks and authorizes $1 million in fiscal year 2004 for such study, and $15 million 

in fiscal year 2005 for not fewer than 3 geographically distributed 

pilot projects. 

Section 815. International Demonstration Program 

Section 815 requires the Secretary of Energy to establish a demonstration program for fuel cells and related hydrogen technologies 

for stationary or transportation applications in countries other than 

the United States. 

Section 816. Tribal Stationary Hybrid Power Demonstration 

Section 816 requires the Secretary to develop and transmit to 

Congress a strategy for a demonstration and commercial application program to develop hybrid systems combining distributed renewable generation with fuel cells for use on Indian land. The section also authorizes $1 million in fiscal year 2005 for the study and 

$5 million in each of fiscal years 2006 through 2008 for the demonstration program. 

Section 817. Distributed Generation Pilot Program 

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uted generation systems that significantly reduce the cost of producing hydrogen from renewable energy. 

Subtitle C—Federal Programs 

Section 821. Public Education and Training 

Section 821 requires the Secretary of Energy to establish programs designed to increase public interest and acceptance of hydrogen fuel technologies, and to provide university-based training for 

research in critical hydrogen and fuel cell-related technologies. 

Section 822. Hydrogen Transition Strategic Planning 

Section 822 requires the head of each Federal agency with an annual outlay of $20 million or less to submit to OMB and the Congress a hydrogen transition plan, describing areas in which use of 

hydrogen energy technologies could benefit the operation of the 

agency and any impediments that may prevent the agency from 

using such hydrogen energy technologies. 

Section 823. Minimum Federal Fleet Requirement 

Section 823 amends the Energy Policy Act of 1992 to require 

each agency to purchase 5 percent of its new vehicles as hydrogenpowered vehicles in fiscal years 2006 and 2007, increasing to 20 

percent for fiscal years 2012 and thereafter. The section also provides for waiver, delay, or reduction in mandated requirements if 

hydrogen-powered vehicles are not available at less than 150 percent of the cost of a comparable alternative fueled vehicle. The Secretary of Energy, in consultation with the GSA Administrator, may 

opt to implement the fleet requirement by allocation of acquisitions 

to certain Federal fleets. Commercial refueling arrangements are 

required where possible. 

Section 824. Stationary Fuel Cell Purchase Requirement 

Section 824 requires the Federal Government to offset not less 

than 1 percent of its total electric energy consumption from fuel 

cells in fiscal years 2006 through 2008, increasing to not less than 

3 percent in 2011 and thereafter. The section also authorizes $400 

million over five years to offset costs to Federal agencies. 

Section 825. Department of Energy Strategy 

Section 825 requires the Secretary of Energy to publish and submit to Congress a plan to identify critical technologies and related 

targets and timetables for development of such technologies to support commercialization of hydrogen-fueled fuel cell vehicles. 

TITLE IX—RESEARCH AND DEVELOPMENT 

Section 901. Short Title 

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

Section 902. Goals 

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

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Section 903. Definitions 

This section is self-explanatory. 

Subtitle A—Energy Efficiency 

Section 911. Energy Efficiency 

This section sets authorization levels and is self-explanatory. 

Section 912. Next Generation Lighting Initiative 

Section 912 authorizes a new initiative to develop advanced solid 

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

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

this section. 

Section 913. National Building Performance Initiative 

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

buildings. An advisory committee is established to oversee creation 

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

Section 914. Secondary Electric Vehicle Battery Use Program 

Section 914 authorizes a program to evaluate secondary use of 

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

Section 915. Energy Efficiency Science Initiative 

Section 915 authorizes a research program administered by the 

Assistant Secretary responsible for energy conservation. 

Subtitle B—Distributed Energy and Electric Energy Systems 

Section 921. Distributed Energy and Electric Energy Systems 

Section 921 provides authorization levels and is self-explanatory.

Section 922. Hybrid Distributed Power Systems 

Section 922 authorizes the development of a strategy for the development of hybrid distributed power systems that combine a renewable technology and non-intermittent power generation technologies. 

Section 923. High Power Density Industry Program 

Section 923 authorizes the creation of a research and demonstration program for high power density facilities. 

Section 924. Micro-Cogeneration Energy Technology 

Section 924 authorizes grants to consortia to develop small-scale 

combined heat and power systems for residential applications. 

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Section 925. Distributed Energy Technology Demonstration Program 

Section 925 authorizes assistance to demonstration projects using 

distributed energy technologies in highly energy intensive commercial applications. 

Section 926. Office of Electric Transmission and Distribution 

Section 926 amends title II of the Department of Energy Organization Act to create a new Office of Electric Transmission and Distribution. 

Section 927. Electric Transmission and Distribution Programs 

Section 927 authorizes research, development and demonstration 

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

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

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

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

Subtitle C—Renewable Energy 

Section 931. Renewable Energy. 

Section 931 provides authorization levels and is self-explanatory. 

Section 932. Bioenergy Programs 

Section 932 authorizes a broad program of research in biopower, 

biofuels and bioproducts, including technologies utilizing cellulosic 

feedstocks or enzyme-based processing. 

Section 933. Biodiesel Engine Testing Program 

Section 933 authorizes testing to determine the impact of biodisel 

on current and future emission control technologies and requires a 

report within 2 years on the findings of the study. 

Section 934. Concentrating Solar Power Research Program 

Section 934 authorizes a program of research on concentrating 

solar power research to establish technologies and economics of 

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

Section 935. Miscellaneous Projects 

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

carrier fuels. 

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Subtitle D—Nuclear Energy 

Section 941. Nuclear Energy 

Section 941 provides authorization levels and is self-explanatory. 

Section 942. Nuclear Energy Research Programs 

Section 942 authorizes the Nuclear Energy Research Initiative, 

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

and Nuclear Infrastructure Support Programs. 

Section 943. Advanced Fuel Cycle Initiative 

Section 943 authorizes the Advanced Fuel Cycle Initiative to 

evaluate proliferation-resistant fuel recycling and transmutation 

technologies, which support evaluation of alternative national 

strategies for spent fuel management and Generation IV advanced 

reactor concepts. An annual progress report is required. 

Section 944. University Nuclear Science and Engineering Support 

Section 944 authorizes fellowship and faculty assistance programs, maintains university research and training reactor, and encourages university-national laboratory interactions. 

Section 945. Security of Nuclear Facilities 

Section 945 authorizes research and development on technologies 

for improving safety and security of reactors. 

Section 946. Alternatives to Industrial Radioactive Sources 

Section 946 authorizes research and development on alternatives 

to large industrial radioactive sources, including well-logging 

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

survey and report to Congress are required of existing types of 

commercial sources, along with review of available disposal options 

for such sources and evaluation of the need for alternative future 

disposal options. 

Subtitle E—Fossil Energy

Section 951. Fossil Energy 

Section 951 provides authorization levels and is self-explanatory. 

Section 952. Fossil Energy Research Programs 

Section 952 authorizes research programs for coal, oil and gas, 

and fuel cells and requires a report at two year intervals on oil and 

gas reserves off the coast of Louisiana and Texas. It establishes a 

national center or consortium of excellence in clean energy and 

power generation. 

Section 953. Research and Development for Coal Mining Technologies 

Section 953 authorizes research and development program on 

coal mining technologies. The research is to be guided by the Mining Industry of the Future program, and NAS reports, and is to include technologies to enable mining of coal with reduced contaminant levels. 

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Sec. 954. Coal and Related Technologies Program 

Section 954 authorizes a broad research, development, demonstration and commercial application program for coal and power 

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

technologies. 

Sec. 955. Complex Well Technology Testing Facility 

Section 955 is self-explanatory. 

Subtitle F—Science 

Section 961. Science 

Section 961 establishes authorization levels for Office of Science 

and authorizes funding for the International Thermonuclear Experimental Reactor separate from the rest of the Office of Science 

budget. 

Section 962. United States Participation in ITER 

Section 962 authorizes the U.S. participation in the International 

Thermonuclear Experimental Reactor (ITER) and requires a comprehensive report within 180 days on overall program directions. 

Section 963. Spallation Neutron Source 

Section 963 sets limits on total funds expended for the Spallation 

Neutron Source and requires a report on the SNS as part of the 

annual budget submission. 

Section 964. Support for Science and Energy Facilities and Infrastructure 

Section 964 requires the development and implementation of a 

strategy for maintaining or building essential facilities and infrastructure primarily supporting programs at the Office of Science, 

the Office of Energy Efficiency and Renewable Energy, the Office 

of Fossil Energy, or the Office of Nuclear Energy, Science and 

Technology. 

Section 965. Catalysis Research Program 

Section 965 authorizes a broad research and development program for catalysis science including use of precious metals and requires National Academy of Science review every 3 years. 

Section 966. Nanoscale Science and Engineering Research 

Section 966 authorizes nanoscale science and engineering programs supportive of the Department’s mission areas and authorizes 

construction of Nanoscience and Nanoengineering Research Centers. 

Section 967. Advanced Scientific Computing for Energy Missions 

Section 967 authorizes a robust scientific computing program 

supporting the Department’s mission areas and requires coordination with other national efforts, including the National Nuclear Security Administration’s Accelerated Strategic Computing Initiative. 

A report to Congress is required before undertaking development 

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puting Act of 1991 is amended to include authorization levels as 

necessary for fiscal years 2004 through 2007. 

Section 968. Genomes to Life Program 

Section 968 authorizes research and development in systems biology and proteomics toward understanding biological systems on 

the scale of proteins to cells and authorizes construction and ancillary equipment for the Genomes to Life user facilities. 

Section 969. Fission and Fusion Energy Materials Research Program 

Section 969 authorizes a research and development program on 

material science issues presented by advanced fission reactors and 

Department’s fusion program. 

Section 970. Energy-Water Supply Technologies Program 

Section 970 authorizes a research and demonstration program to 

study energy-related issues associated with water resources and 

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

and energy and water sustainability. The arsenic removal program 

is to be run by the American Water Works Association Research 

Foundation for the Department. Desalination program is to follow 

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

of major national river basins, to understand water usage patterns 

and the impact of energy production activities in these basins. 

Subtitle G—Energy and Environment 

Section 971. United States-Mexico Energy Technology Cooperation 

Section 971 authorizes a joint U.S.-Mexico collaborative program 

in the border region to promote energy efficiency and reduced environmental risks that contribute to public health issues. 

Section 972. Coal Technology Loan

Section 972 authorizes the Secretary to provide a loan to the 

clean coal plant in Healy, Alaska. 

Subtitle H—Management 

Section 981. Availability of Funds 

Section 981 authorizes funding under entire title to remain available until expended. 

Section 982. Cost Sharing 

Section 982 sets cost sharing requirements for programs (20 percent for R&D, 50 percent for Demonstration and Commercial Application) with ability to the Secretary to waive this requirement and 

allows in-kind contributions. 

Section 983. Merit Review of Proposals 

Section 983 requires merit review of proposals in this title. 

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Section 984. External Technical Review of Departmental Programs 

Section 984 requires advisory boards for Department programs 

and authorizes the Secretary to use the National Academy of 

Sciences to establish such boards and to conduct other reviews and 

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

Section 985. Improved Coordination of Technology Transfer Activities 

Section 985 requires the Secretary to appoint a Technology 

Transfer Coordinator and establishes a Tech Transfer Working 

Group with representation from each DOE facility. 

Section 986. Technology Infrastructure Program 

Section 986 requires the Secretary to establish a pilot program 

to encourage the creation of technology clusters in support of departmental mission areas and authorizes $10,000,000 annually for 

FY2004, FY2005 and FY2006. 

Section 987. Small Business Advocacy and Assistance 

Section 987 requires each National Laboratory and enables each 

single purpose research facility to designate a small business advocate to facilitate participation of small businesses in procurement 

and research opportunities. Small business technical assistance 

grants are authorized, but will not exceed $10,000 each to improve 

a concern’s products or services and authorizes $5,000,000 annually. 

Section 988. Mobility of Scientific and Technical Personnel 

Section 988 requires a report on barriers that may exist to inhibit transfer of personnel among Department’s facilities and laboratories. 

Section 989. National Academy of Sciences Report 

Section 989 requires a National Academy study on obstacles to 

accelerating the transition of energy technology into commercial 

application.

Section 990. Outreach 

Section 990 requires that all programs include an outreach component to provide the public with information. 

Section 991. Competitive Award of Management Contracts 

Section 991 requires that management and operating contracts 

for nonmilitary laboratories shall be subject to competition unless 

the Secretary grants a waiver and informs Congress. 

Section 992. Reprogramming 

Section 992 states that reprogramming that changes an individual distribution by more than 5 percent is not allowed unless 

the Secretary has provided 30 days notice to the appropriate authorizing committees. 

Section 993. Construction With Other Laws 

Section 993 requires the Secretary to conform this title to existing laws. 

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Section 994. Improved Coordination and Management of Civilian 

Science and Technology 

Section 994 amends the Department of Energy Organization Act 

to establish an additional Under Secretary designated as the Under 

Secretary for Science and Energy. The Office of Science shall now 

be headed by the Assistant Secretary for Science instead of a Director. An additional Assistant Secretary position is created, accompanied by a sense of Congress that leadership in nuclear energy 

shall be at Assistant Secretary level. Sections 5314 and 5315 of 

title 5, United States Code, are amended to show 3, instead of 2, 

Under Secretaries of Energy and 8, instead of 6, Assistant Secretaries of Energy. 

Section 995. Educational Programs in Science and Mathematics 

Section 995 amends the Department of Energy Science Education 

Enhancement Act (42 U.S.C. 7381a) to authorize the Department 

of Energy to support competitive science and mathematics events 

and reauthorizes funding of that Act for $40,000,000 for each of fiscal years 2004 through 2008. 

Section 996. Other Transactions Authority 

Section 996 amends the Department of Energy Organization Act 

(42 U.S.C. 7256) to allow transactions by the Secretary of Energy 

to further research, development, or demonstrations and exempts 

them from provisions of section 9 of the Federal Nonnuclear Energy Research and Development Act of 1974 (42 U.S.C. 5908). 

These other transactions can only be entered if standard contract, 

grant or cooperative agreements are not feasible or appropriate. 

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

that the Secretary develop guidelines within 3 months for using the 

other transactions mechanism. 

Section 997. Report on Research and Development Program Evaluation Methodologies 

Section 997 requires the Secretary within 6 months to arrange 

with the National Academy of Sciences to investigate and report on 

the scientific and technical merits of any evaluation methodology 

for scientific and technical programs of the Department then to 

submit this report to Congress within 6 months of its receipt. 

TITLE X—PERSONNEL AND TRAINING 

Section 1001. Workforce Trends and Traineeship Grants 

Section 1001 requires the Department of Energy, in consultation 

with the Department of Labor, to monitor workforce trends in the 

energy industry and report to Congress. Authorizes the Department of Energy, in consultation with the Department of Labor, to 

establish traineeship grants to address shortages of trained personnel. 

Section 1002. Research Fellowships in Energy Research 

Section 1002 authorizes the Secretary of Energy to establish fellowships for postdoctoral and senior researchers in energy research 

and development fields. 

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Section 1003. Training Guidelines for Electric Energy Industry Personnel 

Section 1003 requires the Secretary of Labor, in consultation 

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

industry and recognized employee representatives, model personnel 

training guidelines to support electric system reliability and safety. 

Section 1004. National Center on Energy Management and Building Technologies 

Section 1004 requires the Secretary of Energy to support the establishment of a National Center on Energy Management and 

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

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

Section 1005. Improved Access to Energy-related Scientific and 

Technical Careers 

Section 1005 requires the Director of each National Laboratory, 

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

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

Section 1006. National Power Plant Operations Technology and 

Education Center 

Section 1006 requires the Secretary of Energy to support the establishment of a national training center to address the need for 

training and educating certified operators for electric power generation plants. 

Section 1007. Federal Mine Inspectors 

Section 1007 requires the Secretary of Labor to hire, train, and 

deploy additional skilled mine inspectors to maintain the number 

of Federal mine inspectors at or above the levels authorized by law 

or established by regulation. 

TITLE XI—ELECTRICITY 

Section 1101. Definitions 

Section 1101 amends definitions used in the Federal Power Act 

(FPA). 

Subtitle A—Reliability 

Section 1111. Electric Reliability Standards 

Section 1111 provides procedures for Federal Energy Regulatory 

Commission’s (FERC) certification and oversight of a FERC approved electric reliability organization that sets mandatory, enforceable reliability rules for the interstate transmission grid. 

164

Subtitle B—Regional Markets 

Section 1121. Implementation Date for Proposed Rulemaking on 

Standard Market Design 

Section 1121 remands the proposed rulemaking on Standard 

Market Design (Docket No. RM01–12–000) to FERC for further reconsideration and prohibits FERC from issuing a final rule or any 

order of general applicability dealing with matters within the scope 

of the proposed rule before July 1, 2005. 

Section 1122. Sense of the Congress on Regional Transmission Organizations 

Section 1122 provides a sense of Congress that voluntary Regional Transmission Organizations (RTO) promote competitive 

markets and benefit consumers. 

Section 1123. Federal Utility Participation in Regional Transmission Organizations 

Section 1123 authorizes power marketing agencies and the Tennessee Valley Authority (TVA) to join RTOs. 

Section 1124. Regional Consideration of Competitive Wholesale 

Markets 

Section 1124 directs FERC to convene regional discussions with 

States to address wholesale competitive markets with a focus on 

issues such as RTO development, interconnection, transmission 

planning, price signals, seams, and market monitoring. 

Subtitle C—Improving Transmission Access and Protecting Service 

Obligations 

Section 1131. Service Obligation Security and Parity 

Section 1131 amends the FPA to protect transmission access for 

load serving entities in order to ensure electric service to retail customers. 

Section 1132. Open Non-Discriminatory Access 

Section 1132 authorizes FERC to require that unregulated transmitting utilities provide open access to their transmission systems 

at rates that are comparable to those they charge themselves and 

on comparable terms and conditions that are not unduly discriminatory. Small distribution utilities or unregulated transmitting 

utilities that do not own assets that are necessary for grid operation are exempted. FERC may revoke an exemption that adversely affects the efficiency and reliability of a transmission system. FERC may remand rates to an unregulated transmitting utility. The Committee recognizes that the Bonneville Power Administration sets rates in accordance with various laws and treaties, including the Pacific Northwest Electric Power Planning and Conservation Act and the Bonneville Power Administration Transmission Act. The limited authority provided FERC to ensure access 

at comparable rates and terms that are not unduly discriminatory 

neither alters nor affects the specific prescriptions applicable to the 

Bonneville Power Administration, nor precludes the Bonneville 

Power Administration from establishing prices, terms, and condiVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00168 Fmt 6659 Sfmt 6602 E:\HR\OC\SR043.XXX SR043
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tions in accordance with its enabling statutes. Those statutes, and 

their implementation by the Bonneville Power Administration, are 

unaffected. Specifically, the Committee notes that the Bonneville 

Power Administration will continue to establish its cost-based rates 

in accordance with existing law and the rates, as well as terms and 

conditions, shall not be considered unduly discriminatory. 

Section 1133. Transmission Infrastructure Investment 

Section 1133 requires FERC to establish by rule within one year 

of the date of enactment transmission pricing policies and policies 

for the allocation of costs associated with interconnection of new 

transmission facilities that are not located within an RTO. The cost 

allocation rulemaking shall seek to ensure that such interconnection costs are allocated in a way that ensures all users of the system bear their appropriate share of costs and that anyone who 

pays for new facilities is appropriately compensated. 

Subtitle D—Amendments to the Public Utility Regulatory Policies 

Act of 1978 

Section 1141. Net Metering 

Section 1141 amends the Public Utility Regulatory Policies Act 

of 1978 (PURPA) to require States to consider the adoption of net 

metering standards regarding how on-site energy production will 

be measured and billed. 

Section 1142. Smart Metering 

Section 1142 amends PURPA to require States to consider real 

time and time based pricing and other forms of demand response 

systems that benefit consumers. 

Section 1143. Adoption of Additional Standards 

Section 1143 amends PURPA to require States to consider standards for interconnection of distributed generation and other generators to the distribution grid; for minimum fuel and technology diversity; and for fossil fuel efficiency. 

Section 1144. Technical Assistance. 

Section 1144 permits the Secretary of Energy to offer technical 

assistance to States and electric utilities. 

Section 1145. Cogeneration and Small Power Production Purchase 

and Sale Requirements 

Section 1145 prospectively repeals PURPA’s mandatory purchase 

requirements (which oblige electric utilities to buy power from 

qualifying cogeneration and small power production facilities) if an 

independently administered, auction-based day ahead and real 

time market exists and prospectively repeals PURPA’s mandatory 

sale requirements (which oblige electric utilities to sell back-up 

power to qualifying cogeneration and small power production facilities) if competing retail suppliers are available. 

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Section 1146. Recovery of Costs 

Section 1146 ensures that public utilities do not directly or indirectly absorb costs associated with purchases from qualifying cogeneration and small power production facilities. 

Subtitle E—Provisions Regarding the Public Utility Holding 

Company Act 

Section 1151. Definitions 

Section 1151 is self-explanatory. 

Section 1152. Repeal of the Public Utility Holding Company Act of 

1935

Section 1152 repeals the Public Utility Holding Company Act of 

1935 (PUHCA). 

Section 1153. Federal Access to Books and Records 

Section 1153 gives FERC authority to require that each holding 

company, associate company and affiliate company make available 

to FERC books, accounts and records that FERC determines are 

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

jurisdictional rates. 

Section 1154. State Access to Books and Records 

Section 1154 provides that upon request of a State commission 

having jurisdiction to regulate a public utility company in a holding 

company system, and under conditions to ensure confidentiality of 

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

to the State commission books, accounts and records that have 

been identified in a proceeding of the State commission and that 

the State commission determines are relevant to costs incurred by 

such public utility company and that are necessary and appropriate 

to protect utility customers with respect to jurisdictional rates. 

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

Section 1155. Exemption Authority 

Section 1155 provides that not later than 90 days after the date 

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

the Federal books and records requirement any person that is a 

holding company solely with respect to a qualifying facility, exempt 

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

not relevant to jurisdictional rates. 

Section 1156. Affiliate Transactions 

Section 1156 preserves the authority of FERC or a State commission to determine if a jurisdictional public utility company can recover in rates costs incurred through transactions with affiliates. 

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Section 1157. Applicability 

Section 1157 provides that PUHCA provisions do not apply to the 

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

government authority not operating in the U.S., or any agency, authority or instrumentality of any of the above. 

Section 1158. Effect on Other Regulations 

Section 1158 preserves authorities of FERC or State commissions 

under other applicable law. 

Section 1159. Enforcement 

Section 1159 authorizes FERC to use its enforcement authorities 

under the FPA to enforce this subtitle. 

Section 1160. Savings Provisions 

Section 1160 permits continuation of activities authorized as of 

the date of enactment and preserves FERC authority under the 

FPA and the Natural Gas Act. 

Section 1161. Implementation 

Section 1161 authorizes FERC to promulgate regulations to implement this subtitle and to submit recommendations to Congress 

for technical and conforming amendments within 12 months of enactment. 

Section 1162. Transfer of Resources 

Section 1162 provides that the Securities and Exchange Commission is to transfer books and records to FERC. 

Section 1163. Effective Date 

Section 1163 provides that this subtitle takes effect 12 months 

after the date of enactment. 

Section 1164. Conforming Amendments to the Federal Power Act 

Section 1164 repeals FPA section 318, dealing with conflicts in 

jurisdiction between PUHCA and the FPA. 

Subtitle F—Market Transparency, Anti Manipulation and 

Enforcement 

Section 1171. Market Transparency Rules 

Section 1171 requires FERC to establish an electronic system to 

provide information on availability and price of wholesale electric 

energy and transmission services. 

Section 1172. Market Manipulation

Section 1172 amends the FPA to prohibit the filing of false information and provides that a round-trip trade is a violation of the 

FPA. Round-trip trade is defined as a transaction or combination 

of transactions in which a person or other entity simultaneously 

enters into financially offsetting transactions to sell the same electric energy at the same location, price, quantity and terms so that 

collectively the purchase and sale transactions themselves result in 

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ment with the intent to deceptively affect reported revenues, trading volumes or prices. 

Section 1173. Enforcement 

Section 1173 expands scope of who can file complaints and 

against whom complaints can be filed under the FPA, extends 

FERC’s investigation authority to transmitting utilities, and increases penalties under the FPA and the Natural Gas Act. 

Section 1174. Refund Effective Date 

Section 1174 amends FERC’s authority to allow refunds under 

the FPA as of the date of the filing of a complaint. 

Subtitle G—Consumer Protections 

Section 1181. Consumer Privacy 

Section 1181 directs the Federal Trade Commission (FTC) to promulgate rules regarding disclosure of consumer information. 

Section 1182. Unfair Trade Practices 

Section 1182 directs the FTC to issue rules to prohibit changes 

of electric utility service without consumer consent (slamming) and 

sales of services without consumer consent (cramming). 

Section 1183. Definitions 

Section 1183 defines terms for this subtitle and is self-explanatory. 

Subtitle H—Technical Amendments 

Section 1191. Technical Amendments 

Section 1191 corrects technical errors in the FPA. 

COST AND BUDGETARY CONSIDERATIONS

The Congressional Budget Office estimate of the costs of this 

measure has been requested but was not received at the time the 

report was filed. When the report is available, the Chairman will 

request it to be printed in the Congressional Record for the advice 

of the Senate. 

REGULATORY IMPACT EVALUATION

In compliance with paragraph 11(b) of rule XXVI of the Standing 

Rules of the Senate, the Committee makes the following evaluation 

of the regulatory impact which would be incurred in carrying out 

S. . The bill contains a variety of regulatory measures in the 

sense of imposing Government-established standards on private individuals and businesses in establishing efficiency standards and 

similar programs. There may be some economic costs associated 

with certain of the requirements. There are also voluntary programs, such as the authorization for Tribal governments to enter 

into agreements that would allow them to assume full responsibility for development of energy resources. Compliance with those 

agreements will require commitments of resources and the establishment of a regulatory program by the Tribes. Various grant and 

other assistance programs will require submission of documentaVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00172 Fmt 6659 Sfmt 6602 E:\HR\OC\SR043.XXX SR043
169

tion or plans as a condition for the assistance and the amendments 

to the Federal Power Act may result in information being made 

available in different modes or times than at present, especially 

under market transparency provisions. The Committee believes 

that the effects are not undue and are reasonable in light of the 

benefits of the programs. 

No personal information would be collected in administering the 

program. Therefore, there would be no impact on personal privacy. 

Little, if any, additional paperwork would result from the enactment of S. , as ordered reported, with the exception of the various studies required by the legislation and the reporting associated with grant and financial assistance programs, the Tribal energy development agreement implementation, or the requirements 

associated with amendments to the Federal Power Act and the 

Public Utility Regulatory Purposes Act of 1978. 

EXECUTIVE COMMUNICATIONS

Executive views on the original bill have not been received. 

(170)

MINORITY VIEWS OF SENATOR BINGAMAN 

Our nation has been blessed with an abundance of natural resources. This fact has long shaped our national energy policy, and 

our energy policy has shaped both our economy and our society. 

Cheap, abundant energy has made us the world’s dominant economic power and it has enabled us to attain a standard of living 

that is the envy of the world. 

Our demand for energy has long since outpaced our own resources. We consume far more than we can produce at home. We 

are increasingly dependent on low-cost oil from abroad. And the environmental consequences of our dependence on fossil fuels are 

growing increasingly apparent and alarming. 

Plainly, then, a new energy policy—an energy policy for the 21st 

century—is needed. Such a policy must, as the President has said, 

‘‘help the private sector * * * promote dependable, affordable, and 

environmentally sound production and distribution of energy for 

the future.’’ But it must do more than promote production. It must 

promote conservation and efficiency, technological innovation, and 

the formation of new, competitive energy markets. At the same 

time, it must protect consumers from exploitation and the environment from degradation. 

The bill ordered reported by the Committee on Energy and Natural Resources, largely along party lines, fails the test. While it 

contains a host of good provisions, overall, it lacks the balance 

needed to provide an effective energy policy for the 21st century. 

Automobile fuel efficiency 

The bill does nothing to address our growing demand for imported oil to fuel our cars and trucks. To the contrary, the bill’s fuel ‘‘economy’’ provisions, which extend provisions of existing law that 

give extra fuel economy credits to so-called ‘‘dual-fuel alternative 

fuel vehicles,’’ will actually increase gasoline consumption by an estimated 11.5 billion barrels. 

During the Committee’s consideration of the bill, Senator Feinstein offered an amendment that would have required sport utility 

vehicles (SUVs) and light-duty trucks to meet, by 2011, the same 

fuel economy standards that passenger vehicles have met since 

1985. Closing this ‘‘SUV loophole’’ would save one million barrels 

of oil per day. It would reduce oil imports by ten percent. And it 

would prevent about 240 million tons of carbon dioxide—the top 

greenhouse gas and biggest single cause of global warming—from 

entering the atmosphere. Regrettably, the Committee rejected Senator Feinstein’s amendment on a largely party-line vote. 

Renewable energy 

The bill does not do enough to increase the use of renewable energy. Last year, the Senate approved an energy bill containing both 

171

a renewable fuel standard for transportation fuels and a renewable 

portfolio standard for electricity. The renewable fuel standard 

would have added 5 billion gallons of homegrown ethanol to the nation’s gasoline supply by 2012. The renewable portfolio standard 

would have ensured that 10 percent of the nation’s electricity 

would be generated from renewable energy sources by 2019. The 

Committee abandoned both initiatives. 

During the Committee’s consideration of the bill, I offered an 

amendment to add a renewable portfolio standard, similar to the 

one approved by the Senate last year. The Committee rejected it 

on a straight party-line vote. 

Nuclear subsidies 

The bill contains huge subsidies for the nuclear power industry. 

It authorizes the Secretary of Energy to guarantee up to half the 

cost of building as many as six new nuclear power plants. It places 

no ceiling on these loan guarantees, which would make the federal 

taxpayers potentially liable for billions of dollars in construction 

and delay costs. 

During the Committee’s consideration of the bill, I offered an 

amendment to strike these subsidies. The Committee rejected it 

largely on a party-line vote. 

In addition, the bill authorizes the Secretary of Energy to build 

and operate a new advanced nuclear reactor to generate both hydrogen and electricity. It authorizes $1.135 billion for this project 

through fiscal year 2008, and such sums as may be needed beyond 

2008. It exempts the project from the management controls the Department of Energy normally applies to its projects, and does not 

require the reactor to be licensed by the Nuclear Regulatory Commission. 

Repeal of the Public Utility Holding Company Act 

The bill repeals the Public Utility Holding Company Act without 

providing any offsetting protection for electricity consumers. The 

Holding Company Act is a Depression-era law designed to protect 

investors and consumers from abuses they suffered at the hands of 

public utility holding companies. While the Act may be outdated 

and more restrictive than it needs to be, it should not be repealed 

without putting in place the new regulatory authorities needed to 

prevent future abuses. Proponents of the Act’s repeal say that federal antitrust law and state utility regulation will be sufficient to 

prevent abuses. But both federal antitrust regulators and state 

utility regulators say they lack the tools to do the job.

The energy bill approved by the Senate last year repealed the 

Holding Company Act, but gave the Federal Energy Regulatory 

Commission new authority to review electric utility mergers. Under 

last year’s bill, mergers and acquisitions that the Holding Company 

Act now bans would have been permitted, if the Federal Energy 

Regulatory Commission found they did not harm electric consumers or the public interest. The Committee abandoned this sensible check on the increasing concentration in the electric utility industry. 

172

Manipulation of electricity markets 

The bill does little to protect electricity consumers from market 

manipulation. The Federal Energy Regulatory Commission’s recent 

investigation of price manipulation in the western electricity markets disclosed a host of practices used by energy traders to manipulate prices. The Committee prohibits only one of these practices— round-trip trading—and leaves all the others unregulated. 

During the Committee’s consideration of the bill, I offered an 

amendment that contained a broad-based prohibition on market 

manipulation. My proposal was based on similar language in the 

Securities Exchange Act of 1934, which has served the public well 

for nearly 70 years. This amendment was also rejected on a 

straight party-line vote. 

Energy development on Indian land 

The bill contains a beneficial title that offers Indian tribes financial and technical assistance to develop energy resources on their 

lands. Unfortunately, the bill goes too far. Under current law, the 

Secretary of the Interior, as the trustee for the Indian tribes, must 

approve of any energy project on Indian land. The Secretary’s approval is a major federal action subject to environmental review 

under the National Environmental Policy Act. The bill would permit the tribes to open their lands to oil and gas drilling, coal mining, pipeline and transmission line rights-of-way, and all manner 

of energy projects without the Secretary’s approval of individual 

projects. Since the tribes are not federal agencies and the Secretary 

would no longer be required to approve energy projects on Indian 

land, they would no longer require an environmental review under 

the National Environmental Policy Act. In addition, the provision 

waives federal liability for any harm to a tribe resulting from a 

project approved under this authority. Thus, in a stroke, the provision eliminates comprehensive environmental reviews, meaningful 

public participation, and the Secretary’s trust responsibility with 

respect to energy projects on Indian land. 

I offered an amendment to strike this provision during the Committee’s consideration of the bill. This amendment was also rejected 

by a straight party-line vote. 

Hydroelectric licensing 

More than 80 years ago, the Federal Water Power Act struck a 

balance between the power industry and the champions of government control over water power development. The power industry 

won the right to appropriate water resources from the public domain for periods of up to 50 years. The champions of government 

control won the right to license hydroelectric projects and to hold 

them to a public interest test. The Federal Energy Regulatory 

Commission cannot consider the hydroelectric benefits of a proposed project alone, but must give equal consideration to the 

project’s effect on fish and wildlife, recreation, and other environmental concerns. In addition, where the project is to be built on an 

Indian reservation, a national forest, or other federal reservation, 

the Commission is required to include in the license whatever conditions the Secretary responsible for the reservation deems necessary for the adequate protection and use of the reservation. 

173

The bill reported by the Committee would tip this long-standing 

balance in the power industry’s favor by giving the license applicant the power to propose ‘‘alternative’’ conditions that the Secretary must accept if they provide ‘‘adequate’’ protection to the reservation, even though ‘‘adequate’’ protection may mean less protection than the Secretary’s conditions. There are similar provisions 

for fishway prescriptions. In addition, the bill gives the license applicant special procedural rights on alternative conditions and the 

right to trial-type hearings on the Secretary’s conditions that will 

not be available to other people whose interests may be affected. 

These trial-type hearings are likely to delay the issuance of both 

new licenses and renewals by three years or more. 

During the last Congress, both the House and the Senate passed 

provisions giving license applicants the ability to propose alternative conditions. The House required them to be at least as protective of the reservation as the Secretary’s, while the Senate did 

not. Neither the House nor the Senate gave license applicants special procedural rights. 

During the Committee’s consideration of the bill, I offered an 

amendment to replace these provisions with the ones approved by 

the House last year. Adoption of my amendment would have eliminated the special procedural rights to trial-type hearings, placed all 

parties on an equal procedural footing, and required alternative 

conditions and fishway prescriptions to be at least as protective as 

the Secretary’s. The Committee rejected the amendment on a largely party-line vote. 

Climate change 

The bill does little or nothing to address the serious problem of 

global climate change. The energy bill passed by the Senate last 

year, by contrast, contained several useful, if modest, climate 

change initiatives. They would not have solved the serious health, 

environmental, and economic problems posed by climate change, 

but they at least acknowledged the existence of the problems and 

would have put us on a track to begin solving those problems by 

creating new offices, providing for data collection, and authorizing 

research and development programs. 

The bill reported by the Committee should do no less, but it does. 

I was prepared to offer a climate change amendment based on the 

provisions approved by the Senate last year. Regrettably, the Committee elected to defer any consideration of this central issue, despite the fact that many aspects of the matter are within the jurisdiction of the Committee. 

The Committee’s unwillingness to address climate change in its 

energy bill stands in sharp and unfavorable contrast with the 

United Kingdom’s energy policy adopted earlier this year. Britain 

sees climate change as the primary challenge to be addressed by 

its energy policy and has committed itself to reducing its carbon dioxide emissions by 60 percent of current levels by 2050. 

The bill on balance 

The bill is not without its good points. It contains many useful 

provisions on oil and gas development, construction of the Alaska 

Natural Gas Pipeline, clean coal development, Indian energy, reVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00177 Fmt 6604 Sfmt 6602 E:\HR\OC\SR043.XXX SR043
174

newal of the Price-Anderson Act, renewable energy, energy efficiency, hydrogen, energy research and development, workforce 

training, and electricity. 

But a vote to report the bill is a vote on the overall balance and 

scope of the bill. As it now stands, the bill does not do enough, or 

goes in the wrong direction, on too many key issues for me to vote 

for it.

JEFF BINGAMAN. 

(175)

MINORITY VIEWS OF SENATOR BOB GRAHAM 

The Energy Policy Act of 2003 does little to extract the United 

States from the web of fossil fuel dependence, demonstrating an 

unwillingness to move away from a policy that could be described 

as ‘‘Drill America First.’’ Nothing more clearly illustrates this point 

than Section 105 of Title I, which requires the Department of the 

Interior to sue invasive exploration technologies to inventory oil 

and natural gas in areas of the outer continental shelf that are currently protected by moratoria. Section 105 demonstrates the narrow focus of this energy legislation when it comes our energy future. It constitutes a backsliding on moratoria that have been 

upheld for two decades by Democratic and Republican Administrations and Congress, rather than a step forward to efficient use of 

our current supplies of fossil fuels. 

Section 105 has been represented as a simple study of our nation’s oil and gas resources. However, authorizing seismic surveys 

and dart core sampling in protected areas of the outer continental 

shelf does not constitute an innocuous study. 

Dart core sampling, which could be used to collect data, is similar in nature to exploratory drilling. Samples are collected by dropping large hollow metal tubes from survey ships, to vertically puncture the seafloor. The heavy free-falling tube gathers velocity as a 

result of the pull of gravity, penetrates the seabed to a substantial 

depth, and is then retrieved shipboard. Environmental impacts of 

dart core sampling, usually done at frequent spatial intervals, include the smothering of seabed organisms with substantial silt 

plumes. 

Seismic 3–D surveys will also be used to collect date in moratoria 

areas and have serious negative impacts on marine life. A study 

from the University of Maryland in February of this year indicates 

that seismic shockwaves damage the auditory organs of fish and 

whales. Internal hemorrhaging in whales caused by the sonar 

pulses used for seismic surveys may correlate to beaching. 

Why risk these environmental impacts to protected areas of the 

outer continental shelf when the Minerals Management Service already conducts an oil and gas inventory every five years? 

The most recent MMS study, the Outer Continental Shelf Petroleum Assessment, was completed in 2000. Data on fossil fuel resources in moratoria areas is gathered through modeling and is included in the assessment. The 2000 assessment is an example of 

the appropriate way to study areas currently under moratoria. 

Policies that increase fuel efficiency and expand the use of renewable energy sources were not included in the committee mark 

of the Energy Policy Act of 2003. The bill risks the economic and 

ecological security of coastal states by focusing on fossil fuel rather 

then addressing comprehensive energy needs. For twenty years, 

Congress and the Administration have agreed with states like FlorVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00179 Fmt 6604 Sfmt 6604 E:\HR\OC\SR043.XXX SR043
176

ida, California, Oregon, and Washington that the risks posed by 

drilling to their economies and shores is too great to be borne. For 

these reasons, I oppose reporting the Energy Policy Act of 2003 

from committee.

BOB GRAHAM. 

(177)

CHANGES IN EXISTING LAW

In compliance with paragraph 12 of rule XXVI of the Standing 

Rules of the Senate, changes in existing law made by the bill S. 

1005, as ordered reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is 

printed in italic, existing law in which no change is proposed is 

shown in roman):

MINERAL LEASING ACT 

Act of February 25, 1920, as amended (30 U.S.C. 181 et seq.) 

COAL

SEC. 2. 

* * * * * * *

(d)(1) * * *

(2)(A) After the Secretary has approved the establishment of a 

logical mining unit, any mining plan approved for that unit must 

require such diligent development, operation, and production that 

the reserves of the entire unit will be mined within a period established by the Secretary which shall not be more than forty years. 

(B) The Secretary may establish a period of more than forty years 

if the Secretary determines that the longer period will ensure the 

maximum economic recovery of a coal deposit, or the longer period 

is in the interest of the orderly, efficient, or economic development 

of a coal resource. 

* * * * * * *

SEC. 3. Any person, association, or corporation holding a lease of 

coal lands or coal deposits under the provisions of this chapter may 

with the approval of the Secretary of the Interior, upon øa finding 

by him that it would be in the interest of the United States, secure 

modifications of the original coal lease by including additional coal 

lands or coal deposits contiguous or cornering to those embraced in 

such lease, but in no event shall the total area added by such modifications to an existing coal lease exceed one hundred sixty acres, 

or add acreage larger than that in the original lease.¿ a finding by 

the Secretary that it (1) would be in the interest of the United 

States, (2) would not displace a competitive interest in the lands, 

and (3) would not include lands or deposits that can be developed 

as part of another potential or existing operation, secure modifications of the original coal lease by including additional coal lands 

or coal deposits contiguous or cornering to those embraced in such 

lease, but in no event shall the total area added by such modifications to an existing coal lease exceed 320 acres, or add acreage larger than that in the original lease. The Secretary shall prescribe 

terms and conditions which shall be consistent with this chapter 

178

and applicable to all of the acreage in such modified lease except 

that nothing in this section shall require the Secretary to apply the 

production or mining plan requirements of sections 202a(2) and 

207(c) of this title. The minimum royalty provisions of section 

207(a) of this title shall not apply to any lands covered by this 

modified lease prior to a modification until the term of the original 

lease or extension thereof which became effective prior to the effective date of this Act has expired. 

* * * * * * *

SEC. 7. * * *

(b) Each lease shall be subject to the conditions of diligent development and continued operation of the mine or mines, except 

where operations under the lease are interrupted by strikes, the 

elements, or casualties not attributable to the lessee. The Secretary 

of the Interior, upon determining that the public interest will be 

served thereby, may suspend the condition of continued operation 

upon the payment of advance royalties. Such advance royalties 

shall be no less than the production royalty which would otherwise 

be paid and shall be computed on a fixed reserve to production 

ratio (determined by the Secretary). øThe aggregate number of 

years during the period of any lease for which advance royalties 

may be accepted in lieu of the condition of continued operation 

shall not exceed ten. The amount of any production royalty paid for 

any year shall be reduced (but not below 0) by the amount of any 

advance royalties paid under such lease to the extent that such advance royalties have not been used to reduce production royalties 

for a prior year. No advance royalty paid during the initial twentyyear term of a lease shall be used to reduce a production royalty 

after the twentieth year of a lease.¿ The aggregate number of years 

during the period of any lease for which advance royalties may be 

accepted in lieu of the condition of continued operation shall not exceed twenty. The amount of any production royalty paid for any 

year shall be reduced (but not below 0) by the amount of any advance royalties paid under such lease to the extent that such advance royalties have not been used to reduce production royalties for 

a prior year. The Secretary may, upon six months’ notification to 

the lessee cease to accept advance royalties in lieu of the requirement of continued operation. Nothing in this subsection shall be 

construed to affect the requirement contained in the second sentence of subsection (a) of this section relating to commencement of 

production at the end of ten years. 

(c) Prior to taking any action on a leasehold which might cause 

a significant disturbance of the environment, øand not later than 

three years after a lease is issued,¿ the lessee shall submit for the 

Secretary’s approval an operation and reclamation plan. The Secretary shall approve or disapprove the plan or require that it be 

modified. Where the land involved is under the surface jurisdiction 

of another Federal agency, that other agency must consent to the 

terms of such approval. 

* * * * * * *

SEC. 27. * * * 

(d)(1) No person, association, or corporation, except as otherwise 

provided in this chapter, shall take, hold, own or control at one 

179

time whether acquired directly from the Secretary under this chapter, or otherwise, oil or gas leases (including options for such leases 

or interests therein) on land held under the provisions of this chapter exceeding in the aggregate two hundred forty-six thousand and 

eighty acres in any one State other than Alaska: Provided, however, That acreage held in special tar sand areas as well as acreage 

under any lease any portion of which has been committed to a federally approved unit or cooperative plan or communitization agreement, or for which royalty, including compensatory royalty or royalty-in-kind, was paid in the preceding calendar year, shall not be 

chargeable against such State limitations. In the case of the State 

of Alaska, the limit shall be three hundred thousand acres in the 

northern leasing district and three hundred thousand sand acres in 

the southern leasing district, and the boundary between said two 

districts shall be the left limit of the Tanana River from the border 

between the United States and Canada to the confluence of the 

Tanana and Yukon Rivers, and the left limit of the Yukon River 

from said confluence to its principal southern mouth. 

FEDERAL POWER ACT 

Act of June 10, 1920, chapter 285, as amended (16 U.S.C. 791a– 825r) 

PART I 

* * * * * * *

SEC. 3. The words defined in this section shall have the following 

meanings for the purpose of this Act, to wit:

* * * * * * *

(17) (A) * * *

ø(C) ‘‘qualifying small power production facility’’ means a 

small power production facility—

(i) which the Commission determines, by rule, meets 

such requirements (including requirements respecting fuel 

use, fuel efficiency, and reliability) as the Commission 

may, by rule, prescribe; and 

(ii) which is owned by a person not primarily engaged in 

the generation or sale of electric power (other than electric 

power solely from cogeneration facilities or small power 

production facilities);¿

(C) ‘‘qualifying small power production facility’’ means a 

small power production facility that the Commission determines, by rule, meets such requirements (including requirements respecting fuel use, fuel efficiency, and reliability) as the 

Commission may, by rule, prescribe;

* * * * * * *

(18)(A) ‘‘cogeneration facility’’ means a facility which produces—

(i) electric energy, and 

(ii) steam or forms of useful energy (such as heat) which 

are used for industrial, commercial, heating, or cooling 

purposes; 

180

ø(B) ‘‘qualifying cogeneration facility’’ means a cogeneration 

facility which— (i) the Commission determines, by rule, meets such requirements (including requirements respecting minimum 

size, fuel use, and fuel efficiency) as the Commission may, 

by rule, prescribe; and 

(ii) is owned by a person not primarily engaged in the 

generation or sale of electric power (other than electric 

power solely from cogeneration facilities or small power 

production facilities);¿

(B) ‘‘qualifying cogeneration facility’’ means a cogeneration facility that the Commission determines, by rule, meets such requirements (including requirements respecting minimum size, 

fuel use, and fuel efficiency) as the Commission may, by rule, 

prescribe;

* * * * * * *

(22) ‘‘electric utility’’ ømeans any person or State agency (including any municipality) which sells electric energy; such 

term includes the Tennessee Valley Authority, but does not include any Federal power marketing agency;¿ means any person 

or Federal or State agency (including any municipality) that 

sells electric energy; such term includes the Tennessee Valley 

Authority and each Federal power marketing agency;

(23) ‘‘transmitting utility’’ ømeans any electric utility, qualifying cogeneration facility, qualifying small power production 

facility, or Federal power marketing agency which owns or operates electric power transmission facilities which are used for 

the sale of electric energy at wholesale;¿ means an entity, including any entity described in section 201(f), that owns or operates facilities used for the transmission of electric energy— (A) in interstate commerce; or 

(B) for the sale of electric energy at wholesale; 

* * * * * * *

(26) ‘‘unregulated transmitting utility’’ means an entity that—

(A) owns or operates facilities used for the transmission 

of electric energy in interstate commerce, and 

(B) is an entity described in section 2010 or a rural electric cooperative with financing from the Rural Utilities 

Service; 

(27) ‘‘distribution utility’’ means an electric utility that does 

not own or operate transmission facilities or an unregulated 

transmitting utility that provides 90 percent of the electric energy its transmits to customers at retail.

SEC. 4. * * *

(e) To issue licenses to citizens of the United States, or to any 

association of such citizens, or to any corporation organized under 

the laws of the United States or any State thereof, or to any State 

or municipality for the purpose of constructing, operating, and 

maintaining dams, water conduits, reservoirs, power houses, transmission lines, or other project works necessary or convenient for 

the development and improvement of navigation and for the development, transmission, and utilization of power across, along, from 

or in any of the streams or other bodies of water over which ConVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00184 Fmt 6604 Sfmt 6602 E:\HR\OC\SR043.XXX SR043
181

gress has jurisdiction under its authority to regulate commerce 

with foreign nations and among the several States, or upon any 

part of the public lands and reservations of the United States (including the Territories), or for the purpose of utilizing the surplus 

water or water power from any Government dam, except as herein 

provided: Provided, That licenses shall be issued within any reservation only after a finding by the Commission that the license 

will not interfere or be inconsistent with the purpose for which 

such reservation was created or acquired, and shall be subject to 

and contain such conditions as the Secretary of the department 

under whose supervision such reservation falls shall deem necessary for the adequate protection and utilization of such reservation. The license applicant shall be entitled to a determination on 

the record, after opportunity for an agency trial-type hearing of any 

disputed issues of material fact, with respect to such conditions: 

Provided further, That no license affecting the navigable capacity 

of any navigable waters of the United States shall be issued until 

the plans of the dam or other structures affecting navigation have 

been approved by the Chief of Engineers and the Secretary of the 

Army. 

* * * * * * *

SEC. 18. The Commission shall require the construction, maintenance, and operation by a licensee at its own expense of such lights 

and signals as may be directed by the Secretary of the Department 

in which the Coast Guard is operating, and such fishways as may 

be prescribed by the Secretary of the Interior or the Secretary of 

Commerce. The license applicant shall be entitled to a determination on the record, after opportunity for an agency trial-type hearing 

of any disputed issues of material fact, with respect to such 

fishways. The operation of any navigation facilities which may be 

constructed as a part of or in connection with any dam or diversion 

structure built under the provisions of this Act, whether at the expense of a licensee hereunder or of the United States, shall at all 

times be controlled by such reasonable rules and regulations in the 

interest of navigation, including the control of the level of the pool 

caused by such dam or diversion structure as may be made from 

time to time by the Secretary of the Army, and for willful failure 

to comply with any such rule or regulation such licensee shall be 

deemed guilty of a misdemeanor, and upon conviction thereof shall 

be punished as provided in section 316 hereof. 

* * * * * * *

SEC. 33. ALTERNATIVE CONDITIONS AND PRESCRIPTIONS. 

(a) ALTERNATIVE CONDITIONS.— (1) Whenever any person applies for a license for any project 

works within any reservation of the United States, and the Secretary of the Department under whose supervision such reservation falls (referred to in this subsection as ‘‘the Secretary’’) 

deems a condition to such license to be necessary under the first 

proviso of section 4(e), the license applicant may propose an alternative condition. 

(2) Notwithstanding the first proviso of section 4(e), the Secretary shall accept the proposed alternative condition referred to 

in paragraph (1), and the Commission shall include in the liVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00185 Fmt 6604 Sfmt 6603 E:\HR\OC\SR043.XXX SR043
182

cense such alternative condition, if the Secretary determines, 

based on substantial evidence provided by the license applicant 

or otherwise available to the Secretary, that such alternative 

condition—

(A) provides for the adequate protection and utilization of 

the reservation; and 

(B) will either—

(i) cost less to implement; or 

(ii) result in improved operation of the project works 

for electricity production, as compared to the condition 

initially deemed necessary by the Secretary. 

(3) The Secretary concerned shall submit into the public 

record of the Commission proceeding with any condition under 

section 4(e) or alternative condition it accepts under this section, a written statement explaining the basis for such condition, and reason for not accepting any alternative condition 

under this section. The written statement must demonstrate 

that the Secretary gave equal consideration to the effects of the 

condition adopted and alternatives not accepted on energy supply, distribution, cost, and use; flood control; navigation; water 

supply; and air quality (in addition to the preservation of other 

aspects of environmental quality); based on such information as 

may be available to the Secretary, including information voluntarily provided in a timely manner by the applicant and others. 

The Secretary shall also submit, together with the aforementioned written statement, all studies, data, and other factual information available to the Secretary and relevant to the Secretary’s decision. 

(4) Nothing in this section shall prohibit other interested parties from proposing alternative conditions. 

(5) If the Secretary does not accept an applicant’s alternative 

condition under this section, and the Commission finds that the 

Secretary’s condition would be inconsistent with the purposes of 

this part, or other applicable law, the Commission may refer 

the dispute to the Commission’s Dispute Resolution Service. The 

Dispute Resolution Service shall consult with the Secretary and 

the Commission and issue a non-binding advisory within 90 

days. The Secretary may accept the Dispute Resolution Service 

advisory unless the Secretary finds that the recommendation 

will not adequately protect the reservation. The Secretary shall 

submit the advisory and the Secretary’s final written determination into the record of the Commission’s proceeding. 

(b) ALTERNATIVE PRESCRIPTIONS.—

(1) Whenever the Secretary of the Interior or the Secretary of 

Commerce prescribes a fishway under section 18, the license applicant or licensee may propose an alternative to such prescription to construct, maintain, or operate a fishway. The alternative may include a fishway or an alternative to a fishway. 

(2) Notwithstanding section 18, the Secretary of the Interior 

or the Secretary of Commerce, as appropriate, shall accept and 

prescribe, and the Commission shall require, the proposed alternative referred to in paragraph (1), if the Secretary of the appropriate department determines, based on substantial evidence 

183

provided by the licensee or otherwise available to the Secretary, 

that such alternative— (A) will be no less protective of the fish resources than the 

fishway initially prescribed by the Secretary; and 

(B) will either— (i) cost less to implement; or 

(ii) result in improved operation of the project works 

for electricity production, as compared to the fishway 

initially deemed necessary by the Secretary. 

(3) The Secretary concerned shall submit into the public 

record of the Commission proceeding with any prescription 

under section 18 or alternative prescription it accepts under this 

section, a written statement explaining the basis for such prescription, and reason for not accepting any alternative prescription under this section. The written statement must demonstrate 

that the Secretary gave equal consideration to the effects of the 

condition adopted and alternatives not accepted on energy supply, distribution, cost, and use; flood control; navigation; water 

supply; and air quality (in addition to the preservation of other 

aspects of environmental quality); based on such information as 

may be available to the Secretary, including information voluntarily provided in a timely manner by the applicant and others. 

The Secretary shall also submit, together with the aforementioned written statement, all studies, data, and other factual information available to the Secretary and relevant to the Secretary’s decision. 

(4) Nothing in this section shall prohibit other interested parties from proposing alternative prescriptions. 

(5) If the Secretary concerned does not accept an applicant’s 

alternative prescription under this section, and the Commission 

finds that the Secretary’s prescription would be inconsistent 

with the purposes of this part, or other applicable law, the Commission may refer the dispute to the Commission’s Dispute Resolution Service. The Dispute Resolution Service shall consult 

with the Secretary and the Commission and issue a non-binding advisory within 90 days. The Secretary may accept the Dispute Resolution Service advisory unless the Secretary finds that 

the recommendation will not adequately protect the fish resources. The Secretary shall submit the advisory and the Secretary’s final written determination into the record of the Commission’s proceeding. 

* * * * * * *

PART II—REGULATION OF ELECTRIC UTILITY 

COMPANIES ENGAGED IN INTERSTATE COMMERCE 

* * * * * * *

FIXING RATES AND CHARGES; DETERMINATION OF COST OF

PRODUCTION OR TRANSMISSION

SEC. 206. * * *

(b) Whenever the Commission institutes a proceeding under this 

section, the Commission shall establish a refund effective date. In 

the case of a proceeding instituted on complaint, the refund effecVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00187 Fmt 6604 Sfmt 6602 E:\HR\OC\SR043.XXX SR043
184

tive date shall not be earlier than øthe date 60 days after the filing 

of such complaint nor later than 5 months after the expiration of 

such 60-day period¿ the date of the filing of such complaint nor 

later than 5 months after the filing of such complaint. In the case 

of a proceeding instituted by the Commission on its own motion, 

the refund effective date shall not be earlier than the date ø60 days 

after¿ of the publication by the Commission of notice of its intention to initiate such proceeding nor later than 5 months after the 

øexpiration of such 60-day period¿ publication date. Upon institution of a proceeding under this section, the Commission shall give 

to the decision of such proceeding the same preference as provided 

under section 205 of this Act and otherwise act as speedily as possible. øIf no final decision is rendered by the refund effective date 

or by the conclusion of the 180-day period commencing upon initiation of a proceeding pursuant to this section, whichever is earlier, 

the Commission shall state the reasons why it has failed to do so 

and shall state its best estimate as to when it reasonably expects 

to make such decision.¿ If no final decision is rendered by the conclusion of the 180-day period commencing upon initiation of a proceeding pursuant to this section, the Commission shall state the reasons why it has failed to do so and shall state its best estimate as 

to when it reasonably expects to make such decision. In any proceeding under this section, the burden of proof to show that any 

rate, charge, classification, rule, regulation, practice, or contract is 

unjust, unreasonable, unduly discriminatory, or preferential shall 

be upon the Commission or the complainant. 

* * * * * * *

CERTAIN WHEELING AUTHORITY

SEC. 211. (a) * * *

* * * * * * *

(c)ø(2)¿ No order may e issued under subsection (a) or (b) which 

requires the transmitting utility subject to the order to transmit, 

during any period, an amount of electric energy which replaces any 

amount of electric energy—

ø(A)¿ (1) required to be provided to such applicant pursuant 

to a contract during such period, or 

ø(B)¿ (2) currently provided to the applicant by the utility 

subject to the order pursuant to a rate schedule on file during 

such period with the Commission: Provided, That nothing in 

this subparagraph shall prevent an application for an order 

hereunder to be filed prior to øtermination of modification¿ termination or modification of øor¿ an existing rate schedule: Provided, That such order shall not become effective until termination of such rate schedule or the modification becomes effective. 

(d)(1) Any transmitting utility ordered under subsection (a) or (b) 

to provide transmission services may apply to the Commission for 

an order permitting such transmitting utility to cease providing all, 

or any portion of, such services. After public notice, notice to each 

affected State regulatory authority, each affected Federal power 

marketing agency, each affected transmitting utility, and each affected electric utility, and after an opportunity for an evidentiary 

185

hearing, the Commission shall issue an order terminating or modifying the order issued under subsection (a) or (b), if the øelectric 

utility¿ transmitting utility providing such transmission services 

has demonstrated, and the Commission has found, that—

(A) due to changed circumstances, the requirements applicable, under this section and section 212, to the issuance of an 

order under subsection (a) or (b) are no longer met, or 

(B) any transmission capacity of the utility providing transmission services under such order which was, at the time such 

order was issued, in excess of the capacity necessary to serve 

its own customers is no longer in excess of the capacity necessary for such purposes, or 

(C) the ordered transmission services require enlargement of 

transmission capacity and the transmitting utility subject to 

the order has failed, after making a good faith effort, to obtain 

the necessary approvals or property rights under applicable 

Federal, State, and local laws. 

No order shall be issued under this subsection pursuant to a finding under subparagraph (A) unless the Commission finds that such 

order is in the public interest. 

* * * * * * *

OPEN ACCESS BY UNREGULATED TRANSMITTING UTILITIES

SEC. 211A. (a) Subject to section 212(h), the Commission may, by 

rule or order, require an unregulated transmitting utility to provide 

transmission services—

(1) at rates that are comparable to those that the unregulated 

transmitting utility charges itself; and 

(2) on terms and conditions (not relating to rates) that are 

comparable to those under which such unregulated transmitting utility provides transmission services to itself and that are 

not unduly discriminatory or preferential. 

(b) The Commission shall exempt from any rule or order under 

this subsection any unregulated transmitting utility that—

(1) is a distribution utility that sells no more than 4,000,000 

megawatt hours of electricity per year; or 

(2) does not own or operate any transmission facilities that 

are necessary for operating an interconnected transmission system (or any portion thereof); or 

(3) meets other criteria the Commission determines to be in 

the public interest. 

(c) Whenever the Commission, after a hearing held upon a complaint, finds any exemption granted pursuant to subsection (b) adversely affects the reliable and efficient operation of an interconnected transmission system, it may revoke the exemption. 

(d) The rate changing procedures applicable to public utilities 

under subsections (c) and (d) of section 205 are applicable to unregulated transmitting utilities for purposes of this section. 

(e) In exercising its authority under paragraph (1) of subsection 

(a), the Commission may remand transmission rates to an unregulated transmitting utility for review and revision where necessary to 

meet the requirements of subsection (a). 

186

(f) The provision of transmission services under subsection (a) 

does not preclude a request for transmission services under section 

211. 

(g) The Commission may not require a State or municipality to 

take action under this section that constitutes a private business use 

for purposes of section 141 of the Internal Revenue Code of 1986 (26 

U.S.C. 141). 

(h) Nothing in this Act authorizes the Commission to require an 

unregulated transmitting utility to transfer control or operational 

control of its transmitting facilities to an RTO or any other Commission-approved organization designated to provide non-discriminatory transmission access. 

* * * * * * *

ELECTRIC RELIABILITY

SEC. 215. (a) For the purposes of this section: 

(1) The term ‘‘bulk power system’’ means— (A) facilities and control systems necessary for operating 

an interconnected electric energy transmission network (or 

any portion thereof; and 

(B) electric energy from generation facilities needed to 

maintain transmission system reliability. 

The term does not include facilities used in the local distribution of electric energy. 

(2) The terms ‘‘Electric Reliability Organization’’ and ‘‘ERO’’ mean the organization certified by the Commission under subsection (c), the purpose of which is to establish and enforce reliability standards for the bulk-power system, subject to Commission review. 

(3) The term ‘‘reliability standard’’ means a requirement, approved by the Commission under this section, to provide for reliable operation of the bulk power system. The term includes requirements for the operation of existing bulk-power system components and the design of planned additions or modifications 

to such components to the extent necessary to provide for reliable operation of the bulk power system, but the term does not 

include any requirement to enlarge such components or to construct new transmission capacity or generation capacity. 

(4) The term ‘‘reliable operation’’ means operating the components of the bulkpower system within equipment and electric 

system thermal, voltage, and stability limits so that instability, 

uncontrolled separation, or cascading failures of such system 

will not occur as a result of a sudden disturbance or unanticipated failure of system components. 

(5) The term ‘‘Interconnection’’ means a geographic area in 

which the operation of bulk-power system components is synchronized such that the failure of one or more of such components may adversely affect the ability of the operators of other 

components within the system to maintain reliable operation of 

the portion of the system within their control. 

(6) The term ‘‘transmission organization’’ means an RTO or 

other transmission organization finally approved by the Commission for the operation of transmission facilities. 

187

(7) The term ‘‘regional entity’’ means an entity having enforcement authority pursuant to subsection (e)(4). 

(b) The Commission shall have jurisdiction, within the United 

States, over the ERO certified by the Commission under subsection 

(c), any regional entities, and all users, owners and operators of the 

bulk power system, including the entities described in section 201(f), 

for purposes of approving reliability standards established under 

this section and enforcing compliance with this section. All users, 

owners and operators of the bulk power system shall comply with 

reliability standards that take effect under this section. The Commission shall issue a final rule to implement the requirements of 

this section not later than 180 days after the date of enactment of 

this section. 

(c) Following the issuance of a Commission rule under subsection 

(b), any person may submit an application to the Commission for 

certification as the Electric Reliability Organization. The Commission may certify one such ERO if the Commission determines that 

such ERO— (1) has the ability to develop and enforce, subject to subsection (d)(2), reliability standards that provide for an adequate 

level of reliability of the bulk power system; and 

(2) has established rules that— (A) assure its independence of the users and owners and 

operators of the bulk power system, while assuring fair 

stakeholder representation in the selection of its directors 

and balanced decisionmaking in any ERO committee or 

subordinate organizational structure; 

(B) allocate equitably reasonable dues, fees, and other 

charges among end users for all activities under this section; 

(C) provide fair and impartial procedures for enforcement 

of reliability standards through the imposition of penalties 

in accordance with subsection (e) (including limitations on 

activities, functions, or operations, or other appropriate 

sanctions); 

(D) provide for reasonable notice and opportunity for 

public comment, due process, openness, and balance of interests in developing reliability standards and otherwise exercising its duties; and 

(E) provide for taking, after certification, appropriate 

steps to gain recognition in Canada and Mexico. 

(d)(1) The ERO shall file each reliability standard or modification 

to a reliability standard that it proposes to be made effective under 

this section with the Commission. 

(2) The Commission may approve by rule or order a proposed reliability standard or modification to a reliability standard if it determines that the standard is just, reasonable, not unduly discriminatory or preferential, and in the public interest. The Commission 

shall give due weight to the technical expertise of the ERO with respect to the content of a proposed standard or modification to a reliability standard and to the technical expertise of a regional entity 

organized on an Interconnection-wide basis with respect to a reliability standard to be applicable within that Interconnection, but 

shall not defer with respect to the effect of a standard on competiVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00191 Fmt 6604 Sfmt 6603 E:\HR\OC\SR043.XXX SR043
188

tion. A proposed standard or modification shall take effect upon approval by the Commission. 

(3) The ERO shall rebuttably presume that a proposal from a regional entity organized on an Interconnection-wide basis for a reliability standard or modification to a reliability standard to be applicable on an Interconnection-wide basis is just, reasonable, and 

not unduly discriminatory or preferential, and in the public interest. 

(4) The Commission shall remand to the ERO for further consideration a proposed reliability standard or a modification to a reliability standard that the Commission disapproves in whole or in 

part. 

(5) The Commission, upon its own motion or upon complaint, may 

order the ERO to submit to the Commission a proposed reliability 

standard or a modification to a reliability standard that addresses 

a specific matter if the Commission considers such a new or modified reliability standard appropriate to carry out this section. 

(6) The final rule adopted under subsection (b) shall include fair 

processes for the identification and timely resolution of any conflict 

between a reliability standard and any function, rule, order, tariff, 

rate schedule, or agreement accepted, approved, or ordered by the 

Commission applicable to a transmission organization. Such transmission organization shall continue to comply with such function, 

rule, order, tariff, rate schedule or agreement accepted approved, or 

ordered by the Commission until— (A) the Commission finds a conflict exists between a reliability standard and any such provision; 

(B) the Commission orders a change to such provision pursuant to section 206 of this part; and 

(C) the ordered change becomes effective under this part. 

If the Commission determines that a reliability standard needs to 

be changed as a result of such a conflict, it shall order the ERO to 

develop and file with the Commission a modified reliability standard under paragraph (4) or (5) of this subsection. 

(e)(1) The ERO may impose, subject to paragraph (2), a penalty 

on a user or owner or operator of the bulk-power system for a violation of a reliability standard approved by the Commission under 

subsection (d) if the ERO, after notice and an opportunity for a 

hearing—

(A) finds that the user or owner or operator has violated a reliability standard approved by the Commission under subsection (d); and 

(B) files notice and the record of the proceeding with the Commission. 

(2) A penalty imposed under paragraph (1) may take effect not 

earlier than the 31st day after the ERO files with the Commission 

notice of the penalty and the record of proceedings. Such penalty 

shall be subject to review by the Commission, on its own motion or 

upon application by the user, owner or operator that is the subject 

of the penalty filed within 30 days after the date such notice is filed 

with the Commission. Application to the Commission for review, or 

the initiation of review by the Commission on its own motion, shall 

not operate as a stay of such penalty unless the Commission otherwise orders upon its own motion or upon application by the user, 

owner or operator that is the subject of such penalty. In any proVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00192 Fmt 6604 Sfmt 6603 E:\HR\OC\SR043.XXX SR043
189

ceeding to review a penalty imposed under paragraph (1), the Commission, after notice and opportunity for hearing (which hearing 

may consist solely of the record before the ERO and opportunity for 

the presentation of supporting reasons to affirm, modify, or set aside 

the penalty), shall by order affirm, set aside, reinstate, or modify the 

penalty, and, if appropriate, remand to the ERO for further proceedings. The Commission shall implement expedited procedures for 

such hearings. 

(3) On its own motion or upon complaint, the Commission may 

order compliance with a reliability standard and may impose a penalty against a user or owner or operator of the bulk power system, 

if the Commission finds, after notice and opportunity for a hearing, 

that the user or owner or operator of the bulk power system has engaged or is about to engage in any acts or practices that constitute 

or will constitute a violation of a reliability standard. 

(4) The Commission shall establish regulations authorizing the 

ERO to enter into an agreement to delegate authority to a regional 

entity for the purpose of proposing reliability standards to the ERO 

and enforcing reliability standards under paragraph (1) if—

(A) the regional entity is governed by an independent board, 

a balanced stakeholder board, or a combination independent 

and balanced stakeholder board; 

(B) the regional entity otherwise satisfies the provisions of 

subsection (c)(1) and (2); and 

(C) the agreement promotes effective and efficient administration of bulk-power system reliability. 

The Commission may modify such delegation. The ERO and the 

Commission shall rebuttably presume that a proposal for delegation 

to a regional entity organized on an Interconnection-wide basis promotes effective and efficient administration of bulk power system reliability and should be approved. Such regulation may provide that 

the Commission may assign the ERO’s authority to enforce reliability standards under paragraph (1) directly to a regional entity 

consistent with the requirements of this paragraph. 

(5) The Commission may take such action as is necessary or appropriate against the ERO or a regional entity to ensure compliance 

with a reliability standard or any Commission order affecting the 

ERO or a regional entity. 

(6) Any penalty imposed under this section shall bear a reasonable relation to the seriousness of the violation and shall take into 

consideration the efforts of such user, owner, or operator to remedy 

the violation in a timely manner. 

(f) The ERO shall file with the Commission for approval any proposed rule or proposed rule change, accompanied by an explanation 

of its basis and purpose. The Commission, upon its own motion or 

complaint, may propose a change to the rules of the ERO. A proposed rule or proposed rule change shall take effect upon a finding 

by the Commission, after notice and opportunity for comment, that 

the change is just, reasonable, not unduly discriminatory or preferential, is in the public interest, and satisfies the requirements of 

subsection (c). 

(g) The ERO shall conduct periodic assessments of the reliability 

and adequacy of the bulk power system in North America. 

190

(h) The President is urged to negotiate international agreements 

with the governments of Canada and Mexico to provide for effective 

compliance with reliability standards and the effectiveness of the 

ERO in the United States and Canada or Mexico. 

(i)(1) The ERO shall have authority to develop and enforce compliance with reliability standards for only the bulk power system. 

(2) This section does not authorize the ERO or the Commission 

to order the construction of additional generation or transmission 

capacity or to set and enforce compliance with standards for adequacy or safety of electric facilities or services. 

(3) Nothing in this section shall be construed to preempt any authority of any State to take action to ensure the safety, adequacy, 

and reliability of electric service within that State, as long as such 

action is not inconsistent with any reliability standard. 

(4) Within 90 days of the application of the ERO or other affected 

party, and after notice and opportunity for comment, the Commission shall issue a final order determining whether a State action is 

inconsistent with a reliability standard, taking into consideration 

any recommendation of the ERO. 

(5) The Commission, after consultation with the ERO, may stay 

the effectiveness of any State action, pending the Commission’s 

issuance of a final order. 

(j) The Commission shall establish a regional advisory body on 

the petition of at least two-thirds of the States within a region that 

have more than one-half of their electric load served within the region. A regional advisory body shall be composed of one member 

from each participating State in the region, appointed by the Governor of each State, and may include representatives of agencies, 

States, and provinces outside the United States. A regional advisory 

body may provide advice to the ERO, a regional entity, or the Commission regarding the governance of an existing or proposed regional entity within the same region, whether a standard proposed 

to apply within the region is just, reasonable, not unduly discriminatory or preferential, and in the public interest, whether fees proposed to be assessed within the region are just, reasonable, not unduly discriminatory or preferential, and in the public interest and 

any other responsibilities requested by the Commission. The Commission may give deference to the advice of any such regional advisory body if that body is organized on an Interconnection-wide 

basis. 

(k) The provisions of this section do not apply to Alaska or Hawaii. 

* * * * * * *

SEC. 220. (a)(1) The Commission shall exercise its authority under 

this Act to ensure that any load-serving entity that, as of the date 

of enactment of this section— (A) owns generation facilities, markets the output of federal 

generation facilities, or holds rights under one or more longterm contracts to purchase electric energy, for the purpose of 

meeting a service obligation, and 

(B) by reason of ownership of transmission facilities, or one 

or more contracts or service agreements for firm transmission 

service, holds firm transmission rights for delivery of the output 

of such generation facilities or such purchased energy to meet 

191

such service obligation, is entitled to use such firm transmission 

rights, or equivalent financial transmission rights, in order to 

deliver such output or purchased energy, or the output of other 

generating facilities or purchased energy to the extent deliverable using such rights, to meet its service obligation. 

(2) To the extent that all or a portion of the service obligation covered by such firm transmission rights is transferred to another loadserving entity, the successor load-serving entity shall be entitled to 

use the firm transmission rights associated with the transferred 

service obligation. Subsequent transfers to another load-serving entity, or back to the original load-serving entity, shall be entitled to 

the same rights. 

(3) The Commission shall exercise its authority under this Act in 

a manner that facilitates the planning and expansion of transmission facilities to meet the reasonable needs of load-serving entities to satisfy their service obligations. 

(b) Nothing in this section shall affect any methodology for the allocation of transmission rights by a Commission-approved entity 

that, prior to the date of enactment of this section, has been authorized by the Commission to allocate transmission rights. 

(c) Nothing in this Act shall relieve a load-serving entity from any 

obligation under State or local law to build transmission or distribution facilities adequate to meet its service obligations. 

(d) Nothing in this section shall provide a basis for abrogating 

any contract or service agreement for firm transmission service or 

rights in effect as of the date of the enactment of this subsection. 

(e) For purposes of this section: 

(1) The term ‘‘distribution utility’’ means an electric utility 

that has a service obligation to end-users. 

(2) The term ‘‘load-serving entity’’ means a distribution utility 

or an electric utility (including an entity described in section 

201(f) or a rural cooperative) that has a service obligation to 

end-users or a distribution utility. 

(3) The term ‘‘service obligation’’ means a requirement applicable to, or the exercise of authority granted to, an electric utility (including an entity described in section 201(f) or a rural cooperative) under Federal, State or local law or under long-term 

contracts to provide electric service to end-users or to a distribution utility. 

(f) Nothing in the section shall apply to an entity located in an 

area referred to in section 212(k)(2)(A). 

SUSTAINABLE TRANSMISSION NETWORKS RULEMAKING

SEC. 221. Within six months of enactment of this section, the 

Commission shall issue a final rule establishing transmission pricing policies applicable to all public utilities and policies for the allocation of costs associated with the expansion, modification or upgrade of existing interstate transmission facilities and for the interconnection of new transmission facilities for utilities and facilities 

which are not included within a Commission approved RTO. Consistent with section 205 of this Act, such rule shall, to the maximum 

extent practicable—

(1) promote capital investment in the economically efficient 

transmission systems; 

192

(2) encourage the construction of transmission and generation 

facilities in a manner which provides the lowest overall risk 

and cost to consumers; 

(3) encourage improved operation of transmission facilities 

and deployment of transmission technologies designed to increase capacity and efficiency of existing networks; 

(4) ensure that the costs of any transmission expansion or 

interconnection be allocated in such a way that all users of the 

affected transmission system bear the appropriate share of 

costs; and 

(5) ensure that parties who pay for facilities necessary for 

transmission expansion or interconnection receive appropriate 

compensation for those facilities. 

MARKET TRANSPARENCY RULES

SEC. 222. (a) Not later than 180 days after the date of enactment 

of this section, the Commission shall issue rules establishing an 

electronic information system to provide the Commission and the 

public with access to such information as is necessary or appropriate to facilitate price transparency and participation in markets 

subject to the Commission’s jurisdiction. Such systems shall provide 

information about the availability and market price of wholesale 

electric energy and transmission services to the Commission, State 

commissions, buyers and sellers of wholesale electric energy, users 

of transmission services, and the public. The Commission shall have 

authority to obtain such information from any electric and transmitting utility, including any entity described in section 201(f). 

(b) The Commission shall exempt from disclosure information it 

determines would, if disclosed, be detrimental to the operation of an 

effective market or jeopardize system security. This section shall not 

apply to an entity described in section 212(k)(2)(B) with respect to 

transactions for the purchase or sale of wholesale electric energy 

and transmission services within the area described in section 

212(k)(2)(A). 

PROHIBITION ON FILING FALSE INFORMATION

SEC. 223. It shall be a violation of this Act for any person or any 

other entity (including entities described in section 201(f)) willfully 

and knowingly to report any information relating to the price of 

electricity sold at wholesale, which information the person or any 

other entity knew to be false at the time of the reporting, to any governmental entity with the intent to manipulate the data being compiled by such governmental entity. 

PROHIBITION ON ROUND TRIP TRADING

SEC. 224. (a) It shall be a violation of this Act for any person or 

any other entity (including entities described in section 201(f)) willfully and knowingly to enter into any contract or other arrangement 

to execute a round-trip trade for the purchase or sale of electric energy at wholesale. 

(b) For the purposes of this section, the term ‘‘round trip trade’’ means a transaction, or combination of transactions, in which a 

person or any other entity—

193

(1) enters into a contract or other arrangement to purchase 

from, or sell to, any other person or other entity electric energy 

at wholesale; 

(2) simultaneously with entering into the contract or arrangement described in paragraph (1), arranges a financially offsetting trade with such other person or entity for the same such 

electric energy, at the same location, price, quantity and terms 

so that, collectively, the purchase and sale transactions in themselves result in no financial gain or loss; and 

(3) enters into the contract or arrangement with the intent to 

deceptively affect reported revenues, trading volumes, or prices. 

* * * * * * *

PART III—LICENSEES AND PUBLIC UTILITIES 

PROCEDURAL AND ADMINISTRATIVE PROVISIONS 

* * * * * * *

COMPLAINTS

SEC. 306. Any person, electric utility (including entities described 

in section 210(f) and rural cooperative entities), State, municipality, 

or State commission complaining of anything done or omitted to be 

done by any licensee, transmitting utility, or public utility in contravention of the provisions of this Act may apply to the Commission by petition which shall briefly state the facts, whereupon a 

statement of the complaint thus made shall be forwarded by the 

Commission to such licensee, transmitting utility, or public utility, 

who shall be called upon to satisfy the complaint or to answer the 

same in writing within a reasonable time to be specified by the 

Commission. If such licensee, transmitting utility, or public utility 

shall not satisfy the complaint within the time specified or there 

shall appear to be any reasonable ground for investigating such 

complaint, it shall be the duty of the Commission to investigate the 

matters complained of in such manner and by such means as it 

shall find proper. 

INVESTIGATIONS BY COMMISSION

SEC. 307. (a) The Commission may investigate any facts, conditions, practices, or matters which it may find necessary or proper 

in order to determine whether any person or transmitting utility

has violated or is about to violate any provision of this Act or any 

rule, regulation, or order thereunder, or to aid in the enforcement 

of the provisions of this Act or in prescribing rules or regulations 

thereunder, or in obtaining information to serve as a basis for recommending further legislation concerning the matters to which this 

Act relates. 

* * * * * * *

REHEARINGS; COURT REVIEW OF ORDERS

SEC. 313. (a) Any person, electric utility, State, municipality, or 

State to which such person, State, municipality, or State commission is a party may apply for a rehearing within thirty days after 

the issuance of such order. * * *

194

GENERAL FORFEITURE PROVISIONS; VENUE

SEC. 315. * * *

(c) This øsubsection¿ section shall not apply in the case of any 

provision of section 211, 212, 213, or 214 or any rule or order 

issued under any such provision. 

* * * * * * *

GENERAL PENALTIES

SEC. 316. (a) Any person who willfully and knowingly does or 

causes or suffers to be done any act, matter, or thing in this Act 

prohibited or declared to be unlawful, or who willfully and knowingly omits or fails to do any act, matter, or thing in this Act required to be done, or willfully and knowingly causes or suffers such 

omission or failure, shall, upon conviction thereof, be punished by 

a fine of not more than ø$5,000¿ $1,000,000 or by imprisonment for 

not more than øtwo years¿ five years, or both. 

(b) Any person who willfully and knowingly violates any rule, 

regulation, restriction, condition, or order made or imposed by the 

Commission under authority of this Act, or any rule or regulation 

imposed by the Secretary of the Army under authority of Part I of 

this Act shall, in addition to any other penalties provided by law, 

be punished upon conviction thereof by a fine of not exceeding 

ø$500¿ $25,000 for each and every day during which such offense 

occurs. 

ø(c) This subsection shall not apply in the case of any provision 

of section 211, 212, 213, or 214 or any rule or order issued under 

any such provision.¿

SEC. 316A. ENFORCEMENT OF CERTAIN PROVISIONS. 

(a) VIOLATIONS.—It shall be unlawful for any person to violate 

any provision of øsection 211, 212, 213, or 214¿ Part II or any rule 

or order issued under any such provision. 

(b) CIVIL PENALTIES.—Any person who violates any provision of 

øsection 211, 212, 213, or 214¿ Part II or any provision of any rule 

or order thereunder shall be subject to a civil penalty of not more 

than ø$10,000¿ $1,000,000 for each day that such violation continues. 

* * * * * * *

øCONFLICT OF JURISDICTION

øSEC. 318. If, with respect to the issue, sale, or guaranty of a security, or assumption of obligation or liability in respect of a security, the method of keeping accounts, the filing of reports, or the 

acquisition or disposition of any security, capital assets, facilities, 

or any other subject matter, any person is subject both to a requirement of the Public Utility Holding Company Act of 1935 or of a 

rule, regulation, or order thereunder and to a requirement of this 

Act or of a rule, regulation, or order thereunder, the requirement 

of the Public Utility Holding Company Act of 1935 shall apply to 

such person, and such person shall not be subject to the requirement of this Act, or of any rule, regulation, or order thereunder, 

with respect to the same subject matter, unless the Securities and 

Exchange Commission has exempted such person from such reVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00198 Fmt 6604 Sfmt 6602 E:\HR\OC\SR043.XXX SR043
195

quirement of the Public Utility Holding Company Act of 1935, in 

which case the requirements of this Act shall apply to such person.¿

PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 

Act of August 26, 1935, chapter 687, as amended (15 U.S.C. 79– 79z–6)

øPUBLIC UTILITY HOLDING COMPANY ACT OF 1935

ø(References in brackets ø ¿ are to title 15, United States Code) 

øAN ACT To provide for control and regulation of public-utility holding companies, 

and for other purposes 

ƒBe it enacted by the Senate and House of Representatives of the 

United States of America in Congress assembled, That this Act may 

be cited as the ‘‘Public Utility Act of 1935.’’

øTITLE I—CONTROL OF PUBLIC-UTILITY 

HOLDING COMPANIES 

øNECESSITY FOR CONTROL OF HOLDING COMPANIES

øSECTION 1. (a) Public-utility holding companies and their subsidiary companies are affected with a national public interest in 

that, among other things, (1) their securities are widely marketed 

and distributed by means of the mails and instrumentalities of 

interstate commerce and are sold to a large number of investors in 

different States; (2) their service, sales, construction, and other contracts and arrangements are often made and performed by means 

of the mails and instrumentalities of interstate commerce; (3) their 

subsidiary public-utility companies often sell and transport gas and 

electric energy by the use of means and instrumentalities of interstate commerce; (4) their practices in respect of and control over 

subsidiary companies often materially affect the interstate commerce in which those companies engage; (5) their activities extending over many States are not susceptible of effective control by any 

State and make difficult, if not impossible, effective State regulation of public-utility companies. 

ø(b) Upon the basis of facts disclosed by the reports of the Federal Trade Commission made pursuant to S. Res. 83 (Seventieth 

Congress, first session), the reports of the Committee on Interstate 

and Foreign Commerce, House of Representatives, made pursuant 

to H. Res. 59 (Seventy-second Congress, first session) and H.J. Res. 

572 (Seventy-second Congress, second session) and otherwise disclosed and ascertained, it is hereby declared that the national public interest, the interest of investors in the securities of holding 

companies and their subsidiary companies and affiliates, and the 

interest of consumers of electric energy and natural and manufactured gas, are or may be adversely affected— ø(1) when such investors cannot obtain the information necessary to appraise the financial position or earning power of 

the issuers, because of the absence of uniform standard accounts; when such securities are issued without the approval 

196

or consent of the States having jurisdiction over subsidiary 

public-utility companies; when such securities are issued upon 

the basis of fictitious or unsound asset values having no fair 

relation to the sums invested in or the earning capacity of the 

properties and upon the basis of paper profits from intercompany transactions, or in anticipation of excessive revenues 

from subsidiary public-utility companies; when such securities 

are issued by a subsidiary public-utility company under circumstances which subject such company to the burden of supporting an overcapitalized structure and tend to prevent voluntary rate reductions; 

ø(2) when subsidiary public-utility companies are subjected 

to excessive charges for services, construction work, equipment, 

and materials, or enter into transactions in which evils result 

from an absence of arm’s-length bargaining or from restraint 

of free and independent competition; when service, management, construction, and other contracts involve the allocation 

of charges among subsidiary public-utility companies in different States so as to present problems of regulation which 

cannot be dealt with effectively by the States; 

ø(3) when control of subsidiary public-utility companies affects the accounting practices and rate, dividend, and other 

policies of such companies so as to complicate and obstruct 

State regulation of such companies, or when control of such 

companies is exerted through disproportionately small investment; 

ø(4) when the growth and extension of holding companies 

bears no relation to economy of management and operation or 

the integration and coordination of related operating properties; or 

ø(5) when in any other respect there is lack of economy of 

management and operation of public-utility companies or lack 

of efficiency and adequacy of service rendered by such companies, or lack of effective public regulation, or lack of economies 

in the raising of capital. 

ø(c) When abuses of the character above enumerated become persistent and wide-spread the holding company becomes an agency 

which, unless regulated, is injurious to investors, consumers, and 

the general public; and it is hereby declared to be the policy of this 

title, in accordance with which policy all the provisions of this title 

shall be interpreted, to meet the problems and eliminate the evils 

as enumerated in this section, connected with public-utility holding 

companies which are engaged in interstate commerce or in activities which directly affect or burden interstate commerce; and for 

the purpose of effectuating such policy to compel the simplification 

of public-utility holding-company systems and the elimination 

therefrom of properties detrimental to the proper functioning of 

such systems, and to provide as soon as practicable for the elimination of public-utility holding companies except as otherwise expressly provided in this title. 

øDEFINITIONS

øSEC. 2. (a) When used in this title, unless the context otherwise 

requires—

197

ø(1) ‘‘Person’’ means an individual or company.

ø(2) ‘‘Company’’ means a corporation, a partnership, an association, a joint-stock company, a business trust, or an organized group of persons, whether incorporated or not; or any receiver, trustee, or other liquidating agent of any of the foregoing in his capacity as such. 

ø(3) ‘‘Electric utility company’’ means any company which 

owns or operates facilities used for the generation, transmission, or distribution of electric energy for sale, other than 

sale to tenants or employees of the company operating such facilities for their own use and not for resale. The Commission, 

upon application, shall by order declare a company operating 

any such facilities not to be an electric utility company if the 

Commission finds that (A) such company is primarily engaged 

in one or more businesses other than the business of an electric utility company, and by reason of the small amount of electric energy sold by such company it is not necessary in the 

public interest or for the protection of investors or consumers 

that such company be considered an electric utility company 

for the purposes of this title, or (B) such company is one operating within a single State, and substantially all of its outstanding securities are owned directly or indirectly by another 

company to which such operating company sells or furnishes 

electric energy which it generates; such other company uses 

and does not resell such electric energy, is engaged primarily 

in manufacturing (other than the manufacturing of electric energy or gas) and is not controlled by any other company; and 

by reason of the small amount of electric energy sold or furnished by such operating company to other persons it is not 

necessary in the public interest or for the protection of investors or consumers that it be considered an electric utility company for the purposes of this title. The filing of an application 

hereunder in good faith shall exempt such company (and the 

owner of the facilities operated by such company) from the application of this paragraph until the Commission has acted 

upon such application. As a condition to the entry of any such 

order, and as a part thereof, the Commission may require application to be made periodically for a renewal of such order, 

and may require the filing of such periodic or special reports 

regarding the business of the company as the Commission may 

find necessary or appropriate to insure that such company continues to be entitled to such exemption during the period for 

which such order is effective. The Commission, upon its own 

motion or upon application, shall revoke such order whenever 

it finds that the conditions specified in clause (A) or (B) are not 

satisfied in the case of such company. Any action of the Commission under the preceding sentence shall be by order. Application under this paragraph may be made by the company in 

respect of which the order is to be issued or by the owner of 

the facilities operated by such company. Any order issued 

under this paragraph shall apply equally to such company and 

such owner. The Commission may by rules or regulations conditionally or unconditionally provide that any specified class or 

classes of companies which it determines to satisfy the condiVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00201 Fmt 6604 Sfmt 6602 E:\HR\OC\SR043.XXX SR043
198

tions specified in clause (A) or (B), and the owners of the facilities operated by such companies, shall not be deemed electric 

utility companies within the meaning of this paragraph. 

ø(4) ‘‘Gas utility company’’ means any company which owns 

operates facilities used for the distribution at retail (other than 

distribution only in enclosed portable containers, or distribution to tenants or employees of the company operating such facilities for their own use and not for resale) of natural or manufactured gas for heat, light, or power. The Commission, upon 

application, shall by order declare a company operating any 

such facilities not to be a gas utility company if the Commission finds that (A) such company is primarily engaged in one 

or more businesses other than the business of a gas utility 

company, and (B) by reason of the small amount of natural or 

manufactured gas distributed at retail by such company it is 

not necessary in the public interest or for the protection of investors or consumers that such company be considered a gas 

utility company for the purposes of this title. The filing of an 

application hereunder in good faith shall exempt such company 

(and the owner of the facilities operated by such company) 

from the application of this paragraph until the Commission 

has acted upon such application. As a condition to the entry of 

any such order, and as a part thereof, the Commission may require application to be made periodically for a renewal of such 

order, and may require the filing of such periodic or special reports regarding the business of the company as the Commission may find necessary or appropriate to insure that such 

company continues to be entitled to such exemption during the 

period for which such order is effective. The Commission, upon 

its own motion or upon application, shall revoke such order 

whenever it finds that the conditions specified in clauses (A) 

and (B) are not satisfied in the case of such company. Any action of the Commission under the preceding sentence shall be 

by order. Application under this paragraph may be made by 

the company in respect of which the order is to be issued or 

by the owner of the facilities operated by such company. Any 

order issued under this paragraph shall apply equally to such 

company and such owner. The Commission may by rules or 

regulations conditionally or unconditionally provide that any 

specified class or classes of companies which it determines to 

satisfy the conditions specified in clauses (A) and (B), and the 

owners of the facilities operated by such companies, shall not 

be deemed gas utility companies within the meaning of this 

paragraph. 

ø(5) ‘‘Public-utility company’’ means an electric utility company or a gas utility company. 

ø(6) ‘‘Commission’’ means the Securities and Exchange Commission. 

ø(7) ‘‘Holding company’’ means—

ø(A) any company which directly or indirectly owns, controls, or holds with power to vote, 10 per centum or more 

of the outstanding voting securities of a public-utility company or of a company which is a holding company by virtue of this clause or clause (B), unless the Commission, as 

199

hereinafter provided, by order declares such company not 

lo be a holding company; and 

ø(B) any person which the Commission determines, after 

notice and opportunity for hearing, directly or indirectly to 

exercise (either alone or pursuant to an arrangement or 

understanding with one or more other persons) such a controlling influence over the management or policies of any 

public-utility or holding company as to make it necessary 

or appropriate in the public interest or for the protection 

of investors or consumers that such person be subject to 

the obligations, duties, and liabilities imposed in this title 

upon holding companies. 

øThe Commission, upon application, shall by order declare that 

a company is not a holding company under clause (A) if the 

Commission finds that the applicant (i) does not, either alone 

or pursuant to an arrangement or understanding with one or 

more other persons, directly or indirectly control a public-utility or holding company either through one or more intermediary persons or by any means or device whatsoever, (ii) is 

not an intermediary company through which such control is exercised, and (iii) does not, directly or indirectly, exercise (either 

alone or pursuant to an arrangement or understanding with 

one or more other persons) such a controlling influence over 

the management or policies of any public-utility or holding 

company as to make it necessary or appropriate in the public 

interest or for the protection of investors or consumers that the 

applicant be subject to the obligations, duties, and liabilities 

imposed in this title upon holding companies. The filing of an 

application hereunder in good faith by a company other than 

a registered holding company shall exempt the applicant from 

any obligation, duty, or liability imposed in this title upon the 

applicant as a holding company, until the Commission has 

acted upon such application. Within a reasonable time after 

the receipt of any application hereunder, the Commission shall 

enter an order granting, or, after notice and opportunity for 

hearing, denying or otherwise disposing of, such application. 

As a condition to the entry of any order granting such application and as a part of any such order, the Commission may require the applicant to apply periodically for a renewal of such 

order and to do or refrain from doing such acts or things, in 

respect of exercise of voting rights, control over proxies, designation of officers and directors, existence of interlocking officers, directors and other relationships, and submission of periodic or special reports regarding affiliations or intercorporate 

relationships of the applicant, as the Commission may find 

necessary or appropriate to ensure that in the case of the applicant the conditions specified in clauses (i), (ii), and (iii) are 

satisfied during the period for which such order is effective. 

The Commission, upon its own motion or upon application of 

the company affected, shall revoke the order declaring such 

company not to be a holding company whenever in its judgment any condition specified in clause (i), (ii), or (iii) is not satisfied in the case of such company, or modify the terms of such 

order whenever in its judgment such modification is necessary 

200

to ensure that in the case of such company the conditions specified in clauses (i), (ii), and (iii) are satisfied during the period 

for which such order is effective. Any action of the Commission 

under the preceding sentence shall be by order. 

ø(8) ‘‘Subsidiary company’’ of a specified holding company 

means—

ø(A) any company 10 per centum or more of the outstanding voting securities of which are directly or indirectly owned, controlled, or held with power to vote, by 

such holding company (or by a company that is a subsidiary company of such holding company by virtue of this 

clause or clause (B)), unless the Commission, as hereinafter provided, by order declares such company not to be 

a subsidiary company of such holding company; and 

ø(B) any person the management or policies of which the 

Commission, after notice and opportunity for hearing, determines to be subject to a controlling influence, directly or 

indirectly, by such holding company (either alone or pursuant to an arrangement or understanding with one or more 

other persons) so as to make it necessary or appropriate in 

the public interest or for the protection of investors or consumers that such person be subject to the obligations, duties, and liabilities imposed in this title upon subsidiary 

companies of holding companies. 

øThe Commission, upon application, shall by order declare that 

a company is not a subsidiary company of a specified holding 

company under clause (A) if the Commission finds that (i) the 

applicant is not controlled, directly or indirectly, by such holding company (either alone or pursuant to an arrangement or 

understanding with one or more other persons) either through 

one or more intermediary persons or by any means or device 

whatsoever, (ii) the applicant is not an intermediary company 

through which such control of another company is exercised, 

and (iii) the management or policies of the applicant are not 

subject to a controlling influence, directly or indirectly, by such 

holding company (either alone or pursuant to an arrangement 

or understanding with one or more other persons) so as to 

make it necessary or appropriate in the public interest or for 

the protection of investors or consumers that the applicant be 

subject to the obligations, duties, and liabilities imposed in this 

title upon subsidiary companies of holding companies. The filing of an application hereunder in good faith shall exempt the 

applicant from any obligation, duty, or liability imposed in this 

title upon the applicant as a subsidiary company of such specified holding company until the Commission has acted upon 

such application. Within a reasonable time after the receipt of 

any application hereunder, the Commission shall enter an 

order granting, or, after notice and opportunity for hearing, denying or otherwise disposing of, such application. As a condition to the entry of, and as a part of, any order granting such 

application, the Commission may require the applicant to 

apply periodically for a renewal of such order and to file such 

periodic or special reports regarding the affiliations or intercorporate relationships of the applicant as the Commission may 

201

find necessary or appropriate to enable it to determine whether 

in the case of the applicant the conditions specified in clauses 

(i), (ii), and (iii) are satisfied during the period for which such 

order is effective. The Commission, upon its own motion or 

upon application, shall revoke the order declaring such company not to be a subsidiary company whenever in its judgment 

any condition specified in clause (i), (ii), or (iii) is not satisfied 

in the case of such company, or modify the terms of such order 

whenever in its judgment such modification is necessary to ensure that in the case of such company the conditions specified 

in clauses (i), (ii), and (iii) are satisfied during the period for 

which such order is effective. Any action of the Commission 

under the preceding sentence shall be by order. Any application under this paragraph may be made by the holding company or the company in respect of which the order is to be entered, but as used in this paragraph the term ‘‘applicant’’

means only the company in respect of which the order is to be 

entered. 

ø(9) ‘‘Holding-company system’’ means any holding company, 

together with all its subsidiary companies, and all mutual 

service companies (as defined in paragraph (13) of this subsection) of which such holding company or any subsidiary company thereof is a member company (as defined in paragraph 

(14) of this subsection). 

ø(10) ‘‘Associate company’’ of a company means any company 

in the same holding-company system with such company. 

ø(11) ‘‘Affiliate’’ of a specified company means—

ø(A) any person that directly or indirectly owns, controls, 

or holds with power to vote, 5 per centum or more of the 

outstanding voting securities of such specified company; 

ø(B) any company 5 per centum or more of whose outstanding voting securities are owned, controlled, or held 

with power to vote, directly or indirectly, by such specified 

company; 

ø(C) any individual who is an officer or director of such 

specified company, or of any company which is an affiliate 

thereof under clause (A) of this paragraph; and 

ø(D) any person or class of persons that the Commission 

determines, after appropriate notice and opportunity for 

hearing, to stand in such relation to such specified company that there is liable to be such an absence of arm’s 

length bargaining in transactions between them as to 

make it necessary or appropriate in the public interest or 

for the protection of investors or consumers that such person be subject to the obligations, duties, and liabilities imposed in this title upon affiliates of a company. 

ø(12) ‘‘Registered holding company’’ means a person whose 

registration is in effect under section 5. 

ø(13) ‘‘Mutual service company’’ means a company approved 

mutual service company under section 13. 

ø(14) ‘‘Member company’’ means a company which is a member of an association or group of companies mutually served by 

a mutual service company. 

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ø(15) ‘‘Director’’ means any director of a corporation or any 

individual who performs similar functions in respect of any 

company. 

ø(16) ‘‘Security’’ means any note, draft, stock, treasury stock, 

bond, debenture, certificate of interest or participation in any 

profit-sharing agreement or in any oil, gas, other mineral royalty or lease, any collateral-trust certificate, preorganization 

certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, receiver’s or trustee’s certificate, or, in general, any instrument commonly known as a ‘‘security’’; or any certificate of 

interest or participation in, temporary or interim certificate for, 

receipt for, guaranty of, assumption of liability on, or warrant 

or right to subscribe to or purchase, any of the foregoing. 

ø(17) ‘‘Voting security’’ means any security presently entitling the owner or holder thereof to vote in the direction or 

management of the affairs of a company, or any security issued 

under or pursuant to any trust, agreement, or arrangement 

whereby a trustee or trustees or agent or agents for the owner 

or holder of such security are presently entitled to vote in the 

direction or management of the affairs of a company; and a 

specified per centum of the outstanding voting securities of a 

company means such amount of the outstanding voting securities of such company as entitles the holder or holders thereof 

to cast said specified per centum of the aggregate votes which 

the holders of all the outstanding voting securities of such company are entitled to cast in the direction or management of the 

affairs of such company. 

ø(18) ‘‘Utility assets’’ means the facilities, in place, of any 

electric utility company or gas utility company for the production, transmission, transportation, or distribution of electric energy or natural or manufactured gas. 

ø(19) ‘‘Service contract’’ means any contract, agreement, or 

understanding whereby a person undertakes to sell or furnish, 

for a charge, any managerial, financial, legal, engineering, purchasing, marketing, auditing, statistical, advertising, publicity, 

tax research, or any other service, information, or data. 

ø(20) ‘‘Sales contract’’ means any contract, agreement, or understanding whereby a person undertakes to sell, lease, or furnish, for a charge, any goods, equipment, materials, supplies, 

appliances, or similar property. As used in this paragraph the 

term ‘‘property’’ does not include electric energy or natural or 

manufactured gas. 

ø(21) ‘‘Construction contract’’ means any contract, agreement, or understanding for the construction, extension, improvement, maintenance, or repair of the facilities or any park 

thereof of a company for a charge. 

ø(22) ‘‘Buy’’, ‘‘acquire’’, ‘‘acquisition’’, or ‘‘purchase’’ includes 

any purchase, acquisition by lease, exchange, merger, consolidation, or other acquisition. 

ø(23) ‘‘Sale’’ or ‘‘sell’’ includes any sale, disposition by lease, 

exchange or pledge, or other disposition. 

ø(24) ‘‘State’’ means any State of the United States or the 

District of Columbia.

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ø(25) ‘‘United States’’, when used in a geographical sense, 

means the States. 

ø(26) ‘‘State commission’’ means any commission, board, 

agency, or officer, by whatever name designated, of a State, 

municipality, or other political subdivision of a State which 

under the law of such State has jurisdiction to regulate public 

utility companies. 

ø(27) ‘‘State securities commission’’ means any commission, 

board, agency, or officer, by whatever name designated, other 

than a State commission as defined in paragraph (26) of this 

subsection, which under the law of a State has jurisdiction to 

regulate, approve, or control the issue or sale of a security by 

a company. 

ø(28) ‘‘Interstate commerce’’ means trade, commerce, transportation, transmission, or communication among the several 

States or between any State and any place outside thereof. 

ø(29) ‘‘Integrated public-utility system’’ means— ø(A) As applied to electric utility companies, a system 

consisting of one or more units of generating plants and/ 

or transmission lines and/or distributing facilities, whose 

utility assets, whether owned by one or more electric utility companies, are physically interconnected or capable of 

physical interconnection and which under normal conditions may be economically operated as a single interconnected and coordinated system confined in its operations to a single area or region, in one or more States, not 

so large as to impair (considering the state of the art and 

the area or region affected) the advantages of localized 

management, efficient operation, and the effectiveness of 

regulation; and 

ø(B) As applied to gas utility companies, a system consisting of one or more gas utility companies which are so 

located and related that substantial economies may be effectuated by being operated as a single coordinated system 

confined in its operations to a single area or region, in one 

or more States, not so large as to impair (considering the 

state of the art and the area or region affected) the advantages of localized management, efficient operation, and the 

effectiveness of regulation; Provided, That gas utility companies deriving natural gas from a common source of supply may be deemed to be included in a single area or region. 

ø(b) No person shall be deemed to be a holding company under 

clause (B) of paragraph (7) of subsection (a), or a subsidiary company under clause (B) of paragraph (8) of such subsection, or an 

affiliate under clause (D) of paragraph (11) of such subsection, unless the Commission, after appropriate notice and opportunity for 

hearing, has issued an order declaring such person to be a holding 

company, a subsidiary company, or an affiliate, or declaring a class 

of which such person is a member to be affiliates. Such an order 

shall not become effective for at least thirty days after the mailing 

of a copy thereof to the person thereby declared to be a holding 

company, subsidiary company, or affiliate; or, in the case of determination of affiliates by classes, until at least thirty days after apVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00207 Fmt 6604 Sfmt 6602 E:\HR\OC\SR043.XXX SR043
204

1Public Law 99–648 (100 Stat. 3632), entitled ‘‘An Act to clarify the exemptive authority of 

the Securities and Exchange Commission,’’ provides as follows: ‘‘Be it enacted by the Senate and House of Representatives of the United States of America in 

Congress assembled, That notwithstanding section 3(a) of the Public Utility Holding Company 

Act of 1935 (15 U.S.C. 79c(a)), a holding company which has only one subsidiary company that 

is solely a gas utility company, as defined in said Act, shall be exempt from all provisions, except section 9(a)(2), of said Act if neither the holding company nor any other subsidiary company 

is a public utility company, the operations of such subsidiary gas utility company do not exceed 

beyond the State in which it is organized, the subsidiary company was incorporated on June 

16, 1986, for the express purpose of operating as a gas utility company, and all of whose voting 

securities are owned by the holding company, and neither the holding company, nor any of its 

subsidiary companies are engaged in residential or commercial plumbing, heating, refrigeration, 

air-conditioning, or in the sale, installation or servicing of such or related equipment.’’

propriate publication thereof in such manner as the Commission 

shall determine. Whenever the Commission, on its own motion or 

upon application by the person declared to be a holding company, 

subsidiary company, or affiliate, finds that the circumstances which 

gave rise to the issuance of any such order no longer exist, the 

Commission shall by order revoke such order. 

ø(c) No provision in this title shall apply to, or be deemed to include, the United States, a State, or any political subdivision of a 

State, or any agency, authority, or instrumentality of any one or 

more of the foregoing, or any corporation which is wholly owned directly or indirectly by any one or more of the foregoing, or any officer, agent, or employee of any of the foregoing acting as such in the 

course of his official duty, unless such provision makes specific reference thereto. 

øPOWER TO MAKE PARTICULAR EXEMPTIONS REGARDING HOLDING

COMPANIES, SUBSIDIARY COMPANIES, AND AFFILIATES

øSEC. 3. (a)1 The Commission, by rules and regulations upon its 

own motion, or by order upon application, shall exempt any holding 

company, and every subsidiary company thereof as such, from any 

provision or provisions of this title, unless and except insofar as it 

finds the exemption detrimental to the public interest or the interest of investors or consumers, if—

ø(1) such holding company, and every subsidiary company 

thereof which is a public-utility company from which such 

holding company derives, directly or indirectly, any material 

part of its income, are predominantly intrastate in character 

and carry on their business substantially in a single State in 

which such holding company and every such subsidiary company thereof are organized; 

ø(2) such holding company is predominantly a public-utility 

company whose operations as such do not extend beyond the 

State in which it is organized and States contiguous thereto; 

ø(3) such holding company is only incidentally a holding 

company, being primarily engaged or interested in one or more 

businesses other than the business of a public-utility company 

and (A) not deriving, directly or indirectly, any material part 

of its income from any one or more subsidiary companies, the 

principal business of which is that of a public-utility company, 

or (B) deriving a material part of its income from any one or 

more such subsidiary companies, if substantially all the outstanding securities of such companies are owned, directly or indirectly, by such holding company;

205

ø(4) such holding company is temporarily a holding company 

solely by reason of the acquisition of securities for purposes of 

liquidation or distribution in connection with a bona fide debt 

previously contracted or in connection with a bona fide arrangement for the underwriting or distribution of securities; or 

ø(5) such holding company is not, and derives no material 

part of its income, directly or indirectly, from any one or more 

subsidiary companies which are, a company or companies the 

principal business of which within the United States is that of 

public-utility company. 

ø(b) The Commission, by rules and regulations upon its own motion, or by order upon application, shall exempt any subsidiary 

company, as such, of a holding company from any provision or provisions of this title, the application of which to such subsidiary 

company the Commission finds is not necessary in the public interest or for the protection of investors, if such subsidiary company 

derives no material part of its income, directly or indirectly, from 

sources within the United States, and neither it nor any of its subsidiary companies is a public-utility company operating in the 

United States. 

ø(c) Within a reasonable time after the receipt of an application 

for exemption under subsection (a) or (b), the Commission shall 

enter an order granting, or, after notice and opportunity for hearing, denying or otherwise disposing of such application. The filing 

of an application in good faith under subsection (a) by a person 

other than a registered holding company shall exempt the applicant from any obligation, duty, or liability imposed in this title 

upon the applicant as a holding company until the Commission has 

acted upon such application. The filing of an application in good 

faith under subsection (b) shall exempt the applicant from any obligation, duty, or liability imposed in this title upon the applicant as 

a subsidiary company until the Commission has acted upon such 

application. Whenever the Commission, on its own motion, or upon 

application by the holding company or any subsidiary company 

thereof exempted by any order issued under subsection (a), or by 

the subsidiary company exempted by any order issued under subsection (b), finds that the circumstances which gave rise to the 

issuance of such order no longer exist, the Commission shall by 

order revoke such order. 

ø(d) The Commission may, by rules and regulations, conditionally 

or unconditionally exempt any specified class or classes of persons 

from the obligations, duties, or liabilities imposed upon such persons as subsidiary companies or affiliates under any provision or 

provisions of this title, and may provide within the extent of any 

such exemption that such specified class or classes of persons shall 

not be deemed subsidiary companies or affiliates within the meaning of any such provision or provisions, if and to the extent that 

it deems the exemption necessary or appropriate in the public interest or for the protection of investors or consumers and not contrary to the purposes of this title. 

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øTRANSACTIONS BY UNREGISTERED HOLDING COMPANIES

øSEC. 4. (a) After December 1, 1935, unless a holding company 

is registered under section 5, it shall be unlawful for such holding 

company, directly or indirectly—

ø(1) to sell, transport, transmit, or distribute, or own or operate any utility assets for the transportation, transmission, or 

distribution of, natural or manufactured gas or electric energy 

in interstate commerce; 

ø(2) by use of the mails or any means or instrumentality of 

interstate commerce, to negotiate, enter into, or take any step 

in the performance of, any service, sales, or construction contract undertaking to perform services or construction work for, 

or sell goods to, any public-utility company or holding company; 

ø(3) to distribute or make any public offering for sale or exchange of any security of such holding company, any subsidiary company or affiliate of such holding company, any public-utility company, or any holding company, by use of the 

mails or any means or instrumentality of interstate commerce, 

or to sell any such security having reason to believe that such 

security, by use of the mails or any means or instrumentality 

of interstate commerce, will be distributed or made the subject 

of a public offering; 

ø(4) by use of the mails or any means or instrumentality of 

interstate commerce, to acquire or negotiate for the acquisition 

of any security or utility assets of any subsidiary company or 

affiliate of such holding company, any public-utility company, 

orany holding company; 

ø(5) to engage in any business in interstate commerce; or 

ø(6) to own, control, or hold with power to vote, any security 

of any subsidiary company thereof that does any of the acts 

enumerated in paragraphs (1) to (5), inclusive, of this subsection. 

ø(b) Every holding company which has outstanding any security 

any of which, by use of the mails or any means or instrumentality 

of interstate commerce, has been distributed or made the subject 

of a public offering subsequent to January 1, 1925, and any of 

which security is owned or held on October 1, 1935 (or, if such company is not a holding company on that date, on the date such company becomes a holding company) by persons not resident in the 

State in which such holding company is organized, shall register 

under section 5 on or before December 1, 1935 or the thirtieth day 

after such company becomes a holding company, whichever date is 

later. 

øREGISTRATION OF HOLDING COMPANIES

øSEC. 5. (a) On or at any time after October 1, 1935, any holding 

company or any person purposing to become a holding company 

may register by filing with the Commission a notification of registration, in such form as the Commission may by rules and regulations prescribe as necessary or appropriate in the public interest or 

for the protection of investors or consumers. A person shall be 

207

deemed to be registered upon receipt by the Commission of such 

notification of registration. 

ø(b) It shall be the duty of every registered holding company to 

file with the Commission, within such reasonable time after registration as the Commission shall fix by rules and regulations or 

order, a registration statement in such form as the Commission 

shall by rules and regulations or order prescribe as necessary or 

appropriate in the public interest or for the protection of investors 

or consumers. Such registration statement shall include— ø(1) such copies of the charter or articles of incorporation, 

partnership, or agreement, with all amendments thereto, and 

the bylaws, trust indentures, mortgages, underwriting arrangements, voting-trust agreements, and similar documents, by 

whatever name known, of or relating to the registrant or any 

of its associate companies as the Commission may by rules and 

regulations or order prescribe as necessary or appropriate in 

the public interest or for the protection of investors or consumers; 

ø(2) such information in such form and in such detail relating to, and copies of such documents of or relating to, the registrant and its associate companies as the Commission may by 

rules and regulations or order prescribe as necessary or appropriate in the public interest or for the protection of investors 

or consumers in respect of— ø(A) the organization and financial structure of such 

companies and the nature of their business; 

ø(B) the terms, position, rights, and privileges of the different classes of their securities outstanding; 

ø(C) the terms and underwriting arrangements under 

which their securities, during not more than the five preceding years, have been offered to the public or otherwise 

disposed of and the relations of underwriters to, and their 

interest in, such companies; 

ø(D) the directors and officers of such companies, their 

remuneration, their interest in the securities of, their material contracts with, and their borrowings from, any of 

such companies; 

ø(E) bonus and profit-sharing arrangements; 

ø(F) material contracts, not made in the ordinary course 

of business, and service, sales, and construction contracts; 

ø(G) options in respect of securities; 

ø(H) balance sheets for not more than the five preceding 

fiscal years certified, if required by the rules and regulations of the Commission, by an independent public accountant; 

ø(I) profit and loss statements for not more than the five 

preceding fiscal years, certified, if required by the rules 

and regulations of the Commission, by an independent 

public accountant; 

ø(3) such further information or documents regarding the 

registrant or its associate companies or the relations between 

them as the Commission may by rules and regulations or order 

prescribe as necessary or appropriate in the public interest or 

for the protection of investors or consumers. 

208

ø(c) The Commission by such rules and regulations or order as 

it deems necessary or appropriate in the public interest or for the 

protection of investors or consumers, may permit a registrant to 

file a preliminary registration statement without complying with 

the provisions of subsection (b); but every registrant shall file a 

complete registration statement with the Commission within such 

reasonable period of time as the Commission shall fix by rules and 

regulations or order, but not later than one year after the date of 

registration. 

ø(d) Whenever the Commission, upon application, finds that a 

registered holding company has ceased to be a holding company, it 

shall so declare by order and upon the taking effect of such order 

the registration of such company shall, upon such terms and conditions as the Commission finds and in such order prescribes as necessary for the protection of investors, cease to be in effect. The denial of any such application by the Commission shall be by order. 

øLAWFUL SECURITY TRANSACTIONS BY REGISTERED HOLDING AND

SUBSIDIARY COMPANIES

øSEC. 6. (a) Except in accordance with a declaration effective 

under section 7 and with the order under such section permitting 

such declaration to become effective, it shall be unlawful for any 

registered holding company or subsidiary company thereof, by use 

of the mails or any means or instrumentality of interstate commerce, or otherwise, directly or indirectly (1) to issue or sell any 

security of such company; or (2) to exercise any privilege or right 

to alter the priorities, preferences, voting power, or other rights of 

the holders of an outstanding security of such company. 

ø(b) The provisions of subsection (a) shall not apply to the issue, 

renewal, or guaranty by a registered holding company or subsidiary 

company thereof of a note or draft (including the pledge of any security as collateral therefor) if such note or draft (1) is not part of 

a public offering, (2) matures or is renewed for not more than nine 

months, exclusive of days of grace, after the date of such issue, renewal, or guaranty thereof, and (3) aggregates (together with all 

other then outstanding notes and drafts of a maturity of nine 

months or less, exclusive of days of grace, as to which such company is primarily or secondarily liable) not more than 5 per centum 

of the principal amount and par value of the other securities of 

such company then outstanding, or such greater per centum thereof as the Commission upon application may by order authorize as 

necessary or appropriate in the public interest or for the protection 

of investors or consumers. In the case of securities having no principal amount or no par value, the value for the purposes of this 

subsection shall be the fairmarket value as of the date of issue. The 

Commission by rules and regulations or order, subject to such 

terms and conditions as it deems appropriate in the public interest 

or for the protection of investors or consumers, shall exempt from 

the provisions of subsection (a) the issue or sale of any security by 

any subsidiary company of a registered holding company, if the 

issue and sale of such security are solely for the purpose of financing the business of such subsidiary company and have been expressly authorized by the State commission of the State in which 

such subsidiary company is organized and doing business, or if the 

209

issue and sale of such security are solely for the purpose of financing the business of such subsidiary company when such subsidiary 

company is not a holding company, a public-utility company, an investment company, or a fiscal or financing agency of a holding company, a public-utility company, or an investment company. The 

provisions of subsection (a) shall not apply to the issue, by a registered holding company or subsidiary company thereof, of a security issued pursuant to the terms of any security outstanding on 

January 1, 1935, giving the holder of such outstanding security the 

right to convert such outstanding security into another security of 

the same issuer or of another person, or giving the right to subscribe to another security of the same issuer or another issuer. 

Within ten days after any issue, sale, renewal, or guaranty exempted from the application of subsection (a) by or under authority of 

this subsection, such holding company or subsidiary company 

thereof shall file with the Commission a certificate of notification 

in such form and setting forth such of the information required in 

a declaration under section 7 as the Commission may by rules and 

regulations or order prescribe as necessary or appropriate in the 

public interest or for the protection of investors or consumers. 

ø(c) It shall be unlawful, by use of the mails or any means or instrumentality of interstate commerce, or otherwise, for any registered holding company or any subsidiary company thereof, directly or indirectly—

ø(1) to sell or offer for sale or to cause to be sold or offered 

for sale, from house to house, any security of such holding company; or 

ø(2) to cause any officer or employee of any subsidiary company of such holding company to sell or cause to be sold any 

security of such holding company. 

As used in this subsection the term ‘‘house’’ shall not include an 

office used for business purposes. 

øDECLARATIONS BY REGISTERED HOLDING AND SUBSIDIARY

COMPANIES IN RESPECT OF SECURITY TRANSACTIONS

øSEC. 7. (a) A registered holding company or subsidiary company 

thereof may file a declaration with the Commission, regarding any 

of the acts enumerated in subsection (a) of section 6, in such form 

as the Commission may be rules and regulations prescribe as necessary or appropriate in the public interest or for the protection of 

investors or consumers. Such declaration shall include—

ø(1) such of the information and documents which are required to be filed in order to register a security under section 

7 of the Securities Act of 1933, as amended, as the Commission 

may by rules and regulations or order prescribe as necessary 

or appropriate in the public interest or for the protection of investors or consumers; and 

ø(2) such additional information, in such form and detail, 

and such documents regarding the declarant or any associate 

company thereof, the particular security and compliance with 

such State laws as may apply to the act in question as the 

Commission may by rules and regulations or order prescribe as 

necessary or appropriate in the public interest or for the 

proection of investors or consumers. 

210

ø(b) A declaration filed under this section shall become effective 

within such reasonable period of time after the filing thereof as the 

Commission shall fix by rules and regulations or order, unless the 

Commission prior to the expiration of such period shall have issued 

an order to the declarant to show cause why such declaration 

should become effective. Within a reasonable time after an opportunity for hearing upon an order to show cause under this subsection, unless the declarant shall withdraw its declaration, the 

Commission shall enter an order either permitting such declaration 

to become effective as filed or amended, or refusing to permit such 

declaration to become effective. Amendments to a declaration may 

be made upon such terms and conditions as the Commission may 

prescribe. 

ø(c) The Commission shall not permit a declaration regarding the 

issue or sale of a security to become effective unless it finds that—

ø(1) such security is (A) a common stock having a par value 

and being without preference as to dividends or distribution 

over, and having at least equal voting rights with, any outstanding security of the declarant; (B) a bond (i) secured by a 

first lien on physical property of the declarant, or (ii) secured 

by an obligation of a subsidiary company of the declarant secured by a first lien on physical property of such subsidiary 

company, or (iii) secured by any other assets of the type and 

character which the Commission by rules and regulations or 

order may prescribe as appropriate in the public interest or for 

the protection of investors; (C) a guaranty of, or assumption of 

liability on, a security of another company; or (D) a receiver’s 

or trustee’s certificate duly authorized by the appropriate court 

or courts; or 

ø(2) such security is to be issued or sold solely (A) for the 

purpose of refunding, extending, exchanging, or discharging an 

outstanding security of the declarant and/or a predecessor company thereof or for the purpose of effecting a merger, consolidation, or other reorganization; (B) for the purpose of financing 

the business of the declarant as a public-utility company; (C) 

for the purpose of financing the business of the declarant, 

when the declarant is neither a holding company nor a publicutility company; and/or (D) for necessary and urgent corporate 

purposes of the declarant where the requirements of the provisions of paragraph (1) would impose an unreasonable financial 

burden upon the declarant and are not necessary or appropriate in the public interest or for the protection of investors 

or consumers; or 

ø(3) such security is one the issuance of which was authorized by the company prior to January 1, 1935, and which the 

Commission by rules and regulations or order authorizes as 

necessary or appropriate in the public interest or for the protection of investors or consumers.

ø(d) If the requirements of subsections (c) and (g) are satisfied, 

the Commission shall permit a declaration regarding the issue or 

sale of a security to become effective unless the Commission finds 

that 

211

ø(1) the security is not reasonably adapted to the security 

structure of the declarant and other companies in the same 

holding-company system; 

ø(2) the security is not reasonably adapted to the earning 

power of the declarant; 

ø(3) financing by the issue and sale of the particular security 

is not necessary or appropriate to the economical and efficient 

operation of a business in which the applicant lawfully is engaged or has an interest; 

ø(4) the fees, commissions, or other remuneration, to whomsoever paid, directly or indirectly, in connection with the issue, 

sale or distribution of the security are not reasonable; 

ø(5) in the case of a security that is a guaranty of, or assumption of liability on, a security of another company, the circumstances are such as to constitute the making of such guaranty or the assumption of such liability an improper risk for 

he declarant; or 

ø(6) the terms and conditions of the issue or sale of the security are detrimental to the public interest or the interest of investors or consumers. 

ø(e) If the requirements of subsection (g) are satisfied, the Commission shall permit a declaration to become effective regarding the 

exercise of a privilege or right to alter the priorities, preferences, 

voting power, or other rights of the holders of an outstanding security unless the Commission finds that such exercise of such privilege or right will result in an unfair or inequitable distribution of 

voting power among holders of the securities of the declarant or is 

otherwise detrimental to the public interest or the interest of investors or consumers. 

ø(f) Any order permitting a declaration to become effective may 

contain such terms and conditions as the Commission finds necessary to assure compliance with the conditions specified in this 

section. 

ø(g) If a State commission or State securities commission, having 

jurisdiction over any of the acts enumerated in subsection (a) of 

section 6, shall inform the Commission, upon request by the Commission for an opinion or otherwise, that State laws applicable to 

the act in question have not been complied with, the Commission 

shall not permit a declaration regarding the act in question to become effective until and unless the Commission is satisfied that 

such compliance has been effected. 

øACQUIRING INTEREST IN ELECTRIC AND GAS UTILITY COMPANIES

SERVING SAME TERRITORY

øSEC. 8. Whenever a State law prohibits, or requires approval or 

authorization of, the ownership or operation by a single company 

of the utility assets of an electric utility company and a gas utility 

company serving substantially the same territory, it shall be unlawful for a registered holding company, or any subsidiary company thereof, by use of the mails or any means or instrumentality 

of interstate commerce, or otherwise—

ø(1) to take any step, without the express approval of the 

State commission of such State, which results in its having a 

212

direct or indirect interest in an electric utility company and a 

gas utility company serving substantially the same territory; or 

ø(2) if it already has any such interest, to acquire, without 

the express approval of the State commission, any direct or indirect interest in an electric utility company or gas utility company serving substantially the same territory as that served by 

such companies in which it already has an interest. 

øACQUISITION OF SECURITIES AND UTILITY ASSETS AND OTHER

INTERESTS

øSEC. 9. (a) Unless the acquisition has been approved by the 

Commission under section 10, it shall be unlawful—

ø(1) for any registered holding company or any subsidiary 

company thereof, by use of the mails or any means or instrumentality of interstate commerce, or otherwise, to acquire, directly or indirectly, any securities or utility assets or any other 

interest in any business; or 

ø(2) for any person, by use of the mails or any means or instrumentality of interstate commerce, to acquire, directly or indirectly, any security of any public-utility company, if such person is an affiliate, under clause (A) of paragraph (11) of subsection (a) of section 2, of such company and of any other public utility or holding company, or will by virtue of such acquisition become such an affiliate. 

ø(b) Subsection (a) shall not apply to—

ø(1) the acquisition by a public-utility company of utility assets the acquisition of which has been expressly authorized by 

a State commission; or 

ø(2) the acquisition by a public-utility company of securities 

of a subsidiary public-utility company thereof, provided that 

both such public-utility companies and all other public-utility 

companies in the same holding-company system are organized 

in the same State, that the business of each such company in 

such system is substantially confined to such State, and that 

the acquisition of such securities has been expressly authorized 

by the State commission of such State. 

ø(c) Subsection (a) shall not apply to the acquisition by a registered holding company, or a subsidiary company thereof, of—

ø(1) securities of, or securities the principal or interest of 

which is guaranteed by, the United States, a State, or political 

subdivision of a State, or any agency, authority, or instrumentality of any one or more of the foregoing, or any corporation 

which is wholly owned, directly or indirectly, by any one or 

more of the foregoing; 

ø(2) such other readily marketable securities, within the limitation of such amounts, as the Commission may by rules and 

regulations prescribe as appropriate for investment of current 

funds and as not detrimental to the public interest or the interest of investors or consumers; or

ø(3) such commercial paper and other securities, within such 

limitations, as the Commission may by rules and regulations 

or order prescribe as appropriate in the ordinary course of 

business of a registered holding company or subsidiary comVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00216 Fmt 6604 Sfmt 6602 E:\HR\OC\SR043.XXX SR043
213

pany thereof and as not detrimental to the public interest or 

the interest of investors or consumers. 

øAPPROVAL OF ACQUISITION OF SECURITIES AND UTILITY ASSETS AND

OTHER INTERESTS

øSEC. 10. (a) A person may apply for approval of the acquisition 

of securities or utility assets, or of any other interest in any business, by filing an application in such form as the Commission may 

by rules and regulations prescribe as necessary or appropriate in 

the public interest or for the protection of investors and consumers. 

Such application shall include— ø(1) in the case of the acquisition of securities, such information and copies of such documents as the Commission may by 

rules and regulations or order prescribe as necessary or appropriate in the public interest or for the protection of investors 

or consumers in respect of— ø(A) the security to be acquired, the consideration to be 

paid therefor, and compliance with such State laws as may 

apply in respect of the issue, sale, or acquisition thereof, 

ø(B) the outstanding securities of the company whose security is to be acquired, the terms, position, rights, and 

privileges of each class and the options in respect of any 

such securities, 

ø(C) the names of all security holders of record (or otherwise known to the applicant) owning, holding, or controlling 1 per centum or more of any class of security of such 

company, the officers and directors of such company, and 

their remuneration, security holdings in, material contracts with, and borrowings from such company and the offices or directorships held, and securities owned, held, or 

controlled, by them in other companies, 

ø(D) the bonus, profit-sharing and voting-trust agreement, underwriting arrangements, trust indentures, mortgages, and similar documents, by whatever name known, 

of or relating to such company, 

ø(E) the material contracts, not made in the ordinary 

course of business, and the service, sales, and construction 

contracts of such company, 

ø(F) the securities owned, held, or controlled, directly or 

indirectly, by such company, 

ø(G) balance sheets and profit and loss statements of 

such company for not more than the five preceding fiscal 

years, certified, if required by the rules and regulations of 

the Commission by an independent public accountant, 

ø(H) any further information regarding such company 

and any associate company or affiliate thereof, or its relation with the applicant company, and 

ø(I) if the applicant be not a registered holding company,any of the information and documents which may be 

required under section 5 from a registered holding company; 

ø(2) in the case of the acquisition of utility assets, such information concerning such assets, the value thereof and consideration to be paid therefor, the owner or owners thereof and 

214

their relation to, agreements with, and interest in the securities of, the applicant or any associate company thereof as the 

Commission may by rules and regulations or order prescribe as 

necessary or appropriate in the public interest or for the protection of investors or consumers; and 

ø(3) in the case of the acquisition of any other interest in an 

business, such information concerning such business and the 

interest to be acquired, and the consideration to be paid, as the 

Commission may by rules and regulations or order prescribe as 

necessary or appropriate in the public interest or for the protection of investors or consumers. 

ø(b) If the requirements of subsection (f) are satisfied, the Commission shall approve the acquisition unless the Commission finds 

that—

ø(1) such acquisition will tend towards interlocking relations 

or the concentration of control of public-utility companies, of a 

kind or to an extent detrimental to the public interest or the 

interest of investors, or consumers; 

ø(2) in case of the acquisition of securities or utility assets, 

the consideration, including all fees, commissions, and other 

remuneration, to whomsoever paid, to be given, directly or indirectly, in connection with such acquisition is not reasonable 

or does not bear a fair relation to the sums invested in or the 

earning capacity of the utility assets to be acquired or the utility assets underlying the securities to be acquired; or 

ø(3) such acquisition will unduly complicate the capital 

structure of the holding-company system of the applicant or 

will be detrimental to the public interest or the interest of investors or consumers or the proper functioning of such holdingcompany system. 

The Commission may condition its approval of the acquisition of securities of another company upon such a fair offer to purchase such 

of the other securities of the company whose security is to be acquired as the Commission may find necessary or appropriate in the 

public interest or for the protection of investors or consumers. 

ø(c) Notwithstanding the provisions of subsection (b), the Commission shall not approve—

ø(1) an acquisition of securities or utility assets, or of any 

other interest, which is unlawful under the provisions of section 8 or is detrimental to the carrying out of the provisions 

of section 11; or 

ø(2) the acquisition of securities or utility assets of a public 

utility or holding company unless the Commission finds that 

such acquisition will serve the public interest by tending towards the economical and efficient development of an integrated public-utility system. This paragraph shall not apply to 

the acquisition of securities or utility assets of a public-utility 

company operating exclusively outside the United States.

ø(d) Within such reasonable time after the filing of an application under this section as the Commission shall fix by rules and 

regulations or order, the Commission shall enter an order either 

granting or, after notice and opportunity for hearing, denying approval of the acquisition unless the applicant shall withdraw its apVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00218 Fmt 6604 Sfmt 6602 E:\HR\OC\SR043.XXX SR043
215

1Public Law 99–186 (99 Stat. 1180), entitled ‘‘An Act to clarify the application of the Public 

Utility Holding Company Act of 1935 to encourage cogeneration activities by gas utility holding 

company systems,’’ as amended by Public Law 99–553 (100 Stat. 3087) and Public Law 102– 486 (106 Stat. 2911), provides as follows: ‘‘SECTION 1. Notwithstanding section 11(b)(1) of the Public Utility Holding Company Act of 

1935, a company registered under said Act, or a subsidiary company of such registered company, 

may acquire or retain, in any geographic area, an interest in any qualifying cogeneration facilities and qualifying small power production facilities as defined pursuant to the Public Utility 

Regulatory Policies Act of 1978, and shall qualify for any exemption relating to the Public Utility Holding Company Act of 1935 prescribed pursuant to section 210 of the Public Utility Regulatory Policies Act of 1978. ‘‘SEC. 2. Nothing herein shall be construed to affect the applicability of section 3(17)(C) or section 3(18)(B) of the Federal Power Act or any provision of the Public Utility Holding Company 

Act of 1935, other than section 11(b)(1), to the acquisition or retention of any such interest by 

any such company.’’ Public Law 101–572 (104 Stat. 2810), entitled ‘‘Gas Related Activities Act of 1990’’ provides 

as follows: 

SEC. 2. RULE OF CONSTRUCTION.

(a) TREATMENT OF CERTAIN ACQUISITIONS INVOLVING GAS COMPANIES OR GAS TRANSPORTATION OR STORAGE.—The acquisition by a registered company or any interest in any natural 

gas company or of any interest in any company organized to participate in activities involving 

the transportation or storage of natural gas, shall be deemed, for the purposes of section 11(b)(1) 

of the Act, to be reasonably incidental or economically necessary or appropriate to the operation 

of such gas utility companies. 

(b) TREATMENT OF ACQUISITIONS RELATED TO SUPPLY OF NATURAL GAS; COMMISSION DETERMINATION OF CUSTOMER INTEREST.—The acquisition by a registered company of any interest in 

any company organized to participate in activities (other than those of a natural gas company 

Continued

plication. Amendments to an application may be made upon such 

terms and conditions as the Commission may prescribe. 

ø(e) The Commission, in any order approving the acquisition of 

securities or utility assets, may prescribe such terms and conditions in respect of such acquisition, including the price to be paid 

for such securities or utility assets, as the Commission may find 

necessary or appropriate in the public interest or for the protection 

of investors or consumers. 

ø(f) The Commission shall not approve any acquisition as to 

which an application is made under this section unless it appears 

to the satisfaction of the Commission that such State laws as may 

apply in respect of such acquisition have been complied with, except where the Commission finds that compliance with such State 

laws would be detrimental to the carrying out of the provisions of 

section 11. 

øSIMPLIFICATION OF HOLDING-COMPANY SYSTEMS

øSEC. 11. (a) It shall be the duty of the Commission to examine 

the corporate structure of every registered holding company and 

subsidiary company thereof, the relationships among the companies in the holding-company system of every such company and the 

character of the interests thereof and the properties owned or controlled thereby to determine the extent to which the corporate 

structure of such holding-company system and the companies 

therein may be simplified, unnecessary complexities therein eliminated, voting power fairly and equitably distributed among the 

holders of securities thereof, and the properties and business thereof confined to those necessary or appropriate to the operations of 

an integrated public-utility system. 

ø(b) It shall be the duty of the Commission, as soon as practical 

after January 1, 1938: 

ø(1) 1 To require by order, after notice and opportunity for 

hearing, that each registered holding company, and each subVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00219 Fmt 6604 Sfmt 6602 E:\HR\OC\SR043.XXX SR043
216

or involving the transportation or storage of natural gas) related to the supply of natural gas, 

including exploration, development, production, marketing, manufacture, or other similar activities related to the supply of natural or manufactured gas, shall be deemed, for purposes of section 11(b)(1) of the Act, to be reasonably incidental or economically necessary or appropriate to 

the operation of such gas utility companies, if—

(1) the Commission determines, after notice and opportunity for hearing in which the company 

proposing the acquisition shall have the burden of proving, that such acquisition is in the interest of consumers of each gas utility company of such registered company or consumers of any 

other subsidiary of such registered company; and 

(2) the Commission determines that such acquisition will not be detrimental to the interest 

of consumers of any such gas utility company or other subsidiary or to the proper functioning 

of the registered holding company system. 

(c) CASE-BY-CASE DECISIONS REQUIRED.—Each such determination under this section shall be 

made on a case-by-case basis, and not be based on any present criteria. 

(d) SAVINGS PROVISION.—Nothing herein shall be construed to affect the applicability of any 

other provisions of the Act to the acquisition or retention of any such interest by any such company. 

(e) DEFINTIONS.—For purposes of this section—

(1) the term ‘‘registered company’’ means a company registered under the Act solely by reason 

of direct or indirect ownership of voting securities of one or more gas utility companies, or any 

subsidiary company of such registered company; 

(2) the term ‘‘natural gas company’’ has the meaning given such term under the Natural Gas 

Act (15 U.S.C. 717(a) et seq.); and 

(3) the term ‘‘the Act’’ means the Public Utility Holding Company Act of 1935. 

sidiary company thereof, shall take such action as the Commission shall find necessary to limit the operations of the holdingcompany system of which such company is a part to a single 

integrated public-utility system, and to such other businesses 

as are reasonably incidental, or economically necessary or appropriate to the operations of such integrated public-utility system: Provided, however, That the Commission shall permit a 

registered holding company to continue to control one or more 

additional integrated public-utility systems, if, after notice and 

opportunity for hearing, it finds that— ø(A) Each of such additional systems cannot be operated 

as an independent system without the loss of substantial 

economies which can be secured by the retention of control 

by such holding company of such system; 

ø(B) All of such additional systems are located in one 

State, or in adjoining States, or in a contiguous foreign 

country; and 

ø(C) The continued combination of such systems under 

the control of such holding company is not so large (considering the state of the art and the area or region affected) 

as to impair the advantages of localized management, efficient operation, or the effectiveness of regulation. 

The Commission may permit as reasonably incidental, or economically necessary or appropriate to the operations of one or more 

integrated public-utility systems and retention of an interest in any 

business (other than the business of a public-utility company as 

such) which the Commission shall find necessary or appropriate in 

the public interest or for the protection of investors or consumers 

and not detrimental to the proper functioning of such system or 

systems. 

ø(2) To require by order, after notice and opportunity for 

hearing, that each registered holding company, and each subsidiary company thereof, shall take such steps as the Commission shall find necessary to ensure that the corporate structure 

or continued existence of any company in the holding-company 

system does not unduly or unnecessarily complicate the strucVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00220 Fmt 6604 Sfmt 6602 E:\HR\OC\SR043.XXX SR043
217

ture, or unfairly or inequitable distribute voting power among 

security holders, of such holding-company system. In carrying 

out the provisions of this paragraph the Commission shall require each registered holding company (and any company in 

the same holding-company system with such holding company) 

to take such action as the Commission shall find necessary in 

order that such holding company shall cease to be a holding 

company with respect to each of its subsidiary companies 

which itself has a subsidiary company which is a holding company. Except for the purpose of fairly and equitably distributing voting power among the security holders of such company, nothing in this paragraph shall authorize the Commission to require any change in the corporate structure or existence of any company which is not a holding company, or of any 

company whose principal business is that of a public-utility 

company. 

The Commission may by order revoke or modify any order previously made under this subsection, if, after notice and opportunity 

for hearing, it finds that the conditions upon which the order was 

predicated do not exist. Any order made under this subsection shall 

be subject to judicial review as provided in section 24. 

ø(c) Any order under subsection (b) shall be complied with within 

one year from the date of such order; but the Commission shall, 

upon a showing (made before or after the entry of such order) that 

the applicant has been or will be unable in the exercise of due diligence to comply with such order within such time, extend such 

time for an additional period not exceeding one year if it finds such 

extension necessary or appropriate in the public interest or for the 

protection of investors or consumers. 

ø(d) The Commission may apply to a court, in accordance with 

the provisions of subsection (f) of section 18, to enforce compliance 

with any order issued under subsection (b). In any such proceeding, 

the court as a court of equity may, to such extent as it deems necessary for purposes of enforcement of such order, take exclusive jurisdiction and possession of the company or companies and the assets thereof, wherever located; and the court shall have jurisdiction, in any such proceeding, to appoint a trustee, and the court 

may constitute and appoint the Commission as sole trustee, to hold 

or administer under the direction of the court the assets so possessed. In any proceeding for the enforcement of an order of the 

Commission issued under subsection (b), the trustee with the approval of the court shall have power to dispose of any or all of such 

assets and, subject to such terms and conditions as the court may 

prescribe, may make such disposition in accordance with a fair and 

equitable reorganization plan which shall have been approved by 

the Commission after opportunity for hearing. Such reorganization 

plan may be proposed in the first instance by the Commission, or, 

subject to such rules and regulations as the Commission may deem 

necessary or appropriate in the public interest or for the protection 

of investors, by any person having a bona fide interest (as defined 

by the rules and regulations of the Commission) in the reorganization. 

ø(e) In accordance with such rules and regulations or order as 

the Commission may deem necessary or appropriate in the public 

218

interest or for the protection of investors or consumers, any registered holding company or any subsidiary company of a registered 

holding company may, at any time after January 1, 1936, submit 

a plan to the Commission for the divestment of control, securities, 

or other assets, or for other action by such company or any subsidiary company thereof for the purpose of enabling such company 

or any subsidiary company thereof to comply with the provisions of 

subsection (b). If, after notice and opportunity for hearing, the 

Commission shall find such plan, as submitted or as modified, necessary to effectuate the provisions of subsection (b) and fair and equitable to the persons affected by such plan, the Commission shall 

make an order approving such plan; and the Commission, at the 

request of the company, may apply to a court, in accordance with 

the provisions of subsection (f) of section 18, to enforce and carry 

out the terms and provisions of such plan. If, upon any such application, the court, after notice and opportunity for hearing, shall approve such plan as fair and equitable and as appropriate to effectuate the provisions of section 11, the court as a court of equity 

may, to such extent as it deems necessary for the purpose of carrying out the terms and provisions of such plan, take exclusive jurisdiction and possession of the company or companies and the assets thereof, wherever located; and the court shall have jurisdiction 

to appoint a trustee, and the court may constitute and appoint the 

Commission as sole trustee, to hold or administer, under the direction of the court and in accordance with the plan theretofore approved, by the court and the Commission, the assets so possessed. 

ø(f) In any proceeding in a court of the United States, whether 

under this section or otherwise, in which a receiver or trustee is 

appointed for any registered holding company, or any subsidiary 

company thereof, the court may constitute and appoint the Commission as sole trustee or receiver, subject to the directions and orders of the court, whether or not a trustee or receiver shall theretofore have been appointed, and in any such proceeding the court 

shall not appoint any person other than the Commission trustee or 

receiver without notifying the Commission and giving it an opportunity to be heard before making any such appointment. In no proceeding under this section or otherwise shall the Commission be 

appointed as trustee or receiver without its express consent. In any 

such proceeding a reorganization plan for a registered holding company or any subsidiary company thereof shall not become effective 

unless such plan shall have been approved by the Commission 

after opportunity for hearing prior to its submission to the court. 

Notwithstanding any other provision of law, any such reorganization plan may be proposed in the first instance by the Commission 

or, subject to such ru1es and regulations as the Commission may 

deem necessary or appropriate in the public interest or for the protection of investors, by any person having a bona fide interest (as 

defined by the rules and regulations of the Commission) in the reorganization. The Commission may, by such rules and regulations 

or order as it may deem necessary or appropriate in the public interest or for the protection of investors or consumers, require that 

any or all fees, expenses, and remuneration, to whomsoever paid, 

in connection with any reorganization, dissolution, liquidation, 

bankruptcy, or receivership of a registered holding company or subVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00222 Fmt 6604 Sfmt 6602 E:\HR\OC\SR043.XXX SR043
219

sidiary company thereof, in any such proceeding, shall be subject 

to approval by the Commission. 

ø(g) It shall be unlawful for any person to solicit or permit the 

use of his or its name to solicit, by use of the mails or any means 

or instrumentality of interstate commerce, or otherwise, any proxy, 

consent, authorization, power of attorney, deposit, or dissent in respect of any reorganization plan of a registered holding company or 

any subsidiary company thereof under this section, or otherwise, or 

in respect of any plan under this section for the divestment of control, securities, or other assets, or for the dissolution of any registered holding company or any subsidiary company thereof, unless—

ø(1) the plan has been proposed by the Commission, or the 

plan and such information regarding’ it and its sponsors as the 

Commission may deem necessary or appropriate in the public 

interest or for the protection of investors or consumers has 

been submitted to the Commission by a person having a bona 

fide interest (as defined by the rules and regulations of the 

Commission) in such reorganization; 

ø(2) each such solicitation is accompanied or preceded by a 

copy of a report on the plan which shall be made by the Commission after an opportunity for a hearing on the plan and 

other plans submitted to it, or by an abstract of such report 

made or approved by the Commission; and 

ø(3) each such solicitation is made not in contravention of 

such rules and regulations or orders as the Commission may 

deem necessary or appropriate in the public interest or for the 

protection of investors or consumers. 

Nothing in this subsection or the rules and regulations thereunder 

shall prevent any person from appearing before the Commission or 

any court through an attorney or proxy. 

øINTERCOMPANY LOANS; DIVIDENDS; SECURITY TRANSACTIONS; SALE

OF UTILITY ASSETS; PROXIES; OTHER TRANSACTIONS

øSEC. 12. (a) It shall be unlawful for any registered holding company, by use of the mails or any means or instrumentality of interstate commerce, or otherwise, directly or indirectly, to borrow, or 

to receive any extension of credit or indemnity, from any publicutility company in the same holding-company system or from any 

subsidiary company of such holding company, but it shall not be 

unlawful under this subsection to renew, or extend the time of, any 

loan, credit, or indemnity outstanding on the date of the enactment 

of this title. 

ø(b) It shall be unlawful for any registered holding company or 

subsidiary company thereof, by use of the mails or any means or 

instrumentality of interstate commerce, or otherwise, directly or indirectly, to lend or in any manner extend its credit to or indemnify 

any company in the same holding-company system in contravention 

of such rules and regulations or orders as the Commission deems 

necessary or appropriate in the public interest or for the protection 

of investors or consumers or to prevent the circumvention of the 

provisions of this title or the rules, regulations, or orders thereunder. 

220

ø(c) It shall be unlawful for any registered holding company or 

any subsidiary company thereof, by use of the mails or any means 

or instrumentality of interstate commerce, or otherwise, to declare 

or pay any dividend on any security of such company or to acquire, 

retire, or redeem any security of such company, in contravention of 

such rules and regulations or orders as the Commission deems necessary or appropriate to protect the financial integrity of companies 

in holding-company systems, to safeguard the working capital of 

public-utility companies, to prevent the payment of dividends out 

of capital or unearned surplus, or to prevent the circumvention of 

the provisions of this title or the rules, regulations, or orders thereunder. 

ø(d) It shall be unlawful for any registered holding company, by 

use of the mails or any means or instrumentality of interstate commerce, or otherwise, to sell any security which it owns of any public-utility company, or any utility assets, in contravention of such 

rules and regulations or orders regarding the consideration to be 

received for such sale, maintenance of competitive conditions, fees 

and commissions, accounts, disclosure of interest, and similar matters as the Commission deems necessary or appropriate in the public interest or for the protection of investors or consumers or to prevent the circumvention of the provisions of this title or the rules, 

regulations, or orders thereunder. 

ø(e) It shall be unlawful for any person to solicit or to permit the 

use of his or its name to solicit, by use of the mails or any means 

or instrumentality of interstate commerce, or otherwise, any proxy, 

power of attorney, consent, or authorization regarding any security 

of a registered holding company or a subsidiary company thereof in 

contravention of such rules and regulations or orders as the Commission deems necessary or appropriate in the public interest or for 

the protection of investors or consumers or to prevent the circumvention of the provisions of this title or the rules, regulations, 

or orders thereunder. 

ø(f) It shall be unlawful for any registered holding company or 

subsidiary company thereof, by use of the mails or any means or 

instrumentality of interstate commerce, or otherwise, to negotiate, 

enter into, or take any step in the performance of any transaction 

not otherwise unlawful under this title, with any company in the 

same holding-company system or with any affiliate of a company 

in such holding-company system in contravention of such rules and 

regulations or orders regarding reports, accounts, costs, maintenance of competitive conditions, a disclosure of interest, duration of 

contracts, and similar matters as the Commission deems necessary 

or appropriate in the public interest or for the protection of investors or consumers or to prevent the circumvention of the provisions 

of this title or the rules and regulations thereunder.

ø(g) It shall be unlawful for any affiliate of any public-utility 

company, by use of the mails or any means or instrumentality of 

interstate commerce, or for any affiliate of any public-utility company engaged in interstate commerce, or of any registered holding 

company or any subsidiary company thereof, by use of the mails or 

any means or instrumentality of interstate commerce, or otherwise, 

to negotiate, enter into, or take any step in the performance of any 

transaction not otherwise unlawful under this title, with any such 

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company of which it is an affiliate, in contravention of such rules 

and regulations or orders regarding reports, accounts, costs, maintenance of competitive conditions, disclosure of interest, duration of 

contracts, and similar matters as the Commission deems necessary 

or appropriate to prevent the circumvention of the provisions of 

this title. 

ø(h) It shall be unlawful for any registered holding company, or 

any subsidiary company thereof, by use of the mails or any means 

or instrumentality of interstate commerce, or otherwise, directly or 

indirectly— ø(1) to make any contribution whatsoever in connection with 

the candidacy, nomination, election or appointment of any person for or to any office or position in the Government of the 

United States, a State, or any political subdivision of a State, 

or any agency, authority, or instrumentality of any one or more 

of the foregoing; or 

ø(2) to make any contribution to or in support of any political 

party or any committee or agency thereof. 

The term ‘‘contribution’’ as used in this subsection includes any 

gift, subscription, loan, advance, or deposit of money or anything 

of value, and includes any contract, agreement, or promise, whether or not legally enforceable, to make a contribution. 

ø(i) It shall be unlawful for any person employed or retained by 

any registered holding company, or any subsidiary company thereof, to present, advocate, or oppose any matter affecting any registered holding company or any subsidiary company thereof, before 

the Congress or any Member or committee thereof, or before the 

Commission or Federal Power Commission, or any member, officer, 

or employee of either such Commission, unless such person shall 

file with the Commission in such form and detail and at such time 

as the Commission shall by rules and regulations or order prescribe 

as necessary or appropriate in the public interest or for the protection of investors or consumers, a statement of the subject matter 

in respect of which such person is retained or employed, the nature 

and character of such retainer or employment, and the amount of 

compensation received or to be received by such person, directly or 

indirectly, in connection therewith. It shall be the duty of every 

such person so employed or retained to file with the Commission 

within ten days after the close of each calendar month during such 

retainer or employment, in such form and detail as the Commission 

shall by rules and regulations or order prescribe as necessary or 

appropriate in the public interest or for the protection of investors 

or consumers, a statement of the expenses incurred and the compensation received by such person during such month in connection 

with such retainer or employment. 

øSERVICE, SALES, AND CONSTRUCTION CONTRACTS

øSEC. 13. (a) After April 1, 1936, it shall be unlawful for any registered holding company, by use of the mails or any means or instrumentality of interstate commerce, or otherwise, to enter into or 

take any step in the performance of any service, sales, or construction contract by which such company undertakes to perform services or construction work for, or sell goods to, any associate company thereof which is a public-utility or mutual service company. 

222

This provision shall not apply to such transactions, involving special or unusual circumstances or not in the ordinary course of business, as the Commission by rules and regulations or order may 

conditionally or unconditionally exempt as being necessary or appropriate in the public interest or for the protection of investors or 

consumers. 

ø(b) After April 1, 1936, it shall be unlawful for any subsidiary 

company of any registered holding company or for any mutual service company, by use of the mails or any means or instrumentality 

of interstate commerce, or otherwise, to enter into or take any step 

in the performance of any service, sales, or construction contract by 

which such company undertakes to perform services or construction 

work for, or sell goods to, any associate company thereof except in 

accordance with such terms and conditions and subject to such limitations and prohibitions as the Commission by rules and regulations or order shall prescribe as necessary or appropriate in the 

public interest or for the protection of investors or consumers and 

to insure that such contracts are performed economically and efficiently for the benefit of such associate companies at cost, fairly 

and equitably allocated among such companies. This provision shall 

not apply to such transactions as the Commission by rules and regulations or order may conditionally or unconditionally exempt as 

being necessary or appropriate in the public interest or for the protection of investors or consumers, if such transactions (1) are with 

any associate company which does not derive, directly or indirectly, 

any material part of its income from sources within the United 

States and which is not a public-utility company operating within 

the United States, or (2) involve special or unusual circumstances 

or are not in the ordinary course of business. 

ø(c) The rules and regulations and orders of the Commission 

under this section may prescribe, among other things, such terms 

and conditions regarding the determination of costs and the allocation thereof among specified classes of companies and for specified 

classes of service, sales, and construction contracts, the duration of 

such contracts, the making and keeping of accounts and cost-accounting procedures, the filing of annual and other periodic and 

special reports, the maintenance of competitive conditions, the disclosure of interests, and similar matters, as the Commission deems 

necessary or appropriate in the public interest or for the protection 

of investors or consumers. 

ø(d) The rules and regulations and orders of the Commission 

under this section shall prescribe, among other things, such terms 

and conditions regarding the manner in which application may be 

made for approval as a mutual service company and the granting 

and continuance of such approval, the nature and enforcement of 

agreements for the sharing of expenses and distributing of revenues among member companies, and matters relating to such 

agreements, the nature and types of businesses and transactions in 

which mutual service companies may engage, and the manner of 

engaging therein, and the relations and transactions with member 

companies and affiliates, as the Commission deems necessary or 

appropriate in the public interest or for the protection of investors 

or consumers. The Commission shall not approve, or continue the 

approval of, any company as a mutual service company unless the 

223

Commission finds such company is so organized as to ownership, 

costs, revenues, and the sharing thereof as reasonably to insure the 

efficient and economical performance of service, sales, or construction contracts by such company for member companies, at cost fairly and equitably allocated among such member companies, at a 

reasonable saving to member companies over the cost to such companies of comparable contracts performed by independent persons. 

The Commission, upon its own motion or at the request of a member company or a State commission, may, after notice and opportunity for hearing, by order require a reallocation or reapportionment of costs among member companies of a mutual service company if it finds the existing allocation inequitable and may require 

the elimination of a service or services to a member company which 

does not bear its fair proportion of costs or which, by reason of its 

size or other circumstances, does not require such service or services. The Commission, after notice and opportunity for hearing, by 

order shall revoke, suspend, or modify the approval given any mutual service company if it finds that such company has persistently 

violated any provision of this section or any rule, regulation, or 

order thereunder. 

ø(e) It shall be unlawful for any affiliate of any public-utility 

company engaged in interstate commerce, or of any registered holding company or subsidiary company thereof, by use of the mails or 

any means or instrumentality of interstate commerce, or otherwise, 

to enter into or take any step in the performance of any service, 

sales, or construction contract, by which such affiliate undertakes 

to perform services or construction work for, or sell goods to, any 

such company of which it is an affiliate, in contravention of such 

rules and regulations or orders regarding reports, accounts, costs, 

maintenance of competitive conditions, disclosure of interest, duration of contracts, and similar matters, as the Commission deems 

necessary or appropriate to prevent the circumvention of the provisions of this title or the rules, regulations, or orders thereunder. 

ø(f) It shall be unlawful for any person whose principal business 

is the performance of service, sales, or construction contracts for 

public-utility or holding companies, by use of the mails or any 

means or instrumentality of interstate commerce, to enter into or 

take any step in the performance of any service, sales, or construction contract with any public-utility company, or for any such person, by use of the mails or any means or instrumentality of interstate commerce, or otherwise, to enter into or take any step in the 

performance of any service, sales, or construction contract with any 

public-utility company engaged in interstate commerce, or with any 

registered holding company or any subsidiary company of a registered holding company, in contravention of such rules and regulations or orders regarding reports, accounts, costs, maintenance of 

competitive conditions, disclosure of interest, duration of contracts, 

and similar matters as the Commission deems necessary or appropriate in the public interest or for the protection of investors or 

consumers or to prevent the circumvention of the provisions of this 

title or the rules, regulations, or orders thereunder. 

ø(g) The Commission, in order to obtain information to serve as 

a basis for recommending further legislation, shall from time to 

time conduct investigations regarding the making, performance, 

224

and costs of service, sales, and construction contracts with holding 

companies and subsidiary companies thereof and with public-utility 

companies, the economies resulting therefrom, and the desirability 

thereof. The Commission shall report to Congress, from time to 

time, the results of such investigations, together with such recommendations for legislation as it deems advisable. On the basis 

of such investigations the Commission shall classify the different 

types of such contracts and the work done thereunder, and shall 

make recommendations from time to time regarding the standards 

and scope of such contracts in relation to public-utility companies 

of different kinds and sizes and the costs incurred thereunder and 

economies resulting therefrom. Such recommendations shall be 

made available to State commissions, public-utility companies, and 

to the public in such form and at such reasonable charge as the 

Commission may prescribe. 

øPERIODIC AND OTHER REPORTS

øSEC. 14. Every registered holding company and every mutual 

service company shall file with the Commission such annual, quarterly, and other periodic and special reports, the answers to such 

specific questions and the minutes of such directors’, stockholders’, and other meetings, as the Commission may by rules and regulations or order prescribe as necessary or appropriate in the public 

interest or for the protection of investors or consumers. Such reports, if required by the rules and regulations of the Commission, 

shall be certified by an independent public accountant, and shall be 

made and filed at such time and in such form and detail as the 

Commission shall prescribe. The Commission may require that 

there be included in reports filed with it such information and documents as it finds necessary or appropriate to keep reasonably current the information filed under section 5 or 13, and such further 

information concerning the financial condition, security structure, 

security holdings, assets, and cost thereof, wherever determinable, 

and affiliations of the reporting company and the associate companies, member companies, and affiliates thereof as the Commission 

deems necessary or appropriate in the public interest or for the 

protection of investors or consumers. 

øACCOUNTS AND RECORDS

øSEC. 15. (a) Every registered holding company and every subsidiary company thereof shall make, keep, and preserve for such 

periods, such accounts, cost-accounting procedures, correspondence, 

memoranda, papers, books, and other records as the Commission 

deems necessary or appropriate in the public interest or for the 

protection of investors or consumers or for the enforcement of the 

provisions of this title or the rules, regulations, or orders thereunder. 

ø(b) Every affiliate of a registered holding company or of any 

subsidiary company thereof, or of any public-utility company engaged in interstate commerce or not so engaged, shall make, keep, 

and preserve for such periods, such accounts, cost-accounting procedures, correspondence, memoranda, papers, books, and other 

records relating to any transaction of such affiliate which is subject 

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225

under, as the Commission deems necessary or appropriate in the 

public interest or for the protection of investors or consumers or for 

the enforcement of the provisions of this title or the rules, regulations, or orders thereunder. 

ø(c) Every mutual service company, and ever affiliate of a mutual 

service company as to any transaction of such affiliate which is 

subject to any provision of this title or any rule, regulation, or 

order thereunder, shall make, keep, and preserve for such periods, 

such accounts, cost-accounting procedures, correspondence, memoranda, papers, books, and other records, as the Commission deems 

necessary or appropriate in the public interest or for the protection 

of investors or consumers or for the enforcement of the provisions 

of this title or the rules, regulations, or orders thereunder. 

ø(d) Every person whose principal business is the performance of 

service, sales, or construction contracts for public-utility or holding 

companies shall make, keep, and preserve for such periods, such 

accounts, cost-accounting procedures, correspondence, memoranda, 

papers, books, and other records, relating to any transaction by 

such person which is subject to any provision of this title or any 

rule, regulation, or order thereunder, as the Commission deems 

necessary or appropriate in the public interest or for the protection 

of investors or consumers or for the enforcement of the provisions 

of this title or the rules and regulations thereunder. 

ø(e) After the Commission has prescribed the form and manner 

of making and keeping accounts, cost-accounting procedures, correspondence, memoranda, papers, books, and other records to be 

kept by any person hereunder, it shall be unlawful for any such 

person to keep any accounts, cost-accounting procedures, correspondence, memoranda, papers, books, or other records other 

than those prescribed or such as may be approved by the Commission, or to keep his or its accounts, cost-accounting procedures, correspondence, memoranda, papers, books, or other records in any 

manner other than that prescribed or approved by the Commission. 

ø(f) All accounts, cost-accounting procedures, correspondence, 

memoranda, papers, books, and other records kept or required to 

be kept by persons subject to any provision of this section shall be 

subject at any time and from time to time to such reasonable periodic, special, and other examinations by the Commission, or any 

member or representative thereof, as the Commission may prescribe. The Commission, after notice and opportunity for hearing, 

may prescribe the account or accounts in which particular outlays, 

receipts, and other transactions shall be entered, charged, or credited and the manner in which such entry, charge, or credit shall 

be made, and may require an entry to be modified or supplemented 

so as properly to show the cost of any asset or any other cost. 

ø(g) It shall be the duty of every registered holding company and 

of every subsidiary company thereof and of every affiliate of a company insofar as such affiliate is subject to any provision of this title 

or any rule, regulation, or order thereunder, to submit the accounts, cost-accounting procedures, correspondence, memoranda, 

papers, books, and other records of such holding company, subsidiary company, or affiliate, as the case may be, to such examinations, in person or by duly appointed attorney, by the holder of any 

security of such holding company, subsidiary company, or affiliate, 

226

as the case may be, as the Commission deems necessary or appropriate in the public interest or for the protection of investors or 

consumers. 

ø(h) It shall be the duty of every mutual service company, and 

of every affiliate of a mutual service company, and of every person 

whose principal business is the performance of service, sales, or 

construction contracts for public-utility or holding companies, insofar as such affiliate or such person is subject to any provision of 

this title or any rule, regulation, or order thereunder, to submit the 

accounts, cost-accounting procedures, correspondence, memoranda, 

papers, books, and other records of such mutual service company, 

affiliate, or person to such examinations, in person or by duly appointed attorney, by member companies of such mutual service 

company and by public-utility or holding companies for which such 

person performs service, sales, or construction contracts as the 

Commission deems necessary or appropriate in the public interest 

or for the protection of investors or consumers. 

ø(i) The Commission, by such rules and regulations as it deems 

necessary or appropriate in the public interest or for the protection 

of investors or consumers may prescribe for persons subject to the 

provisions of subsection (a), (b), (c), or (d) of this section uniform 

methods for keeping accounts required under any provision of this 

section, including, among other things, the manner in which the 

cost of all assets, whenever determinable, shall be shown, the 

methods of classifying and segregating accounts, and the manner 

in which cost-accounting procedures shall be maintained. 

øLIABILITY FOR MISLEADING STATEMENTS

øSEC. 16. (a) Any person who shall make or cause to be made 

any statement in any application, report, registration statement, or 

document filed pursuant to any provision of this title, or any rule, 

regulation, or order thereunder, which statement was at the time 

and in the light of the circumstances under which it was made 

false or misleading with respect to any material fact shall be liable 

in the same manner, to the same extent, and subject to the same 

limitations as provided in section 18 of the Securities Exchange Act 

of 1934 with respect to an application, report, or document filed 

pursuant to the Securities Exchange Act of 1934. 

ø(b) The rights and remedies provided by this title, except as provided in section 17(b), shall be in addition to any and all other 

rights and remedies that may exist under the Securities Act of 

1933, as amended, or the Securities Exchange Act of 1934, or otherwise at law or in equity; but no person permitted to maintain a 

suit for damages under the provisions of this title shall recover, 

through satisfaction of judgment in one or more actions, a total 

amount in excess of his actual damages on account of the act complained of. 

øOFFICERS, DIRECTORS, AND OTHER AFFILIATES

øSEC. 17. (a) Every person who is an officer or director of a registered holding company shall file with the Commission in such 

form as the Commission shall prescribe (1) at the time of the registration of such holding company, or within ten days after such 

person becomes an officer or director, a statement of the securities 

227

of such registered holding company or any subsidiary company 

thereof of which he is, directly or indirectly, the beneficial owner, 

and (2) within ten days after the close of each calendar month 

thereafter, if there has been any change in such ownership during 

such month, a statement of such ownership as of the close of such 

calendar month and of the changes in such ownership that have occurred during such calendar month. 

ø(b) For the purpose of preventing the unfair use of information 

which may have been obtained by any such officer or director by 

reason of his relationship to such registered holding company or 

any subsidiary company thereof, any profit realized by any such officer or director from any purchase and sale, or any sale and purchase, of any security of such registered holding company or any 

subsidiary company thereof within any period of less than six 

months, unless such security was acquired in good faith in connection with a debt previously contracted, shall inure to and be recoverable by the holding company or subsidiary company in respect of 

the security of which such profit was realized, irrespective of any 

intention on the part of such officer or director in entering into 

such transaction to hold the security purchased or not to repurchase the security sold for a period of more than six months. Suit 

to recover such profit may be instituted at law or in equity in any 

court of competent jurisdiction by the company entitled thereto or 

by the owner of any security of such company in the name and in 

the behalf of such company if such company shall fail or refuse to 

bring such suit within sixty days after request or shall fail diligently to prosecute the same thereafter; but no such suit shall be 

brought more than two years after the date such profit was realized. This subsection shall not cover any transaction where such 

person was not an officer or director at the times of the purchase 

and sale, or the sale and purchase, of the security involved, or any 

transaction or transactions which the Commission by rules and 

regulations may, as necessary or appropriate in the public interest 

or for the protection of investors or consumers, exempt as not comprehended within the purpose of this subsection. Nothing in this 

subsection shall be construed to give a remedy in the case of any 

transaction in respect of which a remedy is given under subsection 

(b) of section 16 of the Securities Exchange Act of 1934. 

ø(c) After one year from the date of the enactment of this title, 

no registered holding company or any subsidiary company thereof 

shall have, as an officer or director thereof, any executive officer, 

director, partner, appointee, or representative of any bank, trust 

company, investment banker, or banking association or firm, or any 

executive officer, director, partner, appointee, or representative of 

any corporation a majority of whose stock, having the unrestricted 

right to vote for the election of directors, is owned by any bank, 

trust company, investment banker, or banking association or firm, 

except in such cases as rules and regulations prescribed by the 

Commission may permit as not adversely affecting the public interest or the interest of investors or consumers. 

228

øINVESTIGATIONS; INJUNCTIONS, ENFORCEMENT OF TITLE, AND

PROSECUTION OF OFFENSES

øSEC. 18. (a) The Commission, in its discretion, may investigate 

any facts, conditions, practices, or matters which it may deem necessary or appropriate to determine whether any person has violated or is about to violate any provision of this title or any rule 

or regulation thereunder, or to aid in the enforcement of the provisions of this title, in the prescribing of rules and regulations thereunder, or in obtaining information to serve as a basis for recommending further legislation concerning the matters to which this 

title relates. The Commission may require or permit any person to 

file with it a statement in writing, under oath or otherwise as it 

shall determine, as to any or all facts and circumstances concerning a matter which may be the subject of investigation. The 

Commission, in its discretion, may publish, or make available to 

State commissions, information concerning any such subject. 

ø(b) The Commission upon its own motion or at the request of 

a State commission may investigate, or obtain any information regarding the business, financial condition, or practices of any registered holding company or subsidiary company thereof or facts, 

conditions, practices, or matters affecting the relations between any 

such company and any other company or companies in the same 

holding-company system. 

ø(c) For the purpose of any investigation or any other proceeding 

under this title, any member of the Commission, or any officer 

thereof designated by it, is empowered to administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, contracts, agreements, or other records which 

the Commission deems relevant or material to the inquiry. Such attendance of witnesses and the production of any such records may 

be required from any place in any State or in any Territory or 

other place subject to the jurisdiction of the United States at any 

designated place of hearing. 

ø(d) In case of contumacy by, or refusal to obey a subpoena 

issued to, any person, the Commission may invoke the aid of any 

court of the United States within the jurisdiction of which such investigation or proceeding is carried on, or where such person resides or carries on business, in requiring the attendance and testimony of witnesses and the production of books, papers, correspondence, memoranda, contracts, agreements, and other records. And 

such court may issue an order requiring such person to appear before the Commission or member or officer designated by the Commission, there to produce records, if so ordered, or to give testimony touching the matter under investigation or in question; and 

any failure to obey such order of the court may be punished by 

such court as a contempt thereof. All process in any such case may 

be served in the judicial district whereof such person is an inhabitant or wherever he may be found. Any person who, without just 

cause, shall fail or refuse to attend and testify or to answer any 

lawful inquiry or to produce books, papers, correspondence, memoranda, contracts, agreements, or other records, if in his or its power 

so to do, in obedience to the subpoena of the Commission, shall be 

229

guilty of a misdemeanor and, upon conviction, shall be subject to 

a fine of not more than $1,000 or to imprisonment for a term of 

not more than one year, or both. 

ø(e) Whenever it shall appear to the Commission that any person 

is engaged or about to engage in any acts or practices which constitute or will constitute a violation of the provisions of this title, 

or of any rule, regulation, or order thereunder, it may in its discretion bring an action in the proper district court of the United 

States or the United States courts of any Territory or other place 

subject to the jurisdiction of the United States, to enjoin such acts 

or practices and to enforce compliance with this title or any rule, 

regulation, or order thereunder, and upon a proper showing a permanent or temporary injunction or degree or restraining order 

shall be granted without bond. The Commission may transmit such 

evidence as may be available concerning such acts or practices to 

the Attorney General, who, in his discretion, may institute the appropriate criminal proceedings under this title. 

ø(f) Upon application of the Commission, the district courts of the 

United States, and the United States courts of any Territory or 

other place subject to the jurisdiction of the United States shall 

have jurisdiction to issue writs of mandamus commanding any person to comply with the provisions of this title or any rule, regulation, or order of the Commission thereunder. 

øHEARINGS BY COMMISSION

øSEC. 19. Hearings may be public and may be held before the 

Commission, any member or members thereof, or any officer or officers of the Commission designated by it, and appropriate records 

thereof shall be kept. In any proceeding before the Commission, the 

Commission, in accordance with such rules and regulations as it 

may prescribe, shall admit as a party any interested State, State 

commission, State securities commission, municipality, or other political subdivision of a State, and may admit as a party any representative of interested consumers or security holders, or any 

other person whose participation in the proceedings may be in the 

public interest or for the protection of investors or consumers. 

øRULES, REGULATIONS, AND ORDERS

øSEC. 20. (a) The Commission shall have authority from time to 

time to make, issue, amend, and rescind such rules and regulations 

and such orders as it may deem necessary or appropriate to carry 

out the provisions of this title, including rules and regulations defining accounting, technical, and trade terms used in this title. 

Among other things, the Commission shall have authority, for the 

purpose of this title, to prescribe the form or forms in which information required in any statement, declaration, application, report, 

or other document filed with the Commission shall be set forth, the 

items or details to be shown in balance sheets, profit and loss 

statements, and surplus accounts, the manner in which the cost of 

all assets, whenever determinable, shall be shown in regard to such 

statements, declarations, applications, reports, and other documents filed with the Commission, or accounts required to be kept 

by the rules, regulations, or orders of the Commission, and the 

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230

ing procedures and the preparation of reports, in the segregation 

and allocation of costs, in the determination of liabilities, in the determination of depreciation and depletion, in the differentiation of 

recurring and nonrecurring income, in the differentiation of investment and operating income, and in the keeping or preparation, 

where the Commission deems it necessary or appropriate, of separate or consolidated balance sheets or profit and loss statements for 

any companies in the same holding-company system. 

ø(b) In the case of the accounts of any company whose methods 

of accounting are prescribed under the provisions of any law of the 

United States or of any State, the rules and regulations or orders 

of the Commission in respect of accounts shall not be inconsistent 

with the requirements imposed by such law or any rule or regulation thereunder; nor shall anything in this title relieve any publicutility company from the duty to keep the accounts, books, records, 

or memoranda which may be required to be kept by the law of any 

State in which it operates or by the State commission of any such 

State. But this provision shall not prevent the Commission from 

imposing such additional requirements regarding reports or accounts as it may deem necessary or appropriate in the public interest or for the protection of investors or consumers. 

ø(c) The rules and regulations of the Commission shall be effective upon publication in the manner which the Commission shall 

prescribe. For the purpose of its rules, regulations, or orders the 

Commission may classify persons and matters within its jurisdiction and prescribe different requirements for different classes of 

persons or matters. Orders of the Commission under this title shall 

be issued only after opportunity for hearing. 

ø(d) The Commission, by such rules and regulations or order as 

it deems necessary or appropriate in the public interest or for the 

protection of investors or consumers, may authorize the filing of 

any information or documents required to be filed with the Commission under this title, or under the Securities Act of 1933, as 

amended, or under the Securities Exchange Act of 1934, by incorporating by reference any information or documents theretofore or 

concurrently filed with the Commission under this title or either of 

such Acts. No provision of this title imposing any liability shall 

apply to any act done or omitted in good faith in conformity with 

any rule, regulation, or order of the Commission, notwithstanding 

that such rule, regulation, or order may, after such act or omission, 

be amended or rescinded or be determined by judicial or other authority to be invalid for any reason.

øEFFECT ON EXISTING LAW

øSEC. 21. Nothing in this title shall affect (1) the jurisdiction of 

the Commission under the Securities Act of 1933, as amended, or 

the Securities Exchange Act of 1934 over any person, security, or 

contract, or (2) the rights, obligations, duties, or liabilities of any 

person under such Acts; nor shall anything in this title affect the 

jurisdiction of any other commission, board, agency, or officer of the 

United States or of any State or political subdivision of any State, 

over any person, security, or contract, insofar as such jurisdiction 

does not conflict with any provision of this title or any rule, regulation, or order thereunder. 

231

øINFORMATION FILED WITH THE COMMISSION

øSEC. 22. (a) When in the judgment of the Commission the disclosure of such information would be in the public interest or the 

interest of investors or consumers, the information contained in 

any statement, application, declaration, report, or other document 

filed with the Commission shall be available to the public, and copies thereof may be furnished to any person at such reasonable 

charge and under such reasonable limitations as the Commission 

may prescribe: Provided, however, That nothing in this title shall 

be construed to require, or to authorize the Commission to require, 

the revealing of trade secrets or processes in any application, declaration, report, or document filed with the Commission under this 

title. 

ø(b) Any person filing such application, declaration, report, or 

document may make written objection to the public disclosure of information contained therein, stating the grounds for such objection, 

and the Commission is authorized to hear objections in any such 

case where it finds it advisable. 

ø(c) It shall be unlawful for any member, officer, or employee of 

the Commission to disclose to any person other than a member, officer, or employee of the Commission, or to use for personal benefit, 

any information contained in any application, declaration, report, 

or document filed with the Commission which is not made available to the public pursuant to this section. 

øANNUAL REPORTS OF COMMISSION

øSEC. 23. The Commission shall submit annually a report to the 

Congress covering the work of the Commission for the preceding 

year and including such information, data, and recommendations 

for further legislation in connection with the matters covered by 

this title as it may find advisable. 

øCOURT REVIEW OF ORDERS

øSEC. 24. (a) Any person or party aggrieved by an order issued 

by the Commission under this title may obtain a review of such 

order in the court of appeals of the United States within any circuit 

wherein such person resides or has his principal place of business, 

or in the United States Court of Appeals for the District of Columbia, by filing in such court, within sixty days after the entry of such 

order, a written petition praying that the order of the Commission 

be modified or set aside in whole or in part. A copy of such petition 

shall be forthwith transmitted by the clerk of the court to any 

member of the Commission, or any officer thereof designated by the 

Commission for that purpose, and thereupon the Commission shall 

file in the court the record upon which the order complained of was 

entered, as provided in section 2112 of title 28, United States Code. 

Upon the filing of such petition such court shall have jurisdiction, 

which upon the filing of the record shall be exclusive, to affirm, 

modify, or set aside such order, in whole or in part. No objection 

to the order of the Commission shall be considered by the court unless such objection shall have been urged before the Commission or 

unless there were reasonable grounds for failure so to do. The findings of the Commissions as to the facts, if supported by substantial 

232

evidence, shall be conclusive. If application is made to the court for 

leave to adduce additional evidence, and it is shown to the satisfaction of the court that such additional evidence is material and that 

there were reasonable grounds for failure to adduce such evidence 

in the proceeding before the Commission, the court may order such 

additional evidence to be taken before the Commission and to be 

adduced upon the hearing in such manner and upon such terms 

and conditions as to the court may seem proper. The Commission 

may modify its findings as to the facts by reason of the additional 

evidence so taken, and it shall file with the court such modified or 

new findings, which, if supported by substantial evidence, shall be 

conclusive, and its recommendation, if any, for the modification or 

setting aside of the original order. The judgment and decree of the 

court affirming, modifying, or setting aside, in whole or in part, any 

such order of the Commission shall be final, subject to review by 

the Supreme Court of the United States upon certiorari or certification as provided in section 1254 of title 28, United States Code. 

ø(b) The commencement of proceedings under subsection (a) shall 

not, unless specifically ordered by the court, operate as a stay of 

the Commission’s order. 

øJURISDICTION OF OFFENSES AND SUITS

øSEC. 25. The District Courts of the United States and the 

United States courts of any Territory or other place subject to the 

jurisdiction of the United States shall have jurisdiction of violations 

of this title or the rules, regulations, or orders thereunder, and, 

concurrently with State and Territorial courts, of all suits in equity 

and actions at law brought to enforce any liability or duty created 

by, or to enjoin any violation of, this title or the rules, regulations, 

or orders thereunder. Any criminal proceeding may be brought in 

the district wherein any act or transaction constituting the violation occurred. Any suit or action to enforce any liability or duty created by, or to enjoin any violation of, this title or rules, regulations, 

or orders thereunder, may be brought in any such district or in the 

district wherein the defendant is an inhabitant or transacts business, and process in such cases may be served in any district of 

which the defendant is an inhabitant or transacts business or 

wherever the defendant may be found. Judgments and decrees so 

rendered shall be subject to review as provided in sections 1254, 

1291, 1292, and 1294 of title 28, United States Code. No costs shall 

be assessed for or against the Commission in any proceeding under 

this title brought by or against the Commission in any court. 

øVALIDITY OF CONTRACTS

øSEC. 26. (a) Any condition, stipulation, or provision binding any 

person to waive compliance with any provision of this title or with 

any rule, regulation, or order thereunder shall be void. 

ø(b) Every contract made in violation of any provision of this title 

or of any rule, regulation, or order thereunder, and every contract 

heretofore or hereafter made, the performance of which involves 

the violation of, or the continuance of any relationship or practice 

in violation of, any provision of this title, or any rule, regulation, 

or order thereunder, shall be void (1) as regards the rights of any 

person who, in violation of any such provision, rule, regulation, or 

233

order, shall have made or engaged in the performance of any such 

contract, and (2) as regards the rights of any person who, not being 

a party to such contract, shall have acquired any right thereunder 

with actual knowledge of the facts by reason of which the making 

or performance of such contract was in violation of any such provision, rule, regulation, or order. 

ø(c) Nothing in this title shall be construed (1) to affect the validity of any loan or extension of credit (or any extension or renewal 

thereof) made or of any lien created prior or subsequent to the enactment of this title, unless at the time of the making of such loan 

or extension of credit (or extension or renewal thereof) or the creating of such lien, the person making such loan or extension of 

credit (or extension or renewal thereof) or acquiring such lien shall 

have actual knowledge of facts by reason of which the making of 

such loan or extension of credit (or extension or renewal thereof) 

or the acquisition of such lien as a violation of the provisions of this 

title or any rule or regulation thereunder, or (2) to afford a defense 

to the collection of any debt or obligation or the enforcement of any 

lien by any person who shall have acquired such debt, obligation, 

or lien in good faith for value and without actual knowledge of the 

violation of any provision of this title or any rule or regulation 

thereunder affecting the legality of such debt, obligation, or lien. 

øLIABILITY OF CONTROLLING PERSONS; PREVENTING COMPLIANCE

WITH TITLE

øSEC. 27. (a) It shall be unlawful for any person, directly or indirectly, to cause to be done any act or thing through or by means 

of any other person which it would be unlawful for such person to 

do under the provisions of this title or any rule, regulation, or order 

thereunder. 

ø(b) It shall be unlawful for any person without just cause to 

hinder, delay, or obstruct the making, filing, or keeping of any information, document, report, record, or account required to be 

made, filed, or kept under any provision of this title or any rule, 

regulation, or order thereunder. 

øUNLAWFUL REPRESENTATIONS

øSEC. 28. It shall be unlawful for any person in issuing, selling, 

offering for sale any security of a registered holding company or 

subsidiary company thereof, to represent or imply in any manner 

whatsoever that such security has been guaranteed, sponsored, or 

recommended for investment by the United States or any agency 

or officer thereof. 

øPENALTIES

øSEC. 29. Any person who willfully violates any provision in this 

title or any rule, regulation, or order thereunder (other than an 

order of the Commission under subsection (b), (d), (e), or (f) of section 11), or any person who willfully makes any statement or entry 

in an application, report, document, account, or record filed or kept 

or required to be filed or kept under the provisions of this title or 

any rule, regulation, or order thereunder, knowing such statement 

or entry to be false or misleading in any material respect, or any 

234

person who willfully destroys (except after such time as may be 

prescribed under any rules or regulations under this title), mutilates, alters, or by any means, or device falsifies any account, correspondence, memorandum, book, paper, or other record kept or required to be kept under the provisions of this title or any rule, regulation, or order thereunder, shall upon conviction be fined not 

more than $10,000 or imprisoned not more than five years, or both, 

except that in the case of a violation of a provision of subsection 

(a) or (b) of section 4 by a holding company which is not an individual, the fine imposed upon such holding company shall be a fine 

not exceeding $200,000; but no person shall be convicted under this 

section for the violation of any rule, regulation, or order if he 

proves that he had no knowledge of such rule, regulation, or order. 

øSTUDY OF PUBLIC-UTILITY AND INVESTMENT COMPANIES

øSEC. 30. The Commission is authorized and directed to make 

studies and investigations of public-utility companies, the territories served or which can be served by public-utility companies, 

and the manner in which the same are or can be served, to determine the sizes, types, and locations of public-utility companies 

which do or can operate most economically and efficiently in the 

public interest, in the interest of investors and consumers, and in 

furtherance of a wider and more economical use of gas and electric 

energy; upon the basis of such investigations and studies the Commission shall make public from time to time its recommendations 

as to the type and size of geographically and economically integrated public-utility systems which, having regard for the nature 

and character of the locality served, can best promote and harmonize the interests of the public, the investor, and the consumer. 

øHIRING AND LEASING AUTHORITY OF THE COMMISSION

øSEC. 31. The provisions of section 4(b) of the Securities Exchange Act of 1934 shall be applicable with respect to the power 

of the Commission—

ø(1) to appoint and fix the compensation of such employees 

as may be necessary for carrying out its functions under this 

title, and 

ø(2) to lease and allocate such real property as may be necessary for carrying out its functions under this title. 

øSEC. 32. EXEMPT WHOLESALE GENERATORS. 

ø(a) DEFINITIONS.—For purposes of this section— ø(1) EXEMPT WHOLESALE GENERATOR.—The term ‘‘exempt 

wholesale generator’’ means any person determined by the 

Federal Energy Regulatory Commission to be engaged directly, 

or indirectly through one or more affiliates as defined in section 2(a)(11)(B), and exclusively in the business of owning or 

operating, or both owning and operating, all or part of one or 

more eligible facilities and selling electric energy at wholesale. 

No person shall be deemed to be an exempt wholesale generator under this section unless such person has applied to the 

Federal Energy Regulatory Commission for a determination 

under this paragraph. A person applying in good faith for such 

a determination shall be deemed an exempt wholesale generVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00238 Fmt 6604 Sfmt 6602 E:\HR\OC\SR043.XXX SR043
235

ator under this section, with all of the exemptions provided by 

this section, until the Federal Energy Regulatory Commission 

makes such determination. The Federal Energy Regulatory 

Commission shall make such determination within 60 days of 

its receipt of such application and shall notify the Commission 

whenever a determination is made under this paragraph that 

any person is an exempt wholesale generator. Not later than 

12 months after the date of enactment of this section, the Federal Energy Regulatory Commission shall promulgate rules implementing the provisions of this paragraph. Applications for 

determination filed after the effective date of such rules shall 

be subject thereto. 

ø(2) ELIGIBLE FACILITY.—The term ‘‘eligible facility’’ means a 

facility, wherever located, which is either— ø(A) used for the generation of electric energy exclusively for sale at wholesale, or 

ø(B) used for the generation of electric energy and leased 

to one or more public utility companies; Provided, That 

any such lease shall be treated as a sale of electric energy 

at wholesale for purposes of sections 205 and 206 of the 

Federal Power Act. 

Such term shall not include any facility for which consent is required under subsection (c) if such consent has not been obtained. 

Such term includes interconnecting transmission facilities necessary to effect a sale of electric energy at wholesale. For purposes 

of this paragraph, the term ‘‘facility’’ may include a portion of a facility subject to the limitations of subsection (d) and shall include 

a facility the construction of which has not been commenced or 

completed. 

ø(3) SALE OF ELECTRIC ENERGY AT WHOLESALE.—The term ‘‘sale of electric energy at wholesale’’ shall have the same 

meaning as provided in section 201(d) of the Federal Power Act 

(16 U.S.C. 824(d)). 

ø(4) RETAIL RATES AND CHARGES.—The term ‘‘retail rates 

and charges’’ means rates and charges for the sale of electric energydirectly to consumers. 

ø(b) FOREIGN RETAIL SALES.—Notwithstanding paragraphs (1) 

and (2) of subsection (a), retail sales of electric energy produced by 

a facility located in a foreign country shall not prevent such facility 

from being an eligible facility, or prevent a person owning or operating, or both owning and operating, such facility from being an exempt wholesale generator if none of the electric energy generated 

by such facility is sold to consumers in the United States. 

ø(c) STATE CONSENT FOR EXISTING RATE-BASED FACILITIES.—If a 

rate or charge for, or in connection with, the construction of a facility, or for electric energy produced by a facility (other than any portion of a rate or charge which represents recovery of the cost of a 

wholesale rate or charge) was in effect under the laws of any State 

as of the date of enactment of this section, in order for the facility 

to be considered an eligible facility, every State commission having 

jurisdiction over any such rate or charge must make a specific determination that allowing such facility to be an eligible facility (1) 

will benefit consumers, (2) is in the public interest, and (3) does not 

violate State law; Provided, That in the case of such a rate or 

236

charge which is a rate or charge of an affiliate of a registered holding company: 

ø(A) such determination with respect to the facility in question shall be required from every State commission having jurisdiction over the retail rates and charges of the affiliates of 

such registered holding company; and 

ø(B) the approval of the Commission under this Act shall not 

be required for the transfer of the facility to an exempt wholesale generator. 

ø(d) HYBRIDS.—(1) No exempt wholesale generator may own or 

operate a portion of any facility if any other portion of the facility 

is owned or operated by an electric utility company that is an affiliate or associate company of such exempt wholesale generator. 

ø(2) ELIGIBLE FACILITY.—Notwithstanding paragraph (1), an 

exempt wholesale generator may own or operate a portion of 

a facility identified in paragraph (1) if such portion has become 

an eligible facility as a result of the operation of subsection (c). 

ø(e) EXEMPTION OF EWGS.—An exempt wholesale generator 

shall not be considered an electric utility company under section 

2(a)(3) of this Act and, whether or not a subsidiary company, an 

affiliate, or an associate company of a holding company, an exempt 

wholesale generator shall be exempt from all provisions of this Act. 

ø(f) OWNERSHIP OF EWGS BY EXEMPT HOLDING COMPANIES.— Notwithstanding any provision of this Act, a holding company that 

is exempt under section 3 of this Act shall be permitted, without 

condition or limitation under this Act, to acquire and maintain an 

interest in the business of one or more exempt wholesale generators. 

ø(g) OWNERSHIP OF EWGS BY REGISTERED HOLDING COMPA- NIES.—Notwithstanding any provision of this Act and the Commission’s jurisdiction as provided under subsection (h) of this section, 

a registered holding company shall be permitted (without the need 

to apply for, or receive, approval from the Commission, and otherwise without condition under this Act) to acquire and hold the securities, or an interest in the business, of one or more exempt 

wholesale generators. 

ø(h) FINANCING AND OTHER RELATIONSHIPS BETWEEN EWGS AND

REGISTERED HOLDING COMPANIES.—The issuance of securities by a 

registered holding company for purposes of financing the acquisition of an exempt wholesale generator, the guarantee of securities 

of an exempt wholesale generator by a registered holding company, 

the entering into service, sales or construction contracts, and the 

creation or maintenance of any other relationship in addition to 

that described in subsection (g) between an exempt wholesale generator and a registered holding company, its affiliates and associate 

companies, shall remain subject to the jurisdiction of the Commission under this Act: Provided, That 

ø(1) section 11 of this Act shall not prohibit the ownership 

of an interest in the business of one or more exempt wholesale 

generators by a registered holding company (regardless of 

where facilities owned or operated by such exempt wholesale 

generators are located), and such ownership by a registered 

holding company shall be deemed consistent with the operation 

of an integrated public utility system; 

237

ø(2) the ownership of an interest in the business of one or 

more exempt wholesale generators by a registered holding company (regardless of where facilities owned or operated by such 

exempt wholesale generators are located) shall be considered 

as reasonably incidental, or economically necessary or appropriate, to the operations of an integrated public utility system; 

ø(3) in determining whether to approve (A) the issue or sale 

of a security by a registered holding company for purposes of 

financing the acquisition of an exempt wholesale generator, or 

(B) the guarantee of a security of an exempt wholesale generator by a registered holding company, the Commission shall 

not make a finding that such security is not reasonably adapted to the earning power of such company or to the security 

structure of such company and other companies in the same 

holding company system, or that the circumstances are such as 

to constitute the making of such guarantee an improper risk 

for such company, unless the Commission first finds that the 

issue or sale of such security, or the making of the guarantee, 

would have a substantial adverse impact on the financial integrity of the registered holding company system; 

ø(4) in determining whether to approve (A) the issue or sale 

of a security by a registered holding company for purposes 

other than the acquisition of an exempt wholesale generator, 

or (B) other transactions by such registered holding company 

or by its subsidiaries other than with respect to exempt wholesale generators, the Commission shall not consider the effect of 

the capitalization or earnings of any subsidiary which is an exempt wholesale generator upon the registered holding company 

system, unless the approval of the issue or sale or other transaction, together with the effect of such capitalization and earnings, would have a substantial adverse impact on the financial 

integrity of the registered holding company system; 

ø(5) the Commission shall make its decision under paragraph (3) to approve or disapprove the issue or sale of a security or the guarantee of a security within 120 days of the filing 

of a declaration concerning such issue, sale or guarantee; and 

ø(6) the Commission shall promulgate regulations with respect to the actions which would be considered, for purposes of 

this subsection, to have a substantial adverse impact on the financial integrity of the registered holding company system; 

such regulations shall ensure that the action has no adverse 

impact on any utility subsidiary or its customers, or on the 

ability of State commissions to protect such subsidiary or customers, and shall take into account the amount and type of 

capital invested in exempt wholesale generators, the ratio of 

such capital to the total capital invested in utility operations, 

the availability of books and records, and the financial and operating experience of the registered holding company and the 

exempt wholesale generator; the Commission shall promulgate 

such regulations within 6 months after the enactment of this 

section; after such 6-month period the Commission shall not 

approve any actions under paragraph (3), (4) or (5) except in 

accordance with such issued regulations. 

238

ø(i) APPLICATION OF ACT TO OTHER ELIGIBLE FACILITIES.—In the 

case of any person engaged directly and exclusively in the business 

of owning or operating (or both owning and operating) all or part 

of one or more eligible facilities, an advisory letter issued by the 

Commission staff under this Act after the date of enactment of this 

section, or an order issued by the Commission under this Act after 

the date of enactment of this section, shall not be required for the 

purpose, or have the effect, of exempting such person from treatment as an electric utility company under section 2(a)(3) or exempting such person from any provision of this Act. 

ø(j) OWNERSHIP OF EXEMPT WHOLESALE GENERATORS AND QUALI- FYING FACILITIES.—The ownership by a person of one or more exempt wholesale generators shall not result in such person being 

considered as being primarily engaged in the generation or sale of 

electric power within the meaning of sections 3(17)(C)(ii) and 

3(18)(B)(ii) of the Federal Power Act (16 U.S.C. 796(17)(C)(ii) and 

796(18)(B)(ii)). 

ø(k) PROTECTION AGAINST ABUSIVE AFFILIATE TRANSACTIONS.— ø(1) PROHIBITION.—After the date of enactment of this section, an electric utility company may not enter into a contract 

to purchase electric energy at wholesale from an exempt wholesale generator if the exempt wholesale generator is an affiliate 

or associate company of the electric utility company. 

ø(2) STATE AUTHORITY TO EXEMPT FROM PROHIBITION.—Notwithstanding paragraph (1), an electric utility company may 

enter into a contract to purchase electric energy at wholesale 

from an exempt wholesale generator that is an affiliate or associate company of the electric utility company— ø(A) if every State commission having jurisdiction over 

the retail rates of such electric utility company makes each 

of the following specific determinations in advance of the 

electric utility company entering into such contract:

ø(i) A determination that such commission has sufficient regulatory authority, resources and access to 

books and records of the electric utility company and 

any relevant associate, affiliate or subsidiary company 

to exercise its duties under this subparagraph. 

ø(ii) A determination that the transaction—

ø(I) will benefit consumers, 

ø(II) does not violate any State law (including 

where applicable, least cost planning), 

ø(III) would not provide the exempt wholesale 

generator any unfair competitive advantage by 

virtue of its affiliation or association with the electric utility company, and 

ø(IV) is in the public interest; or 

ø(B) if such electric utility company is not subject to 

State commission retail rate regulation and the purchased 

electric energy: 

ø(i) would not be resold to any affiliate or associate 

company, or 

ø(ii) the purchased electric energy would be resold to 

an affiliate or associate company and every State commission having jurisdiction over the retail rates of 

239

1So in original. Probably should be ‘‘subsection’’. 

such affiliate or associate company makes each of the 

determinations provided under subparagraph (A), including the determination concerning a State commission’s duties. 

ø(l) RECIPROCAL ARRANGEMENTS PROHIBITED.—Reciprocal arrangements among companies that are not affiliates or associate 

companies of each other that are entered into in order to avoid the 

provisions of this section are prohibited. 

øSEC. 33. [TREATMENT OF FOREIGN UTILITIES. 

ø(a) EXEMPTIONS FOR FOREIGN UTILITY COMPANIES.— ø(1) IN GENERAL.—A foreign utility company shall be exempt 

from all of the provisions of this Act, except as otherwise provided under this section, and shall not, for any purpose under 

this Act, be deemed to be a public utility company under section 2(a)(5), notwithstanding that the foreign utility company 

may be a subsidiary company, an affiliate, or an associate company of a holding company or of a public utility company. 

ø(2) STATE COMMISSION CERTIFICATION.—Section 1 (a)(1) shall 

not apply or be effective unless every State commission having 

jurisdiction over the retail electric or gas rates of a public utility company that is an associate company or an affiliate of a 

company otherwise exempted under section (a)(1) (other than 

a public utility company that is an associate company or an affiliate of a registered holding company) has certified to the 

Commission that it has the authority and resources to protect 

ratepayers subject to its jurisdiction and that it intends to exercise its authority. Such certification, upon the filing of a notice by such State commission, may be revised or withdrawn 

by the State commission prospectively as to any future acquisition. The requirement of State certification shall be deemed 

satisfied if the relevant State commission had, prior to the date 

of enactment of this section, on the basis of prescribed conditions of general applicability; determine that ratepayers of a 

public utility company are adequately insulated from the effects of diversification and the diversification would not impair 

the ability of the State commission to regulate effectively the 

operations of such company. 

ø(3) DEFINITION.—For purposes of this section, the term ‘‘foreign utility company’’ means any company that— ø(A) owns or operates facilities that are not located in 

any State and that are used for the generation, transmission, or distribution of electric energy for sale or the 

distribution at retail of natural or manufactured gas for 

heat, light, or power, if such company— ø(i) derives no part of its income, directly or indirectly, from the generation, transmission, or distribution of electric energy for sale or the distribution at retail of natural or manufactured gas for heat, light, or 

power, within the United States; and 

ø(ii) neither the company nor any of its subsidiary 

companies is a public utility company operating in the 

United States; and 

240

ø(B) provides notice to the Commission, in such form as 

the Commission may prescribe, that such company is a foreign utility company. 

ø(b) OWNERSHIP OF FOREIGN UTILITY COMPANIES BY EXEMPT

HOLDING COMPANIES.—Notwithstanding any provision of this Act 

except as provided under this section, a holding company that is 

exempt under section 3 of the Act shall be permitted without condition or limitation under the Act to acquire and maintain an interest in the business of one or more foreign utility companies. 

ø(c) REGISTERED HOLDING COMPANIES.—

ø(1) OWNERSHIP OF FOREIGN UTILITY COMPANIES BY REGISTERED HOLDING COMPANIES.—Notwithstanding any provision 

of this Act except as otherwise provided under this section, a 

registered holding company shall be permitted as of the date 

of enactment of this section (without the need to apply for, or 

receive approval from the Commission) to acquire and hold the 

securities or an interest in the business, of one or more foreign 

utility companies. The Commission shall promulgate rules or 

regulations regarding registered holding companies’ acquisition 

of interests in foreign utility companies which shall provide for 

the protection of the customers of a public utility company 

which is an associate company of a foreign utility company and 

the maintenance of the financial integrity of the registered 

holding company system. 

ø(2) ISSUANCE OF SECURITIES.—The issuance of securities by 

a registered holding company for purposes of financing the acquisition of a foreign utility company, the guarantee of securities of a foreign utility company by a registered holding company, the entering into service, sales, or construction contracts, 

and the creation or maintenance of any other relationship between a foreign utility company and a registered holding company, its affiliates and associate companies, shall remain subject to the jurisdiction of the Commission under this Act (unless otherwise exempted under this Act, in the case of a transaction with an affiliate or associate company located outside of 

the United States). Any State commission with jurisdiction 

over the retail rates of a public utility company which is part 

of a registered holding company system may make such recommendations to the Commission regarding the registered 

holding company’s relationship to a foreign utility company, 

and the Commission shall reasonably and fully consider such 

State recommendation. 

ø(3) CONSTRUCTION.—Any interest in the business of 1 or 

more foreign utility companies, or 1 or more companies organized exclusively to own, directly or indirectly, the securities or 

other interest in a foreign utility company, shall for all purposes of his Act, be considered to be—

ø(A) consistent with the operation of a single integrated 

public utility system, within the meaning of section 11; 

and 

ø(B) reasonably incidental, or economically necessary or 

appropriate, to the operations of an integrated public utility system, within the meaning of section 11. 

241

ø(d) EFFECT ON EXISTING LAW; NO STATE PREEMPTION.—Nothing 

in this section shall—

ø(1) preclude any person from qualifying for or maintaining 

any exemption otherwise provided for under this Act or the 

rules, regulations, or orders promulgated or issued under this 

Act; or 

ø(2) be deemed or construed to limit the authority of any 

State (including any State regulatory authority) with respect 

to—

ø(A) any public utility company or holding company subject to such State’s jurisdiction; or 

ø(B) any transaction between any foreign utility company (or any affiliate or associate company thereof) and 

any public utility company or holding company subject to 

such State’s jurisdiction. 

ø(e) REPORTING REQUIREMENTS.—

ø(1) FILING OF REPORTS.—A public utility company that is an 

associate company of a foreign utility company shall file with 

the Commission such reports (with respect to such foreign utility company) as the Commission may by rules, regulations, or 

order prescribe as necessary or appropriate in the public interest or for the protection of investors or consumers. 

ø(2) NOTICE OF ACQUISITIONS.—Not later than 30 days after 

the consummation of the acquisition of an interest in a foreign 

utility company by an associate company of a public utility 

company that is subject to the jurisdiction of a State commission with respect to its retail electric or gas rates or by such 

public utility company, such associate company or such public 

utility company, shall provide notice of such acquisition to 

every State commission having jurisdiction over the retail electric or gas rates of such public utility company, in such form 

as may be prescribed by the State commission. 

ø(f) PROHIBITION ON ASSUMPTION OF LIABILITIES.—

ø(1) IN GENERAL.—No public utility company that is subject 

to the jurisdiction of a State commission with respect to its retail electric or gas rates shall issue any security for the purpose of financing the acquisiitn, or for the purposes of financing the ownership or operation, of a foreign utility company, 

nor shall any such pubic utility company assume any obligation or liability as guarantor, endorser, surety, or otherwise in 

respect of any security of a foreign utility company. 

ø(2) EXCEPTION FOR HOLDING COMPANIES WHICH ARE PREDOMINANTLY PUBLIC UTILITY COMPANIES.—Subsection (f)(1) 

shall not apply if: 

ø(A) The public utility company that is subject to the jurisdiction of a State commission with respect to its retail 

electric or gas rates is a holding company and is not an affiliate under section 2(a)(11)(B) of another holding company or is not subject to regulation as a holding company 

and has no affiliate as defined in section 2(a)(11)(A) that 

is a pubic utility company subject to the jurisdiction of a 

State commission with respect to its retail electric or gas 

rates; and 

242

1So in original. Probably should be ‘‘subsection’’. 

ø(B) each State commission having jurisdiction with respect to the retail electric and gas rates of such public utility company expressly permits such public utility to engage in a transaction otherwise prohibited under section1

(f)(1); and 

ø(C) the transaction (aggregated with all other then outstanding transactions exempted under this subsection) 

does not exceed 5 per centum of the then-outstanding total 

capitalization of the public utility. 

ø(g) PROHIBITION ON PLEDGING OR ENCUMBERING UTILITY AS- SETS.—No public utility company that is subject to the jurisdiction 

of State commission with respect to its retail electric or gas rates 

shall pledge or encumber any utility assets or utility assets of any 

subsidiary thereof for the benefit of an associate foreign utility 

company. 

øSEC. 34. EXEMPT TELECOMMUNICATIONS COMPANIES. 

ø(a) DEFINITIONS.—For purposes of this section— ø(1) EXEMPT TELECOMMUNICATIONS COMPANY.—The term ‘‘exempt telecommunications company’’ means any person determined by the Federal Communications Commission to be 

engaged directly or indirectly, wherever located, through one or 

more affiliates (as defined in section 2(a)(11)(B)), and exclusively in the businesses of providing 

ø(A) telecommunications services; 

ø(B) information services; 

ø(C) other services or products subject to the jurisdiction 

of the Federal Communications Commission; or 

ø(D) products or services that are related or incidental 

to the provision of a product or service described in subparagraph (A) (B), or (C).

No person shall be deemed to be an exempt telecommunications company under this section unless such person has applied to the Federal Communications Commission for a determination under this paragraph. A person applying in good 

faith for such a determination shall be deemed an exempt telecommunications company under this section, with all of the exemptions provided by this section, until the Federal Communications Commission makes such determination. The Federal 

Communications Commission shall make such determination 

within 60 days of its receipt of any such application filed after 

the enactment of this section and shall notify the Commission 

whenever a determination is made under this paragraph that 

any person is an exempt telecommunications company. Not 

later than 12 months after the date of enactment of this section, the Federal Communications Commission shall promulgate rules implementing the provisions of this paragraph 

which shall be applicable to applications filed under this paragraph after the effective date of such rules. 

ø(2) OTHER TERMS.—For purposes of this section, the terms ‘‘telecommunications services’’ and ‘‘information services’’ shall 

have the same meanings as provided in the Communications 

Act of 1934. 

243

ø(b) STATE CONSENT FOR SALE OF EXISTING RATE-BASED FACILITIES.—If a rate or charge for the sale of electric energy or natural 

gas (other than any portion of a rate or charge which represents 

recovery of the cost of a wholesale rate or charge) for, or in connection with, assets of a public utility company that is an associate 

company or affiliate of a registered holding company was in effect 

under the laws of any State as of December 19, 1995, the public 

utility company owning such assets may not sell such assets to an 

exempt telecommunications company that is an associate company 

or affiliate unless State commissions having jurisdiction over such 

public utility company approve such sale. Nothing in this subsection shall preempt the otherwise applicable authority of any 

State to approve or disapprove the sale of such assets. The approval of the Commission under this Act shall not be required for 

the sale of assets as provided in this subsection. 

ø(c) OWNERSHIP OF ETCS BY EXEMPT HOLDING COMPANIES.—

Notwithstanding any provision of this Act, a holding company that 

is exempt under section 3 of this Act shall be permitted, without 

condition or limitation under this Act, to acquire and maintain an 

interest in the business of one or more exempt telecommunications 

companies. 

ø(d) OWNERSHIP OF ETCS BY REGISTERED HOLDING COMPANIES.—Notwithstanding any provision of this Act, a registered holding company shall be permitted (without the need to apply for, or 

receive, approval from the Commission, and otherwise without condition under this Act) to acquire and hold the securities, or an interest in the business, of one or more exempt telecommunications 

companies. 

ø(e) FINANCING AND OTHER RELATIONSHIPS BETWEEN ETCS AND

REGISTERED HOLDING COMPANIES.—The relationship between an 

exempt telecommunications company and a registered holding company, its affiliates and associate companies, shall remain subject to 

the jurisdiction of the Commission under this Act: Provided, That—

ø(1) section 11 of this Act shall not prohibit the ownership 

of an interest in the business of one or more exempt telecommunications companies by a registered holding company 

(regardless of activities engaged in or where facilities owned or 

operated by such exempt telecommunications companies are located), and such ownership by a registered holding company 

shall be deemed consistent with the operation of an integrated 

public utility system; 

ø(2) the ownership of an interest in the business of one or 

more exempt telecommunications companies by a registered 

holding company (regardless of activities engaged in or where 

facilities owned or operated by such exempt telecommunications companies are located) shall be considered as reasonably incidental, or economically necessary or appropriate, to 

the operations of an integrated public utility system; 

ø(3) the Commission shall have no jurisdiction under this 

Act over, and there shall be no restriction or approval required 

under this Act with respect to (A) the issue or sale of a security 

by a registered holding company for purposes of financing the 

acquisition of an exempt telecommunications company, or (B) 

244

the guarantee of a security of an exempt telecommunications 

company by a registered holding company; and 

ø(4) except for costs that should be fairly and equitably allocated among companies that are associate companies of a registered holding company, the Commission shall have no jurisdiction under this Act over the sales, service, and construction 

contracts between an exempt telecommunications company and 

a registered holding company, its affiliates and associate companies. 

ø(f) REPORTING OBLIGATIONS CONCERNING INVESTMENTS AND AC- TIVITIES OF REGISTERED PUBLIC-UTILITY HOLDING COMPANY SYS- TEMS.—

ø(1) OBLIGATIONS TO REPORT INFORMATION.—Any registered 

holding company or subsidiary thereof that acquires or holds 

the securities, or an interest in the business, of an exempt telecommunications company shall file with the Commission such 

information as the Commission, by rule, may prescribe concern 

ø(A) investments and activities by the registered holding 

company, or any subsidiary thereof, with respect to exempt 

telecommunications companies, and 

ø(B) any activities of an exempt telecommunications 

company within the holding company system, that are reasonably likely to have a material impact on the financial 

or operational condition of the holding company system. 

ø(2) AUTHORITY TO REQUIRE ADDITIONAL INFORMATION.—If, 

based on reports provided to the Commission pursuant to paragraph (1) of this subsection or other available information, the 

Commission reasonably concludes that it has concerns regarding the financial or operational condition of any registered 

holding company or any subsidiary thereof (including an exempt telecommunications company), the Commission may require such registered holding company to make additional reports, and provide additional information. 

ø(3) AUTHORITY TO LIMIT DISCLOSURE OF INFORMATION.—Notwithstanding any other provision of law, the Commission shall 

not be compelled to disclose any information required to be reported under this subsection. Nothing in this subsection shall 

authorize the Commission to withhold the information from 

Congress, or prevent the Commission from complying with a 

request for information from any other Federal or State department or agency requesting the information for purposes 

within the scope of its jurisdiction. For purposes of section 552 

of title 5, United States Code, this subsection shall be considered a statute described in subsection (b)(3)(B) of such section 

552. 

ø(g) ASSUMPTION OF LIABILITIES.—Any public utility company 

that is an associate company, or an affiliate, of a registered holding 

company and that is subject to the jurisdiction of a State commission with respect to its retail electric or gas rates shall not issue 

any security for the purpose of financing the acquisition, ownership, or operation of an exempt telecommunications company. Any 

public utility company that is an associate company, or an affiliate, 

of a registered holding company and that is subject to the jurisdiction of a State commission with respect to its retail electric or gas 

245

rates shall not assume any obligation or liability as guarantor, endorser, surety, or otherwise by the public utility company in respect 

of an security of an exempt telecommunications company. 

ø(h) PLEDGING OR MORTGAGING OF ASSETS.—Any public utility 

company that is an associate company, or affiliate, of a registered 

holding company and that is subject to the jurisdiction of a State 

commission with respect to its retail electric or gas rates shall not 

pledge, mortgage, or otherwise use as collateral any assets of the 

public utility company or assets of any subsidiary company thereof 

for be benefit of an exempt telecommunications company. 

ø(i) PROTECTION AGAINST ABUSIVE AFFILIATE TRANSACTIONS—-A 

public utility company may enter into a contract to purchase services or products described in subsection (a)(1) from an exempt telecommunications company that is an affiliate or associate company 

of the public utility company only if—

ø(1) every State commission having jurisdiction over the retail rates of such public utility company approves such contract, or 

ø(2) such public utility company is not subject to State commission retail rate regulation and the purchased services or 

product—

ø(A) would not be resold to any affiliate or associate 

company; or 

ø(B) would be resold to an affiliate or associate company 

and every State commission having jurisdiction over the 

retail rates of such affiliate or associate company makes 

the determination required by subparagraph (A). 

The requirements of this subsection shall not apply in any case in 

which the State or the State commission concerned publishes a notice that the State or State commission waives its authority under 

this subsection. 

ø(j) NONPREEMPTION OF RATE AUTHORITY.—Nothing in this Act 

shall preclude the Federal Energy Regulatory Commission or a 

State commission from exercising its jurisdiction under otherwise 

applicable law to determine whether a public utility company may 

recover in rates the costs of products or services purchased from or 

sold to an associate company or affiliate that is an exempt telecommunications company, regardless of whether such costs are incurred through the direct or indirect purchase or sale of products 

or services from such associate company or affiliate. 

ø(k) RECIPROCAL ARRANGEMENTS PROHIBITED.—Reciprocal arrangements among companies that are not affiliates or associate 

companies of each other that are entered into in order to avoid the 

provisions of this section are prohibited. 

ø(l) BOOKS AND RECORDS.—(1) Upon written order of a State 

commission, a State commission may examine the books, accounts, 

memoranda, contracts, and records of—

ø(A) a public utility company subject to its regulatory authority under State law; 

ø(B) any exempt telecommunications company selling products or services to such public utility company or to an associate company of such public utility company; and 

246

ø(C) any associate company or affiliate of an exempt telecommunications company which sells products or services to a 

public utility company referred to in subparagraph (A), 

wherever located, if such examination is required for the effective 

discharge of the State commission’s regulatory responsibilities affecting the provision of electric or gas service in connection with 

the activities of such exempt telecommunications company. 

ø(2) Where a State commission issues an order pursuant to paragraph (1), the State commission shall not publicly disclose trade secrets or sensitive commercial information. 

ø(3) Any United States district court located in the State in 

which the State commission referred to in paragraph (1) is located 

shall have jurisdiction to enforce compliance with this subsection. 

ø(4) Nothing in this section shall— ø(A) preempt applicable State law concerning the provision 

of records and other information; or 

ø(B) in any way limit rights to obtain records and other information under Federal law, contracts, or otherwise. 

ø(m) INDEPENDENT AUDIT AUTHORITY FOR STATE COMMISSIONS.— ø(1) STATE MAY ORDER AUDIT.—Any State commission with 

jurisdiction over a public utility company that— ø(A) is an associate company of a registered holding 

company; and 

ø(B) transacts business, directly or indirectly, with a 

subsidiary company, an affiliate or an associate company 

that is an exempt telecommunications company, 

may order an independent audit to be performed, no more frequently than on an annual basis, of all matters deemed relevant by the selected auditor that reasonably relate to retail 

rates: Provided, That such matters relate, directly or indirectly, to transactions or transfers between the public utility 

company subject to its jurisdiction and such exempt telecommunications company. 

ø(2) SELECTION OF FIRM TO CONDUCT AUDIT.—(A) If a State 

commission orders an audit in accordance with paragraph (1), 

the public utility company and the State commission shall 

jointly select, within 60 days, a firm to perform the audit. The 

firm selected to perform the audit shall possess demonstrated 

qualifications relating to—

ø(i) competency, including adequate technical training 

and professional proficiency in each discipline necessary to 

carry out the audit; and 

ø(ii) independence and objectivity, including that the 

firm be free from personal or external impairments to 

independence, and should assume an independent position 

with the State commission and auditee, making certain 

that the audit is based upon an impartial consideration of 

all pertinent facts and responsible opinions. 

(B) The public utility company and the exempt telecommunications company shall cooperate fully with all reasonable requests necessary to perform the audit and the public utility 

company shall bear all costs of having the audit performed. 

ø(3) AVAILABILITY OF AUDITOR’S REPORT.—The auditor’s report shall be provided to the State commission not later than 

247

6 months after the selection of the auditor, and provided to the 

public utility company not later than 60 days thereafter. 

ø(n) APPLICABILITY OF TELECOMMUNICATIONS REGULATION.— Nothing in this section shall affect the authority of the Federal 

Communications Commission under the Communications Act of 

1934, or the authority of State commissions under State laws concerning the provision of telecommunications services, to regulate 

the activities of an exempt telecommunications company. 

øSEPARABILITY OF PROVISIONS

øSEC. 35. If any provision of this title or the application of such 

provision to any person or circumstances shall be held invalid, the 

remainder of the title and the application of such provision to persons or circumstances other than those as to which it is held invalid shall not be affected thereby. 

øSHORT TITLE

øSEC. 36. This title may be cited as the ‘‘Public Utility Holding 

Company Act of 1935’’.¿

UNITED STATES HOUSING ACT OF 1937 

Act of September 1, 1937, chapter 896, as amended (42 U.S.C. 1437 

et seq.) 

SEC. 9. * * *

(d) * * *

(1) * * *

(1) capital expenditures to improve the security and safety of residents; øand¿

(J) homeownership activities, including programs under 

section 1437z–4 of this titleø.¿;

(K) improvement of energy and water-use efficiency by installing fixtures and fittings that conform to the American 

Society of Mechanical Engineers/American National 

Standards Institute standards Al12.19.2–1998 and 

A112.18.1–2000, or any revision thereto, applicable at the 

time of installation, and by increasing energy efficiency and 

water conservation by such other means as the Secretary 

determines are appropriate; and 

(L) integrated utility management and capital planning 

to maximize energy conservation and efficiency measures. 

* * * * * * *

(e)* * *

(2)* * *

(C) TREATMENT OF SAVINGS.—ƒThe≈ (i) IN GENERAL.—

The treatment of utility and waste management costs 

under the formula shall provide that a public housing 

agency shall receive the full financial benefit from any reduction in the cost of utilities or waste management resulting from any contract with a third party to undertake 

energy conservation improvements in one or more of its 

public housing projects.

248

(ii) THIRD PARTY CONTRACTS.—Contracts described in 

clause (i) may include contracts for equipment conversions 

to less costly utility sources, projects with resident-paid 

utilities, and adjustments to frozen base year consumption, 

including systems repaired to meet applicable building and 

safety codes and adjustments for occupancy rates increased 

by rehabilitation. 

(iii) TERM OF CONTRACT.—The total term of a contract 

described in clause (i) shall not exceed 20 years to allow 

longer payback periods for retrofits, including windows, 

heating system replacements, wall insulation, site-based 

generations, advanced energy savings technologies, including renewable energy generation, and other such retrofits. 

* * * * * * *

NATURAL GAS ACT 

Act of June 21, 1938, chapter 556, as amended (15 U.S.C. 717–

717w) 

* * * * * * *

GENERAL PENALTIES

SEC. 21. (a) Any person who willfully and knowingly does or 

causes or suffers to be done any act, matter, or thing in this Act 

prohibited or declared to be unlawful, or who willfully and knowingly omits or fails to do any act, matter or thing in this Act required to be done, or willfully and knowingly causes or suffers such 

omission or failure, shall, upon conviction thereof, be punished by 

a fine of not more than ø$5,000¿ $1,000,000 or by imprisonment for 

not more than øtwo years¿ five years, or both. 

(b) Any person who willfully and knowingly violates any rule, 

regulation, restriction, condition, or order made or imposed by the 

Commission under authority of this Act, shall, in addition to any 

other penalties provided by law, be punished upon conviction thereof by a fine of not exceeding ø$500¿ $50,000 for each and every day 

during which such offense occurs. 

* * * * * * *

NATIONAL HOUSING ACT 

* * * * * * *

Act of June 27, 1938, as amended (12 U.S.C. 1701 et seq.) 

* * * * * * *

SEC. 203. * * * 

(b) * * * 

(2) * * * 

(B)(iii) * * * As used herein, the term ‘‘veteran’’ means 

any person who served on active duty in the armed forces 

of the United States for a period of not less than ninety 

days (or as certified by the Secretary of Defense as having 

249

performed extra-hazardous service), and who was discharged or released therefrom under conditions other than 

dishonorable, except that persons enlisting in the armed 

forces after September 7, 1980, or entering active duty 

after October 16, 1981, shall have their eligibility determined in accordance with section 3103A(d) of title 38, 

United States Code. 

Notwithstanding any other provision of this paragraph or paragraph (10), the amount which may be insured under this section 

may be increased by up to ø20¿ 30 percent if such increase is necessary to account for the increased cost of the residence due to the 

installation of a solar energy system (as defined in subparagraph 

(3) of the last paragraph of section 2(a) of this Act) therein. 

* * * * * * *

SEC. 207. * * * 

(c) * * * 

(3) * * * No mortgage shall be accepted for insurance under 

this section or section 210 unless the Secretary finds that the 

property or project, with respect to which the mortgage is executed, is economically sound. Such property or project may include five or more family units and may include such commercial and community facilities as the Secretary deems adequate 

to serve the occupants. 

Notwithstanding any other provision of this paragraph, the amount 

which may be insured under this section may be increased by up 

to ø20¿ 30 percent if such increase is necessary to account for the 

increased cost of the project due to the installation therein of a 

solar energy system (as defined in subparagraph (3) of the last 

paragraph of section 2(a) of this Act) or residential energy conservation measures (as defined in section 210(11)(A) through (G) 

and (I) of Public Law 95–619) in cases where the Secretary determines that such measures are in addition to those required under 

the minimum property standards and will be cost-effective over the 

life of the measure. 

* * * * * * *

SEC. 213. * * * 

(p) Notwithstanding any other provision of this section, the 

project mortgage amounts which may be insured under this section 

may be increased by up to ø20 per centum¿ 30 percent if such increase is necessary to account for the increased cost of the project 

due to the installation therein of a solar energy system (as defined 

in subparagraph (3) of the last paragraph of section 2(a) of this 

Act) or residential energy conservation measures (as defined in section 210(11)(A) through (G) and (1) of Public Law 95–619) in cases 

where the Secretary determines that such measures are in addition 

to those required under the minimum property standards and will 

be cost-effective over the life of the measure. 

* * * * * * *

SEC. 220. 

(d) * * * 

(3) * * * 

250

(B)(iii) * * * Provided further, That nothing contained in 

this subparagraph shall preclude the insurance of mortgages covering existing multifamily dwellings to be rehabilitated or reconstructed for the purposes set forth in subsection (a) of this section: And provided further, That the 

Secretary may further increase any of the dollar amount 

limitations which would otherwise apply for the purpose of 

this clause by not to exceed ø20 per centum¿ 30 percent if 

such increase is necessary to account for the increased cost 

of the project due to the installation therein of a solar energy system (as defined in subparagraph (3) of the last 

paragraph of section 2(a) of this Act) or residential energy 

conservation measures (as defined in section 210(11)(A) 

through (G) and (I) of Public Law 95–619) in cases where 

the Secretary determines that such measures are in addition to those required under the minimum property standards and will be cost-effective over the life of the measure; 

and 

* * * * * * *

SEC. 221. * * *

(k) With respect to any project insured under subsection (d)(3) or 

(d)(4), the Secretary may further increase the dollar amount limitations which would otherwise apply for the purpose of those subsections by up to ø20 per centum¿ 30 percent if such increase is 

necessary to account for the increased cost of the project due to the 

installation therein of a solar energy system (as defined in subparagraph (3) of the last paragraph of section 2(a) of this Act) or 

residential energy conservation measures (as defined in section 

210(11)(A) through (G) and (I) of Public Law 95–619) in cases 

where the Secretary determines that such measures are in addition 

to those required under the minimum property standards and will 

be cost-effective over the life of the measure. 

* * * * * * *

SEC. 231. * * *

(c)(2) (A) not to exceed, for such part of the property or project 

as may be attributable to dwelling use (excluding exterior land improvement as defined by the Secretary), $35,978 per family unit 

without a bedroom, $40,220 per family unit with one bedroom, 

$48,029 per family unit with two bedrooms, $57,798 per family unit 

with three bedrooms, and $67,950 per family unit with four or 

more bedrooms; except that as to projects to consist of elevator-type 

structures the Secretary may, in his discretion, increase the dollar 

amount limitations per family unit to not to exceed $40,876 per 

family unit without a bedroom, $46,859 per family unit with one 

bedroom, $56,979 per family unit with two bedrooms, $73,710 per 

family unit with three bedrooms, and $80,913 per family unit with 

four or more bedrooms, as the case may be, to compensate for the 

higher costs incident to the construction of elevator-type structures 

of sound standards of construction and design; (B) the Secretary 

may, by regulation, increase any of the dollar amount limitations 

in subparagraph (A) (as such limitations may have been adjusted 

in accordance with section 206A of this Act) by not to exceed 110 

percent in any geographical area where the Secretary finds that 

251

cost levels so require and by not to exceed 140 percent where the 

Secretary determines it necessary on a project-by-project basis, but 

in no case may any such increase exceed 90 percent where the Secretary determines that a mortgage purchased or to be purchased by 

the Government National Mortgage Association in implementing 

its special assistance functions under section 305 of this Act (as 

such section existed immediately before November 30, 1983) is involved; (C) the Secretary may, by regulation, increase any of the 

dollar limitations in subparagraph (A) (as such limitations may 

have been adjusted in accordance with section 206A of this Act) by 

not to exceed ø20 per centum¿ 30 percent if such increase is necessary to account for the increased cost of the project due to the 

installation therein of a solar energy system (as defined in subparagraph (3) of the last paragraph of section 2(a) of this Act) or 

residential energy conservation measures (as defined in section 

210(11)(A) through (G) and (1) of Public Law 95–619) in cases 

where the Secretary determines that such measures are in addition 

to those required under the minimum property standards and will 

be cost-effective over the life of the measure; 

* * * * * * *

SEC. 234. * * *

(j) The Secretary may further increase the dollar amount limitations which would otherwise apply under subsection (e) of this section by not to exceed ø20 per centum¿ 30 percent if such increase 

is necessary to account for the increased cost of a project due to the 

installation therein of a solar energy system (as defined in subparagraph (3) of the last paragraph of section 2(A) of this Act) or 

residential energy conservation measures (as defined in section 

210(11)(A) through (G) and (1) of Public Law 95–619) in cases 

where the Secretary determines that such measures are in addition 

to those required under the minimum property standards and will 

be cost-effective over the life of the measure. 

OUTER CONTINENTAL SHELF LANDS ACT 

Act of August 7, 1953, as amended (43 U.S.C. 1331 et seq.) 

* * * * * * *

SEC. 8. øLeasing of¿ LEASES, EASEMENTS, AND RIGHTS-OF-WAY

ON THE OUTER CONTINENTAL SHELF.—(a)(1) * * *

(3)(A) The Secretary may, in order to promote increased production on the lease area, through direct, secondary, or tertiary recovery means, reduce or eliminate any royalty or net profit share set 

forth in the lease for such area. 

(B) In the Western and Central Planning Areas of the Gulf of 

Mexico and the portion of the Eastern Planning Area of the Gulf 

of Mexico encompassing whole lease blocks lying west of 87 degrees, 30 minutes West longitude and in the Planning Areas offshore Alaska, the Secretary may, in order to—

(i) promote development or increased production on producing or non-producing leases; or 

(ii) encourage production of marginal resources on producing 

or non-producing leases; through primary, secondary, or tertiary recovery means, reduce or eliminate any royalty or net 

252

profit share set forth in the lease(s). With the lessee’s consent, 

the Secretary may make other modifications to the royalty or 

net profit share terms of the lease in order to achieve these 

purposes. 

* * * * * * *

(p) EASEMENTS OR RIGHTS-OF-WAY FOR ENERGY AND RELATED

PURPOSES.— (1) The Secretary may grant an easement or right-of-way on 

the outer Continental Shelf for activities not otherwise authorized in this Act, the Deepwater Port Act of 1974 (33 U.S.C. 1501 

et seq.), or the Ocean Thermal Energy Conversion Act of 1980 

(42 U.S. C. 9101 et seq.), or other applicable law when such activities—

(A) support exploration, development, or production of oil 

or natural gas, except that such easements or rights-of-way 

shall not be granted in areas where oil and gas preleasing, 

leasing and related activities are prohibited by a Congressional moratorium or a withdrawal pursuant to section 12 

of this Act; 

(B) support transportation of oil or natural gas; 

(C) produce or support production, transportation, or 

transmission of energy from sources other than oil and gas; 

or 

(D) use facilities currently or previously used for activities authorized under this Act. 

(2) The Secretary shall promulgate regulations to ensure that 

activities authorized under this subsection are conducted in a 

manner that provides for safety, protection of the environment, 

conservation of the natural resources of the outer Continental 

Shelf, appropriate coordination with other Federal agencies, 

and a fair return to the Federal government for any easement 

or right-of-way granted under this subsection. Such regulations 

shall establish procedures for— (A) public notice and comment on proposals to be permitted pursuant to this subsection; 

(B) consultation and review by State and local governments that may be impacted by activities to be permitted 

pursuant to this subsection; 

(C) consideration of the coastal zone management program being developed or administered by an affected coastal State pursuant to section 305 or section 306 of the Coastal Zone Management Act of 1972 (16 U.S.C. 1454, 1455); 

and 

(D) consultation with the Secretary of Defense and other 

appropriate agencies prior to the issuance of an easement 

or right-of-way under this subsection concerning issues related to national security and navigational obstruction. 

(3) The Secretary shall require the holder of an easement or 

right-of-way granted under this subsection to furnish a surety 

bond or other form of security, as prescribed by the Secretary, 

and to comply with such other requirements as the Secretary 

may deem necessary to protect the interests of the United States. 

(4) This subsection shall not apply to any area within the exterior boundaries of any unit of the National Park System, NaVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00256 Fmt 6604 Sfmt 6603 E:\HR\OC\SR043.XXX SR043
253

tional Wildlife Refuge System, or National Marine Sanctuary 

System, or any National Monument. 

(5) Nothing in this subsection shall be construed to amend or 

repeal, expressly by implication, the applicability of any other 

law, including but not limited to, the Coastal Zone Management Act (16 U.S.C. 1455 et seq.) or the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). 

* * * * * * *

SEC. 32. COASTAL IMPACT ASSISTANCE FAIRNESS PROGRAM. 

(a) DEFINITIONS.—When used in this section: 

(1) The term ‘‘coastal political subdivision ‘‘ means a county, 

parish, or any equivalent subdivision of a Producing Coastal 

State in all or part of which subdivision lies within the coastal 

zone (as defined in section 304(1) of the Coastal Zone Management Act (16 U.S.C. 1453(1))) and within a distance of 200 

miles from the geographic center of any leased tract. 

(2) The term ‘‘coastal population ‘‘’means the population of all 

political subdivisions, as determined by the most recent official 

data of the Census Bureau, contained in whole or in part within the designated coastal boundary of a State as defined in a 

State’s coastal zone management program under the Coastal 

Zone Management Act (16 U.S.C. 1451 et seq.). 

(3) The term ‘‘Coastal State’’ has the same meaning as provided by subsection 304(4) of the Coastal Zone Management Act 

(16 U.S.C. 1453(4)). 

(4) The term ‘‘coastline’’ has the same meaning as the term ‘‘coast line’’ as defined in subsection 2(c) of the Submerged 

Lands Act (43 U.S.C. 1301(c)). 

(5) The term ‘‘distance’’ means the minimum great circle distance, measured in statute miles. 

(6) The term ‘‘leased tract’’ means a tract maintained under 

section 6 or leased under section 8 for the purpose of drilling 

for, developing, and producing oil and natural gas resources. 

(7) The term ‘‘Producing Coastal State’’ means a Coastal 

State with a coastal seaward boundary within 200 miles from 

the geographic center of a leased tract other than a leased tract 

within any area of the Outer Continental Shelf where a moratorium on new leasing was in effect as of January 1, 2002, unless 

the lease was issued prior to the establishment of the moratorium and was in production on January 1, 2002. 

(8) The term ‘‘qualified Outer Continental Shelf revenues’’

means all amounts received by the United States from each 

leased tract or portion of a leased tract lying seaward of the 

zone defined and governed by section 8(g) of this Act, or lying 

within such zone but to which section 8(g) does not apply, the 

geographic center of which lies within a distance of 200 miles 

from any part of the coastline of any Producing Coastal State, 

including bonus bids, rents, royalties (including payments for 

royalties taken in kind and sold), net profit share payments, 

and related late payment interest. Such term shall only apply 

to leases issued after January 1, 2003 and revenues from existing leases that occurs after January 1, 2003. Such term does 

not include any revenues from a leased tract or portion of a 

254

leased tract that is included within any area of the Outer Continental Shelf where a moratorium on new leasing was in effect 

as of January 1, 2002, unless the lease was issued prior to the 

establishment of the moratorium and was in production on 

January 1, 2002. 

(9) The term ‘‘Secretary’’ means the Secretary of Interior. 

(b) AUTHORIZATION.—For fiscal years 2004 through 2009, an 

amount equal to not more than 12.5 percent of qualified Outer Continental Shelf revenues is authorized to be appropriated for the purposes of this section. 

(c) IMPACT ASSISTANCE PAYMENTS TO STATES AND POLITICAL

SUBDIVISIONS.—The Secretary shall make payments from the 

amounts available under this section to Producing Coastal States 

with an approved Coastal Impact Assistance Plan, and to coastal 

political subdivisions as follows: 

(1) Of the amounts appropriated, the allocation for each Producing Coastal State shall be calculated based on the ratio of 

qualified Outer Continental Shelf revenues generated off the 

coastline of the Producing Coastal State to the qualified Outer 

Continental Shelf revenues generated off the coastlines of all 

Producing Coastal States for each fiscal year. Where there is 

more than one Producing Coastal State within 200 miles of a 

leased tract, the amount of each Producing Coastal State’s allocation for such leased tract shall be inversely proportional to 

the distance between the nearest point on the coastline of such 

State and the geographic center of each leased tract or portion 

of the leased tract (to the nearest whole mile) that is within 200 

miles of that coastline, as determined by the Secretary. 

(2) Thirty-five percent of each Producing Coastal State’s allocable share as determined under paragraph (1) shall be paid 

directly to the coastal political subdivisions by the Secretary 

based on the following formula: 

(A) Twenty-five percent shall be allocated based on the 

ratio of such coastal political subdivision’s coastal population to the coastal population of all coastal political subdivisions in the Producing Coastal State. 

(B) Twenty-five percent shall be allocated based on the 

ratio of such coastal political subdivision’s coastline miles 

to the coastline miles of a coastal political subdivision in 

the Producing Coastal State except that for those coastal 

political subdivisions in the State of Louisiana without a 

coastline, the coastline for purposes of this element of the 

formula shall be the average length of the coastline of the 

remaining coastal subdivisions in the state. 

(C) Fifty percent shall be allocated based on the relative 

distance of such coastal political subdivision from any 

leased tract used to calculate the Producing Coastal State’s 

allocation using ratios that are inversely proportional to the 

distance between the point in the coastal political subdivision closest to the geographic center of each leased tract or 

portion, as determined by the Secretary, except that in the 

State of Alaska, the funds for this element of the formula 

shall be divided equally among the two closest coastal political subdivisions. For purposes of the calculations under 

255

this subparagraph, a leased tract or portion of a leased 

tract shall be excluded if the leased tract or portion is located in a geographic area where a moratorium on new 

leasing was in effect on January 1, 2002, unless the lease 

was issued prior to the establishment of the moratorium 

and was in production on January 1, 2002. 

(3) Any amount allocated to a Producing Coastal State or 

coastal political subdivision but not disbursed because of a failure to have an approved Coastal Impact Assistance Plan under 

this section shall be allocated equally by the Secretary among 

all other Producing Coastal States in a manner consistent with 

this subsection except that the Secretary shall hold in escrow 

such amount until the final resolution of any appeal regarding 

the disapproval of a plan submitted under this section. The Secretary may waive the provisions of this paragraph and hold a 

Producing Coastal State’s allocable share in escrow if the Secretary determines that such State is making a good faith effort 

to develop and submit, or update, a Coastal Impact Assistance 

Plan. 

(4) For purposes of this subsection, calculations of payments 

for fiscal years 2004 through 2006 shall be made using qualified Outer Continental Shelf revenues received in fiscal year 

2003, and calculations of payments for fiscal years 2007 

through 2009 shall be made using qualified Outer Continental 

Shelf revenues received in fiscal year 2006. 

(d) COASTAL IMPACT ASSISTANCE PLAN.— (1) The Governor of each Producing Coastal State shall prepare, and submit to the Secretary, a Coastal Impact Assistance 

Plan. The Governor shall solicit local input and shall provide 

for public participation in the development of the plan. The 

plan shall be submitted to the Secretary by July 1, 2004. 

Amounts received by Producing Coastal States and coastal political subdivisions may be used only for the purposes specified 

in the Producing Coastal State’s Coastal Impact Assistance 

Plan. 

(2) The Secretary shall approve a plan under paragraph (1) 

prior to disbursement of amounts under this section. The Secretary shall approve the plan if the Secretary determines that 

the plan is consistent with the uses set forth in subsection (f) 

of this section and if the plan contains—

(A) the name of the State agency that will have the authority to represent and act for the State in dealing with 

the Secretary for purposes of this section; 

(B) a program for the implementation of the plan which 

describes how the amounts provided under this section will 

be used; 

(C) a contact for each political subdivision and description of how coastal political subdivisions will use amounts 

provided under this section, including a certification by the 

Governor that such uses are consistent with the requirements of this section; 

(D) certification by the Governor that ample opportunity 

has been accorded for public participation in the development and revision of the plan; and 

256

(E) measures for taking into account other relevant Federal resources and programs. 

(3) The Secretary shall approve or disapprove each plan or 

amendment within 90 days of its submission. 

(4) Any amendment to the plan shall be prepared in accordance with the requirements of this subsection and shall be submitted to the Secretary for approval or disapproval. 

(e) AUTHORIZED USES.—Producing Coastal States and coastal political subdivisions shall use amounts provided under this section, 

including any such amounts deposited in a State or coastal political 

subdivision administered trust fund dedicated to uses consistent 

with this subsection, in compliance with Federal and State law and 

only for one or more of the following purposes— (1) projects and activities for the conservation, protection or 

restoration of coastal areas including wetlands; 

(2) mitigating damage to fish, wildlife or natural resources; 

(3) planning assistance and administrative costs of complying 

with the provisions of this section; 

(4) implementation of Federally approved marine, coastal, or 

comprehensive conservation management plans; and 

(5) mitigating impacts of Outer Continental Shelf activities 

through funding onshore infrastructure and public service 

needs. 

(f) COMPLIANCE WITH AUTHORIZED USES.—If the Secretary determines that any expenditure made by a Producing Coastal State or 

coastal political subdivision is not consistent with the uses authorized in subsection (e) of this section, the Secretary shall not disburse 

any further amounts under this section to that Producing Coastal 

State or coastal political subdivision until the amounts used for the 

inconsistent expenditure have been repaid or obligated for authorized uses. 

* * * * * * *

ATOMIC ENERGY ACT OF 1954 

Act of August 1, 1946, chapter 724, as amended by the Act of 

August 30, 1954, chapter 1073, as amended (42 U.S.C. 2011 et seq.) 

CHAPTER 14. GENERAL AUTHORITY 

* * * * * * *

SEC. 170. INDEMNIFICATION AND LIMITATION OF LIABILITY. (b) AMOUNT AND TYPE OF FINANCIAL PROTECTION FOR LICENS- EES.—(1) The amount of primary financial protection required shall 

be the amount of liability insurance available from private sources, 

except that the Commission may establish a lesser amount on the 

basis of criteria set forth in writing, which it may revise from time 

to time, taking into consideration such factors as the following: (A) 

the cost and terms of private insurance, (B) the type, size, and location of the licensed activity and other factors pertaining to the hazard, and (C) the nature and purpose of the licensed activity: Provided, That for facilities designed for producing substantial 

amounts of electricity and having a rated capacity of 100,000 electrical kilowatts or more, the amount of primary financial protection 

257

required shall be the maximum amount available at reasonable 

cost and on reasonable terms from private sources (excluding the 

amount of private liability insurance available under the industry 

retrospective rating plan required in this subsection). Such primary 

financial protection may include private insurance, private contractual indemnities, self-insurance, other proof of financial responsibility, or a combination of such measures and shall be subject to 

such terms and conditions as the Commission may, by rule, regulation, or order, prescribe. The Commission shall require licensees 

that are required to have and maintain primary financial protection equal to the maximum amount of liability insurance available 

from private sources to maintain, in addition to such primary financial protection, private liability insurance available under an 

industry retrospective rating plan providing for premium charges 

deferred in whole or major part until public liability from a nuclear 

incident exceeds or appears likely to exceed the level of the primary 

financial protection required of the licensee involved in the nuclear 

incident: Provided, That such insurance is available to, and required of, all of the licensees of such facilities without regard to the 

manner in which they obtain other types or amounts of such primary financial protection: And provided further: That the maximum amount of the standard deferred premium that may be 

charged a licensee following any nuclear incident under such a plan 

shall not be more than ø$63,000,000¿ $94,000,000 (subject to adjustment for inflation under subsection t.), but not more than 

ø$10,000,000 in any 1 year¿ $15,000,000 in any 1 year (subject to 

adjustment for inflation under subsection t.), for each facility for 

which such licensee is required to maintain the maximum amount 

of primary financial protection: And provided further, That the 

amount which may be charged a licensee following any nuclear incident shall not exceed the licensee’s pro rata share of the aggregate public liability claims and costs (excluding legal costs subject 

to subsection o. (1)(D), payment of which has not been authorized 

under such subsection) arising out of the nuclear incident. Payment 

of any State premium taxes which may be applicable to any deferred premium provided for in this Act shall be the responsibility 

of the licensee and shall not be included in the retrospective premium established by the Commission. 

* * * * * * *

(5)(A) For purposes of this section only, the Commission shall consider a combination of facilities described in subparagraph (B) to be 

a single facility having a rated capacity of 100,000 electrical kilowatts or more. 

(B) A combination of facilities referred to in subparagraph (A) is 

2 or more facilities located at a single site, each of which has a 

rated capacity of not more than 1,300,000 electrical kilowatts.

(c). INDEMNIFICATION OF øLICENSES¿ Licensees BY NUCLEAR REG- ULATORY COMMISSION.—The Commission shall, with respect to ølicenses issued between August 30, 1954, and December 31, 2003¿

licenses issued after August 30, 1954, for which it requires financial protection of less than $560,000,000, agree to indemnify and hold 

harmless the licensee and other persons indemnified, as their interest may appear, from public liability arising from nuclear incidents 

which is in excess of the level of financial protection required of the 

258

licensee. The aggregate indemnity for all persons indemnified in 

connection with each nuclear incident shall not exceed 

$500,000,000, excluding costs of investigating and settling claims 

and defending suits for damage: Provided, however, That this 

amount of indemnity shall be reduced by the amount that the financial protection required shall exceed $60,000,000. Such a contract of indemnification shall cover public liability arising out of or 

in connection with the licensed activity. øWith respect to any production or utilization facility for which a construction permit is 

issued between August 30, 1954, and December 31, 2003, the requirements of this subsection shall apply to any license issued for 

such facility subsequent to December 31, 2003.¿

(d) INDEMNIFICATION OF CONTRACTORS BY DEPARTMENT OF EN- ERGY.—(1)(A) In addition to any other authority the Secretary of 

Energy (in this section referred to as the ‘‘Secretary’’) may have, 

the Secretary shallø, until December 31, 2004,¿ enter into agreements of indemnification under this subsection with any person 

who may conduct activities under a contract with the Department 

of Energy that involve the risk of public liability and that are not 

subject to financial protection requirements under subsection b. or 

agreements of indemnification under subsection c. or k. 

* * * * * * *

ø(2) In agreements of indemnification entered into under paragraph (1), the Secretary may require the contractor to provide and 

maintain financial protection of such a type and in such amounts 

as the Secretary shall determine to be appropriate to cover public 

liability arising out of or in connection with the contractual activity, and shall indemnify the persons indemnified against such 

claims above the amount of the financial protection required, to the 

full extent of the aggregate public liability of the persons indemnified for each nuclear incident, including such legal costs of the 

contractor as are approved by the Secretary. 

ø(3)(A) Notwithstanding paragraph (2), if the maximum amount 

of financial protection required of the contractor, shall at all times 

remain equal to or greater than the maximum amount of financial 

protection required of licensees under subsection b. 

ø(B) The amount of indemnity provided contractors under this 

subsection shall not, at any time, be reduced in the event that the 

maximum amount of financial protection required of licensees is reduced. 

ø(C) All agreements of indemnification under which the Department of Energy (or its predecessor agencies) may be required to indemnify any person, shall be deemed to be amended, on the date 

of the enactment of the Price-Anderson Amendments Act of 1988, 

to reflect the amount of indemnity for public liability and any applicable financial protection required of the contractor under this 

subsection on such date.¿

(2) In an agreement of indemnification entered into under paragraph (1), the Secretary— (A) may require the contractor to provide and maintain financial protection of such a type and in such amounts as the Secretary shall determine to be appropriate to cover public liability 

arising out of or in connection with the contractual activity; 

and 

259

(B) shall indemnify the persons indemnified against such liability above the amount of the financial protection required, in 

the amount of $10,000,000,000 (subject to adjustment for inflation under subsection t.), in the aggregate, for all persons indemnified in connection with the contract and for each nuclear 

incident, including such legal costs of the contractor as are approved by the Secretary. 

(3) All agreements of indemnification under which the Department of Energy (or its predecessor agencies) may be required to indemnify any person under this section shall be deemed to be amended, on the date of enactment of the Price-Anderson Amendments Act 

of 2003, to reflect the amount of indemnity for public liability and 

any applicable financial protection required of the contractor under 

this subsection. 

* * * * * * *

(5) In the case of nuclear incidents occurring outside the United 

States, the amount of the indemnity provided by the Secretary 

under this subsection shall not exceed ø$100,000,000¿

$500,000,000.

* * * * * * *

(e) LIMITATION ON AGGREGATE PUBLIC LIABILITY.—(1) The aggregate public liability for a single nuclear incident of persons indemnified, including such legal costs as are authorized to be paid under 

subsection o. (1)(D), shall not exceed—

(A) in the case of facilities designed for producing substantial 

amounts of electricity and having a rated capacity of 100,000 

electrical kilowatts or more, the maximum amount of financial 

protection required of such facilities under subsection b. (plus 

any surcharge assessed under subsection o. (1)(E)); 

(B) in the case of contractors with whom the Secretary has 

entered into an agreement of indemnification under subsection 

d., øthe maximum amount of financial protection required 

under subsection b. or¿ the amount of indemnity and financial 

protection that may be required under øparagraph (3) of subsection d., whichever amount is more¿ paragraph (2) of subsection d.; and 

(C) in the case of all licensees of the Commission required to 

maintain financial protection under this section—

(i) $500,000,000, together with the amount of financial 

protection required of the licensee; or 

(ii) if the amount of financial protection required of the 

licensee exceeds $60,000,000, $560,000,000 or the amount 

of financial protection required of the licensee, whichever 

amount is more. 

* * * * * * *

(4) With respect to any nuclear incident occurring outside of the 

United States to which an agreement of indemnification entered 

into under the provisions of subsection d. is applicable, such aggregate public liability shall not exceed the amount of ø$100,000,000¿

$500,000,000, together with the amount of financial protection required of the contractor. 

* * * * * * *

260

(k) EXEMPTION FROM FINANCIAL PROTECTION REQUIREMENT FOR

NONPROFIT EDUCATIONAL INSTITUTIONS.—With respect to any license issued pursuant to section 53, 63, 81, 104 a., or 104 c. for the 

conduct of educational activities to a person found by the Commission to be a nonprofit educational institution, the Commission shall 

exempt such licensee from the financial protection requirement of 

subsection a. With respect to ølicenses issued between August 30, 

1954, and August 1, 2002¿ licenses issued after August 30, 1954,

for which the Commission grants such exemption: 

(1) the Commission shall agree to indemnify and hold harmless the licensee and other persons indemnified, as their interests may appear, from public liability in excess of $250,000 

arising from nuclear incidents. The aggregate indemnity for all 

persons indemnified in connection with each nuclear incident 

shall not exceed $500,000,000, including such legal costs of the 

licensee as are approved by the Commission; 

(2) such contracts of indemnification shall cover public liability arising out of or in connection with the licensed activity; 

and shall include damage to property of persons indemnified, 

except property which is located at the site of and used in connection with the activity where the nuclear incident occurs; 

and 

(3) such contracts of indemnification, when entered into with 

a licensee having immunity from public liability because it is 

a State agency, shall provide also that the Commission shall 

make payments under the contract on account of activities of 

the licensee in the same manner and to the same extent as the 

Commission would be required to do if the licensee were not 

such a State agency. 

Any licensee may waive an exemption to which it is entitled under 

this subsection. øWith respect to any production or utilization facility for which a construction permit is issued between August 30, 

1954, and August 1, 2002, the requirements of this subsection shall 

apply to any license issued for such facility subsequent to August 

1, 2002.¿

* * * * * * *

(p) REPORTS TO CONGRESS.—The Commission and the Secretary 

shall submit to the Congress by øAugust 1, 1998¿ August 1, 2013, 

detailed reports concerning the need for continuation or modification of the provisions of this section, taking into account the condition of the nuclear industry, availability of private insurance, and 

the state of knowledge concerning nuclear safety at that time, 

among other relevant factors, and shall include recommendations 

as to the repeal or modification of any of the provisions of this section. 

* * * * * * *

(t) INFLATION ADJUSTMENT.—(1) The Commission shall adjust the 

amount of the maximum total and annual standard deferred premium under subsection b. (1) not less than once during each 5–year 

period following øthe date of the enactment of the Price-Anderson 

Amendments Act of 1988¿ July 1, 2003, in accordance with the aggregate percentage change in the Consumer Price Index since—

261

(A) øsuch date of enactment¿ July 1, 2003, in the case of the 

first adjustment under this subsection; or 

(B) the previous adjustment under this subsection. 

(2) The Secretary shall adjust the amount of indemnification provided under an agreement of indemnification under subsection d. 

not less than once during each 5-year period following July 1, 2003, 

in accordance with the aggregate percentage change in the Consumer Price Index since—

(A) that date, in the case of the first adjustment under this 

paragraph; or 

(B) the previous adjustment under this paragraph. 

ø(2)¿ (3) For purposes of this subsection, the term ‘‘Consumer 

Price Index’’ means the Consumer Price Index for all urban consumers published by the Secretary of Labor. 

* * * * * * *

SEC. 234A. CIVIL MONETARY PENALTIES FOR VIOLATIONS OF DEPARTMENT OF ENERGY SAFETY REGULATIONS.—(a) * * *

(b)(1) The Secretary shall have the power to compromise, modify 

or remit, with or without conditions, such civil penalties and to prescribe regulations as he may deem necessary to implement this section. 

(2) In determining the amount of any civil penalty under this 

subsection, the Secretary shall take into account the nature, circumstances, extent, and gravity of the violation or violations and, 

with respect to the violator, ability to pay, effect on ability to continue to do business, any history of prior such violations, the degree of culpability, and such other matters as justice may require. 

[In implementing this section, the Secretary shall determine by 

rule whether nonprofit educational institutions should receive automatic remission of any penalty under this section.¿

* * * * * * *

ø(d) The provisions of this section shall not apply to: 

ø(1) The University of Chicago (and any subcontractors or 

suppliers thereto) for activities associated with Argonne National Laboratory; 

ø(2) The University of California (and any subcontractors or 

suppliers thereto) for activities associated with Los Alamos National Laboratory, Lawrence Livermore National Laboratory, 

and Lawrence Berkeley National Laboratory; 

ø(3) American Telephone and Telegraph Company and its 

subsidiaries (and any subcontractors or suppliers thereto) for 

activities associated with Sandia National Laboratories; 

ø(4) Universities Research Association, Inc. (and any subcontractors or suppliers thereto) for activities associated with 

FERMI National Laboratory; 

ø(5) Princeton University (and any subcontractors or suppliers thereto) for activities associated with Princeton Plasma 

Physics Laboratory; 

ø(6) The Associated Universities, Inc. (and any subcontractors or suppliers thereto) for activities associated with the 

Brookhaven National Laboratory; and 

262

ø(7) Battelle Memorial Institute (and any subcontractors or 

suppliers thereto) for activities associated with Pacific Northwest Laboratory.¿

(d)(1) Notwithstanding subsection (a), in the case of any not-forprofit contractor, subcontractor, or supplier, the total amount of 

civil penalties paid under subsection a. may not exceed the total 

amount of fees paid within any one-year period (as determined by 

the Secretary) under the contract under which the violation occurs. 

(2) For purposes of this section, the term ‘‘not-for-profit’’ means 

that no part of the net earnings of the contractor, subcontractor, or 

supplier inures to the benefit of any natural person or for-profit artificial person. 

SOLID WASTE DISPOSAL ACT 

Public Law 89–272, as amended (42 U.S.C. 6901 et seq.) 

SHORT TITLE AND TABLE OF CONTENTS

* * * * * * *

Subtitle F—Federal Responsibilities 

Sec. 6001. Application of Federal, State, and local law to Federal facilities. 

Sec. 6002. Federal Procurement. 

Sec. 6003. Cooperation with Environmental Protection Agency. 

Sec. 6004. Applicability of solid waste disposal guidelines to executive agencies 

Sec. 6005. Increased use of recovered mineral component in federally funded projects 

involving procurement of cement or concrete.

* * * * * * *

Subtitle F—Federal Responsibilities 

* * * * * * *

SEC. 6005. INCREASED USE OF RECOVERED MINERAL COMPONENT IN 

FEDERALLY FUNDED PROJECTS INVOLVING PROCUREMENT OF CEMENT OR CONCRETE. 

(a) DEFINITIONS.— In this section: 

(1) AGENCY HEAD.—The term ‘‘agency head’’ means—

(A) the Secretary of Transportation; and 

(B) the head of each other Federal agency that on a regular basis procures, or provides Federal funds to pay or assist in paying the cost of procuring, material for cement or 

concrete projects. 

(2) CEMENT OR CONCRETE PROJECT.—The term ‘‘cement or 

concrete project’’ means a project for the construction or maintenance of a highway or other transportation facility or a Federal, State, or local government building or other public facility 

that—

(A) involves the procurement of cement or concrete; and 

(B) is carried out in whole or in part using Federal 

funds. 

(3) RECOVERED MINERAL COMPONENT.—The term ‘‘recovered 

mineral component’’ means—

(A) ground granulated blast furnace slag; 

(B) coal combustion fly ash; and 

263

(C) any other waste material or byproduct recovered or 

diverted from solid waste that the Administrator, in consultation with an agency head, determines should be treated as recovered mineral component under this section for 

use in cement or concrete projects paid for, in whole or in 

part, by the agency head. 

(b) IMPLEMENTATION OF REQUIREMENTS.— (1) IN GENERAL.—Not later than 1 year after the date of enactment of this section, the Administrator and each agency 

head shall take such actions as are necessary to implement fully 

all procurement requirements and incentives in effect as of the 

date of enactment of this section (including guidelines under 

section 6002) that provide for the use of cement and concrete incorporating recovered mineral component in cement or concrete 

projects. 

(2) PRIORITY.—In carrying out paragraph (1) an agency head 

shall give priority to achieving greater use of recovered mineral 

component in cement or concrete projects for which recovered 

mineral components historically have not been used or have 

been used only minimally. 

(3) CONFORMANCE.—The Administrator and each agency 

head shall carry out this subsection in accordance with section 

6002. 

(c) FULL IMPLEMENTATION STUDY.— (1) IN GENERAL.—The Administrator, in cooperation with the 

Secretary of Transportation and the Secretary of Energy, shall 

conduct a study to determine the extent to which current procurement requirements, when fully implemented in accordance 

with subsection (b), may realize energy savings and environmental benefits attainable with substitution of recovered mineral component in cement used in cement or concrete projects. 

(2) MATTERS TO BE ADDRESSED.—The study shall—

(A) quantify the extent to which recovered mineral components are being substituted for Portland cement, particularly as a result of current procurement requirements, and 

the energy savings and environmental benefits associated 

with that substitution; 

(B) identify all barriers in procurement requirements to 

fuller realization of energy savings and environmental benefits, including barriers resulting from exceptions from current law; and 

(C)(i) identify potential mechanisms to achieve greater 

substitution of recovered mineral component in types of cement or concrete projects for which recovered mineral components historically have not been used or have been used 

only minimally; 

(ii) evaluate the feasibility of establishing guidelines or 

standards for optimized substitution rates of recovered mineral component in those cement or concrete projects; and 

(iii) identify any potential environmental or economic effects that may result from greater substitution of recovered 

mineral component in those cement or concrete projects. 

(3) REPORT.—Not later than 30 months after the date of enactment of this section, the Administrator shall submit to the 

264

Committee on Appropriations and Committee on Environment 

and Public Works of the Senate and the Committee on Appropriations, Committee on Energy and Commerce, and Committee 

on Transportation and Infrastructure of the House of Representatives a report on the study. 

(d) ADDITIONAL PROCUREMENT REQUIREMENTS.—Unless the study 

conducted under subsection (c) identifies any effects or other problems described in subsection (c)(2)(C)(iii) that warrant further review or delay, the Administrator and each agency head shall, within 1 year of the release of the report in accordance with subsection 

(c)(3), take additional actions authorized under this section to establish procurement requirements and incentives that provide for the 

use of cement and concrete with increased substitution of recovered 

mineral component in the construction and maintenance of cement 

or concrete projects, so as to— (1) realize more fully the energy savings and environmental 

benefits associated with increased substitution; and 

(2) eliminate barriers identified under subsection (c). 

(e) EFFECT OF SECTION.—Nothing in this section affects the requirements of section 6002 (including the guidelines and specifications for iplementing those requirements). 

GEOTHERMAL STEAM ACT OF 1970 

Public Law 91–581, as amended (30 U.S.C. 1001 et seq.) 

* * * * * * *

SEC. 4. øIf lands to be leased under this chapter are within any 

known geothermal resources area, they shall be leased to the highest responsible qualified bidder by competitive bidding under regulations formulated by the Secretary. If the lands to be leased are 

not within any known geothermal resources area, the qualified person first making application for the lease shall be entitled to a 

lease of such lands without competitive bidding. Notwithstanding 

the foregoing, at any time within one hundred and eighty days following December 24, 1970: 

ø(a) Conversion to geothermal lease with respect to all lands 

which were on September 7, 1965, subject to valid leases or permits 

issued under the Mineral Leasing Act of February 25, 1920, as 

amended (30 U.S.C. 181 et seq.), or under the Mineral Leasing Act 

of Acquired Lands, as amended (30 U.S.C. 351, 358), or to existing 

mining claims located on or prior to September 7, 1965, the lessees 

or permittees or claimants or their successors in interest who are 

qualified to hold geothermal leases shall have the right to convert 

such leases or permits or claims to geothermal leases covering the 

same lands; 

ø(b) Consideration of first person in conflicting land interests 

where there are conflicting claims, leases, or permits therefor embracing the same land, the person who first was issued a lease or 

permit, or who first recorded the mining claim shall be entitled to 

first consideration; 

ø(c) Conversion to application for geothermal lease with respect 

to all lands which were on September 7, 1965, the subject of applications for leases or permits under the above Acts, the applicants 

265

may convert their applications applications for geothermal leases 

having priorities dating from the time of filing of such applications 

under such Acts; 

ø(d) Acreage limitation no person shall be permitted to convert 

mineral leases, permits, applications therefor, or mining claims for 

more than 10,240 acres; and 

ø(e) Regulations; substantial expenditures for exploration, development, or production of geothermal steam requisite for conversion 

the conversion of leases, permits, and mining claims and applications for leases and permits shall be accomplished in accordance 

with regulations prescribed by the Secretary. No right to conversion to a geothermal lease shall accrue to any person under this 

section unless such person shows to the reasonable satisfaction of 

the Secretary that substantial expenditures for the exploration, development, or production of geothermal steam have been made by 

the applicant who is seeking conversion, on the lands for which a 

lease is sought or on adjoining, adjacent, or nearby Federal or nonFederal lands. 

ø(f) Competitive geothermal lease; time for payment of highest 

bid and first year rental with respect to lands within any known 

geothermal resources area and which are subject to a right to conversion to a geothermal lease, such lands shall be leased by competitive bidding: Provided, That, the competitive geothermal lease 

shall be issued to the person owning the right to conversion to a 

geothermal lease if he makes payment of an amount equal to the 

highest bona fide bid for the competitive geothermal lease, plus the 

rental for the first year, within thirty days after he receives written 

notice from the Secretary of the amount of the highest bid.¿

(a) NOMINATIONS.—The Secretary shall accept nominations at any 

time from companies and individuals of lands to be leased under 

this Act. 

(b) COMPETITIVE LEASE SALE REQUIRED.—The Secretary shall 

hold a competitive lease sale at least once every 2 years for lands 

in a State in which there are nominations pending under subsection 

(a) where such lands are otherwise available for leasing. 

(c) NONCOMPETITIVE LEASING.—The Secretary shall make available for a period of 2 years for noncompetitive leasing any tract for 

which a competitive lease sale is held, but for which the Secretary 

does not receive any bids in the competitive lease sale.

* * * * * * *

SEC. 5 * * *

(c) If there is no well on the leased lands capable of producing 

geothermal resources in commercial quantities, the failure to pay 

rental on or before the anniversary date shall terminate the lease 

by operation of law: Provided, however, That whenever the Secretary discovers that the rental payment due under a lease is paid 

timely but the amount of the payment is deficient because of an 

error or other reason and the deficiency is nominal, as determined 

by the Secretary pursuant to regulations prescribed by him, he 

shall notify the lessee of the deficiency and such lease shall not 

automatically tenninate unless the lessee fails to pay the deficiency 

within the period prescribed in the notice: Provided further, That, 

where any lease has been terminated automatically by operation of 

law under this section for failure to pay rental timely and it is 

266

shown to the satisfaction of the Secretary of the Interior that the 

failure to pay timely the lease rental was justifiable or not due to 

a lack of reasonable diligence or was inadvertent, he in his judgment may reinstate the lease if— (1) a petition for reinstatement, together with the required 

rental, is filed with the Secretary of the Interior; and 

(2) no valid lease has been issued affecting any of the lands 

in the terminated lease prior to the filing of the petition for reinstatement; and * * *

HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974 

Public Law 93–383, as amended (42 U.S.C. 5301 et seq.) 

* * * * * * *

SEC. 105.(a) * * *

(8) provision of public services, including but not limited to 

those concerned with employment, crime prevention, child 

care, health, drug abuse, education, energy conservation or efficiency, welfare or recreation needs, if such services have not 

been provided by the unit of general local government (through 

funds raised by such unit, or received by such unit from the 

State in which it is located) during any part of the twelve 

month period immediately preceding the date of submission of 

the statement with respect to which funds are to be made 

available under this title, and which are to be used for such 

services, unless the Secretary finds that the discontinuation of 

such services was the result of events not within the control 

of the unit of general local government, except that not more 

than 15 per centum of the amount of any assistance to a unit 

of general local government (or in the case of nonentitled communities not more than 15 per centum statewide) under this 

title including program income may be used for activities 

under this paragraph unless such unit of general local government used more than 15 percent of the assistance received 

under this title for fiscal year 1982 or fiscal year 1983 for such 

activities (excluding any assistance received pursuant to Public 

Law 98–8), in which case such unit of general local government 

may use not more than the percentage or amount of such assistance used for such activities for such fiscal year, whichever 

method of calculation yields the higher amount, except that of 

any amount of assistance under this title (including program 

income) in each of fiscal years 1993 through 2003 to the City 

of Los Angeles and County of Los Angeles, each such unit of 

general government may use not more than 25 percent in each 

such fiscal year for activities under this paragraph, øand except that¿ ; except that of any amount of assistance under this 

title (including program income) in each of fiscal years 1999, 

2000, and 2001, to the City of Miami, such city may use not 

more than 25 percent in each fiscal year for activities under 

this paragraph; and except that each percentage limitation 

under this paragraph on the amount of assistance provided 

under this title that may be used for the provision of public 

services is hereby increased by 10 percent, but such percentage 

267

increase may be used only for the provision of public services 

concerning energy conservation or efficiency.

* * * * * * *

ENERGY POLICY AND CONSERVATION ACT 

Public Law 94–163, as amended (42 U.S.C. 6201 et seq.)

TABLE OF CONTENTS 

Sec. 2. Statements of purposes. 

Sec. 3. Definitions. 

TITLE I—MATTERS RELATED TO DOMESTIC SUPPLY AVAILABILITY 

* * * * *

PART D—øEXPIRATION¿ NORTHEAST HOME HEATING OIL RESERVE 

Sec. 181. øExpiration¿ Establishment. 

Sec. 182. Authority. 

Sec. 183. Conditions for release; plan. 

Sec. 184. Northeast Home Heating Oil Reserve Account 

Sec. 185. Exemptions. 

TITLE II—STANDBY ENERGY AUTHORITIES 

* * * * *

øPART C—ENERGY EMERGENCY PREPAREDNESS 

Sec. 271. Congressional findings, policy, and purpose. 

Sec. 272. Preparation for petroleum supply interruptions. 

Sec. 273. Summer fill and fuel budgeting programs. 

PART D—EXPIRATION 

Sec. 281. Expiration¿

PART C—SUMMER FILL AND FUEL BUDGETING PROGRAMS 

Sec. 273. Summer fill and fuel budgeting programs. 

TITLE III—IMPROVING ENERGY EFFICIENCY 

PART B—ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS 

OTHER THAN AUTOMOBILES 

* * * * *

Sec. 324. Labeling. 

Sec. 324A. Energy Star program. 

Sec. 325 Energy conservation standards

TITLE I—MATTERS RELATED TO DOMESTIC 

SUPPLY AVAILABILITY 

* * * * * * *

PART B—STRATEGIC PETROLEUM RESERVE

øAUTHORIZATION OF APPROPRIATIONS

SEC. 166. There are authorized to be appropriated for fiscal year 

2000 such sums as may be necessary to implement this part, to remain available only through March 31, 2000.¿

268

AUTHORIZATION OF APPROPRIATIONS

SEC. 166. There are authorized to be appropriated to the Secretary 

such sums as may be necessary to carry out this part and part D, 

to remain available until expended.

* * * * * * *

CONDITIONS FOR RELEASE; PLAN

SEC. 183. * * * 

(b) DEFINITION.—For purposes of this section a ‘‘dislocation in the 

heating oil market’’ shall be deemed to occur only when—

(1) The price differential between crude oil, as reflected in an 

industry daily publication such as ‘‘Platt’s Oilgram Price Report’’ or ‘‘Oil Daily’’ and No. 2 heating oil, as reported in the 

Energy Information Administration’s retail price data for the 

Northeast, increases øby more tan 60 percent over its 5 year 

rolling average for the months of mid-October through March¿

by more than 60 percent over its 5-year rolling average for the 

months of mid-October through March (considered as a heating 

season average), and continues for 7 consecutive days; and 

(2) The price differential continues to increase during the 

most recent week for which price information is available. 

* * * * * * *

øAUTHORIZATION OF APPROPRIATIONS

øSEC. 186. There are authorized to be appropriated for fiscal year 

2001, 2002, and 2003 such sums as may be necessary to implement 

this part. 

øPART E—EXPIRATION 

øEXPIRATION

øSEC. 191. Except as otherwise provided in title I, all authority 

under any provision of title I (other than a provision of such title 

amending another law) and any rule, regulation, or order issued 

pursuant to such authority, shall expire at midnight, September 

30, 2008, but such expiration shall not affect any action or pending 

proceedings, civil or criminal, not finally determined on such date, 

nor any action or proceeding based upon any act committed prior 

to midnight, September 30, 2008.¿

* * * * * * * 

TITLE II—STANDBY ENERGY AUTHORITIES 

PART B—AUTHORITIES WITH RESPECT TO 

INTERNATIONAL ENERGY PROGRAM 

* * * * * * * 

DOMESTIC RENEWABLE ENERGY INDUSTRY AND RELATED SERVICE

INDUSTRIES

SEC. 256. * * *

269

ø(h) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated to the Secretary for purposes of carrying out the 

programs under subsections (d) and (e) $10,000,000, to be divided 

equitably between the interagency working subgroups based on 

program requirements, for each of the fiscals years 1993 and 1994, 

and such sums as may be necessary for fiscal year 1995 to carry 

out the purposes of this subtitle. There are authorized to be appropriated for fiscal year 1997 such sums as may be necessary to carry 

out this part. There are authorized to be appropriated for fiscal 

years 2000 through 2003, such sums as maybe necessary.¿

(g) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to 

be appropriated such sums as may be necessary to implement this 

part, to remain available until expended. 

PART C—SUMMER FILL AND FUEL BUDGETING 

PROGRAMS

SEC. 273. SUMMER FILL AND FUEL BUDGETING PROGRAMS. 

(a) * * * 

ø(e) INAPPLICABILITY OF EXPIRING PROVISIONS.—Section 281 does 

not apply to this section. 

øPART D—EXPIRATION 

øSEC. 281. Except as otherwise provided in title 11, all authority 

under any provision of title II (other than a provision of such title 

amending another law) and any rule, regulation, or order issued 

pursuant to such authority, shall expire at midnight, September 

30, 2008, but such expiration shall not affect any action or pending 

proceedings, civil or criminal, not finally determined on such date, 

nor any action or proceeding based upon any act committed prior 

to midnight, September 30, 2008.¿

* * * * * * * 

TITLE III—IMPROVING ENERGY EFFICIENCY 

* * * * * * *

SEC. 321. For the purposes of this part: 

* * * * * * *

(30)(S) The term ‘‘medium base compact fluorescent lamp’’ means 

an integrally ballasted fluorescent lamp with a medium screw base 

and a rated input voltage of 115 to 130 volts and which is designed 

as a direct replacement for a general services incandescent lampø.¿

but does not include any lamps specifically designed to be used for 

special purpose applications, and also does not include any lamp 

not described in subparagraph (D) that is excluded by the Secretary, 

by rule. 

* * * * * * *

(32) The term ‘‘battery charger’’ means a device that charges batteries for consumer products. 

(33) The term ‘‘commercial refrigerator, freezer and refrigeratorfreezer’’ means a refrigerator, freezer or refrigerator freezer that—

(A) is not a consumer product regulated under this Act; and 

270

(B) incorporates most components involved in the vapor-compression cycle and the refrigerated compartment in a single 

package. 

(34) The term ‘‘external power supply’’ means an external power 

supply circuit that is used to convert household electric current into 

either DC current or lower-voltage AC current to operate a consumer 

product. 

(35) The term ‘‘illuminated exit sign’’ means a sign that— (A) is designed to be permanently fixed in place to identify an 

exit; and 

(B) consists of an electrically powered integral light source 

that illuminates the legend ‘‘EXIT’’ and any directional indicators and provides contrast between the legend, any directional 

indicators, and the background. 

(36)(A) Except as provided in subparagraph (B), the term ‘‘lowvoltage dry-type transformer’’ means a transformer that— (i) has an input voltage of 600 volts or less; 

(ii) is air-cooled; 

(iii) does not use oil as a coolant; and 

(iv) is rated for operation at a frequency of 60 Hertz. 

(B) The term ‘‘low-voltage dry-type transformer’’ does not include—

(i) transformers with multiple voltage taps, with the highest 

voltage tap equaling at least 20 percent more than the lowest 

voltage tap; 

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

transformers, rectifier transformers, auto-transformers, 

Uninterruptible Power System transformers, impedance transformers, harmonic transformers, regulating transformers, 

sealed and nonventilating transformers, machine tool transformers, welding transformers, grounding transformers, or testing transformers, that are designed to be used in a special purpose application and are unlikely to be used in general purpose 

applications; or 

(iii) any transformer not listed in clause (ii) that is excluded 

by the Secretary by rule because the transformer is designed for 

a special application and the application of standards to the 

transformer would not result in significant energy savings. 

(37)(A) Except as provided in subsection (B), the term ‘‘distribution transformer’’ means a transformer that—

(i) has an input voltage of 34.5 kilovolts or less; 

(ii) has an output voltage of 600 volts or less; and 

(iii) is rated for operation at a frequency of 60 Hertz. 

(B) The term ‘‘distribution transformer’’ does not include—

(i) transformers with multiple voltage taps, with the highest 

voltage tap equaling at least 15 percent more than the lowest 

voltage tap; 

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

transformers, rectifier transformers, autotransformers, 

Uninterruptible Power System transformers, impedance transformers, harmonic transformers, regulating transformers, 

sealed and nonventilating transformers, machine tool transformers, welding transformers, grounding transformers, or testing transformers, that are designed to be used in a special purVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00274 Fmt 6604 Sfmt 6603 E:\HR\OC\SR043.XXX SR043
271

pose application, and are unlikely to be used in general purpose 

applications; or 

(iii) any transformer not listed in clause (ii) that is excluded 

by the Secretary by rule because the transformer is designed for 

a special application, is unlikely to be used in general purpose 

applications, and the application of standards to the transformer would not result in significant energy savings. 

(38) The term ‘‘standby mode’’ means the lowest amount of electric 

power used by a household appliance when not performing its active 

functions, as defined on an individual product basis by the Secretary. 

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

reflector bowl that directs light upward so as to give indirect illumination. 

(40) The term ‘‘transformer’’ means a device consisting of two or 

more coils of insulated wire that transfers alternating current by 

electromagnetic induction from one coil to another to change the 

original voltage or current value. 

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

designed to be installed within the heated space, except that such 

term does not include a warm air furnace. 

(42) The term ‘‘traffic signal module’’ means a standard 8–inch 

(200mm) or 12-inch (300mm) traffic signal indication, consisting of 

a light source, a lens, and all other parts necessary for operation, 

that communicates movement messages to drivers through red, 

amber, and green colors.

* * * * * * *

SEC. 323. 

(b) AMENDED AND NEW PROCEDURES.—

* * * * * * *

(9) Test procedures for illuminated exit signs shall be based on 

the test method used under Version 2. 0 of the Energy Star program 

of the Environmental Protection Agency for illuminated exit signs. 

(10) Test procedures for low voltage dry-type distribution transformers shall be based on the ‘Standard Test Method for Measuring 

the Energy Consumption of Distribution Transformers’ prescribed 

by the National Electrical Manufacturers Association (NEMA TP 2–

1998). The Secretary may review and revise this test procedure. 

(11) Test procedures for traffic signal modules shall be based on 

the test method used under the Energy Star program of the Environmental Protection Agency for traffic signal modules, as in effect 

on the date of enactment of this paragraph. 

(12) Test procedures for medium base compact fluorescent lamps 

shall be based on the test methods used under the August 9, 2001 

version of the Energy Star program of the Environmental Protection 

Agency and Department of Energy for compact fluorescent lamps. 

Covered products shall meet all test requirements for regulated parameters in section 325(bb). However, covered products may be marketed prior to completion of lamp life and lumen maintenance at 

40% of rated life testing provided manufacturers document engiVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00275 Fmt 6604 Sfmt 6603 E:\HR\OC\SR043.XXX SR043
272

neering predictions and analysis that support expected attainment 

of lumen maintenance at 40% rated life and lamp life time. 

* * * * * * *

(f) ADDITIONAL CONSUMER AND COMMERCIAL PRODUCTS.—The 

Secretary shall within 24 months after the date of enactment of this 

subsection prescribe testing requirements for suspended ceiling fans, 

refrigerated bottled or canned beverage vending machines, and commercial refrigerators, freezers and refrigerator-freezers. Such testing 

requirements shall be based on existing test procedures used in industry to the extent practical and reasonable. In the case of suspended ceiling fans, such test procedures shall include efficiency at 

both maximum output and at an output no more than 50 percent 

of the maximum output. 

* * * * * * *

SEC. 324. (a) IN GENERAL.—

(2)(F) Not later than 3 months after the date of enactment of 

this subparagraph, the Commission shall initiate a rulemaking 

to consider the effectiveness of the current consumer products 

labeling program in assisting consumers in making purchasing 

decisions and improving energy efficiency and to consider 

changes to the labeling rules that would improve the effectiveness of consumer product labels. Such rulemaking shall be completed within 2 years after the date of enactment of this subparagraph. 

* * * * * * *

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

covered products referred to in subsections (u) through (aa) of 

section 325, prescribe, by rule, pursuant to this section, labeling 

requirements for such products after a test procedure has been 

set pursuant to section 323. In the case of products to which 

TP–1 standards under section 325(y) apply, labeling requirements shall be based on the ‘‘Standard for the Labeling of Distribution Transformer Efficiency’’ prescribed by the National 

Electrical Manufacturers Association (NEMA TP–3) as in effect 

upon the date of enactment of this Act. 

* * * * * * *

SEC. 324A. ENERGY STAR PROGRAM. 

There is established at the Department of Energy and the Environmental Protection Agency a voluntary program to identify and 

promote energy-efficient products and buildings in order to reduce 

energy consumption, improve energy security, and reduce pollution 

through voluntary labeling of or other forms of communication 

about products and buildings that meet the highest energy efficiency 

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

Agency consistent with the terms of agreements between the 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; 

273

(2) work to enhance public awareness of the Energy Star 

label, including special outreach to small businesses; 

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

(4) solicit the comments of interested parties in establishing 

a new Energy Star product category, specifications, or criteria, 

or in revising a product category, and upon adoption of a new 

or revised product category, specifications, or criteria, publish a 

notice of any changes in product categories, specifications or criteria along with an explanation of such changes, and, where 

appropriate, responses to comments submitted by interested parties; and 

(5) unless waived or reduced by mutual agreement between 

the Administrator, the Secretary, and the affected parties, provide not less than 12 months lead time prior to implementation 

of changes in product categories, specifications, or criteria as 

may be adopted pursuant to this section. 

* * * * * * *

SEC. 325. * * *

(u) STANDBY MODE ELECTRIC ENERGY CONSUMPTION.— (1) INITIAL RULEMAKING.— (A) The Secretary shall, within 18 months after the date 

of enactment of this subsection, prescribe by notice and 

comment, definitions of standby mode and test procedures 

for the standby mode power use of battery chargers and external power supplies. In establishing these test procedures, 

the Secretary shall consider, among other factors, existing 

test procedures used for measuring energy consumption in 

standby mode and assess the current and projected future 

market for battery chargers and external power supplies. 

This assessment shall include estimates of the significance 

of potential energy savings from technical improvements to 

these products and suggested product classes for standards. 

Prior to the end of this time period, the Secretary shall hold 

a scoping workshop to discuss and receive comments on 

plans for developing energy conservation standards for 

standby mode energy use for these products. 

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

enactment of this subsection, issue a final rule that determines whether energy conservation standards shall be promulgated for battery chargers and external power supplies 

or classes thereof. For each product class, any such standards shall be set at the lowest level of standby energy use 

that—(i) meets the criteria of subsections (o), (p), (q), (r), (s) 

and (t); and 

(ii) will result in significant overall annual energy 

savings, considering both standby mode and other operating modes. 

(2) DESIGNATION OF ADDITIONAL COVERED PRODUCTS.— (A) Not later than 180 days after the date of enactment 

of this subsection, the Secretary shall publish for public 

comment and public hearing a notice to determine whether 

any non-covered products should be designated as covered 

products for the purpose of instituting a rulemaking under 

274

this section to determine whether an energy conservation 

standard restricting standby mode energy consumption, 

should be promulgated; except that any restriction on 

standby mode energy consumption shall be limited to major 

sources of such consumption. 

(B) In making the determinations pursuant to subparagraph (A) of whether to designate new covered products 

and institute rulemakings, the Secretary shall, among other 

relevant factors and in addition to the criteria in section 

322(b), consider—

(i) standby mode power consumption compared to 

overall product energy consumption; and 

(ii) the priority and energy savings potential of 

standards which may be promulgated under this subsection compared to other required rulemakings under 

this section and the available resources of the Department to conduct such rulemakings. 

(C) Not later than 1 year after the date of enactment of 

this subsection, the Secretary shall issue a determination of 

any new covered products for which he intends to institute 

rulemakings on standby mode pursuant to this section and 

he shall state the dates by which he intends to initiate those 

rulemakings. 

(3) REVIEW OF STANDBY ENERGY USE IN COVERED PRODUCTS.—In determining pursuant to section 323 whether test 

procedures and energy conservation standards pursuant to this 

section should be revised, the Secretary shall consider for covered products which are major sources of standby mode energy 

consumption whether to incorporate standby mode into such 

test procedures and energy conservation standards, taking into 

account, among other relevant factors, the criteria for non-covered products in subparagraph (B) of paragraph (2) of this subsection. 

(4) RULEMAKING.—

(A) Any rulemaking instituted under this subsection or 

for covered products under this section which restricts 

standby mode power consumption shall be subject to the 

criteria and procedures for issuing energy conservation 

standards set forth in this section and the criteria set forth 

in subparagraph (B) of paragraph (2) of this subsection. 

(B) No standard can be proposed for new covered products or covered products in a standby mode unless the Secretary has promulgated applicable test procedures for each 

product pursuant to section 323. 

(C) The provisions of section 327 shall apply to new covered products which are subject to the rulemakings for 

standby mode after a final rule has been issued. 

(5) EFFECTIVE DATE.—Any standard promulgated under this 

subsection shall be applicable to products manufactured or imported 3 years after the date of promulgation. 

(6) VOLUNTARY PROGRAMS.—The Secretary and the Administrator shall collaborate and develop programs, including programs pursuant to section 324A (relating to Energy Star ProVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00278 Fmt 6604 Sfmt 6603 E:\HR\OC\SR043.XXX SR043
275

grams) and other voluntary industry agreements or codes of 

conduct, which are designed to reduce standby mode energy use. 

(v) SUSPENDED CEILING FANS, VENDING MACHINES, AND COM- MERCIAL REFRIGERATORS, FREEZERS AND REFRIGERATOR-FREEZ- ERS.—The Secretary shall within 36 months after the date on which 

testing requirements are prescribed by the Secretary pursuant to section 323(f), prescribe, by rule, energy conservation standards for 

suspended ceiling fans, refrigerated bottled or canned beverage 

vending machines, and commercial refrigerators, freezers and refrigerator-freezers. In establishing standards under this subsection, 

the Secretary shall use the criteria and procedures contained in subsections (l) and (m). Any standard prescribed under this subsection 

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

(w) ILLUMINATED EXIT SIGNS.—Illuminated exit signs manufactured on or after January 1, 2005 shall meet the Version 2.0 Energy 

Star Program performance requirements for illuminated exit signs 

prescribed by the Environmental Protection Agency. 

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

2005—

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

(2) shall not be capable of operating with lamps that total 

more than 190 watts. 

(y) DISTRIBUTION TRANSFORMERS.—The efficiency of low voltage 

dry-type transformers manufactured on or after January 1, 2005 

shall be the Class I Efficiency Levels for distribution transformers 

specified in Table 4–2 of the ‘‘Guide for Determining Energy Efficiency for Distribution Transformers’’ published by the National 

Electrical Manufacturers Association (NEMA TP–1–2002). 

(z) TRAFFIC SIGNAL MODULES.—Traffic signal modules manufactured on or after January 1, 2006 shall meet the performance requirements used under the Energy Star program of the Environmental Protection Agency for traffic signals, as in effect on the date 

of enactment of this paragraph, and shall be installed with compatible, electrically-connected signal control interface devices and conflict monitoring systems. 

(aa) UNIT HEATERS.—Unit heaters manufactured on or after the 

date that is three years after the date of enactment of the Clean and 

Secure Energy Act shall be equipped with an intermittent ignition 

device and shall have either power venting or an automatic flue 

damper. 

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

and covered lamp (no reflector) medium base compact fluorescent 

lamps manufactured on or after January 1, 2005 shall meet the following requirements prescribed by the August 9, 2001 version of the 

Energy Star Program Requirements for CFLs, Energy Star Eligibility Criteria, Energy-Efficiency Specification issued by the Environmental Protection Agency and Department of Energy: minimum 

initial efficacy; lumen maintenance at 1000 hours; lumen maintenance at 40% of rated life; rapid cycle stress test; and lamp life. The 

Secretary may, by rule, establish requirements for color quality 

(CRI); power factor; operating frequency; and maximum allowable 

start time based on the requirements prescribed by the August 9, 

2001 version of the Energy Star Program Requirements for CFLs. 

276

The Secretary may, by rule, revise these requirements or establish 

other requirements considering energy savings, cost effectiveness, 

and consumer satisfaction. 

(cc) EFFECTIVE DATE.—The provisions of section 327 shall 

apply—

(1) to products for which standards are to be set pursuant to 

subsection (v) of this section on the date on which a final rule 

is issued by the Department of Energy, except that any state or 

local standards prescribed or enacted for any such product 

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

be preempted until the standard set pursuant to subsection (v) 

for that product takes effect; and 

(2) to products for which standards are set in subsections (w) 

through (bb) of this section on the date of enactment of the 

Clean and Secure Energy Act, except that any state or local 

standards prescribed or enacted prior to the date of enactment 

of the Clean and Secure Energy Act shall not be preempted 

until the standards set in subsections (w) through (bb) take effect. 

* * * * * * *

SEC. 337 * * * 

(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, carry out a program to educate homeowners and small business owners concerning the energy 

savings resulting from properly conducted maintenance of air conditioning, heating, and ventilating systems. The Secretary shall carry 

out the program in a cost-shared manner in cooperation with the 

Administrator of the Environmental Protection Agency and such 

other entities as the Secretary considers appropriate, including industry trade associations, industry members, and energy efficiency 

organizations. 

(d) SMALL BUSINESS EDUCATION AND ASSISTANCE.—The Administrator of the Small Business Administration, in consultation with 

the Secretary of Energy and the Administrator of the Environmental 

Protection Agency, shall develop and coordinate a Government-wide 

program, building on the existing Energy Star for Small Business 

Program, to assist small business to become more energy efficient, 

understand the cost savings obtainable through efficiencies, and 

identify financing options for energy efficiency upgrades. The Secretary and the Administrator shall make the program information 

available directly to small businesses and through other Federal 

agencies, including the Federal Emergency Management Program, 

and the Department of Agriculture. 

* * * * * * *

PART J—ENCOURAGING THE USE OF ALTERNATIVE 

FUELS

SEC. 400AA. ALTERNATIVE FUEL USE BY LIGHT DUTY FEDERAL VEHICLES. 

(a) DEPARTMENT OF ENERGY PROGRAM.—(1) * * * 

(3)(A) * * * 

277

ø(E) Dual fueled vehicles acquired pursuant to this section shall 

be operated on alternative fuels unless the Secretary determines 

that operation on such alternative fuels is not feasible.¿

(E)(i) Dual fueled vehicles acquired pursuant to this section shall 

be operated on alternative fuels unless the Secretary determines that 

an agency qualifies for a waiver of such requirement for vehicles operated by the agency in a particular geographic area where—

‘‘(I) the alternative fuel otherwise required to be used in the 

vehicle is not reasonably available to retail purchasers of the 

fuel, as certified to the Secretary by the head of the agency; or 

‘‘(II) the cost of the alternative fuel otherwise required to be 

used in the vehicle is unreasonably more expensive compared to 

gasoline, as certified to the Secretary by the head of the agency. 

‘‘(ii) The Secretary shall monitor compliance with this subparagraph by all such fleets and shall report annually to the Congress 

on the extent to which the requirements of this subparagraph are 

being achieved. The report shall include information on annual reductions achieved from the use of petroleum-based fuels and the 

problems, if any, encountered in acquiring alternative fuels. 

ENERGY CONSERVATION AND PRODUCTION ACT 

Public Law 94–385, as amended (42 U.S.C. 6801 et seq.) 

SEC. 305. FEDERAL BUILDING ENERGY EFFICIENCY STANDARDS. 

(a)(1) * * * 

(2) The standards established under paragraph (1) shall— (A) contain energy saving and renewable energy specifications that meet or exceed the energy saving and renewable energy specifications of øCABO Model Energy Code, 1992¿ the 

2000 International Energy Conservation Code (in the case of 

residential buildings) or ASHRAE Standard 90.1–1989 (in the 

case of commercial buildings);

(3) REVISED FEDERAL BUILDING ENERGY EFFICIENCY PERFORMANCE STANDARDS.— (A) IN GENERAL.—Not later than 1 year after the date of enactment of this paragraph, the Secretary of Energy shall establish, by rule, revised Federal building energy efficiency performance standards that require that, if cost effective, for new Federal buildings— (i) such buildings be designed so as to achieve energy 

consumption levels at least 30 percent below those of the 

most recent version of the International Energy Conservation Code, as appropriate; and 

(ii) sustainable design principles are applied to the 

siting, design, and construction of all new and replacement 

buildings. 

(B) ADDITIONAL REVISIONS.—Not later than 1 year after the 

date of approval of amendments to ASHRAE Standard 90.1 or 

the 2000 International Energy Conservation Code, the Secretary 

of Energy shall determine, based on the cost-effectiveness of the 

requirements under the amendments, whether the revised 

standards established under this paragraph should be updated 

to reflect the amendments. 

278

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

budget request of the Federal agency for each fiscal year and 

each report submitted by the Federal agency under section 

548(a) of the National Energy Conservation Policy Act (42 

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

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

controlled by the Federal agency; and 

(ii) a statement concerning whether the Federal buildings 

meet or exceed the revised standards established under this 

paragraph. 

* * * * * * *

ALASKA NATURAL GAS TRANSPORTATION ACT OF 1976 

Public Law 94–586, as amended (15 U.S.C. 719 et seq.) 

* * * * * * *

JUDICIAL REVIEW

SEC. 10. * * *

(c)(1) A claim under subsection (b) shall be barred unless a complaint is filed prior to the expiration of such time limits in the 

United States Court of Appeals for the District of Columbia acting 

as a Special Court. Such court shall have exclusive jurisdiction to 

determine such proceeding in accordance with the procedures hereinafter provided, and no other court of the United States, of any 

State, territory, or possession of the United States, or of the District of Columbia, shall have jurisdiction of any such claim in any 

proceeding instituted prior to or on or after the date of enactment 

of this Act. 

(2) The United States Court of Appeals for the District of Columbia Circuit shall set any action brought under this section for expedited consideration, taking into account the national interest described in section 2. 

* * * * * * *

DEPARTMENT OF ENERGY ORGANIZATION ACT 

Public Law 95–91, as amended (42 U.S.C. 7101 et seq.)

TABLE OF CONTENTS 

* * * * * * *

TITLE II—ESTABLISHMENT OF THE DEPARTMENT 

Sec. 201. Establishment. 

Sec. 202. Principal officers. 

Sec. 203. Assistant Secretaries. 

Sec. 204. Federal Energy Regulatory Commission. 

Sec. 205. Energy Information Administration. 

Sec. 206. Economic Regulatory Administration. 

Sec. 207. Comptroller General functions. 

Sec. 208. [Repealed]. 

øSection 209¿ Sec. 209. Office of Science. 

279

Sec. 210. Leasing Liaison Committee. 

Sec. 211. Office of Minority Economic Impact. 

[Sec. 212. Repealed P.L. 106–65, § 3294(d)(1), Oct. 5, 1999, 113 Stat. 970] 

ø213¿ Sec. 213. Establishment of policy for National Nuclear Security Administration. 

ø214.¿ Sec. 214. Establishment of security, counterintelligence, and intelligence policies. 

ø215.¿ Sec. 215. Office of Counterintelligence. 

ø216.¿ Sec. 216. Office of Intelligence. 

Sec. 217. Office of Indian Energy Policy and Programs. 

Sec. 218. Comprehensive Indian Energy Activities. 

218. Office of Electric Transmission and Distribution. 

* * * * * * *

TITLE II—ESTABLISHMENT OF THE 

DEPARTMENT 

* * * * * * *

PRINCIPAL OFFICERS

SEC. 202. (a) There shall be in the Department a Deputy Secretary, who shall be appointed by the President, by and with the 

advice and consent of the Senate, and who shall be compensated 

at the rate provided for level II of the Executive Schedule under 

section 5313 of title 5. The Deputy Secretary shall act for and exercise the functions of the Secretary during the absence or disability 

of the Secretary or in the event the office of Secretary becomes vacant. The Secretary shall designate the order in which the Under 

Secretary and other officials shall act for and perform the functions 

of the Secretary during the absence or disability of both the Secretary and Deputy Secretary or in the event of vacancies in both 

of those offices. 

ø(b) There shall be in the Department an Under Secretary and 

a General Counsel, who shall be appointed by the President, by 

and with the advice and consent of the Senate, and who shall perform such functions and duties as the Secretary shall prescribe. 

The Under Secretary shall bear primary responsibility for energy 

conservation. The Under Secretary shall be compensated at the 

rate provided for level III of the Executive Schedule under section 

5314 of title 5, and the General Counsel shall be compensated at 

the rate provided for level IV of the Executive Schedule under section 5315 of title 5, United States Code.¿ (b)(1) There shall be in 

the Department an Under Secretary for Energy and Science, who 

shall be appointed by the President, by and with the advice and 

consent of the Senate. The Under Secretary shall be compensated at 

the rate provided for at level III of the Executive Schedule under 

section 5314 of title 5, United States Code.

(2) The Under Secretary for Energy and Science shall be appointed from among persons who— (A) have extensive background in scientific or engineering 

fields; and 

(B) are well qualified to manage the civilian research and development programs of the Department of Energy. 

(3) The Under Secretary for Energy and Science shall—

(A) serve as the Science and Technology Advisor to the Secretary; 

280

(B) monitor the Department’s research and development programs in order to advise the Secretary with respect to any undesirable duplication or gaps in such programs; 

(C) advise the Secretary with respect to the well-being and 

management of the multipurpose laboratories under the jurisdiction of the Department;

(D) advise the Secretary with respect to education and training activities required for effective short- and long-term basic 

and applied research activities of the Department; 

(E) advise the Secretary with respect to grants and other 

forms of financial assistance required for effective short- and 

long-term basic and applied research activities of the Department; and 

(F) exercise authority and responsibility over Assistant Secretaries carrying out energy research and development and energy 

technology functions under sections 203 and 209, as well as 

other elements of the Department assigned by the Secretary.

(c)(1) There shall be in the Department an Under Secretary for 

Nuclear Security, who shall be appointed by the President, by and 

with the advice and consent of the Senate. The Under Secretary 

shall be compensated at the rate provided for at level III of the Executive Schedule under section 5314 of title 5. 

(2) The Under Secretary for Nuclear Security shall be appointed 

from among persons who—

(A) have extensive background in national security, organizational management, and appropriate technical fields; and 

(B) are well qualified to manage the nuclear weapons, nonproliferation, and materials disposition programs of the National Nuclear Security Administration in a manner that advances and protects the national security of the United States. 

(3) The Under Secretary for Nuclear Security shall serve as the 

Administrator for Nuclear Security under section 2402 of title 50. 

In carrying out the functions of the Administrator, the Under Secretary shall be subject to the authority, direction, and control of the 

Secretary. Such authority, direction, and control may be delegated 

only to the Deputy Secretary of Energy, without redelegation.

(d) There shall be in the Department an Under Secretary, who 

shall be appointed by the President, by and with the advice and 

consent of the Senate, and who shall perform such functions and 

duties as the Secretary shall prescribe, consistent with this section. 

The Under Secretary shall be compensated at the rate provided for 

level III of the Executive Schedule under section 5314 of title 5, 

United States Code. 

(e) There shall be in the Department a General Counsel, who shall 

be appointed by the President, by and with the advice and consent 

of the Senate, and who shall perform such functions and duties as 

the Secretary shall prescribe. The General Counsel shall be compensated at the rate provided for level IV of the Executive Schedule 

under section 5315 of title 5, United States Code.

* * * * * * *

281

ASSISTANT SECRETARIES

SEC. 203 (a) øThere shall be in the Department six Assistant 

Secretaries¿ Except as provided in section 209, there shall be in the 

Department seven Assistant Secretaries, each of whom shall be appointed by the President, by and with the advice and consent of the 

Senate; who shall be compensated at the rate provided for at level 

IV of the Executive Schedule under section 5315 of title 5; and who 

shall perform, in accordance with applicable law, such of the functions transferred or delegated to, or vested in, the Secretary as he 

shall prescribe in accordance with the provisions of this chapter. 

The functions which the Secretary shall assign to the Assistant 

Secretaries include, but are not limited to, the following: 

* * * * * * *

øOFFICE OF SCIENCE

øSEC. 209. (a) There shall be within the Department an Office of 

Science to be headed by a Director, who shall be appointed by the 

President, by and with the advice and consent of the Senate, and 

who shall be compensated at the rate provided for level IV of the 

Executive Schedule under section 5315 of title 5, United States 

Code. 

ø(b) It shall be the duty and responsibility of the Director—

ø(1) to advise the Secretary with respect to the physical research program transferred to the Department from the Energy Research and Development Administration; 

ø(2) to monitor the Department’s energy research and development programs in order to advise the Secretary with respect 

to any undesirable duplication or gaps in such programs; 

ø(3) to advise the Secretary with respect to the well-being 

and management of the multipurpose laboratories under the 

jurisdiction of the Department, excluding laboratories that constitute part of the nuclear weapons complex; 

ø(4) to advise the Secretary with respect to education and 

training activities required for effective short- and long-term 

basic and applied research activities of the Department; 

ø(5) to advise the Secretary with respect to grants and other 

forms of financial assistance required for effective short- and 

long-term basic and applied research activities of the Department; and 

ø(6) to carry out such additional duties assigned to the Office 

by the Secretary relating to basic and applied research, including but not limited to supervision or support of research activities carried out by any of the Assistant Secretaries designated 

by section 203 of this Act, as the Secretary considers advantageous.¿

OFFICE OF SCIENCE

SEC. 209. (a) There shall be within the Department an Office of 

Science, to be headed by an Assistant Secretary for Science, who 

shall be appointed by the President, by and with the advice and 

consent of the Senate, and who shall be compensated at the rate 

282

provided for level IV of the Executive Schedule under section 5315 

of title 5, United States Code. 

(b) The Assistant Secretary for Science shall be in addition to the 

Assistant Secretaries provided for under section 203 of this Act. 

(c) It shall be the duty and responsibility of the Assistant Secretary for Science to carry out the fundamental science and engineering research functions of the Department, including the responsibility for policy and management of such research, as well as 

other functions vested in the Secretary which he may assign to the 

Assistant Secretary. 

* * * * * * *

OFFICE OF INDIAN ENERGY POLICY AND PROGRAMS

SEC. 217. (a) ESTABLISHMENT.—There is established within the 

Department an Office of Indian Energy Policy and Programs (referred to in this section as the ‘‘Office’’. The Office shall be headed 

by a Director, who shall be appointed by the Secretary and compensated at a rate equal to that of level IV of the Executive Schedule 

under section 5315 of title 5, United States Code. 

(b) DUTIES OF DIRECTOR.—The Director shall in accordance with 

Federal policies promoting Indian self-determination and the purposes of this Act, provide, direct, foster, coordinate, and implement 

energy planning, education, management, conservation, and delivery programs of the Department that—

(1) promote Indian tribal energy development, efficiency, and 

use; 

(2) reduce or stabilize energy costs; 

(3) enhance and strengthen Indian tribal energy and economic infrastructure relating to natural resource development 

and electrification; and 

(4) electrify Indian tribal land and the homes of tribal members. 

COMPREHENSIVE INDIAN ENERGY ACTIVITIES

SEC. 218. (a) INDIAN ENERGY EDUCATION PLANNING AND MANAGEMENT ASSISTANCE.—

(1) The Director shall establish programs within the Office of 

Indian Energy Policy and Programs to assist Indian tribes in 

meeting energy education, research and development, planning, 

and management needs. 

(2) In carrying out this section, the Director may provide 

grants, on a competitive basis, to an Indian tribe or tribal consortium for use in carrying out—

(A) energy, energy efficiency, and energy conservation 

programs; 

(B) studies and other activities supporting tribal acquisition of energy supplies, services, and facilities; 

(C) planning, construction, development, operation, maintenance, and improvement of tribal electrical generation, 

transmission, and distribution facilities located on Indian 

land; and 

283

(D) development, construction, and interconnection of 

electric power transmission facilities located on Indian 

land with other electric transmission facilities. 

(3)(A) The Director may develop, in consultation with Indian 

tribes, a formula for providing grants under this section. 

(B) In providing a grant under this subsection, the Director 

shall give priority to an application received from an Indian 

tribe with inadequate electric service (as determined by the Director). 

(4) The Secretary may promulgate such regulations as the 

Secretary determines are necessary to carry out this subsection. 

(5) There is authorized to be appropriated to carry out this section $20,000,000 for each of fiscal years 2004 through 2011. 

(b) LOAN GUARANTEE PROGRAM.— (1) Subject to paragraph (3), the Secretary may provide loan 

guarantees (as defined in section 502 of the Federal Credit Reform Act of 1990 (2 U.S. C. 661 a)) for not more than 90 percent 

of the unpaid principal and interest due on any loan made to 

any Indian tribe for energy development. 

(2) A loan guaranteed under this subsection shall be made 

by—

(A) a financial institution subject to examination by the 

Secretary; or 

(B) an Indian tribe, from funds of the Indian tribe. 

(3) The aggregate outstanding amount guaranteed by the Secretary at any time under this subsection shall not exceed 

$2,000,000,000. 

(4) The Secretary may promulgate such regulations as the 

Secretary determines are necessary to carry out this subsection. 

(5) There are authorized to be appropriated such sums as are 

necessary to carry out this subsection, to remain available until 

expended. 

(6) Not later than 1 year from the date of enactment of this 

section, the Secretary shall report to the Congress on the financing requirements of Indian tribes for energy development on Indian land. 

(c) INDIAN ENERGY PREFERENCE.— (1) In purchasing electricity or any other energy product or 

byproduct, a Federal agency or department may give preference 

to an energy and resource production enterprise, partnership, 

consortium, corporation, or other type of business organization 

the majority of the interest in which is owned and controlled by 

1 or more Indian tribes. 

(2) In carrying out this subsection, a Federal agency or department shall not— (A) pay more than the prevailing market price for an energy product or byproduct; and 

(B) obtain less than prevailing market terms and conditions. 

OFFICE OF ELECTRIC TRANSMISSION AND DISTRIBUTION. 

SEC. 218. (a) There is established within the Department an Office of Electric Transmission and Distribution. This Office shall beheaded by a Director, who shall be appointed by the Secretary. The 

284

Director shall be compensated at the annual rate prescribed for level 

IV of the Executive Schedule under section 5315 of title 5, United 

States Code. 

(b) The Director shall— (1) coordinate and develop a comprehensive, multi year strategy to improve the Nation’s electricity transmission and distribution; 

(2) ensure that the recommendations of the Secretary’s National Transmission Grid Study are implemented; 

(3) carry out the research, development, and demonstration 

functions; 

(4) grant authorizations for electricity import and export; 

(5) perform other electricity transmission and distribution-related functions assigned by the Secretary; and 

(6) develop programs for workforce training in power and 

transmission engineering. 

* * * * * * *

CONTRACTS

SEC. 646. 

* * * * * * *

(f) To the extent provided in advance in appropriations Acts, the 

Secretary may retain and use money rentals received by the Secretary directly from a lease entered into under subsection (c) of this 

section in any amount the Secretary considers necessary to cover 

the administrative expenses of the lease, the maintenance and repair of the leased property, or environmental restoration activities 

at the facility where the leased property is located. Amounts retained under this subsection shall be retained in a separate fund 

established in the Treasury for such purpose. The Secretary shall 

annually submit to the Congress a report on amounts retained and 

amounts used under this subsection.

(g)(1) In addition to other authorities granted to the Secretary 

under law, the Secretary may enter into other transactions on such 

terms as the Secretary may deem appropriate in furtherance of research, development, or demonstration functions vested in the Secretary. Such other transactions shall not be subject to the provisions 

of section 9 of the Federal Nonnuclear Energy Research and Development Act of 1974 (42 US.C. 5908). 

(2)(A) The Secretary shall ensure that—

(i) to the maximum extent the Secretary determines practicable, no transaction entered into under paragraph (1) provides for research, development, or demonstration that duplicates research, development, or demonstration being conducted 

under existing projects carried out by the Department; and 

(ii) To the extent the Secretary determines practicable, the 

funds provided by the Government under a transaction authorized by paragraph (1) do not exceed the total amount provided 

by other parties to the transaction. 

(iii) To the extent the Secretary determines practicable, competitive, merit-based selection procedures shall be used when entering into transactions under paragraph (1). 

285

(B) A transaction authorized by paragraph (1) may be used for a 

research, development, or demonstration project only if the Secretary 

determines the use of a standard contract, grant, or cooperative 

agreement for the project is not feasible or appropriate. 

(3)(A) The Secretary shall protect from disclosure, including disclosure under section 552 of title 5, United States Code, for up to 

5 years after the date the information is received by the Secretary— (i) a proposal, proposal abstract, and supporting documents 

submitted to the Department in a competitive or noncompetitive 

process having the potential for resulting in an award to the 

party submitting the information entering into a transaction 

under paragraph (1); and 

(ii) a business plan and technical information relating to a 

transaction authorized by paragraph (1) submitted to the Department as confidential business information. 

(B) The Secretary may protect from disclosure, for up to 5 years 

after the information was developed, any information developed 

pursuant to a transaction under paragraph (1) which developed information is of a character that it would be protected from disclosure under section 552(b)(4) of title 5, United States Code, if obtained from a person other than a Federal agency. 

(4) Not later than 90 days after the date of enactment of this section, the Secretary shall prescribe guidelines for using other transactions authorized by the amendment under subsection (a). Such 

guidelines shall be published in the Federal Register for public comment under rulemaking procedures of the Department. 

(5) The authority of the Secretary under this subsection may be 

delegated only to an officer of the Department who is appointed by 

the President by and with the advice and consent of the Senate and 

may not be delegated to any other person. 

PUBLIC UTILITY REGULATORY POLICIES ACT OF 1978 

Public Law 95–617, as amended (16 U.S.C. 2601 et seq.) 

* * * * * * *

SEC. 111. CONSIDERATION AND DETERMINATION RESPECTING CERTAIN RATEMAKING STANDARDS. 

* * * * * * *

(d) ESTABLISHMENT.—The following Federal standards are hereby 

established: 

* * * * * * *

(11) NET METERING.—

(A) Each electric utility shall make available upon request net metering service to any electric consumer that the 

electric utility serves. 

(B) For purposes of implementing this paragraph, any 

reference contained in this section to the date of enactment 

of the Public Utility Regulatory Policies Act of 1978 shall 

be deemed to be a reference to the date of enactment of this 

paragraph. 

(C) Notwithstanding subsections (b) and (c) of section 

112, each State regulatory authority shall consider and 

286

make a determination concerning whether it is appropriate 

to implement the standard set out in subparagraph (A) not 

later than 1 year after the date of enactment of this paragraph. 

(12) TIME-BASED METERING AND COMMUNICATIONS.—

(A) Each electric utility shall offer each of its customer 

classes, and provide individual customers upon customer 

request, a time-based rate schedule under which the rate 

charged by the electric utility varies during different time 

periods and reflects the variance in the costs of generating 

and purchasing electricity at the wholesale level. The timebased rate schedule shall enable the electric consumer to 

manage energy use and cost through advanced metering 

and communications technology. 

(B) The types of time-based rate schedules that may be offered under the schedule referred to in subparagraph (A) 

include, among others—

(i) time-of-use pricing whereby electricity prices are 

set for a specific time period on an advance or forward 

basis, typically not changing more often than twice a 

year. Prices paid for energy consumed during these periods shall be pre-established and known to consumers 

in advance of such consumption, allowing them to vary 

their demand and usage in response to such prices and 

manage their energy costs by shifting usage to a lower 

cost period or reducing their consumption overall; 

(ii) critical peak pricing whereby time-of-use prices 

are in effect except for certain peak days, when prices 

may reflect the costs of generating and purchasing electricity at the wholesale level and when consumers may 

receive additional discounts for reducing peak period 

energy consumption; and 

(iii) real-time pricing whereby electricity prices are 

set for a specific time period on an advanced or forward basis and may change as often as hourly. 

(C) Each electric utility subject to subparagraph (A) shall 

provide each customer requesting a time-based rate with a 

time-based meter capable of enabling the utility and customer to offer and receive such rate, respectively. 

(D) For purposes of implementing this paragraph, any 

reference contained in this section to the date of enactment 

of the Public Utility Regulatory Policies Act of 1978 shall 

be deemed to be a reference to the date of enactment of this 

paragraph. 

(E) In a State that permits third party marketers to sell 

electric energy to retail electric consumers, such consumers 

shall be entitled to receive that same time-based metering 

and communications device and service as a retail electric 

consumer of the electric utility. 

(F) Notwithstanding subsections (b) and (c) of section 

112, each State regulatory authority shall, not later than 

twelve (12) months after enactment of this paragraph conduct an investigation in accordance with section 115(i) and 

287

issue a decision whether it is appropriate to implement the 

standards set out in subparagraphs (A) and (C). 

* * * * * * *

SEC. 113. ADOPTION OF CERTAIN STANDARDS. 

(a) * * * 

(b) ESTABLISHMENT.—The following Federal standards are hereby 

established: 

* * * * * * *

(6) Each electric utility shall provide distributed generation, 

combined heat and power, and district heating and cooling systems competitive access to the local distribution grid and competitive pricing of service, and shall use simplified standard 

contracts for the interconnection of generating facilities that 

have a power production capacity of 250 kilowatts or less. 

(7) No electric utility may refuse to interconnect a generating 

facility with the distribution facilities of the electric utility if the 

owner or operator of the generating facility complies with technical standards adopted by the State regulatory authority and 

agrees to pay the costs established by such State regulatory authority. 

(8) Each electric utility shall develop a plan to minimize dependence on one fuel source and to ensure that the electric energy it sells to consumers is generated using a diverse range of 

fuels and technologies, including renewable technologies. 

(9) Each electric utility shall develop and implement a tenyear plan to increase the efficiency of its fossil fuel generation.

(c) * * *

(d) SPECIAL RULE.—For purposes of implementing paragraphs 

(6), (7), (8), and (9) of subsection (b), any reference contained in this 

section to the date of enactment of the Public Utility Regulatory 

Policies Act of 1978 shall be deemed to be a reference to the date 

of enactment of this subsection. 

* * * * * * *

SEC. 115. SPECIAL RULES FOR STANDARDS. 

* * * * * * *

(i) NET METERING.—In undertaking the consideration and making the determination under section 111 with respect to the standard concerning net metering established by section III (d)(13), the 

term net metering service shall mean a service provided in accordance with the following standards: 

(1) An electric utility— (A) shall charge the owner or operator of an on-site generating facility rates and charges that are identical to those 

that would be charged other electric consumers of the electric utility in the same rate class; and 

(B) shall not charge the owner or operator of an on-site 

generating facility any additional standby, capacity, interconnection, or other rate or charge. 

(2) An electric utility that sells electric energy to the owner or 

operator of an on-site generating facility shall measure the 

quantity of electric energy produced by the on-site facility and 

288

the quantity of electric energy consumed by the owner or operator of an on-site generating facility during a billing period in 

accordance with reasonable metering practices. 

(3) If the quantity of electric energy sold by the electric utility 

to an on-site generating facility exceeds the quantity of electric 

energy supplied by the on-site generating facility to the electric 

utility during the billing period, the electric utility may bill the 

owner or operator for the net quantity of electric energy sold, in 

accordance with reasonable metering practices. 

(4) If the quantity of electric energy supplied by the on-site 

generating facility to the electric utility exceeds the quantity of 

electric energy sold by the electric utility to the on-site generating facility during the billing period—

(A) the electric utility may bill the owner or operator of 

the on-site generating facility for the appropriate charges 

for the billing period in accordance with paragraph (2); 

and 

(B) the owner or operator of the on-site generating facility 

shall be credited for the excess kilowatt-hours generated 

during the billing period, with the kilowatt-hour credit appearing on the bill for the following billing period—

(5) An eligible on-site generating facility and net metering 

system used by an electric consumer shall meet all applicable 

safety, performance, reliability, and interconnection standards 

established by the National Electrical Code, the Institute of 

Electrical and Electronics Engineers, and Underwriters Laboratories. 

(6) The Commission, after consultation with State regulatory 

authorities and unregulated electric utilities and after notice 

and opportunity for comment, may adopt, by rule, additional 

control and testing requirements for on-site generating facilities 

and net metering systems that the Commission determines are 

necessary to protect public safety and system reliability. 

(7) For purposes of this subsection—

(A) The term ‘‘eligible on-site generating facility’’ means 

a facility on the site of a residential electric consumer with 

a maximum generating capacity of 10 kilowatts or less that 

is fueled by solar energy, wind energy, or fuel cells; or a facility on the site of a commercial electric consumer with a 

maximum generating capacity of 500 kilowatts or less that 

is fueled solely by a renewable energy resource, landfill gas, 

or a high-efficiency system. 

(B) The term ‘‘renewable energy resource’’ means solar, 

wind, biomass, or geothermal energy. 

(C) The term ‘‘high-efficiency system ‘‘ means fuel cells or 

combined heat and power. 

(D) The term ‘‘net metering service’’ means service to an 

electric consumer under which electric energy generated by 

that electric consumer from an eligible on-site generating 

facility and delivered to the local distribution facilities may 

be used to offset electric energy provided by the electric utility to the electric consumer during the applicable billing period. 

289

(k) TIME-BASED METERING AND COMMUNICATIONS.—Each State 

regulatory authority shall conduct an investigation and issue a decision whether or not it is appropriate for electric utilities to provide 

and install time-based meters and communications devices for each 

of their customers which enable such customers to participate in 

time-based pricing rate schedules and other demand response programs. 

* * * * * * *

SEC. 132. RESPONSIBILITIES OF THE SECRETARY OF ENERGY. 

(a) AUTHORITY.—The Secretary may periodically notify the State 

regulatory authorities, and electric utilities identified pursuant to 

section 102(c)—

(1) load management techniques and the results of studies 

and experiments concerning load management techniques; 

(2) developments and innovations in electric utility rate making throughout the United States, including the results of studies and experiments in rate structuring and rate reform; 

(3) methods for determining cost of service; øand¿

(4) any other data or information which the Secretary determines would assist such authorities and utilities in carrying 

out the provisions of this titleø.¿; and

(5) technologies, techniques and rate-making methods related 

to advanced metering and communications and the use of these 

technologies, techniques and methods in demand response programs. 

* * * * * * *

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

to carry out the purposes of subsection (b) not to exceed $1,000,000 

for each of the fiscal years 1979 and 1980.¿

(c) TECHNICAL ASSISTANCE FOR CERTAIN RESPONSIBILITIES.—The 

Secretary may provide such technical assistance as determined appropriate to assist State regulatory authorities and electric utilities 

in carrying out their responsibilities under section 111(d)(11) and 

paragraphs (6), (7), (8), and (9) of section 113(b). 

(d) DEMAND RESPONSE.—The Secretary shall be responsible for— (1) educating consumers on the availability, advantages and 

benefits of advanced metering and communications technologies, including the funding of demonstration or pilot 

projects; 

(2) working with States, utilities, other energy providers and 

advanced metering and communications experts to identify and 

address barriers to the adoption of demand response programs; 

and 

(3) not later than 180 days after the date of enactment of the 

Energy Policy Act of 2003, providing the Congress with a report 

that identifies and quantifies the national benefits of demand 

response and makes a recommendation on achieving specific 

levels of such benefits by January 1, 2005. 

* * * * * * *

SEC. 210. COGENERATION AND SMALL, POWER PRODUCTION. 

* * * * * * *

290

(m) TERMINATION OF MANDATORY PURCHASE AND SALE REQUIRE- MENTS.—

(1) OBLIGATION TO PURCHASE.—After the date of enactment of 

this subsection, no electric utility shall be required to enter into 

a new contract or obligation to purchase electric energy from a 

qualifying cogeneration facility or a qualifying small power production facility under this section if the Commission finds that 

the qualifying cogeneration facility or qualifying small power 

production facility has access to an independently administered, 

auction-based day ahead and real time wholesale market for 

the sale of electric energy. 

(2) OBLIGATION TO SELL.—After the date of enactment of this 

subsection, no electric utility shall be required to enter into a 

new contract or obligation to sell electric energy to a qualifying 

cogeneration facility or a qualifying small power production facility under this section if competing retail electric suppliers are 

able to provide electric energy to the qualifying cogeneration facility or qualifying small power production facility. 

(3) NO EFFECT ON EXISTING RIGHTS AND REMEDIES.—Nothing 

in this subsection affects the rights or remedies of any party 

under any contract or obligation in effect on the date of enactment of this subsection, to purchase electric energy or capacity 

from or to sell electric energy or capacity to a facility under this 

Act (including the right to recover costs of purchasing electric 

energy or capacity). 

(4) RECOVERY OF COSTS.—

(A) REGULATION.—The Commission shall promulgate 

such regulations as are necessary to ensure that an electric 

utility that purchases electric energy or capacity from a 

qualifying cogeneration facility or qualifying small power 

production facility in accordance with any legally enforceable obligation entered into or imposed under this section 

before the date of enactment of this subsection recovers all 

prudently incurred costs associated with the purchase. 

(B) ENFORCEMENT.—A regulation under subparagraph 

(A) shall be enforceable in accordance with the provisions 

of law applicable to enforcement of regulations under the 

Federal Power Act (16 U.S.C. 791a et seq.). 

* * * * * * *

NATIONAL ENERGY CONSERVATION POLICY ACT 

Public Law 95–619 as amended (42 U.S.C. 8201 et seq.) 

TITLE I—GENERAL PROVISIONS 

SEC. 101. SHORT TITLE AND TABLE OF CONTENTS. 

* * * * * * *

PART 3—FEDERAL ENERGY MANAGEMENT 

* * * * * * *

Sec. 551 Definitions. 

291

Sec. 552. Federal procurement of energy efficient products 

Sec. 553. Energy and water savings measures in congressional buildings. 

* * * * * * *

SEC. 251. ENERGY-CONSERVING IMPROVEMENTS FOR ASSISTED 

HOUSING. 

(a) * * * 

(b) GRANTS.—(1) The Secretary of Housing and Urban Development is authorized to make grants to finance energy conserving improvements (as defined in subparagraph (2) of the last paragraph 

of section 2(A) of the National Housing Act) to projects which are 

øfinanced with loans¿ assisted under section 202 of the Housing 

Act of 1959, which are eligible multifamily housing projects (as 

such term is defined in section 512 of the Multi-family Assisted 

Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f 

note)) and are subject to mortgage restructuring and rental assistance sufficiency plans under such Act, or which are subject to mortgages insured under section 221(d)(3) or section 236 of the National 

Housing Act. Such improvements may also include the installation 

of energy and water conserving fixtures and fittings that conform to 

the American Society of Mechanical Engineers/American National 

Standards Institute standards A112.19.2–1998 and A112.18.1–

2000, or any revision thereto, applicable at the time of installation. 

The Secretary shall make assistance available under this subsection on a priority basis to those projects which are in financial 

difficulty as a result of high energy costs. 

* * * * * * *

SEC. 543. ENERGY MANAGEMENT REQUIREMENTS. 

(a) ENERGY PERFORMANCE REQUIREMENTS FOR FEDERAL BUILD- INGS.—(1) Subject to paragraph (2), each agency shall apply energy 

conservation measures to, and shall improve the design for the construction of, øits Federal buildings so that the energy consumption 

per gross square foot of its Federal buildings in use during the fiscal year 1995 is at least 10 percent less than the energy consumption per gross square foot of its Federal buildings in use during the 

fiscal year 1985 and so that the energy consumption per gross 

square foot of its Federal buildings in use during the fiscal year 

2000 is at least 20 percent less than the energy consumption per 

gross square foot of its Federal buildings in use during fiscal year 

1985.¿ the Federal buildings of the agency (including each industrial or laboratory facility) so that the energy consumption per gross 

square foot of the Federal buildings of the agency in fiscal years 

2004 through 2013 is reduced, as compared with the energy consumption per gross square foot of the Federal buildings of the agency in fiscal year 2000, by the percentage specified in the following 

table:

Fiscal Year Percentage reduction 

2004 ................................................................................................... 2 

2005 ................................................................................................... 4 

2006 ................................................................................................... 6 

2007 ................................................................................................... 8 

2008 ................................................................................................... 10 

2009 ................................................................................................... 12 

2010 ................................................................................................... 14 

2011 ................................................................................................... 16 

292

2012 ................................................................................................... 18 

2013 ................................................................................................... 20.

* * * * * * *

(3) Not later than December 31, 2011, the Secretary shall review 

the results of the implementation of the energy performance requirement established under paragraph (1) and submit to Congress recommendations concerning energy performance requirements for fiscal years 2014 through 2022. 

* * * * * * *

(c) EXCLUSIONS.—(1) øAn agency may exclude, from the energy 

consumption requirements for the year 2000 established under subsection (a) and the requirements of subsection (b)(1), any Federal 

building or collection of Federal buildings, and the associated energy consumption and gross square footage, if the head of such 

agency finds that compliance with such requirements would be impractical. A finding of impracticability shall be based on the energy 

intensiveness of activities carried out in such Federal buildings or 

collection of Federal buildings, the type and amount of energy consumed, the technical feasibility of making the desired changes, and, 

in the cases of the Departments of Defense and Energy, the unique 

character of certain facilities operated by such Departments.¿

(A) An agency may exclude, from the energy performance requirement for a fiscal year established under subsection (a) and 

the energy management requirement established under subsection (b), any Federal building or collection of Federal buildings, if the head of the agency finds that—

(i) compliance with those requirements would be impracticable; 

(ii) the agency has completed and submitted all federally 

required energy management reports; 

(iii) the agency has achieved compliance with the energy 

efficiency requirements of this Act, the Energy Policy Act of 

1992, Executive Orders, and other Federal law; and 

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

cost-effective projects with respect to the Federal building or 

collection of Federal buildings to be excluded. 

(B) A finding of impracticability under subparagraph (A)(i) 

shall be based on—

(i) the energy intensiveness of activities carried out in the 

Federal building or collection of Federal buildings; or 

(ii) the fact that the Federal building or collection of Federal buildings is used in the performance of a national security function.

(2) Each agency shall identify and list, in each report made 

under section 548(a), the Federal buildings designated by it for 

such exclusion. The Secretary shall review such findings for consistency with the øimpracticability standards¿ standards for exclusion set forth in paragraph (1), and may within 90 days after receipt of the findings, reverse øa finding of impracticability¿ the exclusion. In the case of any such reversal, the agency shall comply 

with the energy consumption requirements for the building concerned.

293

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

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

* * * * * * *

(e) METERING OF ENERGY USE.—

(1) DEADLINE.—By October 1, 2010, in accordance with 

guidelines established by the Secretary under paragraph (2), all 

Federal buildings shall, for the purposes of efficient use of energy and reduction in the cost of electricity used in such buildings, be metered or submetered. Each agency shall use, to the 

maximum extent practicable, advanced meters or advanced metering devices that provide data at least daily and that measure 

at least hourly consumption of electricity in the Federal buildings of the agency. Such data shall be incorporated into existing 

Federal energy tracking systems and made available to Federal 

facility energy managers. 

(2) GUIDELINES.—

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

of enactment of this subsection, the Secretary, in consultation with the Department of Defense, the General Services 

Administration, representatives from the metering industry, 

utility industry, energy services industry, energy efficiency 

industry, national laboratories, universities, and Federal 

facility energy managers, shall establish guidelines for 

agencies to carry out paragraph (1). 

(B) REQUIREMENTS FOR GUIDELINES.—The guidelines 

shall—

(i) take into consideration—

(I) the cost of metering and submetering and the 

reduced cost of operation and maintenance expected to result from metering and submetering; 

(II) the extent to which metering and submetering are expected to result in increased potential for energy management, increased potential for 

energy savings and energy efficiency improvement, 

and cost and energy savings due to utility contract 

aggregation; and 

(III) the measurement and verification protocols 

of the Department of Energy; 

(ii) include recommendations concerning the amount 

of funds and the number of trained personnel necessary 

to gather and use the metering information to track 

and reduce energy use; 

(iii) establish priorities for types and locations of 

buildings to be metered and submetered based on cost 

effectiveness and a schedule of one or more dates, not 

later than 1 year after the date of issuance of the 

guidelines, on which the requirements specified in 

paragraph (1) shall take effect; and 

(iv) establish exclusions from the requirements specified in paragraph (1) based on the de minimis quantity 

of energy use of a Federal building, industrial process, 

or structure. 

294

(3) PLAN.—No later than 6 months after the date guidelines 

are established under paragraph (2), in a report submitted by 

the agency under section 548(a), each agency shall submit to the 

Secretary a plan describing how the agency will implement the 

requirements of paragraph (1), including— (A) how the agency will designate personnel primarily responsible for achieving the requirements; and 

(B) demonstration by the agency, complete with documentation, of any finding that advanced meters or advanced metering devices, as defined in paragraph (1), are 

not practicable. 

* * * * * * *

SEC. 546. INCENTIVES FOR AGENCIES. 

* * * * * * *

(c) UTILITY INCENTIVE PROGRAMS.—

ø(l) Agencies are authorized and encouraged to participate in 

programs to increase energy efficiency and for water conservation or the management of electricity demand conducted by 

gas, water, or electric utilities and generally available to customers of such utilities.¿

(1) Agencies are authorized and encouraged to participate in 

programs, including utility energy services contracts, conducted 

by gas, water and electric utilities and generally available to 

customers of such utilities, for the purposes of increased energy 

efficiency, water conservation or the management of electricity 

demand. 

* * * * * * *

(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 øfacilities¿ facilities, equipment and vehicles utilized by such agency. 

* * * * * * *

(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. Except as otherwise provided 

by law, such funds may be used only for energy efficiency of unconventional and renewable energy resources projects. 

* * * * * * *

SEC. 548. REPORTS. 

(a) * * * 

(b) REPORTS TO THE PRESIDENT AND CONGRESS.—The Secretary 

shall report, not later than April 2 of each year, with respect to 

each fiscal year beginning after the date of the enactment of this 

subsection, to the President and Congress—

* * * * * * *

SEC. 550. SURVEY OF ENERGY SAVING POTENTIAL. 

* * * * * * *

295

(d) REPORT.—As soon as practicable after the completion of the 

project carried out under this section, the Secretary shall transmit 

a report of the findings and conclusions of the project to the Committee on Energy and Natural Resources and the Committee on 

Governmental Affairs of the Senate, the Committee on Energy and 

Commerce, the Committee on Government Operations, and the 

Committee on Public Works and Transportation of the House of 

Representatives, and the agencies who own the buildings involved 

in such project. Such report shall include an analysis of the probability of each agency achieving øthe 20 percent reduction goal established under section 543(a) of the National Energy Conservation 

Policy Act (42 U.S.C. 8253(a))¿ each of the energy reduction goals 

established under section 543(a). 

* * * * * * *

SEC. 552. FEDERAL PROCUREMENT OF ENERGY EFFICIENT PRODUCTS.

(a) DEFINITIONS.—In this section: 

(1) The term ‘‘Energy Star product’’ means a product that is 

rated for energy efficiency under an Energy Star program. 

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

(3) The term ‘‘executive agency’’ has the meaning given the 

term in section 4 of the Office of Federal Procurement Policy Act 

(41 U.S.C. 403). 

(4) The term ‘‘FEMP designated product’’ means a product 

that is designated under the Federal Energy Management Program of the Department of Energy as being among the highest 

25 percent of equivalent products for energy efficiency. 

(b) PROCUREMENT OF ENERGY EFFICIENT PRODUCTS.— (1) REQUIREMENT.—To meet the requirements of an executive 

agency for an energy consuming product, the head of the executive agency shall, except as provided in paragraph (2), procure 

an Energy Star product or a FEMP designated product. 

(2) EXCEPTIONS.—The head of an executive agency is not required to procure an Energy Star product or FEMP designated 

product under paragraph (1) if the head of the executive agency 

finds in writing that— (A) an Energy Star product or FEMP designated product 

is not cost-effective over the life of the product taking energy 

cost savings into account; or 

(B) no Energy Star product or FEMP designated product 

is reasonably available that meets the functional requirements of the executive agency. 

(3) PROCUREMENT PLANNING.—The head of an executive agency shall incorporate into the specifications for all procurements 

involving energy consuming products and systems, including 

guide specifications, project specifications, and construction, 

renovation, and services contracts that include provision of energy consuming products and systems, and into the factors for 

the evaluation of offers received for the procurement, criteria for 

energy efficiency that are consistent with the criteria used for 

rating Energy Star products and for rating FEMP designated 

products. 

296

(c) LISTING OF ENERGY EFFICIENT PRODUCTS IN FEDERAL CATA- LOGS.—Energy Star products and FEMP designated products shall 

be clearly identified and prominently displayed in any inventory or 

listing of products by the General Services Administration or the 

Defense Logistics Agency. The General Services Administration or 

the Defense Logistics Agency shall supply only Energy Star products 

or FEMP designated products for all product categories covered by 

the Energy Star program or the Federal Energy Management Program, except in cases where the agency ordering a product specifies 

in writing that no Energy Star product or FEMP designated product is available to meet the buyer’s functional requirements, or that 

no Energy Star product or FEMP designated product is cost-effective for the intended application over the life of the product, taking 

energy cost savings into account. 

(d) DESIGNATION OF ELECTRIC MOTORS.—In the case of electric 

motors of 1 to 500 horsepower, agencies shall select only premium 

efficient motors that meet a standard designated by the Secretary. 

The Secretary shall designate such a standard within 120 days 

after the date of the enactment of this section, after considering the 

recommendations of associated electric motor manufacturers and 

energy efficiency groups. 

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

enactment of this section, the Secretary shall issue guidelines to 

carry out this section. 

SEC. 553. CONGRESSIONAL BUILDING EFFICIENCY. 

(a) IN GENERAL.—The Architect of the Capitol— (1) shall develop, update, and implement a cost-effective energy conservation and management plan (referred to in this section as the ‘‘plan’’) for all facilities administered by the Congress (referred to in this section as ‘‘congressional buildings’’) to 

meet the energy performance requirements for Federal buildings 

established under section 543(a)(1); and 

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

after the date of enactment of this section. 

(b) PLAN REQUIREMENTS.—The plan shall include— (1) a description of the life-cycle cost analysis used to determine the cost-effectiveness of proposed energy efficiency projects; 

(2) a schedule of energy surveys to ensure complete surveys of 

all congressional buildings every 5 years to determine the cost 

and payback period of energy and water conservation measures; 

(3) a strategy for installation of life-cycle cost-effective energy 

and water conservation measures; 

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

(5) information packages and ‘‘how-to’’ guides for each Member and employing authority of Congress that detail simple, 

cost-effective methods to save energy and taxpayer dollars in the 

workplace. 

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

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

(2) energy management and conservation projects; and 

297

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

* * * * * * *

SEC. 801. AUTHORITY TO ENTER INTO CONTRACTS. 

(a) * * * 

(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 life-cycle 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. 

* * * * * * *

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—

(A) the lease or purchase of operating equipment, improvements, altered operation and maintenance, or technical services; or 

(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.¿

(2) The term ‘‘energy savings ‘‘ means—

(A) 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 co-generation or heat recovery, excluding any co-generation process for other than a federally owned building or 

buildings or other federally owned facilities; or 

298

(iii) the increased efficient use of existing water sources; 

or 

(B) 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.

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—

(A) may provide for appropriate software licensing agreements; and 

(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).¿

(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, and, where appropriate, operation, 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. Such contracts 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).¿

(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, more efficient treatment of wastewater or stormwater, improvements in operation or maintenance efficiencies, retrofit activities, or other related activities, 

not at a Federal hydroelectric facility. ’

299

DEPARTMENT OF ENERGY SCIENCE EDUCATION 

ENHANCEMENT ACT 

Part E of Title XXXI of Public Law 101–510, as amended (42 

U.S.C. 7381–7381e) 

* * * * * * *

SEC. 3164. SCIENCE EDUCATION PROGRAMS. 

(a) PROGRAMS.—The Secretary is authorized to establish programs to enhance the quality of mathematics, science, and engineering education. Any such programs shall be operated at or 

through the support of Department research and development facilities, shall use the scientific resources of the Department, and 

shall be consistent with the overall Federal plan for education and 

human resources in science and technology developed by the Federal Coordinating Council for Science, Engineering, and Technology. 

(b) RELATIONSHIP TO OTHER DEPARTMENT ACTIVITIES.—The programs described in subsection (a) shall supplement and be coordinated with current activities of the Department, but shall not supplant them.

(c) PROGRAMS FOR STUDENTS FROM UNDER-REPRESENTED

GROUPS.—In carrying out a program under subsection (a), the Secretary shall give priority to activities that are designed to encourage 

students from under-represented groups to pursue scientific and 

technical careers.

SEC. 3165. LABORATORY COOPERATIVE SCIENCE CENTERS AND 

OTHER AUTHORIZED EDUCATION ACTIVITIES. 

* * * * * * *

(13) Establish a prefreshman enrichment program in which middle-school students attend summer workshops on mathematics, 

science, and engineering conducted by universities on their campuses.

(14) Support competitive events for students, under supervision of 

teachers, designed to encourage student interest and knowledge in 

science and mathematics. 

* * * * * * *

SEC. 3167. PARTNERSHIPS WITH HISTORICALLY BLACK COLLEGES AND 

UNIVERSITIES, HISPANIC-SERVING INSTITUTIONS, AND 

TRIBAL COLLEGES. 

(a) DEFINITIONS.—In this section: 

(1) HISPANIC-SERVING INSTITUTION.—The term ‘‘Hispanicserving institution’’ has the meaning given that term in section 

502(a) of the Higher Education Act of 1965 (20 U.S.C 

1101a(a)). 

(2) HISTORICALLY BLACK COLLEGE OR UNIVERSITY.—The term 

‘‘historically Black college or university’’ has the meaning given 

the term ‘‘part B institution’’ in section 322 of the Higher Education Act of 1965 (20 U.S.C. 1061). 

(3) NATIONAL LABORATORY.—The term ‘‘National Laboratory’’

has the meaning given that term in section 903(5) of the Energy 

Policy Act of 2003. 

300

(4) SCIENCE FACILITY.—The term ‘‘science facility’’ has the 

meaning given the term ‘single purpose research facility’ in section 903(8) of the Energy Policy Act of 2003. 

(5) TRIBAL COLLEGE.—The term ‘‘tribal college’’ has the meaning given the term ‘‘tribally controlled college or university’’ in 

section 2(a) of the Tribally Controlled College or University Assistance Act of 1978 (25 U.S. C. 1801 (a)). 

(b) EDUCATION PARTNERSHIP.—The Secretary shall direct the Director of each National Laboratory, and may direct the head of any 

science facility, to increase the participation of historically Black 

colleges or universities, Hispanic-serving institutions, or tribal colleges in activities that increase the capacity of the historically Black 

colleges or universities, Hispanic-serving institutions, or tribal colleges to train personnel in science or engineering. 

(c) ACTIVITIES.—An activity under subsection (b) may include—

(1) collaborative research; 

(2) equipment transfer; 

(3) training activities conducted at a National Laboratory or 

science facility; and 

(4) mentoring activities conducted at a National Laboratory 

or science facility. 

(d) REPORT.—Not later than 2 years after the date of enactment 

of this section, the Secretary shall submit to the Congress a report 

on the activities carried out under this section.

SEC. ø3167.¿ 3168. DEFINITIONS. 

In this part: 

(1) The term ‘‘Secretary’’ means the Secretary of Energy. 

(2) The term ‘‘Department’’ means the Department of Energy. 

(3) The term ‘‘Department research and development facilities’’ means all Department of Energy single-purpose and multipurpose National Laboratories and research and development 

facilities and programs, and any other facility or program operated by a contractor funded from the Office of Energy Research 

of the Department of Energy. 

(4) The term ‘‘local educational agency’’ has the meaning 

given that term by section 1471(12) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 2891(12)). 

SEC. ø3168.¿ 3169. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated to the Secretary for carrying out university research support and other science, mathematics, and engineering education programs authorized by this 

subchapter and administered by the Office of Science of the Department of Energy, $40,000,000 for fiscal year 1991; and $40,000,000 

for each of fiscal years 2004 through 2008. 

SPARK M. MATSUNAGA HYDROGEN RESEARCH, 

DEVELOPMENT, AND DEMONSTRATION ACT OF 1990 

Public Law 101–566, as amended (42 U.S.C. 12401 et seq.) 

* * * * * * *

301

øSEC. 102. FINDING, PURPOSES, AND DEFINITION. 

ø(a) FINDING.—Congress finds that it is in the national interest 

to accelerate efforts to develop a domestic capability to economically produce hydrogen in quantities that will make a significant 

contribution toward reducing the Nation’s dependence on conventional fuels. 

ø(b) PURPOSES.—The purposes of this Act are— ø(1) to direct the Secretary of Energy to conduct a research, 

development, and demonstration program leading to the production, storage, transport, and use of hydrogen for industrial, 

residential, transportation, and utility applications; 

ø(2) to direct the Secretary to develop a technology assessment and information transfer program among the Federal 

agencies and aerospace, transportation, energy, and other entities; and 

ø(3) to develop renewable energy resources as a primary 

source of energy for the production of hydrogen. 

ø(c) DEFINITION.—As used in this Act, the term: 

ø(1) ‘‘critical technology’’ (or ‘‘critical technical issue’’) means 

a technology (or issue) that, in the opinion of the Secretary, requires understanding and development in order to take the 

next needed step in the development of hydrogen as an economic fuel or storage medium; 

ø(2) ‘‘Department’’ means the Department of Energy; and 

ø(3) ‘‘Secretary’’ means the Secretary of Energy. 

øSEC. 103. COMPREHENSIVE MANAGEMENT PLAN. 

ø(a) PLAN.—The Secretary shall prepare a comprehensive 5-year 

program management plan for research and development activities, 

which shall be conducted over a period of no less than 5 years and 

shall be consistent with the provisions of sections 104 and 105. In 

the preparation of such plan, the Secretary shall consult with the 

Administrator of the National Aeronautics and Space Administration, the Secretary of Transportation, the Hydrogen Technical Advisory Panel established under section 108, and the heads of such 

other Federal agencies and such public and private organizations 

as he deems appropriate. The plan shall be structured to identify 

and address areas of research critical to the realization of a domestic hydrogen production capability within the shortest time practicable. 

ø(b) CONTENTS OF PLAN.—Within 180 days after the date of the 

enactment of this Act, the Secretary shall transmit the comprehensive program management plan to the Committee on Science, 

Space, and Technology of the House of Representatives and the 

Committee on Energy and Natural Resources of the Senate. Subsequent plans shall be incorporated in the management plan under 

this section. The plan shall include—

ø(1) a prioritization of research areas critical to the economic 

use of hydrogen as a fuel and energy storage medium; 

ø(2) the program elements, management structure, and activities, including program responsibilities of individual agencies and individual institutional elements; 

ø(3) the program strategies including technical milestones to 

be achieved toward specific goals during each fiscal year for all 

major activities and projects; 

302

ø(4) the estimated costs of individual program items, including current as well as proposed funding levels for each of the 

5 years of the plan for each of the participating agencies; 

ø(5) a description of the methodology of coordination and 

technology transfer; and 

ø(6) the proposed participation by industry and academia in 

the planning and implementation of the program.

ø(c) DEMONSTRATION PLAN.—The Secretary shall, in consultation 

with the Secretary of Transportation, the Administrator of the National Aeronautics and Space Administration, and the Hydrogen 

Technical Advisory Panel established under section 108, also prepare a comprehensive large-scale hydrogen demonstration plan 

with respect to demonstrations carried out pursuant to section 105. 

Subsequent plans shall be incorporated in the management plan 

under this section. Such plan shall include—

ø(1) a description of the necessary research and development 

activities that must be completed before initiation of a largescale hydrogen production and storage demonstration program; 

ø(2) an assessment of the appropriateness of a large-scale 

demonstration immediately upon completion of the necessary 

research and development activities; 

ø(3) an implementation schedule with associated budget and 

program management resource requirements; and 

ø(4) a description of the role of the private sector in carrying 

out the demonstration program. 

øSEC. 104. RESEARCH AND DEVELOPMENT. 

ø(a) PROGRAM.—The Secretary shall conduct a research and development program, consistent with the comprehensive 5–year program management plan under section 103, to ensure the development of a domestic hydrogen fuel production capability within the 

shortest time practicable consistent with market conditions. 

ø(b) RESEARCH.—(1) Particular attention shall be given to developing an understanding and resolution of all critical technical 

issues preventing the introduction of hydrogen into the marketplace. 

ø(2) The Secretary shall initiate research or accelerate existing 

research in critical technical issues that will contribute to the development of more economic hydrogen production and use, including, but not limited to, critical technical issues with respect to production, liquefaction, transmission, distribution, storage, and use 

(including use of hydrogen in surface transportation). 

ø(c) RENEWABLE ENERGY PRIORITY.—The Secretary shall give priority to those production techniques that use renewable energy resources as their primary source of energy for hydrogen production. 

ø(d) NEW TECHNOLOGIES.—The Secretary shall, for the purpose 

of performing his responsibilities pursuant to this Act, solicit proposals for and evaluate any reasonable new or improved technology 

that could lead or contribute to the development of economic hydrogen production storage and utilization. 

ø(e) INFORMATION.—The Secretary shall conduct evaluations, arrange for tests and demonstrations, and disseminate to developers 

information, data, and materials necessary to support efforts undertaken pursuant to this section, consistent with section 106. 

303

øSEC. 105. DEMONSTRATIONS. 

ø(a) REQUIREMENT.—The Secretary shall conduct demonstrations 

of critical technologies, preferably in self-contained locations, so 

that technical and non-technical parameters can be evaluated to 

best determine commercial applicability of the technology. 

ø(b) SMALL-SCALE DEMONSTRATIONS.—Concurrently with activities conducted pursuant to section 104, the Secretary shall conduct 

small-scale demonstrations of hydrogen technology at self-contained sites. 

øSEC. 106. TECHNOLOGY TRANSFER PROGRAM. 

ø(a) PROGRAM.—The Secretary shall conduct a program designed 

to accelerate wider application of hydrogen production, storage, utilization, and other technologies available in near term as a result 

of aerospace experience as well as other research progress by transferring critical technologies to the private sector. The Secretary 

shall direct the program with the advice and assistance of the Hydrogen Technical Advisory Panel established under section 108. 

The objective in seeking this advice is to increase participation of 

private industry in the demonstration of near commercial applications through cooperative research and development arrangements, 

joint ventures or other appropriate arrangements involving the private sector. 

ø(b) INFORMATION.—The Secretary, in carrying out the program 

authorized by subsection (a), shall—

ø(1) Undertake an inventory and assessment of hydrogen 

technologies and their commercial capability to economically 

produce, store, or utilize hydrogen in aerospace, transportation, 

electric utilities, petrochemical, chemical, merchant hydrogen, 

and other industrial sectors; and 

ø(2) develop a National Aeronautics Space Administration, 

Department of Energy, and industry information exchange program to improve technology transfer for— ø(A) application of aerospace experience by industry; 

ø(B) application of research progress by industry and 

aerospace; 

ø(C) application of commercial capability of industry by 

aerospace; and 

ø(D) expression of industrial needs to research organizations. 

The information exchange program may consist of workshops, 

publications, conferences, and a data base for the use by the 

public and private sectors. 

øSEC. 107. COORDINATION AND CONSULTATION. 

ø(a) SECRETARY’S RESPONSIBILITY.—The Secretary shall have 

overall management responsibility for carrying out programs under 

this Act. In carrying out such programs, the Secretary, consistent 

with such overall management responsibility—

ø(1) shall use the expertise of the National Aeronautics and 

Space Administration and the Department of Transportation; 

and 

ø(2) may use the expertise of any other Federal agency in accordance with subsection (b) in carrying out any activities 

under this title, to the extent that the Secretary determines 

304

that any such agency has capabilities which would allow such 

agency to contribute to the purpose of this Act. 

ø(b) ASSISTANCE—The Secretary may, in accordance with subsection (a), obtain the assistance of any department, agency, or instrumentality of the Executive branch of the Federal Government 

upon written request, on a reimbursable basis or otherwise and 

with the consent of such department, agency, or instrumentality. 

Each such request shall identify the assistance the Secretary 

deems necessary to carry out any duty under this Act. 

ø(c) CONSULTATION.—The Secretary shall consult with the Administrator of the National Aeronautics and Space Administration, 

the Administrator of the Environmental Protection Agency, the 

Secretary of Transportation, and the Hydrogen Technical Advisory 

Panel established under section 108 in carrying out his authorities 

pursuant to this Act. 

øSEC. 108. TECHNICAL PANEL. 

ø(a) ESTABLISHMENT.—There is hereby established the Hydrogen 

Technical Advisory Panel (the ‘‘technical panel’’), to advise the Secretary on the programs under this Act. 

ø(b) MEMBERSHIP.—The technical panel shall be appointed by the 

Secretary and shall be comprised of such representatives from domestic industry, universities, professional societies, Government 

laboratories, financial, environmental, and other organizations as 

the Secretary deems appropriate based on his assessment of the 

technical and other qualifications of such representatives. Appointments to the technical panel shall be made within 90 days after the 

enactment of this Act. The technical panel shall have a chairman, 

who shall be elected by the members from among their number. 

ø(c) COOPERATION.—The heads of the departments, agencies, and 

instrumentalities of the Executive branch of the Federal Government shall cooperate with the technical panel in carrying out the 

requirements of this section and shall furnish to the technical 

panel such information as the technical panel deems necessary to 

carry out this section. 

ø(d) REVIEW.—The technical panel shall review and make any 

necessary recommendations to the Secretary on the following 

items—

ø(1) the implementation and conduct of programs under this 

Act; 

ø(2) the economic, technological, and environmental consequences of the deployment of hydrogen production and use 

systems; and 

ø(3) comments on and recommendations for improvements in 

the comprehensive 5–year program management plan required 

under section 103. 

ø(e) SUPPORT.—The Secretary shall provide such staff, funds and 

other support as may be necessary to enable the technical panel to 

carry out the functions described in this section. 

øSEC. 109. AUTHORIZATION OF APPROPRIATIONS. 

øThere is hereby authorized to be appropriated to carry out the 

purposes of this Act (in addition to any amounts made available for 

such purposes to other Acts)— ø(1) $3,000,000 for the fiscal year 1992; 

305

ø(2) $7,000,000 for the fiscal year 1993; and 

ø(3) $10,000,000 for the fiscal year 1994.¿

SEC 102. DEFINITIONS. 

In this Act—

(a) the term ‘‘advisory committee’’ means the Hydrogen and 

Fuel Cell Technical Advisory Committee established under section 107. 

(b) the term ‘‘Department’’ means the Department of Energy. 

(c) the term ‘‘fuel cell’’ means a device that directly converts 

the chemical energy of a fuel into electricity by an electrochemical process. 

(d) the term ‘‘infrastructure’’ means the equipment, systems, 

or facilities used to produce, distribute, deliver, or store hydrogen. 

(e) the term ‘‘Secretary’’ means the Secretary of Energy.

SEC. 103. HYDROGEN RESEARCH AND DEVELOPMENT. 

(a) IN GENERAL.—The Secretary shall conduct a research and development program on technologies related to the production, distribution, storage, and use of hydrogen energy, fuel cells, and related infrastructure. 

(b) GOAL.—The goal of such program shall be to enable the safe, 

economic, and environmentally sound use of hydrogen energy, fuel 

cells, and related infrastructure for transportation, commercial, industrial, residential, and electric power generation applications. 

(c) FOCUS.—In carrying out activities under this section, the Secretary shall focus on critical technical issues including, but not limited to—

(1) the production of hydrogen from diverse energy sources, 

with emphasis on cost-effective production from renewable energy sources; 

(2) the delivery of hydrogen, including safe delivery in fueling 

stations and use of existing hydrogen pipelines; 

(3) the storage of hydrogen, including storage of hydrogen in 

surface transportation; 

(4) fuel cell technologies for transportation, stationary and 

portable applications, with emphasis on cost-reduction of fuel 

cell stacks; and 

(5) the use of hydrogen energy and fuel cells, including use 

in—

(A) isolated villages, islands, and areas in which other 

energy sources are not available or are very expensive; and 

(B) foreign markets, particularly where an energy infrastructure is not well developed. 

(d) CODES AND STANDARDS.—The Secretary shall facilitate the development of domestic and international codes and standards and 

seek to resolve other critical regulatory and technical barriers preventing the introduction of hydrogen energy and fuel cells into the 

marketplace. 

(e) SOLICITATION.—The Secretary shall carry out the research and 

development activities authorized under this section through solicitation of proposals, and evaluation using competitive merit review. 

(f) COST SHARING.—The Secretary shall require a commitment 

from non-Federal sources of at least 20 percent of the cost of proVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00309 Fmt 6604 Sfmt 6603 E:\HR\OC\SR043.XXX SR043
306

posed research and development projects. The Secretary may reduce 

or eliminate the cost sharing requirement— (1) if the Secretary determines that the research and development is of a basic or fundamental nature, or 

(2) for technical analyses, outreach activities, and educational 

programs that the Secretary does not expect to result in a marketable product. 

SEC. 104. DEMONSTRATION PROGRAMS. 

(a) REQUIREMENT.—In conjunction with activities conducted 

under section 103, the Secretary shall conduct demonstrations of hydrogen energy and fuel cell technologies in order to evaluate the 

commercial potential of such technologies. 

(b) SOLICITATION.—The Secretary shall carry out the demonstrations authorized under this section through solicitation of proposals, 

and evaluation using competitive merit review. 

(c) COST SHARING.—The Secretary shall require a commitment 

from non-Federal sources of at least 50 percent of the costs directly 

relating to a demonstration project under this section. The Secretary 

may reduce such non-Federal requirement if the Secretary determines that the reduction is appropriate considering the technological risks involved in the project. 

SEC. 105. TECHNOLOGY TRANSFER. 

The Secretary shall conduct programs to—

(a) transfer critical hydrogen energy and fuel cell technologies 

to the private sector in order to promote wider understanding 

of such technologies and wider use of research progress under 

this Act; 

(b) to accelerate wider application of hydrogen energy and 

fuel cell technologies in foreign countries in order to increase 

the global market for the technologies and foster global development without harmful environmental effects; 

(c) foster the exchange of generic, nonproprietary information 

and technology developed pursuant to this Act, among industry, 

academia, and the Federal agencies; and 

(d) inventory and assess the technical and commercial viability of technologies related to production, distribution, storage, 

and use of hydrogen energy and fuel cells. 

SEC. 106. COORDINATION AND CONSULTATION.

The Secretary shall have overall management responsibility for 

carrying out programs under this Act. In carrying out such programs, the Secretary—

(a) shall establish a central point for the coordination of all 

hydrogen energy and fuel cell research, development, and demonstration activities of the Department; 

(b) in carrying out the Secretary’s authorities pursuant to this 

Act, shall consult with other Federal agencies as appropriate, 

and may obtain the assistance of any Federal agency, on a reimbursable basis or otherwise and with the consent of such 

agency; 

(c) shall attempt to ensure that activities under this Act do 

not unnecessarily duplicate any available research and development results or displace or compete with privately funded hydrogen and fuel cell energy activities. 

307

SEC. 107. ADVISORY COMMITTEE. 

(a) ESTABLISHMENT.—There is hereby established the Hydrogen 

and Fuel Cell Technical Advisory Committee, to advise the Secretary on the programs under this Act. 

(b) MEMBERSHIP.—The advisory committee shall be comprised of 

not fewer than 12 nor more than 25 members appointed by the Secretary based on their technical and other qualifications from domestic industry, automakers, universities, professional societies, Federal 

laboratories, financial institutions, and environmental and other organizations as the Secretary deems appropriate. The advisory committee shall have a chairperson, who shall be elected by the members from among their number. 

(c) TERMS.—Members of the advisory committee shall be appointed for terms of 3 years, with each term to begin not later than 

3 months after the date of enactment of Clean and Secure Energy 

Act, except that one-third of the members first appointed shall serve 

for 1 year, and one-third of the members first appointed shall serve 

for 2 years, as designated by the Secretary at the time of appointment. 

(d) REVIEW.—The advisory committee shall review and make any 

necessary recommendations to the Secretary on— (1) implementation and conduct of programs under this Act; 

(2) economic, technological, and environmental consequences 

of the deployment of technologies related to production, distribution, storage, and use of hydrogen energy, and fuel cells; 

(3) means for resolving barriers to implementing hydrogen 

and fuel cell technologies; and 

(4) the coordination plan and any updates thereto prepared 

by the Secretary pursuant to section 108. 

(e) RESPONSE.—The Secretary shall consider any recommendations made by the advisory committee, and shall provide a response 

to the advisory committee within 30 days after receipt of such recommendations. Such response shall either describe the implementation of the advisory committee’s recommendations or provide an explanation of the reasons that any such recommendations will not be 

implemented. 

(f) SUPPORT.—The Secretary shall provide such staff, funds and 

other support as may be necessary to enable the advisory committee 

to carry out its functions. In carrying out activities pursuant to this 

section, the advisory committee may also obtain the assistance of 

any Federal agency, on a reimbursable basis or otherwise and with 

the consent of such agency. 

SEC. 108. COORDINATION PLAN. 

(a) PLAN.—The Secretary, in consultation with other Federal 

agencies, shall prepare and maintain on an ongoing basis a comprehensive plan for activities under this Act. 

(b) DEVELOPMENT.—In developing such plan, the Secretary 

shall—

(1) consider the guidance of the National Hydrogen Energy 

Roadmap published by the Department in November 2002 and 

any updates thereto; 

(2) consult with the advisory committee; 

(3) consult with interested parties from domestic industry, 

automakers, universities, professional societies, Federal laboraVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00311 Fmt 6604 Sfmt 6603 E:\HR\OC\SR043.XXX SR043
308

tories, financial institutions, and environmental and other organizations as the Secretary deems appropriate. 

(c) CONTENTS.—At a minimum, the plan shall provide—

(1) an assessment of the effectiveness of the programs authorized under this Act, including a summary of recommendations 

of the advisory committee for improvements in such programs; 

(2) a description of proposed research, development, and demonstration activities planned by the Department for the next five 

years; 

(3) a description of the role Federal laboratories, institutions 

of higher education, small businesses, and other private sector 

firms are expected to play in such programs; 

(4) cost and performance milestones that will be used to 

evaluate the programs for the next five years; and 

(5) any significant technical, regulatory, and other hurdles 

that stand in the way of achieving such cost and performance 

milestones, and how the programs will address those hurdles; 

and 

(6) to the extent practicable, an analysis of Federal, State, 

local, and private sector hydrogen research, development, and 

demonstration activities to identify areas for increased intergovernmental and private public sector collaboration. 

(d) REPORT.—Not later than January 1, 2005, and biennially 

thereafter, the Secretary shall transmit to Congress the comprehensive plan developed for the programs authorized under this Act, or 

any updates thereto. 

SEC. 109. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated to carry out the purposes 

of this Act—

(1) such sums as may be necessary for fiscal years 1992 

through 2003; 

(2) $105,000,000 for fiscal year 2004; 

(3) $150,000,000 for fiscal year 2005; 

(4) $175,000,000 for fiscal year 2006; 

(5) $200,000,000 for fiscal year 2007; and 

(6) $225,000,000 for fiscal year 2008 

CRANSTON-GONZALEZ NATIONAL AFFORDABLE 

HOUSING ACT 

Public Law 101–625, as amended (42 U.S.C. 12701 et seq.) 

SEC. 109. (a) * * * 

(1) The Secretary of Housing and Urban Development and 

the Secretary of Agriculture shall, not later than ø1 year after 

the date of the enactment of the Energy Policy Act of 1992¿

September 30, 2003 jointly establish, by rule, energy efficiency 

standards for— (A) new construction of public and assisted housing and 

single family and multifamily residential housing (other 

than manufactured homes) subject to mortgages insured 

under the National Housing Act (12 U.S.C. 1701 et seq.); 

øand¿

309

(B) new construction of single family housing (other than 

manufactured homes) subject to mortgages insured, guaranteed, or made by the Secretary of Agriculture under title 

V of the Housing Act of 1949 (42 U.S.C. 1471 et seq.)ø.¿

; and

(C) rehabilitation and new construction of public and assisted housing funded by HOPE VI revitalization grants 

under section 24 of the United States Housing Act of 1937 

(42 U.S.C. 1437v), where such standards are determined to 

be cost effective by the Secretary of Housing and Urban 

Development. 

(2) CONTENTS.—Such standards shall meet or exceed the requirements of the øCouncil of American Building Officials 

Model Energy Code, 1992 (hereafter in this section referred to 

as ‘‘CABO Model Energy Code, 1992’’), or, in the case of multifamily high rises, the requirements of the American Society of 

Heating, Refrigerating, and Air-Conditioning Engineers Standard 90.1–1989 (hereafter in this section referred to as 

‘‘ASHRAE Standard 90.1–1989’’)¿ 2000 International Energy 

Conservation Code and shall be cost-effective with respect to 

construction and operating costs on a life-cycle cost basis. In 

developing such standards, the Secretaries shall consult with 

an advisory task force composed of homebuilders, national, 

State, and local housing agencies (including public housing 

agencies), energy agencies, building code organizations and 

agencies, energy efficiency organizations, utility organizations, 

low-income housing organizations, and other parties designated by the Secretaries. 

(b) MODEL ENERGY CODE.—If the Secretaries have not, within ø1 

year after the date of the enactment of the Energy Policy Act of 

1992¿ September 30, 2003 established energy efficiency standards 

under subsection (a) of this section, all new construction of housing 

specified in such subsection shall meet the requirements of øCABO 

Model Energy Code, 1992, or, in the case of multifamily high rises, 

the requirements of ASHRAE Standard 90.1–1989¿ the 2000 International Energy Conservation Code.

(c) REVISIONS OF øMODEL ENERGY CODE¿INTERNATIONAL ENERGY

CONSERVATION CODE.—If the requirements of øCABO Model Energy Code, 1992, or, in the case of multifamily high rises, ASHRAE 

Standard 90.1–1989¿ the 2000 International Energy Conservation 

Code, are revised at any time, the Secretaries shall, not later than 

1 year after such revision, amend the standards established under 

subsection (a) of this section to meet or exceed the requirements of 

such revised code or standard unless the Secretaries determine 

that compliance with such revised code or standard would not result in a significant increase in energy efficiency or would not be 

technologically feasible or economically justified. 

HIGH-PERFORMANCE COMPUTING ACT OF 1991 

Public Law 102–194, as amended (15 U.S.C. 5501 et seq.) 

* * * * * * *

310

SEC. 4. DEFINITIONS. 

As used in this Act, the term—

* * * * * * *

(3) ‘‘high-performance computing’’ ømeans¿ and ‘‘networking 

and information technology’’ mean advanced computing, communications, and information technologies, including scientific 

workstations, supercomputer systems ø(including vector supercomputers and large scale parallel systems)¿, high-capacity 

and high-speed networks, special purpose and experimental 

systems, and applications and systems software; 

(4) ‘‘Internet’’ means the international computer network of 

both Federal and non-Federal interoperable øpacket switched¿

data networks; 

* * * * * * *

SEC. 203. DEPARTMENT OF ENERGY ACTIVITIES. 

(a) GENERAL RESPONSIBILITIES.—As part of the øProgram described in subchapter I of this chapter, the Secretary of Energy 

shall—

ø(1) perform research and development on, and systems evaluations of, highperformance computing and communications 

systems; 

ø(2) conduct computational research with emphasis on energy applications; 

ø(3) support basic research, education, and human resources 

in computational science; and 

ø(4) provide for networking infrastructure support for energy-related mission activities.¿ Networking and Information 

Technology Research and Development Program, the Secretary 

of Energy shall conduct basic and applied research in networking and information technology, with emphasis on supporting fundamental research in the physical sciences and engineering, and energy applications; providing supercomputer access and advanced communication capabilities and facilities to 

scientific researchers; and developing tools for distributed scientific collaboration. 

(b) COLLABORATIVE CONSORTIA.—In accordance with the øProgram¿ Networking and Information Technology Research and Development Program, the Secretary of Energy shall establish HighPerformance Computing Research and Development Collaborative 

Consortia by soliciting and selecting proposals. Each Collaborative 

Consortium shall—

* * * * * * *

(e) AUTHORIZATION OF APPROPRIATIONS.—ø(1) There are authorized to be appropriated to the Secretary of Energy for the purposes 

of the Program $93,000,000 for fiscal year 1992; $110,000,000 for 

fiscal year 1993; $138,000,000 for fiscal year 1994: $157,000,000 for 

fiscal year 1995; and $169,000,000 for fiscal year 1996. 

ø(2) There are authorized to be appropriated to the Secretary of 

Energy for fiscal years 1992, 1993, 1994, 1995, and 1996, such 

funds as may be necessary to carry out the activities that are not 

part of the Program but are authorized by this section.¿ There are 

authorized to be appropriated to the Secretary of Energy to carry 

311

out the Networking and Information Technology Research and Development Program such sums as may be necessary for fiscal years 

2004 through 2008.

* * * * * * *

ENERGY POLICY ACT OF 1992 

Public Law 102–486, as amended (42 U.S.C. 13211 et seq.)

* * * * * * *

TABLE OF CONTENTS 

* * * * * * *

TITLE III—ALTERNATIVE FUELS—GENERAL 

* * * * * * *

Sec. 311. United States Postal Service. 

Sec. 312. Fuel Use Credits. 

* * * * * * *

TITLE III—ALTERNATIVE FUELS—GENERAL 

SEC. 301. DEFINITIONS. 

For the purposes of this title, title IV, and title V (unless otherwise specified)—

(1) * * * 

(2) The term ‘‘alternative fuel’’ means methanol, denatured 

ethanol, and other alcohols; mixtures containing 85 percent or 

more (or such other percentage, but not less than 70 percent, 

as determined by the Secretary, by rule, to provide for requirements relating to cold start, safety, or vehicle functions) by volume of methanol, denatured ethanol, and other alcohols with 

gasoline or other fuels; natural gas, including liquid fuels domestically produced from natural gas; liquefied petroleum gas; 

mixtures containing 50 percent or more by volume of lease condensate or fuels extracted from lease condensate; hydrogen; 

coal-derived liquid fuels; fuels (other than alcohol) derived from 

biological materials; electricity (including electricity from solar 

energy); and any other fuel the Secretary determines, by rule, 

is substantially not petroleum and would yield substantial energy security benefits and substantial environmental benefits; 

(3) The term ‘‘alternative fueled vehicle’’ means a dedicated 

vehicle øor a dual fueled vehicle¿, a dual fueled vehicle, or a 

neighborhood electric vehicle;

* * * * * * *

(13) the term ‘‘motor vehicle’’ has the meaning given such 

term under section 216(2) of the Clean Air Act (42 U.S.C. 

7550(2)); øand¿

(14) the term ‘‘replacement fuel’’ means the portion of any 

motor fuel that is methanol, ethanol, or other alcohols, natural 

gas, liquefied petroleum gas, mixtures containing 50 percent or 

more by volume of lease condensate or fuels extracted from lease 

condensate, hydrogen, coal derived liquid fuels, fuels (other 

312

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 ‘‘neighborhood electric vehicle’’ means a motor 

vehicle—

(A) which meets the definition of a low-speed vehicle, as 

such term is defined in part 571 of title 49, Code of Federal 

Regulations; 

(B) which meets the definition of a zero-emission vehicle, 

as such term is defined in section 86.1702–99 of title 40, 

Code of Federal Regulations; 

(C) which meets the requirements of Federal Motor Vehicle Safety Standard No. 500; and 

(D) which has a top speed of not greater than 25 miles 

per hour. 

(16) the term ‘‘lease condensate’’ means a mixture, primarily 

of pentanes and heavier hydrocarbons, which is recovered as a 

liquid from natural gas in lease separation facilities. 

* * * * * * *

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) 25 percent in fiscal year 1996; 

(B) 33 percent in fiscal year 1997; 

(C) 50 percent in fiscal year 1998; and 

(D) 75 percent in fiscal year 1999 and thereafter, shall be alternative fueled vehicles. 

(2) The Secretary, in consultation with the Administrator of General Services where appropriate, may permit a Federal fleet to acquire a smaller percentage than is required in paragraph (1), so 

long as the aggregate percentage acquired by all Federal fleets is 

at least equal to the required percentage. 

(3) For purposes of this subsection, the term ‘‘Federal fleet’’

means 20 or more light duty motor vehicles, located in a metropolitan statistical area or consolidated metropolitan statistical area, as 

established by the Bureau of the Census, with a 1980 population 

of more than 250,000, that are centrally fueled or capable of being 

centrally fueled and are owned, operated, leased, or otherwise controlled by or assigned to any Federal executive department, military department, Government corporation, independent establishment, or executive agency, the United States Postal Service, the 

Congress, the courts of the United States, or the Executive Office 

of the President. Such term does not include—

(A) motor vehicles held for lease or rental to the general public; 

(B) motor vehicles used for motor vehicle manufacturer product evaluations or tests; 

(C) law enforcement vehicles; 

(D) emergency vehicles; 

313

(E) motor vehicles acquired and used for military purposes 

that the Secretary of Defense has certified to the Secretary 

must be exempt for national security reasons; or 

(F) nonroad vehicles, including farm and construction vehicles.

(4) HYDROGEN VEHICLES.— (A) Of the number of vehicles acquired under paragraph 

(1)(D) by a Federal feet of 100 or more vehicles, not less than— (i) 5 percent in fiscal years 2006 and 2007; 

(ii) 10 percent in fiscal years 2008 and 2009; 

(iii) 15 percent in fiscal years 2010 and 2011; and 

(iv) 20 percent in fiscal years 2012 and thereafter, shall 

be hydrogen-powered vehicles that meet standards for performance, reliability, cost, and maintenance established by 

the Secretary. 

(B) The Secretary may establish a lesser percentage, or waive 

the requirement under subparagraph (A) for any fiscal year entirely, if hydrogen-powered vehicles meeting the standards set 

by the Secretary pursuant to subparagraph (A) are not available at a purchase price that is less than 150 percent of the purchase price of other comparable alternative fueled vehicles. 

(C) The Secretary may by rule, delay the implementation of 

the requirements under subparagraph (A) in the event that the 

Secretary determines that hydrogen-powered vehicles are not 

commercially or economically available, or that fuel for such vehicles is not commercially or economically available. 

(D) The Secretary, in consultation with the Administrator of 

General Services, may for reasons of refueling infrastructure 

use and cost optimization, elect to allocate the acquisitions necessary to achieve the requirements in subparagraph (A) to certain Federal fleets in lieu of requiring each Federal fleet to 

achieve the requirements in subparagraph (A).

(c) ALLOCATION OF INCREMENTAL COSTS.—The General Services 

Administration and any other Federal agency that procures motor 

vehicles for distribution to other Federal agencies ømay¿ shall allocate the incremental cost of alternative fuel vehicles over the cost 

of comparable gasoline vehicles across the entire fleet of motor vehicles distributed by such agency. 

* * * * * * *

SEC. 304. REFUELING. 

(a) IN GENERAL.—Federal agencies shall, to the maximum extent 

practicable, arrange for the fueling of alternative fueled vehicles acquired under section 13212 of this title at commercial fueling facilities that offer alternative fuels for sale to the public. øIf publicly¿

(b) COMMERCIAL ARRANGEMENTS.—

(1) IN GENERAL.—If publicly available fueling facilities are 

not convenient or accessible to the location of Federal alternative fueled vehicles purchased under section 13212 of this 

title, Federal agencies are authorized to enter into commercial 

arrangements for the purposes of fueling Federal alternative 

fueled vehicles, including, as appropriate, purchase, lease, contract, construction, or other arrangements in which the Federal 

Government is a participant.

314

(2) MANDATORY ARRANGEMENTS.— (A) IN GENERAL.—In a case in which publicly available 

fueling facilities are not convenient or accessible to the locations of 2 or more Federal fleets for which hydrogen-powered vehicles are required to be purchased under section 

303(b)(4), the Federal agency for which the Federal fleets 

are maintained (or the Federal agencies for which the Federal fleets are maintained, acting jointly under a memorandum of agreement providing for cost sharing) shall 

enter into a commercial arrangement as provided in paragraph (1). 

(B) SUNSET.—Subparagraph (A) ceases to be effective at 

the end offiscal year 2013.

ø(b)¿ (c) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to the Secretary for carrying out this section such sums as maybe necessary for fiscal years 1993 through 

1998, to remain available until expended. 

* * * * * * *

SECTION 312. øBIODIESEL¿ FUEL USE CREDITS. 

ø(a) ALLOCATION OF CREDITS.— ø(1) IN GENERAL.—The Secretary shall allocate one credit 

under this section to a fleet or covered person for each qualifying volume of the biodiesel component of fuel containing at 

least 20 percent biodiesel by volume purchased after the date 

of the enactment of this section for use by the fleet or covered 

person in vehicles owned or operated by the fleet or covered 

person that weigh more than 8,500 pounds gross vehicle 

weight rating. 

ø(2) EXCEPTIONS.—No credits shall be allocated under paragraph (1) for a purchase of biodiesel— ø(A) for use in alternative fueled vehicles; or 

ø(B) that is required by Federal or State law. 

ø(3) AUTHORITY TO MODIFY PERCENTAGE.—The Secretary 

may, by rule, lower the 20 percent biodiesel volume requirement in paragraph (1) for reasons related to cold start, safety, 

or vehicle function considerations. 

ø(4) DOCUMENTATION.—A fleet or covered person seeking a 

credit under this section shall provide written documentation 

to the Secretary supporting the allocation of a credit to such 

fleet or covered person under paragraph (1). 

ø(b) USE OF CREDITS.—

ø(1) IN GENERAL.—At the request of a fleet or covered person 

allocated a credit under subsection (a), the Secretary shall, for 

the year in which the purchase of a qualifying volume is made, 

treat that purchase as the acquisition of one alternative fueled 

vehicle the fleet or covered person is required to acquire under 

this title, title IV, or title V. 

ø(2) LIMITATION.—Credits allocated under subsection (a) may 

not be used to satisfy more than 50 percent of the alternative 

fueled vehicle requirements of a fleet or covered person under 

this title, title IV, and title V. This paragraph shall not apply 

to a fleet or covered person that is a biodiesel alternative fuel 

provider described in section 501(a)(2)(A). 

315

ø(c) CREDIT NOT A SECTION 508 CREDIT.—A credit under this section shall not be considered a credit under section 508. 

ø(d) ISSUANCE OF RULE.—The Secretary shall, before January 1, 

1999, issue a rule establishing procedures for the implementation 

of this section. 

ø(e) COLLECTION OF DATA.—The Secretary shall collect such data 

as are required to make a determination described in subsection 

(f)(2)(B). 

ø(f) DEFINITIONS.—For purposes of this section— ø(1) the term ‘‘biodiesel’’ means a diesel fuel substitute produced from nonpetroleum renewable resources that meets the 

registration requirements for fuels and fuel additives established by the Environmental Protection Agency under section 

211 of the Clean Air Act; and 

ø(2) the term ‘‘qualifying volume’’ means— ø(A) 450 gallons; or 

ø(B) if the Secretary determines by rule that the average 

annual alternative fuel use in light duty vehicles by fleets 

and covered persons exceeds 450 gallons or gallon equivalents, the amount of such average annual alternative fuel 

use.¿

(a) ALLOCATION.— (1) The Secretary shall allocate one credit under this section 

to a fleet or covered person for each qualifying volume of alternative fuel or biodiesel purchased for use in an on-road motor 

vehicle operated by the fleet that weighs more than 8,500 

pounds gross vehicle weight rating. 

(2) No credits shall be allocated under this section for purchase of an alternative fuel or biodiesel that is required by Federal or State law. 

(3) A fleet or covered person seeking a credit under this section shall provide written documentation to the Secretary supporting the allocation of a credit to such fleet or covered person 

under this section. 

(b) USE.—At the request of a fleet or covered person allocated a 

credit under subsection (a), the Secretary shall, for the year in 

which the purchase of a qualifying volume is made, treat that purchase as the acquisition of one alternative fueled vehicle the feet or 

covered person is required to acquire under this title, title IV, or 

title V. 

(c) TREATMENT.—A credit provided to a fleet or covered person 

under this section shall be considered a credit under section 508. 

(d) ISSUANCE OF RULE.—Not later than 6 months after the date 

of enactment of this section, the Secretary shall issue a rule establishing procedures for the implementation of this section. 

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

(1) the term ‘‘biodiesel’’ means a diesel fuel substitute produced from nonpetroleum renewable resources that meets the 

registration requirements for fuels and fuel additives established by the Environmental Protection Agency under section 

211 of the Clean Air Act; and 

(2) the term ‘‘qualifying volume’’ means— (A) in the case of biodiesel, when used as a component of 

fuel containing at least 20 percent biodiesel by volume, 450 

316

gallons, or if the Secretary determines by rule that the average annual alternative fuel use in light duty vehicles by 

fleets and covered persons exceeds 450 gallons or gallon 

equivalents, the amount of such average annual alternative 

fuel use; or 

(B) in the case of an alternative fuel, the amount of such 

fuel determined by the Secretary to have an equivalent energy content to the amount of biodiesel defined as a qualifying volume pursuant to subparagraph (A). 

* * * * * * *

TITLE V—AVAILABILITY AND USE OF REPLACEMENT FUELS, ALTERNATIVE FUELS, 

AND ALTERNATIVE FUELED PRIVATE VEHICLES 

* * * * * * *

SEC. 507. FLEET REQUIREMENT PROGRAM. 

* * * * * * *

(p) CREDITS FOR NEW QUALIFIED HYBRID MOTOR VEHICLES.— (1) DEFINITIONS.—In this subsection: ‘‘(A) 2000 MODEL YEAR CITY FUEL EFFICIENCY.—The term ‘‘2000 model year city fuel efficiency’’, with respect to a 

motor vehicle, means fuel efficiency determined in accordance with the following tables: 

(i) In the case of a passenger automobile:

The 2000 model year city 

If vehicle inertia weight class is: fuel efficiency is: 

1,500 or 1,750 lbs ............................................................................. 43.7 mpg 

2,000 lbs ............................................................................................ 38.3 mpg 

2,250 lbs ............................................................................................ 34.1 mpg 

2,500 lbs ............................................................................................ 30.7 mpg 

2,750 lbs ............................................................................................ 27.9 mpg 

3,000 lbs ............................................................................................ 25.6 mpg 

3,500 lbs 22.0 mpg ............................................................................

4,000 lbs ............................................................................................ 19.3 mpg 

4,500 lbs ............................................................................................ 17.2 mpg 

5,000 lbs ............................................................................................ 15.5 mpg 

5,500 lbs ............................................................................................ 14.1 mpg 

6,000 lbs ............................................................................................ 12.9 mpg 

6,500 lbs ............................................................................................ 11.9 mpg 

7,000 to 8,500 lbs .............................................................................. 11.1 mpg.

(ii) In the case of a light truck:

The 2000 model year city 

If vehicle inertia weight class is: fuel efficiency is: 

1,500 or 1,750 lbs ............................................................................. 37.6 mpg 

2,000 lbs ............................................................................................ 33.7 mpg 

2,250 lbs ............................................................................................ 30.6 mpg 

2,500 lbs ............................................................................................ 28.0 mpg 

2,750 lbs ............................................................................................ 25.9 mpg 

3,000 lbs ............................................................................................ 24.1 mpg 

3,500 lbs ............................................................................................ 21.3 mpg 

4,000 lbs ............................................................................................ 19.0 mpg 

4,500 lbs ............................................................................................ 17.3 mpg 

5,000 lbs ............................................................................................ 15.8 mpg 

5,500 lbs ............................................................................................ 14.6 mpg 

6,000 lbs ............................................................................................ 13.6 mpg 

317

The 2000 model year city 

If vehicle inertia weight class is: fuel efficiency is: 

6,500 lbs ............................................................................................ 12.8 mpg 

7,000 to 8,500 lbs .............................................................................. 12.0 mpg.

(B) ADMINISTRATOR.—The term ‘‘Administrator’’ means 

the Administrator of the Environmental Protection Agency. 

(C) ENERGY STORAGE DEVICE.—The term ‘‘energy storage 

device’’ means an onboard rechargeable energy storage system or similar storage device. 

(D) FUEL EFFICIENCY.—The term ‘‘fuel efficiency’’ means 

the percentage increased fuel efficiency specified in table 1 

in paragraph (2)(C) over the average 2000 model year city 

fuel efficiency of vehicles in the same weight class. 

(E) MAXIMUM AVAILABLE POWER.—The term ‘‘maximum 

available power’’, with respect to a new qualified hybrid 

motor vehicle that is a passenger vehicle or light truck, 

means the quotient obtained by dividing—

(i) the maximum power available from the electrical 

storage device of the new qualified hybrid motor vehicle, during a standard 10-second pulse power or equivalent test; by 

(ii) the sum of—

(I) the maximum power described in clause (i); 

and 

(II) the net power of the internal combustion or 

heat engine, as determined in accordance with 

standards established by the Society of Automobile 

Engineers. 

(F) MOTOR VEHICLE.—The term ‘‘motor vehicle’’ has the 

meaning given the term in section 216 of the Clean Air Act 

(42 U.S.C. 7550). 

(G) NEW QUALIFIED HYBRID MOTOR VEHICLE.—The term 

‘‘new qualified hybrid motor vehicle’’ means a motor vehicle 

that—

(i) draws propulsion energy from both—

(I) an internal combustion engine (or heat engine 

that uses combustible fuel); and

(II) an energy storage device; 

(ii) in the case of a passenger automobile or light 

truck—

(I) in the case of a 2001 or later model vehicle, 

receives a certificate of conformity under the Clean 

Air Act (42 U.S.C. 7401 et seq.) and produces 

emissions at a level that is at or below the standard established by a qualifying California standard described in section 243(e)(2) of the Clean Air 

Act (42 U.S.C. 7583(e)(2)) for that make and model 

year; and 

(II) in the case of a 2004 or later model vehicle, 

is certified by the Administrator as producing 

emissions at a level that is at or below the level established for Bin 5 vehicles in the Tier 2 regulations promulgated by the Administrator under secVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00321 Fmt 6604 Sfmt 6603 E:\HR\OC\SR043.XXX SR043
318

tion 202(i) of the Clean Air Act (42 U.S.C. 7521(i)) 

for that make and model year vehicle; and 

(iii) employs a vehicle braking system that recovers 

waste energy to charge an energy storage device. 

(H) VEHICLE INERTIA WEIGHT CLASS.—The term ‘‘vehicle 

inertia weight class’’ has the meaning given the term in regulations promulgated by the Administrator for purposes of 

the administration of title II of the Clean Air Act (42 

U.S.C. 7521 et seq.). 

(2) ALLOCATION.— (A) IN GENERAL.—The Secretary shall allocate a partial 

credit to a fleet or covered person under this title if the fleet 

or person acquires a new qualified hybrid motor vehicle 

that is eligible to receive a credit under each of the tables 

in subparagraph (C). 

(B) AMOUNT.—The amount of a partial credit allocated 

under subparagraph (A) for a vehicle described in that subparagraph shall be equal to the sum of—

(i) the partial credits determined under table 1 in 

subparagraph (C); and 

(ii) the partial credits determined under table 2 in 

subparagraph (C). 

(C) TABLES.—The tables referred to in subparagraphs (A) 

and (B) are as follows:

Table 1 

Partial credit for increased fuel efficiency: Amount of credit: 

At least 125% but less than 150% of 2000 model year city fuel 

efficiency.

0.14 

At least 150% but less than 175% of 2000 model year city fuel 

efficiency.

0.21 

At least 175% but less than 200% of 2000 model year city fuel 

efficiency.

0.28 

At least 200% but less than 225% of 2000 model year city fuel 

efficiency.

0.35 

At least 225% but less than 250% of 2000 model year city fuel 

efficiency.

0.50. 

Table 2 

Partial credit for ‘‘Maximum Available Power’’: Amount of credit: 

At least 5% but less than 10% ......................................................... 0.125 

At least 10% but less than 20% ....................................................... 0.250 

At least 20% but less than 30% ....................................................... 0.375 

At least 30% or more ........................................................................ 0.500.

(D) USE OF CREDITS.—At the request of a fleet or covered 

person allocated a credit under this subsection, the Secretary shall, for the year in which the acquisition of the 

qualified hybrid motor vehicle is made, treat that credit as 

the acquisition of alternative fueled vehicle that the fleet or 

covered person is required to acquire under this title. 

(3) REGULATIONS.—The Secretary shall promulgate regulations under which any Federal fleet that acquires a new qualified hybrid motor vehicle will receive partial credits determined 

under the tables contained in paragraph (2)(C) for purposes of 

meeting the requirements of section 303. 

(q) CREDIT FOR SUBSTANTIAL CONTRIBUTION TOWARDS USE OF

DEDICATED VEHICLES IN NONCOVERED FLEETS.—

319

(1) DEFINITIONS.—In this subsection: 

(A) DEDICATED VEHICLE.—The term ‘‘dedicated vehicle’’

includes—

(i) a light, medium, or heavy duty vehicle; and 

(ii) a neighborhood electric vehicle. 

(B) MEDIUM OR HEAVY DUTY VEHICLE.—

The term ‘‘medium or heavy duty vehicle’’ includes a 

vehicle that—

(i) operates solely on alternative fuel; and 

(ii)(I) in the case of a medium duty vehicle, has a 

gross vehicle weight rating of more than 8,500 pounds 

but not more than 14,000 pounds; or 

(II) in the case of a heavy duty vehicle, has a gross 

vehicle weight rating of more than 14,000 pounds. 

(C) SUBSTANTIAL CONTRIBUTION.—The term ‘‘substantial 

contribution’’ (equal to 1 full credit) means not less than 

$15,000 in cash or in kind services, as determined by the 

Secretary. 

(2) ISSUANCE OF CREDITS.—The Secretary shall issue a credit 

to a fleet or covered person under this title if the fleet or person 

makes a substantial contribution toward the acquisition and 

use of dedicated vehicles by a person that owns, operates, leases, 

or otherwise controls a fleet that is not covered by this title. 

(3) MULTIPLE CREDITS FOR MEDIUM AND HEAVY DUTY DEDICATED VEHICLES.—The Secretary shall issue 2 full credits to a 

fleet or covered person under this title if the fleet or person acquires a medium or heavy duty dedicated vehicle. 

(4) USE OF CREDITS.—At the request of a fleet or covered person allocated a credit under this subsection, the Secretary shall, 

for the year in which the acquisition of the dedicated vehicle is 

made, treat that credit as the acquisition of 1 alternative fueled 

vehicle that the fleet or covered person is required to acquire 

under this title. 

(5) LIMITATION.—Per vehicle credits acquired under this subsection shall not exceed the per vehicle credits allowed under 

this section to a fleet for qualifying vehicles in each of the 

weight categories (light, medium, or heavy duty). 

(r) CREDIT FOR SUBSTANTIAL INVESTMENT IN ALTERNATIVE FUEL

INFRASTRUCTURE.—

(1) DEFINITIONS.—In this section, the term ‘‘qualifying infrastructure’’ means—

(A) equipment required to refuel or recharge alternative 

fueled vehicles; 

(B) facilities or equipment required to maintain, repair, 

or operate alternative fueled vehicles; 

(C) training programs, educational materials, or other 

activities necessary to provide information regarding the 

operation, maintenance, or benefits associated with alternative fueled vehicles; and 

(D) such other activities the Secretary considers to constitute an appropriate expenditure in support of the operation, maintenance, or further widespread adoption of or 

utilization of alternative fueled vehicles. 

320

(2) ISSUANCE OF CREDITS.—The Secretary shall issue a credit 

to a fleet or covered person under this title for investment in 

qualifying infrastructure if the qualifying infrastructure is open 

to the general public during regular business hours. 

(3) AMOUNT.—For the purposes of credits under this subsection—

(A) 1 credit shall be equal to a minimum investment of $25, 000 in cash or in kind services, as determined by the 

Secretary; and 

(B) except in the case of a Federal or State fleet, no part 

of the investment may be provided by Federal or State 

funds. 

(4) USE OF CREDITS.—At the request of a fleet or covered person allocated a credit under this subsection, the Secretary shall, 

for the year in which the investment is made, treat that credit 

as the acquisition of 1 alternative fueled vehicle that the fleet 

or covered person is required to acquire under this title. 

* * * * * * *

SEC. 508. CREDITS.

* * * * * * *

(e) CREDIT FOR PURCHASE OF MEDIUM AND HEAVY DUTY DEDI- CATED VEHICLES.— (1) DEFINITIONS.—In this subsection: 

(A) The term ‘‘medium duty dedicated vehicle’’ means a 

dedicated vehicle that has a gross vehicle weight rating of 

more than 8,500 pounds but not more than 14,000 pounds. 

(B) The term ‘‘heavy duty dedicated vehicle’’ means a 

dedicated vehicle that has a gross vehicle weight rating of 

more than 14,000 pounds. 

(2) CREDITS FOR MEDIUM DUTY VEHICLES.—The Secretary 

shall issue 2 full credits to a fleet or covered person under this 

title, if the fleet or covered person acquires a medium duty dedicated vehicle. 

(3) CREDITS FOR HEAVY DUTY VEHICLES.—The Secretary shall 

issue 3 full credits to a fleet or covered person under this title, 

if the fleet or covered person acquires a heavy duty dedicated 

vehicle. 

(4) USE OF CREDITS.—At the request of a fleet or covered person allocated a credit under this subsection, the Secretary shall, 

for the year in which the acquisition of the dedicated vehicle is 

made, treat that credit as the acquisition of 1 alternative fueled 

vehicle that the fleet or covered person is required to acquire 

under this title. 

(f) CREDIT FOR INVESTMENT IN ALTERNATIVE FUEL INFRASTRUCTURE.—

(1) DEFINITIONS.—In this subsection, the term ‘‘qualifying infrastructure’’ means—

(A) equipment required to refuel or recharge alternative 

fueled vehicles; 

(B) facilities or equipment required to maintain, repair, 

or operate alternative fueled vehicles; 

(C) such other activities the Secretary considers to constitute an appropriate expenditure in support of the operVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00324 Fmt 6604 Sfmt 6603 E:\HR\OC\SR043.XXX SR043
321

ation, maintenance, or further widespread adoption of or 

utilization of alternative fueled vehicles. 

(2) ISSUANCE OF CREDITS.—The Secretary shall issue a credit 

to a fleet or covered person under this title for investment in 

qualifying infrastructure if the qualifying infrastructure is open 

to the general public during regular business hours. 

(3) AMOUNT.—For the purposes of credits under this subsection—

(A) 1 credit shall be equal to a minimum investment of $25,000 in cash or equivalent expenditure, as determined 

by the Secretary; and 

(B) except in the case of a Federal or State fleet, no part 

of the investment may be provided by Federal or State 

funds. 

(4) USE OF CREDITS.—At the request of a fleet or covered person allocated a credit under this subsection, the Secretary shall, 

for the year in which the investment is made, treat that credit 

as the acquisition of 1 alternative fueled vehicle that the fleet 

or covered person is required to acquire under this title. 

* * * * * * * 

SEC. 515. ALTERNATIVE COMPLIANCE. 

(a) APPLICATION FOR WAIVER.—Any covered person subject to the 

requirements of section 501 and any State subject to the requirement of section 507(o) may petition the Secretary for a waiver of the 

applicable requirements of section 501 or 507(o). 

(b) GRANT OF WAIVER.—The Secretary may grant a waiver of the 

requirements of section 501 or 507(o) upon a showing that the fleet 

owned, operated, leased, or otherwise controlled by the State or covered person — (1) will achieve a reduction in its annual consumption of petroleum fuels equal to the reduction in consumption of petroleum that would result from compliance with section 501 or 

507(o); and 

(2) is in compliance with all applicable vehicle emission 

standards established by the Administrator under the Clean Air 

Act. 

(c) REVOCATION OF WAIVER.—The Secretary shall revoke any 

waiver granted under this section if the State or covered person fails 

to comply with the requirements of subsection (b).

* * * * * * *

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) of this section. 

Payments under this section may only be made upon receipt by the 

Secretary of an incentive payment application which establishes 

that the applicant is eligible to receive such payment øand which 

satisfies such other requirements as the Secretary deems necessary. Such application shall be in such form, and shall be subVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00325 Fmt 6604 Sfmt 6602 E:\HR\OC\SR043.XXX SR043
322

mitted at such time, as the Secretary shall establish.¿. If there are 

insufficient appropriations to make full payment for electric production from all qualified renewable energy facilities in any given year, 

the Secretary shall assign 60 percent of appropriated funds for that 

year to facilities that use solar, wind, geothermal, or closed loop 

(dedicated energy crops) biomass technologies to generate electricity, 

and assign the remaining 40 percent to other projects. The Secretary 

may, after transmitting to Congress an explanation of the reasons 

therefor, alter the percentage requirements of the preceding sentence.

(b) QUALIFIED RENEWABLE ENERGY FACILITY.—For purposes of 

this section, a qualified renewable energy facility is a facility which 

is owned by a State or any political subdivision of a State (or an 

agency, authority, or instrumentality of øa State or a political subdivision), by any corporation or association which is wholly owned, 

directly or indirectly, by one or more of the foregoing, or by a nonprofit electrical cooperative¿ a not-for-profit electric cooperative, a 

public utility described in section 115 of the Internal Revenue Code 

of 1986, a State, Commonwealth, territory, or possession of the 

United States or the District of Columbia, or a political subdivision 

thereof, or an Indian tribal government of subdivision thereof, and 

which generates electric energy for sale in, or affecting, interstate 

commerce using solar, wind, biomass, landfill gas, or geothermal 

energy, except that— (1) the burning of municipal solid waste shall not be treated 

as using biomass energy; and 

(2) geothermal energy shall not include energy produced 

from a dry steam geothermal reservoir which has— (A) no mobile liquid in its natural state; 

(B) steam quality of 95 percent water; and 

(C) an enthalpy for the total produced fluid greater than 

or equal to 1200 Btu/lb (British thermal units per pound). 

(c) ELIGIBILITY WINDOW.—Payments may be made under this 

section only for electricity generated from a qualified renewable energy facility first used øduring the 10-fiscal year period beginning 

with the first full fiscal year occurring after the date of enactment 

of this section¿ after October 1, 2003, and 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 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) of this 

section. For any facility, the amount of such payment shall be 

1.5 cents per kilowatt hour, adjusted as provided in paragraph 

(2). 

(2) ADJUSTMENTS.—The amount of the payment made to any 

person under this subsection as provided in paragraph (1) shall 

be adjusted for inflation for each fiscal year beginning after 

calendar year 1993 in the same manner as provided in the proVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00326 Fmt 6604 Sfmt 6602 E:\HR\OC\SR043.XXX SR043
323

visions of section 29(d)(2)(B) of title 26, except that in applying 

such provisions the calendar year 1993 shall be substituted for 

calendar year 1979. 

(f) SUNSET.—No payment may be made under this section to any 

facility after øthe expiration of the 20-fiscal year period beginning 

with the first full fiscal year occurring after the date of 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. 

ø(g) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated to the Secretary for fiscal years 1993, 1994, and 

1995 such sums as may be necessary to carry out the purposes of 

this section.¿

(g) AUTHORIZATION OF APPROPRIATIONS.—

(1) IN GENERAL.—Subject to paragraph (2), there are authorized to be appropriated such sums as may be necessary to carry 

out this section for fiscal years 2003 through 2023. 

(2) AVAILABILITY OF FUNDS.—funds made available under 

paragraph (1) shall remain available until expended. 

* * * * * * *

TITLE XXVI—INDIAN ENERGY RESOURCES 

øSEC. 2601. DEFINITIONS. 

øFor purposes of this title—

ø(1) the term ‘‘Indian tribe’’ means any Indian tribe, band, 

nation, or other organized group or community, including any 

Alaska Native village or regional or village corporation as defined in or established pursuant to the Alaska Native Claims 

Settlement Act (43 U.S.C. 1601 et seq.), which is recognized as 

eligible for the special programs and services provided by the 

United States to Indians because of their status as Indians; 

and 

ø(2) the term ‘‘Indian reservation’’ includes Indian reservations; public domain Indian allotments; former Indian reservations in Oklahoma; land held by incorporated Native groups, 

regional corporations, and village corporations under the provisions of the Alaska Native Claims Settlement Act (43 U.S.C. 

1601 et seq.); and dependent Indian communities within the 

borders of the United States whether within the original or 

subsequently acquired territory thereof, and whether within or 

without the limits of a State. 

øSEC. 2602. TRIBAL CONSULTATION. 

øIn implementing the provisions of this Act, the Secretary of Energy shall involve and consult with Indian tribes to the maximum 

extent possible and where appropriate and shall do so in a manner 

that is consistent with the Federal trust and the Government-toGovernment relationships between Indian tribes and the Federal 

Government. 

324

øSEC. 2603. PROMOTING ENERGY RESOURCE DEVELOPMENT AND ENERGY VERTICAL INTEGRATION ON INDIAN RESERVATIONS. 

ø(a) DEMONSTRATION PROGRAMS.—The Secretary of Energy, in 

consultation with the Secretary of the Interior, shall establish and 

implement a demonstration program to assist Indian tribes in pursuing energy self-sufficiency and to promote the development of a 

vertically integrated energy industry on Indian reservations, in 

order to increase development of the substantial energy resources 

located on such Indian reservations. Such program shall include, 

but not be limited to, the following components: 

ø(1) The Secretary shall provide development grants to Indian tribes or to joint ventures which are 51 percent or more 

controlled by an Indian tribe to assist Indian tribes in obtaining the managerial and technical capability needed to develop 

the energy resources on Indian reservations. Such grants shall 

include provisions for management training for tribal or village 

members, improving the technical capacity of the Indian tribe, 

and the reduction of tribal unemployment. Each grant shall be 

for a period of 3 years. 

ø(2) The Secretary shall provide grants, not to exceed 50 percent of the project costs, for vertical integration projects. For 

purposes of this paragraph, the term ‘‘vertical integration 

project’’ means a project that promotes the vertical integration 

of the energy resources on an Indian reservation, so that the 

energy resources are used or processed on such Indian reservation. Such term includes, but is not limited to, projects involving solar and wind energy, oil refineries, the generation and 

transmission of electricity, hydroelectricity, cogeneration, natural gas distribution, and clean, innovative uses of coal. 

ø(3) The Secretary shall provide technical assistance (and 

such other assistance as is appropriate) to Indian tribes for energy resource development and to promote the vertical integration of energy resources on Indian reservations. 

ø(b) LOW INTEREST LOANS.—

ø(1) IN GENERAL.—The Secretary shall establish a program 

for making low interest loans to Indian tribes. Such loans shall 

be used exclusively by Indian tribes in the promotion of energy 

resource development and vertical integration on Indian reservations. 

ø(2) TERMS.—The Secretary shall establish reasonable terms 

for loans made under this section which are to be used to carry 

out the purposes of this section. 

ø(c) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated— ø(1) $10,000,000 for each of the fiscal years 1994, 1995, 1996, 

and 1997 to carry out the purposes of subsection (a)(1); 

ø(2) $10,000,000 for each of the fiscal years 1994, 1995, 1996, 

and 1997 to carry out the purposes of subsection (a)(2); and 

ø(3) $10,000,000 for each of the fiscal years 1994, 1995, 1996, 

and 1997 to carry out the purposes of subsection (b). 

øSEC. 2604. INDIAN ENERGY RESOURCE REGULATION. 

ø(a) GRANTS.—The Secretary of the Interior is authorized to 

make annual grants to Indian tribes for the purpose of assisting InVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00328 Fmt 6604 Sfmt 6602 E:\HR\OC\SR043.XXX SR043
325

dian tribes in the development, administration, implementation, 

and enforcement of tribal laws and regulations governing the development of energy resources on Indian reservations. 

ø(b) PURPOSE.—The purposes for which funds provided under a 

grant awarded under subsection (a) may be used include, but are 

not limited to—

ø(1) the training and education of employees responsible for 

enforcing or monitoring compliance with Federal and tribal 

laws and regulations; 

ø(2) the development of tribal inventories of energy resources; 

ø(3) the development of tribal laws and regulations; 

ø(4) the development of tribal legal and governmental infras 

ructure to regulate environmental quality pursuant to Federal 

and tribal laws; and 

ø(5) the enforcement and monitoring of Federal and tribal 

laws and regulations. 

ø(c) OTHER ASSISTANCE.—The Secretary of the Interior and the 

Secretary of Energy shall cooperate with and provide assistance to 

Indian tribes for the purpose of assisting Indian tribes in the development, administration, and enforcement of tribal programs. Such 

cooperation and assistance shall include the following: 

ø(1) Technical assistance and training, including the provi 

sion of necessary circulars and training materials. 

ø(2) Assistance in the preparation and maintenance of a continuing inventory of information on tribal energy resources and 

tribal operations. In providing assistance under this para 

graph, Federal departments and agencies shall make available 

to Indian tribes all relevant data concerning tribal energy resource development consistent with applicable laws regarding 

disclosure of proprietary and confidential information. 

ø(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated $10,000,000 for each of the fiscal years 1994, 

1995, 1996, and 1997 to carry out the purposes of this section. 

øSEC. 2605. INDIAN ENERGY RESOURCE COMMISSION. 

ø(a) ESTABLISHMENT.—There is hereby established the Indian 

Energy Resource Commission (hereafter in this section referred Ito 

as the ‘‘Commission’’). 

ø(b) MEMBERSHIP.—The Commission shall consist of—

ø(1) 8 members appointed by the Secretary of the Interior 

from recommendations submitted by Indian tribes with developable energy resources, at least 4 of whom shall be elected 

tribal leaders; 

ø(2) 3 members appointed by the Secretary of the Interior 

from recommendations submitted by the Governors of States 

that have Indian reservations with developable energy resources; 

ø(3) 2 members appointed by the Secretary of the Interior 

from among individuals in the private sector with expertise in 

tribal and State taxation of energy resources; 

ø(4) 2 members appointed by the Secretary of the Interior 

from individuals with expertise in oil and gas royalty management administration, including auditing and accounting; 

326

ø(5) 2 members appointed by the Secretary of the Interior 

from individuals in the private sector with expertise in energy 

development; 

ø(6) 1 member appointed by the Secretary of the Interior 

from recommendations submitted by National environmental 

organizations; 

ø(7) the Secretary of the Interior, or his designee; and 

ø(8) the Secretary of Energy, or his designee. 

ø(c) APPOINTMENTS.—Members of the Commission shall be appointed not later than 60 days after the date of the enactment of 

this title. 

ø(d) VACANCIES.—A vacancy in the Commission shall be filled in 

the same manner as the original appointment was made. A vacancy in the Commission shall not affect the powers of the Commission. 

ø(e) CHAIRPERSON.—The members of the Commission shall elect 

a Chairperson from among the members of the Commission. 

ø(f) QUORUM.—Eleven members of the Commission shall constitute a quorum, but a lesser number may hold hearings. 

ø(g) ORGANIZATIONAL MEETING.—The Commission shall hold an 

organizational meeting to establish the rules and procedures of the 

Commission not later than 30 days after the members are first appointed to the Commission. 

ø(h) COMPENSATION.—Each member of the Commission who is 

not an officer or employee of the United States shall be compensated at a rate established by the Commission, not to exceed 

the rate of basic pay payable for level IV of the Executive Schedule 

under section 5315 of title.5, United States Code, for each day (including travel time) during which such member is engaged in the 

actual performance of duties as a member of the Commission. Each 

member of the Commission who is an officer or employee of the 

United States shall receive no additional compensation. 

ø(i) TRAVEL.—While away from their homes or regular places of 

business in the performance of duties for the Commission, all members of the Commission shall be allowed travel expenses, including 

per diem in lieu of subsistence, at a rate established by the Commission not to exceed the rates authorized for employees under sections 5702 and 5703 of title 5, United States Code. 

ø(j) COMMISSION STAFF.— ø(1) EXECUTIVE DIRECTOR.—The Commission shall appoint 

an Executive Director who shall be compensated at a rate established by the Commission not to exceed the rate of basic 

pay payable for level V of the Executive Schedule under section 

5316 of title 5, United States Code. 

ø(2) ADDITIONAL PERSONNEL.—With the approval of the Commission, the Executive Director may appoint and fix the compensation of such additional personnel as the Executive Director considers necessary to carry out the duties of the Commission. Such appointments shall be made in accordance with the 

provisions of title 5, United States Code, governing appointments in the competitive service, but at rates not to exceed the 

rate of basic pay payable for level 15 of the General Schedule. 

ø(3) EXPERTS AND CONSULTANTS.—Subject to such rules as 

may be issued by the Commission, the Chairperson may proVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00330 Fmt 6604 Sfmt 6602 E:\HR\OC\SR043.XXX SR043
327

cure temporary and intermittent services of experts and consultants to the same extent as is authorized by section 3109 of 

title 5, United States Code, but at rates not to exceed $200 a 

day for individuals.

ø(4) PERSONNEL DETAIL AUTHORIZED.—Upon the request of 

the Chairperson, the head of any Federal agency is authorized 

to detail, on a reimbursable basis, any of the personnel of such 

agency to the Commission to assist the Commission in carrying 

out its duties under this title. Such detail shall be without 

interruption or loss of civil service status or privilege. 

ø(k) DUTIES OF THE COMMISSION.—The Commission shall—

ø(1) Develop proposals to address the dual taxation by Indian tribes and States of the extraction of mineral resources on 

Indian reservations; 

ø(2) make recommendations to improve the management, administration, accounting and auditing of royalties associated 

with the production of oil and gas on Indian reservations; 

ø(3) develop alternatives for the collection and distribution of 

royalties associated with production of oil and gas on Indian 

reservations; 

ø(4) develop proposals on incentives to foster the development of energy resources on Indian reservations; 

ø(5) identify barriers or obstacles to the development of energy resources on Indian reservations, and make recommendations designed to foster the development of energy resources on 

Indian reservations and promote economic development; 

ø(6) develop proposals for the promotion of vertical integration of the development of energy resources on Indian reservations; and 

ø(7) develop proposals on taxation incentives to foster the development of energy resources on Indian reservations including, but not limited to, investment tax credits and enterprise 

zone credits. 

ø(l) POWERS OF THE COMMISSION.—The powers of the Commission shall include the following: 

ø(1) For the purpose of carrying out its duties under this section, the Commission may hold hearings, take testimony, and 

receive evidence at such times and places as the Commission 

considers appropriate. The Commission may administer oaths 

or affirmations to witnesses appearing before the Commission. 

ø(2) Any member or employee of the Commission may, if authorized by the Commission, take any action which the Commission is authorized to take by this section. 

ø(3) The Commission may secure directly from any Federal 

agency such information as may be necessary to enable the 

Commission to carry out its duties under this section. 

ø(m) COMMISSION REPORT.—

ø(1) IN GENERAL.—The Commission shall, within 12 months 

after funds are made available to carry out this section, prepare and transmit to the President, the Committee on Interior 

and Insular Affairs of the House of Representatives, the Select 

Committee on Indian Affairs: of the Senate, and the Committee on Energy and Natural Resources of the Senate, a reVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00331 Fmt 6604 Sfmt 6602 E:\HR\OC\SR043.XXX SR043
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port containing the recommendations and proposals specified 

in subsection (k). 

ø(2) REVIEW AND COMMENT.—Prior to submission of the report required under this section, the Chairman shall circulate 

a draft of the report to Indian tribes and States that have Indian reservations with developable energy resources and other 

interested tribes and States for review and comment. 

ø(n) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated to the Commission $1,000,000 to carry out this 

section. Such sum shall remain available, without fiscal year limitation, until expended. 

ø(o) TERMINATION.—The Commission shall terminate 30 days 

after submitting the final report required by subsection (m). 

øSEC. 2606. TRIBAL GOVERNMENT ENERGY ASSISTANCE PROGRAM. 

ø(a) FINANCIAL ASSISTANCE.—The Secretary may grant financial 

assistance to Indian tribal governments, or private sector persons 

working in cooperation with Indian tribal governments, to carry 

out projects to evaluate the feasibility of, develop options for, and 

encourage the adoption of energy efficiency and renewable energy 

projects on Indian reservations. Such grants may include the costs 

of technical assistance in resource assessment, feasibility analysis, 

technology transfer, and the resolution of other technical, financial, 

or management issues identified by the applicants for such grants. 

ø(b) CONDITIONS.—Any applicant for financial assistance under 

this section must evidence coordination and cooperation with, and 

support from, local educational institutions and the affected local 

energy institutions. 

ø(c) CONSIDERATIONS.—In determining the amount of financial 

assistance to be provided for a proposed project, the Secretary shall 

consider—

ø(1) the extent of involvement of local educational institutions and local energy institutions; 

ø(2) the ease and costs of operation and maintenance of any 

project contemplated as a part of the project; 

ø(3) whether the measure will contribute significantly to the 

development, or the quality of the environment, of the affected 

Indian reservations; and 

ø(4) any other factors which the Secretary may determine to 

be relevant to a particular project. 

ø(d) COST-SHARE.—With the exception of grants awarded for the 

purpose of feasibility studies, the Secretary shall require at least 

20 percent of the costs of any project under this section to be provided from non-Federal sources, unless the grant recipient is a forprofit private sector institution, in which case the Secretary shall 

require at least 50 percent of the costs of any project to be provided 

from non-Federal sources. 

ø(e) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to appropriated such sums as are necessary for the development 

and implementation of the program established by this section.¿

329

TITLE XXVI—INDIAN ENERGY 

SEC. 2601. DEFINITIONS. 

For purposes of this title: 

(1) The term ‘‘Director’’ means the Director of the Office of Indian Energy Policy and Programs. 

(2) The term ‘‘Indian land’’ means 

(A) any land located within the boundaries of an Indian 

reservation, pueblo, or rancheria; 

(B) any land not located within the boundaries of an Indian reservation, pueblo, or rancheria, the title to which is 

held—(i) in trust by the United States for the benefit of an 

Indian tribe; 

(ii) by an Indian tribe, subject to restriction by the 

United States against alienation; or 

(iii) by a dependent Indian community; and 

(C) land conveyed to a Native Corporation under the 

Alaska Native Claims Settlement Act (43 U.S.C. 1601 et 

seq.). 

(3) The term ‘‘Indian reservation’’ includes— (A) an Indian reservation in existence in any State or 

States as of the date of enactment of this paragraph; 

(B) a public domain Indian allotment; 

(C) a former reservation in the State of Oklahoma; 

(D) a parcel of land owned by a Native Corporation 

under the Alaska Native Claims Settlement Act (43 U.S.C. 

1601 et seq.); and 

(E) a dependent Indian community located within the 

borders of the United States, regardless of whether the community is located— (i) on original or acquired territory of the community; or 

(ii) within or outside the boundaries of any particular State. 

(4) The term ‘‘Indian tribe’’ has the meaning given the term 

in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b). 

(5) The term ‘‘Native Corporation’’ has the meaning given the 

term in section 3 of the Alaska Native Claims Settlement Act 

(43 U.S. C. 1602). 

(6) The term ‘‘organization’’ means a partnership, joint venture, limited liability company, or other unincorporated association or entity that is established to develop Indian energy resources. 

(7) The term ‘‘Program’’ means the Indian energy resource development program established under section 2602(a). 

(8) The term ‘‘Secretary’’ means the Secretary of the Interior. 

(9) The term ‘‘tribal consortium’’ means an organization that 

consists of 2 or more entities, at least 1 of which is an Indian 

tribe. 

(10) The term ‘‘tribal land’’ means any land or interests in 

land owned by any Indian tribe, band, nation, pueblo, community, rancheria, colony or other group, title to which is held in 

330

trust by the United States or which is subject to a restriction 

against alienation imposed by the United States. 

(11) The term ‘‘vertical integration of energy resources’’ means 

any project or activity that promotes the location and operation 

of a facility (including any pipeline, gathering system, transportation system or facility, or electric transmission facility), on or 

near Indian land to process, refine, generate electricity from, or 

otherwise develop energy resources on, Indian land. 

SEC. 2602. INDIAN TRIBAL ENERGY RESOURCE DEVELOPMENT. 

(a) IN GENERAL.—To assist Indian tribes in the development of 

energy resources and further the goal of Indian self-determination, 

the Secretary shall establish and implement an Indian energy resource development program to assist Indian tribes and tribal consortia in achieving the purposes of this title. 

(b) GRANTS AND LOANS.—In carrying out the Program, the Secretary shall—

(1) provide development grants to Indian tribes and tribal 

consortia for use in developing or obtaining the managerial and 

technical capacity needed to develop energy resources on Indian 

land; 

(2) provide grants to Indian tribes and tribal consortia for 

use in carrying out projects to promote the vertical integration 

of energy resources, and to process, use, or develop those energy 

resources, on Indian land; and 

(3) provide low-interest loans to Indian tribes and tribal consortia for use in the promotion of energy resource development 

and vertical integration or energy resources on Indian land. 

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

be appropriated to carry out this section such sums as are necessary 

for each of fiscal years 2004 through 2014. 

SEC. 2603. INDIAN TRIBAL ENERGY RESOURCE REGULATION. 

(a) GRANTS.—The Secretary may provide to Indian tribes and 

tribal consortia, on an annual basis, grants for use in developing, 

administering, implementing, and enforcing tribal laws (including 

regulations) governing the development and management of energy 

resources on Indian land. 

(b) USE OF FUNDS.—Funds from a grant provided under this section may be used by an Indian tribe or tribal consortium for—

(1) the development of a tribal energy resource inventory or 

tribal energy resource on Indian land; 

(2) the development of a feasibility study or other report necessary to the development of energy resources on Indian land; 

(3) the development and enforcement of tribal laws and the 

development of technical infrastructure to protect the environment under applicable law; or 

(4) the training of employees that—

(A) are engaged in the development of energy resources on 

Indian land; or 

(B) are responsible for protecting the environment. 

(c) OTHER ASSISTANCE.—To the maximum extent practicable, the 

Secretary and the Secretary of Energy shall make available to Indian tribes and tribal consortia scientific and technical data for use 

331

in the development and management of energy resources on Indian 

land. 

SEC. 2604. LEASES, BUSINESS AGREEMENTS, AND RIGHTS-OF-WAY INVOLVING ENERGY DEVELOPMENT OR TRANSMISSION. 

(a) LEASES AND AGREEMENTS.—Subject to the provisions of this 

section—

(1) an Indian tribe may, at its discretion, enter into a lease 

or business agreement for the purpose of energy development, 

including a lease or business agreement for—

(A) exploration for, extraction of, processing of, or other 

development of energy resources on tribal land; and 

(B) construction or operation of an electric generation, 

transmission, or distribution facility located on tribal land; 

or a facility to process or refine energy resources developed 

on tribal land; and 

(2) a lease or business agreement described in paragraph (1) 

shall not require the approval of the Secretary under section 

2103 of the Revised Statutes (25 U.S.C. 81) or any other provision of law, if—

(A) the lease or business agreement is executed in accordance with a tribal energy resource agreement approved by 

the Secretary under subsection (e); 

(B) the term of the lease or business agreement does not 

exceed—

(i) 30 years; or 

(ii) in the case of a lease for the production of oil and 

gas resources, 10 years and as long thereafter as oil or 

gas is produced in paying quantities; and 

(C) the Indian tribe has entered into a tribal energy resource agreement with the Secretary, as described in subsection (e), relating to the development of energy resources 

on tribal land (including an annual trust asset evaluation 

of the activities of the Indian tribe conducted in accordance 

with the agreement). 

(b) RIGHTS-OF-WAY FOR PIPELINES OR ELECTRIC TRANSMISSION

OR DISTRIBUTION LINES.—An Indian tribe may grant a right-of-way 

over tribal land for a pipeline or an electric transmission or distribution line without specific approval by the Secretary if—

(1) the right-of-way is executed in accordance with a tribal 

energy resource agreement approved by the Secretary under 

subsection (e); 

(2) the term of the right-of-way does not exceed 30 years; 

(3) the pipeline or electric transmission or distribution line 

serves—

(A) an electric generation, transmission, or distribution 

facility located on tribal land; or 

(B) a facility located on tribal land that processes or refines energy resources developed on tribal land; and 

(4) the Indian tribe has entered into a tribal energy resource 

agreement with the Secretary, as described in subsection (e), relating to the development of energy resources on tribal land (including an annual trust asset evaluation of the activities of the 

Indian tribe conducted in accordance with the agreement. 

332

(c) RENEWALS.—A lease or business agreement entered into or a 

right-of-way granted by an Indian tribe under this section may be 

renewed at the discretion of the Indian tribe in accordance with this 

section. 

(d) VALIDITY.—No lease, business agreement, or right-of-way 

under this section shall be valid unless the lease, business agreement, or right-of-way is authorized in accordance with tribal energy 

resource agreements approved by the Secretary under subsection (e). 

(e) TRIBAL ENERGY RESOURCE AGREEMENTS.— (1) On promulgation of regulations under paragraph (9), an 

Indian tribe may submit to the Secretary for approval a tribal 

energy resource agreement governing leases, business agreements, and rights-of-way under this section. 

(2)(A) Not later than 180 days after the date on which the 

Secretary receives a tribal energy resource agreement submitted 

by an Indian tribe under paragraph (1) (or such later date as 

may be agreed to by the Secretary and the Indian tribe), the 

Secretary shall approve or disapprove the tribal energy resource 

agreement. 

(B) The Secretary shall approve a tribal energy resource 

agreement submitted under paragraph (1) if— (i) the Secretary determines that the Indian tribe has 

demonstrated that the Indian tribe has sufficient capacity 

to regulate the development of energy resources of the Indian tribe; and 

(ii) the tribal energy resource agreement includes provisions that, with respect to a lease, business agreement, or 

right-of-way under this section— (I) ensure the acquisition of necessary information 

from the applicant for the lease, business agreement, or 

right-of-way; 

(II) address the term of the lease or business agreement or the term of conveyance of the right-of-way; 

(III) address amendments and renewals; 

(IV) address consideration for the lease, business 

agreement, or right-of-way; 

(V) address technical or other relevant requirements; 

(VI) establish requirements for environmental review 

in accordance with subparagraph (C); 

(VII) ensure compliance with all applicable environmental laws; 

(VIII) identify final approval authority; 

(IX) provide for public notification of final approvals; 

(X) establish a process for consultation with any affected States concerning potential off-reservation impacts associated with the lease, business agreement, or 

right-of-way; and 

(XI) describe the remedies for breach of the lease, 

agreement, or right-of-way. 

(C) Tribal energy resource agreements submitted under paragraph (1) shall establish, and include provisions to ensure compliance with, an environmental review process that, with respect 

to a lease, business agreement, or right-of-way under this section, provides for—

333

(i) the identification and evaluation of all significant environmental impacts (as compared with a no-action alternative), including effects on cultural resources; 

(ii) the identification of proposed mitigation; 

(iii) a process for ensuring that the public is informed of 

and has an opportunity to comment on any proposed lease, 

business agreement, or right-of-way before tribal approval 

of the lease, business agreement, or right-of-way (or any 

amendment to or renewal of the lease, business agreement, 

or right-of-way); and 

(iv) sufficient administrative support and technical capability to carry out the environmental review process. 

(D) A tribal energy resource agreement negotiated between the 

Secretary and an Indian tribe in accordance with this subsection shall include— (i) provisions requiring the Secretary to conduct an annual trust asset evaluation to monitor the performance of 

the activities of the Indian tribe associated with the development of energy resources on tribal land by the Indian 

tribe; and 

(ii) in the case of a finding by the Secretary of imminent 

jeopardy to a physical trust asset, provisions authorizing 

the Secretary to reassume responsibility for activities associated with the development of energy resources on tribal 

land. 

(3) The Secretary shall provide notice and opportunity for 

public comment on tribal energy resource agreements submitted 

under paragraph (1). 

(4) If the Secretary disapproves a tribal energy resource 

agreement submitted by an Indian tribe under paragraph (1), 

the Secretary shall— (A) notify the Indian tribe in writing of the basis for the 

disapproval; 

(B) identify what changes or other actions are required to 

address the concerns of the Secretary; and 

(C) provide the Indian tribe with an opportunity to revise 

and resubmit the tribal energy resource agreement. 

(5) If an Indian tribe executes a lease or business agreement 

or grants a right-of-way in accordance with a tribal energy resource agreement approved under this subsection, the Indian 

tribe shall, in accordance with the process and requirements set 

forth in the Secretary’s regulations adopted pursuant to subsection (e)(9), provide to the Secretary—

(A) a copy of the lease, business agreement, or right-ofway document (including all amendments to and renewals 

of the document); and 

(B) in the case of a tribal energy resource agreement or 

a lease, business agreement, or right-of-way that permits 

payment to be made directly to the Indian tribe, documentation of those payments sufficient to enable the Secretary to discharge the trust responsibility of the United 

States as appropriate under applicable law. 

(6) The Secretary shall continue to have a trust obligation to 

ensure that the rights of an Indian tribe are protected in the 

334

event of a violation of the terms of any lease, business agreement or right-of-way by any other party to the lease, business 

agreement, or right-of-way. 

(7)(A) The United States shall not be liable for any loss or injury sustained by any party (including an Indian tribe or any 

member of an Indian tribe) to a lease, business agreement, or 

right-of-way executed in accordance with tribal energy resource 

agreements approved under this subsection. 

(B) On approval of a tribal energy resource agreement of an 

Indian tribe under paragraph (1), the Indian tribe shall be 

stopped from asserting a claim against the United States on the 

ground that Secretary should not have approved the Tribal energy resource agreement. 

(8)(A) In this paragraph, the term ‘interested party’ means 

any person or entity the interests of which have sustained or 

will sustain a significant adverse impact as a result of the failure of an Indian tribe to comply with a tribal energy resource 

agreement of the Indian tribe approved by the Secretary under 

paragraph (2). 

(B) After exhaustion of tribal remedies, and in accordance 

with the process and requirements set forth in regulations 

adopted by the Secretary pursuant to subsection (e)(9), an interested party may submit to the Secretary a petition to review 

compliance of an Indian tribe with a tribal energy resource 

agreement of the Indian tribe approved under this subsection. 

(C) If the Secretary determines that an Indian tribe is not in 

compliance with a tribal energy resource agreement approved 

under this subsection, the Secretary shall take such action as 

is necessary to compel compliance, including—

(i) suspending a lease, business agreement, or right-ofway under this section until an Indian tribe is in compliance with the approved tribal energy resource agreement; 

and 

(ii) rescinding approval of the tribal energy resource 

agreement and reassuming the responsibility for approval 

of any future leases, business agreements, or rights-of-way 

associated with an energy pipeline or distribution line described in subsections (a) and (b). 

(D) If the Secretary seeks to compel compliance of an Indian 

tribe with an approved tribal energy resource agreement under 

subparagraph (C)(ii), the Secretary shall—

(i) make a written determination that describes the manner in which the tribal energy resource agreement has been 

violated; 

(ii) provide the Indian tribe with a written notice of the 

violation together with the written determination; and 

(iii) before taking any action described in subparagraph 

(C)(ii) or seeking any other remedy, provide the Indian tribe 

with a hearing and a reasonable opportunity to attain compliance with the tribal energy resource agreement. 

(E)(i) An Indian tribe described in subparagraph (D) shall retain all rights to appeal as provided in regulations promulgated 

by the Secretary. 

335

(ii) The decision of the Secretary with respect to an appeal described in clause (i), after any agency appeal provided for by 

regulation, shall constitute a final agency action.

(9) Not later than 180 days after the date of enactment of the 

Indian Tribal Energy Development and Self-Determination Act 

of 2003, the Secretary shall promulgate regulations that implement the provisions of this subsection, including—

(A) criteria to be used in determining the capacity of an 

Indian tribe described in paragraph (2)(B)(i), including the 

experience of the Indian tribe in managing natural resources and financial and administrative resources available for use by the Indian tribe in implementing the approved tribal energy resource agreement of the Indian tribe; 

and 

(B) a process and requirements in accordance with which 

an Indian tribe may—

(i) voluntarily rescind an approved tribal energy resource agreement approved by the Secretary under this 

subsection; and 

(ii) return to the Secretary the responsibility to approve any future leases, business agreements, and 

rights-of-way described in this subsection. 

(f) NO EFFECT ON OTHER LAW.—Nothing in this section affects 

the application of—

(1) any Federal environmental law; 

(2) the Surface Mining Control and Reclamation Act of 1977 

(30 U.S.C. 1201 et seq.); or 

(3) except as otherwise provided in this title, the Indian Mineral Development Act of 1982 (25 US. C. 2101 et seq.). 

SEC. 2605. FEDERAL POWER MARKETING ADMINISTRATIONS. 

(a) DEFINITIONS.—In this section: 

(1) The term ‘‘Administrator’’ means the Administrator of the 

Bonneville Power Administration and the Administrator of the 

Western Area Power Administration. 

(2) The term ‘‘power marketing administration ‘‘ means—

(A) the Bonneville Power Administration; 

(B) the Western Area Power Administration; and 

(C) any other power administration the power allocation 

of which is used by or for the benefit of an Indian tribe located in the service area of the administration. 

(b) ENCOURAGEMENT OF INDIAN TRIBAL ENERGY DEVELOPMENT.—

Each Administrator shall encourage Indian tribal energy development by taking such actions as are appropriate, including administration of programs of the Bonneville Power Administration and the 

Western Area Power Administration, in accordance with this section. 

(c) ACTION BY THE ADMINISTRATOR.—In carrying out this section, 

and in accordance with existing law—

(1) each Administrator shall consider the unique relationship 

that exists between the United States and Indian tribes. 

(2) power allocations from the Western Area Power Administration to Indian tribes may be used to meet firming and reserve needs of Indian-owned energy projects on Indian land; 

336

(3) the Administrator of the Western Area Power Administration may purchase power from Indian tribes to meet the firming 

and reserve requirements of the Western Area Power Administration; and 

(4) each Administrator shall not pay more than the prevailing 

market price for an energy product nor obtain less than prevailing market terms and conditions. 

(d) ASSISTANCE FOR TRANSMISSION SYSTEM USE.—

(1) An Administrator may provide technical assistance to Indian tribes seeking to use the high-voltage transmission system 

for delivery of electric power. 

(2) The costs of technical assistance provided under paragraph (1) shall be funded by the Secretary of Energy using nonreimbursable funds appropriated for that purpose, or by the applicable Indian tribes. 

(e) POWER ALLOCATION STUDY.—Not later than 2 years after the 

date of enactment of the Indian Tribal Energy Development and 

Self-Determination Act of 2003, the Secretary of Energy shall submit to the Congress a report that—

(1) describes the use by Indian tribes of Federal power allocations of the Western Area Power Administration (or power sold 

by the Southwestern Power Administration) and the Bonneville 

Power Administration to or for the benefit of Indian tribes in 

service areas of those administrations; and 

(2) identifies—

(A) the quantity of power allocated to Indian tribes by the 

Western Area Power Administration; 

(B) the quantity of power sold to Indian tribes by other 

power marketing administrations; and 

(C) barriers that impede tribal access to and use of Federal power, including an assessment of opportunities to remove those barriers and improve the ability of power marketing administrations to facilitate the use of Federal power 

by Indian tribes. 

(f) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to 

be appropriated to carry out this section $750,000, which shall remain available until expended and shall not be reimbursable. 

SEC 2606. INDIAN MINERAL DEVELOPMENT REVIEW. 

(a) IN GENERAL.—The Secretary shall conduct a review of all activities being conducted under the Indian Mineral Development Act 

of 1982 (25 U.S.C. 2101 et seq.) as of that date. 

(b) REPORT.—Not later than 1 year after the date of enactment of 

the Indian Tribal Energy Development and Self-Determination Act 

of 2003, the Secretary shall submit to the Congress a report that includes—

(1) the results of the review; 

(2) recommendations to ensure that Indian tribes have the opportunity to develop Indian energy resources; and 

(3) an analysis of the barriers to the development of energy 

resources on Indian land (including legal, fiscal, market, and 

other barriers), along with recommendations for the removal of 

those barriers. 

337

SEC 2607. WIND AND HYDROPOWER FEASIBILITY STUDY. 

(a) STUDY.—The Secretary, in coordination with the Secretary of 

the Army and the Secretary of the Interior, shall conduct a study 

of the cost and feasibility of developing a demonstration project that 

would use wind energy generated by Indian tribes and hydropower 

generated by the Army Corps of Engineers on the Missouri River to 

supply f rming power to the Western Area Power Administration. 

(b) SCOPE OF STUDY.—The study shall—

(1) determine the feasibility of the blending of wind energy 

and hydropower generated from the Missouri River dams operated by the Army Corps of Engineers; 

(2) review historical purchase requirements and projected 

purchase requirements for firming and the patterns of availability and use of firming energy; 

(3) assess the wind energy resource potential on tribal land 

and projected cost savings through a blend of wind and hydropower over a 30-year period; 

(4) determine seasonal capacity needs and associated transmission upgrades for integration of tribal wind generation; and 

(5) include an independent tribal engineer as a study team 

member. 

(c) REPORT.—Not later than 1 year after the date of enactment of 

this Act, the Secretary and Secretary of the Army shall submit to 

Congress a report that describes the results of the study, including—

(1) an analysis of the potential energy cost or benefits to the 

customers of the Western Area Power Administration through 

the blend of wind and hydropower; 

(2) an evaluation of whether a combined wind and hydropower system can reduce reservoir fluctuation, enhance efficient 

and reliable energy production, and provide Missouri River 

management flexibility; 

(3) recommendations for a demonstration project that could 

be carried out by the Western Area Power Administration in 

partnership with an Indian tribal government or tribal consortium to demonstrate the feasibility and potential of using wind 

energy produced on Indian land to supply firming energy to the 

Western Area Power Administration or any other Federal power 

marketing agency; and 

(4) an identification of—

(A) the economic and environmental costs or benefits to 

be realized through such a Federal-tribal partnership; and 

(B) the manner in which such a partnership could contribute to the energy security of the United States. 

(d) FUNDING.—

(1) There is authorized to be appropriated to carry out this 

section $500,000, to remain available until expended. 

(2) Costs incurred by the Secretary in carrying out this section shall be nonreimbursable.

* * * * * * *

338

HUD DEMONSTRATION ACT OF 1993 

Public Law 103–120, as amended (42 U.S.C. 9816 note) 

* * * * * * * 

SEC. 4. CAPACITY BUILDING FOR COMMUNITY DEVELOPMENT AND 

AFFORDABLE HOUSING 

(a) * * * 

(b) FORM OF ASSISTANCE.—Assistance under this section may be 

used for—

(1) training, education, support, and advice to enhance the 

technical and administrative capabilities of community development corporations and community housing development organizations, including capabilities regarding the provision of 

energy efficient, affordable housing and residential energy conservation measures;

(2) loans, grants, or predevelopment assistance to community 

development corporations and community housing development 

organizations to carry out community development and affordable housing activities that benefit low-income families, including such activities relating to the provision of energy efficient, 

affordable housing and residential energy conservation measures that benefit low-income families.

* * * * * * * 

NORTH AMERICAN FREE TRADE AGREEMENT 

IMPLEMENTATION ACT 

Part 2 of subtitle D of title V of Public Law 103–182 (22 U.S.C. 

290m–290m–3) 

* * * * * * *

SEC. 545. SUPPORT FOR CERTAIN ENERGY POLICIES. 

Consistent with the focus of the Bank’s Charter on environmental 

infrastructure projects, the Board members representing the United 

States should use their voice and vote to encourage the Bank to finance projects related to clean and efficient energy, including energy 

conservation, that prevent, control, or reduce environmental pollutants or contaminants. 

* * * * * * *

USEC PRIVATIZATION ACT 

Subchapter A of chapter 1 of title III of Public Law 104–134, as 

amended (42 U.S.C. 2297h) 

* * * * * * *

SEC. 3112. URANIUM TRANSFERS AND SALES. 

* * * * * * *

ø(d) INVENTORY SALES.—(1) In addition to the transfers authorized under subsections (c) and (e), the Secretary may, from time to 

time, sell natural and low-enriched uranium (including low-enVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00342 Fmt 6604 Sfmt 6602 E:\HR\OC\SR043.XXX SR043
339

riched uranium derived from highly enriched uranium) from the 

Department of Energy’s stockpile. 

ø(2) Except as provided in subsections (b), (c), and (e), no sale or 

transfer of natural or low-enriched uranium shall be made unless 

ø(A) the President determines that the material is not necessary for national security needs, 

ø(B) the Secretary determines that the sale of the material 

will not have an adverse material impact on the domestic uranium mining, conversion, or enrichment industry, taking into 

account the sales of uranium under the Russian HEU Agreement and the Suspension Agreement, and 

ø(C) the price paid to the Secretary will not be less than the 

fair market value of the material. 

ø(e) GOVERNMENT TRANSFERS.—Notwithstanding subsection 

(d)(2), the Secretary may transfer or sell enriched uranium— ø(1) to a Federal agency if the material is transferred for the 

use of the receiving agency without any resale or transfer to 

another entity and the material does not meet commercial 

specifications; 

ø(2) to any person for national security purposes, as determined by the Secretary; or L(3) to any State or local agency or 

nonprofit, charitable, or educational institution for use other 

than the generation of electricity for commercial use.¿

(d)(1)(A) The aggregate annual deliveries of uranium in any form 

(including natural uranium concentrates, natural uranium hexafluoride, enriched uranium, and depleted uranium) sold or transferred for commercial nuclear power end uses by the United States 

Government shall not exceed 3,000,000 pounds U3O8 equivalent per 

year through calendar year 2009. Such aggregate annual deliveries 

shall not exceed 5,000,000 pounds U3O8 equivalent per year in calendar years 2010 and 2011. Such aggregate annual deliveries shall 

not exceed 7,000,000 pounds U3O8 equivalent in calendar year 2012. 

Such aggregate annual deliveries shall not exceed 10,000,000 

pounds U3O8 equivalent per year in calendar year 2013 and each 

year thereafter. Any sales or transfers by the United States Government to commercial end users shall be limited to long-term contracts of no less than 3 years duration. 

(B) The recovery and extraction of the uranium component from 

contaminated uranium bearing materials from United States Government sites by commercial entities shall be the preferred method 

of making uranium available under this subsection. The uranium 

component contained in such contaminated materials shall be 

counted against the annual maximum deliveries set forth in this 

section, provided that uranium is sold to end users. 

(C) Sales or transfers of uranium by the United States Government for the following purposes are exempt from the provisions of 

this subsection—

(i) sales or transfers provided for under existing law for use 

by the Tennessee Valley Authority in relation to the Department 

of Energy’s high-enriched uranium or tritium programs; 

(ii) sales or transfers to the Department of Energy research reactor sales program; 

(iii) the transfer of up to 3,293 metric tons of uranium to the 

United States Enrichment Corporation to replace uranium that 

340

the Secretary transferred, prior to privatization of the United 

States Enrichment Corporation in July 1998, to the Corporation 

on or about June 30, 1993, April 20, 1998, and May 18, 1998, 

and that does not meet commercial specifications; 

(iv) the sale or transfer of any uranium for emergency purposes in the event of a disruption in supply to end users in the 

United States; 

(v) the sale or transfer of any uranium in fulfillment of the 

United States Government’s obligations to provide security of 

supply with respect to implementation of the Russian HEU 

Agreement; and 

(vi) the sale or transfer of any enriched uranium for use in 

an advanced commercial nuclear power plant in the United 

States with nonstandard fuel requirements. 

(D) The Secretary may transfer or sell enriched uranium to any 

person for national security purposes, as determined by the Secretary. 

(2) Except as provided in subsections (b) and (c), and in paragraph (1)(B) and (C) of this subsection, no sale or transfer of uranium in any form shall be made by the United States Government 

unless—

(A) the President determines that the material is not necessary for national security needs; 

(B) the price paid to the Secretary will not be less than the 

fair market value of the material, as determined at the time 

that such material is contracted for sale; 

(C) prior to any sale or transfer, the Secretary solicits the 

written views of the Department of State and the National Security Council with regard to whether such sale or transfer 

would have any adverse effect on national security interests of 

the United States, including interests related to the implementation of the Russian HEU Agreement; and 

(D) neither the Department of State nor the National Security 

Council objects to such sale or transfer. 

The Secretary shall endeavor to determine whether a sale or transfer is permitted under this paragraph within 30 days. The Secretary’s determinations pursuant to this paragraph shall be made 

available to interested members of the public prior to authorizing 

any such sale or transfer. 

(3) Within 1 year after the date of enactment of this subsection 

and annually thereafter the Secretary shall undertake an assessment for the purpose of reviewing available excess Government uranium inventories, and determining, consistent with the procedures 

and limitations established in this subsection, the level of inventory 

to be sold or transferred to end users. 

(4) Within 5 years after the date of enactment of this subsection 

and biennially thereafter the Secretary shall report to the Congress 

on the implementation of this subsection. The report shall include 

a discussion of all sales or transfers made by the United States Government, the impact of such sales or transfers on the domestic uranium industry, the spot market uranium price, and the national security interests of the United States, and any steps taken to remediate any adverse impacts of such sales or transfers. 

341

(5) For purposes of this subsection, the term ‘‘United States Government’’ does not include the Tennessee Valley Authority.

NATIVE AMERICAN HOUSING ASSISTANCE AND SELFDETERMINATION ACT OF 1996 

Public Law 104–330, as amended (25 U.S.C. 4101 et seq.) 

* * * * * * *

SEC. 202. ELIGIBLE AFFORDABLE HOUSING ACTIVITIES. 

Affordable housing activities under this title are activities, in accordance with the requirements of this title, to develop or to support affordable housing for rental or homeownership, or to provide 

housing services with respect to affordable housing, through the 

following activities: 

(1) * * * 

(2) DEVELOPMENT.—The acquisition, new construction, reconstruction, or moderate or substantial rehabilitation of affordable housing, which may include real property acquisition, site 

improvement, development of utilities and utility services, conversion, demolition, financing, administration and planning, 

improvement to achieve greater energy efficiency, and other related activities.

* * * * * * *

LEGISLATIVE BRANCH APPROPRIATIONS ACT, 1999 

Public Law 105–275 (2 U.S.C. 1815)

* * * * * * *

[SEC. 310. Energy conservation and management 

The Architect of the Capitol—

(1) shall develop and implement a cost-effective energy conservation strategy for all facilities currently administered by 

Congress to achieve a net reduction of 20 percent in energy 

consumption on the congressional campus compared to fiscal 

year 1991 consumption levels on a Btu-per-gross-square-foot 

basis not later than 7 years after October 21, 1998; 

(2) shall submit to Congress no later than 10 months after 

October 21, 1998, a comprehensive energy conservation and 

management plan which includes life cycle costs methods to 

determine the cost-effectiveness of proposed energy efficiency 

projects; 

(3) shall submit to the Committee on Appropriations in the 

Senate and the House of Representatives a request for the 

amount of appropriations necessary to carry out this section; 

(4) shall present to Congress annually a report on congressional energy management and conservation programs which 

details energy expenditures for each facility, energy management and conservation projects, and future priorities to ensure 

compliance with the requirements of this section; 

(5) shall perform energy surveys of all congressional buildings and update such surveys as needed; 

342

(6) shall use such surveys to determine the cost and payback 

period of energy and water conservation measures likely to 

achieve the required energy consumption levels; 

(7) shall install energy and water conservation measures 

that will achieve the requirements through previously determined life cycle cost methods and procedures; 

(8) may contract with nongovernmental entities and employ 

private sector capital to finance energy conservation projects 

and achieve energy consumption targets; 

(9) may develop innovative contracting methods that will attract private sector funding for the installation of energy-efficient and renewable energy technology to meet the requirements of this section; 

(10) may participate in the Department of Energy’s Financing Renewable Energy and Efficiency (FREE Savings) contracts program for Federal Government facilities; and 

(11) shall produce information packages and ‘‘how-to’’ guides 

for each Member and employing authority of the Congress that 

detail simple, cost-effective methods to save energy and taxpayer dollars.] 

* * * * * * *

ENERGY ACT OF 2000 

Public Law 106–469 (42 U.S.C. 6217) 

* * * * * * *

SEC. 604. SCIENTIFIC INVENTORY OF OIL AND GAS RESERVES. 

ø(a) IN GENERAL.—The Secretary of the Interior, in consultation 

with the Secretaries of Agriculture and Energy, shall conduct an 

inventory of all onshore Federal lands. The inventory shall identify—

ø(1) the United States Geological Survey reserve estimates of 

the oil and gas resources underlying these lands; and 

ø(2) the extent and nature of any restrictions or impediments 

to the development of such resources.

ø(b) REGULAR UPDATE.—Once completed, the USGS reserve estimates and the surface availability data as provided in subsection 

(a)(2) shall be regularly updated and made publicly available. 

ø(c) INVENTORY.—The inventory shall be provided to the Committee on Resources of the House of Representatives and to the 

Committee on Energy and Natural Resources of the Senate within 

2 years after the date of the enactment of this section. 

ø(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated such sums as may be necessary to implement 

this section.]

(a) IN GENERAL.—The Secretary of the Interior, in consultation 

with the Secretaries of Agriculture and Energy, shall conduct an inventory of all onshore Federal lands and take measures necessary 

to update and revise this inventory. The inventory shall identify for 

all federal lands—

(1) the United States Geological Survey estimates of the oil 

and gas resources underlying these lands; 

343

(2) the extent and nature of any restrictions or impediments 

to the exploration, production and transportation of such resources, including—

(A) existing land withdrawals and the underlying purpose for each withdrawal; 

(B) restrictions or impediments affecting timeliness of 

granting leases; 

(C) post-lease restrictions or impediments such as conditions of approval, applications for permits to drill, applicable environmental permits; 

(D) permits or restrictions associated with transporting 

the resources; and 

(E) identification of the authority for each restriction or 

impediment together with the impact on additional processing or review time and potential remedies; and 

(3) the estimates of oil and gas resources not available for exploration and production by virtue of the restrictions identified 

above. 

(b) REPORTS.—The Secretary shall provide a progress report to 

the Congress by October 1, 2006 and shall complete the inventory 

by October 1, 2010. 

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

be appropriated such sums as may be necessary to implement this 

section.

TITLE 5, UNITED STATES CODE

SEC. 5314. Positions at Level III. 

* * * * * * *

Chairman, Consumer Product Safety Commission. 

[Under Secretaries of Energy (2)] Under Secretaries of Energy (3).

Chairman, Commodity Futures Trading Commission. 

* * * * * 

SEC. 5315. Positions at Level IV. 

* * * * * 

Director, Bureau of Prisons, Department of Justice. 

[Assistant Secretaries of Energy (6)] Assistant Secretaries of Energy (8).

General Counsel of the Department of Energy. 

Administrator, Economic Regulatory Administration, Department of Energy. 

Administrator, Energy Information Administration, Department of 

Energy. Inspector General, Department of Energy. 

Director, Office of Indian Energy Policy and Programs, Department of Energy. 

Director, Office of Electric Transmission and Distribution, Department of Energy. 

[Director, Office of Science, Department of Energy.] 

Assistant Secretary of Labor for Mine Safety and Health. 

TITLE 23, UNITED STATE CODE 

* * * * * * *

344

HIGHWAYS 

* * * * * * *

CHAPTER 1. FEDERAL-AID HIGHWAYS 

* * * * * * *

Subchapter I. General Provisions 

* * * * * * *

§ 127. Vehicle weight limitations—Interstate System 

(a) * * * and are applicable to State highways other than the 

Interstate System, shall be applicable in lieu of the requirements 

of this subsection. In order to promote reduction of fuel use and 

emissions due to engine idling, the maximum gross vehicle weight 

limit and the axle weight limit for any motor vehicle equipped with 

an idling reduction technology certified by the U.S. Department of 

Energy will be increased by an amount necessary to compensate for 

the additional weight of the idling reduction system, provided that 

the weight increase shall be no greater than 400 pounds.

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) * * * 

(b) PASSENGER AUTOMOBILES.—Except as provided in this section, the average fuel economy standard for passenger automobiles 

manufactured by a manufacturer in a model year after model year 

1984 shall be 27.5 miles a gallon or other such number as the Secretary prescribes under subsection (c).

* * * * * * * 

ø(f) CONSIDERATIONS ON DECISIONS ON MAXIMUM FEASIBLE AVERAGE FUEL ECONOMY.—When deciding maximum feasible average 

fuel economy under this section, the Secretary of Transportation 

shall consider technological feasibility, economic practicability, the 

345

effect of other motor vehicle standards of the Government on fuel 

economy, and the need of the United States to conserve energy.¿

(f) CONSIDERATIONS.—When deciding maximum feasible average 

fuel economy under this section, the Secretary of Transportation 

shall consider the following matters: 

(1) technological feasibility; 

(2) economic practicability; 

(3) the effect of other motor vehicle standards of the Government on fuel economy; 

(4) the need of the United States to conserve energy; 

(5) the effects of fuel economy standards on motor vehicle and 

passenger safety; and 

(6) the effects of compliance with average fuel economy standards on levels of employment in the United States.

* * * * * * *

§ 32905. Manufacturing incentives for alternative fuel automobiles 

(a) * * *

(b) DUAL FUELED AUTOMOBILES.—Except as provided in subsection (d) of this section or section 32904 (a)(2) of this title, for any 

model of dual fueled automobile manufactured by a manufacturer 

in model years ø1993–2004¿ 1993–2008, the Administrator of the 

Environmental Protection Agency shall measure the fuel economy 

for that model by dividing 1.0 by the sum of—

* * * * * * *

(d) GASEOUS FUEL DUAL FUELED AUTOMOBILES.—For any model 

of gaseous fuel dual fueled automobile manufactured by a manufacturer in model years ø1993–2004¿ 1993–2003, the Administrator 

shall measure the fuel economy for that model by dividing 1.0 by 

the sum of—

* * * * * * *

(f) EXTENDING APPLICATION OF SUBSECTIONS (B) AND (D).—Not 

later than December 31, ø2001¿ 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 model year ø2004¿ 2008 and explain 

the basis on which the extension is granted; or 

(2) * * *

(g) STUDY AND REPORT.—Not later than øSeptember 30, 2000¿

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. * * *

* * * * * * *

346

§ 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. 

* * * * * * *

§ 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. ø(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.¿

(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 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 acVerDate Jan 31 2003 05:44 May 08, 2003 Jkt 086873 PO 00000 Frm 00350 Fmt 6604 Sfmt 6603 E:\HR\OC\SR043.XXX SR043
347

cordance 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.’’. 

* * * * * * *

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