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[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6 Placed on Calendar Senate (PCS)]

                                                        Calendar No. 85
108th CONGRESS
  1st Session
                                 H. R. 6

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             April 29, 2003

                                Received

                              May 5, 2003

                          Read the first time

                              May 6, 2003

            Read the second time and placed on the calendar

_______________________________________________________________________

                                 AN ACT

 
To enhance energy conservation and research and development, to provide 
   for security and diversity in the energy supply for the American 
                    people, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Table of contents.
Sec. 2. Energy policy.
                    DIVISION A--ENERGY AND COMMERCE

Sec. 10001. Short title.
                      TITLE I--ENERGY CONSERVATION

         Subtitle A--Federal Leadership in Energy Conservation

Sec. 11001. Energy and water saving measures in congressional 
                            buildings.
Sec. 11002. Energy management requirements.
Sec. 11003. Energy use measurement and accountability.
Sec. 11004. Federal building performance standards.
Sec. 11005. Procurement of energy efficient products.
Sec. 11006. Energy savings performance contracts.
Sec. 11007. Voluntary commitments to reduce industrial energy 
                            intensity.
Sec. 11008. Federal agency participation in demand reduction programs.
Sec. 11009. Advanced Building Efficiency Testbed.
Sec. 11010. Increased use of recovered mineral component in federally 
                            funded projects involving procurement of 
                            cement or concrete.
Sec. 11011. Use of photovoltaic energy in public buildings.
Sec. 11012. Telecommuting study.
            Subtitle B--Energy Assistance and State Programs

Sec. 11021. LIHEAP and weatherization assistance.
Sec. 11022. State energy programs.
Sec. 11023. Energy efficient appliance rebate programs.
Sec. 11024. Energy efficient public buildings.
Sec. 11025. Low income community energy efficiency pilot program.
                 Subtitle C--Energy Efficient Products

Sec. 11041. Energy Star program.
Sec. 11042. Consumer education on energy efficiency benefits of air 
                            conditioning, heating, and ventilation 
                            maintenance.
Sec. 11043. Additional definitions.
Sec. 11044. Additional test procedures.
Sec. 11045. Energy conservation standards for additional consumer and 
                            commercial products.
Sec. 11046. Energy labeling.
Sec. 11047. Study of energy efficiency standards.
                         TITLE II--OIL AND GAS

                Subtitle A--Alaska Natural Gas Pipeline

Sec. 12001. Short title.
Sec. 12002. Findings and purposes.
Sec. 12003. Definitions.
Sec. 12004. Issuance of certificate of public convenience and 
                            necessity.
Sec. 12005. Environmental reviews.
Sec. 12006. Pipeline expansion.
Sec. 12007. Federal Coordinator.
Sec. 12008. Judicial review.
Sec. 12009. State jurisdiction over in-State delivery of natural gas.
Sec. 12010. Study of alternative means of construction.
Sec. 12011. Clarification of ANGTA status and authorities.
Sec. 12012. Sense of Congress.
Sec. 12013. Participation of small business concerns.
Sec. 12014. Alaska pipeline construction training program.
                Subtitle B--Strategic Petroleum Reserve

Sec. 12101. Full capacity of Strategic Petroleum Reserve.
Sec. 12102. Strategic Petroleum Reserve expansion.
Sec. 12103. Permanent authority to operate the Strategic Petroleum 
                            Reserve and other energy programs.
                    Subtitle C--Hydraulic Fracturing

Sec. 12201. Hydraulic fracturing.
   Subtitle D--Unproven Oil and Natural Gas Reserves Recovery Program

Sec. 12301. Program.
Sec. 12302. Eligible reservoirs.
Sec. 12303. Focus areas.
Sec. 12304. Limitation on location of activities.
Sec. 12305. Program administration.
Sec. 12306. Advisory Committee.
Sec. 12307. Limits on participation.
Sec. 12308. Payments to Federal Government.
Sec. 12309. Authorization of appropriations.
Sec. 12310. Public availability of project results and methodologies.
Sec. 12311. Sunset.
Sec. 12312. Definitions.
                       Subtitle E--Miscellaneous

Sec. 12401. Appeals relating to pipeline construction projects.
Sec. 12402. Natural gas market data transparency.
Sec. 12403. Oil and gas exploration and production defined.
Sec. 12404. Complex well technology testing facility.
                        TITLE III--HYDROELECTRIC

                   Subtitle A--Alternative Conditions

Sec. 13001. Alternative conditions and fishways.
                   Subtitle B--Additional Hydropower

Sec. 13201. Hydroelectric production incentives.
Sec. 13202. Hydroelectric efficiency improvement.
Sec. 13203. Small hydroelectric power projects.
Sec. 13204. Increased hydroelectric generation at existing Federal 
                            facilities.
                       TITLE IV--NUCLEAR MATTERS

               Subtitle A--Price-Anderson Act Amendments

Sec. 14001. Short title.
Sec. 14002. Extension of indemnification authority.
Sec. 14003. Maximum assessment.
Sec. 14004. Department of Energy liability limit.
Sec. 14005. Incidents outside the United States.
Sec. 14006. Reports.
Sec. 14007. Inflation adjustment.
Sec. 14008. Price-Anderson treatment of modular reactors.
Sec. 14009. Applicability.
Sec. 14010. Prohibition on assumption by United States Government of 
                            liability for certain foreign accidents.
Sec. 14011. Secure transfer of nuclear materials.
Sec. 14012. Nuclear facility threats.
Sec. 14013. Unreasonable risk consultation.
Sec. 14014. Financial accountability.
Sec. 14015. Civil penalties.
                   Subtitle B--Miscellaneous Matters

Sec. 14021. Licenses.
Sec. 14022. Nuclear Regulatory Commission meetings.
Sec. 14023. NRC training program.
Sec. 14024. Cost recovery from Government agencies.
Sec. 14025. Elimination of pension offset.
Sec. 14026. Carrying of firearms by licensee employees.
Sec. 14027. Unauthorized introduction of dangerous weapons.
Sec. 14028. Sabotage of nuclear facilities or fuel.
Sec. 14029. Cooperative research and development and special 
                            demonstration projects for the uranium 
                            mining industry.
Sec. 14030. Uranium sales.
Sec. 14031. Medical isotope production.
Sec. 14032. Highly enriched uranium diversion threat report.
Sec. 14033. Whistleblower protection.
Sec. 14034. Preventing the misuse of nuclear materials and technology.
Sec. 14035. Limitation on legal fee reimbursement.
Sec. 14036. Transfer.
Sec. 14037. Study to determine feasibility of developing commercial 
                            nuclear energy production facilities at 
                            existing Department of Energy sites.
                      TITLE V--VEHICLES AND FUELS

                Subtitle A--Energy Policy Act Amendments

Sec. 15011. Credit for substantial contribution toward noncovered 
                            fleets.
Sec. 15012. Credit for alternative fuel infrastructure.
Sec. 15013. Alternative fueled vehicle report.
Sec. 15014. Allocation of incremental costs.
                     Subtitle B--Advanced Vehicles

Sec. 15021. Definitions.
Sec. 15022. Pilot program.
Sec. 15023. Reports to Congress.
Sec. 15024. Authorization of appropriations.
           Subtitle C--Hydrogen Fuel Cell Heavy-Duty Vehicles

Sec. 15031. Definition.
Sec. 15032. Findings.
Sec. 15033. Hydrogen fuel cell buses.
Sec. 15034. Authorization of appropriations.
                       Subtitle D--Miscellaneous

Sec. 15041. Railroad efficiency.
Sec. 15042. Mobile emission reductions trading and crediting.
Sec. 15043. Idle reduction technologies.
Sec. 15044. Study of aviation fuel conservation and emissions.
Sec. 15045. Diesel fueled vehicles.
Sec. 15046. Waivers of alternative fueled vehicle fueling requirement.
Sec. 15047. Total integrated thermal systems.
Sec. 15048. Oil bypass filtration technology.
Sec. 15049. Natural gas condensate study.
Sec. 15050. Study on reducing petroleum consumption.
Sec. 15051. Conserve by Bicycling Program.
                         TITLE VI--ELECTRICITY

                   Subtitle A--Transmission Capacity

Sec. 16011. Transmission infrastructure improvement rulemaking.
Sec. 16012. Siting of interstate electrical transmission facilities.
Sec. 16013. Transmission technologies.
                   Subtitle B--Transmission Operation

Sec. 16021. Open access transmission by certain utilities.
Sec. 16022. Regional transmission organizations.
Sec. 16023. Native load.
                        Subtitle C--Reliability

Sec. 16031. Electric reliability standards.
                      Subtitle D--PUHCA Amendments

Sec. 16041. Short title.
Sec. 16042. Definitions.
Sec. 16043. Repeal of the Public Utility Holding Company Act of 1935.
Sec. 16044. Federal access to books and records.
Sec. 16045. State access to books and records.
Sec. 16046. Exemption authority.
Sec. 16047. Affiliate transactions.
Sec. 16048. Applicability.
Sec. 16049. Effect on other regulations.
Sec. 16050. Enforcement.
Sec. 16051. Savings provisions.
Sec. 16052. Implementation.
Sec. 16053. Transfer of resources.
Sec. 16054. Effective date.
Sec. 16055. Authorization of appropriations.
Sec. 16056. Conforming amendments to the Federal Power Act.
                      Subtitle E--PURPA Amendments

Sec. 16061. Real-time pricing and time-of-use metering standards.
Sec. 16062. Cogeneration and small power production purchase and sale 
                            requirements.
Sec. 16063. Smart metering.
                      Subtitle F--Renewable Energy

Sec. 16071. Net metering.
Sec. 16072. Renewable energy production incentive.
Sec. 16073. Renewable energy on Federal lands.
Sec. 16074. Assessment of renewable energy resources.
 Subtitle G--Market Transparency, Round Trip Trading Prohibition, and 
                              Enforcement

Sec. 16081. Market transparency rules.
Sec. 16082. Prohibition on round trip trading.
Sec. 16083. Conforming changes.
Sec. 16084. Enforcement.
                    Subtitle H--Consumer Protections

Sec. 16091. Refund effective date.
Sec. 16092. Jurisdiction over interstate sales.
Sec. 16093. Consumer privacy.
Sec. 16094. Unfair trade practices.
          Subtitle I--Merger Review Reform and Accountability

Sec. 16101. Merger review reform and accountability.
                 Subtitle J--Study of Economic Dispatch

Sec. 16111. Study on the benefits of economic dispatch.
                         TITLE VII--MOTOR FUELS

                     Subtitle A--General Provisions

Sec. 17101. Renewable content of motor vehicle fuel.
Sec. 17102. Fuels safe harbor.
Sec. 17103. Findings and MTBE transition assistance.
Sec. 17104. Elimination of oxygen content requirement for reformulated 
                            gasoline.
Sec. 17105. Analyses of motor vehicle fuel changes.
Sec. 17106. Data collection.
Sec. 17107. Fuel system requirements harmonization study.
Sec. 17107A. Reducing the proliferation boutique fuels.
Sec. 17108. Commercial byproducts from municipal solid waste loan 
                            guarantee program.
                        Subtitle B--MTBE Cleanup

Sec. 17201. Funding for MTBE Contamination.
                   TITLE VIII--AUTOMOBILE EFFICIENCY

Sec. 18001. Authorization of appropriations for implementation and 
                            enforcement of fuel economy standards.
Sec. 18002. Study of feasibility and effects of reducing use of fuel 
                            for automobiles.
                          DIVISION B--SCIENCE

Sec. 20001. Purposes.
Sec. 20002. Goals.
Sec. 20003. Definitions.
                   TITLE I--RESEARCH AND DEVELOPMENT

                     Subtitle A--Energy Efficiency

                Part 1--Authorization of Appropriations

Sec. 21101. Energy efficiency.
                        Part 2--Lighting Systems

Sec. 21111. Next Generation Lighting Initiative.
                           Part 3--Buildings

Sec. 21121. National Building Performance Initiative.
Sec. 21122. Electric motor control technology.
                            Part 4--Vehicles

Sec. 21131. Definitions.
Sec. 21132. Establishment of secondary electric vehicle battery use 
                            program.
              Part 5--Energy Efficiency Science Initiative

Sec. 21141. Energy Efficiency Science Initiative.
          Part 6--Advanced Energy Technology Transfer Centers

Sec. 21151. Advanced Energy Technology Transfer Centers.
       Subtitle B--Distributed Energy and Electric Energy Systems

                Part 1--Authorization of Appropriations

Sec. 21201. Distributed energy and electric energy systems.
                       Part 2--Distributed Power

Sec. 21211. Strategy.
Sec. 21212. High power density industry program.
Sec. 21213. Micro-cogeneration energy technology.
                      Part 3--Transmission Systems

Sec. 21221. Transmission infrastructure systems research, development, 
                            demonstration, and commercial application.
                      Subtitle C--Renewable Energy

                Part 1--Authorization of Appropriations

Sec. 21301. Renewable energy.
                           Part 2--Bioenergy

Sec. 21311. Bioenergy programs.
                     Part 3--Miscellaneous Projects

Sec. 21321. Miscellaneous projects.
Sec. 21322. Renewable energy in public buildings.
                       Subtitle D--Nuclear Energy

                Part 1--Authorization of Appropriations

Sec. 21401. Nuclear energy.
                Part 2--Nuclear Energy Research Programs

Sec. 21411. Nuclear energy research programs.
                    Part 3--Advanced Fuel Recycling

Sec. 21421. Advanced fuel recycling program.
                      Part 4--University Programs

Sec. 21431. University nuclear science and engineering support.
               Part 5--Geological Isolation of Spent Fuel

Sec. 21441. Geological isolation of spent fuel.
                       Subtitle E--Fossil Energy

                Part 1--Authorization of Appropriations

Sec. 21501. Fossil energy.
                       Part 2--Research Programs

Sec. 21511. Fossil energy research programs.
Sec. 21512. Research and development for coal mining technologies.
   Part 3--Ultra-deepwater and Unconventional Natural Gas and Other 
                          Petroleum Resources

Sec. 21521. Program authority.
Sec. 21522. Ultra-deepwater program.
Sec. 21523. Unconventional natural gas and other petroleum resources 
                            program.
Sec. 21524. Additional requirements for awards.
Sec. 21525. Advisory committees.
Sec. 21526. Limits on participation.
Sec. 21527. Fund.
Sec. 21528. Transfer of advanced oil and gas exploration and production 
                            technologies.
Sec. 21529. Sunset.
Sec. 21530. Definitions.
                          Subtitle F--Science

                Part 1--Authorization of Appropriations

Sec. 21601. Science.
                     Part 2--Fusion Energy Sciences

Sec. 21611. ITER.
Sec. 21612. Plan for fusion experiment.
Sec. 21613. Plan for fusion energy sciences program.
                   Part 3--Spallation Neutron Source

Sec. 21621. Definition.
Sec. 21622. Report.
Sec. 21623. Limitations.
                         Part 4--Miscellaneous

Sec. 21631. Facility and infrastructure support for nonmilitary energy 
                            laboratories.
Sec. 21632. Research regarding precious metal catalysis.
Sec. 21633. Nanotechnology research and development.
Sec. 21634. Advanced scientific computing for energy missions.
Sec. 21635. Nitrogen fixation.
Sec. 21636. Department of Energy Science and Technology Scholarship 
                            Program.
                        Part 5--Genomes to Life

Sec. 21641. Genomes to life.
                   Subtitle G--Energy and Environment

Sec. 21701. Authorization of appropriations.
Sec. 21702. United States-Mexico energy technology cooperation.
Sec. 21703. Waste reduction and use of alternatives.
Sec. 21704. Coal gasification.
Sec. 21705. Petroleum coke gasification.
Sec. 21706. Other biopower and bioenergy.
Sec. 21707. Coal technology loan.
Sec. 21708. Fuel cell test center.
Sec. 21709. Fuel cell transit bus demonstration.
                         Subtitle H--Management

Sec. 21801. Availability of funds.
Sec. 21802. Cost sharing.
Sec. 21803. Merit review of proposals.
Sec. 21804. External technical review of departmental programs.
Sec. 21805. Improved coordination of technology transfer activities.
Sec. 21806. Small business advocacy and assistance.
Sec. 21807. Mobility of scientific and technical personnel.
Sec. 21808. National Academy of Sciences report.
Sec. 21809. Outreach.
Sec. 21810. Limits on use of funds.
Sec. 21811. Reprogramming.
Sec. 21812. Construction with other laws.
Sec. 21813. University collaboration.
Sec. 21814. Federal laboratory educational partners.
Sec. 21815. Interagency cooperation.
               TITLE II--DEPARTMENT OF ENERGY MANAGEMENT

Sec. 22001. External regulation of Department of Energy.
Sec. 22002. Improved coordination and management of civilian science 
                            and technology programs.
Sec. 22003. Report on equal employment opportunity practices.
Sec. 22004. Sense of Congress.
                     TITLE III--CLEAN SCHOOL BUSES

Sec. 23001. Establishment of pilot program.
Sec. 23002. Fuel cell bus development and demonstration program.
Sec. 23003. Diesel retrofit program.
Sec. 23004. Authorization of appropriations.
                         DIVISION C--RESOURCES

                         TITLE I--INDIAN ENERGY

Sec. 30101. Indian energy.
                         TITLE II--OIL AND GAS

Sec. 30201. Program on oil and gas royalties in-kind.
Sec. 30202. Clarification of fair market rental value determinations 
                            for public lands and Forest Service rights-
                            of-way.
Sec. 30203. USGS estimates of oil and gas resources underlying onshore 
                            Federal lands.
Sec. 30204. Royalty incentives for certain offshore areas.
Sec. 30205. Marginal property production incentives.
Sec. 30206. Federal onshore oil and gas leasing and permitting 
                            practices.
Sec. 30207. Management of Federal oil and gas leasing programs.
Sec. 30208. Consultation regarding oil and gas leasing on public lands.
Sec. 30209. Oil and gas lease acreage limitations.
Sec. 30210. Federal reimbursement for orphan well reclamation.
Sec. 30211. Preservation of geological and geophysical data.
Sec. 30212. Compliance with Executive Order No. 13211; actions 
                            concerning regulations that significantly 
                            affect energy supply, distribution, or use.
Sec. 30213. Reimbursement for costs of NEPA analyses, documentation, 
                            and studies.
Sec. 30214. Alternate energy-related uses on the Outer Continental 
                            Shelf.
Sec. 30215. Deadline for decision on appeals of consistency 
                            determinations under the Coastal Zone 
                            Management Act of 1972.
Sec. 30216. Task force on energy project streamlining.
Sec. 30217. Pilot program on Northern Rocky Mountains energy resource 
                            management.
Sec. 30218. Energy development facilitator study.
Sec. 30219. Combined hydrocarbon leasing.
Sec. 30220. Royalty payments under leases under the Outer Continental 
                            Shelf Lands Act.
                       TITLE III--BIOMASS ENERGY

Sec. 30301. Grants to improve the commercial value of forest biomass 
                            for electric energy, useful heat, 
                            transportation fuels, petroleum-based 
                            product substitutes, and other commercial 
                            purposes.
             TITLE IV--ARCTIC COASTAL PLAIN DOMESTIC ENERGY

Sec. 30401. Short title.
Sec. 30402. Definitions.
Sec. 30403. Leasing program for lands within the Coastal Plain.
Sec. 30404. Lease sales.
Sec. 30405. Grant of leases by the Secretary.
Sec. 30406. Lease terms and conditions.
Sec. 30407. Coastal Plain environmental protection.
Sec. 30408. Expedited judicial review.
Sec. 30409. Federal and State distribution of revenues.
Sec. 30410. Rights-of-way across the Coastal Plain.
Sec. 30411. Conveyance.
Sec. 30412. Local government impact aid and community service 
                            assistance.
                          TITLE V--HYDROPOWER

Sec. 30501. Study and report on increasing electric power production 
                            capability of existing facilities.
Sec. 30502. Study and implementation of increased operational 
                            efficiencies in hydroelectric power 
                            projects.
Sec. 30503. Shift of project loads to off-peak periods.
                      TITLE VI--GEOTHERMAL ENERGY

Sec. 30601. Competitive lease sale requirements.
Sec. 30602. Special provisions regarding direct use of low temperature 
                            geothermal energy resources.
Sec. 30603. Royalties and near-term production incentives.
Sec. 30604. Consultation regarding geothermal leasing and permitting on 
                            public lands.
Sec. 30605. Review and report to Congress.
Sec. 30606. Reimbursement for costs of NEPA analyses, documentation, 
                            and studies.
Sec. 30607. Assessment of geothermal energy potential.
Sec. 30608. Cooperative or unit plans.
Sec. 30609. Royalty on byproducts.
Sec. 30610. Repeal of authorities of Secretary to readjust terms, 
                            conditions, rentals, and royalties.
Sec. 30611. Crediting of rental toward royalty.
Sec. 30612. Lease duration and work commitment requirements.
Sec. 30613. Advanced royalties required for suspension of production.
Sec. 30614. Annual rental.
                            TITLE VII--COAL

Sec. 30701. Short title.
Sec. 30702. Repeal of the 160-acre limitation for coal leases.
Sec. 30703. Mining plans.
Sec. 30704. Payment of advance royalties under coal leases.
Sec. 30705. Elimination of deadline for submission of coal lease 
                            operation and reclamation plan.
Sec. 30706. Amendments relating to financial assurances with respect to 
                            bonus bids.
Sec. 30707. Inventory requirement.
Sec. 30708. Application of amendments.
               TITLE VIII--INSULAR AREAS ENERGY SECURITY

Sec. 30801. Insular areas energy security.
                   TITLE IX--MISCELLANEOUS PROVISIONS

Sec. 30901. Report on energy facility rights-of-way and corridors on 
                            Federal lands.
Sec. 30902. Electricity transmission line right-of-way, Cleveland 
                            National Forest and adjacent public lands, 
                            California.
Sec. 30903. Consultation regarding energy rights-of-way on public 
                            lands.
Sec. 30904. Enhancing energy efficiency in management of Federal lands.
Sec. 30905. Permitting of wind energy development projects on public 
                            lands.
Sec. 30906. Sense of the Congress regarding generation capacity of 
                            electricity from renewable energy resources 
                            on public lands.
Sec. 30907. Assessment of ocean thermal energy resources.
Sec. 30908. Sense of the Congress regarding development of minerals 
                            under Padre Island National Seashore.
Sec. 30909. Encouraging prohibition of off-shore drilling in the Great 
                            Lakes.
                            DIVISION D--TAX

Sec. 40001. Short title; etc.
                         TITLE I--CONSERVATION

Sec. 41001. Credit for residential solar energy property.
Sec. 41002. Extension and expansion of credit for electricity produced 
                            from renewable resources.
Sec. 41003. Credit for qualified fuel cell power plants.
Sec. 41004. Credit for energy efficiency improvements to existing 
                            homes.
Sec. 41005. Business credit for construction of new energy efficient 
                            home.
Sec. 41006. Energy credit for combined heat and power system property.
Sec. 41007. New nonrefundable personal credits allowed against regular 
                            and minimum taxes.
Sec. 41008. Repeal of 4.3-cent motor fuel excise taxes on railroads and 
                            inland waterway transportation which remain 
                            in general fund.
Sec. 41009. Reduced motor fuel excise tax on certain mixtures of diesel 
                            fuel.
Sec. 41010. Repeal of phaseouts for qualified electric vehicle credit 
                            and deduction for clean fuel-vehicles.
Sec. 41011. Alternative motor vehicle credit.
                         TITLE II--RELIABILITY

Sec. 42001. Natural gas gathering lines treated as 7-year property.
Sec. 42002. Natural gas distribution lines treated as 15-year property.
Sec. 42003. Electric transmission property treated as 15-year property.
Sec. 42004. Expensing of capital costs incurred in complying with 
                            environmental protection agency sulfur 
                            regulations.
Sec. 42005. Credit for production of low sulfur diesel fuel.
Sec. 42006. Determination of small refiner exception to oil depletion 
                            deduction.
Sec. 42007. Sales or dispositions to implement Federal energy 
                            regulatory commission or State electric 
                            restructuring policy.
Sec. 42008. Modifications to special rules for nuclear decommissioning 
                            costs.
Sec. 42009. Treatment of certain income of cooperatives.
Sec. 42010. Arbitrage rules not to apply to prepayments for natural 
                            gas.
                         TITLE III--PRODUCTION

Sec. 43001. Oil and gas from marginal wells.
Sec. 43002. Temporary suspension of limitation based on 65 percent of 
                            taxable income and extension of suspension 
                            of taxable income limit with respect to 
                            marginal production.
Sec. 43003. Amortization of delay rental payments.
Sec. 43004. Amortization of geological and geophysical expenditures.
Sec. 43005. Extension and modification of credit for producing fuel 
                            from a nonconventional source.
Sec. 43006. Business related energy credits allowed against regular and 
                            minimum tax.
Sec. 43007. Temporary repeal of alternative minimum tax preference for 
                            intangible drilling costs.
Sec. 43008. Allowance of enhanced recovery credit against the 
                            alternative minimum tax.
                    TITLE IV--CORPORATE EXPATRIATION

Sec. 44001. Tax treatment of corporate expatriation.
Sec. 44002. Expressing the sense of the Congress that tax reform is 
                            needed to address the issue of corporate 
                            expatriation.
                         DIVISION E--CLEAN COAL

Sec. 50001. Authorization of appropriations.
Sec. 50002. Project criteria.
Sec. 50003. Report.
Sec. 50004. Clean coal Centers of Excellence.
                          DIVISION F--HYDROGEN

Sec. 60001. Definitions.
Sec. 60002. Plan.
Sec. 60003. Program.
Sec. 60004. Interagency task force.
Sec. 60005. Advisory Committee.
Sec. 60006. External review.
Sec. 60007. Miscellaneous provisions.
Sec. 60008. Authorization of appropriations.
Sec. 60009. Fuel cell program at National Parks.
Sec. 60010. Advanced power system technology incentive program.
                          DIVISION G--HOUSING

Sec. 70001. Capacity building for energy-efficient, affordable housing.
Sec. 70002. Increase of CDBG public services cap for energy 
                            conservation and efficiency activities.
Sec. 70003. FHA mortgage insurance incentives for energy efficient 
                            housing.
Sec. 70004. Public Housing Capital Fund.
Sec. 70005. Grants for energy-conserving improvements for assisted 
                            housing.
Sec. 70006. North American Development Bank.
Sec. 70007. Energy-efficient appliances.
Sec. 70008. Energy efficiency standards.
Sec. 70009. Energy strategy for HUD.

SEC. 2. ENERGY POLICY.

    It is the sense of the Congress that the United States should take 
all actions necessary in the areas of conservation, efficiency, 
alternative source, technology development, and domestic production to 
reduce the United States dependence on foreign energy sources from 58 
percent to 45 percent by January 1, 2013.

                    DIVISION A--ENERGY AND COMMERCE

SEC. 10001. SHORT TITLE.

    This division may be cited as the ``Energy Policy Act of 2003''.

                      TITLE I--ENERGY CONSERVATION

         Subtitle A--Federal Leadership in Energy Conservation

SEC. 11001. ENERGY AND WATER SAVING MEASURES IN CONGRESSIONAL 
              BUILDINGS.

    (a) In General.--Part 3 of title V of the National Energy 
Conservation Policy Act is amended by adding at the end:

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

    ``(a) In General.--The Architect of the Capitol--
            ``(1) shall develop, update, and implement a cost-effective 
        energy conservation and management plan (referred to in this 
        section as the `plan') for all facilities administered by 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 of the 
National Energy Conservation Policy Act is amended by adding at the end 
of the items relating to part 3 of title V the following new item:

``Sec. 552. Energy and water savings measures in congressional 
                            buildings.''.
    (c) Repeal.--Section 310 of the Legislative Branch Appropriations 
Act, 1999 (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.
    (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 years after the enactment of this Act.

SEC. 11002. ENERGY MANAGEMENT REQUIREMENTS.

    (a) Energy Reduction Goals.--
            (1) Amendment.--Section 543(a)(1) of the National Energy 
        Conservation Policy Act (42 U.S.C. 8253(a)(1)) is amended by 
        striking ``its Federal buildings so that'' and all that follows 
        through the end and inserting ``the Federal buildings of the 
        agency (including each industrial or laboratory facility) so 
        that the energy consumption per gross square foot of the 
        Federal buildings of the agency in fiscal years 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 2001, 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.''.
            (2) Reporting baseline.--The energy reduction goals and 
        baseline established in paragraph (1) of section 543(a) of the 
        National Energy Conservation Policy Act, as amended by 
        paragraph (1) of this subsection, supersede all previous goals 
        and baselines under such paragraph, and related reporting 
        requirements.
    (b) Review and Revision of Energy Performance Requirement.--Section 
543(a) of the National Energy Conservation Policy Act (42 U.S.C. 
8253(a)) is further amended by adding at the end the following:
    ``(3) Not later than December 31, 2012, 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 2023.''.
    (c) Exclusions.--Section 543(c)(1) of the National Energy 
Conservation Policy Act (42 U.S.C. 8253(c)(1)) is amended by striking 
``An agency may exclude'' and all that follows through the end and 
inserting ``(A) An agency may exclude, from the energy performance 
requirement for a fiscal year established under subsection (a) and the 
energy management requirement established under subsection (b), any 
Federal building or collection of Federal buildings, if the head of the 
agency finds that--
            ``(i) compliance with those requirements would be 
        impracticable;
            ``(ii) the agency has completed and submitted all federally 
        required energy management reports;
            ``(iii) the agency has achieved compliance with the energy 
        efficiency requirements of this Act, the Energy Policy Act of 
        1992, Executive orders, and other Federal law; and
            ``(iv) the agency has implemented all practicable, life 
        cycle cost-effective projects with respect to the Federal 
        building or collection of Federal buildings to be excluded.
    ``(B) A finding of impracticability under subparagraph (A)(i) shall 
be based on--
            ``(i) the energy intensiveness of activities carried out in 
        the Federal building or collection of Federal buildings; or
            ``(ii) the fact that the Federal building or collection of 
        Federal buildings is used in the performance of a national 
        security function.''.
    (d) Review by Secretary.--Section 543(c)(2) of the National Energy 
Conservation Policy Act (42 U.S.C. 8253(c)(2)) is amended--
            (1) by striking ``impracticability standards'' and 
        inserting ``standards for exclusion''; and
            (2) by striking ``a finding of impracticability'' and 
        inserting ``the exclusion''.
    (e) Criteria.--Section 543(c) of the National Energy Conservation 
Policy Act (42 U.S.C. 8253(c)) is further amended by adding at the end 
the following:
    ``(3) Not later than 180 days after the date of enactment of this 
paragraph, the Secretary shall issue guidelines that establish criteria 
for exclusions under paragraph (1).''.
    (f) Retention of Energy 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.''.
    (g) Reports.--Section 548(b) of the National Energy Conservation 
Policy Act (42 U.S.C. 8258(b)) is amended--
            (1) in the subsection heading, by inserting ``The President 
        and'' before ``Congress''; and
            (2) by inserting ``President and'' before ``Congress''.
    (h) Conforming Amendment.--Section 550(d) of the National Energy 
Conservation Policy Act (42 U.S.C. 8258b(d)) is amended in the second 
sentence by striking ``the 20 percent reduction goal established under 
section 543(a) of the National Energy Conservation Policy Act (42 
U.S.C. 8253(a)).'' and inserting ``each of the energy reduction goals 
established under section 543(a).''.

SEC. 11003. 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
                                    ``(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. 11004. 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 
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 ASHRAE Standard 90.1 or 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. 11005. PROCUREMENT OF ENERGY EFFICIENT PRODUCTS.

    (a) Requirements.--Part 3 of title V of the National Energy 
Conservation Policy Act is amended by adding at the end the following:

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

    ``(a) Definitions.--In this section:
            ``(1) Energy star product.--The term `Energy Star product' 
        means a product that is rated for energy efficiency under an 
        Energy Star program.
            ``(2) Energy star program.--The term `Energy Star program' 
        means the program established by section 324A of the Energy 
        Policy and Conservation Act.
            ``(3) Executive agency.--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) FEMP designated product.--The term `FEMP designated 
        product' means a product that is designated under the Federal 
        Energy Management Program of the Department of Energy as being 
        among the highest 25 percent of equivalent products for energy 
        efficiency.
    ``(b) Procurement of Energy Efficient Products.--
            ``(1) Requirement.--To meet the requirements of an 
        executive agency for an energy consuming product, the head of 
        the executive agency shall, except as provided in paragraph 
        (2), procure--
                    ``(A) an Energy Star product; or
                    ``(B) a FEMP designated product.
            ``(2) Exceptions.--The head of an 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.
    ``(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 101(b) 
of the National Energy Conservation Policy Act (42 U.S.C. 8201 note), 
as amended by section 11001(b) of this division, is further amended by 
inserting after the item relating to section 552 the following:

``Sec. 553. Federal procurement of energy efficient products.''.

SEC. 11006. 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 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.''.
    (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 cogeneration or heat 
                        recovery, excluding any cogeneration process 
                        for other than a federally owned building or 
                        buildings or other federally owned facilities; 
                        or
                            ``(iii) the increased efficient use of 
                        existing water sources; 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, operation, and, 
                where appropriate, maintenance and repair, of an 
                identified energy or water conservation measure or 
                series of measures at one or more locations; or
                    ``(B) energy savings through the construction and 
                operation of one or more buildings or facilities to 
                replace one or more existing buildings or facilities.
        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. 3301), be in 
        compliance with the prospectus requirements and procedures of 
        section 7 of the Public Buildings Act of 1959 (40 U.S.C. 
        3307).''.
    (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 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.''.
    (f) 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, and energy efficiency services covered. The 
Secretary shall report these findings to Congress, and shall implement 
identified administrative and regulatory changes to increase program 
flexibility and effectiveness to the extent that such changes are 
consistent with statutory authority.

SEC. 11007. VOLUNTARY COMMITMENTS TO REDUCE INDUSTRIAL ENERGY 
              INTENSITY.

    (a) Voluntary Agreements.--The Secretary of Energy shall enter into 
voluntary agreements with one or more persons in industrial sectors 
that consume significant amounts of primary energy per unit of physical 
output to reduce the energy intensity of their production activities.
    (b) Goal.--Voluntary agreements under this section shall have a 
goal of reducing energy intensity by not less than 2.5 percent each 
year from 2004 through 2014.
    (c) Recognition.--The Secretary of Energy, in cooperation with the 
Administrator of the Environmental Protection Agency and other 
appropriate Federal agencies, shall develop mechanisms to recognize and 
publicize the achievements of participants in voluntary agreements 
under this section.
    (d) Definition.--In this section, the term ``energy intensity'' 
means the primary energy consumed per unit of physical output in an 
industrial process.
    (e) Technical Assistance.--An entity that enters into an agreement 
under this section and continues to make a good faith effort to achieve 
the energy efficiency goals specified in the agreement shall be 
eligible to receive from the Secretary a grant or technical assistance 
as appropriate to assist in the achievement of those goals.
    (f) Report.--Not later than June 30, 2010 and June 30, 2014, the 
Secretary shall submit to Congress a report that evaluates the success 
of the voluntary agreements, with independent verification of a sample 
of the energy savings estimates provided by participating firms.

SEC. 11008. FEDERAL AGENCY PARTICIPATION IN DEMAND REDUCTION PROGRAMS.

    Section 546(c) of the National Energy Conservation Policy Act (42 
U.S.C. 8256(c)) is amended by adding at the end of the following new 
paragraph:
    ``(6) Federal agencies are encouraged to participate in State or 
regional demand side reduction programs. The availability of such 
programs, including measures employing onsite generation, and the 
savings resulting from such participation, should be included in the 
evaluation of energy options for Federal facilities.''.

SEC. 11009. ADVANCED BUILDING EFFICIENCY TESTBED.

    (a) Establishment.--The Secretary of Energy, in consultation with 
the Administrator of the General Services Administration, shall 
establish an Advanced Building Efficiency Testbed program for the 
development, testing, and demonstration of advanced engineering 
systems, components, and materials to enable innovations in building 
technologies. The program shall evaluate efficiency concepts for 
government and industry buildings, and demonstrate the ability of next 
generation buildings to support individual and organizational 
productivity and health as well as flexibility and technological change 
to improve environmental sustainability. Such program shall complement 
and not duplicate existing national programs.
    (b) Participants.--The program established under subsection (a) 
shall be led by a university with the ability to combine the expertise 
from numerous academic fields including, at a minimum, intelligent 
workplaces and advanced building systems and engineering, electrical 
and computer engineering, computer science, architecture, urban design, 
and environmental and mechanical engineering. Such university shall 
partner with other universities and entities who have established 
programs and the capability of advancing innovative building efficiency 
technologies.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Energy to carry out this section 
$6,000,000 for each of the fiscal years 2004 through 2006, to remain 
available until expended. For any fiscal year in which funds are 
expended under this section, the Secretary shall provide one-third of 
the total amount to the lead university described in subsection (b), 
and provide the remaining two-thirds to the other participants referred 
to in subsection (b) on an equal basis.

SEC. 11010. 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:

  ``increased use of recovered mineral component in federally funded 
          projects involving procurement of cement or concrete

    ``Sec. 6005. (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.
            ``(3) Report.--Not later than 30 months after the date of 
        enactment of this section, the Administrator shall submit to 
        Congress a report on the study.
    ``(d) Additional Procurement Requirements.--Unless the study 
conducted under subsection (c) identifies any effects or other problems 
described in subsection (c)(2)(C)(iii) that warrant further review or 
delay, the Administrator and each agency head shall, within 1 year of 
the release of the report in accordance with subsection (c)(3), take 
additional actions authorized under this Act to establish procurement 
requirements and incentives that provide for the use of cement and 
concrete with increased substitution of recovered mineral component in 
the construction and maintenance of cement or concrete projects, 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. 11011. USE OF PHOTOVOLTAIC ENERGY IN PUBLIC BUILDINGS.

    (a) In General.--Subchapter VI of chapter 31 of title 40, United 
States Code, is amended by adding at the end the following:
``Sec. 3177. Use of photovoltaic energy in public buildings
    ``(a) Photovoltaic Energy Commercialization Program.--
            ``(1) In general.--The Administrator of General Services 
        may establish a photovoltaic energy commercialization program 
        for the procurement and installation of photovoltaic solar 
        electric systems for electric production in new and existing 
        public buildings.
            ``(2) Purposes.--The purposes of the program shall be to 
        accomplish the following:
                    ``(A) To accelerate the growth of a commercially 
                viable photovoltaic industry to make this energy system 
                available to the general public as an option which can 
                reduce the national consumption of fossil fuel.
                    ``(B) To reduce the fossil fuel consumption and 
                costs of the Federal Government.
                    ``(C) To attain the goal of installing solar energy 
                systems in 20,000 Federal buildings by 2010, as 
                contained in the Federal Government's Million Solar 
                Roof Initiative of 1997.
                    ``(D) To stimulate the general use within the 
                Federal Government of life-cycle costing and innovative 
                procurement methods.
                    ``(E) To develop program performance data to 
                support policy decisions on future incentive programs 
                with respect to energy.
            ``(3) Acquisition of photovoltaic solar electric systems.--
                    ``(A) In general.--The program shall provide for 
                the acquisition of photovoltaic solar electric systems 
                and associated storage capability for use in public 
                buildings.
                    ``(B) Acquisition levels.--The acquisition of 
                photovoltaic electric systems shall be at a level 
                substantial enough to allow use of low-cost production 
                techniques with at least 150 megawatts (peak) 
                cumulative acquired during the 5 years of the program.
            ``(4) Administration.--The Administrator shall administer 
        the program and shall--
                    ``(A) prescribe such rules and regulations as may 
                be appropriate to monitor and assess the performance 
                and operation of photovoltaic solar electric systems 
                installed pursuant to this subsection;
                    ``(B) develop innovative procurement strategies for 
                the acquisition of such systems; and
                    ``(C) transmit to the Committee on Transportation 
                and Infrastructure of the House of Representatives and 
                to the Committee on Environment and Public Works of the 
                Senate an annual report on the results of the program.
    ``(b) Photovoltaic Systems Evaluation Program.--
            ``(1) In general.--Not later than 60 days after the date of 
        enactment of this section, the Administrator, in consultation 
        with the Secretary of Energy, shall establish a photovoltaic 
        solar energy systems evaluation program to evaluate such 
        photovoltaic solar energy systems as are required in public 
        buildings.
            ``(2) Program requirement.--In evaluating photovoltaic 
        solar energy systems under the program, the Administrator shall 
        ensure that such systems reflect the most advanced technology.
    ``(c) Authorization of Appropriations.--
            ``(1) Photovoltaic energy commercialization program.--There 
        is authorized to be appropriated to carry out subsection (a) 
        $210,000,000 for each of fiscal years 2004 through 2008. Such 
        sums shall remain available until expended.
            ``(2) Photovoltaic systems evaluation program.--There is 
        authorized to be appropriated to carry out subsection (b) 
        $52,700,000 for each of fiscal years 2004 through 2008. Such 
        sums shall remain available until expended.''.
    (b) Conforming Amendment.--The analysis for such chapter is amended 
by inserting after the item relating to section 3176 the following:

``3177. Use of photovoltaic energy in public buildings''.

SEC. 11012. TELECOMMUTING STUDY.

    (a) Study Required.--The Secretary, in consultation with the 
Commission, the Director of the Office of Personnel Management, the 
Administrator of General Services, and the Administrator of NTIA, shall 
conduct a study of the energy conservation implications of the 
widespread adoption of telecommuting by Federal employees in the United 
States.
    (b) Required Subjects of Study.--The study required by subsection 
(a) shall analyze the following subjects in relation to the energy 
saving potential of telecommuting by Federal employees:
            (1) Reductions of energy use and energy costs in commuting 
        and regular office heating, cooling, and other operations.
            (2) Other energy reductions accomplished by telecommuting.
            (3) Existing regulatory barriers that hamper telecommuting, 
        including barriers to broadband telecommunications services 
        deployment.
            (4) Collateral benefits to the environment, family life, 
        and other values.
    (c) Report Required.--The Secretary shall submit to the President 
and the Congress a report on the study required by this section not 
later than 6 months after the date of the enactment of this Act. Such 
report shall include a description of the results of the analysis of 
each of the subject described in subsection (b).
    (d) Definitions.--As used in this section:
            (1) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.
            (2) Commission.--The term ``Commission'' means the Federal 
        Communications Commission.
            (3) NTIA.--The term ``NTIA'' means the National 
        Telecommunications and Information Administration of the 
        Department of Commerce.
            (4) Telecommuting.--The term ``telecommuting'' means the 
        performance of work functions using communications 
        technologies, thereby eliminating or substantially reducing the 
        need to commute to and from traditional worksites.
            (5) Federal employee.--The term ``Federal employee'' has 
        the meaning provided the term ``employee'' by section 2105 of 
        title 5, United States Code.

            Subtitle B--Energy Assistance and State Programs

SEC. 11021. LIHEAP AND WEATHERIZATION ASSISTANCE.

    (a) Low-Income Home Energy Assistance Program.--Section 2602(b) of 
the Low-Income Home Energy Assistance Act of 1981 (42 U.S.C. 8621(b)) 
is amended by striking ``each of fiscal years 2002 through 2004'' and 
inserting ``each of fiscal years 2002 and 2003, and $3,400,000,000 for 
each of fiscal years 2004 through 2006''.
    (b) Weatherization.--Section 422 of the Energy Conservation and 
Production Act (42 U.S.C. 6872) is amended by striking ``for fiscal 
years 1999 through 2003 such sums as may be necessary'' and inserting 
``$325,000,000 for fiscal year 2004, $400,000,000 for fiscal year 2005, 
and $500,000,000 for fiscal year 2006''.
    (c) Report to Congress.--Not later than 1 year after the date of 
enactment of this Act, the Secretary of Health and Human Services shall 
transmit to the Congress a report on how the Low-Income Home Energy 
Assistance Program could be used more effectively to prevent loss of 
life from extreme temperatures. In preparing such report, the Secretary 
shall consult with appropriate officials in all 50 States and the 
District of Columbia.

SEC. 11022. STATE ENERGY PROGRAMS.

    (a) State Energy Conservation Plans.--Section 362 of the Energy 
Policy and Conservation Act (42 U.S.C. 6322) is amended by inserting at 
the end the following new subsection:
    ``(g) The Secretary shall, at least once every 3 years, invite the 
Governor of each State to review and, if necessary, revise the energy 
conservation plan of such State submitted under subsection (b) or (e). 
Such reviews should consider the energy conservation plans of other 
States within the region, and identify opportunities and actions 
carried out in pursuit of common energy conservation goals.''.
    (b) State Energy Efficiency Goals.--Section 364 of the Energy 
Policy and Conservation Act (42 U.S.C. 6324) is amended to read as 
follows:

                    ``state energy efficiency goals

    ``Sec. 364. Each State energy conservation plan with respect to 
which assistance is made available under this part on or after the date 
of enactment of the Energy Policy Act of 2003 shall contain a goal, 
consisting of an improvement of 25 percent or more in the efficiency of 
use of energy in the State concerned in calendar year 2010 as compared 
to calendar year 1990, and may contain interim goals.''.
    (c) Authorization of Appropriations.--Section 365(f) of the Energy 
Policy and Conservation Act (42 U.S.C. 6325(f)) is amended by striking 
``for fiscal years 1999 through 2003 such sums as may be necessary'' 
and inserting ``$100,000,000 for each of the fiscal years 2004 and 2005 
and $125,000,000 for fiscal year 2006''.

SEC. 11023. ENERGY EFFICIENT APPLIANCE REBATE PROGRAMS.

    (a) Definitions.--In this section:
            (1) Eligible state.--The term ``eligible State'' means a 
        State that meets the requirements of subsection (b).
            (2) Energy star program.--The term ``Energy Star program'' 
        means the program established by section 324A of the Energy 
        Policy and Conservation Act.
            (3) Residential energy star product.--The term 
        ``residential Energy Star product'' means a product for a 
        residence that is rated for energy efficiency under the Energy 
        Star program.
            (4) State energy office.--The term ``State energy office'' 
        means the State agency responsible for developing State energy 
        conservation plans under section 362 of the Energy Policy and 
        Conservation Act (42 U.S.C. 6322).
            (5) State program.--The term ``State program'' means a 
        State energy efficient appliance rebate program described in 
        subsection (b)(1).
    (b) Eligible States.--A State shall be eligible to receive an 
allocation under subsection (c) if the State--
            (1) establishes (or has established) a State energy 
        efficient appliance rebate program to provide rebates to 
        residential consumers for the purchase of residential Energy 
        Star products to replace used appliances of the same type;
            (2) submits an application for the allocation at such time, 
        in such form, and containing such information as the Secretary 
        may require; and
            (3) provides assurances satisfactory to the Secretary that 
        the State will use the allocation to supplement, but not 
        supplant, funds made available to carry out the State program.
    (c) Amount of Allocations.--
            (1) In general.--Subject to paragraph (2), for each fiscal 
        year, the Secretary shall allocate to the State energy office 
        of each eligible State to carry out subsection (d) an amount 
        equal to the product obtained by multiplying the amount made 
        available under subsection (f) for the fiscal year by the ratio 
        that the population of the State in the most recent calendar 
        year for which data are available bears to the total population 
        of all eligible States in that calendar year.
            (2) Minimum allocations.--For each fiscal year, the amounts 
        allocated under this subsection shall be adjusted 
        proportionately so that no eligible State is allocated a sum 
        that is less than an amount determined by the Secretary.
    (d) Use of Allocated Funds.--The allocation to a State energy 
office under subsection (c) may be used to pay up to 50 percent of the 
cost of establishing and carrying out a State program.
    (e) Issuance of Rebates.--Rebates may be provided to residential 
consumers that meet the requirements of the State program. The amount 
of a rebate shall be determined by the State energy office, taking into 
consideration--
            (1) the amount of the allocation to the State energy office 
        under subsection (c);
            (2) the amount of any Federal or State tax incentive 
        available for the purchase of the residential Energy Star 
        product; and
            (3) the difference between the cost of the residential 
        Energy Star product and the cost of an appliance that is not a 
        residential Energy Star product, but is of the same type as, 
        and is the nearest capacity, performance, and other relevant 
        characteristics (as determined by the State energy office) to 
        the residential Energy Star product.
    (f) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $50,000,000 for each of the 
fiscal years 2004 through 2008.

SEC. 11024. 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 2004 
through 2013. Not more than 30 percent of appropriated funds shall be 
used for administration.

SEC. 11025. 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.
    (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.

                 Subtitle C--Energy Efficient Products

SEC. 11041. ENERGY STAR PROGRAM.

    (a) Amendment.--The Energy Policy and Conservation Act (42 U.S.C. 
6201 and following) is amended by inserting the following after section 
324:

``SEC. 324A. ENERGY STAR PROGRAM.

    ``There is established at the Department of Energy and the 
Environmental Protection Agency a program to identify and promote 
energy-efficient products and buildings in order to reduce energy 
consumption, improve energy security, and reduce pollution through 
labeling of and 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; and
            ``(4) solicit the comments of interested parties in 
        establishing a new Energy Star product category or in revising 
        a product category, and upon adoption of a new or revised 
        product category provide an explanation of the decision that 
        responds to significant public comments.''.
    (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. 11042. CONSUMER EDUCATION ON ENERGY EFFICIENCY BENEFITS OF AIR 
              CONDITIONING, HEATING, AND VENTILATION MAINTENANCE.

    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.--(1) 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.
    ``(2) The Secretary shall carry out the program 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 Agency, and the 
Department of Agriculture.''.

SEC. 11043. ADDITIONAL DEFINITIONS.

    Section 321 of the Energy Policy and Conservation Act (42 U.S.C. 
6291) is amended 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--
                            ``(i) an electrically powered integral 
                        light source that illuminates the legend `EXIT' 
                        and any directional indicators; and
                            ``(ii) provides contrast between the 
                        legend, any directional indicators, and the 
                        background.
            ``(36)(A) Except as provided in subparagraph (B), the term 
        `low-voltage 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 that are designed to be used in 
                a special purpose application, such as transformers 
                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; 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) 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.
            ``(38) The term `torchiere' means a portable electric lamp 
        with a reflector bowl that directs light upward so as to give 
        indirect illumination.
            ``(39) 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.
            ``(40) 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.
            ``(41) 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. 11044. ADDITIONAL TEST PROCEDURES.

    (a) Exit Signs.--Section 323(b) of the Energy Policy and 
Conservation Act (42 U.S.C. 6293) is amended 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 based on future revisions 
        to such standard test method.
            ``(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.''.
    (b) Additional Consumer and Commercial Products.--Section 323 of 
the Energy Policy and Conservation Act (42 U.S.C. 6293) is further 
amended 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, commercial unit heaters, 
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. 11045. ENERGY CONSERVATION STANDARDS FOR ADDITIONAL CONSUMER AND 
              COMMERCIAL PRODUCTS.

    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 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 noncovered 
        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 for standby mode.--(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 to reduce standby mode energy 
        use.--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, Unit Heaters, and 
Commercial Refrigerators, Freezers and Refrigerator-Freezers.--The 
Secretary shall within 24 months after the date on which testing 
requirements are prescribed by the Secretary pursuant to section 
323(f), prescribe, by rule, energy conservation standards for suspended 
ceiling fans, refrigerated bottled or canned beverage vending machines, 
unit heaters, 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) Low Voltage Dry-Type Transformers.--The efficiency of low 
voltage dry-type transformers manufactured on or after January 1, 2005 
shall be the Class I Efficiency Levels for low voltage dry-type 
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-1-1996).
    ``(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) Effective Date of Section 327.--The provisions of section 
327 shall apply to products for which standards are set in subsections 
(v) through (z) of this section after the effective date for such 
standards.''.

SEC. 11046. 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.''.
    (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 (z) 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.''.

SEC. 11047. STUDY OF ENERGY EFFICIENCY STANDARDS.

    The Secretary of Energy shall contract with the National Academy of 
Sciences for a study, to be completed within 1 year of enactment of 
this Act, to examine whether the goals of energy efficiency standards 
are best served by measurement of energy consumed, and efficiency 
improvements, at the actual site of energy consumption, or through the 
full fuel cycle, beginning at the source of energy production. The 
Secretary shall submit the report to the Congress.

                         TITLE II--OIL AND GAS

                Subtitle A--Alaska Natural Gas Pipeline

SEC. 12001. SHORT TITLE.

    This subtitle may be cited as the ``Alaska Natural Gas Pipeline Act 
of 2003''.

SEC. 12002. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds the following:
            (1) Construction of a natural gas pipeline system from the 
        Alaskan North Slope to United States markets is in the national 
        interest and will enhance national energy security by providing 
        access to the significant gas reserves in Alaska needed to meet 
        the anticipated demand for natural gas.
            (2) The Commission issued a conditional certificate of 
        public convenience and necessity for the Alaska natural gas 
        transportation system, which remains in effect.
    (b) Purposes.--The purposes of this subtitle are as follows:
            (1) To provide a statutory framework for the expedited 
        approval, construction, and initial operation of an Alaska 
        natural gas transportation project, as an alternative to the 
        framework provided in the Alaska Natural Gas Transportation Act 
        of 1976 (15 U.S.C. 719 et seq.), which remains in effect.
            (2) To establish a process for providing access to such 
        transportation project in order to promote competition in the 
        exploration, development, and production of Alaska natural gas.
            (3) To clarify Federal authorities under the Alaska Natural 
        Gas Transportation Act of 1976.

SEC. 12003. DEFINITIONS.

    In this subtitle, the following definitions apply:
            (1) Alaska natural gas.--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) Alaska natural gas transportation project.--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--
                    (A) the Alaska Natural Gas Transportation Act of 
                1976 (15 U.S.C. 719 et seq.); or
                    (B) section 12004.
            (3) Alaska natural gas transportation system.--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) Commission.--The term ``Commission'' means the Federal 
        Energy Regulatory Commission.
            (5) President's decision.--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. 719e) 
        and approved by Public Law 95-158 (91 Stat. 1268).

SEC. 12004. 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) In general.--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) Considerations.--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 12005.
    (d) Prohibition on Certain Pipeline Route.--No license, permit, 
lease, right-of-way, authorization, or other approval required under 
Federal law for the construction of any pipeline to transport natural 
gas from lands within the Prudhoe Bay oil and gas lease area may be 
granted for any pipeline that follows a route that traverses--
            (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 12006, 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, be consistent with the 
purposes set forth in section 12002(b)(2), 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.
    (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. 12005. 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 12004 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 
12004. 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 12004 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. 12006. 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.
    (e) Regulations.--The Commission may issue regulations to carry out 
the provisions of this section.

SEC. 12007. 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 
        of the Senate;
            (2) hold office at the pleasure of the President; 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) Expedited reviews and actions.--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) Prohibition on certain terms and conditions.--Except 
        with respect to Commission actions under sections 12004, 12005, 
        and 12006, 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, right-of-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 of the project.
            (3) Prohibition on certain actions.--Except with respect to 
        Commission actions under sections 12004, 12005, and 12006, 
        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 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. 12008. 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--
            (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 as described in section 12002(a).
    (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. 12009. 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 12004(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. 12010. 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. 12011. 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. 719g) 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 U.S.C. 719g) 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. 12012. 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. 12013. 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) In general.--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) Report.--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) Updates.--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) Applicability.--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. 12014. 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;
            (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
                    (C) other relevant factors and circumstances.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Labor such sums as may be necessary, 
but not to exceed $20,000,000, to carry out this section.

                Subtitle B--Strategic Petroleum Reserve

SEC. 12101. FULL CAPACITY OF STRATEGIC PETROLEUM RESERVE.

    The President shall--
            (1) fill the Strategic Petroleum Reserve established 
        pursuant to part B of title I of the Energy Policy and 
        Conservation Act (42 U.S.C. 6231 et seq.) to full capacity as 
        soon as practicable;
            (2) acquire petroleum for the Strategic Petroleum Reserve 
        by the most practicable and cost-effective means, with 
        consideration being given to domestically produced petroleum, 
        including the acquisition of crude oil the United States is 
        entitled to receive in kind as royalties from production on 
        Federal lands; and
            (3) ensure that the fill rate minimizes impacts on 
        petroleum markets.

SEC. 12102. STRATEGIC PETROLEUM RESERVE EXPANSION.

    (a) Plan.--Not later than 180 days after the date of the enactment 
of this Act, the Secretary of Energy shall transmit to the Congress a 
plan for the expansion of the Strategic Petroleum Reserve to 
1,000,000,000 barrels, including--
            (1) plans for the elimination of infrastructure impediments 
        to maximum drawdown capability;
            (2) a schedule for the completion of all required 
        environmental reviews;
            (3) provision for consultation with Federal and State 
        environmental agencies;
            (4) a schedule and procedures for site selection; and
            (5) anticipated annual budget requests.
    (b) Construction of Additional Capacity.--The Secretary of Energy 
shall acquire property and complete construction for the expansion of 
the Strategic Petroleum Reserve in accordance with the plan transmitted 
under subsection (a).
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Energy $1,500,000,000 for carrying out 
this section, to remain available until expended.

SEC. 12103. 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. 6250e); and
            (3) by striking part E (42 U.S.C. 6251; relating to the 
        expiration of title I of the Act).
    (b) Amendment to Title II of the Energy Policy and Conservation 
Act.--Title II of the Energy Policy and Conservation Act (42 U.S.C. 
6271 et seq.) is amended--
            (1) by inserting before section 273 (42 U.S.C. 6283) the 
        following:

          ``Part C--Summer Fill and Fuel Budgeting Programs'';

            (2) by striking section 273(e) (42 U.S.C. 6283(e); relating 
        to the expiration of summer fill and fuel budgeting programs); 
        and
            (3) by striking part D (42 U.S.C. 6285; relating to the 
        expiration of title II of the Act).
    (c) Technical Amendments.--The table of contents for the Energy 
Policy and Conservation Act is amended--
            (1) by inserting after the items relating to part C of 
        title I the following:

              ``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) Amendment to the Energy Policy and Conservation Act.--Section 
183(b)(1) of the Energy Policy and Conservation Act (42 U.S.C. 
6250b(b)(1)) is amended by inserting ``(considered as a heating season 
average)'' after ``mid-October through March''.

                    Subtitle C--Hydraulic Fracturing

SEC. 12201. HYDRAULIC FRACTURING.

    Paragraph (1) of section 1421(d) of the Safe Drinking Water Act (42 
U.S.C. 300h(d)) is amended to read as follows:
            ``(1) The term `underground injection'--
                    ``(A) means the subsurface emplacement of fluids by 
                well injection; and
                    ``(B) excludes--
                            ``(i) the underground injection of natural 
                        gas for purposes of storage; and
                            ``(ii) the underground injection of fluids 
                        or propping agents pursuant to hydraulic 
                        fracturing operations related to oil or gas 
                        production activities.''.

   Subtitle D--Unproven Oil and Natural Gas Reserves Recovery Program

SEC. 12301. PROGRAM.

    The Secretary shall carry out a program to demonstrate technologies 
for the recovery of oil and natural gas reserves from reservoirs 
described in section 12302.

SEC. 12302. ELIGIBLE RESERVOIRS.

    The program under this subtitle shall only address oil and natural 
gas reservoirs with 1 or more of the following characteristics:
            (1) Complex geology involving rapid changes in the type and 
        quality of the oil reservoir across the reservoir.
            (2) Low reservoir pressure.
            (3) Unconventional natural gas reservoirs in coalbeds, 
        tight sands, or shales.

SEC. 12303. FOCUS AREAS.

    The program under this subtitle may focus on areas including coal-
bed methane, deep drilling, natural gas production from tight sands, 
natural gas production from gas shales, innovative production 
techniques (including horizontal drilling, fracture detection 
methodologies, and three-dimensional seismic), and enhanced recovery 
techniques.

SEC. 12304. LIMITATION ON LOCATION OF ACTIVITIES.

    Activities under this subtitle shall be carried out only--
            (1) in--
                    (A) areas onshore in the United States on public 
                land administered by the Secretary of the Interior 
                available for oil and gas leasing, where consistent 
                with applicable law and land use plans; and
                    (B) areas onshore in the United States on State or 
                private land, subject to applicable law; and
            (2) with the approval of the appropriate Federal or State 
        land management agency or private land owner.

SEC. 12305. PROGRAM ADMINISTRATION.

    (a) Role of the Secretary.--The Secretary shall have ultimate 
responsibility for, and oversight of, all aspects of the program under 
this subtitle.
    (b) Role of the Program Consortium.--
            (1) In general.--The Secretary shall contract with a 
        consortium to--
                    (A) manage awards pursuant to subsection (e)(4);
                    (B) make recommendations to the Secretary for 
                project solicitations;
                    (C) disburse funds awarded under subsection (e) as 
                directed by the Secretary in accordance with the annual 
                plan under subsection (d); and
                    (D) carry out other activities assigned to the 
                program consortium by this section.
            (2) Limitation.--The Secretary may not assign any 
        activities to the program consortium except as specifically 
        authorized under this section.
            (3) Conflict of interest.--(A) The Secretary shall 
        establish procedures--
                    (i) to ensure that each board member, officer, or 
                employee of the program consortium who is in a 
                decisionmaking capacity under subsection (e)(3) or (4) 
                shall disclose to the Secretary any financial interests 
                in, or financial relationships with, applicants for or 
                recipients of awards under this section, including 
                those of his or her spouse or minor child, unless such 
                relationships or interests would be considered to be 
                remote or inconsequential; and
                    (ii) to require any board member, officer, or 
                employee with a financial relationship or interest 
                disclosed under clause (i) to recuse himself or herself 
                from any review under subsection (e)(3) or oversight 
                under subsection (e)(4) with respect to such applicant 
                or recipient.
            (B) The Secretary may disqualify an application or revoke 
        an award under this section if a board member, officer, or 
        employee has failed to comply with procedures required under 
        subparagraph (A)(ii).
    (c) Selection of the Program Consortium.--
            (1) In general.--The Secretary shall select the program 
        consortium through an open, competitive process.
            (2) Members.--The program consortium may include 
        corporations and institutions of higher education. The 
        Secretary shall give preference in the selection of the program 
        consortium to applicants with broad representation from the 
        various major oil and natural gas basins in the United States. 
        After submitting a proposal under paragraph (4), the program 
        consortium may not add members without the consent of the 
        Secretary.
            (3) Tax status.--The program consortium shall be an entity 
        that is exempt from tax under section 501(c)(3) of the Internal 
        Revenue Code of 1986.
            (4) Schedule.--Not later than 90 days after the date of 
        enactment of this Act, the Secretary shall solicit proposals 
        for the creation of the program consortium, which must be 
        submitted not less than 180 days after the date of enactment of 
        this Act. The Secretary shall select the program consortium not 
        later than 240 days after such date of enactment.
            (5) Application.--Applicants shall submit a proposal 
        including such information as the Secretary may require. At a 
        minimum, each proposal shall--
                    (A) list all members of the consortium;
                    (B) fully describe the structure of the consortium, 
                including any provisions relating to intellectual 
                property; and -
                    (C) describe how the applicant would carry out the 
                activities of the program consortium under this 
                section.
            (6) Eligibility.--To be eligible to be selected as the 
        program consortium, an applicant must be an entity whose 
        members collectively have demonstrated capabilities in planning 
        and managing programs for the production of oil or natural gas.
            (7) Criterion.--The Secretary may consider the amount of 
        the fee an applicant proposes to receive under subsection (f) 
        in selecting a consortium under this section.
    (d) Annual Plan.--
            (1) In general.--The program under this subtitle shall be 
        carried out pursuant to an annual plan prepared by the 
        Secretary in accordance with paragraph (2).
            (2) Development.--(A) Before drafting an annual plan under 
        this subsection, the Secretary shall solicit specific written 
        recommendations from the program consortium for each element to 
        be addressed in the plan, including those described in 
        paragraph (4). The Secretary may request that the program 
        consortium submit its recommendations in the form of a draft 
        annual plan.
            (B) The Secretary shall submit the recommendations of the 
        program consortium under subparagraph (A) to the Advisory 
        Committee for review, and the Advisory Committee shall provide 
        to the Secretary written comments by a date determined by the 
        Secretary. The Secretary may also solicit comments from any 
        other experts.
            (C) The Secretary shall consult regularly with the program 
        consortium throughout the preparation of the annual plan.
            (3) Publication.--The Secretary shall transmit to the 
        Congress and publish in the Federal Register the annual plan, 
        along with any written comments received under paragraph (2)(A) 
        and (B). The annual plan shall be transmitted and published not 
        later than 60 days after the date of enactment of an Act making 
        appropriations for a fiscal year for the program under this 
        subtitle.
            (4) Contents.--The annual plan shall describe the ongoing 
        and prospective activities of the program under this subtitle 
        and shall include--
                    (A) a list of any solicitations for awards that the 
                Secretary plans to issue to carry out activities, 
                including the topics for such work, who would be 
                eligible to apply, selection criteria, and the duration 
                of awards; and
                    (B) a description of the activities expected of the 
                program consortium to carry out subsection (e)(4).
    (e) Awards.--
            (1) In general.--The Secretary shall make awards to carry 
        out activities under the program under this subtitle. The 
        program consortium shall not be eligible to receive such 
        awards, but members of the program consortium may receive such 
        awards.
            (2) Proposals.--
                    (A) Solicitation.--The Secretary shall solicit 
                proposals for awards under this subsection in such 
                manner and at such time as the Secretary may prescribe, 
                in consultation with the program consortium.
                    (B) Contents.--Each proposal submitted shall 
                include the following:
                            (i) An estimate of the potential unproven 
                        reserves in the reservoir, established by a 
                        registered petroleum engineer.
                            (ii) An estimate of the potential for 
                        success of the project.
                            (iii) A detailed project plan.
                            (iv) A detailed analysis of the costs 
                        associated with the project.
                            (v) A time frame for project completion.
                            (vi) Evidence that any lienholder on the 
                        project will subordinate its interests to the 
                        extent necessary to ensure that the Federal 
                        government receives its portion of any revenues 
                        pursuant to section 12308.
                            (vii) Such other matters as the Secretary 
                        considers appropriate.
            (3) Review.--The Secretary shall make awards under this 
        subsection through a competitive process, which shall include a 
        review by individuals selected by the Secretary. Such 
        individuals shall include, for each application, Federal 
        officials, the program consortium, and non-Federal experts who 
        are not board members, officers, or employees of the program 
        consortium or of a member of the program consortium.
            (4) Oversight.--(A) The program consortium shall oversee 
        the implementation of awards under this subsection, consistent 
        with the annual plan under subsection (d), including disbursing 
        funds and monitoring activities carried out under such awards 
        for compliance with the terms and conditions of the awards.
            (B) Nothing in subparagraph (A) shall limit the authority 
        or responsibility of the Secretary to oversee awards, or limit 
        the authority of the Secretary to review or revoke awards.
            (C) The Secretary shall provide to the program consortium 
        the information necessary for the program consortium to carry 
        out its responsibilities under this paragraph.
    (f) Fee.--To compensate the program consortium for carrying out its 
activities under this section, the Secretary shall provide to the 
program consortium a fee in an amount not to exceed 7.5 percent of the 
amounts awarded under subsection (e) for each fiscal year.
    (g) Disallowed Expenses.--No portion of any award shall be used by 
a recipient for general or administrative expenses of any kind.
    (h) Audit.--The Secretary shall retain an independent, commercial 
auditor to determine the extent to which funds provided to the program 
consortium, and funds provided under awards made under subsection (e), 
have been expended in a manner consistent with the purposes and 
requirements of this subtitle. The auditor shall transmit a report 
annually to the Secretary, who shall transmit the report to Congress, 
along with a plan to remedy any deficiencies cited in the report.

SEC. 12306. ADVISORY COMMITTEE.

    (a) Establishment.--Not later than 270 days after the date of 
enactment of this Act, the Secretary shall establish an Advisory 
Committee.
    (b) Membership.--The Advisory Committee shall be composed of 
members appointed by the Secretary and including--
            (1) individuals with extensive experience or operational 
        knowledge of oil and natural gas production, including 
        independent oil and gas producers;
            (2) individuals broadly representative of oil and natural 
        gas production; and
            (3) no individuals who are Federal employees.
    (c) Duties.--The Advisory Committee shall advise the Secretary on 
the development and implementation of activities under this subtitle.
    (d) Compensation.--A member of the Advisory Committee shall serve 
without compensation but shall receive travel expenses, including per 
diem in lieu of subsistence, in accordance with applicable provisions 
under subchapter I of chapter 57 of title 5, United States Code.
    (e) Prohibition.--The Advisory Committee shall not make 
recommendations on funding awards to consortia or for specific 
projects.

SEC. 12307. LIMITS ON PARTICIPATION.

    An entity shall be eligible to receive an award under this subtitle 
only if the Secretary finds--
            (1) that the entity's participation in the program under 
        this subtitle would be in the economic interest of the United 
        States;
            (2) that the entity is a United States-owned entity 
        organized under the laws of the United States with production 
        levels of less than 1,000 barrels per day of oil equivalent; 
        and
            (3) that the entity has demonstrated that nongovernmental 
        third party sources of financing are not available for the 
        proposal project.

SEC. 12308. PAYMENTS TO FEDERAL GOVERNMENT.

    (a) Initial Rate.--Until the amount of a grant under this subtitle 
has been fully repaid to the Federal Government under this subsection, 
95 percent of all revenues derived from increased incremental 
production attributable to participation in the program under this 
subtitle shall be paid to the Secretary by the purchaser of such 
increased production.
    (b) Rate After Repayment.--After the Federal Government has been 
fully repaid under subsection (a), 5 percent of all revenues derived 
from increased incremental production attributable to participation in 
the program under this subtitle shall be paid to the Secretary by the 
purchaser of such increased production.

SEC. 12309. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Secretary for 
carrying out this subtitle $100,000,000, to remain available until 
expended.

SEC. 12310. PUBLIC AVAILABILITY OF PROJECT RESULTS AND METHODOLOGIES.

    The results of any project undertaken pursuant to this subtitle and 
the methodologies used to achieve those results shall be made public by 
the Secretary. The methodologies used shall not be proprietary so that 
such methodologies may be used for other projects by persons not 
seeking awards pursuant to this subtitle.

SEC. 12311. SUNSET.

    The authority provided by this subtitle shall terminate on 
September 30, 2010.

SEC. 12312. DEFINITIONS.

    In this subtitle:
            (1) Program consortium.--The term ``program consortium'' 
        means the consortium selected under section 12305(c).
            (2) Remote or inconsequential.--The term ``remote or 
        inconsequential'' has the meaning given that term in 
        regulations issued by the Office of Government Ethics under 
        section 208(b)(2) of title 18, United States Code.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.

                       Subtitle E--Miscellaneous

SEC. 12401. APPEALS RELATING TO PIPELINE CONSTRUCTION PROJECTS.

    (a) Agency of Record.--Any Federal administrative agency proceeding 
that is an appeal or review of Federal authority for an interstate 
natural gas pipeline construction project, including construction of 
natural gas storage and liquefied natural gas facilities, shall use as 
its exclusive record for all purposes the record compiled by the 
Federal Energy Regulatory Commission pursuant to such Commission's 
proceeding under section 7 of the Natural Gas Act.
    (b) Sense of the Congress.--It is the sense of the Congress that 
all Federal and State agencies with jurisdiction over interstate 
natural gas pipeline construction activities should coordinate their 
proceedings within the time frames established by the Federal Energy 
Regulatory Commission while it is acting pursuant to section 7 of the 
Natural Gas Act to determine whether a proposed interstate natural gas 
pipeline is in the public convenience and necessity.

SEC. 12402. NATURAL GAS MARKET DATA TRANSPARENCY.

    (a) Establishment of System.--Not later than 180 days after the 
date of enactment of this Act, the Federal Energy Regulatory Commission 
shall issue rules authorizing or establishing an electronic information 
system to provide the Commission and the public with timely access to 
such information as is necessary or appropriate to facilitate price 
transparency and participation in natural gas markets. Such system 
shall provide information about the market price of natural gas sold in 
interstate commerce.
    (b) Data Subject to Disclosure.--Rules issued under subsection (a) 
shall require public availability only of--
            (1) aggregate data; and
            (2) transaction-specific data that is otherwise required by 
        the Federal Energy Regulatory Commission to be made public.
    (c) Civil Penalty.--Any person who violates any provision of a rule 
issued under subsection (a) shall be subject to a civil penalty of not 
more than $1,000,000 for each day that such violation continues. Such 
penalty shall be assessed by the Federal Energy Regulatory Commission, 
after notice and opportunity for public hearing. In determining the 
amount of a proposed penalty, the Commission shall take into 
consideration the seriousness of the violation and the efforts of such 
person to remedy the violation in a timely manner.

SEC. 12403. OIL AND GAS EXPLORATION AND PRODUCTION DEFINED.

    Section 502 of the Federal Water Pollution Control Act (33 U.S.C. 
1362) is amended by adding at the end the following:
    ``(24) The term `oil and gas exploration and production' means all 
field operations necessary for both exploration and production of oil 
and gas, including activities necessary to prepare a site for drilling 
and for the movement and placement of drilling equipment, whether or 
not such activities may be considered construction activities.''.

SEC. 12404. COMPLEX WELL TECHNOLOGY TESTING FACILITY.

    The Secretary, in coordination with industry leaders in extended 
reach drilling technology, shall establish a Complex Well Technology 
Testing Facility at the Rocky Mountain Oilfield Testing Center to 
increase the range of extended drilling technology to 50,000 feet, so 
that more energy resources can be realized with fewer drilling 
facilities.

                        TITLE III--HYDROELECTRIC

                   Subtitle A--Alternative Conditions

SEC. 13001. 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 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 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.''.

                   Subtitle B--Additional Hydropower

SEC. 13201. HYDROELECTRIC PRODUCTION INCENTIVES.

    (a) Incentive Payments.--For electric energy generated and sold by 
a qualified hydroelectric facility during the incentive period, the 
Secretary of Energy (referred to in this section as the ``Secretary'') 
shall make, subject to the availability of appropriations, incentive 
payments to the owner or operator of such facility. The amount of such 
payment made to any such owner or operator shall be as determined under 
subsection (e) of this section. Payments under this section may only be 
made upon receipt by the Secretary of an incentive payment application 
which establishes that the applicant is eligible to receive such 
payment and which satisfies such other requirements as the Secretary 
deems necessary. Such application shall be in such form, and shall be 
submitted at such time, as the Secretary shall establish.
    (b) Definitions.--For purposes of this section:
            (1) Qualified hydroelectric facility.--The term ``qualified 
        hydroelectric facility'' means a turbine or other generating 
        device owned or solely operated by a non-Federal entity which 
        generates hydroelectric energy for sale and which is added to 
        an existing dam or conduit.
            (2) Existing dam or conduit.--The term ``existing dam or 
        conduit'' means any dam or conduit the construction of which 
        was completed before the date of the enactment of this section 
        and which does not require any construction or enlargement of 
        impoundment or diversion structures (other than repair or 
        reconstruction) in connection with the installation of a 
        turbine or other generating device.
            (3) Conduit.--The term ``conduit'' has the same meaning as 
        when used in section 30(a)(2) of the Federal Power Act.
The terms defined in this subsection shall apply without regard to the 
hydroelectric kilowatt capacity of the facility concerned, without 
regard to whether the facility uses a dam owned by a governmental or 
nongovernmental entity, and without regard to whether the facility 
begins operation on or after the date of the enactment of this section.
    (c) Eligibility Window.--Payments may be made under this section 
only for electric energy generated from a qualified hydroelectric 
facility which begins operation during the period of 10 fiscal years 
beginning with the first full fiscal year occurring after the date of 
enactment of this subtitle.
    (d) Incentive Period.--A qualified hydroelectric facility may 
receive payments under this section for a period of 10 fiscal years 
(referred to in this section as the ``incentive period''). Such period 
shall begin with the fiscal year in which electric energy generated 
from the facility is first eligible for such payments.
    (e) Amount of Payment.--
            (1) In general.--Payments made by the Secretary under this 
        section to the owner or operator of a qualified hydroelectric 
        facility shall be based on the number of kilowatt hours of 
        hydroelectric energy generated by the facility during the 
        incentive period. For any such facility, the amount of such 
        payment shall be 1.8 cents per kilowatt hour (adjusted as 
        provided in paragraph (2)), subject to the availability of 
        appropriations under subsection (g), except that no facility 
        may receive more than $750,000 in one calendar year.
            (2) Adjustments.--The amount of the payment made to any 
        person under this section as provided in paragraph (1) shall be 
        adjusted for inflation for each fiscal year beginning after 
        calendar year 2003 in the same manner as provided in the 
        provisions of section 29(d)(2)(B) of the Internal Revenue Code 
        of 1986, except that in applying such provisions the calendar 
        year 2003 shall be substituted for calendar year 1979.
    (f) Sunset.--No payment may be made under this section to any 
qualified hydroelectric facility after the expiration of the period of 
20 fiscal years beginning with the first full fiscal year occurring 
after the date of enactment of this subtitle, and no payment may be 
made under this section to any such facility after a payment has been 
made with respect to such facility for a period of 10 fiscal years.
    (g) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary to carry out the purposes of this section 
$10,000,000 for each of the fiscal years 2004 through 2013.

SEC. 13202. HYDROELECTRIC EFFICIENCY IMPROVEMENT.

    (a) Incentive Payments.--The Secretary of Energy shall make 
incentive payments to the owners or operators of hydroelectric 
facilities at existing dams to be used to make capital improvements in 
the facilities that are directly related to improving the efficiency of 
such facilities by at least 3 percent.
    (b) Limitations.--Incentive payments under this section shall not 
exceed 10 percent of the costs of the capital improvement concerned and 
not more than one payment may be made with respect to improvements at a 
single facility. No payment in excess of $750,000 may be made with 
respect to improvements at a single facility.
    (c) Authorization.--There is authorized to be appropriated to carry 
out this section not more than $10,000,000 for each of the fiscal years 
2004 through 2013.

SEC. 13203. SMALL HYDROELECTRIC POWER PROJECTS.

    Section 408(a)(6) of the Public Utility Regulatory Policies Act of 
1978 is amended by striking ``April 20, 1977'' and inserting ``March 4, 
2003''.

SEC. 13204. INCREASED HYDROELECTRIC GENERATION AT EXISTING FEDERAL 
              FACILITIES.

    (a) In General.--The Secretary of Energy, in consultation with the 
Secretary of the Interior and Secretary of the Army, shall conduct 
studies of the cost-effective opportunities to increase hydropower 
generation at existing federally-owned or operated water regulation, 
storage, and conveyance facilities. Such studies shall be completed 
within two years after the date of enactment of this subtitle and 
transmitted to the Committee on Commerce of the House of 
Representatives and the Committee on Energy and Natural Resources of 
the Senate. An individual study shall be prepared for each of the 
Nation's principal river basins. Each such study shall identify and 
describe with specificity the following matters:
            (1) Opportunities to improve the efficiency of hydropower 
        generation at such facilities through, but not limited to, 
        mechanical, structural, or operational changes.
            (2) Opportunities to improve the efficiency of the use of 
        water supplied or regulated by Federal projects where such 
        improvement could, in the absence of legal or administrative 
        constraints, make additional water supplies available for 
        hydropower generation or reduce project energy use.
            (3) Opportunities to create additional hydropower 
        generating capacity at existing facilities through, but not 
        limited to, the construction of additional generating 
        facilities, the uprating of generators and turbines, and the 
        construction of pumped storage facilities.
            (4) Preliminary assessment of the costs and the economic 
        and environmental consequences of such measures.
    (b) Previous Studies.--If studies of the type required by 
subsection (a) have been prepared by any agency of the United States 
and published within the five years prior to the date of enactment of 
this subtitle, the Secretary of Energy may choose not to perform new 
studies and incorporate the information in such studies into the 
studies required by subsection (a).
    (c) Authorization.--There is authorized to be appropriated such 
sums as may be necessary to carry out the purposes of this section.

                       TITLE IV--NUCLEAR MATTERS

               Subtitle A--Price-Anderson Act Amendments

SEC. 14001. SHORT TITLE.

    This subtitle may be cited as the ``Price-Anderson Amendments Act 
of 2003''.

SEC. 14002. EXTENSION OF INDEMNIFICATION AUTHORITY.

    (a) Indemnification of Nuclear Regulatory Commission Licensees.--
Section 170 c. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(c)) is 
amended--
            (1) in the subsection heading, by striking ``Licenses'' and 
        inserting ``Licensees''; and
            (2) by striking ``December 31, 2003'' each place it appears 
        and inserting ``August 1, 2017''.
    (b) Indemnification of Department of Energy Contractors.--Section 
170 d.(1)(A) of the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)(1)(A)) 
is amended by striking ``December 31, 2004'' and inserting ``August 1, 
2017''.
    (c) Indemnification of Nonprofit Educational Institutions.--Section 
170 k. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(k)) is amended 
by striking ``August 1, 2002'' each place it appears and inserting 
``August 1, 2017''.

SEC. 14003. MAXIMUM ASSESSMENT.

    Section 170 of the Atomic Energy Act of 1954 (42 U.S.C. 2210) is 
amended--
            (1) in subsection b.(1), in the second proviso of the third 
        sentence--
                    (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.--
                    (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, 2002''; and
                    (C) by striking ``such date of enactment'' and 
                inserting ``July 1, 2002''.

SEC. 14004. DEPARTMENT OF ENERGY LIABILITY LIMIT.

    (a) Indemnification of Department of Energy Contractors.--Section 
170 d. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)) is amended 
by striking paragraph (2) and inserting the following:
    ``(2) In an agreement of indemnification entered into under 
paragraph (1), the Secretary--
            ``(A) may require the contractor to provide and maintain 
        the financial protection of such a type and in such amounts as 
        the Secretary shall determine to be appropriate to cover public 
        liability arising out of or in connection with the contractual 
        activity; and
            ``(B) shall indemnify the persons indemnified against such 
        liability above the amount of the financial protection 
        required, in the amount of $10,000,000,000 (subject to 
        adjustment for inflation under subsection t.), in the 
        aggregate, for all persons indemnified in connection with the 
        contract and for each nuclear incident, including such legal 
        costs of the contractor as are approved by the Secretary.''.
    (b) Contract Amendments.--Section 170 d. of the Atomic Energy Act 
of 1954 (42 U.S.C. 2210(d)) is 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 170 e.(1)(B) of the Atomic Energy Act 
of 1954 (42 U.S.C. 2210(e)(1)(B)) is amended--
            (1) by striking ``the maximum amount of financial 
        protection required under subsection b. or''; and
            (2) by striking ``paragraph (3) of subsection d., whichever 
        amount is more'' and inserting ``paragraph (2) of subsection 
        d.''.

SEC. 14005. INCIDENTS OUTSIDE THE UNITED STATES.

    (a) Amount of Indemnification.--Section 170 d.(5) of the Atomic 
Energy Act of 1954 (42 U.S.C. 2210(d)(5)) is amended by striking 
``$100,000,000'' and inserting ``$500,000,000''.
    (b) Liability Limit.--Section 170 e.(4) of the Atomic Energy Act of 
1954 (42 U.S.C. 2210(e)(4)) is amended by striking ``$100,000,000'' and 
inserting ``$500,000,000''.

SEC. 14006. REPORTS.

    Section 170 p. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(p)) 
is amended by striking ``August 1, 1998'' and inserting ``August 1, 
2013''.

SEC. 14007. INFLATION ADJUSTMENT.

    Section 170 t. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(t)) 
is amended--
            (1) by redesignating paragraph (2) as paragraph (3); and
            (2) by adding after paragraph (1) the following:
    ``(2) The Secretary shall adjust the amount of indemnification 
provided under an agreement of indemnification under subsection d. not 
less than once during each 5-year period following July 1, 2002, 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. 14008. PRICE-ANDERSON 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 new paragraph:
    ``(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. 14009. APPLICABILITY.

    The amendments made by sections 14003, 14004, and 14005 do not 
apply to a nuclear incident that occurs before the date of enactment of 
this Act.

SEC. 14010. PROHIBITION ON ASSUMPTION BY UNITED STATES GOVERNMENT OF 
              LIABILITY FOR CERTAIN FOREIGN ACCIDENTS.

    Section 170 of the Atomic Energy Act of 1954 (42 U.S.C. 2210) is 
amended by adding at the end the following new subsection:
    ``u. Prohibition on Assumption of Liability for Certain Foreign 
Accidents.--Notwithstanding this section or any other provision of law, 
no officer of the United States or of any department, agency, or 
instrumentality of the United States Government may enter into any 
contract or other arrangement, or into any amendment or modification of 
a contract or other arrangement, the purpose or effect of which would 
be to directly or indirectly impose liability on the United States 
Government, or any department, agency, or instrumentality of the United 
States Government, or to otherwise directly or indirectly require an 
indemnity by the United States Government, for nuclear accidents 
occurring in connection with the design, construction, or operation of 
a production facility or utilization facility in any country whose 
government has been identified by the Secretary of State as engaged in 
state sponsorship of terrorist activities (specifically including any 
country the government of which, as of September 11, 2001, had been 
determined by the Secretary of State under section 620A(a) of the 
Foreign Assistance Act of 1961, section 6(j)(1) of the Export 
Administration Act of 1979, or section 40(d) of the Arms Export Control 
Act to have repeatedly provided support for acts of international 
terrorism).''.

SEC. 14011. SECURE TRANSFER OF NUCLEAR MATERIALS.

    (a) Amendment.--Chapter 14 of the Atomic Energy Act of 1954 (42 
U.S.C. 2201-2210b) is amended by adding at the end the following new 
section:
    ``Sec. 170C. Secure Transfer of Nuclear Materials.--
    ``a. The Nuclear Regulatory Commission shall establish a system to 
ensure that, with respect to activities by any party pursuant to a 
license issued under this Act--
            ``(1) materials described in subsection b., when 
        transferred or received in the United States--
                    ``(A) from a facility licensed by the Nuclear 
                Regulatory Commission;
                    ``(B) from a facility licensed by an agreement 
                State; or
                    ``(C) from a country with whom the United States 
                has an agreement for cooperation under section 123,
        are accompanied by a manifest describing the type and amount of 
        materials being transferred;
            ``(2) each individual transferring or accompanying the 
        transfer of such materials has been subject to a security 
        background check by appropriate Federal entities; and
            ``(3) such materials are not transferred to or received at 
        a destination other than a facility licensed by the Nuclear 
        Regulatory Commission or an agreement State under this Act or 
        other appropriate Federal facility, or a destination outside 
        the United States in a country with whom the United States has 
        an agreement for cooperation under section 123.
    ``b. Except as otherwise provided by the Commission by regulation, 
the materials referred to in subsection a. are byproduct materials, 
source materials, special nuclear materials, high-level radioactive 
waste, spent nuclear fuel, transuranic waste, and low-level radioactive 
waste (as defined in section 2(16) of the Nuclear Waste Policy Act of 
1982 (42 U.S.C. 10101(16))).''.
    (b) Regulations.--Not later than 1 year after the date of the 
enactment of this Act, and from time to time thereafter as it considers 
necessary, the Nuclear Regulatory Commission shall issue regulations 
identifying radioactive materials that, consistent with the protection 
of public health and safety and the common defense and security, are 
appropriate exceptions to the requirements of section 170C of the 
Atomic Energy Act of 1954, as added by subsection (a) of this section.
    (c) Effective Date.--The amendment made by subsection (a) shall 
take effect upon the issuance of regulations under subsection (b).
    (d) Effect on Other Law.--Nothing in this section or the amendment 
made by this section shall waive, modify, or affect the application of 
chapter 51 of title 49, United States Code, part A of subtitle V of 
title 49, United States Code, part B of subtitle VI of title 49, United 
States Code, and title 23, United States Code.
    (e) Table of Sections Amendment.--The table of sections for chapter 
14 of the Atomic Energy Act of 1954 is amended by adding at the end the 
following new item:

``Sec. 170C. Secure transfer of nuclear materials.''.

SEC. 14012. NUCLEAR FACILITY THREATS.

    (a) Study.--The President, in consultation with the Nuclear 
Regulatory Commission and other appropriate Federal, State, and local 
agencies and private entities, shall conduct a study to identify the 
types of threats that pose an appreciable risk to the security of the 
various classes of facilities licensed by the Nuclear Regulatory 
Commission under the Atomic Energy Act of 1954. Such study shall take 
into account, but not be limited to--
            (1) the events of September 11, 2001;
            (2) an assessment of physical, cyber, biochemical, and 
        other terrorist threats;
            (3) the potential for attack on facilities by multiple 
        coordinated teams of a large number of individuals;
            (4) the potential for assistance in an attack from several 
        persons employed at the facility;
            (5) the potential for suicide attacks;
            (6) the potential for water-based and air-based threats;
            (7) the potential use of explosive devices of considerable 
        size and other modern weaponry;
            (8) the potential for attacks by persons with a 
        sophisticated knowledge of facility operations;
            (9) the potential for fires, especially fires of long 
        duration; and
            (10) the potential for attacks on spent fuel shipments by 
        multiple coordinated teams of a large number of individuals.
    (b) Summary and Classification Report.--Not later than 180 days 
after the date of the enactment of this Act, the President shall 
transmit to the Congress and the Nuclear Regulatory Commission a 
report--
            (1) summarizing the types of threats identified under 
        subsection (a); and
            (2) classifying each type of threat identified under 
        subsection (a), in accordance with existing laws and 
        regulations, as either--
                    (A) involving attacks and destructive acts, 
                including sabotage, directed against the facility by an 
                enemy of the United States, whether a foreign 
                government or other person, or otherwise falling under 
                the responsibilities of the Federal Government; or
                    (B) involving the type of risks that Nuclear 
                Regulatory Commission licensees should be responsible 
                for guarding against.
    (c) Federal Action Report.--Not later than 90 days after the date 
on which a report is transmitted under subsection (b), the President 
shall transmit to the Congress a report on actions taken, or to be 
taken, to address the types of threats identified under subsection 
(b)(2)(A). Such report may include a classified annex as appropriate.
    (d) Regulations.--Not later than 270 days after the date on which a 
report is transmitted under subsection (b), the Nuclear Regulatory 
Commission shall issue regulations, including changes to the design 
basis threat, to ensure that licensees address the threats identified 
under subsection (b)(2)(B).
    (e) Physical Security Program.--The Nuclear Regulatory Commission 
shall establish an operational safeguards response evaluation program 
that ensures that the physical protection capability and operational 
safeguards response for sensitive nuclear facilities, as determined by 
the Commission consistent with the protection of public health and the 
common defense and security, shall be tested periodically through 
Commission approved or designed, observed, and evaluated force-on-force 
exercises to determine whether the ability to defeat the design basis 
threat is being maintained. For purposes of this subsection, the term 
``sensitive nuclear facilities'' includes at a minimum commercial 
nuclear power plants, including associated spent fuel storage 
facilities, spent fuel storage pools and dry cask storage at closed 
reactors, independent spent fuel storage facilities and geologic 
repository operations areas, category I fuel cycle facilities, and 
gaseous diffusion plants.
    (f) Control of Information.--In carrying out this section, the 
President and the Nuclear Regulatory Commission shall control the 
dissemination of restricted data, safeguards information, and other 
classified national security information in a manner so as to ensure 
the common defense and security, consistent with chapter 12 of the 
Atomic Energy Act of 1954.

SEC. 14013. UNREASONABLE RISK CONSULTATION.

    Section 170 of the Atomic Energy Act of 1954 (42 U.S.C. 2210) is 
amended by adding at the end the following new subsection:
    ``v. Unreasonable Risk Consultation.--(1) Before entering into an 
agreement of indemnification under this section with respect to a 
utilization facility, the Nuclear Regulatory Commission shall consult 
with the Assistant to the President for Homeland Security (or any 
successor official) concerning whether the location of the proposed 
facility and the design of that type of facility ensure that the 
facility provides for adequate protection of public health and safety 
if subject to a terrorist attack.
    ``(2) Before issuing a license or a license renewal for a sensitive 
nuclear facility, the Nuclear Regulatory Commission shall consult with 
the Secretary of Homeland Security or his designee concerning the 
emergency evacuation plan for the communities living near the sensitive 
nuclear facility. For purposes of this paragraph, the term `sensitive 
nuclear facility' has the meaning given that term in section 14012 of 
the Energy Policy Act of 2003.''.

SEC. 14014. FINANCIAL ACCOUNTABILITY.

    (a) Amendment.--Section 170 of the Atomic Energy Act of 1954 (42 
U.S.C. 2210) is amended by adding at the end the following new 
subsection:
    ``w. Financial Accountability.--(1) Notwithstanding subsection d., 
the Attorney General may bring an action in the appropriate United 
States district court to recover from a contractor of the Secretary (or 
subcontractor or supplier of such contractor) amounts paid by the 
Federal Government under an agreement of indemnification under 
subsection d. for public liability resulting from conduct which 
constitutes intentional misconduct of any corporate officer, manager, 
or superintendent of such contractor (or subcontractor or supplier of 
such contractor).
    ``(2) The Attorney General may recover under paragraph (1) an 
amount not to exceed the amount of the profit derived by the defendant 
from the contract.
    ``(3) No amount recovered from any contractor (or subcontractor or 
supplier of such contractor) under paragraph (1) may be reimbursed 
directly or indirectly by the Department of Energy.
    ``(4) Paragraph (1) shall not apply to any nonprofit entity 
conducting activities under contract for the Secretary.
    ``(5) No waiver of a defense required under this section shall 
prevent a defendant from asserting such defense in an action brought 
under this subsection.
    ``(6) The Secretary shall, by rule, define the terms `profit' and 
`nonprofit entity' for purposes of this subsection. Such rulemaking 
shall be completed not later than 180 days after the date of the 
enactment of this subsection.''.
    (b) Effective Date.--The amendment made by this section shall not 
apply to any agreement of indemnification entered into under section 
170 d. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)) before the 
date of the enactment of this Act.

SEC. 14015. CIVIL PENALTIES.

    (a) Repeal of Automatic Remission.--Section 234A b. (2) of the 
Atomic Energy Act of 1954 (42 U.S.C. 2282a(b)(2)) is amended by 
striking the last sentence.
    (b) Limitation for Nonprofit 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. Notwithstanding subsection a., a civil penalty for a violation 
under subsection a. shall not exceed the amount of any discretionary 
fee paid under the contract under which such violation occurs for any 
nonprofit contractor, subcontractor, or supplier--
            ``(1) described in section 501(c)(3) of the Internal 
        Revenue Code of 1986 and exempt from tax under section 501(a) 
        of such Code; or
            ``(2) identified by the Secretary by rule as appropriate to 
        be treated the same under this subsection as an entity 
        described in paragraph (1), consistent with the purposes of 
        this section.''.
    (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 the enactment of this Act.
    (d) Rulemaking.--Not later than 6 months after the date of the 
enactment of this Act, the Secretary of Energy shall issue a rule for 
the implementation of the amendment made by subsection (b).

                   Subtitle B--Miscellaneous Matters

SEC. 14021. LICENSES.

    Section 103 c. of the Atomic Energy Act of 1954 (42 U.S.C. 2133(c)) 
is amended by inserting ``from the authorization to commence 
operations'' after ``forty years''.

SEC. 14022. NUCLEAR REGULATORY COMMISSION MEETINGS.

    If a quorum of the Nuclear Regulatory Commission gathers to discuss 
official Commission business the discussions shall be recorded, and the 
Commission shall notify the public of such discussions within 15 days 
after they occur. The Commission shall promptly make a transcript of 
the recording available to the public on request, except to the extent 
that public disclosure is exempted or prohibited by law. This section 
shall not apply to a meeting, within the meaning of that term under 
section 552b(a)(2) of title 5, United States Code.

SEC. 14023. NRC TRAINING PROGRAM.

    (a) In General.--In order to maintain the human resource investment 
and infrastructure of the United States in the nuclear sciences, health 
physics, and engineering fields, in accordance with the statutory 
authorities of the Commission relating to the civilian nuclear energy 
program, the Nuclear Regulatory Commission shall carry out a training 
and fellowship program to address shortages of individuals with 
critical nuclear safety regulatory skills.
    (b) Authorization of Appropriations.--
            (1) In general.--There are authorized to be appropriated to 
        carry out this section $1,000,000 for each of fiscal years 2004 
        through 2007.
            (2) Availability.--Funds made available under paragraph (1) 
        shall remain available until expended.

SEC. 14024. COST RECOVERY FROM GOVERNMENT AGENCIES.

    Section 161 w. of the Atomic Energy Act of 1954 (42 U.S.C. 2201(w)) 
is amended--
            (1) by striking ``for or is issued'' and all that follows 
        through ``1702'' and inserting ``to the Commission for, or is 
        issued by the Commission, a license or certificate'';
            (2) by striking ``483a'' and inserting ``9701''; and
            (3) by striking ``, of applicants for, or holders of, such 
        licenses or certificates''.

SEC. 14025. ELIMINATION OF PENSION OFFSET.

    Section 161 of the Atomic Energy Act of 1954 (42 U.S.C. 2201) is 
amended by adding at the end the following:
            ``y. exempt from the application of sections 8344 and 8468 
        of title 5, United States Code, an annuitant who was formerly 
        an employee of the Commission who is hired by the Commission as 
        a consultant, if the Commission finds that the annuitant has a 
        skill that is critical to the performance of the duties of the 
        Commission.''.

SEC. 14026. CARRYING OF FIREARMS BY LICENSEE EMPLOYEES.

    Section 161 k. of the Atomic Energy Act of 1954 (42 U.S.C. 2201(k)) 
is amended to read as follows:
            ``k. authorize such of its members, officers, and employees 
        as it deems necessary in the interest of the common defense and 
        security to carry firearms while in the discharge of their 
        official duties. The Commission may also authorize--
                    ``(1) such of those employees of its contractors 
                and subcontractors (at any tier) engaged in the 
                protection of property under the jurisdiction of the 
                United States located at facilities owned by or 
                contracted to the United States or being transported to 
                or from such facilities as it deems necessary in the 
                interests of the common defense and security; and
                    ``(2) such of those employees of persons licensed 
                or certified by the Commission (including employees of 
                contractors of licensees or certificate holders) 
                engaged in the protection of property of (A) facilities 
                owned or operated by a Commission licensee or 
                certificate holder that are designated by the 
                Commission, or (B) property of significance to the 
                common defense and security located at facilities owned 
                or operated by a Commission licensee or certificate 
                holder or being transported to or from such facilities;
        to carry firearms while in the discharge of their official 
        duties. A person authorized to carry firearms under this 
        subsection may, while in the performance of, and in connection 
        with, official duties, make arrests without warrant for any 
        offense against the United States committed in that person's 
        presence or for any felony cognizable under the laws of the 
        United States if that person has reasonable grounds to believe 
        that the individual to be arrested has committed or is 
        committing such felony. An employee of a contractor or 
        subcontractor or of a Commission licensee or certificate holder 
        (or a contractor of a licensee or certificate holder) 
        authorized to carry firearms under this subsection may make 
        such arrests only when the individual to be arrested is within, 
        or in direct flight from, the area of such offense. A person 
        granted authority to make arrests by this subsection may 
        exercise that authority only in the enforcement of laws 
        regarding the property of the United States in the custody of 
        the Department of Energy, the Nuclear Regulatory Commission, or 
        a contractor of the Department of Energy or Nuclear Regulatory 
        Commission or of a licensee or certificate holder of the 
        Commission, laws applicable to facilities owned or operated by 
        a Commission licensee or certificate holder that are designated 
        by the Commission pursuant to this subsection and property of 
        significance to the common defense and security that is in the 
        custody of a licensee or certificate holder or a contractor of 
        a licensee or certificate holder of the Commission, or any 
        provision of this Act that may subject an offender to a fine, 
        imprisonment, or both. The arrest authority conferred by this 
        subsection is in addition to any arrest authority under other 
        laws. The Secretary and the Commission, with the approval of 
        the Attorney General, shall issue guidelines to implement this 
        subsection;''.

SEC. 14027. UNAUTHORIZED INTRODUCTION OF DANGEROUS WEAPONS.

    Section 229 a. of the Atomic Energy Act of 1954 (42 U.S.C. 
2278a(a)) is amended by adding after ``custody of the Commission'' the 
following: ``or subject to its licensing authority or to certification 
by the Commission under this Act or any other Act''.

SEC. 14028. SABOTAGE OF NUCLEAR FACILITIES OR FUEL.

    Section 236 a. of the Atomic Energy Act of 1954 (42 U.S.C. 2284(a)) 
is amended to read as follows:
    ``a. Any person who intentionally and willfully destroys or causes 
physical damage to, or who intentionally and willfully attempts to 
destroy or cause physical damage to--
            ``(1) any production facility or utilization facility 
        licensed under this Act;
            ``(2) any nuclear waste storage, treatment, or disposal 
        facility licensed under this Act;
            ``(3) any nuclear fuel for a utilization facility licensed 
        under this Act or any spent nuclear fuel from such a facility;
            ``(4) any uranium enrichment or nuclear fuel fabrication 
        facility licensed or certified by the Nuclear Regulatory 
        Commission; or
            ``(5) any production, utilization, waste storage, waste 
        treatment, waste disposal, uranium enrichment, or nuclear fuel 
        fabrication facility subject to licensing or certification 
        under this Act during its construction where the destruction or 
        damage caused or attempted to be caused could affect public 
        health and safety during the operation of the facility,
shall be fined not more than $1,000,000 or imprisoned for up to life in 
prison without parole, or both.''.

SEC. 14029. COOPERATIVE RESEARCH AND DEVELOPMENT AND SPECIAL 
              DEMONSTRATION PROJECTS FOR THE URANIUM MINING INDUSTRY.

    (a) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Energy $10,000,000 for each of fiscal 
years 2004, 2005, and 2006 for--
            (1) cooperative, cost-shared agreements between the 
        Department of Energy and domestic uranium producers to 
        identify, test, and develop improved in situ leaching mining 
        technologies, including low-cost environmental restoration 
        technologies that may be applied to sites after completion of 
        in situ leaching operations; and
            (2) funding for competitively selected demonstration 
        projects with domestic uranium producers relating to--
                    (A) enhanced production with minimal environmental 
                impacts;
                    (B) restoration of well fields; and
                    (C) decommissioning and decontamination activities.
    (b) Domestic Uranium Producer.--For purposes of this section, the 
term ``domestic uranium producer'' has the meaning given that term in 
section 1018(4) of the Energy Policy Act of 1992 (42 U.S.C. 2296b-
7(4)), except that the term shall not include any producer that has not 
produced uranium from domestic reserves on or after July 30, 1998, in 
Colorado, Nebraska, Texas, Utah, or Wyoming.

SEC. 14030. URANIUM SALES.

    (a) Restrictions on Inventory Sales.--Section 3112(d) of the USEC 
Privatization Act (42 U.S.C. 2297h-10(d)) is amended to read as 
follows:
    ``(d) Inventory Sales.--(1) In addition to the transfers and sales 
authorized under subsections (b), (c), and (e), the Secretary of Energy 
or the Secretary of the Army may transfer or sell uranium subject to 
paragraph (2).
    ``(2) Except as provided in subsections (b), (c), and (e), no sale 
or transfer of uranium shall be made under this subsection by the 
Secretary of Energy or the Secretary of the Army unless--
            ``(A) the President determines that the material is not 
        necessary for national security needs;
            ``(B) the price paid to the appropriate Secretary, if the 
        transaction is a sale, will not be less that the fair market 
        value of the material; and
            ``(C) the sale or transfer to end users is made pursuant to 
        a contract of at least 3 years duration.
    ``(3) The Secretary of Energy shall not make any transfer or sale 
of uranium under this subsection that would cause the total amount of 
uranium transferred or sold pursuant to this subsection that is 
delivered for consumption by end users to exceed--
            ``(A) 3 million pounds of U<INF>3</INF>O<INF>8</INF> 
        equivalent in fiscal year 2004, 2005, 2006, 2007, 2008, or 
        2009;
            ``(B) 5 million pounds of U<INF>3</INF>O<INF>8</INF> 
        equivalent in fiscal year 2010 or 2011;
            ``(C) 7 million pounds of U<INF>3</INF>O<INF>8</INF> 
        equivalent in fiscal year 2012; and
            ``(D) 10 million pounds of U<INF>3</INF>O<INF>8</INF> 
        equivalent in fiscal year 2013 or any fiscal year thereafter.
    ``(4) For the purposes of this subsection, the recovery of uranium 
from uranium bearing materials transferred or sold by the Secretary of 
Energy or the Secretary of the Army to the domestic uranium industry 
shall be the preferred method of making uranium available. The 
recovered uranium shall be counted against the annual maximum 
deliveries set for in this section, when such uranium is sold to end 
users.''.
    (b) Transfers to Corporation.--Section 3112 of the USEC 
Privatization Act (42 U.S.C. 2297h-10) is further amended by adding at 
the end the following new subsection:
    ``(g) Transfers to Corporation.--Notwithstanding subsection (b)(2) 
and subsection (d)(2), the Secretary may transfer up to 9,550 metric 
tons of uranium to the Corporation to replace uranium that the 
Secretary transferred to the Corporation on or about June 30, 1993, 
April 20, 1998, and May 18, 1998, and that does not meet commercial 
specifications.''.
    (c) Services.--Section 3112 of the USEC Privatization Act (42 
U.S.C. 2297h-10) is further amended by adding at the end the following 
new subsection:
    ``(h) Services.--(1) Notwithstanding any other provision of this 
section, if the Secretary determines that if the Corporation has 
failed, or may fail, to perform any obligation under the Agreement 
between the Department of Energy and the Corporation dated June 17, 
2002, and as amended thereafter, which failure could result in 
termination of the Agreement, the Secretary shall notify the Committee 
on Energy and Commerce of the House of Representatives and the 
Committee on Energy and Natural Resources of the Senate, in such a 
manner that affords the Committees an opportunity to comment, prior to 
a determination by the Secretary whether termination, waiver, or 
modification of the Agreement is required. The Secretary is authorized 
to take such action as he determines necessary under the Agreement to 
terminate, waive, or modify provisions of the Agreement to achieve its 
purposes.
    ``(2) Notwithstanding any other provision of this section, if the 
Secretary determines in accordance with Article 2D of the Agreement 
between the Department of Energy and the Corporation dated June 17, 
2002, and as amended thereafter, to transition operation of the Paducah 
gaseous diffusion plant, the Secretary may provide uranium enrichment 
services in a manner consistent with Article 2D of such Agreement.''.
    (d) Report.--Within 3 years after the date of enactment of this 
Act, the Secretary shall report to the Congress on the implementation 
of this section. The report shall include a discussion of available 
excess uranium inventories, all sales or transfers made by the 
Secretary of Energy or the Secretary of the Army, 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.

SEC. 14031. MEDICAL ISOTOPE PRODUCTION.

    Section 134 of the Atomic Energy Act of 1954 (42 U.S.C. 2160d) is 
amended--
            (1) by redesignating subsection b. as subsection f.;
            (2) by inserting after subsection a. the following:
    ``b. The Commission may issue a license authorizing the export 
(including shipment to and use at intermediate and ultimate consignees 
specified in the license) to a Recipient Country of highly enriched 
uranium for medical isotope production if, in addition to any other 
requirements of this Act, the Commission determines that--
            ``(1) a Recipient Country that supplies an assurance letter 
        to the United States Government in connection with the 
        Commission's consideration of the export license application 
        has informed the United States Government that any intermediate 
        consignees and the ultimate consignee specified in the 
        application are required to use such highly enriched uranium 
        solely to produce medical isotopes; and
            ``(2) the highly enriched uranium for medical isotope 
        production will be irradiated only in a reactor in a Recipient 
        Country that--
                    ``(A) uses an alternative nuclear reactor fuel; or
                    ``(B) is the subject of an agreement with the 
                United States Government to convert to an alternative 
                nuclear reactor fuel when such fuel can be used in that 
                reactor.
    ``c. Applications to the Commission for licenses authorizing the 
export to a Recipient Country of highly enriched uranium for medical 
isotope production shall be subject to subsection b., and subsection a. 
shall not be applicable to such exports.
    ``d. The Commission is authorized to specify, by rulemaking or 
decision in connection with an export license application, that a 
country other than a Recipient Country may receive exports of highly 
enriched uranium for medical isotope production in accordance with the 
same criteria established by subsection b. for exports to a Recipient 
Country, upon the Commission's finding that such additional country is 
a party to the Treaty on the Nonproliferation of Nuclear Weapons and 
the Convention on the Physical Protection of Nuclear Material and will 
receive such highly enriched uranium pursuant to an agreement with the 
United States concerning peaceful uses of nuclear energy.
    ``e. The Commission shall review the adequacy of physical 
protection requirements that are currently applicable to the 
transportation of highly enriched uranium for medical isotope 
production. If it determines that additional physical protection 
measures are necessary, including any limits that the Commission finds 
are necessary on the quantity of highly enriched uranium contained in a 
single shipment for medical isotope production, the Commission shall 
impose such requirements, as license conditions or through other 
appropriate means.''; and
            (3) in subsection f., as so redesignated by paragraph (1) 
        of this section--
                    (A) by striking ``and'' at the end of paragraph 
                (2);
                    (B) by striking the period at the end of paragraph 
                (3)(B) and inserting a semicolon; and
                    (C) by adding at the end the following:
            ``(4) the term `medical isotopes' means radioactive 
        isotopes, including Molybdenum 99, Iodine 131, and Xenon 133, 
        that are used to produce radiopharmaceuticals for diagnostic or 
        therapeutic procedures on patients, or in connection with 
        research and development of radiopharmaceuticals;
            ``(5) the term `highly enriched uranium for medical isotope 
        production' means highly enriched uranium contained in, or for 
        use in, targets to be irradiated for the sole purpose of 
        producing medical isotopes; -
            ``(6) the term `radiopharmaceuticals' means radioactive 
        isotopes containing byproduct material combined with chemical 
        or biological material that are designed to accumulate 
        temporarily in a part of the body, for therapeutic purposes or 
        for enabling the production of a useful image of the 
        appropriate body organ or function for use in diagnosis of 
        medical conditions; and
            ``(7) the term `Recipient Country' means Canada, Belgium, 
        France, Germany, and the Netherlands.''.

SEC. 14032. HIGHLY ENRICHED URANIUM DIVERSION THREAT REPORT.

    Section 307 of the Energy Reorganization Act of 1974 (42 U.S.C. 
5877) is amended by adding at the end the following new subsection:
    ``(d) Not later than 6 months after the date of the enactment of 
this Act, the Secretary of Energy shall transmit to the Congress a 
report with recommendations on reducing the threat resulting from the 
theft or diversion of highly enriched uranium. Such report shall 
address--
            ``(1) monitoring of highly enriched uranium supplies at any 
        commercial companies who have access to substantial amounts of 
        highly enriched uranium;
            ``(2) assistance to companies described in paragraph (1) 
        with security and personnel checks;
            ``(3) acceleration of the process of blending down excess 
        highly enriched uranium into low-enriched uranium;
            ``(4) purchasing highly enriched uranium (except for 
        production of medical isotopes);
            ``(5) paying the cost of shipping highly enriched uranium;
            ``(6) accelerating the conversion of commercial research 
        reactors and energy reactors to the use of low-enriched uranium 
        fuel where they now use highly enriched uranium fuel;
            ``(7) minimizing, and encouraging transparency in, the 
        further enrichment of low-enriched uranium to highly enriched 
        uranium; and
            ``(8) accelerating the purchase of excess weapons grade 
        plutonium and uranium from Russia to reduce the likelihood that 
        such plutonium and uranium could be stolen or sold to 
        terrorists.''.

SEC. 14033. WHISTLEBLOWER PROTECTION.

    (a) Definition of Employer.--Section 211(a)(2) of the Energy 
Reorganization Act of 1974 (42 U.S.C. 5851(a)(2)) is amended--
            (1) by striking ``and'' at the end of subparagraph (C);
            (2) in subparagraph (D), by striking ``that is 
        indemnified'' and all that follows through ``12344.'' and 
        inserting ``or the Commission; and''; and
            (3) by adding at the end the following new subparagraph:
            ``(E) the Department of Energy and the Commission.''.
    (b) De Novo Review.--Subsection (b) of such section 211 is amended 
by adding at the end the following new paragraph:
    ``(4) If the Secretary has not issued a final decision within 180 
days after the filing of a complaint under paragraph (1), and there is 
no showing that such delay is due to the bad faith of the claimant, the 
claimant may bring an action at law or equity for de novo review in the 
appropriate district court of the United States, which shall have 
jurisdiction over such an action without regard to the amount in 
controversy.''.

SEC. 14034. PREVENTING THE MISUSE OF NUCLEAR MATERIALS AND TECHNOLOGY.

    (a) Amendment.--Chapter 14 of the Atomic Energy Act of 1954 (42 
U.S.C. 2201 et seq.) is amended by adding at the end the following new 
section:
    ``Sec. 170D. Preventing the Misuse of Nuclear Materials and 
Technology.--
    ``a. In order to successfully promote the development of nuclear 
energy as a safe and reliable source of electrical energy, it is the 
policy of the United States to prevent any nuclear materials, 
technology, components, substances, technical information, or related 
goods or services from being misused or diverted from peaceful nuclear 
energy purposes.
    ``b. In order to further advance the policy set forth in subsection 
a., notwithstanding any other provision of law, no Federal agency shall 
issue any license, approval, or authorization for the export or 
reexport, or the transfer or retransfer, either directly or indirectly, 
to any country whose government has been identified by the Secretary of 
State as engaged in state sponsorship of terrorist activities 
(specifically including any country the government of which, as of 
September 11, 2001, had been determined by the Secretary of State under 
section 620A(a) of the Foreign Assistance Act of 1961, section 6(j)(1) 
of the Export Administration Act of 1979, or section 40(d) of the Arms 
Export Control Act to have repeatedly provided support for acts of 
international terrorism) of--
            ``(1) any special nuclear material or byproduct material;
            ``(2) any nuclear production or utilization facilities; or
            ``(3) any components, technologies, substances, technical 
        information, or related goods or services used (or which could 
        be used) in a nuclear production or utilization facility.
    ``c. Any license, approval, or authorization described in 
subsection b. made prior to the date of enactment of this section is 
hereby revoked.''.
    (b) Table of Contents Amendment.--The table of contents of such 
chapter 14 is amended by adding at the end the following item:

``Sec. 170D. Preventing the misuse of nuclear materials and 
                            technology.''.

SEC. 14035. LIMITATION ON LEGAL FEE REIMBURSEMENT.

    The Department of Energy shall not, except as required under a 
contract entered into before the date of enactment of this Act, 
reimburse any contractor or subcontractor of the Department for any 
legal fees or expenses incurred with respect to a complaint subsequent 
to--
            (1) an adverse determination on the merits with respect to 
        such complaint against the contractor or subcontractor by the 
        Director of the Department of Energy's Office of Hearings and 
        Appeals pursuant to section 708 of title 10, Code of Federal 
        Regulations, or by a Department of Labor Administrative Law 
        Judge pursuant to section 211 of the Energy Reorganization Act 
        of 1974 (42 U.S.C. 5851); or
            (2) an adverse final judgment by any State or Federal court 
        with respect to such complaint against the contractor or 
        subcontractor for wrongful termination or retaliation due to 
        the making of disclosures protected under chapter 12 of title 
        5, United States Code, section 211 of the Energy Reorganization 
        Act of 1974 (42 U.S.C. 5851), or any comparable State law,
unless the adverse determination or final judgment is reversed upon 
further administrative or judicial review.

SEC. 14036. TRANSFER.

     Not later than December 31, 2003, the Secretary of Energy shall 
transmit to the Congress a plan for the transfer to the Secretary of 
title to, and full responsibility for the possession, transportation, 
disposal, stewardship, maintenance, and monitoring of, all facilities, 
property, and radioactive waste at the Western New York Service Center 
in West Valley, New York. The Secretary shall consult with the 
President of the New York State Energy Research and Development 
Authority in developing such plan.

SEC. 14037. STUDY TO DETERMINE FEASIBILITY OF DEVELOPING COMMERCIAL 
              NUCLEAR ENERGY PRODUCTION FACILITIES AT EXISTING 
              DEPARTMENT OF ENERGY SITES.

    (a) In General.--The Secretary of Energy shall conduct a study to 
determine the feasibility of developing commercial nuclear energy 
production facilities at Department of Energy sites in existence on the 
date of the enactment of this Act, including--
            (1) options for how and where nuclear power plants can be 
        developed on existing Department of Energy sites;
            (2) estimates on cost savings to the Federal Government 
        that may be realized by locating new nuclear power plants on 
        Federal sites;
            (3) the feasibility of incorporating new technology into 
        nuclear power plants located on Federal sites;
            (4) potential improvements in the licensing and safety 
        oversight procedures of nuclear power plants located on Federal 
        sites;
            (5) an assessment of the effects of nuclear waste 
        management policies and projects as a result of locating 
        nuclear power plants located on Federal sites; and
            (6) any other factors that the Secretary believes would be 
        relevant in making the determination.
    (b) Report.--Not later than 90 days after the date of the enactment 
of this Act, the Secretary shall submit to Congress a report describing 
the results of the study under subsection (a).

                      TITLE V--VEHICLES AND FUELS

                Subtitle A--Energy Policy Act Amendments

SEC. 15011. CREDIT FOR SUBSTANTIAL CONTRIBUTION TOWARD NONCOVERED 
              FLEETS.

    Section 508 of the Energy Policy Act of 1992 (42 U.S.C. 13258) is 
amended by adding at the end the following new subsection:
    ``(e) Credit for Substantial Contribution Toward Use of Dedicated 
Vehicles in Noncovered Fleets.--
            ``(1) Definitions.--In this subsection:
                    ``(A) Medium or heavy duty vehicle.--The term 
                `medium or heavy duty vehicle' means a dedicated 
                vehicle that--
                            ``(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.
                    ``(B) Substantial contribution.--The term 
                `substantial contribution' means not less than $15,000 
                in cash or in kind services, as determined by the 
                Secretary.
            ``(2) Allocation of credits.--The Secretary shall allocate 
        a credit to a fleet or covered person under this section if the 
        fleet or person makes a substantial contribution toward the 
        acquisition and use of dedicated vehicles or neighborhood 
        electric 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 
        vehicles.--The Secretary shall issue 2 full credits to a fleet 
        or covered person under this section if the fleet or person 
        makes a substantial contribution toward the acquisition and use 
        of a medium or heavy duty 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 or neighborhood electric 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.--Except as provided in paragraph (3), no 
        more than 1 credit shall be allocated under this subsection for 
        each vehicle.''.

SEC. 15012. CREDIT FOR ALTERNATIVE FUEL INFRASTRUCTURE.

    Section 508 of the Energy Policy Act of 1992 (42 U.S.C. 13258), as 
amended by this division, is further amended by adding at the end the 
following new subsection:
    ``(f) Credit for Investment in Alternative Fuel Infrastructure.--
            ``(1) Definition.--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) 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) Allocation of credits.--The Secretary shall allocate 
        a credit to a fleet or covered person under this section 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. 15013. ALTERNATIVE FUELED VEHICLE REPORT.

    (a) Definitions.--In this section:
            (1) Alternative fuel.--The term ``alternative fuel'' has 
        the meaning given the term in section 301 of the Energy Policy 
        Act of 1992 (42 U.S.C. 13211).
            (2) Alternative fueled vehicle.--The term ``alternative 
        fueled vehicle'' has the meaning given the term in section 301 
        of the Energy Policy Act of 1992 (42 U.S.C. 13211).
            (3) Light duty motor vehicle.--The term ``light duty motor 
        vehicle'' has the meaning given the term in section 301 of the 
        Energy Policy Act of 1992 (42 U.S.C. 13211).
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.
    (b) Report.--Not later than 1 year after the date of enactment of 
this Act, the Secretary shall submit to Congress a report on the effect 
that titles III, IV, and V of the Energy Policy Act of 1992 have had on 
the development of alternative fueled vehicle technology, the 
availability of alternative fueled vehicles in the market, the cost of 
light duty motor vehicles that are alternative fueled vehicles, and the 
availability, cost, and use of alternative fuels and biodiesel. Such 
report shall include any recommendations of the Secretary for 
legislation concerning the alternative fueled vehicle requirements 
under the Energy Policy Act of 1992, and shall examine, discuss, and 
determine the following:
            (1) The number of alternative fueled vehicles acquired by 
        fleets or covered persons required to acquire alternative 
        fueled vehicles.
            (2) The extent to which fleets subject to alternative 
        fueled vehicle acquisition requirements have met those 
        requirements through the use of fuel mixtures that contain at 
        least 20 percent biodiesel pursuant to section 312 of the 
        Energy Policy Act of 1992 (42 U.S.C. 13220).
            (3) The amount of alternative fuel used in alternative 
        fueled vehicles acquired by fleets required to acquire 
        alternative fueled vehicles under the Energy Policy Act of 
        1992.
            (4) The amount of petroleum displaced by the use of 
        alternative fueled vehicles acquired by fleets or covered 
        persons.
            (5) The cost of compliance with vehicle acquisition 
        requirements under the Energy Policy Act of 1992, and the 
        benefits of using such fuel and vehicles.
            (6) Projections of the amount of biodiesel, the number of 
        alternative fueled vehicles, and the amount of alternative fuel 
        that will be used over the next decade by fleets required to 
        acquire alternative fueled vehicles under the Energy Policy Act 
        of 1992.
            (7) The existence of any obstacles to increased use of 
        alternative fuel and biodiesel in vehicles acquired or 
        maintained by fleets required to acquire alternative fueled 
        vehicles under the Energy Policy Act of 1992, and the benefits 
        of using such fuel and vehicles.

SEC. 15014. ALLOCATION OF INCREMENTAL COSTS.

    Section 303(c) of the Energy Policy Act of 1992 (42 U.S.C. 
13212(c)) is amended by striking ``may'' and inserting ``shall''.

                     Subtitle B--Advanced Vehicles

SEC. 15021. DEFINITIONS.

    For the purposes of this subtitle, the following definitions apply:
            (1) Alternative fueled vehicle..--The term ``alternative 
        fueled vehicle'' means a vehicle propelled solely on an 
        alternative fuel as defined in section 301 of the Energy Policy 
        Act of 1992 (42 U.S.C. 13211), except the term does not include 
        any vehicle that the Secretary determines, by rule, does not 
        yield substantial environmental benefits over a vehicle 
        operating solely on gasoline or diesel derived from fossil 
        fuels.
            (2) Fuel cell vehicle.--The term ``fuel cell vehicle'' 
        means a vehicle propelled by an electric motor powered by a 
        fuel cell system that converts chemical energy into electricity 
        by combining oxygen (from air) with hydrogen fuel that is 
        stored on the vehicle or is produced onboard by reformation of 
        a hydrocarbon fuel. Such fuel cell system may or may not 
        include the use of auxiliary energy storage systems to enhance 
        vehicle performance.
            (3) Hybrid vehicle.--The term ``hybrid vehicle'' means a 
        medium or heavy duty vehicle propelled by an internal 
        combustion engine or heat engine using any combustible fuel and 
        an onboard rechargeable energy storage device.
            (4) Neighborhood electric vehicle.--The term ``neighborhood 
        electric vehicle'' means a motor vehicle capable of traveling 
        at speeds of 25 miles per hour that is--
                    (A) a low-speed vehicle, as such term is defined in 
                section 571.3(b) of title 49, Code of Federal 
                Regulations;
                    (B) a zero-emission vehicle, as such term is 
                defined in section 86.1702-99 of title 40, Code of 
                Federal Regulations; and
                    (C) otherwise lawful to use on local streets.
            (5) Pilot program.--The term ``pilot program'' means the 
        competitive grant program established under section 15022.
            (6) Ultra-low sulfur diesel vehicle.--The term ``ultra-low 
        sulfur diesel vehicle'' means a vehicle manufactured in model 
        years 2002 through 2006 powered by a heavy-duty diesel engine 
        that--
                    (A) is fueled by diesel fuel which contains sulfur 
                at not more than 15 parts per million; and
                    (B) emits not more than the lesser of--
                            (i) for vehicles manufactured in--
                                    (I) model years 2002 and 2003, 3.0 
                                grams per brake horsepower-hour of 
                                oxides of nitrogen and .01 grams per 
                                brake horsepower-hour of particulate 
                                matter; and
                                    (II) model years 2004 through 2006, 
                                2.5 grams per brake horsepower-hour of 
                                nonmethane hydrocarbons and oxides of 
                                nitrogen and .01 grams per brake 
                                horsepower-hour of particulate matter; 
                                or
                            (ii) the emissions of nonmethane 
                        hydrocarbons, oxides of nitrogen, and 
                        particulate matter of the best performing 
                        technology of ultra-low sulfur diesel vehicles 
                        of the same class and application that are 
                        commercially available.

SEC. 15022. PILOT PROGRAM.

    (a) Establishment.--The Secretary shall establish a competitive 
grant pilot program, to be administered through the Clean Cities 
Program of the Department of Energy, to provide not more than 10 
geographically dispersed project grants to State governments, local 
governments, or metropolitan transportation authorities to carry out a 
project or projects for the purposes described in subsection (b).
    (b) Grant Purposes.--Grants under this section may be used for the 
following purposes:
            (1) The acquisition of alternative fueled vehicles or fuel 
        cell vehicles, including--
                    (A) passenger vehicles including neighborhood 
                electric vehicles; and
                    (B) motorized two-wheel bicycles, scooters, or 
                other vehicles for use by law enforcement personnel or 
                other State or local government or metropolitan 
                transportation authority employees.
            (2) The acquisition of alternative fueled vehicles, hybrid 
        vehicles, or fuel cell vehicles, including--
                    (A) buses used for public transportation or 
                transportation to and from schools;
                    (B) delivery vehicles for goods or services; and
                    (C) ground support vehicles at public airports, 
                including vehicles to carry baggage or push airplanes 
                away from terminal gates.
            (3) The acquisition of ultra-low sulfur diesel vehicles.
            (4) Infrastructure necessary to directly support an 
        alternative fueled vehicle, fuel cell vehicle, or hybrid 
        vehicle project funded by the grant, including fueling and 
        other support equipment.
            (5) Operation and maintenance of vehicles, infrastructure, 
        and equipment acquired as part of a project funded by the 
        grant.
    (c) Applications.--
            (1) Requirements.--The Secretary shall issue requirements 
        for applying for grants under the pilot program. At a minimum, 
        the Secretary shall require that applications be submitted by 
        the head of a State or local government or a metropolitan 
        transportation authority, or any combination thereof, and a 
        registered participant in the Clean Cities Program of the 
        Department of Energy, and shall include--
                    (A) a description of the projects proposed in the 
                application, including how they meet the requirements 
                of this subtitle;
                    (B) an estimate of the ridership or degree of use 
                of the projects proposed in the application;
                    (C) an estimate of the air pollution emissions 
                reduced and fossil fuel displaced as a result of the 
                projects proposed in the application, and a plan to 
                collect and disseminate environmental data, related to 
                the projects to be funded under the grant, over the 
                life of the projects;
                    (D) a description of how the projects proposed in 
                the application will be sustainable without Federal 
                assistance after the completion of the term of the 
                grant;
                    (E) a complete description of the costs of each 
                project proposed in the application, including 
                acquisition, construction, operation, and maintenance 
                costs over the expected life of the project;
                    (F) a description of which costs of the projects 
                proposed in the application will be supported by 
                Federal assistance under this subtitle; and
                    (G) documentation to the satisfaction of the 
                Secretary that diesel fuel containing sulfur at not 
                more than 15 parts per million is available for 
                carrying out the projects, and a commitment by the 
                applicant to use such fuel in carrying out the 
                projects.
            (2) Partners.--An applicant under paragraph (1) may carry 
        out projects under the pilot program in partnership with public 
        and private entities.
    (d) Selection Criteria.--In evaluating applications under the pilot 
program, the Secretary shall consider each applicant's previous 
experience with similar projects and shall give priority consideration 
to applications that--
            (1) are most likely to maximize protection of the 
        environment;
            (2) demonstrate the greatest commitment on the part of the 
        applicant to ensure funding for the proposed projects and the 
        greatest likelihood that each project proposed in the 
        application will be maintained or expanded after Federal 
        assistance under this subtitle is completed; and
            (3) exceed the minimum requirements of subsection 
        (c)(1)(A).
    (e) Pilot Project Requirements.--
            (1) Maximum amount.--The Secretary shall not provide more 
        than $20,000,000 in Federal assistance under the pilot program 
        to any applicant.
            (2) Cost sharing.--The Secretary shall not provide more 
        than 50 percent of the cost, incurred during the period of the 
        grant, of any project under the pilot program.
            (3) Maximum period of grants.--The Secretary shall not fund 
        any applicant under the pilot program for more than 5 years.
            (4) Deployment and distribution.--The Secretary shall seek 
        to the maximum extent practicable to ensure a broad geographic 
        distribution of project sites.
            (5) Transfer of information and knowledge.--The Secretary 
        shall establish mechanisms to ensure that the information and 
        knowledge gained by participants in the pilot program are 
        transferred among the pilot program participants and to other 
        interested parties, including other applicants that submitted 
        applications.
    (f) Schedule.--
            (1) Publication.--Not later than 3 months after the date of 
        the enactment of this Act, the Secretary shall publish in the 
        Federal Register, Commerce Business Daily, and elsewhere as 
        appropriate, a request for applications to undertake projects 
        under the pilot program. Applications shall be due within 6 
        months of the publication of the notice.
            (2) Selection.--Not later than 6 months after the date by 
        which applications for grants are due, the Secretary shall 
        select by competitive, peer review all applications for 
        projects to be awarded a grant under the pilot program.
    (g) Limit on Funding.--The Secretary shall provide not less than 20 
percent and not more than 25 percent of the grant funding made 
available under this section for the acquisition of ultra-low sulfur 
diesel vehicles.

SEC. 15023. REPORTS TO CONGRESS.

    (a) Initial Report.--Not later than 2 months after the date grants 
are awarded under this subtitle, the Secretary shall transmit to the 
Congress a report containing--
            (1) an identification of the grant recipients and a 
        description of the projects to be funded;
            (2) an identification of other applicants that submitted 
        applications for the pilot program; and
            (3) a description of the mechanisms used by the Secretary 
        to ensure that the information and knowledge gained by 
        participants in the pilot program are transferred among the 
        pilot program participants and to other interested parties, 
        including other applicants that submitted applications.
    (b) Evaluation.--Not later than 3 years after the date of the 
enactment of this Act, and annually thereafter until the pilot program 
ends, the Secretary shall transmit to the Congress a report containing 
an evaluation of the effectiveness of the pilot program, including an 
assessment of the benefits to the environment derived from the projects 
included in the pilot program as well as an estimate of the potential 
benefits to the environment to be derived from widespread application 
of alternative fueled vehicles and ultra-low sulfur diesel vehicles.

SEC. 15024. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Secretary 
$200,000,000 to carry out this subtitle, to remain available until 
expended.

           Subtitle C--Hydrogen Fuel Cell Heavy-Duty Vehicles

SEC. 15031. DEFINITION.

    For the purposes of this subtitle, the term ``advanced vehicle 
technologies program'' means the program created pursuant to section 
5506 of title 49, United States Code.

SEC. 15032. FINDINGS.

    The Congress makes the following findings:
            (1) The Department of Energy and the Department of 
        Transportation jointly developed the consortium-based advanced 
        vehicle technologies program to develop energy efficient and 
        clean heavy-duty vehicles in 1998.
            (2) The majority of clean fuel vehicles in operation today 
        are transit buses.
            (3) Hydrogen fuel cell heavy-duty vehicle bus deployments 
        can most appropriately advance hydrogen fuel cell technology 
        development due to centralized refueling, stable duty cycles, 
        and fixed routes.
            (4) Hydrogen fuel cell heavy-duty vehicle bus deployments 
        are the most effective manner in which to advance technology 
        developments for public awareness, consumption, and acceptance.

SEC. 15033. HYDROGEN FUEL CELL BUSES.

    The Secretary of Energy, through the advanced vehicle technologies 
program, in coordination with the Secretary of Transportation, shall 
advance the development of fuel cell bus technologies by providing 
funding for 4 demonstration sites that--
            (1) have or will soon have hydrogen infrastructure for fuel 
        cell bus operation; and
            (2) are operated by entities with experience in the 
        development of fuel cell bus technologies,
to enable the widespread utilization of fuel cell buses. Such 
demonstrations shall address the reliability of fuel cell heavy-duty 
vehicles, expense, infrastructure, containment, storage, safety, 
training, and other issues.

SEC. 15034. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Secretary of Energy 
$10,000,000 for each of the fiscal years 2004 through 2008 for carrying 
out this subtitle.

                       Subtitle D--Miscellaneous

SEC. 15041. RAILROAD EFFICIENCY.

    (a) Establishment.--The Secretary shall, in conjunction with the 
Secretary of Transportation and the Administrator of the Environmental 
Protection Agency, establish a public-private research partnership 
involving the Federal Government, the railroad industry, locomotive 
manufacturers and equipment suppliers, and the research facility owned 
by the Federal Railroad Administration and operated by contract. The 
goal of the research partnership shall include developing and 
demonstrating locomotive technologies that increase fuel economy, 
reduce emissions, and lower costs.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out the requirements of this section $25,000,000 
for fiscal year 2004, $30,000,000 for fiscal year 2005, and $35,000,000 
for fiscal year 2006.

SEC. 15042. MOBILE EMISSION REDUCTIONS TRADING AND CREDITING.

    Within 180 days after the date of enactment of this Act, the 
Administrator of the Environmental Protection Agency shall provide a 
report to the Congress on the Environmental Protection Agency's 
experience with the trading of mobile source emission reduction credits 
for use by owners and operators of stationary source emission sources 
to meet emission offset requirements within a nonattainment area. The 
report shall describe--
            (1) projects approved by the Environmental Protection 
        Agency that include the trading of mobile source emission 
        reduction credits for use by stationary sources in complying 
        with offset requirements, including project and stationary 
        sources location, volumes of emissions offset and traded, a 
        description of the sources of mobile emission reduction 
        credits, and, if available, the cost of the credits;
            (2) the significant issues identified by the Environmental 
        Protection Agency in its consideration and approval of trading 
        in such projects;
            (3) the requirements for monitoring and assessing the air 
        quality benefits of any approved project;
            (4) the statutory authority upon which the Environmental 
        Protection Agency has based approval of such projects;
            (5) an evaluation of how the resolution of issues in 
        approved projects could be utilized in other projects; and
            (6) any other issues the Environmental Protection Agency 
        considers relevant to the trading and generation of mobile 
        source emission reduction credits for use by stationary sources 
        or for other purposes.

SEC. 15043. IDLE REDUCTION TECHNOLOGIES.

    (a) Definitions.--For purposes of this section:
            (1) Idle reduction technology.--The term ``idle reduction 
        technology'' means a device or system of devices utilized to 
        reduce long-duration idling of a heavy-duty vehicle.
            (2) Heavy-duty vehicle.--The term ``heavy-duty vehicle'' 
        means a vehicle that has a gross vehicle weight rating greater 
        than 26,000 pounds and is powered by a diesel engine.
            (3) Long-duration idling.--The term ``long-duration 
        idling'' means the operation of a main drive engine, for a 
        period greater than 15 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.
    (b) Studies of the Benefits of Idle Reduction Technologies.--
            (1) Potential fuel savings.--Not later than 90 days after 
        the date of enactment of this section, the Secretary of Energy 
        shall, in consultation with the Secretary of Transportation, 
        commence a study to analyze the potential fuel savings 
        resulting from use of idle reduction technologies.
            (2) Recognition of benefits of advanced idle reduction 
        technologies.--Within 90 days after the date of enactment of 
        this section, the Administrator of the Environmental Protection 
        Agency is directed to commence a review of the Agency's mobile 
        source air emissions models used under the Clean Air Act to 
        determine whether such models accurately reflect the emissions 
        resulting from long-duration idling of heavy-duty trucks and 
        other vehicles and engines, and shall update those models as 
        the Administrator deems appropriate. Additionally, within 90 
        days after the date of enactment of this section, the 
        Administrator shall commence a review as to the appropriate 
        emissions reductions credit that should be allotted under the 
        Clean Air Act for the use of advanced idle reduction 
        technologies, and whether such credits should be subject to an 
        emissions trading system, and shall revise Agency regulations 
        and guidance as the Administrator deems appropriate.
            (3) Idling technologies.--Not later than 180 days after the 
        date of the enactment of this section, the Secretary of Energy, 
        in consultation with the Secretary of Transportation and the 
        Administrator of the Environmental Protection Agency, shall 
        commence a study to analyze where heavy duty and other vehicles 
        stop for long duration idling.
    (c) Vehicle Weight Exemption.--Section 127(a) of title 23, United 
States Code, is amended by adding at the end the following: ``In 
instances where an idle reduction technology is installed onboard a 
motor vehicle, the maximum gross vehicle weight limit and the axle 
weight limit for any motor vehicle equipped with an idling reduction 
system may be increased by an amount necessary to compensate for the 
additional weight of the idling reduction system, except that the 
weight limit increase shall be no greater than 400 pounds.''.

SEC. 15044. STUDY OF AVIATION FUEL CONSERVATION AND EMISSIONS.

    The Administrator of the Federal Aviation Administration and the 
Administrator of the Environmental Protection Agency shall jointly 
commence a study within 60 days after the date of enactment of this Act 
to identify the impact of aircraft emissions on air quality in 
nonattainment areas and to identify ways to promote fuel conservation 
measures for aviation, enhance fuel efficiency, and reduce emissions. 
As part of this study, the Administrator of the Federal Aviation 
Administration and the Administrator of the Environmental Protection 
Agency shall focus on how air traffic management inefficiencies, such 
as aircraft idling at airports, result in unnecessary fuel burn and air 
emissions. Within 180 days after the commencement of the study, the 
Administrator of the Federal Aviation Administration and the 
Administrator of the Environmental Protection Agency shall submit a 
report to the Committees on Energy and Commerce and Transportation and 
Infrastructure of the House of Representatives and the Committees on 
Environment and Public Works and Commerce, Science, and Transportation 
of the Senate containing the results of the study and recommendations 
as to how unnecessary fuel use and emissions affecting air quality may 
be reduced, without impacting safety and security, increasing 
individual aircraft noise, and taking into account all aircraft 
emissions and their relative impact on human health.

SEC. 15045. DIESEL FUELED VEHICLES.

    (a) Diesel Combustion and After Treatment Technologies.--The 
Secretary of Energy shall accelerate efforts to improve diesel 
combustion and after-treatment technologies for use in diesel fueled 
motor vehicles.
    (b) Goal.--
            (1) Compliance with tier 2 emission standards by 2010.--The 
        Secretary shall carry out subsection (a) with a view to 
        developing and demonstrating diesel technology meeting tier 2 
        emission standards not later than 2010.
            (2) Tier 2 emission standards defined.--In this subsection, 
        the term ``tier 2 emission standards'' means the motor vehicle 
        emission standards promulgated by the Administrator of the 
        Environmental Protection Agency on February 10, 2000, under 
        sections 202 and 211 of the Clean Air Act to apply to passenger 
        cars, light trucks, and larger passenger vehicles of model 
        years after the 2003 vehicle model year.

SEC. 15046. WAIVERS OF ALTERNATIVE FUELED VEHICLE FUELING REQUIREMENT.

    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 needs a waiver of such requirement for vehicles in the 
fleet of 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 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 of petroleum-based fuels and the problems, if any, 
encountered in acquiring alternative fuels.''.

SEC. 15047. TOTAL INTEGRATED THERMAL SYSTEMS.

    The Secretary shall--
            (1) conduct a study of the benefits of total integrated 
        thermal systems in reducing demand for oil and protecting the 
        environment; and
            (2) examine the feasibility of using total integrated 
        thermal systems in Department of Defense and other Federal 
        motor vehicle fleets.

SEC. 15048. OIL BYPASS FILTRATION TECHNOLOGY.

    The Secretary of Energy and the Administrator of the Environmental 
Protection Agency shall--
            (1) conduct a joint study of the benefits of oil bypass 
        filtration technology in reducing demand for oil and protecting 
        the environment; and
            (2) examine the feasibility of using oil bypass filtration 
        technology in Federal motor vehicle fleets.

SEC. 15049. NATURAL GAS CONDENSATE STUDY.

    Not later than 18 months after the date of enactment of this Act, 
the Secretary of Energy, in consultation with the Administrator of the 
Environmental Protection Agency, shall transmit to the Congress the 
results of a study to consider fuels derived from natural gas 
condensate and the appropriate blending of such condensates. The study 
shall consider--
            (1) usage options;
            (2) potential volume capacities;
            (3) costs;
            (4) air emissions;
            (5) fuel efficiencies; and
            (6) potential use in the Federal fleet program under title 
        III of the Energy Policy Act of 1992 (42 U.S.C. 13201 et seq.).

SEC. 15050. STUDY ON REDUCING PETROLEUM CONSUMPTION.

    (a) In General.--The Administrator of General Services, in 
cooperation with the Secretary of Energy, shall conduct a study to 
consider the merits of establishing performance measures to guide the 
reduction of petroleum consumption by Federal fleets.
    (b) Matters To Be Addressed.--The study shall assess the 
feasibility of performance measures--
            (1) to enable agency and congressional decisionmakers to 
        establish annual and long-term performance goals to define the 
        level of petroleum consumption reduction to be achieved by 
        Federal fleets;
            (2) to improve the effectiveness and accountability of 
        Federal efforts to reduce petroleum consumption and dependency;
            (3) to enhance decisionmaking by providing objective 
        information on achieving performance objectives; and
            (4) to provide an alternative to the mandated alternative 
        fueled vehicle requirements in section 303 of the Energy Policy 
        Act of 1992 (42 U.S.C. 13212).
    (c) Report.--Not later than 12 months after the date of enactment 
of this Act, the Administrator shall submit to the Committees on 
Environment and Public Works and Governmental Affairs of the Senate and 
the Committees on Energy and Commerce and Government Reform of the 
House of Representatives a report on the study.

SEC. 15051. CONSERVE BY BICYCLING PROGRAM.

    (a) Definitions.--In this section:
            (1) Program.--The term ``program'' means the Conserve by 
        Bicycling Program established by subsection (b).
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Transportation.
    (b) Establishment.--There is established within the Department of 
Transportation a program to be known as the ``Conserve by Bicycling 
Program''.
    (c) Projects.--
            (1) In general.--In carrying out the program, the Secretary 
        shall establish not more than 10 pilot projects that are--
                    (A) dispersed geographically throughout the United 
                States; and
                    (B) designed to conserve energy resources by 
                encouraging the use of bicycles in place of motor 
                vehicles.
            (2) Requirements.--A pilot project described in paragraph 
        (1) shall--
                    (A) use education and marketing to convert motor 
                vehicle trips to bicycle trips;
                    (B) document project results and energy savings (in 
                estimated units of energy conserved);
                    (C) facilitate partnerships among interested 
                parties in at least 2 of the fields of--
                            (i) transportation;
                            (ii) law enforcement;
                            (iii) education;
                            (iv) public health;
                            (v) environment; and
                            (vi) energy;
                    (D) maximize bicycle facility investments;
                    (E) demonstrate methods that may be used in other 
                regions of the United States; and
                    (F) facilitate the continuation of ongoing programs 
                that are sustained by local resources.
            (3) Cost sharing.--At least 20 percent of the cost of each 
        pilot project described in paragraph (1) shall be provided from 
        State or local sources.
    (d) Energy and Bicycling Research Study.--
            (1) In general.--Not later than 2 years after the date of 
        enactment of this Act, the Secretary shall enter into a 
        contract with the National Academy of Sciences for, and the 
        National Academy of Sciences shall conduct and submit to 
        Congress a report on, a study on the feasibility of converting 
        motor vehicle trips to bicycle trips.
            (2) Components.--The study shall--
                    (A) document the results or progress of the pilot 
                projects under subsection (c);
                    (B) determine the type and duration of motor 
                vehicle trips that people in the United States may 
                feasibly make by bicycle, taking into consideration 
                factors such as--
                            (i) weather;
                            (ii) land use and traffic patterns;
                            (iii) the carrying capacity of bicycles; 
                        and
                            (iv) bicycle infrastructure;
                    (C) determine any energy savings that would result 
                from the conversion of motor vehicle trips to bicycle 
                trips;
                    (D) include a cost-benefit analysis of bicycle 
                infrastructure investments; and
                    (E) include a description of any factors that would 
                encourage more motor vehicle trips to be replaced with 
                bicycle trips.
    (e) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $6,200,000, to remain available 
until expended, of which--
            (1) $5,150,000 shall be used to carry out pilot projects 
        described in subsection (c);
            (2) $300,000 shall be used by the Secretary to coordinate, 
        publicize, and disseminate the results of the program; and
            (3) $750,000 shall be used to carry out subsection (d).

                         TITLE VI--ELECTRICITY

                   Subtitle A--Transmission Capacity

SEC. 16011. TRANSMISSION INFRASTRUCTURE IMPROVEMENT RULEMAKING.

    Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended 
by adding the following new section at the end thereof:

``SEC. 215. TRANSMISSION INFRASTRUCTURE IMPROVEMENT RULEMAKING.

    ``(a) Rulemaking Requirement.--Within 1 year after the enactment of 
this section, the Commission shall establish, by rule, incentive-based 
(including but not limited to performance-based) transmission rate 
treatments to promote capital investment in the enlargement and 
improvement of facilities for the transmission of electric energy in 
interstate commerce as appropriate to--
            ``(1) promote economically efficient transmission and 
        generation of electricity;
            ``(2) provide a return on equity that attracts new 
        investment in transmission facilities and reasonably reflects 
        the risks taken by public utilities in restructuring control of 
        transmission assets; and
            ``(3) encourage deployment of transmission technologies and 
        other measures to increase the capacity and efficiency of 
        existing transmission facilities and improve the operation of 
        such facilities.
The Commission may, from time to time, revise such rule.
    ``(b) Funding of Certain Facilities.--The rule promulgated pursuant 
to this section shall provide that, upon the request of a regional 
transmission organization or other Commission-approved transmission 
organization, new transmission facilities that increase the transfer 
capability of the transmission system shall be participant funded. In 
such rules, the Commission shall also provide guidance as to what types 
of facilities may be participant funded.
    ``(c) Just and Reasonable Rates.--With respect to any transmission 
rate filed with the Commission on or after the effective date of the 
rule promulgated under this section, the Commission shall, in its 
review of such rate under sections 205 and 206, apply the rules adopted 
pursuant to this section, including any revisions thereto. Nothing in 
this section shall be construed to override, weaken, or conflict with 
the procedural and other requirements of this part, including the 
requirement of sections 205 and 206 that all rates, charges, terms, and 
conditions be just and reasonable and not unduly discriminatory or 
preferential.''.

SEC. 16012. SITING OF INTERSTATE ELECTRICAL TRANSMISSION FACILITIES.

    (a) Amendment of Federal Power Act.--Part II of the Federal Power 
Act is amended by adding at the end the following:

``SEC. 216. SITING OF INTERSTATE ELECTRICAL TRANSMISSION FACILITIES.

    ``(a) Transmission Studies.--Within one year after the enactment of 
this section, and every 3 years thereafter, the Secretary of Energy 
shall conduct a study of electric transmission congestion. After 
considering alternatives and recommendations from interested parties 
the Secretary shall issue a report, based on such study, which may 
designate one or more geographic areas experiencing electric energy 
transmission congestion as `interstate congestion areas'.
    ``(b) Construction Permit.--The Commission is authorized, after 
notice and an opportunity for hearing, to issue permits for the 
construction or modification of electric transmission facilities in 
interstate congestion areas designated by the Secretary under 
subsection (a) if the Commission makes each of the following findings:
            ``(1) A finding that--
                    ``(A) the State in which the transmission 
                facilities are to be constructed or modified is without 
                authority to approve the siting of the facilities, or
                    ``(B) a State commission or body in the State in 
                which the transmission facilities are to be constructed 
                or modified that has authority to approve the siting of 
                the facilities has withheld approval, conditioned its 
                approval in such a manner that the proposed 
                construction or modification will not significantly 
                reduce transmission congestion in interstate commerce 
                and is otherwise not economically feasible, or delayed 
                final approval for more than one year after the filing 
                of an application seeking approval or one year after 
                the designation of the relevant interstate congestion 
                area, whichever is later.
            ``(2) A finding that the facilities to be authorized by the 
        permit will be used for the transmission of electric energy in 
        interstate commerce.
            ``(3) A finding that the proposed construction or 
        modification is consistent with the public interest.
            ``(4) A finding that the proposed construction or 
        modification will significantly reduce transmission congestion 
        in interstate commerce.
The Commission may include in a permit issued under this section 
conditions consistent with the public interest.
    ``(c) Permit Applications.--Permit applications under subsection 
(b) shall be made in writing to the Commission and verified under oath. 
The Commission shall issue rules setting forth the form of the 
application, the information it is to contain, and the manner of 
service of notice of the permit application upon interested persons.
    ``(d) Comments.--In any proceeding before the Commission under 
subsection (b), the Commission shall afford each State in which a 
transmission facility covered by the permit is or will be located, each 
affected Federal agency and Indian tribe, private property owners, and 
other interested persons, a reasonable opportunity to present their 
views and recommendations with respect to the need for and impact of a 
facility covered by the permit.
    ``(e) Rights-of-Way.--In the case of a permit under subsection (b) 
for electric transmission facilities to be located on property other 
than property owned by the United States or a State, if the permit 
holder cannot acquire by contract, or is unable to agree with the owner 
of the property to the compensation to be paid for, the necessary 
right-of-way to construct or modify such transmission facilities, the 
permit holder may acquire the right-of-way by the exercise of the right 
of eminent domain in the district court of the United States for the 
district in which the property concerned is located, or in the 
appropriate court of the State in which the property is located. The 
practice and procedure in any action or proceeding for that purpose in 
the district court of the United States shall conform as nearly as may 
be with the practice and procedure in similar action or proceeding in 
the courts of the State where the property is situated.
    ``(f) State Law.--Nothing in this section shall preclude any person 
from constructing any transmission facilities pursuant to State law.
    ``(g) Compliance With Other Laws.--Commission action under this 
section shall be subject to the National Environmental Policy Act of 
1969 (42 U.S.C. 4321 et seq.) and all other applicable Federal laws.
    ``(h) Compensation.--Any exercise of eminent domain authority 
pursuant to this section shall be considered a taking of private 
property for which just compensation is due. Just compensation shall be 
an amount equal to the full fair market value of the property taken on 
the date of the exercise of eminent domain authority, except that the 
compensation shall exceed fair market value if necessary to make the 
landowner whole for decreases in the value of any portion of the land 
not subject to eminent domain. Any parcel of land acquired by eminent 
domain under this subsection shall be transferred back to the owner 
from whom it was acquired (or his heirs or assigns) if the land is not 
used for power line construction or modification within a reasonable 
period of time after the acquisition. Property acquired under this 
subsection may not be used for any heritage area, recreational trail, 
or park, or for any other purpose (other than power line construction 
or modification, and for power line operation and maintenance) without 
the consent of the owner of the parcel from whom the property was 
acquired (or his heirs or assigns).
    ``(i) ERCOT.--Nothing in this section shall be construed to 
authorize any interconnection with any facility owned or operated by an 
entity referred to in section 212(k)(2)(B).
    ``(j) Rights of Way on Federal Lands.--
            ``(1) Lead agency.--If an applicant, or prospective 
        applicant, for Federal authorization related to an electricity 
        transmission or distribution facility so requests, the 
        Department of Energy (DOE) shall act as the lead agency for 
        purposes of coordinating all applicable Federal authorization 
        and related environmental review of the facility. The term 
        `Federal authorization' shall mean any authorization required 
        under Federal law in order to site a transmission or 
        distribution facility, including but not limited to such 
        permits, special use authorizations, certifications, opinions, 
        or other approvals as may be required, whether issued by a 
        Federal or a State agency. To the maximum extent practicable 
        under applicable Federal law, the Secretary of Energy shall 
        coordinate this Federal authorization and review process with 
        any Indian tribes, multi-State entities, and State agencies 
        that are responsible for conducting any separate permitting and 
        environmental reviews of the facility, to ensure timely and 
        efficient review and permit decisions.
            ``(2) Authority to set deadlines.--As lead agency, the 
        Department of Energy, in consultation with other Federal and, 
        as appropriate, with Indian tribes, multi-State entities, and 
        State agencies that are willing to coordinate their own 
        separate permitting and environmental reviews with the Federal 
        authorization and environmental reviews, shall establish prompt 
        and binding intermediate milestones and ultimate deadlines for 
        the review of and Federal authorization decisions relating to 
        the proposed facility. The Secretary of Energy shall ensure 
        that once an application has been submitted with such data as 
        the Secretary deems necessary, all permit decisions and related 
        environmental reviews under all applicable Federal laws shall 
        be completed within 1 year or, if a requirement of another 
        provision of Federal law makes this impossible, as soon 
        thereafter as is practicable. The Secretary of Energy also 
        shall provide an expeditious pre-application mechanism for 
        prospective applicants to confer with the agencies involved to 
        have each such agency determine and communicate to the 
        prospective applicant within 60 days of when the prospective 
        applicant submits a request for such information concerning--
                    ``(A) the likelihood of approval for a potential 
                facility; and
                    ``(B) key issues of concern to the agencies and 
                public.
            ``(3) Consolidated environmental review and record of 
        decision.--The Secretary of Energy, in consultation with the 
        affected agencies, shall prepare a single environmental review 
        document, which shall be used as the basis for all decisions on 
        the proposed project under Federal law. The document may be an 
        environmental assessment or environmental impact statement 
        under the National Environmental Policy Act of 1969 if 
        warranted, or such other form of analysis as may be warranted. 
        DOE and other agencies shall streamline the review and 
        permitting of transmission and distribution facilities within 
        corridors designated under section 503 of the Federal Land 
        Policy and Management Act (43 U.S.C. 1763) by fully taking into 
        account prior analyses and decisions as to the corridors. The 
        document under this section may consist of or include an 
        environmental assessment, if allowed by law, or an 
        environmental impact statement, if warranted or required by 
        law, or such other form of analysis as warranted, consistent 
        with any requirement of the National Environmental Policy Act, 
        the Federal Land Policy and Management Act, or any other 
        applicable law. Such document shall include consideration by 
        the relevant agencies of any applicable criteria or other 
        matters as required under applicable laws.
            ``(4) Appeals.--In the event that any agency has denied a 
        Federal authorization required for a transmission or 
        distribution facility, or has failed to act by the deadline 
        established by the Secretary pursuant to this section for 
        deciding whether to issue the authorization, the applicant or 
        any State in which the facility would be located may file an 
        appeal with the Secretary of Energy, who shall, in consultation 
        with the affected agency, review the denial or take action on 
        the pending application. Based on the overall record and in 
        consultation with the affected agency, the Secretary may then 
        either issue the necessary authorization with any appropriate 
        conditions, or deny the application. The Secretary shall issue 
        a decision within 90 days of the filing of the appeal. In 
        making a decision under this paragraph, the Secretary shall 
        comply with all applicable requirements of Federal law, 
        including any requirements of the Endangered Species Act, the 
        Clean Water Act, the National Forest Management Act, the 
        National Environmental Policy Act, and the Federal Land 
        Management and Policy Act.
            ``(5) Conforming regulations and memoranda of agreement.--
        Not later than 18 months after the date of enactment of this 
        section, the Secretary of Energy shall issue any regulations 
        necessary to implement the foregoing provisions. Not later than 
        1 year after the date of enactment of this section, the 
        Secretary and the heads of all relevant Federal departments and 
        non-departmental agencies shall, and interested Indian tribes, 
        multi-State entities, and State agencies may, enter into 
        Memoranda of Agreement to ensure the timely and coordinated 
        review and permitting of electricity transmission and 
        distribution facilities. The head of each Federal department or 
        non-departmental agency with approval authority shall designate 
        a senior responsible official and dedicate sufficient other 
        staff and resources to ensure that the DOE regulations and any 
        Memoranda are fully implemented.
            ``(6) Miscellaneous.--Each Federal authorization for an 
        electricity transmission or distribution facility shall be 
        issued for a duration, as determined by the Secretary of 
        Energy, commensurate with the anticipated use of the facility 
        and with appropriate authority to manage the right-of-way for 
        reliability and environmental protection. Further, when such 
        authorizations expire, they shall be reviewed for renewal 
        taking fully into account reliance on such electricity 
        infrastructure, recognizing its importance for public health, 
        safety and economic welfare and as a legitimate use of Federal 
        lands.
            ``(7) Maintaining and enhancing the transmission 
        infrastructure.--In exercising the responsibilities under this 
        section, the Secretary of Energy shall consult regularly with 
        the Federal Energy Regulatory Commission (FERC) and FERC-
        approved Regional Transmission Organizations and Independent 
        System Operators.
    ``(k) Interstate Compacts.--The consent of Congress is hereby given 
for States to enter into interstate compacts establishing regional 
transmission siting agencies to facilitate coordination among the 
States within such areas for purposes of siting future electric energy 
transmission facilities and to carry out State electric energy 
transmission siting responsibilities. The Secretary of Energy may 
provide technical assistance to regional transmission siting agencies 
established under this subsection.
    ``(l) Savings Clause.--Nothing in this section shall be construed 
to affect any requirement of the environmental laws of the United 
States, including, but not limited to, the National Environmental 
Policy Act of 1969. This section shall not apply to any component of 
the National Wilderness Preservation System, the National Wild and 
Scenic Rivers System, or the National Park system (including National 
Monuments therein).''.
    (b) Federal Corridors.--The Secretary of the Interior, the 
Secretary of Energy, the Secretary of Agriculture, and the Chairman of 
the Council on Environmental Quality shall, within 90 days of the date 
of enactment of this subsection, submit a joint report to Congress 
identifying the following:
            (1) all existing designated transmission and distribution 
        corridors on Federal land and the status of work related to 
        proposed transmission and distribution corridor designations, 
        the schedule for completing such work, any impediments to 
        completing the work, and steps that Congress could take to 
        expedite the process;
            (2) the number of pending applications to locate 
        transmission and distribution facilities on Federal lands, key 
        information relating to each such facility, how long each 
        application has been pending, the schedule for issuing a timely 
        decision as to each facility, and progress in incorporating 
        existing and new such rights-of-way into relevant land use and 
        resource management plans or their equivalent; and
            (3) the number of existing transmission and distribution 
        rights-of-way on Federal lands that will come up for renewal 
        within the following 5, 10, and 15 year periods, and a 
        description of how the Secretaries plan to manage such 
        renewals.

SEC. 16013. TRANSMISSION TECHNOLOGIES.

    The Federal Energy Regulatory Commission shall shall take 
affirmative steps in the exercise of its authorities under the Federal 
Power Act to encourage the deployment of transmission technologies that 
utilize real time monitoring and analytical software to increase and 
maximize the capacity and efficiency of transmission networks and to 
reduce line losses.

                   Subtitle B--Transmission Operation

SEC. 16021. OPEN ACCESS TRANSMISSION BY CERTAIN UTILITIES.

    Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended 
by inserting after section 211 the following:

``SEC. 211A. OPEN ACCESS BY UNREGULATED TRANSMITTING UTILITIES.

    ``(a) In General.--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) Exemptions.--
            ``(1) In general.--The Commission shall exempt from any 
        rule or order under this subsection any unregulated 
        transmitting utility that--
                    ``(A)(i) sells no more than 4,000,000 megawatt 
                hours of electricity per year; and
                    ``(ii) is a distribution utility; or
                    ``(B) does not own or operate any transmission 
                facilities that are necessary for operating an 
                interconnected transmission system (or any portion 
                thereof); or
                    ``(C) meets other criteria the Commission 
                determines to be in the public interest.
            ``(2) Local distribution.-- The requirements of subsection 
        (a) shall not apply to facilities used in local distribution.
    ``(c) Rate Changing Procedures.--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.
    ``(d) Remand.--In exercising its authority under paragraph (1), the 
Commission may remand transmission rates to an unregulated transmitting 
utility for review and revision where necessary to meet the 
requirements of subsection (a).
    ``(e) Section 211 Requests.--The provision of transmission services 
under subsection (a) does not preclude a request for transmission 
services under section 211.
    ``(f) Definitions.--For purposes of this section--
            ``(1) The term `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 either an entity described in section 
                201(f) or a rural electric cooperative.
            ``(2) The term `distribution utility' means an unregulated 
        transmitting utility that serves at least ninety percent of its 
        electric customers at retail.''.

SEC. 16022. REGIONAL TRANSMISSION ORGANIZATIONS.

    (a) Sense of the Congress on RTOs.--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 that 
have operational control of interstate transmission facilities and do 
not own or control generation facilities used to supply electric energy 
for sale at wholesale.
    (b) Sense of the Congress on Capital Investment.--It is the sense 
of the Congress that the Federal Energy Regulatory Commission should 
provide to any transmitting utility that becomes a member of an 
operational regional transmitting organization approved by the 
Commission a return on equity sufficient to attract new investment 
capital for expansion of transmission capacity, in accordance with 
sections 205 and 206 of the Federal Power Act (16 U.S.C. 824d and 
824e), including the requirement that rates be just and reasonable.
    (c) Report on Pending Applications.--Not later than 120 days after 
the date of enactment of this section, the Federal Energy Regulatory 
Commission shall submit to the Committee on Energy and Commerce of the 
United States House of Representatives and the Committee on Energy and 
Natural Resources of the United States Senate a report containing the 
following:
            (1) A list of all regional transmission organization 
        applications filed at the Commission pursuant to the 
        Commission's Order No. 2000, including an identification of 
        each public utility and other entity included within the 
        proposed membership of the regional transmission organization.
            (2) A table showing the date each such application was 
        filed, the date of any revised filings of such application, the 
        date of each preliminary or final Commission order regarding 
        such application, and a statement of whether the application 
        has been rejected, preliminarily approved, finally approved, or 
        has some other status (including a description of that status).
            (3) For any application that has not been finally approved 
        by the Commission, a detailed description of every aspect of 
        the application that the Commission has determined does not 
        conform to the requirements of Order No. 2000.
            (4) For any application that has not been finally approved 
        by the Commission, an explanation by the Commission of why the 
        items described pursuant to paragraph (3) constitute material 
        noncompliance with the requirements of the Commission's Order 
        No. 2000 sufficient to justify denial of approval by the 
        Commission.
            (5) For all regional transmission organization applications 
        filed pursuant to the Commission's Order No. 2000, whether 
        finally approved or not--
                    (A) a discussion of that regional transmission 
                organization's efforts to minimize rate seams between 
                itself and--
                            (i) other regional transmission 
                        organizations; and
                            (ii) entities not participating in a 
                        regional transmission organization; and
                    (B) a discussion of the impact of such seams on 
                consumers and wholesale competition; and
                    (C) a discussion of minimizing cost-shifting on 
                consumers.
    (d) Federal Utility Participation in RTOS.--
            (1) Definitions.--For purposes of this section--
                    (A) The term ``appropriate Federal regulatory 
                authority'' means--
                            (i) 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
                            (ii) with respect to the Tennessee Valley 
                        Authority, the Board of Directors of the 
                        Tennessee Valley Authority.
                    (B) The term ``Federal utility'' means a Federal 
                power marketing agency or the Tennessee Valley 
                Authority.
                    (C) The term ``transmission system'' means electric 
                transmission facilities owned, leased, or contracted 
                for by the United States and operated by a Federal 
                utility.
            (2) Transfer.--The appropriate Federal regulatory authority 
        is authorized to enter into a contract, agreement or other 
        arrangement transferring control and use of all or part of the 
        Federal utility's transmission system to a regional 
        transmission organization approved by the Federal Energy 
        Regulatory Commission. Such contract, agreement or arrangement 
        shall 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 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 regional transmission 
                organization's 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 regional transmission organization 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 regional transmission organization 
                and terminate the contract, agreement or other 
                arrangement in accordance with its terms.
        Neither this section, actions taken pursuant to it, nor any 
        other transaction of a Federal utility using a regional 
        transmission organization shall serve to confer upon the 
        Federal Energy Regulatory Commission jurisdiction or authority 
        over the Federal utility's electric generation assets, electric 
        capacity or energy that the Federal utility is authorized by 
        law to market, or the Federal utility's power sales activities.
            (3) Existing statutory and other obligations.--
                    (A) System operation requirements.--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 paragraph (2).
                    (B) Other obligations.--This subsection shall not 
                be construed to--
                            (i) 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
                            (ii) authorize abrogation of any contract 
                        or treaty obligation.

SEC. 16023. NATIVE LOAD.

    Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended 
by adding the following new section at the end thereof:

``SEC. 217. SERVICE OBLIGATIONS OF LOAD-SERVING ENTITIES.

    ``(a) In General.--In exercising authority under this Act, the 
Commission shall ensure that any load-serving entity that either--
            ``(1) owns transmission facilities for the transmission of 
        electric energy in interstate commerce used to purchase or 
        deliver electric energy to meet--
                    ``(A) a service obligation to customers; or
                    ``(B) an existing wholesale contractual obligation; 
                or
            ``(2) holds a contract or service agreement for firm 
        transmission service used to purchase or deliver electric 
        energy to meet--
                    ``(A) a service obligation to customers; or
                    ``(B) an existing wholesale contractual obligation,
shall be entitled to use such transmission facilities or equivalent 
transmission rights to meet such obligations before transmission 
capacity is made available for other uses.
    ``(b) Use by Successor in Interest.--To the extent that all or a 
portion of the service obligation or contractual obligation covered by 
subsection (a) is transferred to another load serving entity, the 
successor shall be entitled to use such transmission facilities or firm 
transmission rights associated with the transferred service obligation 
consistent with subsection (a). Subsequent transfers to another load 
serving entity, or back to the original load-serving entity, shall be 
entitled to the same rights.
    ``(c) Other Entities.--The Commission may exercise authority under 
this Act to make transmission rights not used to meet an obligation 
covered by subsection (a) available to other entities in a manner 
determined by the Commission to be not unduly discriminatory or 
preferential.
    ``(d) Definitions.--For the purposes of this section:
            ``(1) The term `load-serving entity' means an electric 
        utility, transmitting utility or Federal power marketing agency 
        that has an obligation under Federal, State, or local law, or 
        under long-term contracts, to provide electric service to 
        either--
                    ``(A) electric consumers (as defined in section 
                3(5) of the Public Utility Regulatory Policies Act of 
                1978 (16 U.S.C. 2602(5)); or
                    ``(B) an electric utility as defined in section 
                3(4) of the Public Utility Regulatory Policies Act of 
                1978 (16 U.S.C. 2602(5)) that has an obligation to 
                provide electric service to electric consumers.
        Such obligations shall be deemed `service obligations'.
            ``(2) The term `existing wholesale contractual obligation' 
        means an obligation under a firm long-term wholesale contract 
        that was in effect on March 28, 2003. A contract modification 
        after March 28, 2003 (other than one that increases the 
        quantity of electric energy sold under the contract) shall not 
        affect the status of such contract as an existing wholesale 
        contractual obligation.
    ``(e) Relationship to Other Provisions.--To the extent that a 
transmitting utility reserves transmission capacity (or reserves the 
equivalent amount of tradable transmission rights) to provide firm 
transmission service to meet service obligations or firm long-term 
wholesale contractual obligations pursuant to subsection (a), that 
transmitting utility shall not be considered as engaging in undue 
discrimination or preference under this Act.
    ``(f) Jurisdiction.--This section shall not apply to an entity 
located in an area referred to in section 212(k)(2)(A).
    ``(g) Savings Clause.--Nothing in this section shall affect any 
allocation of transmission rights by the PJM Interconnection, the New 
York Independent System Operator, the New England Independent System 
Operator, the Midwest Independent System Operator, or the California 
Independent System Operator. Nothing in this section shall provide a 
basis for abrogating any contract for firm transmission service or 
rights in effect as of the date of enactment of this section.''.

                        Subtitle C--Reliability

SEC. 16031. ELECTRIC RELIABILITY STANDARDS.

    Part II of the Federal Power Act (16 U.S.C 824 et seq.) is amended 
by inserting the following new section at the end thereof:

``SEC. 218. ELECTRIC RELIABILITY.

    ``(a) Definitions.--For purposes of this section--
            ``(1) The term `bulk-power system' means--
                    ``(A) facilities and control systems necessary for 
                operating an interconnected electric energy 
                transmission network (or any portion thereof); and
                    ``(B) electric energy from generation facilities 
                needed to maintain transmission system reliability.
        The term does not include facilities used in the local 
        distribution of electric energy.
            ``(2) The terms `Electric Reliability Organization' and 
        `ERO' mean the organization certified by the Commission under 
        subsection (c) the purpose of which is to establish and enforce 
        reliability standards for the bulk-power system, subject to 
        Commission review.
            ``(3) The term `reliability standard' means a requirement, 
        approved by the Commission under this section, to provide for 
        reliable operation of the bulk-power system. The term includes 
        requirements for the operation of existing bulk-power system 
        facilities and the design of planned additions or modifications 
        to such facilities to the extent necessary to provide for 
        reliable operation of the bulk-power system, but the term does 
        not include any requirement to enlarge such facilities or to 
        construct new transmission capacity or generation capacity.
            ``(4) The term `reliable operation' means operating the 
        elements of the bulk-power system within equipment and electric 
        system thermal, voltage, and stability limits so that 
        instability, uncontrolled separation, or cascading failures of 
        such system will not occur as a result of a sudden disturbance 
        or unanticipated failure of system elements.
            ``(5) The term `Interconnection' means a geographic area in 
        which the operation of bulk-power system components is 
        synchronized such that the failure of 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 facilities within their control.
            ``(6) The term `transmission organization' means a regional 
        transmission organization, independent system operator, 
        independent transmission provider, or other transmission 
        organization finally approved by the Commission for the 
        operation of transmission facilities.
            ``(7) The term `regional entity' means an entity having 
        enforcement authority pursuant to subsection (e)(4).
    ``(b) Jurisdiction and Applicability.--(1) The Commission shall 
have jurisdiction, within the United States, over the ERO certified by 
the Commission under subsection (c), any regional entities, and all 
users, owners and operators of the bulk-power system, including but not 
limited to the entities described in section 201(f), for purposes of 
approving reliability standards established under this section and 
enforcing compliance with this section. All users, owners and operators 
of the bulk-power system shall comply with reliability standards that 
take effect under this section.
    ``(2) The Commission shall issue a final rule to implement the 
requirements of this section not later than 180 days after the date of 
enactment of this section.
    ``(c) Certification.--Following the issuance of a Commission rule 
under subsection (b)(2), any person may submit an application to the 
Commission for certification as the Electric Reliability Organization 
(ERO). 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 (e)(2), reliability standards that provide for an 
        adequate level of reliability of the bulk-power system;
            ``(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) Reliability Standards.--(1) The Electric Reliability 
Organization shall file each reliability standard or modification to a 
reliability standard that it proposes to be made effective under this 
section with the Commission.
    ``(2) The Commission may approve, by rule or order, a proposed 
reliability standard or modification to a reliability standard if it 
determines that the standard is just, reasonable, not unduly 
discriminatory or preferential, and in the public interest. The 
Commission shall give due weight to the technical expertise of the 
Electric Reliability Organization with respect to the content of a 
proposed standard or modification to a reliability standard and to the 
technical expertise of a regional entity organized on an 
Interconnection-wide basis with respect to a reliability standard to be 
applicable within that Interconnection, but shall not defer with 
respect to the effect of a standard on competition. A proposed standard 
or modification shall take effect upon approval by the Commission.
    ``(3) The Electric Reliability Organization shall rebuttably 
presume that a proposal from a regional entity organized on an 
Interconnection-wide basis for a reliability standard or modification 
to a reliability standard to be applicable on an Interconnection-wide 
basis is just, reasonable, and not unduly discriminatory or 
preferential, and in the public interest.
    ``(4) The Commission shall remand to the Electric Reliability 
Organization for further consideration a proposed reliability standard 
or a modification to a reliability standard that the Commission 
disapproves in whole or in part.
    ``(5) The Commission, upon its own motion or upon complaint, may 
order the Electric Reliability Organization to submit to the Commission 
a proposed reliability standard or a modification to a reliability 
standard that addresses a specific matter if the Commission considers 
such a new or modified reliability standard appropriate to carry out 
this section.
    ``(6) The final rule adopted under subsection (b)(2) shall include 
fair processes for the identification and timely resolution of any 
conflict between a reliability standard and any function, rule, order, 
tariff, rate schedule, or agreement accepted, approved, or ordered by 
the Commission applicable to a transmission organization. Such 
transmission organization shall continue to comply with such function, 
rule, order, tariff, rate schedule or agreement accepted approved, or 
ordered by the Commission until--
            ``(A) the Commission finds a conflict exists between a 
        reliability standard and any such provision;
            ``(B) the Commission orders a change to such provision 
        pursuant to section 206 of this part; and
            ``(C) the ordered change becomes effective under this part.
If the Commission determines that a reliability standard needs to be 
changed as a result of such a conflict, it shall order the ERO to 
develop and file with the Commission a modified reliability standard 
under paragraph (4) or (5) of this subsection.
    ``(e) Enforcement.--(1) The ERO may impose, subject to paragraph 
(2), a penalty on a user or owner or operator of the bulk-power system 
for a violation of a reliability standard approved by the Commission 
under subsection (d) if the ERO, after notice and an opportunity for a 
hearing--
            ``(A) finds that the user or owner or operator has violated 
        a reliability standard approved by the Commission under 
        subsection (d); and
            ``(B) files notice and the record of the proceeding with 
        the Commission.
    ``(2) A penalty imposed under paragraph (1) may take effect not 
earlier than the 31st day after the electric reliability organization 
files with the Commission notice of the penalty and the record of 
proceedings. Such penalty shall be subject to review by the Commission, 
on its own motion or upon application by the user, owner or operator 
that is the subject of the penalty filed within 30 days after the date 
such notice is filed with the Commission. Application to the Commission 
for review, or the initiation of review by the Commission on its own 
motion, shall not operate as a stay of such penalty unless the 
Commission otherwise orders upon its own motion or upon application by 
the user, owner or operator that is the subject of such penalty. In any 
proceeding to review a penalty imposed under paragraph (1), the 
Commission, after notice and opportunity for hearing (which hearing may 
consist solely of the record before the electric reliability 
organization 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 electric reliability organization 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--
                    ``(i) an independent board;
                    ``(ii) a balanced stakeholder board; or
                    ``(iii) a combination independent and balanced 
                stakeholder board.
            ``(B) the regional entity otherwise satisfies the 
        provisions of subsection (c)(1) and (2); and
            ``(C) the agreement promotes effective and efficient 
        administration of bulk-power system reliability.
The Commission may modify such delegation. The ERO and the Commission 
shall rebuttably presume that a proposal for delegation to a regional 
entity organized on an Interconnection-wide basis promotes effective 
and efficient administration of bulk-power system reliability and 
should be approved. Such regulation may provide that the Commission may 
assign the ERO's authority to enforce reliability standards under 
paragraph (1) directly to a regional entity consistent with the 
requirements of this paragraph.
    ``(5) The Commission may take such action as is necessary or 
appropriate against the ERO or a regional entity to ensure compliance 
with a reliability standard or any Commission order affecting the ERO 
or a regional entity.
    ``(6) Any penalty imposed under this section shall bear a 
reasonable relation to the seriousness of the violation and shall take 
into consideration the efforts of such user, owner, or operator to 
remedy the violation in a timely manner.
    ``(f) Changes in Electricity Reliability Organization Rules.--The 
Electric Reliability Organization shall file with the Commission for 
approval any proposed rule or proposed rule change, accompanied by an 
explanation of its basis and purpose. The Commission, upon its own 
motion or complaint, may propose a change to the rules of the Electric 
Reliability Organization. A proposed rule or proposed rule change shall 
take effect upon a finding by the Commission, after notice and 
opportunity for comment, that the change is just, reasonable, not 
unduly discriminatory or preferential, is in the public interest, and 
satisfies the requirements of subsection (c).
    ``(g) Reliability Reports.--The Electric Reliability Organization 
shall conduct periodic assessments of the reliability and adequacy of 
the bulk-power system in North America.
    ``(h) Coordination with Canada and Mexico.--The President is urged 
to negotiate international agreements with the governments of Canada 
and Mexico to provide for effective compliance with reliability 
standards and the effectiveness of the Electric Reliability 
Organization in the United States and Canada or Mexico.
    ``(i) Savings Provisions.--(1) The Electric Reliability 
Organization shall have authority to develop and enforce compliance 
with reliability standards for only the bulk-power system.
    ``(2) This section does not authorize the Electric Reliability 
Organization or the Commission to order the construction of additional 
generation or transmission capacity or to set and enforce compliance 
with standards for adequacy or safety of electric facilities or 
services.
    ``(3) Nothing in this section shall be construed to preempt any 
authority of any State to take action to ensure the safety, adequacy, 
and reliability of electric service within that State, as long as such 
action is not inconsistent with any reliability standard, except that 
the State of New York may establish rules that result in greater 
reliability within that State, as long as such action does not result 
in lesser reliability outside the State than that provided by the 
reliability standards.
    ``(4) Within 90 days of the application of the Electric Reliability 
Organization or other affected party, and after notice and opportunity 
for comment, the Commission shall issue a final order determining 
whether a State action is inconsistent with a reliability standard, 
taking into consideration any recommendation of the Electric 
Reliability Organization.
    ``(5) The Commission, after consultation with the Electric 
Reliability Organization and the State taking action, may stay the 
effectiveness of any State action, pending the Commission's issuance of 
a final order.
    ``(j) Regional Advisory Bodies.--The Commission shall establish a 
regional advisory body on the petition of at least 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 or 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 Electric 
Reliability Organization, a regional entity, or the Commission 
regarding the governance of an existing or proposed regional entity 
within the same region, whether a standard proposed to apply within the 
region is just, reasonable, not unduly discriminatory or preferential, 
and in the public interest, whether fees proposed to be assessed within 
the region are just, reasonable, not unduly discriminatory or 
preferential, and in the public interest and any other responsibilities 
requested by the Commission. The Commission may give deference to the 
advice of any such regional advisory body if that body is organized on 
an Interconnection-wide basis.
    ``(k) Application to Alaska and Hawaii.--The provisions of this 
section do not apply to Alaska or Hawaii.''.

                      Subtitle D--PUHCA Amendments

SEC. 16041. SHORT TITLE.

    This subtitle may be cited as the ``Public Utility Holding Company 
Act of 2003''.

SEC. 16042. DEFINITIONS.

    For 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-5a, 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--
                    (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. 16043. REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935.

    The Public Utility Holding Company Act of 1935 (15 U.S.C. 79 et 
seq.) is repealed.

SEC. 16044. 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 
deems to be relevant to costs incurred by a public utility or natural 
gas company that is an associate company of such holding company and 
necessary or appropriate for the protection of utility customers with 
respect to jurisdictional rates.
    (b) Affiliate Companies.--Each affiliate of a holding company or of 
any subsidiary company of a holding company shall maintain, and shall 
make available to the Commission, such books, accounts, memoranda, and 
other records with respect to any transaction with another affiliate, 
as the Commission deems to be 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 deems to be 
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. 16045. STATE ACCESS TO BOOKS AND RECORDS.

    (a) In General.--Upon the written request of a State commission 
having jurisdiction to regulate a public utility company in a holding 
company system, the holding company or any associate company or 
affiliate thereof, other than such public utility company, wherever 
located, shall produce for inspection books, accounts, memoranda, and 
other records that--
            (1) have been identified in reasonable detail by the State 
        commission;
            (2) the State commission deems are relevant to costs 
        incurred by such public utility company; and
            (3) are necessary for the effective discharge of the 
        responsibilities of the State commission with respect to such 
        proceeding.
    (b) Limitation.--Subsection (a) does not apply to any person that 
is a holding company solely by reason of ownership of one or more 
qualifying facilities under the Public Utility Regulatory Policies Act 
of 1978 (16 U.S.C. 2601 et seq.).
    (c) Confidentiality of Information.--The production of books, 
accounts, memoranda, and other records under subsection (a) shall be 
subject to such terms and conditions as may be necessary and 
appropriate to safeguard against unwarranted disclosure to the public 
of any trade secrets or sensitive commercial information.
    (d) Effect on State Law.--Nothing in this section shall preempt 
applicable State law concerning the provision of books, accounts, 
memoranda, and other records, or in any way limit the rights of any 
State to obtain books, accounts, memoranda, and other records under any 
other Federal law, contract, or otherwise.
    (e) Court Jurisdiction.--Any United States district court located 
in the State in which the State commission referred to in subsection 
(a) is located shall have jurisdiction to enforce compliance with this 
section.

SEC. 16046. EXEMPTION AUTHORITY.

    (a) Rulemaking.--Not later than 90 days after the effective date of 
this subtitle, the Commission shall promulgate a final rule to exempt 
from the requirements of section 16044 (relating to Federal access to 
books and records) 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 (16 U.S.C. 2601 et seq.);
            (2) exempt wholesale generators; or
            (3) foreign utility companies.
    (b) Other Authority.--The Commission shall exempt a person or 
transaction from the requirements of section 16044 (relating to Federal 
access to books and records) if, upon application or upon the motion of 
the Commission--
            (1) the Commission finds that the books, accounts, 
        memoranda, and other records of any person are not relevant to 
        the jurisdictional rates of a public utility or natural gas 
        company; or
            (2) the Commission finds that any class of transactions is 
        not relevant to the jurisdictional rates of a public utility or 
        natural gas company.

SEC. 16047. AFFILIATE TRANSACTIONS.

    (a) Commission Authority Unaffected.--Nothing in this subtitle 
shall limit the authority of the Commission under the Federal Power Act 
(16 U.S.C. 791a et seq.) to require that jurisdictional rates are just 
and reasonable, including the ability to deny or approve the pass 
through of costs, the prevention of cross-subsidization, and the 
promulgation of such rules and regulations as are necessary or 
appropriate for the protection of utility consumers.
    (b) Recovery of Costs.--Nothing in this subtitle shall preclude the 
Commission or a State commission from exercising its jurisdiction under 
otherwise applicable law to determine whether a public utility company, 
public utility, or natural gas company may recover in rates any costs 
of an activity performed by an associate company, or any costs of goods 
or services acquired by such public utility company from an associate 
company.

SEC. 16048. APPLICABILITY.

    Except as otherwise specifically provided in this subtitle, no 
provision of this subtitle shall apply to, or be deemed to include--
            (1) the United States;
            (2) a State or any political subdivision of a State;
            (3) any foreign governmental authority not operating in the 
        United States;
            (4) any agency, authority, or instrumentality of any entity 
        referred to in paragraph (1), (2), or (3); or
            (5) any officer, agent, or employee of any entity referred 
        to in paragraph (1), (2), or (3) acting as such in the course 
        of his or her official duty.

SEC. 16049. 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. 16050. 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. 16051. 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, so long as 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 et seq.) (including section 301 of that Act) or the Natural 
Gas Act (15 U.S.C. 717 et seq.) (including section 8 of that Act).

SEC. 16052. IMPLEMENTATION.

    Not later than 12 months after the date of enactment of this 
subtitle, the Commission shall--
            (1) promulgate such regulations as may be necessary or 
        appropriate to implement this subtitle (other than section 
        16045, relating to State access to books and records); and
            (2) submit to the 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. 16053. 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. 16054. EFFECTIVE DATE.

    This subtitle shall take effect 12 months after the date of 
enactment of this subtitle.

SEC. 16055. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated such funds as may be 
necessary to carry out this subtitle.

SEC. 16056. CONFORMING AMENDMENTS TO THE FEDERAL POWER ACT.

    (a) Conflict of Jurisdiction.--Section 318 of the Federal Power Act 
(16 U.S.C. 825q) is repealed.
    (b) Definitions.--(1) Section 201(g)(5) of the Federal Power Act 
(16 U.S.C. 824(g)(5)) is amended by striking ``1935'' and inserting 
``2003''.
    (2) Section 214 of the Federal Power Act (16 U.S.C. 824m) is 
amended by striking ``1935'' and inserting ``2003''.

                      Subtitle E--PURPA Amendments

SEC. 16061. REAL-TIME PRICING AND TIME-OF-USE METERING STANDARDS.

    (a) Adoption of Standards.--Section 111(d) of the Public Utility 
Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by 
adding at the end the following:
            ``(11) Real-time pricing.--(A) Each electric utility shall, 
        at the request of an electric consumer, provide electric 
        service under a real-time rate schedule, under which the rate 
        charged by the electric utility varies by the hour (or smaller 
        time interval) according to changes in the electric utility's 
        wholesale power cost. The real-time pricing service shall 
        enable the electric consumer to manage energy use and cost 
        through real-time metering and communications technology.
            ``(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.
            ``(12) Time-of-use metering.--(A) Each electric utility 
        shall, at the request of an electric consumer, provide electric 
        service under a time-of-use rate schedule which enables the 
        electric consumer to manage energy use and cost through time-
        of-use metering and technology.
            ``(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 standards set out in subparagraph (A) not later than 1 year 
        after the date of enactment of this paragraph.''.
    (b) Special Rules.--Section 115 of the Public Utility Regulatory 
Policies Act of 1978 (16 U.S.C. 2625) is amended by adding at the end 
the following:
    ``(i) Real-Time Pricing.--In a State that permits third-party 
marketers to sell electric energy to retail electric consumers, the 
electric consumer shall be entitled to receive the same real-time 
metering and communication service as a direct retail electric consumer 
of the electric utility.
    ``(j) Time-of-Use Metering.--In a State that permits third-party 
marketers to sell electric energy to retail electric consumers, the 
electric consumer shall be entitled to receive the same time-of-use 
metering and communication service as a direct retail electric consumer 
of the electric utility.''.

SEC. 16062. 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--
                    ``(A) the qualifying cogeneration facility or 
                qualifying small power production facility has access 
                to--
                            ``(i) independently administered, auction-
                        based day ahead and real time wholesale markets 
                        for the sale of electric energy, and
                            ``(ii) long-term wholesale markets for the 
                        sale of capacity and electric energy;
                    ``(B) the qualifying cogeneration facility or 
                qualifying small power production facility has access 
                to a competitive wholesale market for the sale of 
                electric energy that provides such qualifying 
                cogeneration facility or qualifying small power 
                production facility with opportunities to sell electric 
                energy that, at a minimum, are comparable to the 
                opportunities provided by the markets, or some minimum 
                combination thereof, described in subparagraph (A); or
                    ``(C) the qualifying cogeneration facility does not 
                meet criteria established by the Commission pursuant to 
                the rulemaking set forth in subparagraph (n) and has 
                not filed with the Commission a notice of self-
                certification or an application for Commission 
                certification under 18 C.F.R. 292.207 prior to the date 
                of enactment of this subsection.
            ``(2) Commission review.--(A) Any electric utility may file 
        an application with the Commission for relief from the 
        mandatory purchase obligation pursuant to this subsection on a 
        utility-wide basis. Such application shall set forth the 
        reasons why such relief is appropriate and describe how the 
        conditions set forth in subparagraphs (A) and (B) of paragraph 
        (1) of this subsection have been met.
            ``(B) After notice, including sufficient notice to 
        potentially affected qualifying facilities, and an opportunity 
        for comment, and within 90 days of the filing of an application 
        under subparagraph (A), the Commission shall make a final 
        determination as to whether the conditions set forth in 
        subparagraphs (A) and (B) of paragraph (1) have been met. The 
        Commission shall not be authorized to issue a tolling order 
        regarding such application or otherwise delay a final decision 
        regarding such application.
            ``(3) Reinstatement of obligation to purchase.--(A) At any 
        time after the Commission makes a finding under paragraph (2) 
        relieving an electric utility of its obligation to purchase 
        electric energy, a qualifying cogeneration facility or a 
        qualifying small power production facility may apply to the 
        Commission for an order reinstating the electric utility's 
        obligation to purchase electric energy under this section. Such 
        application shall set forth the reasons why such relief is no 
        longer appropriate and describe how the tests set forth in 
        subparagraphs (A) and (B) of paragraph (1) of this subsection 
        are no longer met.
            ``(B) After notice, including sufficient notice to 
        potentially affected utilities, and opportunity for comment, 
        and within 90 days of the filing of an application under 
        subparagraph (A), the Commission shall issue an order 
        reinstating the electric utility's obligation to purchase 
        electric energy under this section if the Commission finds that 
        the condition in paragraph (1), which relieved the obligation 
        to purchase, is no longer met. The Commission shall not be 
        authorized to issue a tolling order regarding such application 
        or otherwise delay a final decision regarding such application.
            ``(4) 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 if--
                    ``(A) competing retail electric suppliers are 
                willing and able to provide electric energy to the 
                qualifying cogeneration facility or qualifying small 
                power production facility, and
                    ``(B) the electric utility is not required by State 
                law to sell electric energy in its service territory.
            ``(5) No effect on existing rights and remedies.--Nothing 
        in this subsection affects the rights or remedies of any party 
        under any contract or obligation, in effect or pending approval 
        before the appropriate State regulatory authority or 
        nonregulated electric utility on the date of enactment of this 
        subsection, to purchase electric energy or capacity from or to 
        sell electric energy or capacity to a facility under this Act 
        (including the right to recover costs of purchasing electric 
        energy or capacity).
            ``(6) Recovery of costs.--
                    ``(A) Regulation.--To ensure recovery by an 
                electric utility that purchases electric energy or 
                capacity from a qualifying facility pursuant to any 
                legally enforceable obligation entered into or imposed 
                under this section of all prudently incurred costs 
                associated with the purchases, the Commission shall 
                issue and enforce such regulations as may be required 
                to ensure that the electric utility shall recover the 
                prudently incurred costs associated with such 
                purchases.
                    ``(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.).
    ``(n) Rulemaking for new facilities.--
            ``(1) In general.--Not later than 180 days after the date 
        of enactment of this subsection, the Commission shall issue a 
        rule revising the criteria for qualifying cogeneration 
        facilities in 18 C.F.R. 292.205. In particular, the Commission 
        shall evaluate the rules regarding qualifying facility criteria 
        and revise such rules, as necessary, to ensure--
                    ``(A) that the thermal energy output of a new 
                qualifying cogeneration facility is used in a 
                productive and beneficial manner;
                    ``(B) the electrical and thermal output of the 
                cogeneration facility is used predominantly for 
                commercial or industrial processes and not intended 
                predominantly for sale to an electric utility; and
                    ``(C) continuing progress in the development of 
                efficient electric energy generating technology.
            ``(2) Applicability.--Any revisions made to operating and 
        efficiency standards shall be applicable only to a cogeneration 
        facility that--
                    ``(A) was not a qualifying cogeneration facility, 
                or
                    ``(B) had not filed with the Commission a notice of 
                self-certification or an application for Commission 
                certification under 18 C.F.R. 292.207,
prior to the date of enactment of this subsection.
            ``(3) Definition.--For purposes of this subsection, the 
        term `commercial processes' includes uses of thermal and 
        electric energy for educational and healthcare facilities.
    ``(o) Rules for Existing Facilities.-- Notwithstanding rule 
revisions under subsection (n), the Commission's rules in effect prior 
to the effective date of any revised rules prescribed under subsection 
(n) shall continue to apply to any cogeneration facility or small power 
production facility that--
            ``(1) was a qualifying cogeneration facility or a 
        qualifying small power production facility, or
            ``(2) had filed with the Commission a notice of self-
        certification or an application for Commission certification 
        under 18 C.F.R. 292.207,
prior to the date of enactment of subsections (m) and (n).''.
    (b) Elimination of Ownership Limitations.--(1) Section 3(17)(C) of 
the Federal Power Act (16 U.S.C. 796(17)(C)) is amended to read as 
follows:
                    ``(C) `qualifying small power production facility' 
                means a small power production facility that the 
                Commission determines, by rule, meets such requirements 
                (including requirements respecting minimum size, fuel 
                use, and fuel efficiency) as the Commission may, by 
                rule, prescribe.''.
    (2) Section 3(18)(B) of the Federal Power Act (16 U.S.C. 
796(18)(B)) is amended to read as follows:
                    ``(B) `qualifying cogeneration facility' means a 
                cogeneration facility that the Commission determines, 
                by rule, meets such requirements (including 
                requirements respecting minimum size, fuel use, and 
                fuel efficiency) as the Commission may, by rule, 
                prescribe.''.

SEC. 16063. 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:
            ``(13) Time-based metering and communications.--(A) Not 
        later than eighteen (18) months after the date of enactment of 
        this paragraph, each electric utility shall offer each of its 
        customer classes, and provide individual customers upon 
        customer request, a time-based rate schedule under which the 
        rate charged by the electric utility varies during different 
        time periods and reflects the variance 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, each the following:
                    ``(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.
                    ``(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, not later than twelve (12) months after 
enactment of this subsection, 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:
            ``(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 each 
of the following:
            ``(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.
            ``(3) Within 6 months of enactment, provide the Congress 
        with a report that identifies and quantifies the national 
        benefits of demand response and provides policy recommendations 
        as to how to achieve specific levels of such benefits by 
        January 1, 2005.''.
    (e) Demand Response and Regional Coordination.--
            (1) Policy.--It is the policy of the United States to 
        encourage States to coordinate, on a regional basis, State 
        energy policies to provide reliable and affordable demand 
        response services to the public.
            (2) Technical assistance.--The Secretary of Energy shall 
        provide technical assistance to States and regional 
        organizations formed by 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) Report.--The Federal Energy Regulatory 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 each of the following:
                    (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, including the prior year and following 
                years.
                    (D) The potential for demand response as a 
                quantifiable, reliable resource for regional planning 
                purposes.
                    (E) Steps taken to ensure that, in regional 
                transmission planning and operations, that 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) Cost Recovery 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. It is further the policy of the 
United States that the benefits of such demand response that accrue to 
those not deploying such technology and devices, but who are part of 
the same regional electricity entity, shall be recognized.

                      Subtitle F--Renewable Energy

SEC. 16071. 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:
            ``(14) 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 amended by 
adding at the end the following:
    ``(l) 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)(14), the term 
`net metering service' shall mean a service provided in accordance with 
the following standards:
            ``(1) Rates and charges.--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) Measurement.--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 normal 
        metering practices.
            ``(3) Electric energy supplied exceeding electric energy 
        generated.--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 normal 
        metering practices.
            ``(4) Electric energy generated exceeding electric energy 
        supplied.--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) Safety and performance standards.--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) Additional control and testing requirements.--The 
        Commission, after consultation with State regulatory 
        authorities and nonregulated 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) Definitions.--For purposes of this subsection:
                    ``(A) The term `eligible on-site generating 
                facility' means--
                            ``(i) 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
                            ``(ii) 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 
                service fuel cells or combined heat and power.
                    ``(D) The term `net metering' 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. 16072. 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 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 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 ``nonprofit electrical cooperative'' and 
        inserting ``a not-for-profit electric cooperative, a public 
        utility described in section 115 of the Internal Revenue Code 
        of 1986, a State, Commonwealth, territory, or possession of the 
        United States or the District of Columbia, or a political 
        subdivision thereof, or an Indian tribal government 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:
    ``(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. 16073. RENEWABLE ENERGY ON FEDERAL LANDS.

    (a) Report to Congress.--Within 24 months after the date of 
enactment of this section, 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 wind and solar energy consistent with 
        applicable law and management plans; and
            (2) an analysis of--
                    (A) the use of rights-of-ways, leases, or other 
                methods to develop wind and solar energy on such lands;
                    (B) the anticipated benefits of grants, loans, tax 
                credits, or other provisions to promote wind and solar 
                energy development on such lands; and
                    (C) any issues that the Secretary of the Interior 
                or the Secretary of Agriculture have encountered in 
                managing wind or solar energy projects on such lands, 
                or believe are likely to arise in relation to the 
                development of wind or solar 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 wind or solar 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) In general.--Within 90 days after the date of the 
        enactment of this Act, 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 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) Transmittal of results.--The results of the study shall 
        be transmitted to the Congress within 24 months after the date 
        of the enactment of this Act.

SEC. 16074. ASSESSMENT OF RENEWABLE ENERGY RESOURCES.

    (a) Resource Assessment.--Not later than 3 months after the date of 
enactment of this Act, and each year thereafter, the Secretary of 
Energy shall review the available assessments of renewable energy 
resources available within the United States, including solar, wind, 
biomass, ocean, geothermal, and hydroelectric energy resources, and 
undertake new assessments as necessary, taking into account changes in 
market conditions, available technologies, and other relevant factors.
    (b) Contents of Reports.--Not later than 1 year after the date of 
enactment of this Act, and each year thereafter, the Secretary shall 
publish a report based on the assessment under subsection (a). The 
report shall contain--
            (1) a detailed inventory describing the available amount 
        and characteristics of the renewable energy resources; and
            (2) such other information as the Secretary believes would 
        be useful in developing such renewable energy resources, 
        including descriptions of surrounding terrain, population and 
        load centers, nearby energy infrastructure, location of energy 
        and water resources, and available estimates of the costs 
        needed to develop each resource, together with an 
        identification of any barriers to providing adequate 
        transmission for remote sources of renewable energy resources 
        to current and emerging markets, recommendations for removing 
        or addressing such barriers, and ways to provide access to the 
        grid that do not unfairly disadvantage renewable or other 
        energy producers.

 Subtitle G--Market Transparency, Round Trip Trading Prohibition, and 
                              Enforcement

SEC. 16081. MARKET TRANSPARENCY RULES.

    Part II of the Federal Power Act is amended by adding the following 
new section at the end thereof:

``SEC. 219. MARKET TRANSPARENCY RULES.

    ``(a) Commission Rules.--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 sales of 
electric energy at wholesale in interstate commerce and transmission of 
electric energy in interstate commerce to the Commission, State 
commissions, buyers and sellers of wholesale electric energy, users of 
transmission services, and the public on a timely basis. The Commission 
shall have authority to obtain such information from any person, and 
any entity described in section 201(f), who sells electric energy at 
wholesale in interstate commerce or provides transmission services in 
interstate commerce.
    ``(b) Exemptions.--The Commission shall exempt from disclosure 
information it determines would, if disclosed, (1) be detrimental to 
the operation of an effective market; or (2) 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. 16082. PROHIBITION ON ROUND TRIP TRADING.

    Part II of the Federal Power Act is amended by adding the following 
new section at the end thereof:

``SEC. 220. PROHIBITION ON ROUND TRIP TRADING.

    ``(a) Prohibition.--It shall be a violation of this Act for any 
person, and any entity 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) Definition of Round-Trip Trade.--For the purposes of this 
section, the term `round-trip trade' means a transaction, or 
combination of transactions, in which a person or 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 
        described in paragraph (1), arranges a financially offsetting 
        trade with such other person or entity for the same quantity of 
        electric energy so that, collectively, the purchase and sale 
        transactions in themselves result in no financial gain or loss; 
        and
            ``(3) has a specific intent to distort reported revenues, 
        trading volumes, or prices.''.

SEC. 16083. CONFORMING CHANGES.

    Section 201(e) of the Federal Power Act is amended by striking ``or 
212'' and inserting ``212, 215, 216, 217, 218, 219, or 220''. Section 
201(b)(2) of such Act is amended by striking ``and 212'' and inserting 
``212, 215, 216, 217, 218, 219, and 220''.

SEC. 16084. ENFORCEMENT.

    (a) Complaints.--Section 306 of the Federal Power Act (16 U.S.C. 
825e) is amended by--
            (1) inserting ``electric utility,'' after ``Any person,''; 
        and
            (2) inserting ``, transmitting utility,'' after 
        ``licensee'' each place it appears.
    (b) Review of Commission Orders.--Section 313(a) of the Federal 
Power Act (16 U.S.C. 8251) is amended by inserting ``electric 
utility,'' after ``person,'' in the first place it appears and by 
striking ``any person unless such person'' and inserting ``any entity 
unless such entity''.
    (c) 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).
    (d) Civil Penalties.--Section 316A of the Federal Power Act (16 
U.S.C. 825-1) 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''.

                    Subtitle H--Consumer Protections

SEC. 16091. 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) in the fifth sentence after ``rendered by the'' insert 
        ``date 60 days after the''.

SEC. 16092. JURISDICTION OVER INTERSTATE SALES.

    (a) Scope of Authority.--Section 206 of the Federal Power Act (16 
U.S.C. 824e) is amended by adding the following new subsection at the 
end thereof:
    ``(e)(1) If an entity that is not a public utility (including an 
entity referred to in section 201(f)) voluntarily makes a spot market 
sale of electric energy and such sale violates Commission rules in 
effect at the time of such sale, such entity shall be subject to the 
Commission's refund authority under this section with respect to such 
violation.
    ``(2) This section shall not apply to any entity that is either--
            ``(A) an entity described in section 201(f); or
            ``(B) a rural electric cooperative,
that does not sell more than 4,000,000 megawatt hours of electricity 
per year.
    ``(3) For purposes of this subsection, the term `spot market sale' 
means an agreement for the sale of electric energy at wholesale in 
interstate commerce that is for 24 hours or less and that is entered 
into the day of, or the day prior to, delivery.''.
    (b) Conforming Amendments.--(1) Section 206 of the Federal Power 
Act (16 U.S.C. 824e) is amended as follows:
            (A) In subsection (b), in the seventh sentence, by striking 
        ``the public utility to make''.
            (B) In the first sentence of subsection (a), by striking 
        ``hearing had'' and inserting ``hearing held''.
    (2) Section 201(b)(2) of such Act (16 U.S.C. 824(b)(2)) is amended 
as follows:
            (A) In the first sentence by striking ``sections 210'' and 
        inserting ``sections 206(f), 210''.
            (B) In the second sentence by striking ``section 210'' and 
        inserting ``section 206(f), 210,''.
    (3) Section 201(e) of the Federal Power Act is amended by striking 
``section 210'' and inserting ``section 206(f), 210''.
    (c) Uniform Investigation Authority.--Section 307(a) of the Federal 
Power Act (16 U.S.C. 825f(a)) is amended as follows:
            (1) By inserting ``, electric utility, transmitting 
        utility, or other entity'' after ``person'' each time it 
        appears.
            (2) By striking the period at the end of the first sentence 
        and inserting the following: ``or in obtaining information 
        about the sale of electric energy at wholesale in interstate 
        commerce and the transmission of electric energy in interstate 
        commerce.''.
    (d) Sanctity of Contract.--(1) The Federal Energy Regulatory 
Commission shall have no authority to abrogate or modify any provision 
of a contract, except upon a finding, after notice and opportunity for 
a hearing, that such action is necessary to protect the public 
interest, unless such contract expressly provides for a different 
standard of review.
    (2) For purposes of this subsection, a contract is any agreement, 
in effect and subject to the jurisdiction of the Commission--
            (A) under section 4 of the Natural Gas Act or section 205 
        of the Federal Power Act; and
            (B) that is not for sales in an organized exchange or 
        auction spot market.
    (3) This subsection shall not apply to any contract executed before 
the date of enactment of this section unless such contract is an 
interconnection agreement, nor shall this subsection affect the outcome 
in any proceeding regarding any contract for sales of electric power 
executed before the date of enactment of this section.

SEC. 16093. CONSUMER PRIVACY.

    (a) In General.--The Federal Trade Commission shall issue rules 
protecting the privacy of electric consumers from the disclosure of 
consumer information obtained in connection with the sale or delivery 
of electric energy to electric consumers. The Federal Trade Commission 
shall proceed in accordance with section 553 of title 5, United States 
Code, when prescribing a rule under this section.
    (b) 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. 16094. 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 approved by the 
appropriate State regulatory authority.
    (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) Rulemaking.--The Federal Trade Commission shall proceed in 
accordance with section 553 of title 5, United States Code, when 
prescribing a rule under this section.
    (d) 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.

          Subtitle I--Merger Review Reform and Accountability

SEC. 16101. MERGER REVIEW REFORM AND ACCOUNTABILITY.

    (a) Merger Review Reform.--Within 180 days after the date of 
enactment of this Act, the Secretary of Energy, in consultation with 
the Federal Energy Regulatory Commission and the Department of Justice, 
shall prepare, and transmit to the Committee on Energy and Commerce of 
the House of Representatives and the Committee on Energy and Natural 
Resources of the Senate each of the following:
            (1) A study of the extent to which the authorities vested 
        in the Federal Energy Regulatory Commission under section 203 
        of the Federal Power Act are duplicative of authorities vested 
        in--
                    (A) other agencies of Federal and State government; 
                and
                    (B) the Federal Energy Regulatory Commission, 
                including under sections 205 and 206 of the Federal 
                Power Act.
            (2) Recommendations on reforms to the Federal Power Act 
        that would eliminate any unnecessary duplication in the 
        exercise of regulatory authority or unnecessary delays in the 
        approval (or disapproval) of applications for the sale, lease, 
        or other disposition of public utility facilities.
    (b) Merger Review Accountability.--Not later than 1 year after the 
date of enactment of this Act and annually thereafter, with respect to 
all orders issued within the preceding year that impose a condition on 
a sale, lease, or other disposition of public utility facilities under 
section 203(b) of the Federal Power Act, the Federal Energy Regulatory 
Commission shall transmit a report to the Committee on Energy and 
Commerce of the House of Representatives and the Committee on Energy 
and Natural Resources of the Senate explaining each of the following:
            (1) The condition imposed.
            (2) Whether the Commission could have imposed such 
        condition by exercising its authority under any provision of 
        the Federal Power Act other than under section 203(b).
            (3) If the Commission could not have imposed such condition 
        other than under section 203(b), why the Commission determined 
        that such condition was consistent with the public interest.

                 Subtitle J--Study of Economic Dispatch

SEC. 16111. STUDY ON THE BENEFITS OF ECONOMIC DISPATCH.

    (a) Study.--The Secretary of Energy, in coordination and 
consultation with the States, shall conduct a study on--
            (1) the procedures currently used by electric utilities to 
        perform economic dispatch;
            (2) identifying possible revisions to those procedures to 
        improve the ability of nonutility generation resources to offer 
        their output for sale for the purpose of inclusion in economic 
        dispatch; and
            (3) the potential benefits to residential, commercial, and 
        industrial electricity consumers nationally and in each state 
        if economic dispatch procedures were revised to improve the 
        ability of nonutility generation resources to offer their 
        output for inclusion in economic dispatch.
    (b) Definition.--The term ``economic dispatch'' when used in this 
section means the operation of generation facilities to produce energy 
at the lowest cost to reliably serve consumers, recognizing any 
operational limits of generation and transmission facilities.
    (c) Report to Congress and the States.--Not later than 90 days 
after the date of enactment of this Act, and on a yearly basis 
following, the Secretary of Energy shall submit a report to the 
Congress and the States on the results of the study conducted under 
subsection (a), including recommendations to the Congress and the 
States for any suggested legislative or regulatory changes.

                         TITLE VII--MOTOR FUELS

                     Subtitle A--General Provisions

SEC. 17101. RENEWABLE CONTENT OF MOTOR VEHICLE FUEL.

    (a) In General.--Section 211 of the Clean Air Act (42 U.S.C. 7545) 
is amended--
            (1) by redesignating subsection (o) as subsection (q); and
            (2) by inserting after subsection (n) the following:
    ``(o) Renewable Fuel Program.--
            ``(1) Definitions.--In this section:
                    ``(A) Cellulosic biomass ethanol.--The term 
                `cellulosic biomass ethanol' means ethanol derived from 
                any lignocellulosic or hemicellulosic matter that is 
                available on a renewable or recurring basis, 
                including--
                            ``(i) dedicated energy crops and trees;
                            ``(ii) wood and wood residues;
                            ``(iii) plants;
                            ``(iv) grasses;
                            ``(v) agricultural residues;
                            ``(vi) fibers;
                            ``(vii) animal wastes, including poultry 
                        fats and poultry wastes, and other waste 
                        materials; and
                            ``(viii) municipal solid waste.
                    ``(B) Renewable fuel.--
                            ``(i) In general.--The term `renewable 
                        fuel' means motor vehicle fuel that--
                                    ``(I)(aa) is produced from grain, 
                                starch, oilseeds, or other biomass; or
                                    ``(bb) is natural gas produced from 
                                a biogas source, including a landfill, 
                                sewage waste treatment plant, feedlot, 
                                or other place where decaying organic 
                                material is found; and
                                    ``(II) is used to replace or reduce 
                                the quantity of fossil fuel present in 
                                a fuel mixture used to operate a motor 
                                vehicle.
                            ``(ii) Inclusion.--The term `renewable 
                        fuel' includes cellulosic biomass ethanol and 
                        biodiesel (as defined in section 312(f) of the 
                        Energy Policy Act of 1992 (42 U.S.C. 13220(f)) 
                        and any blending components derived from 
                        renewable fuel (provided that only the 
                        renewable fuel portion of any such blending 
                        component shall be considered part of the 
                        applicable volume under the renewable fuel 
                        program established by this subsection).
                    ``(C) Small refinery.--The term `small refinery' 
                means a refinery for which average aggregate daily 
                crude oil throughput for the calendar year (as 
                determined by dividing the aggregate throughput for the 
                calendar year by the number of days in the calendar 
                year) does not exceed 75,000 barrels.
            ``(2) Renewable fuel program.--
                    ``(A) In general.--Not later than 1 year from 
                enactment of this provision, the Administrator shall 
                promulgate regulations ensuring that gasoline sold or 
                dispensed to consumers in the contiguous United States, 
                on an annual average basis, contains the applicable 
                volume of renewable fuel as specified in subparagraph 
                (B). Regardless of the date of promulgation, such 
                regulations shall contain compliance provisions for 
                refiners, blenders, and importers, as appropriate, to 
                ensure that the requirements of this section are met, 
                but shall not restrict where renewables can be used, or 
                impose any per-gallon obligation for the use of 
                renewables. If the Administrator does not promulgate 
                such regulations, the applicable percentage, on a 
                volume percentage of gasoline basis, shall be 1.62 in 
                2005.
                    ``(B) Applicable volume.--
                            ``(i) Calendar years 2005 through 2015.--
                        For the purpose of subparagraph (A), the 
                        applicable volume for any of calendar years 
                        2005 through 2015 shall be determined in 
                        accordance with the following table:

                  Applicable volume of renewable fuel

    ``Calendar year:                           (In billions of gallons)
                2005.......................................        2.7 
                2006.......................................        2.7 
                2007.......................................        2.9 
                2008.......................................        2.9 
                2009.......................................        3.4 
                2010.......................................        3.4 
                2011.......................................        3.4 
                2012.......................................        4.2 
                2013.......................................        4.2 
                2014.......................................        4.2 
                2015.......................................        5.0.
                            ``(ii) Calendar year 2016 and thereafter.--
                        For the purpose of subparagraph (A), the 
                        applicable volume for calendar year 2016 and 
                        each calendar year thereafter shall be equal to 
                        the product obtained by multiplying--
                                    ``(I) the number of gallons of 
                                gasoline that the Administrator 
                                estimates will be sold or introduced 
                                into commerce in the calendar year; and
                                    ``(II) the ratio that--
                                            ``(aa) 5.0 billion gallons 
                                        of renewable fuels; bears to
                                            ``(bb) the number of 
                                        gallons of gasoline sold or 
                                        introduced into commerce in 
                                        calendar year 2015.
            ``(3) Applicable percentages.--Not later than October 31 of 
        each calendar year after 2002, the Administrator of the Energy 
        Information Administration shall provide the Administrator an 
        estimate of the volumes of gasoline sales in the United States 
        for the coming calendar year. Based on such estimates, the 
        Administrator shall, by November 30 of each calendar year after 
        2003, determine and publish in the Federal Register, the 
        renewable fuel obligation, on a volume percentage of gasoline 
        basis, applicable to refiners, blenders, and importers, as 
        appropriate, for the coming calendar year, to ensure that the 
        requirements of paragraph (2) are met. For each calendar year, 
        the Administrator shall establish a single applicable 
        percentage that applies to all parties, and make provision to 
        avoid redundant obligations. In determining the applicable 
        percentages, the Administrator shall make adjustments to 
        account for the use of renewable fuels by exempt small 
        refineries during the previous year.
            ``(4) Cellulosic biomass ethanol.--For the purpose of 
        paragraph (2), 1 gallon of cellulosic biomass ethanol shall be 
        considered to be the equivalent of 1.5 gallon of renewable 
        fuel.
            ``(5) Credit program.--
                    ``(A) In general.--The regulations promulgated to 
                carry out this subsection shall provide for the 
                generation of an appropriate amount of credits by any 
                person that refines, blends, or imports gasoline that 
                contains a quantity of renewable fuel that is greater 
                than the quantity required under paragraph (2). Such 
                regulations shall provide for the generation of an 
                appropriate amount of credits for biodiesel fuel. If a 
                small refinery notifies the Administrator that it 
                waives the exemption provided by this Act, the 
                regulations shall provide for the generation of credits 
                by the small refinery beginning in the year following 
                such notification.
                    ``(B) Use of credits.--A person that generates 
                credits under subparagraph (A) may use the credits, or 
                transfer all or a portion of the credits to another 
                person, for the purpose of complying with paragraph 
                (2).
                    ``(C) Life of credits.--A credit generated under 
                this paragraph shall be valid to show compliance:
                            ``(i) in the calendar year in which the 
                        credit was generated or the next calendar year, 
                        or
                            ``(ii) in the calendar year in which the 
                        credit was generated or next two consecutive 
                        calendar years if the Administrator promulgates 
                        regulations under paragraph (6).
                    ``(D) Inability to purchase sufficient credits.--
                The regulations promulgated to carry out this 
                subsection shall include provisions allowing any person 
                that is unable to generate or purchase sufficient 
                credits to meet the requirements under paragraph (2) to 
                carry forward a renewables deficit provided that, in 
                the calendar year following the year in which the 
                renewables deficit is created, such person shall 
                achieve compliance with the renewables requirement 
                under paragraph (2), and shall generate or purchase 
                additional renewables credits to offset the renewables 
                deficit of the previous year.
            ``(6) Seasonal variations in renewable fuel use.--
                    ``(A) Study.--For each of calendar years 2005 
                through 2015, the Administrator of the Energy 
                Information Administration, shall conduct a study of 
                renewable fuels blending to determine whether there are 
                excessive seasonal variations in the use of renewable 
                fuels.
                    ``(B) Regulation of excessive seasonal 
                variations.--If, for any calendar year, the 
                Administrator of the Energy Information Administration, 
                based on the study under subparagraph (A), makes the 
                determinations specified in subparagraph (C), the 
                Administrator shall promulgate regulations to ensure 
                that 35 percent or more of the quantity of renewable 
                fuels necessary to meet the requirement of paragraph 
                (2) is used during each of the periods specified in 
                subparagraph (D) of each subsequent calendar year.
                    ``(C) Determinations.--The determinations referred 
                to in subparagraph (B) are that--
                            ``(i) less than 35 percent of the quantity 
                        of renewable fuels necessary to meet the 
                        requirement of paragraph (2) has been used 
                        during one of the periods specified in 
                        subparagraph (D) of the calendar year;
                            ``(ii) a pattern of excessive seasonal 
                        variation described in clause (i) will continue 
                        in subsequent calendar years; and
                            ``(iii) promulgating regulations or other 
                        requirements to impose a 35% or more seasonal 
                        use of renewable fuels will not prevent or 
                        interfere with the attainment of national 
                        ambient air quality standards or significantly 
                        increase the price of motor fuels to the 
                        consumer.
                    ``(D) Periods.--The two periods referred to in this 
                paragraph are--
                            ``(i) April through September; and
                            ``(ii) January through March and October 
                        through December.
                    ``(E) Exclusions.--Renewable fuels blended or 
                consumed in 2005 in a State which has received a waiver 
                under section 209(b) shall not be included in the study 
                in subparagraph (A).
            ``(7) Waivers.--
                    ``(A) In general.--The Administrator, in 
                consultation with the Secretary of Agriculture and the 
                Secretary of Energy, may waive the requirement of 
                paragraph (2) in whole or in part on petition by one or 
                more States by reducing the national quantity of 
                renewable fuel required under this subsection--
                            ``(i) based on a determination by the 
                        Administrator, after public notice and 
                        opportunity for comment, that implementation of 
                        the requirement would have a significant and 
                        meaningful adverse impact on the economy or 
                        environment of a State, a region, or the United 
                        States, or will prevent or interfere with the 
                        attainment of a national ambient air quality 
                        standard in any area of a State; or
                            ``(ii) based on a determination by the 
                        Administrator, after public notice and 
                        opportunity for comment, that there is an 
                        inadequate domestic supply or distribution 
                        capacity to meet the requirement.
                     ``(B) Petitions for waivers.--The Administrator, 
                in consultation with the Secretary of Agriculture and 
                the Secretary of Energy, shall approve or disapprove a 
                State petition for a waiver of the requirement of 
                paragraph (2) within 90 days after the date on which 
                the petition is received by the Administrator. If the 
                Administrator does not act to approve or disapprove a 
                State petition for a waiver within 90 days, the 
                Administrator shall publish a notice setting forth the 
                reasons for not acting within the required 90-day 
                period.
                    ``(C) Termination of waivers.--A waiver granted 
                under subparagraph (A) shall terminate after 1 year, 
                but may be renewed by the Administrator after 
                consultation with the Secretary of Agriculture and the 
                Secretary of Energy.
            ``(8) Study and waiver for initial year of program.--Not 
        later than 180 days from enactment, the Secretary of Energy 
        shall complete for the Administrator a study assessing whether 
        the renewable fuels requirement under paragraph (2) will likely 
        result in significant adverse consumer impacts in 2005, on a 
        national, regional or State basis. Such study shall evaluate 
        renewable fuel supplies and prices, blendstock supplies, and 
        supply and distribution system capabilities. Based on such 
        study, the Secretary shall make specific recommendations to the 
        Administrator regarding waiver of the requirements of paragraph 
        (2), in whole or in part, to avoid any such adverse impacts. 
        Within 270 days from enactment, the Administrator shall, 
        consistent with the recommendations of the Secretary waive, in 
        whole or in part, the renewable fuels requirement under 
        paragraph (2) by reducing the national quantity of renewable 
        fuel required under this subsection in 2005. This provision 
        shall not be interpreted as limiting the Administrator's 
        authority to waive the requirements of paragraph (2) in whole, 
        or in part, under paragraph (7) or paragraph (9), pertaining to 
        waivers.
            ``(9) Assessment and waiver.--The Secretary of Energy, in 
        consultation with the Administrator of the Environmental 
        Protection Agency and the Secretary of Agriculture on his own 
        motion, or upon petition of any State shall evaluate the 
        requirement of paragraph (2) and determine, prior to January 1, 
        2007, or prior to January 1 of any subsequent year in which the 
        applicable volume of renewable fuel is increased under 
        paragraph (2)(B), whether the requirement of paragraph (2), 
        including the applicable volume of renewable fuel contained in 
        paragraph (2)(B) should remain in effect, in whole or in part, 
        during 2007 or any year or years subsequent to 2007. In 
        evaluating the requirement of paragraph (2) and in making any 
        determination under this section, the Secretary shall consider 
        the best available information and data collected by accepted 
        methods or best available means regarding--
                    ``(A) the capacity of renewable fuel producers to 
                supply an adequate amount of renewable fuel at 
                competitive prices to fulfill the requirement in 
                paragraph (2);
                    ``(B) the potential of the requirement in paragraph 
                (2) to significantly raise the price of gasoline, food 
                or heating oil for consumers in any significant area or 
                region of the country above the price that would 
                otherwise apply to such commodities in the absence of 
                the requirement;
                    ``(C) the potential of the requirement in paragraph 
                (2) to interfere with the supply of fuel in any 
                significant gasoline market or region of the country, 
                including interference with the efficient operation of 
                refiners, blenders, importers, wholesale suppliers, and 
                retail vendors of gasoline, and other motor fuels; and
                    ``(D) the potential of the requirement to cause or 
                promote exceedences of Federal, State, or local air 
                quality standards.
        If the Secretary determines, after public notice and the 
        opportunity for comment, that the requirement of paragraph (2) 
        would have significant and meaningful adverse impact on the 
        supply of fuel and related infrastructure or on the economy, 
        environment, public health or environment of any significant 
        area or region of the country, the Secretary may waive, in 
        whole or in part, the requirement of paragraph (2) in any one 
        year or period of years as well as reduce the applicable volume 
        of renewable fuel contained in paragraph (2)(B) in any one year 
        or period of years.
            ``(10) Small refineries.--
                    ``(A) In general.--The requirement of paragraph (2) 
                shall not apply to small refineries until the first 
                calendar year beginning more than 5 years after the 
                first year set forth in the table in paragraph 
                (2)(B)(i). Not later than December 31, 2006, the 
                Secretary of Energy shall complete for the 
                Administrator a study to determine whether the 
                requirement of paragraph (2) would impose a 
                disproportionate economic hardship on small refineries. 
                For any small refinery that the Secretary of Energy 
                determines would experience a disproportionate economic 
                hardship, the Administrator shall extend the small 
                refinery exemption for such small refinery for no less 
                than two additional years.
                    ``(B) Economic hardship.--
                            ``(i) Extension of exemption.--A small 
                        refinery may at any time petition the 
                        Administrator for an extension of the exemption 
                        from the requirement of paragraph (2) for the 
                        reason of disproportionate economic hardship. 
                        In evaluating a hardship petition, the 
                        Administrator, in consultation with the 
                        Secretary of Energy, shall consider the 
                        findings of the study in addition to other 
                        economic factors.
                            ``(ii) Deadline for action on petitions.--
                        The Administrator shall act on any petition 
                        submitted by a small refinery for a hardship 
                        exemption not later than 90 days after the 
                        receipt of the petition.
                    ``(C) Credit program.--If a small refinery notifies 
                the Administrator that it waives the exemption provided 
                by this Act, the regulations shall provide for the 
                generation of credits by the small refinery beginning 
                in the year following such notification.
                    ``(D) Opt-in for small refiners.--A small refinery 
                shall be subject to the requirements of this section if 
                it notifies the Administrator that it waives the 
                exemption under subparagraph (A).''.
    (b) Penalties and Enforcement.--Section 211(d) of the Clean Air Act 
(42 U.S.C. 7545(d)) is amended--
            (1) in paragraph (1)--
                    (A) in the first sentence, by striking ``or (n)'' 
                each place it appears and inserting ``(n) or (o)''; and
                    (B) in the second sentence, by striking ``or (m)'' 
                and inserting ``(m), or (o)''; and
            (2) in the first sentence of paragraph (2), by striking 
        ``and (n)'' each place it appears and inserting ``(n), and 
        (o)''.
    (c) Survey of Renewable Fuel Market.--
            (1) Survey and report.--Not later than December 1, 2006, 
        and annually thereafter, the Administrator of the Environmental 
        Protection Agency (in consultation with the Secretary of Energy 
        acting through the Administrator of the Energy Information 
        Administration) shall--
                    (A) conduct, with respect to each conventional 
                gasoline use area and each reformulated gasoline use 
                area in each State, a survey to determine the market 
                shares of--
                            (i) conventional gasoline containing 
                        ethanol;
                            (ii) reformulated gasoline containing 
                        ethanol;
                            (iii) conventional gasoline containing 
                        renewable fuel; and
                            (iv) reformulated gasoline containing 
                        renewable fuel; and
                    (B) submit to Congress, and make publicly 
                available, a report on the results of the survey under 
                subparagraph (A).
            (2) Recordkeeping and reporting requirements.--The 
        Administrator may require any refiner, blender, or importer to 
        keep such records and make such reports as are necessary to 
        ensure that the survey conducted under paragraph (1) is 
        accurate. The Administrator shall rely, to the extent 
        practicable, on existing reporting and recordkeeping 
        requirements to avoid duplicative requirements.
            (3) Applicable law.--Activities carried out under this 
        subsection shall be conducted in a manner designed to protect 
        confidentiality of individual responses.
            (4) Calculation of market shares.--Market shares for 
        conventional gasoline and reformulated gasoline use areas will 
        be calculated on a statewide basis using information collected 
        under paragraph (2) and other information available to the 
        Administrator. Market share information may be based upon 
        gasoline distribution patterns that include multistate use 
        areas.

SEC. 17102. FUELS SAFE HARBOR.

    (a) In General.--Notwithstanding any other provision of Federal or 
State law, no renewable fuel, as defined by section 211(o)(1) of the 
Clean Air Act, or fuel containing MTBE, used or intended to be used as 
a motor vehicle fuel, nor any motor vehicle fuel containing such 
renewable fuel or MTBE, shall be deemed defective in design or 
manufacture by virtue of the fact that it is, or contains, such a 
renewable fuel or MTBE, if it does not violate a control or prohibition 
imposed by the Administrator under section 211 of such Act, and the 
manufacturer is in compliance with all requests for information under 
subsection (b) of such section 211(b) of the Clean Air Act. If the safe 
harbor provided by this section does not apply, the existence of a 
design defect or manufacturing defect shall be determined under 
otherwise applicable law. Nothing in this paragraph shall be construed 
to affect the liability of any person for environmental remediation 
costs, drinking water contamination, negligence, public nuisance or any 
other liability other than liability for a defect in design or 
manufacture of a motor vehicle fuel.
    (b) Effective Date.--This section shall be effective as of the date 
of enactment and shall apply with respect to all claims filed on or 
after that date.

SEC. 17103. FINDINGS AND MTBE TRANSITION ASSISTANCE.

    (a) Findings.--Congress finds that--
            (1) since 1979, methyl tertiary butyl ether (referred to in 
        this section as ``MTBE'') has been used nationwide at low 
        levels in gasoline to replace lead as an octane booster or 
        anti-knocking agent;
            (2) Public Law 101-549 (commonly known as the ``Clean Air 
        Act Amendments of 1990'') (42 U.S.C. 7401 et seq.) established 
        a fuel oxygenate standard under which reformulated gasoline 
        must contain at least 2 percent oxygen by weight;
            (3) at the time of the adoption of the fuel oxygen 
        standard, Congress was aware that significant use of MTBE would 
        result from the adoption of that standard, and that the use of 
        MTBE would likely be important to the cost-effective 
        implementation of that program;
            (4) Congress was aware that gasoline and its component 
        additives can and do leak from storage tanks;
            (5) the fuel industry responded to the fuel oxygenate 
        standard established by Public Law 101-549 by making 
        substantial investments in--
                    (A) MTBE production capacity; and
                    (B) systems to deliver MTBE-containing gasoline to 
                the marketplace;
            (6) Congress has--
                    (A) reconsidered the relative value of the 
                oxygenate requirement for reformulated gasoline; and
                    (B) decided to provide for the elimination of the 
                oxygenate requirement for reformulated gasoline and to 
                provide for a renewable content requirement for motor 
                fuel; and
            (7) it is appropriate for Congress to provide some limited 
        transition assistance--
                    (A) to merchant producers of MTBE who produced MTBE 
                in response to a market created by the oxygenate 
                requirement contained in the Clean Air Act; and
                    (B) for the purpose of mitigating any fuel supply 
                problems that may result from the elimination of the 
                oxygenate requirement for reformulated gasoline.
    (b) Purposes.--The purpose of this section is to provide assistance 
to merchant producers of MTBE in making the transition from producing 
MTBE to producing other fuel additives.
    (c) MTBE Merchant Producer Conversion Assistance.--Section 211(c) 
of the Clean Air Act (42 U.S.C. 7545(c)) is amended by adding at the 
end the following:
            ``(5) MTBE merchant producer conversion assistance.--
                    ``(A) In general.--
                            ``(i) Grants.--The Secretary of Energy, in 
                        consultation with the Administrator, may make 
                        grants to merchant producers of methyl tertiary 
                        butyl ether in the United States to assist the 
                        producers in the conversion of eligible 
                        production facilities described in subparagraph 
                        (C) to the production of iso-octane and 
                        alkylates.
                            ``(ii) Determination.--The Administrator, 
                        in consultation with the Secretary of Energy, 
                        may determine that transition assistance for 
                        the production of iso-octane and alkylates is 
                        inconsistent with the provisions of 
                        subparagraph (B) and, on that basis, may deny 
                        applications for grants authorized by this 
                        provision.
                    ``(B) Further grants.--The Secretary of Energy, in 
                consultation with the Administrator, may also further 
                make grants to merchant producers of MTBE in the United 
                States to assist the producers in the conversion of 
                eligible production facilities described in 
                subparagraph (C) to the production of such other fuel 
                additives that, consistent with this subsection--
                            ``(i) unless the Administrator determines 
                        that such fuel additives may reasonably be 
                        anticipated to endanger public health or the 
                        environment;
                            ``(ii) have been registered and have been 
                        tested or are being tested in accordance with 
                        the requirements of this section; and
                            ``(iii) will contribute to replacing 
                        gasoline volumes lost as a result of paragraph 
                        (5).
                    ``(C) Eligible production facilities.--A production 
                facility shall be eligible to receive a grant under 
                this paragraph if the production facility--
                            ``(i) is located in the United States; and
                            ``(ii) produced methyl tertiary butyl ether 
                        for consumption before April 1, 2003 and ceased 
                        production at any time after the date of 
                        enactment.
                    ``(D) Authorization of appropriations.--There is 
                authorized to be appropriated to carry out this 
                paragraph $250,000,000 for each of fiscal years 2004 
                through 2006, to remain available until expended.''.
    (d) Effect on State Law.--The amendments made to the Clean Air Act 
by this title have no effect regarding any available authority of 
States to limit the use of methyl tertiary butyl ether in motor vehicle 
fuel.

SEC. 17104. ELIMINATION OF OXYGEN CONTENT REQUIREMENT FOR REFORMULATED 
              GASOLINE.

    (a) Elimination.--
            (1) In general.--Section 211(k) of the Clean Air Act (42 
        U.S.C. 7545(k)) is amended--
                    (A) in paragraph (2)--
                            (i) in the second sentence of subparagraph 
                        (A), by striking ``(including the oxygen 
                        content requirement contained in subparagraph 
                        (B))'';
                            (ii) by striking subparagraph (B); and
                            (iii) by redesignating subparagraphs (C) 
                        and (D) as subparagraphs (B) and (C), 
                        respectively;
                    (B) in paragraph (3)(A), by striking clause (v);
                    (C) in paragraph (7)--
                            (i) in subparagraph (A)--
                                    (I) by striking clause (i); and
                                    (II) by redesignating clauses (ii) 
                                and (iii) as clauses (i) and (ii), 
                                respectively; and
                            (ii) in subparagraph (C)--
                                    (I) by striking clause (ii); and
                                    (II) by redesignating clause (iii) 
                                as clause (ii); and
            (2) Effective date.--The amendments made by paragraph (1) 
        take effect 270 days after the date of enactment of this Act, 
        except that such amendments shall take effect upon enactment in 
        any State that has received a waiver under section 209(b) of 
        the Clean Air Act.
    (b) Maintenance of Toxic Air Pollutant Emission Reductions.--
Section 211(k)(1) of the Clean Air Act (42 U.S.C. 7545(k)(1)) is 
amended--
            (1) by striking ``Within 1 year after the enactment of the 
        Clean Air Act Amendments of 1990,'' and inserting the 
        following:
                    ``(A) In general.--Not later than November 15, 
                1991,''; and
            (2) by adding at the end the following:
                    ``(B) Maintenance of toxic air pollutant emissions 
                reductions from reformulated gasoline.--
                            ``(i) Definitions.--In this subparagraph 
                        the term `PADD' means a Petroleum 
                        Administration for Defense District.
                            ``(ii) Regulations regarding emissions of 
                        toxic air pollutants.--Not later than 270 days 
                        after the date of enactment of this 
                        subparagraph the Administrator shall establish, 
                        for each refinery or importer, standards for 
                        toxic air pollutants from use of the 
                        reformulated gasoline produced or distributed 
                        by the refinery or importer that maintain the 
                        reduction of the average annual aggregate 
                        emissions of toxic air pollutants for 
                        reformulated gasoline produced or distributed 
                        by the refinery or importer during calendar 
                        years 1999 and 2000, determined on the basis of 
                        data collected by the Administrator with 
                        respect to the refinery or importer.
                            ``(iii) Standards applicable to specific 
                        refineries or importers.--
                                    ``(I) Applicability of standards.--
                                For any calendar year, the standards 
                                applicable to a refinery or importer 
                                under clause (ii) shall apply to the 
                                quantity of gasoline produced or 
                                distributed by the refinery or importer 
                                in the calendar year only to the extent 
                                that the quantity is less than or equal 
                                to the average annual quantity of 
                                reformulated gasoline produced or 
                                distributed by the refinery or importer 
                                during calendar years 1999 and 2000.
                                    ``(II) Applicability of other 
                                standards.--For any calendar year, the 
                                quantity of gasoline produced or 
                                distributed by a refinery or importer 
                                that is in excess of the quantity 
                                subject to subclause (I) shall be 
                                subject to standards for toxic air 
                                pollutants promulgated under 
                                subparagraph (A) and paragraph (3)(B).
                            ``(iv) Credit program.--The Administrator 
                        shall provide for the granting and use of 
                        credits for emissions of toxic air pollutants 
                        in the same manner as provided in paragraph 
                        (7).
                            ``(v) Regional protection of toxics 
                        reduction baselines.--
                                    ``(I) In general.--Not later than 
                                60 days after the date of enactment of 
                                this subparagraph, and not later than 
                                April 1 of each calendar year that 
                                begins after that date of enactment, 
                                the Administrator shall publish in the 
                                Federal Register a report that 
                                specifies, with respect to the previous 
                                calendar year--
                                            ``(aa) the quantity of 
                                        reformulated gasoline produced 
                                        that is in excess of the 
                                        average annual quantity of 
                                        reformulated gasoline produced 
                                        in 1999 and 2000; and
                                            ``(bb) the reduction of the 
                                        average annual aggregate 
                                        emissions of toxic air 
                                        pollutants in each PADD, based 
                                        on retail survey data or data 
                                        from other appropriate sources.
                                    ``(II) Effect of failure to 
                                maintain aggregate toxics reductions.--
                                If, in any calendar year, the reduction 
                                of the average annual aggregate 
                                emissions of toxic air pollutants in a 
                                PADD fails to meet or exceed the 
                                reduction of the average annual 
                                aggregate emissions of toxic air 
                                pollutants in the PADD in calendar 
                                years 1999 and 2000, the Administrator, 
                                not later than 90 days after the date 
                                of publication of the report for the 
                                calendar year under subclause (I), 
                                shall--
                                            ``(aa) identify, to the 
                                        maximum extent practicable, the 
                                        reasons for the failure, 
                                        including the sources, volumes, 
                                        and characteristics of 
                                        reformulated gasoline that 
                                        contributed to the failure; and
                                            ``(bb) promulgate revisions 
                                        to the regulations promulgated 
                                        under clause (ii), to take 
                                        effect not earlier than 180 
                                        days but not later than 270 
                                        days after the date of 
                                        promulgation, to provide that, 
                                        notwithstanding clause 
                                        (iii)(II), all reformulated 
                                        gasoline produced or 
                                        distributed at each refinery or 
                                        importer shall meet the 
                                        standards applicable under 
                                        clause (ii) not later than 
                                        April 1 of the year following 
                                        the report in subclause (II) 
                                        and for subsequent years.
                            ``(vi) Regulations to control hazardous air 
                        pollutants from motor vehicles and motor 
                        vehicle fuels.--Not later than July 1, 2004, 
                        the Administrator shall promulgate final 
                        regulations to control hazardous air pollutants 
                        from motor vehicles and motor vehicle fuels, as 
                        provided for in section 80.1045 of title 40, 
                        Code of Federal Regulations (as in effect on 
                        the date of enactment of this subparagraph).''.
    (c) Consolidation in Reformulated Gasoline Regulations.--Not later 
than 180 days after the date of enactment of this Act, the 
Administrator shall revise the reformulated gasoline regulations under 
subpart D of part 80 of title 40, Code of Federal Regulations, to 
consolidate the regulations applicable to VOC-Control Regions 1 and 2 
under section 80.41 of that title by eliminating the less stringent 
requirements applicable to gasoline designated for VOC-Control Region 2 
and instead applying the more stringent requirements applicable to 
gasoline designated for VOC-Control Region 1.
    (d) Savings Clause.--Nothing in this section is intended to affect 
or prejudice either any legal claims or actions with respect to 
regulations promulgated by the Administrator prior to enactment of this 
Act regarding emissions of toxic air pollutants from motor vehicles or 
the adjustment of standards applicable to a specific refinery or 
importer made under such prior regulations and the Administrator may 
apply such adjustments to the standards applicable to such refinery or 
importer under clause (iii)(I) of section 211(k)(1)(B) of the Clean Air 
Act, except that--
            (1) the Administrator shall revise such adjustments to be 
        based only on calendar years 1999-2000, and
            (2) for adjustments based on toxic air pollutant emissions 
        from reformulated gasoline significantly below the national 
        annual average emissions of toxic air pollutants from all 
        reformulated gasoline, the Administrator may revise such 
        adjustments to take account of the scope of any lawful and 
        enforceable Federal or State prohibition on methyl tertiary 
        butyl ether imposed after the effective date of the enactment 
        of this paragraph, except that any such adjustment shall 
        require such refiner or importer, to the greatest extent 
        practicable, to maintain the reduction achieved during calendar 
        year 1999-2000 in the average annual aggregate emissions of 
        toxic air pollutants from reformulated gasoline produced or 
        distributed by the refinery or importer. Any such adjustment 
        shall not be made at a level below the average percentage of 
        reductions of emissions of toxic air pollutants for 
        reformulated gasoline supplied to PADD I during calendar years 
        1999-2000.

SEC. 17105. ANALYSES OF MOTOR VEHICLE FUEL CHANGES.

    Section 211 of the Clean Air Act (42 U.S.C. 7545) is amended by 
inserting after subsection (o) the following:
    ``(p) Analyses of Motor Vehicle Fuel Changes and Emissions Model.--
            ``(1) Anti-backsliding analysis.--
                    ``(A) Draft analysis.--Not later than 4 years after 
                the date of enactment of this paragraph, the 
                Administrator shall publish for public comment a draft 
                analysis of the changes in emissions of air pollutants 
                and air quality due to the use of motor vehicle fuel 
                and fuel additives resulting from implementation of the 
                amendments made by title VII of the Energy Policy Act 
                of 2003.
                    ``(B) Final analysis.--After providing a reasonable 
                opportunity for comment but not later than 5 years 
                after the date of enactment of this paragraph, the 
                Administrator shall publish the analysis in final form.
            ``(2) Emissions model.--For the purposes of this 
        subsection, as soon as the necessary data are available, the 
        Administrator shall develop and finalize an emissions model 
        that reasonably reflects the effects of gasoline 
        characteristics or components on emissions from vehicles in the 
        motor vehicle fleet during calendar year 2005.''.

SEC. 17106. DATA COLLECTION.

    Section 205 of the Department of Energy Organization Act (42 U.S.C. 
7135) is amended by adding at the end the following:
    ``(m) Renewable Fuels Survey.--(1) In order to improve the ability 
to evaluate the effectiveness of the Nation's renewable fuels mandate, 
the Administrator shall conduct and publish the results of a survey of 
renewable fuels demand in the motor vehicle fuels market in the United 
States monthly, and in a manner designed to protect the confidentiality 
of individual responses. In conducting the survey, the Administrator 
shall collect information both on a national and regional basis, 
including--
            ``(A) the quantity of renewable fuels produced;
            ``(B) the quantity of renewable fuels blended;
            ``(C) the quantity of renewable fuels imported;
            ``(D) the quantity of renewable fuels demanded;
            ``(E) market price data; and
            ``(F) such other analyses or evaluations as the 
        Administrator finds is necessary to achieve the purposes of 
        this section.
    ``(2) The Administrator shall also collect or estimate information 
both on a national and regional basis, pursuant to subparagraphs (A) 
through (F) of paragraph (1), for the five years prior to 
implementation of this subsection.
    ``(3) This subsection does not affect the authority of the 
Administrator to collect data under section 52 of the Federal Energy 
Administration Act of 1974 (15 U.S.C. 790a).''.

SEC. 17107. FUEL SYSTEM REQUIREMENTS HARMONIZATION STUDY.

    (a) Study.--
            (1) In general.--The Administrator of the Environmental 
        Protection Agency and the Secretary of Energy shall jointly 
        conduct a study of Federal, State, and local requirements 
        concerning motor vehicle fuels, including--
                    (A) requirements relating to reformulated gasoline, 
                volatility (measured in Reid vapor pressure), 
                oxygenated fuel, and diesel fuel; and
                    (B) other requirements that vary from State to 
                State, region to region, or locality to locality.
            (2) Required elements.--The study shall assess--
                    (A) the effect of the variety of requirements 
                described in paragraph (1) on the supply, quality, and 
                price of motor vehicle fuels available to consumers in 
                various States and localities;
                    (B) the effect of the requirements described in 
                paragraph (1) on achievement of--
                            (i) national, regional, and local air 
                        quality standards and goals; and
                            (ii) related environmental and public 
                        health protection standards and goals;
                    (C) the effect of Federal, State, and local motor 
                vehicle fuel regulations, including multiple motor 
                vehicle fuel requirements, on--
                            (i) domestic refineries;
                            (ii) the fuel distribution system; and
                            (iii) industry investment in new capacity;
                    (D) the effect of the requirements described in 
                paragraph (1) on emissions from vehicles, refineries, 
                and fuel handling facilities;
                    (E) the feasibility of developing national or 
                regional motor vehicle fuel slates for the 48 
                contiguous States that, while improving air quality at 
                the national, regional and local levels consistent with 
                the attainment of national ambient air quality 
                standards, could--
                            (i) enhance flexibility in the fuel 
                        distribution infrastructure and improve fuel 
                        fungibility;
                            (ii) reduce price volatility and costs to 
                        consumers and producers;
                            (iii) provide increased liquidity to the 
                        gasoline market; and
                            (iv) enhance fuel quality, consistency, and 
                        supply;
                    (F) the feasibility of providing incentives, to 
                promote cleaner burning motor vehicle fuel; and
                    (G) the extent to which improvements in air quality 
                and any increases or decreases in the price of motor 
                fuel can be projected to result from the Environmental 
                Protection Agency's Tier II requirements for 
                conventional gasoline and vehicle emission systems, the 
                reformulated gasoline program, the renewable content 
                requirements established by this subtitle, State 
                programs regarding gasoline volatility, and any other 
                requirements imposed by States or localities affecting 
                the composition of motor fuel.
    (b) Report.--
            (1) In general.--Not later than December 31, 2006, the 
        Administrator of the Environmental Protection Agency and the 
        Secretary of Energy shall submit to Congress a report on the 
        results of the study conducted under subsection (a).
            (2) Recommendations.--
                    (A) In general.--The report shall contain 
                recommendations for legislative and administrative 
                actions that may be taken--
                            (i) to improve air quality;
                            (ii) to reduce costs to consumers and 
                        producers; and
                            (iii) to increase supply liquidity.
                    (B) Required considerations.--The recommendations 
                under subparagraph (A) shall take into account the need 
                to provide advance notice of required modifications to 
                refinery and fuel distribution systems in order to 
                ensure an adequate supply of motor vehicle fuel in all 
                States.
            (3) Consultation.--In developing the report, the 
        Administrator of the Environmental Protection Agency and the 
        Secretary of Energy shall consult with--
                    (A) the Governors of the States;
                    (B) automobile manufacturers;
                    (C) motor vehicle fuel producers and distributors; 
                and
                    (D) the public.

SEC. 17107A. REDUCING THE PROLIFERATION BOUTIQUE FUELS.

    (a) EPA Approval of State Plans with Boutique Fuels.--Section 
211(c)(4) of the Clean Air Act (42 U.S.C. 7545(c)(4)) is amended by 
adding the following at the end thereof:
    ``(D) In the case of gasoline, after the enactment of this 
subparagraph, the Administrator shall give a preference to the approval 
of implementation plan provisions described in subparagraph (C) if the 
control or prohibition in such provisions requires the use of either of 
the following:
            ``(i) Federal clean burning fuel meeting the requirements 
        of subsection (p)(1).
            ``(ii) Low RVP gasoline meeting the requirements of 
        subsection (p)(2).''.
    (b) Preferred Gasoline Options.--Section 211 of the Clean Air Act 
(42 U.S.C. 7545) is amended by adding the following new subsection at 
the end thereof:
    ``(r) Preferred Gasoline Options.--
            ``(1) Federal Clean Burning Gasoline.--For purposes of this 
        section, the term `Federal clean burning gasoline' means 
        reformulated gasoline as defined in subsection (k), the Reid 
        Vapor Pressure of which is equal to 6.8 pounds per square inch 
        (psi) for the high ozone season (as determined by the 
        Administrator).
            ``(2) Low rvp gasoline.--The Administrator shall promulgate 
        regulations providing for a gasoline blend for the high ozone 
        season (as determined by the Administrator) having a Reid Vapor 
        Pressure of 7.8 pounds per square inch (psi).''.

SEC. 17108. COMMERCIAL BYPRODUCTS FROM MUNICIPAL SOLID WASTE LOAN 
              GUARANTEE PROGRAM.

    (a) Definition of Municipal Solid Waste.--In this section, the term 
``municipal solid waste'' has the meaning given the term ``solid 
waste'' in section 1004 of the Solid Waste Disposal Act (42 U.S.C. 
6903).
    (b) Establishment of Program.--The Secretary of Energy shall 
establish a program to provide guarantees of loans by private 
institutions for the construction of facilities for the processing and 
conversion of municipal solid waste into fuel ethanol and other 
commercial byproducts.
    (c) Requirements.--The Secretary may provide a loan guarantee under 
subsection (b) to an applicant if--
            (1) without a loan guarantee, credit is not available to 
        the applicant under reasonable terms or conditions sufficient 
        to finance the construction of a facility described in 
        subsection (b);
            (2) the prospective earning power of the applicant and the 
        character and value of the security pledged provide a 
        reasonable assurance of repayment of the loan to be guaranteed 
        in accordance with the terms of the loan; and
            (3) the loan bears interest at a rate determined by the 
        Secretary to be reasonable, taking into account the current 
        average yield on outstanding obligations of the United States 
        with remaining periods of maturity comparable to the maturity 
        of the loan.
    (d) Criteria.--In selecting recipients of loan guarantees from 
among applicants, the Secretary shall give preference to proposals 
that--
            (1) meet all applicable Federal and State permitting 
        requirements;
            (2) are most likely to be successful; and
            (3) are located in local markets that have the greatest 
        need for the facility because of--
                    (A) the limited availability of land for waste 
                disposal; or
                    (B) a high level of demand for fuel ethanol or 
                other commercial byproducts of the facility.
    (e) Maturity.--A loan guaranteed under subsection (b) shall have a 
maturity of not more than 20 years.
    (f) Terms and Conditions.--The loan agreement for a loan guaranteed 
under subsection (b) shall provide that no provision of the loan 
agreement may be amended or waived without the consent of the 
Secretary.
    (g) Assurance of Repayment.--The Secretary shall require that an 
applicant for a loan guarantee under subsection (b) provide an 
assurance of repayment in the form of a performance bond, insurance, 
collateral, or other means acceptable to the Secretary in an amount 
equal to not less than 20 percent of the amount of the loan.
    (h) Guarantee Fee.--The recipient of a loan guarantee under 
subsection (b) shall pay the Secretary an amount determined by the 
Secretary to be sufficient to cover the administrative costs of the 
Secretary relating to the loan guarantee.
    (i) Full Faith and Credit.--The full faith and credit of the United 
States is pledged to the payment of all guarantees made under this 
section. Any such guarantee made by the Secretary shall be conclusive 
evidence of the eligibility of the loan for the guarantee with respect 
to principal and interest. The validity of the guarantee shall be 
incontestable in the hands of a holder of the guaranteed loan.
    (j) Reports.--Until each guaranteed loan under this section has 
been repaid in full, the Secretary shall annually submit to Congress a 
report on the activities of the Secretary under this section.
    (k) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.
    (l) Termination of Authority.--The authority of the Secretary to 
issue a loan guarantee under subsection (b) terminates on the date that 
is 10 years after the date of enactment of this Act.

                        Subtitle B--MTBE Cleanup

SEC. 17201. FUNDING FOR MTBE CONTAMINATION.

    Notwithstanding any other provision of law, there is authorized to 
be appropriated to the Administrator of the United States Environmental 
Protection Agency from the Leaking Underground Storage Tank Trust Fund 
not more than $850,000,000 to be used for taking such action limited to 
site assessment (including exposure assessment), corrective action, 
inspection of underground storage tank systems, and groundwater 
monitoring as the Administrator deems necessary to protect human 
health, welfare, and the environment from underground storage tank 
releases of fuel containing fuel oxygenates.

                   TITLE VIII--AUTOMOBILE EFFICIENCY

SEC. 18001. AUTHORIZATION OF APPROPRIATIONS FOR IMPLEMENTATION AND 
              ENFORCEMENT OF FUEL ECONOMY STANDARDS.

    In addition to any other funds authorized by law, there are 
authorized to be appropriated to the National Highway Traffic Safety 
Administration to implement and enforce average fuel economy standards 
$5,000,000 for fiscal years 2004 through 2006.

SEC. 18002. STUDY OF FEASIBILITY AND EFFECTS OF REDUCING USE OF FUEL 
              FOR AUTOMOBILES.

    (a) In General.--Not later than 30 days after the date of the 
enactment of this Act, the Administrator of the National Highway 
Traffic Safety Administration shall study the feasibility and effects 
of reducing by model year 2012, by a significant percentage, the use of 
fuel for automobiles.
    (b) Subjects of Study.--The study under this section shall 
include--
            (1) examination of, and recommendation of alternatives to, 
        the policy under current Federal law of establishing average 
        fuel economy standards for automobiles and requiring each 
        automobile manufacturer to comply with average fuel economy 
        standards that apply to the automobiles it manufactures;
            (2) examination of how automobile manufacturers could 
        contribute toward achieving the reduction referred to in 
        subsection (a);
            (3) examination of the potential of fuel cell technology in 
        motor vehicles in order to determine the extent to which such 
        technology may contribute to achieving the reduction referred 
        to in subsection (a); and
            (4) examination of the effects of the reduction referred to 
        in subsection (a) on--
                    (A) gasoline supplies;
                    (B) the automobile industry, including sales of 
                automobiles manufactured in the United States;
                    (C) motor vehicle safety; and
                    (D) air quality.
    (c) Report.--The Administrator shall submit to the Congress a 
report on the findings, conclusion, and recommendations of the study 
under this section by not later than 1 year after the date of the 
enactment of this Act.

                          DIVISION B--SCIENCE

SEC. 20001. PURPOSES.

    The purposes of this division are to--
            (1) contribute to a national energy strategy through an 
        energy research and development program that supports basic 
        energy research and provides mechanisms to develop, 
        demonstrate, and promote the commercial application of new 
        energy technologies in partnership with industry;
            (2) protect and strengthen the Nation's economy, standard 
        of living, and national security by reducing dependence on 
        imported energy;
            (3) meet future needs for energy services at the lowest 
        total cost to the Nation, giving balanced and comprehensive 
        consideration to technologies that improve the efficiency of 
        energy end uses and that enhance energy supply;
            (4) reduce the environmental impacts of energy production, 
        distribution, transportation, and use;
            (5) help increase domestic production of energy, increase 
        the availability of hydrocarbon reserves, and lower energy 
        prices; and
            (6) stimulate economic growth and enhance the ability of 
        United States companies to compete in future markets for 
        advanced energy technologies.

SEC. 20002. GOALS.

    (a) In General.--In order to achieve the purposes of this division, 
the Secretary shall conduct a balanced set of programs of energy 
research, development, demonstration, and commercial application, 
guided by the following goals:
            (1) Energy efficiency.--
                    (A) Buildings.--Develop, in partnership with 
                industry, technologies, designs, and production methods 
                that will enable an average 25 percent increase by 2010 
                in the energy efficiency of all new buildings, as 
                compared to a new building in 1996.
                    (B) Industry.--Develop, in partnership with 
                industry, technologies, designs, and production methods 
                that will enable the energy intensity of the major 
                energy-consuming industries to improve by at least 25 
                percent by 2010 as compared to 1991.
                    (C) Vehicles.--Develop, in partnership with 
                industry, technologies that will enable--
                            (i) by 2010, mid-sized passenger 
                        automobiles with a fuel economy of 80 miles per 
                        gallon;
                            (ii) by 2010, light trucks (classes 1 and 
                        2a) with a fuel economy of 60 miles per gallon;
                            (iii) by 2010, medium trucks and buses 
                        (classes 2b through 6 and class 8 transit 
                        buses) with a fuel economy, in ton-miles per 
                        gallon for trucks and passenger miles per 
                        gallon for buses, that is 3 times that of year 
                        2000 equivalent vehicles;
                            (iv) by 2010, heavy trucks (classes 7 and 
                        8) with a fuel economy, in ton-miles per 
                        gallon, that is 2 times that of year 2000 
                        equivalent vehicles; and
                            (v) by 2020, meeting the goal of the 
                        President's Hydrogen Initiative.
            (2) Distributed energy and electric energy systems.--
                    (A) Distributed generation.--Develop, in 
                partnership with industry, technologies based on 
                natural gas that achieve electricity generating 
                efficiencies greater than 40 percent by 2015 for on-
                site, or distributed, generation technologies.
                    (B) Electric energy systems and storage.--Develop, 
                in partnership with industry--
                            (i) technologies for generators and 
                        transmission, distribution, and storage systems 
                        that combine high capacity with high efficiency 
                        (particularly for electric transmission 
                        facilities in rural and remote areas);
                            (ii) new transmission and distribution 
                        technologies, including flexible alternating 
                        current transmission systems, composite 
                        conductor materials, advanced protection 
                        devices, and controllers;
                            (iii) technologies for interconnection of 
                        distributed energy resources with electric 
                        power systems;
                            (iv) high-temperature superconducting 
                        materials for power delivery equipment such as 
                        transmission and distribution cables, 
                        transformers, and generators; and
                            (v) real-time transmission and distribution 
                        system control technologies that provide for 
                        continual exchange of information between 
                        generation, transmission, distribution, and 
                        end-user facilities.
            (3) Renewable energy.--
                    (A) Wind power.--Develop, in partnership with 
                industry, technologies and designs that will--
                            (i) reduce the cost of wind power by 40 
                        percent by 2012 as compared to 2000; and
                            (ii) expand utilization of class 3 and 4 
                        winds.
                    (B) Photovoltaics.--Develop, in partnership with 
                industry, total photovoltaic systems with installed 
                costs of $5,000 per peak kilowatt by 2005 and $2000 per 
                peak kilowatt by 2015.
                    (C) Solar thermal systems.--Develop, in partnership 
                with industry, solar power technologies (including 
                baseload solar power) that combine high-efficiency and 
                high-temperature receivers with advanced thermal 
                storage and power cycles to accommodate peak loads and 
                reduce lifecycle costs.
                    (D) Geothermal energy.--Develop, in partnership 
                with industry, technologies and processes based on 
                advanced hydrothermal systems and advanced heat and 
                power systems, including geothermal or ground source 
                heat pump technology, with a specific focus on--
                            (i) improving exploration and 
                        characterization technology to increase the 
                        probability of drilling successful wells from 
                        20 percent to 40 percent by 2010;
                            (ii) reducing the cost of drilling by 2008 
                        to an average cost of $225 per foot;
                            (iii) developing enhanced geothermal 
                        systems technology with the potential to double 
                        the usable geothermal resource base, as 
                        compared to the date of enactment of this Act; 
                        and
                            (iv) reducing the cost of installing the 
                        ground loop of ground-source heat pumps by 30 
                        percent by 2007 compared to the cost in 2000.
                    (E) Biomass-based power systems.--Develop, in 
                partnership with industry, integrated power generating 
                systems, advanced conversion, and feedstock 
                technologies capable of producing electric power that 
                is cost-competitive with fossil-fuel generated 
                electricity by 2010, through co-production of fuels, 
                chemicals, and other products under subparagraph (F).
                    (F) Biofuels.--Develop, in partnership with 
                industry, new and emerging technologies and 
                biotechnology processes capable of making--
                            (i) gaseous and liquid biofuels that are 
                        price-competitive, by 2010, with gasoline or 
                        diesel in either internal combustion engines or 
                        fuel cells; and
                            (ii) biofuels, biobased polymers, and 
                        chemicals, including those derived from 
                        lignocellulosic feedstock, with particular 
                        emphasis on developing biorefineries that use 
                        enzyme-based processing systems.
                    (G) Hydropower.--Develop, in partnership with 
                industry, a new generation of turbine technologies that 
                will increase generating capacity and be less damaging 
                to fish and aquatic ecosystems.
            (4) Fossil energy.--
                    (A) Power generation.--Develop, in partnership with 
                industry, technologies, including precombustion 
                technologies, by 2015 with the capability of 
                realizing--
                            (i) electricity generating efficiencies of 
                        75 percent (lower heating value) for natural 
                        gas; and
                            (ii) widespread commercial application of 
                        combined heat and power with thermal 
                        efficiencies of more than 85 percent (higher 
                        heating value).
                    (B) Offshore oil and gas resources.--Develop, in 
                partnership with industry, technologies to--
                            (i) extract methane hydrates in coastal 
                        waters of the United States; and
                            (ii) develop natural gas and oil reserves 
                        in the ultra-deepwater of the Central and 
                        Western Gulf of Mexico, with a focus on 
                        improving, while lowering costs and reducing 
                        environmental impacts, the safety and 
                        efficiency of--
                                    (I) the recovery of ultra-deepwater 
                                resources; and
                                    (II) sub-sea production technology 
                                used for such recovery.
                    (C) Onshore oil and gas resources.--Advance the 
                science and technology available to domestic onshore 
                petroleum producers, particularly independent producers 
                of oil or gas, through--
                            (i) advances in technology for exploration 
                        and production of domestic petroleum resources, 
                        particularly those not accessible with current 
                        technology;
                            (ii) improvement in the ability to extract 
                        hydrocarbons (including heavy oil) from known 
                        reservoirs and classes of reservoirs; and
                            (iii) development of technologies and 
                        practices that reduce the impact on the 
                        environment from petroleum exploration and 
                        production.
                    (D) Transportation fuels.--Increase the 
                availability of transportation fuels by focusing 
                research on--
                            (i) reducing the cost of producing 
                        transportation fuels from coal and natural gas; 
                        and
                            (ii) indirect liquefaction of coal and 
                        biomass.
            (5) Nuclear energy.--
                    (A) Existing reactors.--Support research to extend 
                the lifetimes of existing United States nuclear power 
                reactors, and increase their reliability while 
                optimizing their current operations for greater 
                efficiencies.
                    (B) Advanced reactors.--Develop, in partnership 
                with industry--
                            (i) advanced, efficient, lower cost, and 
                        passively safe reactor designs;
                            (ii) proliferation-resistant and high-burn-
                        up nuclear fuels; and
                            (iii) technologies to minimize generation 
                        of radioactive materials and improve the 
                        management of nuclear waste.
                    (C) Nuclear scientists and engineers.--Attract new 
                students and faculty to the nuclear sciences, nuclear 
                engineering, and related fields (including health 
                physics, nuclear medicine, nuclear chemistry, and 
                radiochemistry).
            (6) Hydrogen.--Carry out programs related to hydrogen in 
        the Fossil Fuel Program and the Nuclear Energy Program.
    (b) Review and Assessment of Goals.--
            (1) Evaluation and modification.--Based on amounts 
        appropriated and developments in science and technology, the 
        Secretary shall evaluate the goals set forth in subsection (a) 
        at least once every 5 years, and shall report to the Congress 
        any proposed modifications to the goals.
            (2) Consultation.--In evaluating and proposing 
        modifications to the goals as provided in paragraph (1), the 
        Secretary shall solicit public input.
            (3) Public comment.--(A) After consultation under paragraph 
        (2), the Secretary shall publish in the Federal Register a set 
        of draft modifications to the goals for public comment.
            (B) Not later than 60 days after the date of publication of 
        draft modifications under subparagraph (A), and after 
        consideration of any public comments received, the Secretary 
        shall publish the final modifications, including a summary of 
        the public comments received, in the Federal Register.
            (4) Effective date.--No modification to goals under this 
        section shall take effect before the date which is 5 years 
        after the date of enactment of this Act.
    (c) Effect of Goals.--(1) Nothing in paragraphs (1) through (6) of 
subsection (a), or any subsequent modification to the goals therein 
pursuant to subsection (b), shall--
            (A) create any new--
                    (i) authority for any Federal agency; or
                    (ii) requirement for any other person;
            (B) be used by a Federal agency to support the 
        establishment of regulatory standards or regulatory 
        requirements; or
            (C) alter the authority of the Secretary to make grants or 
        other awards.
    (2) Nothing in this subsection shall be construed to limit the 
authority of the Secretary to impose conditions on grants or other 
awards based on the goals in subsection (a) or any subsequent 
modification thereto.

SEC. 20003. DEFINITIONS.

    For purposes of this division:
            (1) Department.--The term ``Department'' means the 
        Department of Energy.
            (2) Departmental mission.--The term ``departmental 
        mission'' means any of the functions vested in the Secretary of 
        Energy by the Department of Energy Organization Act (42 U.S.C. 
        7101 et seq.) or other law.
            (3) Independent producer of oil or gas.--
                    (A) In general.--The term ``independent producer of 
                oil or gas'' means any person who produces oil or gas 
                other than a person to whom subsection (c) of section 
                613A of the Internal Revenue Code of 1986 does not 
                apply by reason of paragraph (2) (relating to certain 
                retailers) or paragraph (4) (relating to certain 
                refiners) of section 613A(d) of such Code.
                    (B) Rules for applying paragraphs (2) and (4) of 
                section 613a(d).--For purposes of subparagraph (A), 
                paragraphs (2) and (4) of section 613A(d) of the 
                Internal Revenue Code of 1986 shall be applied by 
                substituting ``calendar year'' for ``taxable year'' 
                each place it appears in such paragraphs.
            (4) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning given that 
        term in section 101(a) of the Higher Education Act of 1965 (20 
        U.S.C. 1001(a)).
            (5) Joint venture.--The term ``joint venture'' has the 
        meaning given that term under section 2 of the National 
        Cooperative Research and Production Act of 1993 (15 U.S.C. 
        4301).
            (6) National laboratory.--The term ``National Laboratory'' 
        means any of the following laboratories owned by the 
        Department:
                    (A) Ames National Laboratory.
                    (B) Argonne National Laboratory.
                    (C) Brookhaven National Laboratory.
                    (D) Fermi National 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) Thomas Jefferson National Accelerator Facility.
            (7) Nonmilitary energy laboratory.--The term ``nonmilitary 
        energy laboratory'' means any of the following laboratories of 
        the Department:
                    (A) Ames National Laboratory.
                    (B) Argonne National Laboratory.
                    (C) Brookhaven National Laboratory.
                    (D) Fermi National Laboratory.
                    (E) Lawrence Berkeley National Laboratory.
                    (F) Oak Ridge National Laboratory.
                    (G) Pacific Northwest National Laboratory.
                    (H) Princeton Plasma Physics Laboratory.
                    (I) Stanford Linear Accelerator Center.
                    (J) Thomas Jefferson National Accelerator Facility.
            (8) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.
            (9) Single-purpose research facility.--The term ``single-
        purpose research facility'' means any of the following 
        primarily single-purpose entities owned by the Department:
                    (A) East Tennessee Technology Park.
                    (B) Fernald Environmental Management Project.
                    (C) Kansas City Plant.
                    (D) Nevada Test Site.
                    (E) New Brunswick Laboratory.
                    (F) Pantex Weapons Facility.
                    (G) Savannah River Technology Center.
                    (H) Stanford Linear Accelerator Center.
                    (I) Y-12 facility at Oak Ridge National Laboratory.
                    (J) Waste Isolation Pilot Plant.
                    (K) Any other similar organization of the 
                Department designated by the Secretary that engages in 
                technology transfer, partnering, or licensing 
                activities.

                   TITLE I--RESEARCH AND DEVELOPMENT

                     Subtitle A--Energy Efficiency

                PART 1--AUTHORIZATION OF APPROPRIATIONS

SEC. 21101. 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.
    (b) Allocations.--From amounts authorized under subsection (a), the 
following sums are authorized:
            (1) Lighting systems.--For activities under section 21111, 
        $50,000,000 for each of fiscal years 2004 through 2007.
            (2) Electric motor control technology.--For activities 
        under section 21122, $2,000,000 for each of fiscal years 2004 
        through 2007.
            (3) Secondary electric vehicle battery use program.--For 
        activities under section 21132--
                    (A) for fiscal year 2004, $4,000,000;
                    (B) for fiscal year 2005, $7,000,000;
                    (C) for fiscal year 2006, $7,000,000; and
                    (D) for fiscal year 2007, $7,000,000.
            (4) Energy efficiency science initiative.--For activities 
        under section 21141--
                    (A) for fiscal year 2004, $20,000,000;
                    (B) for fiscal year 2005, $25,000,000;
                    (C) for fiscal year 2006, $30,000,000; and
                    (D) for fiscal year 2007, $35,000,000.
    (c) Extended Authorization.--There are authorized to be 
appropriated to the Secretary for activities under section 21111, 
$50,000,000 for each of fiscal years 2008 through 2012.
    (d) Limits on Use of Funds.--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.

                        PART 2--LIGHTING SYSTEMS

SEC. 21111. 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--
            (1) to develop, by 2012, advanced solid-state lighting 
        technologies based on white light emitting diodes that, 
        compared to incandescent and fluorescent lighting technologies, 
        are--
                    (A) longer lasting;
                    (B) more energy-efficient; and
                    (C) cost-competitive;
            (2) to develop an inorganic white light emitting diode that 
        has an efficiency of 160 lumens per watt and a 10-year 
        lifetime; and
            (3) to develop an organic white light emitting diode with 
        an efficiency of 100 lumens per watt with a 5-year lifetime 
        that--
                    (A) illuminates over a full color spectrum;
                    (B) covers large areas over flexible surfaces; and
                    (C) does not contain harmful pollutants, such as 
                mercury, typical of fluorescent lamps.
    (c) Fundamental Research.--
            (1) Consortium.--The Secretary shall carry out the 
        fundamental research activities of the Next Generation Lighting 
        Initiative through a private consortium (which may include 
        private firms, trade associations and institutions of higher 
        education), which the Secretary shall select through a 
        competitive process. Each proposed consortium shall submit to 
        the Secretary such information as the Secretary may require, 
        including a program plan agreed to by all participants of the 
        consortium.
            (2) Joint venture.--The consortium shall be structured as a 
        joint venture among the participants of the consortium. The 
        Secretary shall serve on the governing council of the 
        consortium.
            (3) Eligibility.--To be eligible to be selected as the 
        consortium under paragraph (1), an applicant must be broadly 
        representative of United States solid-state lighting research, 
        development, and manufacturing expertise as a whole.
            (4) Grants.--(A) The Secretary shall award grants for 
        fundamental research to the consortium, which the consortium 
        may disburse to researchers, including those who are not 
        participants of the consortium.
            (B) To receive a grant, the consortium must provide a 
        description to the Secretary of the proposed research and list 
        the parties that will receive funding.
            (C) Grants shall be matched by the consortium pursuant to 
        section 21802.
            (5) National laboratories.--National Laboratories may 
        participate in the research described in this section, and may 
        receive funds from the consortium.
            (6) Intellectual property.--Participants in the consortium 
        and the Federal Government shall have royalty-free nonexclusive 
        rights to use intellectual property derived from research 
        funded pursuant to this subsection.
    (d) Development, Demonstration, and Commercial Application.--The 
Secretary shall carry out the development, demonstration, and 
commercial application activities of the Next Generation Lighting 
Initiative through awards to private firms, trade associations, and 
institutions of higher education. In selecting awardees, the Secretary 
may give preference to members of the consortium selected pursuant to 
subsection (c).
    (e) Plans and Assessments.--(1) The consortium shall formulate an 
annual operating plan which shall include research priorities, 
technical milestones, and plans for technology transfer, and which 
shall be subject to approval by the Secretary.
    (2) The Secretary shall enter into an arrangement with the National 
Academy of Sciences to conduct periodic reviews of the Next Generation 
Lighting Initiative. The Academy shall review the research priorities, 
technical milestones, and plans for technology transfer established 
under paragraph (1) and evaluate the progress toward achieving them. 
The Secretary shall consider the results of such reviews in evaluating 
the plans submitted under paragraph (1).
    (f) Audit.--The Secretary shall retain an independent, commercial 
auditor to perform an audit of the consortium to determine the extent 
to which the funds authorized by this section have been expended in a 
manner consistent with the purposes of this section. The auditor shall 
transmit a report annually to the Secretary, who shall transmit the 
report to the Congress, along with a plan to remedy any deficiencies 
cited in the report.
    (g) Sunset.--The Next Generation Lighting Initiative shall 
terminate no later than September 30, 2013.
    (h) Definitions.--As used in this section:
            (1) Advanced solid-state lighting.--The term ``advanced 
        solid-state lighting'' means a semiconducting device package 
        and delivery system that produces white light using externally 
        applied voltage.
            (2) Fundamental research.--The term ``fundamental 
        research'' includes basic research on both solid-state 
        materials and manufacturing processes.
            (3) Inorganic white light emitting diode.--The term 
        ``inorganic white light emitting diode'' means an inorganic 
        semiconducting package that produces white light using 
        externally applied voltage.
            (4) Organic white light emitting diode.--The term ``organic 
        white light emitting diode'' means an organic semiconducting 
        compound that produces white light using externally applied 
        voltage.

                           PART 3--BUILDINGS

SEC. 21121. NATIONAL BUILDING PERFORMANCE INITIATIVE.

    (a) Interagency Group.--Not later than 3 months 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 
cochaired by appropriate officials of the Department and the Department 
of Commerce, who shall jointly arrange for the provision of necessary 
administrative support to the group.
    (b) Integration of Efforts.--The Initiative, working with the 
National Institute of Building Sciences, shall integrate Federal, 
State, and voluntary private sector efforts to reduce the costs of 
construction, operation, maintenance, and renovation of commercial, 
industrial, institutional, and residential buildings.
    (c) 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 be based on whole building principles and 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.--
            (1) Establishment.--The Director of the Office of Science 
        and Technology Policy shall establish an advisory committee 
        to--
                    (A) analyze and provide recommendations on 
                potential private sector roles and participation in the 
                Initiative; and
                    (B) review and provide recommendations on the plan 
                described in subsection (c).
            (2) Membership.--Membership of the advisory committee shall 
        include representatives with a broad range of appropriate 
        expertise, including expertise in--
                    (A) building research and technology;
                    (B) architecture, engineering, and building 
                materials and systems; and
                    (C) the residential, commercial, and industrial 
                sectors of the construction industry.
    (f) Construction.--Nothing in this section provides any Federal 
agency with new authority to regulate building performance.

SEC. 21122. ELECTRIC MOTOR CONTROL TECHNOLOGY.

    The Secretary shall conduct a research, development, demonstration, 
and commercial application program on advanced control devices to 
improve the energy efficiency of electric motors used in heating, 
ventilation, air conditioning, and comparable systems.

                            PART 4--VEHICLES

SEC. 21131. DEFINITIONS.

    For purposes of this part, the term--
            (1) ``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; and
            (2) ``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.

SEC. 21132. ESTABLISHMENT OF SECONDARY ELECTRIC VEHICLE BATTERY USE 
              PROGRAM.

    (a) 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 application, 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 evaluate 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.
    (b) Solicitation.--(1) Not later than 6 months 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.
    (2)(A) Proposals submitted in response to a solicitation under this 
section shall include--
            (i) a description of the project, including the batteries 
        to be used in the project, the proposed locations and 
        applications for the batteries, the number of batteries to be 
        demonstrated, and the type, characteristics, and estimated 
        life-cycle costs of the batteries compared to other energy 
        storage devices currently used;
            (ii) the contribution, if any, of State or local 
        governments and other persons to the demonstration project;
            (iii) the type of associated equipment and supporting 
        infrastructure to be demonstrated; and
            (iv) any other information the Secretary considers 
        appropriate.
    (B) If the proposal includes a lease arrangement, the proposal 
shall indicate the terms of such lease arrangement for the batteries 
and associated equipment.
    (c) Selection of Proposals.--(1)(A) The Secretary shall, not later 
than 3 months after the closing date established by the Secretary for 
receipt of proposals under subsection (b), select at least 5 proposals 
to receive financial assistance under this section.
    (B) No one project selected under this section shall receive more 
than 25 percent of the funds authorized under this section. No more 
than 3 projects selected under this section shall demonstrate the same 
battery type.
    (2) In selecting a proposal under this section, the Secretary shall 
consider--
            (A) the ability of the proposer to acquire the batteries 
        and associated equipment and to successfully manage and conduct 
        the demonstration project, including satisfying the reporting 
        requirements set forth in paragraph (3)(B);
            (B) the geographic and climatic diversity of the projects 
        selected;
            (C) the long-term technical and competitive viability of 
        the batteries to be used in the project and of the original 
        manufacturer of such batteries;
            (D) the suitability of the batteries for their intended 
        uses;
            (E) the technical performance of the batteries, including 
        the expected additional useful life and the batteries' ability 
        to retain energy;
            (F) the environmental effects of the use of and disposal of 
        the batteries proposed to be used in the project selected;
            (G) the extent of involvement of State or local government 
        and other persons in the demonstration project and whether such 
        involvement will--
                    (i) permit a reduction of the Federal cost share 
                per project; or
                    (ii) otherwise be used to allow the Federal 
                contribution to be provided to demonstrate a greater 
                number of batteries; and
            (H) such other criteria as the Secretary considers 
        appropriate.
    (3) Conditions.--The Secretary shall require that--
            (A) as a part of a demonstration project, the users of the 
        batteries provide to the proposer information regarding the 
        operation, maintenance, performance, and use of the batteries, 
        and the proposer provide such information to the battery 
        manufacturer, for 3 years after the beginning of the 
        demonstration project;
            (B) the proposer provide to the Secretary such information 
        regarding the operation, maintenance, performance, and use of 
        the batteries as the Secretary may request;
            (C) the proposer provide to the Secretary such information 
        regarding the disposal of the batteries as the Secretary may 
        require to ensure that the proposer disposes of the batteries 
        in accordance with applicable law; and
            (D) the proposer provide at least 50 percent of the costs 
        associated with the proposal.

              PART 5--ENERGY EFFICIENCY SCIENCE INITIATIVE

SEC. 21141. 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.

          PART 6--ADVANCED ENERGY TECHNOLOGY TRANSFER CENTERS

SEC. 21151. ADVANCED ENERGY TECHNOLOGY TRANSFER CENTERS.

    (a) Grants.--Not later than 18 months after the date of the 
enactment of this Act, the Secretary shall make grants to nonprofit 
institutions, State and local governments, or universities (or 
consortia thereof), to establish a geographically dispersed network of 
Advanced Energy Technology Transfer Centers, to be located in areas the 
Secretary determines have the greatest need of the services of such 
Centers.
    (b) Activities.--(1) Each Center shall operate a program to 
encourage demonstration and commercial application of advanced energy 
methods and technologies through education and outreach to building and 
industrial professionals, and to other individuals and organizations 
with an interest in efficient energy use.
    (2) Each Center shall establish an advisory panel to advise the 
Center on how best to accomplish the activities under paragraph (1).
    (c) Application.--A person seeking a grant under this section shall 
submit to the Secretary an application in such form and containing such 
information as the Secretary may require. The Secretary may award a 
grant under this section to an entity already in existence if the 
entity is otherwise eligible under this section.
    (d) Selection Criteria.--The Secretary shall award grants under 
this section on the basis of the following criteria, at a minimum:
            (1) The ability of the applicant to carry out the 
        activities in subsection (b).
            (2) The extent to which the applicant will coordinate the 
        activities of the Center with other entities, such as State and 
        local governments, utilities, and educational and research 
        institutions.
    (e) Matching Funds.--The Secretary shall require a non-Federal 
matching requirement of at least 50 percent of the costs of 
establishing and operating each Center.
    (f) Advisory Committee.--The Secretary shall establish an advisory 
committee to advise the Secretary on the establishment of Centers under 
this section. The advisory committee shall be composed of individuals 
with expertise in the area of advanced energy methods and technologies, 
including at least 1 representative from--
            (1) State or local energy offices;
            (2) energy professionals;
            (3) trade or professional associations;
            (4) architects, engineers, or construction professionals;
            (5) manufacturers;
            (6) the research community; and
            (7) nonprofit energy or environmental organizations.
    (g) Definitions.--For purposes of this section--
            (1) the term ``advanced energy methods and technologies'' 
        means all methods and technologies that promote energy 
        efficiency and conservation, including distributed generation 
        technologies, and life-cycle analysis of energy use;
            (2) the term ``Center'' means an Advanced Energy Technology 
        Transfer Center established pursuant to this section; and
            (3) the term ``distributed generation'' means an electric 
        power generation facility that is designed to serve retail 
        electric consumers at or near the facility site.

       Subtitle B--Distributed Energy and Electric Energy Systems

                PART 1--AUTHORIZATION OF APPROPRIATIONS

SEC. 21201. DISTRIBUTED ENERGY AND ELECTRIC ENERGY SYSTEMS.

    (a) In General.--The following sums are authorized to be 
appropriated to the Secretary for distributed energy and electric 
energy systems activities, including activities authorized under this 
subtitle:
            (1) For fiscal year 2004, $190,000,000.
            (2) For fiscal year 2005, $200,000,000.
            (3) For fiscal year 2006, $220,000,000.
            (4) For fiscal year 2007, $240,000,000.
    (b) Micro-Cogeneration Energy Technology.--From amounts authorized 
under subsection (a), the following sums shall be available for 
activities under section 21213:
            (1) For fiscal year 2004, $5,000,000.
            (2) For fiscal year 2005, $5,500,000.
            (3) For fiscal year 2006, $6,000,000.
            (4) For fiscal year 2007, $6,500,000.

                       PART 2--DISTRIBUTED POWER

SEC. 21211. STRATEGY.

    (a) Requirement.--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.
    (b) Contents.--The strategy shall--
            (1) identify the needs best met with such hybrid 
        distributed power systems and the technological barriers to the 
        use of such systems;
            (2) provide for the development of methods to design, test, 
        integrate into systems, and operate such hybrid distributed 
        power systems;
            (3) include, as appropriate, research, development, 
        demonstration, and commercial application on related 
        technologies needed for the adoption of such hybrid distributed 
        power systems, including energy storage devices and 
        environmental control technologies;
            (4) include research, development, demonstration, and 
        commercial application of interconnection technologies for 
        communications and controls of distributed generation 
        architectures, particularly technologies promoting real-time 
        response to power market information and physical conditions on 
        the electrical grid; and
            (5) describe how activities under the strategy will be 
        integrated with other research, development, demonstration, and 
        commercial application activities supported by the Department 
        of Energy related to electric power technologies.

SEC. 21212. 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 facilities. Such 
program shall consider technologies that provide significant 
improvement in thermal controls, metering, load management, peak load 
reduction, or the efficient cooling of electronics.

SEC. 21213. 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.

                      PART 3--TRANSMISSION SYSTEMS

SEC. 21221. TRANSMISSION INFRASTRUCTURE SYSTEMS RESEARCH, DEVELOPMENT, 
              DEMONSTRATION, AND COMMERCIAL APPLICATION.

    (a) Program Authorized.--The Secretary shall develop and implement 
a comprehensive research, development, demonstration, and commercial 
application program to promote improved reliability and efficiency of 
electrical transmission systems. Such program may include--
            (1) advanced energy technologies, materials, and systems;
            (2) advanced grid reliability and efficiency technology 
        development;
            (3) technologies contributing to significant load 
        reductions;
            (4) advanced metering, load management, and control 
        technologies;
            (5) technologies to enhance existing grid components;
            (6) the development and use of high-temperature 
        superconductors to--
                    (A) enhance the reliability, operational 
                flexibility, or power-carrying capability of electric 
                transmission or distribution systems; or
                    (B) increase the efficiency of electric energy 
                generation, transmission, distribution, or storage 
                systems;
            (7) integration of power systems, including systems to 
        deliver high-quality electric power, electric power 
        reliability, and combined heat and power;
            (8) any other infrastructure technologies, as appropriate; 
        and
            (9) technology transfer and education.
    (b) Program Plan.--Not later than 1 year after the date of the 
enactment of this Act, 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) 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 infrastructure technologies.

                      Subtitle C--Renewable Energy

                PART 1--AUTHORIZATION OF APPROPRIATIONS

SEC. 21301. 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, $380,000,000.
            (2) For fiscal year 2005, $420,000,000.
            (3) For fiscal year 2006, $460,000,000.
            (4) For fiscal year 2007, $499,000,000.
    (b) Bioenergy.--From the amounts authorized under subsection (a), 
the following sums are authorized to be appropriated to carry out 
section 21311 and section 21706:
            (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.
    (c) Public Buildings.--From the amounts authorized under subsection 
(a), $30,000,000 for each of the fiscal years 2004 through 2007 are 
authorized to be appropriated to carry out section 21322.
    (d) Limits on Use of Funds.--
            (1) Exclusion.--None of the funds authorized to be 
        appropriated under this section may be used for Renewable 
        Support and Implementation.
            (2) Bioenergy.--Of the funds authorized under subsection 
        (b), not less than $5,000,000 for each fiscal year shall be 
        made available for grants to Historically Black Colleges and 
        Universities, Tribal Colleges, and Hispanic-Serving 
        Institutions.
            (3) Rural and remote locations.--In carrying out this 
        section, the Secretary, in consultation with the Secretary of 
        Agriculture, shall demonstrate the use of advanced wind power 
        technology, biomass, geothermal energy systems, and other 
        renewable energy technologies to assist in delivering 
        electricity to rural and remote locations.
            (4) Regional field verification.--Of the funds authorized 
        under subsection (a), not less than $4,000,000 for each fiscal 
        year shall be made available for the Regional Field 
        Verification Program of the Department.
            (5) Hydropower demonstration projects.--Of the funds 
        authorized under subsection (a), such sums as may be necessary 
        shall be made available for demonstration projects of off-
        stream pumped storage hydropower.

                           PART 2--BIOENERGY

SEC. 21311. BIOENERGY PROGRAMS.

    The Secretary shall conduct a program of research, development, 
demonstration, and commercial application for bioenergy, including--
            (1) biopower energy systems;
            (2) biofuels;
            (3) integrated applications of both biopower and biofuels;
            (4) cross-cutting research and development in feedstocks; 
        and
            (5) economic analysis.

                     PART 3--MISCELLANEOUS PROJECTS

SEC. 21321. MISCELLANEOUS PROJECTS.

    (a) Programs.--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) hydrogen carrier fuels.
    (b) Study.--(1) The Secretary shall enter into an arrangement with 
the National Academy of Sciences to conduct a study on--
            (A) the feasibility of various methods of renewable 
        generation of energy from the ocean, including energy from 
        waves, tides, currents, and thermal gradients; and
            (B) the research, development, demonstration, and 
        commercial application activities required to make marine 
        renewable energy generation competitive with other forms of 
        electricity generation.
    (2) Not later than 1 year after the date of the enactment of this 
Act, the Secretary shall transmit the study to the Congress along with 
the Secretary's recommendations for implementing the results of the 
study.

SEC. 21322. RENEWABLE ENERGY IN PUBLIC BUILDINGS.

    (a) Demonstration and Technology Transfer Program.--The Secretary 
shall establish a program for the demonstration of innovative 
technologies for solar and other renewable energy sources in buildings 
owned or operated by a State or local government, and for the 
dissemination of information resulting from such demonstration to 
interested parties.
    (b) Limit on Federal Funding.--The Secretary shall provide under 
this section no more than 40 percent of the incremental costs of the 
solar or other renewable energy source project funded.
    (c) Requirement.--As part of the application for awards under this 
section, the Secretary shall require all applicants--
            (1) to demonstrate a continuing commitment to the use of 
        solar and other renewable energy sources in buildings they own 
        or operate; and
            (2) to state how they expect any award to further their 
        transition to the significant use of renewable energy.

                       Subtitle D--Nuclear Energy

                PART 1--AUTHORIZATION OF APPROPRIATIONS

SEC. 21401. NUCLEAR ENERGY.

    (a) In General.--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:
            (1) For fiscal year 2004, $388,000,000.
            (2) For fiscal year 2005, $416,000,000.
            (3) For fiscal year 2006, $445,000,000.
            (4) For fiscal year 2007, $474,000,000.
    (b) Allocations.--From amounts authorized under subsection (a), the 
following sums are authorized:
            (1) Nuclear infrastructure support.--For activities under 
        section 21411(e)--
                    (A) for fiscal year 2004, $125,000,000;
                    (B) for fiscal year 2005, $130,000,000;
                    (C) for fiscal year 2006, $135,000,000; and
                    (D) for fiscal year 2007, $140,000,000.
            (2) Advanced fuel recycling program.--For activities under 
        section 21421--
                    (A) for fiscal year 2004, $80,000,000;
                    (B) for fiscal year 2005, $93,000,000;
                    (C) for fiscal year 2006, $106,000,000; and
                    (D) for fiscal year 2007, $120,000,000.
            (3) University programs.--For activities under section 
        21431--
                    (A) for fiscal year 2004, $35,200,000, of which--
                            (i) $3,000,000 shall be for activities 
                        under subsection (b)(1) of that section;
                            (ii) $4,275,000 shall be for activities 
                        under subsection (b)(2) of that section;
                            (iii) $8,000,000 shall be for activities 
                        under subsection (b)(3) of that section;
                            (iv) $500,000 shall be for activities under 
                        subsection (b)(5) of that section;
                            (v) $7,000,000 shall be for activities 
                        under subsection (c)(1) of that section;
                            (vi) $700,000 shall be for activities under 
                        subsection (c)(2) of that section;
                            (vii) $10,000,000 shall be for activities 
                        under subsection (c)(3) of that section;
                            (viii) $1,000,000 shall be for activities 
                        under subsection (d)(1) of that section; and
                            (ix) $725,000 shall be for activities under 
                        subsection (d)(2) of that section;
                    (B) for fiscal year 2005, $44,350,000, of which--
                            (i) $3,100,000 shall be for activities 
                        under subsection (b)(1) of that section;
                            (ii) $6,275,000 shall be for activities 
                        under subsection (b)(2) of that section;
                            (iii) $12,000,000 shall be for activities 
                        under subsection (b)(3) of that section;
                            (iv) $550,000 shall be for activities under 
                        subsection (b)(5) of that section;
                            (v) $7,500,000 shall be for activities 
                        under subsection (c)(1) of that section;
                            (vi) $1,100,000 shall be for activities 
                        under subsection (c)(2) of that section;
                            (vii) $12,000,000 shall be for activities 
                        under subsection (c)(3) of that section;
                            (viii) $1,100,000 shall be for activities 
                        under subsection (d)(1) of that section; and
                            (ix) $725,000 shall be for activities under 
                        subsection (d)(2) of that section;
                    (C) for fiscal year 2006, $49,200,000, of which--
                            (i) $3,200,000 shall be for activities 
                        under subsection (b)(1) of that section;
                            (ii) $7,150,000 shall be for activities 
                        under subsection (b)(2) of that section;
                            (iii) $13,000,000 shall be for activities 
                        under subsection (b)(3) of that section;
                            (iv) $600,000 shall be for activities under 
                        subsection (b)(5) of that section;
                            (v) $8,000,000 shall be for activities 
                        under subsection (c)(1) of that section;
                            (vi) $1,200,000 shall be for activities 
                        under subsection (c)(2) of that section;
                            (vii) $14,000,000 shall be for activities 
                        under subsection (c)(3) of that section;
                            (viii) $1,200,000 shall be for activities 
                        under subsection (d)(1) of that section; and
                            (ix) $850,000 shall be for activities under 
                        subsection (d)(2) of that section; and
                    (D) for fiscal year 2007, $54,950,000, of which--
                            (i) $3,200,000 shall be for activities 
                        under subsection (b)(1) of that section;
                            (ii) $8,150,000 shall be for activities 
                        under subsection (b)(2) of that section;
                            (iii) $15,000,000 shall be for activities 
                        under subsection (b)(3) of that section;
                            (iv) $650,000 shall be for activities under 
                        subsection (b)(5) of that section;
                            (v) $8,500,000 shall be for activities 
                        under subsection (c)(1); of that section;
                            (vi) $1,300,000 shall be for activities 
                        under subsection (c)(2) of that section;
                            (vii) $16,000,000 shall be for activities 
                        under subsection (c)(3) of that section;
                            (viii) $1,300,000 shall be for activities 
                        under subsection (d)(1) of that section; and
                            (ix) $850,000 shall be for activities under 
                        subsection (d)(2) of that section.
    (c) Limit on Use of Funds.--None of the funds authorized under this 
section may be used for decommissioning the Fast Flux Test Facility.

                PART 2--NUCLEAR ENERGY RESEARCH PROGRAMS

SEC. 21411. 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, and component aging in 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--
            (1) rely on the expertise and capabilities of the National 
        Laboratories in the areas of advanced nuclear fuels cycles and 
        fuels testing;
            (2) pursue an approach that considers a variety of reactor 
        designs;
            (3) include participation of international collaborators in 
        research, development, and design efforts as appropriate; and
            (4) encourage 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) utilize improved instrumentation.
    (e) 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 2005. 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.

                    PART 3--ADVANCED FUEL RECYCLING

SEC. 21421. ADVANCED FUEL RECYCLING PROGRAM.

    (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.

                      PART 4--UNIVERSITY PROGRAMS

SEC. 21431. 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--
            (1) establish a graduate and undergraduate fellowship 
        program to attract new and talented students;
            (2) establish a Junior Faculty Research Initiation Grant 
        Program to assist institutions of higher education in 
        recruiting and retaining new faculty in the nuclear sciences 
        and engineering;
            (3) support fundamental nuclear sciences and engineering 
        research through the Nuclear Engineering Education Research 
        Program;
            (4) encourage collaborative nuclear research among 
        industry, National Laboratories, and institutions of higher 
        education through the Nuclear Energy Research Initiative; and
            (5) support communication and outreach related to nuclear 
        science and engineering.
    (c) Strengthening University Research and Training Reactors and 
Associated Infrastructure.--Activities under this section may include--
            (1) converting research reactors currently using high-
        enrichment fuels to low-enrichment 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, through the Innovations in Nuclear 
        Infrastructure and Education Program, for reactor improvements 
        as part of a focused effort that emphasizes research, training, 
        and education.
    (d) University-National Laboratory Interactions.--The Secretary 
shall develop--
            (1) a sabbatical fellowship program for professors at 
        institutions of higher education to spend extended periods of 
        time at National Laboratories in the areas of nuclear science 
        and technology; and
            (2) a visiting scientist program in which National 
        Laboratory staff can spend time in academic nuclear science and 
        engineering departments.
The Secretary may provide fellowships for students to spend time at 
National Laboratories in the area of nuclear science with a member of 
the Laboratory staff acting as a mentor.
    (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.

               PART 5--GEOLOGICAL ISOLATION OF SPENT FUEL

SEC. 21441. GEOLOGICAL ISOLATION OF SPENT FUEL.

    The Secretary shall conduct a study to determine the feasibility of 
deep borehole disposal of spent nuclear fuel and high-level radioactive 
waste. The study shall emphasize geological, chemical, and hydrological 
characterization of, and design of engineered structures for, deep 
borehole environments. Not later than 1 year after the date of 
enactment of this Act, the Secretary shall transmit the study to the 
Congress.

                       Subtitle E--Fossil Energy

                PART 1--AUTHORIZATION OF APPROPRIATIONS

SEC. 21501. 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, other than those 
described in subsection (b), including activities authorized under this 
subtitle but not including activities authorized under division E:
            (1) For fiscal year 2004, $530,000,000.
            (2) For fiscal year 2005, $556,000,000.
            (3) For fiscal year 2006, $583,000,000.
            (4) For fiscal year 2007, $611,000,000.
No less than 60 percent of the amount appropriated for each fiscal year 
under this subsection shall be available for activities related to the 
coal research program under section 21511(a).
    (b) Ultra-Deepwater and Unconventional Resources.--
            (1) Oil and gas lease income.--For each of fiscal years 
        2004 through 2010, from any royalties, rents, and bonuses 
        derived from Federal onshore and offshore oil and gas leases 
        issued under the Outer Continental Shelf Lands Act and the 
        Mineral Leasing Act which are deposited in the Treasury, and 
        after distribution of any such funds as described in paragraph 
        (2), an amount equal to 7.5 percent of the amount of royalties, 
        rents, and bonuses derived from those leases deposited in the 
        Treasury shall be deposited into the Ultra-Deepwater and 
        Unconventional Natural Gas and Other Petroleum Research Fund 
        (in this subsection referred to as the Fund). For purposes of 
        this subsection, the term ``royalties'' excludes proceeds from 
        the sale of royalty production taken in kind and royalty 
        production that is transferred under section 27(a)(3) of the 
        Outer Continental Shelf Lands Act (43 U.S.C. 1353(a)(3)). 
        Monies in the Fund shall be available to the Secretary for 
        obligation under part 3, without fiscal year limitation, to the 
        extent provided in advance in appropriations Acts.
            (2) Prior distributions.--The distributions described in 
        paragraph (1) are those required by law--
                    (A) to States and to the Reclamation Fund under the 
                Mineral Leasing Act (30 U.S.C. 191(a)); and
                    (B) to other funds receiving monies from Federal 
                oil and gas leasing programs, including--
                            (i) any recipients pursuant to section 8(g) 
                        of the Outer Continental Shelf Lands Act (43 
                        U.S.C. 1337(g));
                            (ii) the Land and Water Conservation Fund, 
                        pursuant to section 2(c) of the Land and Water 
                        Conservation Fund Act of 1965 (16 U.S.C. 4601-
                        5(c)); and
                            (iii) the Historic Preservation Fund, 
                        pursuant to section 108 of the National 
                        Historic Preservation Act (16 U.S.C. 470h).
            (3) Allocation.--Amounts made available under this 
        subsection in each fiscal year shall be allocated as follows:
                    (A) 67.5 percent shall be for ultra-deepwater 
                natural gas and other petroleum activities under 
                section 21522;
                    (B) 22.5 percent shall be for unconventional 
                natural gas and other petroleum resource activities 
                under section 21523; and
                    (C) 10 percent shall be for research complementary 
                to research under section 21521(b)(1) through (3).
    (c) Allocations.--From amounts authorized under subsection (a), the 
following sums are authorized:
            (1) Fuel cell proton exchange membrane technology.--For 
        activities under section 21511(c)(2), $28,000,000 for each of 
        the fiscal years 2004 through 2007.
            (2) Coal mining technologies.--For activities under section 
        21512--
                    (A) for fiscal year 2004, $12,000,000; and
                    (B) for fiscal year 2005, $15,000,000.
            (3) Office of arctic energy.--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 2007.
    (d) 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 2008 through 2011.
    (e) Limits on Use of Funds.--
            (1) Exclusions.--None of the funds authorized under this 
        section may be used for--
                    (A) Fossil Energy Environmental Restoration; or
                    (B) Import/Export Authorization.
            (2) University coal mining research.--Of the funds 
        authorized under subsection (c)(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.

                       PART 2--RESEARCH PROGRAMS

SEC. 21511. FOSSIL ENERGY RESEARCH PROGRAMS.

    (a) Coal Research.--(1) In addition to the Clean Coal Power 
Initiative authorized under division E, the Secretary shall conduct a 
program of research, development, demonstration, and commercial 
application for coal and power systems, including--
            (A) central systems;
            (B) sequestration research and development;
            (C) fuels;
            (D) advanced research; and
            (E) advanced separation technologies.
    (2) Not later than 6 months after the date of enactment of this 
Act, the Secretary shall transmit to the Congress a report providing--
            (A) a detailed description of how proposals will be 
        solicited and evaluated;
            (B) a list of activities and technical milestones; and
            (C) a description of how these activities will complement 
        and not duplicate the Clean Coal Power Initiative authorized 
        under division E.
    (b) 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) environmental research.
    (c) 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.
    (d) Technology Transfer.--To the maximum extent practicable, 
existing technology transfer mechanisms shall be used to implement oil 
and gas exploration and production technology transfer programs.

SEC. 21512. 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 based on 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; and
            (2) expand mining research capabilities at institutions of 
        higher education.

   PART 3--ULTRA-DEEPWATER AND UNCONVENTIONAL NATURAL GAS AND OTHER 
                          PETROLEUM RESOURCES

SEC. 21521. PROGRAM AUTHORITY.

    (a) In General.--The Secretary shall carry out a program under this 
part of research, development, demonstration, and commercial 
application of technologies for ultra-deepwater and unconventional 
natural gas and other petroleum resource exploration and production, 
including safe operations and environmental mitigation (including 
reduction of greenhouse gas emissions and sequestration of carbon).
    (b) Program Elements.--The program under this part shall address 
the following areas, including improving safety and minimizing 
environmental impacts of activities within each area:
            (1) Ultra-deepwater technology.
            (2) Ultra-deepwater architecture.
            (3) Unconventional natural gas and other petroleum resource 
        exploration and production technology.
    (c) Limitation on Location of Field Activities.--Field activities 
under the program under this part shall be carried out only--
            (1) in--
                    (A) areas in the territorial waters of the United 
                States not under any Outer Continental Shelf moratorium 
                as of September 30, 2002;
                    (B) areas onshore in the United States on public 
                land administered by the Secretary of the Interior 
                available for oil and gas leasing, where consistent 
                with applicable law and land use plans; and
                    (C) areas onshore in the United States on State or 
                private land, subject to applicable law; and
            (2) with the approval of the appropriate Federal or State 
        land management agency or private land owner.
    (d) Research at National Energy Technology Laboratory.--The 
Secretary, through the National Energy Technology Laboratory, shall 
carry out research complementary to research under subsection (b).
    (e) Consultation with Secretary of the Interior.--In carrying out 
this part, the Secretary shall consult regularly with the Secretary of 
the Interior.

SEC. 21522. ULTRA-DEEPWATER PROGRAM.

    (a) In General.--The Secretary shall carry out the activities under 
paragraphs (1) and (2) of section 21521(b), to maximize the value of 
the ultra-deepwater natural gas and other petroleum resources of the 
United States by increasing the supply of such resources and by 
reducing the cost and increasing the efficiency of exploration for and 
production of such resources, while improving safety and minimizing 
environmental impacts.
    (b) Role of the Secretary.--The Secretary shall have ultimate 
responsibility for, and oversight of, all aspects of the program under 
this section.
    (c) Role of the Program Consortium.--
            (1) In general.--The Secretary shall contract with a 
        consortium to--
                    (A) manage awards pursuant to subsection (f)(4);
                    (B) make recommendations to the Secretary for 
                project solicitations;
                    (C) disburse funds awarded under subsection (f) as 
                directed by the Secretary in accordance with the annual 
                plan under subsection (e); and
                    (D) carry out other activities assigned to the 
                program consortium by this section.
            (2) Limitation.--The Secretary may not assign any 
        activities to the program consortium except as specifically 
        authorized under this section.
            (3) Conflict of interest.--(A) The Secretary shall 
        establish procedures--
                    (i) to ensure that each board member, officer, or 
                employee of the program consortium who is in a 
                decisionmaking capacity under subsection (f)(3) or (4) 
                shall disclose to the Secretary any financial interests 
                in, or financial relationships with, applicants for or 
                recipients of awards under this section, including 
                those of his or her spouse or minor child, unless such 
                relationships or interests would be considered to be 
                remote or inconsequential; and
                    (ii) to require any board member, officer, or 
                employee with a financial relationship or interest 
                disclosed under clause (i) to recuse himself or herself 
                from any review under subsection (f)(3) or oversight 
                under subsection (f)(4) with respect to such applicant 
                or recipient.
            (B) The Secretary may disqualify an application or revoke 
        an award under this section if a board member, officer, or 
        employee has failed to comply with procedures required under 
        subparagraph (A)(ii).
    (d) Selection of the Program Consortium.--
            (1) In general.--The Secretary shall select the program 
        consortium through an open, competitive process.
            (2) Members.--The program consortium may include 
        corporations, institutions of higher education, National 
        Laboratories, or other research institutions. After submitting 
        a proposal under paragraph (4), the program consortium may not 
        add members without the consent of the Secretary.
            (3) Tax status.--The program consortium shall be an entity 
        that is exempt from tax under section 501(c)(3) of the Internal 
        Revenue Code of 1986.
            (4) Schedule.--Not later than 90 days after the date of 
        enactment of this Act, the Secretary shall solicit proposals 
        for the creation of the program consortium, which must be 
        submitted not less than 180 days after the date of enactment of 
        this Act. The Secretary shall select the program consortium not 
        later than 240 days after such date of enactment.
            (5) Application.--Applicants shall submit a proposal 
        including such information as the Secretary may require. At a 
        minimum, each proposal shall--
                    (A) list all members of the consortium;
                    (B) fully describe the structure of the consortium, 
                including any provisions relating to intellectual 
                property; and -
                    (C) describe how the applicant would carry out the 
                activities of the program consortium under this 
                section.
            (6) Eligibility.--To be eligible to be selected as the 
        program consortium, an applicant must be an entity whose 
        members collectively have demonstrated capabilities in planning 
        and managing research, development, demonstration, and 
        commercial application programs in natural gas or other 
        petroleum exploration or production.
            (7) Criterion.--The Secretary may consider the amount of 
        the fee an applicant proposes to receive under subsection (g) 
        in selecting a consortium under this section.
    (e) Annual Plan.--
            (1) In general.--The program under this section shall be 
        carried out pursuant to an annual plan prepared by the 
        Secretary in accordance with paragraph (2).
            (2) Development.--(A) Before drafting an annual plan under 
        this subsection, the Secretary shall solicit specific written 
        recommendations from the program consortium for each element to 
        be addressed in the plan, including those described in 
        paragraph (4). The Secretary may request that the program 
        consortium submit its recommendations in the form of a draft 
        annual plan.
            (B) The Secretary shall submit the recommendations of the 
        program consortium under subparagraph (A) to the Ultra-
        Deepwater Advisory Committee established under section 21525(a) 
        for review, and such Advisory Committee shall provide to the 
        Secretary written comments by a date determined by the 
        Secretary. The Secretary may also solicit comments from any 
        other experts.
            (C) The Secretary shall consult regularly with the program 
        consortium throughout the preparation of the annual plan.
            (3) Publication.--The Secretary shall transmit to the 
        Congress and publish in the Federal Register the annual plan, 
        along with any written comments received under paragraph (2)(A) 
        and (B). The annual plan shall be transmitted and published not 
        later than 60 days after the date of enactment of an Act making 
        appropriations for a fiscal year for the program under this 
        section.
            (4) Contents.--The annual plan shall describe the ongoing 
        and prospective activities of the program under this section 
        and shall include--
                    (A) a list of any solicitations for awards that the 
                Secretary plans to issue to carry out research, 
                development, demonstration, or commercial application 
                activities, including the topics for such work, who 
                would be eligible to apply, selection criteria, and the 
                duration of awards; and
                    (B) a description of the activities expected of the 
                program consortium to carry out subsection (f)(4).
    (f) Awards.--
            (1) In general.--The Secretary shall make awards to carry 
        out research, development, demonstration, and commercial 
        application activities under the program under this section. 
        The program consortium shall not be eligible to receive such 
        awards, but members of the program consortium may receive such 
        awards.
            (2) Proposals.--The Secretary shall solicit proposals for 
        awards under this subsection in such manner and at such time as 
        the Secretary may prescribe, in consultation with the program 
        consortium.
            (3) Review.--The Secretary shall make awards under this 
        subsection through a competitive process, which shall include a 
        review by individuals selected by the Secretary. Such 
        individuals shall include, for each application, Federal 
        officials, the program consortium, and non-Federal experts who 
        are not board members, officers, or employees of the program 
        consortium or of a member of the program consortium.
            (4) Oversight.--(A) The program consortium shall oversee 
        the implementation of awards under this subsection, consistent 
        with the annual plan under subsection (e), including disbursing 
        funds and monitoring activities carried out under such awards 
        for compliance with the terms and conditions of the awards.
            (B) Nothing in subparagraph (A) shall limit the authority 
        or responsibility of the Secretary to oversee awards, or limit 
        the authority of the Secretary to review or revoke awards.
            (C) The Secretary shall provide to the program consortium 
        the information necessary for the program consortium to carry 
        out its responsibilities under this paragraph.
    (g) Fee.--
            (1) In general.--To compensate the program consortium for 
        carrying out its activities under this section, the Secretary 
        shall provide to the program consortium a fee in an amount not 
        to exceed 7.5 percent of the amounts awarded under subsection 
        (f) for each fiscal year.
            (2) Advance.--The Secretary shall advance funds to the 
        program consortium upon selection of the consortium, which 
        shall be deducted from amounts to be provided under paragraph 
        (1).
    (h) Audit.--The Secretary shall retain an independent, commercial 
auditor to determine the extent to which funds provided to the program 
consortium, and funds provided under awards made under subsection (f), 
have been expended in a manner consistent with the purposes and 
requirements of this part. The auditor shall transmit a report annually 
to the Secretary, who shall transmit the report to Congress, along with 
a plan to remedy any deficiencies cited in the report.

SEC. 21523. UNCONVENTIONAL NATURAL GAS AND OTHER PETROLEUM RESOURCES 
              PROGRAM.

    (a) In General.--The Secretary shall carry out activities under 
section 21521(b)(3), to maximize the value of the onshore 
unconventional natural gas and other petroleum resources of the United 
States by increasing the supply of such resources and by reducing the 
cost and increasing the efficiency of exploration for and production of 
such resources, while improving safety and minimizing environmental 
impacts.
    (b) Awards.--
            (1) In general.--The Secretary shall carry out this section 
        through awards made through an open, competitive process.
            (2) Consortia.--In carrying out paragraph (1), the 
        Secretary shall give preference to making awards to consortia.
    (c) Audit.--The Secretary shall retain an independent, commercial 
auditor to determine the extent to which funds provided under awards 
made under this section have been expended in a manner consistent with 
the purposes and requirements of this part. The auditor shall transmit 
a report annually to the Secretary, who shall transmit the report to 
Congress, along with a plan to remedy any deficiencies cited in the 
report.
    (d) Focus Areas.--Awards under this section may focus on areas 
including advanced coal-bed methane, deep drilling, natural gas 
production from tight sands, natural gas production from gas shales, 
innovative exploration and production techniques, enhanced recovery 
techniques, and environmental mitigation of unconventional natural gas 
and other petroleum resources exploration and production.
    (e) Activities by the United States Geological Survey.--The 
Secretary of the Interior, through the United States Geological Survey, 
shall, where appropriate, carry out programs of long-term research to 
complement the programs under this section.

SEC. 21524. ADDITIONAL REQUIREMENTS FOR AWARDS.

    (a) Demonstration Projects.--An application for an award under this 
part for a demonstration project shall describe with specificity the 
intended commercial use of the technology to be demonstrated.
    (b) Flexibility in Locating Demonstration Projects.--Subject to the 
limitation in section 21521(c), a demonstration project under this part 
relating to an ultra-deepwater technology or an ultra-deepwater 
architecture may be conducted in deepwater depths.
    (c) Intellectual Property Agreements.--If an award under this part 
is made to a consortium (other than the program consortium), the 
consortium shall provide to the Secretary a signed contract agreed to 
by all members of the consortium describing the rights of each member 
to intellectual property used or developed under the award.
    (d) Technology Transfer.--Each recipient of an award under this 
part shall conduct technology transfer activities, as appropriate, and 
outreach activities pursuant to section 21809.
    (e) Cost-Sharing Reduction for Independent Producers.--In applying 
the cost-sharing requirements under section 21802 to an award under 
this part made solely to an independent producer of oil or gas, the 
Secretary may reduce the applicable non-Federal requirement in such 
section to a level not less than 10 percent of the cost of the project.

SEC. 21525. ADVISORY COMMITTEES.

    (a) Ultra-Deepwater Advisory Committee.--
            (1) Establishment.--Not later than 270 days after the date 
        of enactment of this section, the Secretary shall establish an 
        advisory committee to be known as the Ultra-Deepwater Advisory 
        Committee.
            (2) Membership.--The advisory committee under this 
        subsection shall be composed of members appointed by the 
        Secretary and including--
                    (A) individuals with extensive research experience 
                or operational knowledge of offshore natural gas and 
                other petroleum exploration and production;
                    (B) individuals broadly representative of the 
                affected interests in ultra-deepwater natural gas and 
                other petroleum production, including interests in 
                environmental protection and safe operations;
                    (C) no individuals who are Federal employees; and
                    (D) no individuals who are board members, officers, 
                or employees of the program consortium.
            (3) Duties.--The advisory committee under this subsection 
        shall--
                    (A) advise the Secretary on the development and 
                implementation of programs under this part related to 
                ultra-deepwater natural gas and other petroleum 
                resources; and
                    (B) carry out section 21522(e)(2)(B).
            (4) Compensation.--A member of the advisory committee under 
        this subsection shall serve without compensation but shall 
        receive travel expenses, including per diem in lieu of 
        subsistence, in accordance with applicable provisions under 
        subchapter I of chapter 57 of title 5, United States Code.
    (b) Unconventional Resources Technology Advisory Committee.--
            (1) Establishment.--Not later than 270 days after the date 
        of enactment of this section, the Secretary shall establish an 
        advisory committee to be known as the Unconventional Resources 
        Technology Advisory Committee.
            (2) Membership.--The advisory committee under this 
        subsection shall be composed of members appointed by the 
        Secretary and including--
                    (A) individuals with extensive research experience 
                or operational knowledge of unconventional natural gas 
                and other petroleum resource exploration and 
                production, including independent oil and gas 
                producers;
                    (B) individuals broadly representative of the 
                affected interests in unconventional natural gas and 
                other petroleum resource exploration and production, 
                including interests in environmental protection and 
                safe operations; and
                    (C) no individuals who are Federal employees.
            (3) Duties.--The advisory committee under this subsection 
        shall advise the Secretary on the development and 
        implementation of activities under this part related to 
        unconventional natural gas and other petroleum resources.
            (4) Compensation.--A member of the advisory committee under 
        this subsection shall serve without compensation but shall 
        receive travel expenses, including per diem in lieu of 
        subsistence, in accordance with applicable provisions under 
        subchapter I of chapter 57 of title 5, United States Code.
    (c) Prohibition.--No advisory committee established under this 
section shall make recommendations on funding awards to consortia or 
for specific projects.

SEC. 21526. LIMITS ON PARTICIPATION.

    (a) In General.--An entity shall be eligible to receive an award 
under this part only if the Secretary finds--
            (1) that the entity's participation in the program under 
        this part would be in the economic interest of the United 
        States; and
            (2) that either--
                    (A) the entity is a United States-owned entity 
                organized under the laws of the United States; or
                    (B) the entity is organized under the laws of the 
                United States and has a parent entity organized under 
                the laws of a country which affords--
                            (i) to United States-owned entities 
                        opportunities, comparable to those afforded to 
                        any other entity, to participate in any 
                        cooperative research venture similar to those 
                        authorized under this part;
                            (ii) to United States-owned entities local 
                        investment opportunities comparable to those 
                        afforded to any other entity; and
                            (iii) adequate and effective protection for 
                        the intellectual property rights of United 
                        States-owned entities.
    (b) Sense of Congress and Report.--It is the Sense of the Congress 
that ultra-deepwater technology developed under this part is to be 
developed primarily for production of ultra-deepwater natural gas and 
other petroleum resources of the United States, and that this priority 
is to be reflected in the terms of grants, contracts, and cooperative 
agreements entered under this part. As part of the annual Departmental 
budget submission, the Secretary shall report on all steps taken to 
implement the policy described in this subsection.

SEC. 21527. FUND.

    There is hereby established in the Treasury of the United States a 
separate fund to be known as the ``Ultra-Deepwater and Unconventional 
Natural Gas and Other Petroleum Research Fund''.

SEC. 21528. TRANSFER OF ADVANCED OIL AND GAS EXPLORATION AND PRODUCTION 
              TECHNOLOGIES.

    (a) Assessment.--The Secretary shall review technology programs 
throughout the Federal Government to assess the suitability of 
technologies developed thereunder for use in ultradeep drilling 
research, development, demonstration, and commercial application.
    (b) Technology Transfer.--Not later than 1 year after the date of 
enactment of this Act, the Secretary shall issue a solicitation seeking 
organizations knowledgeable of the technology needs of the ultradeep 
drilling industry. The Secretary shall select the most qualified 
applicant to manage a program to transfer technologies the Secretary 
determines suitable under subsection (a) to appropriate entities. The 
organization selected under section 21522(d) shall not be eligible for 
selection under this subsection.
    (c) Funding.--From the funds available under section 
21501(b)(3)(C), $1,000,000 shall be available to carry out this section 
in each of the fiscal years 2004 through 2007.

SEC. 21529. SUNSET.

    The authority provided by this part shall terminate on September 
30, 2010.

SEC. 21530. DEFINITIONS.

    In this part:
            (1) Deepwater.--The term ``deepwater'' means a water depth 
        that is greater than 200 but less than 1,500 meters.
            (2) Program consortium.--The term ``program consortium'' 
        means the consortium selected under section 21522(d).
            (3) Remote or inconsequential.--The term ``remote or 
        inconsequential'' has the meaning given that term in 
        regulations issued by the Office of Government Ethics under 
        section 208(b)(2) of title 18, United States Code.
            (4) Ultra-deepwater.--The term ``ultra-deepwater'' means a 
        water depth that is equal to or greater than 1,500 meters.
            (5) Ultra-deepwater architecture.--The term ``ultra-
        deepwater architecture'' means the integration of technologies 
        for the exploration for, or production of, natural gas or other 
        petroleum resources located at ultra-deepwater depths.
            (6) Ultra-deepwater technology.--The term ``ultra-deepwater 
        technology'' means a discrete technology that is specially 
        suited to address one or more challenges associated with the 
        exploration for, or production of, natural gas or other 
        petroleum resources located at ultra-deepwater depths.
            (7) Unconventional natural gas and other petroleum 
        resource.--The term ``unconventional natural gas and other 
        petroleum resource'' means natural gas and other petroleum 
        resource located onshore in an economically inaccessible 
        geological formation.

                          Subtitle F--Science

                PART 1--AUTHORIZATION OF APPROPRIATIONS

SEC. 21601. 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 21634(c)(2)(C), 
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, $4,618,000,000.
            (4) For fiscal year 2007, $5,310,000,000.
    (b) Allocations.--From amounts authorized under subsection (a), the 
following sums are authorized:
            (1) Fusion energy sciences.--(A) For the Fusion Energy 
        Sciences Program, excluding activities under sections 21611 and 
        21612--
                    (i) for fiscal year 2004, $276,000,000;
                    (ii) for fiscal year 2005, $300,000,000;.
                    (iii) for fiscal year 2006, $340,000,000; and
                    (iv) for fiscal year 2007, $350,000,000.
            (B) For activities under section 21611 and for the project 
        described in section 21612--
                    (i) for fiscal year 2004, $12,000,000;
                    (ii) for fiscal year 2005, $20,000,000;
                    (iii) for fiscal year 2006, $50,000,000; and
                    (iv) for fiscal year 2007, $75,000,000.
            (2) Spallation neutron source.--
                    (A) Construction.--For construction of the 
                Spallation Neutron Source--
                            (i) for fiscal year 2004, $124,600,000;
                            (ii) for fiscal year 2005, $79,800,000; and
                            (iii) for fiscal year 2006, $41,100,000 for 
                        completion of construction.
                    (B) Other project funding.--For other project costs 
                (including research and development necessary to 
                complete the project, preoperations costs, and capital 
                equipment related to construction) of the Spallation 
                Neutron Source, $103,279,000 for the period 
                encompassing fiscal years 2003 through 2006, to remain 
                available until expended through September 30, 2006.
            (3) Nanotechnology research and development.--For 
        activities under section 21633--
                    (A) for fiscal year 2004, $265,000,000;
                    (B) for fiscal year 2005, $292,000,000;
                    (C) for fiscal year 2006, $322,000,000; and
                    (D) for fiscal year 2007, $355,000,000.
            (4) Science and technology scholarship program.--For 
        activities under section 21636--
                    (A) for fiscal year 2004, $800,000;
                    (B) for fiscal year 2005, $1,600,000;
                    (C) for fiscal year 2006, $2,000,000; and
                    (D) for fiscal year 2007, $2,000,000.
            (5) Genomes to life.--For activities under section 21641--
                    (A) $100,000,000 for fiscal year 2004; and
                    (B) such sums as may be necessary for fiscal years 
                2005 through 2007.
    (c) Limits on Use of Funds.--Of the funds authorized under 
subsection (b)(1), no funds shall be available for implementation of 
the plan described in section 21612.

                     PART 2--FUSION ENERGY SCIENCES

SEC. 21611. ITER.

    (a) In General.--The United States is authorized to participate in 
ITER in accordance with the provisions of this section.
    (b) Agreement.--(1) The Secretary is authorized to negotiate an 
agreement for United States participation in ITER.
    (2) Any agreement for United States participation in ITER shall, at 
a minimum--
            (A) clearly define the United States financial contribution 
        to construction and operating costs;
            (B) ensure that the share of ITER's high-technology 
        components manufactured in the United States is at least 
        proportionate to the United States financial contribution to 
        ITER;
            (C) ensure that the United States will not be financially 
        responsible for cost overruns in components manufactured in 
        other ITER participating countries;
            (D) guarantee the United States full access to all data 
        generated by ITER;
            (E) enable United States researchers to propose and carry 
        out an equitable share of the experiments at ITER;
            (F) provide the United States with a role in all collective 
        decisionmaking related to ITER; and
            (G) describe the process for discontinuing or 
        decommissioning ITER and any United States role in those 
        processes.
    (c) Plan.--The Secretary, in consultation with the Fusion Energy 
Sciences Advisory Committee, shall develop a plan for the participation 
of United States scientists in ITER that shall include the United 
States research agenda for ITER, methods to evaluate whether ITER is 
promoting progress toward making fusion a reliable and affordable 
source of power, and a description of how work at ITER will relate to 
other elements of the United States fusion program. The Secretary shall 
request a review of the plan by the National Academy of Sciences.
    (d) Limitation.--No funds shall be expended for the construction of 
ITER until the Secretary has transmitted to the Congress--
            (1) the agreement negotiated pursuant to subsection (b) and 
        120 days have elapsed since that transmission;
            (2) a report describing the management structure of ITER 
        and providing a fixed dollar estimate of the cost of United 
        States participation in the construction of ITER, and 120 days 
        have elapsed since that transmission;
            (3) a report describing how United States participation in 
        ITER will be funded without reducing funding for other programs 
        in the Office of Science, including other fusion programs, and 
        60 days have elapsed since that transmission; and
            (4) the plan required by subsection (c) (but not the 
        National Academy of Sciences review of that plan), and 60 days 
        have elapsed since that transmission.
    (e) Definitions.--In this section--
            (1) the term ``construction'' means the physical 
        construction of the ITER facility, and the physical 
        construction, purchase, or manufacture of equipment or 
        components that are specifically designed for the ITER 
        facility, but does not mean the design of the facility, 
        equipment, or components; and
            (2) the term ``ITER'' means the international burning 
        plasma fusion research project in which the President announced 
        United States participation on January 30, 2003.

SEC. 21612. PLAN FOR FUSION EXPERIMENT.

    (a) In General.--If at any time during the negotiations on ITER, 
the Secretary determines that construction and operation of ITER is 
unlikely or infeasible, the Secretary shall send to Congress, as part 
of the budget request for the following year, a plan for implementing 
the domestic burning plasma experiment known as FIRE, including costs 
and schedules for such a plan. The Secretary shall refine such plan in 
full consultation with the Fusion Energy Sciences Advisory Committee 
and shall also transmit such plan to the National Academy of Sciences 
for review.
    (b) Definitions.--As used in this section--
            (1) the term ``ITER'' has the meaning given that term in 
        section 21611; and
            (2) the term ``FIRE'' means the Fusion Ignition Research 
        Experiment, the fusion research experiment for which design 
        work has been supported by the Department as a possible 
        alternative burning plasma experiment in the event that ITER 
        fails to move forward.

SEC. 21613. PLAN FOR FUSION ENERGY SCIENCES PROGRAM.

    (a) Declaration of Policy.--It shall be the policy of the United 
States to conduct research, development, demonstration, and commercial 
application to provide for the scientific, engineering, and commercial 
infrastructure necessary to ensure that the United States is 
competitive with other nations in providing fusion energy for its own 
needs and the needs of other nations, including by demonstrating 
electric power or hydrogen production for the United States energy grid 
utilizing fusion energy at the earliest date possible.
    (b) Fusion Energy Plan.--
            (1) In general.--Within 6 months after the date of 
        enactment of this Act, the Secretary shall transmit to Congress 
        a plan for carrying out the policy set forth in subsection (a), 
        including cost estimates, proposed budgets, potential 
        international partners, and specific programs for implementing 
        such policy.
            (2) Requirements of plan.--Such plan shall also 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;
                    (D) such facilities that are selected are funded at 
                a cost-effective rate;
                    (E) communication of scientific results and methods 
                between the fusion energy science community and the 
                broader scientific and technology communities is 
                improved;
                    (F) inertial confinement fusion facilities are 
                utilized to the extent practicable for the purpose of 
                inertial fusion energy research and development; and
                    (G) attractive alternative inertial and magnetic 
                fusion energy approaches are more fully explored.
            (3) Report on fusion materials and technology project.--In 
        addition, the plan required by this subsection shall also 
        address the status of, and to the degree possible, the costs 
        and schedules for--
                    (A) the design and implementation of international 
                or national facilities for the testing of fusion 
                materials; and
                    (B) the design and implementation of international 
                or national facilities for the testing and development 
                of key fusion technologies.

                   PART 3--SPALLATION NEUTRON SOURCE

SEC. 21621. DEFINITION.

    For the purposes of this part, the term ``Spallation Neutron 
Source'' means Department Project 99-E-334, Oak Ridge National 
Laboratory, Oak Ridge, Tennessee.

SEC. 21622. 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.

SEC. 21623. LIMITATIONS.

    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.

                         PART 4--MISCELLANEOUS

SEC. 21631. FACILITY AND INFRASTRUCTURE SUPPORT FOR NONMILITARY ENERGY 
              LABORATORIES.

    (a) Facility Policy.--The Secretary shall develop and implement a 
strategy for the nonmilitary energy laboratories and facilities of the 
Office of Science. Such strategy shall provide a 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) Transmittal.--The Secretary shall prepare and transmit, 
        along with the President's budget request to the Congress for 
        fiscal year 2005, a report containing the strategy developed 
        under subsection (a).
            (2) Contents.--For each nonmilitary energy laboratory and 
        facility, 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 long-term 
                operational costs and return on investment;
                    (C) the total current budget for all facilities and 
                infrastructure funding; and
                    (D) the current status of each facilities and 
                infrastructure project compared to the original 
                baseline cost, schedule, and scope.

SEC. 21632. RESEARCH REGARDING PRECIOUS METAL CATALYSIS.

    From the amounts authorized to be appropriated to the Secretary 
under section 21601, such sums as may be necessary for each of the 
fiscal years 2004, 2005, and 2006 may be used to carry out research in 
the use of precious metals (excluding platinum, palladium, and rhodium) 
in catalysis.

SEC. 21633. NANOTECHNOLOGY RESEARCH AND DEVELOPMENT.

    (a) In General.--The Secretary, acting through the Office of 
Science, shall implement a Nanotechnology Research and Development 
Program to promote nanotechnology research, development, demonstration, 
education, technology transfer, and commercial application activities 
as necessary to ensure continued United States leadership in 
nanotechnology across scientific and engineering disciplines.
    (b) Program Activities.--The activities of the Nanotechnology 
Research and Development Program shall be designed to--
            (1) provide sustained support for nanotechnology research 
        and development through--
                    (A) grants to individual investigators and 
                interdisciplinary teams of investigators; and
                    (B) establishment of interdisciplinary research 
                centers and advanced technology user facilities;
            (2) ensure that solicitation and evaluation of proposals 
        under the Program encourage interdisciplinary research;
            (3) expand education and training of undergraduate and 
        graduate students in interdisciplinary nanotechnology science 
        and engineering;
            (4) accelerate the commercial application of nanotechnology 
        innovations in the private sector;
            (5) ensure that societal and ethical concerns will be 
        addressed as the technology is developed by--
                    (A) establishing a research program to identify 
                societal and ethical concerns related to 
                nanotechnology, and ensuring that the results of such 
                research are widely disseminated; and
                    (B) integrating, insofar as possible, research on 
                societal and ethical concerns with nanotechnology 
                research and development; and
            (6) ensure that the potential of nanotechnology to produce 
        or facilitate the production of clean, inexpensive energy is 
        realized by supporting nanotechnology energy applications 
        research and development.
    (c) Definitions.--For the purposes of this section--
            (1) the term ``nanotechnology'' means science and 
        engineering aimed at creating materials, devices, and systems 
        at the atomic and molecular level; and
            (2) the term ``advanced technology user facility'' means a 
        nanotechnology research and development facility supported, in 
        whole or in part, by Federal funds that is open to all United 
        States researchers on a competitive, merit-reviewed basis.
    (d) Report.--Within 2 years after the date of enactment of this 
Act, the Secretary shall transmit to the Congress a report describing 
the projects to identify societal and ethical concerns related to 
nanotechnology and the funding provided to support these projects.

SEC. 21634. 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;
            (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) develop and 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.
    (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)--
                            (i) by striking ``means'' and inserting 
                        ``and `networking and information technology' 
                        mean''; and
                            (ii) 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--
            ``(1) supporting fundamental research in the physical 
        sciences and engineering, and energy applications;
            ``(2) providing supercomputer access and advanced 
        communication capabilities and facilities to scientific 
        researchers; and
            ``(3) 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 2007.''.
    (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.
    (e) Report.--(1) Before undertaking any new initiative to develop 
new advanced architecture for high-speed computing, the Secretary, 
through the Director of the Office of Science, shall transmit a report 
to the Congress describing--
            (A) the expected duration and cost of the initiative;
            (B) the technical milestones the initiative is designed to 
        achieve;
            (C) how institutions of higher education and private firms 
        will participate in the initiative; and
            (D) why the goals of the initiative could not be achieved 
        through existing programs.
    (2) No funds may be expended on any initiative described in 
paragraph (1) until 30 days after the report required by that paragraph 
is transmitted to the Congress.

SEC. 21635. NITROGEN FIXATION.

    The Secretary, acting through the Office of Science, shall support 
a program of research, development, demonstration, and commercial 
application on biological nitrogen fixation, including plant genomics 
research relevant to the development of commercial crop varieties with 
enhanced nitrogen fixation efficiency and ability.

SEC. 21636. DEPARTMENT OF ENERGY SCIENCE AND TECHNOLOGY SCHOLARSHIP 
              PROGRAM.

    (a) Establishment of Program.--
            (1) In general.--The Secretary shall establish a Department 
        of Energy Science and Technology Scholarship Program to award 
        scholarships to individuals that is designed to recruit and 
        prepare students for careers in the Department.
            (2) Competitive process.--Individuals shall be selected to 
        receive scholarships under this section through a competitive 
        process primarily on the basis of academic merit, with 
        consideration given to financial need and the goal of promoting 
        the participation of individuals identified in section 33 or 34 
        of the Science and Engineering Equal Opportunities Act (42 
        U.S.C. 1885a or 1885b).
            (3) Service agreements.--To carry out the Program the 
        Secretary shall enter into contractual agreements with 
        individuals selected under paragraph (2) under which the 
        individuals agree to serve as full-time employees of the 
        Department, for the period described in subsection (f)(1), in 
        positions needed by the Department and for which the 
        individuals are qualified, in exchange for receiving a 
        scholarship.
    (b) Scholarship Eligibility.--In order to be eligible to 
participate in the Program, an individual must--
            (1) be enrolled or accepted for enrollment as a full-time 
        student at an institution of higher education in an academic 
        program or field of study described in the list made available 
        under subsection (d);
            (2) be a United States citizen; and
            (3) at the time of the initial scholarship award, not be a 
        Federal employee as defined in section 2105 of title 5 of the 
        United States Code.
    (c) Application Required.--An individual seeking a scholarship 
under this section shall submit an application to the Secretary at such 
time, in such manner, and containing such information, agreements, or 
assurances as the Secretary may require.
    (d) Eligible Academic Programs.--The Secretary shall make publicly 
available a list of academic programs and fields of study for which 
scholarships under the Program may be utilized, and shall update the 
list as necessary.
    (e) Scholarship Requirement.--
            (1) In general.--The Secretary may provide a scholarship 
        under the Program for an academic year if the individual 
        applying for the scholarship has submitted to the Secretary, as 
        part of the application required under subsection (c), a 
        proposed academic program leading to a degree in a program or 
        field of study on the list made available under subsection (d).
            (2) Duration of eligibility.--An individual may not receive 
        a scholarship under this section for more than 4 academic 
        years, unless the Secretary grants a waiver.
            (3) Scholarship amount.--The dollar amount of a scholarship 
        under this section for an academic year shall be determined 
        under regulations issued by the Secretary, but shall in no case 
        exceed the cost of attendance.
            (4) Authorized uses.--A scholarship provided under this 
        section may be expended for tuition, fees, and other authorized 
        expenses as established by the Secretary by regulation.
            (5) Contracts regarding direct payments to institutions.--
        The Secretary may enter into a contractual agreement with an 
        institution of higher education under which the amounts 
        provided for a scholarship under this section for tuition, 
        fees, and other authorized expenses are paid directly to the 
        institution with respect to which the scholarship is provided.
    (f) Period of Obligated Service.--
            (1) Duration of service.--The period of service for which 
        an individual shall be obligated to serve as an employee of the 
        Department is, except as provided in subsection (h)(2), 24 
        months for each academic year for which a scholarship under 
        this section is provided.
            (2) Schedule for service.--(A) Except as provided in 
        subparagraph (B), obligated service under paragraph (1) shall 
        begin not later than 60 days after the individual obtains the 
        educational degree for which the scholarship was provided.
            (B) The Secretary may defer the obligation of an individual 
        to provide a period of service under paragraph (1) if the 
        Secretary determines that such a deferral is appropriate. The 
        Secretary shall prescribe the terms and conditions under which 
        a service obligation may be deferred through regulation.
    (g) Penalties for Breach of Scholarship Agreement.--
            (1) Failure to complete academic training.--Scholarship 
        recipients who fail to maintain a high level of academic 
        standing, as defined by the Secretary by regulation, who are 
        dismissed from their educational institutions for disciplinary 
        reasons, or who voluntarily terminate academic training before 
        graduation from the educational program for which the 
        scholarship was awarded, shall be in breach of their 
        contractual agreement and, in lieu of any service obligation 
        arising under such agreement, shall be liable to the United 
        States for repayment within 1 year after the date of default of 
        all scholarship funds paid to them and to the institution of 
        higher education on their behalf under the agreement, except as 
        provided in subsection (h)(2). The repayment period may be 
        extended by the Secretary when determined to be necessary, as 
        established by regulation.
            (2) Failure to begin or complete the service obligation or 
        meet the terms and conditions of deferment.--Scholarship 
        recipients who, for any reason, fail to begin or complete their 
        service obligation after completion of academic training, or 
        fail to comply with the terms and conditions of deferment 
        established by the Secretary pursuant to subsection (f)(2)(B), 
        shall be in breach of their contractual agreement. When 
        recipients breach their agreements for the reasons stated in 
        the preceding sentence, the recipient shall be liable to the 
        United States for an amount equal to--
                    (A) the total amount of scholarships received by 
                such individual under this section; plus
                    (B) the interest on the amounts of such awards 
                which would be payable if at the time the awards were 
                received they were loans bearing interest at the 
                maximum legal prevailing rate, as determined by the 
                Treasurer of the United States,
        multiplied by 3.
    (h) Waiver or Suspension of Obligation.--
            (1) Death of individual.--Any obligation of an individual 
        incurred under the Program (or a contractual agreement 
        thereunder) for service or payment shall be canceled upon the 
        death of the individual.
            (2) Impossibility or extreme hardship.--The Secretary shall 
        by regulation provide for the partial or total waiver or 
        suspension of any obligation of service or payment incurred by 
        an individual under the Program (or a contractual agreement 
        thereunder) whenever compliance by the individual is impossible 
        or would involve extreme hardship to the individual, or if 
        enforcement of such obligation with respect to the individual 
        would be contrary to the best interests of the Government.
    (i) Definitions.--In this section the following definitions apply:
            (1) Cost of attendance.--The term ``cost of attendance'' 
        has the meaning given that term in section 472 of the Higher 
        Education Act of 1965 (20 U.S.C. 1087ll).
            (2) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning given that 
        term in section 101(a) of the Higher Education Act of 1965 (20 
        U.S.C. 1001(a)).
            (3) Program.--The term ``Program'' means the Department of 
        Energy Science and Technology Scholarship Program established 
        under this section.

                        PART 5--GENOMES TO LIFE

SEC. 21641. GENOMES TO LIFE.

    (a) Program.--
            (1) Establishment.--The Secretary shall establish a 
        research, development, and demonstration program in genetics, 
        protein science, and computational biology of microbes and 
        plants to support the energy and environmental mission of the 
        Department.
            (2) Grants.--The program shall support individual 
        investigators and multidisciplinary teams of investigators 
        through competitive, merit-reviewed grants.
            (3) Consultation.--In carrying out the program, the 
        Secretary shall consult with other Federal agencies that 
        conduct genetic and protein research.
    (b) Goals.--The program shall have the goal of developing 
technologies and methods based on the biological functions of microbes 
and plants that --
            (1) can facilitate the production of fuels, including 
        hydrogen;
            (2) convert carbon dioxide to organic carbon; and
            (3) detoxify soils and water at Department facilities 
        contaminated with heavy metals and radiological materials.
    (c) Plan.--
            (1) Development of plan.--Within one year after the date of 
        enactment of this Act, the Secretary shall prepare and transmit 
        to the Congress a research plan describing how the program 
        authorized pursuant to this section will be undertaken to 
        accomplish the program goals established in subsection (b).
            (2) Review of plan.--The Secretary shall contract with the 
        National Academy of Sciences to review the research plan 
        developed under this subsection. The Secretary shall transmit 
        the review to the Congress not later than 6 months after 
        transmittal of the research plan under paragraph (1), along 
        with the Secretary's response to the recommendations contained 
        in the review.
    (d) Facilities.--In carrying out the program under this section, 
the Secretary may construct, acquire, and operate facilities necessary 
to carry out this section.
    (e) Prohibition on Biomedical or Human Subject Research.--(1) In 
carrying out this program, the Secretary shall not conduct biomedical 
research.
    (2) Nothing in this section shall authorize the Secretary to 
conduct any research or demonstrations--
            (A) on human cells or human subjects; or
            (B) designed to have any application with respect to human 
        cells or human subjects.

                   Subtitle G--Energy and Environment

SEC. 21701. AUTHORIZATION OF APPROPRIATIONS.

    (a) United States-Mexico Energy Technology Cooperation.--The 
following sums are authorized to be appropriated to the Secretary to 
carry out activities under section 21702:
            (1) For fiscal year 2004, $5,000,000.
            (2) For fiscal year 2005, $6,000,000.
            (3) For fiscal year 2006, $6,000,000.
            (4) For fiscal year 2007, $6,000,000.
    (b) Waste Reduction and Use of Alternatives.--There are authorized 
to be appropriated to the Secretary to carry out activities under 
section 21703, $500,000 for fiscal year 2004.

SEC. 21702. 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.
    (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.

SEC. 21703. WASTE REDUCTION AND USE OF ALTERNATIVES.

    (a) Grant Authority.--The Secretary is authorized to make a single 
grant to a qualified institution to examine and develop the feasibility 
of burning post-consumer carpet in cement kilns as an alternative 
energy source. The purposes of the grant shall include determining--
            (1) how post-consumer carpet can be burned without 
        disrupting kiln operations;
            (2) the extent to which overall kiln emissions may be 
        reduced;
            (3) the emissions of air pollutants and other relevant 
        environmental impacts; and
            (4) how this process provides benefits to both cement kiln 
        operations and carpet suppliers.
    (b) Qualified Institution.--For the purposes of subsection (a), a 
qualified institution is a research-intensive institution of higher 
education with demonstrated expertise in the fields of fiber recycling 
and logistical modeling of carpet waste collection and preparation.

SEC. 21704. COAL GASIFICATION.

    The Secretary is authorized to provide loan guarantees for a 
project to produce energy from a plant using integrated gasification 
combined cycle technology of at least 400 megawatts in capacity that 
produces power at competitive rates in deregulated energy generation 
markets and that does not receive any subsidy (direct or indirect) from 
ratepayers.

SEC. 21705. PETROLEUM COKE GASIFICATION.

    The Secretary is authorized to provide loan guarantees for at least 
one petroleum coke gasification polygeneration project.

SEC. 21706. OTHER BIOPOWER AND BIOENERGY.

    The Secretary shall conduct a program to assist in the planning, 
design, and implementation of projects to convert rice straw, rice 
hulls, soybean matter, poultry fat, poultry waste, sugarcane bagasse, 
forest thinnings, and barley grain into biopower and biofuels.

SEC. 21707. 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-FC22-91PC99544 on such terms and conditions as the 
Secretary determines, including interest rates and upfront payments.

SEC. 21708. FUEL CELL TEST CENTER.

    (a) Study.--Not later than 1 year after the date of enactment of 
this Act, the Secretary shall transmit to the Congress a report on the 
results of a study of the establishment of a test center for next-
generation fuel cells at an institution of higher education that has 
available a continuous source of hydrogen and access to the electric 
transmission grid. Such report shall include a conceptual design for 
such test center and a projection of the costs of establishing the test 
center.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary for carrying out this section $500,000.

SEC. 21709. FUEL CELL TRANSIT BUS DEMONSTRATION.

    The Secretary shall establish a transit bus demonstration program 
to make competitive, merit-based awards for five-year projects to 
demonstrate not more than 12 fuel cell transit buses (and necessary 
infrastructure) in three geographically dispersed localities. In 
selecting projects under this section, the Secretary shall give 
preference to projects that are most likely to mitigate congestion and 
improve air quality. There are authorized to be appropriated to the 
Secretary $10,000,000 for each of the fiscal years 2004 through 2007 
for carrying out this section.

                         Subtitle H--Management

SEC. 21801. AVAILABILITY OF FUNDS.

    Funds authorized to be appropriated to the Department under this 
title shall remain available until expended.

SEC. 21802. 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. The 
Secretary may reduce or eliminate the non-Federal requirement under 
this subsection if the Secretary determines that the research and 
development is of a basic or fundamental nature.
    (b) Demonstration and Commercial Application.--Except as otherwise 
provided in this title, the Secretary shall require at least 50 percent 
of the costs directly and specifically related to any demonstration or 
commercial application project under this title to be provided from 
non-Federal sources. The Secretary may reduce the non-Federal 
requirement under this 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. 21803. 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. 21804. 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 the following areas:
            (A) Energy efficiency.
            (B) Renewable energy.
            (C) Nuclear energy.
            (D) 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) Office of Science Advisory Committees.--
            (1) 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.
            (2) Science advisory committee.--
                    (A) Establishment.--There shall be in the Office of 
                Science a Science Advisory Committee that includes the 
                chairs of each of the advisory committees described in 
                paragraph (1).
                    (B) Responsibilities.--The Science Advisory 
                Committee shall--
                            (i) serve as the science advisor to the 
                        Assistant Secretary for Science created under 
                        section 209 of the Department of Energy 
                        Organization Act, as added by section 22001 of 
                        this Act;
                            (ii) advise the Assistant Secretary with 
                        respect to the well-being and management of the 
                        National Laboratories and single-purpose 
                        research facilities;
                            (iii) advise the Assistant Secretary with 
                        respect to education and workforce training 
                        activities required for effective short-term 
                        and long-term basic and applied research 
                        activities of the Office of Science; and
                            (iv) advise the Assistant Secretary with 
                        respect to the well being of the university 
                        research programs supported by the Office of 
                        Science.
    (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 performance-based goals for such 
programs as established under section 20002, and the progress on 
meeting such goals.
    (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 20002, 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. 21805. 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, and 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 Stevenson-Wydler Technology Innovation Act of 1980.

SEC. 21806. 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 procurement and collaborative 
        research along with recommendations, if appropriate, on how to 
        improve participation;
            (3) make available to small business concerns training, 
        mentoring, and clear, up-to-date information on how to 
        participate in the procurement and collaborative research, 
        including how to submit effective proposals, and information 
        related to alternative approaches to resolution of disputes 
        involving intellectual property rights and other technology 
        transfer matters;
            (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) Small business concern.--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) Socially and economically disadvantaged small business 
        concerns.--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)).

SEC. 21807. 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 
single-purpose research facilities.

SEC. 21808. NATIONAL ACADEMY OF SCIENCES REPORT.

    Within 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 studies on--
                    (A) the obstacles to accelerating the commercial 
                application of 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 studies.

SEC. 21809. 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. 21810. LIMITS ON USE OF FUNDS.

    (a) Competitive Procedure Requirement.--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.
    (b) Congressional Notice.--At least 2 months before a contract 
award for which the Secretary intends to grant such a waiver, the 
Secretary shall submit to the Congress a report notifying the Congress 
of the waiver and setting forth the reasons for the waiver.

SEC. 21811. 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. 21812. 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. 21813. UNIVERSITY COLLABORATION.

    Not later than 2 years after the date of enactment of this Act, the 
Secretary shall transmit to the Congress a report that examines the 
feasibility of promoting collaborations between large institutions of 
higher education and small institutions of higher education through 
grants, contracts, and cooperative agreements made by the Secretary for 
energy projects. The Secretary shall also consider providing incentives 
for the inclusion of small institutions of higher education, including 
minority-serving institutions, in energy research grants, contracts, 
and cooperative agreements.

SEC. 21814. FEDERAL LABORATORY EDUCATIONAL PARTNERS.

    (a) Distribution of Royalties Received by Federal Agencies.--
Section 14(a)(1)(B)(v) of the Stevenson-Wydler Technology Innovation 
Act of 1980 (15 U.S.C. 3710c(a)(1)(B)(v)), is amended to read as 
follows:
                    ``(v) for scientific research and development and 
                for educational assistance and other purposes 
                consistent with the missions and objectives of the 
                Department of Energy and the laboratory.''.
    (b) Cooperative Research and Development Agreements.--Section 
12(b)(5)(C) of the Stevenson-Wydler Technology Innovation Act of 1980 
(15 U.S.C. 3710a(b)(5)(C)) is amended to read as follows:
            ``(C) for scientific research and development and for 
        educational assistance consistent with the missions and 
        objectives of the Department of Energy and the laboratory.''.

SEC. 21815. INTERAGENCY COOPERATION.

    The Secretary shall enter into discussions with the Administrator 
of the National Aeronautics and Space Administration with the goal of 
reaching an interagency working agreement between the 2 agencies that 
would make the National Aeronautics and Space Administration's 
expertise in energy, gained from its existing and planned programs, 
more readily available to the relevant research, development, 
demonstration, and commercial applications programs of the Department. 
Technologies to be discussed should include the National Aeronautics 
and Space Administration's modeling, research, development, testing, 
and evaluation of new energy technologies, including solar, wind, fuel 
cells, and hydrogen storage and distribution.

               TITLE II--DEPARTMENT OF ENERGY MANAGEMENT

SEC. 22001. EXTERNAL REGULATION OF DEPARTMENT OF ENERGY.

    (a) Department of Energy Report.--Not later than 18 months after 
the date of enactment of this Act, the Secretary shall transmit to the 
Congress a report on the assumption by the Nuclear Regulatory 
Commission of the Department's regulatory and enforcement 
responsibilities with respect to nuclear safety, and the assumption by 
the Occupational Safety and Health Administration of the Department's 
regulatory and enforcement responsibilities with respect to 
occupational safety and health, at any nonmilitary energy laboratory 
owned or operated by the Department. The report shall include--
            (1) a detailed transition plan, drafted in coordination 
        with the Nuclear Regulatory Commission and the Occupational 
        Safety and Health Administration, for termination of self-
        regulation authority, including the activities to be 
        coordinated with the Nuclear Regulatory Commission and the 
        Occupational Safety and Health Administration;
            (2) a description of any issues that would require 
        resolution with the Nuclear Regulatory Commission, the 
        Occupational Safety and Health Administration, or other 
        external regulators; and
            (3) an estimate of--
                    (A) the annual cost of administering and 
                implementing external regulation of the nuclear safety 
                and occupational safety and health responsibilities at 
                nonmilitary energy laboratories owned or operated by 
                the Department;
                    (B) the number of Federal and contractor employees 
                required to administer and implement such external 
                regulation; and
                    (C) the extent and schedule by which the Department 
                and the staffs at its nonmilitary energy laboratories 
                would be reduced, and the anticipated cost savings from 
                that reduction.
    (b) General Accounting Office Reporting Requirement.--The 
Comptroller General shall provide a report not later than 20 months 
after the date of enactment of this Act that compares the Department's 
transition plan with the Department's implementation of nuclear safety 
and occupational safety and health responsibilities under sections 234A 
and 234C of the Atomic Energy Act of 1954.

SEC. 22002. IMPROVED COORDINATION AND MANAGEMENT OF CIVILIAN SCIENCE 
              AND TECHNOLOGY PROGRAMS.

    (a) Reconfiguration of Position of Director of the Office of 
Science.--Section 209 of the Department of Energy Organization Act (42 
U.S.C. 7139) is amended by--
            (1) striking ``a Director'' and inserting ``an Assistant 
        Secretary, in addition to those appointed under section 
        203(a),''; and
            (2) striking ``Director'' and inserting ``Assistant 
        Secretary''.
    (b) Technical and Conforming Amendments.--(1) 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 (7)''.
    (2) 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. 22003. REPORT ON EQUAL EMPLOYMENT OPPORTUNITY PRACTICES.

    Not later than twelve months after the date of enactment of this 
Act, and biennially thereafter, the Secretary shall transmit to 
Congress a report on the equal employment opportunity practices at 
Department of Energy National laboratories. Such report shall include--
            (1) a thorough review of each laboratory contractor's equal 
        employment opportunity policies, including promotion to 
        management and professional positions and pay raises;
            (2) a statistical report on complaints and their 
        disposition in the laboratories;
            (3) a description of how equal employment opportunity 
        practices at the laboratories are treated in the contract and 
        in calculating award fees for each contractor;
            (4) a summary of disciplinary actions and their disposition 
        by either the Department or the relevant contractors for each 
        laboratory;
            (5) a summary of outreach efforts to attract women and 
        minorities to the laboratories;
            (6) a summary of efforts to retain women and minorities in 
        the laboratories; and
            (7) a summary of collaboration efforts with the Office of 
        Federal Contract Compliance Programs to improve equal 
        employment opportunity practices at the laboratories.

SEC. 22004. SENSE OF CONGRESS.

    It is the sense of the Congress that--
            (1) the Secretary of Energy should develop and implement 
        more stringent procurement and inventory controls, including 
        controls on the purchase card program, to prevent waste, fraud, 
        and abuse of taxpayer funds by employees and contractors of the 
        Department of Energy; and
            (2) the Department's Inspector General should continue to 
        closely review purchase card purchases and other procurement 
        and inventory practices at the Department.

                     TITLE III--CLEAN SCHOOL BUSES

SEC. 23001. ESTABLISHMENT OF PILOT PROGRAM.

    (a) Establishment.--The Secretary of Energy, in consultation with 
the Administrator of the Environmental Protection Agency, shall 
establish a pilot program for awarding grants on a competitive basis to 
eligible entities for the demonstration and commercial application of 
alternative fuel school buses and ultra-low sulfur diesel school buses.
    (b) Requirements.--Not later than 3 months after the date of the 
enactment of this Act, the Secretary shall establish and publish in the 
Federal register grant requirements on eligibility for assistance, and 
on implementation of the program established under subsection (a), 
including certification requirements to ensure compliance with this 
title.
    (c) Solicitation.--Not later than 6 months after the date of the 
enactment of this Act, the Secretary shall solicit proposals for grants 
under this section.
    (d) Eligible Recipients.--A grant shall be awarded under this 
section only--
            (1) to a local or State governmental entity responsible for 
        providing school bus service to one or more public school 
        systems or responsible for the purchase of school buses; or
            (2) to a contracting entity that provides school bus 
        service to one or more public school systems, if the grant 
        application is submitted jointly with the school system or 
        systems which the buses will serve.
    (e) Types of Grants.--
            (1) In general.--Grants under this section shall be for the 
        demonstration and commercial application of technologies to 
        facilitate the use of alternative fuel school buses and ultra-
        low sulfur diesel school buses in lieu of buses manufactured 
        before model year 1977 and diesel-powered buses manufactured 
        before model year 1991.
            (2) No economic benefit.--Other than the receipt of the 
        grant, a recipient of a grant under this section may not 
        receive any economic benefit in connection with the receipt of 
        the grant.
            (3) Priority of grant applications.--The Secretary shall 
        give priority to awarding grants to applicants who can 
        demonstrate the use of alternative fuel buses and ultra-low 
        sulfur diesel school buses in lieu of buses manufactured before 
        model year 1977.
    (f) Conditions of Grant.--A grant provided under this section shall 
include the following conditions:
            (1) All buses acquired with funds provided under the grant 
        shall be operated as part of the school bus fleet for which the 
        grant was made for a minimum of 5 years.
            (2) Funds provided under the grant may only be used--
                    (A) to pay the cost, except as provided in 
                paragraph (3), of new alternative fuel school buses or 
                ultra-low sulfur diesel school buses, including State 
                taxes and contract fees; and
                    (B) to provide--
                            (i) up to 10 percent of the price of the 
                        alternative fuel buses acquired, for necessary 
                        alternative fuel infrastructure if the 
                        infrastructure will only be available to the 
                        grant recipient; and
                            (ii) up to 15 percent of the price of the 
                        alternative fuel buses acquired, for necessary 
                        alternative fuel infrastructure if the 
                        infrastructure will be available to the grant 
                        recipient and to other bus fleets.
            (3) The grant recipient shall be required to provide at 
        least the lesser of 15 percent of the total cost of each bus 
        received or $15,000 per bus.
            (4) In the case of a grant recipient receiving a grant to 
        demonstrate ultra-low sulfur diesel school buses, the grant 
        recipient shall be required to provide documentation to the 
        satisfaction of the Secretary that diesel fuel containing 
        sulfur at not more than 15 parts per million is available for 
        carrying out the purposes of the grant, and a commitment by the 
        applicant to use such fuel in carrying out the purposes of the 
        grant.
    (g) Buses.--Funding under a grant made under this section may be 
used to demonstrate the use only of new alternative fuel school buses 
or ultra-low sulfur diesel school buses--
            (1) with a gross vehicle weight of greater than 14,000 
        pounds;
            (2) that are powered by a heavy duty engine;
            (3) that, in the case of alternative fuel school buses 
        manufactured in model years 2003 through 2006, emit not more 
        than 1.8 grams per brake horsepower-hour of nonmethane 
        hydrocarbons and oxides of nitrogen and .01 grams per brake 
        horsepower-hour of particulate matter; and
            (4) that, in the case of ultra-low sulfur diesel school 
        buses, emit not more than--
                    (A) for buses manufactured in model year 2003, 3.0 
                grams per brake horsepower-hour of oxides of nitrogen 
                and .01 grams per brake horsepower-hour of particulate 
                matter; and
                    (B) for buses manufactured in model years 2004 
                through 2006, 2.5 grams per brake horsepower-hour of 
                nonmethane hydrocarbons and oxides of nitrogen and .01 
                grams per brake horsepower-hour of particulate matter,
        except that under no circumstances shall buses be acquired 
        under this section that emit nonmethane hydrocarbons, oxides of 
        nitrogen, or particulate matter at a rate greater than the best 
        performing technology of the same class of ultra-low sulfur 
        diesel school buses commercially available at the time the 
        grant is made.
    (h) Deployment and Distribution.--The Secretary shall seek to the 
maximum extent practicable to achieve nationwide deployment of 
alternative fuel school buses and ultra-low sulfur diesel school buses 
through the program under this section, and shall ensure a broad 
geographic distribution of grant awards, with a goal of no State 
receiving more than 10 percent of the grant funding made available 
under this section for a fiscal year.
    (i) Limit on Funding.--The Secretary shall provide not less than 20 
percent and not more than 25 percent of the grant funding made 
available under this section for any fiscal year for the acquisition of 
ultra-low sulfur diesel school buses.
    (j) Reduction of School Bus Idling.--Each local educational agency 
(as defined in section 9101 of the Elementary and Secondary Education 
Act of 1965 (20 U.S.C. 7801)) that receives Federal funds under the 
Elementary and Secondary Education Act of 1965 (20 U.S.C. 6301 et seq.) 
is encouraged to develop a policy, consistent with the health, safety, 
and welfare of students and the proper operation and maintenance of 
school buses, to reduce the incidence of unnecessary school bus idling 
at schools when picking up and unloading students.
    (k) Annual Report.--Not later than January 31 of each year, the 
Secretary of Energy shall provide a report evaluating implementation of 
the program under this title to the Congress. Such report shall include 
the total number of grant applications received, the number and types 
of alternative fuel buses and ultra-low sulfur diesel school buses 
requested in grant applications, a list of grants awarded and the 
criteria used to select the grant recipients, certified engine emission 
levels of all buses purchased under the program, and any other 
information the Secretary considers appropriate.
    (l) Definitions.--For purposes of this section--
            (1) the term ``alternative fuel school bus'' means a bus 
        powered substantially by electricity (including electricity 
        supplied by a fuel cell), or by liquefied natural gas, 
        compressed natural gas, liquefied petroleum gas, hydrogen, 
        propane, or methanol or ethanol at no less than 85 percent by 
        volume;
            (2) the term ``idling'' means operating an engine while 
        remaining stationary for more than approximately 15 minutes, 
        except that such term does not apply to routine stoppages 
        associated with traffic movement or congestion; and
            (3) the term ``ultra-low sulfur diesel school bus'' means a 
        school bus powered by diesel fuel which contains sulfur at not 
        more than 15 parts per million.

SEC. 23002. FUEL CELL BUS DEVELOPMENT AND DEMONSTRATION PROGRAM.

    (a) Establishment of Program.--The Secretary shall establish a 
program for entering into cooperative agreements with private sector 
fuel cell bus developers for the development of fuel cell-powered 
school buses, and subsequently with not less than 2 units of local 
government using natural gas-powered school buses and such private 
sector fuel cell bus developers to demonstrate the use of fuel cell-
powered school buses.
    (b) Cost Sharing.--The non-Federal contribution for activities 
funded under this section shall be not less than--
            (1) 20 percent for fuel infrastructure development 
        activities; and
            (2) 50 percent for demonstration activities and for 
        development activities not described in paragraph (1).
    (c) Funding.--No more than $25,000,000 of the amounts authorized 
under section 23004(a) may be used for carrying out this section for 
the period encompassing fiscal years 2004 through 2006.
    (d) Reports to Congress.--Not later than 3 years after the date of 
the enactment of this Act, and not later than October 1, 2006, the 
Secretary shall transmit to the Congress a report that--
            (1) evaluates the process of converting natural gas 
        infrastructure to accommodate fuel cell-powered school buses; 
        and
            (2) assesses the results of the development and 
        demonstration program under this section.

SEC. 23003. DIESEL RETROFIT PROGRAM.

    (a) Establishment.--The Administrator of the Environmental 
Protection Agency and the Secretary shall establish a pilot program for 
awarding grants on a competitive basis to eligible recipients for the 
demonstration and commercial application of retrofit technologies for 
diesel school buses.
    (b) Eligible Recipients.--A grant shall be awarded under this 
section only--
            (1) to a local or State governmental entity responsible for 
        providing school bus service to one or more public school 
        systems; or
            (2) to a contracting entity that provides school bus 
        service to one or more public school systems, if the grant 
        application is submitted jointly with the school system or 
        systems which the buses will serve.
    (c) Conditions of Grant.--A grant provided under this section may 
be used only to demonstrate the use of retrofit emissions-control 
technology on diesel buses that--
            (1) operate on ultra-low sulfur diesel fuel; and
            (2) were manufactured in model year 1991 or later.
    (d) Verification.--Not later than 3 months after the date of 
enactment of this Act, the Administrator shall publish in the Federal 
Register procedures to verify--
            (1) the retrofit emissions-control technology to be 
        demonstrated; and
            (2) that buses on which retrofit emissions-control 
        technology are to be demonstrated will operate on diesel fuel 
        containing not more than 15 parts per million of sulfur.

SEC. 23004. AUTHORIZATION OF APPROPRIATIONS.

    (a) School Bus Grants.--There are authorized to be appropriated to 
the Secretary for carrying out this title, to remain available until 
expended--
            (1) $90,000,000 for fiscal year 2004;
            (2) $100,000,000 for fiscal year 2005; and
            (3) $110,000,000 for fiscal year 2006.
    (b) Retrofit Grants.--There are authorized to be appropriated to 
the Administrator of the Environmental Protection Agency and the 
Secretary such sums as may be necessary for carrying out section 23003.

                         DIVISION C--RESOURCES

                         TITLE I--INDIAN ENERGY

SEC. 30101. 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.

    ``In this title:
            ``(1) Indian.--The term `Indian' means an individual member 
        of an Indian tribe who owns land or an interest in land, the 
        title to which land--
                    ``(A) is held in trust by the United States; or
                    ``(B) is subject to a restriction against 
                alienation imposed by the United States.
            ``(2) Indian land.--The term `Indian land' means--
                    ``(A) any land located within the boundaries of an 
                Indian reservation, pueblo, or rancheria; or
                    ``(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.
            ``(3) Indian reservation.--The term `Indian reservation' 
        includes--
                    ``(A) an Indian reservation in existence as of the 
                date of the enactment of this paragraph;
                    ``(B) a public domain Indian allotment;
                    ``(C) a former reservation in the State of 
                Oklahoma; and
                    ``(D) 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) Indian tribe.--The term `Indian tribe' has the 
        meaning given that term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 450b), 
        except the term, for the purposes of this title, shall not 
        include any Native Corporation.
            ``(5) Native corporation.--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) Secretary.--The term `Secretary' means the Secretary 
        of the Interior.
            ``(7) Tribal consortium.--The term `tribal consortium' 
        means an organization that consists of at least 3 entities, at 
        least 1 of which is an Indian tribe.

``SEC. 2602. INDIAN TRIBAL RESOURCE REGULATION.

    ``To the maximum extent practicable, the Secretary and the 
Secretary of Energy shall make available to Indian tribes, tribal 
consortia, and Native Corporations scientific and technical data for 
use in the development and management of energy resources on Indian 
land and on land conveyed to a Native Corporation.

``SEC. 2603. LEASES, BUSINESS AGREEMENTS, AND RIGHTS-OF-WAY INVOLVING 
              ENERGY DEVELOPMENT OR TRANSMISSION.

    ``(a) In General.--Notwithstanding any other provision of law--
            ``(1) an Indian or Indian tribe may 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; and
                    ``(B) construction or operation of--
                            ``(i) an electric generation, transmission, 
                        or distribution facility located on Indian 
                        land; or
                            ``(ii) a facility to process or refine 
                        energy resources developed on Indian land; and
            ``(2) a lease or business agreement described in paragraph 
        (1) shall not require the approval of the Secretary if--
                    ``(A) the lease or business agreement is executed 
                under tribal regulations approved by the Secretary 
                under subsection (e); and
                    ``(B) the term of the lease or business agreement 
                does not exceed 30 years.
    ``(b) Rights-of-Way for Pipelines or Electric Transmission or 
Distribution Lines.--An Indian tribe may grant a right-of-way over the 
Indian land of the Indian tribe for a pipeline or an electric 
transmission or distribution line without specific approval by the 
Secretary if--
            ``(1) the right-of-way is executed under and complies with 
        tribal regulations approved by the Secretary under subsection 
        (e);
            ``(2) the term of the right-of-way does not exceed 30 
        years; and
            ``(3) the pipeline or electric transmission or distribution 
        line serves--
                    ``(A) an electric generation, transmission, or 
                distribution facility located on Indian land; or
                    ``(B) a facility located on Indian land that 
                processes or refines renewable or nonrenewable energy 
                resources developed on Indian land.
    ``(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 regulations 
approved by the Secretary under subsection (e).
    ``(e) Tribal Regulatory Requirements.--
            ``(1) In general.--An Indian tribe may submit to the 
        Secretary for approval tribal regulations governing leases, 
        business agreements, and rights-of-way under this section.
            ``(2) Approval or disapproval.--
                    ``(A) In general.--Not later than 120 days after 
                the date on which the Secretary receives tribal 
                regulations 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 regulations.
                    ``(B) Conditions for approval.--The Secretary shall 
                approve tribal regulations submitted under paragraph 
                (1) only if the regulations include 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; and
                            ``(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.
                    ``(C) Environmental review process.--Tribal 
                regulations submitted under paragraph (1) shall 
                establish, and include provisions to ensure compliance 
                with, an environmental review process that, with 
                respect to a lease, business agreement, or right-of-way 
                under this section, provides for--
                            ``(i) the identification and evaluation of 
                        all significant environmental impacts (as 
                        compared with a no-action alternative);
                            ``(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 
                        a lease, business agreement, or right-of-way); 
                        and
                            ``(iv) sufficient administrative support 
                        and technical capability to carry out the 
                        environmental review process.
            ``(3) Public participation.--The Secretary may provide 
        notice and opportunity for public comment on tribal regulations 
        submitted under paragraph (1).
            ``(4) Disapproval.--If the Secretary disapproves tribal 
        regulations 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 regulations.
            ``(5) Execution of lease or business agreement or granting 
        of right-of-way.--If an Indian tribe executes a lease or 
        business agreement or grants a right-of-way in accordance with 
        tribal regulations approved under this subsection, the Indian 
        tribe shall 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 tribal regulations 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) Liability.--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 
        regulations approved under this subsection.
            ``(7) compliance review.--
                    ``(A) In general.--After exhaustion of tribal 
                remedies, any person may submit to the Secretary, in a 
                timely manner, a petition to review compliance of an 
                Indian tribe with tribal regulations of the Indian 
                tribe approved under this subsection.
                    ``(B) Action by secretary.--The Secretary shall--
                            ``(i) not later than 60 days after the date 
                        on which the Secretary receives a petition 
                        under subparagraph (A), review compliance of an 
                        Indian tribe described in subparagraph (A); and
                            ``(ii) on completion of the review, if the 
                        Secretary determines that an Indian tribe is 
                        not in compliance with tribal regulations 
                        approved under this subsection, take such 
                        action as is necessary to compel compliance, 
                        including--
                                    ``(I)(aa) rescinding a lease, 
                                business agreement, or right-of-way 
                                under this section; or
                                    ``(bb) suspending a lease, business 
                                agreement, or right-of-way under this 
                                section until an Indian tribe is in 
                                compliance with tribal regulations; and
                                    ``(II) rescinding approval of the 
                                tribal regulations and reassuming the 
                                responsibility for approval of leases, 
                                business agreements, or rights-of-way 
                                associated with an energy pipeline or 
                                distribution line described in 
                                subsection (b).
                    ``(C) Compliance.--If the Secretary seeks to compel 
                compliance of an Indian tribe with tribal regulations 
                under subparagraph (B)(ii), the Secretary shall--
                            ``(i) make a written determination that 
                        describes the manner in which the tribal 
                        regulations have 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 (B)(ii) or seeking any other 
                        remedy, provide the Indian tribe with a hearing 
                        and a reasonable opportunity to attain 
                        compliance with the tribal regulations.
                    ``(D) Appeal.--An Indian tribe described in 
                subparagraph (C) shall retain all rights to appeal as 
                provided in regulations promulgated by the Secretary.
    ``(f) Agreements.--
            ``(1) In general.--Any agreement by an Indian tribe that 
        relates to the development of an electric generation, 
        transmission, or distribution facility, or a facility to 
        process or refine renewable or nonrenewable energy resources 
        developed on Indian land, shall not require the specific 
        approval of the Secretary under section 2103 of the Revised 
        Statutes (25 U.S.C. 81) if the activity that is the subject of 
        the agreement is carried out in accordance with this section.
            ``(2) Liability.--The United States shall not be liable for 
        any loss or injury sustained by any person (including an Indian 
        tribe or any member of an Indian tribe) resulting from an 
        action taken in performance of an agreement entered into under 
        this subsection.
    ``(g) No Effect on Other Law.--Nothing in this section affects the 
application of any provision of--
            ``(1) the Act of May 11, 1938 (commonly known as the Indian 
        Mineral Leasing Act of 1938; 25 U.S.C. 396a et seq.);
            ``(2) the Indian Mineral Development Act of 1982 (25 U.S.C. 
        2101 et seq.);
            ``(3) the Surface Mining Control and Reclamation Act of 
        1977 (30 U.S.C. 1201 et seq.); or
            ``(4) any Federal environmental law.
    ``(h) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section, to 
remain available until expended.''.

                         TITLE II--OIL AND GAS

SEC. 30201. 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 royalty in-
kind accepted by the Secretary of the Interior on or after the date of 
the enactment of this Act 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 
Federal law governing leasing of Federal lands for oil and gas 
development.
    (b) Terms and Conditions.--All royalty accruing to the United 
States shall, on the demand of the Secretary of the Interior, be paid 
in oil or gas. If the Secretary of the Interior 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)(A) Royalty production shall be placed in marketable 
        condition by the lessee at no cost to the United States.
            (B) In this paragraph, the term ``in marketable condition'' 
        means sufficiently free from impurities and otherwise in a 
        condition that it will be accepted by a purchaser under a sales 
        contract typical of the field or area in which the royalty 
        production was produced.
            (3) The Secretary of the Interior 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 of the Interior 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 of the Interior 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 of the Interior 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) at the discretion of the Secretary of the Interior, 
        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 of the 
Interior 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.--By June 30, 2004, the Secretary of the 
Interior shall provide a report to the Congress that describes actions 
taken to develop an organization, business processes, and automated 
systems to support a full royalty in-kind capability to be used in 
tandem with the royalty in value approach to managing Federal oil and 
gas revenues.
    (f) Deduction of Expenses.--
            (1) In general.--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) Accounting for deductions.--If the Secretary of the 
        Interior 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 of the Interior--
            (1) shall consult with a State before conducting a royalty 
        in-kind program under this title 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) shall consult 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 in-kind 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) Preference.--If the Secretary of the Interior 
        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) Proration among refineries in production area.--In 
        disposing of oil under this subsection, the Secretary of the 
        Interior may, at the discretion of the Secretary, prorate such 
        oil among such refineries in the area in which the oil is 
        produced.
    (i) Disposition to Federal Agencies.--
            (1) Onshore royalty.--Any royalty oil or gas taken by the 
        Secretary of the Interior in-kind from onshore oil and gas 
        leases may be sold at not less than the market price to any 
        department or agency of the United States.
            (2) Offshore royalty.--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. 30202. CLARIFICATION OF FAIR MARKET RENTAL VALUE DETERMINATIONS 
              FOR PUBLIC LANDS AND FOREST SERVICE RIGHTS-OF-WAY.

    (a) Linear Rights-of-Way Under Federal Land Policy and Management 
Act.--Section 504 of the Federal Land Policy and Management Act of 1976 
(43 U.S.C. 1764) is amended by adding at the end the following:
    ``(k) Determination of Fair Market Value of Linear Rights-of-Way.--
(1) Effective upon the issuance of the rules required by paragraph (2), 
for purposes of subsection (g), the Secretary concerned shall determine 
the fair market rental for the use of land encumbered by a linear 
right-of-way granted, issued, or renewed under this title using the 
valuation method described in paragraphs (2), (3), and (4).
    ``(2) Not later than 1 year after the date of enactment of this 
subsection, and in accordance with subsection (k), the Secretary of the 
Interior shall amend section 2803.1-2 of title 43, Code of Federal 
Regulations, as in effect on the date of enactment of this subsection, 
to revise the per acre rental fee zone value schedule by State, county, 
and type of linear right-of-way use to reflect current values of land 
in each zone. The Secretary of Agriculture shall make the same 
revisions for linear rights-of-way granted, issued, or renewed under 
this title on National Forest System lands.
    ``(3) The Secretary concerned shall update annually the schedule 
revised under paragraph (2) by multiplying the current year's rental 
per acre by the annual change, second quarter to the second quarter 
(June 30 to June 30) in the Gross National Product Implicit Price 
Deflator Index published in the Survey of Current Business of the 
Department of Commerce, Bureau of Economic Analysis.
    ``(4) Whenever the cumulative change in the index referred to in 
paragraph (3) exceeds 30 percent, or the change in the 3-year average 
of the 1-year Treasury interest rate used to determine per acre rental 
fee zone values exceeds plus or minus 50 percent, the Secretary 
concerned shall conduct a review of the zones and rental per acre 
figures to determine whether the value of Federal land has differed 
sufficiently from the index referred to in paragraph (3) to warrant a 
revision in the base zones and rental per acre figures. If, as a result 
of the review, the Secretary concerned determines that such a revision 
is warranted, the Secretary concerned shall revise the base zones and 
rental per acre figures accordingly.''.
    (b) Rights-of-Way Under Mineral Leasing Act.--Section 28(l) of the 
Mineral Leasing Act (30 U.S.C. 185(l)) is amended by inserting before 
the period at the end the following: ``using the valuation method 
described in section 2803.1-2 of title 43, Code of Federal Regulations, 
as revised pursuant to section 504(k) of the Federal Land Policy and 
Management Act of 1976 (43 U.S.C. 1764(k))''.

SEC. 30203. USGS ESTIMATES OF OIL AND GAS RESOURCES UNDERLYING ONSHORE 
              FEDERAL LANDS.

    Section 604(a) of the Energy Act of 2000 (42 U.S.C. 6217) is 
amended--
            (1) in subsection (a)(1)--
                    (A) by striking ``reserve''; and
                    (B) by striking ``and'' after the semicolon;
            (2) by striking subsection (a)(2) and inserting the 
        following:
            ``(2) the extent and nature of any restrictions or 
        impediments to the development of such resources, including--
                    ``(A) impediments to the timely granting of leases; 
                and
                    ``(B) post-lease restrictions, impediments, or 
                delays on development, involving conditions of 
                approval, applications for permits to drill, or 
                processing of environmental permits; and
                    ``(C) permits or restrictions associated with 
                transporting the resources for entry into commerce; and
            ``(3) the amount of resources not produced or introduced 
        into commerce because of those restrictions.''; and
            (3) in subsection (b)--
                    (A) by striking ``reserve'' and inserting 
                ``resource''; and
                    (B) by striking ``publically'' and inserting 
                ``publicly''.

SEC. 30204. ROYALTY INCENTIVES FOR CERTAIN OFFSHORE AREAS.

    (a) Outer Continental Shelf Shallow Water Deep Gas Royalty 
Relief.--
            (1) Short title.--This subsection may be cited as the 
        ``Outer Continental Shelf Shallow Water Deep Gas Royalty Relief 
        Act''.
            (2) Purposes.--The purposes of this subsection are the 
        following:
                    (A) To accelerate natural gas exploration, 
                development, and production from wells drilled to deep 
                depths on existing shallow water lease tracts on the 
                Outer Continental Shelf.
                    (B) To provide royalty incentives for the 
                production of natural gas from such tracts.
                    (C) To provide royalty incentives for development 
                of new technologies and the exploration and development 
                of the new frontier of deep drilling on the Outer 
                Continental Shelf.
            (3) Royalty incentives under existing leases for production 
        of deep gas in shallow water in the gulf of mexico.--
                    (A) Suspension of royalties.--
                            (i) In general.--The Secretary of the 
                        Interior shall grant royalty relief for natural 
                        gas produced under leases issued under the 
                        Outer Continental Shelf Lands Act (43 U.S.C. 
                        1301 et seq.) prior to January 1, 2001, from 
                        deep wells on oil and gas lease tracts in 
                        shallow waters of the Gulf of Mexico located 
                        wholly west of 87 degrees, 30 minutes west 
                        longitude.
                            (ii) Amount of relief.--The Secretary shall 
                        grant royalty relief to eligible leases in the 
                        following amounts:
                                    (I) A suspension volume of at least 
                                15 billion cubic feet of natural gas 
                                produced from a successful deep well 
                                with a total vertical depth of 15,000 
                                feet to 17,999 feet.
                                    (II) A suspension volume of at 
                                least 25 billion cubic feet of natural 
                                gas produced from a successful deep 
                                well with a total vertical depth of 
                                18,000 feet to 19,999 feet.
                                    (III) A suspension volume of at 
                                least 35 billion cubic feet of natural 
                                gas produced from any ultra deep well.
                                    (IV) A suspension volume of at 
                                least 5 billion cubic feet of natural 
                                gas per well for up to 2 unsuccessful 
                                wells drilled to a depth of at least 
                                18,000 feet on a lease tract that 
                                subsequently produces natural gas from 
                                a successful deep well.
                            (iii) Limitation.--The Secretary shall not 
                        grant the royalty incentives outlined in this 
                        subparagraph if the average annual NYMEX 
                        natural gas price exceeds for one full calendar 
                        year the threshold price of $5 per million Btu, 
                        adjusted from the year 2000 for inflation.
                    (B) Definitions.--For purposes of this paragraph:
                            (i) The term ``deep well'' means a well 
                        drilled with a perforated interval, the top of 
                        which is at least 15,000 feet true vertical 
                        depth below the datum at mean sea level.
                            (ii) The term ``eligible lease'' means a 
                        lease that--
                                    (I) was issued in a lease sale held 
                                before January 1, 2001;
                                    (II) is for a tract located in the 
                                Gulf of Mexico entirely in water depths 
                                less than 200 meters on a block wholly 
                                west of 87 degrees, 30 minutes west 
                                longitude; and
                                    (III) is for a tract that has not 
                                produced gas or oil from a well that 
                                commenced drilling before March 26, 
                                2003, with a completion 15,000 feet 
                                true vertical depth below the datum at 
                                mean sea level or deeper.
                            (iii) The term ``shallow water'' means 
                        water less than 200 meters deep.
                            (iv) The term ``ultra deep well'' means a 
                        well 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.
            (4) Sunset.--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.
    (b) Deep Water Areas.--Section 8(a) of the Outer Continental Shelf 
Lands Act (43 U.S.C. 1337(a)) is amended by adding at the end the 
following:
    ``(9)(A) 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, and for all tracts in a frontier area offshore 
Alaska, any oil or gas lease sale under this Act occurring after the 
date of the enactment of this paragraph and before July 1, 2007, shall 
use the bidding system authorized in paragraph (1)(H), except that the 
suspension of royalties shall be set at a volume of not less than the 
following:
            ``(i) 5 million barrels of oil equivalent for each lease in 
        water depths of 400 to 800 meters.
            ``(ii) 9 million barrels of oil equivalent for each lease 
        in water depths of 800 to 1,600 meters.
            ``(iii) 12 million barrels of oil equivalent for each lease 
        in water depths greater than 1,600 meters.
    ``(B) For purposes of this paragraph, the term `frontier area 
offshore Alaska' includes, at a minimum, those areas offshore Alaska 
with seasonal ice, long distances to existing pipelines and ports, or a 
lack of production infrastructure.''.
    (c) Application of Other Existing Authority to Offshore Alaska.--
Section 8(a)(3)(B) of the Outer Continental Shelf Lands Act (43 U.S.C. 
1337(a)(3)(B)) is amended--
            (1) by striking ``and the portion'' and inserting ``, the 
        portion''; and
            (2) by inserting after ``longitude,'' the following: ``and 
        in the planning areas offshore Alaska,''.
    (d) Relationship to Existing Authority.--Except as expressly 
provided in this section, nothing in this section is intended to limit 
the authority of the Secretary of the Interior under the Outer 
Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) to provide royalty 
suspension.
    (e) Savings Clause.--Nothing in this section shall be construed to 
affect any offshore preleasing, leasing, or development moratorium, 
including any moratorium applicable to the Eastern Planning Area of the 
Gulf of Mexico located off the Gulf Coast of Florida.

SEC. 30205. MARGINAL PROPERTY PRODUCTION INCENTIVES.

    (a) Purpose.--The purpose of this section is to provide to 
independent producers incentives for extended production from Federal 
oil and gas leases that are still producible but approaching 
abandonment due to economic factors.
    (b) Marginal Property Defined.--
            (1) In general.--Until such time as the Secretary of the 
        Interior promulgates rules under subsection (f) that prescribe 
        a different definition, for purposes of the royalty relief 
        granted under 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.
            (2) Calculation of average per well production.--In 
        calculating the average per well production under paragraph 
        (1), the lessee and the Secretary shall--
                    (A) include those wells that produce more than half 
                the days in the three most recent production months; 
                and
                    (B) calculate the average over the three most 
                recent production months.
    (c) Conditions for Reduction of Royalty Rate.--Until such time as 
the Secretary of the Interior promulgates rules under subsection (f) 
that prescribe different thresholds or standards--
            (1) the Secretary shall, upon request by the operator of a 
        marginal property who is an independent producer, reduce the 
        royalty rate on oil production from the marginal property as 
        prescribed in subsection (d) 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) the Secretary shall, upon request by the operator of a 
        marginal property who is an independent producer, reduce the 
        royalty rate on gas production from the marginal property to 
        the rate prescribed in subsection (d) when the spot price of 
        natural gas delivered at Henry Hub, Louisiana, is, on average, 
        less than $2 per million British thermal units for 90 
        consecutive trading days.
    (d) Reduced Royalty Rate.--
            (1) In general.--The reduced royalty rate under this 
        subsection 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) Effective date.--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 (c) is met.
    (e) Termination of Reduced Royalty Rate.--A royalty rate prescribed 
in subsection (d)(1) shall terminate--
            (1) for 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 (b); and
            (2) for 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 per 
                million British thermal units for 90 consecutive 
                trading days, or
                    (B) the property no longer qualifies as a marginal 
                property under subsection (b).
    (f) Rules Prescribing Different Relief.--
            (1) In general.--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 
        (b) through (d).
            (2) Marginal properties.--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--
                    (A) by rule 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) by rule define what constitutes a marginal 
                property on the outer Continental Shelf for purposes of 
                this section.
            (3) Considerations.--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;
                    (F) regional differences in average wellhead 
                prices;
                    (G) national energy security issues; and
                    (H) other relevant matters.
    (g) 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.
    (h) Independent Producer Defined.--In this section the term 
``independent producer'' means a person who is not an integrated oil 
company, as that term is defined in section 219(b)(4) of the Internal 
Revenue Code of 1986 (26 U.S.C. 291(b)(4)).

SEC. 30206. FEDERAL ONSHORE OIL AND GAS LEASING AND PERMITTING 
              PRACTICES.

    (a) Review of Onshore Oil and Gas Leasing Practices.--The Secretary 
of the Interior, in cooperation with the Secretary of Agriculture with 
respect to National Forest System lands under the jurisdiction of the 
Department of Agriculture, shall perform an internal review of Federal 
onshore oil and gas leasing and permitting practices. The review shall 
include the following:
            (1) The process by which Federal land managers accept or 
        reject an offer to lease, including the timeframes in which 
        such offers are acted upon, and any recommendations for 
        improving and expediting the process.
            (2) The process for considering applications for permits to 
        drill, including the timeframes in which such applications are 
        considered, and any recommendations for improving and 
        expediting the process.
            (3) The process for considering surface use plans of 
        operation, including the timeframes in which such plans are 
        considered, and any recommendations for improving and 
        expediting the process.
            (4) The process for administrative appeal of decisions or 
        orders of officers or employees of the Bureau of Land 
        Management with respect to a Federal oil or gas lease, 
        including the timeframes in which such appeals are heard and 
        decided, and any recommendations for improving and expediting 
        the process.
            (5) The process by which Federal land managers identify 
        stipulations to address site-specific concerns and conditions, 
        including those relating to the environment and resource use 
        conflicts, whether stipulations are effective in addressing 
        resource values, and any recommendations for expediting and 
        improving the identification and effectiveness of stipulations.
            (6) The process by which the Federal land management 
        agencies coordinate planning and analysis with planning of 
        Federal, State, and local agencies having jurisdiction over 
        adjacent areas and other land uses, and any recommendations for 
        improving and expediting the process.
            (7) The documentation provided to lease applicants and 
        lessees with respect to determinations to reject lease 
        applications or to require modification of proposed surface use 
        plans of operation and recommendations regarding improvement of 
        such documentation to more clearly set forth the basis for the 
        decision.
    (b) Report.--The Secretaries shall report to the Committee on 
Resources of the House of Representatives and to the Committee on 
Energy and Natural Resources of the Senate no later than 1 year after 
the date of the enactment of this Act, summarizing the findings of 
their respective reviews undertaken pursuant to this section and the 
actions they have taken or plan to take to improve the Federal onshore 
oil and gas leasing program.

SEC. 30207. MANAGEMENT OF FEDERAL OIL AND GAS LEASING PROGRAMS.

    (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 the public; and
            (3) improve the collection, storage, and retrieval of 
        information related to such leasing activities.
    (b) Best Management Practices.--
            (1) In general.--Within 18 months after the date of 
        enactment of this Act, the Secretary of the Interior shall 
        develop and implement best management practices to improve the 
        administration of the onshore oil and gas leasing program 
        pursuant to the Mineral Leasing Act (30 U.S.C. 181, et seq.) 
        and ensure timely action on oil and gas leases and applications 
        for permits to drill on lands otherwise available for leasing.
            (2) Consideration and consultation.--In developing such 
        best management practices the Secretary shall consider the 
        recommendations resulting from the review under section 30206.
            (3) Regulations.--Within 180 days after the development of 
        best management practices under paragraph (1), the Secretary 
        shall publish for public comment proposed regulations that set 
        forth specific timeframes for processing leases and 
        applications in accordance with those practices, including 
        deadlines for--
                    (A) approving or disapproving--
                            (i) resource management plans and related 
                        documents;
                            (ii) lease applications;
                            (iii) applications for permits to drill; 
                        and
                            (iv) surface use plans; and
                    (B) related administrative appeals.

SEC. 30208. CONSULTATION REGARDING OIL AND GAS LEASING ON PUBLIC LANDS.

    (a) In General.--Not later than six months after the date of 
enactment of this Act, 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 
oil and gas leasing on public lands within the jurisdiction of the 
Secretary of the Interior and National Forest System lands within the 
jurisdiction of the Secretary of Agriculture.
    (b) Contents.--The memorandum of understanding shall include 
provisions that--
            (1) establish an administrative procedure for timely 
        processing of oil and gas lease applications, including lines 
        of authority, steps in application processing, and timeframes 
        for application processing;
            (2) establish an administrative procedure for timely 
        processing of surface use plans of operation and applications 
        for permits to drill, including lines of authority and steps 
        for processing such plans and applications within 30 days after 
        receipt by the Secretary concerned;
            (3) provide for coordination of planning relating to oil 
        and gas development;
            (4) provide for coordination of environmental compliance 
        efforts to avoid duplication of effort;
            (5) provide for coordination of use of lease stipulations 
        to achieve consistency;
            (6) ensure that lease stipulations are only as restrictive 
        as is necessary to protect the resource for which the 
        stipulations are applied; and
            (7) establish reasonable timeframes to process applications 
        for permits to drill.
    (c) Data Retrieval System.--
            (1) In general.--The Secretary of the Interior and the 
        Secretary of Agriculture shall establish a joint data retrieval 
        system that is capable of tracking applications and formal 
        requests made pursuant to procedures of the Federal onshore oil 
        and gas leasing program and providing information as to the 
        status of such applications and requests within the Department 
        of the Interior and the Department of Agriculture.
            (2) Availability of data.--Data in the joint data retrieval 
        system shall be made available to the public, consistent with 
        applicable laws and regulations regarding confidentiality and 
        proprietary data.
            (3) Resource mapping.--The Secretary of the Interior and 
        the Secretary of Agriculture shall establish a joint GIS 
        mapping system for use in tracking surface resource values to 
        aid in resource management and processing of surface use plans 
        of operation and applications for permits to drill.

SEC. 30209. OIL AND GAS LEASE ACREAGE LIMITATIONS.

    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 sand 
areas'' 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. 30210. FEDERAL REIMBURSEMENT FOR ORPHAN WELL RECLAMATION.

    (a) Definitions.--In this section:
            (1) Lessee.--The term ``lessee'' means a person who owns a 
        lease, working interest, or operating rights in an oil and gas 
        lease on lands owned by the United States.
            (2) Orphan well.--The term ``orphan well'' means any oil or 
        gas well--
                    (A) that is located on lands owned by the United 
                States;
                    (B) that requires plugging and abandonment under 
                the regulations of the Department of the Interior; and
                    (C) for which the Secretary is unable to find any 
                person who is legally responsible and has the financial 
                resources to reclaim the well.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior or the Secretary's designee.
    (b) Reimbursement for Reclaiming Wells on Lands Subject to New 
Leases.--If the Secretary issues a new oil and gas lease on federally 
owned lands on which 1 or more orphaned wells are located, the 
Secretary--
            (1) may require, as a condition of the lease, that the 
        lessee reclaim pursuant to the Secretary's standards all 
        orphaned wells on the land leased; and
            (2) shall provide to the lessee a credit against royalties 
        due under the lease for 100 percent of the reasonable actual 
        costs of reclaiming the orphaned well pursuant to such 
        requirement.
    (c) Royalty Credits for Reclaiming Orphan Wells on Other Lands.--
The Secretary--
            (1) may authorize any lessee under an oil and gas lease on 
        federally owned lands to reclaim pursuant to the Secretary's 
        standards--
                    (A) an orphan well on unleased federally owned 
                lands or unleased lands on the outer Continental Shelf; 
                or
                    (B) an orphan well located on an existing lease on 
                federally owned lands or the outer Continental Shelf 
                for the reclamation of which the lessee is not legally 
                responsible; and
            (2) shall provide to the lessee a credit against royalties 
        under the lessee's lease of 115 percent of the reasonable 
        actual costs of reclaiming the orphan well.
    (d) Reporting and Application of Royalty Credits.--
            (1) In general.--Any credit against royalties required to 
        be provided to a lessee under this section may be reported 
        against royalties on production from any oil and gas lease on 
        federally owned lands, or on the outer Continental Shelf, 
        administered by the Secretary, that are owed by--
                    (A) a lessee;
                    (B) any wholly owned affiliate or wholly commonly 
                owned affiliate of a lessee; or
                    (C) any wholly owned affiliate or wholly commonly 
                owned affiliate of the person conducting the 
                reclamation work on an orphan well.
            (2) Reporting by designees.--Credits against royalties 
        required to be provided to a lessee under this section may be 
        reported by a designee (as defined in section 3 of the Federal 
        Oil and Gas Royalty Simplification and Fairness Act of 1982 (30 
        U.S.C. 1702)), when the designee reports and pays royalty on 
        behalf of the lessee.
    (e) Implementing Regulations.--The Secretary may promulgate such 
regulations as may be necessary and appropriate to implement this 
section.
    (f) Protection Against Liability.--No person who reclaims an orphan 
well under this section shall be liable under any provision of Federal 
law for any costs or damages as a result of action taken or omitted in 
the course of carrying out a reclamation plan approved by the Secretary 
under this section. This section shall not preclude liability for costs 
or damages as a result of a gross negligence or intentional misconduct 
by the person carrying out an approved reclamation plan. For purposes 
of the preceding sentence, reckless, willful, or wanton misconduct 
shall constitute gross negligence.

SEC. 30211. PRESERVATION OF GEOLOGICAL AND GEOPHYSICAL DATA.

    (a) Short Title.--This section may be cited as the ``National 
Geological and Geophysical Data Preservation Program Act of 2003''.
    (b) Program.--The Secretary of the Interior shall carry out a 
National Geological and Geophysical Data Preservation Program in 
accordance with this section--
            (1) to archive geologic, geophysical, and engineering data, 
        maps, well logs, and samples;
            (2) to provide a national catalog of such archival 
        material; and
            (3) to provide technical and financial assistance related 
        to the archival material.
    (c) Plan.--Within 1 year after the date of the enactment of this 
Act, the Secretary shall develop and submit to the Committee on 
Resources of the House of Representatives and the Committee on Energy 
and Natural Resources of the Senate a plan for the implementation of 
the Program.
    (d) Data Archive System.--
            (1) Establishment.--The Secretary shall establish, as a 
        component of the Program, a data archive system, which shall 
        provide for the storage, preservation, and archiving of 
        subsurface, surface, geological, geophysical and engineering 
        data and samples. The Secretary, in consultation with the 
        Advisory Committee, shall develop guidelines relating to the 
        data archive system, including the types of data and samples to 
        be preserved.
            (2) System components.--The system shall be comprised of 
        State agencies and agencies within the Department of the 
        Interior that maintain geological and geophysical data and 
        samples 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) Limitation of designation.--The Secretary may not 
        designate a State agency as a component of the data archive 
        system unless it is the agency that acts as the geological 
        survey in the State.
            (4) Data from federal lands.--The data archive system shall 
        provide for the archiving of relevant subsurface data and 
        samples obtained from 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.
    (e) National Catalog.--
            (1) In general.--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) data and samples available in the data archive 
                system established under subsection (d);
                    (B) the repository for particular material in such 
                system; and
                    (C) the means of accessing the material.
            (2) Availability.--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.
    (f) Advisory Committee.--
            (1) In general.--The Advisory Committee shall advise the 
        Secretary on planning and implementation of the Program.
            (2) New duties.--In addition to its duties under the 
        National Geologic Mapping Act of 1992 (43 U.S.C. 31b et seq.), 
        the Advisory Committee shall perform the following duties:
                    (A) Advise the Secretary on developing guidelines 
                and procedures for providing assistance for facilities 
                in subsection (g)(1).
                    (B) Review and critique the draft implementation 
                plan prepared by the Secretary pursuant to subsection 
                (c).
                    (C) Identify useful studies of data archived under 
                the Program that will advance understanding of the 
                Nation's energy and mineral resources, geologic 
                hazards, and engineering geology.
                    (D) Review the progress of the Program in archiving 
                significant data and preventing the loss of such data, 
                and the scientific progress of the studies funded under 
                the Program.
                    (E) Include in the annual report to the Secretary 
                required under section 5(b)(3) of the National Geologic 
                Mapping Act of 1992 (43 U.S.C. 31d(b)(3)) an evaluation 
                of the progress of the Program toward fulfilling the 
                purposes of the Program under subsection (b).
    (g) Financial Assistance.--
            (1) Archive facilities.--Subject to the availability of 
        appropriations, the Secretary shall provide financial 
        assistance to a State agency that is designated under 
        subsection (d)(2), for providing facilities to archive energy 
        material.
            (2) Studies.--Subject to the availability of 
        appropriations, the Secretary shall provide financial 
        assistance to any State agency designated under subsection 
        (d)(2) for studies that enhance understanding, interpretation, 
        and use of materials archived in the data archive system 
        established under subsection (d).
            (3) Federal share.--The Federal share of the cost of an 
        activity carried out with assistance under this subsection 
        shall be no more than 50 percent of the total cost of that 
        activity.
            (4) Private contributions.--The Secretary shall apply to 
        the non-Federal share of the cost of an activity carried out 
        with assistance under this subsection the value of private 
        contributions of property and services used for that activity.
    (h) Report.--The Secretary shall include in each report under 
section 8 of the National Geologic Mapping Act of 1992 (43 U.S.C. 
31g)--
            (1) a description of the status of the Program;
            (2) an evaluation of the progress achieved in developing 
        the Program during the period covered by the report; and
            (3) any recommendations for legislative or other action the 
        Secretary considers necessary and appropriate to fulfill the 
        purposes of the Program under subsection (b).
    (i) Definitions.--As used in this section:
            (1) Advisory committee.--The term ``Advisory Committee'' 
        means the advisory committee established under section 5 of the 
        National Geologic Mapping Act of 1992 (43 U.S.C. 31d).
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior acting through the Director of the United 
        States Geological Survey.
            (3) Program.--The term ``Program'' means the National 
        Energy Data Preservation Program carried out under this 
        section.
            (4) Survey.--The term ``Survey'' means the United States 
        Geological Survey.
    (j) 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.
    (k) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary $30,000,000 for each of fiscal years 2004 
through 2008 for carrying out this section.

SEC. 30212. COMPLIANCE WITH EXECUTIVE ORDER 13211; ACTIONS CONCERNING 
              REGULATIONS THAT SIGNIFICANTLY AFFECT ENERGY SUPPLY, 
              DISTRIBUTION, OR USE.

    (a) Requirement.--The Secretary of the Interior shall--
            (1) require that before any person takes any action that 
        could have a significant adverse effect on the supply of 
        domestic energy resources from Federal public lands, the person 
        shall comply with Executive Order No. 13211; and
            (2) within 180 days after the date of the enactment of this 
        Act, publish guidance for purposes of this section describing 
        what constitutes a significant adverse effect on the supply of 
        domestic energy resources under Executive Order No. 13211.
    (b) MOU.--The Secretary of the Interior and the Secretary of 
Agriculture shall include in the memorandum of understanding under 
section 30208 provisions regarding implementation of subsection (a)(1) 
of this section.

SEC. 30213. REIMBURSEMENT FOR COSTS OF NEPA ANALYSES, DOCUMENTATION, 
              AND STUDIES.

    (a) In General.--The Mineral Leasing Act (30 U.S.C. 181 et seq.) is 
amended by inserting after section 37 the following:

   ``reimbursement for costs of certain analyses, documentation, and 
                                studies

    ``Sec. 38. (a) In General.--The Secretary of the Interior may, 
through royalty credits, reimburse a person who is a lessee, operator, 
operating rights owner, or applicant for any lease under this Act for 
reasonable amounts paid by the person for preparation by the Secretary 
(or a contractor or other person selected by the Secretary) of any 
project-level analysis, documentation, or related study required under 
the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) 
with respect to the lease.
    ``(b) Conditions.--The Secretary may provide reimbursement under 
subsection (b) only if--
            ``(1) adequate funding to enable the Secretary to timely 
        prepare the analysis, documentation, or related study is not 
        appropriated;
            ``(2) the person paid the costs voluntarily; and
            ``(3) the person maintains records of its costs in 
        accordance with regulations prescribed by the Secretary.''.
    (b) Application.--The amendment made by this section shall apply 
with respect to any lease entered into before, on, or after the date of 
the enactment of this Act.
    (c) Deadline for Regulations.--The Secretary of the Interior shall 
issue regulations implementing the amendment made by this section by 
not later than 90 days after the date of the enactment of this Act.

SEC. 30214. ALTERNATE ENERGY-RELATED USES ON THE OUTER CONTINENTAL 
              SHELF.

    (a) Purposes.--The purposes of this section are as follows:
            (1) To protect the economic and land use interests of the 
        Federal Government in the management of the Outer Continental 
        Shelf for energy-related and certain other purposes.
            (2) To provide an administrative framework for the 
        oversight and management of energy-related activities on the 
        Outer Continental Shelf, consistent with other applicable laws.
            (3) To expedite projects to increase the production, 
        transmission, or conservation of energy on the Outer 
        Continental Shelf.
            (4) To provide for interagency coordination in the siting 
        and permitting of energy-related activities on the Outer 
        Continental Shelf.
            (5) To ensure that energy-related activities on the Outer 
        Continental Shelf are conducted in a manner that provides for 
        safety, protection of the environment, prevention of waste, 
        conservation of natural resources, protection of correlative 
        rights, and protection of national security interests.
            (6) To authorize alternate uses of existing structures and 
        facilities previously permitted under the Outer Continental 
        Shelf Lands Act (43 U.S.C. 1331 note).
            (7) To ensure that the Federal Government receives a fair 
        return for any easement or right-of-way granted under section 
        8(p) of the Outer Continental Shelf Lands Act.
    (b) 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, in consultation with the Secretary of 
        the Department in which the Coast Guard is operating and other 
        relevant departments and agencies of the Federal Government, 
        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, production, 
                transportation, or storage of oil, natural gas, or 
                other minerals;
                    ``(B) produce or support production, 
                transportation, or transmission of energy from sources 
                other than oil and gas; or
                    ``(C) use facilities currently or previously used 
                for activities authorized under this Act.
            ``(2)(A) The Secretary shall establish reasonable forms of 
        annual or one-time payments for any easement or right-of-way 
        granted under this subsection. Such payments shall not be 
        assessed on the basis of throughput or production. The 
        Secretary may establish fees, rentals, bonus, or other payments 
        by rule or by agreement with the party to whom the easement or 
        right-of-way is granted.
            ``(B) Before exercising the authority granted under this 
        subsection, the Secretary shall consult with the Secretary of 
        Defense and other appropriate agencies concerning issues 
        related to national security and navigational obstruction.
            ``(C) The Secretary is authorized to issue an easement or 
        right-of-way for energy and related purposes as described in 
        paragraph (1) on a competitive or noncompetitive basis. In 
        determining whether such easement or right-of-way shall be 
        granted competitively or noncompetitively, the Secretary shall 
        consider such factors as prevention of waste and conservation 
        of natural resources, economic viability of an energy project, 
        protection of the environment, national interest, national 
        security, human safety, protection of correlative rights, and 
        potential return for the easement or right-of-way.
            ``(3) The Secretary, in consultation with the Secretary of 
        the Department in which the Coast Guard is operating and other 
        relevant departments and agencies of the Federal Government and 
        affected States, shall prescribe any necessary regulations to 
        assure safety, protection of the environment, prevention of 
        waste, and conservation of the natural resources of the Outer 
        Continental Shelf, protection of national security interests, 
        and protection of correlative rights therein.
            ``(4) 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.
            ``(5) Nothing in this subsection shall be construed to 
        displace, supersede, limit, or modify the jurisdiction, 
        responsibility, or authority of any Federal or State agency 
        under any other Federal law.
            ``(6) This subsection shall not apply to any area on the 
        Outer Continental Shelf designated as a National Marine 
        Sanctuary.''.
    (c) 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. 30215. DEADLINE FOR DECISION ON APPEALS OF CONSISTENCY 
              DETERMINATIONS UNDER THE COASTAL ZONE MANAGEMENT ACT OF 
              1972.

    (a) In General.--Section 319 of the Coastal Zone Management Act of 
1972 (16 U.S.C. 1465) is amended to read as follows:

                       ``appeals to the secretary

    ``Sec. 319. (a) Notice.--The Secretary shall publish an initial 
notice in the Federal Register within 30 days after the date of the 
filing of any appeal to the Secretary of a consistency determination 
under section 307.
    ``(b) Closure of Record.--(1) No later than the end of 360-day 
period beginning on the date of publication of an initial notice under 
subsection (a), the Secretary shall receive no more filings on the 
appeal and the record of decision regarding the appeal shall be closed.
    ``(2) Upon the closure of the record of decision, the Secretary 
shall immediately publish a notice that the record of decision has been 
closed.
    ``(3) The Secretary may extend the period specified in paragraph 
(1) with respect to an appeal--
            ``(A) in accordance with the mutual agreement of the 
        parties to the appeal; or
            ``(B) as needed to complete the development of any 
        environmental analyses required under the National 
        Environmental Policy Act of 1969 (42 U.S.C. 4331 et seq.).
    ``(c) Deadline for Decision.--The Secretary shall issue a decision 
in any appeal filed under section 307 no later than 90 days after the 
publication of a notice under subsection (b)(2).
    ``(d) Application.-- This section applies to appeals initiated by 
the Secretary and appeals filed by an applicant.''.
    (b) Application.--The amendment made by subsection (a)--
            (1) shall apply with respect to any appeal initiated or 
        filed on or after the date of the enactment of this Act; and
            (2) shall not affect any appeal initiated or filed before 
        the date of the enactment of this Act.

SEC. 30216. TASK FORCE ON ENERGY PROJECT STREAMLINING.

    (a) Findings.--The Congress finds that--
            (1) increased production and transmission of energy in a 
        safe and environmentally sound manner is essential to the well-
        being of the American people;
            (2) on May 18, 2001, President George W. Bush signed 
        Executive Order No. 13212 requiring agencies to expedite their 
        review of permits of other actions as necessary to accelerate 
        the completion of energy-related projects, while maintaining 
        safety, public health, and environmental protections; and
            (3) Executive Order No. 13212 established an interagency 
        task force chaired by the Chairman of the Council on 
        Environmental Quality to monitor and assist agencies in their 
        efforts to expedite review of actions consistent with the 
        Executive order, and to monitor and assist agencies in setting 
        up appropriate mechanisms to coordinate Federal, State, tribal, 
        and local permitting in geographic areas where increased 
        permitting activity is expected.
    (b) Sense of Congress.--It is the sense of the Congress that the 
Task Force established pursuant to Executive Order No. 13212 should 
remain in existence until such time as the President finds that the 
needs for which it was established have been met.

SEC. 30217. PILOT PROGRAM ON NORTHERN ROCKY MOUNTAINS ENERGY RESOURCE 
              MANAGEMENT.

    (a) Findings.--The Congress finds that the task force established 
by President George W. Bush by the issuance of Executive Order No. 
13212, and headed by the Chairman of the Council on Environmental 
Quality, has developed a pilot project the goals of which are--
            (1) to reduce conflict, uncertainty, and the time involved 
        in making decisions on energy resource management in the 
        Northern Rocky Mountains;
            (2) to establish a mechanism to provide for the 
        coordination of Federal and State policy guidance regarding the 
        development of regional energy resources and their transmission 
        to markets;
            (3) to institutionalize early collaboration and 
        participation of all parties involved in regional decisions on 
        environmental, economic and energy issues related to the 
        exploration, development, and production of energy resources; 
        and
            (4) to take a long-term and regional view on how best to 
        manage the energy resources in the Northern Rocky Mountains.
    (b) Sense of the Congress.--It is the sense of the Congress that 
the task force should carry out this pilot project and report to the 
Congress no later than 36 months after the date of enactment of this 
Act on the progress it has made in accomplishing the goals set forth in 
subsection (a) of this section.

SEC. 30218. ENERGY DEVELOPMENT FACILITATOR STUDY.

    (a) In General.--The Chairman of the Council on Environmental 
Quality shall conduct a study to determine the feasibility of 
establishing under the Council the position of Facilitator for Energy 
Development, to coordinate Federal agency actions relating to energy 
project permitting. The study shall consider, among other matters--
            (1) the ways in which a facilitator can facilitate the 
        long-term coordination of energy projects on Federal lands; and
            (2) the role of a facilitator in ensuring that the 
        questions or concerns of permit applicants and other persons 
        involved in energy projects are addressed in the agency.
    (b) Report.--Not later than 12 months after the date of enactment 
of this section, the Chairman shall submit a report to the Committee on 
Resources of the House of Representatives and the Committee on Energy 
and Natural Resources of the Senate detailing the findings of the study 
required by subsection (a), and including any legislative 
recommendations of the Chairman with respect to the establishment of 
the position studied.

SEC. 30219. COMBINED HYDROCARBON LEASING.

    (a) Special Provisions Regarding Leasing.--Section 17(b)(2) of the 
Mineral Leasing Act (30 U.S.C. 226(b)(2)) is amended--
            (1) by inserting ``(A)'' after ``(2)''; and
            (2) by adding at the end the following:
    ``(B) For any area that contains any combination of tar sand and 
oil or gas (or both), the Secretary may issue under this Act, 
separately--
            ``(i) a lease for exploration for and extraction of tar 
        sand; and
            ``(ii) a lease for exploration for and development of oil 
        and gas.
    ``(C) A lease issued for tar sand shall be issued using the same 
bidding process, annual rental, and posting period as a lease issued 
for oil and gas, except that the minimum acceptable bid required for a 
lease issued for tar sand shall be $2 per acre.
    ``(D) The Secretary may waive, suspend, or alter any requirement 
under section 26 that a permittee under a permit authorizing 
prospecting for tar sand must exercise due diligence, to promote any 
resource covered by a combined hydrocarbon lease.''.
    (b) Conforming Amendment.--Section 17(b)(1)(B) of the Mineral 
Leasing Act (30 U.S.C. 226(b)(1)(B)) is amended in the second sentence 
by inserting ``, subject to paragraph (2)(B),'' after ``The 
Secretary''.
    (c) Regulations.--Within 45 days after the date of the enactment of 
this Act, the Secretary of the Interior shall issue final regulations 
to implement this section.

SEC. 30220. ROYALTY PAYMENTS UNDER LEASES UNDER THE OUTER CONTINENTAL 
              SHELF LANDS ACT.

    (a) Royalty Relief.--
            (1) In general.--For purposes of providing compensation for 
        lessees and a State for which amounts are authorized by section 
        6004(c) of the Oil Pollution Act of 1980 (Public Law 101-380), 
        a lessee may withhold from payment any royalty due and owing to 
        the United States under any lease under the Outer Continental 
        Shelf Lands Act (43 U.S.C. 1301 et seq.) for offshore oil or 
        gas production from a covered lease tract if, on or before the 
        date that the payment is due and payable to the United States, 
        the lessee makes a payment to the State of 44 cents for every 
        $1 of royalty withheld.
            (2) Treatment of withheld amounts.--Any royalty withheld by 
        a lessee in accordance with this section shall be treated as 
        paid for purposes of satisfaction of the royalty obligations of 
        the lessee to the United States.
            (3) Certification of withheld amounts.--The Secretary of 
        the Treasury shall--
                    (A) determine the amount of royalty withheld by a 
                lessee under this section; and
                    (B) promptly publish a certification when the total 
                amount of royalty withheld by the lessee under this 
                section is equal to the lessee's share of the total 
                drainage claim for the West Delta field (with interest) 
                as described at page 47 of Senate Report number 101-
                534.
    (b) Period of Royalty Relief.--Subsection (a) shall apply to 
royalty amounts that are due and payable in the period beginning on 
January 1, 2003, and ending on the date on which the Secretary 
publishes a certification under subsection (a)(3)(B).
    (c) Definitions.--As used in this section:
            (1) Covered lease tract.--The term ``covered lease tract'' 
        means a leased tract (or portion of a leased tract)--
                    (A) lying seaward of the zone defined and governed 
                by section 8(g) of the Outer Continental Shelf Lands 
                Act (43 U.S.C. 1337(g)); or
                    (B) lying within such zone but to which such 
                section does not apply.
            (2) Lessee.--The term ``lessee'' means a person (including 
        a successor or assign of a person) that, on the date of the 
        enactment of the Oil Pollution Act of 1980, was a lessee 
        referred to in section 6004(c) of that Act (as in effect on 
        that date of the enactment), but did not hold lease rights in 
        Federal offshore lease OCS-G-5669.

                       TITLE III--BIOMASS ENERGY

SEC. 30301. GRANTS TO IMPROVE THE COMMERCIAL VALUE OF FOREST BIOMASS 
              FOR ELECTRIC ENERGY, USEFUL HEAT, TRANSPORTATION FUELS, 
              PETROLEUM-BASED PRODUCT SUBSTITUTES, AND OTHER COMMERCIAL 
              PURPOSES.

    (a) Findings.--Congress finds the following:
            (1) Thousands of communities in the United States, many 
        located near Federal lands, are at risk to wildfire. 
        Approximately 190,000,000 acres of land managed by the 
        Secretary of Agriculture and the Secretary of the Interior are 
        at risk of catastrophic fire in the near future. The 
        accumulation of heavy forest fuel loads continues to increase 
        as a result of disease, insect infestations, and drought, 
        further raising the risk of fire each year.
            (2) In addition, more than 70,000,000 acres across all land 
        ownerships are at risk to higher than normal mortality over the 
        next 15 years from insect infestation and disease. High levels 
        of tree mortality from insects and disease result in increased 
        fire risk, loss of old growth, degraded watershed conditions, 
        and changes in species diversity and productivity, as well as 
        diminished fish and wildlife habitat and decreased timber 
        values.
            (3) Preventive treatments such as removing fuel loading, 
        ladder fuels, and hazard trees, planting proper species mix and 
        restoring and protecting early successional habitat, and other 
        specific restoration treatments designed to reduce the 
        susceptibility of forest land, woodland, and rangeland to 
        insect outbreaks, disease, and catastrophic fire present the 
        greatest opportunity for long-term forest health by creating a 
        mosaic of species-mix and age distribution. Such prevention 
        treatments are widely acknowledged to be more successful and 
        cost effective than suppression treatments in the case of 
        insects, disease, and fire.
            (4) The by-products of preventive treatment (wood, brush, 
        thinnings, chips, slash, and other hazardous fuels) removed 
        from forest lands, woodlands and rangelands represent an 
        abundant supply of biomass for biomass-to-energy facilities and 
        raw material for business. There are currently few markets for 
        the extraordinary volumes of by-products being generated as a 
        result of the necessary large-scale preventive treatment 
        activities.
            (5) The United States should--
                    (A) promote economic and entrepreneurial 
                opportunities in using by-products removed through 
                preventive treatment activities related to hazardous 
                fuels reduction, disease, and insect infestation; and
                    (B) develop and expand markets for traditionally 
                underused wood and biomass as an outlet for by-products 
                of preventive treatment activities.
    (b) Definitions.--In this section:
            (1) Biomass.--The term ``biomass'' means trees and woody 
        plants, including limbs, tops, needles, and other woody parts, 
        and by-products of preventive treatment, such as wood, brush, 
        thinnings, chips, and slash, that are removed--
                    (A) to reduce hazardous fuels; or
                    (B) to reduce the risk of or to contain disease or 
                insect infestation.
            (2) Indian tribe.--The term ``Indian tribe'' has the 
        meaning given the term in section 4(e) of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 450b(e)).
            (3) Person.--The term ``person'' includes--
                    (A) an individual;
                    (B) a community (as determined by the Secretary 
                concerned);
                    (C) an Indian tribe;
                    (D) a small business, micro-business, or a 
                corporation that is incorporated in the United States; 
                and
                    (E) a nonprofit organization.
            (4) Preferred community.--The term ``preferred community'' 
        means--
                    (A) any town, township, municipality, or other 
                similar unit of local government (as determined by the 
                Secretary concerned) that--
                            (i) has a population of not more than 
                        50,000 individuals; and
                            (ii) the Secretary concerned, in the sole 
                        discretion of the Secretary concerned, 
                        determines contains or is located near land, 
                        the condition of which is at significant risk 
                        of catastrophic wildfire, disease, or insect 
                        infestation or which suffers from disease or 
                        insect infestation; or
                    (B) any county that--
                            (i) is not contained within a metropolitan 
                        statistical area; and
                            (ii) the Secretary concerned, in the sole 
                        discretion of the Secretary concerned, 
                        determines contains or is located near land, 
                        the condition of which is at significant risk 
                        of catastrophic wildfire, disease, or insect 
                        infestation or which suffers from disease or 
                        insect infestation.
            (5) Secretary concerned.--The term ``Secretary concerned'' 
        means--
                    (A) the Secretary of Agriculture with respect to 
                National Forest System lands; and
                    (B) the Secretary of the Interior with respect to 
                Federal lands under the jurisdiction of the Secretary 
                of the Interior and Indian lands.
    (c) Biomass Commercial Use Grant Program.--
            (1) In general.--The Secretary concerned may make grants to 
        any person that owns or operates a facility that uses biomass 
        as a raw material to produce electric energy, sensible heat, 
        transportation fuels, or substitutes for petroleum-based 
        products to offset the costs incurred to purchase biomass for 
        use by such facility.
            (2) Grant amounts.--A grant under this subsection may not 
        exceed $20 per green ton of biomass delivered.
            (3) Monitoring of grant recipient activities.--As a 
        condition of a grant under this subsection, the grant recipient 
        shall keep such records as the Secretary concerned may require 
        to fully and correctly disclose the use of the grant funds and 
        all transactions involved in the purchase of biomass. Upon 
        notice by a representative of the Secretary concerned, the 
        grant recipient shall afford the representative reasonable 
        access to the facility that purchases or uses biomass and an 
        opportunity to examine the inventory and records of the 
        facility.
    (d) Improved Biomass Use Grant Program.--
            (1) In general.--The Secretary concerned may make grants to 
        persons to offset the cost of projects to develop or research 
        opportunities to improve the use of, or add value to, biomass. 
        In making such grants, the Secretary concerned shall give 
        preference to persons in preferred communities.
            (2) Selection.--The Secretary concerned shall select a 
        grant recipient under paragraph (1) after giving consideration 
        to the anticipated public benefits of the project, including 
        the potential to develop thermal or electric energy resources 
        or affordable energy, opportunities for the creation or 
        expansion of small businesses and micro-businesses, and the 
        potential for new job creation.
            (3) Grant amount.--A grant under this subsection may not 
        exceed $100,000.
    (e) Authorization of Appropriations.--There is authorized to be 
appropriated $50,000,000 for each of the fiscal years 2004 through 2014 
to carry out this section.
    (f) Report.--Not later than October 1, 2010, the Secretary of 
Agriculture, in consultation with the Secretary of the Interior, shall 
submit to the Committee on Energy and Natural Resources and the 
Committee on Agriculture, Nutrition, and Forestry of the Senate and the 
Committee on Resources and the Committee on Agriculture of the House of 
Representatives a report describing the results of the grant programs 
authorized by this section. The report shall include the following:
            (1) An identification of the size, type, and the use of 
        biomass by persons that receive grants under this section.
            (2) The distance between the land from which the biomass 
        was removed and the facility that used the biomass.
            (3) The economic impacts, particularly new job creation, 
        resulting from the grants to and operation of the eligible 
        operations.

             TITLE IV--ARCTIC COASTAL PLAIN DOMESTIC ENERGY

SEC. 30401. SHORT TITLE.

    This title may be cited as the ``Arctic Coastal Plain Domestic 
Energy Security Act of 2003''.

SEC. 30402. DEFINITIONS.

    In this title:
            (1) Coastal plain.--The term ``Coastal Plain'' means that 
        area identified as such in the map entitled ``Arctic National 
        Wildlife Refuge'', dated August 1980, as referenced in section 
        1002(b) of the Alaska National Interest Lands Conservation Act 
        of 1980 (16 U.S.C. 3142(b)(1)), comprising approximately 
        1,549,000 acres, and as described in appendix I to part 37 of 
        title 50, Code of Federal Regulations.
            (2) Secretary.--The term ``Secretary'', except as otherwise 
        provided, means the Secretary of the Interior or the 
        Secretary's designee.

SEC. 30403. LEASING PROGRAM FOR LANDS WITHIN THE COASTAL PLAIN.

    (a) In General.--The Secretary shall take such actions as are 
necessary--
            (1) to establish and implement in accordance with this Act 
        a competitive oil and gas leasing program under the Mineral 
        Leasing Act (30 U.S.C. 181 et seq.) that will result in an 
        environmentally sound program for the exploration, development, 
        and production of the oil and gas resources of the Coastal 
        Plain; and
            (2) to administer the provisions of this title through 
        regulations, lease terms, conditions, restrictions, 
        prohibitions, stipulations, and other provisions that ensure 
        the oil and gas exploration, development, and production 
        activities on the Coastal Plain will result in no significant 
        adverse effect on fish and wildlife, their habitat, subsistence 
        resources, and the environment, and including, in furtherance 
        of this goal, by requiring the application of the best 
        commercially available technology for oil and gas exploration, 
        development, and production to all exploration, development, 
        and production operations under this title in a manner that 
        ensures the receipt of fair market value by the public for the 
        mineral resources to be leased.
    (b) Repeal.--Section 1003 of the Alaska National Interest Lands 
Conservation Act of 1980 (16 U.S.C. 3143) is repealed.
    (c) Compliance With Requirements Under Certain Other Laws.--
            (1) Compatibility.--For purposes of the National Wildlife 
        Refuge System Administration Act of 1966, the oil and gas 
        leasing program and activities authorized by this section in 
        the Coastal Plain are deemed to be compatible with the purposes 
        for which the Arctic National Wildlife Refuge was established, 
        and that no further findings or decisions are required to 
        implement this determination.
            (2) Adequacy of the department of the interior's 
        legislative environmental impact statement.--The ``Final 
        Legislative Environmental Impact Statement'' (April 1987) on 
        the Coastal Plain prepared pursuant to section 1002 of the 
        Alaska National Interest Lands Conservation Act of 1980 (16 
        U.S.C. 3142) and section 102(2)(C) of the National 
        Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)) is 
        deemed to satisfy the requirements under the National 
        Environmental Policy Act of 1969 that apply with respect to 
        actions authorized to be taken by the Secretary to develop and 
        promulgate the regulations for the establishment of a leasing 
        program authorized by this title before the conduct of the 
        first lease sale.
            (3) Compliance with nepa for other actions.--Before 
        conducting the first lease sale under this title, the Secretary 
        shall prepare an environmental impact statement under the 
        National Environmental Policy Act of 1969 with respect to the 
        actions authorized by this title that are not referred to in 
        paragraph (2). Notwithstanding any other law, the Secretary is 
        not required to identify nonleasing alternative courses of 
        action or to analyze the environmental effects of such courses 
        of action. The Secretary shall only identify a preferred action 
        for such leasing and a single leasing alternative, and analyze 
        the environmental effects and potential mitigation measures for 
        those two alternatives. The identification of the preferred 
        action and related analysis for the first lease sale under this 
        title shall be completed within 18 months after the date of the 
        enactment of this Act. The Secretary shall only consider public 
        comments that specifically address the Secretary's preferred 
        action and that are filed within 20 days after publication of 
        an environmental analysis. Notwithstanding any other law, 
        compliance with this paragraph is deemed to satisfy all 
        requirements for the analysis and consideration of the 
        environmental effects of proposed leasing under this title.
    (d) Relationship to State and Local Authority.--Nothing in this 
title shall be considered to expand or limit State and local regulatory 
authority.
    (e) Special Areas.--
            (1) In general.--The Secretary, after consultation with the 
        State of Alaska, the city of Kaktovik, and the North Slope 
        Borough, may designate up to a total of 45,000 acres of the 
        Coastal Plain as a Special Area if the Secretary determines 
        that the Special Area is of such unique character and interest 
        so as to require special management and regulatory protection. 
        The Secretary shall designate as such a Special Area the 
        Sadlerochit Spring area, comprising approximately 4,000 acres 
        as depicted on the map referred to in section 402(1).
            (2) Management.--Each such Special Area shall be managed so 
        as to protect and preserve the area's unique and diverse 
        character including its fish, wildlife, and subsistence 
        resource values.
            (3) Exclusion from leasing or surface occupancy.--The 
        Secretary may exclude any Special Area from leasing. If the 
        Secretary leases a Special Area, or any part thereof, for 
        purposes of oil and gas exploration, development, production, 
        and related activities, there shall be no surface occupancy of 
        the lands comprising the Special Area.
            (4) Directional drilling.--Notwithstanding the other 
        provisions of this subsection, the Secretary may lease all or a 
        portion of a Special Area under terms that permit the use of 
        horizontal drilling technology from sites on leases located 
        outside the area.
    (f) Limitation on Closed Areas.--The Secretary's sole authority to 
close lands within the Coastal Plain to oil and gas leasing and to 
exploration, development, and production is that set forth in this 
title.
    (g) Regulations.--
            (1) In general.--The Secretary shall prescribe such 
        regulations as may be necessary to carry out this title, 
        including rules and regulations relating to protection of the 
        fish and wildlife, their habitat, subsistence resources, and 
        environment of the Coastal Plain, by no later than 15 months 
        after the date of the enactment of this Act.
            (2) Revision of regulations.--The Secretary shall 
        periodically review and, if appropriate, revise the rules and 
        regulations issued under subsection (a) to reflect any 
        significant biological, environmental, or engineering data that 
        come to the Secretary's attention.

SEC. 30404. LEASE SALES.

    (a) In General.--Lands may be leased pursuant to this title to any 
person qualified to obtain a lease for deposits of oil and gas under 
the Mineral Leasing Act (30 U.S.C. 181 et seq.).
    (b) Procedures.--The Secretary shall, by regulation, establish 
procedures for--
            (1) receipt and consideration of sealed nominations for any 
        area in the Coastal Plain for inclusion in, or exclusion (as 
        provided in subsection (c)) from, a lease sale;
            (2) the holding of lease sales after such nomination 
        process; and
            (3) public notice of and comment on designation of areas to 
        be included in, or excluded from, a lease sale.
    (c) Lease Sale Bids.--Bidding for leases under this title shall be 
by sealed competitive cash bonus bids.
    (d) Acreage Minimum in First Sale.--In the first lease sale under 
this title, the Secretary shall offer for lease those tracts the 
Secretary considers to have the greatest potential for the discovery of 
hydrocarbons, taking into consideration nominations received pursuant 
to subsection (b)(1), but in no case less than 200,000 acres.
    (e) Timing of Lease Sales.--The Secretary shall--
            (1) conduct the first lease sale under this title within 22 
        months after the date of the enactment of this Act; and
            (2) conduct additional sales so long as sufficient interest 
        in development exists to warrant, in the Secretary's judgment, 
        the conduct of such sales.

SEC. 30405. GRANT OF LEASES BY THE SECRETARY.

    (a) In General.--The Secretary may grant to the highest responsible 
qualified bidder in a lease sale conducted pursuant to section 30404 
any lands to be leased on the Coastal Plain upon payment by the lessee 
of such bonus as may be accepted by the Secretary.
    (b) Subsequent Transfers.--No lease issued under this title may be 
sold, exchanged, assigned, sublet, or otherwise transferred except with 
the approval of the Secretary. Prior to any such approval the Secretary 
shall consult with, and give due consideration to the views of, the 
Attorney General.

SEC. 30406. LEASE TERMS AND CONDITIONS.

    (a) In General.--An oil or gas lease issued pursuant to this title 
shall--
            (1) provide for the payment of a royalty of not less than 
        12\1/2\ percent in amount or value of the production removed or 
        sold from the lease, as determined by the Secretary under the 
        regulations applicable to other Federal oil and gas leases;
            (2) provide that the Secretary may close, on a seasonal 
        basis, portions of the Coastal Plain to exploratory drilling 
        activities as necessary to protect caribou calving areas and 
        other species of fish and wildlife;
            (3) require that the lessee of lands within the Coastal 
        Plain shall be fully responsible and liable for the reclamation 
        of lands within the Coastal Plain and any other Federal lands 
        that are adversely affected in connection with exploration, 
        development, production, or transportation activities conducted 
        under the lease and within the Coastal Plain by the lessee or 
        by any of the subcontractors or agents of the lessee;
            (4) provide that the lessee may not delegate or convey, by 
        contract or otherwise, the reclamation responsibility and 
        liability to another person without the express written 
        approval of the Secretary;
            (5) provide that the standard of reclamation for lands 
        required to be reclaimed under this title shall be, as nearly 
        as practicable, a condition capable of supporting the uses 
        which the lands were capable of supporting prior to any 
        exploration, development, or production activities, or upon 
        application by the lessee, to a higher or better use as 
        approved by the Secretary;
            (6) contain terms and conditions relating to protection of 
        fish and wildlife, their habitat, and the environment as 
        required pursuant to section 30403(a)(2);
            (7) provide that the lessee, its agents, and its 
        contractors use best efforts to provide a fair share, as 
        determined by the level of obligation previously agreed to in 
        the 1974 agreement implementing section 29 of the Federal 
        Agreement and Grant of Right of Way for the Operation of the 
        Trans-Alaska Pipeline, of employment and contracting for Alaska 
        Natives and Alaska Native Corporations from throughout the 
        State;
            (8) prohibit the export of oil produced under the lease; 
        and
            (9) contain such other provisions as the Secretary 
        determines necessary to ensure compliance with the provisions 
        of this title and the regulations issued under this title.
    (b) Project Labor Agreements.--The Secretary, as a term and 
condition of each lease under this title and in recognizing the 
Government's proprietary interest in labor stability and in the ability 
of construction labor and management to meet the particular needs and 
conditions of projects to be developed under the leases issued pursuant 
to this title and the special concerns of the parties to such leases, 
shall require that the lessee and its agents and contractors negotiate 
to obtain a project labor agreement for the employment of laborers and 
mechanics on production, maintenance, and construction under the lease.

SEC. 30407. COASTAL PLAIN ENVIRONMENTAL PROTECTION.

    (a) No Significant Adverse Effect Standard To Govern Authorized 
Coastal Plain Activities.--The Secretary shall, consistent with the 
requirements of section 30403, administer the provisions of this title 
through regulations, lease terms, conditions, restrictions, 
prohibitions, stipulations, and other provisions that--
            (1) ensure the oil and gas exploration, development, and 
        production activities on the Coastal Plain will result in no 
        significant adverse effect on fish and wildlife, their habitat, 
        and the environment;
            (2) require the application of the best commercially 
        available technology for oil and gas exploration, development, 
        and production on all new exploration, development, and 
        production operations; and
            (3) ensure that the maximum amount of surface acreage 
        covered by production and support facilities, including 
        airstrips and any areas covered by gravel berms or piers for 
        support of pipelines, does not exceed 2,000 acres on the 
        Coastal Plain.
    (b) Site-Specific Assessment and Mitigation.--The Secretary shall 
also require, with respect to any proposed drilling and related 
activities, that--
            (1) a site-specific analysis be made of the probable 
        effects, if any, that the drilling or related activities will 
        have on fish and wildlife, their habitat, and the environment;
            (2) a plan be implemented to avoid, minimize, and mitigate 
        (in that order and to the extent practicable) any significant 
        adverse effect identified under paragraph (1); and
            (3) the development of the plan shall occur after 
        consultation with the agency or agencies having jurisdiction 
        over matters mitigated by the plan.
    (c) Regulations To Protect Coastal Plain Fish and Wildlife 
Resources, Subsistence Users, and the Environment.--Before implementing 
the leasing program authorized by this title, the Secretary shall 
prepare and promulgate regulations, lease terms, conditions, 
restrictions, prohibitions, stipulations, and other measures designed 
to ensure that the activities undertaken on the Coastal Plain under 
this title are conducted in a manner consistent with the purposes and 
environmental requirements of this title.
    (d) Compliance With Federal and State Environmental Laws and Other 
Requirements.--The proposed regulations, lease terms, conditions, 
restrictions, prohibitions, and stipulations for the leasing program 
under this title shall require compliance with all applicable 
provisions of Federal and State environmental law and shall also 
require the following:
            (1) Standards at least as effective as the safety and 
        environmental mitigation measures set forth in items 1 through 
        29 at pages 167 through 169 of the ``Final Legislative 
        Environmental Impact Statement'' (April 1987) on the Coastal 
        Plain.
            (2) Seasonal limitations on exploration, development, and 
        related activities, where necessary, to avoid significant 
        adverse effects during periods of concentrated fish and 
        wildlife breeding, denning, nesting, spawning, and migration.
            (3) That exploration activities, except for surface 
        geological studies, be limited to the period between 
        approximately November 1 and May 1 each year and that 
        exploration activities shall be supported by ice roads, winter 
        trails with adequate snow cover, ice pads, ice airstrips, and 
        air transport methods, except that such exploration activities 
        may occur at other times, if the Secretary finds that such 
        exploration will have no significant adverse effect on the fish 
        and wildlife, their habitat, and the environment of the Coastal 
        Plain.
            (4) Design safety and construction standards for all 
        pipelines and any access and service roads, that--
                    (A) minimize, to the maximum extent possible, 
                adverse effects upon the passage of migratory species 
                such as caribou; and
                    (B) minimize adverse effects upon the flow of 
                surface water by requiring the use of culverts, 
                bridges, and other structural devices.
            (5) Prohibitions on public access and use on all pipeline 
        access and service roads.
            (6) Stringent reclamation and rehabilitation requirements, 
        consistent with the standards set forth in this title, 
        requiring the removal from the Coastal Plain of all oil and gas 
        development and production facilities, structures, and 
        equipment upon completion of oil and gas production operations, 
        except that the Secretary may exempt from the requirements of 
        this paragraph those facilities, structures, or equipment that 
        the Secretary determines would assist in the management of the 
        Arctic National Wildlife Refuge and that are donated to the 
        United States for that purpose.
            (7) Appropriate prohibitions or restrictions on access by 
        all modes of transportation.
            (8) Appropriate prohibitions or restrictions on sand and 
        gravel extraction.
            (9) Consolidation of facility siting.
            (10) Appropriate prohibitions or restrictions on use of 
        explosives.
            (11) Avoidance, to the extent practicable, of springs, 
        streams, and river system; the protection of natural surface 
        drainage patterns, wetlands, and riparian habitats; and the 
        regulation of methods or techniques for developing or 
        transporting adequate supplies of water for exploratory 
        drilling.
            (12) Avoidance or reduction of air traffic-related 
        disturbance to fish and wildlife.
            (13) Treatment and disposal of hazardous and toxic wastes, 
        solid wastes, reserve pit fluids, drilling muds and cuttings, 
        and domestic wastewater, including an annual waste management 
        report, a hazardous materials tracking system, and a 
        prohibition on chlorinated solvents, in accordance with 
        applicable Federal and State environmental law.
            (14) Fuel storage and oil spill contingency planning.
            (15) Research, monitoring, and reporting requirements.
            (16) Field crew environmental briefings.
            (17) Avoidance of significant adverse effects upon 
        subsistence hunting, fishing, and trapping by subsistence 
        users.
            (18) Compliance with applicable air and water quality 
        standards.
            (19) Appropriate seasonal and safety zone designations 
        around well sites, within which subsistence hunting and 
        trapping shall be limited.
            (20) Reasonable stipulations for protection of cultural and 
        archeological resources.
            (21) All other protective environmental stipulations, 
        restrictions, terms, and conditions deemed necessary by the 
        Secretary.
    (e) Considerations.--In preparing and promulgating regulations, 
lease terms, conditions, restrictions, prohibitions, and stipulations 
under this section, the Secretary shall consider the following:
            (1) The stipulations and conditions that govern the 
        National Petroleum Reserve-Alaska leasing program, as set forth 
        in the 1999 Northeast National Petroleum Reserve-Alaska Final 
        Integrated Activity Plan/Environmental Impact Statement.
            (2) The environmental protection standards that governed 
        the initial Coastal Plain seismic exploration program under 
        parts 37.31 to 37.33 of title 50, Code of Federal Regulations.
            (3) The land use stipulations for exploratory drilling on 
        the KIC-ASRC private lands that are set forth in Appendix 2 of 
        the August 9, 1983, agreement between Arctic Slope Regional 
        Corporation and the United States.
    (f) Facility Consolidation Planning.--
            (1) In general.--The Secretary shall, after providing for 
        public notice and comment, prepare and update periodically a 
        plan to govern, guide, and direct the siting and construction 
        of facilities for the exploration, development, production, and 
        transportation of Coastal Plain oil and gas resources.
            (2) Objectives.--The plan shall have the following 
        objectives:
                    (A) Avoiding unnecessary duplication of facilities 
                and activities.
                    (B) Encouraging consolidation of common facilities 
                and activities.
                    (C) Locating or confining facilities and activities 
                to areas that will minimize impact on fish and 
                wildlife, their habitat, and the environment.
                    (D) Utilizing existing facilities wherever 
                practicable.
                    (E) Enhancing compatibility between wildlife values 
                and development activities.
    (g) Access to Public Lands.--The Secretary shall--
            (1) manage public lands in the Coastal Plain subject to 
        section subsections (a) and (b) of section 811 of the Alaska 
        National Interest Lands Conservation Act (16 U.S.C. 3121); and
            (2) ensure that local residents shall have reasonable 
        access to public lands in the Coastal Plain for traditional 
        uses.

SEC. 30408. EXPEDITED JUDICIAL REVIEW.

    (a) Filing of Complaint.--
            (1) Deadline.--Subject to paragraph (2), any complaint 
        seeking judicial review of any provision of this title or any 
        action of the Secretary under this title shall be filed in any 
        appropriate district court of the United States--
                    (A) except as provided in subparagraph (B), within 
                the 90-day period beginning on the date of the action 
                being challenged; or
                    (B) in the case of a complaint based solely on 
                grounds arising after such period, within 90 days after 
                the complainant knew or reasonably should have known of 
                the grounds for the complaint.
            (2) Venue.--Any complaint seeking judicial review of an 
        action of the Secretary under this title may be filed only in 
        the United States Court of Appeals for the District of 
        Columbia.
            (3) Limitation on scope of certain review.--Judicial review 
        of a Secretarial decision to conduct a lease sale under this 
        title, including the environmental analysis thereof, shall be 
        limited to whether the Secretary has complied with the terms of 
        this title and shall be based upon the administrative record of 
        that decision. The Secretary's identification of a preferred 
        course of action to enable leasing to proceed and the 
        Secretary's analysis of environmental effects under this title 
        shall be presumed to be correct unless shown otherwise by clear 
        and convincing evidence to the contrary.
    (b) Limitation on Other Review.--Actions of the Secretary with 
respect to which review could have been obtained under this section 
shall not be subject to judicial review in any civil or criminal 
proceeding for enforcement.

SEC. 30409. FEDERAL AND STATE DISTRIBUTION OF REVENUES.

    (a) In General.--Notwithstanding any other provision of law, of the 
amount of adjusted bonus, rental, and royalty revenues from oil and gas 
leasing and operations authorized under this title--
            (1) 50 percent shall be paid to the State of Alaska; and
            (2) except as provided in section 30412(d) the balance 
        shall be deposited into the Treasury as miscellaneous receipts.
    (b) Payments to Alaska.--Payments to the State of Alaska under this 
section shall be made semiannually.
    (c) Use of Bonus Payments for Low-Income Home Energy Assistance.--
Amounts that are received by the United States as bonuses for leases 
under this title and deposited into the Treasury under subsection 
(a)(2) may be appropriated to the Secretary of the Health and Human 
Services, in addition to amounts otherwise available, to provide 
assistance under the Low-Income Home Energy Assistance Act of 1981 (42 
U.S.C. 8621 et seq.).

SEC. 30410. RIGHTS-OF-WAY ACROSS THE COASTAL PLAIN.

    (a) Exemption.--Title XI of the Alaska National Interest Lands 
Conservation Act of 1980 (16 U.S.C. 3161 et seq.) shall not apply to 
the issuance by the Secretary under section 28 of the Mineral Leasing 
Act (30 U.S.C. 185) of rights-of-way and easements across the Coastal 
Plain for the transportation of oil and gas.
    (b) Terms and Conditions.--The Secretary shall include in any 
right-of-way or easement referred to in subsection (a) such terms and 
conditions as may be necessary to ensure that transportation of oil and 
gas does not result in a significant adverse effect on the fish and 
wildlife, subsistence resources, their habitat, and the environment of 
the Coastal Plain, including requirements that facilities be sited or 
designed so as to avoid unnecessary duplication of roads and pipelines.
    (c) Regulations.--The Secretary shall include in regulations under 
section 30403(g) provisions granting rights-of-way and easements 
described in subsection (a) of this section.

SEC. 30411. CONVEYANCE.

    In order to maximize Federal revenues by removing clouds on title 
to lands and clarifying land ownership patterns within the Coastal 
Plain, the Secretary, notwithstanding the provisions of section 
1302(h)(2) of the Alaska National Interest Lands Conservation Act (16 
U.S.C. 3192(h)(2)), shall convey--
            (1) to the Kaktovik Inupiat Corporation the surface estate 
        of the lands described in paragraph 1 of Public Land Order 
        6959, to the extent necessary to fulfill the Corporation's 
        entitlement under section 12 of the Alaska Native Claims 
        Settlement Act (43 U.S.C. 1611) in accordance with the terms 
        and conditions of the Agreement between the Department of the 
        Interior, the United States Fish and Wildlife Service, the 
        Bureau of Land Management, and the Kaktovik Inupiat Corporation 
        effective January 22, 1993; and
            (2) to the Arctic Slope Regional Corporation the remaining 
        subsurface estate to which it is entitled pursuant to the 
        August 9, 1983, agreement between the Arctic Slope Regional 
        Corporation and the United States of America.

SEC. 30412. LOCAL GOVERNMENT IMPACT AID AND COMMUNITY SERVICE 
              ASSISTANCE.

    (a) Financial Assistance Authorized.--
            (1) In general.--The Secretary may use amounts available 
        from the Coastal Plain Local Government Impact Aid Assistance 
        Fund established by subsection (d) to provide timely financial 
        assistance to entities that are eligible under paragraph (2) 
        and that are directly impacted by the exploration for or 
        production of oil and gas on the Coastal Plain under this 
        title.
            (2) Eligible entities.--The North Slope Borough, Kaktovik, 
        and other boroughs, municipal subdivisions, villages, and any 
        other community organized under Alaska State law shall be 
        eligible for financial assistance under this section.
    (b) Use of Assistance.--Financial assistance under this section may 
be used only for--
            (1) planning for mitigation of the potential effects of oil 
        and gas exploration and development on environmental, social, 
        cultural, recreational and subsistence values;
            (2) implementing mitigation plans and maintaining 
        mitigation projects;
            (3) developing, carrying out, and maintaining projects and 
        programs that provide new or expanded public facilities and 
        services to address needs and problems associated with such 
        effects, including firefighting, police, water, waste 
        treatment, medivac, and medical services; and
            (4) establishment of a coordination office, by the North 
        Slope Borough, in the City of Kaktovik, which shall--
                    (A) coordinate with and advise developers on local 
                conditions, impact, and history of the areas utilized 
                for development; and
                    (B) provide to the Committee on Resources of the 
                Senate and the Committee on Energy and Resources of the 
                Senate an annual report on the status of coordination 
                between developers and the communities affected by 
                development.
    (c) Application.--
            (1) In general.--Any community that is eligible for 
        assistance under this section may submit an application for 
        such assistance to the Secretary, in such form and under such 
        procedures as the Secretary may prescribe by regulation.
            (2) North slope borough communities.--A community located 
        in the North Slope Borough may apply for assistance under this 
        section either directly to the Secretary or through the North 
        Slope Borough.
            (3) Application assistance.--The Secretary shall work 
        closely with and assist the North Slope Borough and other 
        communities eligible for assistance under this section in 
        developing and submitting applications for assistance under 
        this section.
    (d) Establishment of Fund.--
            (1) In general.--There is established in the Treasury the 
        Coastal Plain Local Government Impact Aid Assistance Fund.
            (2) Use.--Amounts in the fund may be used only for 
        providing financial assistance under this section.
            (3) Deposits.--Subject to paragraph (4), there shall be 
        deposited into the fund amounts received by the United States 
        as revenues derived from rents, bonuses, and royalties under on 
        leases and lease sales authorized under this title.
            (4) Limitation on deposits.--The total amount in the fund 
        may not exceed $11,000,000.
            (5) Investment of balances.--The Secretary of the Treasury 
        shall invest amounts in the fund in interest bearing government 
        securities.
    (e) Authorization of Appropriations.--To provide financial 
assistance under this section there is authorized to be appropriated to 
the Secretary from the Coastal Plain Local Government Impact Aid 
Assistance Fund $5,000,000 for each fiscal year.

                          TITLE V--HYDROPOWER

SEC. 30501. STUDY AND REPORT ON INCREASING ELECTRIC POWER PRODUCTION 
              CAPABILITY OF EXISTING FACILITIES.

    (a) In General.--The Secretary of the Interior, in consultation 
with the Administrator of each Federal power marketing administration, 
shall conduct a study of the potential for increasing electric power 
production capability at existing facilities under the administrative 
jurisdiction of the Secretary.
    (b) Content.--The study under this section shall include 
identification and description in detail of each facility that is 
capable, with or without modification, of producing additional 
hydroelectric power, including estimation of the existing potential for 
the facility to generate hydroelectric power.
    (c) Report.--The Secretary shall submit to the Congress a report on 
the findings, conclusions, and recommendations of the study under this 
section by not later than 12 months after the date of the enactment of 
this Act. The Secretary shall include in the report the following:
            (1) The identifications, descriptions, and estimations 
        referred to in subsection (b).
            (2) A description of activities the Secretary is currently 
        conducting or considering, or that could be considered, to 
        produce additional hydroelectric power from each identified 
        facility.
            (3) A summary of action that has already been taken by the 
        Secretary to produce additional hydroelectric power from each 
        identified facility.
            (4) The costs to install, upgrade, or modify equipment or 
        take other actions to produce additional hydroelectric power 
        from each identified facility and the level of Federal power 
        customer involvement in the Secretary's determination of such 
        costs.
            (5) The benefits that would be achieved by such 
        installation, upgrade, modification, or other action, including 
        quantified estimates of any additional energy or capacity from 
        each facility identified under subsection (b).
            (6) A description of actions that are planned, underway, or 
        might reasonably be considered to increase hydroelectric power 
        production by replacing turbine runners.
            (7) A description of actions that are planned, underway, or 
        might reasonably be considered to increase hydroelectric power 
        production by performing generator uprates and rewinds.
            (8) The impact of increased hydroelectric power production 
        on irrigation, fish, wildlife, Indian tribes, river health, 
        water quality, navigation, recreation, fishing, and flood 
        control.
            (9) Any additional recommendations the Secretary considers 
        advisable to increase hydroelectric power production from, and 
        reduce costs and improve efficiency at, facilities under the 
        jurisdiction of the Secretary.

SEC. 30502. STUDY AND IMPLEMENTATION OF INCREASED OPERATIONAL 
              EFFICIENCIES IN HYDROELECTRIC POWER PROJECTS.

    (a) In General.--The Secretary of Interior shall conduct a study of 
operational methods and water scheduling techniques at all 
hydroelectric power plants under the administrative jurisdiction of the 
Secretary that have an electric power production capacity greater than 
50 megawatts, to--
            (1) determine whether such power plants and associated 
        river systems are operated so as to optimize energy and 
        capacity capabilities; and
            (2) identify measures that can be taken to improve 
        operational flexibility at such plants to achieve such 
        optimization.
    (b) Report.--The Secretary shall submit a report on the findings, 
conclusions, and recommendations of the study under this section by not 
later than 18 months after the date of the enactment of this Act, 
including a summary of the determinations and identifications under 
paragraphs (1) and (2) of subsection (a). The Secretary shall include 
in the report the impact of optimized hydroelectric power production on 
irrigation, fish, wildlife, Indian tribes, river health, water quality, 
navigation, recreation, fishing, and flood control.
    (c) Cooperation with Federal Power Marketing Administrations.--The 
Secretary shall coordinate with the Administrator of each Federal power 
marketing administration in determining how the value of electric power 
produced by each hydroelectric power facility that produces power 
marketed by the administration can be optimized.

SEC. 30503. SHIFT OF PROJECT LOADS TO OFF-PEAK PERIODS.

    (a) In General.--The Secretary of the Interior shall--
            (1) review electric power consumption by Bureau of 
        Reclamation facilities for water pumping purposes; and
            (2) make such adjustments in such pumping as possible to 
        minimize the amount of electric power consumed for such pumping 
        during periods of peak electric power consumption, including by 
        performing as much of such pumping as possible during off-peak 
        hours at night.
    (b) Consent of Affected Irrigation Customers Required.--The 
Secretary may not under this section make any adjustment in pumping at 
a facility without the consent of each person that has contracted with 
the United States for delivery of water from the facility for use for 
irrigation and that would be affected by such adjustment.
    (c) Existing Obligations Not Affected.--This section shall not be 
construed to affect any existing obligation of the Secretary to provide 
electric power, water, or other benefits from Bureau of Reclamation 
facilities.

                      TITLE VI--GEOTHERMAL ENERGY

SEC. 30601. COMPETITIVE LEASE SALE REQUIREMENTS.

    (a) In General.--Section 4 of the Geothermal Steam Act of 1970 (30 
U.S.C. 1003) is amended to read as follows:

                          ``leasing procedures

    ``Sec. 4. (a) In General.--
            ``(1) Nominations.--The Secretary shall accept nominations 
        at any time from qualified companies and individuals of areas 
        to be leased under this Act.
            ``(2) Competitive lease sale required.--The Secretary shall 
        hold a competitive lease sale at least once every 2 years for 
        lands in a State in that are located areas with respect to 
        which there are nominations pending under paragraph (1).
            ``(3) Noncompetitive leasing.--The Secretary shall make 
        available for a period of 2 years for noncompetitive leasing 
        any lands for which a competitive lease sale is held, but for 
        which the Secretary does not receive any bids in a competitive 
        lease sale.''.
    (b) Pending Lease Applications.--Not later than 6 months after the 
date of the enactment of this Act, the Secretary of the Interior shall 
initiate competitive lease sales under the Geothermal Steam Act of 1970 
(30 U.S.C. 1001 et seq.), as amended by this Act, for areas with 
respect to which applications for leasing are pending on the date of 
the enactment of this Act.

SEC. 30602. SPECIAL PROVISIONS REGARDING DIRECT USE OF LOW TEMPERATURE 
              GEOTHERMAL ENERGY RESOURCES.

    (a) Leasing Procedure.--Section 4 of the Geothermal Steam Act of 
1970 (30 U.S.C. 1003) is further amended by adding at the end the 
following:
    ``(b) Leasing of Low Temperature Geothermal Resources.--Lands 
leased under this Act exclusively for qualified development and direct 
utilization of low temperature geothermal resources shall be leased to 
any qualified applicant who first applies for such lease under 
regulations formulated by the Secretary.''.
    (b) Limitation on Lease Area.--Section 7 of the Geothermal Steam 
Act of 1970 (30 U.S.C. 1006) is amended--
            (1) in the first sentence by striking ``A geothermal 
        lease'' and inserting ``(a) In General.--Except as provided in 
        subsection (b), a geothermal lease''; and
            (2) by adding at the end the following:
    ``(b) Leasing of Low Temperature Geothermal Resources.--A 
geothermal lease for qualified development and direct utilization of 
low temperature geothermal resources shall embrace not more than the 
minimum amount of acreage determined by the Secretary to be reasonably 
necessary for such utilization.''.
    (c) Annual Payment.--Section 5 of the Geothermal Steam Act of 1970 
(30 U.S.C. 1004) is amended--
            (1) in paragraph (c) by redesignating subparagraphs (1) and 
        (2) as subparagraphs (A) and (B);
            (2) by redesignating paragraphs (a) through (d) in order as 
        paragraphs (1) through (4);
            (3) by inserting ``(a) In General.--'' after ``Sec. 5.''; 
        and
            (4) by adding at the end the following:
    ``(b) Exemption for Use of Low Temperature Resources.--
            ``(1) In general.--In lieu of any royalty or rental under 
        subsection (a), a lease for qualified development and direct 
        utilization of low temperature geothermal resources shall 
        provide for payment by the lessee of an annual fee per well of 
        not less than $100, and not more than $1,000, in accordance 
        with the schedule issued under paragraph (2).
            ``(2) Schedule.--The Secretary shall issue a schedule of 
        fees under this section under which a fee is based on the scale 
        of development and utilization to which the fee applies.''.
    (d) Definitions.--Section 2 of the Geothermal Steam Act of 1970 (30 
U.S.C. 1001) is amended--
            (1) in paragraph (f) by redesignating subparagraphs (1) 
        through (4) in order as subparagraphs (A) through (D);
            (2) by redesignating paragraphs (a) through (f) in order as 
        paragraphs (1) through (6); and
            (3) by adding at the end the following:
            ``(7) Low temperature geothermal resources.--The term `low 
        temperature geothermal resources' means geothermal steam and 
        associated geothermal resources having a wellhead temperature 
        of less than 195 degrees Fahrenheit.
            ``(8) Qualified development and direct utilization.--The 
        term `qualified development and direct utilization' means 
        development and utilization in which all products of geothermal 
        resources, other than any heat utilized, are returned to the 
        geothermal formation from which they are produced.''.
    (e) Existing Leases.--
            (1) Application to convert.--Any lessee under a lease under 
        the Geothermal Steam Act of 1970 that was issued before the 
        date of the enactment of this Act may apply to the Secretary of 
        the Interior, by not later than 18 months after the date of the 
        enactment of this Act, to convert such lease to a lease for 
        qualified development and direct utilization of low temperature 
        geothermal resources in accordance with the amendments made by 
        this section.
            (2) Conversion.--The Secretary shall approve such an 
        application and convert such a lease to a lease in accordance 
        with the amendments by not later than 180 days after receipt of 
        such application, unless the Secretary determines that the 
        applicant is not a qualified applicant with respect to the 
        lease.

SEC. 30603. ROYALTIES AND NEAR-TERM PRODUCTION INCENTIVES.

    (a) Royalty.--Section 5 of the Geothermal Steam Act of 1970 (30 
U.S.C. 1004) is further amended in subsection (a) by striking paragraph 
(1) and inserting the following:
            ``(1) a royalty on direct use of geothermal steam and 
        associated geothermal resources, other than low temperature 
        geothermal resources, which shall be--
                    ``(A) 3.5 percent of the gross proceeds from the 
                sale of electricity produced by such resources; and
                    ``(B) 0.75 percent of the gross proceeds from the 
                sale of items produced by the direct use of such 
                resources;''.
    (b) Near-Term Production Incentive.--
            (1) In general.--Notwithstanding section 5(a) of the 
        Geothermal Steam Act of 1970, as amended by subsection (a), or 
        any provision of any lease under that Act, the royalty required 
        to be paid--
                    (A) under any qualified geothermal energy lease 
                with respect to commercial production of heat or energy 
                from a facility that begins such production in the 6-
                year period beginning on the date of the enactment of 
                this Act; or
                    (B) on qualified expansion geothermal energy;
        shall be 50 percent of the amount of royalty otherwise required 
        to be paid under those provisions.
            (2) State share.--Notwithstanding section 20 of the 
        Geothermal Steam Act of 1970 (30 U.S.C. 1019), section 35 of 
        the Mineral Leasing Act (30 U.S.C.191), or section 6 of the 
        Mineral Leasing Act for Acquired Lands (30 U.S.C. 355), in the 
        case of monies received by the United States from royalty 
        described in subparagraph (A) or (B) of paragraph (1), the 
        percentage required to be paid by the Secretary of the Treasury 
        to a State under those sections shall be 100 percent.
            (3) 4-year application.--Paragraphs (1) and (2) apply only 
        to commercial production of heat or energy from a facility in 
        the first 4 years of such production.
            (4) No effect on state portion.--This subsection shall not 
        be construed to reduce the amount of royalty required to be 
        paid to a State.
    (c) Definitions.--In this section:
            (1) Qualified expansion geothermal energy.--The term 
        ``qualified expansion geothermal energy'' means geothermal 
        energy produced from a generation facility for which--
                    (A) the production is increased by more than 10 
                percent as a result of expansion of the facility 
                carried out in the 6-year period beginning on the date 
                of the enactment of this Act; and
                    (B) such production increase is greater than 10 
                percent of the average production by the facility 
                during the 5-year period preceding the expansion of the 
                facility.
            (2) Qualified geothermal energy lease.--The term 
        ``qualified geothermal energy lease'' means a lease under the 
        Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.)--
                    (A) that was executed before the end of the 6-year 
                period beginning on the date of the enactment of this 
                Act; and
                    (B) under which no commercial production of any 
                form of heat or energy occurred before the date of the 
                enactment of this Act.
    (d) Royalty Existing Leases.--
            (1) In general.--Any lessee under a lease issued under the 
        Geothermal Steam Act of 1970 before the date of the enactment 
        of this Act may modify the terms of the lease relating to 
        payment of royalties to comply with the amendment made by 
        subsection (a), by applying to the Secretary of the Interior by 
        not later than 18 months after the date of the enactment of 
        this Act.
            (2) Application of modification.--Such modification shall 
        apply to any use of geothermal steam and associated geothermal 
        resources to which the amendment applies that occurs after the 
        date of that application.

SEC. 30604. CONSULTATION REGARDING GEOTHERMAL LEASING AND PERMITTING ON 
              PUBLIC LANDS.

    (a) In General.--Not later than 6 months after the date of the 
enactment of this Act, 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 under their 
respective administrative jurisdictions.
    (b) Lease and Permit Applications.--The memorandum of understanding 
shall include provisions that--
            (1) identify known geothermal areas on public lands within 
        the National Forest System and when necessary review management 
        plans to consider leasing under the Geothermal Steam Act of 
        1970 (30 U.S.C. 1001 et seq.) as a land use;
            (2) establish an administrative procedure for processing 
        geothermal lease applications, including lines of authority, 
        steps in application processing, and timeframes for application 
        processing;
            (3) provide that the Secretary concerned shall--
                    (A) within 14 days after receiving an application 
                for a lease, determine whether the application contains 
                sufficient information to allow processing of the 
                application; and
                    (B) if the application is found not to contain 
                sufficient information to allow processing the 
                application the Secretary shall, before the end of such 
                14-day period, provide written notification to the 
                lease applicant that the application is being returned 
                to the applicant without processing and itemizing the 
                deficiencies in the application that prevent 
                processing;
            (4) provide that the Secretary concerned shall within 30 
        days after receiving a lease application, provide written 
        notice to the lease applicant regarding the status of the 
        application, including an estimation of the time that will be 
        required to complete action on the application; and
            (5) establish an administrative procedure for processing 
        geothermal development permits, including lines of authority, 
        steps in permit processing, and timeframes for permit 
        processing.
    (c) Five-Year Leasing Plan.--The memorandum of understanding shall 
develop a 5-year plan for leasing under the Geothermal Steam Act of 
1970 (30 U.S.C. 1001 et seq.) of public land in the National Forest 
System. The plan for geothermal leasing shall be updated every 5 years.
    (d) Data Retrieval System.--The memorandum of understanding shall 
establish a joint data retrieval system that is capable of tracking 
lease and permit applications and requests and providing to the 
applicant or requester information as to their status within the 
Departments of the Interior and Agriculture, including an estimate of 
the time required for administrative action.

SEC. 30605. REVIEW AND REPORT TO CONGRESS.

    The Secretary of the Interior shall promptly review and report to 
the Congress within 3 years after the date of the enactment of this Act 
regarding the status of all moratoria on and withdrawals from leasing 
under the Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) of 
known geothermal resources areas (as that term is defined in section 2 
of that Act (30 U.S.C. 1001), specifying for each such area whether the 
basis for such moratoria or withdrawal still applies.

SEC. 30606. REIMBURSEMENT FOR COSTS OF NEPA ANALYSES, DOCUMENTATION, 
              AND STUDIES.

    (a) In General.--The Geothermal Steam Act of 1970 (30 U.S.C. 1001 
et seq.) is amended by adding at the end the following:

   ``reimbursement for costs of certain analyses, documentation, and 
                                studies

    ``Sec. 30. (a) In General.--The Secretary of the Interior may, 
through royalty credits, reimburse a person who is a lessee, operator, 
operating rights owner, or applicant for a lease under this Act for 
reasonable amounts paid by the person for preparation by the Secretary 
(or a contractor or other person selected by the Secretary) of any 
project-level analysis, documentation, or related study required under 
the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) 
with respect to the lease.
    ``(b) Conditions.--The Secretary may provide reimbursement under 
subsection (a) only if--
            ``(1) adequate funding to enable the Secretary to timely 
        prepare the analysis, documentation, or related study is not 
        appropriated;
            ``(2) the person paid the amounts voluntarily; and
            ``(3) the person maintains records of its costs in 
        accordance with regulations prescribed by the Secretary.''.
    (b) Application.--The amendments made by this section shall apply 
with respect to any lease entered into before, on, or after the date of 
the enactment of this Act.
    (c) Deadline for Regulations.--The Secretary shall issue 
regulations implementing the amendments made by this section by not 
later than 90 days after the date of the enactment of this Act.

SEC. 30607. ASSESSMENT OF GEOTHERMAL ENERGY POTENTIAL.

    The Secretary of Interior, acting through the Director of the 
United States Geological Survey, shall update the 1978 Assessment of 
Geothermal Resources, and submit that updated assessment to the 
Committee on Resources of the House of Representatives and the 
Committee on Energy and Natural Resources of the Senate--
            (1) within 3 years after the date of enactment of this Act; 
        and
            (2) thereafter as the availability of data and developments 
        in technology warrant.

SEC. 30608. COOPERATIVE OR UNIT PLANS.

      (a) In General.--Section 18 of the Geothermal Steam Act of 1970 
(30 U.S.C. 1017) is amended to read as follows:

                      ``cooperative or unit plans

    ``Sec. 18. (a) Adoption of Plan by Lessees.--
            ``(1) In general.--For the purpose of more properly 
        conserving the natural resources of any geothermal field, or 
        like area, or any part thereof (whether or not any part of the 
        geothermal field, or like area, is then subject to any 
        cooperative or unit plan of development or operation), lessees 
        thereof and their representatives may unite with each other, or 
        jointly or separately with others, in collectively adopting and 
        operating under a cooperative or unit plan of development or 
        operation of such field, or like area, or any part thereof, if 
        determined and certified by the Secretary to be necessary or 
        advisable in the public interest.
            ``(2) Modification of lease requirements by secretary.--The 
        Secretary may, in the discretion of the Secretary, and with the 
        consent of the holders of leases involved, establish, alter, 
        change, or revoke drilling, producing, rental, minimum royalty, 
        and royalty requirements of such leases and to make such 
        regulations with reference to such leases, with the consent of 
        the lessees, in connection with the institution and operation 
        of any such cooperative or unit plan as the Secretary may deem 
        necessary or proper to secure the proper protection of the 
        public interest.
    ``(b) Requirement of Plans Under New Leases.--The Secretary--
            ``(1) may provide that geothermal leases issued under this 
        Act after the date of the enactment of this section shall 
        contain a provision requiring the lessee to operate under such 
        a reasonable cooperative or unit plan; and
            ``(2) may prescribe such a plan under which such lessee 
        shall operate, which shall adequately protect the rights of all 
        parties in interest, including the United States.
    ``(c) Modification of Rate of Prospecting, Development, and 
Production.--The Secretary may require that any plan authorized by the 
this section that applies to lands owned by the United States contain a 
provision under which authority is vested in the Secretary, or any 
person, committee, or State or Federal officer or agency as may be 
designated in the plan, to alter or modify from time to time the rate 
of prospecting and development and the quantity and rate of production 
under such plan.
    ``(d) Exclusion From Determination of Holding or Control.--Any 
lands that are subject to any plan approved or prescribed by the 
Secretary under this section shall not be considered in determining 
holdings or control under any provision of this Act.
    ``(e) Pooling of Certain Lands.--If separate tracts of lands cannot 
be independently developed and operated to use geothermal steam and 
associated geothermal resources pursuant to this Act in conformity with 
an established development program--
            ``(1) any such lands, or a portion thereof, may be pooled 
        with other lands, whether or not owned by the United States, 
        for purposes of such development and operation under a 
        communitization agreement providing for an apportionment of 
        production or royalties among the separate tracts of land 
        comprising the production unit, if such pooling is determined 
        by the Secretary to be in the public interest; and
            ``(2) operation or production pursuant to such an agreement 
        shall be treated as operation or production with respect to 
        each tract of land that is subject to the agreement.
    ``(f) Plan Review.--No more than 5 years after approval of any 
cooperative or unit plan of development or operation, and at least 
every 5 years thereafter, the Secretary shall review each such plan 
and, after notice and opportunity for comment, eliminate from inclusion 
in such plan any lands that the Secretary determines are not reasonably 
necessary for cooperative or unit operations under the plan. Such 
elimination shall be based on scientific evidence, and shall occur only 
if it is determined by the Secretary to be for the purpose of 
conserving and properly managing the geothermal resource. Any land so 
eliminated shall be eligible for an extension under subsection (c) or 
(g) of section 6 if it meets the requirements for such an extension.
    ``(g) Approval by Secretary.--The Secretary may, on such conditions 
as the Secretary may prescribe, approve operating, drilling, or 
development contracts made by one or more lessees of geothermal leases, 
with one or more persons, associations, or corporations if, in the 
discretion of the Secretary, the conservation of natural resources or 
the public convenience or necessity may require or the interests of the 
United States may be best served thereby. All leases operated under 
such approved operating, drilling, or development contracts, and 
interests thereunder, shall be excepted in determining holdings or 
control under section 7 of this Act.''.

SEC. 30609. ROYALTY ON BYPRODUCTS.

    Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 1004) is 
further amended in subsection (a) by striking paragraph (2) and 
inserting the following:
            ``(2) a royalty on any byproduct that is a mineral named in 
        the first section of the Mineral Leasing Act (30 U.S.C. 181), 
        and that is derived from production under the lease, at the 
        rate of the royalty that applies under that Act to production 
        of such mineral under a lease under that Act;''.

SEC. 30610. REPEAL OF AUTHORITIES OF SECRETARY TO READJUST TERMS, 
              CONDITIONS, RENTALS, AND ROYALTIES.

    Section 8 of the Geothermal Steam Act of 1970 (30 U.S.C. 1007) is 
amended by repealing subsections (a) and (b), and by striking ``(c)''.

SEC. 30611. CREDITING OF RENTAL TOWARD ROYALTY.

    Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 1004) is 
further amended--
            (1) in subsection (a)(2) by inserting ``and'' after the 
        semicolon at the end;
            (2) in subsection (a)(3) by striking ``; and'' and 
        inserting a period;
            (3) by striking paragraph (4) of subsection (a); and
            (4) by adding at the end the following:
    ``(c) Crediting of Rental Toward Royalty.--Any annual rental under 
this section that is paid with respect to a lease before the first day 
of the year for which the annual rental is owed shall be credited to 
the amount of royalty that is required to be paid under the lease for 
that year.''.

SEC. 30612. LEASE DURATION AND WORK COMMITMENT REQUIREMENTS.

    (a) In General.--Section 6 of the Geothermal Steam Act of 1970 (30 
U.S.C. 1005) is amended--
            (1) by striking so much as precedes subsection (c), and 
        striking subsections (e), (g), (h), (i), and (j);
            (2) by redesignating subsections (c), (d), and (f) in order 
        as subsections (g), (h), and (i);
            (3) by inserting before subsection (g), as so redesignated, 
        the following:

             ``lease term and work commitment requirements

    ``Sec. 6. (a) Primary Term.--
            ``(1) In general.--A geothermal lease shall be for a 
        primary term of ten years.
            ``(2) Initial extension.--The Secretary shall extend the 
        primary term of a geothermal lease for 5 years if, for each 
        year after the fifth year of the lease--
                    ``(A) the Secretary determined under subsection (c) 
                that the lessee satisfied the work commitment 
                requirements that applied to the lease for that year; 
                or
                    ``(B) the lessee paid in accordance with subsection 
                (d) the value of any work that was not completed in 
                accordance with those requirements.
            ``(3) Additional extension.--The Secretary shall extend the 
        primary term of a geothermal lease (after an extension under 
        paragraph (2)) for an additional 5 years if, for each year 
        after the fifteenth year of the lease, the Secretary determined 
        under subsection (c) that the lessee satisfied the work 
        commitment requirements that applied to the lease for that 
        year.
    ``(b) Requirement to Satisfy Annual Work Commitment Requirement.--
            ``(1) In general.--The lessee for a geothermal lease shall, 
        for each year after the fifth year of the lease, satisfy work 
        commitment requirements prescribed by the Secretary that apply 
        to the lease for that year.
            ``(2) Prescription of work commitment requirements.--The 
        Secretary shall issue regulations prescribing minimum work 
        commitment requirements for geothermal leases, that--
                    ``(A) require that a lessee, in each year after the 
                fifth year of the primary term of a geothermal lease, 
                diligently work to achieve commercial production or 
                utilization of steam under the lease;
                    ``(B) require that in each year to which work 
                commitment requirements under the regulations apply, 
                the lessee shall significantly reduce the amount of 
                work that remains to be done to achieve such production 
                or utilization;
                    ``(C) describe specific work that must be completed 
                by a lessee by the end of each year to which the work 
                commitment requirements apply;
                    ``(D) carry forward and apply to work commitment 
                requirements for a year, work completed in any year in 
                the preceding 3-year period that was in excess of the 
                work required to be performed in that preceding year; 
                and
                    ``(E) establish transition rules for leases issued 
                before the date of the enactment of this subsection.
            ``(3) Termination of application of requirements.--Work 
        commitment requirements prescribed under this subsection shall 
        not apply to a geothermal lease after the date on which 
        geothermal steam is produced or utilized under the lease in 
        commercial quantities.
    ``(c) Determination of Whether Requirements Satisfied.--The 
Secretary shall, by not later than 21 days after the end of each year 
for which work commitment requirements under subsection (b) apply to a 
geothermal lease--
            ``(1) determine whether the lessee has satisfied the 
        requirements that apply for that year;
            ``(2) notify the lessee of that determination; and
            ``(3) in the case of a notification that the lessee did not 
        satisfy work commitment requirements for the year, include in 
        the notification--
                    ``(A) a description of the specific work that was 
                not completed by the lessee in accordance with the 
                requirements; and
                    ``(B) the amount of the dollar value of such work 
                that was not completed, reduced by the amount of 
                expenditures made for work completed in a prior year 
                that is carried forward pursuant to subsection 
                (b)(2)(D).
    ``(d) Payment of Value of Uncompleted Work.--
            ``(1) In general.--If the Secretary notifies a lessee that 
        the lessee failed to satisfy work commitment requirements under 
        subsection (b), the lessee shall pay to the Secretary, by not 
        later than the end of the 60-day period beginning on the date 
        of the notification, the dollar value of work that was not 
        completed by the lessee, in the amount stated in the 
        notification (as reduced under subsection (c)(3)(B)).
            ``(2) Failure to pay value of uncompleted work.--If a 
        lessee fails to pay such amount to the Secretary before the end 
        of that period, the lease shall terminate upon the expiration 
        of the period.
    ``(e) Continuation After Commercial Production or Utilization.--If 
geothermal steam is produced or utilized in commercial quantities 
within the primary term of the lease under subsection (a) (including 
any extension of the lease under subsection (a)), such lease shall 
continue until the date on which geothermal steam is no longer produced 
or utilized in commercial quantities.
    ``(f) Conversion of Geothermal Lease to Mineral Lease.--The lessee 
under a lease that has produced geothermal steam for electrical 
generation, has been determined by the Secretary to be incapable of any 
further commercial production or utilization of geothermal steam, and 
that is producing any valuable byproduct in payable quantities may, 
within 6 months after such determination--
            ``(1) convert the lease to a mineral lease under the 
        Mineral Leasing Act (30 U.S.C. 181 et seq.) or under the 
        Mineral Leasing Act for Acquired Lands (30 U.S.C. 351 et seq.), 
        if the lands that are subject to the lease can be leased under 
        that Act for the production of such byproduct; or
            ``(2) convert the lease to a mining claim under the general 
        mining laws, if the byproduct is a locatable mineral.''.
    (b) Conforming Amendment.--
            (1) Section 18 of the Geothermal Steam Act of 1970 (30 
        U.S.C. 1017) is amended by striking ``subsection (c) or (g)'' 
        and inserting ``subsection (g)''.
            (2) Section 20 of the Geothermal Steam Act of 1970 (30 
        U.S.C. 1019) is amended by striking ``, including the payments 
        referred to in section 6(i),''.

SEC. 30613. ADVANCED ROYALTIES REQUIRED FOR SUSPENSION OF PRODUCTION.

    Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 1004) is 
further amended by adding at the end the following:
    ``(d) Advanced Royalties Required for Suspension of Production.--
(1) If production of heat or energy under a geothermal lease is 
suspended after the date of any such production for which royalty is 
required under section 5(a), the Secretary shall require the lessee, 
until the end of such suspension, to pay royalty in advance at the 
monthly pro-rata rate of the average annual rate at which such royalty 
was paid each year in the 5-year-period preceding the date of 
suspension.
    ``(2) Paragraph (1) shall not apply if the suspension is required 
or otherwise caused by the Secretary, the Secretary of a military 
department, or a State or local government.''.

SEC. 30614. ANNUAL RENTAL.

    (a) Annual Rental Rate.--Section 5 of the Geothermal Steam Act of 
1970 (30 U.S.C. 1004) is further amended in subsection (a) in paragraph 
(3) by striking ``$1 per acre or fraction thereof for each year of the 
lease'' and all that follows through the end of the paragraph and 
inserting ``$1 per acre or fraction thereof for each year of the lease 
in the case of a lease awarded in a noncompetitive lease sale; or $2 
per acre or fraction thereof for the first year, $3 per acre or 
fraction thereof for each of the second through tenth years, and $5 per 
acre or fraction thereof for each year after the 10th year thereof, in 
the case of a lease awarded in a competitive lease sale; and''.
    (b) Termination of Lease for Failure to Pay Rental.--Section 5 of 
the Geothermal Steam Act of 1970 (30 U.S.C. 1004) is further amended by 
adding at the end the following:
    ``(e) Termination of Lease For Failure to Pay Rental.--
            ``(1) In general.--The Secretary shall terminate any lease 
        with respect to which rental is not paid in accordance with 
        this Act and the terms of the lease under which the rental is 
        required, upon the expiration of the 45-day period beginning on 
        the date of the failure to pay such rental.
            ``(2) Notification.--The Secretary shall promptly notify a 
        lessee that has not paid rental required under the lease that 
        the lease will be terminated at the end of the period referred 
        to in paragraph (1).
            ``(3) Reinstatement.--A lease that would otherwise 
        terminate under paragraph (1) shall not terminate under that 
        paragraph if the lessee pays to the Secretary, before the end 
        of the period referred to in paragraph (1), the amount of 
        rental due plus a late fee equal to 10 percent of such 
        amount.''.

                            TITLE VII--COAL

SEC. 30701. SHORT TITLE.

    This title may be cited as the ``Coal Leasing Amendments Act of 
2003''.

SEC. 30702. REPEAL OF THE 160-ACRE LIMITATION FOR COAL LEASES.

    Section 3 of the Mineral Leasing Act (30 U.S.C. 203) is amended in 
the first sentence by striking ``such lease,'' and all that follows 
through the end of the sentence and inserting ``such lease.''.

SEC. 30703. 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 40 years if 
the Secretary determines that the longer period--
            ``(i) will ensure the maximum economic recovery of a coal 
        deposit; or
            ``(ii) the longer period is in the interest of the orderly, 
        efficient, or economic development of a coal resource.''.

SEC. 30704. PAYMENT OF ADVANCE ROYALTIES UNDER COAL LEASES.

    (a) In General.--Section 7(b) of the Mineral Leasing Act of 1920 
(30 U.S.C. 207(b)) is amended to read as follows:
    ``(b)(1) Each lease shall be subjected to the condition 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.
    ``(2)(A) 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.
    ``(B) Such advance royalties shall be computed based on the average 
price for coal sold in the spot market from the same region during the 
last month of each applicable continued operation year.
    ``(C) The aggregate number of years during the initial and any 
extended term of any lease for which advance royalties may be accepted 
in lieu of the condition of continued operation shall not exceed 20.
    ``(3) The amount of any production royalty paid for any year shall 
be reduced (but not below zero) 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.
    ``(4) This subsection shall be applicable to any lease or logical 
mining unit in existence on the date of the enactment of this paragraph 
or issued or approved after such date.
    ``(5) Nothing in this subsection shall be construed to affect the 
requirement contained in the second sentence of subsection (a) relating 
to commencement of production at the end of 10 years.''.
    (b) Authority To Waive, Suspend, or Reduce Advance Royalties.--
Section 39 of the Mineral Leasing Act (30 U.S.C. 209) is amended by 
striking the last sentence.

SEC. 30705. 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. 30706. AMENDMENTS RELATING TO FINANCIAL ASSURANCES WITH RESPECT TO 
              BONUS BIDS.

    (a) Prohibition on Requiring Surety Bonds.--Section 2(a) of the 
Mineral Leasing Act (30 U.S.C. 201(a)) is amended by adding at the end 
the following:
    ``(4) The Secretary shall not require a surety bond or any other 
financial assurance to guarantee payment of deferred bonus bid 
installments with respect to any coal lease issued based upon a cash 
bonus bid.
    ``(5) Notwithstanding any other provision of law, if the lessee 
under a coal lease fails to pay any installment of a deferred cash 
bonus bid within 10 days after the Secretary provides written notice 
that payment of such installment is past due--
            ``(A) such lease shall automatically terminate;
            ``(B) any deferred bonus payments that have not been paid 
        to the United States with respect to such lease shall no longer 
        be owed to the United States; and
            ``(C) any bonus payments already made to the United States 
        with respect to such lease shall not be returned to the lessee 
        or credited in any future lease sale.''.
    (b) Conforming Amendment.--Section 2(a)(1) of the Mineral Leasing 
Act (30 U.S.C. 201(a)(1)) is amended by striking ``Upon default or 
cancellation of any coal lease for which bonus payments are due, any 
unpaid remainder of the bid shall be immediately payable to the United 
States.''.

SEC. 30707. INVENTORY REQUIREMENT.

    (a) Review of Assessments.--
            (1) In general.--The Secretary of the Interior, in 
        consultation with the Secretary of Agriculture and the 
        Secretary of Energy, shall review coal assessments and other 
        available data to identify--
                    (A) public lands with coal resources;
                    (B) the extent and nature of any restrictions or 
                impediments to the development of coal resources on 
                public lands identified under paragraph (1); and
                    (C) with respect to areas of such lands for which 
                sufficient data exists, resources of compliant coal and 
                supercompliant coal.
            (2) Definitions.--For purposes of this subsection--
                    (A) the term ``compliant coal'' means coal that 
                contains not less than 1.0 and not more than 1.2 pounds 
                of sulfur dioxide per million Btu; and
                    (B) the term ``supercompliant coal'' means coal 
                that contains less than 1.0 pounds of sulfur dioxide 
                per million Btu.
    (b) Completion and Updating of the Inventory.--The Secretary--
            (1) shall complete the inventory under subsection (a) by 
        not later than 2 years after the date of the enactment of this 
        Act; and
            (2) shall update the inventory as the availability of data 
        and developments in technology warrant.
    (c) Report.--The Secretary shall submit to the Committee on 
Resources of the House of Representatives and to the Committee on 
Energy and Natural Resources of the Senate and make publicly 
available--
            (1) a report containing the inventory under this section, 
        by not later than 2 years after the effective date of this 
        section; and
            (2) each update of such inventory.

SEC. 30708. APPLICATION OF AMENDMENTS.

    The amendments made by this title apply with respect to any coal 
lease issued before, on, or after the date of the enactment of this 
Act.

               TITLE VIII--INSULAR AREAS ENERGY SECURITY

SEC. 30801. INSULAR AREAS ENERGY SECURITY.

    Section 604 of the Act entitled ``An Act to authorize 
appropriations for certain insular areas of the United States, and for 
other purposes'', approved December 24, 1980 (Public Law 96-597; 94 
Stat. 3480-3481), is amended--
            (1) in subsection (a)(4) by striking the period and 
        inserting a semicolon;
            (2) by adding at the end of subsection (a) the following 
        new paragraphs:
            ``(5) electric power transmission and distribution lines in 
        insular areas are inadequate to withstand damage caused by the 
        hurricanes and typhoons which frequently occur in insular areas 
        and such damage often costs millions of dollars to repair; and
            ``(6) the refinement of renewable energy technologies since 
        the publication of the 1982 Territorial Energy Assessment 
        prepared pursuant to subsection (c) reveals the need to 
        reassess the state of energy production, consumption, 
        infrastructure, reliance on imported energy, and indigenous 
        sources in regard to the insular areas.'';
            (3) by amending subsection (e) to read as follows:
    ``(e)(1) The Secretary of the Interior, in consultation with the 
Secretary of Energy and the chief executive officer of each insular 
area, shall update the plans required under subsection (c) by--
            ``(A) updating the contents required by subsection (c);
            ``(B) drafting long-term energy plans for such insular 
        areas with the objective of reducing, to the extent feasible, 
        their reliance on energy imports by the year 2010 and 
        maximizing, to the extent feasible, use of indigenous energy 
        sources; and
            ``(C) drafting long-term energy transmission line plans for 
        such insular areas with the objective that the maximum 
        percentage feasible of electric power transmission and 
        distribution lines in each insular area be protected from 
        damage caused by hurricanes and typhoons.
    ``(2) Not later than May 31, 2004, the Secretary of the Interior 
shall submit to the Congress the updated plans for each insular area 
required by this subsection.''; and
            (4) by amending subsection (g)(4) to read as follows:
            ``(4) Power line grants for territories.--
                    ``(A) In general.--The Secretary of the Interior is 
                authorized to make grants to governments of territories 
                of the United States to carry out eligible projects to 
                protect electric power transmission and distribution 
                lines in such territories from damage caused by 
                hurricanes and typhoons.
                    ``(B) Eligible projects.--The Secretary may award 
                grants under subparagraph (A) only to governments of 
                territories of the United States that submit written 
                project plans to the Secretary for projects that meet 
                the following criteria:
                            ``(i) The project is designed to protect 
                        electric power transmission and distribution 
                        lines located in one or more of the territories 
                        of the United States from damage caused by 
                        hurricanes and typhoons.
                            ``(ii) The project is likely to 
                        substantially reduce the risk of future damage, 
                        hardship, loss, or suffering.
                            ``(iii) The project addresses one or more 
                        problems that have been repetitive or that pose 
                        a significant risk to public health and safety.
                            ``(iv) The project is not likely to cost 
                        more than the value of the reduction in direct 
                        damage and other negative impacts that the 
                        project is designed to prevent or mitigate. The 
                        cost benefit analysis required by this 
                        criterion shall be computed on a net present 
                        value basis.
                            ``(v) The project design has taken into 
                        consideration long-term changes to the areas 
                        and persons it is designed to protect and has 
                        manageable future maintenance and modification 
                        requirements.
                            ``(vi) The project plan includes an 
                        analysis of a range of options to address the 
                        problem it is designed to prevent or mitigate 
                        and a justification for the selection of the 
                        project in light of that analysis.
                            ``(vii) The applicant has demonstrated to 
                        the Secretary that the matching funds required 
                        by subparagraph (D) are available.
                    ``(C) Priority.--When making grants under this 
                paragraph, the Secretary shall give priority to grants 
                for projects which are likely to--
                            ``(i) have the greatest impact on reducing 
                        future disaster losses; and
                            ``(ii) best conform with plans that have 
                        been approved by the Federal Government or the 
                        government of the territory where the project 
                        is to be carried out for development or hazard 
                        mitigation for that territory.
                    ``(D) Matching requirement.--The Federal share of 
                the cost for a project for which a grant is provided 
                under this paragraph shall not exceed 75 percent of the 
                total cost of that project. The non-Federal share of 
                the cost may be provided in the form of cash or 
                services.
                    ``(E) Treatment of funds for certain purposes.--
                Grants provided under this paragraph shall not be 
                considered as income, a resource, or a duplicative 
                program when determining eligibility or benefit levels 
                for Federal major disaster and emergency assistance.
                    ``(F) Authorization of appropriations.--There is 
                authorized to be appropriated to carry out this 
                paragraph $5,000,000 for each fiscal year beginning 
                after the date of the enactment of this paragraph.''.

                   TITLE IX--MISCELLANEOUS PROVISIONS

SEC. 30901. REPORT ON ENERGY FACILITY RIGHTS-OF-WAY AND CORRIDORS ON 
              FEDERAL LANDS.

    (a) Report to Congress.--
            (1) In general.--Not later than 1 year after the date of 
        the enactment of this section, the Secretary of Agriculture and 
        the Secretary of the Interior, in consultation with the 
        Secretaries of Commerce, Defense, and Energy and the Federal 
        Energy Regulatory Commission, shall submit to the Committees on 
        Energy and Commerce and Resources of the House of 
        Representatives and the Committee on Energy and Natural 
        Resources of the Senate a joint report--
                    (A) addressing--
                            (i) the location of existing rights-of-way 
                        and designated and de facto corridors for oil 
                        and gas pipelines and electric transmission and 
                        distribution facilities on Federal lands; and
                            (ii) opportunities for additional oil and 
                        gas pipeline and electric transmission capacity 
                        within such rights-of-way and corridors; and
                    (B) containing a plan for making available, upon 
                request, to the appropriate Federal, State, and local 
                agencies, tribal governments, and other persons 
                involved in the siting of oil and gas pipelines and 
                electricity transmission facilities Geographic 
                Information System-based information regarding the 
                location of such existing rights-of-way and corridors 
                and any planned rights-of-way and corridors.
            (2) Consultations and considerations.--In undertaking the 
        report, the Secretary of the Interior and the Secretary of 
        Agriculture shall consult with--
                    (A) other agencies of Federal, State, tribal, or 
                local units of government as appropriate;
                    (B) persons involved in the siting of oil and gas 
                pipelines and electric transmission facilities; and
                    (C) other interested members of the public.
            (3) Limitation.--The Secretary of the Interior and the 
        Secretary of Agriculture shall limit the distribution of the 
        report and Geographic Information System-based information 
        referred to in paragraph (1) as necessary for national and 
        infrastructure security reasons, if either Secretary determines 
        that such information is authorized to be withheld from public 
        disclosure pursuant to a national security or other exception 
        under section 552(b) of title 5, United States Code (popularly 
        known as the ``Freedom of Information Act'').
    (b) Corridor Designations.--
            (1) Within the 11 contiguous western states.--Not later 
        than 24 months after the date of the enactment of this section, 
        the Secretaries of Agriculture, Commerce, Defense, Energy, and 
        the Interior, in consultation with the Federal Energy 
        Regulatory Commission and the affected utility industries, 
        jointly shall--
                    (A) designate, pursuant to title 5 of the Federal 
                Land Policy and Management Act of 1976 (43 U.S.C. 1761 
                et seq.), and other applicable Federal laws, corridors 
                needed or useful for oil and gas pipelines and 
                electricity transmission and facilities on Federal 
                lands in the eleven contiguous Western States as that 
                term is defined in section 103(o) of the Federal Land 
                Policy and Management Act of 1976 (43 U.S.C. 1702(o));
                    (B) perform any environmental reviews that may be 
                required to complete the designations of corridors for 
                such facilities on Federal lands in those States; and
                    (C) incorporate the designated corridors into the 
                relevant departmental and agency land use and resource 
                management plans or the equivalent.
            (2) Within the remaining states.--Not later than 4 years 
        after the date of the enactment of this section, the 
        Secretaries of Agriculture, Commerce, Defense, Energy, and the 
        Interior, in consultation with the Federal Energy Regulatory 
        Commission and the affected utility industries, jointly shall 
        identify corridors needed or useful for oil and gas pipelines 
        and electricity transmission and distribution facilities on 
        Federal lands in the States other than those described in 
        paragraph (1), and shall schedule prompt action to identify, 
        designate, and incorporate these corridors into the land use 
        plan.
            (3) Ongoing responsibilities.--The Secretaries of 
        Agriculture, Commerce, Defense, Energy, and the Interior, in 
        consultation with the Federal Energy Regulatory Commission and 
        the affected utility industries, shall ensure that additional 
        corridors as may be needed or useful for oil and gas pipelines 
        and electricity transmission and distribution facilities on 
        Federal lands are promptly designated. The Secretaries shall 
        provide a process for the prompt review of applications for 
        such corridors.
    (c) Factors to Consider.--When carrying out this section, the 
Secretaries shall take into account the need for upgraded and new 
electricity transmission and distribution facilities to improve 
reliability, relieve congestion, and enhance the capability of the 
national grid to deliver electricity.
    (d) Definition of Corridor.--As used in this section and for 
purposes of title V of the Federal Land Policy and Management Act of 
1976, the term `corridor' shall mean a linear strip of land without 
definite width, but limited by technological, environmental, and 
topographical factors, and that contains or may in the future contain 
one or more utility, communication, or transportation facilities. A 
corridor is a land use designation identified for the purpose of 
establishing policy direction as to the preferred location of 
compatible linear facilities and compatible and conflicting land uses. 
It does not imply entitlement of use or limits as to siting facilities 
in additional locations. Appropriate environmental review and 
regulatory permitting reflecting work already undertaken in the 
designation of a corridor shall precede occupancy on a project-specific 
basis.

SEC. 30902. ELECTRICITY TRANSMISSION LINE RIGHT-OF-WAY, CLEVELAND 
              NATIONAL FOREST AND ADJACENT PUBLIC LANDS, CALIFORNIA.

    (a) Issuance.--Subject to subsection (c), the Secretary of the 
Interior and the Secretary of Agriculture shall issue all necessary 
grants, easements, permits, plan amendments, and other approvals to 
allow for the siting and construction of a high-voltage electricity 
transmission line right-of-way running approximately north to south 
through the Trabuco Ranger District of the Cleveland National Forest in 
the State of California and adjacent lands under the jurisdiction of 
the Bureau of Land Management and the Forest Service. The right-of-way 
approvals shall provide all necessary Federal authorization from the 
Secretary of the Interior and the Secretary of Agriculture for the 
routing, construction, operation, and maintenance of a 500 KV 
transmission line capable of meeting the long-term electricity 
transmission needs of the region between the existing Valley-Serrano 
transmission line to the north and the Telega-Escondido transmission 
line to the south, and for connecting to future generating capacity 
that may be developed in the region.
    (b) Protection of Wilderness Areas.--The Secretary of the Interior 
and the Secretary of Agriculture shall not allow any portion of a 
transmission line right-of-way corridor identified in subsection (a) to 
enter any identified wilderness area in existence as of the date of the 
enactment of this section.
    (c) Environmental and Administrative Reviews.--
            (1) Department of interior or local agency.--The Secretary 
        of the Interior, acting through the Bureau of Land Management, 
        shall be the lead Federal agency with overall responsibility to 
        ensure completion of required environmental and other reviews 
        of the approvals to be issued under subsection (a).
            (2) National forest system land.--For the portions of the 
        corridor on National Forest System lands, the Secretary of 
        Agriculture shall complete all required environmental reviews 
        and administrative actions in coordination with the Secretary 
        of the Interior.
            (3) Expeditious completion.--The reviews required for 
        issuance of the approvals under subsection (a) shall be 
        completed not later than 1 year after the date of the enactment 
        of this Act.
    (d) Time for Issuance.--The necessary grants, easements, permits, 
plan amendments, and other approvals for the transmission line right-
of-way shall be issued not later than 60 days after the completion of 
the environmental reviews under subsection (c).
    (e) Other Terms and Conditions.--The transmission line right-of-way 
shall be subject to such terms and conditions as the Secretary of the 
Interior and the Secretary of Agriculture consider necessary, as a 
result of the environmental reviews under subsection (c), to protect 
the value of historic, cultural, and natural resources under the 
jurisdiction of the Department of the Interior or the Department of 
Agriculture.
    (f) Preference Among Proposals.--The Secretary of the Interior and 
the Secretary of Agriculture shall give a preference to any application 
or preapplication proposal for a transmission line right-of-way, as 
described in subsection (a), that was submitted before December 31, 
2002, over all other applications and proposals for the same or similar 
right-of-way submitted on or after that date.

SEC. 30903. CONSULTATION REGARDING ENERGY RIGHTS-OF-WAY ON PUBLIC 
              LANDS.

    (a) In General.--Not later than 6 months after the date of the 
enactment of this Act, 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 
the processing of new applications for linear rights of way for 
electrical transmission lines and oil or gas pipelines on public lands 
within the jurisdiction of the Secretary of the Interior and National 
Forest System lands within the jurisdiction of the Secretary of 
Agriculture.
    (b) Contents.--The memorandum of understanding shall include 
provisions that--
            (1) establish an administrative procedure for processing 
        right-of-way applications, including lines of authority, steps 
        in application processing, and timeframes for application 
        processing;
            (2) provide for coordination of planning relating to the 
        granting of these rights-of-way;
            (3) provide for coordination of environmental compliance 
        efforts to avoid duplication of effort; and
            (4) provide for coordination of use of right-of-way 
        stipulations to achieve consistency.

SEC. 30904. ENHANCING ENERGY EFFICIENCY IN MANAGEMENT OF FEDERAL LANDS.

    (a) Sense of the Congress.--It is the sense of the Congress that 
Federal agencies should enhance the use of energy efficient 
technologies in the management of natural resources.
    (b) Energy Efficient Buildings.--To the extent practicable, the 
Secretary of the Interior, the Secretary of Commerce, and the Secretary 
of Agriculture shall seek to incorporate energy efficient technologies 
in public and administrative buildings associated with management of 
the National Park System, National Wildlife Refuge System, National 
Forest System, National Marine Sanctuaries System, and other public 
lands and resources managed by the Secretaries.
    (c) Energy Efficient Vehicles.--To the extent practicable, the 
Secretary of the Interior, the Secretary of Commerce, and the Secretary 
of Agriculture shall seek to use energy efficient motor vehicles, 
including vehicles equipped with biodiesel or hybrid engine 
technologies, in the management of the National Park System, National 
Wildlife Refuge System, National Forest System, National Marine 
Sanctuaries System, and other public lands and resources managed by the 
Secretaries.

SEC. 30905. PERMITTING OF WIND ENERGY DEVELOPMENT PROJECTS ON PUBLIC 
              LANDS.

    (a) Required Policies and Procedures.--The Secretary of the 
Interior shall process right-of-way applications for wind energy site 
testing and monitoring facilities on public lands administered by the 
Bureau of Land Management in accordance with policies and procedures 
that are substantially the same as those set forth in Bureau of Land 
Management Instruction Memorandum No. 2003-020, dated October 16, 2002.
    (b) Limitation on Rent and Other Charges.--
            (1) In general.--The Secretary of the Interior may not 
        impose rent and other charges with respect to any wind energy 
        development project on public lands that, in the aggregate, 
        exceed 50 percent of the maximum amount of rent that could be 
        charged with respect to that project under the terms of the 
        Bureau of Land Management Instruction Memorandum referred to in 
        subsection (a).
            (2) Termination.--Paragraph (1) shall not apply after the 
        earlier of--
                    (A) the date on which the Secretary of the Interior 
                determines there exists at least 10,000 megawatts of 
                electricity generating capacity from non-hydropower 
                renewable energy resources on public lands; or
                    (B) the end of the 10-year period beginning on the 
                date of the enactment of this Act.
            (3) State share not affected.--This subsection shall not 
        affect any State share of rent and other charges with respect 
        to any wind energy development project on public lands.

SEC. 30906. SENSE OF THE CONGRESS REGARDING GENERATION CAPACITY OF 
              ELECTRICITY FROM RENEWABLE ENERGY RESOURCES ON PUBLIC 
              LANDS.

    It is the sense of the Congress that the Secretary of the Interior 
shall, within the next 10 years after the date of the enactment of this 
Act, seek to have approved non-hydropower renewable energy projects 
located on the public lands with a generation capacity of at least 
10,000 megawatts of electricity.

SEC. 30907. ASSESSMENT OF OCEAN THERMAL ENERGY RESOURCES.

    (a) Resource Assessment.--Not later than 3 months after the date of 
the enactment of this Act, and each year thereafter, the Secretary of 
the Interior shall--
            (1) review assessments of ocean thermal energy resources, 
        other than resources of any area of the Outer Continental Shelf 
        that is subject to a moratorium on leasing for energy 
        exploration or development, that are available in the United 
        States and its territories and possessions; and
            (2) undertake new assessments of such resources as 
        necessary.
    (b) Considerations.--In reviewing and undertaking assessments under 
subsection (a), the Secretary shall take into account changes in market 
conditions, available technologies, and other relevant factors.
    (c) Reports.--Not later than 1 year after the date of the enactment 
of this Act, and each year thereafter, the Secretary shall publish a 
report on reviews and assessments under subsection (a). Each report 
shall contain--
            (1) a detailed inventory of the available amount and 
        characteristics of ocean thermal energy resources;
            (2) estimates of the costs of actions needed to develop and 
        accelerate efforts to commercialize ocean thermal energy 
        conversion; and
            (3) such other information as the Secretary considers would 
        be useful in developing ocean thermal energy resources.

SEC. 30908. SENSE OF THE CONGRESS REGARDING DEVELOPMENT OF MINERALS 
              UNDER PADRE ISLAND NATIONAL SEASHORE.

    (a) Findings.--The Congress finds the following:
            (1) Pursuant to Public Law 87-712 (16 U.S.C. 459d et seq.; 
        popularly known as the ``Federal Enabling Act'') and various 
        deeds and actions thereunder, the United States is the owner of 
        the surface estate only of certain lands constituting the Padre 
        Island National Seashore.
            (2) Ownership of the oil, gas, and other minerals in the 
        subsurface estate of the lands constituting the Padre Island 
        National Seashore was never acquired by the United States and 
        ownership of those interests are held by the State of Texas and 
        private parties.
            (3) The Federal Enabling Act expressly contemplated that 
        the United States would recognize the ownership and future 
        development of the oil, gas, and other minerals in the 
        subsurface estate of the lands constituting the Padre Island 
        National Seashore by the owners and their mineral lessees and 
        recognized that approval of the State of Texas was required to 
        create Padre Island National Seashore.
            (4) Approval was given for the creation of Padre Island 
        National Seashore by the State of Texas through Tex. Rev. Civ. 
        Stat. Ann. Art. 6077(t) (Vernon 1970), which expressly 
        recognized that development of the oil, gas, and other minerals 
        in the subsurface of the lands constituting Padre Island 
        National Seashore would be conducted with full rights of 
        ingress and egress under the laws of the State of Texas.
    (b) Sense of the Congress.--With regard to Federal law, any 
regulation of the development of oil, gas, or other minerals in the 
subsurface of the lands constituting Padre Island National Seashore 
should be made as if those lands retained the status that they had on 
September 27, 1962.

SEC. 30909. ENCOURAGING PROHIBITION OF OFF-SHORE DRILLING IN THE GREAT 
              LAKES.

    (a) Findings.--The Congress finds that--
            (1) the water resources of the Great Lakes Basin are 
        precious public natural resources, shared and held in trust by 
        the States of Illinois, Indiana, Michigan, Minnesota, New York, 
        Ohio, Pennsylvania, and Wisconsin, and the Canadian Province of 
        Ontario;
            (2) the environmental dangers associated with off-shore 
        drilling in the Great Lakes for oil and gas outweigh the 
        potential benefits of such drilling;
            (3) in accordance with the Submerged Lands Act (43 U.S.C. 
        1301 et seq.), each State that borders any of the Great Lakes 
        has authority over the area between that State's coastline and 
        the boundary of Canada or another State;
            (4) the States of Illinois, Michigan, New York, 
        Pennsylvania, and Wisconsin each have a statutory prohibition 
        of off-shore drilling in the Great Lakes for oil and gas;
            (5) the States of Indiana, Minnesota, and Ohio do not have 
        such a prohibition; and
            (6) the Canadian Province of Ontario does not have such a 
        prohibition, and drilling for and production of gas occurs in 
        the Canadian portion of Lake Erie.
    (b) Encouragement of Prohibitions on Off-Shore Drilling.--The 
Congress encourages--
            (1) the States of Illinois, Michigan, New York, 
        Pennsylvania, and Wisconsin to continue to prohibit off-shore 
        drilling in the Great Lakes for oil and gas;
            (2) the States of Indiana, Minnesota, and Ohio and the 
        Canadian Province of Ontario to enact a prohibition of such 
        drilling; and
            (3) the Canadian Province of Ontario to require the 
        cessation of any such drilling and any production resulting 
        from such drilling.

                            DIVISION D--TAX

SEC. 40001. SHORT TITLE; ETC.

    (a) Short Title.--This division may be cited as the ``Energy Tax 
Policy Act of 2003''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this division an amendment or repeal is expressed 
in terms of an amendment to, or repeal of, a section or other 
provision, the reference shall be considered to be made to a section or 
other provision of the Internal Revenue Code of 1986.

                         TITLE I--CONSERVATION

SEC. 41001. CREDIT FOR RESIDENTIAL SOLAR ENERGY PROPERTY.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
(relating to nonrefundable personal credits) is amended by inserting 
after section 25B the following new section:

``SEC. 25C. RESIDENTIAL SOLAR ENERGY PROPERTY.

    ``(a) Allowance of Credit.--In the case of an individual, there 
shall be allowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to the sum of--
            ``(1) 15 percent of the qualified photovoltaic property 
        expenditures made by the taxpayer during such year, and
            ``(2) 15 percent of the qualified solar water heating 
        property expenditures made by the taxpayer during the taxable 
        year.
    ``(b) Limitations.--
            ``(1) Maximum credit.--The credit allowed under subsection 
        (a) shall not exceed--
                    ``(A) $2,000 for each system of property described 
                in subsection (c)(1), and
                    ``(B) $2,000 for each system of property described 
                in subsection (c)(2).
            ``(2) Safety certifications.--No credit shall be allowed 
        under this section for an item of property unless--
                    ``(A) in the case of solar water heating equipment, 
                such equipment is certified for performance and safety 
                by the non-profit Solar Rating Certification 
                Corporation or a comparable entity endorsed by the 
                government of the State in which such property is 
                installed, and
                    ``(B) in the case of a photovoltaic system, such 
                system meets appropriate fire and electric code 
                requirements.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualified solar water heating property expenditure.--
        The term `qualified solar water heating property expenditure' 
        means an expenditure for property to heat water for use in a 
        dwelling unit located in the United States and used as a 
        residence if at least half of the energy used by such property 
        for such purpose is derived from the sun.
            ``(2) Qualified photovoltaic property expenditure.--The 
        term `qualified photovoltaic property expenditure' means an 
        expenditure for property which uses solar energy to generate 
        electricity for use in a dwelling unit.
            ``(3) Solar panels.--No expenditure relating to a solar 
        panel or other property installed as a roof (or portion 
        thereof) shall fail to be treated as property described in 
        paragraph (1) or (2) solely because it constitutes a structural 
        component of the structure on which it is installed.
            ``(4) Labor costs.--Expenditures for labor costs properly 
        allocable to the onsite preparation, assembly, or original 
        installation of the property described in paragraph (1) or (2) 
        and for piping or wiring to interconnect such property to the 
        dwelling unit shall be taken into account for purposes of this 
        section.
            ``(5) Swimming pools, etc., used as storage medium.--
        Expenditures which are properly allocable to a swimming pool, 
        hot tub, or any other energy storage medium which has a 
        function other than the function of such storage shall not be 
        taken into account for purposes of this section.
    ``(d) Special Rules.--
            ``(1) Dollar amounts in case of joint occupancy.--In the 
        case of any dwelling unit which is jointly occupied and used 
        during any calendar year as a residence by 2 or more 
        individuals the following shall apply:
                    ``(A) The amount of the credit allowable under 
                subsection (a) by reason of expenditures made during 
                such calendar year by any of such individuals with 
                respect to such dwelling unit shall be determined by 
                treating all of such individuals as 1 taxpayer whose 
                taxable year is such calendar year.
                    ``(B) There shall be allowable with respect to such 
                expenditures to each of such individuals, a credit 
                under subsection (a) for the taxable year in which such 
                calendar year ends in an amount which bears the same 
                ratio to the amount determined under subparagraph (A) 
                as the amount of such expenditures made by such 
                individual during such calendar year bears to the 
                aggregate of such expenditures made by all of such 
                individuals during such calendar year.
                    ``(C) Subparagraphs (A) and (B) shall be applied 
                separately with respect to qualified solar water 
                heating property expenditures and qualified 
                photovoltaic property expenditures.
            ``(2) Tenant-stockholder in cooperative housing 
        corporation.--In the case of an individual who is a tenant-
        stockholder (as defined in section 216) in a cooperative 
        housing corporation (as defined in such section), such 
        individual shall be treated as having made his tenant-
        stockholder's proportionate share (as defined in section 
        216(b)(3)) of any expenditures of such corporation.
            ``(3) Condominiums.--
                    ``(A) In general.--In the case of an individual who 
                is a member of a condominium management association 
                with respect to a condominium which he owns, such 
                individual shall be treated as having made his 
                proportionate share of any expenditures of such 
                association.
                    ``(B) Condominium management association.--For 
                purposes of this paragraph, the term `condominium 
                management association' means an organization which 
                meets the requirements of paragraph (1) of section 
                528(c) (other than subparagraph (E) thereof) with 
                respect to a condominium project substantially all of 
                the units of which are used as residences.
            ``(4) Allocation in certain cases.--If less than 80 percent 
        of the use of an item is for nonbusiness purposes, only that 
        portion of the expenditures for such item which is properly 
        allocable to use for nonbusiness purposes shall be taken into 
        account.
            ``(5) When expenditure made; amount of expenditure.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), an expenditure with respect to an 
                item shall be treated as made when the original 
                installation of the item is completed.
                    ``(B) Expenditures part of building construction.--
                In the case of an expenditure in connection with the 
                construction or reconstruction of a structure, such 
                expenditure shall be treated as made when the original 
                use of the constructed or reconstructed structure by 
                the taxpayer begins.
                    ``(C) Amount.--The amount of any expenditure shall 
                be the cost thereof.
            ``(6) Property financed by subsidized energy financing.--
        For purposes of determining the amount of expenditures made by 
        any individual with respect to any dwelling unit, there shall 
        not be taken into account expenditures which are made from 
        subsidized energy financing (as defined in section 
        48(a)(4)(A)).
    ``(e) Basis Adjustments.--For purposes of this subtitle, if a 
credit is allowed under this section for any expenditure with respect 
to any property, the increase in the basis of such property which would 
(but for this subsection) result from such expenditure shall be reduced 
by the amount of the credit so allowed.
    ``(f) Termination.--The credit allowed under this section shall not 
apply to taxable years beginning after December 31, 2006 (December 31, 
2008, with respect to qualified photovoltaic property expenditures).''.
    (b) Conforming Amendments.--
            (1) Subsection (a) of section 1016 is amended by striking 
        ``and'' at the end of paragraph (27), by striking the period at 
        the end of paragraph (28) and inserting ``, and'', and by 
        adding at the end the following new paragraph:
            ``(29) to the extent provided in section 25C(e), in the 
        case of amounts with respect to which a credit has been allowed 
        under section 25C.''.
            (2) The table of sections for subpart A of part IV of 
        subchapter A of chapter 1 is amended by inserting after the 
        item relating to section 25B the following new item:

                              ``Sec. 25C. Residential solar energy 
                                        property.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 2003.

SEC. 41002. EXTENSION AND EXPANSION OF CREDIT FOR ELECTRICITY PRODUCED 
              FROM RENEWABLE RESOURCES.

    (a) Extension of Credit for Wind and Closed-Loop Biomass 
Facilities.--Subparagraphs (A) and (B) of section 45(c)(3) are each 
amended by striking ``2004'' and inserting ``2007''.
    (b) Expansion of Credit for Open-Loop Biomass, Landfill Gas 
Facilities, and Trash Combustion Facilities.--Paragraph (3) of section 
45(c) is amended by adding at the end the following new subparagraphs:
                    ``(D) Open-loop biomass facilities.--In the case of 
                a facility using open-loop biomass to produce 
                electricity, the term `qualified facility' means any 
                facility owned by the taxpayer which is originally 
                placed in service before January 1, 2007.
                    ``(E) Landfill gas facilities.--In the case of a 
                facility producing electricity from gas derived from 
                the biodegradation of municipal solid waste, the term 
                `qualified facility' means any facility owned by the 
                taxpayer which is originally placed in service before 
                January 1, 2007.
                    ``(F) Trash combustion facilities.--In the case of 
                a facility which burns municipal solid waste to produce 
                electricity, the term `qualified facility' means any 
                facility owned by the taxpayer which is originally 
                placed in service after the date of the enactment of 
                this subparagraph and before January 1, 2007.''.
    (c) Definition and Special Rules.--Subsection (c) of section 45 is 
amended by adding at the end the following new paragraphs:
            ``(5) Open-loop biomass.--The term `open-loop biomass' 
        means any solid, nonhazardous, cellulosic waste material which 
        is segregated from other waste materials and which is derived 
        from--
                    ``(A) any of the following forest-related 
                resources: mill residues, precommercial thinnings, 
                slash, and brush,
                    ``(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 sources, including orchard tree 
                crops, vineyard, grain, legumes, sugar, and other crop 
                by-products or residues.
        Such term shall not include closed-loop biomass.
            ``(6) Reduced credit for certain preeffective date 
        facilities.--In the case of any facility described in 
        subparagraph (D) or (E) of paragraph (3) which is placed in 
        service before the date of the enactment of this paragraph--
                    ``(A) subsection (a)(1) shall be applied by 
                substituting `1.0 cents' for `1.5 cents', and
                    ``(B) the 5-year period beginning on the date of 
                the enactment of this paragraph shall be substituted in 
                lieu of the 10-year period in subsection (a)(2)(A)(ii).
            ``(7) Credit eligibility for open-loop biomass 
        facilities.--In the case of any facility described in paragraph 
        (3)(D) which is placed in service before the date of enactment 
        of this paragraph, if the owner of such facility is not the 
        producer of the electricity, the person eligible for the credit 
        allowable under subsection (a) is the lessee or the operator of 
        such facility.
            ``(8) Limit on reductions for grants, etc., for open-loop 
        biomass facilities.--If the amount of the credit determined 
        under subsection (a) with respect to any open-loop biomass 
        facility is required to be reduced under paragraph (3) of 
        subsection (b), the fraction under such paragraph shall in no 
        event be greater than \1/2\.
            ``(9) Coordination with section 29.--The term `qualified 
        facility' shall not include any facility the production from 
        which is allowed as a credit under section 29 for the taxable 
        year or any prior taxable year.''.
    (d) Qualified Energy Resources.--Paragraph (1) of section 45(c) 
(relating to qualified energy resources) is amended to read as follows:
            ``(1) Qualified energy resources.--The term `qualified 
        energy resources' means any resource described in paragraph (3) 
        which is used to generate electricity at a qualified 
        facility.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to electricity sold after the date of the enactment of this Act, 
in taxable years ending after such date.

SEC. 41003. CREDIT FOR QUALIFIED FUEL CELL POWER PLANTS.

    (a) Business Property.--
            (1) In general.--Subparagraph (A) of section 48(a)(3) 
        (defining energy property) is amended by striking ``or'' at the 
        end of clause (i), by adding ``or'' at the end of clause (ii), 
        and by inserting after clause (ii) the following new clause:
                            ``(iii) equipment which is part of a 
                        qualified fuel cell power plant,''.
            (2) Qualified fuel cell power plant.--Subsection (a) of 
        section 48 is amended by redesignating paragraphs (4) and (5) 
        as paragraphs (5) and (6), respectively, and by inserting after 
        paragraph (3) the following new paragraph:
            ``(4) Qualified fuel cell power plant.--For purposes of 
        this subsection--
                    ``(A) In general.--The term `qualified fuel cell 
                power plant' means a fuel cell power plant that has an 
                electricity-only generation efficiency greater than 30 
                percent.
                    ``(B) Limitation.--The energy credit with respect 
                to any qualified fuel cell power plant for any taxable 
                year shall not exceed--
                            ``(i) $500 for each \1/2\ kilowatt of 
                        capacity of the power plant, reduced by
                            ``(ii) the aggregate energy credits allowed 
                        with respect to such power plant for all prior 
                        taxable years.
                    ``(C) Fuel cell power plant.--The term `fuel cell 
                power plant' means an integrated system comprised of a 
                fuel cell stack assembly and associated balance of 
                plant components that converts a fuel into electricity 
                using electrochemical means.
                    ``(D) Termination.--Such term shall not include any 
                property placed in service after December 31, 2006.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to property placed in service after December 31, 
        2003, under rules similar to the rules of section 48(m) of the 
        Internal Revenue Code of 1986 (as in effect on the day before 
        the date of the enactment of the Revenue Reconciliation Act of 
        1990).
    (b) Nonbusiness Property.--
            (1) In general.--Subpart A of part IV of subchapter A of 
        chapter 1 (relating to nonrefundable personal credits) is 
        amended by inserting after section 25C the following new 
        section:

``SEC. 25D. NONBUSINESS QUALIFIED FUEL CELL POWER PLANT.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a credit against the tax imposed by this chapter for the 
taxable year an amount equal to 10 percent of the qualified fuel cell 
power plant expenditures which are paid or incurred during such year.
    ``(b) Limitations.--The credit allowed under subsection (a) with 
respect to any qualified fuel cell power plant for any taxable year 
shall not exceed--
            ``(1) $500 for each \1/2\ kilowatt of capacity of the power 
        plant, reduced by
            ``(2) the aggregate energy credits allowed with respect to 
        such power plant for all prior taxable years.
    ``(c) Qualified Fuel Cell Power Plant Expenditures.--For purposes 
of this section, the term `qualified fuel cell power plant 
expenditures' means expenditures by the taxpayer for any qualified fuel 
cell power plant (as defined in section 48(a)(4))--
            ``(1) which meets the requirements of subparagraphs (B) and 
        (D) of section 48(a)(3), and
            ``(2) which is installed on or in connection with a 
        dwelling unit--
                    ``(A) which is located in the United States, and
                    ``(B) which is used by the taxpayer as a residence.
Such term includes expenditures for labor costs properly allocable to 
the onsite preparation, assembly, or original installation of the 
property.
    ``(d) Special Rules.--For purposes of this section, rules similar 
to the rules of section 25C(d) shall apply.
    ``(e) Basis Adjustments.--For purposes of this subtitle, if a 
credit is allowed under this section for any expenditure with respect 
to any property, the increase in the basis of such property which would 
(but for this subsection) result from such expenditure shall be reduced 
by the amount of the credit so allowed.
    ``(f) Termination.--This section shall not apply to any expenditure 
made after December 31, 2006.''.
            (2) Conforming amendments.--
                    (A) Subsection (a) of section 1016 is amended by 
                striking ``and'' at the end of paragraph (28), by 
                striking the period at the end of paragraph (29) and 
                inserting ``, and'', and by adding at the end the 
                following new paragraph:
            ``(30) to the extent provided in section 25D(e), in the 
        case of amounts with respect to which a credit has been allowed 
        under section 25D.''.
                    (B) The table of sections for subpart A of part IV 
                of subchapter A of chapter 1 is amended by inserting 
                after the item relating to section 25C the following 
                new item:

                              ``Sec. 25D. Nonbusiness qualified fuel 
                                        cell power plant.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to expenditures paid or incurred after December 31, 
        2003, in taxable years ending after such date.

SEC. 41004. CREDIT FOR ENERGY EFFICIENCY IMPROVEMENTS TO EXISTING 
              HOMES.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
(relating to nonrefundable personal credits) is amended by inserting 
after section 25D the following new section:

``SEC. 25E. ENERGY EFFICIENCY IMPROVEMENTS TO EXISTING HOMES.

    ``(a) Allowance of Credit.--In the case of an individual, there 
shall be allowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to 20 percent of the amount paid 
or incurred by the taxpayer for qualified energy efficiency 
improvements installed during such taxable year.
    ``(b) Limitations.--
            ``(1) Maximum credit.--The credit allowed by this section 
        with respect to a dwelling shall not exceed $2,000.
            ``(2) Prior credit amounts for taxpayer on same dwelling 
        taken into account.--If a credit was allowed to the taxpayer 
        under subsection (a) with respect to a dwelling in 1 or more 
        prior taxable years, the amount of the credit otherwise 
        allowable for the taxable year with respect to that dwelling 
        shall not exceed the amount of $2,000 reduced by the sum of the 
        credits allowed under subsection (a) to the taxpayer with 
        respect to the dwelling for all prior taxable years.
    ``(c) Carryforward of Unused Credit.--If the credit allowable under 
subsection (a) exceeds the limitation imposed by section 26(a) for such 
taxable year reduced by the sum of the credits allowable under this 
subpart (other than this section) for such taxable year, such excess 
shall be carried to the succeeding taxable year and added to the credit 
allowable under subsection (a) for such succeeding taxable year.
    ``(d) Qualified Energy Efficiency Improvements.--For purposes of 
this section, the term `qualified energy efficiency improvements' means 
any energy efficient building envelope component which meets the 
prescriptive criteria for such component established by the 2000 
International Energy Conservation Code (or, in the case of metal roofs 
with appropriate pigmented coatings, meets the Energy Star program 
requirements), if--
            ``(1) such component is installed in or on a dwelling--
                    ``(A) located in the United States, and
                    ``(B) owned and used by the taxpayer as the 
                taxpayer's principal residence (within the meaning of 
                section 121),
            ``(2) the original use of such component commences with the 
        taxpayer, and
            ``(3) such component reasonably can be expected to remain 
        in use for at least 5 years.
If the aggregate cost of such components with respect to any dwelling 
exceeds $1,000, such components shall be treated as qualified energy 
efficiency improvements only if such components are also certified in 
accordance with subsection (e) as meeting such criteria.
    ``(e) Certification.--The certification described in subsection (d) 
shall be--
            ``(1) determined on the basis of the technical 
        specifications or applicable ratings (including product 
        labeling requirements) for the measurement of energy 
        efficiency, based upon energy use or building envelope 
        component performance, for the energy efficient building 
        envelope component,
            ``(2) provided by a local building regulatory authority, a 
        utility, a manufactured home production inspection primary 
        inspection agency (IPIA), or an accredited home energy rating 
        system provider who is accredited by or otherwise authorized to 
        use approved energy performance measurement methods by the 
        Residential Energy Services Network (RESNET), and
            ``(3) made in writing in a manner that specifies in readily 
        verifiable fashion the energy efficient building envelope 
        components installed and their respective energy efficiency 
        levels.
    ``(f) Definitions and Special Rules.--
            ``(1) Tenant-stockholder in cooperative housing 
        corporation.--In the case of an individual who is a tenant-
        stockholder (as defined in section 216) in a cooperative 
        housing corporation (as defined in such section), such 
        individual shall be treated as having paid his tenant-
        stockholder's proportionate share (as defined in section 
        216(b)(3)) of the cost of qualified energy efficiency 
        improvements made by such corporation.
            ``(2) Condominiums.--
                    ``(A) In general.--In the case of an individual who 
                is a member of a condominium management association 
                with respect to a condominium which he owns, such 
                individual shall be treated as having paid his 
                proportionate share of the cost of qualified energy 
                efficiency improvements made by such association.
                    ``(B) Condominium management association.--For 
                purposes of this paragraph, the term `condominium 
                management association' means an organization which 
                meets the requirements of paragraph (1) of section 
                528(c) (other than subparagraph (E) thereof) with 
                respect to a condominium project substantially all of 
                the units of which are used as residences.
            ``(3) Building envelope component.--The term `building 
        envelope component' means insulation material or system which 
        is specifically and primarily designed to reduce the heat loss 
        or gain of a dwelling when installed in or on such dwelling, 
        exterior windows (including skylights) and doors, and metal 
        roofs with appropriate pigmented coatings which are 
        specifically and primarily designed to reduce the heat gain of 
        a dwelling when installed in or on such dwelling.
            ``(4) Manufactured homes included.--For purposes of this 
        section, the term `dwelling' includes a manufactured home which 
        conforms to Federal Manufactured Home Construction and Safety 
        Standards (section 3280 of title 24, Code of Federal 
        Regulations, as in effect on April 3, 2003).
    ``(g) Basis Adjustment.--For purposes of this subtitle, if a credit 
is allowed under this section for any expenditure with respect to any 
property, the increase in the basis of such property which would (but 
for this subsection) result from such expenditure shall be reduced by 
the amount of the credit so allowed.
    ``(h) Application of Section.--This section shall apply to 
qualified energy efficiency improvements installed after December 31, 
2003, and before January 1, 2007.''.
    (b) Conforming Amendments.--
            (1) Subsection (c) of section 23 is amended by striking 
        ``section 1400C'' and inserting ``sections 25E and 1400C''.
            (2) Subsection (a) of section 1016 is amended by striking 
        ``and'' at the end of paragraph (29), by striking the period at 
        the end of paragraph (30) and inserting ``, and'', and by 
        adding at the end the following new paragraph:
            ``(31) to the extent provided in section 25E(g), in the 
        case of amounts with respect to which a credit has been allowed 
        under section 25E.''.
            (3) Subsection (d) of section 1400C is amended by inserting 
        ``and section 25E'' after ``this section''.
            (4) The table of sections for subpart A of part IV of 
        subchapter A of chapter 1 is amended by inserting after the 
        item relating to section 25D the following new item:

                              ``Sec. 25E. Energy efficiency 
                                        improvements to existing 
                                        homes.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 2003.

SEC. 41005. BUSINESS CREDIT FOR CONSTRUCTION OF NEW ENERGY EFFICIENT 
              HOME.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business related credits) is amended by inserting after 
section 45F the following new section:

``SEC. 45G. NEW ENERGY EFFICIENT HOME CREDIT.

    ``(a) In General.--For purposes of section 38, in the case of an 
eligible contractor, the credit determined under this section for the 
taxable year is an amount equal to the aggregate adjusted bases of all 
energy efficient property installed in a qualified new energy efficient 
home during construction of such home.
    ``(b) Limitations.--
            ``(1) Maximum credit.--
                    ``(A) In general.--The credit allowed by this 
                section with respect to a dwelling shall not exceed 
                $2,000.
                    ``(B) Prior credit amounts on same dwelling taken 
                into account.--If a credit was allowed under subsection 
                (a) with respect to a dwelling in 1 or more prior 
                taxable years, the amount of the credit otherwise 
                allowable for the taxable year with respect to that 
                dwelling shall not exceed the amount of $2,000 reduced 
                by the sum of the credits allowed under subsection (a) 
                with respect to the dwelling for all prior taxable 
                years.
            ``(2) Coordination with rehabilitation and energy 
        credits.--For purposes of this section--
                    ``(A) the basis of any property referred to in 
                subsection (a) shall be reduced by that portion of the 
                basis of any property which is attributable to 
                qualified rehabilitation expenditures (as defined in 
                section 47(c)(2)) or to the energy percentage of energy 
                property (as determined under section 48(a)), and
                    ``(B) expenditures taken into account under either 
                section 47 or 48(a) shall not be taken into account 
                under this section.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Eligible contractor.--The term `eligible contractor' 
        means the person who constructed the new energy efficient home, 
        or in the case of a manufactured home which conforms to Federal 
        Manufactured Home Construction and Safety Standards (section 
        3280 of title 24, Code of Federal Regulations, as in effect on 
        April 3, 2003), the manufactured home producer of such home.
            ``(2) Energy efficient property.--The term `energy 
        efficient property' means any energy efficient building 
        envelope component, and any energy efficient heating or cooling 
        appliance.
            ``(3) Qualified new energy efficient home.--The term 
        `qualified new energy efficient home' means a dwelling--
                    ``(A) located in the United States,
                    ``(B) the construction of which is substantially 
                completed after December 31, 2003,
                    ``(C) the original use of which is as a principal 
                residence (within the meaning of section 121) which 
                commences with the person who acquires such dwelling 
                from the eligible contractor, and
                    ``(D) which is certified to have a level of annual 
                heating and cooling energy consumption that is at least 
                30 percent below the annual level of heating and 
                cooling energy consumption of a comparable dwelling 
                constructed in accordance with the standards of the 
                2000 International Energy Conservation Code and to have 
                building envelope component improvements account for 
                \1/3\ of such 30 percent.
            ``(4) Construction.--The term `construction' includes 
        reconstruction and rehabilitation.
            ``(5) Acquire.--The term `acquire' includes purchase and, 
        in the case of reconstruction and rehabilitation, such term 
        includes a binding written contract for such reconstruction or 
        rehabilitation.
            ``(6) Building envelope component.--The term `building 
        envelope component' means insulation material or system which 
        is specifically and primarily designed to reduce the heat loss 
        or gain of a dwelling when installed in or on such dwelling, 
        exterior windows (including skylights) and doors, and metal 
        roofs with appropriate pigmented coatings which are 
        specifically and primarily designed to reduce the heat gain of 
        a dwelling when installed in or on such dwelling.
            ``(7) Manufactured home included.--The term `dwelling' 
        includes a manufactured home conforming to Federal Manufactured 
        Home Construction and Safety Standards (section 3280 of title 
        24, Code of Federal Regulations, as in effect on April 3, 
        2003).
    ``(d) Certification.--
            ``(1) Method.--A certification described in subsection 
        (c)(3)(D) shall be determined on the basis of one of the 
        following methods:
                    ``(A) The technical specifications or applicable 
                ratings (including product labeling requirements) for 
                the measurement of energy efficiency for the energy 
                efficient building envelope component or energy 
                efficient heating or cooling appliance, based upon 
                energy use or building envelope component performance.
                    ``(B) An energy performance measurement method that 
                utilizes computer software approved by organizations 
                designated by the Secretary.
            ``(2) Provider.--Such certification shall be provided by--
                    ``(A) in the case of a method described in 
                paragraph (1)(A), a local building regulatory 
                authority, a utility, a manufactured home production 
                inspection primary inspection agency (IPIA), or an 
                accredited home energy rating systems provider who is 
                accredited by, or otherwise authorized to use, approved 
                energy performance measurement methods by the Home 
                Energy Ratings Systems Council or the National 
                Association of State Energy Officials, or
                    ``(B) in the case of a method described in 
                paragraph (1)(B), an individual recognized by an 
                organization designated by the Secretary for such 
                purposes.
            ``(3) Form.--Such certification shall be made in writing in 
        a manner that specifies in readily verifiable fashion the 
        energy efficient building envelope components and energy 
        efficient heating or cooling appliances installed and their 
        respective energy efficiency levels, and in the case of a 
        method described in subparagraph (B) of paragraph (1), 
        accompanied by written analysis documenting the proper 
        application of a permissible energy performance measurement 
        method to the specific circumstances of such dwelling.
            ``(4) Regulations.--
                    ``(A) In general.--In prescribing regulations under 
                this subsection for energy performance measurement 
                methods, the Secretary shall prescribe procedures for 
                calculating annual energy costs for heating and cooling 
                and cost savings and for the reporting of the results. 
                Such regulations shall--
                            ``(i) be based on the National Home Energy 
                        Rating Technical Guidelines of the National 
                        Association of State Energy Officials, the Home 
                        Energy Rating Guidelines of the Home Energy 
                        Rating Systems Council, or the modified 2001 
                        California Residential ACM manual,
                            ``(ii) provide that any calculation 
                        procedures be developed such that the same 
                        energy efficiency measures allow a home to 
                        qualify for the credit under this section 
                        regardless of whether the house uses a gas or 
                        oil furnace or boiler or an electric heat pump, 
                        and
                            ``(iii) require that any computer software 
                        allow for the printing of the Federal tax forms 
                        necessary for the credit under this section and 
                        explanations for the homebuyer of the energy 
                        efficient features that were used to comply 
                        with the requirements of this section.
                    ``(B) Providers.--For purposes of paragraph (2)(B), 
                the Secretary shall establish requirements for the 
                designation of individuals based on the requirements 
                for energy consultants and home energy raters specified 
                by the National Association of State Energy Officials.
    ``(e) Basis Adjustment.--For purposes of this subtitle, if a credit 
is determined under this section for any expenditure with respect to 
any property, the increase in the basis of such property which would 
(but for this subsection) result from such expenditure shall be reduced 
by the amount of the credit so determined.
    ``(f) Application of Section.--Subsection (a) shall apply to 
dwellings purchased during the period beginning on January 1, 2004, and 
ending on December 31, 2006.''.
    (b) Credit Made Part of General Business Credit.--Subsection (b) of 
section 38 (relating to current year business credit) is amended by 
striking ``plus'' at the end of paragraph (14), by striking the period 
at the end of paragraph (15) and inserting ``, plus'', and by adding at 
the end thereof the following new paragraph:
            ``(16) the new energy efficient home credit determined 
        under section 45G.''.
    (c) Denial of Double Benefit.--Section 280C (relating to certain 
expenses for which credits are allowable) is amended by adding at the 
end thereof the following new subsection:
    ``(d) New Energy Efficient Home Expenses.--No deduction shall be 
allowed for that portion of expenses for a new energy efficient home 
otherwise allowable as a deduction for the taxable year which is equal 
to the amount of the credit determined for such taxable year under 
section 45G.''.
    (d) Limitation on Carryback.--Subsection (d) of section 39 is 
amended by adding at the end the following new paragraph:
            ``(11) No carryback of new energy efficient home credit 
        before effective date.--No portion of the unused business 
        credit for any taxable year which is attributable to the credit 
        determined under section 45G may be carried back to any taxable 
        year ending before January 1, 2004.''.
    (e) Deduction for Certain Unused Business Credits.--Subsection (c) 
of section 196 is amended by striking ``and'' at the end of paragraph 
(9), by striking the period at the end of paragraph (10) and inserting 
``, and'', and by adding after paragraph (10) the following new 
paragraph:
            ``(11) the new energy efficient home credit determined 
        under section 45G.''.
    (f) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 is amended by inserting after the 
item relating to section 45F the following new item:

                              ``Sec. 45G. New energy efficient home 
                                        credit.''.
    (g) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 2003.

SEC. 41006. ENERGY CREDIT FOR COMBINED HEAT AND POWER SYSTEM PROPERTY.

    (a) In General.--Subparagraph (A) of section 48(a)(3) (defining 
energy property) is amended by striking ``or'' at the end of clause 
(ii), by adding ``or'' at the end of clause (iii), and by inserting 
after clause (iii) the following new clause:
                            ``(iv) combined heat and power system 
                        property,''.
    (b) Combined Heat and Power System Property.--Subsection (a) of 
section 48 is amended by redesignating paragraphs (5) and (6) as 
paragraphs (6) and (7), respectively, and by inserting after paragraph 
(4) the following new paragraph:
            ``(5) Combined heat and power system property.--For 
        purposes of this subsection--
                    ``(A) Combined heat and power system property.--The 
                term `combined heat and power system property' means 
                property comprising a system--
                            ``(i) which uses the same energy source for 
                        the simultaneous or sequential generation of 
                        electrical power, mechanical shaft power, or 
                        both, in combination with the generation of 
                        steam or other forms of useful thermal energy 
                        (including heating and cooling applications),
                            ``(ii) which has an electrical capacity of 
                        more than 50 kilowatts or a mechanical energy 
                        capacity of more than 67 horsepower or an 
                        equivalent combination of electrical and 
                        mechanical energy capacities,
                            ``(iii) which produces--
                                    ``(I) at least 20 percent of its 
                                total useful energy in the form of 
                                thermal energy, and
                                    ``(II) at least 20 percent of its 
                                total useful energy in the form of 
                                electrical or mechanical power (or 
                                combination thereof),
                            ``(iv) the energy efficiency percentage of 
                        which exceeds 60 percent (70 percent in the 
                        case of a system with an electrical capacity in 
                        excess of 50 megawatts or a mechanical energy 
                        capacity in excess of 67,000 horsepower, or an 
                        equivalent combination of electrical and 
                        mechanical energy capacities), and
                            ``(v) which is placed in service after 
                        December 31, 2003, and before January 1, 2007.
                    ``(B) Special rules.--
                            ``(i) Energy efficiency percentage.--For 
                        purposes of subparagraph (A)(iv), the energy 
                        efficiency percentage of a system is the 
                        fraction--
                                    ``(I) the numerator of which is the 
                                total useful electrical, thermal, and 
                                mechanical power produced by the system 
                                at normal operating rates, and
                                    ``(II) the denominator of which is 
                                the lower heating value of the primary 
                                fuel source for the system.
                            ``(ii) Determinations made on btu basis.--
                        The energy efficiency percentage and the 
                        percentages under subparagraph (A)(iii) shall 
                        be determined on a Btu basis.
                            ``(iii) Input and output property not 
                        included.--The term `combined heat and power 
                        system property' does not include property used 
                        to transport the energy source to the facility 
                        or to distribute energy produced by the 
                        facility.
                            ``(iv) Public utility property.--
                                    ``(I) Accounting rule for public 
                                utility property.--If the combined heat 
                                and power system property is public 
                                utility property (as defined in section 
                                168(i)(1)), the taxpayer may only claim 
                                the credit under the subsection if, 
                                with respect to such property, the 
                                taxpayer uses a normalization method of 
                                accounting.
                                    ``(II) Certain exception not to 
                                apply.--The matter in paragraph (3) 
                                which follows subparagraph (D) shall 
                                not apply to combined heat and power 
                                system property.
                    ``(C) Extension of depreciation recovery period.--
                If a taxpayer is allowed credit under this section for 
                combined heat and power system property and such 
                property would (but for this subparagraph) have a class 
                life of 15 years or less under section 168, such 
                property shall be treated as having a 22-year class 
                life for purposes of section 168.''.
    (c) No Carryback of Energy Credit Before Effective Date.--
Subsection (d) of section 39 is amended by adding at the end the 
following new paragraph:
            ``(12) No carryback of energy credit before effective 
        date.--No portion of the unused business credit for any taxable 
        year which is attributable to the energy credit with respect to 
        property described in section 48(a)(5) may be carried back to a 
        taxable year ending before January 1, 2004.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2003, in taxable 
years ending after such date.

SEC. 41007. NEW NONREFUNDABLE PERSONAL CREDITS ALLOWED AGAINST REGULAR 
              AND MINIMUM TAXES.

    (a) In General.--
            (1) Section 25C.--Section 25C(b), as added by section 
        41001, is amended by adding at the end the following new 
        paragraph:
            ``(3) Limitation based on amount of tax.--The credit 
        allowed under subsection (a) for the taxable year shall not 
        exceed the excess of--
                    ``(A) the sum of the regular tax liability (as 
                defined in section 26(b)) plus the tax imposed by 
                section 55, over
                    ``(B) the sum of the credits allowable under this 
                subpart (other than this section and section 25D and 
                25E) and section 27 for the taxable year.''.
            (2) Section 25D.--Section 25D(b), as added by section 103, 
        is amended to read as follows:
    ``(b) Limitations.--
            ``(1) In general.--The credit allowed under subsection (a) 
        with respect to any qualified fuel cell power plant for any 
        taxable year shall not exceed--
                    ``(A) $500 for each \1/2\ kilowatt of capacity of 
                the power plant, reduced by
                    ``(B) the aggregate energy credits allowed with 
                respect to such power plant for all prior taxable 
                years.
            ``(2) Limitation based on amount of tax.--The credit 
        allowed under subsection (a) for the taxable year shall not 
        exceed the excess of--
                    ``(A) the sum of the regular tax liability (as 
                defined in section 26(b)) plus the tax imposed by 
                section 55, over
                    ``(B) the sum of the credits allowable under this 
                subpart (other than this section and section 25E) and 
                section 27 for the taxable year.''.
            (3) Section 25E.--Section 25E(b), as added by section 
        41004, is amended by adding at the end the following new 
        paragraph:
            ``(3) Limitation based on amount of tax.--The credit 
        allowed under subsection (a) for the taxable year shall not 
        exceed the excess of--
                    ``(A) the sum of the regular tax liability (as 
                defined in section 26(b)) plus the tax imposed by 
                section 55, over
                    ``(B) the sum of the credits allowable under this 
                subpart (other than this section) and section 27 for 
                the taxable year.''.
    (b) Conforming Amendments.--
            (1) Section 23(b)(4)(B) is amended by inserting ``and 
        sections 25C, 25D, and 25E'' after ``this section''.
            (2) Section 24(b)(3)(B) is amended by striking ``and 25B'' 
        and inserting ``, 25B, 25C, 25D, and 25E''.
            (3) Section 25(e)(1)(C) is amended by inserting ``25C, 25D, 
        and 25E'' after ``25B,''.
            (4) Section 25B(g)(2) is amended by striking ``section 23'' 
        and inserting ``sections 23, 25C, 25D, and 25E''.
            (5) Section 25E(c), as added by section 41004, is amended 
        by striking ``section 26(a) for such taxable year reduced by 
        the sum of the credits allowable under this subpart (other than 
        this section)'' and inserting ``subsection (b)(3)''.
            (6) Section 26(a)(1) is amended by striking ``and 25B'' and 
        inserting ``25B, 25C, 25D, and 25E''.
            (7) Section 904(h) is amended by striking ``and 25B'' and 
        inserting ``25B, 25C, 25D, and 25E''.
            (8) Section 1400C(d) is amended by striking ``and 25B'' and 
        inserting ``25B, 25C, 25D, and 25E''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2003.

SEC. 41008. REPEAL OF 4.3-CENT MOTOR FUEL EXCISE TAXES ON RAILROADS AND 
              INLAND WATERWAY TRANSPORTATION WHICH REMAIN IN GENERAL 
              FUND.

    (a) Taxes on Trains.--
            (1) In general.--Subparagraph (A) of section 4041(a)(1) is 
        amended by striking ``or a diesel-powered train'' each place it 
        appears and by striking ``or train''.
            (2) Conforming amendments.--
                    (A) Subparagraph (C) of section 4041(a)(1) is 
                amended by striking clause (ii) and by redesignating 
                clause (iii) as clause (ii).
                    (B) Subparagraph (C) of section 4041(b)(1) is 
                amended by striking all that follows ``section 
                6421(e)(2)'' and inserting a period.
                    (C) Subsection (d) of section 4041 is amended by 
                redesignating paragraph (3) as paragraph (4) and by 
                inserting after paragraph (2) the following new 
                paragraph:
            ``(3) Diesel fuel used in trains.--There is hereby imposed 
        a tax of 0.1 cent per gallon on any liquid other than gasoline 
        (as defined in section 4083)--
                    ``(A) sold by any person to an owner, lessee, or 
                other operator of a diesel-powered train for use as a 
                fuel in such train, or
                    ``(B) used by any person as a fuel in a diesel-
                powered train unless there was a taxable sale of such 
                fuel under subparagraph (A).
        No tax shall be imposed by this paragraph on the sale or use of 
        any liquid if tax was imposed on such liquid under section 
        4081.''.
                    (D) Subsection (f) of section 4082 is amended by 
                striking ``section 4041(a)(1)'' and inserting 
                ``subsections (d)(3) and (a)(1) of section 4041, 
                respectively''.
                    (E) Paragraph (3) of section 4083(a) is amended by 
                striking ``or a diesel-powered train''.
                    (F) Paragraph (3) of section 6421(f) is amended to 
                read as follows:
            ``(3) Gasoline used in trains.--In the case of gasoline 
        used as a fuel in a train, this section shall not apply with 
        respect to the Leaking Underground Storage Tank Trust Fund 
        financing rate under section 4081.''.
                    (G) Paragraph (3) of section 6427(l) is amended to 
                read as follows:
            ``(3) Refund of certain taxes on fuel used in diesel-
        powered trains.--For purposes of this subsection, the term 
        `nontaxable use' includes fuel used in a diesel-powered train. 
        The preceding sentence shall not apply to the tax imposed by 
        section 4041(d) and the Leaking Underground Storage Tank Trust 
        Fund financing rate under section 4081 except with respect to 
        fuel sold for exclusive use by a State or any political 
        subdivision thereof.''.
    (b) Fuel Used on Inland Waterways.--
            (1) In general.--Paragraph (1) of section 4042(b) is 
        amended by adding ``and'' at the end of subparagraph (A), by 
        striking ``, and'' at the end of subparagraph (B) and inserting 
        a period, and by striking subparagraph (C).
            (2) Conforming amendment.--Paragraph (2) of section 4042(b) 
        is amended by striking subparagraph (C).
    (c) Effective Date.--The amendments made by this section shall take 
effect on January 1, 2004.

SEC. 41009. REDUCED MOTOR FUEL EXCISE TAX ON CERTAIN MIXTURES OF DIESEL 
              FUEL.

    (a) In General.--Paragraph (2) of section 4081(a) is amended by 
adding at the end the following:
                    ``(C) Diesel-water fuel emulsion.--In the case of 
                diesel-water fuel emulsion at least 14 percent of which 
                is water and with respect to which the emulsion 
                additive is registered by a United States manufacturer 
                with the Environmental Protection Agency pursuant to 
                section 211 of the Clean Air Act (as in effect on March 
                31, 2003), subparagraph (A)(iii) shall be applied by 
                substituting `19.7 cents' for `24.3 cents'.''.
    (b) Special Rules for Diesel-Water Fuel Emulsions.--
            (1) Refunds for tax-paid purchases.--Section 6427 is 
        amended by redesignating subsections (m) through (p) as 
        subsections (n) through (q), respectively, and by inserting 
        after subsection (l) the following new subsection:
    ``(m) Diesel Fuel Used To Produce Emulsion.--
            ``(1) In general.--Except as provided in subsection (k), if 
        any diesel fuel on which tax was imposed by section 4081 at the 
        regular tax rate is used by any person in producing an emulsion 
        described in section 4081(a)(2)(C) which is sold or used in 
        such person's trade or business, the Secretary shall pay 
        (without interest) to such person an amount equal to the excess 
        of the regular tax rate over the incentive tax rate with 
        respect to such fuel.
            ``(2) Definitions.--For purposes of paragraph (1)--
                    ``(A) Regular tax rate.--The term `regular tax 
                rate' means the aggregate rate of tax imposed by 
                section 4081 determined without regard to section 
                4081(a)(2)(C).
                    ``(B) Incentive tax rate.--The term `incentive tax 
                rate' means the aggregate rate of tax imposed by 
                section 4081 determined with regard to section 
                4081(a)(2)(C).''.
            (2) Later separation of fuel.--
                    (A) In general.--Section 4081 (relating to 
                imposition of tax) is amended by redesignating 
                subsections (d) and (e) as subsections (e) and (f), 
                respectively, and by inserting after subsection (c) the 
                following new subsection:
    ``(d) Later Separation of Fuel From Diesel-Water Fuel Emulsion.--If 
any person separates the taxable fuel from a diesel-water fuel emulsion 
on which tax was imposed under subsection (a) at a rate determined 
under subsection (a)(2)(C) (or with respect to which a credit or 
payment was allowed or made by reason of section 6427), such person 
shall be treated as the refiner of such taxable fuel. The amount of tax 
imposed on any removal of such fuel by such person shall be reduced by 
the amount of tax imposed (and not credited or refunded) on any prior 
removal or entry of such fuel.''.
                    (B) Conforming amendment.--Subsection (d) of 
                section 6416 is amended by striking ``section 4081(e)'' 
                and inserting ``section 4081(f)''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on October 1, 2003.

SEC. 41010. REPEAL OF PHASEOUTS FOR QUALIFIED ELECTRIC VEHICLE CREDIT 
              AND DEDUCTION FOR CLEAN FUEL-VEHICLES.

    (a) Credit for Qualified Electric Vehicles.--Subsection (b) of 
section 30 (relating to limitations) is amended by striking paragraph 
(2) and redesignating paragraph (3) as paragraph (2).
    (b) Deduction for Clean-Fuel Vehicles and Certain Refueling 
Property.--Paragraph (1) of section 179A(b) (relating to qualified 
clean-fuel vehicle property) is amended to read as follows:
            ``(1) Qualified clean-fuel vehicle property.-- The cost 
        which may be taken into account under subsection (a)(1)(A) with 
        respect to any motor vehicle shall not exceed--
                    ``(A) in the case of a motor vehicle not described 
                in subparagraph (B) or (C), $2,000,
                    ``(B) in the case of any truck or van with a gross 
                vehicle weight rating greater than 10,000 pounds but 
                not greater than 26,000 pounds, $5,000, or
                    ``(C) $50,000 in the case of--
                            ``(i) a truck or van with a gross vehicle 
                        weight rating greater than 26,000 pounds, or
                            ``(ii) any bus which has a seating capacity 
                        of at least 20 adults (not including the 
                        driver).''.

SEC. 41011. ALTERNATIVE MOTOR VEHICLE CREDIT.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
(relating to foreign tax credit, etc.) is amended by adding at the end 
the following:

``SEC. 30B. ALTERNATIVE MOTOR VEHICLE CREDIT.

    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this chapter for the taxable year an amount 
equal to the sum of--
            ``(1) the new qualified fuel cell motor vehicle credit 
        determined under subsection (b), and
            ``(2) the advanced lean burn technology motor vehicle 
        credit determined under subsection (c).
    ``(b) New Qualified Fuel Cell Motor Vehicle Credit.--
            ``(1) In general.--For purposes of subsection (a), the new 
        qualified fuel cell motor vehicle credit determined under this 
        subsection with respect to a new qualified fuel cell motor 
        vehicle placed in service by the taxpayer during the taxable 
        year is--
                    ``(A) $4,000, if such vehicle has a gross vehicle 
                weight rating of not more than 8,500 pounds,
                    ``(B) $10,000, if such vehicle has a gross vehicle 
                weight rating of more than 8,500 pounds but not more 
                than 14,000 pounds,
                    ``(C) $20,000, if such vehicle has a gross vehicle 
                weight rating of more than 14,000 pounds but not more 
                than 26,000 pounds, and
                    ``(D) $40,000, if such vehicle has a gross vehicle 
                weight rating of more than 26,000 pounds.
            ``(2) Increase for fuel efficiency.--
                    ``(A) In general.--The amount determined under 
                paragraph (1)(A) with respect to a new qualified fuel 
                cell motor vehicle which is a passenger automobile or 
                light truck shall be increased by--
                            ``(i) $1,000, if such vehicle achieves at 
                        least 150 percent but less than 175 percent of 
                        the 2000 model year city fuel economy,
                            ``(ii) $1,500, if such vehicle achieves at 
                        least 175 percent but less than 200 percent of 
                        the 2000 model year city fuel economy,
                            ``(iii) $2,000, if such vehicle achieves at 
                        least 200 percent but less than 225 percent of 
                        the 2000 model year city fuel economy,
                            ``(iv) $2,500, if such vehicle achieves at 
                        least 225 percent but less than 250 percent of 
                        the 2000 model year city fuel economy,
                            ``(v) $3,000, if such vehicle achieves at 
                        least 250 percent but less than 275 percent of 
                        the 2000 model year city fuel economy,
                            ``(vi) $3,500, if such vehicle achieves at 
                        least 275 percent but less than 300 percent of 
                        the 2000 model year city fuel economy, and
                            ``(vii) $4,000, if such vehicle achieves at 
                        least 300 percent of the 2000 model year city 
                        fuel economy.
                    ``(B) 2000 model year city fuel economy.--For 
                purposes of subparagraph (A), the 2000 model year city 
                fuel economy with respect to a vehicle shall be 
                determined in accordance with the following tables:
                            ``(i) In the case of a passenger 
                        automobile:

``If vehicle inertia weight class   The 2000 model year city fuel 
        is:                                 economy 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 or 8,500 lbs............................            11.1 mpg.
                            ``(ii) In the case of a light truck:

``If vehicle inertia weight class   The 2000 model year city fuel 
        is:                                 economy 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 or 8,500 lbs............................            12.0 mpg.
                    ``(C) Vehicle inertia weight class.--For purposes 
                of subparagraph (B), the term `vehicle inertia weight 
                class' has the same meaning as when defined in 
                regulations prescribed by the Administrator of the 
                Environmental Protection Agency for purposes of the 
                administration of title II of the Clean Air Act (42 
                U.S.C. 7521 et seq.).
            ``(3) New qualified fuel cell motor vehicle.--For purposes 
        of this subsection, the term `new qualified fuel cell motor 
        vehicle' means a motor vehicle--
                    ``(A) which is propelled by power derived from one 
                or more cells which convert chemical energy directly 
                into electricity by combining oxygen with hydrogen fuel 
                which is stored on board the vehicle in any form and 
                may or may not require reformation prior to use,
                    ``(B) which, in the case of a passenger automobile 
                or light truck--
                            ``(i) for 2004 and later model vehicles, 
                        has received a certificate of conformity under 
                        the Clean Air Act and meets or exceeds the 
                        equivalent qualifying California low emission 
                        vehicle standard under section 243(e)(2) of the 
                        Clean Air Act for that make and model year, and
                            ``(ii) for 2004 and later model vehicles, 
                        has received a certificate that such vehicle 
                        meets or exceeds the Bin 5 Tier II emission 
                        level established in regulations prescribed by 
                        the Administrator of the Environmental 
                        Protection Agency under section 202(i) of the 
                        Clean Air Act for that make and model year 
                        vehicle,
                    ``(C) the original use of which commences with the 
                taxpayer,
                    ``(D) which is acquired for use or lease by the 
                taxpayer and not for resale, and
                    ``(E) which is made by a manufacturer.
    ``(c) Advanced Lean Burn Technology Motor Vehicle Credit.--
            ``(1) In general.--For purposes of subsection (a), the 
        advanced lean burn technology motor vehicle credit determined 
        under this subsection with respect to a new qualified advanced 
        lean burn technology motor vehicle placed in service by the 
        taxpayer during the taxable year is the credit amount 
        determined under paragraph (2).
            ``(2) Credit amount.--
                    ``(A) Increase for fuel efficiency.--The credit 
                amount determined under this paragraph shall be--
                            ``(i) $500, if such vehicle achieves at 
                        least 125 percent but less than 150 percent of 
                        the 2000 model year city fuel economy,
                            ``(ii) $1,000, if such vehicle achieves at 
                        least 150 percent but less than 175 percent of 
                        the 2000 model year city fuel economy,
                            ``(iii) $1,500, if such vehicle achieves at 
                        least 175 percent but less than 200 percent of 
                        the 2000 model year city fuel economy,
                            ``(iv) $2,000, if such vehicle achieves at 
                        least 200 percent but less than 225 percent of 
                        the 2000 model year city fuel economy,
                            ``(v) $2,500, if such vehicle achieves at 
                        least 225 percent but less than 250 percent of 
                        the 2000 model year city fuel economy, and
                            ``(vi) $3,000, if such vehicle achieves at 
                        least 250 percent of the 2000 model year city 
                        fuel economy.
                For purposes of clause (i), the 2000 model year city 
                fuel economy with respect to a vehicle shall be 
                determined using the tables provided in subsection 
                (b)(2)(B) with respect to such vehicle.
                    ``(B) Conservation credit.--The amount determined 
                under subparagraph (A) with respect to an advanced lean 
                burn technology motor vehicle shall be increased by--
                            ``(i) $250, if such vehicle achieves a 
                        lifetime fuel savings of at least 1,500 gallons 
                        of gasoline, and
                            ``(ii) $500, if such vehicle achieves a 
                        lifetime fuel savings of at least 2,500 gallons 
                        of gasoline.
                    ``(C) Option to use like vehicle.--At the option of 
                the vehicle manufacturer, the increase for fuel 
                efficiency and conservation credit may be calculated by 
                comparing the new advanced lean-burn technology motor 
                vehicle to a like vehicle.
            ``(3) Definitions.--For purposes of this subsection--
                    ``(A) Advanced lean burn technology motor 
                vehicle.--The term `advanced lean burn technology motor 
                vehicle' means a motor vehicle with an internal 
                combustion engine that--
                            ``(i) is designed to operate primarily 
                        using more air than is necessary for complete 
                        combustion of the fuel,
                            ``(ii) incorporates direct injection,
                            ``(iii) achieves at least 125 percent of 
                        the 2000 model year city fuel economy, and
                            ``(iv) for 2004 and later model vehicles, 
                        has received a certificate that such vehicle 
                        meets or exceeds the Bin 8 Tier II emission 
                        level established in regulations prescribed by 
                        the Administrator of the Environmental 
                        Protection Agency under section 202(i) of the 
                        Clean Air Act for that make and model year 
                        vehicle.
                    ``(B) Like vehicle.--The term `like vehicle' for an 
                advanced lean burn technology motor vehicle derived 
                from a conventional production vehicle produced in the 
                same model year means a model that is equivalent in the 
                following areas:
                            ``(i) Body style (2-door or 4-door).
                            ``(ii) Transmission (automatic or manual).
                            ``(iii) Acceleration performance 
                        (<plus-minus> 0.05 seconds).
                            ``(iv) Drivetrain (2-wheel drive or 4-wheel 
                        drive).
                            ``(v) Certification by the Administrator of 
                        the Environmental Protection Agency.
                    ``(C) Lifetime fuel savings.--The term `lifetime 
                fuel savings' shall be calculated by dividing 120,000 
                by the difference between the 2000 model year city fuel 
                economy for the vehicle inertia weight class and the 
                city fuel economy for the new qualified hybrid motor 
                vehicle.
    ``(d) Limitation Based on Amount of Tax.--The credit allowed under 
subsection (a) for the taxable year shall not exceed the excess of--
            ``(1) the sum of the regular tax liability (as defined in 
        section 26(b)) plus the tax imposed by section 55, over
            ``(2) the sum of the credits allowable under subpart A and 
        sections 27, 29, and 30A for the taxable year.
    ``(e) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Consumable fuel.--The term `consumable fuel' means 
        any solid, liquid, or gaseous matter which releases energy when 
        consumed by an auxiliary power unit.
            ``(2) Motor vehicle.--The term `motor vehicle' has the 
        meaning given such term by section 30(c)(2).
            ``(3) 2000 model year city fuel economy.--The 2000 model 
        year city fuel economy with respect to any vehicle shall be 
        measured under rules similar to the rules under section 
        4064(c).
            ``(4) Other terms.--The terms `automobile', `passenger 
        automobile', `light truck', and `manufacturer' have the 
        meanings given such terms in regulations prescribed by the 
        Administrator of the Environmental Protection Agency for 
        purposes of the administration of title II of the Clean Air Act 
        (42 U.S.C. 7521 et seq.).
            ``(5)  Reduction in basis.--For purposes of this subtitle, 
        if a credit is allowed under this section for any expenditure 
        with respect to any property, the increase in the basis of such 
        property which would (but for this paragraph) result from such 
        expenditure shall be reduced by the amount of the credit so 
        allowed.
            ``(6) No double benefit.--The amount of any deduction or 
        credit allowable under this chapter (other than the credit 
        allowable under this section), with respect to a vehicle 
        described under subsection (b), shall be reduced by the amount 
        of credit allowed under subsection (a) for such vehicle for the 
        taxable year.
            ``(7) Property used by tax-exempt entities.--In the case of 
        a credit amount which is allowable with respect to a motor 
        vehicle which is acquired by an entity exempt from tax under 
        this chapter, the person which sells or leases such vehicle to 
        the entity shall be treated as the taxpayer with respect to the 
        vehicle for purposes of this section and the credit shall be 
        allowed to such person, but only if the person clearly 
        discloses to the entity in any sale or lease document the 
        specific amount of any credit otherwise allowable to the entity 
        under this section.
            ``(8) Recapture.--The Secretary shall, by regulations, 
        provide for recapturing the benefit of any credit allowable 
        under subsection (a) with respect to any property which ceases 
        to be property eligible for such credit (including recapture in 
        the case of a lease period of less than the economic life of a 
        vehicle).
            ``(9) Property used outside united states, etc., not 
        qualified.--No credit shall be allowed under subsection (a) 
        with respect to any property referred to in section 50(b) or 
        with respect to the portion of the cost of any property taken 
        into account under section 179.
            ``(10) Election to not take credit.--No credit shall be 
        allowed under subsection (a) for any vehicle if the taxpayer 
        elects to not have this section apply to such vehicle.
            ``(11) Carryforward allowed.--
                    ``(A) In general.--If the credit amount allowable 
                under subsection (a) for a taxable year exceeds the 
                amount of the limitation under subsection (d) for such 
                taxable year (referred to as the `unused credit year' 
                in this paragraph), such excess shall be allowed as a 
                credit carryforward for each of the 20 taxable years 
                following the unused credit year.
                    ``(B) Rules.--Rules similar to the rules of section 
                39 shall apply with respect to the credit carryforward 
                under subparagraph (A).
            ``(12) Interaction with air quality and motor vehicle 
        safety standards.--Unless otherwise provided in this section, a 
        motor vehicle shall not be considered eligible for a credit 
        under this section unless such vehicle is in compliance with--
                    ``(A) the applicable provisions of the Clean Air 
                Act for the applicable make and model year of the 
                vehicle (or applicable air quality provisions of State 
                law in the case of a State which has adopted such 
                provision under a waiver under section 209(b) of the 
                Clean Air Act), and
                    ``(B) the motor vehicle safety provisions of 
                sections 30101 through 30169 of title 49, United States 
                Code.
    ``(f) Regulations.--
            ``(1) In general.--The Secretary shall promulgate such 
        regulations as necessary to carry out the provisions of this 
        section.
            ``(2) Determination of motor vehicle eligibility.--The 
        Secretary, in coordination with the Secretary of Transportation 
        and the Administrator of the Environmental Protection Agency, 
        shall prescribe such regulations as necessary to determine 
        whether a motor vehicle meets the requirements to be eligible 
        for a credit under this section.
    ``(g) Termination.--This section shall not apply to any property 
placed in service after--
            ``(1) in the case of a new qualified fuel cell motor 
        vehicle (as described in subsection (b)), December 31, 2012, 
        and
            ``(2) in the case of any other property, December 31, 
        2006.''.
    (b) Conforming Amendments.--
            (1) Section 1016(a) is amended by striking ``and'' at the 
        end of paragraph (30), by striking the period at the end of 
        paragraph (31) and inserting ``, and'', and by adding at the 
        end the following:
            ``(32) to the extent provided in section 30B(e)(5).''.
            (2) Section 6501(m) is amended by inserting ``30B(e)(10),'' 
        after ``30(d)(4),''.
            (3) The table of sections for subpart B of part IV of 
        subchapter A of chapter 1 is amended by inserting after the 
        item relating to section 30A the following:

                              ``Sec. 30B. Alternative motor vehicle 
                                        credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2003, in taxable 
years ending after such date.

                         TITLE II--RELIABILITY

SEC. 42001. NATURAL GAS GATHERING LINES TREATED AS 7-YEAR PROPERTY.

    (a) In General.--Subparagraph (C) of section 168(e)(3) (relating to 
classification of certain property) is amended by striking ``and'' at 
the end of clause (i), by redesignating clause (ii) as clause (iii), 
and by inserting after clause (i) the following new clause:
                            ``(ii) any natural gas gathering line, 
                        and''.
    (b) Natural Gas Gathering Line.--Subsection (i) of section 168 is 
amended by adding after paragraph (15) the following new paragraph:
            ``(16) Natural gas gathering line.--The term `natural gas 
        gathering line' means--
                    ``(A) the pipe, equipment, and appurtenances 
                determined to be a gathering line by the Federal Energy 
                Regulatory Commission, or
                    ``(B) the pipe, equipment, and appurtenances used 
                to deliver natural gas from the wellhead or a 
                commonpoint to the point at which such gas first 
                reaches--
                            ``(i) a gas processing plant,
                            ``(ii) an interconnection with a 
                        transmission pipeline certificated by the 
                        Federal Energy Regulatory Commission as an 
                        interstate transmission pipeline,
                            ``(iii) an interconnection with an 
                        intrastate transmission pipeline, or
                            ``(iv) a direct interconnection with a 
                        local distribution company, a gas storage 
                        facility, or an industrial consumer.''.
    (c) Alternative System.--The table contained in section 
168(g)(3)(B) is amended by inserting after the item relating to 
subparagraph (C)(i) the following:

``(C)(ii)......................................................   10''.
    (d) Alternative Minimum Tax Exception.--Subparagraph (B) of section 
56(a)(1) is amended by inserting before the period the following: ``, 
or in section 168(e)(3)(C)(ii)''.
    (e) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act, in taxable years ending after such date.

SEC. 42002. NATURAL GAS DISTRIBUTION LINES TREATED AS 15-YEAR PROPERTY.

    (a) In General.--Subparagraph (E) of section 168(e)(3) (relating to 
classification of certain property) is amended by striking ``and'' at 
the end of clause (ii), by striking the period at the end of clause 
(iii) and by inserting ``, and'', and by adding at the end the 
following new clause:
                            ``(iv) any natural gas distribution 
                        line.''.
    (b) Alternative System.--The table contained in section 
168(g)(3)(B) is amended by inserting after the item relating to 
subparagraph (E)(iii) the following:

``(E)(iv)......................................................   20''.
    (c) Alternative Minimum Tax Exception.--Subparagraph (B) of section 
56(a)(1) is amended by inserting before the period the following: ``, 
or in section 168(e)(3)(E)(iv)''.
    (d) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act, in taxable years ending after such date.

SEC. 42003. ELECTRIC TRANSMISSION PROPERTY TREATED AS 15-YEAR PROPERTY.

    (a) In General.--Subparagraph (E) of section 168(e)(3) (relating to 
classification of certain property) is amended by striking ``and'' at 
the end of clause (iii), by striking the period at the end of clause 
(iv) and by inserting ``, and'', and by adding at the end the following 
new clause:
                            ``(v) any section 1245 property (as defined 
                        in section 1245(a)(3)) used in the transmission 
                        at 69 or more kilovolts of electricity for 
                        sale.''.
    (b) Alternative System.--The table contained in section 
168(g)(3)(B) is amended by inserting after the item relating to 
subparagraph (E)(iv) the following:

``(E)(v).......................................................   20''.
    (c) Alternative Minimum Tax Exception.--Subparagraph (B) of section 
56(a)(1) is amended by inserting before the period the following: ``, 
or in section 168(e)(3)(E)(v)''.
    (d) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act, in taxable years ending after such date.

SEC. 42004. EXPENSING OF CAPITAL COSTS INCURRED IN COMPLYING WITH 
              ENVIRONMENTAL PROTECTION AGENCY SULFUR REGULATIONS.

    (a) In General.--Part VI of subchapter B of chapter 1 (relating to 
itemized deductions for individuals and corporations) is amended by 
inserting after section 179A the following new section:

``SEC. 179B. DEDUCTION FOR CAPITAL COSTS INCURRED IN COMPLYING WITH 
              ENVIRONMENTAL PROTECTION AGENCY SULFUR REGULATIONS.

    ``(a) Treatment as Expenses.--A small business refiner (as defined 
in section 45H(c)(1)) may elect to treat 75 percent of qualified 
capital costs (as defined in section 45H(c)(2)) which are paid or 
incurred by the taxpayer during the taxable year as expenses which are 
not chargeable to capital account. Any cost so treated shall be allowed 
as a deduction for the taxable year in which paid or incurred.
    ``(b) Reduced Percentage.--In the case of a small business refiner 
with average daily domestic refinery runs for the 1-year period ending 
on March 31, 2003, in excess of 155,000 barrels, the number of 
percentage points described in subsection (a) shall be reduced (not 
below zero) by the product of such number (before the application of 
this subsection) and the ratio of such excess to 50,000 barrels.
    ``(c) Basis Reduction.--
            ``(1) In general.--For purposes of this title, the basis of 
        any property shall be reduced by the portion of the cost of 
        such property taken into account under subsection (a).
            ``(2) Ordinary income recapture.--For purposes of section 
        1245, the amount of the deduction allowable under subsection 
        (a) with respect to any property which is of a character 
        subject to the allowance for depreciation shall be treated as a 
        deduction allowed for depreciation under section 167.''.
    (b) Conforming Amendments.--
            (1) Section 263(a)(1) is amended by striking ``or'' at the 
        end of subparagraph (G), by striking the period at the end of 
        subparagraph (H) and inserting ``; or'', and by adding at the 
        end the following new subparagraph:
                    ``(I) expenditures for which a deduction is allowed 
                under section 179B.''.
            (2) Section 312(k)(3)(B) is amended--
                    (A) by striking ``section 179 or 179A'' each place 
                it appears and inserting ``section 179, 179A, or 
                179B'', and
                    (B) in the heading, by striking ``179 or 179A'' and 
                inserting ``179, 179A, or 179B''.
            (3) Section 1016(a) is amended by striking ``and'' at the 
        end of paragraph (31), by striking the period at the end of 
        paragraph (32) and inserting ``, and'', and by adding at the 
        end the following new paragraph:
            ``(33) to the extent provided in section 179B(c).''
            (4) Paragraphs (2)(C) and (3)(C) of section 1245(a) are 
        each amended by inserting ``179B,'' after ``179A,''.
            (5) The table of sections for part VI of subchapter B of 
        chapter 1 is amended by inserting after the item relating to 
        section 179A the following new item:

                              ``Sec. 179B. Deduction for capital costs 
                                        incurred in complying with 
                                        Environmental Protection Agency 
                                        sulfur regulations.''.
    (c) Effective Date.--The amendment made by this section shall apply 
to expenses paid or incurred after March 31, 2003, in taxable years 
ending after such date.

SEC. 42005. CREDIT FOR PRODUCTION OF LOW SULFUR DIESEL FUEL.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business-related credits) is amended by adding at the end 
the following new section:

``SEC. 45H. CREDIT FOR PRODUCTION OF LOW SULFUR DIESEL FUEL.

    ``(a) In General.--For purposes of section 38, the amount of the 
low sulfur diesel fuel production credit determined under this section 
with respect to any facility of a small business refiner is an amount 
equal to 5 cents for each gallon of low sulfur diesel fuel produced 
during the taxable year by such small business refiner at such 
facility.
    ``(b) Maximum Credit.--
            ``(1) In general.--The aggregate credit determined under 
        subsection (a) for any taxable year with respect to any 
        facility shall not exceed--
                    ``(A) 25 percent of the qualified capital costs 
                incurred by the small business refiner with respect to 
                such facility, reduced by
                    ``(B) the aggregate credits determined under this 
                section for all prior taxable years with respect to 
                such facility.
            ``(2) Reduced percentage.--In the case of a small business 
        refiner with average daily domestic refinery runs for the 1-
        year period ending on March 31, 2003, in excess of 155,000 
        barrels, the number of percentage points described in paragraph 
        (1) shall be reduced (not below zero) by the product of such 
        number (before the application of this paragraph) and the ratio 
        of such excess to 50,000 barrels.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Small business refiner.--The term `small business 
        refiner' means, with respect to any taxable year, a refiner of 
        crude oil with respect to which not more than 1,500 persons are 
        engaged in the refinery operations of the business on any day 
        during such taxable year and whose average daily domestic 
        refinery run for the 1-year period ending on March 31, 2003, 
        did not exceed 205,000 barrels.
            ``(2) Qualified capital costs.--The term `qualified capital 
        costs' means, with respect to any facility, those costs paid or 
        incurred during the applicable period for compliance with the 
        applicable EPA regulations with respect to such facility, 
        including expenditures for the construction of new process 
        operation units or the dismantling and reconstruction of 
        existing process units to be used in the production of low 
        sulfur diesel fuel, associated adjacent or offsite equipment 
        (including tankage, catalyst, and power supply), engineering, 
        construction period interest, and sitework.
            ``(3) Applicable epa regulations.--The term `applicable EPA 
        regulations' means the Highway Diesel Fuel Sulfur Control 
        Requirements of the Environmental Protection Agency.
            ``(4) Applicable period.--The term `applicable period' 
        means, with respect to any facility, the period beginning on 
        April 1, 2003, and ending with the date which is 1 year after 
        the date on which the taxpayer must comply with the applicable 
        EPA regulations with respect to such facility.
            ``(5) Low sulfur diesel fuel.--The term `low sulfur diesel 
        fuel' means diesel fuel with a sulfur content of 15 parts per 
        million or less.
    ``(d) Reduction in Basis.--For purposes of this subtitle, if a 
credit is determined under this section for any expenditure with 
respect to any property, the increase in basis of such property which 
would (but for this subsection) result from such expenditure shall be 
reduced by the amount of the credit so determined.
    ``(e) Certification.--
            ``(1) Required.--Not later than the date which is 30 months 
        after the first day of the first taxable year in which the low 
        sulfur diesel fuel production credit is allowed with respect to 
        a facility, the small business refiner must obtain 
        certification from the Secretary, in consultation with the 
        Administrator of the Environmental Protection Agency, that the 
        taxpayer's qualified capital costs with respect to such 
        facility will result in compliance with the applicable EPA 
        regulations.
            ``(2) Contents of application.--An application for 
        certification shall include relevant information regarding unit 
        capacities and operating characteristics sufficient for the 
        Secretary, in consultation with the Administrator of the 
        Environmental Protection Agency, to determine that such 
        qualified capital costs are necessary for compliance with the 
        applicable EPA regulations.
            ``(3) Review period.--Any application shall be reviewed and 
        notice of certification, if applicable, shall be made within 60 
        days of receipt of such application.
            ``(4) Statute of limitations.--With respect to the credit 
        allowed under this section--
                    ``(A) the statutory period for the assessment of 
                any deficiency attributable to such credit shall not 
                expire before the end of the 3-year period ending on 
                the date that the review period described in paragraph 
                (3) ends, and
                    ``(B) such deficiency may be assessed before the 
                expiration of such 3-year period notwithstanding the 
                provisions of any other law or rule of law which would 
                otherwise prevent such assessment.
    ``(f) Controlled Groups.--For purposes of this section, all persons 
treated as a single employer under subsection (b), (c), (m), or (o) of 
section 414 shall be treated as 1 taxpayer.''.
    (b) Credit Made Part of General Business Credit.--Subsection (b) of 
section 38 (relating to general business credit) is amended by striking 
``plus'' at the end of paragraph (15), by striking the period at the 
end of paragraph (16) and inserting ``, plus'', and by adding at the 
end the following new paragraph:
            ``(17) in the case of a small business refiner, the low 
        sulfur diesel fuel production credit determined under section 
        45H(a).''.
    (c) Denial of Double Benefit.--Section 280C (relating to certain 
expenses for which credits are allowable) is amended by adding after 
subsection (d) the following new subsection:
    ``(e) Low Sulfur Diesel Fuel Production Credit.--No deduction shall 
be allowed for that portion of the expenses otherwise allowable as a 
deduction for the taxable year which is equal to the amount of the 
credit determined for the taxable year under section 45H(a).''.
    (d) Basis Adjustment.--Section 1016(a) (relating to adjustments to 
basis) is amended by striking ``and'' at the end of paragraph (32), by 
striking the period at the end of paragraph (33) and inserting ``, 
and'', and by adding at the end the following new paragraph:
            ``(34) in the case of a facility with respect to which a 
        credit was allowed under section 45H, to the extent provided in 
        section 45H(d).''.
    (e) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 is amended by adding at the end 
the following new item:

                              ``Sec. 45H. Credit for production of low 
                                        sulfur diesel fuel.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to expenses paid or incurred after March 31, 2003, in taxable 
years ending after such date.

SEC. 42006. DETERMINATION OF SMALL REFINER EXCEPTION TO OIL DEPLETION 
              DEDUCTION.

    (a) In General.--Paragraph (4) of section 613A(d) (relating to 
certain refiners excluded) is amended to read as follows:
            ``(4) Certain refiners excluded.--If the taxpayer or a 
        related person engages in the refining of crude oil, subsection 
        (c) shall not apply to the taxpayer for a taxable year if the 
        average daily refinery runs of the taxpayer and the related 
        person for the taxable year exceed 75,000 barrels. For purposes 
        of this paragraph, the average daily refinery runs for any 
        taxable year shall be determined by dividing the aggregate 
        refinery runs for the taxable year by the number of days in the 
        taxable year.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2003.

SEC. 42007. SALES OR DISPOSITIONS TO IMPLEMENT FEDERAL ENERGY 
              REGULATORY COMMISSION OR STATE ELECTRIC RESTRUCTURING 
              POLICY.

    (a) In General.--Section 451 (relating to general rule for taxable 
year of inclusion) is amended by adding at the end the following new 
subsection:
    ``(i) Special Rule for Sales or Dispositions To Implement Federal 
Energy Regulatory Commission or State Electric Restructuring Policy.--
            ``(1) In general.--In the case of any qualifying electric 
        transmission transaction to which the taxpayer elects the 
        application of this section, qualified gain from such 
        transaction shall be recognized--
                    ``(A) in the taxable year which includes the date 
                of such transaction to the extent the amount realized 
                from such transaction exceeds--
                            ``(i) the cost of exempt utility property 
                        which is purchased by the taxpayer during the 
                        4-year period beginning on such date, reduced 
                        (but not below zero) by
                            ``(ii) any portion of such cost previously 
                        taken into account under this subsection, and
                    ``(B) ratably over the 8-taxable year period 
                beginning with the taxable year which includes the date 
                of such transaction, in the case of any such gain not 
                recognized under subparagraph (A).
            ``(2) Qualified gain.--For purposes of this subsection, the 
        term `qualified gain' means, with respect to any qualifying 
        electric transmission transaction in any taxable year--
                    ``(A) any ordinary income derived from such 
                transaction which would be required to be recognized 
                under section 1245 or 1250 for such taxable year 
                (determined without regard to this subsection), and
                    ``(B) any income derived from such transaction in 
                excess of the amount described in subparagraph (A) 
                which is required to be included in gross income for 
                such taxable year (determined without regard to this 
                subsection).
            ``(3) Qualifying electric transmission transaction.--For 
        purposes of this subsection, the term `qualifying electric 
        transmission transaction' means any sale or other disposition 
        before January 1, 2007, of--
                    ``(A) property used in the trade or business of 
                providing electric transmission services, or
                    ``(B) any stock or partnership interest in a 
                corporation or partnership, as the case may be, whose 
                principal trade or business consists of providing 
                electric transmission services,
        but only if such sale or disposition is to an independent 
        transmission company.
            ``(4) Independent transmission company.--For purposes of 
        this subsection, the term `independent transmission company' 
        means--
                    ``(A) an independent transmission provider approved 
                by the Federal Energy Regulatory Commission,
                    ``(B) a person--
                            ``(i) who the Federal Energy Regulatory 
                        Commission determines in its authorization of 
                        the transaction under section 203 of the 
                        Federal Power Act (16 U.S.C. 824b) or by 
                        declaratory order is not a market participant 
                        within the meaning of such Commission's rules 
                        applicable to independent transmission 
                        providers, and
                            ``(ii) whose transmission facilities to 
                        which the election under this subsection 
                        applies are under the operational control of a 
                        Federal Energy Regulatory Commission-approved 
                        independent transmission provider before the 
                        close of the period specified in such 
                        authorization, but not later than the close of 
                        the period applicable under subsection 
                        (a)(2)(B) as extended under paragraph (2), or
                    ``(C) in the case of facilities subject to the 
                jurisdiction of the Public Utility Commission of 
                Texas--
                            ``(i) a person which is approved by that 
                        Commission as consistent with Texas State law 
                        regarding an independent transmission provider, 
                        or
                            ``(ii) a political subdivision or affiliate 
                        thereof whose transmission facilities are under 
                        the operational control of a person described 
                        in clause (i).
            ``(5) Exempt utility property.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `exempt utility 
                property' means property used in the trade or business 
                of--
                            ``(i) generating, transmitting, 
                        distributing, or selling electricity, or
                            ``(ii) producing, transmitting, 
                        distributing, or selling natural gas.
                    ``(B) Nonrecognition of gain by reason of 
                acquisition of stock.--Acquisition of control of a 
                corporation shall be taken into account under this 
                subsection with respect to a qualifying electric 
                transmission transaction only if the principal trade or 
                business of such corporation is a trade or business 
                referred to in subparagraph (A).
            ``(6) Special rule for consolidated groups.--In the case of 
        a corporation which is a member of an affiliated group filing a 
        consolidated return, any exempt utility property purchased by 
        another member of such group shall be treated as purchased by 
        such corporation for purposes of applying paragraph (1)(A).
            ``(7) Time for assessment of deficiencies.--If the taxpayer 
        has made the election under paragraph (1) and any gain is 
        recognized by such taxpayer as provided in paragraph (1)(B), 
        then--
                    ``(A) the statutory period for the assessment of 
                any deficiency, for any taxable year in which any part 
                of the gain on the transaction is realized, 
                attributable to such gain shall not expire prior to the 
                expiration of 3 years from the date the Secretary is 
                notified by the taxpayer (in such manner as the 
                Secretary may by regulations prescribe) of the purchase 
                of exempt utility property or of an intention not to 
                purchase such property, and
                    ``(B) such deficiency may be assessed before the 
                expiration of such 3-year period notwithstanding any 
                law or rule of law which would otherwise prevent such 
                assessment.
            ``(8) Purchase.--For purposes of this subsection, the 
        taxpayer shall be considered to have purchased any property if 
        the unadjusted basis of such property is its cost within the 
        meaning of section 1012.
            ``(9) Election.--An election under paragraph (1) shall be 
        made at such time and in such manner as the Secretary may 
        require and, once made, shall be irrevocable.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to transactions occurring after the date of the enactment of this 
Act, in taxable years ending after such date.

SEC. 42008. MODIFICATIONS TO SPECIAL RULES FOR NUCLEAR DECOMMISSIONING 
              COSTS.

    (a) Repeal of Limitation on Deposits Into Fund Based on Cost of 
Service; Contributions After Funding Period.--Subsection (b) of section 
468A is amended to read as follows:
    ``(b) Limitation on Amounts Paid Into Fund.--
            ``(1) In general.--The amount which a taxpayer may pay into 
        the Fund for any taxable year shall not exceed the ruling 
        amount applicable to such taxable year.
            ``(2) Contributions after funding period.--Notwithstanding 
        any other provision of this section, a taxpayer may pay into 
        the Fund in any taxable year after the last taxable year to 
        which the ruling amount applies. Payments may not be made under 
        the preceding sentence to the extent such payments would cause 
        the assets of the Fund to exceed the nuclear decommissioning 
        costs allocable to the taxpayer's current or former interest in 
        the nuclear power plant to which the Fund relates. The 
        limitation under the preceding sentence shall be determined by 
        taking into account a reasonable rate of inflation for the 
        nuclear decommissioning costs and a reasonable after-tax rate 
        of return on the assets of the Fund until such assets are 
        anticipated to be expended.''.
    (b) Clarification of Treatment of Fund Transfers.--Subsection (e) 
of section 468A is amended by adding at the end the following new 
paragraph:
            ``(8) Treatment of fund transfers.--If, in connection with 
        the transfer of the taxpayer's interest in a nuclear power 
        plant, the taxpayer transfers the Fund with respect to such 
        power plant to the transferee of such interest and the 
        transferee elects to continue the application of this section 
        to such Fund--
                    ``(A) the transfer of such Fund shall not cause 
                such Fund to be disqualified from the application of 
                this section, and
                    ``(B) no amount shall be treated as distributed 
                from such Fund, or be includible in gross income, by 
                reason of such transfer.''.
    (c) Treatment of Certain Decommissioning Costs.--
            (1) In general.--Section 468A is amended by redesignating 
        subsections (f) and (g) as subsections (g) and (h), 
        respectively, and by inserting after subsection (e) the 
        following new subsection:
    ``(f) Transfers Into Qualified Funds.--
            ``(1) In general.--Notwithstanding subsection (b), any 
        taxpayer maintaining a Fund to which this section applies with 
        respect to a nuclear power plant may transfer into such Fund up 
        to an amount equal to the excess of the total nuclear 
        decommissioning costs with respect to such nuclear power plant 
        over the portion of such costs taken into account in 
        determining the ruling amount in effect immediately before the 
        transfer.
            ``(2) Deduction for amounts transferred.--
                    ``(A) In general.--Except as provided in 
                subparagraph (C), the deduction allowed by subsection 
                (a) for any transfer permitted by this subsection shall 
                be allowed ratably over the remaining estimated useful 
                life (within the meaning of subsection (d)(2)(A)) of 
                the nuclear power plant beginning with the taxable year 
                during which the transfer is made.
                    ``(B) Denial of deduction for previously deducted 
                amounts.--No deduction shall be allowed for any 
                transfer under this subsection of an amount for which a 
                deduction was previously allowed or a corresponding 
                amount was not included in gross income. For purposes 
                of the preceding sentence, a ratable portion of each 
                transfer shall be treated as being from previously 
                deducted or excluded amounts to the extent thereof.
                    ``(C) Transfers of qualified funds.--If--
                            ``(i) any transfer permitted by this 
                        subsection is made to any Fund to which this 
                        section applies, and
                            ``(ii) such Fund is transferred thereafter,
                any deduction under this subsection for taxable years 
                ending after the date that such Fund is transferred 
                shall be allowed to the transferor for the taxable year 
                which includes such date.
                    ``(D) Special rules.--
                            ``(i) Gain or loss not recognized.--No gain 
                        or loss shall be recognized on any transfer 
                        permitted by this subsection.
                            ``(ii) Transfers of appreciated property.--
                        If appreciated property is transferred in a 
                        transfer permitted by this subsection, the 
                        amount of the deduction shall be the adjusted 
                        basis of such property.
            ``(3) New ruling amount required.--Paragraph (1) shall not 
        apply to any transfer unless the taxpayer requests from the 
        Secretary a new schedule of ruling amounts in connection with 
        such transfer.
            ``(4) No basis in qualified funds.--Notwithstanding any 
        other provision of law, the taxpayer's basis in any Fund to 
        which this section applies shall not be increased by reason of 
        any transfer permitted by this subsection.''.
            (2) New ruling amount to take into account total costs.--
        Subparagraph (A) of section 468A(d)(2) is amended to read as 
        follows:
                    ``(A) fund the total nuclear decommissioning costs 
                with respect to such power plant over the estimated 
                useful life of such power plant, and''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2003.

SEC. 42009. TREATMENT OF CERTAIN INCOME OF COOPERATIVES.

    (a) Income From Open Access and Nuclear Decommissioning 
Transactions.--
            (1) In general.--Subparagraph (C) of section 501(c)(12) is 
        amended by striking ``or'' at the end of clause (i), by 
        striking clause (ii), and by adding at the end the following 
        new clauses:
                            ``(ii) from any provision or sale of 
                        transmission service or ancillary services if 
                        such services are provided on a 
                        nondiscriminatory open access basis under an 
                        independent transmission provider agreement 
                        approved by FERC (other than income received or 
                        accrued directly or indirectly from a member),
                            ``(iii) from any nuclear decommissioning 
                        transaction, or
                            ``(iv) from any asset exchange or 
                        conversion transaction.''.
            (2) Definitions and special rules.--Paragraph (12) of 
        section 501(c) is amended by adding at the end the following 
        new subparagraphs:
                    ``(E) For purposes of subparagraph (C)(ii), the 
                term `FERC' means the Federal Energy Regulatory 
                Commission and references to such term shall be treated 
                as including the Public Utility Commission of Texas 
                with respect to any ERCOT utility (as defined in 
                section 212(k)(2)(B) of the Federal Power Act (16 
                U.S.C. 824k(k)(2)(B))).
                    ``(F) For purposes of subparagraph (C)(iii), the 
                term `nuclear decommissioning transaction' means--
                            ``(i) any transfer into a trust, fund, or 
                        instrument established to pay any nuclear 
                        decommissioning costs if the transfer is in 
                        connection with the transfer of the mutual or 
                        cooperative electric company's interest in a 
                        nuclear power plant or nuclear power plant 
                        unit,
                            ``(ii) any distribution from any trust, 
                        fund, or instrument established to pay any 
                        nuclear decommissioning costs, or
                            ``(iii) any earnings from any trust, fund, 
                        or instrument established to pay any nuclear 
                        decommissioning costs.
                    ``(G) For purposes of subparagraph (C)(iv), the 
                term `asset exchange or conversion transaction' means 
                any voluntary exchange or involuntary conversion of any 
                property related to generating, transmitting, 
                distributing, or selling electric energy by a mutual or 
                cooperative electric company, the gain from which 
                qualifies for deferred recognition under section 1031 
                or 1033, but only if the replacement property acquired 
                by such company pursuant to such section constitutes 
                property which is used, or to be used, for--
                            ``(i) generating, transmitting, 
                        distributing, or selling electric energy, or
                            ``(ii) producing, transmitting, 
                        distributing, or selling natural gas.''.
    (b) Treatment of Income From Load Loss Transactions, Etc.--
Paragraph (12) of section 501(c), as amended by subsection (a)(2), is 
amended by adding after subparagraph (G) the following new 
subparagraph:
                    ``(H)(i) In the case of a mutual or cooperative 
                electric company described in this paragraph or an 
                organization described in section 1381(a)(2)(C), income 
                received or accrued from a load loss transaction shall 
                be treated as an amount collected from members for the 
                sole purpose of meeting losses and expenses.
                    ``(ii) For purposes of clause (i), the term `load 
                loss transaction' means any wholesale or retail sale of 
                electric energy (other than to members) to the extent 
                that the aggregate sales during the recovery period do 
                not exceed the load loss mitigation sales limit for 
                such period.
                    ``(iii) For purposes of clause (ii), the load loss 
                mitigation sales limit for the recovery period is the 
                sum of the annual load losses for each year of such 
                period.
                    ``(iv) For purposes of clause (iii), a mutual or 
                cooperative electric company's annual load loss for 
                each year of the recovery period is the amount (if any) 
                by which--
                            ``(I) the megawatt hours of electric energy 
                        sold during such year to members of such 
                        electric company are less than
                            ``(II) the megawatt hours of electric 
                        energy sold during the base year to such 
                        members.
                    ``(v) For purposes of clause (iv)(II), the term 
                `base year' means--
                            ``(I) the calendar year preceding the 
                        start-up year, or
                            ``(II) at the election of the electric 
                        company, the second or third calendar years 
                        preceding the start-up year.
                    ``(vi) For purposes of this subparagraph, the 
                recovery period is the 7-year period beginning with the 
                start-up year.
                    ``(vii) For purposes of this subparagraph, the 
                start-up year is the calendar year which includes the 
                date of the enactment of this subparagraph or, if 
                later, at the election of the mutual or cooperative 
                electric company--
                            ``(I) the first year that such electric 
                        company offers nondiscriminatory open access, 
                        or
                            ``(II) the first year in which at least 10 
                        percent of such electric company's sales are 
                        not to members of such electric company.
                    ``(viii) A company shall not fail to be treated as 
                a mutual or cooperative company for purposes of this 
                paragraph or as a corporation operating on a 
                cooperative basis for purposes of section 1381(a)(2)(C) 
                by reason of the treatment under clause (i).
                    ``(ix) For purposes of subparagraph (A), in the 
                case of a mutual or cooperative electric company, 
                income received, or accrued, indirectly from a member 
                shall be treated as an amount collected from members 
                for the sole purpose of meeting losses and expenses.''.
    (c) Exception From Unrelated Business Taxable Income.--Subsection 
(b) of section 512 (relating to modifications) is amended by adding at 
the end the following new paragraph:
            ``(18) Treatment of mutual or cooperative electric 
        companies.--In the case of a mutual or cooperative electric 
        company described in section 501(c)(12), there shall be 
        excluded income which is treated as member income under 
        subparagraph (H) thereof.''.
    (d) Cross Reference.--Section 1381 is amended by adding at the end 
the following new subsection:
    ``(c) Cross Reference.--

                                ``For treatment of income from load 
loss transactions of organizations described in subsection (a)(2)(C), 
see section 501(c)(12)(H).''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 42010. ARBITRAGE RULES NOT TO APPLY TO PREPAYMENTS FOR NATURAL 
              GAS.

    (a) In General.--Subsection (b) of section 148 (relating to higher 
yielding investments) is amended by adding at the end the following new 
paragraph:
            ``(4) Safe harbor for prepaid natural gas.--
                    ``(A) In general.--The term `investment-type 
                property' does not include a prepayment under a 
                qualified natural gas supply contract.
                    ``(B) Qualified natural gas supply contract.--For 
                purposes of this paragraph, the term `qualified natural 
                gas supply contract' means any contract to acquire 
                natural gas for resale by a utility owned by a 
                governmental unit if the amount of gas permitted to be 
                acquired under the contract by the utility during any 
                year does not exceed the sum of--
                            ``(i) the annual average amount during the 
                        testing period of natural gas purchased (other 
                        than for resale) by customers of such utility 
                        who are located within the service area of such 
                        utility, and
                            ``(ii) the amount of natural gas to be used 
                        to transport the prepaid natural gas to the 
                        utility during such year.
                    ``(C) Natural gas used to generate electricity.--
                Natural gas used to generate electricity shall be taken 
                into account in determining the average under 
                subparagraph (B)(i)--
                            ``(i) only if the electricity is generated 
                        by a utility owned by a governmental unit, and
                            ``(ii) only to the extent that the 
                        electricity is sold (other than for resale) to 
                        customers of such utility who are located 
                        within the service area of such utility.
                    ``(D) Adjustments for changes in customer base.--
                            ``(i) New business customers.--If--
                                    ``(I) after the close of the 
                                testing period and before the date of 
                                issuance of the issue, the utility 
                                owned by a governmental unit enters 
                                into a contract to supply natural gas 
                                (other than for resale) for a business 
                                use at a property within the service 
                                area of such utility, and
                                    ``(II) the utility did not supply 
                                natural gas to such property during the 
                                testing period or the ratable amount of 
                                natural gas to be supplied under the 
                                contract is significantly greater than 
                                the ratable amount of gas supplied to 
                                such property during the testing 
                                period,
                        then a contract shall not fail to be treated as 
                        a qualified natural gas supply contract by 
                        reason of supplying the additional natural gas 
                        under the contract referred to in subclause 
                        (I).
                            ``(ii) Lost customers.--The average under 
                        subparagraph (B)(i) shall not exceed the annual 
                        amount of natural gas reasonably expected to be 
                        purchased (other than for resale) by persons 
                        who are located within the service area of such 
                        utility and who, as of the date of issuance of 
                        the issue, are customers of such utility.
                    ``(E) Ruling requests.--The Secretary may increase 
                the average under subparagraph (B)(i) for any period if 
                the utility owned by the governmental unit establishes 
                to the satisfaction of the Secretary that, based on 
                objective evidence of growth in natural gas consumption 
                or population, such average would otherwise be 
                insufficient for such period.
                    ``(F) Adjustment for natural gas otherwise on 
                hand.--
                            ``(i) In general.--The amount otherwise 
                        permitted to be acquired under the contract for 
                        any period shall be reduced by--
                                    ``(I) the applicable share of 
                                natural gas held by the utility on the 
                                date of issuance of the issue, and
                                    ``(II) the natural gas (not taken 
                                into account under subclause (I)) which 
                                the utility has a right to acquire 
                                during such period (determined as of 
                                the date of issuance of the issue).
                            ``(ii) Applicable share.--For purposes of 
                        the clause (i), the term `applicable share' 
                        means, with respect to any period, the natural 
                        gas allocable to such period if the gas were 
                        allocated ratably over the period to which the 
                        prepayment relates.
                    ``(G) Intentional acts.--Subparagraph (A) shall 
                cease to apply to any issue if the utility owned by the 
                governmental unit engages in any intentional act to 
                render the volume of natural gas acquired by such 
                prepayment to be in excess of the sum of--
                            ``(i) the amount of natural gas needed 
                        (other than for resale) by customers of such 
                        utility who are located within the service area 
                        of such utility, and
                            ``(ii) the amount of natural gas used to 
                        transport such natural gas to the utility.
                    ``(H) Testing period.--For purposes of this 
                paragraph, the term `testing period' means, with 
                respect to an issue, the most recent 5 calendar years 
                ending before the date of issuance of the issue.
                    ``(I) Service area.--For purposes of this 
                paragraph, the service area of a utility owned by a 
                governmental unit shall be comprised of--
                            ``(i) any area throughout which such 
                        utility provided at all times during the 
                        testing period--
                                    ``(I) in the case of a natural gas 
                                utility, natural gas transmission or 
                                distribution services, and
                                    ``(II) in the case of an electric 
                                utility, electricity distribution 
                                services,
                            ``(ii) any area within a county contiguous 
                        to the area described in clause (i) in which 
                        retail customers of such utility are located if 
                        such area is not also served by another utility 
                        providing natural gas or electricity services, 
                        as the case may be, and
                            ``(iii) any area recognized as the service 
                        area of such utility under State or Federal 
                        law.''.
    (b) Private Loan Financing Test Not To Apply to Prepayments for 
Natural Gas.--Paragraph (2) of section 141(c) (providing exceptions to 
the private loan financing test) is amended by striking ``or'' at the 
end of subparagraph (A), by striking the period at the end of 
subparagraph (B) and inserting ``, or'', and by adding at the end the 
following new subparagraph:
                    ``(C) is a qualified natural gas supply contract 
                (as defined in section 148(b)(4)).''.
    (c) Effective Date.--The amendment made by this section shall apply 
to obligations issued after the date of the enactment of this Act.

                         TITLE III--PRODUCTION

SEC. 43001. OIL AND GAS FROM MARGINAL WELLS.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business credits) is amended by adding at the end the 
following:

``SEC. 45I. CREDIT FOR PRODUCING OIL AND GAS FROM MARGINAL WELLS.

    ``(a) General Rule.--For purposes of section 38, the marginal well 
production credit for any taxable year is an amount equal to the 
product of--
            ``(1) the credit amount, and
            ``(2) the qualified credit oil production and the qualified 
        natural gas production which is attributable to the taxpayer.
    ``(b) Credit Amount.--For purposes of this section--
            ``(1) In general.--The credit amount is--
                    ``(A) $3 per barrel of qualified crude oil 
                production, and
                    ``(B) 50 cents per 1,000 cubic feet of qualified 
                natural gas production.
            ``(2) Reduction as oil and gas prices increase.--
                    ``(A) In general.--The $3 and 50 cents amounts 
                under paragraph (1) shall each be reduced (but not 
                below zero) by an amount which bears the same ratio to 
                such amount (determined without regard to this 
                paragraph) as--
                            ``(i) the excess (if any) of the applicable 
                        reference price over $15 ($1.67 for qualified 
                        natural gas production), bears to
                            ``(ii) $3 ($0.33 for qualified natural gas 
                        production).
                The applicable reference price for a taxable year is 
                the reference price of the calendar year preceding the 
                calendar year in which the taxable year begins.
                    ``(B) Inflation adjustment.--In the case of any 
                taxable year beginning in a calendar year after 2003, 
                each of the dollar amounts contained in subparagraph 
                (A) shall be increased to an amount equal to such 
                dollar amount multiplied by the inflation adjustment 
                factor for such calendar year (determined under section 
                43(b)(3)(B) by substituting `2002' for `1990').
                    ``(C) Reference price.--For purposes of this 
                paragraph, the term `reference price' means, with 
                respect to any calendar year--
                            ``(i) in the case of qualified crude oil 
                        production, the reference price determined 
                        under section 29(d)(2)(C), and
                            ``(ii) in the case of qualified natural gas 
                        production, the Secretary's estimate of the 
                        annual average wellhead price per 1,000 cubic 
                        feet for all domestic natural gas.
    ``(c) Qualified Crude Oil and Natural Gas Production.--For purposes 
of this section--
            ``(1) In general.--The terms `qualified crude oil 
        production' and `qualified natural gas production' mean 
        domestic crude oil or natural gas which is produced from a 
        qualified marginal well.
            ``(2) Limitation on amount of production which may 
        qualify.--
                    ``(A) In general.--Crude oil or natural gas 
                produced during any taxable year from any well shall 
                not be treated or qualified crude oil production or 
                qualified natural gas production to the extent 
                production from the well during the taxable year 
                exceeds 1,095 barrels or barrel equivalents.
                    ``(B) Proportionate reductions.--
                            ``(i) Short taxable years.--In the case of 
                        a short taxable year, the limitations under 
                        this paragraph shall be proportionately reduced 
                        to reflect the ratio which the number of days 
                        in such taxable year bears to 365.
                            ``(ii) Wells not in production entire 
                        year.--In the case of a well which is not 
                        capable of production during each day of a 
                        taxable year, the limitations under this 
                        paragraph applicable to the well shall be 
                        proportionately reduced to reflect the ratio 
                        which the number of days of production bears to 
                        the total number of days in the taxable year.
            ``(3) Definitions.--
                    ``(A) Qualified marginal well.--The term `qualified 
                marginal well' means a domestic well--
                            ``(i) the production from which during the 
                        taxable year is treated as marginal production 
                        under section 613A(c)(6), or
                            ``(ii) which, during the taxable year--
                                    ``(I) has average daily production 
                                of not more than 25 barrel equivalents, 
                                and
                                    ``(II) produces water at a rate not 
                                less than 95 percent of total well 
                                effluent.
                    ``(B) Crude oil, etc.--The terms `crude oil', 
                `natural gas', `domestic', and `barrel' have the 
                meanings given such terms by section 613A(e).
                    ``(C) Barrel equivalent.--The term `barrel 
                equivalent' means, with respect to natural gas, a 
                conversation ratio of 6,000 cubic feet of natural gas 
                to 1 barrel of crude oil.
    ``(d) Other Rules.--
            ``(1) Production attributable to the taxpayer.--In the case 
        of a qualified marginal well in which there is more than one 
        owner of operating interests in the well and the crude oil or 
        natural gas production exceeds the limitation under subsection 
        (c)(2), qualifying crude oil production or qualifying natural 
        gas production attributable to the taxpayer shall be determined 
        on the basis of the ratio which taxpayer's revenue interest in 
        the production bears to the aggregate of the revenue interests 
        of all operating interest owners in the production.
            ``(2) Operating interest required.--Any credit under this 
        section may be claimed only on production which is attributable 
        to the holder of an operating interest.
            ``(3) Production from nonconventional sources excluded.--In 
        the case of production from a qualified marginal well which is 
        eligible for the credit allowed under section 29 for the 
        taxable year, no credit shall be allowable under this section 
        unless the taxpayer elects not to claim the credit under 
        section 29 with respect to the well.''.
    (b) Credit Treated as Business Credit.--Section 38(b) is amended by 
striking ``plus'' at the end of paragraph (16), by striking the period 
at the end of paragraph (17) and inserting ``, plus'', and by adding at 
the end the following:
            ``(18) the marginal oil and gas well production credit 
        determined under section 45I(a).''.
    (c) Carryback.--Subsection (a) of section 39 (relating to carryback 
and carryforward of unused credits generally) is amended by adding at 
the end the following:
            ``(3) 10-year carryback for marginal oil and gas well 
        production credit.--In the case of the marginal oil and gas 
        well production credit--
                    ``(A) this section shall be applied separately from 
                the business credit (other than the marginal oil and 
                gas well production credit),
                    ``(B) paragraph (1) shall be applied by 
                substituting `10 taxable years' for `1 taxable years' 
                in subparagraph (A) thereof, and
                    ``(C) paragraph (2) shall be applied--
                            ``(i) by substituting `31 taxable years' 
                        for `21 taxable years' in subparagraph (A) 
                        thereof, and
                            ``(ii) by substituting `30 taxable years' 
                        for `20 taxable years' in subparagraph (A) 
                        thereof.''.
    (d) Coordination With Section 29.--Section 29(a) is amended by 
striking ``There'' and inserting ``At the election of the taxpayer, 
there''.
    (e) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 is amended by adding at the end 
the following:

                              ``Sec. 45I. Credit for producing oil and 
                                        gas from marginal wells.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to production in taxable years beginning after December 31, 2003.

SEC. 43002. TEMPORARY SUSPENSION OF LIMITATION BASED ON 65 PERCENT OF 
              TAXABLE INCOME AND EXTENSION OF SUSPENSION OF TAXABLE 
              INCOME LIMIT WITH RESPECT TO MARGINAL PRODUCTION.

    (a) Limitation Based on 65 Percent of Taxable Income.--Subsection 
(d) of section 613A (relating to limitation on percentage depletion in 
case of oil and gas wells) is amended by adding at the end the 
following new paragraph:
            ``(6) Temporary suspension of taxable income limit.--
        Paragraph (1) shall not apply to taxable years beginning after 
        December 31, 2003, and before January 1, 2007, including with 
        respect to amounts carried under the second sentence of 
        paragraph (1) to such taxable years.''.
    (b) Extension of Suspension of Taxable Income Limit With Respect to 
Marginal Production.--Subparagraph (H) of section 613A(c)(6) (relating 
to temporary suspension of taxable income limit with respect to 
marginal production) is amended by striking ``2004'' and inserting 
``2007''.
    (c) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 2003.

SEC. 43003. AMORTIZATION OF DELAY RENTAL PAYMENTS.

    (a) In General.--Section 167 (relating to depreciation) is amended 
by redesignating subsection (h) as subsection (i) and by inserting 
after subsection (g) the following new subsection:
    ``(h) Amortization of Delay Rental Payments for Domestic Oil and 
Gas Wells.--
            ``(1) In general.--Any delay rental payment paid or 
        incurred in connection with the development of oil or gas wells 
        within the United States (as defined in section 638) shall be 
        allowed as a deduction ratably over the 24-month period 
        beginning on the date that such payment was paid or incurred.
            ``(2) Half-year convention.--For purposes of paragraph (1), 
        any payment paid or incurred during the taxable year shall be 
        treated as paid or incurred on the mid-point of such taxable 
        year.
            ``(3) Exclusive method.--Except as provided in this 
        subsection, no depreciation or amortization deduction shall be 
        allowed with respect to such payments.
            ``(4) Treatment upon abandonment.--If any property to which 
        a delay rental payment relates is retired or abandoned during 
        the 24-month period described in paragraph (1), no deduction 
        shall be allowed on account of such retirement or abandonment 
        and the amortization deduction under this subsection shall 
        continue with respect to such payment.
            ``(5) Delay rental payments.--For purposes of this 
        subsection, the term `delay rental payment' means an amount 
        paid for the privilege of deferring development of an oil or 
        gas well under an oil or gas lease.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to amounts paid or incurred in taxable years beginning after December 
31, 2003.

SEC. 43004. AMORTIZATION OF GEOLOGICAL AND GEOPHYSICAL EXPENDITURES.

    (a) In General.--Section 167 (relating to depreciation) is amended 
by redesignating subsection (i) as subsection (j) and by inserting 
after subsection (h) the following new subsection:
    ``(i) Amortization of Geological and Geophysical Expenditures.--
            ``(1) In general.--Any geological and geophysical expenses 
        paid or incurred in connection with the exploration for, or 
        development of, oil or gas within the United States (as defined 
        in section 638) shall be allowed as a deduction ratably over 
        the 24-month period beginning on the date that such expense was 
        paid or incurred.
            ``(2) Special rules.--For purposes of this subsection, 
        rules similar to the rules of paragraphs (2), (3), and (4) of 
        subsection (h) shall apply.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to costs paid or incurred in taxable years beginning after December 31, 
2003.

SEC. 43005. EXTENSION AND MODIFICATION OF CREDIT FOR PRODUCING FUEL 
              FROM A NONCONVENTIONAL SOURCE.

    (a) In General.--Section 29 is amended by adding at the end the 
following new subsection:
    ``(h) Extension for Other Facilities.--
            ``(1) Extension for oil and certain gas.--In the case of a 
        well for producing qualified fuels described in subparagraph 
        (A) or (B)(i) of subsection (c)(1)--
                    ``(A) Application of credit for new wells.--
                Notwithstanding subsection (f), this section shall 
                apply with respect to such fuels--
                            ``(i) which are produced from a well 
                        drilled after the date of the enactment of this 
                        subsection and before January 1, 2007, and
                            ``(ii) which are sold not later than the 
                        close of the 4-year period beginning on the 
                        date that such well is drilled, or, if earlier, 
                        January 1, 2010.
                    ``(B) Extension of credit for old wells.--
                Subsection (f)(2) shall be applied by substituting 
                `2007' for `2003' with respect to wells described in 
                subsection (f)(1)(A) with respect to such fuels.
            ``(2) Extension for facilities producing qualified fuel 
        from landfill gas.--
                    ``(A) In general.--In the case of a facility for 
                producing qualified fuel from landfill gas which was 
                placed in service after June 30, 1998, and before 
                January 1, 2007, this section shall apply to fuel 
                produced at such facility during the 5-year period 
                beginning on the later of--
                            ``(i) the date such facility was placed in 
                        service, or
                            ``(ii) the date of the enactment of this 
                        subsection.
                    ``(B) Reduction of credit for certain landfill 
                facilities.--In the case of a facility to which 
                paragraph (1) applies and which is located at a 
                landfill which is required pursuant to section 
                60.751(b)(2) or section 60.33c of title 40, Code of 
                Federal Regulations (as in effect on April 3, 2003) to 
                install and operate a collection and control system 
                which captures gas generated within the landfill, 
                subsection (a)(1) shall be applied to gas so captured 
                by substituting `$2' for `$3' for the taxable year 
                during which such system is required to be installed 
                and operated.
            ``(3) Special rules.--In determining the amount of credit 
        allowable under this section solely by reason of this 
        subsection--
                    ``(A) Daily limit.--The amount of qualified fuels 
                sold during any taxable year which may be taken into 
                account by reason of this subsection with respect to 
                any project shall not exceed an average barrel-of-oil 
                equivalent of 200,000 cubic feet of natural gas per 
                day. Days before the date the project is placed in 
                service shall not be taken into account in determining 
                such average.
                    ``(B) Extension period to commence with unadjusted 
                credit amount.--In the case of fuels sold during 2003, 
                the dollar amount applicable under subsection (a)(1) 
                shall be $3 (without regard to subsection (b)(2)). In 
                the case of fuels sold after 2003, subparagraph (B) of 
                subsection (d)(2) shall be applied by substituting 
                `2003' for `1979'.''.
    (b) Treatment as Business Credit.--
            (1) Credit moved to subpart relating to business related 
        credits.--The Internal Revenue Code of 1986 is amended by 
        redesignating section 29 as section 45J and by moving section 
        45J (as so redesignated) from subpart B of part IV of 
        subchapter A of chapter 1 to the end of subpart D of part IV of 
        subchapter A of chapter 1.
            (2) Credit Treated as Business Credit.--Section 38(b) is 
        amended by striking ``plus'' at the end of paragraph (17), by 
        striking the period at the end of paragraph (18) and inserting 
        ``, plus'', and by adding at the end the following:
            ``(19) the nonconventional source production credit 
        determined under section 45J(a).''.
            (3) Conforming Amendments.--
                    (A) Section 30(b)(2)(A), as redesignated by section 
                110(a), is amended by striking ``sections 27 and 29'' 
                and inserting ``section 27''.
                    (B) Section 30B(d), as added by section 41011, is 
                amended by striking ``, 29,''.
                    (C) Section 39(d) is amended by adding at the end 
                the following new paragraph:
            ``(13) No carryback for nonconventional source production 
        credit.--No portion of the unused business credit for any 
        taxable year which is attributable to the credit under section 
        45J may be carried back to a taxable year ending before April 
        1, 2003.''.
                    (D) Sections 43(b)(2), 45I(b)(2)(C) (as added by 
                section 43001), and 613A(c)(6)(C) are each amended by 
                striking ``section 29(d)(2)(C)'' and inserting 
                ``section 45J(d)(2)(C)''.
                    (E) Paragraph (9) of section 45(c), as added by 
                section 41002(c), is amended by striking ``section 29'' 
                and inserting ``section 45J'' and by striking ``section 
                29'' in the heading of such paragraph and inserting 
                ``section 45J''.
                    (F) Section 45I(d)(3), as added by section 43001, 
                is amended by striking ``section 29'' each place it 
                appears and inserting ``section 45J''.
                    (G) Section 45J(a), as amended by section 43001(d) 
                and redesignated by paragraph (1), is amended by 
                striking ``At the election of the taxpayer, there shall 
                be allowed as a credit against the tax imposed by this 
                chapter for the taxable year'' and inserting ``For 
                purposes of section 38, if the taxpayer elects to have 
                this section apply, the nonconventional source 
                production credit determined under this section for the 
                taxable year is''.
                    (H) Section 45J(b), as so redesignated, is amended 
                by striking paragraph (6).
                    (I) Section 53(d)(1)(B)(iii) is amended by striking 
                ``under section 29'' and all that follows through ``or 
                not allowed''.
                    (J) Section 55(c)(2) is amended by striking 
                ``29(b)(6),''.
                    (K) Subsection (a) of section 772 is amended by 
                inserting ``and'' at the end of paragraph (9), by 
                striking paragraph (10), and by redesignating paragraph 
                (11) as paragraph (10).
                    (L) Paragraph (5) of section 772(d) is amended by 
                striking ``the foreign tax credit, and the credit 
                allowable under section 29'' and inserting ``and the 
                foreign tax credit''.
                    (M) The table of sections for subpart B of part IV 
                of subchapter A of chapter 1 is amended by striking the 
                item relating to section 29.
                    (N) The table of sections for subpart D of part IV 
                of subchapter A of chapter 1 is amended by inserting 
                after the item relating to section 45I the following 
                new item:

                              ``Sec. 45J. Credit for producing fuel 
                                        from a nonconventional 
                                        source.''.
    (c) Effective Dates.--
            (1) In general.--The amendment made by subsection (a) shall 
        apply to fuel sold after March 31, 2003, in taxable years 
        ending after such date.
            (2) Treatment as business credit.--The amendments made by 
        subsection (b) shall apply to taxable years ending after March 
        31, 2003.

SEC. 43006. BUSINESS RELATED ENERGY CREDITS ALLOWED AGAINST REGULAR AND 
              MINIMUM TAX.

    (a) In General.--Subsection (c) of section 38 (relating to 
limitation based on amount of tax) is amended by redesignating 
paragraph (4) as paragraph (5) and by inserting after paragraph (3) the 
following new paragraph:
            ``(4) Special rules for specified energy credits.--
                    ``(A) In general.--In the case of specified energy 
                credits--
                            ``(i) this section and section 39 shall be 
                        applied separately with respect to such 
                        credits, and
                            ``(ii) in applying paragraph (1) to such 
                        credits--
                                    ``(I) the tentative minimum tax 
                                shall be treated as being zero, and
                                    ``(II) the limitation under 
                                paragraph (1) (as modified by subclause 
                                (I)) shall be reduced by the credit 
                                allowed under subsection (a) for the 
                                taxable year (other than the specified 
                                energy credits).
                    ``(B) Specified energy credits.--For purposes of 
                this subsection, the term `specified energy credits' 
                means the credits determined under sections 45G, 45H, 
                and 45I.
                    ``(C) Special rule for qualified wind facilities.--
                For purposes of this subsection, the term `specified 
                energy credits' shall include the credit determined 
                under section 45 to the extent that such credit is 
                attributable to electricity produced--
                            ``(i) at a facility using wind to produce 
                        electricity which is originally placed in 
                        service after the date of the enactment of this 
                        paragraph, and
                            ``(ii) during the 4-year period beginning 
                        on the date that such facility was originally 
                        placed in service.''.
    (b) Conforming Amendments.--Paragraphs (2)(A)(ii)(II) and 
(3)(A)(ii)(II) of section 38(c) are each amended by inserting ``or the 
specified energy credits'' after ``employee credit''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act.

SEC. 43007. TEMPORARY REPEAL OF ALTERNATIVE MINIMUM TAX PREFERENCE FOR 
              INTANGIBLE DRILLING COSTS.

    (a) In General.--Clause (ii) of section 57(a)(2)(E) is amended by 
adding at the end the following new sentence: ``The preceding sentence 
shall not apply to taxable years beginning after December 31, 2003, and 
before January 1, 2006.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2003.

SEC. 43008. ALLOWANCE OF ENHANCED RECOVERY CREDIT AGAINST THE 
              ALTERNATIVE MINIMUM TAX.

    (a) In General.--Subparagraph (B) of section 38(c)(4), as amended 
by section 43006, is amended by adding at the end the following new 
sentence: ``For taxable years beginning after December 31, 2003, and 
before January 1, 2006, such term includes the credit determined under 
section 43.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2003.

                    TITLE IV--CORPORATE EXPATRIATION

SEC. 44001. TAX TREATMENT OF CORPORATE EXPATRIATION.

    (a) In General.--Subchapter C of chapter 80 (relating to provisions 
affecting more than one subtitle) is amended by adding at the end the 
following new section:

``SEC. 7874. TAX TREATMENT OF CORPORATE EXPATRIATION.

    ``(a) Inverted Corporations Treated as Domestic Corporations.--
            ``(1) In general.--If a foreign incorporated entity is 
        treated as an inverted domestic corporation, then, 
        notwithstanding section 7701(a)(4), such entity shall be 
        treated for purposes of this title as a domestic corporation.
            ``(2) Inverted domestic corporation.--For purposes of this 
        section, a foreign incorporated entity shall be treated as an 
        inverted domestic corporation if, pursuant to a plan (or a 
        series of related transactions)--
                    ``(A) the entity completes after March 4, 2003, the 
                direct or indirect acquisition of substantially all of 
                the properties held directly or indirectly by a 
                domestic corporation or substantially all of the 
                properties constituting a trade or business of a 
                domestic partnership,
                    ``(B) after the acquisition at least 80 percent of 
                the stock (by vote or value) of the entity is held--
                            ``(i) in the case of an acquisition with 
                        respect to a domestic corporation, by former 
                        shareholders of the domestic corporation by 
                        reason of holding stock in the domestic 
                        corporation, or
                            ``(ii) in the case of an acquisition with 
                        respect to a domestic partnership, by former 
                        partners of the domestic partnership by reason 
                        of holding a capital or profits interest in the 
                        domestic partnership, and
                    ``(C) the expanded affiliated group which after the 
                acquisition includes the entity does not have 
                substantial business activities in the foreign country 
                in which or under the law of which the entity is 
                created or organized when compared to the total 
                business activities of such expanded affiliated group.
            ``(3) Termination.--This subsection shall not apply to any 
        acquisition completed after December 31, 2004.
    ``(b) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Foreign incorporated entity.--The term `foreign 
        incorporated entity' means any entity which is, or but for 
        subsection (a) would be, treated as a foreign corporation for 
        purposes of this title.
            ``(2) Expanded affiliated group.--The term `expanded 
        affiliated group' means an affiliated group as defined in 
        section 1504(a) but without regard to paragraphs (2), (3), and 
        (4) of section 1504(b), except that section 1504(a) shall be 
        applied by substituting `more than 50 percent' for `at least 80 
        percent' each place it appears.
            ``(3) Certain stock disregarded.--There shall not be taken 
        into account in determining ownership under subsection 
        (a)(3)(B)--
                    ``(A) stock held by members of the expanded 
                affiliated group which includes the foreign 
                incorporated entity, or
                    ``(B) stock of such foreign incorporated entity 
                which is sold in a public offering related to the 
                acquisition described in subsection (a)(3)(A).
            ``(4) Plan deemed in certain cases.--If a foreign 
        incorporated entity acquires directly or indirectly 
        substantially all of the properties of a domestic corporation 
        or partnership during the 4-year period beginning on the date 
        which is 2 years before the ownership requirements of 
        subsection (a)(3)(B) are met, such actions shall be treated as 
        pursuant to a plan.
            ``(5) Certain transfers disregarded.--The transfer of 
        properties or liabilities (including by contribution or 
        distribution) shall be disregarded if such transfers are part 
        of a plan a principal purpose of which is to avoid the purposes 
        of this section.
            ``(6) Special rule for related partnerships.--For purposes 
        of applying subsection (a)(3)(B) to the acquisition of a 
        domestic partnership, except as provided in regulations, all 
        partnerships which are under common control (within the meaning 
        of section 482) shall be treated as 1 partnership.
            ``(7) Regulations.--The Secretary shall prescribe such 
        regulations as may be appropriate to determine whether a 
        corporation is an inverted domestic corporation, including 
        regulations--
                    ``(A) to treat warrants, options, contracts to 
                acquire stock, convertible debt interests, and other 
                similar interests as stock, and
                    ``(B) to treat stock as not stock.
    ``(c) Special Rule for Treaties.--Nothing in section 894 or 7852(d) 
or in any other provision of law shall be construed as permitting an 
exemption, by reason of any treaty obligation of the United States 
heretofore or hereafter entered into, from the provisions of this 
section.
    ``(d) Regulations.--The Secretary shall provide such regulations as 
are necessary to carry out this section, including regulations 
providing for such adjustments to the application of this section as 
are necessary to prevent the avoidance of the purposes of this section, 
including the avoidance of such purposes through--
            ``(1) the use of related persons, pass-through or other 
        noncorporate entities, or other intermediaries, or
            ``(2) transactions designed to have persons cease to be (or 
        not become) members of expanded affiliated groups or related 
        persons.''.
    (b) Conforming Amendment.--The table of sections for subchapter C 
of chapter 80 is amended by adding at the end the following new item:

                              ``Sec. 7874. Tax treatment of corporate 
                                        expatriation.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after March 4, 2003.

SEC. 44002. EXPRESSING THE SENSE OF THE CONGRESS THAT TAX REFORM IS 
              NEEDED TO ADDRESS THE ISSUE OF CORPORATE EXPATRIATION.

    (a) Findings.--The Congress finds that--
            (1) the tax laws of the United States are overly complex;
            (2) the tax laws of the United States are among the most 
        burdensome and uncompetitive in the world;
            (3) the tax laws of the United States make it difficult for 
        domestically-owned United States companies to compete abroad 
        and in the United States;
            (4) a domestically-owned corporation is disadvantaged 
        compared to a United States subsidiary of a foreign-owned 
        corporation; and
            (5) international competitiveness is forcing many United 
        States corporations to make a choice they do not want to make-
        go out of business, sell the business to a foreign competitor, 
        or become a subsidiary of a foreign corporation (i.e., engage 
        in an inversion transaction).
    (b) Sense of Congress.--It is the sense of Congress that passage of 
legislation to fix the underlying problems with our tax laws is 
essential and should occur as soon as possible, so United States 
corporations will not face the current pressures to engage in inversion 
transactions.

                         DIVISION E--CLEAN COAL

SEC. 50001. AUTHORIZATION OF APPROPRIATIONS.

    (a) Clean Coal Power Initiative.--Except as provided in subsection 
(b), there are authorized to be appropriated to the Secretary to carry 
out the activities authorized by this division $200,000,000 for each of 
the fiscal years 2004 through 2012, to remain available until expended.
    (b) Limit on Use of Funds.--The Secretary shall transmit to the 
Committee on Energy and Commerce and the Committee on Science of the 
House of Representatives, and to the Senate, the report required by 
this subsection not later than March 31, 2005. Notwithstanding 
subsection (a), no funds may be used to carry out the activities 
authorized by this division after September 30, 2005, unless the report 
has been transmitted and one month has elapsed since that transmission. 
The report shall include, with respect to subsection (a), a 10-year 
plan containing--
            (1) a detailed assessment of whether the aggregate funding 
        levels provided under subsection (a) are the appropriate 
        funding levels for that program;
            (2) a detailed description of how proposals will be 
        solicited and evaluated, including a list of all activities 
        expected to be undertaken;
            (3) a detailed list of technical milestones for each coal 
        and related technology that will be pursued; and
            (4) a detailed description of how the program will avoid 
        problems enumerated in General Accounting Office reports on the 
        Clean Coal Technology Program, including problems that have 
        resulted in unspent funds and projects that failed either 
        financially or scientifically.
    (c) Applicability.--Subsection (b) shall not apply to any project 
begun before September 30, 2005.

SEC. 50002. PROJECT CRITERIA.

    (a) In General.--The Secretary shall not provide funding under this 
division for any project that does not advance efficiency, 
environmental performance, and cost competitiveness well beyond the 
level of technologies that are in commercial service or have been 
demonstrated on a scale that the Secretary determines is sufficient to 
demonstrate that commercial service is viable as of the date of the 
enactment of this Act.
    (b) Technical Criteria for Clean Coal Power Initiative.--
            (1) Gasification.--(A) In allocating the funds made 
        available under section 50001(a), the Secretary shall ensure 
        that at least 60 percent of the funds are used only for 
        projects on coal-based gasification technologies, including 
        gasification combined cycle, gasification fuel cells, 
        gasification coproduction, and hybrid gasification/combustion.
            (B) The Secretary shall periodically set technical 
        milestones specifying the emission and thermal efficiency 
        levels that coal gasification projects must be designed to and 
        reasonably expected to achieve. The technical milestones shall 
        get more restrictive during the life of the program. The 
        Secretary shall set the periodic milestones so as to achieve by 
        2020 coal gasification projects able--
                    (i) to remove 99 percent of sulfur dioxide;
                    (ii) to emit no more than .05 lbs of NOx per 
                million BTU;
                    (iii) to achieve substantial reductions in mercury 
                emissions; and
                    (iv) to achieve a thermal efficiency of--
                            (I) 60 percent for coal of more than 9,000 
                        Btu;
                            (II) 59 percent for coal of 7,000 to 9,000 
                        Btu; and
                            (III) 50 percent for coal of less than 
                        7,000 Btu.
            (2) Other projects.--The Secretary shall periodically set 
        technical milestones for projects not described in paragraph 
        (1). The milestones shall specify the emission and thermal 
        efficiency levels that projects funded under this paragraph 
        must be designed to and reasonably expected to achieve. The 
        technical milestones shall get more restrictive during the life 
        of the program. The Secretary shall set the periodic milestones 
        so as to achieve by 2010 projects able--
                    (A) to remove 97 percent of sulfur dioxide;
                    (B) to emit no more than .08 lbs of NOx per million 
                BTU;
                    (C) to achieve substantial reductions in mercury 
                emissions; and
                    (D) to achieve a thermal efficiency of--
                            (i) 45 percent for coal of more than 9,000 
                        Btu;
                            (ii) 44 percent for coal of 7,000 to 9,000 
                        Btu; and
                            (iii) 40 percent for coal of less than 
                        7,000 Btu.
            (3) Consultation.--Before setting the technical milestones 
        under paragraphs (1)(B) and (2), the Secretary shall consult 
        with the Administrator of the Environmental Protection Agency 
        and interested entities, including coal producers, industries 
        using coal, organizations to promote coal or advanced coal 
        technologies, environmental organizations, and organizations 
        representing workers.
            (4) Existing units.--In the case of projects at existing 
        units, in lieu of the thermal efficiency requirements set forth 
        in paragraph (1)(B)(iv) and (2)(D), the milestones shall be 
        designed to achieve an overall thermal design efficiency 
        improvement compared to the efficiency of the unit as operated, 
        of not less than--
                    (A) 7 percent for coal of more than 9,000 Btu;
                    (B) 6 percent for coal of 7,000 to 9,000 Btu; or
                    (C) 4 percent for coal of less than 7,000 Btu.
            (5) Permitted uses.--In allocating funds made available 
        under section 50001, the Secretary may fund projects that 
        include, as part of the project, the separation and capture of 
        carbon dioxide.
    (c) Financial Criteria.--The Secretary shall not provide a funding 
award under this division 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.
    (d) Financial Assistance.--The Secretary shall provide financial 
assistance to projects that meet the requirements of subsections (a), 
(b), and (c) and are likely to--
            (1) achieve overall cost reductions in the utilization of 
        coal to generate useful forms of energy;
            (2) improve the competitiveness of coal among various forms 
        of energy in order to maintain a diversity of fuel choices in 
        the United States to meet electricity generation requirements; 
        and
            (3) demonstrate methods and equipment that are applicable 
        to 25 percent of the electricity generating facilities, using 
        different types of coal, that use coal as the primary feedstock 
        as of the date of the enactment of this Act.
    (e) Federal Share.--The Federal share of the cost of a coal or 
related technology project funded by the Secretary under this division 
shall not exceed 50 percent.
    (f) Applicability.--No technology, or level of emission reduction, 
shall be treated as adequately demonstrated for purposes of section 111 
of the Clean Air Act, 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 division.

SEC. 50003. REPORT.

    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 
consultation with other appropriate Federal agencies, shall transmit to 
the Committee on Energy and Commerce and the Committee on Science of 
the House of Representatives, and to the Senate, a report describing--
            (1) the technical milestones set forth in section 50002 and 
        how those milestones ensure progress toward meeting the 
        requirements of subsections (b)(1)(B) and (b)(2) of section 
        50002; and
            (2) the status of projects funded under this division.

SEC. 50004. CLEAN COAL CENTERS OF EXCELLENCE.

    As part of the program authorized in section 50001, 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.

                          DIVISION F--HYDROGEN

SEC. 60001. DEFINITIONS.

    In this division:
            (1) The term ``Advisory Committee'' means the Hydrogen 
        Technical and Fuel Cell Advisory Committee established under 
        section 60005 of this Act.
            (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 and an oxidant into 
        electricity by an electrochemical process taking place at 
        separate electrodes in the device.
            (4) The term ``infrastructure'' means the equipment, 
        systems, or facilities used to produce, distribute, deliver, or 
        store hydrogen and other advanced clean fuels.
            (5) The term ``light duty vehicle'' means a car or truck, 
        classified by the Department of Transportation as a Class I or 
        IIA vehicle.
            (6) The term ``Secretary'' means the Secretary of Energy.

SEC. 60002. PLAN.

    Not later than six months after the date of enactment of this Act, 
the Secretary shall transmit to the Congress a coordinated plan for the 
programs described in this division and any other programs of the 
Department that are directly related to fuel cells or hydrogen. The 
plan shall describe, at a minimum--
            (1) the agenda for the next five years for the programs 
        authorized under this division, including the agenda for each 
        activity enumerated in section 60003(a);
            (2) the types of entities that will carry out the 
        activities under this division and what role each entity is 
        expected to play;
            (3) the milestones that will be used to evaluate the 
        programs for the next five years;
            (4) the most significant technical and nontechnical hurdles 
        that stand in the way of achieving the goals described in 
        section 60003(b), and how the programs will address those 
        hurdles; and
            (5) the policy assumptions that are implicit in the plan, 
        including any assumptions that would affect the sources of 
        hydrogen or the marketability of hydrogen-related products.

SEC. 60003. PROGRAM.

    (a) Activities.--The Secretary, in partnership with the private 
sector, shall conduct a program to address--
            (1) production of hydrogen from diverse energy sources, 
        including--
                    (A) fossil fuels, which may include carbon capture 
                and sequestration;
                    (B) hydrogen-carrier fuels (including ethanol and 
                methanol);
                    (C) renewable energy resources; and
                    (D) nuclear energy;
            (2) the safe delivery of hydrogen or hydrogen-carrier 
        fuels, including--
                    (A) transmission by pipeline and other distribution 
                methods; and
                    (B) convenient and economic refueling of vehicles 
                either at central refueling stations or through 
                distributed on-site generation;
            (3) advanced vehicle technologies, including--
                    (A) engine and emission control systems;
                    (B) energy storage, electric propulsion, and hybrid 
                systems;
                    (C) automotive materials;
                    (D) clean fuels in addition to hydrogen; and
                    (E) other advanced vehicle technologies;
            (4) storage of hydrogen or hydrogen-carrier fuels, 
        including development of materials for safe and economic 
        storage in gaseous, liquid, or solid form at refueling 
        facilities and onboard vehicles;
            (5) development of safe, durable, affordable, and efficient 
        fuel cells, including research and development on fuel-flexible 
        fuel cell power systems, improved manufacturing processes, 
        high-temperature membranes, cost-effective fuel processing for 
        natural gas, fuel cell stack and system reliability, low 
        temperature operation, and cold start capability; and
            (6) development of necessary codes and standards (including 
        international codes and standards) and safety practices for the 
        production, distribution, storage, and use of hydrogen, 
        hydrogen-carrier fuels and related products.
    (b) Program Goals.--
            (1) Vehicles.--For vehicles, the goals of the program are--
                    (A) to enable a commitment by automakers no later 
                than year 2015 to offer safe, affordable, and 
                technically viable hydrogen fuel cell vehicles in the 
                mass consumer market; and
                    (B) to enable production, delivery, and acceptance 
                by consumers of model year 2020 hydrogen fuel cell and 
                other vehicles that will have--
                            (i) a range of at least three hundred 
                        miles;
                            (ii) improved performance and ease of 
                        driving;
                            (iii) safety and performance comparable to 
                        vehicle technologies in the market;
                            (iv) when compared to light duty vehicles 
                        in model year 2003--
                                    (I) a fuel economy that is two and 
                                one half times the equivalent fuel 
                                economy of comparable light duty 
                                vehicles in model year 2003; and
                                    (II) near zero emissions of air 
                                pollutants; and
                            (v) vehicle fuel system crash integrity and 
                        occupant protection.
            (2) Hydrogen energy and energy infrastructure.--For 
        hydrogen energy and energy infrastructure, the goals of the 
        program are to enable a commitment not later than 2015 that 
        will lead to infrastructure by 2020 that will provide--
                    (A) safe and convenient refueling;
                    (B) improved overall efficiency;
                    (C) widespread availability of hydrogen from 
                domestic energy sources through--
                            (i) production, with consideration of 
                        emissions levels;
                            (ii) delivery, including transmission by 
                        pipeline and other distribution methods for 
                        hydrogen; and
                            (iii) storage, including storage in surface 
                        transportation vehicles;
                    (D) hydrogen for fuel cells, internal combustion 
                engines, and other energy conversion devices for 
                portable, stationary, and transportation applications; 
                and
                    (E) other technologies consistent with the 
                Department's plan.
            (3) Fuel cells.--The goals for fuel cells and their 
        portable, stationary, and transportation applications are to 
        enable--
                    (A) safe, economical, and environmentally sound 
                hydrogen fuel cells;
                    (B) fuel cells for light duty and other vehicles; 
                and
                    (C) other technologies consistent with the 
                Department's plan.
    (c) Demonstration.--In carrying out the program under this section, 
the Secretary shall fund a limited number of demonstration projects. In 
selecting projects under this subsection, the Secretary shall, to the 
extent practicable and in the public interest, select projects that--
            (1) involve using hydrogen and related products at 
        facilities or installations that would exist without the 
        demonstration program, such as existing office buildings, 
        military bases, vehicle fleet centers, transit bus authorities, 
        or parks;
            (2) depend on reliable power from hydrogen to carry out 
        essential activities;
            (3) lead to the replication of hydrogen technologies and 
        draw such technologies into the marketplace;
            (4) integrate in a single project both mobile and 
        stationary applications of hydrogen fuel cells;
            (5) address the interdependency of demand for hydrogen fuel 
        cell applications and hydrogen fuel infrastructure; and
            (6) raise awareness of hydrogen technology among the 
        public.
    (d) Deployment.--In carrying out the program under this section, 
the Secretary shall, in partnership with the private sector, conduct 
activities to facilitate the deployment of--
            (1) hydrogen energy and energy infrastructure;
            (2) fuel cells;
            (3) advanced vehicle technologies; and
            (4) clean fuels in addition to hydrogen.
    (e) Funding.--(1) The Secretary shall carry out the program under 
this section using a competitive, merit-review process and consistent 
with the generally applicable Federal laws and regulations governing 
awards of financial assistance, contracts, or other agreements.
    (2) Activities under this section may be carried out by funding 
nationally recognized university-based research centers.
    (3) The Secretary shall endeavor to avoid duplication or 
displacement of other research and development programs and activities.
    (f) Cost Sharing.--
            (1) Requirement.--For projects carried out through grants, 
        cooperative agreements, or contracts under this section, the 
        Secretary shall require a commitment from non-Federal sources 
        of at least--
                    (A) 20 percent of the cost of a project, except 
                projects carried out under subsections (c) and (d); and
                    (B) 50 percent of the cost of a project carried out 
                under subsection (c) or (d).
            (2) Reduction.--The Secretary may reduce the non-Federal 
        requirement under paragraph (1) if the Secretary determines 
        that--
                    (A) the reduction is appropriate considering the 
                technological risks involved; or
                    (B) the project is for technical analyses or other 
                activities that the Secretary does not expect to result 
                in a marketable product.
            (3) Size of non-federal share.--The Secretary may consider 
        the size of the non-Federal share in selecting projects.

SEC. 60004. INTERAGENCY TASK FORCE.

    (a) Establishment.--Not later than 120 days after the date of 
enactment of this Act, the President shall establish an interagency 
task force chaired by the Secretary or his designee with 
representatives from each of the following:
            (1) The Office of Science and Technology Policy within the 
        Executive Office of the President.
            (2) The Department of Transportation.
            (3) The Department of Defense.
            (4) The Department of Commerce (including the National 
        Institute of Standards and Technology).
            (5) The Environmental Protection Agency.
            (6) The National Aeronautics and Space Administration.
            (7) Other Federal agencies as the Secretary determines 
        appropriate.
    (b) Duties.--
            (1) Planning.--The interagency task force shall work 
        toward--
                    (A) a safe, economical, and environmentally sound 
                fuel infrastructure for hydrogen and hydrogen-carrier 
                fuels, including an infrastructure that supports buses 
                and other fleet transportation;
                    (B) fuel cells in government and other 
                applications, including portable, stationary, and 
                transportation applications;
                    (C) distributed power generation, including the 
                generation of combined heat, power, and clean fuels 
                including hydrogen;
                    (D) uniform hydrogen codes, standards, and safety 
                protocols; and
                    (E) vehicle hydrogen fuel system integrity safety 
                performance.
            (2) Activities.--The interagency task force may organize 
        workshops and conferences, may issue publications, and may 
        create databases to carry out its duties. The interagency task 
        force shall--
                    (A) foster the exchange of generic, nonproprietary 
                information and technology among industry, academia, 
                and government;
                    (B) develop and maintain an inventory and 
                assessment of hydrogen, fuel cells, and other advanced 
                technologies, including the commercial capability of 
                each technology for the economic and environmentally 
                safe production, distribution, delivery, storage, and 
                use of hydrogen;
                    (C) integrate technical and other information made 
                available as a result of the programs and activities 
                under this division;
                    (D) promote the marketplace introduction of 
                infrastructure for hydrogen and other clean fuel 
                vehicles; and
                    (E) conduct an education program to provide 
                hydrogen and fuel cell information to potential end-
                users.
    (c) Agency Cooperation.--The heads of all agencies, including those 
whose agencies are not represented on the interagency task force, shall 
cooperate with and furnish information to the interagency task force, 
the Advisory Committee, and the Department.

SEC. 60005. ADVISORY COMMITTEE.

    (a) Establishment.--The Hydrogen Technical and Fuel Cell Advisory 
Committee is established to advise the Secretary on the programs and 
activities under this division.
    (b) Membership.--
            (1) Members.--The Advisory Committee is comprised of not 
        fewer than 12 nor more than 25 members. These members shall be 
        appointed by the Secretary to represent domestic industry, 
        academia, professional societies, government agencies, and 
        financial, environmental, and other appropriate organizations 
        based on the Department's assessment of the technical and other 
        qualifications of committee members and the needs of the 
        Advisory Committee.
            (2) Terms.--The term of a member of the Advisory Committee 
        shall not be more than 3 years. The Secretary may appoint 
        members of the Advisory Committee in a manner that allows the 
        terms of the members serving at any time to expire at spaced 
        intervals so as to ensure continuity in the functioning of the 
        Advisory Committee. A member of the Advisory Committee whose 
        term is expiring may be reappointed.
            (3) Chairperson.--The Advisory Committee shall have a 
        chairperson, who is elected by the members from among their 
        number.
    (c) Review.--The Advisory Committee shall review and make 
recommendations to the Secretary on--
            (1) the implementation of programs and activities under 
        this division;
            (2) the safety, economical, and environmental consequences 
        of technologies for the production, distribution, delivery, 
        storage, or use of hydrogen energy and fuel cells; and
            (3) the plan under section 60002.
    (d) Response.--(1) The Secretary shall consider, but need not 
adopt, any recommendations of the Advisory Committee under subsection 
(c).
    (2) The Secretary shall transmit a biennial report to the Congress 
describing any recommendations made by the Advisory Committee since the 
previous report. The report shall include a description of how the 
Secretary has implemented or plans to implement the recommendations, or 
an explanation of the reasons that a recommendation will not be 
implemented. The report shall be transmitted along with the President's 
budget proposal.
    (e) Support.--The Secretary shall provide resources necessary in 
the judgment of the Secretary for the Advisory Committee to carry out 
its responsibilities under this division.

SEC. 60006. EXTERNAL REVIEW.

    (a) Plan.--The Secretary shall enter into an arrangement with a 
competitively selected nongovernmental entity, such as the National 
Academy of Sciences, to review the plan prepared under section 60002, 
which shall be completed not later than six months after the entity 
receives the plan. Not later than 45 days after receiving the review, 
the Secretary shall transmit the review to the Congress along with a 
plan to implement the review's recommendations or an explanation of the 
reasons that a recommendation will not be implemented.
    (b) Additional Review.--The Secretary shall enter into an 
arrangement with a competitively selected nongovernmental entity, such 
as the National Academy of Sciences, under which the entity will review 
the program under section 60003 during the fourth year following the 
date of enactment of this Act. The entity's review shall include the 
research priorities and technical milestones, and evaluate the progress 
toward achieving them. The review shall be completed no later than five 
years after the date of enactment of this Act. Not later than 45 days 
after receiving the review, the Secretary shall transmit the review to 
the Congress along with a plan to implement the review's 
recommendations or an explanation for the reasons that a recommendation 
will not be implemented.

SEC. 60007. MISCELLANEOUS PROVISIONS.

    (a) Representation.--The Secretary may represent the United States 
interests with respect to activities and programs under this division, 
in coordination with the Department of Transportation, the National 
Institute of Standards and Technology, and other relevant Federal 
agencies, before governments and nongovernmental organizations 
including--
            (1) other Federal, State, regional, and local governments 
        and their representatives;
            (2) industry and its representatives, including members of 
        the energy and transportation industries; and
            (3) in consultation with the Department of State, foreign 
        governments and their representatives including international 
        organizations.
    (b) Regulatory Authority.--Nothing in this division shall be 
construed to alter the regulatory authority of the Department.

SEC. 60008. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this division, 
in addition to any amounts made available for these purposes under 
other Acts--
            (1) $273,500,000 for fiscal year 2004;
            (2) $325,000,000 for fiscal year 2005;
            (3) $375,000,000 for fiscal year 2006;
            (4) $400,000,000 for fiscal year 2007; and
            (5) $425,000,000 for fiscal year 2008.''.

SEC. 60009. FUEL CELL PROGRAM AT NATIONAL PARKS.

    The Secretary of Energy, in cooperation with the Secretary of 
Interior and the National Park Service, is authorized to establish a 
program to provide matching funds to assist in the deployment of fuel 
cells at one or more prominent National Parks. The Secretary of Energy 
shall transmit to Congress within 1 year, and annually thereafter, a 
report describing any activities taken pursuant to such program. The 
report shall address whether activities taken pursuant to such program 
reduce the environmental impacts of energy use at National Parks. There 
are authorized to be appropriated $2,000,000 for each of fiscal years 
2004 through 2010 to carry out the purposes of this section.

SEC. 60010. ADVANCED POWER SYSTEM TECHNOLOGY INCENTIVE PROGRAM.

    (a) Program.--The Secretary of Energy is authorized to establish an 
Advanced Power System Technology Incentive Program to support the 
deployment of certain advanced power system technologies and to improve 
and protect certain critical governmental, industrial, and commercial 
processes. Funds provided under this section shall be used by the 
Secretary to make incentive payments to eligible owners or operators of 
advanced power system technologies to increase power generation through 
enhanced operational, economic, and environmental performance. Payments 
under this section may only be made upon receipt by the Secretary of an 
incentive payment application establishing an applicant as either--
            (1) a qualifying advanced power system technology facility; 
        or
            (2) a qualifying security and assured power facility.
    (b) Incentives.--Subject to availability of funds, a payment of 1.8 
cents per kilowatt-hour shall be paid to the owner or operator of a 
qualifying advanced power system technology facility under this section 
for electricity generated at such facility. An additional 0.7 cents per 
kilowatt-hour shall be paid to the owner or operator of a qualifying 
security and assured power facility for electricity generated at such 
facility. Any facility qualifying under this section shall be eligible 
for an incentive payment for up to, but not more than, the first 
10,000,000 kilowatt-hours produced in any fiscal year.
    (c) Eligibility.--For purposes of this section--
            (1) the term ``qualifying advanced power system technology 
        facility'' means a facility using an advanced fuel cell, 
        turbine, or hybrid power system or power storage system to 
        generate or store electric energy; and
            (2) the term ``qualifying security and assured power 
        facility'' means a qualifying advanced power system technology 
        facility determined by the Secretary of Energy, in consultation 
        with the Secretary of Homeland Security, to be in critical need 
        of secure, reliable, rapidly available, high-quality power for 
        critical governmental, industrial, or commercial applications.
    (d) Authorization.--There are authorized to be appropriated to the 
Secretary of Energy for the purposes of this section, $10,000,000 for 
each of the fiscal years 2004 through 2010.

                          DIVISION G--HOUSING

SEC. 70001. 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. 70002. 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 period 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. 70003. 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 paragraph beginning after subparagraph (B)(ii)(IV) 
(relating to solar energy systems), 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)(IV) of the National Housing Act 
(12 U.S.C. 1715k(d)(3)(B)(iii)(IV)) 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.--Section 231(c)(2)(C) of 
the National Housing Act (12 U.S.C. 1715v(c)(2)(C)) 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. 70004. 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
            (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. 70005. GRANTS FOR ENERGY-CONSERVING IMPROVEMENTS FOR ASSISTED 
              HOUSING.

    Section 251(b)(1) of the National Energy Conservation Policy Act 
(42 U.S.C. 8231(1)) is amended--
            (1) by striking ``financed with loans'' and inserting 
        ``assisted'';
            (2) by inserting after ``1959,'' the following: ``which are 
        eligible multifamily housing projects (as such term is defined 
        in section 512 of the Multifamily Assisted Housing Reform and 
        Affordability Act of 1997 (42 U.S.C. 1437f note)) and are 
        subject to mortgage restructuring and rental assistance 
        sufficiency plans under such Act,''; and
            (3) by inserting after the period at the end of the first 
        sentence the following new sentence: ``Such improvements may 
        also include the installation of energy and water conserving 
        fixtures and fittings that conform to the American Society of 
        Mechanical Engineers/American National Standards Institute 
        standards A112.19.2-1998 and A112.18.1-2000, or any revision 
        thereto, applicable at the time of installation.''.

SEC. 70006. 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. 70007. 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 552 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. 70008. 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, 2004'';
                            (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)--
                    (A) by striking ``1 year after the date of the 
                enactment of the Energy Policy Act of 1992'' and 
                inserting ``September 30, 2004''; 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 ``The International Energy 
                Conservation Code''; and
                    (B) by striking ``CABO'' and all that follows 
                through ``1989'' and inserting ``the 2000 International 
                Energy Conservation Code''.

SEC. 70009. 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.

            Passed the House of Representatives April 11, 2003.

            Attest:

                                                 JEFF TRANDAHL,

                                                                 Clerk.

                                                        Calendar No. 85

108th CONGRESS

  1st Session

                                H. R. 6

_______________________________________________________________________

                                 AN ACT

To enhance energy conservation and research and development, to provide 
   for security and diversity in the energy supply for the American 
                    people, and for other purposes.

_______________________________________________________________________

                              May 6, 2003

            Read the second time and placed on the calendar
```