II

September 2, 2003

Ordered to be printed as passed

In the Senate of the United States,

July 31 (legislative day, July 21), 2003.

Resolved, That the bill from the House of Representatives (H.R. 6) entitled ‘‘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.’’, do pass with the following

AMENDMENT:

Strike out all after the enacting clause and insert:

1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Energy Policy Act of

3 2003’’.
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1 SEC. 2. TABLE OF CONTENTS.

Sec. 1. Short title.

Sec. 2. Table of contents.

DIVISION A—RELIABLE AND DIVERSE POWER GENERATION AND

TRANSMISSION

TITLE I—REGIONAL COORDINATION

Sec. 101. Policy on regional coordination.

Sec. 102. Federal support for regional coordination.

TITLE II—ELECTRICITY

Subtitle A—Amendments to the Federal Power Act

Sec. 201. Definitions.

Sec. 202. Electric utility mergers.

Sec. 203. Market-based rates.

Sec. 204. Refund effective date.

Sec. 205. Open access transmission by certain utilities.

Sec. 206. Electric reliability standards.

Sec. 207. Market transparency rules.

Sec. 208. Access to transmission by intermittent generators.

Sec. 209. Enforcement.

Sec. 210. Electric power transmission systems.

Subtitle B—Amendments to the Public Utility Holding Company Act

Sec. 221. Short title.

Sec. 222. Definitions.

Sec. 223. Repeal of the Public Utility Holding Company Act of 1935.

Sec. 224. Federal access to books and records.

Sec. 225. State access to books and records.

Sec. 226. Exemption authority.

Sec. 227. Affiliate transactions.

Sec. 228. Applicability.

Sec. 229. Effect on other regulations.

Sec. 230. Enforcement.

Sec. 231. Savings provisions.

Sec. 232. Implementation.

Sec. 233. Transfer of resources.

Sec. 234. Inter-agency review of competition in the wholesale and retail markets

for electric energy.

Sec. 235. GAO study on implementation.

Sec. 236. Effective date.

Sec. 237. Authorization of appropriations.

Sec. 238. Conforming amendments to the Federal Power Act.

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

Sec. 241. Real-time pricing and time-of-use metering standards.

Sec. 242. Adoption of additional standards.

Sec. 243. Technical assistance.

Sec. 244. Cogeneration and small power production purchase and sale requirements.
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Sec. 245. Net metering.

Subtitle D—Consumer Protections

Sec. 251. Information disclosure.

Sec. 252. Consumer privacy.

Sec. 253. Office of Consumer Advocacy.

Sec. 254. Unfair trade practices.

Sec. 255. Applicable procedures.

Sec. 256. Federal Trade Commission enforcement.

Sec. 257. State authority.

Sec. 258. Application of subtitle.

Sec. 259. Definitions.

Subtitle E—Renewable Energy and Rural Construction Grants

Sec. 261. Renewable energy production incentive.

Sec. 262. Assessment of renewable energy resources.

Sec. 263. Federal purchase requirement.

Sec. 264. Renewable portfolio standard.

Sec. 265. Renewable energy on Federal land.

Subtitle F—General Provisions

Sec. 271. Change 3 cents to 1.5 cents.

Sec. 272. Bonneville Power Administration bonds.

TITLE III—HYDROELECTRIC RELICENSING

Sec. 301. Alternative conditions and fishways.

TITLE IV—INDIAN ENERGY

Sec. 401. Comprehensive Indian energy program.

Sec. 402. Office of Indian Energy Policy and Programs.

Sec. 403. Conforming amendments.

Sec. 404. Siting energy facilities on tribal lands.

Sec. 405. Indian Mineral Development Act review.

Sec. 406. Renewable energy study.

Sec. 407. Federal Power Marketing Administrations.

Sec. 408. Feasibility study of combined wind and hydropower demonstration

project.

TITLE V—NUCLEAR POWER

Subtitle A—Price-Anderson Act Reauthorization

Sec. 501. Short title.

Sec. 502. Extension of indemnification authority.

Sec. 503. Department of Energy liability limit.

Sec. 504. Incidents outside the United States.

Sec. 505. Reports.

Sec. 506. Inflation adjustment.

Sec. 507. Civil penalties.

Sec. 508. Treatment of modular reactors.

Sec. 509. Effective date.
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Subtitle B—Miscellaneous Provisions

Sec. 511. Uranium sales.

Sec. 512. Reauthorization of thorium reimbursement.

Sec. 513. Fast Flux Test Facility.

Sec. 514. Nuclear Power 2010.

Sec. 515. Office of Spent Nuclear Fuel Research.

Sec. 516. Decommissioning pilot program.

Subtitle C—Growth of Nuclear Energy

Sec. 521. Combined license periods.

Subtitle D—NRC Regulatory Reform

Sec. 531. Antitrust review.

Sec. 532. Decommissioning.

Subtitle E—NRC Personnel Crisis

Sec. 541. Elimination of pension offset.

Sec. 542. NRC training program.

DIVISION B—DOMESTIC OIL AND GAS PRODUCTION AND

TRANSPORTATION

TITLE VI—OIL AND GAS PRODUCTION

Sec. 601. Permanent authority to operate the Strategic Petroleum Reserve.

Sec. 602. Federal onshore leasing programs for oil and gas.

Sec. 603. Oil and gas lease acreage limitations.

Sec. 604. Orphaned and abandoned wells on Federal land.

Sec. 605. Orphaned and abandoned oil and gas well program.

Sec. 606. Offshore development.

Sec. 607. Coalbed methane study.

Sec. 608. Fiscal policies to maximize recovery of domestic oil and gas resources.

Sec. 609. Strategic Petroleum Reserve.

Sec. 610. Hydraulic fracturing.

Sec. 611. Authorization of appropriations.

Sec. 612. Preservation of oil and gas resource data.

Sec. 613. Resolution of Federal resource development conflicts in the Powder

River Basin.

TITLE VII—NATURAL GAS PIPELINES

Subtitle A—Alaska Natural Gas Pipeline

Sec. 701. Short title.

Sec. 702. Findings.

Sec. 703. Purposes.

Sec. 704. Issuance of certificate of public convenience and necessity.

Sec. 705. Environmental reviews.

Sec. 706. Pipeline expansion.

Sec. 707. Federal Coordinator.

Sec. 708. Judicial review.

Sec. 709. State jurisdiction over in-State delivery of natural gas.

Sec. 710. Loan guarantee.

Sec. 711. Study of alternative means of construction.
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Sec. 712. Clarification of ANGTA status and authorities.

Sec. 713. Definitions.

Sec. 714. Sense of the Senate.

Sec. 715. Alaskan pipeline construction training program.

Subtitle B—Operating Pipelines

Sec. 721. Environmental review and permitting of natural gas pipeline projects.

Subtitle C—Pipeline Safety

PART I—SHORT TITLE; AMENDMENT OF TITLE 49

Sec. 741. Short title; amendment of title 49, United States Code.

PART II—PIPELINE SAFETY IMPROVEMENT ACT OF 2003

Sec. 761. Implementation of Inspector General recommendations.

Sec. 762. NTSB safety recommendations.

Sec. 763. Qualifications of pipeline personnel.

Sec. 764. Pipeline integrity inspection program.

Sec. 765. Enforcement.

Sec. 766. Public education, emergency preparedness, and community right-toknow.

Sec. 767. Penalties.

Sec. 768. State oversight role.

Sec. 769. Improved data and data availability.

Sec. 770. Research and development.

Sec. 771. Pipeline integrity technical advisory committee.

Sec. 772. Authorization of appropriations.

Sec. 773. Operator assistance in investigations.

Sec. 774. Protection of employees providing pipeline safety information.

Sec. 775. State pipeline safety advisory committees.

Sec. 776. Fines and penalties.

Sec. 777. Study of rights-of-way.

Sec. 778. Study of natural gas reserve.

Sec. 779. Study and report on natural gas pipeline and storage facilities in New

England.

PART III—PIPELINE SECURITY SENSITIVE INFORMATION

Sec. 781. Meeting community right-to-know without security risks.

Sec. 782. Technical assistance for security of pipeline facilities.

Sec. 783. Criminal penalties for damaging or destroying a facility.

DIVISION C—DIVERSIFYING ENERGY DEMAND AND IMPROVING

EFFICIENCY

TITLE VIII—FUELS AND VEHICLES

Subtitle A—CAFE Standards, Alternative Fuels, and Advanced Technology

Sec. 801. Increased fuel economy standards.

Sec. 802. Expedited procedures for congressional increase in fuel economy standards.

Sec. 803. Revised considerations for decisions on maximum feasible average fuel

economy.
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Sec. 804. Extension of maximum fuel economy increase for alternative fueled vehicles.

Sec. 805. Procurement of alternative fueled and hybrid light duty trucks.

Sec. 806. Use of alternative fuels.

Sec. 807. Hybrid electric and fuel cell vehicles.

Sec. 808. Diesel fueled vehicles.

Sec. 809. Fuel cell demonstration.

Sec. 810. Bus replacement.

Sec. 811. Average fuel economy standards for pickup trucks.

Sec. 812. Exception to HOV passenger requirements for alternative fuel vehicles.

Sec. 813. Data collection.

Sec. 814. Green school bus pilot program.

Sec. 815. Fuel cell bus development and demonstration program.

Sec. 816. Authorization of appropriations.

Sec. 817. Temporary biodiesel credit expansion.

Sec. 818. Neighborhood electric vehicles.

Sec. 819. Credit for hybrid vehicles, dedicated alternative fuel vehicles, and infrastructure.

Sec. 820. Renewable content of motor vehicle fuel.

Sec. 820A. Federal agency ethanol-blended gasoline and biodiesel purchasing requirement.

Sec. 820B. Commercial byproducts from municipal solid waste loan guarantee

program.

Subtitle B—Additional Fuel Efficiency Measures

Sec. 821. Fuel efficiency of the Federal fleet of automobiles.

Sec. 822. Idling reduction systems in heavy duty vehicles.

Sec. 823. Conserve By Bicycling program.

Sec. 824. Fuel cell vehicle program.

Subtitle C—Federal Reformulated Fuels

Sec. 831. Short title.

Sec. 832. Leaking underground storage tanks.

Sec. 833. Authority for water quality protection from fuels.

Sec. 834. Elimination of oxygen content requirement for reformulated gasoline.

Sec. 835. Public health and environmental impacts of fuels and fuel additives.

Sec. 836. Analyses of motor vehicle fuel changes.

Sec. 837. Additional opt-in areas under reformulated gasoline program.

Sec. 838. Federal enforcement of State fuels requirements.

Sec. 839. Fuel system requirements harmonization study.

Sec. 840. Review of Federal procurement initiatives relating to use of recycled

products and fleet and transportation efficiency.

TITLE IX—ENERGY EFFICIENCY AND ASSISTANCE TO LOW INCOME

CONSUMERS

Subtitle A—Low Income Assistance and State Energy Programs

Sec. 901. Increased funding for LIHEAP, weatherization assistance, and State

energy grants.

Sec. 902. State energy programs.

Sec. 903. Energy efficient schools.

Sec. 904. Low income community energy efficiency pilot program.

Sec. 905. Energy efficient appliance rebate programs.
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Subtitle B—Federal Energy Efficiency

Sec. 911. Energy management requirements.

Sec. 912. Energy use measurement and accountability.

Sec. 913. Federal building performance standards.

Sec. 914. Procurement of energy efficient products.

Sec. 915. Repeal of energy savings performance contract sunset.

Sec. 916. Energy savings performance contract definitions.

Sec. 917. Review of energy savings performance contract program.

Sec. 918. Federal Energy Bank.

Sec. 919. Energy and water saving measures in congressional buildings.

Sec. 920. Increased use of recovered material in federally funded projects involving procurement of cement or concrete.

Subtitle C—Industrial Efficiency and Consumer Products

Sec. 921. Voluntary commitments to reduce industrial energy intensity.

Sec. 922. Authority to set standards for commercial products.

Sec. 923. Additional definitions.

Sec. 924. Additional test procedures.

Sec. 925. Energy labeling.

Sec. 926. Energy Star Program.

Sec. 927. Energy conservation standards for central air-conditioners and heat

pumps.

Sec. 928. Energy conservation standards for additional consumer and commercial

products.

Sec. 929. Consumer education on energy efficiency benefits of air-conditioning,

heating, and ventilation maintenance.

Sec. 930. Study of energy efficiency standards.

Subtitle D—Housing Efficiency

Sec. 931. Capacity building for energy efficient, affordable housing.

Sec. 932. Increase of CDBG public services cap for energy conservation and efficiency activities.

Sec. 933. FHA mortgage insurance incentives for energy efficient housing.

Sec. 934. Public housing capital fund.

Sec. 935. Grants for energy-conserving improvements for assisted housing.

Sec. 936. North American Development Bank.

Sec. 937. Capital fund.

Sec. 938. Energy-efficient appliances.

Sec. 939. Energy efficiency standards.

Sec. 940. Energy strategy for HUD.

Subtitle E—Rural and Remote Communities

Sec. 941. Short title.

Sec. 942. Findings and purpose.

Sec. 943. Definitions.

Sec. 944. Authorization of appropriations.

Sec. 945. Statement of activities and review.

Sec. 946. Eligible activities.

Sec. 947. Allocation and distribution of funds.

Sec. 948. Rural and remote community electrification grants.

Sec. 949. Additional authorization of appropriations.

Sec. 950. Rural recovery community development block grants.
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DIVISION D—INTEGRATION OF ENERGY POLICY AND CLIMATE

CHANGE POLICY

TITLE X—NATIONAL CLIMATE CHANGE POLICY

Subtitle A—Sense of Congress

Sec. 1001. Sense of Congress on climate change.

Subtitle B—Climate Change Strategy

Sec. 1011. Short title.

Sec. 1012. Definitions.

Sec. 1013. National climate change strategy.

Sec. 1014. Office of National Climate Change Policy.

Sec. 1015. Office of Climate Change Technology.

Sec. 1016. Additional offices and activities.

Subtitle C—Science and Technology Policy

Sec. 1021. Global climate change in the Office of Science and Technology Policy.

Sec. 1022. Director of Office of Science and Technology Policy Functions.

Subtitle D—Miscellaneous Provisions

Sec. 1031. Additional information for regulatory review.

Sec. 1032. Greenhouse gas emissions from Federal facilities.

TITLE XI—NATIONAL GREENHOUSE GAS DATABASE

Sec. 1101. Purpose.

Sec. 1102. Definitions.

Sec. 1103. Establishment of memorandum of agreement.

Sec. 1104. National Greenhouse Gas Database.

Sec. 1105. Greenhouse gas reduction reporting.

Sec. 1106. Measurement and verification.

Sec. 1107. Independent reviews.

Sec. 1108. Review of participation.

Sec. 1109. Enforcement.

Sec. 1110. Report on statutory changes and harmonization.

Sec. 1111. Authorization of appropriations.

DIVISION E—ENHANCING RESEARCH, DEVELOPMENT, AND

TRAINING

TITLE XII—ENERGY RESEARCH AND DEVELOPMENT PROGRAMS

Sec. 1201. Short title.

Sec. 1202. Findings.

Sec. 1203. Definitions.

Sec. 1204. Construction with other laws.

Subtitle A—Energy Efficiency

Sec. 1211. Enhanced energy efficiency research and development.

Sec. 1212. Energy efficiency science initiative.

Sec. 1213. Next generation lighting initiative.

Sec. 1214. Railroad efficiency.

Sec. 1215. High power density industry program.
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Sec. 1216. Research regarding precious metal catalysis.

Subtitle B—Renewable Energy

Sec. 1221. Enhanced renewable energy research and development.

Sec. 1222. Bioenergy programs.

Sec. 1223. Hydrogen research and development.

Subtitle C—Fossil Energy

Sec. 1231. Enhanced fossil energy research and development.

Sec. 1232. Power plant improvement initiative.

Sec. 1233. Research and development for advanced safe and efficient coal mining

technologies.

Sec. 1234. Ultra-deepwater and unconventional resource exploration and production technologies.

Sec. 1235. Research and development for new natural gas transportation technologies.

Sec. 1236. Authorization of appropriations for Office of Arctic Energy.

Sec. 1237. Clean coal technology loan.

Subtitle D—Nuclear Energy

Sec. 1241. Enhanced nuclear energy research and development.

Sec. 1242. University nuclear science and engineering support.

Sec. 1243. Nuclear energy research initiative.

Sec. 1244. Nuclear energy plant optimization program.

Sec. 1245. Nuclear energy technology development program.

Subtitle E—Fundamental Energy Science

Sec. 1251. Enhanced programs in fundamental energy science.

Sec. 1252. Nanoscale science and engineering research.

Sec. 1253. Advanced scientific computing for energy missions.

Sec. 1254. Fusion energy sciences program and planning.

Subtitle F—Energy, Safety, and Environmental Protection

Sec. 1261. Critical energy infrastructure protection research and development.

Sec. 1262. Research and demonstration for remediation of groundwater from energy activities.

TITLE XIII—CLIMATE CHANGE SCIENCE AND TECHNOLOGY

Subtitle A—Department of Energy Programs

Sec. 1301. Department of Energy global change research.

Sec. 1302. Amendments to the Federal Nonnuclear Research and Development Act

of 1974.

Subtitle B—Department of Agriculture Programs

Sec. 1311. Carbon sequestration basic and applied research.

Sec. 1312. Carbon sequestration demonstration projects and outreach.

Sec. 1313. Carbon storage and sequestration accounting research.

Subtitle C—International Energy Technology Transfer

Sec. 1321. Clean energy technology exports program.
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Sec. 1322. International energy technology deployment program.

Subtitle D—Climate Change Science and Information

PART I—AMENDMENTS TO THE GLOBAL CHANGE RESEARCH ACT OF 1990

Sec. 1331. Amendment of Global Change Research Act of 1990.

Sec. 1332. Changes in definitions.

Sec. 1333. Change in committee name and structure.

Sec. 1334. Change in national global change research plan.

Sec. 1335. Integrated Program Office.

Sec. 1336. Research grants.

Sec. 1337. Evaluation of information.

PART II—NATIONAL CLIMATE SERVICES AND MONITORING

Sec. 1341. Amendment of National Climate Program Act.

Sec. 1342. Changes in findings.

Sec. 1343. Tools for regional planning.

Sec. 1344. Authorization of appropriations.

Sec. 1345. National Climate Service Plan.

Sec. 1346. International Pacific research and cooperation.

Sec. 1347. Reporting on trends.

Sec. 1348. Arctic research and policy.

Sec. 1349. Abrupt climate change research.

PART III—OCEAN AND COASTAL OBSERVING SYSTEM

Sec. 1351. Ocean and coastal observing system.

Sec. 1352. Authorization of appropriations.

Subtitle E—Climate Change Technology

Sec. 1361. NIST greenhouse gas functions.

Sec. 1362. Development of new measurement technologies.

Sec. 1363. Enhanced environmental measurements and standards.

Sec. 1364. Technology development and diffusion.

Sec. 1365. Authorization of appropriations.

Subtitle F—Climate Adaptation and Hazards Prevention

PART I—ASSESSMENT AND ADAPTATION

Sec. 1371. Regional climate assessment and adaptation program.

Sec. 1372. Coastal vulnerability and adaptation.

Sec. 1373. Arctic research center.

PART II—FORECASTING AND PLANNING PILOT PROGRAMS

Sec. 1381. Remote sensing pilot projects.

Sec. 1382. Database establishment.

Sec. 1383. Air quality research, forecasts and warnings.

Sec. 1384. Definitions.

Sec. 1385. Authorization of appropriations.

TITLE XIV—MANAGEMENT OF DOE SCIENCE AND TECHNOLOGY

PROGRAMS

Sec. 1401. Definitions.
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Sec. 1402. Availability of funds.

Sec. 1403. Cost sharing.

Sec. 1404. Merit review of proposals.

Sec. 1405. External technical review of departmental programs.

Sec. 1406. Improved coordination and management of civilian science and technology programs.

Sec. 1407. Improved coordination of technology transfer activities.

Sec. 1408. Technology infrastructure program.

Sec. 1409. Small business advocacy and assistance.

Sec. 1410. Other transactions.

Sec. 1411. Mobility of scientific and technical personnel.

Sec. 1412. National Academy of Sciences report.

Sec. 1413. Report on technology readiness and barriers to technology transfer.

Sec. 1414. United States-Mexico energy technology cooperation.

TITLE XV—PERSONNEL AND TRAINING

Sec. 1501. Workforce trends and traineeship grants.

Sec. 1502. Postdoctoral and senior research fellowships in energy research.

Sec. 1503. Training guidelines for electric energy industry personnel.

Sec. 1504. National Center on Energy Management and Building Technologies.

Sec. 1505. Improved access to energy-related scientific and technical careers.

Sec. 1506. National power plant operations technology and education center.

Sec. 1507. Federal mine inspectors.

DIVISION F—TECHNOLOGY ASSESSMENT AND STUDIES

TITLE XVI—TECHNOLOGY ASSESSMENT

Sec. 1601. National Science and Technology Assessment Service.

TITLE XVII—STUDIES

Sec. 1701. Regulatory reviews.

Sec. 1702. Assessment of dependence of State of Hawaii on oil.

Sec. 1703. Study of siting an electric transmission system on Amtrak right-ofway.

Sec. 1704. Updating of insular area renewable energy and energy efficiency

plans.

Sec. 1705. Consumer Energy Commission.

Sec. 1706. Study of natural gas and other energy transmission infrastructure

across the great lakes.

Sec. 1707. National Academy of Sciences study of procedures for selection and assessment of certain routes for shipment of spent nuclear fuel

from research nuclear reactors.

Sec. 1708. Report on energy savings and water use.

Sec. 1709. Report on research on hydrogen production and use.

DIVISION G—ENERGY INFRASTRUCTURE SECURITY

TITLE XVIII—CRITICAL ENERGY INFRASTRUCTURE

Subtitle A—Department of Energy Programs

Sec. 1801. Definitions.

Sec. 1802. Role of the Department of Energy.

Sec. 1803. Critical energy infrastructure programs.
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Sec. 1804. Advisory Committee on Energy Infrastructure Security.

Sec. 1805. Best practices and standards for energy infrastructure security.

Subtitle B—Department of the Interior Programs

Sec. 1811. Outer Continental Shelf energy infrastructure security.

DIVISION H—ENERGY TAX INCENTIVES

Sec. 1900. Short title; etc.

TITLE XIX—EXTENSION AND MODIFICATION OF RENEWABLE

ELECTRICITY PRODUCTION TAX CREDIT

Sec. 1901. Three-year extension of credit for producing electricity from wind and

poultry waste.

Sec. 1902. Credit for electricity produced from biomass.

Sec. 1903. Credit for electricity produced from swine and bovine waste nutrients,

geothermal energy, and solar energy.

Sec. 1904. Treatment of persons not able to use entire credit.

Sec. 1905. Credit for electricity produced from small irrigation power.

Sec. 1906. Credit for electricity produced from municipal biosolids and recycled

sludge.

TITLE XX—ALTERNATIVE MOTOR VEHICLES AND FUELS

INCENTIVES

Sec. 2001. Alternative motor vehicle credit.

Sec. 2002. Modification of credit for qualified electric vehicles.

Sec. 2003. Credit for installation of alternative fueling stations.

Sec. 2004. Credit for retail sale of alternative fuels as motor vehicle fuel.

Sec. 2005. Small ethanol producer credit.

Sec. 2006. All alcohol fuels taxes transferred to Highway Trust Fund.

Sec. 2007. Increased flexibility in alcohol fuels tax credit.

Sec. 2008. Incentives for biodiesel.

Sec. 2009. Credit for taxpayers owning commercial power takeoff vehicles.

Sec. 2010. Modifications to the incentives for alternative vehicles and fuels.

TITLE XXI—CONSERVATION AND ENERGY EFFICIENCY PROVISIONS

Sec. 2101. Credit for construction of new energy efficient home.

Sec. 2102. Credit for energy efficient appliances.

Sec. 2103. Credit for residential energy efficient property.

Sec. 2104. Credit for business installation of qualified fuel cells and stationary

microturbine power plants.

Sec. 2105. Energy efficient commercial buildings deduction.

Sec. 2106. Allowance of deduction for qualified new or retrofitted energy management devices.

Sec. 2107. Three-year applicable recovery period for depreciation of qualified energy management devices.

Sec. 2108. Energy credit for combined heat and power system property.

Sec. 2109. Credit for energy efficiency improvements to existing homes.

Sec. 2110. Allowance of deduction for qualified new or retrofitted water submetering devices.

Sec. 2111. Three-year applicable recovery period for depreciation of qualified

water submetering devices.
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TITLE XXII—CLEAN COAL INCENTIVES

Subtitle A—Credit for Emission Reductions and Efficiency Improvements in

Existing Coal-based Electricity Generation Facilities

Sec. 2201. Credit for production from a qualifying clean coal technology unit.

Subtitle B—Incentives for Early Commercial Applications of Advanced Clean

Coal Technologies

Sec. 2211. Credit for investment in qualifying advanced clean coal technology.

Sec. 2212. Credit for production from a qualifying advanced clean coal technology unit.

Subtitle C—Treatment of Persons Not Able To Use Entire Credit

Sec. 2221. Treatment of persons not able to use entire credit.

TITLE XXIII—OIL AND GAS PROVISIONS

Sec. 2301. Oil and gas from marginal wells.

Sec. 2302. Natural gas gathering lines treated as 7-year property.

Sec. 2303. Expensing of capital costs incurred in complying with environmental

protection agency sulfur regulations.

Sec. 2304. Environmental tax credit.

Sec. 2305. Determination of small refiner exception to oil depletion deduction.

Sec. 2306. Marginal production income limit extension.

Sec. 2307. Amortization of geological and geophysical expenditures.

Sec. 2308. Amortization of delay rental payments.

Sec. 2309. Study of coal bed methane.

Sec. 2310. Extension and modification of credit for producing fuel from a nonconventional source.

Sec. 2311. Natural gas distribution lines treated as 15-year property.

TITLE XXIV—ELECTRIC UTILITY RESTRUCTURING PROVISIONS

Sec. 2401. Ongoing study and reports regarding tax issues resulting from future

restructuring decisions.

Sec. 2402. Modifications to special rules for nuclear decommissioning costs.

Sec. 2403. Treatment of certain income of cooperatives.

Sec. 2404. Sales or dispositions to implement Federal Energy Regulatory Commission or State electric restructuring policy.

Sec. 2405. Application of temporary regulations to certain output contracts.

Sec. 2406. Treatment of certain development income of cooperatives.

TITLE XXV—ADDITIONAL PROVISIONS

Sec. 2501. Extension of accelerated depreciation and wage credit benefits on Indian reservations.

Sec. 2502. Study of effectiveness of certain provisions by GAO.

Sec. 2503. Credit for production of Alaska natural gas.

Sec. 2504. Sale of gasoline and diesel fuel at duty-free sales enterprises.

Sec. 2505. Treatment of dairy property.

Sec. 2506. Clarification of excise tax exemptions for agricultural aerial applicators.

Sec. 2507. Modification of rural airport definition.

Sec. 2508. Exemption from ticket taxes for transportation provided by seaplanes.
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DIVISION I—IRAQ OIL IMPORT RESTRICTION

TITLE XXVI—IRAQ OIL IMPORT RESTRICTION

Sec. 2601. Short title and findings.

Sec. 2602. Prohibition on Iraqi-origin petroleum imports.

Sec. 2603. Termination/Presidential certification.

Sec. 2604. Humanitarian interests.

Sec. 2605. Definitions.

Sec. 2606. Effective date.

DIVISION J—MISCELLANEOUS

TITLE XXVII—MISCELLANEOUS PROVISION

Sec. 2701. Fair treatment of Presidential judicial nominees.

1 DIVISION A—RELIABLE AND DI2 VERSE POWER GENERATION

3 AND TRANSMISSION

4 TITLE I—REGIONAL

5 COORDINATION

6 SEC. 101. POLICY ON REGIONAL COORDINATION.

7 (a) STATEMENT OF POLICY.—It is the policy of the

8 Federal Government to encourage States to coordinate, on

9 a regional basis, State energy policies to provide reliable

10 and affordable energy services to the public while mini11 mizing the impact of providing energy services on commu12 nities and the environment.

13 (b) DEFINITION OF ENERGY SERVICES.—For purposes

14 of this section, the term ‘‘energy services’’ means—

15 (1) the generation or transmission of electric en16 ergy,
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1 (2) the transportation, storage, and distribution

2 of crude oil, residual fuel oil, refined petroleum prod3 uct, or natural gas, or

4 (3) the reduction in load through increased effi5 ciency, conservation, or load control measures.

6 SEC. 102. FEDERAL SUPPORT FOR REGIONAL COORDINA7 TION.

8 (a) TECHNICAL ASSISTANCE.—The Secretary of En9 ergy shall provide technical assistance to States and re10 gional organizations formed by two or more States to assist

11 them in coordinating their energy policies on a regional

12 basis. Such technical assistance may include assistance

13 in—

14 (1) identifying the areas with the greatest energy

15 resource potential, and assessing future supply avail16 ability and demand requirements,

17 (2) planning, coordinating, and siting addi18 tional energy infrastructure, including generating fa19 cilities, electric transmission facilities, pipelines, re20 fineries, and distributed generation facilities to maxi21 mize the efficiency of energy resources and infrastruc22 ture and meet regional needs with the minimum ad23 verse impacts on the environment,

24 (3) identifying and resolving problems in dis25 tribution networks,
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1 (4) developing plans to respond to surge demand

2 or emergency needs, and

3 (5) developing renewable energy, energy effi4 ciency, conservation, and load control programs.

5 (b) ANNUAL CONFERENCE ON REGIONAL ENERGY CO6 ORDINATION.—

7 (1) ANNUAL CONFERENCE.—The Secretary of

8 Energy shall convene an annual conference to pro9 mote regional coordination on energy policy and in10 frastructure issues.

11 (2) PARTICIPATION.—The Secretary of Energy

12 shall invite appropriate representatives of Federal,

13 State, and regional energy organizations, and other

14 interested parties.

15 (3) STATE AND FEDERAL AGENCY COOPERA16 TION.—The Secretary of Energy shall consult and co17 operate with State and regional energy organizations,

18 the Secretary of the Interior, the Secretary of Agri19 culture, the Secretary of Commerce, the Secretary of

20 the Treasury, the Chairman of the Federal Energy

21 Regulatory Commission, the Administrator of the En22 vironmental Protection Agency, and the Chairman of

23 the Council on Environmental Quality in the plan24 ning and conduct of the conference.
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1 (4) AGENDA.—The Secretary of Energy, in con2 sultation with the officials identified in paragraph

3 (3) and participants identified in paragraph (2),

4 shall establish an agenda for each conference that pro5 motes regional coordination on energy policy and in6 frastructure issues.

7 (5) RECOMMENDATIONS.—Not later than 60 days

8 after the conclusion of each annual conference, the

9 Secretary of Energy shall report to the President and

10 the Congress recommendations arising out of the con11 ference that may improve—

12 (A) regional coordination on energy policy

13 and infrastructure issues, and

14 (B) Federal support for regional coordina15 tion.

16 TITLE II—ELECTRICITY

17 Subtitle A—Amendments to the

18 Federal Power Act

19 SEC. 201. DEFINITIONS.

20 (a) DEFINITION OF ELECTRIC UTILITY.—Section

21 3(22) of the Federal Power Act (16 U.S.C. 796(22)) is

22 amended to read as follows:

23 ‘‘(22) ‘electric utility’ means any person or Fed24 eral or State agency (including any municipality)

25 that sells electric energy; such term includes the Ten-
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1 nessee Valley Authority and each Federal power mar2 keting agency.’’.

3 (b) DEFINITION OF TRANSMITTING UTILITY.—Section

4 3(23) of the Federal Power Act (16 U.S.C. 796(23)) is

5 amended to read as follows:

6 ‘‘(23) TRANSMITTING UTILITY.—The term ‘trans7 mitting utility’ means an entity (including any enti8 ty described in section 201(f)) that owns or operates

9 facilities used for the transmission of electric energy

10 in—

11 ‘‘(A) interstate commerce; or

12 ‘‘(B) for the sale of electric energy at whole13 sale.’’.

14 SEC. 202. ELECTRIC UTILITY MERGERS.

15 Section 203(a) of the Federal Power Act (16 U.S.C.

16 824b) is amended to read as follows:

17 ‘‘(a)(1) No public utility shall, without first having se18 cured an order of the Commission authorizing it to do so—

19 ‘‘(A) sell, lease, or otherwise dispose of the whole

20 of its facilities subject to the jurisdiction of the Com21 mission, or any part thereof of a value in excess of

22 $10,000,000,

23 ‘‘(B) merge or consolidate, directly or indirectly,

24 such facilities or any part thereof with the facilities

25 of any other person, by any means whatsoever,
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1 ‘‘(C) purchase, acquire, or take any security of

2 any other public utility, or

3 ‘‘(D) purchase, lease, or otherwise acquire exist4 ing facilities for the generation of electric energy un5 less such facilities will be used exclusively for the sale

6 of electric energy at retail.

7 ‘‘(2) No holding company in a holding company sys8 tem that includes a transmitting utility or an electric util9 ity company shall purchase, acquire, or take any security

10 of, or, by any means whatsoever, directly or indirectly,

11 merge or consolidate with a transmitting utility, an electric

12 utility company, a gas utility company, or a holding com13 pany in a holding company system that includes a trans14 mitting utility, an electric utility company, or a gas utility

15 company, without first having secured an order of the Com16 mission authorizing it to do so.

17 ‘‘(3) Upon application for such approval the Commis18 sion shall give reasonable notice in writing to the Governor

19 and State commission of each of the States in which the

20 physical property affected, or any part thereof, is situated,

21 and to such other persons as it may deem advisable.

22 ‘‘(4) After notice and opportunity for hearing, the

23 Commission shall approve the proposed disposition, consoli24 dation, acquisition, or control, if it finds that the proposed

25 transaction—
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1 ‘‘(A) will be consistent with the public interest;

2 ‘‘(B) will not adversely affect the interests of con3 sumers of electric energy of any public utility that is

4 a party to the transaction or is an associate company

5 of any party to the transaction;

6 ‘‘(C) will not impair the ability of the Commis7 sion or any State commission having jurisdiction

8 over any public utility that is a party to the trans9 action or an associate company of any party to the

10 transaction to protect the interests of consumers or the

11 public; and

12 ‘‘(D) will not lead to cross-subsidization of asso13 ciate companies or encumber any utility assets for the

14 benefit of an associate company.

15 ‘‘(5) The Commission shall, by rule, adopt procedures

16 for the expeditious consideration of applications for the ap17 proval of dispositions, consolidations, or acquisitions under

18 this section. Such rules shall identify classes of transactions,

19 or specify criteria for transactions, that normally meet the

20 standards established in paragraph (4), and shall require

21 the Commission to grant or deny an application for ap22 proval of a transaction of such type within 90 days after

23 the conclusion of the hearing or opportunity to comment

24 under paragraph (4). If the Commission does not act within

25 90 days, such application shall be deemed granted unless
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1 the Commission finds that further consideration is required

2 to determine whether the proposed transaction meets the

3 standards of paragraph (4) and issues one or more orders

4 tolling the time for acting on the application for an addi5 tional 90 days.

6 ‘‘(6) For purposes of this subsection, the terms ‘asso7 ciate company’, ‘electric utility company’, ‘gas utility com8 pany’, ‘holding company’, and ‘holding company system’

9 have the meaning given those terms in the Public Utility

10 Holding Company Act of 2003.’’.

11 SEC. 203. MARKET-BASED RATES.

12 (a) APPROVAL OF MARKET-BASED RATES.—Section

13 205 of the Federal Power Act (16 U.S.C. 824d) is amended

14 by adding at the end the following:

15 ‘‘(h) The Commission may determine whether a mar16 ket-based rate for the sale of electric energy subject to the

17 jurisdiction of the Commission is just and reasonable and

18 not unduly discriminatory or preferential. In making such

19 determination, the Commission shall consider such factors

20 as the Commission may deem to be appropriate and in the

21 public interest, including to the extent the Commission con22 siders relevant to the wholesale power market—

23 ‘‘(1) market power;

24 ‘‘(2) the nature of the market and its response

25 mechanisms; and
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1 ‘‘(3) reserve margins.’’.

2 (b) REVOCATION OF MARKET-BASED RATES.—Section

3 206 of the Federal Power Act (16 U.S.C. 824e) is amended

4 by adding at the end the following:

5 ‘‘(f) Whenever the Commission, after a hearing had

6 upon its own motion or upon complaint, finds that a rate

7 charged by a public utility authorized to charge a market8 based rate under section 205 is unjust, unreasonable, un9 duly discriminatory or preferential, the Commission shall

10 determine the just and reasonable rate and fix the same by

11 order.’’.

12 SEC. 204. REFUND EFFECTIVE DATE.

13 Section 206(b) of the Federal Power Act (16 U.S.C.

14 824e(b)) is amended by—

15 (1) striking ‘‘the date 60 days after the filing of

16 such complaint nor later than 5 months after the ex17 piration of such 60-day period’’ in the second sen18 tence and inserting ‘‘the date of the filing of such

19 complaint nor later than 5 months after the filing of

20 such complaint’’;

21 (2) striking ‘‘60 days after’’ in the third sentence

22 and inserting ‘‘of’’; and

23 (3) striking ‘‘expiration of such 60-day period’’

24 in the third sentence and inserting ‘‘publication

25 date’’.
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1 SEC. 205. OPEN ACCESS TRANSMISSION BY CERTAIN UTILI2 TIES.

3 Part II of the Federal Power Act is further amended

4 by inserting after section 211 the following:

5 ‘‘OPEN ACCESS BY UNREGULATED TRANSMITTING

6 UTILITIES

7 ‘‘SEC. 211A. (a) Subject to section 212(h), the Commis8 sion may, by rule or order, require an unregulated trans9 mitting utility to provide transmission services—

10 ‘‘(1) at rates that are comparable to those that

11 the unregulated transmitting utility charges itself,

12 and

13 ‘‘(2) on terms and conditions (not relating to

14 rates) that are comparable to those under Commission

15 rules that require public utilities to offer open access

16 transmission services and that are not unduly dis17 criminatory or preferential.

18 ‘‘(b) The Commission shall exempt from any rule or

19 order under this subsection any unregulated transmitting

20 utility that—

21 ‘‘(1) sells no more than 4,000,000 megawatt

22 hours of electricity per year;

23 ‘‘(2) does not own or operate any transmission

24 facilities that are necessary for operating an inter25 connected transmission system (or any portion there26 of); or
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1 ‘‘(3) meets other criteria the Commission deter2 mines to be in the public interest.

3 ‘‘(c) The rate changing procedures applicable to public

4 utilities under subsections (c) and (d) of section 205 are

5 applicable to unregulated transmitting utilities for pur6 poses of this section.

7 ‘‘(d) In exercising its authority under paragraph (1),

8 the Commission may remand transmission rates to an un9 regulated transmitting utility for review and revision where

10 necessary to meet the requirements of subsection (a).

11 ‘‘(e) The provision of transmission services under sub12 section (a) does not preclude a request for transmission

13 services under section 211.

14 ‘‘(f) The Commission may not require a State or mu15 nicipality to take action under this section that constitutes

16 a private business use for purposes of section 141 of the

17 Internal Revenue Code of 1986 (26 U.S.C. 141).

18 ‘‘(g) For purposes of this subsection, the term ‘unregu19 lated transmitting utility’ means an entity that—

20 ‘‘(1) owns or operates facilities used for the

21 transmission of electric energy in interstate com22 merce, and

23 ‘‘(2) is either an entity described in section

24 201(f) or a rural electric cooperative.’’.
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1 SEC. 206. ELECTRIC RELIABILITY STANDARDS.

2 Part II of the Federal Power Act (16 U.S.C. 824 et

3 seq.) is amended by inserting the following after section 215

4 as added by this Act:

5 ‘‘SEC. 216. ELECTRIC RELIABILITY.

6 ‘‘(a) DEFINITIONS.—For purposes of this section—

7 ‘‘(1) ‘bulk-power system’ means the network of

8 interconnected transmission facilities and generating

9 facilities;

10 ‘‘(2) ‘electric reliability organization’ means a

11 self-regulating organization certified by the Commis12 sion under subsection (c) whose purpose is to promote

13 the reliability of the bulk-power system; and

14 ‘‘(3) ‘reliability standard’ means a requirement

15 to provide for reliable operation of the bulk-power sys16 tem approved by the Commission under this section.

17 ‘‘(b) JURISIDICTION AND APPLICABILITY.—The Com18 mission shall have jurisdiction, within the United States,

19 over an electric reliability organization, any regional enti20 ties, and all users, owners and operators of the bulk-power

21 system, including but not limited to the entities described

22 in section 201(f), for purposes of approving reliability

23 standards and enforcing compliance with this section. All

24 users, owners and operators of the bulk-power system shall

25 comply with reliability standards that take effect under this

26 section.
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1 ‘‘(c) CERTIFICATION.—(1) The Commission shall issue

2 a final rule to implement the requirements of this section

3 not later than 180 days after the date of enactment of this

4 section.

5 ‘‘(2) Following the issuance of a Commission rule

6 under paragraph (1), any person may submit an applica7 tion to the Commission for certification as an electric reli8 ability organization. The Commission may certify an ap9 plicant if the Commission determines that the applicant—

10 ‘‘(A) has the ability to develop, and enforce reli11 ability standards that provide for an adequate level

12 of reliability of the bulk-power system;

13 ‘‘(B) has established rules that—

14 ‘‘(i) assure its independence of the users and

15 owners and operators of the bulk-power system;

16 while assuring fair stakeholder representation in

17 the selection of its directors and balanced deci18 sionmaking in any committee or subordinate or19 ganizational structure;

20 ‘‘(ii) allocate equitably dues, fees, and other

21 charges among end users for all activities under

22 this section;

23 ‘‘(iii) provide fair and impartial procedures

24 for enforcement of reliability standards through

25 imposition of penalties (including limitations on
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1 activities, functions, or operations, or other ap2 propriate sanctions); and

3 ‘‘(iv) provide for reasonable notice and op4 portunity for public comment, due process, open5 ness, and balance of interests in developing reli6 ability standards and otherwise exercising its

7 duties.

8 ‘‘(3) If the Commission receives two or more timely

9 applications that satisfy the requirements of this subsection,

10 the Commission shall approve only the application it con11 cludes will best implement the provisions of this section.

12 ‘‘(d) RELIABILITY STANDARDS.—(1) An electric reli13 ability organization shall file a proposed reliability stand14 ard or modification to a reliability standard with the Com15 mission.

16 ‘‘(2) The Commission may approve a proposed reli17 ability standard or modification to a reliability standard

18 if it determines that the standard is just, reasonable, not

19 unduly discriminatory or preferential, and in the public

20 interest. The Commission shall give due weight to the tech21 nical expertise of the electric reliability organization with

22 respect to the content of a proposed standard or modifica23 tion to a reliability standard, but shall not defer with re24 spect to its effect on competition.
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1 ‘‘(3) The electric reliability organization and the Com2 mission shall rebuttably presume that a proposal from a

3 regional entity organized on an interconnection-wide basis

4 for a reliability standard or modification to a reliability

5 standard to be applicable on an interconnection-wide basis

6 is just, reasonable, and not unduly discriminatory or pref7 erential, and in the public interest.

8 ‘‘(4) The Commission shall remand to the electric reli9 ability organization for further consideration a proposed re10 liability standard or a modification to a reliability stand11 ard that the Commission disapproves in whole or in part.

12 ‘‘(5) The Commission, upon its own motion or upon

13 complaint, may order an electric reliability organization

14 to submit to the Commission a proposed reliability stand15 ard or a modification to a reliability standard that address16 es a specific matter if the Commission considers such a new

17 or modified reliability standard appropriate to carry out

18 this section.

19 ‘‘(e) ENFORCEMENT.—(1) An electric reliability orga20 nization may impose a penalty on a user or owner or oper21 ator of the bulk-power system if the electric reliability orga22 nization, after notice and an opportunity for a hearing—

23 ‘‘(A) finds that the user or owner or operator of

24 the bulk-power system has violated a reliability
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1 standard approved by the Commission under sub2 section (d); and

3 ‘‘(B) files notice with the Commission, which

4 shall affirm, set aside or modify the action.

5 ‘‘(2) On its own motion or upon complaint, the Com6 mission may order compliance with a reliability standard

7 and may impose a penalty against a user or owner or oper8 ator of the bulk-power system, if the Commission finds, after

9 notice and opportunity for a hearing, that the user or owner

10 or operator of the bulk-power system has violated or threat11 ens to violate a reliability standard.

12 ‘‘(3) The Commission shall establish regulations au13 thorizing the electric reliability organization to enter into

14 an agreement to delegate authority to a regional entity for

15 the purpose of proposing and enforcing reliability stand16 ards (including related activities) if the regional entity sat17 isfies the provisions of subsection (c)(2) (A) and (B) and

18 the agreement promotes effective and efficient administra19 tion of bulk-power system reliability, and may modify such

20 delegation. The electric reliability organization and the

21 Commission shall rebuttably presume that a proposal for

22 delegation to a regional entity organized on an interconnec23 tion-wide basis promotes effective and efficient administra24 tion of bulk-power system reliability and should be ap25 proved. Such regulation may provide that the Commission
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1 may assign the electric reliability organization’s authority

2 to enforce reliability standards directly to a regional entity

3 consistent with the requirements of this paragraph.

4 ‘‘(4) The Commission may take such action as is nec5 essary or appropriate against the electric reliability organi6 zation or a regional entity to ensure compliance with a reli7 ability standard or any Commission order affecting the

8 electric reliability organization or a regional entity.

9 ‘‘(f) CHANGES IN ELECTRICITY RELIALB1LITY ORGANI10 ZATION RULES.—An electric reliability organization shall

11 file with the Commission for approval any proposed rule

12 or proposed rule change, accompanied by an explanation

13 of its basis and purpose. The Commission, upon its own

14 motion or complaint, may propose a change to the rules

15 of the electric reliability organization. A proposed rule or

16 proposed rule change shall take effect upon a finding by

17 the Commission, after notice and opportunity for comment,

18 that the change is just, reasonable, not unduly discrimina19 tory or preferential, is in the public interest, and satisfies

20 the requirements of subsection (c)(2).

21 ‘‘(g) COORDINATION WITH CANADA AND MEXICO.—(1)

22 The electric reliability organization shall take all appro23 priate steps to gain recognition in Canada and Mexico.

24 ‘‘(2) The President shall use his best efforts to enter

25 into international agreements with the governments of Can-
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1 ada and Mexico to provide for effective compliance with re2 liability standards and the effectiveness of the electric reli3 ability organization in the United States and Canada or

4 Mexico.

5 ‘‘(h) RELIABILITY REPORTS.—The electric reliability

6 organization shall conduct periodic assessments of the reli7 ability and adequacy of the interconnected bulk-power sys8 tem in North America.

9 ‘‘(i) SAVINGS PROVISIONS.—(1) The electric reliability

10 organization shall have authority to develop and enforce

11 compliance with standards for the reliable operation of only

12 the bulk-power system.

13 ‘‘(2) This section does not provide the electric reli14 ability organization or the Commission with the authority

15 to order the construction of additional generation or trans16 mission capacity or to set and enforce compliance with

17 standards for adequacy or safety of electric facilities or serv18 ices.

19 ‘‘(3) Nothing in this section shall be construed to pre20 empt any authority of any State to take action to ensure

21 the safety, adequacy, and reliability of electric service with22 in that State, as long as such action is not inconsistent

23 with any reliability standard.

24 ‘‘(4) Within 90 days of the application of the electric

25 reliability organization or other affected party, and after
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1 notice and opportunity for comment, the Commission shall

2 issue a final order determining whether a State action is

3 inconsistent with a reliability standard, taking into consid4 eration any recommendation of the electric reliability orga5 nization.

6 ‘‘(5) The Commission, after consultation with the elec7 tric reliability organization, may stay the effectiveness of

8 any State action, pending the Commission’s issuance of a

9 final order.

10 ‘‘(j) APPLICATION OF ANTITRUST LAWS.—

11 ‘‘(1) IN GENERAL.—To the extent undertaken to

12 develop, implement, or enforce a reliability standard,

13 each of the following activities shall not, in any ac14 tion under the antitrust laws, be deemed illegal per

15 se—

16 ‘‘(A) activities undertaken by an electric re17 liability organization under this section, and

18 ‘‘(B) activities of a user or owner or oper19 ator of the bulk-power system undertaken in good

20 faith under the rules of an electric reliability or21 ganization.

22 ‘‘(2) RULE OF REASON.—In any action under

23 the antitrust laws, an activity described in paragraph

24 (1) shall be judged on the basis of its reasonableness,
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1 taking into account all relevant factors affecting com2 petition and reliability.

3 ‘‘(3) DEFINITION.—For purposes of this sub4 section, ‘antitrust laws’ has the meaning given the

5 term in subsection (a) of the first section of the Clay6 ton Act (15 U.S.C. 12(a)), except that it includes sec7 tion 5 of the Federal Trade Commission Act (15 U.

8 S.C. 45) to the extent that section 5 applies to unfair

9 methods of competition.

10 ‘‘(k) REGIONAL ADVISORY BODIES.—The Commission

11 shall establish a regional advisory body on the petition of

12 at least two-thirds of the States within a region that have

13 more than one-half of their electric load served within the

14 region. A regional advisory body shall be composed of one

15 member from each participating State in the region, ap16 pointed by the Governor of each State, and may include

17 representatives of agencies, States, and provinces outside the

18 United States. A regional advisory body may provide ad19 vice to the electric reliability organization, a regional reli20 ability entity, or the Commission regarding the governance

21 of an existing or proposed regional reliability entity within

22 the same region, whether a standard proposed to apply

23 within the region is just, reasonable, not unduly discrimi24 natory or preferential, and in the public interest, whether

25 fees proposed to be assessed within the region are just, rea-
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1 sonable, not unduly discriminatory or preferential, and in

2 the public interest and any other responsibilities requested

3 by the Commission. The Commission may give deference to

4 the advice of any such regional advisory body if that body

5 is organized on an interconnection-wide basis.

6 ‘‘(l) APPLICATION TO ALASKA AND HAWAII.—The pro7 visions of this section do not apply to Alaska or Hawaii.’’.

8 SEC. 207. MARKET TRANSPARENCY RULES.

9 Part II of the Federal Power Act is further amended

10 by adding at the end the following:

11 ‘‘SEC. 216. MARKET TRANSPARENCY RULES.

12 ‘‘(a) COMMISSION RULES.—Not later than 180 days

13 after the date of enactment of this section, the Commission

14 shall issue rules establishing an electronic information sys15 tem to provide information about the availability and price

16 of wholesale electric energy and transmission services to the

17 Commission, State commissions, buyers and sellers of

18 wholesale electric energy, users of transmission services, and

19 the public on a timely basis.

20 ‘‘(b) INFORMATION REQUIRED.—The Commission

21 shall require—

22 ‘‘(1) each regional transmission organization to

23 provide statistical information about the available ca24 pacity and capacity constraints of transmission fa25 cilities operated by the organization; and
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1 ‘‘(2) each broker, exchange, or other market-mak2 ing entity that matches offers to sell and offers to buy

3 wholesale electric energy in interstate commerce to

4 provide statistical information about the amount and

5 sale price of sales of electric energy at wholesale in

6 interstate commerce it transacts.

7 ‘‘(c) TIMELY BASIS.—The Commission shall require

8 the information required under subsection (b) to be posted

9 on the Internet as soon as practicable and updated as fre10 quently as practicable.

11 ‘‘(d) PROTECTION OF SENSITIVE INFORMATION.—The

12 Commission shall exempt from disclosure commercial or fi13 nancial information that the Commission, by rule or order,

14 determines to be privileged, confidential, or otherwise sen15 sitive.’’.

16 SEC. 208. ACCESS TO TRANSMISSION BY INTERMITTENT

17 GENERATORS.

18 Part II of the Federal Power Act is further amended

19 by adding at the end the following:

20 ‘‘SEC. 217. ACCESS TO TRANSMISSION BY INTERMITTENT

21 GENERATORS.

22 ‘‘(a) FAIR TREATMENT OF INTERMITTENT GENERA23 TORS.—The Commission shall ensure that all transmitting

24 utilities provide transmission service to intermittent gen-
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1 erators in a manner that does not unduly prejudice or dis2 advantage such generators for characteristics that are—

3 ‘‘(1) inherent to intermittent energy resources;

4 and

5 ‘‘(2) are beyond the control of such generators.

6 ‘‘(b) POLICIES.—The Commission shall ensure that the

7 requirement in subsection (a) is met by adopting such poli8 cies as it deems appropriate which shall include the fol9 lowing:

10 ‘‘(1) Subject to the sole exception set forth in

11 paragraph (2), the Commission shall ensure that the

12 rates transmitting utilities charge intermittent gener13 ator customers for transmission services do not un14 duly prejudice or disadvantage intermittent generator

15 customers for scheduling deviations.

16 ‘‘(2) The Commission may exempt a transmit17 ting utility from the requirement set forth in para18 graph (1) if the transmitting utility demonstrates

19 that scheduling deviations by its intermittent gener20 ator customers are likely to have an adverse impact

21 on the reliability of the transmitting utility’s system.

22 ‘‘(3) The Commission shall ensure that to the ex23 tent any transmission charges recovering the trans24 mitting utility’s embedded costs are assessed to such

25 intermittent generators, they are assessed to such gen-
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1 erators on the basis of kilowatt-hours generated or

2 some other method to ensure that they are fully recov3 ered by the transmitting utility.

4 ‘‘(4) The Commission shall require transmitting

5 utilities to offer to intermittent generators, and may

6 require transmitting utilities to offer to all trans7 mission customers, access to nonfirm transmission

8 service.

9 ‘‘(c) DEFINITIONS.—As used in this section:

10 ‘‘(1) The term ‘intermittent generator’ means a

11 facility that generates electricity using wind or solar

12 energy and no other energy source.

13 ‘‘(2) The term ‘nonfirm transmission service’

14 means transmission service provided on an ‘as avail15 able’ basis.

16 ‘‘(3) The term ‘scheduling deviation’ means de17 livery of more or less energy than has previously been

18 forecast in a schedule submitted by an intermittent

19 generator to a control area operator or transmitting

20 utility.’’.

21 SEC. 209. ENFORCEMENT.

22 (a) COMPLAINTS.—Section 306 of the Federal Power

23 Act (16 U.S.C. 825e) is amended by—

24 (1) inserting ‘‘electric utility,’’ after ‘‘Any per25 son,’’; and
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1 (2) inserting ‘‘transmitting utility,’’ after ‘‘li2 censee’’ each place it appears.

3 (b) INVESTIGATIONS.—Section 307(a) of the Federal

4 Power Act (16 U.S.C. 825f(a)) is amended by inserting ‘‘or

5 transmitting utility’’ after ‘‘any person’’ in the first sen6 tence.

7 (c) REVIEW OF COMMISSION ORDERS.—Section 313(a)

8 of the Federal Power Act (16 U.S.C. 8251) is amended by

9 inserting ‘‘electric utility,’’ after ‘‘Any person,’’ in the first

10 sentence.

11 (d) CRIMINAL PENALTIES.—Section 316(c) of the Fed12 eral Power Act (16 U.S.C. 825o(c)) is repealed.

13 (e) CIVIL PENALTIES.—Section 316A of the Federal

14 Power Act (16 U.S.C. 825o–1) is amended by striking ‘‘sec15 tion 211, 212, 213, or 214’’ each place it appears and in16 serting ‘‘Part II’’.

17 SEC. 210. ELECTRIC POWER TRANSMISSION SYSTEMS.

18 The Federal Government should be attentive to electric

19 power transmission issues, including issues that can be ad20 dressed through policies that facilitate investment in, the

21 enhancement of, and the efficiency of electric power trans22 mission systems.
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1 Subtitle B—Amendments to the

2 Public Utility Holding Company

3 Act

4 SEC. 221. SHORT TITLE.

5 This subtitle may be cited as the ‘‘Public Utility Hold6 ing Company Act of 2003’’.

7 SEC. 222. DEFINITIONS.

8 For purposes of this subtitle:

9 (1) The term ‘‘affiliate’’ of a company means

10 any company, 5 percent or more of the outstanding

11 voting securities of which are owned, controlled, or

12 held with power to vote, directly or indirectly, by

13 such company.

14 (2) The term ‘‘associate company’’ of a company

15 means any company in the same holding company

16 system with such company.

17 (3) The term ‘‘Commission’’ means the Federal

18 Energy Regulatory Commission.

19 (4) The term ‘‘company’’ means a corporation,

20 partnership, association, joint stock company, busi21 ness trust, or any organized group of persons, whether

22 incorporated or not, or a receiver, trustee, or other

23 liquidating agent of any of the foregoing.

24 (5) The term ‘‘electric utility company’’ means

25 any company that owns or operates facilities used for
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1 the generation, transmission, or distribution of elec2 tric energy for sale.

3 (6) The terms ‘‘exempt wholesale generator’’ and

4 ‘‘foreign utility company’’ have the same meanings as

5 in sections 32 and 33, respectively, of the Public Util6 ity Holding Company Act of 1935 (15 U.S.C. 79z–5a,

7 79z–5b), as those sections existed on the day before the

8 effective date of this subtitle.

9 (7) The term ‘‘gas utility company’’ means any

10 company that owns or operates facilities used for dis11 tribution at retail (other than the distribution only in

12 enclosed portable containers or distribution to tenants

13 or employees of the company operating such facilities

14 for their own use and not for resale) of natural or

15 manufactured gas for heat, light, or power.

16 (8) The term ‘‘holding company’’ means—

17 (A) any company that directly or indirectly

18 owns, controls, or holds, with power to vote, 10

19 percent or more of the outstanding voting securi20 ties of a public utility company or of a holding

21 company of any public utility company; and

22 (B) any person, determined by the Commis23 sion, after notice and opportunity for hearing, to

24 exercise directly or indirectly (either alone or

25 pursuant to an arrangement or understanding
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1 with one or more persons) such a controlling in2 fluence over the management or policies of any

3 public utility company or holding company as to

4 make it necessary or appropriate for the rate

5 protection of utility customers with respect to

6 rates that such person be subject to the obliga7 tions, duties, and liabilities imposed by this sub8 title upon holding companies.

9 (9) The term ‘‘holding company system’’ means

10 a holding company, together with its subsidiary com11 panies.

12 (10) The term ‘‘jurisdictional rates’’ means rates

13 established by the Commission for the transmission of

14 electric energy in interstate commerce, the sale of elec15 tric energy at wholesale in interstate commerce, the

16 transportation of natural gas in interstate commerce,

17 and the sale in interstate commerce of natural gas for

18 resale for ultimate public consumption for domestic,

19 commercial, industrial, or any other use.

20 (11) The term ‘‘natural gas company’’ means a

21 person engaged in the transportation of natural gas

22 in interstate commerce or the sale of such gas in

23 interstate commerce for resale.

24 (12) The term ‘‘person’’ means an individual or

25 company.
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1 (13) The term ‘‘public utility’’ means any person

2 who owns or operates facilities used for transmission

3 of electric energy in interstate commerce or sales of

4 electric energy at wholesale in interstate commerce.

5 (14) The term ‘‘public utility company’’ means

6 an electric utility company or a gas utility company.

7 (15) The term ‘‘State commission’’ means any

8 commission, board, agency, or officer, by whatever

9 name designated, of a State, municipality, or other

10 political subdivision of a State that, under the laws

11 of such State, has jurisdiction to regulate public util12 ity companies.

13 (16) The term ‘‘subsidiary company’’ of a hold14 ing company means—

15 (A) any company, 10 percent or more of the

16 outstanding voting securities of which are di17 rectly or indirectly owned, controlled, or held

18 with power to vote, by such holding company;

19 and

20 (B) any person, the management or policies

21 of which the Commission, after notice and oppor22 tunity for hearing, determines to be subject to a

23 controlling influence, directly or indirectly, by

24 such holding company (either alone or pursuant

25 to an arrangement or understanding with one or
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1 more other persons) so as to make it necessary

2 for the rate protection of utility customers with

3 respect to rates that such person be subject to the

4 obligations, duties, and liabilities imposed by

5 this subtitle upon subsidiary companies of hold6 ing companies.

7 (17) The term ‘‘voting security’’ means any secu8 rity presently entitling the owner or holder thereof to

9 vote in the direction or management of the affairs of

10 a company.

11 SEC. 223. REPEAL OF THE PUBLIC UTILITY HOLDING COM12 PANY ACT OF 1935.

13 The Public Utility Holding Company Act of 1935 (15

14 U.S.C. 79 et seq.) is repealed.

15 SEC. 224. FEDERAL ACCESS TO BOOKS AND RECORDS.

16 (a) IN GENERAL.—Each holding company and each

17 associate company thereof shall maintain, and shall make

18 available to the Commission, such books, accounts, memo19 randa, and other records as the Commission deems to be

20 relevant to costs incurred by a public utility or natural gas

21 company that is an associate company of such holding com22 pany and necessary or appropriate for the protection of

23 utility customers with respect to jurisdictional rates.

24 (b) AFFILIATE COMPANIES.—Each affiliate of a hold25 ing company or of any subsidiary company of a holding
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1 company shall maintain, and shall make available to the

2 Commission, such books, accounts, memoranda, and other

3 records with respect to any transaction with another affil4 iate, as the Commission deems to be relevant to costs in5 curred by a public utility or natural gas company that is

6 an associate company of such holding company and nec7 essary or appropriate for the protection of utility customers

8 with respect to jurisdictional rates.

9 (c) HOLDING COMPANY SYSTEMS.—The Commission

10 may examine the books, accounts, memoranda, and other

11 records of any company in a holding company system, or

12 any affiliate thereof, as the Commission deems to be rel13 evant to costs incurred by a public utility or natural gas

14 company within such holding company system and nec15 essary or appropriate for the protection of utility customers

16 with respect to jurisdictional rates.

17 (d) CONFIDENTIALITY.—No member, officer, or em18 ployee of the Commission shall divulge any fact or informa19 tion that may come to his or her knowledge during the

20 course of examination of books, accounts, memoranda, or

21 other records as provided in this section, except as may be

22 directed by the Commission or by a court of competent ju23 risdiction.
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1 SEC. 225. STATE ACCESS TO BOOKS AND RECORDS.

2 (a) In GENERAL.—Upon the written request of a State

3 commission having jurisdiction to regulate a public utility

4 company in a holding company system, the holding com5 pany or any associate company or affiliate thereof, other

6 than such public utility company, wherever located, shall

7 produce for inspection books, accounts, memoranda, and

8 other records that—

9 (1) have been identified in reasonable detail by

10 the State commission;

11 (2) the State commission deems are relevant to

12 costs incurred by such public utility company; and

13 (3) are necessary for the effective discharge of the

14 responsibilities of the State commission with respect

15 to such proceeding.

16 (b) LIMITATION.—Subsection (a) does not apply to

17 any person that is a holding company solely by reason of

18 ownership of one or more qualifying facilities under the

19 Public Utility Regulatory Policies Act of 1978 (16 U.S.C.

20 2601 et seq.).

21 (c) CONFIDENTIALITY OF INFORMATION.—The produc22 tion of books, accounts, memoranda, and other records

23 under subsection (a) shall be subject to such terms and con24 ditions as may be necessary and appropriate to safeguard

25 against unwarranted disclosure to the public of any trade

26 secrets or sensitive commercial information.
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1 (d) EFFECT ON STATE LAW.—Nothing in this section

2 shall preempt applicable State law concerning the provision

3 of books, accounts, memoranda, and other records, or in any

4 way limit the rights of any State to obtain books, accounts,

5 memoranda, and other records under any other Federal

6 law, contract, or otherwise.

7 (e) COURT JURISDICTION.—Any United States district

8 court located in the State in which the State commission

9 referred to in subsection (a) is located shall have jurisdic10 tion to enforce compliance with this section.

11 SEC. 226. EXEMPTION AUTHORITY.

12 (a) RULEMAKING.—Not later than 90 days after the

13 effective date of this subtitle, the Commission shall promul14 gate a final rule to exempt from the requirements of section

15 224 any person that is a holding company, solely with re16 spect to one or more—

17 (1) qualifying facilities under the Public Utility

18 Regulatory Policies Act of 1978 (16 U.S.C. 2601 et

19 seq.);

20 (2) exempt wholesale generators; or

21 (3) foreign utility companies.

22 (b) OTHER AUTHORITY.—The Commission shall ex23 empt a person or transaction from the requirements of sec24 tion 224, if, upon application or upon the motion of the

25 Commission—
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1 (1) the Commission finds that the books, ac2 counts, memoranda, and other records of any person

3 are not relevant to the jurisdictional rates of a public

4 utility or natural gas company; or

5 (2) the Commission finds that any class of trans6 actions is not relevant to the jurisdictional rates of a

7 public utility or natural gas company.

8 SEC. 227. AFFILIATE TRANSACTIONS.

9 (a) COMMISSION AUTHORITY UNAFFECTED.—Nothing

10 in this subtitle shall limit the authority of the Commission

11 under the Federal Power Act (16 U.S.C. 791a et seq.) to

12 require that jurisdictional rates are just and reasonable, in13 cluding the ability to deny or approve the pass through of

14 costs, the prevention of cross-subsidization, and the promul15 gation of such rules and regulations as are necessary or ap16 propriate for the protection of utility consumers.

17 (b) RECOVERY OF COSTS.—Nothing in this subtitle

18 shall preclude the Commission or a State commission from

19 exercising its jurisdiction under otherwise applicable law

20 to determine whether a public utility company, public util21 ity, or natural gas company may recover in rates any costs

22 of an activity performed by an associate company, or any

23 costs of goods or services acquired by such public utility

24 company from an associate company.
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1 SEC. 228. APPLICABILITY.

2 Except as otherwise specifically provided in this sub3 title, no provision of this subtitle shall apply to, or be

4 deemed to include—

5 (1) the United States;

6 (2) a State or any political subdivision of a

7 State;

8 (3) any foreign governmental authority not oper9 ating in the United States;

10 (4) any agency, authority, or instrumentality of

11 any entity referred to in paragraph (1), (2), or (3);

12 or

13 (5) any officer, agent, or employee of any entity

14 referred to in paragraph (1), (2), or (3) acting as

15 such in the course of his or her official duty.

16 SEC. 229. EFFECT ON OTHER REGULATIONS.

17 Nothing in this subtitle precludes the Commission or

18 a State commission from exercising its jurisdiction under

19 otherwise applicable law to protect utility customers.

20 SEC. 230. ENFORCEMENT.

21 The Commission shall have the same powers as set

22 forth in sections 306 through 317 of the Federal Power Act

23 (16 U.S.C. 825e–825p) to enforce the provisions of this sub24 title.
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1 SEC. 231. SAVINGS PROVISIONS.

2 (a) IN GENERAL.—Nothing in this subtitle prohibits

3 a person from engaging in or continuing to engage in ac4 tivities or transactions in which it is legally engaged or

5 authorized to engage on the effective date of this subtitle.

6 (b) EFFECT ON OTHER COMMISSION AUTHORITY.—

7 Nothing in this subtitle limits the authority of the Commis8 sion under the Federal Power Act (16 U.S.C. 791a et seq.)

9 (including section 301 of that Act) or the Natural Gas Act

10 (15 U.S.C. 717 et seq.) (including section 8 of that Act).

11 SEC. 232. IMPLEMENTATION.

12 Not later than 18 months after the date of enactment

13 of this subtitle, the Commission shall—

14 (1) promulgate such regulations as may be nec15 essary or appropriate to implement this subtitle

16 (other than section 225); and

17 (2) submit to the Congress detailed recommenda18 tions on technical and conforming amendments to

19 Federal law necessary to carry out this subtitle and

20 the amendments made by this subtitle.

21 SEC. 233. TRANSFER OF RESOURCES.

22 All books and records that relate primarily to the func23 tions transferred to the Commission under this subtitle shall

24 be transferred from the Securities and Exchange Commis25 sion to the Commission.
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1 SEC. 234. INTER-AGENCY REVIEW OF COMPETITION IN THE

2 WHOLESALE AND RETAIL MARKETS FOR

3 ELECTRIC ENERGY.

4 (a) TASK FORCE.—There is established an inter-agen5 cy task force, to be known as the ‘‘Electric Energy Market

6 Competition Task Force’’ (referred to in this section as the

7 ‘‘task force’’), which shall consist of—

8 (1) one member each from—

9 (A) the Department of Justice, to be ap10 pointed by the Attorney General of the United

11 States;

12 (B) the Federal Energy Regulatory Com13 mission, to be appointed by the chairman of that

14 Commission; and

15 (C) the Federal Trade Commission, to be

16 appointed by the chairman of that Commission;

17 and

18 (2) two advisory members (who shall not vote),

19 of whom—

20 (A) one shall be appointed by the Secretary

21 of Agriculture to represent the Rural Utility

22 Service; and

23 (B) one shall be appointed by the Chairman

24 of the Securities and Exchange Commission to

25 represent that Commission.

26 (b) STUDY AND REPORT.—
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1 (1) STUDY.—The task force shall perform a

2 study and analysis of the protection and promotion

3 of competition within the wholesale and retail market

4 for electric energy in the United States.

5 (2) REPORT.—

6 (A) FINAL REPORT.—Not later than 1 year

7 after the effective date of this subtitle, the task

8 force shall submit a final report of its findings

9 under paragraph (1) to the Congress.

10 (B) PUBLIC COMMENT.—At least 60 days

11 before submission of a final report to the Con12 gress under subparagraph (A), the task force

13 shall publish a draft report in the Federal Reg14 ister to provide for public comment.

15 (c) FOCUS.—The study required by this section shall

16 examine—

17 (1) the best means of protecting competition

18 within the wholesale and retail electric market;

19 (2) activities within the wholesale and retail

20 electric market that may allow unfair and unjustified

21 discriminatory and deceptive practices;

22 (3) activities within the wholesale and retail

23 electric market, including mergers and acquisitions,

24 that deny market access or suppress competition;
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1 (4) cross-subsidization that may occur between

2 regulated and nonregulated activities; and

3 (5) the role of State public utility commissions

4 in regulating competition in the wholesale and retail

5 electric market.

6 (d) CONSULTATION.—In performing the study required

7 by this section, the task force shall consult with and solicit

8 comments from its advisory members, the States, represent9 atives of the electric power industry, and the public.

10 SEC. 235. GAO STUDY ON IMPLEMENTATION.

11 (a) STUDY.—The Comptroller General shall conduct a

12 study of the success of the Federal Government and the

13 States during the 18-month period following the effective

14 date of this subtitle in—

15 (1) the prevention of anticompetitive practices

16 and other abuses by public utility holding companies,

17 including cross-subsidization and other market power

18 abuses; and

19 (2) the promotion of competition and efficient

20 energy markets to the benefit of consumers.

21 (b) REPORT TO CONGRESS.—Not earlier than 18

22 months after the effective date of this subtitle or later than

23 24 months after that effective date, the Comptroller General

24 shall submit a report to the Congress on the results of the

25 study conducted under subsection (a), including probable
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1 causes of its findings and recommendations to the Congress

2 and the States for any necessary legislative changes.

3 SEC. 236. EFFECTIVE DATE.

4 This subtitle shall take effect 18 months after the date

5 of enactment of this subtitle.

6 SEC. 237. AUTHORIZATION OF APPROPRIATIONS.

7 There are authorized to be appropriated such funds as

8 may be necessary to carry out this subtitle.

9 SEC. 238. CONFORMING AMENDMENTS TO THE FEDERAL

10 POWER ACT.

11 (a) CONFLICT OF JURISDICTION.—Section 318 of the

12 Federal Power Act (16 U.S.C. 825q) is repealed.

13 (b) DEFINITIONS.—(1) Section 201(g) of the Federal

14 Power Act (16 U.S.C. 824(g)) is amended by striking

15 ‘‘1935’’ and inserting ‘‘2002’’.

16 (2) Section 214 of the Federal Power Act (16 U.S.C.

17 824m) is amended by striking ‘‘1935’’ and inserting

18 ‘‘2002’’.
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1 Subtitle C—Amendments to the

2 Public Utility Regulatory Poli3 cies Act of 1978

4 SEC. 241. REAL-TIME PRICING AND TIME-OF-USE METERING

5 STANDARDS.

6 (a) ADOPTION OF STANDARDS.—Section 111(d) of the

7 Public Utility Regulatory Policies Act of 1978 (16 U.S.C.

8 2621(d)) is amended by adding at the end the following:

9 ‘‘(11) REAL-TIME PRICING.—(A) Each electric

10 utility shall, at the request of an electric consumer,

11 provide electric service under a real-time rate sched12 ule, under which the rate charged by the electric util13 ity varies by the hour (or smaller time interval) ac14 cording to changes in the electric utility’s wholesale

15 power cost. The real-time pricing service shall enable

16 the electric consumer to manage energy use and cost

17 through real-time metering and communications tech18 nology.

19 ‘‘(B) For purposes of implementing this para20 graph, any reference contained in this section to the

21 date of enactment of the Public Utility Regulatory

22 Policies Act of 1978 shall be deemed to be a reference

23 to the date of enactment of this paragraph.

24 ‘‘(C) Notwithstanding subsections (b) and (c) of

25 section 112, each State regulatory authority shall con-
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1 sider and make a determination concerning whether

2 it is appropriate to implement the standard set out

3 in subparagraph (A) not later than 1 year after the

4 date of enactment of this paragraph.

5 ‘‘(12) TIME-OF-USE METERING.—(A) Each elec6 tric utility shall, at the request of an electric con7 sumer, provide electric service under a time-of-use

8 rate schedule which enables the electric consumer to

9 manage energy use and cost through time-of-use me10 tering and technology.

11 ‘‘(B) For purposes of implementing this para12 graph, any reference contained in this section to the

13 date of enactment of the Public Utility Regulatory

14 Policies Act of 1978 shall be deemed to be a reference

15 to the date of enactment of this paragraph.

16 ‘‘(C) Notwithstanding subsections (b) and (c) of

17 section 112, each State regulatory authority shall con18 sider and make a determination concerning whether

19 it is appropriate to implement the standards set out

20 in subparagraph (A) not later than 1 year after the

21 date of enactment of this paragraph.’’.

22 (b) SPECIAL RULES.—Section 115 of the Public Util23 ity Regulatory Policies Act of 1978 (16 U.S.C. 2625) is

24 amended by adding at the end the following:
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1 ‘‘(i) REAL-TIME PRICING.—In a State that permits

2 third-party marketers to sell electric energy to retail electric

3 consumers, the electric consumer shall be entitled to receive

4 the same real-time metering and communication service as

5 a direct retail electric consumer of the electric utility.

6 ‘‘(j) TIME-OF-USE METERING.—In a State that per7 mits third-party marketers to sell electric energy to retail

8 electric consumers, the electric consumer shall be entitled

9 to receive the same time-of-use metering and communica10 tion service as a direct retail electric consumer of the elec11 tric utility.’’.

12 SEC. 242. ADOPTION OF ADDITIONAL STANDARDS.

13 (a) ADOPTION OF STANDARDS.—Section 113(b) of the

14 Public Utility Regulatory Policies Act of 1978 (16 U.S.C.

15 2623(b)) is amended by adding at the end the following:

16 ‘‘(6) DISTRIBUTED GENERATION.—Each electric

17 utility shall provide distributed generation, combined

18 heat and power, and district heating and cooling sys19 tems competitive access to the local distribution grid

20 and competitive pricing of service, and shall use sim21 plified standard contracts for the interconnection of

22 generating facilities that have a power production ca23 pacity of 250 kilowatts or less.

24 ‘‘(7) DISTRIBUTION INTERCONNECTIONS.—No

25 electric utility may refuse to interconnect a gener-
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1 ating facility with the distribution facilities of the

2 electric utility if the owner or operator of the gener3 ating facility complies with technical standards

4 adopted by the State regulatory authority and agrees

5 to pay the costs established by such State regulatory

6 authority.

7 ‘‘(8) MINIMUM FUEL AND TECHNOLOGY DIVER8 SITY STANDARD.—Each electric utility shall develop a

9 plan to minimize dependence on one fuel source and

10 to ensure that the electric energy it sells to consumers

11 is generated using a diverse range of fuels and tech12 nologies, including renewable technologies.

13 ‘‘(9) FOSSIL FUEL EFFICIENCY.—Each electric

14 utility shall develop and implement a ten-year plan

15 to increase the efficiency of its fossil fuel generation

16 and shall monitor and report to its State regulatory

17 authority excessive greenhouse gas emissions resulting

18 from the inefficient operation of its fossil fuel gener19 ating plants.’’.

20 (b) TIME FOR ADOPTING STANDARDS.—Section 113 of

21 the Public Utility Regulatory Policies Act of 1978 (16

22 U.S.C. 2623) is further amended by adding at the end the

23 following:

24 ‘‘(d) SPECIAL RULE.—For purposes of implementing

25 paragraphs (6), (7), (8), and (9) of subsection (b), any ref-
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1 erence contained in this section to the date of enactment

2 of the Public Utility Regulatory Policies Act of 1978 shall

3 be deemed to be a reference to the date of enactment of this

4 subsection.’’.

5 SEC. 243. TECHNICAL ASSISTANCE.

6 Section 132(c) of the Public Utility Regulatory Poli7 cies Act of 1978 (16 U.S.C. 2642(c)) is amended to read

8 as follows:

9 ‘‘(c) TECHNICAL ASSISTANCE FOR CERTAIN RESPON10 SIBILITIES.—The Secretary may provide such technical as11 sistance as he determines appropriate to assist State regu12 latory authorities and electric utilities in carrying out their

13 responsibilities under section 111(d)(11) and paragraphs

14 (6), (7), (8), and (9) of section 113(b).’’.

15 SEC. 244. COGENERATION AND SMALL POWER PRODUCTION

16 PURCHASE AND SALE REQUIREMENTS.

17 (a) TERMINATION OF MANDATORY PURCHASE AND

18 SALE REQUIREMENTS.—Section 210 of the Public Utility

19 Regulatory Policies Act of 1978 (16 U.S.C. 824a–3) is

20 amended by adding at the end the following:

21 ‘‘(m) TERMINATION OF MANDATORY PURCHASE AND

22 SALE REQUIREMENTS.—

23 ‘‘(1) OBLIGATION TO PURCHASE.— After the date

24 of enactment of this subsection, no electric utility

25 shall be required to enter into a new contract or obli-
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1 gation to purchase electric energy from a qualifying

2 cogeneration facility or a qualifying small power pro3 duction facility under this section if the Commission

4 finds that the qualifying cogeneration facility or

5 qualifying small power production facility has access

6 to independently administered, auction-based day

7 ahead and real time wholesale markets for the sale of

8 electric energy.

9 ‘‘(2) OBLIGATION TO SELL.—After the date of en10 actment of this subsection, no electric utility shall be

11 required to enter into a new contract or obligation to

12 sell electric energy to a qualifying cogeneration facil13 ity or a qualifying small power production facility

14 under this section if competing retail electric sup15 pliers are able to provide electric energy to the quali16 fying cogeneration facility or qualifying small power

17 production facility.

18 ‘‘(3) NO EFFECT ON EXISTING RIGHTS AND REM19 EDIES.—Nothing in this subsection affects the rights

20 or remedies of any party under any contract or obli21 gation, in effect on the date of enactment of this sub22 section, to purchase electric energy or capacity from

23 or to sell electric energy or capacity to a facility

24 under this Act (including the right to recover costs of

25 purchasing electric energy or capacity).
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1 ‘‘(4) RECOVERY OF COSTS.—

2 ‘‘(A) REGULATION.—To ensure recovery by

3 an electric utility that purchases electric energy

4 or capacity from a qualifying facility pursuant

5 to any legally enforceable obligation entered into

6 or imposed under this section before the date of

7 enactment of this subsection, of all prudently in8 curred costs associated with the purchases, the

9 Commission shall issue and enforce such regula10 tions as may be required to ensure that the elec11 tric utility shall collect the prudently incurred

12 costs associated with such purchases.

13 ‘‘(B) ENFORCEMENT.—A regulation under

14 subparagraph (A) shall be enforceable in accord15 ance with the provisions of law applicable to en16 forcement of regulations under the Federal Power

17 Act (16 U.S.C. 791a et seq.).’’.

18 (b) ELIMINATION OF OWNERSHIP LIMITATIONS.—

19 (1) Section 3(17)(C) of the Federal Power Act

20 (16 U.S.C. 796(17)(C)) is amended to read as follows:

21 ‘‘(C) ‘qualifying small power production fa22 cility’ means a small power production facility

23 that the Commission determines, by rule, meets

24 such requirements (including requirements re25 specting minimum size, fuel use, and fuel effi-
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1 ciency) as the Commission may, by rule, pre2 scribe.’’.

3 (2) Section 3(18)(B) of the Federal Power Act

4 (16 U.S.C. 796(18)(B)) is amended to read as follows:

5 ‘‘(B) ‘qualifying cogeneration facility’ means a cogen6 eration facility that the Commission determines, by rule,

7 meets such requirements (including requirements respecting

8 minimum size, fuel use, and fuel efficiency) as the Commis9 sion may, by rule, prescribe.’’.

10 SEC. 245. NET METERING.

11 (a) ADOPTION OF STANDARD.—Section 111(d) of the

12 Public Utility Regulatory Policies Act of 1978 (16 U.S.C.

13 2621(d)) is further amended by adding at the end the fol14 lowing:

15 ‘‘(13) NET METERING.—(A) Each electric utility

16 shall make available upon request net metering serv17 ice to any electric consumer that the electric utility

18 serves.

19 ‘‘(B) For purposes of implementing this para20 graph, any reference contained in this section to the

21 date of enactment of the Public Utility Regulatory

22 Policies Act of 1978 shall be deemed to be a reference

23 to the date of enactment of this paragraph.

24 ‘‘(C) Notwithstanding subsections (b) and (c) of

25 section 112, each State regulatory authority shall con-
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1 sider and make a determination concerning whether

2 it is appropriate to implement the standard set out

3 in subparagraph (A) not later than 1 year after the

4 date of enactment of this paragraph.’’.

5 (b) SPECIAL RULES FOR NET METERING.—Section

6 115 of the Public Utility Regulatory Policies Act of 1978

7 (16 U.S.C. 2625) is further amended by adding at the end

8 the following:

9 ‘‘(k) NET METERING.—

10 ‘‘(1) RATES AND CHARGES.—An electric

11 utility—

12 ‘‘(A) shall charge the owner or operator of

13 an on-site generating facility rates and charges

14 that are identical to those that would be charged

15 other electric consumers of the electric utility in

16 the same rate class; and

17 ‘‘(B) shall not charge the owner or operator

18 of an on-site generating facility any additional

19 standby, capacity, interconnection, or other rate

20 or charge.

21 ‘‘(2) MEASUREMENT.—An electric utility that

22 sells electric energy to the owner or operator of an on23 site generating facility shall measure the quantity of

24 electric energy produced by the on-site facility and the

25 quantity of electric energy consumed by the owner or
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1 operator of an on-site generating facility during a

2 billing period in accordance with normal metering

3 practices.

4 ‘‘(3) ELECTRIC ENERGY SUPPLIED EXCEEDING

5 ELECTRIC ENERGY GENERATED.—If the quantity of

6 electric energy sold by the electric utility to an on-site

7 generating facility exceeds the quantity of electric en8 ergy supplied by the on-site generating facility to the

9 electric utility during the billing period, the electric

10 utility may bill the owner or operator for the net

11 quantity of electric energy sold, in accordance with

12 normal metering practices.

13 ‘‘(4) ELECTRIC ENERGY GENERATED EXCEEDING

14 ELECTRIC ENERGY SUPPLIED.—If the quantity of elec15 tric energy supplied by the on-site generating facility

16 to the electric utility exceeds the quantity of electric

17 energy sold by the electric utility to the on-site gener18 ating facility during the billing period—

19 ‘‘(A) the electric utility may bill the owner

20 or operator of the on-site generating facility for

21 the appropriate charges for the billing period in

22 accordance with paragraph (2); and

23 ‘‘(B) the owner or operator of the on-site

24 generating facility shall be credited for the excess

25 kilowatt-hours generated during the billing pe-
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1 riod, with the kilowatt-hour credit appearing on

2 the bill for the following billing period.

3 ‘‘(5) SAFETY AND PERFORMANCE STANDARDS.—

4 An eligible on-site generating facility and net meter5 ing system used by an electric consumer shall meet all

6 applicable safety, performance, reliability, and inter7 connection standards established by the National

8 Electrical Code, the Institute of Electrical and Elec9 tronics Engineers, and Underwriters Laboratories.

10 ‘‘(6) ADDITIONAL CONTROL AND TESTING RE11 QUIREMENTS.—The Commission, after consultation

12 with State regulatory authorities and nonregulated

13 electric utilities and after notice and opportunity for

14 comment, may adopt, by rule, additional control and

15 testing requirements for on-site generating facilities

16 and net metering systems that the Commission deter17 mines are necessary to protect public safety and sys18 tem reliability.

19 ‘‘(7) DEFINITIONS.—For purposes of this sub20 section:

21 ‘‘(A) The term ‘eligible on-site generating

22 facility’ means—

23 ‘‘(i) a facility on the site of a residen24 tial electric consumer with a maximum gen25 erating capacity of 10 kilowatts or less that
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1 is fueled by solar energy, wind energy, or

2 fuel cells; or

3 ‘‘(ii) a facility on the site of a commer4 cial electric consumer with a maximum

5 generating capacity of 500 kilowatts or less

6 that is fueled solely by a renewable energy

7 resource, landfill gas, or a high efficiency

8 system.

9 ‘‘(B) The term ‘renewable energy resource’

10 means solar, wind, biomass, or geothermal en11 ergy.

12 ‘‘(C) The term ‘high efficiency system’

13 means fuel cells or combined heat and power.

14 ‘‘(D) The term ‘net metering service’ means

15 service to an electric consumer under which elec16 tric energy generated by that electric consumer

17 from an eligible on-site generating facility and

18 delivered to the local distribution facilities may

19 be used to offset electric energy provided by the

20 electric utility to the electric consumer during

21 the applicable billing period.’’.

22 Subtitle D—Consumer Protections

23 SEC. 251. INFORMATION DISCLOSURE.

24 (a) OFFERS AND SOLICITATIONS.—The Federal Trade

25 Commission shall issue rules requiring each electric utility
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1 that makes an offer to sell electric energy, or solicits electric

2 consumers to purchase electric energy to provide the electric

3 consumer a statement containing the following

4 information—

5 (1) the nature of the service being offered, includ6 ing information about interruptibility of service;

7 (2) the price of the electric energy, including a

8 description of any variable charges;

9 (3) a description of all other charges associated

10 with the service being offered, including access

11 charges, exit charges, back-up service charges, strand12 ed cost recovery charges, and customer service charges;

13 and

14 (4) information the Federal Trade Commission

15 determines is technologically and economically fea16 sible to provide, is of assistance to electric consumers

17 in making purchasing decisions, and concerns—

18 (A) the product or its price;

19 (B) the share of electric energy that is gen20 erated by each fuel type; and

21 (C) the environmental emissions produced

22 in generating the electric energy.

23 (b) PERIODIC BILLINGS.—The Federal Trade Commis24 sion shall issue rules requiring any electric utility that sells

25 electric energy to transmit to each of its electric consumers,
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1 in addition to the information transmitted pursuant to sec2 tion 115(f) of the Public Utility Regulatory Policies Act of

3 1978 (16 U.S.C. 2625(f)), a clear and concise statement

4 containing the information described in subsection (a)(4)

5 for each billing period (unless such information is not rea6 sonably ascertainable by the electric utility).

7 SEC. 252. CONSUMER PRIVACY.

8 (a) PROHIBITION.—The Federal Trade Commission

9 shall issue rules prohibiting any electric utility that obtains

10 consumer information in connection with the sale or deliv11 ery of electric energy to an electric consumer from using,

12 disclosing, or permitting access to such information unless

13 the electric consumer to whom such information relates pro14 vides prior written approval.

15 (b) PERMITTED USE.—The rules issued under this sec16 tion shall not prohibit any electric utility from using, dis17 closing, or permitting access to consumer information re18 ferred to in subsection (a) for any of the following

19 purposes—

20 (1) to facilitate an electric consumer’s change in

21 selection of an electric utility under procedures ap22 proved by the State or State regulatory authority;

23 (2) to initiate, render, bill, or collect for the sale

24 or delivery of electric energy to electric consumers or

25 for related services;
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1 (3) to protect the rights or property of the person

2 obtaining such information;

3 (4) to protect retail electric consumers from

4 fraud, abuse, and unlawful subscription in the sale or

5 delivery of electric energy to such consumers;

6 (5) for law enforcement purposes; or

7 (6) for purposes of compliance with any Federal,

8 State, or local law or regulation authorizing disclo9 sure of information to a Federal, State, or local agen10 cy.

11 (c) AGGREGATE CONSUMER INFORMATION.—The rules

12 issued under this subsection may permit a person to use,

13 disclose, and permit access to aggregate consumer informa14 tion and may require an electric utility to make such infor15 mation available to other electric utilities upon request and

16 payment of a reasonable fee.

17 (d) DEFINITIONS.—As used in this section:

18 (1) The term ‘‘aggregate consumer information’’

19 means collective data that relates to a group or cat20 egory of retail electric consumers, from which indi21 vidual consumer identities and characteristics have

22 been removed.

23 (2) The term ‘‘consumer information’’ means in24 formation that relates to the quantity, technical con-
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1 figuration, type, destination, or amount of use of elec2 tric energy delivered to any retail electric consumer.

3 SEC. 253. OFFICE OF CONSUMER ADVOCACY.

4 (a) DEFINITIONS.—In this section:

5 (1) COMMISSION.—The term ‘‘Commission’’

6 means the Federal Energy Regulatory Commission.

7 (2) ENERGY CUSTOMER.—The term ‘‘energy cus8 tomer’’ means a residential customer or a small com9 mercial customer that receives products or services

10 from a public utility or natural gas company under

11 the jurisdiction of the Commission.

12 (3) NATURAL GAS COMPANY.—The term ‘‘natural

13 gas company’’ has the meaning given the term in sec14 tion 2 of the Natural Gas Act (15 U.S.C. 717a), as

15 modified by section 601(a) of the Natural Gas Policy

16 Act of 1978 (15 U.S.C. 3431(a)).

17 (4) OFFICE.—The term ‘‘Office’’ means the Office

18 of Consumer Advocacy established by subsection

19 (b)(1).

20 (5) PUBLIC UTILITY.—The term ‘‘public utility’’

21 has the meaning given the term in section 201(e) of

22 the Federal Power Act (16 U.S.C. 824(e)).

23 (6) SMALL COMMERCIAL CUSTOMER.—The term

24 ‘‘small commercial customer’’ means a commercial
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1 customer that has a peak demand of not more than

2 1,000 kilowatts per hour.

3 (b) OFFICE.—

4 (1) ESTABLISHMENT.—There is established with5 in the Department of Justice the Office of Consumer

6 Advocacy.

7 (2) DIRECTOR.—The Office shall be headed by a

8 Director to be appointed by the President, by and

9 with the advice and consent of the Senate.

10 (3) DUTIES.—The Office may represent the in11 terests of energy customers on matters concerning

12 rates or service of public utilities and natural gas

13 companies under the jurisdiction of the

14 Commission—

15 (A) at hearings of the Commission;

16 (B) in judicial proceedings in the courts of

17 the United States;

18 (C) at hearings or proceedings of other Fed19 eral regulatory agencies and commissions.

20 SEC. 254. UNFAIR TRADE PRACTICES.

21 (a) SLAMMING.—The Federal Trade Commission shall

22 issue rules prohibiting the change of selection of an electric

23 utility except with the informed consent of the electric con24 sumer.
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1 (b) CRAMMING.—The Federal Trade Commission shall

2 issue rules prohibiting the sale of goods and services to an

3 electric consumer unless expressly authorized by law or the

4 electric consumer.

5 SEC. 255. APPLICABLE PROCEDURES.

6 The Federal Trade Commission shall proceed in ac7 cordance with section 553 of title 5, United States Code,

8 when prescribing a rule required by this subtitle.

9 SEC. 256. FEDERAL TRADE COMMISSION ENFORCEMENT.

10 Violation of a rule issued under this subtitle shall be

11 treated as a violation of a rule under section 18 of the Fed12 eral Trade Commission Act (15 U.S.C. 57a) respecting un13 fair or deceptive acts or practices. All functions and powers

14 of the Federal Trade Commission under such Act are avail15 able to the Federal Trade Commission to enforce compliance

16 with this subtitle notwithstanding any jurisdictional limits

17 in such Act.

18 SEC. 257. STATE AUTHORITY.

19 Nothing in this subtitle shall be construed to preclude

20 a State or State regulatory authority from prescribing and

21 enforcing laws, rules, or procedures regarding the practices

22 which are the subject of this section.

23 SEC. 258. APPLICATION OF SUBTITLE.

24 The provisions of this subtitle apply to each electric

25 utility if the total sales of electric energy by such utility
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1 for purposes other than resale exceed 500 million kilowatt2 hours per calendar year. The provisions of this subtitle do

3 not apply to the operations of an electric utility to the ex4 tent that such operations relate to sales of electric energy

5 for purposes of resale.

6 SEC. 259. DEFINITIONS.

7 As used in this subtitle:

8 (1) The term ‘‘aggregate consumer information’’

9 means collective data that relates to a group or cat10 egory of electric consumers, from which individual

11 consumer identities and identifying characteristics

12 have been removed.

13 (2) The term ‘‘consumer information’’ means in14 formation that relates to the quantity, technical con15 figuration, type, destination, or amount of use of elec16 tric energy delivered to an electric consumer.

17 (3) The terms ‘‘electric consumer’’, ‘‘electric util18 ity’’, and ‘‘State regulatory authority’’ have the

19 meanings given such terms in section 3 of the Public

20 Utility Regulatory Policies Act of 1978 (16 U.S.C.

21 2602).
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1 Subtitle E—Renewable Energy and

2 Rural Construction Grants

3 SEC. 261. RENEWABLE ENERGY PRODUCTION INCENTIVE.

4 (a) INCENTIVE PAYMENTS.—Section 1212(a) of the

5 Energy Policy Act of 1992 (42 U.S.C. 13317(a)) is amended

6 by striking ‘‘and which satisfies’’ and all that follows

7 through ‘‘Secretary shall establish.’’ and inserting the fol8 lowing: ‘‘. The Secretary shall establish other procedures

9 necessary for efficient administration of the program. The

10 Secretary shall not establish any criteria or procedures that

11 have the effect of assigning to proposals a higher or lower

12 priority for eligibility or allocation of appropriated funds

13 on the basis of the energy source proposed.’’.

14 (b) QUALIFIED RENEWABLE ENERGY FACILITY.—Sec15 tion 1212(b) of the Energy Policy Act of 1992 (42 U.S.C.

16 13317(b)) is amended—

17 (1) by striking ‘‘a State or any political’’ and

18 all that follows through ‘‘nonprofit electrical coopera19 tive’’ and inserting the following: ‘‘a nonprofit elec20 trical cooperative, a public utility described in section

21 115 of such Code, a State, Commonwealth, territory,

22 or possession of the United States or the District of

23 Columbia, or a political subdivision thereof, or an In24 dian tribal government or subdivision thereof,’’; and
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1 (2) by inserting ‘‘landfill gas, incremental hy2 dropower, ocean’’ after ‘‘wind, biomass,’’.

3 (c) ELIGIBILITY WINDOW.—Section 1212(c) of the En4 ergy Policy Act of 1992 (42 U.S.C. 13317(c)) is amended

5 by striking ‘‘during the 10-fiscal year period beginning

6 with the first full fiscal year occurring after the enactment

7 of this section’’ and inserting ‘‘before October 1, 2013’’.

8 (d) PAYMENT PERIOD.—Section 1212(d) of the Energy

9 Policy Act of 1992 (42 U.S.C. 13317(d)) is amended by in10 serting ‘‘or in which the Secretary finds that all necessary

11 Federal and State authorizations have been obtained to

12 begin construction of the facility’’ after ‘‘eligible for such

13 payments’’.

14 (e) AMOUNT OF PAYMENT.—Section 1212(e)(1) of the

15 Energy Policy Act of 1992 (42 U.S.C. 13317(e)(1)) is

16 amended by inserting ‘‘landfill gas, incremental hydro17 power, ocean’’ after ‘‘wind, biomass,’’.

18 (f) SUNSET.—Section 1212(f) of the Energy Policy Act

19 of 1992 (42 U.S.C. 13317(f)) is amended by striking ‘‘the

20 expiration of’’ and all that follows through ‘‘of this section’’

21 and inserting ‘‘September 30, 2023’’.

22 (g) INCREMENTAL HYDROPOWER; AUTHORIZATION OF

23 APPROPRIATIONS.—Section 1212 of the Energy Policy Act

24 of 1992 (42 U.S.C. 13317) is further amended by striking

25 subsection (g) and inserting the following:
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1 ‘‘(g) INCREMENTAL HYDROPOWER.—

2 ‘‘(1) PROGRAMS.—Subject to subsection (h)(2), if

3 an incremental hydropower program meets the re4 quirements of this section, as determined by the Sec5 retary, the incremental hydropower program shall be

6 eligible to receive incentive payments under this sec7 tion.

8 ‘‘(2) DEFINITION OF INCREMENTAL HYDRO9 POWER.—In this subsection, the term ‘incremental hy10 dropower’ means additional generating capacity

11 achieved from increased efficiency or additions of new

12 capacity at a hydroelectric facility in existence on the

13 date of enactment of this paragraph.

14 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—

15 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

16 there are authorized to be appropriated such sums as

17 may be necessary to carry out this section for fiscal

18 years 2003 through 2023.

19 ‘‘(2) LIMITATION ON FUNDS USED FOR INCRE20 MENTAL HYDROPOWER PROGRAMS.—Not more than

21 30 percent of the amounts made available under

22 paragraph (1) shall be used to carry out programs de23 scribed in subsection (g)(2).
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1 ‘‘(3) AVAILABILITY OF FUNDS.—Funds made

2 available under paragraph (1) shall remain available

3 until expended.’’.

4 SEC. 262. ASSESSMENT OF RENEWABLE ENERGY RE5 SOURCES.

6 (a) RESOURCE ASSESSMENT.—Not later than 3

7 months after the date of enactment of this title, and each

8 year thereafter, the Secretary of Energy shall review the

9 available assessments of renewable energy resources avail10 able within the United States, including solar, wind, bio11 mass, ocean, geothermal, and hydroelectric energy resources,

12 and undertake new assessments as necessary, taking into

13 account changes in market conditions, available tech14 nologies and other relevant factors.

15 (b) CONTENTS OF REPORTS.—Not later than 1 year

16 after the date of enactment of this title, and each year there17 after, the Secretary shall publish a report based on the as18 sessment under subsection (a). The report shall contain—

19 (1) a detailed inventory describing the available

20 amount and characteristics of the renewable energy

21 resources, and

22 (2) such other information as the Secretary of

23 Energy believes would be useful in developing such re24 newable energy resources, including descriptions of

25 surrounding terrain, population and load centers,
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1 nearby energy infrastructure, location of energy and

2 water resources, and available estimates of the costs

3 needed to develop each resource, together with an

4 identification of any barriers to providing adequate

5 transmission for remote sources of renewable energy

6 resources to current and emerging markets, rec7 ommendations for removing or addressing such bar8 riers, and ways to provide access to the grid that do

9 not unfairly disadvantage renewable or other energy

10 producers.

11 SEC. 263. FEDERAL PURCHASE REQUIREMENT.

12 (a) REQUIREMENT.—The President shall seek to ensure

13 that, to the extent economically feasible and technically

14 practicable, of the total amount of electric energy the Fed15 eral Government consumes during any fiscal year—

16 (1) not less than 3 percent in fiscal years 2003

17 through 2004,

18 (2) not less than 5 percent in fiscal years 2005

19 through 2009, and

20 (3) not less than 7.5 percent in fiscal year 2010

21 and each fiscal year thereafter,

22 shall be renewable energy. The President shall encourage the

23 use of innovative purchasing practices by Federal agencies.

24 (b) DEFINITION.—For purposes of this section, the

25 term ‘‘renewable energy’’ means electric energy generated
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1 from solar, wind, biomass, geothermal, fuel cells, municipal

2 solid waste, or additional hydroelectric generation capacity

3 achieved from increased efficiency or additions of new ca4 pacity.

5 (c) TRIBAL POWER GENERATION.—The President shall

6 seek to ensure that, to the extent economically feasible and

7 technically practicable, not less than one-tenth of the

8 amount specified in subsection (a) shall be renewable energy

9 that is generated by an Indian tribe or by a corporation,

10 partnership, or business association which is wholly or ma11 jority owned, directly or indirectly, by an Indian tribe. For

12 purposes of this subsection, the term ‘‘Indian tribe’’ means

13 any Indian tribe, band, nation, or other organized group

14 or community, including any Alaskan Native village or re15 gional or village corporation as defined in or established

16 pursuant to the Alaska Native Claims Settlement Act (43

17 U.S.C. 1601 et seq.), which is recognized as eligible for the

18 special programs and services provided by the United States

19 to Indians because of their status as Indians.

20 (d) BIENNIAL REPORT.—In 2004 and every 2 years

21 thereafter, the Secretary of Energy shall report to the Com22 mittee on Energy and Natural Resources of the Senate and

23 the appropriate committees of the House of Representatives

24 on the progress of the Federal Government in meeting the

25 goals established by this section.
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1 SEC. 264. RENEWABLE PORTFOLIO STANDARD.

2 Title VI of the Public Utility Regulatory Policies Act

3 of 1978 is amended by adding at the end the following:

4 ‘‘SEC. 606. FEDERAL RENEWABLE PORTFOLIO STANDARD.

5 ‘‘(a) MINIMUM RENEWABLE GENERATION REQUIRE6 MENT.—For each calendar year beginning in calendar year

7 2005, each retail electric supplier shall submit to the Sec8 retary, not later than April 1 of the following calendar year,

9 renewable energy credits in an amount equal to the required

10 annual percentage specified in subsection (b).

11 ‘‘(b) REQUIRED ANNUAL PERCENTAGE.—(1) For cal12 endar years 2005 through 2020, the required annual per13 centage of the retail electric supplier’s base amount that

14 shall be generated from renewable energy resources shall be

15 the percentage specified in the following table:

Required annual

‘‘Calendar Years percentage

2005 through 2006 ..................................................................... 1.0

2007 through 2008 ..................................................................... 2.2

2009 through 2010 ..................................................................... 3.4

2011 through 2012 ..................................................................... 4.6

2013 through 2014 ..................................................................... 5.8

2015 through 2016 ..................................................................... 7.0

2017 through 2018 ..................................................................... 8.5

2019 through 2020 ..................................................................... 10.0.

16 ‘‘(2) Not later than January 1, 2015, the Secretary

17 may, by rule, establish required annual percentages in

18 amounts not less than 10.0 for calendar years 2020 through

19 2030.
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1 ‘‘(c) SUBMISSION OF CREDITS.—(1) A retail electric

2 supplier may satisfy the requirements of subsection (a)

3 through the submission of renewable energy credits—

4 ‘‘(A) issued to the retail electric supplier under

5 subsection (d);

6 ‘‘(B) obtained by purchase or exchange under

7 subsection (e); or

8 ‘‘(C) borrowed under subsection (f).

9 ‘‘(2) A credit may be counted toward compliance with

10 subsection (a) only once.

11 ‘‘(d) ISSUANCE OF CREDITS.—(1) The Secretary shall

12 establish, not later than 1 year after the date of enactment

13 of this section, a program to issue, monitor the sale or ex14 change of, and track renewable energy credits.

15 ‘‘(2) Under the program, an entity that generates elec16 tric energy through the use of a renewable energy resource

17 may apply to the Secretary for the issuance of renewable

18 energy credits. The application shall indicate—

19 ‘‘(A) the type of renewable energy resource used

20 to produce the electricity,

21 ‘‘(B) the location where the electric energy was

22 produced, and

23 ‘‘(C) any other information the Secretary deter24 mines appropriate.
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1 ‘‘(3)(A) Except as provided in paragraphs (B), (C),

2 and (D), the Secretary shall issue to an entity one renew3 able energy credit for each kilowatt-hour of electric energy

4 the entity generates from the date of enactment of this sec5 tion and in each subsequent calendar year through the use

6 of a renewable energy resource at an eligible facility.

7 ‘‘(B) For incremental hydropower the credits shall be

8 calculated based on the expected increase in average annual

9 generation resulting from the efficiency improvements or

10 capacity additions. The number of credits shall be cal11 culated using the same water flow information used to de12 termine a historic average annual generation baseline for

13 the hydroelectric facility and certified by the Secretary or

14 the Federal Energy Regulatory Commission. The calcula15 tion of the credits for incremental hydropower shall not be

16 based on any operational changes at the hydroelectric facil17 ity not directly associated with the efficiency improvements

18 or capacity additions.

19 ‘‘(C) The Secretary shall issue two renewable energy

20 credits for each kilowatt-hour of electric energy generated

21 and supplied to the grid in that calendar year through the

22 use of a renewable energy resource at an eligible facility

23 located on Indian land. For purposes of this paragraph,

24 renewable energy generated by biomass cofired with other
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1 fuels is eligible for two credits only if the biomass was

2 grown on the land eligible under this paragraph.

3 ‘‘(D) For renewable energy resources produced from a

4 generation offset, the Secretary shall issue two renewable

5 energy credits for each kilowatt-hour generated.

6 ‘‘(E) To be eligible for a renewable energy credit, the

7 unit of electric energy generated through the use of a renew8 able energy resource may be sold or may be used by the

9 generator. If both a renewable energy resource and a non10 renewable energy resource are used to generate the electric

11 energy, the Secretary shall issue credits based on the propor12 tion of the renewable energy resource used. The Secretary

13 shall identify renewable energy credits by type and date of

14 generation.

15 ‘‘(5) When a generator sells electric energy generated

16 through the use of a renewable energy resource to a retail

17 electric supplier under a contract subject to section 210 of

18 this Act, the retail electric supplier is treated as the gener19 ator of the electric energy for the purposes of this section

20 for the duration of the contract.

21 ‘‘(6) The Secretary may issue credits for existing facil22 ity offsets to be applied against a retail electric supplier’s

23 own required annual percentage. The credits are not

24 tradeable and may only be used in the calendar year gen25 eration actually occurs.
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1 ‘‘(e) CREDIT TRADING.—A renewable energy credit

2 may be sold or exchanged by the entity to whom issued or

3 by any other entity who acquires the credit. A renewable

4 energy credit for any year that is not used to satisfy the

5 minimum renewable generation requirement of subsection

6 (a) for that year may be carried forward for use within

7 the next 4 years.

8 ‘‘(f) CREDIT BORROWING.—At any time before the end

9 of calendar year 2005, a retail electric supplier that has

10 reason to believe it will not have sufficient renewable energy

11 credits to comply with subsection (a) may—

12 ‘‘(1) submit a plan to the Secretary dem13 onstrating that the retail electric supplier will earn

14 sufficient credits within the next 3 calendar years

15 which, when taken into account, will enable the retail

16 electric supplier’s to meet the requirements of sub17 section (a) for calendar year 2005 and the subsequent

18 calendar years involved; and

19 ‘‘(2) upon the approval of the plan by the Sec20 retary, apply credits that the plan demonstrates will

21 be earned within the next 3 calendar years to meet

22 the requirements of subsection (a) for each calendar

23 year involved.

24 ‘‘(g) CREDIT COST CAP.—The Secretary shall offer re25 newable energy credits for sale at the lesser of 3 cents per
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1 kilowatt-hour or 200 percent of the average market value

2 of credits for the applicable compliance period. On January

3 1 of each year following calendar year 2005, the Secretary

4 shall adjust for inflation the price charged per credit for

5 such calendar year, based on the Gross Domestic Product

6 Implicit Price Deflator.

7 ‘‘(h) ENFORCEMENT.—The Secretary may bring an ac8 tion in the appropriate United States district court to im9 pose a civil penalty on a retail electric supplier that does

10 not comply with subsection (a), unless the retail electric

11 supplier was unable to comply with subsection (a) for rea12 sons outside of the supplier’s reasonable control (including

13 weather-related damage, mechanical failure, lack of trans14 mission capacity or availability, strikes, lockouts, actions

15 of a governmental authority). A retail electric supplier who

16 does not submit the required number of renewable energy

17 credits under subsection (a) shall be subject to a civil pen18 alty of not more than the greater of 3 cents or 200 percent

19 of the average market value of credits for the compliance

20 period for each renewable energy credit not submitted.

21 ‘‘(i) INFORMATION COLLECTION.—The Secretary may

22 collect the information necessary to verify and audit—

23 ‘‘(1) the annual electric energy generation and

24 renewable energy generation of any entity applying

25 for renewable energy credits under this section,
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1 ‘‘(2) the validity of renewable energy credits sub2 mitted by a retail electric supplier to the Secretary,

3 and

4 ‘‘(3) the quantity of electricity sales of all retail

5 electric suppliers.

6 ‘‘(j) ENVIRONMENTAL SAVINGS CLAUSE.—Incremental

7 hydropower shall be subject to all applicable environmental

8 laws and licensing and regulatory requirements.

9 ‘‘(k) STATE SAVINGS CLAUSE.—This section does not

10 preclude a State from requiring additional renewable en11 ergy generation in that State, or from specifying technology

12 mix.

13 ‘‘(l) DEFINITIONS.—For purposes of this section:

14 ‘‘(1) BIOMASS.—The term ‘biomass’ means any

15 organic material that is available on a renewable or

16 recurring basis, including dedicated energy crops,

17 trees grown for energy production, wood waste and

18 wood residues, plants (including aquatic plants,

19 grasses, and agricultural crops), residues, fibers, ani20 mal wastes and other organic waste materials, and

21 fats and oils, except that with respect to material re22 moved from National Forest System lands the term

23 includes only organic material from—

24 ‘‘(A) thinnings from trees that are less than

25 12 inches in diameter;
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1 ‘‘(B) slash;

2 ‘‘(C) brush; and

3 ‘‘(D) mill residues.

4 ‘‘(2) ELIGIBLE FACILITY.—The term ‘eligible fa5 cility’ means—

6 ‘‘(A) a facility for the generation of electric

7 energy from a renewable energy resource that is

8 placed in service on or after the date of enact9 ment of this section; or

10 ‘‘(B) a repowering or cofiring increment

11 that is placed in service on or after the date of

12 enactment of this section at a facility for the

13 generation of electric energy from a renewable

14 energy resource that was placed in service before

15 that date.

16 ‘‘(3) ELIGIBLE RENEWABLE ENERGY RE17 SOURCE.—The term ‘renewable energy resource’

18 means solar, wind, ocean, or geothermal energy, bio19 mass (excluding solid waste and paper that is com20 monly recycled), landfill gas, a generation offset, or

21 incremental hydropower.

22 ‘‘(4) GENERATION OFFSET.—The term ‘genera23 tion offset’ means reduced electricity usage metered at

24 a site where a customer consumes energy from a re25 newable energy technology.
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1 ‘‘(5) EXISTING FACILITY OFFSET.—The term ‘ex2 isting facility offset’ means renewable energy gen3 erated from an existing facility, not classified as an

4 eligible facility, that is owned or under contract to a

5 retail electric supplier on the date of enactment of

6 this section.

7 ‘‘(6) INCREMENTAL HYDROPOWER.—The term

8 ‘incremental hydropower’ means additional genera9 tion that is achieved from increased efficiency or ad10 ditions of capacity after the date of enactment of this

11 section at a hydroelectric dam that was placed in

12 service before that date.

13 ‘‘(7) INDIAN LAND.—The term ‘Indian land’

14 means—

15 ‘‘(A) any land within the limits of any In16 dian reservation, pueblo, or rancheria,

17 ‘‘(B) any land not within the limits of any

18 Indian reservation, pueblo, or rancheria title to

19 which was on the date of enactment of this para20 graph either held by the United States for the

21 benefit of any Indian tribe or individual or held

22 by any Indian tribe or individual subject to re23 striction by the United States against alienation,

24 ‘‘(C) any dependent Indian community,

25 and
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1 ‘‘(D) any land conveyed to any Alaska Na2 tive corporation under the Alaska Native Claims

3 Settlement Act.

4 ‘‘(8) INDIAN TRIBE.—The term ‘Indian tribe’

5 means any Indian tribe, band, nation, or other orga6 nized group or community, including any Alaskan

7 Native village or regional or village corporation as

8 defined in or established pursuant to the Alaska Na9 tive Claims Settlement Act (43 U.S.C. 1601 et seq.),

10 which is recognized as eligible for the special pro11 grams and services provided by the United States to

12 Indians because of their status as Indians.

13 ‘‘(9) RENEWABLE ENERGY.—The term ‘renewable

14 energy’ means electric energy generated by a renew15 able energy resource.

16 ‘‘(10) RENEWABLE ENERGY RESOURCE.—The

17 term ‘renewable energy resource’ means solar, wind,

18 ocean, or geothermal energy, biomass (including mu19 nicipal solid waste), landfill gas, a generation offset,

20 or incremental hydropower.

21 ‘‘(11) REPOWERING OR COFIRING INCREMENT.—

22 The term ‘repowering or cofiring increment’ means

23 the additional generation from a modification that is

24 placed in service on or after the date of enactment of

25 this section to expand electricity production at a fa-
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1 cility used to generate electric energy from a renew2 able energy resource or to cofire biomass that was

3 placed in service before the date of enactment of this

4 section, or the additional generation above the average

5 generation in the 3 years preceding the date of enact6 ment of this section, to expand electricity production

7 at a facility used to generate electric energy from a

8 renewable energy resource or to cofire biomass that

9 was placed in service before the date of enactment of

10 this section.

11 ‘‘(12) RETAIL ELECTRIC SUPPLIER.—The term

12 ‘retail electric supplier’ means a person that sells elec13 tric energy to electric consumers and sold not less

14 than 1,000,000 megawatt-hours of electric energy to

15 electric consumers for purposes other than resale dur16 ing the preceding calendar year; except that such

17 term does not include the United States, a State or

18 any political subdivision of a State, or any agency,

19 authority, or instrumentality of any one or more of

20 the foregoing, or a rural electric cooperative.

21 ‘‘(13) RETAIL ELECTRIC SUPPLIER’S BASE

22 AMOUNT.—The term ‘retail electric supplier’s base

23 amount’ means the total amount of electric energy

24 sold by the retail electric supplier to electric customers

25 during the most recent calendar year for which infor-
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1 mation is available, excluding electric energy gen2 erated by—

3 ‘‘(A) an eligible renewable energy resource;

4 ‘‘(B) municipal solid waste; or

5 ‘‘(C) a hydroelectric facility.

6 ‘‘(m) SUNSET.—This section expires December 31,

7 2030.’’.

8 SEC. 265. RENEWABLE ENERGY ON FEDERAL LAND.

9 (a) COST-SHARE DEMONSTRATION PROGRAM.—With10 in 12 months after the date of enactment of this section,

11 the Secretaries of the Interior, Agriculture, and Energy

12 shall develop guidelines for a cost-share demonstration pro13 gram for the development of wind and solar energy facilities

14 on Federal land.

15 (b) DEFINITION OF FEDERAL LAND.—As used in this

16 section, the term ‘‘Federal land’’ means land owned by the

17 United States that is subject to the operation of the mineral

18 leasing laws; and is either—

19 (1) public land as defined in section 103(e) of

20 the Federal Land Policy and Management Act of

21 1976 (42 U.S.C. 1702(e)); or

22 (2) a unit of the National Forest System as that

23 term is used in section 11(a) of the Forest and Range24 land Renewable Resources Planning Act of 1974 (16

25 U.S.C. 1609(a)).
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1 (c) RIGHTS-OF-WAY.—The demonstration program

2 shall provide for the issuance of rights-of-way pursuant to

3 the provisions of title V of the Federal Land Policy and

4 Management Act of 1976 (43 U.S.C. 1761 et seq.) by the

5 Secretary of the Interior with respect to Federal land under

6 the jurisdiction of the Department of the Interior, and by

7 the Secretary of Agriculture with respect to Federal lands

8 under the jurisdiction of the Department of Agriculture.

9 (d) AVAILABLE SITES.—For purposes of this dem10 onstration program, the issuance of rights-of-way shall be

11 limited to areas—

12 (1) of high energy potential for wind or solar de13 velopment;

14 (2) that have been identified by the wind or solar

15 energy industry, through a process of nomination, ap16 plication, or otherwise, as being of particular interest

17 to one or both industries;

18 (3) that are not located within roadless areas;

19 (4) where operation of wind or solar facilities

20 would be compatible with the scenic, recreational, en21 vironmental, cultural, or historic values of the Fed22 eral land, and would not require the construction of

23 new roads for the siting of lines or other transmission

24 facilities; and
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1 (5) where issuance of the right-of-way is con2 sistent with the land and resource management plans

3 of the relevant land management agencies.

4 (e) COST-SHARE PAYMENTS BY DOE.—The Secretary

5 of Energy, in cooperation with the Secretary of the Interior

6 with respect to Federal land under the jurisdiction of the

7 Department of the Interior, and the Secretary of Agri8 culture with respect to Federal land under the jurisdiction

9 of the Department of Agriculture, shall determine if the por10 tion of a project on Federal land is eligible for financial

11 assistance pursuant to this section. Only those projects that

12 are consistent with the requirements of this section and fur13 ther the purposes of this section shall be eligible. In the event

14 a project is selected for financial assistance, the Secretary

15 of Energy shall provide no more than 15 percent of the costs

16 of the project on the Federal land, and the remainder of

17 the costs shall be paid by non-Federal sources.

18 (f) REVISION OF LAND USE PLANS.—The Secretary of

19 the Interior shall consider development of wind and solar

20 energy, as appropriate, in revisions of land use plans under

21 section 202 of the Federal Land Policy and Management

22 Act of 1976 (42 U.S.C. 1712); and the Secretary of Agri23 culture shall consider development of wind and solar en24 ergy, as appropriate, in revisions of land and resource

25 management plans under section 5 of the Forest and Range-
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1 land Renewable Resources Planning Act of 1974 (16 U.S.C.

2 1604). Nothing in this subsection shall preclude the issuance

3 of a right-of-way for the development of a wind or solar

4 energy project prior to the revision of a land use plan by

5 the appropriate land management agency.

6 (g) REPORT TO CONGRESS.—Within 24 months after

7 the date of enactment of this section, the Secretary of the

8 Interior shall develop and report to Congress recommenda9 tions on any statutory or regulatory changes the Secretary

10 believes would assist in the development of renewable energy

11 on Federal land. The report shall include—

12 (1) a five-year plan developed by the Secretary

13 of the Interior, in cooperation with the Secretary of

14 Agriculture, for encouraging the development of wind

15 and solar energy on Federal land in an environ16 mentally sound manner; and

17 (2) an analysis of—

18 (A) whether the use of rights-of-ways is the

19 best means of authorizing use of Federal land for

20 the development of wind and solar energy, or

21 whether such resources could be better developed

22 through a leasing system, or other method;

23 (B) the desirability of grants, loans, tax

24 credits or other provisions to promote wind and

25 solar energy development on Federal land; and
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1 (C) any problems, including environmental

2 concerns, which the Secretary of the Interior or

3 the Secretary of Agriculture have encountered in

4 managing wind or solar energy projects on Fed5 eral land, or believe are likely to arise in rela6 tion to the development of wind or solar energy

7 on Federal land;

8 (3) a list, developed in consultation with the Sec9 retaries of Energy and Defense, of lands under the ju10 risdiction of the Departments of Energy and Defense

11 that would be suitable for development for wind or

12 solar energy, and recommended statutory and regu13 latory mechanisms for such development.

14 (h) NATIONAL ACADEMY OF SCIENCES STUDY.— With15 in 90 days after the enactment of this Act, the Secretary

16 of the Interior shall contract with the National Academy

17 of Sciences to study the potential for the development of

18 wind, solar, and ocean energy on the Outer Continental

19 Shelf; assess existing Federal authorities for the develop20 ment of such resources; and recommend statutory and regu21 latory mechanisms for such development. The results of the

22 study shall be transmitted to Congress within 24 months

23 after the enactment of this Act.
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1 Subtitle F—General Provisions

2 SEC. 271. CHANGE 3 CENTS TO 1.5 CENTS.

3 Not withstanding any other provision in this Act, ‘‘3

4 cents’’ shall be considered by law to be ‘‘1.5 cents’’ in any

5 place ‘‘3 cents’’ appears in title II of this Act.

6 SEC. 272. BONNEVILLE POWER ADMINISTRATION BONDS.

7 Section 13 of the Federal Columbia River Trans8 mission System Act (16 U.S.C. 838k) is amended—

9 (1) by striking the section heading and all that

10 follows through ‘‘(a) The Administrator’’ and insert11 ing the following:

12 ‘‘SEC. 13. BONNEVILLE POWER ADMINISTRATION BONDS.

13 ‘‘(a) BONDS.—

14 ‘‘(1) IN GENERAL.—The Administrator’’; and

15 (2) by adding at the end the following:

16 ‘‘(2) ADDITIONAL BORROWING AUTHORITY.—In

17 addition to the borrowing authority of the Adminis18 trator authorized under paragraph (1) or any other

19 provision of law, an additional $1,300,000,000 is

20 made available, to remain outstanding at any one

21 time—

22 ‘‘(A) to provide funds to assist in financing

23 the construction, acquisition, and replacement of

24 the transmission system of the Bonneville Power

25 Administration; and
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1 ‘‘(B) to implement the authorities of the Ad2 ministrator under the Pacific Northwest Electric

3 Power Planning and Conservation Act (16

4 U.S.C. 839 et seq.).’’.

5 TITLE III—HYDROELECTRIC

6 RELICENSING

7 SEC. 301. ALTERNATIVE CONDITIONS AND FISHWAYS.

8 (a) ALTERNATIVE MANDATORY CONDITIONS.—Section

9 4 of the Federal Power Act (16 U.S.C. 797) is amended

10 by adding at the end the following:

11 ‘‘(h)(1) Whenever any person applies for a license for

12 any project works within any reservation of the United

13 States under subsection (e), and the Secretary of the depart14 ment under whose supervision such reservation falls (in this

15 subsection referred to as the ‘Secretary’) shall deem a condi16 tion to such license to be necessary under the first proviso

17 of such section, the license applicant may propose an alter18 native condition.

19 ‘‘(2) Notwithstanding the first proviso of subsection

20 (e), the Secretary of the department under whose super21 vision the reservation falls shall accept the proposed alter22 native condition referred to in paragraph (1), and the Com23 mission shall include in the license such alternative condi24 tion, if the Secretary of the appropriate department deter-
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1 mines, based on substantial evidence provided by the license

2 applicant, that the alternative condition—

3 ‘‘(A) provides for the adequate protection and

4 utilization of the reservation; and

5 ‘‘(B) will either—

6 ‘‘(i) cost less to implement, or

7 ‘‘(ii) result in improved operation of the

8 project works for electricity production as com9 pared to the condition initially deemed necessary

10 by the Secretary.

11 ‘‘(3) The Secretary shall submit into the public record

12 of the Commission proceeding with any condition under

13 subsection (e) or alternative condition it accepts under this

14 subsection a written statement explaining the basis for such

15 condition, and reason for not accepting any alternative con16 dition under this subsection, including the effects of the con17 dition accepted and alternatives not accepted on energy

18 supply, distribution, cost, and use, air quality, flood con19 trol, navigation, and drinking, irrigation, and recreation

20 water supply, based on such information as may be avail21 able to the Secretary, including information voluntarily

22 provided in a timely manner by the applicant and others.

23 ‘‘(4) Nothing in this subsection shall prohibit other in24 terested parties from proposing alternative conditions.’’.
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1 (b) ALTERNATIVE FISHWAYS.—Section 18 of the Fed2 eral Power Act (16 U.S.C. 811) is amended by—

3 (1) inserting ‘‘(a)’’ before the first sentence; and

4 (2) adding at the end the following:

5 ‘‘(b)(1) Whenever the Secretary of the Interior or the

6 Secretary of Commerce prescribes a fishway under this sec7 tion, the license applicant or the licensee may propose an

8 alternative to such prescription to construct, maintain, or

9 operate a fishway.

10 ‘‘(2) Notwithstanding subsection (a), the Secretary of

11 the Interior or the Secretary of Commerce, as appropriate,

12 shall accept and prescribe, and the Commission shall re13 quire, the proposed alternative referred to in paragraph (1),

14 if the Secretary of the appropriate department determines,

15 based on substantial evidence provided by the licensee, that

16 the alternative—

17 ‘‘(A) will be no less protective of the fish re18 sources than the fishway initially prescribed by the

19 Secretary; and

20 ‘‘(B) will either—

21 ‘‘(i) cost less to implement, or

22 ‘‘(ii) result in improved operation of the

23 project works for electricity production as com24 pared to the fishway initially prescribed by the

25 Secretary.
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1 ‘‘(3) The Secretary shall submit into the public record

2 of the Commission proceeding with any prescription under

3 subsection (a) or alternative prescription it accepts under

4 this subsection a written statement explaining the basis for

5 such prescription, and reason for not accepting any alter6 native prescription under this subsection, including the ef7 fects of the prescription accepted or alternative not accepted

8 on energy supply, distribution, cost, and use, air quality,

9 flood control, navigation, and drinking, irrigation, and

10 recreation water supply, based on such information as may

11 be available to the Secretary, including information volun12 tarily provided in a timely manner by the applicant and

13 others.

14 ‘‘(4) Nothing in this subsection shall prohibit other in15 terested parties from proposing alternative prescriptions.’’.

16 (c) TIME OF FILING APPLICATION.—Section 15(c)(1)

17 of the Federal Power Act (16 U.S.C. 808(c)(1)) is amended

18 by striking the first sentence and inserting the following:

19 ‘‘(1) Each application for a new license pursu20 ant to this section shall be filed with the

21 Commission—

22 ‘‘(A) at least 24 months before the expira23 tion of the term of the existing license in the case

24 of licenses that expire prior to 2008; and
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1 ‘‘(B) at least 36 months before the expira2 tion of the term of the existing license in the case

3 of licenses that expire in 2008 or any year there4 after.’’.

5 TITLE IV—INDIAN ENERGY

6 SEC. 401. COMPREHENSIVE INDIAN ENERGY PROGRAM.

7 Title XXVI of the Energy Policy Act of 1992 (25

8 U.S.C. 3501–3506) is amended by adding after section 2606

9 the following:

10 ‘‘SEC. 2607. COMPREHENSIVE INDIAN ENERGY PROGRAM.

11 ‘‘(a) DEFINITIONS.—For purposes of this section—

12 ‘‘(1) the term ‘Director’ means the Director of the

13 Office of Indian Energy Policy and Programs estab14 lished by section 217 of the Department of Energy

15 Organization Act, and

16 ‘‘(2) the term ‘Indian land’ means—

17 ‘‘(A) any land within the limits of an In18 dian reservation, pueblo, or rancheria;

19 ‘‘(B) any land not within the limits of an

20 Indian reservation, pueblo, or rancheria whose

21 title is held—

22 ‘‘(i) in trust by the United States for

23 the benefit of an Indian tribe,
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1 ‘‘(ii) by an Indian tribe subject to re2 striction by the United States against alien3 ation, or

4 ‘‘(iii) by a dependent Indian commu5 nity; and

6 ‘‘(C) land conveyed to an Alaska Native

7 Corporation under the Alaska Native Claims

8 Settlement Act.

9 ‘‘(b) INDIAN ENERGY EDUCATION PLANNING AND MAN10 AGEMENT ASSISTANCE.—(1) The Director shall establish

11 programs within the Office of Indian Energy Policy and

12 Programs to assist Indian tribes in meeting their energy

13 education, research and development, planning, and man14 agement needs.

15 ‘‘(2) The Director may make grants, on a competitive

16 basis, to an Indian tribe for—

17 ‘‘(A) renewable energy, energy efficiency, and

18 conservation programs;

19 ‘‘(B) studies and other activities supporting trib20 al acquisition of energy supplies, services, and facili21 ties;

22 ‘‘(C) planning, constructing, developing, oper23 ating, maintaining, and improving tribal electrical

24 generation, transmission, and distribution facilities;

25 and
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1 ‘‘(D) developing, constructing, and inter2 connecting electric power transmission facilities with

3 transmission facilities owned and operated by a Fed4 eral power marketing agency or an electric utility

5 that provides open access transmission service.

6 ‘‘(3) The Director may develop, in consultation with

7 Indian tribes, a formula for making grants under this sec8 tion. The formula may take into account the following—

9 ‘‘(A) the total number of acres of Indian land

10 owned by an Indian tribe;

11 ‘‘(B) the total number of households on the In12 dian tribe’s Indian land;

13 ‘‘(C) the total number of households on the In14 dian tribe’s Indian land that have no electricity serv15 ice or are under-served; and

16 ‘‘(D) financial or other assets available to the In17 dian tribe from any source.

18 ‘‘(4) In making a grant under paragraph (2), the Di19 rector shall give priority to an application received from

20 an Indian tribe that is not served or is served inadequately

21 by an electric utility, as that term is defined in section 3(4)

22 of the Public Utility Regulatory Policies Act of 1978 (16

23 U.S.C. 2602(4)), or by a person, State agency, or any other

24 non-Federal entity that owns or operates a local distribu-
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1 tion facility used for the sale of electric energy to an electric

2 consumer.

3 ‘‘(5) There are authorized to be appropriated to the

4 Department of Energy such sums as may be necessary to

5 carry out the purposes of this section.

6 ‘‘(6) The Secretary is authorized to promulgate such

7 regulations as the Secretary determines to be necessary to

8 carry out the provisions of this subsection.

9 ‘‘(c) LOAN GUARANTEE PROGRAM.—

10 ‘‘(1) AUTHORITY.—The Secretary may guarantee

11 not more than 90 percent of the unpaid principal and

12 interest due on any loan made to any Indian tribe

13 for energy development, including the planning, devel14 opment, construction, and maintenance of electrical

15 generation plants, and for transmission and delivery

16 mechanisms for electricity produced on Indian land.

17 A loan guaranteed under this subsection shall be

18 made by—

19 ‘‘(A) a financial institution subject to the

20 examination of the Secretary; or

21 ‘‘(B) an Indian tribe, from funds of the In22 dian tribe, to another Indian tribe.

23 ‘‘(2) AVAILABILITY OF APPROPRIATIONS.—

24 Amounts appropriated to cover the cost of loan guar25 antees shall be available without fiscal year limita-
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1 tion to the Secretary to fulfill obligations arising

2 under this subsection.

3 ‘‘(3) AUTHORIZATION OF APPROPRIATIONS.—(A)

4 There are authorized to be appropriated to the Sec5 retary such sums as may be necessary to cover the

6 cost of loan guarantees, as defined by section 502(5)

7 of the Federal Credit Reform Act of 1990 (2 U.S.C.

8 661a(5)).

9 ‘‘(B) There are authorized to be appropriated to

10 the Secretary such sums as may be necessary to cover

11 the administrative expenses related to carrying out

12 the loan guarantee program established by this sub13 section.

14 ‘‘(4) LIMITATION ON AMOUNT.—The aggregate

15 outstanding amount guaranteed by the Secretary of

16 Energy at any one time under this subsection shall

17 not exceed $2,000,000,000.

18 ‘‘(5) REGULATIONS.—The Secretary is author19 ized to promulgate such regulations as the Secretary

20 determines to be necessary to carry out the provisions

21 of this subsection.

22 ‘‘(d) INDIAN ENERGY PREFERENCE.—(1) An agency

23 or department of the United States Government may give,

24 in the purchase of electricity, oil, gas, coal, or other energy

25 product or by-product, preference in such purchase to an
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1 energy and resource production enterprise, partnership,

2 corporation, or other type of business organization majority

3 or wholly owned and controlled by a tribal government.

4 ‘‘(2) In implementing this subsection, an agency or de5 partment shall pay no more than the prevailing market

6 price for the energy product or by-product and shall obtain

7 no less than existing market terms and conditions.

8 ‘‘(e) EFFECT ON OTHER LAWS.—This section does

9 not—

10 ‘‘(1) limit the discretion vested in an Adminis11 trator of a Federal power marketing agency to market

12 and allocate Federal power, or

13 ‘‘(2) alter Federal laws under which a Federal

14 power marketing agency markets, allocates, or pur15 chases power.’’.

16 SEC. 402. OFFICE OF INDIAN ENERGY POLICY AND PRO17 GRAMS.

18 Title II of the Department of Energy Organization Act

19 is amended by adding at the end the following:

20 ‘‘OFFICE OF INDIAN ENERGY POLICY AND PROGRAMS

21 ‘‘SEC. 217. (a) There is established within the Depart22 ment an Office of Indian Energy Policy and Programs.

23 This Office shall be headed by a Director, who shall be ap24 pointed by the Secretary and compensated at the rate equal

25 to that of level IV of the Executive Schedule under section

26 5315 of title 5, United States Code.
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1 ‘‘(b) The Director shall provide, direct, foster, coordi2 nate, and implement energy planning, education, manage3 ment, conservation, and delivery programs of the Depart4 ment that—

5 ‘‘(1) promote tribal energy efficiency and utiliza6 tion;

7 ‘‘(2) modernize and develop, for the benefit of In8 dian tribes, tribal energy and economic infrastructure

9 related to natural resource development and elec10 trification;

11 ‘‘(3) preserve and promote tribal sovereignty and

12 self determination related to energy matters and en13 ergy deregulation;

14 ‘‘(4) lower or stabilize energy costs; and

15 ‘‘(5) electrify tribal members’ homes and tribal

16 lands.

17 ‘‘(c) The Director shall carry out the duties assigned

18 the Secretary or the Director under title XXVI of the En19 ergy Policy Act of 1992 (25 U.S.C. 3501 et seq.).’’.

20 SEC. 403. CONFORMING AMENDMENTS.

21 (a) AUTHORIZATION OF APPROPRIATIONS.—Section

22 2603(c) of the Energy Policy Act of 1992 (25 U.S.C.

23 3503(c)) is amended to read as follows:
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1 ‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There are

2 authorized to be appropriated such sums as may be nec3 essary to carry out the purposes of this section.’’.

4 (b) TABLE OF CONTENTS.—The table of contents of the

5 Department of Energy Act is amended by inserting after

6 the item relating to section 216 the following new item:

‘‘Sec. 217. Office of Indian Energy Policy and Programs.’’.

7 (c) EXECUTIVE SCHEDULE.—Section 5315 of title 5,

8 United States Code, is amended by inserting ‘‘Director, Of9 fice of Indian Energy Policy and Programs, Department

10 of Energy.’’ after ‘‘Inspector General, Department of En11 ergy.’’.

12 SEC. 404. SITING ENERGY FACILITIES ON TRIBAL LANDS.

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

14 (1) INDIAN TRIBE.—The term ‘‘Indian tribe’’

15 means any Indian tribe, band, nation, or other orga16 nized group or community, which is recognized as eli17 gible for the special programs and services provided

18 by the United States to Indians because of their sta19 tus as Indians, except that such term does not include

20 any Regional Corporation as defined in section 3(g)

21 of the Alaska Native Claims Settlement Act (43

22 U.S.C. 1602(g)).

23 (2) INTERESTED PARTY.—The term ‘‘interested

24 party’’ means a person whose interests could be ad-
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1 versely affected by the decision of an Indian tribe to

2 grant a lease or right-of-way pursuant to this section.

3 (3) PETITION.—The term ‘‘petition’’ means a

4 written request submitted to the Secretary for the re5 view of an action (or inaction) of the Indian tribe

6 that is claimed to be in violation of the approved trib7 al regulations.

8 (4) RESERVATION.—The term ‘‘reservation’’

9 means—

10 (A) with respect to a reservation in a State

11 other than Oklahoma, all land that has been set

12 aside or that has been acknowledged as having

13 been set aside by the United States for the use

14 of an Indian tribe, the exterior boundaries of

15 which are more particularly defined in a final

16 tribal treaty, agreement, executive order, Federal

17 statute, secretarial order, or judicial determina18 tion;

19 (B) with respect to a reservation in the

20 State of Oklahoma, all land that is—

21 (i) within the jurisdictional area of an

22 Indian tribe, and

23 (ii) within the boundaries of the last

24 reservation of such tribe that was estab-
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1 lished by treaty, executive order, or secre2 tarial order.

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

4 the Secretary of the Interior.

5 (6) TRIBAL LANDS.—The term ‘tribal lands’

6 means any tribal trust lands, or other lands owned by

7 an Indian tribe that are within such tribe’s reserva8 tion.

9 (b) LEASES INVOLVING GENERATION, TRANSMISSION,

10 DISTRIBUTION OR ENERGY PROCESSING FACILITIES.—An

11 Indian tribe may grant a lease of tribal land for electric

12 generation, transmission, or distribution facilities, or facili13 ties to process or refine renewable or nonrenewable energy

14 resources developed on tribal lands, and such leases shall

15 not require the approval of the Secretary if the lease is exe16 cuted under tribal regulations approved by the Secretary

17 under this subsection and the term of the lease does not ex18 ceed 30 years.

19 (c) RIGHTS-OF-WAY FOR ELECTRIC GENERATION,

20 TRANSMISSION, DISTRIBUTION OR ENERGY PROCESSING

21 FACILITIES.—An Indian tribe may grant a right-of-way

22 over tribal lands for a pipeline or an electric transmission

23 or distribution line without separate approval by the Sec24 retary, if—
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1 (1) the right-of-way is executed under and com2 plies with tribal regulations approved by the Sec3 retary and the term of the right-of-way does not ex4 ceed 30 years; and

5 (2) the pipeline or electric transmission or dis6 tribution line serves—

7 (A) an electric generation, transmission or

8 distribution facility located on tribal land, or

9 (B) a facility located on tribal land that

10 processes or refines renewable or nonrenewable

11 energy resources developed on tribal lands.

12 (d) RENEWALS.—Leases or rights-of-way entered into

13 under this subsection may be renewed at the discretion of

14 the Indian tribe in accordance with the requirements of this

15 section.

16 (e) TRIBAL REGULATION REQUIREMENTS.—(1) The

17 Secretary shall have the authority to approve or disapprove

18 tribal regulations required under this subsection. The Sec19 retary shall approve such tribal regulations if they are com20 prehensive in nature, including provisions that address—

21 (A) securing necessary information from the les22 see or right-of-way applicant;

23 (B) term of the conveyance;

24 (C) amendments and renewals;

25 (D) consideration for the lease or right-of-way;
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1 (E) technical or other relevant requirements;

2 (F) requirements for environmental review as set

3 forth in paragraph (3);

4 (G) requirements for complying with all applica5 ble environmental laws; and

6 (H) final approval authority.

7 (2) No lease or right-of-way shall be valid unless au8 thorized in compliance with the approved tribal regula9 tions.

10 (3) An Indian tribe, as a condition of securing Secre11 tarial approval as contemplated in paragraph (1), must es12 tablish an environmental review process that includes the

13 following—

14 (A) an identification and evaluation of all sig15 nificant environmental impacts of the proposed action

16 as compared to a no action alternative;

17 (B) identification of proposed mitigation;

18 (C) a process for ensuring that the public is in19 formed of and has an opportunity to comment on the

20 proposed action prior to tribal approval of the lease

21 or right-of-way; and

22 (D) sufficient administrative support and tech23 nical capability to carry out the environmental re24 view process.
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1 (4) The Secretary shall review and approve or dis2 approve the regulations of the Indian tribe within 180 days

3 of the submission of such regulations to the Secretary. Any

4 disapproval of such regulations by the Secretary shall be

5 accompanied by written documentation that sets forth the

6 basis for the disapproval. The 180-day period may be ex7 tended by the Secretary after consultation with the Indian

8 tribe.

9 (5) If the Indian tribe executes a lease or right-of-way

10 pursuant to tribal regulations required under this sub11 section, the Indian tribe shall provide the Secretary with—

12 (A) a copy of the lease or right-of-way document

13 and all amendments and renewals thereto; and

14 (B) in the case of regulations or a lease or right15 of-way that permits payment to be made directly to

16 the Indian tribe, documentation of the payments suf17 ficient to enable the Secretary to discharge the trust

18 responsibility of the United States as appropriate

19 under existing law.

20 (6) The United States shall not be liable for losses sus21 tained by any party to a lease executed pursuant to tribal

22 regulations under this subsection, including the Indian

23 tribe.

24 (7)(A) An interested party may, after exhaustion of

25 tribal remedies, submit, in a timely manner, a petition to
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1 the Secretary to review the compliance of the Indian tribe

2 with any tribal regulations approved under this subsection.

3 If upon such review, the Secretary determines that the regu4 lations were violated, the Secretary may take such action

5 as may be necessary to remedy the violation, including re6 scinding or holding the lease or right-of-way in abeyance

7 until the violation is cured. The Secretary may also rescind

8 the approval of the tribal regulations and reassume the re9 sponsibility for approval of leases or rights-of-way associ10 ated with the facilities addressed in this section.

11 (B) If the Secretary seeks to remedy a violation de12 scribed in subparagraph (A), the Secretary shall—

13 (i) make a written determination with respect to

14 the regulations that have been violated;

15 (ii) provide the Indian tribe with a written no16 tice of the alleged violation together with such written

17 determination; and

18 (iii) prior to the exercise of any remedy or the

19 rescission of the approval of the regulations involved

20 and reassumption of the lease or right-of-way ap21 proval responsibility, provide the Indian tribe with a

22 hearing and a reasonable opportunity to cure the al23 leged violation.

24 (C) The tribe shall retain all rights to appeal as pro25 vided by regulations promulgated by the Secretary.
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1 (f) AGREEMENTS.—(1) Agreements between an Indian

2 tribe and a business entity that are directly associated with

3 the development of electric generation, transmission or dis4 tribution facilities, or facilities to process or refine renew5 able or nonrenewable energy resources developed on tribal

6 lands, shall not separately require the approval of the Sec7 retary pursuant to section 18 of title 25, United States

8 Code, so long as the activity that is the subject of the agree9 ment has been the subject of an environmental review proc10 ess pursuant to subsection (e) of this section.

11 (2) The United States shall not be liable for any losses

12 or damages sustained by any party, including the Indian

13 tribe, that are associated with an agreement entered into

14 under this subsection.

15 (g) DISCLAIMER.—Nothing in this section is intended

16 to modify or otherwise affect the applicability of any provi17 sion of the Indian Mineral Leasing Act of 1938 (25 U.S.C.

18 396a–396g); Indian Mineral Development Act of 1982 (25

19 U.S.C. 2101–2108); Surface Mining Control and Reclama20 tion Act of 1977 (30 U.S.C. 1201–1328); any amendments

21 thereto; or any other laws not specifically addressed in this

22 section.

23 SEC. 405. INDIAN MINERAL DEVELOPMENT ACT REVIEW.

24 (a) IN GENERAL.—The Secretary of the Interior shall

25 conduct a review of the activities that have been conducted
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1 by the governments of Indian tribes under the authority of

2 the Indian Mineral Development Act of 1982 (25 U.S.C.

3 2101 et seq.).

4 (b) REPORT.—Not later than 1 year after the date of

5 the enactment of this Act, the Secretary shall transmit to

6 the Committee on Resources of the House of Representatives

7 and the Committee on Indian Affairs and the Committee

8 on Energy and Natural Resources of the Senate a report

9 containing—

10 (1) the results of the review;

11 (2) recommendations designed to help ensure

12 that Indian tribes have the opportunity to develop

13 their nonrenewable energy resources; and

14 (3) an analysis of the barriers to the development

15 of energy resources on Indian land, including Federal

16 policies and regulations, and make recommendations

17 regarding the removal of those barriers.

18 (c) CONSULTATION.—The Secretary shall consult with

19 Indian tribes on a government-to-government basis in devel20 oping the report and recommendations as provided in this

21 subsection.

22 SEC. 406. RENEWABLE ENERGY STUDY.

23 (a) IN GENERAL.—Not later than 2 years after the

24 date of the enactment of this Act, and once every 2 years

25 thereafter, the Secretary of Energy shall transmit to the
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1 Committees on Energy and Commerce and Resources of the

2 House of Representatives and the Committees on Energy

3 and Natural Resources and Indian Affairs of the Senate

4 a report on energy consumption and renewable energy de5 velopment potential on Indian land. The report shall iden6 tify barriers to the development of renewable energy by In7 dian tribes, including Federal policies and regulations, and

8 make recommendations regarding the removal of such bar9 riers.

10 (b) CONSULTATION.—The Secretary shall consult with

11 Indian tribes on a government-to-government basis in devel12 oping the report and recommendations as provided in this

13 section.

14 SEC. 407. FEDERAL POWER MARKETING ADMINISTRATIONS.

15 Title XXVI of the Energy Policy Act of 1992 (25

16 U.S.C. 3501) (as amended by section 201) is amended by

17 adding at the end the following:

18 ‘‘SEC. 2608. FEDERAL POWER MARKETING ADMINISTRA19 TIONS.

20 ‘‘(a) DEFINITION OF ADMINISTRATOR.—In this sec21 tion, the term ‘Administrator’ means—

22 ‘‘(1) the Administrator of the Bonneville Power

23 Administration; or

24 ‘‘(2) the Administrator of the Western Area

25 Power Administration.
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1 ‘‘(b) ASSISTANCE FOR TRANSMISSION STUDIES.—(1)

2 Each Administrator may provide technical assistance to In3 dian tribes seeking to use the high-voltage transmission sys4 tem for delivery of electric power. The costs of such technical

5 assistance shall be funded—

6 ‘‘(A) by the Administrator using non-reimburs7 able funds appropriated for this purpose, or

8 ‘‘(B) by the Indian tribe.

9 ‘‘(2) PRIORITY FOR ASSISTANCE FOR TRANSMISSION

10 STUDIES.—In providing discretionary assistance to Indian

11 tribes under paragraph (1), each Administrator shall give

12 priority in funding to Indian tribes that have limited fi13 nancial capability to conduct such studies.

14 ‘‘(c) POWER ALLOCATION STUDY.—(1) Not later than

15 2 years after the date of enactment of this Act, the Secretary

16 of Energy shall transmit to the Committees on Energy and

17 Commerce and Resources of the House of Representatives

18 and the Committees on Energy and Natural Resources and

19 Indian Affairs of the Senate a report on Indian tribes’ utili20 zation of Federal power allocations of the Western Area

21 Power Administration, or power sold by the Southwestern

22 Power Administration, and the Bonneville Power Adminis23 tration to or for the benefit of Indian tribes in their service

24 areas. The report shall identify—
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1 ‘‘(A) the amount of power allocated to tribes by

2 the Western Area Power Administration, and how the

3 benefit of that power is utilized by the tribes;

4 ‘‘(B) the amount of power sold to tribes by other

5 Power Marketing Administrations; and

6 ‘‘(C) existing barriers that impede tribal access

7 to and utilization of Federal power, and opportuni8 ties to remove such barriers and improve the ability

9 of the Power Marketing Administration to facilitate

10 the utilization of Federal power by Indian tribes.

11 ‘‘(2) The Power Marketing Administrations shall con12 sult with Indian tribes on a government-to-government

13 basis in developing the report provided in this section.

14 ‘‘(d) AUTHORIZATION FOR APPROPRIATION.—There

15 are authorized to be appropriated to the Secretary of En16 ergy such sums as may be necessary to carry out the pur17 poses of this section.’’.

18 SEC. 408. FEASIBILITY STUDY OF COMBINED WIND AND HY19 DROPOWER DEMONSTRATION PROJECT.

20 (a) STUDY.—The Secretary of Energy, in coordination

21 with the Secretary of the Army and the Secretary of the

22 Interior, shall conduct a study of the cost and feasibility

23 of developing a demonstration project that would use wind

24 energy generated by Indian tribes and hydropower gen25 erated by the Army Corps of Engineers on the Missouri
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1 River to supply firming power to the Western Area Power

2 Administration.

3 (b) SCOPE OF STUDY.—The study shall—

4 (1) determine the feasibility of the blending of

5 wind energy and hydropower generated from the Mis6 souri River dams operated by the Army Corps of En7 gineers;

8 (2) review historical purchase requirements and

9 projected purchase requirements for firming and the

10 patterns of availability and use of firming energy;

11 (3) assess the wind energy resource potential on

12 tribal lands and projected cost savings through a

13 blend of wind and hydropower over a thirty-year pe14 riod;

15 (4) include a preliminary interconnection study

16 and a determination of resource adequacy of the

17 Upper Great Plains Region of the Western Area

18 Power Administration;

19 (5) determine seasonal capacity needs and asso20 ciated transmission upgrades for integration of tribal

21 wind generation; and

22 (6) include an independent tribal engineer as a

23 study team member.

24 (c) REPORT.—The Secretary of Energy and Secretary

25 of the Army shall submit a report to Congress not later than
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1 1 year after the date of enactment of this title. The Secre2 taries shall include in the report—

3 (1) an analysis of the potential energy cost sav4 ings to the customers of the Western Area Power Ad5 ministration through the blend of wind and hydro6 power;

7 (2) an evaluation of whether a combined wind

8 and hydropower system can reduce reservoir fluctua9 tion, enhance efficient and reliable energy production

10 and provide Missouri River management flexibility;

11 (3) recommendations for a demonstration project

12 which the Western Area Power Administration could

13 carry out in partnership with an Indian tribal gov14 ernment or tribal government energy consortium to

15 demonstrate the feasibility and potential of using

16 wind energy produced on Indian lands to supply

17 firming energy to the Western Area Power Adminis18 tration or other Federal power marketing agency; and

19 (4) an identification of the economic and envi20 ronmental benefits to be realized through such a Fed21 eral-tribal partnership and identification of how such

22 a partnership could contribute to the energy security

23 of the United States.

24 (d) CONSULTATION.—The Secretary shall consult with

25 Indian tribes on a government-to-government basis in devel-
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1 oping the report and recommendations provided in this sec2 tion.

3 (e) AUTHORIZATION OF APPROPRIATIONS.—There are

4 authorized to be appropriated $500,000 to carry out this

5 section, which shall remain available until expended. All

6 costs incurred by the Western Area Power Administration

7 associated with performing the tasks required under this

8 section shall be nonreimbursable.

9 TITLE V—NUCLEAR POWER

10 Subtitle A—Price-Anderson Act

11 Reauthorization

12 SEC. 501. SHORT TITLE.

13 This subtitle may be cited as the ‘‘Price-Anderson

14 Amendments Act of 2003’’.

15 SEC. 502. EXTENSION OF INDEMNIFICATION AUTHORITY.

16 (a) INDEMNIFICATION OF NUCLEAR REGULATORY

17 COMMISSION LICENSEES.—Section 170c. of the Atomic En18 ergy Act of 1954 (42 U.S.C. 2210(c)) is amended—

19 (1) in the subsection heading, by striking ‘‘LI20 CENSES’’ and inserting ‘‘LICENSEES’’; and

21 (2) by striking ‘‘August 1, 2002’’ each place it

22 appears and inserting ‘‘August 1, 2012’’.

23 (b) INDEMNIFICATION OF DEPARTMENT OF ENERGY

24 CONTRACTORS.—Section 170d.(1)(A) of the Atomic Energy
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1 Act of 1954 (42 U.S.C. 2210(d)(1)(A)) is amended by strik2 ing ‘‘, until August 1, 2002,’’.

3 (c) INDEMNIFICATION OF NONPROFIT EDUCATIONAL

4 INSTITUTIONS.—Section 170k. of the Atomic Energy Act of

5 1954 (42 U.S.C. 2210(k)) is amended by striking ‘‘August

6 1, 2002’’ each place it appears and inserting ‘‘August 1,

7 2012’’.

8 SEC. 503. DEPARTMENT OF ENERGY LIABILITY LIMIT.

9 (a) INDEMNIFICATION OF DEPARTMENT OF ENERGY

10 CONTRACTORS.—Section 170d. of the Atomic Energy Act

11 of 1954 (42 U.S.C. 2210(d)) is amended by striking para12 graph (2) and inserting the following:

13 ‘‘(2) In agreements of indemnification entered

14 into under paragraph (1), the Secretary—

15 ‘‘(A) may require the contractor to provide

16 and maintain financial protection of such a type

17 and in such amounts as the Secretary shall de18 termine to be appropriate to cover public liabil19 ity arising out of or in connection with the con20 tractual activity; and

21 ‘‘(B) shall indemnify the persons indem22 nified against such liability above the amount of

23 the financial protection required, in the amount

24 of $10,000,000,000 (subject to adjustment for in25 flation under subsection t.), in the aggregate, for
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1 all persons indemnified in connection with such

2 contract and for each nuclear incident, including

3 such legal costs of the contractor as are approved

4 by the Secretary.’’.

5 (b) CONTRACT AMENDMENTS.—Section 170d. of the

6 Atomic Energy Act of 1954 (42 U.S.C. 2210(d)) is further

7 amended by striking paragraph (3) and inserting the fol8 lowing:

9 ‘‘(3) All agreements of indemnification under

10 which the Department of Energy (or its predecessor

11 agencies) may be required to indemnify any person

12 under this section shall be deemed to be amended, on

13 the date of the enactment of the Price-Anderson

14 Amendments Act of 2003, to reflect the amount of in15 demnity for public liability and any applicable fi16 nancial protection required of the contractor under

17 this subsection.’’.

18 (c) LIABILITY LIMIT.—Section 170e.(1)(B) of the

19 Atomic Energy Act of 1954 (42 U.S.C. 2210(e)(1)(B)) is

20 amended—

21 (1) by striking ‘‘the maximum amount of finan22 cial protection required under subsection b. or’’; and

23 (2) by striking ‘‘paragraph (3) of subsection d.,

24 whichever amount is more’’ and inserting ‘‘paragraph

25 (2) of subsection d.’’.
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1 SEC. 504. INCIDENTS OUTSIDE THE UNITED STATES.

2 (a) AMOUNT OF INDEMNIFICATION.—Section 170d.(5)

3 of the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)(5))

4 is amended by striking ‘‘$100,000,000’’ and inserting

5 ‘‘$500,000,000’’.

6 (b) LIABILITY LIMIT.—Section 170e.(4) of the Atomic

7 Energy Act of 1954 (42 U.S.C. 2210(e)(4)) is amended by

8 striking ‘‘$100,000,000’’ and inserting ‘‘$500,000,000’’.

9 SEC. 505. REPORTS.

10 Section 170p. of the Atomic Energy Act of 1954 (42

11 U.S.C. 2210(p)) is amended by striking ‘‘August 1, 1998’’

12 and inserting ‘‘August 1, 2008’’.

13 SEC. 506. INFLATION ADJUSTMENT.

14 Section 170t. of the Atomic Energy Act of 1954 (42

15 U.S.C. 2210(t)) is amended—

16 (1) by redesignating paragraph (2) as para17 graph (3); and

18 (2) by adding after paragraph (1) the following:

19 ‘‘(2) The Secretary shall adjust the amount of in20 demnification provided under an agreement of indem21 nification under subsection d. not less than once dur22 ing each 5-year period following July 1, 2002, in ac23 cordance with the aggregate percentage change in the

24 Consumer Price Index since—

25 ‘‘(A) that date, in the case of the first ad26 justment under this paragraph; or
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1 ‘‘(B) the previous adjustment under this

2 paragraph.’’.

3 SEC. 507. CIVIL PENALTIES.

4 (a) REPEAL OF AUTOMATIC REMISSION.—Section

5 234Ab.(2) of the Atomic Energy Act of 1954 (42 U.S.C.

6 2282a(b)(2)) is amended by striking the last sentence.

7 (b) LIMITATION FOR NOT-FOR-PROFIT INSTITU8 TIONS.—Subsection d. of section 234A of the Atomic Energy

9 Act of 1954 (42 U.S.C. 2282a(d)) is amended to read as

10 follows:

11 ‘‘d.(1) Notwithstanding subsection a., in the case

12 of any not-for-profit contractor, subcontractor, or sup13 plier, the total amount of civil penalties assessed

14 under subsection a. may not exceed the total amount

15 of fees paid within any one-year period (as deter16 mined by the Secretary) under the contract under

17 which the violation occurs.

18 ‘‘(2) For purposes of this section, the term ‘not19 for-profit’ means that no part of the net earnings of

20 the contractor, subcontractor, or supplier inures, or

21 may lawfully inure, to the benefit of any natural per22 son or for-profit artificial person.’’.

23 (c) EFFECTIVE DATE.—The amendments made by this

24 section shall not apply to any violation of the Atomic En-
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1 ergy Act of 1954 occurring under a contract entered into

2 before the date of enactment of this section.

3 SEC. 508. TREATMENT OF MODULAR REACTORS.

4 Section 170b. of the Atomic Energy Act of 1954 (42

5 U.S.C. 2210(b)) is amended by adding at the end the fol6 lowing:

7 ‘‘(5)(A) For purposes of this section only, the

8 Commission shall consider a combination of facilities

9 described in subparagraph (B) to be a single facility

10 having a rated capacity of 100,000 electrical kilo11 watts or more.

12 ‘‘(B) A combination of facilities referred to in

13 subparagraph (A) is two or more facilities located at

14 a single site, each of which has a rated capacity of

15 100,000 electrical kilowatts or more but not more

16 than 300,000 electrical kilowatts, with a combined

17 rated capacity of not more than 1,300,000 electrical

18 kilowatts.’’.

19 SEC. 509. EFFECTIVE DATE.

20 The amendments made by sections 503(a) and 504 do

21 not apply to any nuclear incident that occurs before the

22 date of the enactment of this subtitle.
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1 Subtitle B—Miscellaneous

2 Provisions

3 SEC. 511. URANIUM SALES.

4 (a) INVENTORY SALES.—Section 3112(d) of the USEC

5 Privatization Act (42 U.S.C. 2297h–10(d)) is amended to

6 read as follows:

7 ‘‘(d) INVENTORY SALES.—(1) In addition to the trans8 fers authorized under subsections (b), (c), and (e), the Sec9 retary may, from time to time, sell or transfer uranium

10 (including natural uranium concentrates, natural uranium

11 hexafluoride, enriched uranium, and depleted uranium)

12 from the Department of Energy’s stockpile.

13 ‘‘(2) Except as provided in subsections (b), (c), and

14 (e), the Secretary may not deliver uranium in any form

15 for consumption by end users in any year in excess of the

16 following amounts:

‘‘Annual Maximum Deliveries to End Users

(Million lbs. U3O8

‘‘Year: equivalent)

2003 through 2009 ..................................................................... 3

2010 ............................................................................................ 5

2011 ............................................................................................ 5

2012 ............................................................................................ 7

2013 and each year thereafter .................................................. 10.

17 ‘‘(3) Except as provided in subsections (b), (c), and

18 (e), no sale or transfer of uranium in any form shall be

19 made unless—

20 ‘‘(A) the President determines that the material

21 is not necessary for national security needs;
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1 ‘‘(B) the Secretary determines, based on the writ2 ten views of the Secretary of State and the Assistant

3 to the President for National Security Affairs, that

4 the sale or transfer will not adversely affect the na5 tional security interests of the United States;

6 ‘‘(C) the Secretary determines that the sale of the

7 material will not have an adverse material impact on

8 the domestic uranium mining, conversion, or enrich9 ment industry, taking into account the sales of ura10 nium under the Russian HEU Agreement and the

11 Suspension Agreement; and

12 ‘‘(D) the price paid to the Secretary will not be

13 less than the fair market value of the material.’’.

14 (b) EXEMPT TRANSFERS AND SALES.—Section 3112(e)

15 of the USEC Privatization Act (42 U.S.C. 2297h–10(e)) is

16 amended to read as follows:

17 ‘‘(e) EXEMPT SALES OR TRANSFERS.—Notwith18 standing subsection (d)(2), the Secretary may transfer or

19 sell uranium—

20 ‘‘(1) to the Tennessee Valley Authority for use

21 pursuant to the Department of Energy’s highly en22 riched uranium or tritium program, to the extent

23 provided by law;

24 ‘‘(2) to research and test reactors under the Uni25 versity Reactor Fuel Assistance and Support Pro-
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1 gram or the Reduced Enrichment for Research and

2 Test Reactors Program;

3 ‘‘(3) to USEC Inc. to replace contaminated ura4 nium received from the Department of Energy when

5 the United States Enrichment Corporation was

6 privatized;

7 ‘‘(4) to any person for emergency purposes in the

8 event of a disruption in supply to end users in the

9 United States; and

10 ‘‘(5) to any person for national security pur11 poses, as determined by the Secretary.’’.

12 SEC. 512. REAUTHORIZATION OF THORIUM REIMBURSE13 MENT.

14 (a) REIMBURSEMENT OF THORIUM LICENSEES.—Sec15 tion 1001(b)(2)(C) of the Energy Policy Act of 1992 (42

16 U.S.C. 2296a) is amended—

17 (1) by striking ‘‘$140,000,000’’ and inserting

18 ‘‘$365,000,000’’; and

19 (2) by adding at the end the following: ‘‘Such

20 payments shall not exceed the following amounts:

21 ‘‘(i) $90,000,000 in fiscal year 2002.

22 ‘‘(ii) $55,000,000 in fiscal year 2003.

23 ‘‘(iii) $20,000,000 in fiscal year 2004.

24 ‘‘(iv) $20,000,000 in fiscal year 2005.

25 ‘‘(v) $20,000,000 in fiscal year 2006.
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1 ‘‘(vi) $20,000,000 in fiscal year 2007.

2 Any amounts authorized to be paid in a fiscal

3 year under this subparagraph that are not paid

4 in that fiscal year may be paid in subsequent

5 fiscal years.’’.

6 (b) AUTHORIZATION OF APPROPRIATIONS.—Section

7 1003(a) of the Energy Policy Act of 1992 (42 U.S.C. 2296a–

8 2) is amended by striking ‘‘$490,000,000’’ and inserting

9 ‘‘$715,000,000’’.

10 (c) DECONTAMINATION AND DECOMMISSIONING

11 FUND.—Section 1802(a) of the Atomic Energy Act of 1954

12 (42 U.S.C. 2297g–1(a)) is amended—

13 (1) by striking ‘‘$488,333,333’’ and inserting

14 ‘‘$518,233,333’’; and

15 (2) by inserting after ‘‘inflation’’ the following:

16 ‘‘beginning on the date of enactment of the Energy

17 Policy Act of 1992’’.

18 SEC. 513. FAST FLUX TEST FACILITY.

19 The Secretary of Energy shall not reactivate the Fast

20 Flux Test Facility to conduct—

21 (1) any atomic energy defense activity,

22 (2) any space-related mission, or

23 (3) any program for the production or utiliza24 tion of nuclear material if the Secretary has deter-
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1 mined, in a record of decision, that the program can

2 be carried out at existing operating facilities.

3 SEC. 514. NUCLEAR POWER 2010.

4 (a) DEFINITIONS.—In this section:

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

6 the Secretary of Energy.

7 (2) OFFICE.—The term ‘‘Office’’ means the Office

8 of Nuclear Energy Science and Technology of the De9 partment of Energy.

10 (3) DIRECTOR.—The term ‘‘Director’’ means the

11 Director of the Office of Nuclear Energy Science and

12 Technology of the Department of Energy.

13 (4) PROGRAM.—The term ‘‘Program’’ means the

14 Nuclear Power 2010 Program.

15 (b) ESTABLISHMENT.—The Secretary shall carry out

16 a program, to be managed by the Director.

17 (c) PURPOSE.—The program shall aggressively pursue

18 those activities that will result in regulatory approvals and

19 design completion in a phased approach, with joint govern20 ment/industry cost sharing, which would allow for the con21 struction and startup of new nuclear plants in the United

22 States by 2010.

23 (d) ACTIVITIES.—In carrying out the program, the Di24 rector shall—
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1 (1) issue a solicitation to industry seeking pro2 posals from joint venture project teams comprised of

3 reactor vendors and power generation companies to

4 participate in the Nuclear Power 2010 program;

5 (2) seek innovative business arrangements, such

6 as consortia among designers, constructors, nuclear

7 steam supply systems and major equipment suppliers,

8 and plant owner/operators, with strong and common

9 incentives to build and operate new plants in the

10 United States;

11 (3) conduct the Nuclear Power 2010 program

12 consistent with the findings of ‘‘A Roadmap to De13 ploy New Nuclear Power Plants in the United States

14 by 2010’’ issued by the Near-Term Deployment Work15 ing Group of the Nuclear Energy Research Advisory

16 Committee of the Department of Energy;

17 (4) rely upon the expertise and capabilities of

18 the Department of Energy national laboratories and

19 sites in the areas of advanced nuclear fuel cycles and

20 fuels testing, giving consideration to existing lead lab21 oratory designations and the unique capabilities and

22 facilities available at each national laboratory and

23 site;

24 (5) pursue deployment of both water-cooled and

25 gas-cooled reactor designs on a dual track basis that
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1 will provide maximum potential for the success of

2 both;

3 (6) include participation of international col4 laborators in research and design efforts where bene5 ficial; and

6 (7) seek to accomplish the essential regulatory

7 and technical work, both generic and design-specific,

8 to make possible new nuclear plants within this dec9 ade.

10 (e) AUTHORIZATION OF APPROPRIATIONS.—There are

11 authorized to be appropriated to the Secretary to carry out

12 the purposes of this section such sums as are necessary for

13 fiscal year 2003 and for each fiscal year thereafter.

14 SEC. 515. OFFICE OF SPENT NUCLEAR FUEL RESEARCH.

15 (a) FINDINGS.—Congress finds that—

16 (1) before the Federal Government takes any ir17 reversible action relating to the disposal of spent nu18 clear fuel, Congress must determine whether the spent

19 fuel in the repository should be treated as waste sub20 ject to permanent burial or should be considered an

21 energy resource that is needed to meet future energy

22 requirements; and

23 (2) national policy on spent nuclear fuel may

24 evolve with time as improved technologies for spent

25 fuel are developed or as national energy needs evolve.
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1 (b) DEFINITIONS.—In this section:

2 (1) ASSOCIATE DIRECTOR.—The term ‘‘Associate

3 Director’’ means the Associate Director of the Office.

4 (2) OFFICE.—The term ‘‘Office’’ means the Office

5 of Spent Nuclear Fuel Research within the Office of

6 Nuclear Energy Science and Technology of the De7 partment of Energy.

8 (c) ESTABLISHMENT.—There is established an Office

9 of Spent Nuclear Fuel Research within the Office of Nuclear

10 Energy Science and Technology of the Department of En11 ergy.

12 (d) HEAD OF OFFICE.—The Office shall be headed by

13 the Associate Director, who shall be a member of the Senior

14 Executive Service appointed by the Director of the Office

15 of Nuclear Energy Science and Technology, and com16 pensated at a rate determined by applicable law.

17 (e) DUTIES OF THE ASSOCIATE DIRECTOR.—

18 (1) IN GENERAL.—The Associate Director shall

19 be responsible for carrying out an integrated research,

20 development, and demonstration program on tech21 nologies for treatment, recycling, and disposal of

22 high-level nuclear radioactive waste and spent nuclear

23 fuel, subject to the general supervision of the Sec24 retary.
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1 (2) PARTICIPATION.—The Associate Director

2 shall coordinate the participation of national labora3 tories, universities, the commercial nuclear industry,

4 and other organizations in the investigation of tech5 nologies for the treatment, recycling, and disposal of

6 spent nuclear fuel and high-level radioactive waste.

7 (3) ACTIVITIES.—The Associate Director shall—

8 (A) develop a research plan to provide rec9 ommendations by 2015;

10 (B) identify promising technologies for the

11 treatment, recycling, and disposal of spent nu12 clear fuel and high-level radioactive waste;

13 (C) conduct research and development ac14 tivities for promising technologies;

15 (D) ensure that all activities include as key

16 objectives minimization of proliferation concerns

17 and risk to the health of the general public or

18 site workers, as well as development of cost-effec19 tive technologies;

20 (E) require research on both reactor- and

21 accelerator-based transmutation systems;

22 (F) require research on advanced processing

23 and separations;

24 (G) include participation of international

25 collaborators in research efforts, and provide
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1 funding to a collaborator that brings unique ca2 pabilities not available in the United States if

3 the country in which the collaborator is located

4 is unable to provide for their support; and

5 (H) ensure that research efforts are coordi6 nated with research on advanced fuel cycles and

7 reactors conducted by the Office of Nuclear En8 ergy Science and Technology.

9 (f) GRANT AND CONTRACT AUTHORITY.—The Sec10 retary may make grants, or enter into contracts, for the

11 purposes of the research projects and activities described in

12 this section.

13 (g) REPORT.—The Associate Director shall annually

14 submit to Congress a report on the activities and expendi15 tures of the Office that describes the progress being made

16 in achieving the objectives of this section.

17 SEC. 516. DECOMMISSIONING PILOT PROGRAM.

18 (a) PILOT PROGRAM.—The Secretary of Energy shall

19 establish a decommissioning pilot program to decommission

20 and decontaminate the sodium-cooled fast breeder experi21 mental test-site reactor located in northwest Arkansas in

22 accordance with the decommissioning activities contained

23 in the August 31, 1998, Department of Energy report on

24 the reactor.
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1 (b) AUTHORIZATION OF APPROPRIATIONS.—There is

2 authorized to be appropriated to carry out this section

3 $16,000,000.

4 Subtitle C—Growth of Nuclear

5 Energy

6 SEC. 521. COMBINED LICENSE PERIODS.

7 Section 103c. of the Atomic Energy Act of 1954 (42

8 U.S.C. 2133(c)) is amended—

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

10 following:

11 ‘‘c. LICENSE PERIOD.—

12 ‘‘(1) IN GENERAL.—Each such’’; and

13 (2) by adding at the end the following:

14 ‘‘(2) COMBINED LICENSES.—In the case of a

15 combined construction and operating license issued

16 under section 185(b), the duration of the operating

17 phase of the license period shall not be less than the

18 duration of the operating license if application had

19 been made for separate construction and operating li20 censes.’’.
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1 Subtitle D—NRC Regulatory

2 Reform

3 SEC. 531. ANTITRUST REVIEW.

4 (a) IN GENERAL.—Section 105 of the Atomic Energy

5 Act of 1954 (42 U.S.C. 2135) is amended by adding at the

6 end the following:

7 ‘‘d. ANTITRUST LAWS.—

8 ‘‘(1) NOTIFICATION.—Except as provided in

9 paragraph (4), when the Commission proposes to

10 issue a license under section 103 or 104b., the Com11 mission shall notify the Attorney General of the pro12 posed license and the proposed terms and conditions

13 of the license.

14 ‘‘(2) ACTION BY THE ATTORNEY GENERAL.—

15 Within a reasonable time (but not more than 90

16 days) after receiving notification under paragraph

17 (1), the Attorney General shall submit to the Commis18 sion and publish in the Federal Register a determina19 tion whether, insofar as the Attorney General is able

20 to determine, the proposed license would tend to cre21 ate or maintain a situation inconsistent with the

22 antitrust laws.

23 ‘‘(3) INFORMATION.—On the request of the Attor24 ney General, the Commission shall furnish or cause to

25 be furnished such information as the Attorney Gen-
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1 eral determines to be appropriate or necessary to en2 able the Attorney General to make the determination

3 under paragraph (2).

4 ‘‘(4) APPLICABILITY.—This subsection shall not

5 apply to such classes or type of licenses as the Com6 mission, with the approval of the Attorney General,

7 determines would not significantly affect the activities

8 of a licensee under the antitrust laws.’’.

9 (b) CONFORMING AMENDMENT.—Section 105c. of the

10 Atomic Energy Act of 1954 (42 U.S.C. 2135(c)) is amended

11 by adding at the end the following:

12 ‘‘(9) APPLICABILITY.—This subsection does not

13 apply to an application for a license to construct or

14 operate a utilization facility under section 103 or

15 104b. that is filed on or after the date of enactment

16 of subsection d.’’.

17 SEC. 532. DECOMMISSIONING.

18 (a) AUTHORITY OVER FORMER LICENSEES FOR DE19 COMMISSIONING FUNDING.—Section 161i. of the Atomic

20 Energy Act of 1954 (42 U.S.C. 2201(i)) is amended—

21 (1) by striking ‘‘and (3)’’ and inserting ‘‘(3)’’;

22 and

23 (2) by inserting before the semicolon at the end

24 the following: ‘‘, and (4) to ensure that sufficient

25 funds will be available for the decommissioning of
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1 any production or utilization facility licensed under

2 section 103 or 104b., including standards and restric3 tions governing the control, maintenance, use, and

4 disbursement by any former licensee under this Act

5 that has control over any fund for the decommis6 sioning of the facility’’.

7 (b) TREATMENT OF NUCLEAR REACTOR FINANCIAL

8 OBLIGATIONS.—Section 523 of title 11, United States Code,

9 is amended by adding at the end the following:

10 ‘‘(f) TREATMENT OF NUCLEAR REACTOR FINANCIAL

11 OBLIGATIONS.—Notwithstanding any other provision of

12 this title—

13 ‘‘(1) any funds or other assets held by a licensee

14 or former licensee of the Nuclear Regulatory Commis15 sion, or by any other person, to satisfy the responsi16 bility of the licensee, former licensee, or any other per17 son to comply with a regulation or order of the Nu18 clear Regulatory Commission governing the decon19 tamination and decommissioning of a nuclear power

20 reactor licensed under section 103 or 104b. of the

21 Atomic Energy Act of 1954 (42 U.S.C. 2133, 2134(b))

22 shall not be used to satisfy the claim of any creditor

23 in any proceeding under this title, other than a claim

24 resulting from an activity undertaken to satisfy that

25 responsibility, until the decontamination and decom-
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1 missioning of the nuclear power reactor is completed

2 to the satisfaction of the Nuclear Regulatory Commis3 sion;

4 ‘‘(2) obligations of licensees, former licensees, or

5 any other person to use funds or other assets to satisfy

6 a responsibility described in paragraph (1) may not

7 be rejected, avoided, or discharged in any proceeding

8 under this title or in any liquidation, reorganization,

9 receivership, or other insolvency proceeding under

10 Federal or State law; and

11 ‘‘(3) private insurance premiums and standard

12 deferred premiums held and maintained in accord13 ance with section 170b. of the Atomic Energy Act of

14 1954 (42 U.S.C. 2210(b)) shall not be used to satisfy

15 the claim of any creditor in any proceeding under

16 this title, until the indemnification agreement exe17 cuted in accordance with section 170c. of that Act (42

18 U.S.C. 2210(c)) is terminated.’’.

19 Subtitle E—NRC Personnel Crisis

20 SEC. 541. ELIMINATION OF PENSION OFFSET.

21 Section 161 of the Atomic Energy Act of 1954 (42

22 U.S.C. 2201) is amended by adding at the end the following:

23 ‘‘y. exempt from the application of sections 8344 and

24 8468 of title 5, United States Code, an annuitant who was

25 formerly an employee of the Commission who is hired by
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1 the Commission as a consultant, if the Commission finds

2 that the annuitant has a skill that is critical to the perform3 ance of the duties of the Commission.’’.

4 SEC. 542. NRC TRAINING PROGRAM.

5 (a) IN GENERAL.—In order to maintain the human

6 resource investment and infrastructure of the United States

7 in the nuclear sciences, health physics, and engineering

8 fields, in accordance with the statutory authorities of the

9 Commission relating to the civilian nuclear energy pro10 gram, the Nuclear Regulatory Commission shall carry out

11 a training and fellowship program to address shortages of

12 individuals with critical safety skills.

13 (b) AUTHORIZATION OF APPROPRIATIONS.—

14 (1) IN GENERAL.—There are authorized to be ap15 propriated to carry out this section $1,000,000 for

16 each of fiscal years 2003 through 2006.

17 (2) AVAILABILITY.—Funds made available under

18 paragraph (1) shall remain available until expended.
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1 DIVISION B—DOMESTIC OIL AND

2 GAS PRODUCTION AND

3 TRANSPORTATION

4 TITLE VI—OIL AND GAS

5 PRODUCTION

6 SEC. 601. PERMANENT AUTHORITY TO OPERATE THE STRA7 TEGIC PETROLEUM RESERVE.

8 (a) AMENDMENT TO TITLE I OF THE ENERGY POLICY

9 AND CONSERVATION ACT.—Title I of the Energy Policy and

10 Conservation Act (42 U.S.C. 6211 et seq.) is amended—

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

12 inserting—

13 ‘‘SEC. 166. There are authorized to be appropriated

14 to the Secretary such sums as may be necessary to carry

15 out this part, to remain available until expended.’’; and

16 (2) by striking part E (42 U.S.C. 6251; relating

17 to the expiration of title I of the Act) and its heading.

18 (b) AMENDMENT TO TITLE II OF THE ENERGY POLICY

19 AND CONSERVATION ACT.—Title II of the Energy Policy

20 and Conservation Act (42 U.S.C. 6271 et seq.) is

21 amended—

22 (1) by striking section 256(h) (42 U.S.C.

23 6276(h)) and inserting—

24 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There

25 are authorized to be appropriated to the Secretary such
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1 sums as may be necessary to carry out this part, to remain

2 available until expended.’’;

3 (2) by striking section 273(e) (42 U.S.C. 6283(e);

4 relating to the expiration of summer fill and fuel

5 budgeting programs); and

6 (3) by striking part D (42 U.S.C. 6285; relating

7 to the expiration of title II of the Act) and its head8 ing.

9 (c) TECHNICAL AMENDMENTS.—The table of contents

10 for the Energy Policy and Conservation Act is amended by

11 striking the items relating to part D of title I and part

12 D of title II.

13 SEC. 602. FEDERAL ONSHORE LEASING PROGRAMS FOR OIL

14 AND GAS.

15 (a) TIMELY ACTION ON LEASES AND PERMITS.—To

16 ensure timely action on oil and gas leases and applications

17 for permits to drill on lands otherwise available for leasing,

18 the Secretary of the Interior shall—

19 (1) ensure expeditious compliance with the re20 quirements of section 102(2)(C) of the National Envi21 ronmental Policy Act of 1969 (42 U.S.C. 4332(2)(C));

22 (2) improve consultation and coordination with

23 the States; and

24 (3) improve the collection, storage, and retrieval

25 of information related to such leasing activities.
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1 (b) IMPROVED ENFORCEMENT.—The Secretary shall

2 improve inspection and enforcement of oil and gas activi3 ties, including enforcement of terms and conditions in per4 mits to drill.

5 (c) AUTHORIZATION OF APPROPRIATIONS.—For each

6 of the fiscal years 2003 through 2006, in addition to

7 amounts otherwise authorized to be appropriated for the

8 purpose of carrying out section 17 of the Mineral Leasing

9 Act (30 U.S.C. 226), there are authorized to be appro10 priated to the Secretary of the Interior—

11 (1) $40,000,000 for the purpose of carrying out

12 paragraphs (1) through (3) of subsection (a); and

13 (2) $20,000,000 for the purpose of carrying out

14 subsection (b).

15 SEC. 603. OIL AND GAS LEASE ACREAGE LIMITATIONS.

16 Section 27(d)(1) of the Mineral Leasing Act (30 U.S.C.

17 184(d)(1)) is amended by inserting after ‘‘acreage held in

18 special tar sand areas’’ the following: ‘‘as well as acreage

19 under any lease any portion of which has been committed

20 to a federally approved unit or cooperative plan or

21 communitization agreement, or for which royalty, includ22 ing compensatory royalty or royalty in kind, was paid in

23 the preceding calendar year,’’.
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1 SEC. 604. ORPHANED AND ABANDONED WELLS ON FEDERAL

2 LAND.

3 (a) ESTABLISHMENT.—(1) The Secretary of the Inte4 rior, in cooperation with the Secretary of Agriculture, shall

5 establish a program to ensure within 3 years after the date

6 of enactment of this Act, remediation, reclamation, and clo7 sure of orphaned oil and gas wells located on lands admin8 istered by the land management agencies within the De9 partment of the Interior and the United States Forest Serv10 ice that are—

11 (A) abandoned;

12 (B) orphaned; or

13 (C) idled for more than 5 years and having no

14 beneficial use.

15 (2) The program shall include a means of ranking crit16 ical sites for priority in remediation based on potential en17 vironmental harm, other land use priorities, and public

18 health and safety.

19 (3) The program shall provide that responsible parties

20 be identified wherever possible and that the costs of remedi21 ation be recovered.

22 (4) In carrying out the program, the Secretary of the

23 Interior shall work cooperatively with the Secretary of Agri24 culture and the States within which the Federal lands are

25 located, and shall consult with the Secretary of Energy, and

26 the Interstate Oil and Gas Compact Commission.
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1 (b) PLAN.—Within 6 months from the date of enact2 ment of this section, the Secretary of the Interior, in co3 operation with the Secretary of Agriculture, shall prepare

4 a plan for carrying out the program established under sub5 section (a). Copies of the plan shall be transmitted to the

6 Committee on Energy and Natural Resources of the Senate

7 and the Committee on Resources of the House of Representa8 tives.

9 (c) AUTHORIZATION OF APPROPRIATIONS.—There are

10 authorized to be appropriated to the Secretary of the Inte11 rior $5,000,000 for each of fiscal years 2003 through 2005

12 to carry out the activities provided for in this section.

13 SEC. 605. ORPHANED AND ABANDONED OIL AND GAS WELL

14 PROGRAM.

15 (a) ESTABLISHMENT.—The Secretary of Energy shall

16 establish a program to provide technical assistance to the

17 various oil and gas producing States to facilitate State ef18 forts over a 10-year period to ensure a practical and eco19 nomical remedy for environmental problems caused by or20 phaned and abandoned exploration or production well sites

21 on State and private lands. The Secretary shall work with

22 the States, through the Interstate Oil and Gas Compact

23 Commission, to assist the States in quantifying and miti24 gating environmental risks of onshore abandoned and or25 phaned wells on State and private lands.
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1 (b) PROGRAM ELEMENTS.—The program should

2 include—

3 (1) mechanisms to facilitate identification of re4 sponsible parties wherever possible;

5 (2) criteria for ranking critical sites based on

6 factors such as other land use priorities, potential en7 vironmental harm and public visibility; and

8 (3) information and training programs on best

9 practices for remediation of different types of sites.

10 (c) AUTHORIZATION OF APPROPRIATIONS.—There are

11 authorized to be appropriated to the Secretary of Energy

12 for the activities under this section $5,000,000 for each of

13 fiscal years 2003 through 2005 to carry out the provisions

14 of this section.

15 SEC. 606. OFFSHORE DEVELOPMENT.

16 Section 5 of the Outer Continental Shelf Lands Act

17 of 1953 (43 U.S.C. 1334) is amended by adding at the end

18 the following:

19 ‘‘(k) SUSPENSION OF OPERATIONS FOR SUBSALT EX20 PLORATION.—Notwithstanding any other provision of law

21 or regulation, the Secretary may grant a request for a sus22 pension of operations under any lease to allow the lessee

23 to reprocess or reinterpret geologic or geophysical data be24 neath allocthonous salt sheets, when in the Secretary’s judg25 ment such suspension is necessary to prevent waste caused
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1 by the drilling of unnecessary wells, and to maximize ulti2 mate recovery of hydrocarbon resources under the lease.

3 Such suspension shall be limited to the minimum period

4 of time the Secretary determines is necessary to achieve the

5 objectives of this subsection.’’.

6 SEC. 607. COALBED METHANE STUDY.

7 (a) STUDY.—The National Academy of Sciences shall

8 conduct a study on the effects of coalbed methane production

9 on surface and water resources.

10 (b) DATA ANALYSIS.—The study shall analyze avail11 able hydrogeologic and water quality data, along with other

12 pertinent environmental or other information to

13 determine—

14 (1) adverse effects associated with surface or sub15 surface disposal of waters produced during extraction

16 of coalbed methane;

17 (2) depletion of groundwater aquifers or drink18 ing water sources associated with production of coal19 bed methane;

20 (3) any other significant adverse impacts to sur21 face or water resources associated with production of

22 coalbed methane; and

23 (4) production techniques or other factors that

24 can mitigate adverse impacts from coalbed methane

25 development.
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1 (c) RECOMMENDATIONS.—The study shall analyze ex2 isting Federal and State laws and regulations, and make

3 recommendations as to changes, if any, to Federal law nec4 essary to address adverse impacts to surface or water re5 sources attributable to coalbed methane development.

6 (d) COMPLETION OF STUDY.—The National Academy

7 of Sciences shall submit the study to the Secretary of the

8 Interior within 18 months after the date of enactment of

9 this Act, and shall make the study available to the public

10 at the same time.

11 (e) REPORT TO CONGRESS.—The Secretary of the Inte12 rior shall report to Congress within 6 months of her receipt

13 of the study on—

14 (1) the findings and recommendations of the

15 study;

16 (2) the Secretary’s agreement or disagreement

17 with each of its findings and recommendations; and

18 (3) any recommended changes in funding to ad19 dress the effects of coalbed methane production on sur20 face and water resources.

21 SEC. 608. FISCAL POLICIES TO MAXIMIZE RECOVERY OF DO22 MESTIC OIL AND GAS RESOURCES.

23 (a) EVALUATION.—The Secretary of Energy, in coordi24 nation with the Secretaries of the Interior, Commerce, and

25 Treasury, Indian tribes and the Interstate Oil and Gas
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1 Compact Commission, shall evaluate the impact of existing

2 Federal and State tax and royalty policies on the develop3 ment of domestic oil and gas resources and on revenues to

4 Federal, State, local and tribal governments.

5 (b) SCOPE.—The evaluation under subsection (a)

6 shall—

7 (1) analyze the impact of fiscal policies on oil

8 and natural gas exploration, development drilling,

9 and production under different price scenarios, in10 cluding the impact of the individual and corporate

11 Alternative Minimum Tax, State and local produc12 tion taxes and fixed royalty rates during low price

13 periods;

14 (2) assess the effect of existing Federal and State

15 fiscal policies on investment under different geological

16 and developmental circumstances, including but not

17 limited to deepwater environments, subsalt forma18 tions, deep and deviated wells, coalbed methane and

19 other unconventional oil and gas formations;

20 (3) assess the extent to which Federal and State

21 fiscal policies negatively impact the ultimate recovery

22 of resources from existing fields and smaller accumu23 lations in offshore waters, especially in water depths

24 less than 800 meters, of the Gulf of Mexico;
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1 (4) compare existing Federal and State policies

2 with tax and royalty regimes in other countries with

3 particular emphasis on similar geological, develop4 mental and infrastructure conditions; and

5 (5) evaluate how alternative tax and royalty

6 policies, including counter-cyclical measures, could

7 increase recovery of domestic oil and natural gas re8 sources and revenues to Federal, State, local and trib9 al governments.

10 (c) POLICY RECOMMENDATIONS.—Based upon the

11 findings of the evaluation under subsection (a), a report de12 scribing the findings and recommendations for policy

13 changes shall be provided to the President, the Congress, the

14 Governors of the member States of the Interstate Oil and

15 Gas Compact Commission, and Indian tribes having an oil

16 and gas lease approved by the Secretary of the Interior. The

17 recommendations should ensure that the public interest in

18 receiving the economic benefits of tax and royalty revenues

19 is balanced with the broader national security and eco20 nomic interests in maximizing recovery of domestic re21 sources. The report should include recommendations regard22 ing actions to—

23 (1) ensure stable development drilling during pe24 riods of low oil and/or natural gas prices to maintain

25 reserve replacement and deliverability;
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1 (2) minimize the negative impact of a volatile

2 investment climate on the oil and gas service industry

3 and domestic oil and gas exploration and production;

4 (3) ensure a consistent level of domestic activity

5 to encourage the education and retention of a tech6 nical workforce; and

7 (4) maintain production capability during peri8 ods of low oil and/or natural gas prices.

9 (d) ROYALTY GUIDELINES.—The recommendations re10 quired under (c) should include guidelines for private re11 source holders as to the appropriate level of royalties given

12 geology, development cost, and the national interest in

13 maximizing recovery of oil and gas resources.

14 (e) REPORT.—The study under subsection (a) shall be

15 completed not later than 18 months after the date of enact16 ment of this section. The report and recommendations re17 quired in (c) shall be transmitted to the President, the Con18 gress, Indian tribes, and the Governors of the member States

19 of the Interstate Oil and Gas Compact Commission.

20 SEC. 609. STRATEGIC PETROLEUM RESERVE.

21 (a) FULL CAPACITY.—The President shall—

22 (1) fill the Strategic Petroleum Reserve estab23 lished pursuant to part B of title I of the Energy Pol24 icy and Conservation Act (42 U.S.C. 6231 et seq.) to

25 full capacity as soon as practicable;
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1 (2) acquire petroleum for the Strategic Petro2 leum Reserve by the most practicable and cost-effec3 tive means, including the acquisition of crude oil the

4 United States is entitled to receive in kind as royal5 ties from production on Federal lands; and

6 (3) ensure that the fill rate minimizes impacts

7 on petroleum markets.

8 (b) RECOMMENDATIONS.—Not later than 180 days

9 after the date of enactment of this Act, the Secretary of En10 ergy shall submit to Congress a plan to—

11 (1) eliminate any infrastructure impediments

12 that may limit maximum drawdown capability; and

13 (2) determine whether the capacity of the Stra14 tegic Petroleum Reserve on the date of enactment of

15 this section is adequate in light of the increasing con16 sumption of petroleum and the reliance on imported

17 petroleum.

18 SEC. 610. HYDRAULIC FRACTURING.

19 Section 1421 of the Safe Drinking Water Act (42

20 U.S.C. 300h) is amended by adding at the end the following:

21 ‘‘(e) HYDRAULIC FRACTURING FOR OIL AND GAS PRO22 DUCTION.—

23 ‘‘(1) STUDY OF THE EFFECTS OF HYDRAULIC

24 FRACTURING.—
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1 ‘‘(A) IN GENERAL.—As soon as practicable,

2 but in no event later than 24 months after the

3 date of enactment of this subsection, the Admin4 istrator shall complete a study of the known and

5 potential effects on underground drinking water

6 sources of hydraulic fracturing, including the ef7 fects of hydraulic fracturing on underground

8 drinking water sources on a nationwide basis,

9 and within specific regions, States, or portions of

10 States.

11 ‘‘(B) CONSULTATION.—In planning and

12 conducting the study, the Administrator shall

13 consult with the Secretary of the Interior, the

14 Secretary of Energy, the Ground Water Protec15 tion Council, affected States, and, as appro16 priate, representatives of environmental, indus17 try, academic, scientific, public health, and other

18 relevant organizations. Such study may be ac19 complished in conjunction with other ongoing

20 studies related to the effects of oil and gas pro21 duction on groundwater resources.

22 ‘‘(C) STUDY ELEMENTS.—The study con23 ducted under subparagraph (A) shall, at a min24 imum, examine and make findings as to

25 whether—
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1 ‘‘(i) such hydraulic fracturing has en2 dangered or will endanger (as defined under

3 subsection (d)(2)) underground drinking

4 water sources, including those sources with5 in specific regions, States or portions of

6 States;

7 ‘‘(ii) there are specific methods, prac8 tices, or hydrogeologic circumstances in

9 which hydraulic fracturing has endangered

10 or will endanger underground drinking

11 water sources; and

12 ‘‘(iii) there are any precautionary ac13 tions that may reduce or eliminate any

14 such endangerment.

15 ‘‘(D) STUDY OF HYDRAULIC FRACTURING IN

16 A PARTICULAR TYPE OF GEOLOGIC FORMATION.—

17 The Administrator may also complete a separate

18 study on the known and potential effects on un19 derground drinking water sources of hydraulic

20 fracturing in a particular type of geologic for21 mation:

22 ‘‘(i) If such a study is undertaken, the

23 Administrator shall follow the procedures

24 for study preparation and independent sci25 entific review set forth in subparagraphs (1)
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1 (B) and (C) and (2) of this subsection. The

2 Administrator may complete this separate

3 study prior to the completion of the broader

4 study of hydraulic fracturing required pur5 suant to subparagraph (A) of this sub6 section.

7 ‘‘(ii) At the conclusion of independent

8 scientific review for any separate study, the

9 Administrator shall determine, pursuant to

10 paragraph (3), whether regulation of hy11 draulic fracturing in the particular type of

12 geologic formation addressed in the separate

13 study is necessary under this part to ensure

14 that underground sources of drinking water

15 will not be endangered on a nationwide

16 basis, or within a specific region, State or

17 portions of a State. Subparagraph (4) of

18 this subsection shall apply to any such de19 termination by the Administrator.

20 ‘‘(iii) If the Administrator completes a

21 separate study, the Administrator may use

22 the information gathered in the course of

23 such a study in undertaking her broad

24 study to the extent appropriate. The broader

25 study need not include a reexamination of
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1 the conclusions reached by the Adminis2 trator in any separate study.

3 ‘‘(2) INDEPENDENT SCIENTIFIC REVIEW.—

4 ‘‘(A) IN GENERAL.—Prior to the time the

5 study under paragraph (1) is completed, the Ad6 ministrator shall enter into an appropriate

7 agreement with the National Academy of

8 Sciences to have the Academy review the conclu9 sions of the study.

10 ‘‘(B) REPORT.—Not later than 11 months

11 after entering into an appropriate agreement

12 with the Administrator, the National Academy of

13 Sciences shall report to the Administrator, the

14 Committee on Energy and Commerce of the

15 House of Representatives, and the Committee on

16 Environment and Public Works of the Senate, on

17 the—

18 ‘‘(i) findings related to the study con19 ducted by the Administrator under para20 graph (1);

21 ‘‘(ii) the scientific and technical basis

22 for such findings; and

23 ‘‘(iii) recommendations, if any, for

24 modifying the findings of the study.

25 ‘‘(3) REGULATORY DETERMINATION.—
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1 ‘‘(A) IN GENERAL.—Not later than 6

2 months after receiving the National Academy of

3 Sciences report under paragraph (2), the Admin4 istrator shall determine, after informal public

5 hearings and public notice and opportunity for

6 comment, and based on information developed or

7 accumulated in connection with the study re8 quired under paragraph (1) and the National

9 Academy of Sciences report under paragraph

10 (2), either—

11 ‘‘(i) that regulation of hydraulic frac12 turing under this part is necessary to en13 sure that underground sources of drinking

14 water will not be endangered on a nation15 wide basis, or within a specific region,

16 State or portions of a State; or

17 ‘‘(ii) that regulation described under

18 clause (i) is unnecessary.

19 ‘‘(B) PUBLICATION OF DETERMINATION.—

20 The Administrator shall publish the determina21 tion in the Federal Register, accompanied by an

22 explanation and the reasons for it.

23 ‘‘(4) PROMULGATION OF REGULATIONS.—

24 ‘‘(A) REGULATION NECESSARY.—If the Ad25 ministrator determines under paragraph (3) that
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1 regulation by hydraulic fracturing under this

2 part is necessary to ensure that hydraulic frac3 turing does not endanger underground drinking

4 water sources on a nationwide basis, or within

5 a specific region, State or portions of a State,

6 the Administrator shall, within 6 months after

7 the issuance of that determination, and after

8 public notice and opportunity for comment, pro9 mulgate regulations under section 1421 (42

10 U.S.C. 300h) to ensure that hydraulic fracturing

11 will not endanger such underground sources of

12 drinking water. However, for purposes of the Ad13 ministrator’s approval or disapproval under sec14 tion 1422 of any State underground injection

15 control program for regulating hydraulic frac16 turing, a State at any time may make the alter17 native demonstration provided for in section

18 1425 of this title.

19 ‘‘(B) REGULATION UNNECESSARY.—The Ad20 ministrator shall not regulate or require States

21 to regulate hydraulic fracturing under this part

22 unless the Administrator determines under para23 graph (3) that such regulation is necessary. This

24 provision shall not apply to any State which has

25 a program for the regulation of hydraulic frac-
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1 turing that was approved by the Administrator

2 under this part prior to the effective date of this

3 subsection.

4 ‘‘(C) EXISTING REGULATIONS.—A deter5 mination by the Administrator under paragraph

6 (3) that regulation is unnecessary will relieve all

7 States (including those with existing approved

8 programs for the regulation of hydraulic frac9 turing) from any further obligation to regulate

10 hydraulic fracturing as an underground injec11 tion under this part.

12 ‘‘(5) DEFINITION OF HYDRAULIC FRACTURING.—

13 For purposes of this subsection, the term ‘hydraulic

14 fracturing’ means the process of creating a fracture in

15 a reservoir rock, and injecting fluids and propping

16 agents, for the purposes of reservoir stimulation re17 lated to oil and gas production activities.

18 ‘‘(6) SAVINGS.—Nothing in this subsection shall

19 in any way limit the authorities of the Administrator

20 under section 1431 (42 U.S.C. 300i).’’.

21 SEC. 611. AUTHORIZATION OF APPROPRIATIONS.

22 There are authorized to be appropriated to the Admin23 istrator of the Environmental Protection Agency $100,000

24 for fiscal year 2003, to remain available until expended,

25 for a grant to the State of Alabama to assist in the imple-
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1 mentation of its regulatory program under section 1425 of

2 the Safe Drinking Water Act.

3 SEC. 612. PRESERVATION OF OIL AND GAS RESOURCE

4 DATA.

5 The Secretary of the Interior, through the United

6 States Geological Survey, may enter into appropriate ar7 rangements with State agencies that conduct geological sur8 vey activities to collect, archive, and provide public access

9 to data and study results regarding oil and natural gas

10 resources. The Secretary may accept private contributions

11 of property and services for purposes of this section.

12 SEC 613. RESOLUTION OF FEDERAL RESOURCE DEVELOP13 MENT CONFLICTS IN THE POWDER RIVER

14 BASIN.

15 The Secretary of the Interior shall undertake a review

16 of existing authorities to resolve conflicts between the devel17 opment of Federal coal and the development of Federal and

18 non-Federal coalbed methane in the Powder River Basin

19 in Wyoming and Montana. Not later than 90 days from

20 enactment of this Act, the Secretary shall report to Congress

21 on her plan to resolve these conflicts.
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1 TITLE VII—NATURAL GAS

2 PIPELINES

3 Subtitle A—Alaska Natural Gas

4 Pipeline

5 SEC. 701. SHORT TITLE.

6 This subtitle may be cited as the ‘‘Alaska Natural Gas

7 Pipeline Act of 2003’’.

8 SEC. 702. FINDINGS.

9 The Congress finds that:

10 (1) Construction of a natural gas pipeline sys11 tem from the Alaskan North Slope to United States

12 markets is in the national interest and will enhance

13 national energy security by providing access to the

14 significant gas reserves in Alaska needed to meet the

15 anticipated demand for natural gas.

16 (2) The Commission issued a conditional certifi17 cate of public convenience and necessity for the Alas18 ka Natural Gas Transportation System, which re19 mains in effect.

20 SEC. 703. PURPOSES.

21 The purposes of this subtitle are—

22 (1) to provide a statutory framework for the ex23 pedited approval, construction, and initial operation

24 of an Alaska natural gas transportation project, as

25 an alternative to the framework provided in the Alas-
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1 ka Natural Gas Transportation Act of 1976 (15

2 U.S.C. 719–719o), which remains in effect;

3 (2) to establish a process for providing access to

4 such transportation project in order to promote com5 petition in the exploration, development and produc6 tion of Alaska natural gas;

7 (3) to clarify Federal authorities under the Alas8 ka Natural Gas Transportation Act; and

9 (4) to authorize Federal financial assistance to

10 an Alaska natural gas transportation project as pro11 vided in this subtitle.

12 SEC. 704. ISSUANCE OF CERTIFICATE OF PUBLIC CONVEN13 IENCE AND NECESSITY.

14 (a) AUTHORITY OF THE COMMISSION.—Notwith15 standing the provisions of the Alaska Natural Gas Trans16 portation Act of 1976 (15 U.S.C. 719–719o), the Commis17 sion may, pursuant to section 7(c) of the Natural Gas Act

18 (15 U.S.C. 717f(c)), consider and act on an application for

19 the issuance of a certificate of public convenience and neces20 sity authorizing the construction and operation of an Alas21 ka natural gas transportation project other than the Alaska

22 Natural Gas Transportation System.

23 (b) ISSUANCE OF CERTIFICATE.—(1) The Commission

24 shall issue a certificate of public convenience and necessity

25 authorizing the construction and operation of an Alaska
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1 natural gas transportation project under this section if the

2 applicant has satisfied the requirements of section 7(e) of

3 the Natural Gas Act (15 U.S.C. 717f(e)).

4 (2) In considering an application under this section,

5 the Commission shall presume that—

6 (A) a public need exists to construct and operate

7 the proposed Alaska natural gas transportation

8 project; and

9 (B) sufficient downstream capacity will exist to

10 transport the Alaska natural gas moving through such

11 project to markets in the contiguous United States.

12 (c) EXPEDITED APPROVAL PROCESS.—The Commis13 sion shall issue a final order granting or denying any ap14 plication for a certificate of public convenience and neces15 sity under section 7(c) of the Natural Gas Act (15 U.S.C.

16 717f(c)) and this section not more than 60 days after the

17 issuance of the final environmental impact statement for

18 that project pursuant to section 705.

19 (d) PROHIBITION ON CERTAIN PIPELINE ROUTE.—No

20 license, permit, lease, right-of-way, authorization or other

21 approval required under Federal law for the construction

22 of any pipeline to transport natural gas from lands within

23 the Prudhoe Bay oil and gas lease area may be granted

24 for any pipeline that follows a route that traverses—
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1 (1) the submerged lands (as defined by the Sub2 merged Lands Act) beneath, or the adjacent shoreline

3 of, the Beaufort Sea; and

4 (2) enters Canada at any point north of 68 de5 grees North latitude.

6 (e) OPEN SEASON.—Except where an expansion is or7 dered pursuant to section 706, initial or expansion capacity

8 on any Alaska natural gas transportation project shall be

9 allocated in accordance with procedures to be established

10 by the Commission in regulations governing the conduct of

11 open seasons for such project. Such procedures shall include

12 the criteria for and timing of any open seasons, be con13 sistent with the purposes set forth in section 703(2) and,

14 for any open season for capacity beyond the initial capac15 ity, provide the opportunity for the transportation of nat16 ural gas other than from the Prudhoe Bay and Point

17 Thompson units. The Commission shall issue such regula18 tions no later than 120 days after the enactment of this

19 subtitle.

20 (f) PROJECTS IN THE CONTIGUOUS UNITED STATES.—

21 Applications for additional or expanded pipeline facilities

22 that may be required to transport Alaska natural gas from

23 Canada to markets in the contiguous United States may

24 be made pursuant to the Natural Gas Act. To the extent

25 such pipeline facilities include the expansion of any facility
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1 constructed pursuant to the Alaska Natural Gas Transpor2 tation Act of 1976, the provisions of that Act shall continue

3 to apply.

4 (g) STUDY OF IN-STATE NEEDS.—The holder of the

5 certificate of public convenience and necessity issued, modi6 fied, or amended by the Commission for an Alaska natural

7 gas transportation project shall demonstrate that it has con8 ducted a study of Alaska in-State needs, including tie-in

9 points along the Alaska natural gas transportation project

10 for in-State access.

11 (h) ALASKA ROYALTY GAS.—The Commission, upon

12 the request of the State of Alaska and after a hearing, may

13 provide for reasonable access to the Alaska natural gas

14 transportation project for the State of Alaska or its designee

15 for the transportation of the State’s royalty gas for local

16 consumption needs within the State: Provided, That the

17 rates of existing shippers of subscribed capacity on such

18 project shall not be increased as a result of such access.

19 (i) REGULATIONS.—The Commission may issue regu20 lations to carry out the provisions of this section.

21 SEC. 705. ENVIRONMENTAL REVIEWS.

22 (a) COMPLIANCE WITH NEPA.—The issuance of a cer23 tificate of public convenience and necessity authorizing the

24 construction and operation of any Alaska natural gas

25 transportation project under section 704 shall be treated as
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1 a major Federal action significantly affecting the quality

2 of the human environment within the meaning of section

3 102(2)(C) of the National Environmental Policy Act of

4 1969 (42 U.S.C. 4332(2)(C)).

5 (b) DESIGNATION OF LEAD AGENCY.—The Commis6 sion shall be the lead agency for purposes of complying with

7 the National Environmental Policy Act of 1969, and shall

8 be responsible for preparing the statement required by sec9 tion 102(2)(c) of that Act (42 U.S.C. 4332(2)(c)) with re10 spect to an Alaska natural gas transportation project under

11 section 704. The Commission shall prepare a single environ12 mental statement under this section, which shall consolidate

13 the environmental reviews of all Federal agencies consid14 ering any aspect of the project.

15 (c) OTHER AGENCIES.—All Federal agencies consid16 ering aspects of the construction and operation of an Alaska

17 natural gas transportation project under section 704 shall

18 cooperate with the Commission, and shall comply with

19 deadlines established by the Commission in the preparation

20 of the statement under this section. The statement prepared

21 under this section shall be used by all such agencies to sat22 isfy their responsibilities under section 102(2)(C) of the Na23 tional Environmental Policy Act of 1969 (42 U.S.C.

24 4332(2)(C)) with respect to such project.
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1 (d) EXPEDITED PROCESS.—The Commission shall

2 issue a draft statement under this section not later than

3 12 months after the Commission determines the application

4 to be complete and shall issue the final statement not later

5 than 6 months after the Commission issues the draft state6 ment, unless the Commission for good cause finds that addi7 tional time is needed.

8 SEC. 706. PIPELINE EXPANSION.

9 (a) AUTHORITY.—With respect to any Alaska natural

10 gas transportation project, upon the request of one or more

11 persons and after giving notice and an opportunity for a

12 hearing, the Commission may order the expansion of such

13 project if it determines that such expansion is required by

14 the present and future public convenience and necessity.

15 (b) REQUIREMENTS.—Before ordering an expansion

16 the Commission shall—

17 (1) approve or establish rates for the expansion

18 service that are designed to ensure the recovery, on an

19 incremental or rolled-in basis, of the cost associated

20 with the expansion (including a reasonable rate of re21 turn on investment);

22 (2) ensure that the rates as established do not re23 quire existing shippers on the Alaska natural gas

24 transportation project to subsidize expansion ship25 pers;
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1 (3) find that the proposed shipper will comply

2 with, and the proposed expansion and the expansion

3 of service will be undertaken and implemented based

4 on, terms and conditions consistent with the then-ef5 fective tariff of the Alaska natural gas transportation

6 project;

7 (4) find that the proposed facilities will not ad8 versely affect the financial or economic viability of the

9 Alaska natural gas transportation project;

10 (5) find that the proposed facilities will not ad11 versely affect the overall operations of the Alaska nat12 ural gas transportation project;

13 (6) find that the proposed facilities will not di14 minish the contract rights of existing shippers to pre15 viously subscribed certificated capacity;

16 (7) ensure that all necessary environmental re17 views have been completed; and

18 (8) find that adequate downstream facilities exist

19 or are expected to exist to deliver incremental Alaska

20 natural gas to market.

21 (c) REQUIREMENT FOR A FIRM TRANSPORTATION

22 AGREEMENT.—Any order of the Commission issued pursu23 ant to this section shall be null and void unless the person

24 or persons requesting the order executes a firm transpor25 tation agreement with the Alaska natural gas transpor-
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1 tation project within a reasonable period of time as speci2 fied in such order.

3 (d) LIMITATION.—Nothing in this section shall be con4 strued to expand or otherwise affect any authorities of the

5 Commission with respect to any natural gas pipeline lo6 cated outside the State of Alaska.

7 (e) REGULATIONS.—The Commission may issue regu8 lations to carry out the provisions of this section.

9 SEC. 707. FEDERAL COORDINATOR.

10 (a) ESTABLISHMENT.—There is established as an inde11 pendent establishment in the executive branch, the Office

12 of the Federal Coordinator for Alaska Natural Gas Trans13 portation Projects.

14 (b) THE FEDERAL COORDINATOR.—The Office shall be

15 headed by a Federal Coordinator for Alaska Natural Gas

16 Transportation Projects, who shall—

17 (1) be appointed by the President, by and with

18 the advice of the Senate,

19 (2) hold office at the pleasure of the President,

20 and

21 (3) be compensated at the rate prescribed for

22 level III of the Executive Schedule (5 U.S.C. 5314).

23 (c) DUTIES.—The Federal Coordinator shall be respon24 sible for—
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1 (1) coordinating the expeditious discharge of all

2 activities by Federal agencies with respect to an Alas3 ka natural gas transportation project; and

4 (2) ensuring the compliance of Federal agencies

5 with the provisions of this subtitle.

6 (d) REVIEWS AND ACTIONS OF OTHER FEDERAL

7 AGENCIES.—(1) All reviews conducted and actions taken by

8 any Federal officer or agency relating to an Alaska natural

9 gas transportation project authorized under this section

10 shall be expedited, in a manner consistent with completion

11 of the necessary reviews and approvals by the deadlines set

12 forth in this subtitle.

13 (2) No Federal officer or agency shall have the author14 ity to include terms and conditions that are permitted, but

15 not required, by law on any certificate, right-of-way, per16 mit, lease or other authorization issued to an Alaska nat17 ural gas transportation project if the Federal Coordinator

18 determines that the terms and conditions would prevent or

19 impair in any significant respect the expeditious construc20 tion and operation of the project.

21 (3) Unless required by law, no Federal officer or agen22 cy shall add to, amend, or abrogate any certificate, right23 of-way, permit, lease or other authorization issued to an

24 Alaska natural gas transportation project if the Federal Co25 ordinator determines that such action would prevent or im-
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1 pair in any significant respect the expeditious construction

2 and operation of the project.

3 (e) STATE COORDINATION.—The Federal Coordinator

4 shall enter into a Joint Surveillance and Monitoring Agree5 ment, approved by the President and the Governor of Alas6 ka, with the State of Alaska similar to that in effect during

7 construction of the Trans-Alaska Oil Pipeline to monitor

8 the construction of the Alaska natural gas transportation

9 project. The Federal Government shall have primary sur10 veillance and monitoring responsibility where the Alaska

11 natural gas transportation project crosses Federal lands

12 and private lands, and the State government shall have pri13 mary surveillance and monitoring responsibility where the

14 Alaska natural gas transportation project crosses State

15 lands.

16 SEC. 708. JUDICIAL REVIEW.

17 (a) EXCLUSIVE JURISDICTION.—The United States

18 Court of Appeals for the District of Columbia Circuit shall

19 have exclusive jurisdiction to determine—

20 (1) the validity of any final order or action (in21 cluding a failure to act) of any Federal agency or of22 ficer under this subtitle;

23 (2) the constitutionality of any provision of this

24 subtitle, or any decision made or action taken there25 under; or
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1 (3) the adequacy of any environmental impact

2 statement prepared under the National Environ3 mental Policy Act of 1969 with respect to any action

4 under this subtitle.

5 (b) DEADLINE FOR FILING CLAIM.—Claims arising

6 under this subtitle may be brought not later than 60 days

7 after the date of the decision or action giving rise to the

8 claim.

9 (c) EXPEDITED CONSIDERATION.—The United States

10 Court of Appeals for the District of Columbia Circuit shall

11 set any action brought under subsection (a) of this section

12 for expedited consideration, taking into account the na13 tional interest as described in section 702 of this subtitle.

14 (d) AMENDMENT TO ANGTA.—Section 10(c) of the

15 Alaska Gas Transportation Act of 1976 (15 U.S.C. 719h)

16 is amended by adding the following paragraph:

17 ‘‘(2) EXPEDITED CONSIDERATION.—The United

18 States Court of Appeals for the District of Columbia

19 Circuit shall set any action brought under subsection

20 (a) of this section for expedited consideration, taking

21 into account the national interest described in section

22 2 of this Act.’’.
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1 SEC. 709. STATE JURISDICTION OVER IN-STATE DELIVERY

2 OF NATURAL GAS.

3 (a) LOCAL DISTRIBUTION.—Any facility receiving

4 natural gas from the Alaska natural gas transportation

5 project for delivery to consumers within the State of Alaska

6 shall be deemed to be a local distribution facility within

7 the meaning of section 1(b) of the Natural Gas Act (15

8 U.S.C. 717), and therefore not subject to the jurisdiction

9 of the Federal Energy Regulatory Commission.

10 (b) ADDITIONAL PIPELINES.—Nothing in this subtitle,

11 except as provided in subsection 704(d), shall preclude or

12 affect a future gas pipeline that may be constructed to de13 liver natural gas to Fairbanks, Anchorage, Matanuska14 Susitna Valley, or the Kenai peninsula or Valdez or any

15 other site in the State of Alaska for consumption within

16 or distribution outside the State of Alaska.

17 (c) RATE COORDINATION.—Pursuant to the Natural

18 Gas Act, the Commission shall establish rates for the trans19 portation of natural gas on the Alaska natural gas trans20 portation project. In exercising such authority, the Commis21 sion, pursuant to Section 17(b) of the Natural Gas Act (15

22 U.S.C. 717p), shall confer with the State of Alaska regard23 ing rates (including rate settlements) applicable to natural

24 gas transported on and delivered from the Alaska natural

25 gas transportation project for use within the State of Alas26 ka.
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1 SEC. 710. LOAN GUARANTEE.

2 (a) AUTHORITY.—The Secretary of Energy may guar3 antee not more than 80 percent of the principal of any loan

4 made to the holder of a certificate of public convenience and

5 necessity issued under section 704(b) of this Act or section

6 9 of the Alaska Natural Gas Transportation Act of 1976

7 (15 U.S.C. 719g) for the purpose of constructing an Alaska

8 natural gas transportation project.

9 (b) CONDITIONS.—(1) The Secretary of Energy may

10 not guarantee a loan under this section unless the guarantee

11 has filed an application for a certificate of public conven12 ience and necessity under section 704(b) of this Act or for

13 an amended certificate under section 9 of the Alaska Nat14 ural Gas Transportation Act of 1976 (15 U.S.C. 719g) with

15 the Commission not later than 18 months after the date of

16 enactment of this subtitle.

17 (2) A loan guaranteed under this section shall be made

18 by a financial institution subject to the examination of the

19 Secretary.

20 (3) Loan requirements, including term, maximum size,

21 collateral requirements and other features shall be deter22 mined by the Secretary.

23 (c) LIMITATION ON AMOUNT.—Commitments to guar24 antee loans may be made by the Secretary of Energy only

25 to the extent that the total loan principal, any part of which

26 is guaranteed, will not exceed $10,000,000,000.
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1 (d) REGULATIONS.—The Secretary of Energy may

2 issue regulations to carry out the provisions of this section.

3 (e) AUTHORIZATION OF APPROPRIATIONS.—There are

4 authorized to be appropriated to the Secretary such sums

5 as may be necessary to cover the cost of loan guarantees,

6 as defined by section 502(5) of the Federal Credit Reform

7 Act of 1990 (2 U.S.C. 661a(5)).

8 SEC. 711. STUDY OF ALTERNATIVE MEANS OF CONSTRUC9 TION.

10 (a) REQUIREMENT OF STUDY.—If no application for

11 the issuance of a certificate or amended certificate of public

12 convenience and necessity authorizing the construction and

13 operation of an Alaska natural gas transportation project

14 has been filed with the Commission within 18 months after

15 the date of enactment of this title, the Secretary of Energy

16 shall conduct a study of alternative approaches to the con17 struction and operation of the project.

18 (b) SCOPE OF STUDY.—The study shall consider the

19 feasibility of establishing a Government corporation to con20 struct an Alaska natural gas transportation project, and

21 alternative means of providing Federal financing and own22 ership (including alternative combinations of Government

23 and private corporate ownership) of the project.

24 (c) CONSULTATION.—In conducting the study, the Sec25 retary of Energy shall consult with the Secretary of the
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1 Treasury and the Secretary of the Army (acting through

2 the Commanding General of the Corps of Engineers).

3 (d) REPORT.—If the Secretary of Energy is required

4 to conduct a study under subsection (a), he shall submit

5 a report containing the results of the study, his rec6 ommendations, and any proposals for legislation to imple7 ment his recommendations to the Congress within 6 months

8 after the expiration of the Secretary of Energy’s authority

9 to guarantee a loan under section 710.

10 SEC. 712. CLARIFICATION OF ANGTA STATUS AND AUTHORI11 TIES.

12 (a) SAVINGS CLAUSE.—Nothing in this subtitle affects

13 any decision, certificate, permit, right-of-way, lease, or

14 other authorization issued under section 9 of the Alaska

15 Natural Gas Transportation Act of 1976 (15 U.S.C. 719g)

16 or any Presidential findings or waivers issued in accord17 ance with that Act.

18 (b) CLARIFICATION OF AUTHORITY TO AMEND TERMS

19 AND CONDITIONS TO MEET CURRENT PROJECT REQUIRE20 MENTS.—Any Federal officer or agency responsible for

21 granting or issuing any certificate, permit, right-of-way,

22 lease, or other authorization under section 9 of the Alaska

23 Natural Gas Transportation Act of 1976 (15 U.S.C. 719g)

24 may add to, amend, or abrogate any term or condition in25 cluded in such certificate, permit, right-of-way, lease, or
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1 other authorization to meet current project requirements

2 (including the physical design, facilities, and tariff speci3 fications), so long as such action does not compel a change

4 in the basic nature and general route of the Alaska Natural

5 Gas Transportation System as designated and described in

6 section 2 of the President’s Decision, or would otherwise

7 prevent or impair in any significant respect the expeditious

8 construction and initial operation of such transportation

9 system.

10 (c) UPDATED ENVIRONMENTAL REVIEWS.—The Sec11 retary of Energy shall require the sponsor of the Alaska

12 Natural Gas Transportation System to submit such up13 dated environmental data, reports, permits, and impact

14 analyses as the Secretary determines are necessary to de15 velop detailed terms, conditions, and compliance plans re16 quired by section 5 of the President’s Decision.

17 SEC. 713. DEFINITIONS.

18 For purposes of this subtitle:

19 (1) The term ‘‘Alaska natural gas’’ means nat20 ural gas derived from the area of the State of Alaska

21 lying north of 64 degrees North latitude.

22 (2) The term ‘‘Alaska natural gas transportation

23 project’’ means any natural gas pipeline system that

24 carries Alaska natural gas to the border between Alas25 ka and Canada (including related facilities subject to
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1 the jurisdiction of the Commission) that is authorized

2 under either—

3 (A) the Alaska Natural Gas Transportation

4 Act of 1976 (15 U.S.C. 719–719o); or

5 (B) section 704 of this subtitle.

6 (3) The term ‘‘Alaska Natural Gas Transpor7 tation System’’ means the Alaska natural gas trans8 portation project authorized under the Alaska Natural

9 Gas Transportation Act of 1976 and designated and

10 described in section 2 of the President’s Decision.

11 (4) The term ‘‘Commission’’ means the Federal

12 Energy Regulatory Commission.

13 (5) The term ‘‘President’s Decision’’ means the

14 Decision and Report to Congress on the Alaska Nat15 ural Gas Transportation system issued by the Presi16 dent on September 22, 1977 pursuant to section 7 of

17 the Alaska Natural Gas Transportation Act of 1976

18 (15 U.S.C. 719c) and approved by Public Law 95–

19 158.

20 SEC. 714. SENSE OF THE SENATE.

21 It is the sense of the Senate that an Alaska natural

22 gas transportation project will provide significant economic

23 benefits to the United States and Canada. In order to maxi24 mize those benefits, the Senate urges the sponsors of the

25 pipeline project to make every effort to use steel that is man-
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1 ufactured or produced in North America and to negotiate

2 a project labor agreement to expedite construction of the

3 pipeline.

4 SEC. 715. ALASKAN PIPELINE CONSTRUCTION TRAINING

5 PROGRAM.

6 (a) Within six months after enactment of this Act, the

7 Secretary of Labor (in this section referred to as the ‘‘Sec8 retary’’) shall submit a report to the Committee on Energy

9 and Natural Resources of the United States Senate and the

10 Committee on Resources of the United States House of Rep11 resentatives setting forth a program to train Alaska resi12 dents in the skills and crafts required in the design, con13 struction, and operation of an Alaska gas pipeline system

14 and that will enhance employment and contracting oppor15 tunities for Alaskan residents. The report shall also describe

16 any laws, rules, regulations and policies which act as a de17 terrent to hiring Alaskan residents or contracting with

18 Alaskan residents to perform work on Alaska gas pipelines,

19 together with any recommendations for change. For pur20 poses of this subsection, Alaskan residents shall be defined

21 as those individuals eligible to vote within the State of Alas22 ka on the date of enactment of this Act.

23 (b) Within 1 year of the date the report is transmitted

24 to Congress, the Secretary shall establish within the State

25 of Alaska, at such locations as are appropriate, one or more
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1 training centers for the express purpose of training Alaskan

2 residents in the skills and crafts necessary in the design,

3 construction and operation of gas pipelines in Alaska. Each

4 such training center shall also train Alaskan residents in

5 the skills required to write, offer, and monitor contracts in

6 support of the design, construction, and operation of Alaska

7 gas pipelines.

8 (c) In implementing the report and program described

9 in this subsection, the Secretary shall consult with the Alas10 kan Governor.

11 (d) There are authorized to be appropriated to the Sec12 retary such sums as may be necessary, but not to exceed

13 $20,000,000 for the purposes of this subsection.

14 Subtitle B—Operating Pipelines

15 SEC. 721. ENVIRONMENTAL REVIEW AND PERMITTING OF

16 NATURAL GAS PIPELINE PROJECTS.

17 (a) INTERAGENCY REVIEW.—The Chairman of the

18 Council on Environmental Quality, in coordination with

19 the Federal Energy Regulatory Commission, shall establish

20 an interagency task force to develop an interagency memo21 randum of understanding to expedite the environmental re22 view and permitting of natural gas pipeline projects.

23 (b) MEMBERSHIP OF INTERAGENCY TASK FORCE.—

24 The task force shall consist of—
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1 (1) the Chairman of the Council on Environ2 mental Quality, who shall serve as the Chairman of

3 the interagency task force,

4 (2) the Chairman of the Federal Energy Regu5 latory Commission,

6 (3) the Director of the Bureau of Land Manage7 ment,

8 (4) the Director of the United States Fish and

9 Wildlife Service,

10 (5) the Commanding General, United States

11 Army Corps of Engineers,

12 (6) the Chief of the Forest Service,

13 (7) the Administrator of the Environmental Pro14 tection Agency,

15 (8) the Chairman of the Advisory Council on

16 Historic Preservation, and

17 (9) the heads of such other agencies as the Chair18 man of the Council on Environmental Quality and

19 the Chairman of the Federal Energy Regulatory Com20 mission deem appropriate.

21 (c) MEMORANDUM OF UNDERSTANDING.—The agencies

22 represented by the members of the interagency task force

23 shall enter into the memorandum of understanding not

24 later than 1 year after the date of the enactment of this

25 section.
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1 Subtitle C—Pipeline Safety

2 PART I—SHORT TITLE; AMENDMENT OF

3 TITLE 49

4 SEC. 741. SHORT TITLE; AMENDMENT OF TITLE 49, UNITED

5 STATES CODE.

6 (a) SHORT TITLE.—This subtitle may be cited as the

7 ‘‘Pipeline Safety Improvement Act of 2003’’.

8 (b) AMENDMENT OF TITLE 49, UNITED STATES

9 CODE.—Except as otherwise expressly provided, whenever

10 in this subtitle an amendment or repeal is expressed in

11 terms of an amendment to, or a repeal of, a section or other

12 provision, the reference shall be considered to be made to

13 a section or other provision of title 49, United States Code.

14 PART II—PIPELINE SAFETY

15 IMPROVEMENT ACT OF 2003

16 SEC. 761. IMPLEMENTATION OF INSPECTOR GENERAL REC17 OMMENDATIONS.

18 (a) IN GENERAL.—Except as otherwise required by

19 this subtitle, the Secretary shall implement the safety im20 provement recommendations provided for in the Depart21 ment of Transportation Inspector General’s Report (RT–

22 2000–069).

23 (b) REPORTS BY THE SECRETARY.—Not later than 90

24 days after the date of enactment of this Act, and every 90

25 days thereafter until each of the recommendations referred
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1 to in subsection (a) has been implemented, the Secretary

2 shall transmit to the Committee on Commerce, Science, and

3 Transportation of the Senate and the Committee on Trans4 portation and Infrastructure of the House of Representa5 tives a report on the specific actions taken to implement

6 such recommendations.

7 (c) REPORTS BY THE INSPECTOR GENERAL.—The In8 spector General shall periodically transmit to the commit9 tees referred to in subsection (b) a report assessing the Sec10 retary’s progress in implementing the recommendations re11 ferred to in subsection (a) and identifying options for the

12 Secretary to consider in accelerating recommendation im13 plementation.

14 SEC. 762. NTSB SAFETY RECOMMENDATIONS.

15 (a) IN GENERAL.—The Secretary of Transportation,

16 the Administrator of Research and Special Program Ad17 ministration, and the Director of the Office of Pipeline

18 Safety shall fully comply with section 1135 of title 49,

19 United States Code, to ensure timely responsiveness to Na20 tional Transportation Safety Board recommendations

21 about pipeline safety.

22 (b) PUBLIC AVAILABILITY.—The Secretary, Adminis23 trator, or Director, respectively, shall make a copy of each

24 recommendation on pipeline safety and response, as de-
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1 scribed in sections 1135 (a) and (b) of title 49, United

2 States Code, available to the public at reasonable cost.

3 (c) REPORTS TO CONGRESS.—The Secretary, Admin4 istrator, or Director, respectively, shall submit to the Con5 gress by January 1 of each year a report containing each

6 recommendation on pipeline safety made by the Board dur7 ing the prior year and a copy of the response to each such

8 recommendation.

9 SEC. 763. QUALIFICATIONS OF PIPELINE PERSONNEL.

10 (a) QUALIFICATION PLAN.—Each pipeline operator

11 shall make available to the Secretary of Transportation, or,

12 in the case of an intrastate pipeline facility operator, the

13 appropriate State regulatory agency, a plan that is de14 signed to enhance the qualifications of pipeline personnel

15 and to reduce the likelihood of accidents and injuries. The

16 plan shall be made available not more than 6 months after

17 the date of enactment of this Act, and the operator shall

18 revise or update the plan as appropriate.

19 (b) REQUIREMENTS.—The enhanced qualification plan

20 shall include, at a minimum, criteria to demonstrate the

21 ability of an individual to safely and properly perform

22 tasks identified under section 60102 of title 49, United

23 States Code. The plan shall also provide for training and

24 periodic reexamination of pipeline personnel qualifications

25 and provide for requalification as appropriate. The Sec-
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1 retary, or, in the case of an intrastate pipeline facility oper2 ator, the appropriate State regulatory agency, may review

3 and certify the plans to determine if they are sufficient to

4 provide a safe operating environment and shall periodically

5 review the plans to ensure the continuation of a safe oper6 ation. The Secretary may establish minimum standards for

7 pipeline personnel training and evaluation, which may in8 clude written examination, oral examination, work per9 formance history review, observation during performance

10 on the job, on the job training, simulations, or other forms

11 of assessment.

12 (c) REPORT TO CONGRESS.—

13 (1) IN GENERAL.—The Secretary shall submit a

14 report to the Congress evaluating the effectiveness of

15 operator qualification and training efforts,

16 including—

17 (A) actions taken by inspectors;

18 (B) recommendations made by inspectors

19 for changes to operator qualification and train20 ing programs; and

21 (C) industry and employee organization re22 sponses to those actions and recommendations.

23 (2) CRITERIA.—The Secretary may establish cri24 teria for use in evaluating and reporting on operator
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1 qualification and training for purposes of this sub2 section.

3 (3) DUE DATE.—The Secretary shall submit the

4 report required by paragraph (1) to the Congress 3

5 years after the date of enactment of this Act.

6 SEC. 764. PIPELINE INTEGRITY INSPECTION PROGRAM.

7 Section 60109 is amended by adding at the end the

8 following:

9 ‘‘(c) INTEGRITY MANAGEMENT.—

10 ‘‘(1) GENERAL REQUIREMENT.—The Secretary

11 shall promulgate regulations requiring operators of

12 hazardous liquid pipelines and natural gas trans13 mission pipelines to evaluate the risks to the opera14 tor’s pipeline facilities in areas identified pursuant to

15 subsection (a)(1), and to adopt and implement a pro16 gram for integrity management that reduces the risk

17 of an incident in those areas. The regulations shall be

18 issued no later than 1 year after the Secretary has

19 issued standards pursuant to subsections (a) and (b)

20 of this section or by December 31, 2003, whichever is

21 sooner.

22 ‘‘(2) STANDARDS FOR PROGRAM.—In promul23 gating regulations under this section, the Secretary

24 shall require an operator’s integrity management
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1 plan to be based on risk analysis and each plan shall

2 include, at a minimum—

3 ‘‘(A) periodic assessment of the integrity of

4 the pipeline through methods including internal

5 inspection, pressure testing, direct assessment, or

6 other effective methods. The assessment period

7 shall be no less than every 5 years unless the De8 partment of Transportation Inspector General,

9 after consultation with the Secretary determines

10 there is not a sufficient capability or it is

11 deemed unnecessary because of more technically

12 appropriate monitoring or creates undue inter13 ruption of necessary supply to fulfill the require14 ments under this paragraph;

15 ‘‘(B) clearly defined criteria for evaluating

16 the results of the periodic assessment methods

17 carried out under subparagraph (A) and proce18 dures to ensure identified problems are corrected

19 in a timely manner; and

20 ‘‘(C) measures, as appropriate, that prevent

21 and mitigate unintended releases, such as leak

22 detection, integrity evaluation, restrictive flow

23 devices, or other measures.

24 ‘‘(3) CRITERIA FOR PROGRAM STANDARDS.—In

25 deciding how frequently the integrity assessment
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1 methods carried out under paragraph (2)(A) must be

2 conducted, an operator shall take into account the po3 tential for new defects developing or previously identi4 fied structural defects caused by construction or in5 stallation, the operational characteristics of the pipe6 line, and leak history. In addition, the Secretary may

7 establish a minimum testing requirement for opera8 tors of pipelines to conduct internal inspections.

9 ‘‘(4) STATE ROLE.—A State authority that has

10 an agreement in effect with the Secretary under sec11 tion 60106 is authorized to review and assess an op12 erator’s risk analyses and integrity management

13 plans required under this section for interstate pipe14 lines located in that State. The reviewing State au15 thority shall provide the Secretary with a written as16 sessment of the plans, make recommendations, as ap17 propriate, to address safety concerns not adequately

18 addressed in the operator’s plans, and submit docu19 mentation explaining the State-proposed plan revi20 sions. The Secretary shall carefully consider the

21 State’s proposals and work in consultation with the

22 States and operators to address safety concerns.

23 ‘‘(5) MONITORING IMPLEMENTATION.—The Sec24 retary of Transportation shall review the risk anal25 ysis and program for integrity management required
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1 under this section and provide for continued moni2 toring of such plans. Not later than 2 years after the

3 implementation of integrity management plans under

4 this section, the Secretary shall complete an assess5 ment and evaluation of the effects on safety and the

6 environment of extending all of the requirements

7 mandated by the regulations described in paragraph

8 (1) to additional areas. The Secretary shall submit

9 the assessment and evaluation to Congress along with

10 any recommendations to improve and expand the uti11 lization of integrity management plans.

12 ‘‘(6) OPPORTUNITY FOR LOCAL INPUT ON INTEG13 RITY MANAGEMENT.—Within 18 months after the date

14 of enactment of the Pipeline Safety Improvement Act

15 of 2003, the Secretary shall, by regulation, establish

16 a process for raising and addressing local safety con17 cerns about pipeline integrity and the operator’s pipe18 line integrity plan. The process shall include—

19 ‘‘(A) a requirement that an operator of a

20 hazardous liquid or natural gas transmission

21 pipeline facility provide information about the

22 risk analysis and integrity management plan re23 quired under this section to local officials in a

24 State in which the facility is located;
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1 ‘‘(B) a description of the local officials re2 quired to be informed, the information that is to

3 be provided to them and the manner, which may

4 include traditional or electronic means, in which

5 it is provided;

6 ‘‘(C) the means for receiving input from the

7 local officials that may include a public forum

8 sponsored by the Secretary or by the State, or

9 the submission of written comments through tra10 ditional or electronic means;

11 ‘‘(D) the extent to which an operator of a

12 pipeline facility must participate in a public

13 forum sponsored by the Secretary or in another

14 means for receiving input from the local officials

15 or in the evaluation of that input; and

16 ‘‘(E) the manner in which the Secretary

17 will notify the local officials about how their con18 cerns are being addressed.’’.

19 SEC. 765. ENFORCEMENT.

20 (a) IN GENERAL.—Section 60112 is amended—

21 (1) by striking subsection (a) and inserting the

22 following:

23 ‘‘(a) GENERAL AUTHORITY.—After notice and an op24 portunity for a hearing, the Secretary of Transportation
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1 may decide a pipeline facility is hazardous if the Secretary

2 decides that—

3 ‘‘(1) operation of the facility is or would be haz4 ardous to life, property, or the environment; or

5 ‘‘(2) the facility is, or would be, constructed or

6 operated, or a component of the facility is, or would

7 be, constructed or operated with equipment, material,

8 or a technique that the Secretary decides is hazardous

9 to life, property, or the environment.’’; and

10 (2) by striking ‘‘is hazardous,’’ in subsection (d)

11 and inserting ‘‘is, or would be, hazardous,’’.

12 SEC. 766. PUBLIC EDUCATION, EMERGENCY PREPARED13 NESS, AND COMMUNITY RIGHT-TO-KNOW.

14 (a) Section 60116 is amended to read as follows:

15 ‘‘§ 60116. Public education, emergency preparedness,

16 and community right-to-know

17 ‘‘(a) PUBLIC EDUCATION PROGRAMS.—(1) Each

18 owner or operator of a gas or hazardous liquid pipeline fa19 cility shall carry out a continuing program to educate the

20 public on the use of a one-call notification system prior to

21 excavation and other damage prevention activities, the pos22 sible hazards associated with unintended releases from the

23 pipeline facility, the physical indications that such a re24 lease may have occurred, what steps should be taken for
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1 public safety in the event of a pipeline release, and how

2 to report such an event.

3 ‘‘(2) Within 12 months after the date of enactment of

4 the Pipeline Safety Improvement Act of 2003, each owner

5 or operator of a gas or hazardous liquid pipeline facility

6 shall review its existing public education program for effec7 tiveness and modify the program as necessary. The com8 pleted program shall include activities to advise affected

9 municipalities, school districts, businesses, and residents of

10 pipeline facility locations. The completed program shall be

11 submitted to the Secretary or, in the case of an intrastate

12 pipeline facility operator, the appropriate State agency and

13 shall be periodically reviewed by the Secretary or, in the

14 case of an intrastate pipeline facility operator, the appro15 priate State agency.

16 ‘‘(3) The Secretary may issue standards prescribing

17 the elements of an effective public education program. The

18 Secretary may also develop material for use in the program.

19 ‘‘(b) EMERGENCY PREPAREDNESS.—

20 ‘‘(1) OPERATOR LIAISON.—Within 12 months

21 after the date of enactment of the Pipeline Safety Im22 provement Act of 2003, an operator of a gas trans23 mission or hazardous liquid pipeline facility shall

24 initiate and maintain liaison with the State emer25 gency response commissions, and local emergency
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1 planning committees in the areas of pipeline right-of2 way, established under section 301 of the Emergency

3 Planning and Community Right-To-Know Act of

4 1986 (42 U.S.C. 11001) in each State in which it op5 erates.

6 ‘‘(2) INFORMATION.—An operator shall, upon re7 quest, make available to the State emergency response

8 commissions and local emergency planning commit9 tees, and shall make available to the Office of Pipeline

10 Safety in a standardized form for the purpose of pro11 viding the information to the public, the information

12 described in section 60102(d), the operator’s program

13 for integrity management, and information about im14 plementation of that program. The information about

15 the facility shall also include, at a minimum—

16 ‘‘(A) the business name, address, telephone

17 number of the operator, including a 24-hour

18 emergency contact number;

19 ‘‘(B) a description of the facility, including

20 pipe diameter, the product or products carried,

21 and the operating pressure;

22 ‘‘(C) with respect to transmission pipeline

23 facilities, maps showing the location of the facil24 ity and, when available, any high consequence
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1 areas which the pipeline facility traverses or ad2 joins and abuts;

3 ‘‘(D) a summary description of the integ4 rity measures the operator uses to assure safety

5 and protection for the environment; and

6 ‘‘(E) a point of contact to respond to ques7 tions from emergency response representative.

8 ‘‘(3) SMALLER COMMUNITIES.—In a community

9 without a local emergency planning committee, the

10 operator shall maintain liaison with the local fire,

11 police, and other emergency response agencies.

12 ‘‘(4) PUBLIC ACCESS.—The Secretary shall pre13 scribe requirements for public access, as appropriate,

14 to this information, including a requirement that the

15 information be made available to the public by widely

16 accessible computerized database.

17 ‘‘(c) COMMUNITY RIGHT-TO-KNOW.—Not later than 12

18 months after the date of enactment of the Pipeline Safety

19 Improvement Act of 2003, and annually thereafter, the

20 owner or operator of each gas transmission or hazardous

21 liquid pipeline facility shall provide to the governing body

22 of each municipality in which the pipeline facility is lo23 cated, a map identifying the location of such facility. The

24 map may be provided in electronic form. The Secretary

25 may provide technical assistance to the pipeline industry
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1 on developing public safety and public education program

2 content and best practices for program delivery, and on

3 evaluating the effectiveness of the programs. The Secretary

4 may also provide technical assistance to State and local of5 ficials in applying practices developed in these programs

6 to their activities to promote pipeline safety.

7 ‘‘(d) PUBLIC AVAILABILITY OF REPORTS.—The Sec8 retary shall—

9 ‘‘(1) make available to the public—

10 ‘‘(A) a safety-related condition report filed

11 by an operator under section 60102(h);

12 ‘‘(B) a report of a pipeline incident filed by

13 an operator;

14 ‘‘(C) the results of any inspection by the Of15 fice of Pipeline Safety or a State regulatory offi16 cial; and

17 ‘‘(D) a description of any corrective action

18 taken in response to a safety-related condition

19 reported under subparagraph (A), (B), or (C);

20 and

21 ‘‘(2) prescribe requirements for public access, as

22 appropriate, to integrity management program infor23 mation prepared under this chapter, including re24 quirements that will ensure data accessibility to the

25 greatest extent feasible.’’.
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1 (b) SAFETY CONDITION REPORTS.—Section

2 60102(h)(2) is amended by striking ‘‘authorities.’’ and in3 serting ‘‘officials, including the local emergency respond4 ers.’’.

5 (c) CONFORMING AMENDMENT.—The chapter analysis

6 for chapter 601 is amended by striking the item relating

7 to section 60116 and inserting the following:

‘‘60116. Public education, emergency preparedness, community right-to-know.’’.

8 SEC. 767. PENALTIES.

9 (a) CIVIL PENALTIES.—Section 60122 is amended—

10 (1) by striking ‘‘$25,000’’ in subsection (a)(1)

11 and inserting ‘‘$500,000’’;

12 (2) by striking ‘‘$500,000’’ in subsection (a)(1)

13 and inserting ‘‘$1,000,000’’;

14 (3) by adding at the end of subsection (a)(1) the

15 following: ‘‘The preceding sentence does not apply to

16 judicial enforcement action under section 60120 or

17 60121.’’; and

18 (4) by striking subsection (b) and inserting the

19 following:

20 ‘‘(b) PENALTY CONSIDERATIONS.—In determining the

21 amount of a civil penalty under this section—

22 ‘‘(1) the Secretary shall consider—

23 ‘‘(A) the nature, circumstances, and gravity

24 of the violation, including adverse impact on the

25 environment;
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1 ‘‘(B) with respect to the violator, the degree

2 of culpability, any history of prior violations,

3 the ability to pay, any effect on ability to con4 tinue doing business; and

5 ‘‘(C) good faith in attempting to comply;

6 and

7 ‘‘(2) the Secretary may consider—

8 ‘‘(A) the economic benefit gained from the

9 violation without any discount because of subse10 quent damages; and

11 ‘‘(B) other matters that justice requires.’’.

12 (b) EXCAVATOR DAMAGE.—Section 60123(d) is

13 amended—

14 (1) by striking ‘‘knowingly and willfully’’;

15 (2) by inserting ‘‘knowingly and willfully’’ before

16 ‘‘engages’’ in paragraph (1); and

17 (3) striking paragraph (2)(B) and inserting the

18 following:

19 ‘‘(B) a pipeline facility, is aware of dam20 age, and does not report the damage promptly to

21 the operator of the pipeline facility and to other

22 appropriate authorities; or’’.

23 (c) CIVIL ACTIONS.—Section 60120(a)(1) is amended

24 to read as follows:
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1 ‘‘(1) On the request of the Secretary of Transportation,

2 the Attorney General may bring a civil action in an appro3 priate district court of the United States to enforce this

4 chapter, including section 60112 of this chapter, or a regu5 lation prescribed or order issued under this chapter. The

6 court may award appropriate relief, including a temporary

7 or permanent injunction, punitive damages, and assessment

8 of civil penalties considering the same factors as prescribed

9 for the Secretary in an administrative case under section

10 60122.’’.

11 SEC. 768. STATE OVERSIGHT ROLE.

12 (a) STATE AGREEMENTS WITH CERTIFICATION.—Sec13 tion 60106 is amended—

14 (1) by striking ‘‘GENERAL AUTHORITY.—’’ in

15 subsection (a) and inserting ‘‘AGREEMENTS WITHOUT

16 CERTIFICATION.—’’;

17 (2) by redesignating subsections (b), (c), and (d)

18 as subsections (c), (d), and (e); and

19 (3) by inserting after subsection (a) the fol20 lowing:

21 ‘‘(b) AGREEMENTS WITH CERTIFICATION.—

22 ‘‘(1) IN GENERAL.—If the Secretary accepts a

23 certification under section 60105 of this title and

24 makes the determination required under this sub25 section, the Secretary may make an agreement with
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1 a State authority authorizing it to participate in the

2 oversight of interstate pipeline transportation. Each

3 such agreement shall include a plan for the State au4 thority to participate in special investigations involv5 ing incidents or new construction and allow the State

6 authority to participate in other activities overseeing

7 interstate pipeline transportation or to assume addi8 tional inspection or investigatory duties. Nothing in

9 this section modifies section 60104(c) or authorizes

10 the Secretary to delegate the enforcement of safety

11 standards prescribed under this chapter to a State

12 authority.

13 ‘‘(2) DETERMINATIONS REQUIRED.—The Sec14 retary may not enter into an agreement under this

15 subsection, unless the Secretary determines that—

16 ‘‘(A) the agreement allowing participation

17 of the State authority is consistent with the Sec18 retary’s program for inspection and consistent

19 with the safety policies and provisions provided

20 under this chapter;

21 ‘‘(B) the interstate participation agreement

22 would not adversely affect the oversight respon23 sibilities of intrastate pipeline transportation by

24 the State authority;
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1 ‘‘(C) the State is carrying out a program

2 demonstrated to promote preparedness and risk

3 prevention activities that enable communities to

4 live safely with pipelines;

5 ‘‘(D) the State meets the minimum stand6 ards for State one-call notification set forth in

7 chapter 61; and

8 ‘‘(E) the actions planned under the agree9 ment would not impede interstate commerce or

10 jeopardize public safety.

11 ‘‘(3) EXISTING AGREEMENTS.—If requested by

12 the State authority, the Secretary shall authorize a

13 State authority which had an interstate agreement in

14 effect after January 1999, to oversee interstate pipe15 line transportation pursuant to the terms of that

16 agreement until the Secretary determines that the

17 State meets the requirements of paragraph (2) and

18 executes a new agreement, or until December 31,

19 2003, whichever is sooner. Nothing in this paragraph

20 shall prevent the Secretary, after affording the State

21 notice, hearing, and an opportunity to correct any al22 leged deficiencies, from terminating an agreement

23 that was in effect before enactment of the Pipeline

24 Safety Improvement Act of 2003 if—
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1 ‘‘(A) the State authority fails to comply

2 with the terms of the agreement;

3 ‘‘(B) implementation of the agreement has

4 resulted in a gap in the oversight responsibilities

5 of intrastate pipeline transportation by the State

6 authority; or

7 ‘‘(C) continued participation by the State

8 authority in the oversight of interstate pipeline

9 transportation has had an adverse impact on

10 pipeline safety.’’.

11 (b) ENDING AGREEMENTS.—Subsection (e) of section

12 60106, as redesignated by subsection (a), is amended to read

13 as follows:

14 ‘‘(e) ENDING AGREEMENTS.—

15 ‘‘(1) PERMISSIVE TERMINATION.—The Secretary

16 may end an agreement under this section when the

17 Secretary finds that the State authority has not com18 plied with any provision of the agreement.

19 ‘‘(2) MANDATORY TERMINATION OF AGREE20 MENT.—The Secretary shall end an agreement for the

21 oversight of interstate pipeline transportation if the

22 Secretary finds that—

23 ‘‘(A) implementation of such agreement has

24 resulted in a gap in the oversight responsibilities
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1 of intrastate pipeline transportation by the State

2 authority;

3 ‘‘(B) the State actions under the agreement

4 have failed to meet the requirements under sub5 section (b); or

6 ‘‘(C) continued participation by the State

7 authority in the oversight of interstate pipeline

8 transportation would not promote pipeline safe9 ty.

10 ‘‘(3) PROCEDURAL REQUIREMENTS.—The Sec11 retary shall give the notice and an opportunity for a

12 hearing to a State authority before ending an agree13 ment under this section. The Secretary may provide

14 a State an opportunity to correct any deficiencies be15 fore ending an agreement. The finding and decision

16 to end the agreement shall be published in the Federal

17 Register and may not become effective for at least 15

18 days after the date of publication unless the Secretary

19 finds that continuation of an agreement poses an im20 minent hazard.’’.

21 SEC. 769. IMPROVED DATA AND DATA AVAILABILITY.

22 (a) IN GENERAL.—Within 12 months after the date

23 of enactment of this Act, the Secretary shall develop and

24 implement a comprehensive plan for the collection and use

25 of gas and hazardous liquid pipeline data to revise the caus-
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1 al categories on the incident report forms to eliminate over2 lapping and confusing categories and include subcategories.

3 The plan shall include components to provide the capability

4 to perform sound incident trend analysis and evaluations

5 of pipeline operator performance using normalized accident

6 data.

7 (b) REPORT OF RELEASES EXCEEDING 5 GALLONS.—

8 Section 60117(b) is amended—

9 (1) by inserting ‘‘(1)’’ before ‘‘To’’;

10 (2) redesignating paragraphs (1) and (2) as sub11 paragraphs (A) and (B);

12 (3) inserting before the last sentence the fol13 lowing:

14 ‘‘(2) A person owning or operating a hazardous liquid

15 pipeline facility shall report to the Secretary each release

16 to the environment greater than 5 gallons of the hazardous

17 liquid or carbon dioxide transported. This section applies

18 to releases from pipeline facilities regulated under this

19 chapter. A report must include the location of the release,

20 fatalities and personal injuries, type of product, amount

21 of product release, cause or causes of the release, extent of

22 damage to property and the environment, and the response

23 undertaken to clean up the release.

24 ‘‘(3) During the course of an incident investigation,

25 a person owning or operating a pipeline facility shall make
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1 records, reports, and information required under subsection

2 (a) of this section or other reasonably described records, re3 ports, and information relevant to the incident investiga4 tion, available to the Secretary within the time limits pre5 scribed in a written request.’’; and

6 (4) indenting the first word of the last sentence

7 and inserting ‘‘(4)’’ before ‘‘The Secretary’’ in that

8 sentence.

9 (c) PENALTY AUTHORITIES.—(1) Section 60122(a) is

10 amended by striking ‘‘60114(c)’’ and inserting

11 ‘‘60117(b)(3)’’.

12 (2) Section 60123(a) is amended by striking

13 ‘‘60114(c),’’ and inserting ‘‘60117(b)(3),’’.

14 (d) ESTABLISHMENT OF NATIONAL DEPOSITORY.—

15 Section 60117 is amended by adding at the end the fol16 lowing:

17 ‘‘(l) NATIONAL DEPOSITORY.—The Secretary shall es18 tablish a national depository of data on events and condi19 tions, including spill histories and corrective actions for

20 specific incidents, that can be used to evaluate the risk of,

21 and to prevent, pipeline failures and releases. The Secretary

22 shall administer the program through the Bureau of Trans23 portation Statistics, in cooperation with the Research and

24 Special Programs Administration, and shall make such in-
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1 formation available for use by State and local planning and

2 emergency response authorities and the public.’’.

3 SEC. 770. RESEARCH AND DEVELOPMENT.

4 (a) INNOVATIVE TECHNOLOGY DEVELOPMENT.—

5 (1) IN GENERAL.—As part of the Department of

6 Transportation’s research and development program,

7 the Secretary of Transportation shall direct research

8 attention to the development of alternative

9 technologies—

10 (A) to expand the capabilities of internal

11 inspection devices to identify and accurately

12 measure defects and anomalies;

13 (B) to inspect pipelines that cannot accom14 modate internal inspection devices available on

15 the date of enactment;

16 (C) to develop innovative techniques meas17 uring the structural integrity of pipelines;

18 (D) to improve the capability, reliability,

19 and practicality of external leak detection de20 vices; and

21 (E) to develop and improve alternative tech22 nologies to identify and monitor outside force

23 damage to pipelines.

24 (2) COOPERATIVE.—The Secretary may partici25 pate in additional technological development through
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1 cooperative agreements with trade associations, aca2 demic institutions, or other qualified organizations.

3 (b) PIPELINE SAFETY AND RELIABILITY RESEARCH

4 AND DEVELOPMENT.—

5 (1) IN GENERAL.—The Secretary of Transpor6 tation, in coordination with the Secretary of Energy,

7 shall develop and implement an accelerated coopera8 tive program of research and development to ensure

9 the integrity of natural gas and hazardous liquid

10 pipelines. This research and development program—

11 (A) shall include materials inspection tech12 niques, risk assessment methodology, and infor13 mation systems surety; and

14 (B) shall complement, and not replace, the

15 research program of the Department of Energy

16 addressing natural gas pipeline issues existing

17 on the date of enactment of this Act.

18 (2) PURPOSE.—The purpose of the cooperative

19 research program shall be to promote pipeline safety

20 research and development to—

21 (A) ensure long-term safety, reliability and

22 service life for existing pipelines;

23 (B) expand capabilities of internal inspec24 tion devices to identify and accurately measure

25 defects and anomalies;
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1 (C) develop inspection techniques for pipe2 lines that cannot accommodate the internal in3 spection devices available on the date of enact4 ment;

5 (D) develop innovative techniques to meas6 ure the structural integrity of pipelines to pre7 vent pipeline failures;

8 (E) develop improved materials and coat9 ings for use in pipelines;

10 (F) improve the capability, reliability, and

11 practicality of external leak detection devices;

12 (G) identify underground environments that

13 might lead to shortened service life;

14 (H) enhance safety in pipeline siting and

15 land use;

16 (I) minimize the environmental impact of

17 pipelines;

18 (J) demonstrate technologies that improve

19 pipeline safety, reliability, and integrity;

20 (K) provide risk assessment tools for opti21 mizing risk mitigation strategies; and

22 (L) provide highly secure information sys23 tems for controlling the operation of pipelines.

24 (3) AREAS.—In carrying out this subsection, the

25 Secretary of Transportation, in coordination with the
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1 Secretary of Energy, shall consider research and de2 velopment on natural gas, crude oil and petroleum

3 product pipelines for—

4 (A) early crack, defect, and damage detec5 tion, including real-time damage monitoring;

6 (B) automated internal pipeline inspection

7 sensor systems;

8 (C) land use guidance and set back manage9 ment along pipeline rights-of-way for commu10 nities;

11 (D) internal corrosion control;

12 (E) corrosion-resistant coatings;

13 (F) improved cathodic protection;

14 (G) inspection techniques where internal in15 spection is not feasible, including measurement

16 of structural integrity;

17 (H) external leak detection, including port18 able real-time video imaging technology, and the

19 advancement of computerized control center leak

20 detection systems utilizing real-time remote field

21 data input;

22 (I) longer life, high strength, non-corrosive

23 pipeline materials;

24 (J) assessing the remaining strength of ex25 isting pipes;
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1 (K) risk and reliability analysis models, to

2 be used to identify safety improvements that

3 could be realized in the near term resulting from

4 analysis of data obtained from a pipeline per5 formance tracking initiative;

6 (L) identification, monitoring, and preven7 tion of outside force damage, including satellite

8 surveillance; and

9 (M) any other areas necessary to ensuring

10 the public safety and protecting the environment.

11 (4) POINTS OF CONTACT.—

12 (A) IN GENERAL.—To coordinate and im13 plement the research and development programs

14 and activities authorized under this subsection—

15 (i) the Secretary of Transportation

16 shall designate, as the point of contact for

17 the Department of Transportation, an offi18 cer of the Department of Transportation

19 who has been appointed by the President

20 and confirmed by the Senate; and

21 (ii) the Secretary of Energy shall des22 ignate, as the point of contact for the De23 partment of Energy, an officer of the De24 partment of Energy who has been appointed
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1 by the President and confirmed by the Sen2 ate.

3 (B) DUTIES.—

4 (i) The point of contact for the Depart5 ment of Transportation shall have the pri6 mary responsibility for coordinating and

7 overseeing the implementation of the re8 search, development, and demonstration

9 program plan under paragraphs (5) and

10 (6).

11 (ii) The points of contact shall jointly

12 assist in arranging cooperative agreements

13 for research, development and demonstra14 tion involving their respective Departments,

15 national laboratories, universities, and in16 dustry research organizations.

17 (5) RESEARCH AND DEVELOPMENT PROGRAM

18 PLAN.—Within 240 days after the date of enactment

19 of this Act, the Secretary of Transportation, in co20 ordination with the Secretary of Energy and the

21 Pipeline Integrity Technical Advisory Committee,

22 shall prepare and submit to the Congress a 5-year

23 program plan to guide activities under this sub24 section. In preparing the program plan, the Secretary

25 shall consult with appropriate representatives of the
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1 natural gas, crude oil, and petroleum product pipe2 line industries to select and prioritize appropriate

3 project proposals. The Secretary may also seek the ad4 vice of utilities, manufacturers, institutions of higher

5 learning, Federal agencies, the pipeline research insti6 tutions, national laboratories, State pipeline safety

7 officials, environmental organizations, pipeline safety

8 advocates, and professional and technical societies.

9 (6) IMPLEMENTATION.—The Secretary of Trans10 portation shall have primary responsibility for ensur11 ing the 5-year plan provided for in paragraph (5) is

12 implemented as intended. In carrying out the re13 search, development, and demonstration activities

14 under this paragraph, the Secretary of Transpor15 tation and the Secretary of Energy may use, to the

16 extent authorized under applicable provisions of law,

17 contracts, cooperative agreements, cooperative research

18 and development agreements under the Stevenson19 Wydler Technology Innovation Act of 1980 (15 U.S.C.

20 3701 et seq.), grants, joint ventures, other trans21 actions, and any other form of agreement available to

22 the Secretary consistent with the recommendations of

23 the Advisory Committee.

24 (7) REPORTS TO CONGRESS.—The Secretary of

25 Transportation shall report to the Congress annually
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1 as to the status and results to date of the implementa2 tion of the research and development program plan.

3 The report shall include the activities of the Depart4 ments of Transportation and Energy, the national

5 laboratories, universities, and any other research or6 ganizations, including industry research organiza7 tions.

8 SEC. 771. PIPELINE INTEGRITY TECHNICAL ADVISORY COM9 MITTEE.

10 (a) ESTABLISHMENT.—The Secretary of Transpor11 tation shall enter into appropriate arrangements with the

12 National Academy of Sciences to establish and manage the

13 Pipeline Integrity Technical Advisory Committee for the

14 purpose of advising the Secretary of Transportation and

15 the Secretary of Energy on the development and implemen16 tation of the 5-year research, development, and demonstra17 tion program plan under section 770(b)(5). The Advisory

18 Committee shall have an ongoing role in evaluating the

19 progress and results of the research, development, and dem20 onstration carried out under that section.

21 (b) MEMBERSHIP.—The National Academy of Sciences

22 shall appoint the members of the Pipeline Integrity Tech23 nical Advisory Committee after consultation with the Sec24 retary of Transportation and the Secretary of Energy.

25 Members appointed to the Advisory Committee should have
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1 the necessary qualifications to provide technical contribu2 tions to the purposes of the Advisory Committee.

3 SEC. 772. AUTHORIZATION OF APPROPRIATIONS.

4 (a) GAS AND HAZARDOUS LIQUIDS.—Section

5 60125(a) is amended to read as follows:

6 ‘‘(a) GAS AND HAZARDOUS LIQUID.—To carry out

7 this chapter and other pipeline-related damage prevention

8 activities of this title (except for section 60107), there are

9 authorized to be appropriated to the Department of Trans10 portation—$30,000,000 for each of the fiscal years 2003,

11 2004, and 2005 of which $23,000,000 is to be derived from

12 user fees for fiscal years 2003, 2004, and 2005 collected

13 under section 60301 of this title.’’.

14 (b) GRANTS TO STATES.—Section 60125(c) is amended

15 to read as follows:

16 ‘‘(c) STATE GRANTS.—Not more than the following

17 amounts may be appropriated to the Secretary to carry out

18 section 60107—$20,000,000 for the fiscal years 2003, 2004,

19 and 2005 of which $18,000,000 is to be derived from user

20 fees for fiscal years 2003, 2004, and 2005 collected under

21 section 60301 of this title.’’.

22 (c) OIL SPILLS.—Section 60125 is amended by redes23 ignating subsections (d), (e), and (f) as subsections (e), (f),

24 (g) and inserting after subsection (c) the following:
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1 ‘‘(d) OIL SPILL LIABILITY TRUST FUND.—Of the

2 amounts available in the Oil Spill Liability Trust Fund,

3 $8,000,000 shall be transferred to the Secretary of Trans4 portation, as provided in appropriation Acts, to carry out

5 programs authorized in this title for each of fiscal years

6 2003, 2004, and 2005.’’.

7 (d) PIPELINE INTEGRITY PROGRAM.—(1) There are

8 authorized to be appropriated to the Secretary of Transpor9 tation for carrying out sections 770(b) and 771 of this sub10 title $3,000,000, to be derived from user fees under section

11 60301 of title 49, United States Code, for each of the fiscal

12 years 2003 through 2007.

13 (2) Of the amounts available in the Oil Spill Liability

14 Trust Fund established by section 9509 of the Internal Rev15 enue Code of 1986 (26 U.S.C. 9509), $3,000,000 shall be

16 transferred to the Secretary of Transportation, as provided

17 in appropriation Acts, to carry out programs for detection,

18 prevention and mitigation of oil spills under sections 770(b)

19 and 771 of this subtitle for each of the fiscal years 2003

20 through 2007.

21 (3) There are authorized to be appropriated to the Sec22 retary of Energy for carrying out sections 770(b) and 771

23 of this subtitle such sums as may be necessary for each of

24 the fiscal years 2003 through 2007.
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1 SEC. 773. OPERATOR ASSISTANCE IN INVESTIGATIONS.

2 (a) IN GENERAL.—If the Department of Transpor3 tation or the National Transportation Safety Board inves4 tigate an accident, the operator involved shall make avail5 able to the representative of the Department or the Board

6 all records and information that in any way pertain to

7 the accident (including integrity management plans and

8 test results), and shall afford all reasonable assistance in

9 the investigation of the accident.

10 (b) CORRECTIVE ACTION ORDERS.—Section 60112(d)

11 is amended—

12 (1) by inserting ‘‘(1)’’ after ‘‘CORRECTIVE AC13 TION ORDERS.—’’; and

14 (2) by adding at the end the following:

15 ‘‘(2) If, in the case of a corrective action order issued

16 following an accident, the Secretary determines that the ac17 tions of an employee carrying out an activity regulated

18 under this chapter, including duties under section 60102(a),

19 may have contributed substantially to the cause of the acci20 dent, the Secretary shall direct the operator to relieve the

21 employee from performing those activities, reassign the em22 ployee, or place the employee on leave until the earlier of

23 the date on which—

24 ‘‘(A) the Secretary determines, after notice and

25 an opportunity for a hearing, that the employee’s per26 formance of duty in carrying out the activity did not
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1 contribute substantially to the cause of the accident;

2 or

3 ‘‘(B) the Secretary determines the employee has

4 been re-qualified or re-trained as provided for in sec5 tion 763 of the Pipeline Safety Improvement Act of

6 2003 and can safely perform those activities.

7 ‘‘(3) Action taken by an operator under paragraph (2)

8 shall be in accordance with the terms and conditions of any

9 applicable collective bargaining agreement to the extent it

10 is not inconsistent with the requirements of this section.’’.

11 SEC. 774. PROTECTION OF EMPLOYEES PROVIDING PIPE12 LINE SAFETY INFORMATION.

13 (a) IN GENERAL.—Chapter 601 is amended by adding

14 at the end the following:

15 ‘‘§ 60129. Protection of employees providing pipeline

16 safety information

17 ‘‘(a) DISCRIMINATION AGAINST PIPELINE EMPLOY18 EES.—No pipeline operator or contractor or subcontractor

19 of a pipeline may discharge an employee or otherwise dis20 criminate against an employee with respect to compensa21 tion, terms, conditions, or privileges of employment because

22 the employee (or any person acting pursuant to a request

23 of the employee)—

24 ‘‘(1) provided, caused to be provided, or is about

25 to provide (with any knowledge of the employer) or
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1 cause to be provided to the employer or Federal Gov2 ernment information relating to any violation or al3 leged violation of any order, regulation, or standard

4 of the Research and Special Programs Administration

5 or any other provision of Federal law relating to

6 pipeline safety under this chapter or any other law

7 of the United States;

8 ‘‘(2) has filed, caused to be filed, or is about to

9 file (with any knowledge of the employer) or cause to

10 be filed a proceeding relating to any violation or al11 leged violation of any order, regulation, or standard

12 of the Administration or any other provision of Fed13 eral law relating to pipeline safety under this chapter

14 or any other law of the United States;

15 ‘‘(3) testified or is about to testify in such a pro16 ceeding; or

17 ‘‘(4) assisted or participated or is about to assist

18 or participate in such a proceeding.

19 ‘‘(b) DEPARTMENT OF LABOR COMPLAINT PROCE20 DURE.—

21 ‘‘(1) FILING AND NOTIFICATION.—A person who

22 believes that he or she has been discharged or other23 wise discriminated against by any person in viola24 tion of subsection (a) may, not later than 90 days

25 after the date on which such violation occurs, file (or
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1 have any person file on his or her behalf) a complaint

2 with the Secretary of Labor alleging such discharge or

3 discrimination. Upon receipt of such a complaint, the

4 Secretary of Labor shall notify, in writing, the person

5 named in the complaint and the Administrator of the

6 Research and Special Programs Administration of the

7 filing of the complaint, of the allegations contained in

8 the complaint, of the substance of evidence supporting

9 the complaint, and of the opportunities that will be

10 afforded to such person under paragraph (2).

11 ‘‘(2) INVESTIGATION; PRELIMINARY ORDER.—

12 ‘‘(A) IN GENERAL.—Not later than 60 days

13 after the date of receipt of a complaint filed

14 under paragraph (1) and after affording the per15 son named in the complaint an opportunity to

16 submit to the Secretary of Labor a written re17 sponse to the complaint and an opportunity to

18 meet with a representative of the Secretary to

19 present statements from witnesses, the Secretary

20 of Labor shall conduct an investigation and de21 termine whether there is reasonable cause to be22 lieve that the complaint has merit and notify in

23 writing the complainant and the person alleged

24 to have committed a violation of subsection (a)

25 of the Secretary’s findings. If the Secretary of
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1 Labor concludes that there is reasonable cause to

2 believe that a violation of subsection (a) has oc3 curred, the Secretary shall accompany the Sec4 retary’s findings with a preliminary order pro5 viding the relief prescribed by paragraph (3)(B).

6 Not later than 30 days after the date of notifica7 tion of findings under this paragraph, either the

8 person alleged to have committed the violation or

9 the complainant may file objections to the find10 ings or preliminary order, or both, and request

11 a hearing on the record. The filing of such objec12 tions shall not operate to stay any reinstatement

13 remedy contained in the preliminary order. Such

14 hearings shall be conducted expeditiously. If a

15 hearing is not requested in such 30-day period,

16 the preliminary order shall be deemed a final

17 order that is not subject to judicial review.

18 ‘‘(B) REQUIREMENTS.—

19 ‘‘(i) REQUIRED SHOWING BY COM20 PLAINANT.—The Secretary of Labor shall

21 dismiss a complaint filed under this sub22 section and shall not conduct an investiga23 tion otherwise required under subparagraph

24 (A) unless the complainant makes a prima

25 facie showing that any behavior described
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1 in paragraphs (1) through (4) of subsection

2 (a) was a contributing factor in the unfa3 vorable personnel action alleged in the com4 plaint.

5 ‘‘(ii) SHOWING BY EMPLOYER.—Not6 withstanding a finding by the Secretary

7 that the complainant has made the showing

8 required under clause (i), no investigation

9 otherwise required under subparagraph (A)

10 shall be conducted if the employer dem11 onstrates, by clear and convincing evidence,

12 that the employer would have taken the

13 same unfavorable personnel action in the

14 absence of that behavior.

15 ‘‘(iii) CRITERIA FOR DETERMINATION

16 BY SECRETARY.—The Secretary may deter17 mine that a violation of subsection (a) has

18 occurred only if the complainant dem19 onstrates that any behavior described in

20 paragraphs (1) through (4) of subsection (a)

21 was a contributing factor in the unfavorable

22 personnel action alleged in the complaint.

23 ‘‘(iv) PROHIBITION.—Relief may not

24 be ordered under subparagraph (A) if the

25 employer demonstrates by clear and con-
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1 vincing evidence that the employer would

2 have taken the same unfavorable personnel

3 action in the absence of that behavior.

4 ‘‘(3) FINAL ORDER.—

5 ‘‘(A) DEADLINE FOR ISSUANCE; SETTLE6 MENT AGREEMENTS.—Not later than 120 days

7 after the date of conclusion of a hearing under

8 paragraph (2), the Secretary of Labor shall issue

9 a final order providing the relief prescribed by

10 this paragraph or denying the complaint. At any

11 time before issuance of a final order, a pro12 ceeding under this subsection may be terminated

13 on the basis of a settlement agreement entered

14 into by the Secretary of Labor, the complainant,

15 and the person alleged to have committed the

16 violation.

17 ‘‘(B) REMEDY.—If, in response to a com18 plaint filed under paragraph (1), the Secretary

19 of Labor determines that a violation of sub20 section (a) has occurred, the Secretary of Labor

21 shall order the person who committed such viola22 tion to—

23 ‘‘(i) take affirmative action to abate

24 the violation;
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1 ‘‘(ii) reinstate the complainant to his

2 or her former position together with the

3 compensation (including back pay) and re4 store the terms, conditions, and privileges

5 associated with his or her employment; and

6 ‘‘(iii) provide compensatory damages

7 to the complainant.

8 If such an order is issued under this paragraph,

9 the Secretary of Labor, at the request of the com10 plainant, shall assess against the person whom

11 the order is issued a sum equal to the aggregate

12 amount of all costs and expenses (including at13 torney’s and expert witness fees) reasonably in14 curred, as determined by the Secretary of Labor,

15 by the complainant for, or in connection with,

16 the bringing the complaint upon which the order

17 was issued.

18 ‘‘(C) FRIVOLOUS COMPLAINTS.—If the Sec19 retary of Labor finds that a complaint under

20 paragraph (1) is frivolous or has been brought in

21 bad faith, the Secretary of Labor may award to

22 the prevailing employer a reasonable attorney’s

23 fee not exceeding $1,000.

24 ‘‘(4) REVIEW.—
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1 ‘‘(A) APPEAL TO COURT OF APPEALS.—Any

2 person adversely affected or aggrieved by an

3 order issued under paragraph (3) may obtain re4 view of the order in the United States Court of

5 Appeals for the circuit in which the violation,

6 with respect to which the order was issued, alleg7 edly occurred or the circuit in which the com8 plainant resided on the date of such violation.

9 The petition for review must be filed not later

10 than 60 days after the date of issuance of the

11 final order of the Secretary of Labor. Review

12 shall conform to chapter 7 of title 5, United

13 States Code. The commencement of proceedings

14 under this subparagraph shall not, unless or15 dered by the court, operate as a stay of the order.

16 ‘‘(B) LIMITATION ON COLLATERAL AT17 TACK.—An order of the Secretary of Labor with

18 respect to which review could have been obtained

19 under subparagraph (A) shall not be subject to

20 judicial review in any criminal or other civil

21 proceeding.

22 ‘‘(5) ENFORCEMENT OF ORDER BY SECRETARY

23 OF LABOR.—Whenever any person has failed to com24 ply with an order issued under paragraph (3), the

25 Secretary of Labor may file a civil action in the
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1 United States district court for the district in which

2 the violation was found to occur to enforce such order.

3 In actions brought under this paragraph, the district

4 courts shall have jurisdiction to grant all appropriate

5 relief, including, but not to be limited to, injunctive

6 relief and compensatory damages.

7 ‘‘(6) ENFORCEMENT OF ORDER BY PARTIES.—

8 ‘‘(A) COMMENCEMENT OF ACTION.—A per9 son on whose behalf an order was issued under

10 paragraph (3) may commence a civil action

11 against the person to whom such order was

12 issued to require compliance with such order.

13 The appropriate United States district court

14 shall have jurisdiction, without regard to the

15 amount in controversy or the citizenship of the

16 parties, to enforce such order.

17 ‘‘(B) ATTORNEY FEES.—The court, in

18 issuing any final order under this paragraph,

19 may award costs of litigation (including reason20 able attorney and expert witness fees) to any

21 party whenever the court determines such award

22 costs is appropriate.

23 ‘‘(c) MANDAMUS.—Any nondiscretionary duty im24 posed by this section shall be enforceable in a mandamus
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1 proceeding brought under section 1361 of title 28, United

2 States Code.

3 ‘‘(d) NONAPPLICABILITY TO DELIBERATE VIOLA4 TIONS.—Subsection (a) shall not apply with respect to an

5 employee of a pipeline, contractor or subcontractor who,

6 acting without direction from the pipeline contractor or

7 subcontractor (or such person’s agent), deliberately causes

8 a violation of any requirement relating to pipeline safety

9 under this chapter or any other law of the United States.

10 ‘‘(e) CONTRACTOR DEFINED.—In this section, the term

11 ‘contractor’ means a company that performs safety-sensitive

12 functions by contract for a pipeline.’’.

13 (b) CIVIL PENALTY.—Section 60122(a) is amended by

14 adding at the end the following:

15 ‘‘(3) A person violating section 60129, or an order

16 issued thereunder, is liable to the Government for a civil

17 penalty of not more than $1,000 for each violation. The

18 penalties provided by paragraph (1) do not apply to a vio19 lation of section 60129 or an order issued thereunder.’’.

20 (c) CONFORMING AMENDMENT.—The chapter analysis

21 for chapter 601 is amended by adding at the end the fol22 lowing:

‘‘60129. Protection of employees providing pipeline safety information.’’.

23 SEC. 775. STATE PIPELINE SAFETY ADVISORY COMMITTEES.

24 Within 90 days after receiving recommendations for

25 improvements to pipeline safety from an advisory com-
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1 mittee appointed by the Governor of any State, the Sec2 retary of Transportation shall respond in writing to the

3 committee setting forth what action, if any, the Secretary

4 will take on those recommendations and the Secretary’s rea5 sons for acting or not acting upon any of the recommenda6 tions.

7 SEC. 776. FINES AND PENALTIES.

8 The Inspector General of the Department of Transpor9 tation shall conduct an analysis of the Department’s assess10 ment of fines and penalties on gas transmission and haz11 ardous liquid pipelines, including the cost of corrective ac12 tions required by the Department in lieu of fines, and, no

13 later than 6 months after the date of enactment of this Act,

14 shall provide a report to the Senate Committee on Com15 merce, Science, and Transportation and the House Com16 mittee on Transportation and Infrastructure on any find17 ings and recommendations for actions by the Secretary or

18 Congress to ensure the fines assessed are an effective deter19 rent for reducing safety risks.

20 SEC. 777. STUDY OF RIGHTS-OF-WAY.

21 The Secretary of Transportation is authorized to con22 duct a study on how best to preserve environmental re23 sources in conjunction with maintaining pipeline rights24 of-way. The study shall recognize pipeline operators’ regu-
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1 latory obligations to maintain rights-of-way and to protect

2 public safety.

3 SEC. 778. STUDY OF NATURAL GAS RESERVE.

4 (a) FINDINGS.—Congress finds that:

5 (1) In the last few months, natural gas prices

6 across the country have tripled.

7 (2) In California, natural gas prices have in8 creased twenty-fold, from $3 per million British ther9 mal units to nearly $60 per million British thermal

10 units.

11 (3) One of the major causes of these price in12 creases is a lack of supply, including a lack of nat13 ural gas reserves.

14 (4) The lack of a reserve was compounded by the

15 rupture of an El Paso Natural Gas Company pipe16 line in Carlsbad, New Mexico on August 1, 2000.

17 (5) Improving pipeline safety will help prevent

18 similar accidents that interrupt the supply of natural

19 gas and will help save lives.

20 (6) It is also necessary to find solutions for the

21 lack of natural gas reserves that could be used during

22 emergencies.

23 (b) STUDY BY THE NATIONAL ACADEMY OF

24 SCIENCES.—The Secretary of Energy shall request the Na25 tional Academy of Sciences to—
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1 (1) conduct a study to—

2 (A) determine the causes of recent increases

3 in the price of natural gas, including whether

4 the increases have been caused by problems with

5 the supply of natural gas or by problems with

6 the natural gas transmission system;

7 (B) identify any Federal or State policies

8 that may have contributed to the price increases;

9 and

10 (C) determine what Federal action would be

11 necessary to improve the reserve supply of nat12 ural gas for use in situations of natural gas

13 shortages and price increases, including deter14 mining the feasibility and advisability of a Fed15 eral strategic natural gas reserve system; and

16 (2) not later than 60 days after the date of en17 actment of this Act, submit to Congress a report on

18 the results of the study.

19 SEC. 779. STUDY AND REPORT ON NATURAL GAS PIPELINE

20 AND STORAGE FACILITIES IN NEW ENGLAND.

21 (a) STUDY.—The Federal Energy Regulatory Commis22 sion, in consultation with the Department of Energy, shall

23 conduct a study on the natural gas pipeline transmission

24 network in New England and natural gas storage facilities
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1 associated with that network. In carrying out the study,

2 the Commission shall consider—

3 (1) the ability of natural gas pipeline and stor4 age facilities in New England to meet current and

5 projected demand by gas-fired power generation

6 plants and other consumers;

7 (2) capacity constraints during unusual weather

8 periods;

9 (3) potential constraint points in regional, inter10 state, and international pipeline capacity serving

11 New England; and

12 (4) the quality and efficiency of the Federal envi13 ronmental review and permitting process for natural

14 gas pipelines.

15 (b) REPORT.—Not later than 120 days after the date

16 of the enactment of this Act, the Federal Energy Regulatory

17 Commission shall prepare and submit to the Senate Com18 mittee on Energy and Natural Resources and the appro19 priate committee of the House of Representatives a report

20 containing the results of the study conducted under sub21 section (a), including recommendations for addressing po22 tential natural gas transmission and storage capacity prob23 lems in New England.
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1 PART III—PIPELINE SECURITY SENSITIVE

2 INFORMATION

3 SEC. 781. MEETING COMMUNITY RIGHT TO KNOW WITHOUT

4 SECURITY RISKS.

5 Section 60117 is amended by adding at the end the

6 following:

7 ‘‘(l) WITHHOLDING CERTAIN INFORMATION.—

8 ‘‘(1) IN GENERAL.—Notwithstanding any other

9 provision of this chapter requiring the Secretary to

10 provide information obtained by the Secretary or an

11 officer, employee, or agent in carrying out this chap12 ter to State or local government officials, the public,

13 or any other person, the Secretary shall withhold such

14 information if it is information that is described in

15 section 552(b)(1)(A) of title 5, United States Code.

16 ‘‘(2) CONDITIONAL RELEASE.—Notwithstanding

17 paragraph (1), upon the receipt of assurances satis18 factory to the Secretary that the information will be

19 handled appropriately, the Secretary may provide in20 formation permitted to be withheld under that

21 paragraph—

22 ‘‘(A) to the owner or operator of the affected

23 pipeline system;

24 ‘‘(B) to an officer, employee or agent of a

25 Federal, State, tribal, or local government, in-
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1 cluding a volunteer fire department, concerned

2 with carrying out this chapter, with protecting

3 the facilities, with protecting public safety, or

4 with national security issues;

5 ‘‘(C) in an administrative or judicial pro6 ceeding brought under this chapter or an admin7 istrative or judicial proceeding that addresses

8 terrorist actions or threats of such actions; or

9 ‘‘(D) to such other persons as the Secretary

10 determines necessary to protect public safety and

11 security.

12 ‘‘(3) REPORT TO CONGRESS.—The Secretary

13 shall provide an annual report to the Congress, in ap14 propriate form as determined by the Secretary, con15 taining a summary of determinations made by the

16 Secretary during the preceding year to withhold in17 formation from release under paragraph (1).’’.

18 SEC. 782. TECHNICAL ASSISTANCE FOR SECURITY OF PIPE19 LINE FACILITIES.

20 The Secretary of Transportation may provide tech21 nical assistance to an operator of a pipeline facility or to

22 State, tribal, or local officials to prevent or respond to acts

23 of terrorism that may impact the pipeline facility,

24 including—
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1 (1) actions by the Secretary that support the use

2 of National Guard or State or Federal personnel to

3 provide additional security for a pipeline facility at

4 risk of terrorist attack or in response to such an at5 tack;

6 (2) use of resources available to the Secretary to

7 develop and implement security measures for a pipe8 line facility;

9 (3) identification of security issues with respect

10 to the operation of a pipeline facility; and

11 (4) the provision of information and guidance on

12 security practices that prevent damage to pipeline fa13 cilities from terrorist attacks.

14 SEC. 783. CRIMINAL PENALTIES FOR DAMAGING OR DE15 STROYING A FACILITY.

16 Section 60123(b) of title 49, United States Code, is

17 amended—

18 (1) by striking ‘‘or’’ after ‘‘gas pipeline facility’’

19 and inserting a comma; and

20 (2) by inserting after ‘‘liquid pipeline facility’’

21 the following: ‘‘, or either an intrastate gas pipeline

22 facility or an intrastate hazardous liquid pipeline fa23 cility that is used in interstate or foreign commerce

24 or in any activity affecting interstate or foreign com25 merce’’.
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1 DIVISION C—DIVERSIFYING EN2 ERGY DEMAND AND IMPROV3 ING EFFICIENCY

4 TITLE VIII—FUELS AND

5 VEHICLES

6 Subtitle A—CAFE Standards, Alter7 native Fuels, and Advanced

8 Technology

9 SEC. 801. INCREASED FUEL ECONOMY STANDARDS.

10 (a) REQUIREMENT FOR NEW REGULATIONS.—

11 (1) IN GENERAL.—The Secretary of Transpor12 tation shall issue, under section 32902 of title 49,

13 United States Code, new regulations setting forth in14 creased average fuel economy standards for auto15 mobiles that are determined on the basis of the max16 imum feasible average fuel economy levels for the

17 automobiles, taking into consideration the matters set

18 forth in subsection (f) of such section.

19 (2) TIME FOR ISSUING REGULATIONS.—

20 (A) NON-PASSENGER AUTOMOBILES.—For

21 non-passenger automobiles, the Secretary of

22 Transportation shall issue the final regulations

23 not later than 15 months after the date of the en24 actment of this Act.
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1 (B) PASSENGER AUTOMOBILES.—For pas2 senger automobiles, the Secretary of Transpor3 tation shall issue—

4 (i) the proposed regulations not later

5 than 180 days after the date of the enact6 ment of this Act; and

7 (ii) the final regulations not later than

8 2 years after that date.

9 (b) PHASED INCREASES.—The regulations issued pur10 suant to subsection (a) shall specify standards that take ef11 fect successively over several vehicle model years not exceed12 ing 15 vehicle model years.

13 (c) CLARIFICATION OF AUTHORITY TO AMEND PAS14 SENGER AUTOMOBILE STANDARD.—Section 32902(b) of

15 title 49, United States Code, is amended by inserting before

16 the period at the end the following: ‘‘or such other number

17 as the Secretary prescribes under subsection (c)’’.

18 (d) ENVIRONMENTAL ASSESSMENT.—When issuing

19 final regulations setting forth increased average fuel econ20 omy standards under this section, the Secretary of Trans21 portation shall also issue an environmental assessment of

22 the effects of the implementation of the increased standards

23 on the environment under the National Environmental Pol24 icy Act of 1969 (42 U.S.C. 4321 et seq.).
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1 (e) AUTHORIZATION OF APPROPRIATIONS.—There is

2 authorized to be appropriated to the Department of Trans3 portation for fiscal year 2003, to remain available until

4 expended, $2,000,000 to carry out this section.

5 SEC. 802. EXPEDITED PROCEDURES FOR CONGRESSIONAL

6 INCREASE IN FUEL ECONOMY STANDARDS.

7 (a) CONDITION FOR APPLICABILITY.—If the Secretary

8 of Transportation fails to issue final regulations with re9 spect to non-passenger automobiles under section 801, or

10 fails to issue final regulations with respect to passenger

11 automobiles under such section, on or before the date by

12 which such final regulations are required by such section

13 to be issued, respectively, then this section shall apply with

14 respect to a bill described in subsection (b).

15 (b) BILL.—A bill referred to in this subsection is a

16 bill that satisfies the following requirements:

17 (1) INTRODUCTION.—The bill is introduced by

18 one or more Members of Congress not later than 60

19 days after the date referred to in subsection (a).

20 (2) TITLE.—The title of the bill is as follows: ‘‘A

21 bill to establish new average fuel economy standards

22 for certain motor vehicles.’’.

23 (3) TEXT.—The bill provides after the enacting

24 clause only the text specified in subparagraph (A) or
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1 (B) or any provision described in subparagraph (C),

2 as follows:

3 (A) NON-PASSENGER AUTOMOBILES.—In the

4 case of a bill relating to a failure timely to issue

5 final regulations relating to non-passenger auto6 mobiles, the following text:

7 ‘‘That, section 32902 of title 49, United States Code, is

8 amended by adding at the end the following new subsection:

9 ‘‘ ‘(l) NON-PASSENGER AUTOMOBILES.—The average

10 fuel economy standard for non-passenger automobiles man11 ufactured by a manufacturer in a model year after model

12 year ll shall be ll miles per gallon.’ ’’, the first blank

13 space being filled in with a subsection designation, the sec14 ond blank space being filled in with the number of a year,

15 and the third blank space being filled in with a number.

16 (B) PASSENGER AUTOMOBILES.—In the

17 case of a bill relating to a failure timely to issue

18 final regulations relating to passenger auto19 mobiles, the following text:

20 ‘‘That, section 32902(b) of title 49, United States Code, is

21 amended to read as follows:

22 ‘‘ ‘(b) PASSENGER AUTOMOBILES.—Except as provided

23 in this section, the average fuel economy standard for pas24 senger automobiles manufactured by a manufacturer in a

25 model year after model year ll shall be ll miles per
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1 gallon.’ ’’, the first blank space being filled in with the num2 ber of a year and the second blank space being filled in

3 with a number.

4 (C) SUBSTITUTE TEXT.—Any text sub5 stituted by an amendment that is in order under

6 subsection (c)(3).

7 (c) EXPEDITED PROCEDURES.—A bill described in

8 subsection (b) shall be considered in a House of Congress

9 in accordance with the procedures provided for the consider10 ation of joint resolutions in paragraphs (3) through (8) of

11 section 8066(c) of the Department of Defense Appropria12 tions Act, 1985 (as contained in section 101(h) of Public

13 Law 98–473; 98 Stat. 1936), with the following exceptions:

14 (1) REFERENCES TO RESOLUTION.—The ref15 erences in such paragraphs to a resolution shall be

16 deemed to refer to the bill described in subsection (b).

17 (2) COMMITTEES OF JURISDICTION.—The com18 mittees to which the bill is referred under this sub19 section shall—

20 (A) in the Senate, be the Committee on

21 Commerce, Science, and Transportation; and

22 (B) in the House of Representatives, be the

23 Committee on Energy and Commerce.

24 (3) AMENDMENTS.—
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1 (A) AMENDMENTS IN ORDER.—Only four

2 amendments to the bill are in order in each

3 House, as follows:

4 (i) Two amendments proposed by the

5 majority leader of that House.

6 (ii) Two amendments proposed by the

7 minority leader of that House.

8 (B) FORM AND CONTENT.—To be in order

9 under subparagraph (A), an amendment shall

10 propose to strike all after the enacting clause and

11 substitute text that only includes the same text as

12 is proposed to be stricken except for one or more

13 different numbers in the text.

14 (C) DEBATE, ET CETERA.—Subparagraph

15 (B) of section 8066(c)(5) of the Department of

16 Defense Appropriations Act, 1985 (98 Stat.

17 1936) shall apply to the consideration of each

18 amendment proposed pursuant to subparagraph

19 (A) of this paragraph in the same manner as

20 such subparagraph (B) applies to debatable mo21 tions.
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1 SEC. 803. REVISED CONSIDERATIONS FOR DECISIONS ON

2 MAXIMUM FEASIBLE AVERAGE FUEL ECON3 OMY.

4 Section 32902(f) of title 49, United States Code, is

5 amended to read as follows:

6 ‘‘(f) CONSIDERATIONS FOR DECISIONS ON MAXIMUM

7 FEASIBLE AVERAGE FUEL ECONOMY.—When deciding

8 maximum feasible average fuel economy under this section,

9 the Secretary of Transportation shall consider the following

10 matters:

11 ‘‘(1) Technological feasibility.

12 ‘‘(2) Economic practicability.

13 ‘‘(3) The effect of other motor vehicle standards

14 of the Government on fuel economy.

15 ‘‘(4) The need of the United States to conserve

16 energy.

17 ‘‘(5) The desirability of reducing United States

18 dependence on imported oil.

19 ‘‘(6) The effects of the average fuel economy

20 standards on motor vehicle and passenger safety.

21 ‘‘(7) The effects of increased fuel economy on air

22 quality.

23 ‘‘(8) The adverse effects of average fuel economy

24 standards on the relative competitiveness of manufac25 turers.
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1 ‘‘(9) The effects of compliance with average fuel

2 economy standards on levels of employment in the

3 United States.

4 ‘‘(10) The cost and lead time necessary for the

5 introduction of the necessary new technologies.

6 ‘‘(11) The potential for advanced technology ve7 hicles, such as hybrid and fuel cell vehicles, to con8 tribute to the achievement of significant reductions in

9 fuel consumption.

10 ‘‘(12) The extent to which the necessity for vehi11 cle manufacturers to incur near-term costs to comply

12 with the average fuel economy standards adversely af13 fects the availability of resources for the development

14 of advanced technology for the propulsion of motor ve15 hicles.

16 ‘‘(13) The report of the National Research Coun17 cil that is entitled ‘Effectiveness and Impact of Cor18 porate Average Fuel Economy Standards’, issued in

19 January 2002.’’.

20 SEC. 804. EXTENSION OF MAXIMUM FUEL ECONOMY IN21 CREASE FOR ALTERNATIVE FUELED VEHI22 CLES.

23 Section 32906(a)(1) of title 49, United States Code,

24 is amended—
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1 (1) in subparagraph (A), by striking ‘‘1993–

2 2004’’ and inserting ‘‘1993 through 2008’’; and

3 (2) in subparagraph (B), by striking ‘‘2005–

4 2008’’ and inserting ‘‘2009 through 2012’’.

5 SEC. 805. PROCUREMENT OF ALTERNATIVE FUELED AND

6 HYBRID LIGHT DUTY TRUCKS.

7 (a) VEHICLE FLEETS NOT COVERED BY REQUIRE8 MENT IN ENERGY POLICY ACT OF 1992.—

9 (1) HYBRID VEHICLES.—The head of each agen10 cy of the executive branch shall coordinate with the

11 Administrator of General Services to ensure that only

12 hybrid vehicles are procured by or for each agency

13 fleet of light duty trucks that is not in a fleet of vehi14 cles to which section 303 of the Energy Policy Act of

15 1992 (42 U.S.C. 13212) applies.

16 (2) WAIVER AUTHORITY.—The head of an agen17 cy, in consultation with the Administrator, may

18 waive the applicability of the policy regarding the

19 procurement of hybrid vehicles in paragraph (1) to

20 that agency to the extent that the head of that agency

21 determines necessary—

22 (A) to meet specific requirements of the

23 agency for capabilities of light duty trucks;
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1 (B) to procure vehicles consistent with the

2 standards applicable to the procurement of fleet

3 vehicles for the Federal Government;

4 (C) to adjust to limitations on the commer5 cial availability of light duty trucks that are hy6 brid vehicles; or

7 (D) to avoid the necessity of procuring a

8 hybrid vehicle for the agency when each of the

9 hybrid vehicles available for meeting the require10 ments of the agency has a cost to the United

11 States that exceeds the costs of comparable non12 hybrid vehicles by a factor that is significantly

13 higher than the difference between—

14 (i) the real cost of the hybrid vehicle to

15 retail purchasers, taking into account the

16 benefit of any tax incentives available to re17 tail purchasers for the purchase of the hy18 brid vehicle; and

19 (ii) the costs of the comparable non20 hybrid vehicles to retail purchasers.

21 (3) APPLICABILITY TO PROCUREMENTS AFTER

22 FISCAL YEAR 2004.—This subsection applies with re23 spect to procurements of light duty trucks in fiscal

24 year 2005 and subsequent fiscal years.
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1 (b) REQUIREMENT TO EXCEED REQUIREMENT IN EN2 ERGY POLICY ACT OF 1992.—

3 (1) LIGHT DUTY TRUCKS.—The head of each

4 agency of the executive branch shall coordinate with

5 the Administrator of General Services to ensure that,

6 of the light duty trucks procured in fiscal years after

7 fiscal year 2004 for the fleets of light duty vehicles of

8 the agency to which section 303 of the Energy Policy

9 Act of 1992 (42 U.S.C. 13212) applies—

10 (A) 5 percent of the total number of such

11 trucks that are procured in each of fiscal years

12 2005 and 2006 are alternative fueled vehicles or

13 hybrid vehicles; and

14 (B) 10 percent of the total number of such

15 trucks that are procured in each fiscal year after

16 fiscal year 2006 are alternative fueled vehicles or

17 hybrid vehicles.

18 (2) COUNTING OF TRUCKS.—Light duty trucks

19 acquired for an agency of the executive branch that

20 are counted to comply with section 303 of the Energy

21 Policy Act of 1992 (42 U.S.C. 13212) for a fiscal year

22 shall be counted to determine the total number of light

23 duty trucks procured for that agency for that fiscal

24 year for the purposes of paragraph (1), but shall not
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1 be counted to satisfy the requirement in that para2 graph.

3 (c) DEFINITIONS.—In this section:

4 (1) HYBRID VEHICLE.—The term ‘‘hybrid vehi5 cle’’ means—

6 (A) a motor vehicle that draws propulsion

7 energy from onboard sources of stored energy

8 that are both—

9 (i) an internal combustion or heat en10 gine using combustible fuel; and

11 (ii) a rechargeable energy storage sys12 tem; and

13 (B) any other vehicle that is defined as a

14 hybrid vehicle in regulations prescribed by the

15 Secretary of Energy for the administration of

16 title III of the Energy Policy Act of 1992.

17 (2) ALTERNATIVE FUELED VEHICLE.—The term

18 ‘‘alternative fueled vehicle’’ has the meaning given

19 that term in section 301 of the Energy Policy Act of

20 1992 (42 U.S.C. 13211).

21 (d) INAPPLICABILITY TO DEPARTMENT OF DE22 FENSE.—This section does not apply to the Department of

23 Defense, which is subject to comparable requirements under

24 section 318 of the National Defense Authorization Act for
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1 Fiscal Year 2002 (Public Law 107–107; 115 Stat. 1055;

2 10 U.S.C. 2302 note).

3 SEC. 806. USE OF ALTERNATIVE FUELS.

4 (a) EXCLUSIVE USE OF ALTERNATIVE FUELS IN DUAL

5 FUELED VEHICLES.—The head of each agency of the execu6 tive branch shall coordinate with the Administrator of Gen7 eral Services to ensure that, not later than January 1, 2009,

8 the fuel actually used in the fleet of dual fueled vehicles used

9 by the agency is an alternative fuel.

10 (b) WAIVER AUTHORITY.—

11 (1) CAPABILITY WAIVER.—

12 (A) AUTHORITY.—If the Secretary of Trans13 portation determines that not all of the dual

14 fueled vehicles can operate on alternative fuels at

15 all times, the Secretary may waive the require16 ment of subsection (a) in part, but only to the

17 extent that—

18 (i) not later than January 1, 2009, not

19 less than 50 percent of the total annual vol20 ume of fuel used in the dual fueled vehicles

21 shall be alternative fuels; and

22 (ii) not later than January 1, 2011,

23 not less than 75 percent of the total annual

24 volume of fuel used in the dual fueled vehi25 cles shall be alternative fuels.
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1 (B) EXPIRATION.—In no case may a waiver

2 under subparagraph (A) remain in effect after

3 December 31, 2012.

4 (2) REGIONAL FUEL AVAILABILITY WAIVER.—The

5 Secretary may waive the applicability of the require6 ment of subsection (a) to vehicles used by an agency

7 in a particular geographic area where the alternative

8 fuel otherwise required to be used in the vehicles is

9 not reasonably available to retail purchasers of the

10 fuel, as certified to the Secretary by the head of the

11 agency.

12 (c) DEFINITIONS.—In this section:

13 (1) ALTERNATIVE FUEL.—The term ‘‘alternative

14 fuel’’ has the meaning given that term in section

15 32901(a)(1) of title 49, United States Code.

16 (2) DUAL FUELED VEHICLE.—The term ‘‘dual

17 fueled vehicle’’ has the meaning given the term ‘‘dual

18 fueled automobile’’ in section 32901(a)(8) of title 49,

19 United States Code.

20 (3) FLEET.—The term ‘‘fleet’’, with respect to

21 dual fueled vehicles, has the meaning that is given

22 that term with respect to light duty motor vehicles in

23 section 301(9) of the Energy Policy Act of 1992 (42

24 U.S.C. 13211(9)).
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1 SEC. 807. HYBRID ELECTRIC AND FUEL CELL VEHICLES.

2 (a) EXPANSION OF SCOPE.—The Secretary of Energy

3 shall expand the research and development program of the

4 Department of Energy on advanced technologies for improv5 ing the environmental cleanliness of vehicles to emphasize

6 research and development on the following:

7 (1) Fuel cells, including—

8 (A) high temperature membranes for fuel

9 cells; and

10 (B) fuel cell auxiliary power systems.

11 (2) Hydrogen storage.

12 (3) Advanced vehicle engine and emission control

13 systems.

14 (4) Advanced batteries and power electronics for

15 hybrid vehicles.

16 (5) Advanced fuels.

17 (6) Advanced materials.

18 (b) AUTHORIZATION OF APPROPRIATIONS.—There is

19 authorized to be appropriated to the Department of Energy

20 for fiscal year 2003, the amount of $225,000,000 for car21 rying out the expanded research and development program

22 provided for under this section.

23 SEC. 808. DIESEL FUELED VEHICLES.

24 (a) DIESEL COMBUSTION AND AFTER TREATMENT

25 TECHNOLOGIES.—The Secretary of Energy shall accelerate

26 research and development directed toward the improvement
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1 of diesel combustion and after treatment technologies for use

2 in diesel fueled motor vehicles.

3 (b) GOAL.—

4 (1) COMPLIANCE WITH TIER 2 EMISSION STAND5 ARDS BY 2010.—The Secretary shall carry out sub6 section (a) with a view to developing and dem7 onstrating diesel technology meeting tier 2 emission

8 standards not later than 2010.

9 (2) TIER 2 EMISSION STANDARDS DEFINED.—In

10 this subsection, the term ‘‘tier 2 emission standards’’

11 means the motor vehicle emission standards promul12 gated by the Administrator of the Environmental

13 Protection Agency on February 10, 2000, under sec14 tions 202 and 211 of the Clean Air Act to apply to

15 passenger cars, light trucks, and larger passenger ve16 hicles of model years after the 2003 vehicle model

17 year.

18 SEC. 809. FUEL CELL DEMONSTRATION.

19 (a) PROGRAM REQUIRED.—The Secretary of Energy

20 and the Secretary of Defense shall jointly carry out a pro21 gram to demonstrate—

22 (1) fuel cell technologies developed in the PNGV

23 and Freedom Car programs;
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1 (2) fuel cell technologies developed in research

2 and development programs of the Department of De3 fense; and

4 (3) follow-on fuel cell technologies.

5 (b) PURPOSES OF PROGRAM.—The purposes of the pro6 gram are to identify and support technological advances

7 that are necessary to achieve accelerated availability of fuel

8 cell technology for use both for nonmilitary and military

9 purposes.

10 (c) COOPERATION WITH INDUSTRY.—

11 (1) IN GENERAL.—The demonstration program

12 shall be carried out in cooperation with industry, in13 cluding the automobile manufacturing industry and

14 the automotive systems and component suppliers in15 dustry.

16 (2) COST SHARING.—The Secretary of Energy

17 and the Secretary of Defense shall provide for indus18 try to bear, in cash or in kind, at least one-half of

19 the total cost of carrying out the demonstration pro20 gram.

21 (d) DEFINITIONS.—In this section:

22 (1) PNGV PROGRAM.—The term ‘‘PNGV pro23 gram’’ means the Partnership for a New Generation

24 of Vehicles, a cooperative program engaged in by the

25 Departments of Commerce, Energy, Transportation,
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1 and Defense, the Environmental Protection Agency,

2 the National Science Foundation, and the National

3 Aeronautics and Space Administration with the auto4 motive industry for the purpose of developing a new

5 generation of vehicles with capabilities resulting in

6 significantly improved fuel efficiency together with

7 low emissions without compromising the safety, per8 formance, affordability, or utility of the vehicles.

9 (2) FREEDOM CAR PROGRAM.—The term ‘‘Free10 dom Car program’’ means a cooperative research pro11 gram engaged in by the Department of Energy with

12 the United States Council on Automotive Research as

13 a follow-on to the PNGV program.

14 SEC. 810. BUS REPLACEMENT.

15 (a) REQUIREMENT FOR STUDY.—The Secretary of

16 Transportation shall carry out a study to determine how

17 best to provide for converting the composition of the fleets

18 of buses in metropolitan areas and school systems from

19 buses utilizing current diesel technology to—

20 (1) buses that draw propulsion from onboard fuel

21 cells;

22 (2) buses that are hybrid electric vehicles;

23 (3) buses that are fueled by clean-burning fuels,

24 such as renewable fuels (including agriculture-based
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1 biodiesel fuels), natural gas, and ultra-low sulphur

2 diesel;

3 (4) buses that are powered by clean diesel en4 gines: or

5 (5) an assortment of buses described in para6 graphs (1), (2), (3), and (4).

7 (b) REPORT.—

8 (1) REQUIREMENT.—The Secretary of Transpor9 tation shall submit a report on the results of the study

10 on bus fleet conversions under subsection (a) to Con11 gress.

12 (2) CONTENT.—The report on bus fleet conver13 sions shall include the following:

14 (A) An assessment of effectuating conver15 sions by the following means:

16 (i) Replacement of buses.

17 (ii) Replacement of power and propul18 sion systems in buses utilizing current die19 sel technology.

20 (iii) Other means.

21 (B) Feasible schedules for carrying out the

22 conversions.

23 (C) Estimated costs of carrying out the con24 versions.
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1 (D) An assessment of the benefits of the con2 versions in terms of emissions control and reduc3 tion of fuel consumption.

4 SEC. 811. AVERAGE FUEL ECONOMY STANDARDS FOR PICK5 UP TRUCKS.

6 (a) IN GENERAL.—Section 32902(a) of title 49, United

7 States Code, is amended—

8 (1) by inserting ‘‘(1)’’ after the after ‘‘AUTO9 MOBILES.—’’; and

10 (2) by adding at the end the following new para11 graph:

12 ‘‘(2) The average fuel economy standard for pickup

13 trucks manufactured by a manufacturer in a model year

14 after model year 2004 shall be no higher than 20.7 miles

15 per gallon. No average fuel economy standard prescribed

16 under another provision of this section shall apply to pick17 up trucks.’’.

18 (b) DEFINITION OF PICKUP TRUCK.—Section

19 32901(a) of such title is amended by adding at the end the

20 following new paragraph:

21 ‘‘(17) ‘pickup truck’ has the meaning given that

22 term in regulations prescribed by the Secretary for

23 the administration of this chapter, as in effect on

24 January 1, 2002, except that such term shall also in25 clude any additional vehicle that the Secretary de-
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1 fines as a pickup truck in regulations prescribed for

2 the administration of this chapter after such date.’’.

3 SEC. 812. EXCEPTION TO HOV PASSENGER REQUIREMENTS

4 FOR ALTERNATIVE FUEL VEHICLES.

5 Section 102(a)(1) of title 23, United States Code, is

6 amended by inserting after ‘‘required’’ the following: ‘‘(un7 less, in the discretion of the State transportation depart8 ment, the vehicle is being operated on, or is being fueled

9 by, an alternative fuel (as defined in section 301(2) of the

10 Energy Policy Act of 1992 (42 U.S.C. 13211(2)))’’.

11 SEC. 813. DATA COLLECTION.

12 Section 205 of the Department of Energy Organization

13 Act (42 U.S.C. 7135) is amended by adding at the end the

14 following:

15 ‘‘(m) In order to improve the ability to evaluate the

16 effectiveness of the Nation’s renewable fuels mandate, the

17 Administrator shall conduct and publish the results of a

18 survey of renewable fuels consumption in the motor vehicle

19 fuels market in the United States monthly, and in a man20 ner designed to protect the confidentiality of individual re21 sponses. In conducting the survey, the Administrator shall

22 collect information retrospectively to 1998, both on a na23 tional basis and a regional basis, including—

24 (1) the quantity of renewable fuels produced;

25 (2) the cost of production;
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1 (3) the cost of blending and marketing;

2 (4) the quantity of renewable fuels blended;

3 (5) the quantity of renewable fuels imported; and

4 (6) market price data.

5 SEC. 814. GREEN SCHOOL BUS PILOT PROGRAM.

6 (a) ESTABLISHMENT.—The Secretary of Energy and

7 the Secretary of Transportation shall jointly establish a

8 pilot program for awarding grants on a competitive basis

9 to eligible entities for the demonstration and commercial

10 application of alternative fuel school buses and ultra-low

11 sulfur diesel school buses.

12 (b) REQUIREMENTS.—Not later than 3 months after

13 the date of the enactment of this Act, the Secretary shall

14 establish and publish in the Federal Register grant require15 ments on eligibility for assistance, and on implementation

16 of the program established under subsection (a), including

17 certification requirements to ensure compliance with this

18 subtitle.

19 (c) SOLICITATION.—Not later than 6 months after the

20 date of the enactment of this Act, the Secretary shall solicit

21 proposals for grants under this section.

22 (d) ELIGIBLE RECIPIENTS.—A grant shall be awarded

23 under this section only—
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1 (1) to a local governmental entity responsible for

2 providing school bus service for one or more public

3 school systems; or

4 (2) jointly to an entity described in paragraph

5 (1) and a contracting entity that provides school bus

6 service to the public school system or systems.

7 (e) TYPES OF GRANTS.—

8 (1) IN GENERAL.—Grants under this section

9 shall be for the demonstration and commercial appli10 cation of technologies to facilitate the use of alter11 native fuel school buses and ultra-low sulfur diesel

12 school buses instead of buses manufactured before

13 model year 1977 and diesel-powered buses manufac14 tured before model year 1991.

15 (2) NO ECONOMIC BENEFIT.—Other than the re16 ceipt of the grant, a recipient of a grant under this

17 section may not receive any economic benefit in con18 nection with the receipt of the grant.

19 (3) PRIORITY OF GRANT APPLICATIONS.—The

20 Secretary shall give priority to awarding grants to

21 applicants who can demonstrate the use of alternative

22 fuel buses and ultra-low sulfur diesel school buses in23 stead of buses manufactured before model year 1977.

24 (f) CONDITIONS OF GRANT.—A grant provided under

25 this section shall include the following conditions:
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1 (1) All buses acquired with funds provided under

2 the grant shall be operated as part of the school bus

3 fleet for which the grant was made for a minimum

4 of 5 years.

5 (2) Funds provided under the grant may only be

6 used—

7 (A) to pay the cost, except as provided in

8 paragraph (3), of new alternative fuel school

9 buses or ultra-low sulfur diesel school buses, in10 cluding State taxes and contract fees; and

11 (B) to provide—

12 (i) up to 10 percent of the price of the

13 alternative fuel buses acquired, for necessary

14 alternative fuel infrastructure if the infra15 structure will only be available to the grant

16 recipient; and

17 (ii) up to 15 percent of the price of the

18 alternative fuel buses acquired, for necessary

19 alternative fuel infrastructure if the infra20 structure will be available to the grant re21 cipient and to other bus fleets.

22 (3) The grant recipient shall be required to pro23 vide at least the lesser of 15 percent of the total cost

24 of each bus received or $15,000 per bus.
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1 (4) In the case of a grant recipient receiving a

2 grant to demonstrate ultra-low sulfur diesel school

3 buses, the grant recipient shall be required to provide

4 documentation to the satisfaction of the Secretary

5 that diesel fuel containing sulfur at not more than 15

6 parts per million is available for carrying out the

7 purposes of the grant, and a commitment by the ap8 plicant to use such fuel in carrying out the purposes

9 of the grant.

10 (g) BUSES.—Funding under a grant made under this

11 section may only be used to demonstrate the use of new al12 ternative fuel school buses or ultra-low sulfur diesel school

13 buses that—

14 (1) have a gross vehicle weight greater than

15 14,000 pounds;

16 (2) are powered by a heavy duty engine;

17 (3) in the case of alternative fuel school buses,

18 emit not more than—

19 (A) for buses manufactured in model year

20 2002, 2.5 grams per brake horsepower-hour of

21 nonmethane hydrocarbons and oxides of nitrogen

22 and .01 grams per brake horsepower-hour of par23 ticulate matter; and

24 (B) for buses manufactured in model years

25 2003 through 2006, 1.8 grams per brake horse-
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1 power-hour of nonmethane hydrocarbons and ox2 ides of nitrogen and .01 grams per brake horse3 power-hour of particulate matter; and

4 (4) in the case of ultra-low sulfur diesel school

5 buses, emit not more than the lesser of—

6 (A) the emissions of nonmethane hydro7 carbons, oxides of nitrogen, and particulate mat8 ter of the best performing technology of the same

9 class of ultra-low sulfur diesel school buses com10 mercially available at the time the grant is

11 made; or

12 (B) the applicable following amounts—

13 (i) for buses manufactured in model

14 year 2002 or 2003, 3.0 grams per brake

15 horsepower-hour of oxides of nitrogen and

16 .01 grams per brake horsepower-hour of

17 particulate matter; and

18 (ii) for buses manufactured in model

19 years 2004 through 2006, 2.5 grams per

20 brake horsepower-hour of nonmethane hy21 drocarbons and oxides of nitrogen and .01

22 grams per brake horsepower-hour of partic23 ulate matter.

24 (h) DEPLOYMENT AND DISTRIBUTION.—The Secretary

25 shall seek to the maximum extent practicable to achieve na-
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1 tionwide deployment of alternative fuel school buses through

2 the program under this section, and shall ensure a broad

3 geographic distribution of grant awards, with a goal of no

4 State receiving more than 10 percent of the grant funding

5 made available under this section for a fiscal year.

6 (i) LIMIT ON FUNDING.—The Secretary shall provide

7 not less than 20 percent and not more than 25 percent of

8 the grant funding made available under this section for any

9 fiscal year for the acquisition of ultra-low sulfur diesel

10 school buses.

11 (j) DEFINITIONS.—For purposes of this section—

12 (1) the term ‘‘alternative fuel school bus’’ means

13 a bus powered substantially by electricity (including

14 electricity supplied by a fuel cell), or by liquefied nat15 ural gas, compressed natural gas, liquefied petroleum

16 gas, hydrogen, propane, or methanol or ethanol at no

17 less than 85 percent by volume;

18 (2) the term ‘‘idling’’ means not turning off an

19 engine while remaining stationary for more than ap20 proximately 3 minutes; and

21 (3) the term ‘‘ultra-low sulfur diesel school bus’’

22 means a school bus powered by diesel fuel which con23 tains sulfur at not more than 15 parts per million.

24 (k) REDUCTION OF SCHOOL BUS IDLING.—Each local

25 educational agency (as defined in section 9101 of the Ele-
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1 mentary and Secondary Education Act of 1965 (20 U.S.C.

2 7801)) that receives Federal funds under the Elementary

3 and Secondary Education Act of 1965 (20 U.S.C. 6301 et

4 seq.) is encouraged to develop a policy to reduce the inci5 dence of school buses idling at schools when picking up and

6 unloading students.

7 SEC. 815. FUEL CELL BUS DEVELOPMENT AND DEMONSTRA8 TION PROGRAM.

9 (a) ESTABLISHMENT OF PROGRAM.—The Secretary

10 shall establish a program for entering into cooperative

11 agreements with private sector fuel cell bus developers for

12 the development of fuel cell-powered school buses, and subse13 quently with not less than two units of local government

14 using natural gas-powered school buses and such private

15 sector fuel cell bus developers to demonstrate the use of fuel

16 cell-powered school buses.

17 (b) COST SHARING.—The non-Federal contribution for

18 activities funded under this section shall be not less than—

19 (1) 20 percent for fuel infrastructure develop20 ment activities; and

21 (2) 50 percent for demonstration activities and

22 for development activities not described in paragraph

23 (1).

24 (c) FUNDING.—No more than $25,000,000 of the

25 amounts authorized under section 815 may be used for car-
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1 rying out this section for the period encompassing fiscal

2 years 2003 through 2006.

3 (d) REPORTS TO CONGRESS.—Not later than 3 years

4 after the date of the enactment of this Act, and not later

5 than October 1, 2006, the Secretary shall transmit to the

6 appropriate congressional committees a report that—

7 (1) evaluates the process of converting natural

8 gas infrastructure to accommodate fuel cell-powered

9 school buses; and

10 (2) assesses the results of the development and

11 demonstration program under this section.

12 SEC. 816. AUTHORIZATION OF APPROPRIATIONS.

13 There are authorized to be appropriated to the Sec14 retary of Energy for carrying out sections 814 and 815,

15 to remain available until expended—

16 (1) $50,000,000 for fiscal year 2003;

17 (2) $60,000,000 for fiscal year 2004;

18 (3) $70,000,000 for fiscal year 2005; and

19 (4) $80,000,000 for fiscal year 2006.

20 SEC. 817. TEMPORARY BIODIESEL CREDIT EXPANSION.

21 (a) BIODIESEL CREDIT EXPANSION.—Section 312(b)

22 of the Energy Policy Act of 1992 (42 U.S.C. 13220(b)) is

23 amended by striking paragraph (2) and inserting the fol24 lowing:

25 ‘‘(2) USE.—
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1 ‘‘(A) IN GENERAL.—A fleet or covered

2 person—

3 ‘‘(i) may use credits allocated under

4 subsection (a) to satisfy more than 50 per5 cent of the alternative fueled vehicle require6 ments of a fleet or covered person under this

7 title, title IV, and title V; but

8 ‘‘(ii) may use credits allocated under

9 subsection (a) to satisfy 100 percent of the

10 alternative fueled vehicle requirements of a

11 fleet or covered person under title V for 1 or

12 more of model years 2002 through 2005.

13 ‘‘(B) APPLICABILITY.—Subparagraph (A)

14 does not apply to a fleet or covered person that

15 is a biodiesel alternative fuel provider described

16 in section 501(a)(2)(A).’’.

17 (b) TREATMENT AS SECTION 508 CREDITS.—Section

18 312(c) of the Energy Policy Act of 1992 (42 U.S.C.

19 13220(c)) is amended—

20 (1) in the subsection heading, by striking

21 ‘‘CREDIT NOT’’ and inserting ‘‘TREATMENT AS’’; and

22 (2) by striking ‘‘shall not be considered’’ and in23 serting ‘‘shall be treated as’’.

24 (c) ALTERNATIVE FUELED VEHICLE STUDY AND RE25 PORT.—
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1 (1) DEFINITIONS.—In this subsection:

2 (A) ALTERNATIVE FUEL.—The term ‘‘alter3 native fuel’’ has the meaning given the term in

4 section 301 of the Energy Policy Act of 1992 (42

5 U.S.C. 13211).

6 (B) ALTERNATIVE FUELED VEHICLE.—The

7 term ‘‘alternative fueled vehicle’’ has the mean8 ing given the term in section 301 of the Energy

9 Policy Act of 1992 (42 U.S.C. 13211).

10 (C) LIGHT DUTY MOTOR VEHICLE.—The

11 term ‘‘light duty motor vehicle’’ has the meaning

12 given the term in section 301 of the Energy Pol13 icy Act of 1992 (42 U.S.C. 13211).

14 (D) SECRETARY.—The term ‘‘Secretary’’

15 means the Secretary of Energy.

16 (2) BIODIESEL CREDIT EXTENSION STUDY.—As

17 soon as practicable after the date of enactment of this

18 Act, the Secretary shall conduct a study—

19 (A) to determine the availability and cost of

20 light duty motor vehicles that qualify as alter21 native fueled vehicles under title V of the Energy

22 Policy Act of 1992 (42 U.S.C. 13251 et seq.);

23 and

24 (B) to compare—
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1 (i) the availability and cost of bio2 diesel; with

3 (ii) the availability and cost of fuels

4 that qualify as alternative fuels under title

5 V of the Energy Policy Act of 1992 (42

6 U.S.C. 13251 et seq.).

7 (3) REPORT.—Not later than 1 year after the

8 date of enactment of this Act, the Secretary shall sub9 mit to Congress a report that—

10 (A) describes the results of the study con11 ducted under paragraph (2); and

12 (B) includes any recommendations of the

13 Secretary for legislation to extend the temporary

14 credit provided under subsection (a) beyond

15 model year 2005.

16 SEC. 818. NEIGHBORHOOD ELECTRIC VEHICLES.

17 Section 301 of the Energy Policy Act of 1992 (42

18 U.S.C. 13211) is amended—

19 (1) by striking ‘‘or a dual fueled vehicle’’ and in20 serting ‘‘, a dual fueled vehicle, or a neighborhood

21 electric vehicle’’;

22 (2) by striking ‘‘and’’ at the end of paragraph

23 (13);

24 (3) by striking the period at the end of subpara25 graph (14) and inserting ‘‘; and’’; and
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1 (4) by adding at the end the following:

2 ‘‘(15) the term ‘neighborhood electric vehicle’

3 means a motor vehicle that qualifies as both—

4 ‘‘(A) a low-speed vehicle, as such term is de5 fined in section 571.3(b) of title 49, Code of Fed6 eral Regulations; and

7 ‘‘(B) a zero-emission vehicle, as such term is

8 defined in section 86.1703–99 of title 40, Code of

9 Federal Regulations.’’.

10 SEC. 819. CREDIT FOR HYBRID VEHICLES, DEDICATED AL11 TERNATIVE FUEL VEHICLES, AND INFRA12 STRUCTURE.

13 Section 507 of the Energy Policy Act of 1992 (42

14 U.S.C. 13258) is amended by adding at the end the fol15 lowing:

16 ‘‘(p) CREDITS FOR NEW QUALIFIED HYBRID MOTOR

17 VEHICLES.—

18 ‘‘(1) DEFINITIONS.—In this subsection:

19 ‘‘(A) 2000 MODEL YEAR CITY FUEL EFFI20 CIENCY.—The term ‘2000 model year city fuel ef21 ficiency’, with respect to a motor vehicle, means

22 fuel efficiency determined in accordance with the

23 following tables:

24 ‘‘(i) In the case of a passenger auto25 mobile:
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The 2000 model year city

‘‘If vehicle inertia weight class is: fuel efficiency is:

1,500 or 1,750 lbs .......................................................................... 43.7 mpg

2,000 lbs .......................................................................................... 38.3 mpg

2,250 lbs .......................................................................................... 34.1 mpg

2,500 lbs .......................................................................................... 30.7 mpg

2,750 lbs .......................................................................................... 27.9 mpg

3,000 lbs .......................................................................................... 25.6 mpg

3,500 lbs .......................................................................................... 22.0 mpg

4,000 lbs .......................................................................................... 19.3 mpg

4,500 lbs .......................................................................................... 17.2 mpg

5,000 lbs .......................................................................................... 15.5 mpg

5,500 lbs .......................................................................................... 14.1 mpg

6,000 lbs .......................................................................................... 12.9 mpg

6,500 lbs .......................................................................................... 11.9 mpg

7,000 to 8,500 lbs ........................................................................... 11.1 mpg.

1 ‘‘(ii) In the case of a light truck:

The 2000 model year city

‘‘If vehicle inertia weight class is: fuel efficiency is:

1,500 or 1,750 lbs .......................................................................... 37.6 mpg

2,000 lbs .......................................................................................... 33.7 mpg

2,250 lbs .......................................................................................... 30.6 mpg

2,500 lbs .......................................................................................... 28.0 mpg

2,750 lbs .......................................................................................... 25.9 mpg

3,000 lbs .......................................................................................... 24.1 mpg

3,500 lbs .......................................................................................... 21.3 mpg

4,000 lbs .......................................................................................... 19.0 mpg

4,500 lbs .......................................................................................... 17.3 mpg

5,000 lbs .......................................................................................... 15.8 mpg

5,500 lbs .......................................................................................... 14.6 mpg

6,000 lbs .......................................................................................... 13.6 mpg

6,500 lbs .......................................................................................... 12.8 mpg

7,000 to 8,500 lbs ........................................................................... 12.0 mpg.

2 ‘‘(B) ADMINISTRATOR.—The term ‘Adminis3 trator’ means the Administrator of the Environ4 mental Protection Agency.

5 ‘‘(C) ENERGY STORAGE DEVICE.—The term

6 ‘energy storage device’ means an onboard re7 chargeable energy storage system or similar stor8 age device.

9 ‘‘(D) FUEL EFFICIENCY.—The term ‘fuel ef10 ficiency’ means the percentage increased fuel effi-
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1 ciency specified in table 1 in paragraph (2)(C)

2 over the average 2000 model year city fuel effi3 ciency of vehicles in the same weight class.

4 ‘‘(E) MAXIMUM AVAILABLE POWER.—The

5 term ‘maximum available power’, with respect to

6 a new qualified hybrid motor vehicle that is a

7 passenger vehicle or light truck, means the

8 quotient obtained by dividing—

9 ‘‘(i) the maximum power available

10 from the electrical storage device of the new

11 qualified hybrid motor vehicle, during a

12 standard 10-second pulse power or equiva13 lent test; by

14 ‘‘(ii) the sum of—

15 ‘‘(I) the maximum power de16 scribed in clause (i); and

17 ‘‘(II) the net power of the internal

18 combustion or heat engine, as deter19 mined in accordance with standards

20 established by the Society of Auto21 mobile Engineers.

22 ‘‘(F) MOTOR VEHICLE.—The term ‘motor

23 vehicle’ has the meaning given the term in sec24 tion 216 of the Clean Air Act (42 U.S.C. 7550).
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1 ‘‘(G) NEW QUALIFIED HYBRID MOTOR VEHI2 CLE.—The term ‘new qualified hybrid motor ve3 hicle’ means a motor vehicle that—

4 ‘‘(i) draws propulsion energy from

5 both—

6 ‘‘(I) an internal combustion en7 gine (or heat engine that uses combus8 tible fuel); and

9 ‘‘(II) an energy storage device;

10 ‘‘(ii) in the case of a passenger auto11 mobile or light truck—

12 ‘‘(I) in the case of a 2001 or later

13 model vehicle, receives a certificate of

14 conformity under the Clean Air Act

15 (42 U.S.C. 7401 et seq.) and produces

16 emissions at a level that is at or below

17 the applicable qualifying California

18 low emissions vehicle standards estab19 lished under authority of section

20 243(e)(2) of the Clean Air Act (42

21 U.S.C. 7583(e)(2)) for that make and

22 model year; and

23 ‘‘(II) in the case of a 2004 or

24 later model vehicle, is certified by the

25 Administrator as producing emissions
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1 at a level that is at or below the level

2 established for Bin 5 vehicles in the

3 Tier 2 regulations promulgated by the

4 Administrator under section 202(i) of

5 the Clean Air Act (42 U.S.C. 7521(i))

6 for that make and model year vehicle;

7 and

8 ‘‘(iii) employs a vehicle braking system

9 that recovers waste energy to charge an en10 ergy storage device.

11 ‘‘(H) VEHICLE INERTIA WEIGHT CLASS.—

12 The term ‘vehicle inertia weight class’ has the

13 meaning given the term in regulations promul14 gated by the Administrator for purposes of the

15 administration of title II of the Clean Air Act

16 (42 U.S.C. 7521 et seq.).

17 ‘‘(2) ALLOCATION.—

18 ‘‘(A) IN GENERAL.—The Secretary shall al19 locate a partial credit to a fleet or covered person

20 under this title if the fleet or person acquires a

21 new qualified hybrid motor vehicle that is eligi22 ble to receive a credit under each of the tables in

23 subparagraph (C).

24 ‘‘(B) AMOUNT.—The amount of a partial

25 credit allocated under subparagraph (A) for a
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1 vehicle described in that subparagraph shall be

2 equal to the sum of—

3 ‘‘(i) the partial credits determined

4 under table 1 in subparagraph (C); and

5 ‘‘(ii) the partial credits determined

6 under table 2 in subparagraph (C).

7 ‘‘(C) TABLES.—The tables referred to in

8 subparagraphs (A) and (B) are as follows:

‘‘Table 1

Amount of

‘‘Partial credit for increased fuel efficiency: credit:

At least 125% but less than 150% of 2000 model year city

fuel efficiency ...................................................................... 0.14

At least 150% but less than 175% of 2000 model year city

fuel efficiency ...................................................................... 0.21

At least 175% but less than 200% of 2000 model year city

fuel efficiency ...................................................................... 0.28

At least 200% but less than 225% of 2000 model year city

fuel efficiency ...................................................................... 0.35

At least 225% but less than 250% of 2000 model year city

fuel efficiency ...................................................................... 0.50.

‘‘Table 2

Amount of

‘‘Partial credit for ‘Maximum Available Power’: credit:

At least 5% but less than 10% .............................................. 0.125

At least 10% but less than 20% ............................................ 0.250

At least 20% but less than 30% ............................................ 0.375

At least 30% or more ............................................................. 0.500.

9 ‘‘(D) USE OF CREDITS.—At the request of a

10 fleet or covered person allocated a credit under

11 this subsection, the Secretary shall, for the year

12 in which the acquisition of the qualified hybrid

13 motor vehicle is made, treat that credit as the ac14 quisition of 1 alternative fueled vehicle that the
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1 fleet or covered person is required to acquire

2 under this title.

3 ‘‘(3) REGULATIONS.—The Secretary shall pro4 mulgate regulations under which any Federal fleet

5 that acquires a new qualified hybrid motor vehicle

6 will receive partial credits determined under the ta7 bles contained in paragraph (2)(C) for purposes of

8 meeting the requirements of section 303.

9 ‘‘(q) CREDIT FOR SUBSTANTIAL CONTRIBUTION TO10 WARDS USE OF DEDICATED VEHICLES IN NONCOVERED

11 FLEETS.—

12 ‘‘(1) DEFINITIONS.—In this subsection:

13 ‘‘(A) DEDICATED VEHICLE.—The term

14 ‘dedicated vehicle’ includes—

15 ‘‘(i) a light, medium, or heavy duty ve16 hicle; and

17 ‘‘(ii) a neighborhood electric vehicle.

18 ‘‘(B) MEDIUM OR HEAVY DUTY VEHICLE.—

19 The term ‘medium or heavy duty vehicle’ in20 cludes a vehicle that—

21 ‘‘(i) operates solely on alternative fuel;

22 and

23 ‘‘(ii)(I) in the case of a medium duty

24 vehicle, has a gross vehicle weight rating of
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1 more than 8,500 pounds but not more than

2 14,000 pounds; or

3 ‘‘(II) in the case of a heavy duty vehi4 cle, has a gross vehicle weight rating of

5 more than 14,000 pounds.

6 ‘‘(C) SUBSTANTIAL CONTRIBUTION.—The

7 term ‘substantial contribution’ (equal to 1 full

8 credit) means not less than $15,000 in cash or

9 in kind services, as determined by the Secretary.

10 ‘‘(2) ISSUANCE OF CREDITS.—The Secretary

11 shall issue a credit to a fleet or covered person under

12 this title if the fleet or person makes a substantial

13 contribution toward the acquisition and use of dedi14 cated vehicles by a person that owns, operates, leases,

15 or otherwise controls a fleet that is not covered by this

16 title.

17 ‘‘(3) MULTIPLE CREDITS FOR MEDIUM AND

18 HEAVY DUTY DEDICATED VEHICLES.—The Secretary

19 shall issue 2 full credits to a fleet or covered person

20 under this title if the fleet or person acquires a me21 dium or heavy duty dedicated vehicle.

22 ‘‘(4) USE OF CREDITS.—At the request of a fleet

23 or covered person allocated a credit under this sub24 section, the Secretary shall, for the year in which the

25 acquisition of the dedicated vehicle is made, treat that
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1 credit as the acquisition of 1 alternative fueled vehicle

2 that the fleet or covered person is required to acquire

3 under this title.

4 ‘‘(5) LIMITATION.—Per vehicle credits acquired

5 under this subsection shall not exceed the per vehicle

6 credits allowed under this section to a fleet for quali7 fying vehicles in each of the weight categories (light,

8 medium, or heavy duty).

9 ‘‘(r) CREDIT FOR SUBSTANTIAL INVESTMENT IN AL10 TERNATIVE FUEL INFRASTRUCTURE.—

11 ‘‘(1) DEFINITIONS.—In this section, the term

12 ‘qualifying infrastructure’ means—

13 ‘‘(A) equipment required to refuel or re14 charge alternative fueled vehicles;

15 ‘‘(B) facilities or equipment required to

16 maintain, repair, or operate alternative fueled

17 vehicles;

18 ‘‘(C) training programs, educational mate19 rials, or other activities necessary to provide in20 formation regarding the operation, maintenance,

21 or benefits associated with alternative fueled ve22 hicles; and

23 ‘‘(D) such other activities the Secretary con24 siders to constitute an appropriate expenditure

25 in support of the operation, maintenance, or fur-
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1 ther widespread adoption of or utilization of al2 ternative fueled vehicles.

3 ‘‘(2) ISSUANCE OF CREDITS.—The Secretary

4 shall issue a credit to a fleet or covered person under

5 this title for investment in qualifying infrastructure

6 if the qualifying infrastructure is open to the general

7 public during regular business hours.

8 ‘‘(3) AMOUNT.—For the purposes of credits

9 under this subsection—

10 ‘‘(A) 1 credit shall be equal to a minimum

11 investment of $25,000 in cash or in kind serv12 ices, as determined by the Secretary; and

13 ‘‘(B) except in the case of a Federal or State

14 fleet, no part of the investment may be provided

15 by Federal or State funds.

16 ‘‘(4) USE OF CREDITS.—At the request of a fleet

17 or covered person allocated a credit under this sub18 section, the Secretary shall, for the year in which the

19 investment is made, treat that credit as the acquisi20 tion of 1 alternative fueled vehicle that the fleet or

21 covered person is required to acquire under this

22 title.’’.

23 SEC. 820. RENEWABLE CONTENT OF MOTOR VEHICLE FUEL.

24 (a) IN GENERAL.—Section 211 of the Clean Air Act

25 (42 U.S.C. 7545) is amended—
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1 (1) by redesignating subsection (o) as subsection

2 (q); and

3 (2) by inserting after subsection (n) the fol4 lowing:

5 ‘‘(o) RENEWABLE FUEL PPROGRAM.—

6 ‘‘(1) DEFINITIONS.—In this section:

7 ‘‘(A) CELLULOSIC BIOMASS ETHANOL.—The

8 term ‘cellulosic biomass ethanol’ means ethanol

9 derived from any lignocellulosic or hemicellulosic

10 matter that is available on a renewable or recur11 ring basis, including—

12 ‘‘(i) dedicated energy crops and trees;

13 ‘‘(ii) wood and wood residues;

14 ‘‘(iii) plants;

15 ‘‘(iv) grasses;

16 ‘‘(v) agricultural residues;

17 ‘‘(vi) fibers;

18 ‘‘(vii) animal wastes and other waste

19 materials; and

20 ‘‘(viii) municipal solid waste.

21 ‘‘(B) RENEWABLE FUEL.—

22 ‘‘(i) IN GENERAL.—The term ‘renew23 able fuel’ means motor vehicle fuel that—

24 ‘‘(I)(aa) is produced from grain,

25 starch, oilseeds, or other biomass; or
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1 ‘‘(bb) is natural gas produced

2 from a biogas source, including a land3 fill, sewage waste treatment plant,

4 feedlot, or other place where decaying

5 organic material is found; and

6 ‘‘(II) is used to replace or reduce

7 the quantity of fossil fuel present in a

8 fuel mixture used to operate a motor

9 vehicle.

10 ‘‘(ii) INCLUSION.—The term ‘renewable

11 fuel’ includes cellulosic biomass ethanol and

12 biodiesel (as defined in section 312(f) of the

13 Energy Policy Act of 1992 (42 U.S.C.

14 13220(f)).

15 ‘‘(C) SMALL REFINERY.—The term ‘small

16 refinery’ means a refinery for which average ag17 gregate daily crude oil throughput for the cal18 endar year (as determined by dividing the aggre19 gate throughput for the calendar year by the

20 number of days in the calendar year) does not

21 exceed 75,000 barrels.

22 ‘‘(2) RENEWABLE FUEL PROGRAM.—

23 ‘‘(A) IN GENERAL.—Not later than 1 year

24 from enactment of this provision, the Adminis25 trator shall promulgate regulations ensuring that
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1 gasoline sold or dispensed to consumers in the

2 United States, on an annual average basis, con3 tains the applicable volume of renewable fuel as

4 specified in subparagraph (B). Regardless of the

5 date of promulgation, such regulations shall con6 tain compliance provisions for refiners, blenders,

7 and importers, as appropriate, to ensure that the

8 requirements of this section are met, but shall

9 not restrict where renewables can be used, or im10 pose any per-gallon obligation for the use of re11 newables. If the Administrator does not promul12 gate such regulations, the applicable percentage,

13 on a volume percentage of gasoline basis, shall be

14 1.62 in 2004.

15 ‘‘(B) APPLICABLE VOLUME.—

16 (i) CALENDAR YEARS 2004 THROUGH

17 2012.—For the purpose of subparagraph (A),

18 the applicable volume for any of calendar

19 years 2004 through 2012 shall be deter20 mined in accordance with the following

21 table:

Applicable volume of renewable fuel

‘‘Calendar year: (In billions of gallons)

2004 ............................................................................................ 2.3

2005 ............................................................................................ 2.6

2006 ............................................................................................ 2.9

2007 ............................................................................................ 3.2

2008 ............................................................................................ 3.5

2009 ............................................................................................ 3.9

2010 ............................................................................................ 4.3
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‘‘Calendar year: (In billions of gallons)

2011 ............................................................................................ 4.7

2012 ............................................................................................ 5.0.

1 ‘‘(ii) CALENDAR YEAR 2013 AND

2 THEREAFTER.—For the purpose of subpara3 graph (A), the applicable volume for cal4 endar year 2013 and each calendar year

5 thereafter shall be equal to the product ob6 tained by multiplying—

7 ‘‘(I) the number of gallons of gaso8 line that the Administrator estimates

9 will be sold or introduced into com10 merce in the calendar year; and

11 ‘‘(II) the ratio that—

12 ‘‘(aa) 5.0 billion gallons of

13 renewable fuels; bears to

14 ‘‘(bb) the number of gallons

15 of gasoline sold or introduced into

16 commerce in calendar year 2012.

17 ‘‘(3) APPLICABLE PERCENTAGES.—Not later

18 than October 31 of each calendar year, through 2011,

19 the Administrator of the Energy Information Admin20 istration shall provide the Administrator an estimate

21 of the volumes of gasoline sales in the United States

22 for the coming calendar year. Based on such esti23 mates, the Administrator shall by November 30 of

24 each calendar year, through 2011, determine and pub-
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1 lish in the Federal Register, the renewable fuel obliga2 tion, on a volume percentage of gasoline basis, appli3 cable to refiners, blenders, distributors and importers,

4 as appropriate, for the coming calendar year, to en5 sure that the requirements of paragraph (2) are met.

6 For each calendar year, the Administrator shall es7 tablish a single applicable percentage that applies to

8 all parties, and make provision to avoid redundant

9 obligations. In determining the applicable percent10 ages, the Administrator shall make adjustments to ac11 count for the use of renewable fuels by exempt small

12 refineries during the previous year.

13 ‘‘(4) CELLULOSIC BIOMASS ETHANOL.—For the

14 purpose of paragraph (2), 1 gallon of cellulosic bio15 mass ethanol shall be considered to be the equivalent

16 of 1.5 gallon of renewable fuel.

17 ‘‘(5) CREDIT PROGRAM.—

18 ‘‘(A) IN GENERAL.—The regulations pro19 mulgated to carry out this subsection shall pro20 vide for the generation of an appropriate

21 amount of credits by any person that refines,

22 blends, or imports gasoline that contains a quan23 tity of renewable fuel that is greater than the

24 quantity required under paragraph (2). Such

25 regulations shall provide for the generation of an
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1 appropriate amount of credits for biodiesel fuel.

2 If a small refinery notifies the Administrator

3 that it waives the exemption provided by this

4 Act, the regulations shall provide for the genera5 tion of credits by the small refinery beginning in

6 the year following such notification.

7 ‘‘(B) USE OF CREDITS.—A person that gen8 erates credits under subparagraph (A) may use

9 the credits, or transfer all or a portion of the

10 credits to another person, for the purpose of com11 plying with paragraph (2).

12 ‘‘(C) LIFE OF CREDITS.—A credit generated

13 under this paragraph shall be valid to show com14 pliance:

15 (i) in the calendar year in which the

16 credit was generated or the next calendar

17 year, or

18 (ii) in the calendar year in which the

19 credit was generated or next two consecutive

20 calendar years if the Administrator promul21 gates regulations under paragraph (6).

22 ‘‘(D) INABILITY TO PURCHASE SUFFICIENT

23 CREDITS.—The regulations promulgated to carry

24 out this subsection shall include provisions al25 lowing any person that is unable to generate or
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1 purchase sufficient credits to meet the require2 ments under paragraph (2) to carry forward a

3 renewables deficit provided that, in the calendar

4 year following the year in which the renewables

5 deficit is created, such person shall achieve com6 pliance with the renewables requirement under

7 paragraph (2), and shall generate or purchase

8 additional renewables credits to offset the renew9 ables deficit of the previous year.

10 ‘‘(6) SEASONAL VARIATIONS IN RENEWABLE

11 FUEL USE.—

12 ‘‘(A) STUDY.—For each of calendar years

13 2004 through 2012, the Administrator of the En14 ergy Information Administration, shall conduct

15 a study of renewable fuels blending to determine

16 whether there are excessive seasonal variations in

17 the use of renewable fuels.

18 ‘‘(B) REGULATION OF EXCESSIVE SEASONAL

19 VARIATIONS.—If, for any calendar year, the Ad20 ministrator of the Energy Information Adminis21 tration, based on the study under subparagraph

22 (A), makes the determinations specified in sub23 paragraph (C), the Administrator shall promul24 gate regulations to ensure that 35 percent or

25 more of the quantity of renewable fuels necessary
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1 to meet the requirement of paragraph (2) is used

2 during each of the periods specified in subpara3 graph (D) of each subsequent calendar year.

4 ‘‘(C) DETERMINATIONS.—The determina5 tions referred to in subparagraph (B) are that—

6 ‘‘(i) less than 35 percent of the quan7 tity of renewable fuels necessary to meet the

8 requirement of paragraph (2) has been used

9 during one of the periods specified in sub10 paragraph (D) of the calendar year; and

11 ‘‘(ii) a pattern of excessive seasonal

12 variation described in clause (i) will con13 tinue in subsequent calendar years.

14 ‘‘(D) PERIODS.—The two periods referred to

15 in this paragraph are—

16 ‘‘(i) April through September; and

17 ‘‘(ii) January through March and Oc18 tober through December.

19 ‘‘(E) EXCLUSIONS.—Renewable fuels blend20 ed or consumed in 2004 in a state which has re21 ceived a waiver under section 209(b) shall not be

22 included in the study in subparagraph (A).

23 ‘‘(7) WAIVERS.—

24 ‘‘(A) IN GENERAL.—The Administrator, in

25 consultation with the Secretary of Agriculture
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1 and the Secretary of Energy, may waive the re2 quirement of paragraph (2) in whole or in part

3 on petition by one or more States by reducing

4 the national quantity of renewable fuel required

5 under this subsection—

6 ‘‘(i) based on a determination by the

7 Administrator, after public notice and op8 portunity for comment, that implementa9 tion of the requirement would severely harm

10 the economy or environment of a State, a

11 region, or the United States; or

12 ‘‘(ii) based on a determination by the

13 Administrator, after public notice and op14 portunity for comment, that there is an in15 adequate domestic supply or distribution

16 capacity to meet the requirement.

17 ‘‘(B) PETITIONS FOR WAIVERS.—The Ad18 ministrator, in consultation with the Secretary

19 of Agriculture and the Secretary of Energy, shall

20 approve or disapprove a State petition for a

21 waiver of the requirement of paragraph (2) with22 in 90 days after the date on which the petition

23 is received by the Administrator.

24 ‘‘(C) TERMINATION OF WAIVERS.—A waiver

25 granted under subparagraph (A) shall terminate
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1 after 1 year, but may be renewed by the Admin2 istrator after consultation with the Secretary of

3 Agriculture and the Secretary of Energy.

4 ‘‘(8) STUDY AND WAIVER FOR INITIAL YEAR OF

5 PROGRAM.—Not later than 180 days from enactment,

6 the Secretary of Energy shall complete for the Admin7 istrator a study assessing whether the renewable fuels

8 requirement under paragraph (2) will likely result in

9 significant adverse consumer impacts in 2004, on a

10 national, regional or state basis. Such study shall

11 evaluate renewable fuel supplies and prices, blendstock

12 supplies, and supply and distribution system capa13 bilities. Based on such study, the Secretary shall

14 make specific recommendations to the Administrator

15 regarding waiver of the requirements of paragraph

16 (2), in whole or in part, to avoid any such adverse

17 impacts. Within 270 days from enactment, the Ad18 ministrator shall, consistent with the recommenda19 tions of the Secretary waive, in whole or in part, the

20 renewable fuels requirement under paragraph (2) by

21 reducing the national quantity of renewable fuel re22 quired under this subsection in 2004. This provision

23 shall not be interpreted as limiting the Administra24 tor’s authority to waive the requirements of para-
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1 graph (2) in whole, or in part, under paragraph (7),

2 pertaining to waivers.

3 ‘‘(9) SMALL REFINERIES.—

4 ‘‘(A) IN GENERAL.—The requirement of

5 paragraph (2) shall not apply to small refineries

6 until January 1, 2008. Not later than December

7 31, 2006, the Secretary of Energy shall complete

8 for the Administrator a study to determine

9 whether the requirement of paragraph (2) would

10 impose a disproportionate economic hardship on

11 small refineries. For any small refinery that the

12 Secretary of Energy determines would experience

13 a disproportionate economic hardship, the Ad14 ministrator shall extend the small refinery ex15 emption for such small refinery for no less than

16 two additional years.

17 ‘‘(B) ECONOMIC HARDSHIP.—

18 ‘‘(i) EXTENSION OF EXEMPTION.—A

19 small refinery may at any time petition the

20 Administrator for an extension of the ex21 emption from the requirement of paragraph

22 (2) for the reason of disproportionate eco23 nomic hardship. In evaluating a hardship

24 petition, the Administrator, in consultation

25 with the Secretary of Energy, shall consider
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1 the findings of the study in addition to

2 other economic factors.

3 ‘‘(ii) DEADLINE FOR ACTION ON PETI4 TIONS.—The Administrator shall act on

5 any petition submitted by a small refinery

6 for a hardship exemption not later than 90

7 days after the receipt of the petition.

8 ‘‘(C) CREDIT PROGRAM.—If a small refin9 ery notifies the Administrator that it waives the

10 exemption provided by this Act, the regulations

11 shall provide for the generation of credits by the

12 small refinery beginning in the year following

13 such notification.

14 ‘‘(D) OPT-IN FOR SMALL REFINERS.—A

15 small refinery shall be subject to the require16 ments of this section if it notifies the Adminis17 trator that it waives the exemption under sub18 paragraph (A).

19 (b) PENALTIES AND ENFORCEMENT.—Section 211(d)

20 of the Clean Air Act (42 U.S.C. 7545(d)) is amended—

21 (1) in paragraph (1)—

22 (A) in the first sentence, by striking ‘‘or

23 (n)’’ each place it appears and inserting ‘‘(n) or

24 (o)’’; and
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1 (B) in the second sentence, by striking ‘‘or

2 (m)’’ and inserting ‘‘(m), or (o)’’; and

3 (2) in the first sentence of paragraph (2), by

4 striking ‘‘and (n)’’ each place it appears and insert5 ing ‘‘(n), and (o)’’.

6 (c) EXCLUSION FROM ETHANOL WAIVER.—Section

7 211(h) of the Clean Air Act (42 U.S.C. 7545(h)) is

8 amended—

9 (1) by redesignating paragraph (5) as para10 graph (6); and

11 (2) by inserting after paragraph (4) the fol12 lowing:

13 ‘‘(5) EXCLUSION FROM ETHANOL WAIVER.—

14 ‘‘(A) PROMULGATION OF REGULATIONS.—

15 Upon notification, accompanied by supporting

16 documentation, from the Governor of a State

17 that the Reid vapor pressure limitation estab18 lished by paragraph (4) will increase emissions

19 that contribute to air pollution in any area in

20 the State, the Administrator shall, by regulation,

21 apply, in lieu of the Reid vapor pressure limita22 tion established by paragraph (4), the Reid

23 vapor pressure limitation established by para24 graph (1) to all fuel blends containing gasoline

25 and 10 percent denatured anhydrous ethanol
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1 that are sold, offered for sale, dispensed, sup2 plied, offered for supply, transported or intro3 duced into commerce in the area during the high

4 ozone season.

5 ‘‘(B) DEADLINE FOR PROMULGATION.—The

6 Administrator shall promulgate regulations

7 under subparagraph (A) not later than 90 days

8 after the date of receipt of a notification from a

9 Governor under that subparagraph.

10 ‘‘(C) EFFECTIVE DATE.—

11 ‘‘(i) IN GENERAL.—With respect to an

12 area in a State for which the Governor sub13 mits a notification under subparagraph

14 (A), the regulations under that subpara15 graph shall take effect on the later of—

16 ‘‘(I) the first day of the first high

17 ozone season for the area that begins

18 after the date of receipt of the notifica19 tion; or

20 ‘‘(II) 1 year after the date of re21 ceipt of the notification.

22 ‘‘(ii) EXTENSION OF EFFECTIVE DATE

23 BASED ON DETERMINATION OF INSUFFI24 CIENT SUPPLY.—
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1 ‘‘(I) IN GENERAL.—If, after re2 ceipt of a notification with respect to

3 an area from a Governor of a State

4 under subparagraph (A), the Adminis5 trator determines, on the Administra6 tor’s own motion or on petition of any

7 person and after consultation with the

8 Secretary of Energy, that the promul9 gation of regulations described in sub10 paragraph (A) would result in an in11 sufficient supply of gasoline in the

12 State, the Administrator, by

13 regulation—

14 ‘‘(aa) shall extend the effec15 tive date of the regulations under

16 clause (i) with respect to the area

17 for not more than 1 year; and

18 ‘‘(bb) may renew the exten19 sion under item (aa) for two ad20 ditional periods, each of which

21 shall not exceed 1 year.

22 ‘‘(II) DEADLINE FOR ACTION ON

23 PETITIONS.—The Administrator shall

24 act on any petition submitted under

25 subclause (I) not later than 180 days
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1 after the date of receipt of the peti2 tion.’’.

3 (d) SURVEY OF RENEWABLE FUEL MARKET.—

4 (1) SURVEY AND REPORT.—Not later than De5 cember 1, 2005, and annually thereafter, the Admin6 istrator shall—

7 (A) conduct, with respect to each conven8 tional gasoline use area and each reformulated

9 gasoline use area in each State, a survey to de10 termine the market shares of—

11 (i) conventional gasoline containing

12 ethanol;

13 (ii) reformulated gasoline containing

14 ethanol;

15 (iii) conventional gasoline containing

16 renewable fuel; and

17 (iv) reformulated gasoline containing

18 renewable fuel; and

19 (B) submit to Congress, and make publicly

20 available, a report on the results of the survey

21 under subparagraph (A).

22 (2) RECORDKEEPING AND REPORTING REQUIRE23 MENTS.—The Administrator may require any refiner,

24 blender, or importer to keep such records and make

25 such reports as are necessary to ensure that the survey
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1 conducted under paragraph (1) is accurate. The Ad2 ministrator shall rely, to the extent practicable, on ex3 isting reporting and recordkeeping requirements to

4 avoid duplicative requirements.

5 (3) APPLICABLE LAW.—Activities carried out

6 under this subsection shall be conducted in a manner

7 designed to protect confidentiality of individual re8 sponses.

9 (e) RENEWABLE FUELS SAFE HARBOR.—

10 (1) IN GENERAL.—Notwithstanding any other

11 provision of federal or state law, no renewable fuel, as

12 defined by this Act, used or intended to be used as a

13 motor vehicle fuel, nor any motor vehicle fuel con14 taining such renewable fuel, shall be deemed defective

15 in design or manufacture by virtue of the fact that it

16 is, or contains, such a renewable fuel, if it does not

17 violate a control or prohibition imposed by the Ad18 ministrator under section 211 of the Clean Air Act,

19 as amended by this Act, and the manufacturer is in

20 compliance with all requests for information under

21 section 211(b) of the Clean Air Act, as amended by

22 this Act. In the event that the safe harbor under this

23 section does not apply, the existence of a design defect

24 or manufacturing defect shall be determined under

25 otherwise applicable law.
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1 (2) EXCEPTIONS.—This subsection shall not

2 apply to ethers.

3 (3) EFFECTIVE DATE.—This subsection shall be

4 effective as of the date of enactment and shall apply

5 with respect to all claims filed on or after that date.

6 SEC. 820A. FEDERAL AGENCY ETHANOL-BLENDED GASO7 LINE AND BIODIESEL PURCHASING REQUIRE8 MENT.

9 Title III of the Energy Policy Act of 1992 is amended

10 by striking section 306 (42 U.S.C. 13215) and inserting the

11 following:

12 ‘‘SEC. 306. FEDERAL AGENCY ETHANOL-BLENDED GASOLINE

13 AND BIODIESEL PURCHASING REQUIREMENT.

14 ‘‘(a) ETHANOL-BLENDED GASOLINE.—The head of

15 each Federal agency shall ensure that, in areas in which

16 ethanol-blended gasoline is reasonably available at a gen17 erally competitive price, the Federal agency purchases eth18 anol-blended gasoline containing at least 10 percent ethanol

19 rather than nonethanol-blended gasoline, for use in vehicles

20 used by the agency that use gasoline.

21 ‘‘(b) BIODIESEL.—

22 ‘‘(1) DEFINITION OF BIODIESEL.—In this sub23 section, the term ‘biodiesel’ has the meaning given the

24 term in section 312(f).
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1 ‘‘(2) REQUIREMENT.—The head of each Federal

2 agency shall ensure that the Federal agency pur3 chases, for use in fueling fleet vehicles that use diesel

4 fuel used by the Federal agency at the location at

5 which fleet vehicles of the Federal agency are centrally

6 fueled, in areas in which the biodiesel-blended diesel

7 fuel described in paragraphs (A) and (B) is available

8 at a generally competitive price—

9 ‘‘(A) as of the date that is 5 years after the

10 date of enactment of this paragraph, biodiesel11 blended diesel fuel that contains at least 2 per12 cent biodiesel, rather than nonbiodiesel-blended

13 diesel fuel; and

14 ‘‘(B) as of the date that is 10 years after the

15 date of enactment of this paragraph, biodiesel16 blended diesel fuel that contains at least 20 per17 cent biodiesel, rather than nonbiodiesel-blended

18 diesel fuel.

19 ‘‘(3) REQUIREMENT OF FEDERAL LAW.—The

20 provisions of this subsection shall not be considered a

21 requirement of Federal law for the purposes of section

22 312.

23 ‘‘(c) EXEMPTION.—This section does not apply to fuel

24 used in vehicles excluded from the definition of ‘fleet’ by

25 subparagraphs (A) through (H) of section 301(9).’’.
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1 SEC. 820B. COMMERCIAL BYPRODUCTS FROM MUNICIPAL

2 SOLID WASTE LOAN GUARANTEE PROGRAM.

3 (a) DEFINITION OF MUNICIPAL SOLID WASTE.—In

4 this section, the term ‘‘municipal solid waste’’ has the

5 meaning given the term ‘‘solid waste’’ in section 1004 of

6 the Solid Waste Disposal Act (42 U.S.C. 6903).

7 (b) ESTABLISHMENT OF PROGRAM.—The Secretary of

8 Energy shall establish a program to provide guarantees of

9 loans by private institutions for the construction of facili10 ties for the processing and conversion of municipal solid

11 waste into fuel ethanol and other commercial byproducts.

12 (c) REQUIREMENTS.—The Secretary may provide a

13 loan guarantee under subsection (b) to an applicant if—

14 (1) without a loan guarantee, credit is not avail15 able to the applicant under reasonable terms or condi16 tions sufficient to finance the construction of a facil17 ity described in subsection (b);

18 (2) the prospective earning power of the appli19 cant and the character and value of the security

20 pledged provide a reasonable assurance of repayment

21 of the loan to be guaranteed in accordance with the

22 terms of the loan; and

23 (3) the loan bears interest at a rate determined

24 by the Secretary to be reasonable, taking into account

25 the current average yield on outstanding obligations
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1 of the United States with remaining periods of matu2 rity comparable to the maturity of the loan.

3 (d) CRITERIA.—In selecting recipients of loan guaran4 tees from among applicants, the Secretary shall give pref5 erence to proposals that—

6 (1) meet all applicable Federal and State per7 mitting requirements;

8 (2) are most likely to be successful; and

9 (3) are located in local markets that have the

10 greatest need for the facility because of—

11 (A) the limited availability of land for

12 waste disposal; or

13 (B) a high level of demand for fuel ethanol

14 or other commercial byproducts of the facility.

15 (e) MATURITY.—A loan guaranteed under subsection

16 (b) shall have a maturity of not more than 20 years.

17 (f) TERMS AND CONDITIONS.—The loan agreement for

18 a loan guaranteed under subsection (b) shall provide that

19 no provision of the loan agreement may be amended or

20 waived without the consent of the Secretary.

21 (g) ASSURANCE OF REPAYMENT.—The Secretary shall

22 require that an applicant for a loan guarantee under sub23 section (b) provide an assurance of repayment in the form

24 of a performance bond, insurance, collateral, or other means
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1 acceptable to the Secretary in an amount equal to not less

2 than 20 percent of the amount of the loan.

3 (h) GUARANTEE FEE.—The recipient of a loan guar4 antee under subsection (b) shall pay the Secretary an

5 amount determined by the Secretary to be sufficient to cover

6 the administrative costs of the Secretary relating to the loan

7 guarantee.

8 (i) FULL FAITH AND CREDIT.—The full faith and

9 credit of the United States is pledged to the payment of

10 all guarantees made under this section. Any such guarantee

11 made by the Secretary shall be conclusive evidence of the

12 eligibility of the loan for the guarantee with respect to prin13 cipal and interest. The validity of the guarantee shall be

14 incontestable in the hands of a holder of the guaranteed

15 loan.

16 (j) REPORTS.—Until each guaranteed loan under this

17 section has been repaid in full, the Secretary shall annually

18 submit to Congress an report on the activities of the Sec19 retary under this section.

20 (k) AUTHORIZATION OF APPROPRIATIONS.—There are

21 authorized to be appropriated such sums as are necessary

22 to carry out this section.

23 (l) TERMINATION OF AUTHORITY.—The authority of

24 the Secretary to issue a loan guarantee under subsection
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1 (b) terminates on the date that is 10 years after the date

2 of enactment of this Act.

3 Subtitle B—Additional Fuel

4 Efficiency Measures

5 SEC. 821. FUEL EFFICIENCY OF THE FEDERAL FLEET OF

6 AUTOMOBILES.

7 Section 32917 of title 49, United States Code, is

8 amended to read as follows:

9 ‘‘§ 32917. Standards for executive agency automobiles

10 ‘‘(a) BASELINE AVERAGE FUEL ECONOMY.—The head

11 of each executive agency shall determine, for all automobiles

12 in the agency’s fleet of automobiles that were leased or

13 bought as a new vehicle in fiscal year 1999, the average

14 fuel economy for such automobiles. For the purposes of this

15 section, the average fuel economy so determined shall be the

16 baseline average fuel economy for the agency’s fleet of auto17 mobiles.

18 ‘‘(b) INCREASE OF AVERAGE FUEL ECONOMY.—The

19 head of an executive agency shall manage the procurement

20 of automobiles for that agency in such a manner that—

21 ‘‘(1) not later than September 30, 2003, the aver22 age fuel economy of the new automobiles in the agen23 cy’s fleet of automobiles is not less than 1 mile per

24 gallon higher than the baseline average fuel economy

25 determined under subsection (a) for that fleet; and
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1 ‘‘(2) not later than September 30, 2005, the aver2 age fuel economy of the new automobiles in the agen3 cy’s fleet of automobiles is not less than 3 miles per

4 gallon higher than the baseline average fuel economy

5 determined under subsection (a) for that fleet.

6 ‘‘(c) CALCULATION OF AVERAGE FUEL ECONOMY.—

7 Average fuel economy shall be calculated for the purposes

8 of this section in accordance with guidance which the Sec9 retary of Transportation shall prescribe for the implementa10 tion of this section.

11 ‘‘(d) DEFINITIONS.—In this section:

12 ‘‘(1) The term ‘automobile’ does not include any

13 vehicle designed for combat-related missions, law en14 forcement work, or emergency rescue work.

15 ‘‘(2) The term ‘executive agency’ has the mean16 ing given that term in section 105 of title 5.

17 ‘‘(3) The term ‘new automobile’, with respect to

18 the fleet of automobiles of an executive agency, means

19 an automobile that is leased for at least 60 consecu20 tive days or bought, by or for the agency, after Sep21 tember 30, 1999.’’.
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1 SEC. 822. IDLING REDUCTION SYSTEMS IN HEAVY DUTY VE2 HICLES.

3 Title III of the Energy Policy and Conservation Act

4 (42 U.S.C. 6291 et seq.) is amended by adding at the end

5 the following:

6 ‘‘PART K—REDUCING TRUCK IDLING

7 ‘‘SEC. 400AAA. REDUCING TRUCK IDLING.

8 ‘‘(a) STUDY.—Not later than 18 months after the date

9 of enactment of this section, the Secretary shall, in consulta10 tion with the Secretary of Transportation, commence a

11 study to analyze the potential fuel savings resulting from

12 long duration idling of main drive engines in heavy-duty

13 vehicles.

14 ‘‘(b) REGULATIONS.—Upon completion of the study

15 under subsection (a), the Secretary may issue regulations

16 requiring the installation of idling reduction systems on all

17 newly manufactured heavy-duty vehicles.

18 ‘‘(c) DEFINITIONS.—As used in this section:

19 ‘‘(1) The term ‘heavy-duty vehicle’ means a vehi20 cle that has a gross vehicle weight rating greater than

21 8,500 pounds and is powered by a diesel engine.

22 ‘‘(2) The term ‘idling reduction system’ means a

23 device or system of devices used to reduce long dura24 tion idling of a diesel engine in a vehicle.

25 ‘‘(3) The term ‘long duration idling’ means the

26 operation of a main drive engine of a heavy-duty ve-
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1 hicle for a period of more than 15 consecutive minutes

2 when the main drive engine is not engaged in gear,

3 except that such term does not include idling as a re4 sult of traffic congestion or other impediments to the

5 movement of a heavy-duty vehicle.

6 ‘‘(4) The term ‘vehicle’ has the meaning given

7 such term in section 4 of title 1, United States

8 Code.’’.

9 SEC. 823. CONSERVE BY BICYCLING PROGRAM.

10 (a) ESTABLISHMENT.—The Secretary of Transpor11 tation shall establish a Conserve By Bicycling pilot pro12 gram that shall provide for up to 10 geographically dis13 persed projects to encourage the use of bicycles in place of

14 motor vehicles. Such projects shall use education and mar15 keting to convert motor vehicle trips to bike trips, document

16 project results and energy savings, and facilitate partner17 ships among entities in the fields of transportation, law en18 forcement, education, public health, environment, or energy.

19 At least 20 percent of the cost of each project shall be pro20 vided from State or local sources. Not later than 2 years

21 after implementation of the projects, the Secretary of Trans22 portation shall submit a report to Congress on the results

23 of the pilot program.

24 (b) NATIONAL ACADEMY STUDY.—The Secretary of

25 Transportation shall contract with the National Academy
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1 of Sciences to conduct a study on the feasibility and benefits

2 of converting motor vehicle trips to bicycle trips and to

3 issue a report, not later than 2 years after enactment of

4 this Act, on the findings of such study.

5 (c) AUTHORIZATION OF APPROPRIATIONS.—There is

6 authorized to be appropriated to the Secretary of’ Transpor7 tation $5,500,000, to remain available until expended, to

8 carry out the pilot program and study pursuant to this sec9 tion.

10 SEC. 824. FUEL CELL VEHICLE PROGRAM.

11 Not later than 1 year from date of enactment of this

12 section, the Secretary shall develop a program with time13 tables for developing technologies to enable at least 100,000

14 hydrogen-fueled fuel cell vehicles to be available for sale in

15 the United States by 2010 and at least 2.5 million of such

16 vehicles to be available by 2020 and annually thereafter.

17 The program shall also include timetables for development

18 of technologies to provide 50 million gasoline equivalent

19 gallons of hydrogen for sale in fueling stations in the United

20 States by 2010 and at least 2.5 billion gasoline equivalent

21 gallons by 2020 and annually thereafter. The Secretary

22 shall annually include a review of the progress toward meet23 ing the vehicle sales of Energy budget.
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1 Subtitle C—Federal Reformulated

2 Fuels

3 SEC. 831. SHORT TITLE.

4 This subtitle may be cited as the ‘‘Federal Reformu5 lated Fuels Act of 2003’’.

6 SEC. 832. LEAKING UNDERGROUND STORAGE TANKS.

7 (a) USE OF LUST FUNDS FOR REMEDIATION OF CON8 TAMINATION FROM ETHER FUEL ADDITIVES.—Section

9 9003(h) of the Solid Waste Disposal Act (42 U.S.C.

10 6991b(h)) is amended—

11 (1) in paragraph (7)(A)—

12 (A) by striking ‘‘paragraphs (1) and (2) of

13 this subsection’’ and inserting ‘‘paragraphs (1),

14 (2), and (12)’’; and

15 (B) by inserting ‘‘and section 9010’’ before

16 ‘‘if’’; and

17 (2) by adding at the end the following:

18 ‘‘(12) REMEDIATION OF CONTAMINATION FROM

19 ETHER FUEL ADDITIVES.—

20 ‘‘(A) IN GENERAL.—The Administrator and

21 the States may use funds made available under

22 section 9013(1) to carry out corrective actions

23 with respect to a release of methyl tertiary butyl

24 ether or other ether fuel additive that presents a
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1 threat to human health, welfare, or the environ2 ment.

3 ‘‘(B) APPLICABLE AUTHORITY.—Subpara4 graph (A) shall be carried out—

5 ‘‘(i) in accordance with paragraph (2),

6 except that a release with respect to which

7 a corrective action is carried out under sub8 paragraph (A) shall not be required to be

9 from an underground storage tank; and

10 ‘‘(ii) in the case of a State, in accord11 ance with a cooperative agreement entered

12 into by the Administrator and the State

13 under paragraph (7).’’.

14 (b) RELEASE PREVENTION AND COMPLIANCE.—Sub15 title I of the Solid Waste Disposal Act (42 U.S.C. 6991 et

16 seq.) is amended by striking section 9010 and inserting the

17 following:

18 ‘‘SEC. 9010. RELEASE PREVENTION AND COMPLIANCE.

19 ‘‘Funds made available under section 9013(2) from the

20 Leaking Underground Storage Tank Trust Fund may be

21 used for conducting inspections, or for issuing orders or

22 bringing actions under this subtitle—

23 ‘‘(1) by a State (pursuant to section 9003(h)(7))

24 acting under—
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1 ‘‘(A) a program approved under section

2 9004; or

3 ‘‘(B) State requirements regulating under4 ground storage tanks that are similar or iden5 tical to this subtitle, as determined by the Ad6 ministrator; and

7 ‘‘(2) by the Administrator, acting under this

8 subtitle or a State program approved under section

9 9004.

10 ‘‘SEC. 9011. BEDROCK BIOREMEDIATION.

11 ‘‘The Administrator shall establish, at an institution

12 of higher education (as defined in section 101 of the Higher

13 Education Act of 1965 (20 U.S.C. 1001)) with established

14 expertise in bioremediation of contaminated bedrock

15 aquifers, a resource center—

16 ‘‘(1) to conduct research concerning bioremedi17 ation of methyl tertiary butyl ether in contaminated

18 underground aquifers, including contaminated bed19 rock; and

20 ‘‘(2) to provide for States a technical assistance

21 clearinghouse for information concerning innovative

22 technologies for bioremediation described in para23 graph (1).
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1 ‘‘SEC. 9012. SOIL REMEDIATION.

2 ‘‘The Administrator may establish a program to con3 duct research concerning remediation of methyl tertiary

4 butyl ether contamination of soil, including granitic or vol5 canic soil.

6 ‘‘SEC. 9013. AUTHORIZATION OF APPROPRIATIONS.

7 ‘‘In addition to amounts made available under section

8 2007(f), there are authorized to be appropriated from the

9 Leaking Underground Storage Tank Trust Fund, notwith10 standing section 9508(c)(1) of the Internal Revenue Code

11 of 1986—

12 ‘‘(1) to carry out section 9003(h)(12),

13 $200,000,000 for fiscal year 2003, to remain available

14 until expended;

15 ‘‘(2) to carry out section 9010—

16 ‘‘(A) $50,000,000 for fiscal year 2003; and

17 ‘‘(B) $30,000,000 for each of fiscal years

18 2004 through 2008;

19 ‘‘(3) to carry out section 9011—

20 ‘‘(A) $500,000 for fiscal year 2003; and

21 ‘‘(B) $300,000 for each of fiscal years 2004

22 through 2008; and

23 ‘‘(4) to carry out section 9012—

24 ‘‘(A) $100,000 for fiscal year 2003; and

25 ‘‘(B) $50,000 for each of fiscal years 2004

26 through 2008.
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1 (c) TECHNICAL AMENDMENTS.—(1) Section 1001 of

2 the Solid Waste Disposal Act (42 U.S.C. prec. 6901) is

3 amended by striking the item relating to section 9010 and

4 inserting the following:

‘‘Sec. 9010. Release prevention and compliance.

‘‘Sec. 9011. Bedrock bioremediation.

‘‘Sec. 9012. Soil remediation.

‘‘Sec. 9013. Authorization of appropriations.’’.

5 (2) Section 9001(3)(A) of the Solid Waste Disposal Act

6 (42 U.S.C. 6991(3)(A)) is amended by striking ‘‘sustances’’

7 and inserting ‘‘substances’’.

8 (3) Section 9003(f)(1) of the Solid Waste Disposal Act

9 (42 U.S.C. 6991b(f)(1)) is amended by striking ‘‘subsection

10 (c) and (d) of this section’’ and inserting ‘‘subsections (c)

11 and (d)’’.

12 (4) Section 9004(a) of the Solid Waste Disposal Act

13 (42 U.S.C. 6991c(a)) is amended in the second sentence by

14 striking ‘‘referred to’’ and all that follows and inserting ‘‘re15 ferred to in subparagraph (A) or (B), or both, of section

16 9001(2).’’.

17 (5) Section 9005 of the Solid Waste Disposal Act (42

18 U.S.C. 6991d) is amended—

19 (A) in subsection (a), by striking ‘‘study taking’’

20 and inserting ‘‘study, taking’’;

21 (B) in subsection (b)(1), by striking ‘‘relevent’’

22 and inserting ‘‘relevant’’; and
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1 (C) in subsection (b)(4), by striking

2 ‘‘Evironmental’’ and inserting ‘‘Environmental’’.

3 SEC. 833. AUTHORITY FOR WATER QUALITY PROTECTION

4 FROM FUELS.

5 (a) FINDINGS.—Congress finds that—

6 (1) since 1979, methyl tertiary butyl ether (re7 ferred to in this section as ‘‘MTBE’’) has been used

8 nationwide at low levels in gasoline to replace lead as

9 an octane booster or anti-knocking agent;

10 (2) Public Law 101–549 (commonly known as

11 the ‘‘Clean Air Act Amendments of 1990’’) (42 U.S.C.

12 7401 et seq.) established a fuel oxygenate standard

13 under which reformulated gasoline must contain at

14 least 2 percent oxygen by weight;

15 (3) at the time of the adoption of the fuel oxygen

16 standard, Congress was aware that significant use of

17 MTBE could result from the adoption of that stand18 ard, and that the use of MTBE would likely be im19 portant to the cost-effective implementation of that

20 program;

21 (4) Congress is aware that gasoline and its com22 ponent additives have leaked from storage tanks, with

23 consequences for water quality;
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1 (5) the fuel industry responded to the fuel oxy2 genate standard established by Public Law 101–549

3 by making substantial investments in—

4 (A) MTBE production capacity; and

5 (B) systems to deliver MTBE-containing

6 gasoline to the marketplace;

7 (6) when leaked or spilled into the environment,

8 MTBE may cause serious problems of drinking water

9 quality;

10 (7) in recent years, MTBE has been detected in

11 water sources throughout the United States;

12 (8) MTBE can be detected by smell and taste at

13 low concentrations;

14 (9) while small quantities of MTBE can render

15 water supplies unpalatable, the precise human health

16 effects of MTBE consumption at low levels are yet un17 known;

18 (10) in the report entitled ‘‘Achieving Clean Air

19 and Clean Water: The Report of the Blue Ribbon

20 Panel on Oxygenates in Gasoline’’ and dated Sep21 tember 1999, Congress was urged—

22 (A) to eliminate the fuel oxygenate stand23 ard;

24 (B) to greatly reduce use of MTBE; and
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1 (C) to maintain the environmental perform2 ance of reformulated gasoline;

3 (11) Congress has—

4 (A) reconsidered the relative value of MTBE

5 in gasoline; and

6 (B) decided to eliminate use of MTBE as a

7 fuel additive;

8 (12) the timeline for elimination of use of MTBE

9 as a fuel additive must be established in a manner

10 that achieves an appropriate balance among the goals

11 of—

12 (A) environmental protection;

13 (B) adequate energy supply; and

14 (C) reasonable fuel prices; and

15 (13) it is appropriate for Congress to provide

16 some limited transition assistance—

17 (A) to merchant producers of MTBE who

18 produced MTBE in response to a market created

19 by the oxygenate requirement contained in the

20 Clean Air Act; and

21 (B) for the purpose of mitigating any fuel

22 supply problems that may result from elimi23 nation of a widely-used fuel additive.

24 (b) PURPOSES.—The purposes of this section are—
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1 (1) to eliminate use of MTBE as a fuel oxygen2 ate; and

3 (2) to provide assistance to merchant producers

4 of MTBE in making the transition from producing

5 MTBE to producing other fuel additives.

6 (c) AUTHORITY FOR WATER QUALITY PROTECTION

7 FROM FUELS.—Section 211(c) of the Clean Air Act (42

8 U.S.C. 7545(c)) is amended—

9 (1) in paragraph (1)(A)—

10 (A) by inserting ‘‘fuel or fuel additive or’’

11 after ‘‘Administrator any’’; and

12 (B) by striking ‘‘air pollution which’’ and

13 inserting ‘‘air pollution, or water pollution,

14 that’’;

15 (2) in paragraph (4)(B), by inserting ‘‘or water

16 quality protection,’’ after ‘‘emission control,’’; and

17 (3) by adding at the end the following:

18 ‘‘(5) PROHIBITION ON USE OF MTBE.—

19 ‘‘(A) IN GENERAL.—Subject to subpara20 graph (E), not later than 4 years after the date

21 of enactment of this paragraph, the use of methyl

22 tertiary butyl ether in motor vehicle fuel in any

23 State other than a State described in subpara24 graph (C) is prohibited.
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1 ‘‘(B) REGULATIONS.—The Administrator

2 shall promulgate regulations to effect the prohibi3 tion in subparagraph (A).

4 ‘‘(C) STATES THAT AUTHORIZE USE.—A

5 State described in this subparagraph is a State

6 that submits to the Administrator a notice that

7 the State authorizes use of methyl tertiary butyl

8 ether in motor vehicle fuel sold or used in the

9 State.

10 ‘‘(D) PUBLICATION OF NOTICE.—The Ad11 ministrator shall publish in the Federal Register

12 each notice submitted by a State under subpara13 graph (C).

14 ‘‘(E) TRACE QUANTITIES.—In carrying out

15 subparagraph (A), the Administrator may allow

16 trace quantities of methyl tertiary butyl ether,

17 not to exceed 0.5 percent by volume, to be present

18 in motor vehicle fuel in cases that the Adminis19 trator determines to be appropriate.

20 ‘‘(6) MTBE MERCHANT PRODUCER CONVERSION

21 ASSISTANCE.—

22 ‘‘(A) IN GENERAL.—

23 ‘‘(i) GRANTS.—The Secretary of En24 ergy, in consultation with the Adminis25 trator, may make grants to merchant pro-
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1 ducers of methyl tertiary butyl ether in the

2 United States to assist the producers in the

3 conversion of eligible production facilities

4 described in subparagraph (C) to the pro5 duction of iso-octane and alkylates.

6 ‘‘(ii) DETERMINATION.—The Adminis7 trator, in consultation with the Secretary of

8 Energy, may determine that transition as9 sistance for the production of iso-octane and

10 alkylates is inconsistent with the provisions

11 of subparagraph (B) and, on that basis,

12 may deny applications for grants author13 ized by this provision.

14 ‘‘(B) FURTHER GRANTS.—The Secretary of

15 Energy, in consultation with the Administrator,

16 may also further make grants to merchant pro17 ducers of MTBE in the United States to assist

18 the producers in the conversion of eligible pro19 duction facilities described in subparagraph (C)

20 to the production of such other fuel additives

21 that, consistent with 211(c)—

22 ‘‘(i) unless the Administrator deter23 mines that such fuel additives may reason24 ably be anticipated to endanger public

25 health or the environment;
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1 ‘‘(ii) have been registered and have

2 been tested or are being tested in accordance

3 with the requirements of this section; and

4 ‘‘(iii) will contribute to replacing gaso5 line volumes lost as a result of paragraph

6 (5).

7 ‘‘(C) ELIGIBLE PRODUCTION FACILITIES.—

8 A production facility shall be eligible to receive

9 a grant under this paragraph if the production

10 facility—

11 ‘‘(i) is located in the United States;

12 and

13 ‘‘(ii) produced methyl tertiary butyl

14 ether for consumption in nonattainment

15 areas during the period—

16 ‘‘(I) beginning on the date of en17 actment of this paragraph; and

18 ‘‘(II) ending on the effective date

19 of the prohibition on the use of methyl

20 tertiary butyl ether under paragraph

21 (5).

22 ‘‘(D) AUTHORIZATION OF APPROPRIA23 TIONS.—There is authorized to be appropriated

24 to carry out this paragraph $250,000,000 for

25 each of fiscal years 2003 through 2005.’’.
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1 (d) NO EFFECT ON LAW CONCERNING STATE AUTHOR2 ITY.—The amendments made by subsection (c) have no ef3 fect on the law in effect on the day before the date of enact4 ment of this Act regarding the authority of States to limit

5 the use of methyl tertiary butyl ether in motor vehicle fuel.

6 SEC. 834. ELIMINATION OF OXYGEN CONTENT REQUIRE7 MENT FOR REFORMULATED GASOLINE.

8 (a) ELIMINATION.—

9 (1) IN GENERAL.—Section 211(k) of the Clean

10 Air Act (42 U.S.C. 7545(k)) is amended—

11 (A) in paragraph (2)—

12 (i) in the second sentence of subpara13 graph (A), by striking ‘‘(including the oxy14 gen content requirement contained in sub15 paragraph (B))’’;

16 (ii) by striking subparagraph (B); and

17 (iii) by redesignating subparagraphs

18 (C) and (D) as subparagraphs (B) and (C),

19 respectively;

20 (B) in paragraph (3)(A), by striking clause

21 (v);

22 (C) in paragraph (7)—

23 (i) in subparagraph (A)—

24 (I) by striking clause (i); and
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1 (II) by redesignating clauses (ii)

2 and (iii) as clauses (i) and (ii), respec3 tively; and

4 (ii) in subparagraph (C)—

5 (I) by striking clause (ii); and

6 (II) by redesignating clause (iii)

7 as clause (ii); and

8 (2) EFFECTIVE DATE.—The amendments made

9 by paragraph (1) take effect 270 days after the date

10 of enactment of this Act, except that such amendments

11 shall take effect upon enactment in any State that has

12 received a waiver under section 209(b) of the Clean

13 Air Act.

14 (b) MAINTENANCE OF TOXIC AIR POLLUTANT EMIS15 SION REDUCTIONS.—Section 211(k)(1) of the Clean Air Act

16 (42 U.S.C. 7545(k)(1)) is amended—

17 (1) by striking ‘‘Within 1 year after the enact18 ment of the Clean Air Act Amendments of 1990,’’ and

19 inserting the following:

20 ‘‘(A) IN GENERAL.—Not later than Novem21 ber 15, 1991,’’; and

22 (2) by adding at the end the following:

23 ‘‘(B) MAINTENANCE OF TOXIC AIR POLLUT24 ANT EMISSIONS REDUCTIONS FROM REFORMU25 LATED GASOLINE.—
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1 ‘‘(i) DEFINITIONS.—In this subpara2 graph the term ‘PADD’ means a Petroleum

3 Administration for Defense District.

4 ‘‘(ii) REGULATIONS REGARDING EMIS5 SIONS OF TOXIC AIR POLLUTANTS.—Not

6 later than 270 days after the date of enact7 ment of this subparagraph, the Adminis8 trator shall establish, for each refinery or

9 importer (other than a refinery or importer

10 in a State that has received a waiver under

11 section 209(b) with regard to gasoline pro12 duced for use in that state), standards for

13 toxic air pollutants from use of the reformu14 lated gasoline produced or distributed by

15 the refinery or importer that maintain the

16 reduction of the average annual aggregate

17 emissions of toxic air pollutants for refor18 mulated gasoline produced or distributed by

19 the refinery or importer during calendar

20 years 1999 and 2000, determined on the

21 basis of data collected by the Administrator

22 with respect to the refinery or importer.

23 (iii) STANDARDS APPLICABLE TO SPE24 CIFIC REFINERIES OR IMPORTERS.—
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1 ‘‘(I) APPLICABILITY OF STAND2 ARDS.—For any calendar year, the

3 standards applicable to a refinery or

4 importer under clause (ii) shall apply

5 to the quantity of gasoline produced or

6 distributed by the refinery or importer

7 in the calendar year only to the extent

8 that the quantity is less than or equal

9 to the average annual quantity of re10 formulated gasoline produced or dis11 tributed by the refinery or importer

12 during calendar years 1999 and 2000.

13 ‘‘(II) APPLICABILITY OF OTHER

14 STANDARDS.—For any calendar year,

15 the quantity of gasoline produced or

16 distributed by a refinery or importer

17 that is in excess of the quantity subject

18 to subclause (I) shall be subject to

19 standards for toxic air pollutants pro20 mulgated under subparagraph (A) and

21 paragraph (3)(B).

22 ‘‘(iv) CREDIT PROGRAM.—The Admin23 istrator shall provide for the granting and

24 use of credits for emissions of toxic air pol-
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1 lutants in the same manner as provided in

2 paragraph (7).

3 ‘‘(v) REGIONAL PROTECTION OF TOXICS

4 REDUCTION BASELINES.—

5 ‘‘(I) IN GENERAL.—Not later than

6 60 days after the date of enactment of

7 this subparagraph, and not later than

8 April 1 of each calendar year that be9 gins after that date of enactment, the

10 Administrator shall publish in the

11 Federal Register a report that specifies,

12 with respect to the previous calendar

13 year—

14 ‘‘(aa) the quantity of refor15 mulated gasoline produced that is

16 in excess of the average annual

17 quantity of reformulated gasoline

18 produced in 1999 and 2000; and

19 ‘‘(bb) the reduction of the av20 erage annual aggregate emissions

21 of toxic air pollutants in each

22 PADD, based on retail survey

23 data or data from other appro24 priate sources.
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1 ‘‘(II) EFFECT OF FAILURE TO

2 MAINTAIN AGGREGATE TOXICS REDUC3 TIONS.—If, in any calendar year, the

4 reduction of the average annual aggre5 gate emissions of toxic air pollutants

6 in a PADD fails to meet or exceed the

7 reduction of the average annual aggre8 gate emissions of toxic air pollutants

9 in the PADD in calendar years 1999

10 and 2000, the Administrator, not later

11 than 90 days after the date of publica12 tion of the report for the calendar year

13 under subclause (I), shall—

14 ‘‘(aa) identify, to the max15 imum extent practicable, the rea16 sons for the failure, including the

17 sources, volumes, and characteris18 tics of reformulated gasoline that

19 contributed to the failure; and

20 ‘‘(bb) promulgate revisions to

21 the regulations promulgated under

22 clause (ii), to take effect not ear23 lier than 180 days but not later

24 than 270 days after the date of

25 promulgation, to provide that,
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1 notwithstanding clause (iii)(II),

2 all reformulated gasoline produced

3 or distributed at each refinery or

4 importer shall meet the standards

5 applicable under clause (iii) not

6 later than April 1 of the year fol7 lowing the report in subclause (II)

8 and for subsequent years.

9 ‘‘(vi) REGULATIONS TO CONTROL HAZ10 ARDOUS AIR POLLUTANTS FROM MOTOR VE11 HICLES AND MOTOR VEHICLE FUELS.—Not

12 later than July 1, 2004, the Administrator

13 shall promulgate final regulations to control

14 hazardous air pollutants from motor vehi15 cles and motor vehicle fuels, as provided for

16 in section 80.1045 of title 40, Code of Fed17 eral Regulations (as in effect on the date of

18 enactment of this subparagraph).’’.

19 (c) CONSOLIDATION IN REFORMULATED GASOLINE

20 REGULATIONS.—Not later than 180 days after the date of

21 enactment of this Act, the Administrator shall revise the

22 reformulated gasoline regulations under subpart D of part

23 80 of title 40, Code of Federal Regulations, to consolidate

24 the regulations applicable to VOC-Control Regions 1 and

25 2 under section 80.41 of that title by eliminating the less
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1 stringent requirements applicable to gasoline designated for

2 VOC-Control Region 2 and instead applying the more strin3 gent requirements applicable to gasoline designated for

4 VOC-Control Region 1.

5 (d) SAVINGS CLAUSE.—Nothing in this section is in6 tended to affect or prejudice any legal claims or actions

7 with respect to regulations promulgated by the Adminis8 trator prior to enactment of this Act regarding emissions

9 of toxic air pollutants from motor vehicles.

10 (e) DETERMINATION REGARDING A STATE PETI11 TION.—Section 211(k) of the Clean Air Act (42 U.S.C.

12 7545(k)) is amended by inserting after paragraph (10) the

13 following:

14 ‘‘(11) DETERMINATION REGARDING A STATE PE15 TITION.—

16 ‘‘(A) IN GENERAL.—Notwithstanding any

17 other provision of this section, not less than 30

18 days after enactment of this paragraph the Ad19 ministrator must determine the adequacy of any

20 petition received from a Governor of a State to

21 exempt gasoline sold in that State from the re22 quirements of paragraph (2)(B).

23 ‘‘(B) APPROVAL.—If the determination in

24 (A) is not made within thirty days of enactment
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1 of this paragraph, the petition shall be deemed

2 approved.’’.

3 SEC. 835. PUBLIC HEALTH AND ENVIRONMENTAL IMPACTS

4 OF FUELS AND FUEL ADDITIVES.

5 Section 211(b) of the Clean Air Act (42 U.S.C.

6 7545(b)) is amended—

7 (1) in paragraph (2)—

8 (A) by striking ‘‘may also’’ and inserting

9 ‘‘shall, on a regular basis,’’; and

10 (B) by striking subparagraph (A) and in11 serting the following:

12 ‘‘(A) to conduct tests to determine potential

13 public health and environmental effects of the

14 fuel or additive (including carcinogenic,

15 teratogenic, or mutagenic effects); and’’; and

16 (2) by adding at the end the following:

17 ‘‘(4) STUDY ON CERTAIN FUEL ADDITIVES AND

18 BLENDSTOCKS.—

19 ‘‘(A) IN GENERAL.—Not later than 2 years

20 after the date of enactment of this paragraph, the

21 Administrator shall—

22 ‘‘(i) conduct a study on the effects on

23 public health, air quality, and water re24 sources of increased use of, and the feasi-
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1 bility of using as substitutes for methyl ter2 tiary butyl ether in gasoline—

3 ‘‘(I) ethyl tertiary butyl ether;

4 ‘‘(II) tertiary amyl methyl ether;

5 ‘‘(III) di-isopropyl ether;

6 ‘‘(IV) tertiary butyl alcohol;

7 ‘‘(V) other ethers and heavy alco8 hols, as determined by then Adminis9 trator;

10 ‘‘(VI) ethanol;

11 ‘‘(VII) iso-octane; and

12 ‘‘(VIII) alkylates; and

13 ‘‘(ii) conduct a study on the effects on

14 public health, air quality, and water re15 sources of the adjustment for ethanol-blend16 ed reformulated gasoline to the VOC per17 formance requirements otherwise applicable

18 under sections 211(k)(1) and 211(k)(3) of

19 the Clean Air Act.

20 ‘‘(iii) submit to the Committee on En21 vironment and Public Works of the Senate

22 and the Committee on Energy and Com23 merce of the House of Representatives a re24 port describing the results of these studies.
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1 ‘‘(B) CONTRACTS FOR STUDY.—In carrying

2 out this paragraph, the Administrator may enter

3 into one or more contracts with nongovernmental

4 entities including but not limited to National

5 Energy Laboratories and institutions of higher

6 education (as defined in section 101 of the High7 er Education Act of 1965 (20 U.S.C. 1001)).’’.

8 SEC. 836. ANALYSES OF MOTOR VEHICLE FUEL CHANGES.

9 Section 211 of the Clean Air Act (42 U.S.C. 7545) (as

10 amended by section 820(a)) is amended by inserting after

11 subsection (o) the following:

12 ‘‘(p) ANALYSES OF MOTOR VEHICLE FUEL CHANGES

13 AND EMISSIONS MODEL.—

14 ‘‘(1) ANTI-BACKSLIDING ANALYSIS.—

15 ‘‘(A) DRAFT ANALYSIS.—Not later than 4

16 years after the date of enactment of this para17 graph, the Administrator shall publish for public

18 comment a draft analysis of the changes in emis19 sions of air pollutants and air quality due to the

20 use of motor vehicle fuel and fuel additives re21 sulting from implementation of the amendments

22 made by the Federal Reformulated Fuels Act of

23 2003.

24 ‘‘(B) FINAL ANALYSIS.—After providing a

25 reasonable opportunity for comment but not
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1 later than 5 years after the date of enactment of

2 this paragraph, the Administrator shall publish

3 the analysis in final form.

4 ‘‘(2) EMISSIONS MODEL.—For the purposes of

5 this subsection, as soon as the necessary data are

6 available, the Administrator shall develop and final7 ize an emissions model that reasonably reflects the ef8 fects of gasoline characteristics or components on

9 emissions from vehicles in the motor vehicle fleet dur10 ing calendar year 2005.’’.

11 SEC. 837. ADDITIONAL OPT-IN AREAS UNDER REFORMU12 LATED GASOLINE PROGRAM.

13 Section 211(k)(6) of the Clean Air Act (42 U.S.C.

14 7545(k)(6)) is amended—

15 (1) by striking ‘‘(6) OPT-IN AREAS.—(A) Upon’’

16 and inserting the following:

17 ‘‘(6) OPT-IN AREAS.—

18 ‘‘(A) CLASSIFIED AREAS.—

19 ‘‘(i) IN GENERAL.—Upon’’;

20 (2) in subparagraph (B), by striking ‘‘(B) If’’

21 and inserting the following:

22 ‘‘(ii) EFFECT OF INSUFFICIENT DO23 MESTIC CAPACITY TO PRODUCE REFORMU24 LATED GASOLINE.—If’’;
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1 (3) in subparagraph (A)(ii) (as redesignated by

2 paragraph (2))—

3 (A) in the first sentence, by striking ‘‘sub4 paragraph (A)’’ and inserting ‘‘clause (i)’’; and

5 (B) in the second sentence, by striking ‘‘this

6 paragraph’’ and inserting ‘‘this subparagraph’’;

7 and

8 (4) by adding at the end the following:

9 ‘‘(B) OZONE TRANSPORT REGION.—

10 ‘‘(i) APPLICATION OF PROHIBITION.—

11 ‘‘(I) IN GENERAL.—In addition to

12 the provisions of subparagraph (A),

13 upon the application of the Governor

14 of a State in the ozone transport re15 gion established by section 184(a), the

16 Administrator, not later than 180 days

17 after the date of receipt of the applica18 tion, shall apply the prohibition speci19 fied in paragraph (5) to any area in

20 the State (other than an area classified

21 as a marginal, moderate, serious, or se22 vere ozone nonattainment area under

23 subpart 2 of part D of title I) unless

24 the Administrator determines under
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1 clause (iii) that there is insufficient ca2 pacity to supply reformulated gasoline.

3 ‘‘(II) PUBLICATION OF APPLICA4 TION.—As soon as practicable after the

5 date of receipt of an application under

6 subclause (I), the Administrator shall

7 publish the application in the Federal

8 Register.

9 ‘‘(ii) PERIOD OF APPLICABILITY.—

10 Under clause (i), the prohibition specified

11 in paragraph (5) shall apply in a State—

12 ‘‘(I) commencing as soon as prac13 ticable but not later than 2 years after

14 the date of approval by the Adminis15 trator of the application of the Gov16 ernor of the State; and

17 ‘‘(II) ending not earlier than 4

18 years after the commencement date de19 termined under subclause (I).

20 ‘‘(iii) EXTENSION OF COMMENCEMENT

21 DATE BASED ON INSUFFICIENT CAPACITY.—

22 ‘‘(I) IN GENERAL.—If, after re23 ceipt of an application from a Gov24 ernor of a State under clause (i), the

25 Administrator determines, on the Ad-
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1 ministrator’s own motion or on peti2 tion of any person, after consultation

3 with the Secretary of Energy, that

4 there is insufficient capacity to supply

5 reformulated gasoline, the Adminis6 trator, by regulation—

7 ‘‘(aa) shall extend the com8 mencement date with respect to

9 the State under clause (ii)(I) for

10 not more than 1 year; and

11 ‘‘(bb) may renew the exten12 sion under item (aa) for two ad13 ditional periods, each of which

14 shall not exceed 1 year.

15 ‘‘(II) DEADLINE FOR ACTION ON

16 PETITIONS.—The Administrator shall

17 act on any petition submitted under

18 subclause (I) not later than 180 days

19 after the date of receipt of the peti20 tion.’’.

21 SEC. 838. FEDERAL ENFORCEMENT OF STATE FUELS RE22 QUIREMENTS.

23 Section 211(c)(4)(C) of the Clean Air Act (42 U.S.C.

24 7545(c)(4)(C)) is amended—
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1 (1) by striking ‘‘(C) A State’’ and inserting the

2 following:

3 ‘‘(C) AUTHORITY OF STATE TO CONTROL

4 FUELS AND FUEL ADDITIVES FOR REASONS OF

5 NECESSITY.—

6 ‘‘(i) IN GENERAL.—A State’’; and

7 (2) by adding at the end the following:

8 ‘‘(ii) ENFORCEMENT BY THE ADMINIS9 TRATOR.—In any case in which a State

10 prescribes and enforces a control or prohibi11 tion under clause (i), the Administrator, at

12 the request of the State, shall enforce the

13 control or prohibition as if the control or

14 prohibition had been adopted under the

15 other provisions of this section.’’.

16 SEC. 839. FUEL SYSTEM REQUIREMENTS HARMONIZATION

17 STUDY.

18 (a) STUDY.—

19 (1) IN GENERAL.—The Administrator of the En20 vironmental Protection Agency and the Secretary of

21 Energy shall jointly conduct a study of Federal,

22 State, and local requirements concerning motor vehi23 cle fuels, including—
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1 (A) requirements relating to reformulated

2 gasoline, volatility (measured in Reid vapor

3 pressure), oxygenated fuel, and diesel fuel; and

4 (B) other requirements that vary from State

5 to State, region to region, or locality to locality.

6 (2) REQUIRED ELEMENTS.—The study shall

7 assess—

8 (A) the effect of the variety of requirements

9 described in paragraph (1) on the supply, qual10 ity, and price of motor vehicle fuels available to

11 the consumer;

12 (B) the effect of the requirements described

13 in paragraph (1) on achievement of—

14 (i) national, regional, and local air

15 quality standards and goals; and

16 (ii) related environmental and public

17 health protection standards and goals;

18 (C) the effect of Federal, State, and local

19 motor vehicle fuel regulations, including multiple

20 motor vehicle fuel requirements, on—

21 (i) domestic refineries;

22 (ii) the fuel distribution system; and

23 (iii) industry investment in new ca24 pacity;
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1 (D) the effect of the requirements described

2 in paragraph (1) on emissions from vehicles, re3 fineries, and fuel handling facilities;

4 (E) the feasibility of developing national or

5 regional motor vehicle fuel slates for the 48 con6 tiguous States that, while protecting and im7 proving air quality at the national, regional,

8 and local levels, could—

9 (i) enhance flexibility in the fuel dis10 tribution infrastructure and improve fuel

11 fungibility;

12 (ii) reduce price volatility and costs to

13 consumers and producers;

14 (iii) provide increased liquidity to the

15 gasoline market; and

16 (iv) enhance fuel quality, consistency,

17 and supply; and

18 (F) the feasibility of providing incentives,

19 and the need for the development of national

20 standards necessary, to promote cleaner burning

21 motor vehicle fuel.

22 (b) REPORT.—

23 (1) IN GENERAL.—Not later than June 1, 2006,

24 the Administrator of the Environmental Protection

25 Agency and the Secretary of Energy shall submit to
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1 Congress a report on the results of the study con2 ducted under subsection (a).

3 (2) RECOMMENDATIONS.—

4 (A) IN GENERAL.—The report shall contain

5 recommendations for legislative and administra6 tive actions that may be taken—

7 (i) to improve air quality;

8 (ii) to reduce costs to consumers and

9 producers; and

10 (iii) to increase supply liquidity.

11 (B) REQUIRED CONSIDERATIONS.—The rec12 ommendations under subparagraph (A) shall

13 take into account the need to provide advance

14 notice of required modifications to refinery and

15 fuel distribution systems in order to ensure an

16 adequate supply of motor vehicle fuel in all

17 States.

18 (3) CONSULTATION.—In developing the report,

19 the Administrator of the Environmental Protection

20 Agency and the Secretary of Energy shall consult

21 with—

22 (A) the Governors of the States;

23 (B) automobile manufacturers;

24 (C) motor vehicle fuel producers and dis25 tributors; and
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1 (D) the public.

2 SEC. 840. REVIEW OF FEDERAL PROCUREMENT INITIATIVES

3 RELATING TO USE OF RECYCLED PRODUCTS

4 AND FLEET AND TRANSPORTATION EFFI5 CIENCY.

6 Not later than 180 days after the date of enactment

7 of this Act, the Administrator of General Services shall sub8 mit to Congress a report that details efforts by each Federal

9 agency to implement the procurement policies specified in

10 Executive Order No. 13101 (63 Fed. Reg. 49643; relating

11 to governmental use of recycled products) and Executive

12 Order No. 13149 (65 Fed. Reg. 24607; relating to Federal

13 fleet and transportation efficiency).

14 TITLE IX—ENERGY EFFICIENCY

15 AND ASSISTANCE TO LOW IN16 COME CONSUMERS

17 Subtitle A—Low Income Assistance

18 and State Energy Programs

19 SEC. 901. INCREASED FUNDING FOR LIHEAP, WEATHERIZA20 TION ASSISTANCE, AND STATE ENERGY

21 GRANTS.

22 (a) LIHEAP.—(1) Section 2602(b) of the Low-Income

23 Home Energy Assistance Act of 1981 (42 U.S.C. 8621(b))

24 is amended by striking the first sentence and inserting the

25 following: ‘‘There are authorized to be appropriated to carry
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1 out the provisions of this title (other than section 2607A),

2 $3,400,000,000 for each of fiscal years 2003 through 2005.’’.

3 (2) Section 2602(e) of the Low-Income Home Energy

4 Assistance Act of 1981 (42 U.S.C. 8621(e)) is amended by

5 striking ‘‘$600,000,000’’ and inserting ‘‘$1,000,000,000’’.

6 (3) Section 2609A(a) of the Low-Income Energy As7 sistance Act of 1981 (42 U.S.C. 8628a(a)) is amended by

8 striking ‘‘not more than $300,000’’ and inserting: ‘‘not

9 more than $750,000’’.

10 (b) WEATHERIZATION ASSISTANCE.—Section 422 of

11 the Energy Conservation and Production Act (42 U.S.C.

12 6872) is amended by striking ‘‘for fiscal years 1999 through

13 2003 such sums as may be necessary.’’ and inserting:

14 ‘‘$325,000,000 for fiscal year 2003, $400,000,000 for fiscal

15 year 2004, and $500,000,000 for fiscal year 2005.’’.

16 SEC. 902. STATE ENERGY PROGRAMS.

17 (a) STATE ENERGY CONSERVATION PLANS.—Section

18 362 of the Energy Policy and Conservation Act (42 U.S.C.

19 6322)) is amended by adding at the end the following:

20 ‘‘(g) The Secretary shall, at least once every 3 years,

21 invite the Governor of each State to review and, if nec22 essary, revise the energy conservation plan of the State sub23 mitted under subsection (b) or (e). Such reviews should con24 sider the energy conservation plans of other States within

25 the region, and identify opportunities and actions that may
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1 be carried out in pursuit of common energy conservation

2 goals.’’.

3 (b) STATE ENERGY CONSERVATION GOALS.—Section

4 364 of the Energy Policy and Conservation Act (42 U.S.C.

5 6324) is amended to read as follows:

6 ‘‘SEC. 364. Each State energy conservation plan with

7 respect to which assistance is made available under this

8 part on or after the date of enactment of the Energy Policy

9 Act of 2003 shall contain a goal, consisting of an improve10 ment of 25 percent or more in the efficiency of use of energy

11 in the State concerned in calendar year 2010 as compared

12 to calendar year 1990, and may contain interim goals.’’.

13 (c) STATE ENERGY CONSERVATION GRANTS.—Section

14 365(f) of the Energy Policy and Conservation Act (42

15 U.S.C. 6325(f)) is amended by striking ‘‘for fiscal years

16 1999 through 2003 such sums as may be necessary.’’ and

17 inserting: ‘‘$100,000,000 for each of fiscal years 2003 and

18 2004; $125,000,000 for fiscal year 2005; and such sums as

19 may be necessary for each fiscal year thereafter.’’.

20 SEC. 903. ENERGY EFFICIENT SCHOOLS.

21 (a) ESTABLISHMENT.—There is established in the De22 partment of Energy the High Performance Schools Program

23 (in this section referred to as the ‘‘Program’’).

24 (b) GRANTS.—The Secretary of Energy may make

25 grants to a State energy office—
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1 (1) to assist school districts in the State to im2 prove the energy efficiency of school buildings;

3 (2) to administer the Program; and

4 (3) to promote participation in the Program.

5 (c) GRANTS TO ASSIST SCHOOL DISTRICTS.—The Sec6 retary shall condition grants under subsection (b)(1) on the

7 State energy office using the grants to assist school districts

8 that have demonstrated—

9 (1) a need for the grants to build additional

10 school buildings to meet increasing elementary or sec11 ondary enrollments or to renovate existing school

12 buildings; and

13 (2) a commitment to use the grant funds to de14 velop high performance school buildings in accordance

15 with a plan that the State energy office, in consulta16 tion with the State educational agency, has deter17 mined is feasible and appropriate to achieve the pur18 poses for which the grant is made.

19 (d) GRANTS FOR ADMINISTRATION.—Grants under

20 subsection (b)(2) shall be used to—

21 (1) evaluate compliance by school districts with

22 requirements of this section;

23 (2) distribute information and materials to

24 clearly define and promote the development of high
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1 performance school buildings for both new and exist2 ing facilities;

3 (3) organize and conduct programs for school

4 board members, school personnel, architects, engineers,

5 and others to advance the concepts of high perform6 ance school buildings;

7 (4) obtain technical services and assistance in

8 planning and designing high performance school

9 buildings; or

10 (5) collect and monitor data and information

11 pertaining to the high performance school building

12 projects.

13 (e) GRANTS TO PROMOTE PARTICIPATION.—Grants

14 under subsection (b)(3) shall be used for promotional and

15 marketing activities, including facilitating private and

16 public financing, promoting the use of energy savings per17 formance contracts, working with school administrations,

18 students, and communities, and coordinating public benefit

19 programs.

20 (f) SUPPLEMENTING GRANT FUNDS.—The State en21 ergy office shall encourage qualifying school districts to sup22 plement funds awarded pursuant to this section with funds

23 from other sources in the implementation of their plans.
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1 (g) ALLOCATIONS.—Except as provided in subsection

2 (h), funds appropriated to carry out this section shall be

3 allocated as follows:

4 (1) 70 percent shall be used to make grants

5 under subsection (b)(1).

6 (2) 15 percent shall be used to make grants

7 under subsection (b)(2).

8 (3) 15 percent shall be used to make grants

9 under subsection (b)(3).

10 (h) OTHER FUNDS.—The Secretary of Energy may re11 tain an amount, not to exceed $300,000 per year, to assist

12 State energy offices in coordinating and implementing the

13 Program. Such funds may be used to develop reference ma14 terials to further define the principles and criteria to

15 achieve high performance school buildings.

16 (i) AUTHORIZATION OF APPROPRIATIONS.—For grants

17 under subsection (b) there are authorized to be

18 appropriated—

19 (1) $200,000,000 for fiscal year 2003;

20 (2) $210,000,000 for fiscal year 2004;

21 (3) $220,000,000 for fiscal year 2005;

22 (4) $230,000,000 for fiscal year 2006; and

23 (5) such sums as may be necessary for fiscal year

24 2007 and each fiscal year thereafter through fiscal

25 year 2012.
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1 (j) DEFINITIONS.—For purposes of this section:

2 (1) HIGH PERFORMANCE SCHOOL BUILDING.—

3 The term ‘‘high performance school building’’ means

4 a school building that, in its design, construction, op5 eration, and maintenance—

6 (A) maximizes use of renewable energy and

7 energy-efficient technologies and systems;

8 (B) is cost-effective on a life-cycle basis;

9 (C) achieves either—

10 (i) the applicable Energy Star build11 ing energy performance ratings; or

12 (ii) energy consumption levels at least

13 30 percent below those of the most recent

14 version of ASHRAE Standard 90.1;

15 (D) uses affordable, environmentally pref16 erable, and durable materials;

17 (E) enhances indoor environmental quality;

18 (F) protects and conserves water; and

19 (G) optimizes site potential.

20 (2) RENEWABLE ENERGY.—The term ‘‘renewable

21 energy’’ means energy produced by solar, wind, bio22 mass, ocean, geothermal, or hydroelectric power.

23 (3) SCHOOL.—The term ‘‘school’’ means—

24 (A) an ‘‘elementary school’’ as that term is

25 defined in section 14101(14) of the Elementary
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1 and Secondary Education Act of 1965 (20

2 U.S.C. 8801(14)),

3 (B) a ‘‘secondary school’’ as that term is de4 fined in section 14101(25) of the Elementary

5 and Secondary Education Act of 1965 (20

6 U.S.C. 8801(25)), or

7 (C) an elementary or secondary Indian

8 school funded by the Bureau of Indian Affairs.

9 (4) STATE EDUCATIONAL AGENCY.—The term

10 ‘‘State educational agency’’ has the same meaning

11 given such term in section 14101(28) of the Elemen12 tary and Secondary Education Act of 1965 (20

13 U.S.C. 8801(28)).

14 (5) STATE ENERGY OFFICE.—The term ‘‘State

15 energy office’’ means the State agency responsible for

16 developing State energy conservation plans under sec17 tion 362 of the Energy Policy and Conservation Act

18 (42 U.S.C. 6322), or, if no such agency exists, a State

19 agency designated by the Governor of the State.

20 SEC. 904. LOW INCOME COMMUNITY ENERGY EFFICIENCY

21 PILOT PROGRAM.

22 (a) GRANTS.—The Secretary of Energy is authorized

23 to make grants to units of local government, private, non24 profit community development organizations, and Indian

25 tribe economic development entities to improve energy effi-
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1 ciency, identify and develop alternative renewable and dis2 tributed energy supplies, and increase energy conservation

3 in low income rural and urban communities.

4 (b) PURPOSE OF GRANTS.—The Secretary may make

5 grants on a competitive basis for—

6 (1) investments that develop alternative renew7 able and distributed energy supplies;

8 (2) energy efficiency projects and energy con9 servation programs;

10 (3) studies and other activities that improve en11 ergy efficiency in low income rural and urban com12 munities;

13 (4) planning and development assistance for in14 creasing the energy efficiency of buildings and facili15 ties; and

16 (5) technical and financial assistance to local

17 government and private entities on developing new

18 renewable and distributed sources of power or com19 bined heat and power generation.

20 (c) DEFINITION.—For purposes of this section, the

21 term ‘‘Indian tribe’’ means any Indian tribe, band, nation,

22 or other organized group or community, including any

23 Alaskan Native village or regional or village corporation

24 as defined in or established pursuant to the Alaska Native

25 Claims Settlement Act (43 U.S.C. 1601 et seq.), which is
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1 recognized as eligible for the special programs and services

2 provided by the United States to Indians because of their

3 status as Indians.

4 (d) AUTHORIZATION OF APPROPRIATIONS.—For the

5 purposes of this section there are authorized to be appro6 priated to the Secretary of Energy an amount not to exceed

7 $20,000,000 for fiscal year 2003 and each fiscal year there8 after through fiscal year 2005.

9 SEC. 905. ENERGY EFFICIENT APPLIANCE REBATE PRO10 GRAMS.

11 (a) DEFINITIONS.—In this section:

12 (1) ELIGIBLE STATE.—The term ‘‘eligible State’’

13 means a State that meets the requirements of sub14 section (b).

15 (2) ENERGY STAR PROGRAM.—The term ‘‘Energy

16 Star program’’ means the program established by sec17 tion 324A of the Energy Policy and Conservation Act.

18 (3) RESIDENTIAL ENERGY STAR PRODUCT.—The

19 term ‘‘residential Energy Star product’’ means a

20 product for a residence that is rated for energy effi21 ciency under the Energy Star program.

22 (4) STATE ENERGY OFFICE.—The term ‘‘State

23 energy office’’ means the State agency responsible for

24 developing State energy conservation plans under sec-
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1 tion 362 of the Energy Policy and Conservation Act

2 (42 U.S.C. 6322).

3 (5) STATE PROGRAM.—The term ‘‘State pro4 gram’’ means a State energy efficient appliance re5 bate program described in subsection (b)(1).

6 (b) ELIGIBLE STATES.—A State shall be eligible to re7 ceive an allocation under subsection (c) if the State—

8 (1) establishes (or has established) a State energy

9 efficient appliance rebate program to provide rebates

10 to residential consumers for the purchase of residen11 tial Energy Star products to replace used appliances

12 of the same type;

13 (2) submits an application for the allocation at

14 such time, in such form, and containing such infor15 mation as the Secretary may require; and

16 (3) provides assurances satisfactory to the Sec17 retary that the State will use the allocation to supple18 ment, but not supplant, funds made available to

19 carry out the State program.

20 (c) AMOUNT OF ALLOCATIONS.—

21 (1) IN GENERAL.—Subject to paragraph (2), for

22 each fiscal year, the Secretary shall allocate to the

23 State energy office of each eligible State to carry out

24 subsection (d) an amount equal to the product ob25 tained by multiplying the amount made available
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1 under subsection (e) for the fiscal year by the ratio

2 that the population of the State in the most recent

3 calendar year for which data are available bears to

4 the total population of all eligible States in that cal5 endar year.

6 (2) MINIMUM ALLOCATIONS.—For each fiscal

7 year, the amounts allocated under this subsection

8 shall be adjusted proportionately so that no eligible

9 State is allocated a sum that is less than an amount

10 determined by the Secretary.

11 (d) USE OF ALLOCATED FUNDS.—The allocation to a

12 State energy office under subsection (c) may be used to pay

13 up to 50 percent of the cost of establishing and carrying

14 out a State program.

15 (e) ISSUANCE OF REBATES.—Rebates may be provided

16 to residential consumers that meet the requirements of the

17 State program. The amount of a rebate shall be determined

18 by the State energy office, taking into consideration—

19 (1) the amount of the allocation to the State en20 ergy office under subsection (c);

21 (2) the amount of any Federal or State tax in22 centive available for the purchase of the residential

23 Energy Star product; and

24 (3) the difference between the cost of the residen25 tial Energy Star product and the cost of an appliance
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1 that is not a residential Energy Star product, but is

2 of the same type as, and is the nearest capacity, per3 formance, and other relevant characteristics (as deter4 mined by the State energy office) to the residential

5 Energy Star product.

6 (f) AUTHORIZATION OF APPROPRIATIONS.—There are

7 authorized to be appropriated to carry out this section such

8 sums as are necessary for fiscal year 2003 through fiscal

9 year 2012.

10 Subtitle B—Federal Energy

11 Efficiency

12 SEC. 911. ENERGY MANAGEMENT REQUIREMENTS.

13 (a) ENERGY REDUCTION GOALS.—Section 543(a)(1) of

14 the National Energy Conservation Policy Act (42 U.S.C.

15 8253(a)(1)) is amended to read as follows:

16 ‘‘(1) Subject to paragraph (2), each agency shall

17 apply energy conservation measures to, and shall im18 prove the design for the construction of, the Federal

19 buildings of the agency (including each industrial or

20 laboratory facility) so that the energy consumption

21 per gross square foot of the Federal buildings of the

22 agency in fiscal years 2002 through 2011 is reduced,

23 as compared with the energy consumption per gross

24 square foot of the Federal buildings of the agency in
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1 fiscal year 2000, by the percentage specified in the

2 following table:

‘‘Fiscal Year Percentage reduction

2002 ............................................................................................ 2

2003 ............................................................................................ 4

2004 ............................................................................................ 6

2005 ............................................................................................ 8

2006 ............................................................................................ 10

2007 ............................................................................................ 12

2008 ............................................................................................ 14

2009 ............................................................................................ 16

2010 ............................................................................................ 18

2011 ............................................................................................ 20.’’.

3 (b) REVIEW AND REVISION OF ENERGY PERFORMANCE

4 REQUIREMENT.—Section 543(a) of the National Energy

5 Conservation Policy Act (42 U.S.C. 8253(a)) is further

6 amended by adding at the end the following:

7 ‘‘(3) Not later than December 31, 2010, the Sec8 retary shall review the results of the implementation

9 of the energy performance requirement established

10 under paragraph (1) and submit to Congress rec11 ommendations concerning energy performance re12 quirements for calendar years 2012 through 2021.’’.

13 (c) EXCLUSIONS.—Section 543(c)(1) of the National

14 Energy Conservation Policy Act (42 U.S.C. 8253(c)(1)) is

15 amended to read as follows:

16 ‘‘(1)(A) An agency may exclude, from the energy

17 performance requirement for a calendar year estab18 lished under subsection (a) and the energy manage19 ment requirement established under subsection (b),
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1 any Federal building or collection of Federal build2 ings, if the head of the agency finds that—

3 ‘‘(i) compliance with those requirements

4 would be impracticable;

5 ‘‘(ii) the agency has completed and sub6 mitted all federally required energy management

7 reports;

8 ‘‘(iii) the agency has achieved compliance

9 with the energy efficiency requirements of this

10 Act, the Energy Policy Act of 1992, Executives

11 Orders, and other Federal law; and

12 ‘‘(iv) the agency has implemented all prac13 ticable, life-cycle cost-effective projects with re14 spect to the Federal building or collection of Fed15 eral buildings to be excluded.

16 ‘‘(B) A finding of impracticability under sub17 paragraph (A)(i) shall be based on—

18 ‘‘(i) the energy intensiveness of activities

19 carried out in the Federal building or collection

20 of Federal buildings; or

21 ‘‘(ii) the fact that the Federal building or

22 collection of Federal buildings is used in the per23 formance of a national security function.’’.
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1 (d) REVIEW BY SECRETARY.—Section 543(c)(2) of the

2 National Energy Conservation Policy Act (42 U.S.C.

3 8253(c)(2)) is amended—

4 (1) by striking ‘‘impracticability standards’’ and

5 inserting ‘‘standards for exclusion’’; and

6 (2) by striking ‘‘a finding of impracticability’’

7 and inserting ‘‘the exclusion’’.

8 (e) CRITERIA.—Section 543(c) of the National Energy

9 Conservation Policy Act (42 U.S.C. 8253(c)) is further

10 amended by adding at the end the following:

11 ‘‘(3) Not later than 180 days after the date of en12 actment of this paragraph, the Secretary shall issue

13 guidelines that establish criteria for exclusions under

14 paragraph (1).’’.

15 (f) REPORTS.—Section 548(b) of the National Energy

16 Conservation Policy Act (42 U.S.C. 8258(b)) is amended—

17 (1) in the subsection heading, by inserting ‘‘THE

18 PRESIDENT AND’’ before ‘‘CONGRESS’’; and

19 (2) by inserting ‘‘President and’’ before ‘‘Con20 gress’’.

21 (g) CONFORMING AMENDMENT.—Section 550(d) of the

22 National Energy Conservation Policy Act (42 U.S.C.

23 8258b(d)) is amended in the second sentence by striking

24 ‘‘the 20 percent reduction goal established under section

25 543(a) of the National Energy Conservation Policy Act (42
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1 U.S.C. 8253(a)).’’ and inserting ‘‘each of the energy reduc2 tion goals established under section 543(a).’’.

3 SEC. 912. ENERGY USE MEASUREMENT AND ACCOUNT4 ABILITY.

5 Section 543 of the National Energy Conservation Pol6 icy Act (42 U.S.C. 8253) is further amended by adding at

7 the end the following:

8 ‘‘(e) METERING OF ENERGY USE.—

9 ‘‘(1) DEADLINE.—By October 1, 2004, all Fed10 eral buildings shall, for the purposes of efficient use

11 of energy and reduction in the cost of electricity used

12 in such buildings, be metered or submetered in ac13 cordance with guidelines established by the Secretary

14 under paragraph (2). Each agency shall use, to the

15 maximum extent practicable, advanced meters or ad16 vanced metering devices that provide data at least

17 daily and that measure at least hourly consumption

18 of electricity in the Federal buildings of the agency.

19 Such data shall be incorporated into existing Federal

20 energy tracking systems and made available to Fed21 eral facility energy managers.

22 ‘‘(2) GUIDELINES.—

23 ‘‘(A) IN GENERAL.—Not later than 180

24 days after the date of enactment of this sub25 section, the Secretary, in consultation with the
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1 Department of Defense, the General Services Ad2 ministration and representatives from the meter3 ing industry, utility industry, energy services

4 industry, energy efficiency industry, national

5 laboratories, universities and Federal facility en6 ergy managers, shall establish guidelines for

7 agencies to carry out paragraph (1).

8 ‘‘(B) REQUIREMENTS FOR GUIDELINES.—

9 The guidelines shall—

10 ‘‘(i) take into consideration—

11 ‘‘(I) the cost of metering and sub12 metering and the reduced cost of oper13 ation and maintenance expected to re14 sult from metering and submetering;

15 ‘‘(II) the extent to which metering

16 and submetering are expected to result

17 in increased potential for energy man18 agement, increased potential for energy

19 savings and energy efficiency improve20 ment, and cost and energy savings due

21 to utility contract aggregation; and

22 ‘‘(III) the measurement and

23 verification protocols of the Depart24 ment of Energy;
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1 ‘‘(ii) include recommendations con2 cerning the amount of funds and the num3 ber of trained personnel necessary to gather

4 and use the metering information to track

5 and reduce energy use;

6 ‘‘(iii) establish one or more dates, not

7 later than 1 year after the date of issuance

8 of the guidelines, on which the requirements

9 specified in paragraph (1) shall take effect;

10 and

11 ‘‘(iv) establish exclusions from the re12 quirements specified in paragraph (1) based

13 on the de minimus quantity of energy use

14 of a Federal building, industrial process, or

15 structure.

16 ‘‘(3) PLAN.—No later than 6 months after

17 the date guidelines are established under para18 graph (2), in a report submitted by the agency

19 under section 548(a), each agency shall submit to

20 the Secretary a plan describing how the agency

21 will implement the requirements of paragraph

22 (1), including (A) how the agency will designate

23 personnel primarily responsible for achieving the

24 requirements and (B) demonstration by the

25 agency, complete with documentation, of any
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1 finding that advanced meters or advanced meter2 ing devices, as defined in paragraph (1), are not

3 practicable.’’.

4 SEC. 913. FEDERAL BUILDING PERFORMANCE STANDARDS.

5 (a) REVISED STANDARDS.—Section 305(a) of the En6 ergy Conservation and Production Act (42 U.S.C. 6834(a))

7 is amended—

8 (1) in paragraph (2)(A), by striking ‘‘CABO

9 Model Energy Code, 1992’’ and inserting ‘‘the 2000

10 International Energy Conservation Code’’; and

11 (2) by adding at the end the following:

12 ‘‘(3) REVISED FEDERAL BUILDING ENERGY EFFI13 CIENCY PERFORMANCE STANDARDS.—

14 ‘‘(A) IN GENERAL.—Not later than 1 year

15 after the date of enactment of this paragraph, the

16 Secretary of Energy shall establish, by rule, re17 vised Federal building energy efficiency perform18 ance standards that require that, if cost19 effective—

20 ‘‘(i) new commercial buildings and

21 multifamily high rise residential buildings

22 be constructed so as to achieve the applica23 ble Energy Star building energy perform24 ance ratings or energy consumption levels

25 at least 30 percent below those of the most
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1 recent ASHRAE Standard 90.1, whichever

2 results in the greater increase in energy effi3 ciency;

4 ‘‘(ii) new residential buildings (other

5 than those described in clause (i)) be con6 structed so as to achieve the applicable En7 ergy Star building energy performance rat8 ings or achieve energy consumption levels at

9 least 30 percent below the requirements of

10 the most recent version of the International

11 Energy Conservation Code, whichever re12 sults in the greater increase in energy effi13 ciency; and

14 ‘‘(iii) sustainable design principles are

15 applied to the siting, design, and construc16 tion of all new and replacement buildings.

17 ‘‘(B) ADDITIONAL REVISIONS.—Not later

18 than 1 year after the date of approval of amend19 ments to ASHRAE Standard 90.1 or the 2000

20 International Energy Conservation Code, the

21 Secretary of Energy shall determine, based on

22 the cost-effectiveness of the requirements under

23 the amendments, whether the revised standards

24 established under this paragraph should be up25 dated to reflect the amendments.
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1 ‘‘(C) STATEMENT ON COMPLIANCE OF NEW

2 BUILDINGS.—In the budget request of the Federal

3 agency for each fiscal year and each report sub4 mitted by the Federal agency under section

5 548(a) of the National Energy Conservation Pol6 icy Act (42 U.S.C. 8258(a)), the head of each

7 Federal agency shall include—

8 ‘‘(i) a list of all new Federal buildings

9 of the Federal agency; and

10 ‘‘(ii) a statement concerning whether

11 the Federal buildings meet or exceed the re12 vised standards established under this para13 graph, including a monitoring and commis14 sioning report that is in compliance with

15 the measurement and verification protocols

16 of the Department of Energy.

17 ‘‘(D) AUTHORIZATION OF APPROPRIA18 TIONS.—There are authorized to be appropriated

19 such sums as are necessary to carry out this

20 paragraph and to implement the revised stand21 ards established under this paragraph.’’.

22 (b) ENERGY LABELING PROGRAM.—Section 305(a) of

23 the Energy Conservation and Production Act (42 U.S.C.

24 6834(a)) is further amended by adding at the end the fol25 lowing:
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1 ‘‘(e) ENERGY LABELING PROGRAM.—The Secretary of

2 Energy, in cooperation with the Administrator of the Envi3 ronmental Protection Agency, shall develop an energy label4 ing program for new Federal buildings that exceed the re5 vised standards established under subsection (a)(3) by 15

6 percent or more.’’.

7 SEC. 914. PROCUREMENT OF ENERGY EFFICIENT PROD8 UCTS.

9 (a) REQUIREMENTS.—Part 3 of title V of the National

10 Energy Conservation Policy Act is amended by adding at

11 the end the following:

12 ‘‘SEC. 552. FEDERAL PROCUREMENT OF ENERGY EFFICIENT

13 PRODUCTS.

14 ‘‘(a) DEFINITIONS.—In this section:

15 ‘‘(1) ENERGY STAR PRODUCT.—The term ‘En16 ergy Star product’ means a product that is rated for

17 energy efficiency under an Energy Star program.

18 ‘‘(2) ENERGY STAR PROGRAM.—The term ‘En19 ergy Star program’ means the program established by

20 section 324A of the Energy Policy and Conservation

21 Act.

22 ‘‘(3) EXECUTIVE AGENCY.—The term ‘executive

23 agency’ has the meaning given the term in section 4

24 of the Office of Federal Procurement Policy Act (41

25 U.S.C. 403).
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1 ‘‘(4) FEMP DESIGNATED PRODUCT.—The term

2 ‘FEMP designated product’ means a product that is

3 designated under the Federal Energy Management

4 Program of the Department of Energy as being

5 among the highest 25 percent of equivalent products

6 for energy efficiency.

7 ‘‘(b) PROCUREMENT OF ENERGY EFFICIENT PROD8 UCTS.—

9 ‘‘(1) REQUIREMENT.—To meet the requirements

10 of an executive agency for an energy consuming prod11 uct, the head of the executive agency shall, except as

12 provided in paragraph (2), procure—

13 ‘‘(A) an Energy Star product; or

14 ‘‘(B) a FEMP designated product.

15 ‘‘(2) EXCEPTIONS.—The head of an executive

16 agency is not required to procure an Energy Star

17 product or FEMP designated product under para18 graph (1) if—

19 ‘‘(A) an Energy Star product or FEMP des20 ignated product is not cost effective over the life

21 cycle of the product; or

22 ‘‘(B) no Energy Star product or FEMP des23 ignated product is reasonably available that

24 meets the requirements of the executive agency.
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1 ‘‘(3) PROCUREMENT PLANNING.—The head of an

2 executive agency shall incorporate into the specifica3 tions for all procurements involving energy con4 suming products and systems, and into the factors for

5 the evaluation of offers received for the procurement,

6 criteria for energy efficiency that are consistent with

7 the criteria used for rating Energy Star products and

8 for rating FEMP designated products.

9 ‘‘(c) LISTING OF ENERGY EFFICIENT PRODUCTS IN

10 FEDERAL CATALOGS.—Energy Star and FEMP designated

11 products shall be clearly identified and prominently dis12 played in any inventory or listing of products by the Gen13 eral Services Administration or the Defense Logistics Agen14 cy.

15 (b) CONFORMING AMENDMENT.—The table of contents

16 in section 1(b) of the National Energy Conservation Policy

17 Act (42 U.S.C. 8201 note) is amended by inserting after

18 the item relating to section 551 the following:

‘‘Sec. 552. Federal Government procurement of energy efficient products.’’

19 (c) REGULATIONS.—Not later than 180 days after the

20 effective date specified in subsection (f), the Secretary of En21 ergy shall issue guidelines to carry out section 552 of the

22 National Energy Conservation Policy Act (as added by sub23 section (a)).

24 (d) DESIGNATION OF ENERGY STAR PRODUCTS.—The

25 Administrator of the Environmental Protection Agency and
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1 the Secretary of Energy shall expedite the process of desig2 nating products as Energy Star products (as defined in sec3 tion 552 of the National Energy Conservation Policy Act

4 (as added by subsection (a)).

5 (e) DESIGNATION OF ELECTRIC MOTORS.—In the case

6 of electric motors of 1 to 500 horsepower, agencies shall se7 lect only premium efficient motors that meet a standard

8 designated by the Secretary. The Secretary shall designate

9 such a standard within 120 days of the enactment of this

10 paragraph, after considering the recommendations of asso11 ciated electric motor manufacturers and energy efficiency

12 groups.

13 (f) EFFECTIVE DATE.—Subsection (a) and the amend14 ment made by that subsection take effect on the date that

15 is 180 days after the date of enactment of this Act.

16 SEC. 915. REPEAL OF ENERGY SAVINGS PERFORMANCE

17 CONTRACT SUNSET.

18 Section 801(c) of the National Energy Conservation

19 Policy Act (42 U.S.C. 8287(c)) is repealed.

20 SEC. 916. ENERGY SAVINGS PERFORMANCE CONTRACT

21 DEFINITIONS.

22 (a) ENERGY SAVINGS.—Section 804(2) of the National

23 Energy Conservation Policy Act (42 U.S.C. 8287c(2)) is

24 amended to read as follows:
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1 ‘‘(2) The term ‘energy savings’ means a reduc2 tion in the cost of energy or water, from a base cost

3 established through a methodology set forth in the con4 tract, used in an existing federally owned building or

5 buildings or other federally owned facilities as a re6 sult of—

7 ‘‘(A) the lease or purchase of operating

8 equipment, improvements, altered operation and

9 maintenance, or technical services;

10 ‘‘(B) the increased efficient use of existing

11 energy sources by cogeneration or heat recovery,

12 excluding any cogeneration process for other

13 than a federally owned building or buildings or

14 other federally owned facilities; or

15 ‘‘(C) the increased efficient use of existing

16 water sources.’’.

17 (b) ENERGY SAVINGS CONTRACT.—Section 804(3) of

18 the National Energy Conservation Policy Act (42 U.S.C.

19 8287c(3)) is amended to read as follows:

20 ‘‘(3) The terms ‘energy savings contract’ and ‘en21 ergy savings performance contract’ mean a contract

22 which provides for the performance of services for the

23 design, acquisition, installation, testing, operation,

24 and, where appropriate, maintenance and repair, of
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1 an identified energy or water conservation measure or

2 series of measures at one or more locations.’’.

3 (c) ENERGY OR WATER CONSERVATION MEASURE.—

4 Section 804(4) of the National Energy Conservation Policy

5 Act (42 U.S.C. 8287c(4)) is amended to read as follows:

6 ‘‘(4) The term ‘energy or water conservation

7 measure’ means—

8 ‘‘(A) an energy conservation measure, as de9 fined in section 551(4) (42 U.S.C. 8259(4)); or

10 ‘‘(B) a water conservation measure that im11 proves water efficiency, is life cycle cost effective,

12 and involves water conservation, water recycling

13 or reuse, more efficient treatment of wastewater

14 or stormwater, improvements in operation or

15 maintenance efficiencies, retrofit activities or

16 other related activities, not at a Federal hydro17 electric facility.’’.

18 SEC. 917. REVIEW OF ENERGY SAVINGS PERFORMANCE

19 CONTRACT PROGRAM.

20 Within 180 days after the date of the enactment of this

21 Act, the Secretary of Energy shall complete a review of the

22 Energy Savings Performance Contract program to identify

23 statutory, regulatory, and administrative obstacles that

24 prevent Federal agencies from fully utilizing the program.

25 In addition, this review shall identify all areas for increas-
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1 ing program flexibility and effectiveness, including audit

2 and measurement verification requirements, accounting for

3 energy use in determining savings, contracting require4 ments, and energy efficiency services covered. The Secretary

5 shall report these findings to the Committee on Energy and

6 Commerce of the House of Representatives and the Com7 mittee on Energy and Natural Resources of the Senate, and

8 shall implement identified administrative and regulatory

9 changes to increase program flexibility and effectiveness to

10 the extent that such changes are consistent with statutory

11 authority.

12 SEC. 918. FEDERAL ENERGY BANK.

13 Part 3 of title V of the National Energy Conservation

14 Policy Act is amended by adding at the end the following:

15 ‘‘SEC. 553. FEDERAL ENERGY BANK.

16 ‘‘(a) DEFINITIONS.—In this section:

17 ‘‘(1) BANK.—The term ‘Bank’ means the Federal

18 Energy Bank established by subsection (b).

19 ‘‘(2) ENERGY OR WATER EFFICIENCY PROJECT.—

20 The term ‘energy or water efficiency project’ means a

21 project that assists a Federal agency in meeting or ex22 ceeding the energy or water efficiency requirements

23 of—

24 ‘‘(A) this part;

25 ‘‘(B) title VIII;
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1 ‘‘(C) subtitle F of title I of the Energy Pol2 icy Act of 1992 (42 U.S.C. 8262 et seq.); or

3 ‘‘(D) any applicable Executive order, in4 cluding Executive Order No. 13123.

5 ‘‘(3) FEDERAL AGENCY.—The term ‘Federal

6 agency’ means—

7 ‘‘(A) an Executive agency (as defined in

8 section 105 of title 5, United States Code);

9 ‘‘(B) the United States Postal Service;

10 ‘‘(C) Congress and any other entity in the

11 legislative branch; and

12 ‘‘(D) a Federal court and any other entity

13 in the judicial branch.

14 ‘‘(b) ESTABLISHMENT OF BANK.—

15 ‘‘(1) IN GENERAL.—There is established in the

16 Treasury of the United States a fund to be known as

17 the ‘Federal Energy Bank’, consisting of—

18 ‘‘(A) such amounts as are deposited in the

19 Bank under paragraph (2);

20 ‘‘(B) such amounts as are repaid to the

21 Bank under subsection (c)(2)(D); and

22 ‘‘(C) any interest earned on investment of

23 amounts in the Bank under paragraph (3).

24 ‘‘(2) DEPOSITS IN BANK.—
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1 ‘‘(A) IN GENERAL.—Subject to the avail2 ability of appropriations and to subparagraph

3 (B), the Secretary of the Treasury shall deposit

4 in the Bank an amount equal to $250,000,000 in

5 fiscal year 2003 and in each fiscal year there6 after.

7 ‘‘(B) MAXIMUM AMOUNT IN BANK.—Depos8 its under subparagraph (A) shall cease beginning

9 with the fiscal year following the fiscal year in

10 which the amounts in the Bank (including

11 amounts on loan from the Bank) become equal to

12 or exceed $1,000,000,000.

13 ‘‘(3) INVESTMENT OF AMOUNTS.—The Secretary

14 of the Treasury shall invest such portion of the Bank

15 as is not, in the judgment of the Secretary, required

16 to meet current withdrawals. Investments may be

17 made only in interest-bearing obligations of the

18 United States.

19 ‘‘(c) LOANS FROM THE BANK.—

20 ‘‘(1) IN GENERAL.—The Secretary of the Treas21 ury shall transfer from the Bank to the Secretary

22 such amounts as are appropriated to carry out the

23 loan program under paragraph (2).

24 ‘‘(2) LOAN PROGRAM.—

25 ‘‘(A) ESTABLISHMENT.—
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1 ‘‘(i) IN GENERAL.—In accordance with

2 subsection (d), the Secretary, in consulta3 tion with the Secretary of Defense, the Ad4 ministrator of General Services, and the Di5 rector of the Office of Management and

6 Budget, shall establish a program to make

7 loans of amounts in the Bank to any Fed8 eral agency that submits an application

9 satisfactory to the Secretary in order to pay

10 the costs of a project described in subpara11 graph (C).

12 ‘‘(ii) COMMENCEMENT OF OPER13 ATIONS.—The Secretary may begin—

14 ‘‘(I) accepting applications for

15 loans from the Bank in fiscal year

16 2002; and

17 ‘‘(II) making loans from the Bank

18 in fiscal year 2003.

19 ‘‘(B) ENERGY SAVINGS PERFORMANCE CON20 TRACTING FUNDING.—To the extent practicable,

21 an agency shall not submit a project for which

22 energy performance contracting funding is avail23 able and is acceptable to the Federal agency

24 under title VIII.

25 ‘‘(C) PURPOSES OF LOAN.—
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1 ‘‘(i) IN GENERAL.—A loan from the

2 Bank may be used to pay—

3 ‘‘(I) the costs of an energy or

4 water efficiency project, or a renewable

5 or alternative energy project, for a new

6 or existing Federal building (including

7 selection and design of the project);

8 ‘‘(II) the costs of an energy meter9 ing plan and metering equipment in10 stalled pursuant to section 543(e) or

11 for the purpose of verification of the

12 energy savings under an energy sav13 ings performance contract under title

14 VIII; or

15 ‘‘(III) at the time of contracting,

16 the costs of cofunding of an energy sav17 ings performance contract (including a

18 utility energy service agreement) in

19 order to shorten the payback period of

20 the project that is the subject of the en21 ergy savings performance contract.

22 ‘‘(ii) LIMITATION.—A Federal agency

23 may use not more than 10 percent of the

24 amount of a loan under subclause (I) or

25 (II) of clause (i) to pay the costs of admin-
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1 istration and proposal development (includ2 ing data collection and energy surveys).

3 ‘‘(iii) RENEWABLE AND ALTERNATIVE

4 ENERGY PROJECTS.—Not more than 25 per5 cent of the amount on loan from the Bank

6 at any time may be loaned for renewable

7 energy and alternative energy projects (as

8 defined by the Secretary in accordance with

9 applicable law (including Executive Or10 ders)).

11 ‘‘(D) REPAYMENTS.—

12 ‘‘(i) IN GENERAL.—Subject to clauses

13 (ii) through (iv), a Federal agency shall

14 repay to the Bank the principal amount of

15 a loan plus interest at a rate determined by

16 the President, in consultation with the Sec17 retary and the Secretary of the Treasury.

18 ‘‘(ii) WAIVER OR REDUCTION OF IN19 TEREST.—The Secretary may waive or re20 duce the rate of interest required to be paid

21 under clause (i) if the Secretary determines

22 that payment of interest by a Federal agen23 cy at the rate determined under that clause

24 is not required to fund the operations of the

25 Bank.
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1 ‘‘(iii) DETERMINATION OF INTEREST

2 RATE.—The interest rate determined under

3 clause (i) shall be at a rate that is sufficient

4 to ensure that, beginning not later than Oc5 tober 1, 2007, interest payments will be suf6 ficient to fully fund the operations of the

7 Bank.

8 ‘‘(iv) INSUFFICIENCY OF APPROPRIA9 TIONS.—

10 ‘‘(I) REQUEST FOR APPROPRIA11 TIONS.—As part of the budget request

12 of the Federal agency for each fiscal

13 year, the head of each Federal agency

14 shall submit to the President a request

15 for such amounts as are necessary to

16 make such repayments as are expected

17 to become due in the fiscal year under

18 this subparagraph.

19 ‘‘(II) SUSPENSION OF REPAYMENT

20 REQUIREMENT.—If, for any fiscal

21 year, sufficient appropriations are not

22 made available to a Federal agency to

23 make repayments under this subpara24 graph, the Bank shall suspend the re25 quirement of repayment under this
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1 subparagraph until such appropria2 tions are made available.

3 ‘‘(E) FEDERAL AGENCY ENERGY BUDG4 ETS.—Until a loan is repaid, a Federal agency

5 budget submitted by the President to Congress

6 for a fiscal year shall not be reduced by the value

7 of energy savings accrued as a result of any en8 ergy conservation measure implemented using

9 amounts from the Bank.

10 ‘‘(F) NO RESCISSION OR REPROGRAM11 MING.—A Federal agency shall not rescind or re12 program loan amounts made available from the

13 Bank except as permitted under guidelines issued

14 under subparagraph (G).

15 ‘‘(G) GUIDELINES.—The Secretary shall

16 issue guidelines for implementation of the loan

17 program under this paragraph, including selec18 tion criteria, maximum loan amounts, and loan

19 repayment terms.

20 ‘‘(d) SELECTION CRITERIA.—

21 ‘‘(1) IN GENERAL.—The Secretary shall establish

22 criteria for the selection of projects to be awarded

23 loans in accordance with paragraph (2).

24 ‘‘(2) SELECTION CRITERIA.—
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1 ‘‘(A) IN GENERAL.—The Secretary may

2 make loans from the Bank only for a project

3 that—

4 ‘‘(i) is technically feasible;

5 ‘‘(ii) is determined to be cost-effective

6 using life cycle cost methods established by

7 the Secretary;

8 ‘‘(iii) includes a measurement and

9 management component, based on the meas10 urement and verification protocols of the

11 Department of Energy, to—

12 ‘‘(I) commission energy savings

13 for new and existing Federal facilities;

14 ‘‘(II) monitor and improve energy

15 efficiency management at existing Fed16 eral facilities; and

17 ‘‘(III) verify the energy savings

18 under an energy savings performance

19 contract under title VIII; and

20 ‘‘(iv)(I) in the case of a renewable en21 ergy or alternative energy project, has a

22 simple payback period of not more than 15

23 years; and
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1 ‘‘(II) in the case of any other project,

2 has a simple payback period of not more

3 than 10 years.

4 ‘‘(B) PRIORITY.—In selecting projects, the

5 Secretary shall give priority to projects that—

6 ‘‘(i) are a component of a comprehen7 sive energy management project for a Fed8 eral facility; and

9 ‘‘(ii) are designed to significantly re10 duce the energy use of the Federal facility.

11 ‘‘(e) REPORTS AND AUDITS.—

12 ‘‘(1) REPORTS TO THE SECRETARY.—Not later

13 than 1 year after the completion of installation of a

14 project that has a cost of more than $1,000,000, and

15 annually thereafter, a Federal agency shall submit to

16 the Secretary a report that—

17 ‘‘(A) states whether the project meets or fails

18 to meet the energy savings projections for the

19 project; and

20 ‘‘(B) for each project that fails to meet the

21 energy savings projections, states the reasons for

22 the failure and describes proposed remedies.

23 ‘‘(2) AUDITS.—The Secretary may audit, or re24 quire a Federal agency that receives a loan from the

25 Bank to audit, any project financed with amounts
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1 from the Bank to assess the performance of the

2 project.

3 ‘‘(3) REPORTS TO CONGRESS.—At the end of

4 each fiscal year, the Secretary shall submit to Con5 gress a report on the operations of the Bank, includ6 ing a statement of—

7 ‘‘(A) the total receipts by the Bank;

8 ‘‘(B) the total amount of loans from

9 the Bank to each Federal agency; and

10 ‘‘(C) the estimated cost and energy sav11 ings resulting from projects funded with

12 loans from the Bank.

13 ‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—There are

14 authorized to be appropriated such sums as are necessary

15 to carry out this section.’’.

16 SEC. 919. ENERGY AND WATER SAVING MEASURES IN CON17 GRESSIONAL BUILDINGS.

18 (a) IN GENERAL.—Part 3 of title V of the National

19 Energy Conservation Policy Act is amended by adding at

20 the end:

21 ‘‘SEC. 554. ENERGY AND WATER SAVINGS MEASURES IN

22 CONGRESSIONAL BUILDINGS.

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

24 ‘‘(1) shall develop, update, and implement a cost25 effective energy conservation and management plan
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1 (referred to in this section as the ‘‘plan’’) for all fa2 cilities administered by the Congress (referred to in

3 this section as ‘congressional buildings’) to meet the

4 energy performance requirements for Federal build5 ings established under section 543(a)(1); and

6 ‘‘(2) shall submit the plan to Congress, not later

7 than 180 days after the date of enactment of this sec8 tion.

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

10 ‘‘(1) a description of the life-cycle cost analysis

11 used to determine the cost-effectiveness of proposed en12 ergy efficiency projects;

13 ‘‘(2) a schedule of energy surveys to ensure com14 plete surveys of all congressional buildings every 5

15 years to determine the cost and payback period of en16 ergy and water conservation measures;

17 ‘‘(3) a strategy for installation of life cycle cost

18 effective energy and water conservation measures;

19 ‘‘(4) the results of a study of the costs and bene20 fits of installation of submetering in congressional

21 buildings; and

22 ‘‘(5) information packages and ‘how-to’ guides

23 for each Member and employing authority of Congress

24 that detail simple, cost-effective methods to save en25 ergy and taxpayer dollars in the workplace.
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1 ‘‘(c) CONTRACTING AUTHORITY.—The Architect—

2 ‘‘(1) may contract with nongovernmental entities

3 and use private sector capital to finance energy con4 servation projects and meet energy performance re5 quirements; and

6 ‘‘(2) may use innovative contracting methods

7 that will attract private sector funding for the instal8 lation of energy efficient and renewable energy tech9 nology, such as energy savings performance contracts

10 described in title VIII.

11 ‘‘(d) CAPITOL VISITOR CENTER.—The Architect—

12 ‘‘(1) shall ensure that state-of-the-art energy effi13 ciency and renewable energy technologies are used in

14 the construction and design of the Visitor Center; and

15 ‘‘(2) shall include in the Visitor Center an ex16 hibit on the energy efficiency and renewable energy

17 measures used in congressional buildings.

18 ‘‘(e) ANNUAL REPORT.—The Architect shall submit to

19 Congress annually a report on congressional energy man20 agement and conservation programs required under this

21 section that describes in detail—

22 ‘‘(1) energy expenditures and savings estimates

23 for each facility;

24 ‘‘(2) energy management and conservation

25 projects; and
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1 ‘‘(3) future priorities to ensure compliance with

2 this section.’’.

3 (b) REPEAL.—Section 310 of the Legislative Branch

4 Appropriations Act, 1999 (40 U.S.C. 166i), is repealed.

5 SEC. 920. INCREASED USE OF RECOVERED MATERIAL IN

6 FEDERALLY FUNDED PROJECTS INVOLVING

7 PROCUREMENT OF CEMENT OR CONCRETE.

8 (a) DEFINITIONS.—In this section:

9 (1) ADMINISTRATOR.—The term ‘‘Adminis10 trator’’ means the Administrator of the Environ11 mental Protection Agency.

12 (2) AGENCY HEAD.—The term ‘‘agency head’’

13 means—

14 (A) the Secretary of Transportation; and

15 (B) the head of each other Federal agency

16 that on a regular basis procures, or provides

17 Federal funds to pay or assist in paying the cost

18 of procuring, material for cement or concrete

19 projects.

20 (3) CEMENT OR CONCRETE PROJECT.—The term

21 ‘‘cement or concrete project’’ means a project for the

22 construction or maintenance of a highway or other

23 transportation facility or a Federal, State, or local

24 government building or other public facility that—
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1 (A) involves the procurement of cement or

2 concrete; and

3 (B) is carried out in whole or in part using

4 Federal funds.

5 (4) RECOVERED MATERIAL.—The term ‘‘recov6 ered material’’ means—

7 (A) ground granulated blast furnace slag;

8 (B) coal combustion fly ash; and

9 (C) any other waste material or byproduct

10 recovered or diverted from solid waste that the

11 Administrator, in consultation with an agency

12 head, determines should be treated as recovered

13 material under this section for use in cement or

14 concrete projects paid for, in whole or in part,

15 by the agency head.

16 (b) IMPLEMENTATION OF REQUIREMENTS.—

17 (1) IN GENERAL.—Not later than 1 year after

18 the date of enactment of this Act, the Administrator

19 and each agency head shall take such actions as are

20 necessary to implement fully all procurement require21 ments and incentives in effect as of the date of enact22 ment of this Act (including guidelines under section

23 6002 of the Solid Waste Disposal Act (42 U.S.C.

24 6963)) that provide for the use of cement and concrete
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1 incorporating recovered material in cement or con2 crete projects.

3 (2) PRIORITY.—In carrying out paragraph (1)

4 an agency head shall give priority to achieving great5 er use of recovered material in cement or concrete

6 projects for which recovered materials historically

7 have not been used or have been used only minimally.

8 (c) FULL IMPLEMENTATION STUDY.—

9 (1) IN GENERAL.—The Administrator and the

10 Secretary of Transportation, in cooperation with the

11 Secretary of Energy, shall conduct a study to deter12 mine the extent to which current procurement require13 ments, when fully implemented in accordance with

14 subsection (b), may realize energy savings and green15 house gas emission reduction benefits attainable with

16 substitution of recovered material in cement used in

17 cement or concrete projects.

18 (2) MATTERS TO BE ADDRESSED.—The study

19 shall—

20 (A) quantify the extent to which recovered

21 materials are being substituted for Portland ce22 ment, particularly as a result of current procure23 ment requirements, and the energy savings and

24 greenhouse gas emission reduction benefits asso25 ciated with that substitution;
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1 (B) identify all barriers in procurement re2 quirements to fuller realization of energy savings

3 and greenhouse gas emission reduction benefits,

4 including barriers resulting from exceptions from

5 current law; and

6 (C)(i) identify potential mechanisms to

7 achieve greater substitution of recovered material

8 in types of cement or concrete projects for which

9 recovered materials historically have not been

10 used or have been used only minimally;

11 (ii) evaluate the feasibility of establishing

12 guidelines or standards for optimized substi13 tution rates of recovered material in those ce14 ment or concrete projects; and

15 (iii) identify any potential environmental

16 or economic effects that may result from greater

17 substitution of recovered material in those ce18 ment or concrete projects.

19 (3) REPORT.—Not later than 30 months after the

20 date of enactment of this Act, the Secretary shall sub21 mit to the Committee on Appropriations and Com22 mittee on Environment and Public Works of the Sen23 ate and the Committee on Appropriations and Com24 mittee on Energy and Commerce of the House of Rep25 resentatives a report on the study.
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1 (d) ADDITIONAL PROCUREMENT REQUIREMENTS.—

2 Within 1 year of the release of the report in accordance with

3 subsection (c)(3), the Administrator and each agency head

4 shall take additional actions authorized under the Solid

5 Waste Disposal Act (42 U.S.C. 6901 et seq.) to establish

6 procurement requirements and incentives that provide for

7 the use of cement and concrete with increased substitution

8 of recovered material in the construction and maintenance

9 of cement or concrete projects, so as to—

10 (1) realize more fully the energy savings and

11 greenhouse gas emission reduction benefits associated

12 with increased substitution; and

13 (2) eliminate barriers identified under subsection

14 (c).

15 (e) EFFECT OF SECTION.—Nothing in this section af16 fects the requirements of section 6002 of the Solid Waste

17 Disposal Act (42 U.S.C. 6962) (including the guidelines

18 and specifications for implementing those requirements).

19 Subtitle C—Industrial Efficiency

20 and Consumer Products

21 SEC. 921. VOLUNTARY COMMITMENTS TO REDUCE INDUS22 TRIAL ENERGY INTENSITY.

23 (a) VOLUNTARY AGREEMENTS.—The Secretary of En24 ergy shall enter into voluntary agreements with one or more

25 persons in industrial sectors that consume significant
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1 amounts of primary energy per unit of physical output to

2 reduce the energy intensity of their production activities.

3 (b) GOAL.—Voluntary agreements under this section

4 shall have a goal of reducing energy intensity by not less

5 than 2.5 percent each year from 2002 through 2012.

6 (c) RECOGNITION.—The Secretary of Energy, in co7 operation with the Administrator of the Environmental

8 Protection Agency and other appropriate Federal agencies,

9 shall develop mechanisms to recognize and publicize the

10 achievements of participants in voluntary agreements

11 under this section.

12 (d) DEFINITION.—In this section, the term ‘‘energy in13 tensity’’ means the primary energy consumed per unit of

14 physical output in an industrial process.

15 (e) TECHNICAL ASSISTANCE.—An entity that enters

16 into an agreement under this section and continues to make

17 a good faith effort to achieve the energy efficiency goals

18 specified in the agreement shall be eligible to receive from

19 the Secretary a grant or technical assistance as appropriate

20 to assist in the achievement of those goals.

21 (f) REPORT.—Not later than June 30, 2008 and June

22 30, 2012, the Secretary shall submit to Congress a report

23 that evaluates the success of the voluntary agreements, with

24 independent verification of a sample of the energy savings

25 estimates provided by participating firms.
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1 SEC. 922. AUTHORITY TO SET STANDARDS FOR COMMER2 CIAL PRODUCTS.

3 Part B of title III of the Energy Policy and Conserva4 tion Act (42 U.S.C. 6291 et seq.) is amended as follows:

5 (1) In the heading for such part, by inserting

6 ‘‘AND COMMERCIAL’’ after ‘‘CONSUMER’’.

7 (2) In section 321(2), by inserting ‘‘or commer8 cial’’ after ‘‘consumer’’.

9 (3) In paragraphs (4), (5), and (15) of section

10 321, by striking ‘‘consumer’’ each place it appears

11 and inserting ‘‘covered’’.

12 (4) In section 322(a), by inserting ‘‘or commer13 cial’’ after ‘‘consumer’’ the first place it appears in

14 the material preceding paragraph (1).

15 (5) In section 322(b), by inserting ‘‘or commer16 cial’’ after ‘‘consumer’’ each place it appears.

17 (6) In section 322 (b)(1)(B) and (b)(2)(A), by

18 inserting ‘‘or per-business in the case of a commercial

19 product’’ after ‘‘per-household’’ each place it appears.

20 (7) In section 322 (b)(2)(A), by inserting ‘‘or

21 businesses in the case of commercial products’’ after

22 ‘‘households’’ each place it appears.

23 (8) In section 322 (B)(2)(C)—

24 (A) by striking ‘‘term’’ and inserting

25 ‘‘terms’’; and
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1 (B) by inserting ‘‘and ‘business’ ’’ after

2 ‘‘ ‘household’ ’’.

3 (9) In section 323 (b)(1) (B) by inserting ‘‘or

4 commercial’’ after ‘‘consumer’’.

5 SEC. 923. ADDITIONAL DEFINITIONS.

6 Section 321 of the Energy Policy and Conservation Act

7 (42 U.S.C. 6291) is amended by adding at the end the fol8 lowing:

9 ‘‘(32) The term ‘battery charger’ means a device

10 that charges batteries for consumer products.

11 ‘‘(33) The term ‘commercial refrigerator, freezer

12 and refrigerator-freezer’ means a refrigerator, freezer

13 or refrigerator-freezer that—

14 ‘‘(A) is not a consumer product regulated

15 under this Act; and

16 ‘‘(B) incorporates most components involved

17 in the vapor-compression cycle and the refrig18 erated compartment in a single package.

19 ‘‘(34) The term ‘external power supply’ means

20 an external power supply circuit that is used to con21 vert household electric current into either DC current

22 or lower-voltage AC current to operate a consumer

23 product.

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

25 sign that—
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1 ‘‘(A) is designed to be permanently fixed in

2 place to identify an exit; and

3 ‘‘(B) consists of—

4 ‘‘(i) an electrically powered integral

5 light source that illuminates the legend

6 ‘EXIT’ and any directional indicators; and

7 ‘‘(ii) provides contrast between the leg8 end, any directional indicators, and the

9 background.

10 ‘‘(36)(A) Except as provided in subsection (B),

11 the term ‘low-voltage dry-type transformer’ means a

12 transformer that—

13 ‘‘(i) has an input voltage of 600 volts or

14 less;

15 ‘‘(ii) is air-cooled;

16 ‘‘(iii) does not use oil as a coolant; and

17 ‘‘(iv) is rated for operation at a frequency

18 of 60 Hertz.

19 ‘‘(B) The term ‘low-voltage dry-type transformer’

20 does not include—

21 ‘‘(i) transformers with multiple voltage

22 taps, with the highest voltage tap equaling at

23 least 20 percent more than the lowest voltage tap;

24 ‘‘(ii) transformers that are designed to be

25 used in a special purpose application, such as
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1 transformers commonly known as drive trans2 formers, rectifier transformers, autotransformers,

3 Uninterruptible Power System transformers, im4 pedance transformers, harmonic transformers,

5 regulating transformers, sealed and nonven6 tilating transformers, machine tool transformers,

7 welding transformers, grounding transformers, or

8 testing transformers; or

9 ‘‘(iii) any transformer not listed in clause

10 (ii) that is excluded by the Secretary by rule be11 cause the transformer is designed for a special

12 application and the application of standards to

13 the transformer would not result in significant

14 energy savings.

15 ‘‘(37) The term ‘standby mode’ means the lowest

16 amount of electric power used by a household appli17 ance when not performing its active functions, as de18 fined on an individual product basis by the Sec19 retary.

20 ‘‘(38) The term ‘torchiere’ means a portable elec21 tric lamp with a reflector bowl that directs light up22 ward so as to give indirect illumination.

23 ‘‘(39) The term ‘transformer’ means a device

24 consisting of two or more coils of insulated wire that

25 transfers alternating current by electromagnetic in-
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1 duction from one coil to another to change the origi2 nal voltage or current value.

3 ‘‘(40) The term ‘unit heater’ means a self-con4 tained fan-type heater designed to be installed within

5 the heated space, except that such term does not in6 clude a warm air furnace.

7 ‘‘(41) The term ‘traffic signal module’ means a

8 standard 8-inch (200mm) or 12-inch (300mm) traffic

9 signal indication, consisting of a light source, a lens,

10 and all other parts necessary for operation, that com11 municates movement messages to drivers through red,

12 amber, and green colors.’’.

13 SEC. 924. ADDITIONAL TEST PROCEDURES.

14 (a) EXIT SIGNS.—Section 323(b) of the Energy Policy

15 and Conservation Act (42 U.S.C. 6293) is amended by add16 ing at the end the following:

17 ‘‘(9) Test procedures for illuminated exit signs

18 shall be based on the test method used under the En19 ergy Star program of the Environmental Protection

20 Agency for illuminated exit signs, as in effect on the

21 date of enactment of this paragraph.

22 ‘‘(10) Test procedures for low voltage dry-type

23 distribution transformers shall be based on the

24 ‘Standard Test Method for Measuring the Energy

25 Consumption of Distribution Transformers’ pre-
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1 scribed by the National Electrical Manufacturers As2 sociation (NEMA TP 2–1998). The Secretary may re3 view and revise this test procedure based on future re4 visions to such standard test method.

5 ‘‘(11) Test procedures for traffic signal modules

6 shall be based on the test method used under the En7 ergy Star program of the Environmental Protection

8 Agency for traffic signal modules, as in effect on the

9 date of enactment of this paragraph.’’.

10 (b) ADDITIONAL CONSUMER AND COMMERCIAL PROD11 UCTS.—Section 323 of the Energy Policy and Conservation

12 Act (42 U.S.C. 6293) is further amended by adding at the

13 end the following:

14 ‘‘(f) ADDITIONAL CONSUMER AND COMMERCIAL PROD15 UCTS.—The Secretary shall within 24 months after the date

16 of enactment of this subsection prescribe testing require17 ments for suspended ceiling fans, refrigerated bottled or

18 canned beverage vending machines, commercial unit heat19 ers, and commercial refrigerators, freezers and refrigerator20 freezers. Such testing requirements shall be based on exist21 ing test procedures used in industry to the extent practical

22 and reasonable. In the case of suspended ceiling fans, such

23 test procedures shall include efficiency at both maximum

24 output and at an output no more than 50 percent of the

25 maximum output.’’.
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1 SEC. 925. ENERGY LABELING.

2 (a) RULEMAKING ON EFFECTIVENESS OF CONSUMER

3 PRODUCT LABELING.—Paragraph (2) of section 324(a) of

4 the Energy Policy and Conservation Act (42 U.S.C.

5 6294(a)(2)) is amended by adding at the end the following:

6 ‘‘(F) Not later than 3 months after the date

7 of enactment of this subparagraph, the Commis8 sion shall initiate a rulemaking to consider the

9 effectiveness of the current consumer products la10 beling program in assisting consumers in mak11 ing purchasing decisions and improving energy

12 efficiency and to consider changes to the labeling

13 rules that would improve the effectiveness of con14 sumer product labels. Such rulemaking shall be

15 completed within 15 months of the date of enact16 ment of this subparagraph.’’.

17 (b) RULEMAKING ON LABELING FOR ADDITIONAL

18 PRODUCTS.—Section 324(a) of the Energy Policy and Con19 servation Act (42 U.S.C. 6294(a)) is further amended by

20 adding at the end the following:

21 ‘‘(5) The Secretary shall within 6 months after

22 the date on which energy conservation standards are

23 prescribed by the Secretary for covered products re24 ferred to in subsections (u) and (v) of section 325,

25 and within 18 months of enactment of this paragraph

26 for products referred to in subsections (w) through (y)
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1 of section 325, prescribe, by rule, labeling require2 ments for such products. Labeling requirements

3 adopted under this paragraph shall take effect on the

4 same date as the standards set pursuant to sections

5 325 (v) through (y).’’.

6 SEC. 926. ENERGY STAR PROGRAM.

7 The Energy Policy and Conservation Act (42 U.S.C.

8 6201 and following) is amended by inserting after section

9 324 the following:

10 ‘‘ENERGY STAR PROGRAM

11 ‘‘SEC. 324A. There is established at the Department

12 of Energy and the Environmental Protection Agency a pro13 gram to identify and promote energy-efficient products and

14 buildings in order to reduce energy consumption, improve

15 energy security, and reduce pollution through labeling of

16 products and buildings that meet the highest energy effi17 ciency standards. Responsibilities under the program shall

18 be divided between the Department of Energy and the Envi19 ronmental Protection Agency consistent with the terms of

20 agreements between the two agencies. The Administrator

21 and the Secretary shall—

22 ‘‘(1) promote Energy Star compliant technologies

23 as the preferred technologies in the marketplace for

24 achieving energy efficiency and to reduce pollution;
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1 ‘‘(2) work to enhance public awareness of the

2 Energy Star label, including special outreach to small

3 businesses;

4 ‘‘(3) preserve the integrity of the Energy Star

5 label; and

6 ‘‘(4) solicit the comments of interested parties in

7 establishing a new Energy Star product category or

8 in revising a product category, and upon adoption of

9 a new or revised product category provide an expla10 nation of the decision that responds to significant

11 public comments.’’.

12 SEC. 927. ENERGY CONSERVATION STANDARDS FOR CEN13 TRAL AIR CONDITIONERS AND HEAT PUMPS.

14 Section 325(d)(3) of the Energy Policy and Conserva15 tion Act (42 U.S.C. 6295(d)) is amended by adding at the

16 end the following:

17 ‘‘(C) REVISION OF STANDARDS.—Not later

18 than 60 days after the date of enactment of this

19 subparagraph, the Secretary shall amend the

20 standards established under paragraph (1).’’.
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1 SEC. 928. ENERGY CONSERVATION STANDARDS FOR ADDI2 TIONAL CONSUMER AND COMMERCIAL PROD3 UCTS.

4 Section 325 of the Energy Policy and Conservation Act

5 (42 U.S.C. 6295) is amended by adding at the end the fol6 lowing:

7 ‘‘(u) STANDBY MODE ELECTRIC ENERGY CONSUMP8 TION.—

9 ‘‘(1) INITIAL RULEMAKING.—(A) The Secretary

10 shall, within 18 months after the date of enactment

11 of this subsection, prescribe by notice and comment,

12 definitions of standby mode and test procedures for

13 the standby mode power use of battery chargers and

14 external power supplies. In establishing these test pro15 cedures, the Secretary shall consider, among other fac16 tors, existing test procedures used for measuring en17 ergy consumption in standby mode and assess the

18 current and projected future market for battery char19 gers and external power supplies. This assessment

20 shall include estimates of the significance of potential

21 energy savings from technical improvements to these

22 products and suggested product classes for standards.

23 Prior to the end of this time period, the Secretary

24 shall hold a scoping workshop to discuss and receive

25 comments on plans for developing energy conservation
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1 standards for standby mode energy use for these prod2 ucts.

3 ‘‘(B) The Secretary shall, within 3 years after

4 the date of enactment of this subsection, issue a final

5 rule that determines whether energy conservation

6 standards shall be promulgated for battery chargers

7 and external power supplies or classes thereof. For

8 each product class, any such standards shall be set at

9 the lowest level of standby energy use that—

10 ‘‘(i) meets the criteria of subsections (o),

11 (p), (q), (r), (s) and (t); and

12 ‘‘(ii) will result in significant overall an13 nual energy savings, considering both standby

14 mode and other operating modes.

15 ‘‘(2) DESIGNATION OF ADDITIONAL COVERED

16 PRODUCTS.—(A) Not later than 180 days after the

17 date of enactment of this subsection, the Secretary

18 shall publish for public comment and public hearing

19 a notice to determine whether any noncovered prod20 ucts should be designated as covered products for the

21 purpose of instituting a rulemaking under this section

22 to determine whether an energy conservation standard

23 restricting standby mode energy consumption, should

24 be promulgated; providing that any restriction on
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1 standby mode energy consumption shall be limited to

2 major sources of such consumption.

3 ‘‘(B) In making the determinations pursuant to

4 subparagraph (A) of whether to designate new covered

5 products and institute rulemakings, the Secretary

6 shall, among other relevant factors and in addition to

7 the criteria in section 322(b), consider—

8 ‘‘(i) standby mode power consumption com9 pared to overall product energy consumption;

10 and

11 ‘‘(ii) the priority and energy savings poten12 tial of standards which may be promulgated

13 under this subsection compared to other required

14 rulemakings under this section and the available

15 resources of the Department to conduct such

16 rulemakings.

17 ‘‘(C) Not later than 1 year after the date of en18 actment of this subsection, the Secretary shall issue a

19 determination of any new covered products for which

20 he intends to institute rulemakings on standby mode

21 pursuant to this section and he shall state the dates

22 by which he intends to initiate those rulemakings.

23 ‘‘(3) REVIEW OF STANDBY ENERGY USE IN COV24 ERED PRODUCTS.—In determining pursuant to sec25 tion 323 whether test procedures and energy conserva-
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1 tion standards pursuant to section 325 should be re2 vised, the Secretary shall consider for covered prod3 ucts which are major sources of standby mode energy

4 consumption whether to incorporate standby mode

5 into such test procedures and energy conservation

6 standards, taking into account, among other relevant

7 factors, the criteria for non-covered products in sub8 paragraph (B) of this subsection.

9 ‘‘(4) RULEMAKING FOR STANDBY MODE.—(A)

10 Any rulemaking instituted under this subsection or

11 for covered products under this section which restricts

12 standby mode power consumption shall be subject to

13 the criteria and procedures for issuing energy con14 servation standards set forth in section 325 and the

15 criteria set forth in paragraph 2(B) of this subsection.

16 ‘‘(B) No standard can be proposed for new cov17 ered products or covered products in a standby mode

18 unless the Secretary has promulgated applicable test

19 procedures for each product pursuant to section 323.

20 ‘‘(C) The provisions of section 327 shall apply to

21 new covered products which are subject to the

22 rulemakings for standby mode after a final rule has

23 been issued.

24 ‘‘(5) EFFECTIVE DATE.—Any standard promul25 gated under this subsection shall be applicable to
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1 products manufactured or imported 3 years after the

2 date of promulgation.

3 ‘‘(6) VOLUNTARY PROGRAMS TO REDUCE STAND4 BY MODE ENERGY USE.—The Secretary and the Ad5 ministrator shall collaborate and develop programs,

6 including programs pursuant to section 324A and

7 other voluntary industry agreements or codes of con8 duct, which are designed to reduce standby mode en9 ergy use.

10 ‘‘(v) SUSPENDED CEILING FANS, VENDING MACHINES,

11 UNIT HEATERS, AND COMMERCIAL REFRIGERATORS,

12 FREEZERS AND REFRIGERATOR-FREEZERS.—The Sec13 retary shall within 24 months after the date on which test14 ing requirements are prescribed by the Secretary pursuant

15 to section 323(f), prescribe, by rule, energy conservation

16 standards for suspended ceiling fans, refrigerated bottled or

17 canned beverage vending machines, unit heaters, and com18 mercial refrigerators, freezers and refrigerator-freezers. In

19 establishing standards under this subsection, the Secretary

20 shall use the criteria and procedures contained in sub21 sections (l) and (m). Any standard prescribed under this

22 subsection shall apply to products manufactured 3 years

23 after the date of publication of a final rule establishing such

24 standard.
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1 ‘‘(w) ILLUMINATED EXIT SIGNS.—Illuminated exit

2 signs manufactured on or after January 1, 2005 shall meet

3 the Energy Star Program performance requirements for il4 luminated exit signs prescribed by the Environmental Pro5 tection Agency as in effect on the date of enactment of this

6 subsection.

7 ‘‘(x) TORCHIERES.—Torchieres manufactured on or

8 after January 1, 2005—

9 ‘‘(1) shall consume not more than 190 watts of

10 power; and

11 ‘‘(2) shall not be capable of operating with lamps

12 that total more than 190 watts.

13 ‘‘(y) LOW VOLTAGE DRY-TYPE TRANSFORMERS.—The

14 efficiency of low voltage dry-type transformers manufac15 tured on or after January 1, 2005 shall be the Class I Effi16 ciency Levels for low voltage dry-type transformers specified

17 in Table 4–2 of the ‘Guide for Determining Energy Effi18 ciency for Distribution Transformers’ published by the Na19 tional Electrical Manufacturers Association (NEMA TP–

20 1–1996).

21 ‘‘(z) TRAFFIC SIGNAL MODULES.—Traffic signal mod22 ules manufactured on or after January 1, 2006 shall meet

23 the performance requirements used under the Energy Star

24 program of the Environmental Protection Agency for traffic

25 signals, as in effect on the date of enactment of this para-
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1 graph, and shall be installed with compatible, electrically2 connected signal control interface devices and conflict moni3 toring systems.’’.

4 SEC. 929. CONSUMER EDUCATION ON ENERGY EFFICIENCY

5 BENEFITS OF AIR CONDITIONING, HEATING,

6 AND VENTILATION MAINTENANCE.

7 Section 337 of the Energy Policy and Conservation Act

8 (42 U.S.C. 6307) is amended by adding at the end the fol9 lowing:

10 ‘‘(c) HVAC MAINTENANCE.—(1) For the purpose of en11 suring that installed air conditioning and heating systems

12 operate at their maximum rated efficiency levels, the Sec13 retary shall, within 180 days of the date of enactment of

14 this subsection, carry out a program to educate homeowners

15 and small business owners concerning the energy savings

16 resulting from properly conducted maintenance of air con17 ditioning, heating, and ventilating systems.

18 ‘‘(2) The Secretary may carry out the program in co19 operation with industry trade associations, industry mem20 bers, and energy efficiency organizations.

21 ‘‘(d) SMALL BUSINESS EDUCATION AND ASSIST22 ANCE.—The Administrator of the Small Business Adminis23 tration, in consultation with the Secretary of Energy and

24 the Administrator of the Environmental Protection Agency,

25 shall develop and coordinate a Government-wide program,
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1 building on the existing Energy Star for Small Business

2 Program, to assist small business to become more energy

3 efficient, understand the cost savings obtainable through ef4 ficiencies, and identify financing options for energy effi5 ciency upgrades. The Secretary and the Administrator shall

6 make the program information available directly to small

7 businesses and through other Federal agencies, including the

8 Federal Emergency Management Agency, and the Depart9 ment of Agriculture.’’.

10 SEC. 930. STUDY OF ENERGY EFFICIENCY STANDARDS.

11 The Secretary of Energy shall contract with the Na12 tional Academy of Sciences for a study, to be completed

13 within 1 year of enactment of this Act, to examine whether

14 the goals of energy efficiency standards are best served by

15 measurement of energy consumed, and efficiency improve16 ments, at the actual site of energy consumption, or through

17 the full fuel cycle, beginning at the source of energy produc18 tion. The Secretary shall submit the report to the Congress.

19 Subtitle D—Housing Efficiency

20 SEC. 931. CAPACITY BUILDING FOR ENERGY EFFICIENT, AF21 FORDABLE HOUSING.

22 Section 4(b) of the HUD Demonstration Act of 1993

23 (42 U.S.C. 9816 note) is amended—

24 (1) in paragraph (1), by inserting before the

25 semicolon at the end the following: ‘‘, including capa-
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1 bilities regarding the provision of energy efficient, af2 fordable housing and residential energy conservation

3 measures’’; and

4 (2) in paragraph (2), by inserting before the

5 semicolon the following: ‘‘, including such activities

6 relating to the provision of energy efficient, affordable

7 housing and residential energy conservation measures

8 that benefit low-income families’’.

9 SEC. 932. INCREASE OF CDBG PUBLIC SERVICES CAP FOR

10 ENERGY CONSERVATION AND EFFICIENCY

11 ACTIVITIES.

12 Section 105(a)(8) of the Housing and Community De13 velopment Act of 1974 (42 U.S.C. 5305(a)(8)) is amended—

14 (1) by inserting ‘‘or efficiency’’ after ‘‘energy

15 conservation’’;

16 (2) by striking ‘‘, and except that’’ and inserting

17 ‘‘; except that’’; and

18 (3) by inserting before the period at the end the

19 following: ‘‘; and except that each percentage limita20 tion under this paragraph on the amount of assist21 ance provided under this title that may be used for

22 the provision of public services is hereby increased by

23 10 percent, but such percentage increase may be used

24 only for the provision of public services concerning

25 energy conservation or efficiency’’.
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1 SEC. 933. FHA MORTGAGE INSURANCE INCENTIVES FOR EN2 ERGY EFFICIENT HOUSING.

3 (a) SINGLE FAMILY HOUSING MORTGAGE INSUR4 ANCE.—Section 203(b)(2) of the National Housing Act (12

5 U.S.C. 1709(b)(2)) is amended, in the first undesignated

6 paragraph beginning after subparagraph (B)(iii) (relating

7 to solar energy systems)—

8 (1) by inserting ‘‘or paragraph (10)’’; and

9 (2) by striking ‘‘20 percent’’ and inserting ‘‘30

10 percent’’.

11 (b) MULTIFAMILY HOUSING MORTGAGE INSURANCE.—

12 Section 207(c) of the National Housing Act (12 U.S.C.

13 1713(c)) is amended, in the second undesignated paragraph

14 beginning after paragraph (3) (relating to solar energy sys15 tems and residential energy conservation measures), by

16 striking ‘‘20 percent’’ and inserting ‘‘30 percent’’.

17 (c) COOPERATIVE HOUSING MORTGAGE INSURANCE.—

18 Section 213(p) of the National Housing Act (12 U.S.C.

19 1715e(p)) is amended by striking ‘‘20 per centum’’ and in20 serting ‘‘30 percent’’.

21 (d) REHABILITATION AND NEIGHBORHOOD CONSERVA22 TION HOUSING MORTGAGE INSURANCE.—Section

23 220(d)(3)(B)(iii) of the National Housing Act (12 U.S.C.

24 1715k(d)(3)(B)(iii)) is amended by striking ‘‘20 per cen25 tum’’ and inserting ‘‘30 percent’’.
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1 (e) LOW-INCOME MULTIFAMILY HOUSING MORTGAGE

2 INSURANCE.—Section 221(k) of the National Housing Act

3 (12 U.S.C. 1715l(k)) is amended by striking ‘‘20 per cen4 tum’’ and inserting ‘‘30 percent’’.

5 (f) ELDERLY HOUSING MORTGAGE INSURANCE.—The

6 proviso at the end of section 213(c)(2) of the National Hous7 ing Act (12 U.S.C. 1715v(c)(2)) is amended by striking ‘‘20

8 per centum’’ and inserting ‘‘30 percent’’.

9 (g) CONDOMINIUM HOUSING MORTGAGE INSUR10 ANCE.—Section 234(j) of the National Housing Act (12

11 U.S.C. 1715y(j)) is amended by striking ‘‘20 per centum’’

12 and inserting ‘‘30 percent’’.

13 SEC. 934. PUBLIC HOUSING CAPITAL FUND.

14 Section 9(d)(1) of the United States Housing Act of

15 1937 (42 U.S.C. 1437g(d)(1)) is amended—

16 (1) in subparagraph (I), by striking ‘‘and’’ at

17 the end;

18 (2) in subparagraph (K), by striking the period

19 at the end and inserting ‘‘; and’’; and

20 (3) by adding at the end the following new sub21 paragraph:

22 ‘‘(L) improvement of energy and water-use

23 efficiency by installing fixtures and fittings that

24 conform to the American Society of Mechanical

25 Engineers/American National Standards Insti-
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1 tute standards A112.19.2–1998 and A112.18.1–

2 2000, or any revision thereto, applicable at the

3 time of installation, and by increasing energy ef4 ficiency and water conservation by such other

5 means as the Secretary determines are appro6 priate.’’.

7 SEC. 935. GRANTS FOR ENERGY-CONSERVING IMPROVE8 MENTS FOR ASSISTED HOUSING.

9 Section 251(b)(1) of the National Energy Conservation

10 Policy Act (42 U.S.C. 8231(1)) is amended—

11 (1) by striking ‘‘financed with loans’’ and insert12 ing ‘‘assisted’’;

13 (2) by inserting after ‘‘1959,’’ the following:

14 ‘‘which are eligible multifamily housing projects (as

15 such term is defined in section 512 of the Multifamily

16 Assisted Housing Reform and Affordability Act of

17 1997 (42 U.S.C. 1437f note) and are subject to a

18 mortgage restructuring and rental assistance suffi19 ciency plans under such Act,’’; and

20 (3) by inserting after the period at the end of the

21 first sentence the following new sentence: ‘‘Such im22 provements may also include the installation of en23 ergy and water conserving fixtures and fittings that

24 conform to the American Society of Mechanical Engi25 neers/American National Standards Institute stand-
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1 ards A112.19.2–1998 and A112.18.1–2000, or any re2 vision thereto, applicable at the time of installation.’’.

3 SEC. 936. NORTH AMERICAN DEVELOPMENT BANK.

4 Part 2 of subtitle D of title V of the North American

5 Free Trade Agreement Implementation Act (22 U.S.C.

6 290m–290m–3) is amended by adding at the end the fol7 lowing:

8 ‘‘SEC. 545. SUPPORT FOR CERTAIN ENERGY POLICIES.

9 ‘‘Consistent with the focus of the Bank’s Charter on

10 environmental infrastructure projects, the Board members

11 representing the United States should use their voice and

12 vote to encourage the Bank to finance projects related to

13 clean and efficient energy, including energy conservation,

14 that prevent, control, or reduce environmental pollutants or

15 contaminants.’’.

16 SEC. 937. CAPITAL FUND.

17 Section 9 of the United States Housing Act of 1937

18 (42 U.S.C. 1437g), as amended by section 934, is

19 amended—

20 (1) in subsection (d)(1)—

21 (A) in subparagraph (L), by striking the

22 period at the end and inserting ‘‘; and’’;

23 (B) by redesignating subparagraph (L) as

24 subparagraph (K); and

25 (C) by adding at the end the following:
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1 ‘‘(L) integrated utility management

2 and capital planning to maximize energy

3 conservation and efficiency measures.’’; and

4 (2) in subsection (e)(2)(C)—

5 (A) by striking ‘‘The’’ and inserting the fol6 lowing:

7 ‘‘(i) IN GENERAL.—The’’; and

8 (B) by adding at the end the following:

9 ‘‘(ii) THIRD PARTY CONTRACTS.—Con10 tracts described in clause (i) may include

11 contracts for equipment conversions to less

12 costly utility sources, projects with resident

13 paid utilities, adjustments to frozen base

14 year consumption, including systems re15 paired to meet applicable building and safe16 ty codes and adjustments for occupancy

17 rates increased by rehabilitation.

18 ‘‘(iii) TERM OF CONTRACT.—The total

19 term of a contract described in clause (i)

20 shall be for not more than 20 years to allow

21 longer payback periods for retrofits, includ22 ing but not limited to windows, heating sys23 tem replacements, wall insulation, site24 based generations, and advanced energy
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1 savings technologies, including renewable

2 energy generation.’’.

3 SEC. 938. ENERGY-EFFICIENT APPLIANCES.

4 A public housing agency shall purchase energy-effi5 cient appliances that are Energy Star products as defined

6 in section 552 of the National Energy Policy and Conserva7 tion Act (as amended by this Act) when the purchase of

8 energy-efficient appliances is cost-effective to the public

9 housing agency.

10 SEC. 939. ENERGY EFFICIENCY STANDARDS.

11 Section 109 of the Cranston-Gonzalez National Afford12 able Housing Act (42 U.S.C. 12709) is amended—

13 (1) in subsection (a)—

14 (A) in paragraph (1)—

15 (i) by striking ‘‘the date of the enact16 ment of the Energy Policy Act of 1992’’ and

17 inserting ‘‘September 30, 2002’’;

18 (ii) in subparagraph (A), by striking

19 ‘‘and’’ at the end;

20 (iii) in subparagraph (B), by striking

21 the period at the end and inserting a semi22 colon; and

23 (iv) by adding at the end the following:

24 ‘‘(C) rehabilitation and new construction of

25 public and assisted housing funded by HOPE VI
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1 revitalization grants, established under section

2 24 of the United States Housing Act of 1937 (42

3 U.S.C. 1437v), where such standards are deter4 mined to be cost effective by the Secretary of

5 Housing and Urban Development; and

6 (B) in paragraph (2), by striking ‘‘Council

7 of American’’ and all that follows through ‘‘life8 cycle cost basis’’ and inserting ‘‘2000 Inter9 national Energy Conservation Code’’;

10 (2) in subsection (b)—

11 (A) by striking ‘‘the date of the enactment

12 of the Energy Policy Act of 1992’’ and inserting

13 ‘‘September 30, 2002’’; and

14 (B) by striking ‘‘CABO’’ and all that fol15 lows through ‘‘1989’’ and inserting ‘‘the 2000

16 International Energy Conservation Code’’; and

17 (3) in subsection (c)—

18 (A) in the heading, by striking ‘‘MODEL

19 ENERGY CODE’’ and inserting ‘‘THE INTER20 NATIONAL ENERGY CONSERVATION CODE’’; and

21 (B) by striking ‘‘CABO’’ and all that fol22 lows through ‘‘1989’’ and inserting ‘‘the 2000

23 International Energy Conservation Code’’.
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1 SEC. 940. ENERGY STRATEGY FOR HUD.

2 (a) IN GENERAL.—The Secretary of Housing and

3 Urban Development shall develop and implement an inte4 grated strategy to reduce utility expenses through cost-effec5 tive energy conservation and efficiency measures, design

6 and construction in public and assisted housing.

7 (b) ENERGY MANAGEMENT OFFICE.—The Secretary of

8 Housing and Urban Development shall create an office at

9 the Department of Housing and Urban Development for

10 utility management, energy efficiency, and conservation,

11 with responsibility for implementing the strategy developed

12 under this section, including development of a centralized

13 database that monitors public housing energy usage, and

14 development of energy reduction goals and incentives for

15 public housing agencies. The Secretary shall submit an an16 nual report to Congress on the strategy.

17 Subtitle E—Rural and Remote

18 Communities

19 SEC. 941. SHORT TITLE.

20 This subtitle may be cited as the ‘‘Rural and Remote

21 Community Fairness Act’’.

22 SEC. 942. FINDINGS AND PURPOSE.

23 (a) FINDINGS.—The Congress finds that—

24 (1) a modern infrastructure, including energy-ef25 ficient housing, electricity, telecommunications, bulk

26 fuel, wastewater and potable water service, is a nec-
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1 essary ingredient of a modern society and develop2 ment of a prosperous economy;

3 (2) the Nation’s rural and remote communities

4 face critical social, economic and environmental prob5 lems, arising in significant measure from the high

6 cost of infrastructure development in sparsely popu7 lated and remote areas, that are not adequately ad8 dressed by existing Federal assistance programs;

9 (3) in the past, Federal assistance has been in10 strumental in establishing electric and other utility

11 service in many developing regions of the Nation, and

12 that Federal assistance continues to be appropriate to

13 ensure that electric and other utility systems in rural

14 areas conform with modern standards of safety, reli15 ability, efficiency and environmental protection; and

16 (4) the future welfare of the Nation and the well17 being of its citizens depend on the establishment and

18 maintenance of viable rural and remote communities

19 as social, economic and political entities.

20 (b) PURPOSE.—The purpose of this subtitle is the de21 velopment and maintenance of viable rural and remote

22 communities through the provision of efficient housing, and

23 reasonably priced and environmentally sound energy,

24 water, wastewater, and bulk fuel, telecommunications and

25 utility services to those communities that do not have those
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1 services or who currently bear costs of those services that

2 are significantly above the national average.

3 SEC. 943. DEFINITIONS.

4 As used in this subtitle:

5 (1) The term ‘‘unit of general local government’’

6 means any city, county, town, township, parish, vil7 lage, borough (organized or unorganized) or other

8 general purpose political subdivision of a State,

9 Guam, the Commonwealth of the Northern Mariana

10 Islands, Puerto Rico, the Republic of the Marshall Is11 lands, the Federated States of Micronesia, the Repub12 lic of Palau, the Virgin Islands, and American

13 Samoa, a combination of such political subdivisions

14 that is recognized by the Secretary; and the District

15 of Columbia; or any other appropriate organization

16 of citizens of a rural and remote community that the

17 Secretary may identify.

18 (2) The term ‘‘population’’ means total resident

19 population based on data compiled by the United

20 States Bureau of the Census and referable to the same

21 point or period in time.

22 (3) The term ‘‘Native American group’’ means

23 any Indian tribe, band, group, and nation, including

24 Alaska Indians, Aleuts, and Eskimos, and any Alas25 kan Native village, of the United States, which is con-
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1 sidered an eligible recipient under the Indian Self-De2 termination and Education Assistance Act (Public

3 Law 93–638) or was considered an eligible recipient

4 under chapter 67 of title 31, United States Code,

5 prior to the repeal of such chapter.

6 (4) The term ‘‘Secretary’’ means the Secretary of

7 Housing and Urban Development, the Secretary of

8 Agriculture, the Secretary of the Interior or the Sec9 retary of Energy, as appropriate.

10 (5) The term ‘‘rural and remote community’’

11 means a unit of local general government or Native

12 American group which is served by an electric utility

13 that has 10,000 or less customers with an average re14 tail cost per kilowatt hour of electricity that is equal

15 to or greater than 150 percent of the average retail

16 cost per kilowatt hour of electricity for all consumers

17 in the United States, as determined by data provided

18 by the Energy Information Administration of the De19 partment of Energy.

20 (6) The term ‘‘alternative energy sources’’ in21 clude nontraditional means of providing electrical en22 ergy, including, but not limited to, wind, solar, bio23 mass, municipal solid waste, hydroelectric, geothermal

24 and tidal power.
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1 (7) The term ‘‘average retail cost per kilowatt

2 hour of electricity’’ has the same meaning as ‘‘average

3 revenue per kilowatt hour of electricity’’ as defined by

4 the Energy Information Administration of the De5 partment of Energy.

6 SEC. 944. AUTHORIZATION OF APPROPRIATIONS.

7 The Secretary is authorized to make grants to rural

8 and remote communities to carry out activities in accord9 ance with the provisions of this subtitle. For purposes of

10 assistance under section 947, there are authorized to be ap11 propriated $100,000,000 for each of fiscal years 2003

12 through 2009.

13 SEC. 945. STATEMENT OF ACTIVITIES AND REVIEW.

14 (a) STATEMENT OF OBJECTIVES AND PROJECTED

15 USE.—Prior to the receipt in any fiscal year of a grant

16 under section 947 by any rural and remote community, the

17 grantee shall have prepared and submitted to the Secretary

18 of the agency providing funding a final statement of rural

19 and remote community development objectives and pro20 jected use of funds.

21 (b) PUBLIC NOTICE.—In order to permit public exam22 ination and appraisal of such statements, to enhance the

23 public accountability of grantees, and to facilitate coordina24 tion of activities with different levels of government, the

25 grantee shall in a timely manner—
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1 (1) furnish citizens information concerning the

2 amount of funds available for rural and remote com3 munity development activities and the range of ac4 tivities that may be undertaken;

5 (2) publish a proposed statement in such manner

6 to afford affected citizens an opportunity to examine

7 its content and to submit comments on the proposed

8 statement and on the community development per9 formance of the grantee;

10 (3) provide citizens with reasonable access to

11 records regarding the past use of funds received under

12 section 947 by the grantee; and

13 (4) provide citizens with reasonable notice of,

14 and opportunity to comment on, any substantial

15 change proposed to be made in the use of funds re16 ceived under section 947 from one eligible activity to

17 another.

18 The final statement shall be made available to the public,

19 and a copy shall be furnished to the appropriate Secretary.

20 Any final statement of activities may be modified or

21 amended from time to time by the grantee in accordance

22 with the same. Procedures required in this paragraph are

23 for the preparation and submission of such statement.

24 (c) PERFORMANCE AND EVALUATION REPORT.—Each

25 grantee shall submit to the appropriate Secretary, at a time
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1 determined by the Secretary, a performance and evaluation

2 report, concerning the use of funds made available under

3 section 947, together with an assessment by the grantee of

4 the relationship of such use to the objectives identified in

5 the grantee’s statement under subsection (a) and to the re6 quirements of subsection (b). The grantee’s report shall indi7 cate its programmatic accomplishments, the nature of and

8 reasons for any changes in the grantee’s program objectives,

9 and indications of how the grantee would change its pro10 grams as a result of its experiences.

11 (d) RETENTION OF INCOME.—

12 (1) IN GENERAL.—Any rural and remote com13 munity may retain any program income that is real14 ized from any grant made by the Secretary under sec15 tion 947 if—

16 (A) such income was realized after the ini17 tial disbursement of the funds received by such

18 unit of general local government under such sec19 tion; and

20 (B) such unit of general local government

21 has agreed that it will utilize the program in22 come for eligible rural and remote community

23 development activities in accordance with the

24 provisions of this title.
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1 (2) EXCEPTION.—The Secretary may, by regula2 tion, exclude from consideration as program income

3 any amounts determined to be so small that compli4 ance with the subsection creates an unreasonable ad5 ministrative burden on the rural and remote commu6 nity.

7 SEC. 946. ELIGIBLE ACTIVITIES.

8 (a) ACTIVITIES INCLUDED.—Eligible activities as9 sisted under this subtitle may include only—

10 (1) weatherization and other cost-effective en11 ergy-related repairs of homes and other buildings;

12 (2) the acquisition, construction, repair, recon13 struction, or installation of reliable and cost-efficient

14 facilities for the generation, transmission or distribu15 tion of electricity, and telecommunications, for con16 sumption in a rural and remote community or com17 munities;

18 (3) the acquisition, construction, repair, recon19 struction, remediation or installation of facilities for

20 the safe storage and efficient management of bulk fuel

21 by rural and remote communities, and facilities for

22 the distribution of such fuel to consumers in a rural

23 or remote community;

24 (4) facilities and training to reduce costs of

25 maintaining and operating generation, distribution
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1 or transmission systems to a rural and remote com2 munity or communities;

3 (5) the institution of professional management

4 and maintenance services for electricity generation,

5 transmission or distribution to a rural and remote

6 community or communities;

7 (6) the investigation of the feasibility of alternate

8 energy sources for a rural and remote community or

9 communities;

10 (7) acquisition, construction, repair, reconstruc11 tion, operation, maintenance, or installation of facili12 ties for water or wastewater service;

13 (8) the acquisition or disposition of real prop14 erty (including air rights, water rights, and other in15 terests therein) for eligible rural and remote commu16 nity development activities; and

17 (9) activities necessary to develop and implement

18 a comprehensive rural and remote development plan,

19 including payment of reasonable administrative costs

20 related to planning and execution of rural and remote

21 community development activities.

22 (b) ACTIVITIES UNDERTAKEN THROUGH ELECTRIC

23 UTILITIES.—Eligible activities may be undertaken either

24 directly by the rural and remote community, or by the rural

25 and remote community through local electric utilities.
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1 SEC. 947. ALLOCATION AND DISTRIBUTION OF FUNDS.

2 For each fiscal year, of the amount approved in an

3 appropriation Act under section 903 for grants in any year,

4 the Secretary shall distribute to each rural and remote com5 munity which has filed a final statement of rural and re6 mote community development objectives and projected use

7 of funds under section 945, an amount which shall be allo8 cated among the rural and remote communities that filed

9 a final statement of rural and remote community develop10 ment objectives and projected use of funds under section 945

11 proportionate to the percentage that the average retail price

12 per kilowatt hour of electricity for all classes of consumers

13 in the rural and remote community exceeds the national

14 average retail price per kilowatt hour for electricity for all

15 consumers in the United States, as determined by data pro16 vided by the Department of Energy’s Energy Information

17 Administration. In allocating funds under this section, the

18 Secretary shall give special consideration to those rural and

19 remote communities that increase economies of scale

20 through consolidation of services, affiliation and regional21 ization of eligible activities under this title.

22 SEC. 948. RURAL AND REMOTE COMMUNITY ELECTRIFICA23 TION GRANTS.

24 Section 313 of the Rural Electrification Act of 1936

25 (7 U.S.C. 940c) is amended by adding after subsection (b)

26 the following:
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1 ‘‘(c) RURAL AND REMOTE COMMUNITIES ELEC2 TRIFICATION GRANTS.—The Secretary of Agriculture, in

3 consultation with the Secretary of Energy and the Secretary

4 of the Interior, may provide grants under this Act for the

5 purpose of increasing energy efficiency, siting or upgrading

6 transmission and distribution lines, or providing or mod7 ernizing electric facilities to—

8 ‘‘(1) a unit of local government of a State or ter9 ritory; or

10 ‘‘(2) an Indian tribe or Tribal College or Univer11 sity as defined in section 316(b)(3) of the Higher

12 Education Act (20 U.S.C. 1059c(b)(3)).

13 ‘‘(d) GRANT CRITERIA.—The Secretary shall make

14 grants based on a determination of cost-effectiveness and

15 most effective use of the funds to achieve the stated purposes

16 of this section.

17 ‘‘(e) PREFERENCE.—In making grants under this sec18 tion, the Secretary shall give a preference to renewable en19 ergy facilities.

20 ‘‘(f) DEFINITION.—For purposes of this section, the

21 term ‘Indian tribe’ means any Indian tribe, band, nation,

22 or other organized group or community, including any

23 Alaska Native village or regional or village corporation as

24 defined in or established pursuant to the Alaska Native

25 Claims Settlement Act (43 U.S.C. 1601 et seq.), which is
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1 recognized as eligible for the special programs and services

2 provided by the United States to Indians because of their

3 status as Indians.

4 ‘‘(e) AUTHORIZATION.—For the purpose of carrying

5 out subsection (c), there are authorized to be appropriated

6 to the Secretary $20,000,000 for each of the 7 fiscal years

7 following the date of enactment of this subsection.’’.

8 SEC. 949. ADDITIONAL AUTHORIZATION OF APPROPRIA9 TIONS.

10 There is hereby authorized to be appropriated

11 $5,000,000 for each of fiscal years 2003 through 2009 to

12 the Denali Commission established by the Denali Commis13 sion Act of 1998 (42 U.S.C. 3121 note) for the purposes

14 of funding the power cost equalization program.

15 SEC. 950. RURAL RECOVERY COMMUNITY DEVELOPMENT

16 BLOCK GRANTS.

17 (a) FINDINGS; PURPOSE.—

18 (1) FINDINGS.—Congress finds that—

19 (A) a modern infrastructure, including af20 fordable housing, wastewater and water service,

21 and advanced technology capabilities is a nec22 essary ingredient of a modern society and devel23 opment of a prosperous economy with minimal

24 environmental impacts;
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1 (B) the Nation’s rural areas face critical so2 cial, economic, and environmental problems,

3 arising in significant measure from the growing

4 cost of infrastructure development in rural areas

5 that suffer from low per capita income and high

6 rates of outmigration and are not adequately ad7 dressed by existing Federal assistance programs;

8 and

9 (C) the future welfare of the Nation and the

10 well-being of its citizens depend on the establish11 ment and maintenance of viable rural areas as

12 social, economic, and political entities.

13 (2) PURPOSE.—The purpose of this section is to

14 provide for the development and maintenance of via15 ble rural areas through the provision of affordable

16 housing and community development assistance to el17 igible units of general local government and eligible

18 Native American groups in rural areas with exces19 sively high rates of outmigration and low per capita

20 income levels.

21 (b) DEFINITIONS.—In this section:

22 (1) ELIGIBLE UNIT OF GENERAL LOCAL GOVERN23 MENT.—The term ‘‘eligible unit of general local gov24 ernment’’ means a unit of general local government

25 that is the governing body of a rural recovery area.
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1 (2) ELIGIBLE INDIAN TRIBE.—The term ‘‘eligible

2 Indian tribe’’ means the governing body of an Indian

3 tribe that is located in a rural recovery area.

4 (3) GRANTEE.—The term ‘‘grantee’’ means an el5 igible unit of general local government or eligible In6 dian tribe that receives a grant under this section.

7 (4) NATIVE AMERICAN GROUP.—The term ‘‘Na8 tive American group’’ means any Indian tribe, band,

9 group, and nation, including Alaska Indians, Aleuts,

10 and Eskimos, and any Alaskan Native village, of the

11 United States, which is considered an eligible recipi12 ent under the Indian Self-Determination and Edu13 cation Assistance Act (Public Law 93–638) or was

14 considered an eligible recipient under chapter 67 of

15 title 31, United States Code, prior to the repeal of

16 such chapter.

17 (5) RURAL RECOVERY AREA.—The term ‘‘rural

18 recovery area’’ means any geographic area rep19 resented by a unit of general local government or a

20 Native American group—

21 (A) the borders of which are not adjacent to

22 a metropolitan area;

23 (B) in which—

24 (i) the population outmigration level

25 equals or exceeds 1 percent over the most re-
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1 cent 5 year period, as determined by the

2 Secretary of Housing and Urban Develop3 ment; and

4 (ii) the per capita income is less than

5 that of the national nonmetropolitan aver6 age; and

7 (C) that does not include a city with a pop8 ulation of more than 15,000.

9 (6) UNIT OF GENERAL LOCAL GOVERNMENT.—

10 (A) IN GENERAL.—The term ‘‘unit of gen11 eral local government’’ means any city, county,

12 town, township, parish, village, borough (orga13 nized or unorganized), or other general purpose

14 political subdivision of a State; Guam, the Com15 monwealth of the Northern Mariana Islands, the

16 Virgin Islands, Puerto Rico, and American

17 Samoa, or a general purpose political subdivi18 sion thereof; a combination of such political sub19 divisions that, except as provided in section

20 106(d)(4), is recognized by the Secretary; and the

21 District of Columbia.

22 (B) OTHER ENTITIES INCLUDED.—The term

23 also includes a State or a local public body or

24 agency, community association, or other entity,

25 that is approved by the Secretary for the purpose
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1 of providing public facilities or services to a new

2 community.

3 (7) SECRETARY.—The term ‘‘Secretary’’ means

4 the Secretary of Housing and Urban Development,

5 the Secretary of Agriculture, the Secretary of the Inte6 rior or the Secretary of Energy, as appropriate.

7 (c) GRANT AUTHORITY.—The Secretary may make

8 grants in accordance with this section to eligible units of

9 general local government, Native American groups and eli10 gible Indian tribes that meet the requirements of subsection

11 (d) to carry out eligible activities described in subsection

12 (f).

13 (d) ELIGIBILITY REQUIREMENTS.—

14 (1) STATEMENT OF RURAL DEVELOPMENT OB15 JECTIVES.—In order to receive a grant under this sec16 tion for a fiscal year, an eligible unit of general local

17 government, Native American group or eligible In18 dian tribe—

19 (A) shall—

20 (i) publish a proposed statement of

21 rural development objectives and a descrip22 tion of the proposed eligible activities de23 scribed in subsection (f) for which the grant

24 will be used; and
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1 (ii) afford residents of the rural recov2 ery area served by the eligible unit of gen3 eral local government, Native American

4 groups or eligible Indian tribe with an op5 portunity to examine the contents of the

6 proposed statement and the proposed eligi7 ble activities published under clause (i), and

8 to submit comments to the eligible unit of

9 general local government, Native American

10 group or eligible Indian tribe, as applicable,

11 on the proposed statement and the proposed

12 eligible activities, and the overall commu13 nity development performance of the eligible

14 unit of general local government, Native

15 American groups or eligible Indian tribe, as

16 applicable; and

17 (B) based on any comments received under

18 subparagraph (A)(ii), prepare and submit to the

19 Secretary—

20 (i) a final statement of rural develop21 ment objectives;

22 (ii) a description of the eligible activi23 ties described in subsection (f) for which a

24 grant received under this section will be

25 used; and
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1 (iii) a certification that the eligible

2 unit of general local government, Native

3 American groups or eligible Indian tribe, as

4 applicable, will comply with the require5 ments of paragraph (2).

6 (2) PUBLIC NOTICE AND COMMENT.—In order to

7 enhance public accountability and facilitate the co8 ordination of activities among different levels of gov9 ernment, an eligible unit of general local government,

10 Native American groups or eligible Indian tribe that

11 receives a grant under this section shall, as soon as

12 practicable after such receipt, provide the residents of

13 the rural recovery area served by the eligible unit of

14 general local government, Native American groups or

15 eligible Indian tribe, as applicable, with—

16 (A) a copy of the final statement submitted

17 under paragraph (1)(B);

18 (B) information concerning the amount

19 made available under this section and the eligi20 ble activities to be undertaken with that amount;

21 (C) reasonable access to records regarding

22 the use of any amounts received by the eligible

23 unit of general local government, Native Amer24 ican groups or eligible Indian tribe under this

25 section in any preceding fiscal year; and
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1 (D) reasonable notice of, and opportunity to

2 comment on, any substantial change proposed to

3 be made in the use of amounts received under

4 this section from one eligible activity to another.

5 (e) DISTRIBUTION OF GRANTS.—

6 (1) IN GENERAL.—In each fiscal year, the Sec7 retary shall distribute to each eligible unit of general

8 local government, Native American groups and eligi9 ble Indian tribe that meets the requirements of sub10 section (d)(1) a grant in an amount described in

11 paragraph (2).

12 (2) AMOUNT.—Of the total amount made avail13 able to carry out this section in each fiscal year, the

14 Secretary shall distribute to each grantee the amount

15 equal to the greater of—

16 (A) the pro rata share of the grantee, as de17 termined by the Secretary, based on the com18 bined annual population outmigration level (as

19 determined by the Secretary of Housing and

20 Urban Development) and the per capita income

21 for the rural recovery area served by the grantee;

22 or

23 (B) $200,000.

24 (f) ELIGIBLE ACTIVITIES.—Each grantee shall use

25 amounts received under this section for one or more of the
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1 following eligible activities, which may be undertaken either

2 directly by the grantee, or by any local economic develop3 ment corporation, regional planning district, nonprofit

4 community development corporation, or statewide develop5 ment organization authorized by the grantee—

6 (1) the acquisition, construction, repair, recon7 struction, operation, maintenance, or installation of

8 facilities for water and wastewater service or any

9 other infrastructure needs determined to be critical to

10 the further development or improvement of a des11 ignated industrial park;

12 (2) the acquisition or disposition of real prop13 erty (including air rights, water rights, and other in14 terests therein) for rural community development ac15 tivities;

16 (3) the development of telecommunications infra17 structure within a designated industrial park that en18 courages high technology business development in

19 rural areas;

20 (4) activities necessary to develop and implement

21 a comprehensive rural development plan, including

22 payment of reasonable administrative costs related to

23 planning and execution of rural development activi24 ties; or

25 (5) affordable housing initiatives.
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1 (g) PERFORMANCE AND EVALUATION REPORT.—

2 (1) IN GENERAL.—Each grantee shall annually

3 submit to the appropriate Secretary a performance

4 and evaluation report, concerning the use of amounts

5 received under this section.

6 (2) CONTENTS.—Each report submitted under

7 paragraph (1) shall include a description of—

8 (A) the eligible activities carried out by the

9 grantee with amounts received under this section,

10 and the degree to which the grantee has achieved

11 the rural development objectives included in the

12 final statement submitted under subsection

13 (d)(1);

14 (B) the nature of and reasons for any

15 change in the rural development objectives or the

16 eligible activities of the grantee after submission

17 of the final statement under subsection (d)(1);

18 and

19 (C) any manner in which the grantee would

20 change the rural development objectives of the

21 grantee as a result of the experience of the grant22 ee in administering amounts received under this

23 section.

24 (h) RETENTION OF INCOME.—A grantee may retain

25 any income that is realized from the grant, if—
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1 (1) the income was realized after the initial dis2 bursement of amounts to the grantee under this sec3 tion; and

4 (2) the—

5 (A) grantee agrees to utilize the income for

6 one or more eligible activities; or

7 (B) amount of the income is determined by

8 the Secretary to be so small that compliance with

9 subparagraph (A) would create an unreasonable

10 administrative burden on the grantee.

11 (i) AUTHORIZATION OF APPROPRIATIONS.—There is

12 authorized to be appropriated to carry out this section

13 $100,000,000 for each of fiscal years 2003 through 2009.

14 DIVISION D—INTEGRATION OF

15 ENERGY POLICY AND CLI16 MATE CHANGE POLICY

17 TITLE X—NATIONAL CLIMATE

18 CHANGE POLICY

19 Subtitle A—Sense of Congress

20 SEC. 1001. SENSE OF CONGRESS ON CLIMATE CHANGE.

21 (a) FINDINGS.—The Congress makes the following

22 findings:

23 (1) Evidence continues to build that increases in

24 atmospheric concentrations of man-made greenhouse

25 gases are contributing to global climate change.
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1 (2) The Intergovernmental Panel on Climate

2 Change (IPCC) has concluded that ‘‘there is new and

3 stronger evidence that most of the warming observed

4 over the last 50 years is attributable to human activi5 ties’’ and that the Earth’s average temperature can be

6 expected to rise between 2.5 and 10.4 degrees Fahr7 enheit in this century.

8 (3) The National Academy of Sciences confirmed

9 the findings of the IPCC, stating that ‘‘the IPCC’s

10 conclusion that most of the observed warming of the

11 last 50 years is likely to have been due to the increase

12 of greenhouse gas concentrations accurately reflects

13 the current thinking of the scientific community on

14 this issue’’ and that ‘‘there is general agreement that

15 the observed warming is real and particularly strong

16 within the past twenty years’’. The National Academy

17 of Sciences also noted that ‘‘because there is consider18 able uncertainty in current understanding of how the

19 climate system varies naturally and reacts to emis20 sions of greenhouse gases and aerosols, current esti21 mates of the magnitude of future warming should be

22 regarded as tentative and subject to future adjust23 ments upward or downward’’.

24 (4) The IPCC has stated that in the last 40

25 years, the global average sea level has risen, ocean
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1 heat content has increased, and snow cover and ice

2 extent have decreased, which threatens to inundate

3 low-lying island nations and coastal regions through4 out the world.

5 (5) In October 2000, a United States Govern6 ment report found that global climate change may

7 harm the United States by altering crop yields, accel8 erating sea-level rise, and increasing the spread of

9 tropical infectious diseases.

10 (6) In 1992, the United States ratified the

11 United Nations Framework Convention on Climate

12 Change (UNFCCC), the ultimate objective of which is

13 the ‘‘stabilization of greenhouse gas concentrations in

14 the atmosphere at a level that would prevent dan15 gerous anthropogenic interference with the climate

16 system. Such a level should be achieved within a

17 time-frame sufficient to allow ecosystems to adapt

18 naturally to climate change, to ensure that food pro19 duction is not threatened and to enable economic de20 velopment to proceed in a sustainable manner’’.

21 (7) The UNFCCC stated in part that the Parties

22 to the Convention are to implement policies ‘‘with the

23 aim of returning . . . to their 1990 levels anthropo24 genic emissions of carbon dioxide and other green25 house gases’’ under the principle that ‘‘policies and
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1 measures . . . should be appropriate for the specific

2 conditions of each Party and should be integrated

3 with national development programmes, taking into

4 account that economic development is essential for

5 adopting measures to address climate change’’.

6 (8) There is a shared international responsibility

7 to address this problem, as industrial nations are the

8 largest historic and current emitters of greenhouse

9 gases and developing nations’ emissions will signifi10 cantly increase in the future.

11 (9) The UNFCCC further stated that ‘‘developed

12 country Parties should take the lead in combating cli13 mate change and the adverse effects thereof’’, as these

14 nations are the largest historic and current emitters

15 of greenhouse gases. The UNFCCC also stated that

16 ‘‘steps required to understand and address climate

17 change will be environmentally, socially and economi18 cally most effective if they are based on relevant sci19 entific, technical and economic considerations and

20 continually re-evaluated in the light of new findings

21 in these areas’’.

22 (10) Senate Resolution 98 of the One Hundred

23 Fifth Congress, which expressed that developing na24 tions must also be included in any future, binding

25 climate change treaty and such a treaty must not re-
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1 sult in serious harm to the United States economy,

2 should not cause the United States to abandon its

3 shared responsibility to help reduce the risks of cli4 mate change and its impacts. Future international ef5 forts in this regard should focus on recognizing the eq6 uitable responsibilities for addressing climate change

7 by all nations, including commitments by the largest

8 developing country emitters in a future, binding cli9 mate change treaty.

10 (11) It is the position of the United States that

11 it will not interfere with the plans of any nation that

12 chooses to ratify and implement the Kyoto Protocol to

13 the UNFCCC.

14 (12) American businesses need to know how gov15 ernments worldwide will address the risks of climate

16 change.

17 (13) The United States benefits from investments

18 in the research, development and deployment of a

19 range of clean energy and efficiency technologies that

20 can reduce the risks of climate change and its impacts

21 and that can make the United States economy more

22 productive, bolster energy security, create jobs, and

23 protect the environment.

24 (b) SENSE OF CONGRESS.—It is the sense of the United

25 States Congress that the United States should demonstrate
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1 international leadership and responsibility in reducing the

2 health, environmental, and economic risks posed by climate

3 change by—

4 (1) taking responsible action to ensure signifi5 cant and meaningful reductions in emissions of

6 greenhouse gases from all sectors;

7 (2) creating flexible international and domestic

8 mechanisms, including joint implementation, tech9 nology deployment, tradable credits for emissions re10 ductions and carbon sequestration projects that will

11 reduce, avoid, and sequester greenhouse gas emissions;

12 and

13 (3) participating in international negotiations,

14 including putting forth a proposal to the Conference

15 of the Parties, with the objective of securing United

16 States participation in a future binding climate

17 change Treaty in a manner that is consistent with the

18 environmental objectives of the UNFCCC, that pro19 tects the economic interests of the United States, and

20 recognizes the shared international responsibility for

21 addressing climate change, including developing coun22 try participation.
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1 Subtitle B—Climate Change

2 Strategy

3 SEC. 1011. SHORT TITLE.

4 This subtitle may be cited as the ‘‘Climate Change

5 Strategy and Technology Innovation Act of 2003’’.

6 SEC. 1012. DEFINITIONS.

7 In this subtitle:

8 (1) CLIMATE-FRIENDLY TECHNOLOGY.—The term

9 ‘‘climate-friendly technology’’ means any energy sup10 ply or end-use technology that, over the life of the

11 technology and compared to similar technology in

12 commercial use as of the date of enactment of this

13 Act—

14 (A) results in reduced emissions of green15 house gases;

16 (B) may substantially lower emissions of

17 other pollutants; and

18 (C) may generate substantially smaller or

19 less hazardous quantities of solid or liquid waste.

20 (2) DEPARTMENT.—The term ‘‘Department’’

21 means the Department of Energy.

22 (3) DEPARTMENT OFFICE.—The term ‘‘Depart23 ment Office’’ means the Office of Climate Change

24 Technology of the Department established by section

25 1015(a).
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1 (4) FEDERAL AGENCY.—The term ‘‘Federal agen2 cy’’ has the meaning given the term ‘‘agency’’ in sec3 tion 551 of title 5, United States Code.

4 (5) GREENHOUSE GAS.—The term ‘‘greenhouse

5 gas’’ means—

6 (A) an anthropogenic gaseous constituent of

7 the atmosphere (including carbon dioxide, meth8 ane, nitrous oxide, chlorofluorocarbons,

9 hydrofluorocarbons, perfluorocarbons, sulfur

10 hexafluoride, and tropospheric ozone) that ab11 sorbs and re-emits infrared radiation and influ12 ences climate; and

13 (B) an anthropogenic aerosol (such as black

14 soot) that absorbs solar radiation and influences

15 climate.

16 (6) INTERAGENCY TASK FORCE.—The term

17 ‘‘Interagency Task Force’’ means the Interagency

18 Task Force established under section 1014(e).

19 (7) KEY ELEMENT.—The term ‘‘key element’’,

20 with respect to the Strategy, means—

21 (A) definition of interim emission mitiga22 tion levels, that, coupled with specific mitigation

23 approaches and after taking into account actions

24 by other nations (if any), would result in sta25 bilization of greenhouse gas concentrations;
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1 (B) technology development, including—

2 (i) a national commitment to double

3 energy research and development by the

4 United States public and private sectors;

5 and

6 (ii) in carrying out such research and

7 development, a national commitment to

8 provide a high degree of emphasis on bold,

9 breakthrough technologies that will make

10 possible a profound transformation of the

11 energy, transportation, industrial, agricul12 tural, and building sectors of the United

13 States;

14 (C) climate adaptation research that focuses

15 on actions necessary to adapt to climate

16 change—

17 (i) that may have already occurred; or

18 (ii) that may occur under future cli19 mate change scenarios;

20 (D) climate science research that—

21 (i) builds on the substantial scientific

22 understanding of climate change that exists

23 as of the date of enactment of this subtitle;

24 and
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1 (ii) focuses on reducing the remaining

2 scientific, technical, and economic uncer3 tainties to aid in the development of sound

4 response strategies.

5 (8) LONG-TERM GOAL OF THE STRATEGY.—The

6 term ‘‘long-term goal of the Strategy’’ means the long7 term goal in section 1013(a)(1).

8 (9) MITIGATION.—The term ‘‘mitigation’’ means

9 actions that reduce, avoid, or sequester greenhouse

10 gases.

11 (10) NATIONAL ACADEMY OF SCIENCES.—The

12 term ‘‘National Academy of Sciences’’ means the Na13 tional Academy of Sciences, the National Academy of

14 Engineering, the Institute of Medicine, and the Na15 tional Research Council.

16 (11) QUALIFIED INDIVIDUAL.—

17 (A) IN GENERAL.—The term ‘‘qualified in18 dividual’’ means an individual who has dem19 onstrated expertise and leadership skills to draw

20 on other experts in diverse fields of knowledge

21 that are relevant to addressing the climate

22 change challenge.

23 (B) FIELDS OF KNOWLEDGE.—The fields of

24 knowledge referred to in subparagraph (A) are—
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1 (i) the science of climate change and

2 its impacts;

3 (ii) energy and environmental econom4 ics;

5 (iii) technology transfer and diffusion;

6 (iv) the social dimensions of climate

7 change;

8 (v) climate change adaptation strate9 gies;

10 (vi) fossil, nuclear, and renewable en11 ergy technology;

12 (vii) energy efficiency and energy con13 servation;

14 (viii) energy systems integration;

15 (ix) engineered and terrestrial carbon

16 sequestration;

17 (x) transportation, industrial, and

18 building sector concerns;

19 (xi) regulatory and market-based

20 mechanisms for addressing climate change;

21 (xii) risk and decision analysis;

22 (xiii) strategic planning; and

23 (xiv) the international implications of

24 climate change strategies.
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1 (12) SECRETARY.—The term ‘‘Secretary’’ means

2 the Secretary of Energy.

3 (13) STABILIZATION OF GREENHOUSE GAS CON4 CENTRATIONS.—The term ‘‘stabilization of greenhouse

5 gas concentrations’’ means the stabilization of green6 house gas concentrations in the atmosphere at a level

7 that would prevent dangerous anthropogenic inter8 ference with the climate system, recognizing that such

9 a level should be achieved within a time frame suffi10 cient to allow ecosystems to adapt naturally to cli11 mate change, to ensure that food production is not

12 threatened and to enable economic development to

13 proceed in a sustainable manner, as contemplated by

14 the United Nations Framework Convention on Cli15 mate Change, done at New York on May 9, 1992.

16 (14) STRATEGY.—The term ‘‘Strategy’’ means

17 the National Climate Change Strategy developed

18 under section 1013.

19 (15) WHITE HOUSE OFFICE.—The term ‘‘White

20 House Office’’ means the Office of National Climate

21 Change Policy established by section 1014(a).

22 SEC. 1013. NATIONAL CLIMATE CHANGE STRATEGY.

23 (a) IN GENERAL.—The President, through the director

24 of the White House Office and in consultation with the
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1 Interagency Task Force, shall develop a National Climate

2 Change Strategy, which shall—

3 (1) have the long-term goal of stabilization of

4 greenhouse gas concentrations through actions taken

5 by the United States and other nations;

6 (2) recognize that accomplishing the long-term

7 goal of the Strategy will take from many decades to

8 more than a century, but acknowledging that signifi9 cant actions must begin in the near term;

10 (3) incorporate the four key elements;

11 (4) be developed on the basis of an examination

12 of a broad range of emissions levels and dates for

13 achievement of those levels (including those evaluated

14 by the Intergovernmental Panel on Climate Change

15 and those consistent with United States treaty com16 mitments) that, after taking into account actions by

17 other nations, would achieve the long-term goal of the

18 Strategy;

19 (5) consider the broad range of activities and ac20 tions that can be taken by United States entities to

21 reduce, avoid, or sequester greenhouse gas emissions

22 both within the United States and in other nations

23 through the use of market mechanisms, which may in24 clude, but not be limited to, mitigation activities, ter25 restrial sequestration, earning offsets through carbon
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1 capture or project-based activities, trading of emis2 sions credits in domestic and international markets,

3 and the application of the resulting credits from any

4 of the above within the United States;

5 (6) minimize any adverse short-term and long6 term social, economic, national security, and environ7 mental impacts, including ensuring that the strategy

8 is developed in an economically and environmentally

9 sound manner;

10 (7) incorporate mitigation approaches leading to

11 the development and deployment of advanced tech12 nologies and practices that will reduce, avoid, or se13 quester greenhouse gas emissions;

14 (8) be consistent with the goals of energy, trans15 portation, industrial, agricultural, forestry, environ16 mental, economic, and other relevant policies of the

17 United States;

18 (9) take into account—

19 (A) the diversity of energy sources and tech20 nologies;

21 (B) supply-side and demand-side solutions;

22 and

23 (C) national infrastructure, energy distribu24 tion, and transportation systems;
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1 (10) be based on an evaluation of a wide range

2 of approaches for achieving the long-term goal of the

3 Strategy, including evaluation of—

4 (A) a variety of cost-effective Federal and

5 State policies, programs, standards, and incen6 tives;

7 (B) policies that integrate and promote in8 novative, market-based solutions in the United

9 States and in foreign countries; and

10 (C) participation in other international in11 stitutions, or in the support of international ac12 tivities, that are established or conducted to

13 achieve the long-term goal of the Strategy;

14 (11) in the final recommendations of the

15 Strategy—

16 (A) emphasize policies and actions that

17 achieve the long-term goal of the Strategy; and

18 (B) provide specific recommendations

19 concerning—

20 (i) measures determined to be appro21 priate for short-term implementation, giv22 ing preference to cost-effective and techno23 logically feasible measures that will—

24 (I) produce measurable net reduc25 tions in United States emissions, com-
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1 pared to expected trends, that lead to2 ward achievement of the long-term goal

3 of the Strategy; and

4 (II) minimize any adverse short5 term and long-term economic, environ6 mental, national security, and social

7 impacts on the United States;

8 (ii) the development of technologies

9 that have the potential for long-term

10 implementation—

11 (I) giving preference to tech12 nologies that have the potential to re13 duce significantly the overall cost of

14 achieving the long-term goal of the

15 Strategy; and

16 (II) considering a full range of

17 energy sources, energy conversion and

18 use technologies, and efficiency options;

19 (iii) such changes in institutional and

20 technology systems are necessary to adapt to

21 climate change in the short-term and the

22 long-term;

23 (iv) such review, modification, and en24 hancement of the scientific, technical, and

25 economic research efforts of the United
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1 States, and improvements to the data re2 sulting from research, as are appropriate to

3 improve the accuracy of predictions con4 cerning climate change and the economic

5 and social costs and opportunities relating

6 to climate change; and

7 (v) changes that should be made to

8 project and grant evaluation criteria under

9 other Federal research and development pro10 grams so that those criteria do not inhibit

11 development of climate-friendly technologies;

12 (12) recognize that the Strategy is intended to

13 guide the Nation’s effort to address climate change,

14 but it shall not create a legal obligation on the part

15 of any person or entity other than the duties of the

16 Director of the White House Office and Interagency

17 Task Force in the development of the Strategy;

18 (13) have a scope that considers the totality of

19 United States public, private, and public-private sec20 tor actions that bear on the long-term goal;

21 (14) be developed in a manner that provides for

22 meaningful participation by, and consultation

23 among, Federal, State, tribal, and local government

24 agencies, nongovernmental organizations, academia,

25 scientific bodies, industry, the public, and other inter-
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1 ested parties in accordance with subsections

2 (b)(3)(C)(iv)(II) and (e)(3)(B)(ii) of section 1014;

3 (15) address how the United States should en4 gage State, tribal, and local governments in devel5 oping and carrying out a response to climate change;

6 (16) promote, to the maximum extent prac7 ticable, public awareness, outreach, and information8 sharing to further the understanding of the full range

9 of climate change-related issues;

10 (17) provide a detailed explanation of how the

11 measures recommended by the Strategy will ensure

12 that they do not result in serious harm to the econ13 omy of the United States;

14 (18) provide a detailed explanation of how the

15 measures recommended by the Strategy will achieve

16 its long-term goal;

17 (19) include any recommendations for legislative

18 and administrative actions necessary to implement

19 the Strategy;

20 (20) serve as a framework for climate change ac21 tions by all Federal agencies;

22 (21) recommend which Federal agencies are, or

23 should be, responsible for the various aspects of imple24 mentation of the Strategy and any budgetary impli25 cations;
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1 (22) address how the United States should en2 gage foreign governments in developing an inter3 national response to climate change; and

4 (23) incorporate initiatives to open markets and

5 promote the deployment of a range of climate-friendly

6 technologies developed in the United States and

7 abroad.

8 (b) SUBMISSION TO CONGRESS.—Not later than 1 year

9 after the date of enactment of this section, the President,

10 through the Interagency Task Force and the Director, shall

11 submit to Congress the Strategy, in the form of a report

12 that includes—

13 (1) a description of the Strategy and its goals,

14 including how the Strategy addresses each of the 4

15 key elements;

16 (2) an inventory and evaluation of Federal pro17 grams and activities intended to carry out the Strat18 egy;

19 (3) a description of how the Strategy will serve

20 as a framework of climate change response actions by

21 all Federal agencies, including a description of co22 ordination mechanisms and interagency activities;

23 (4) evidence that the Strategy is consistent with

24 other energy, transportation, industrial, agricultural,
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1 forestry, environmental, economic, and other relevant

2 policies of the United States;

3 (5) a description of provisions in the Strategy

4 that ensure that it minimizes any adverse short-term

5 and long-term social, economic, national security,

6 and environmental impacts, including ensuring that

7 the Strategy is developed in an economically and en8 vironmentally sound manner;

9 (6) evidence that the Strategy has been developed

10 in a manner that provides for participation by, and

11 consultation among, Federal, State, tribal, and local

12 government agencies, nongovernmental organizations,

13 academia, scientific bodies, industry, the public, and

14 other interested parties;

15 (7) a description of Federal activities that pro16 mote, to the maximum extent practicable, public

17 awareness, outreach, and information-sharing to fur18 ther the understanding of the full range of climate

19 change-related issues; and

20 (8) recommendations for legislative or adminis21 trative changes to Federal programs or activities im22 plemented to carry out this Strategy, in light of new

23 knowledge of climate change and its impacts and

24 costs or benefits, or technological capacity to improve

25 mitigation or adaption activities.
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1 (c) UPDATES.—Not later than 4 years after the date

2 of submission of the Strategy to Congress under subsection

3 (b), and at the end of each 4-year period thereafter, the

4 President shall submit to Congress an updated version of

5 the Strategy.

6 (d) PROGRESS REPORTS.—Not later than 1 year after

7 the date of submission of the Strategy to Congress under

8 subsection (b), and annually thereafter at the time that the

9 President submits to the Congress the budget of the United

10 States Government under section 1105 of title 31, United

11 States Code, the President shall submit to Congress a report

12 that—

13 (1) describes the Strategy, its goals, and the Fed14 eral programs and activities intended to carry out the

15 Strategy through technological, scientific, mitigation,

16 and adaptation activities;

17 (2) evaluates the Federal programs and activities

18 implemented as part of this Strategy against the

19 goals and implementation dates outlined in the Strat20 egy;

21 (3) assesses the progress in implementation of the

22 Strategy;

23 (4) incorporates the technology program reports

24 required pursuant to section 1015(a)(3) and sub25 sections (d) and (e) of section 1321;
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1 (5) describes any changes to Federal programs or

2 activities implemented to carry out this Strategy, in

3 light of new knowledge of climate change and its im4 pacts and costs or benefits, or technological capacity

5 to improve mitigation or adaptation activities;

6 (6) describes all Federal spending on climate

7 change for the current fiscal year and each of the 5

8 years previous; categorized by Federal agency and

9 program function (including scientific research, en10 ergy research and development, regulation, education,

11 and other activities);

12 (7) estimates the budgetary impact for the cur13 rent fiscal year and each of the 5 years previous of

14 any Federal tax credits, tax deductions or other in15 centives claimed by taxpayers that are directly or in16 directly attributable to greenhouse gas emissions re17 duction activities;

18 (8) estimates the amount, in metric tons, of net

19 greenhouse gas emissions reduced, avoided, or seques20 tered directly or indirectly as a result of the imple21 mentation of the Strategy;

22 (9) evaluates international research and develop23 ment and market-based activities and the mitigation

24 actions taken by the United States and other nations

25 to achieve the long-term goal of the Strategy; and
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1 (10) makes recommendations for legislative or

2 administrative actions or adjustments that will accel3 erate progress towards meeting the near-term and

4 long-term goals contained in the Strategy.

5 (e) NATIONAL ACADEMY OF SCIENCES REVIEW.—

6 (1) IN GENERAL.—Not later than 90 days after

7 the date of publication of the Strategy under sub8 section (b) and each update under subsection (c), the

9 Director of the National Science Foundation, on be10 half of the Director of the White House Office and the

11 Interagency Task Force, shall enter into appropriate

12 arrangements with the National Academy of Sciences

13 to conduct a review of the Strategy or update.

14 (2) CRITERIA.—The review by the National

15 Academy of Sciences shall evaluate the goals and rec16 ommendations contained in the Strategy or update,

17 taking into consideration—

18 (A) the adequacy of effort and the appro19 priateness of focus of the totality of all public,

20 private, and public-private sector actions of the

21 United States with respect to the Strategy, in22 cluding the four key elements;

23 (B) the adequacy of the budget and the effec24 tiveness with which each Federal agency is car25 rying out its responsibilities;
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1 (C) current scientific knowledge regarding

2 climate change and its impacts;

3 (D) current understanding of human social

4 and economic responses to climate change, and

5 responses of natural ecosystems to climate

6 change;

7 (E) advancements in energy technologies

8 that reduce, avoid, or sequester greenhouse gases

9 or otherwise mitigate the risks of climate change;

10 (F) current understanding of economic costs

11 and benefits of mitigation or adaptation activi12 ties;

13 (G) the existence of alternative policy op14 tions that could achieve the Strategy goals at

15 lower economic, environmental, or social cost;

16 and

17 (H) international activities and the actions

18 taken by the United States and other nations to

19 achieve the long-term goal of the Strategy.

20 (3) REPORT.—Not later than 1 year after the

21 date of submittal to the Congress of the Strategy or

22 update, as appropriate, the National Academy of

23 Sciences shall prepare and submit to the Congress

24 and the President a report concerning the results of

25 its review, along with any recommendations as ap-
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1 propriate. Such report shall also be made available to

2 the public.

3 (4) AUTHORIZATION OF APPROPRIATIONS.—For

4 the purposes of this subsection, there are authorized to

5 be appropriated to the National Science Foundation

6 such sums as may be necessary.

7 SEC. 1014. OFFICE OF NATIONAL CLIMATE CHANGE POLICY.

8 (a) ESTABLISHMENT.—

9 (1) IN GENERAL.—There is established, within

10 the Executive Office of the President, the Office of Na11 tional Climate Change Policy.

12 (2) FOCUS.—The White House Office shall have

13 the focus of achieving the long-term goal of the Strat14 egy while minimizing adverse short-term and long15 term economic and social impacts.

16 (3) DUTIES.—Consistent with paragraph (2), the

17 White House Office shall—

18 (A) establish policies, objectives, and prior19 ities for the Strategy;

20 (B) in accordance with subsection (d), es21 tablish the Interagency Task Force to serve as the

22 primary mechanism through which the heads of

23 Federal agencies shall assist the Director of the

24 White House Office in developing and imple25 menting the Strategy;
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1 (C) to the maximum extent practicable, en2 sure that the Strategy is based on objective,

3 quantitative analysis, drawing on the analytical

4 capabilities of Federal and State agencies, espe5 cially the Department Office;

6 (D) advise the President concerning nec7 essary changes in organization, management,

8 budgeting, and personnel allocation of Federal

9 agencies involved in climate change response ac10 tivities; and

11 (E) advise the President and notify a Fed12 eral agency if the policies and discretionary pro13 grams of the agency are not well aligned with,

14 or are not contributing effectively to, the long15 term goal of the Strategy.

16 (b) DIRECTOR OF THE WHITE HOUSE OFFICE.—

17 (1) IN GENERAL.—The White House Office shall

18 be headed by a Director, who shall report directly to

19 the President, and shall consult with the appropriate

20 economic, environmental, national security, domestic

21 policy, science and technology and other offices with

22 the Executive Office of the President.

23 (2) APPOINTMENT.—The Director of the White

24 House Office shall be a qualified individual ap-
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1 pointed by the President, by and with the advice and

2 consent of the Senate.

3 (3) DUTIES OF THE DIRECTOR OF THE WHITE

4 HOUSE OFFICE.—

5 (A) STRATEGY.—In accordance with section

6 1013, the Director of the White House Office

7 shall coordinate the development and updating of

8 the Strategy.

9 (B) INTERAGENCY TASK FORCE.—The Di10 rector of the White House Office shall serve as

11 Chair of the Interagency Task Force.

12 (C) ADVISORY DUTIES.—

13 (i) ENERGY, ECONOMIC, ENVIRON14 MENTAL, TRANSPORTATION, INDUSTRIAL,

15 AGRICULTURAL, BUILDING, FORESTRY, AND

16 OTHER PROGRAMS.—The Director of the

17 White House Office, using an integrated

18 perspective considering the totality of ac19 tions in the United States, shall advise the

20 President and the heads of Federal agencies

21 on—

22 (I) the extent to which United

23 States energy, economic, environ24 mental, transportation, industrial, ag25 ricultural, forestry, building, and other
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1 relevant programs are capable of pro2 ducing progress on the long-term goal

3 of the Strategy; and

4 (II) the extent to which proposed

5 or newly created energy, economic, en6 vironmental, transportation, indus7 trial, agricultural, forestry, building,

8 and other relevant programs positively

9 or negatively affect the ability of the

10 United States to achieve the long-term

11 goal of the Strategy.

12 (ii) TAX, TRADE, AND FOREIGN POLI13 CIES.—The Director of the White House Of14 fice, using an integrated perspective consid15 ering the totality of actions in the United

16 States, shall advise the President and the

17 heads of Federal agencies on—

18 (I) the extent to which the United

19 States tax policy, trade policy, and

20 foreign policy are capable of producing

21 progress on the long-term goal of the

22 Strategy; and

23 (II) the extent to which proposed

24 or newly created tax policy, trade pol25 icy, and foreign policy positively or
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1 negatively affect the ability of the

2 United States to achieve the long-term

3 goal of the Strategy.

4 (iii) INTERNATIONAL TREATIES.—The

5 Secretary of State, acting in conjunction

6 with the Interagency Task Force and using

7 the analytical tools available to the White

8 House Office, shall provide to the Director

9 of the White House Office an opinion that—

10 (I) specifies, to the maximum ex11 tent practicable, the economic and en12 vironmental costs and benefits of any

13 proposed international treaties or com14 ponents of treaties that have an influ15 ence on greenhouse gas management;

16 and

17 (II) assesses the extent to which

18 the treaties advance the long-term goal

19 of the Strategy, while minimizing ad20 verse short-term and long-term eco21 nomic and social impacts and consid22 ering other impacts.

23 (iv) CONSULTATION.—

24 (I) WITH MEMBERS OF INTER25 AGENCY TASK FORCE.—To the extent
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1 practicable and appropriate, the Direc2 tor of the White House Office shall con3 sult with all members of the Inter4 agency Task Force before providing ad5 vice to the President.

6 (II) WITH OTHER INTERESTED

7 PARTIES.—The Director of the White

8 House Office shall establish a process

9 for obtaining the meaningful partici10 pation of Federal, State, tribal, and

11 local government agencies, nongovern12 mental organizations, academia, sci13 entific bodies, industry, the public, and

14 other interested parties in the develop15 ment and updating of the Strategy.

16 (D) PUBLIC EDUCATION, AWARENESS, OUT17 REACH, AND INFORMATION-SHARING.—The Di18 rector of the White House Office, to the max19 imum extent practicable, shall promote public

20 awareness, outreach, and information-sharing to

21 further the understanding of the full range of cli22 mate change-related issues.

23 (4) ANNUAL REPORTS.—The Director of the

24 White House Office, in consultation with the Inter25 agency Task Force and other interested parties, shall
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1 prepare the annual reports for submission by the

2 President to Congress under section 1013(d).

3 (5) ANALYSIS.—During development of the

4 Strategy, preparation of the annual reports submitted

5 under paragraph (4), and provision of advice to the

6 President and the heads of Federal agencies, the Di7 rector of the White House Office shall place signifi8 cant emphasis on the use of objective, quantitative

9 analysis, taking into consideration any uncertainties

10 associated with the analysis.

11 (c) STAFF.—

12 (1) IN GENERAL.—The Director of the White

13 House Office shall employ a professional staff, includ14 ing the staff appointed under paragraph (2), of not

15 more than 25 individuals to carry out the duties of

16 the White House Office.

17 (2) INTERGOVERNMENTAL PERSONNEL AND FEL18 LOWSHIPS.—The Director of the White House Office

19 may use the authority provided by the Intergovern20 mental Personnel Act of 1970 (42 U.S.C. 4701 et seq.)

21 and subchapter VI of chapter 33 of title 5, United

22 States Code, and fellowships, to obtain staff from Fed23 eral agencies, academia, scientific bodies, or a Na24 tional Laboratory (as that term is defined in section

25 1203), for appointments of a limited term.
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1 (d) AUTHORIZATION OF APPROPRIATIONS.—

2 (1) USE OF AVAILABLE APPROPRIATIONS.—From

3 funds made available to Federal agencies for the fiscal

4 year in which this title is enacted, the President shall

5 provide such sums as are necessary to carry out the

6 duties of the White House Office under this title until

7 the date on which funds are made available under

8 paragraph (2).

9 (2) AUTHORIZATION OF APPROPRIATIONS.—

10 There is authorized to be appropriated to the Execu11 tive Office of the President to carry out the duties of

12 the White House Office under this subtitle, $5,000,000

13 for each of fiscal years 2003 through 2011, to remain

14 available through September 30, 2011.

15 (e) INTERAGENCY TASK FORCE.—

16 (1) IN GENERAL.—The Director of the White

17 House Office shall establish the Interagency Task

18 Force.

19 (2) COMPOSITION.—The Interagency Task Force

20 shall be composed of—

21 (A) the Director of the White House Office,

22 who shall serve as Chair;

23 (B) the Secretary of State;

24 (C) the Secretary of Energy;

25 (D) the Secretary of Commerce;
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1 (E) the Secretary of Transportation;

2 (F) the Secretary of Agriculture;

3 (G) the Administrator of the Environmental

4 Protection Agency;

5 (H) the Chairman of the Council of Eco6 nomic Advisers;

7 (I) the Chairman of the Council on Envi8 ronmental Quality;

9 (J) the Director of the Office of Science and

10 Technology Policy;

11 (K) the Director of the Office of Manage12 ment and Budget; and

13 (L) the heads of such other Federal agencies

14 as the President considers appropriate.

15 (3) STRATEGY.—

16 (A) IN GENERAL.—The Interagency Task

17 Force shall serve as the primary forum through

18 which the Federal agencies represented on the

19 Interagency Task Force jointly assist the Direc20 tor of the White House Office in—

21 (i) developing and updating the Strat22 egy; and

23 (ii) preparing annual reports under

24 section 1013(d).
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1 (B) REQUIRED ELEMENTS.—In carrying

2 out subparagraph (A), the Interagency Task

3 Force shall—

4 (i) take into account the long-term goal

5 and other requirements of the Strategy spec6 ified in section 1013(a);

7 (ii) consult with State, tribal, and

8 local government agencies, nongovernmental

9 organizations, academia, scientific bodies,

10 industry, the public, and other interested

11 parties; and

12 (iii) build consensus around a Strategy

13 that is based on strong scientific, technical,

14 and economic analyses.

15 (4) WORKING GROUPS.—The Chair, in consulta16 tion with the members of the Interagency Task Force,

17 may establish such topical working groups as are nec18 essary to carry out the duties of the Interagency Task

19 Force and implement the Strategy, taking into con20 sideration the key elements of the Strategy. Such

21 working groups may be comprised of members of the

22 Interagency Task Force or their designees.

23 (f) STAFF.—In accordance with procedures established

24 by the Chair of the Interagency Task Force, the Federal

25 agencies represented on the Interagency Task Force shall
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1 provide staff from the agencies to support information, data

2 collection, and analyses required by the Interagency Task

3 Force.

4 (g) HEARINGS.—Upon request of the Chair, the Inter5 agency Task Force may hold such hearings, meet and act

6 at such times and places, take such testimony, and receive

7 such evidence as the Interagency Task Force considers to

8 be appropriate.

9 SEC. 1015. OFFICE OF CLIMATE CHANGE TECHNOLOGY.

10 (a) ESTABLISHMENT.—

11 (1) IN GENERAL.—There is established, within

12 the Department, the Office of Climate Change Tech13 nology.

14 (2) DUTIES.—The Department Office shall—

15 (A) manage an energy technology research

16 and development program that directly supports

17 the Strategy by—

18 (i) focusing on high-risk, bold, break19 through technologies that—

20 (I) have significant promise of

21 contributing to the long-term goal of

22 the Strategy by—

23 (aa) mitigating the emissions

24 of greenhouse gases;
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1 (bb) removing and seques2 tering greenhouse gases from emis3 sion streams; or

4 (cc) removing and seques5 tering greenhouse gases from the

6 atmosphere;

7 (II) are not being addressed sig8 nificantly by other Federal programs;

9 and

10 (III) would represent a substan11 tial advance beyond technology avail12 able on the date of enactment of this

13 subtitle;

14 (ii) forging fundamentally new re15 search and development partnerships among

16 various Department, other Federal, and

17 State programs, particularly between basic

18 science and energy technology programs, in

19 cases in which such partnerships have sig20 nificant potential to affect the ability of the

21 United States to achieve the long-term goal

22 of the Strategy at the lowest possible cost;

23 (iii) forging international research and

24 development partnerships that are in the

25 interests of the United States and make
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1 progress on achieving the long-term goal of

2 the Strategy;

3 (iv) making available, through moni4 toring, experimentation, and analysis, data

5 that are essential to proving the technical

6 and economic viability of technology central

7 to addressing climate change; and

8 (v) transferring research and develop9 ment programs to other program offices of

10 the Department once such a research and

11 development program crosses the threshold

12 of high-risk research and moves into the

13 realm of more conventional technology de14 velopment;

15 (B) through active participation in the

16 Interagency Task Force and utilization of the

17 analytical capabilities of the Department Office,

18 share analyses of alternative climate change

19 strategies with other agencies represented on the

20 Interagency Task Force to assist them in

21 understanding—

22 (i) the scale of the climate change chal23 lenge; and

24 (ii) how actions of the Federal agencies

25 on the Interagency Task Force positively or
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1 negatively contribute to climate change so2 lutions;

3 (C) provide analytical support to the White

4 House Office, particularly in support of the de5 velopment of the Strategy and associated

6 progress reporting;

7 (D) foster the development of tools, data,

8 and capabilities to ensure that—

9 (i) the United States has a robust ca10 pability for evaluating alternative climate

11 change response scenarios; and

12 (ii) the Department Office provides

13 long-term analytical continuity during the

14 terms of service of successive Presidents;

15 (E) identify the total contribution of all De16 partment programs to the Strategy; and

17 (F) advise the Secretary on all aspects of

18 climate change-related issues, including nec19 essary changes in Department organization,

20 management, budgeting, and personnel alloca21 tion in the programs involved in climate change

22 response-related activities.

23 (3) ANNUAL REPORTS.—The Department Office

24 shall prepare an annual report for submission by the
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1 Secretary to Congress and the White House Office

2 that—

3 (A) assesses progress toward meeting the

4 goals of the energy technology research and devel5 opment program described in this section;

6 (B) assesses the activities of the Department

7 Office;

8 (C) assesses the contributions of all energy

9 technology research and development programs of

10 the Department (including science programs) to

11 the long-term goal and other requirements of the

12 Strategy; and

13 (D) make recommendations for actions by

14 the Department and other Federal agencies to

15 address the components of technology develop16 ment that are necessary to support the Strategy.

17 (b) DIRECTOR OF THE DEPARTMENT OFFICE.—

18 (1) IN GENERAL.—The Department Office shall

19 be headed by a Director, who shall be a qualified in20 dividual appointed by the President, and who shall be

21 compensated at a rate provided for level IV of the Ex22 ecutive Schedule under section 5315 of title 5, United

23 States Code.
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1 (2) REPORTING.—The Director of the Depart2 ment Office shall report directly to the Under Sec3 retary for Energy and Science.

4 (3) VACANCIES.—A vacancy in the position of

5 the Director of the Department Office shall be filled

6 in the same manner as the original appointment was

7 made.

8 (c) INTERGOVERNMENTAL PERSONNEL.—The Depart9 ment Office may use the authority provided by the Intergov10 ernmental Personnel Act of 1970 (42 U.S.C. 4701 et seq.),

11 subchapter VI of chapter 33 of title 5, United States Code,

12 and other departmental personnel authorities, to obtain

13 staff for appointments of a limited term.

14 (d) RELATIONSHIP TO OTHER DEPARTMENT PRO15 GRAMS.—Each project carried out by the Department Office

16 shall be—

17 (1) initiated only after consultation with one or

18 more other appropriate program offices of the Depart19 ment that support research and development in the

20 areas relating to the project;

21 (2) managed by the Department Office; and

22 (3) in the case of a project that reaches a suffi23 cient level of maturity, with the concurrence of the

24 Department Office and the appropriate office de25 scribed in paragraph (1), transferred to the appro-
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1 priate office, along with the funds necessary to con2 tinue the project to the point at which non-Federal

3 funding can provide substantial support for the

4 project.

5 (e) COLLABORATION AND COST SHARING.—

6 (1) WITH OTHER FEDERAL AGENCIES.—Projects

7 supported by the Department Office may include par8 ticipation of, and be supported by, other Federal

9 agencies that have a role in the development, commer10 cialization, or transfer of energy, transportation, in11 dustrial, agricultural, forestry, or other climate

12 change-related technology.

13 (2) WITH THE PRIVATE SECTOR.—

14 (A) IN GENERAL.—Notwithstanding section

15 1403, the Department Office shall create an oper16 ating model that allows for collaboration, divi17 sion of effort, and cost sharing with industry on

18 individual climate change response projects.

19 (B) REQUIREMENTS.—Although cost shar20 ing in some cases may be appropriate, the De21 partment Office shall focus on long-term high22 risk research and development and should not

23 make industrial partnerships or cost sharing a

24 requirement, if such a requirement would bias
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1 the activities of the Department Office toward

2 incremental innovations.

3 (C) REEVALUATION ON TRANSFER.—At such

4 time as any bold, breakthrough research and de5 velopment program reaches a sufficient level of

6 technological maturity such that the program is

7 transferred to a program office of the Depart8 ment other than the Department Office, the cost9 sharing requirements and criteria applicable to

10 the program shall be reevaluated.

11 (D) PUBLICATION IN FEDERAL REGISTER.—

12 Each cost-sharing agreement entered into under

13 this paragraph shall be published in the Federal

14 Register.

15 (f) ANALYSIS OF CLIMATE CHANGE STRATEGY.—

16 (1) IN GENERAL.—The Department Office shall

17 foster the development and application of advanced

18 computational tools, data, and capabilities that, to19 gether with the capabilities of other Federal agencies,

20 support integrated assessment of alternative climate

21 change response scenarios and implementation of the

22 Strategy.

23 (2) PROGRAMS.—

24 (A) IN GENERAL.—The Department Office

25 shall—
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1 (i) develop and maintain core analyt2 ical competencies and complex, integrated

3 computational modeling capabilities that,

4 together with the capabilities of other Fed5 eral agencies, are necessary to support the

6 design and implementation of the Strategy;

7 and

8 (ii) track United States and inter9 national progress toward the long-term goal

10 of the Strategy.

11 (B) INTERNATIONAL CARBON DIOXIDE SE12 QUESTRATION MONITORING AND DATA PRO13 GRAM.—In consultation with Federal, State,

14 academic, scientific, private sector, nongovern15 mental, tribal, and international carbon capture

16 and sequestration technology programs, the De17 partment Office shall design and carry out an

18 international carbon dioxide sequestration moni19 toring and data program to collect, analyze, and

20 make available the technical and economic data

21 to ascertain—

22 (i) whether engineered sequestration

23 and terrestrial sequestration will be accept24 able technologies from regulatory, economic,

25 and international perspectives;
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1 (ii) whether carbon dioxide sequestered

2 in geological formations or ocean systems is

3 stable and has inconsequential leakage rates

4 on a geologic time-scale; and

5 (iii) the extent to which forest, agricul6 tural, and other terrestrial systems are suit7 able carbon sinks.

8 (3) AREAS OF EXPERTISE.—

9 (A) IN GENERAL.—The Department Office

10 shall develop and maintain expertise in inte11 grated assessment, modeling, and related capa12 bilities necessary—

13 (i) to understand the relationship be14 tween natural, agricultural, industrial, en15 ergy, and economic systems;

16 (ii) to design effective research and de17 velopment programs; and

18 (iii) to assist with the development and

19 implementation of the Strategy.

20 (B) TECHNOLOGY TRANSFER AND DIFFU21 SION.—The expertise described in clause (i) shall

22 include knowledge of technology transfer and

23 technology diffusion in United States and for24 eign markets.
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1 (4) DISSEMINATION OF INFORMATION.—The De2 partment Office shall ensure, to the maximum extent

3 practicable, that technical and scientific knowledge re4 lating to greenhouse gas emission reduction, avoid5 ance, and sequestration is broadly disseminated

6 through publications, fellowships, and training pro7 grams.

8 (5) ASSESSMENTS.—In a manner consistent

9 with the Strategy, the Department shall conduct as10 sessments of deployment of climate-friendly tech11 nology.

12 (6) ANALYSIS.—During development of the

13 Strategy, annual reports submitted under subsection

14 (a)(3), and advice to the Secretary, the Director of the

15 Department Office shall place significant emphasis on

16 the use of objective, quantitative analysis, taking into

17 consideration any associated uncertainties.

18 (g) AUTHORIZATION OF APPROPRIATIONS.—

19 (1) USE OF AVAILABLE APPROPRIATIONS.—From

20 funds made available to Federal agencies for the fiscal

21 year in which this subtitle is enacted, the President

22 shall provide such sums as are necessary to carry out

23 the duties of the Department Office under this subtitle

24 until the date on which funds are made available

25 under paragraph (2).
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1 (2) AUTHORIZATION OF APPROPRIATIONS.—

2 There is authorized to be appropriated to the Sec3 retary, to carry out the duties of the Department Of4 fice under this subtitle, $4,750,000,000 for the period

5 of fiscal years 2003 through 2011, to remain available

6 through September 30, 2011.

7 (3) ADDITONAL AMOUNTS.—Amounts authorized

8 to be appropriated under this section shall be in addi9 tion to—

10 (A) amounts made available to carry out

11 the United States Global Change Research Pro12 gram under the Global Change Research Act of

13 1990 (15 U.S.C. 2921 et seq.); and

14 (B) amounts made available under other

15 provisions of law for energy research and devel16 opment.

17 SEC. 1016. ADDITIONAL OFFICES AND ACTIVITIES.

18 The Secretary of Agriculture, the Secretary of Trans19 portation, the Secretary of Commerce, the Administrator of

20 the Environmental Protection Agency, and the heads of

21 other Federal agencies may establish such offices and carry

22 out such activities, in addition to those established or au23 thorized by this Act, as are necessary to carry out this Act.
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1 Subtitle C—Science and Technology

2 Policy

3 SEC. 1021. GLOBAL CLIMATE CHANGE IN THE OFFICE OF

4 SCIENCE AND TECHNOLOGY POLICY.

5 Section 101(b) of the National Science and Technology

6 Policy, Organization, and Priorities Act of 1976 (42 U.S.C.

7 6601(b)) is amended—

8 (1) by redesignating paragraphs (7) through (13)

9 as paragraphs (8) through (14), respectively; and

10 (2) by inserting after paragraph (6) the fol11 lowing:

12 ‘‘(7) improving efforts to understand, assess, pre13 dict, mitigate, and respond to global climate change;’’.

14 SEC. 1022. DIRECTOR OF OFFICE OF SCIENCE AND TECH15 NOLOGY POLICY FUNCTIONS.

16 (a) ADVISE PRESIDENT ON GLOBAL CLIMATE

17 CHANGE.—Section 204(b)(1) of the National Science and

18 Technology Policy, Organization, and Priorities Act of

19 1976 (42 U.S.C. 6613(b)(1)) is amended by inserting ‘‘glob20 al climate change,’’ after ‘‘to,’’.

21 (b) ADVISE DIRECTOR OF OFFICE OF NATIONAL CLI22 MATE CHANGE POLICY.—Section 207 of that Act (42 U.S.C.

23 6616) is amended—

24 (1) by redesignating subsections (b) and (c) as

25 subsections (c) and (d), respectively; and
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1 (2) by inserting after subsection (a) the fol2 lowing:

3 ‘‘(b) ADVISE DIRECTOR OF OFFICE OF NATIONAL CLI4 MATE CHANGE POLICY.—In carrying out this Act, the Di5 rector shall advise the Director of the Office of National Cli6 mate Change Policy on matters concerning science and tech7 nology as they relate to global climate change.’’.

8 Subtitle D—Miscellaneous

9 Provisions

10 SEC. 1031. ADDITIONAL INFORMATION FOR REGULATORY

11 REVIEW.

12 In each case that an agency prepares and submits a

13 Statement of Energy Effects pursuant to Executive Order

14 13211 of May 18, 2001 (relating to actions concerning regu15 lations that significantly affect energy supply, distribution,

16 or use), the agency shall also submit an estimate of the

17 change in net annual greenhouse gas emissions resulting

18 from the proposed significant energy action and any rea19 sonable alternatives to the action.

20 SEC. 1032. GREENHOUSE GAS EMISSIONS FROM FEDERAL

21 FACILITIES.

22 (a) METHODOLOGY.—Not later than 1 year after the

23 date of enactment of this section, the Secretary of Energy,

24 Secretary of Agriculture, Secretary of Commerce, and Ad25 ministrator of the Environmental Protection Agency shall
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1 publish a jointly developed methodology for preparing esti2 mates of annual net greenhouse gas emissions from all fed3 erally owned, leased, or operated facilities and emission

4 sources, including stationary, mobile, and indirect emis5 sions as may be determined to be feasible.

6 (b) PUBLICATION.—Not later than 18 months after the

7 date of enactment of this section, and annually thereafter,

8 the Secretary of Energy shall publish an estimate of annual

9 net greenhouse gas emissions from all federally owned,

10 leased, or operated facilities and emission sources, using the

11 methodology published under subsection (a).

12 TITLE XI—NATIONAL

13 GREENHOUSE GAS DATABASE

14 SEC. 1101. PURPOSE.

15 The purpose of this title is to establish a greenhouse

16 gas inventory, reductions registry, and information system

17 that—

18 (1) are complete, consistent, transparent, and ac19 curate;

20 (2) will create reliable and accurate data that

21 can be used by public and private entities to design

22 efficient and effective greenhouse gas emission reduc23 tion strategies; and

24 (3) will acknowledge and encourage greenhouse

25 gas emission reductions.
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1 SEC. 1102. DEFINITIONS.

2 In this title:

3 (1) ADMINISTRATOR.—The term ‘‘Adminis4 trator’’ means the Administrator of the Environ5 mental Protection Agency.

6 (2) BASELINE.—The term ‘‘baseline’’ means the

7 historic greenhouse gas emission levels of an entity, as

8 adjusted upward by the designated agency to reflect

9 actual reductions that are verified in accordance

10 with—

11 (A) regulations promulgated under section

12 1104(c)(1); and

13 (B) relevant standards and methods devel14 oped under this title.

15 (3) DATABASE.—The term ‘‘database’’ means the

16 National Greenhouse Gas Database established under

17 section 1104.

18 (4) DESIGNATED AGENCY.—The term ‘‘des19 ignated agency’’ means a department or agency to

20 which responsibility for a function or program is as21 signed under the memorandum of agreement entered

22 into under section 1103(a).

23 (5) DIRECT EMISSIONS.—The term ‘‘direct emis24 sions’’ means greenhouse gas emissions by an entity

25 from a facility that is owned or controlled by that en26 tity.
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1 (6) ENTITY.—The term ‘‘entity’’ means—

2 (A) a person located in the United States;

3 or

4 (B) a public or private entity, to the extent

5 that the entity operates in the United States.

6 (7) FACILITY.—The term ‘‘facility’’ means—

7 (A) all buildings, structures, or installations

8 located on any 1 or more contiguous or adjacent

9 properties of an entity in the United States; and

10 (B) a fleet of 20 or more motor vehicles

11 under the common control of an entity.

12 (8) GREENHOUSE GAS.—The term ‘‘greenhouse

13 gas’’ means—

14 (A) carbon dioxide;

15 (B) methane;

16 (C) nitrous oxide;

17 (D) hydrofluorocarbons;

18 (E) perfluorocarbons;

19 (F) sulfur hexafluoride; and

20 (G) any other anthropogenic climate-forcing

21 emissions with significant ascertainable global

22 warming potential, as—

23 (i) recommended by the National Acad24 emy of Sciences under section 1107(b)(3);

25 and
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1 (ii) determined in regulations promul2 gated under section 1104(c)(1) (or revisions

3 to the regulations) to be appropriate and

4 practicable for coverage under this title.

5 (9) INDIRECT EMISSIONS.—The term ‘‘indirect

6 emissions’’ means greenhouse gas emissions that—

7 (A) are a result of the activities of an enti8 ty; but

9 (B)(i) are emitted from a facility owned or

10 controlled by another entity; and

11 (ii) are not reported as direct emissions by

12 the entity the activities of which resulted in the

13 emissions.

14 (10) REGISTRY.—The term ‘‘registry’’ means the

15 registry of greenhouse gas emission reductions estab16 lished as a component of the database under section

17 1104(b)(2).

18 (11) SEQUESTRATION.—

19 (A) IN GENERAL.—The term ‘‘sequestra20 tion’’ means the capture, long-term separation,

21 isolation, or removal of greenhouse gases from the

22 atmosphere.

23 (B) INCLUSIONS.—The term ‘‘sequestration’’

24 includes—

25 (i) soil carbon sequestration;
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1 (ii) agricultural and conservation

2 practices;

3 (iii) reforestation;

4 (iv) forest preservation;

5 (v) maintenance of an underground

6 reservoir; and

7 (vi) any other appropriate biological

8 or geological method of capture, isolation, or

9 removal of greenhouse gases from the atmos10 phere, as determined by the Administrator.

11 SEC. 1103. ESTABLISHMENT OF MEMORANDUM OF AGREE12 MENT.

13 (a) IN GENERAL.—Not later than 1 year after the date

14 of enactment of this Act, the President, acting through the

15 Director of the Office of National Climate Change Policy,

16 shall direct the Secretary of Energy, the Secretary of Com17 merce, the Secretary of Agriculture, the Secretary of Trans18 portation, and the Administrator to enter into a memo19 randum of agreement under which those heads of Federal

20 agencies will—

21 (1) recognize and maintain statutory and regu22 latory authorities, functions, and programs that—

23 (A) are established as of the date of enact24 ment of this Act under other law;
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1 (B) provide for the collection of data relat2 ing to greenhouse gas emissions and effects; and

3 (C) are necessary for the operation of the

4 database;

5 (2)(A) distribute additional responsibilities and

6 activities identified under this title to Federal depart7 ments or agencies in accordance with the missions

8 and expertise of those departments and agencies; and

9 (B) maximize the use of available resources of

10 those departments and agencies; and

11 (3) provide for the comprehensive collection and

12 analysis of data on greenhouse gas emissions relating

13 to product use (including the use of fossil fuels and

14 energy-consuming appliances and vehicles).

15 (b) MINIMUM REQUIREMENTS.—The memorandum of

16 agreement entered into under subsection (a) shall, at a min17 imum, retain the following functions for the designated

18 agencies:

19 (1) DEPARTMENT OF ENERGY.—The Secretary of

20 Energy shall be primarily responsible for developing,

21 maintaining, and verifying the registry and the emis22 sion reductions reported under section 1605(b) of the

23 Energy Policy Act of 1992 (42 U.S.C. 13385(b)).
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1 (2) DEPARTMENT OF COMMERCE.—The Secretary

2 of Commerce shall be primarily responsible for the de3 velopment of—

4 (A) measurement standards for the moni5 toring of emissions; and

6 (B) verification technologies and methods to

7 ensure the maintenance of a consistent and tech8 nically accurate record of emissions, emission re9 ductions, and atmospheric concentrations of

10 greenhouse gases for the database.

11 (3) ENVIRONMENTAL PROTECTION AGENCY.—The

12 Administrator shall be primarily responsible for—

13 (A) emissions monitoring, measurement,

14 verification, and data collection under this title

15 and title IV (relating to acid deposition control)

16 and title VIII of the Clean Air Act (42 U.S.C.

17 7651 et seq.), including mobile source emissions

18 information from implementation of the cor19 porate average fuel economy program under

20 chapter 329 of title 49, United States Code; and

21 (B) responsibilities of the Environmental

22 Protection Agency relating to completion of the

23 national inventory for compliance with the

24 United Nations Framework Convention on Cli25 mate Change, done at New York on May 9, 1992.
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1 (4) DEPARTMENT OF AGRICULTURE.—The Sec2 retary of Agriculture shall be primarily responsible

3 for—

4 (A) developing measurement techniques

5 for—

6 (i) soil carbon sequestration; and

7 (ii) forest preservation and reforest8 ation activities; and

9 (B) providing technical advice relating to

10 biological carbon sequestration measurement and

11 verification standards for measuring greenhouse

12 gas emission reductions or offsets.

13 (c) DRAFT MEMORANDUM OF AGREEMENT.—Not later

14 than 15 months after the date of enactment of this Act, the

15 President, acting through the Director of the Office of Na16 tional Climate Change Policy, shall publish in the Federal

17 Register, and solicit comments on, a draft version of the

18 memorandum of agreement described in subsection (a).

19 (d) NO JUDICIAL REVIEW.—The final version of the

20 memorandum of agreement shall not be subject to judicial

21 review.

22 SEC. 1104. NATIONAL GREENHOUSE GAS DATABASE.

23 (a) ESTABLISHMENT.—As soon as practicable after the

24 date of enactment of this Act, the designated agencies, in

25 consultation with the private sector and nongovernmental
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1 organizations, shall jointly establish, operate, and maintain

2 a database, to be known as the ‘‘National Greenhouse Gas

3 Database’’, to collect, verify, and analyze information on

4 greenhouse gas emissions by entities.

5 (b) NATIONAL GREENHOUSE GAS DATABASE COMPO6 NENTS.—The database shall consist of—

7 (1) an inventory of greenhouse gas emissions;

8 and

9 (2) a registry of greenhouse gas emission reduc10 tions.

11 (c) COMPREHENSIVE SYSTEM.—

12 (1) IN GENERAL.—Not later than 2 years after

13 the date of enactment of this Act, the designated agen14 cies shall jointly promulgate regulations to implement

15 a comprehensive system for greenhouse gas emissions

16 reporting, inventorying, and reductions registration.

17 (2) REQUIREMENTS.—The designated agencies

18 shall ensure, to the maximum extent practicable,

19 that—

20 (A) the comprehensive system described in

21 paragraph (1) is designed to—

22 (i) maximize completeness, trans23 parency, and accuracy of information re24 ported; and
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1 (ii) minimize costs incurred by entities

2 in measuring and reporting greenhouse gas

3 emissions; and

4 (B) the regulations promulgated under

5 paragraph (1) establish procedures and protocols

6 necessary—

7 (i) to prevent the reporting of some or

8 all of the same greenhouse gas emissions or

9 emission reductions by more than 1 report10 ing entity;

11 (ii) to provide for corrections to errors

12 in data submitted to the database;

13 (iii) to provide for adjustment to data

14 by reporting entities that have had a sig15 nificant organizational change (including

16 mergers, acquisitions, and divestiture), in

17 order to maintain comparability among

18 data in the database over time;

19 (iv) to provide for adjustments to re20 flect new technologies or methods for meas21 uring or calculating greenhouse gas emis22 sions; and

23 (v) to account for changes in registra24 tion of ownership of emission reductions re-
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1 sulting from a voluntary private trans2 action between reporting entities.

3 (3) BASELINE IDENTIFICATION AND PROTEC4 TION.—Through regulations promulgated under para5 graph (1), the designated agencies shall develop and

6 implement a system that provides—

7 (A) for the provision of unique serial num8 bers to identify the verified emission reductions

9 made by an entity relative to the baseline of the

10 entity;

11 (B) for the tracking of the reductions associ12 ated with the serial numbers; and

13 (C) that the reductions may be applied, as

14 determined to be appropriate by any Act of Con15 gress enacted after the date of enactment of this

16 Act, toward a Federal requirement under such

17 an Act that is imposed on the entity for the pur18 pose of reducing greenhouse gas emissions.

19 SEC. 1105. GREENHOUSE GAS REDUCTION REPORTING.

20 (a) IN GENERAL.—An entity that participates in the

21 registry shall meet the requirements described in subsection

22 (b).

23 (b) REQUIREMENTS.—
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1 (1) IN GENERAL.—The requirements referred to

2 in subsection (a) are that an entity (other than an

3 entity described in paragraph (2)) shall—

4 (A) establish a baseline (including all of the

5 entity’s greenhouse gas emissions on an entity6 wide basis); and

7 (B) submit the report described in sub8 section (c)(1).

9 (2) REQUIREMENTS APPLICABLE TO ENTITIES

10 ENTERING INTO CERTAIN AGREEMENTS.—An entity

11 that enters into an agreement with a participant in

12 the registry for the purpose of a carbon sequestration

13 project shall not be required to comply with the re14 quirements specified in paragraph (1) unless that en15 tity is required to comply with the requirements by

16 reason of an activity other than the agreement.

17 (c) REPORTS.—

18 (1) REQUIRED REPORT.—Not later than April 1

19 of the third calendar year that begins after the date

20 of enactment of this Act, and not later than April 1

21 of each calendar year thereafter, subject to paragraph

22 (3), an entity described in subsection (a) shall submit

23 to each appropriate designated agency a report that

24 describes, for the preceding calendar year, the entity-
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1 wide greenhouse gas emissions (as reported at the fa2 cility level), including—

3 (A) the total quantity of each greenhouse

4 gas emitted, expressed in terms of mass and in

5 terms of the quantity of carbon dioxide equiva6 lent;

7 (B) an estimate of the greenhouse gas emis8 sions from fossil fuel combusted by products

9 manufactured and sold by the entity in the pre10 vious calendar year, determined over the average

11 lifetime of those products; and

12 (C) such other categories of emissions as the

13 designated agency determines in the regulations

14 promulgated under section 1104(c)(1) may be

15 practicable and useful for the purposes of this

16 title, such as—

17 (i) direct emissions from stationary

18 sources;

19 (ii) indirect emissions from imported

20 electricity, heat, and steam;

21 (iii) process and fugitive emissions;

22 and

23 (iv) production or importation of

24 greenhouse gases.
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1 (2) VOLUNTARY REPORTING.—An entity de2 scribed in subsection (a) may (along with establishing

3 a baseline and reporting reductions under this sec4 tion)—

5 (A) submit a report described in paragraph

6 (1) before the date specified in that paragraph

7 for the purposes of achieving and commoditizing

8 greenhouse gas reductions through use of the reg9 istry; and

10 (B) submit to any designated agency, for

11 inclusion in the registry, information that has

12 been verified in accordance with regulations pro13 mulgated under section 1104(c)(1) and that re14 lates to—

15 (i) with respect to the calendar year

16 preceding the calendar year in which the

17 information is submitted, and with respect

18 to any greenhouse gas emitted by the

19 entity—

20 (I) project reductions from facili21 ties owned or controlled by the report22 ing entity in the United States;

23 (II) transfers of project reductions

24 to and from any other entity;
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1 (III) project reductions and trans2 fers of project reductions outside the

3 United States;

4 (IV) other indirect emissions that

5 are not required to be reported under

6 paragraph (1); and

7 (V) product use phase emissions;

8 (ii) with respect to greenhouse gas

9 emission reductions activities of the entity

10 that have been carried out during or after

11 1990, verified in accordance with regula12 tions promulgated under section 1104(c)(1),

13 and submitted to 1 or more designated

14 agencies before the date that is 4 years after

15 the date of enactment of this Act, any green16 house gas emission reductions that have

17 been reported or submitted by an entity

18 under—

19 (I) section 1605(b) of the Energy

20 Policy Act of 1992 (42 U.S.C.

21 13385(b)); or

22 (II) any other Federal or State

23 voluntary greenhouse gas reduction

24 program; and
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1 (iii) any project or activity for the re2 duction of greenhouse gas emissions or se3 questration of a greenhouse gas that is car4 ried out by the entity, including a project

5 or activity relating to—

6 (I) fuel switching;

7 (II) energy efficiency improve8 ments;

9 (III) use of renewable energy;

10 (IV) use of combined heat and

11 power systems;

12 (V) management of cropland,

13 grassland, or grazing land;

14 (VI) a forestry activity that in15 creases forest carbon stocks or reduces

16 forest carbon emissions;

17 (VII) carbon capture and storage;

18 (VIII) methane recovery;

19 (IX) greenhouse gas offset invest20 ment; and

21 (X) any other practice for achiev22 ing greenhouse gas reductions as recog23 nized by 1 or more designated agencies.

24 (3) EXEMPTIONS FROM REPORTING.—
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1 (A) IN GENERAL.—If the Director of the Of2 fice of National Climate Change Policy deter3 mines under section 1108(b) that the reporting

4 requirements under paragraph (1) shall apply to

5 all entities (other than entities exempted by this

6 paragraph), regardless of participation or non7 participation in the registry, an entity shall be

8 required to submit reports under paragraph (1)

9 only if, in any calendar year after the date of

10 enactment of this Act—

11 (i) the total greenhouse gas emissions

12 of at least 1 facility owned by the entity ex13 ceeds 10,000 metric tons of carbon dioxide

14 equivalent (or such greater quantity as may

15 be established by a designated agency by

16 regulation); or

17 (ii)(I) the total quantity of greenhouse

18 gases produced, distributed, or imported by

19 the entity exceeds 10,000 metric tons of car20 bon dioxide equivalent (or such greater

21 quantity as may be established by a des22 ignated agency by regulation); and

23 (II) the entity is not a feedlot or other

24 farming operation (as defined in section

25 101 of title 11, United States Code).
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1 (B) ENTITIES ALREADY REPORTING.—

2 (i) IN GENERAL.—An entity that, as of

3 the date of enactment of this Act, is re4 quired to report carbon dioxide emissions

5 data to a Federal agency shall not be re6 quired to re-report that data for the pur7 poses of this title.

8 (ii) REVIEW OF PARTICIPATION.—For

9 the purpose of section 1108, emissions re10 ported under clause (i) shall be considered

11 to be reported by the entity to the registry.

12 (4) PROVISION OF VERIFICATION INFORMATION

13 BY REPORTING ENTITIES.—Each entity that submits

14 a report under this subsection shall provide informa15 tion sufficient for each designated agency to which the

16 report is submitted to verify, in accordance with

17 measurement and verification methods and standards

18 developed under section 1106, that the greenhouse gas

19 report of the reporting entity—

20 (A) has been accurately reported; and

21 (B) in the case of each voluntary report

22 under paragraph (2), represents—

23 (i) actual reductions in direct green24 house gas emissions—
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1 (I) relative to historic emission

2 levels of the entity; and

3 (II) net of any increases in—

4 (aa) direct emissions; and

5 (bb) indirect emissions de6 scribed in paragraph (1)(C)(ii);

7 or

8 (ii) actual increases in net sequestra9 tion.

10 (5) FAILURE TO SUBMIT REPORT.—An entity

11 that participates or has participated in the registry

12 and that fails to submit a report required under this

13 subsection shall be prohibited from including emission

14 reductions reported to the registry in the calculation

15 of the baseline of the entity in future years.

16 (6) INDEPENDENT THIRD-PARTY VERIFICA17 TION.—To meet the requirements of this section and

18 section 1106, a entity that is required to submit a re19 port under this section may—

20 (A) obtain independent third-party

21 verification; and

22 (B) present the results of the third-party

23 verification to each appropriate designated agen24 cy.

25 (7) AVAILABILITY OF DATA.—
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1 (A) IN GENERAL.—The designated agencies

2 shall ensure, to the maximum extent practicable,

3 that information in the database is—

4 (i) published;

5 (ii) accessible to the public; and

6 (iii) made available in electronic for7 mat on the Internet.

8 (B) EXCEPTION.—Subparagraph (A) shall

9 not apply in any case in which the designated

10 agencies determine that publishing or otherwise

11 making available information described in that

12 subparagraph poses a risk to national security.

13 (8) DATA INFRASTRUCTURE.—The designated

14 agencies shall ensure, to the maximum extent prac15 ticable, that the database uses, and is integrated with,

16 Federal, State, and regional greenhouse gas data col17 lection and reporting systems in effect as of the date

18 of enactment of this Act.

19 (9) ADDITIONAL ISSUES TO BE CONSIDERED.—

20 In promulgating the regulations under section

21 1104(c)(1) and implementing the database, the des22 ignated agencies shall take into consideration a broad

23 range of issues involved in establishing an effective

24 database, including—
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1 (A) the appropriate units for reporting each

2 greenhouse gas;

3 (B) the data and information systems and

4 measures necessary to identify, track, and verify

5 greenhouse gas emission reductions in a manner

6 that will encourage the development of private

7 sector trading and exchanges;

8 (C) the greenhouse gas reduction and se9 questration methods and standards applied in

10 other countries, as applicable or relevant;

11 (D) the extent to which available fossil fuels,

12 greenhouse gas emissions, and greenhouse gas

13 production and importation data are adequate

14 to implement the database;

15 (E) the differences in, and potential unique16 ness of, the facilities, operations, and business

17 and other relevant practices of persons and enti18 ties in the private and public sectors that may

19 be expected to participate in the registry; and

20 (F) the need of the registry to maintain

21 valid and reliable information on baselines of en22 tities so that, in the event of any future action

23 by Congress to require entities, individually or

24 collectively, to reduce greenhouse gas emissions,

25 Congress will be able—
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1 (i) to take into account that informa2 tion; and

3 (ii) to avoid enacting legislation that

4 penalizes entities for achieving and report5 ing reductions.

6 (d) ANNUAL REPORT.—The designated agencies shall

7 jointly publish an annual report that—

8 (1) describes the total greenhouse gas emissions

9 and emission reductions reported to the database dur10 ing the year covered by the report;

11 (2) provides entity-by-entity and sector-by-sector

12 analyses of the emissions and emission reductions re13 ported;

14 (3) describes the atmospheric concentrations of

15 greenhouse gases; and

16 (4) provides a comparison of current and past

17 atmospheric concentrations of greenhouse gases.

18 SEC. 1106. MEASUREMENT AND VERIFICATION.

19 (a) STANDARDS.—

20 (1) IN GENERAL.—Not later than 1 year after

21 the date of enactment of this Act, the designated agen22 cies shall jointly develop comprehensive measurement

23 and verification methods and standards to ensure a

24 consistent and technically accurate record of green25 house gas emissions, emission reductions, sequestra-
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1 tion, and atmospheric concentrations for use in the

2 registry.

3 (2) REQUIREMENTS.—The methods and stand4 ards developed under paragraph (1) shall address the

5 need for—

6 (A) standardized measurement and

7 verification practices for reports made by all en8 tities participating in the registry, taking into

9 account—

10 (i) protocols and standards in use by

11 entities desiring to participate in the reg12 istry as of the date of development of the

13 methods and standards under paragraph

14 (1);

15 (ii) boundary issues, such as leakage

16 and shifted use;

17 (iii) avoidance of double counting of

18 greenhouse gas emissions and emission re19 ductions; and

20 (iv) such other factors as the des21 ignated agencies determine to be appro22 priate;

23 (B) measurement and verification of actions

24 taken to reduce, avoid, or sequester greenhouse

25 gas emissions;
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1 (C) in coordination with the Secretary of

2 Agriculture, measurement of the results of the use

3 of carbon sequestration and carbon recapture

4 technologies, including—

5 (i) organic soil carbon sequestration

6 practices; and

7 (ii) forest preservation and reforest8 ation activities that adequately address the

9 issues of permanence, leakage, and

10 verification;

11 (D) such other measurement and

12 verification standards as the Secretary of Com13 merce, the Secretary of Agriculture, the Adminis14 trator, and the Secretary of Energy determine to

15 be appropriate; and

16 (E) other factors that, as determined by the

17 designated agencies, will allow entities to ade18 quately establish a fair and reliable measure19 ment and reporting system.

20 (b) REVIEW AND REVISION.—The designated agencies

21 shall periodically review, and revise as necessary, the meth22 ods and standards developed under subsection (a).

23 (c) PUBLIC PARTICIPATION.—The Secretary of Com24 merce shall—
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1 (1) make available to the public for comment, in

2 draft form and for a period of at least 90 days, the

3 methods and standards developed under subsection

4 (a); and

5 (2) after the 90-day period referred to in para6 graph (1), in coordination with the Secretary of En7 ergy, the Secretary of Agriculture, and the Adminis8 trator, adopt the methods and standards developed

9 under subsection (a) for use in implementing the

10 database.

11 (d) EXPERTS AND CONSULTANTS.—

12 (1) IN GENERAL.—The designated agencies may

13 obtain the services of experts and consultants in the

14 private and nonprofit sectors in accordance with sec15 tion 3109 of title 5, United States Code, in the areas

16 of greenhouse gas measurement, certification, and

17 emission trading.

18 (2) AVAILABLE ARRANGEMENTS.—In obtaining

19 any service described in paragraph (1), the designated

20 agencies may use any available grant, contract, coop21 erative agreement, or other arrangement authorized

22 by law.

23 SEC. 1107. INDEPENDENT REVIEWS.

24 (a) IN GENERAL.—Not later than 5 years after the

25 date of enactment of this Act, and every 3 years thereafter,
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1 the Comptroller General of the United States shall submit

2 to Congress a report that—

3 (1) describes the efficacy of the implementation

4 and operation of the database; and

5 (2) includes any recommendations for improve6 ments to this title and programs carried out under

7 this title—

8 (A) to achieve a consistent and technically

9 accurate record of greenhouse gas emissions,

10 emission reductions, and atmospheric concentra11 tions; and

12 (B) to achieve the purposes of this title.

13 (b) REVIEW OF SCIENTIFIC METHODS.—The des14 ignated agencies shall enter into an agreement with the Na15 tional Academy of Sciences under which the National Acad16 emy of Sciences shall—

17 (1) review the scientific methods, assumptions,

18 and standards used by the designated agencies in im19 plementing this title;

20 (2) not later than 4 years after the date of enact21 ment of this Act, submit to Congress a report that de22 scribes any recommendations for improving—

23 (A) those methods and standards; and
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1 (B) related elements of the programs, and

2 structure of the database, established by this title;

3 and

4 (3) regularly review and update as appropriate

5 the list of anthropogenic climate-forcing emissions

6 with significant global warming potential described

7 in section 1102(8)(G).

8 SEC. 1108. REVIEW OF PARTICIPATION.

9 (a) IN GENERAL.—Not later than 5 years after the

10 date of enactment of this Act, the Director of the Office of

11 National Climate Change Policy shall determine whether

12 the reports submitted to the registry under section

13 1105(c)(1) represent less than 60 percent of the national

14 aggregate anthropogenic greenhouse gas emissions.

15 (b) INCREASED APPLICABILITY OF REQUIREMENTS.—

16 If the Director of the Office of National Climate Change

17 Policy determines under subsection (a) that less than 60

18 percent of the aggregate national anthropogenic greenhouse

19 gas emissions are being reported to the registry—

20 (1) the reporting requirements under section

21 1105(c)(1) shall apply to all entities (except entities

22 exempted under section 1105(c)(3)), regardless of any

23 participation or nonparticipation by the entities in

24 the registry; and
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1 (2) each entity shall submit a report described in

2 section 1105(c)(1)—

3 (A) not later than the earlier of—

4 (i) April 30 of the calendar year im5 mediately following the year in which the

6 Director of the Office of National Climate

7 Change Policy makes the determination

8 under subsection (a); or

9 (ii) the date that is 1 year after the

10 date on which the Director of the Office of

11 National Climate Change Policy makes the

12 determination under subsection (a); and

13 (B) annually thereafter.

14 (c) RESOLUTION OF DISAPPROVAL.—For the purposes

15 of this section, the determination of the Director of the Of16 fice of National Climate Change Policy under subsection (a)

17 shall be considered to be a major rule (as defined in section

18 804(2) of title 5, United States Code) subject to the congres19 sional disapproval procedure under section 802 of title 5,

20 United States Code.

21 SEC. 1109. ENFORCEMENT.

22 If an entity that is required to report greenhouse gas

23 emissions under section 1105(c)(1) or 1108 fails to comply

24 with that requirement, the Attorney General may, at the

25 request of the designated agencies, bring a civil action in
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1 United States district court against the entity to impose

2 on the entity a civil penalty of not more than $25,000 for

3 each day for which the entity fails to comply with that re4 quirement.

5 SEC. 1110. REPORT ON STATUTORY CHANGES AND HARMO6 NIZATION.

7 Not later than 3 years after the date of enactment of

8 this Act, the President shall submit to Congress a report

9 that describes any modifications to this title or any other

10 provision of law that are necessary to improve the accuracy

11 or operation of the database and related programs under

12 this title.

13 SEC. 1111. AUTHORIZATION OF APPROPRIATIONS.

14 There are authorized to be appropriated such sums as

15 are necessary to carry out this title.

16 DIVISION E—ENHANCING RE17 SEARCH, DEVELOPMENT, AND

18 TRAINING

19 TITLE XII—ENERGY RESEARCH

20 AND DEVELOPMENT PROGRAMS

21 SEC. 1201. SHORT TITLE.

22 This division may be cited as the ‘‘Energy Science and

23 Technology Enhancement Act of 2003’’.

24 SEC. 1202. FINDINGS.

25 The Congress finds the following:
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1 (1) A coherent national energy strategy requires

2 an energy research and development program that

3 supports basic energy research and provides mecha4 nisms to develop, demonstrate, and deploy new energy

5 technologies in partnership with industry.

6 (2) An aggressive national energy research, de7 velopment, demonstration, and technology deployment

8 program is an integral part of a national climate

9 change strategy, because it can reduce—

10 (A) United States energy intensity by 1.9

11 percent per year from 1999 to 2020;

12 (B) United States energy consumption in

13 2020 by 8 quadrillion Btu from otherwise ex14 pected levels; and

15 (C) United States carbon dioxide emissions

16 from expected levels by 166 million metric tons

17 in carbon equivalent in 2020.

18 (3) An aggressive national energy research, de19 velopment, demonstration, and technology deployment

20 program can help maintain domestic United States

21 production of energy, increase United States hydro22 carbon reserves by 14 percent, and lower natural gas

23 prices by 20 percent, compared to estimates for 2020.

24 (4) An aggressive national energy research, de25 velopment, demonstration, and technology deployment
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1 program is needed if United States suppliers and

2 manufacturers are to compete in future markets for

3 advanced energy technologies.

4 SEC. 1203. DEFINITIONS.

5 In this title:

6 (1) DEPARTMENT.—The term ‘‘Department’’

7 means the Department of Energy.

8 (2) DEPARTMENTAL MISSION.—The term ‘‘de9 partmental mission’’ means any of the functions vest10 ed in the Secretary of Energy by the Department of

11 Energy Organization Act (42 U.S.C. 7101 et seq.) or

12 other law.

13 (3) INSTITUTION OF HIGHER EDUCATION.—The

14 term ‘‘institution of higher education’’ has the mean15 ing given that term in section 1201(a) of the Higher

16 Education Act of 1965 (20 U.S.C. 1141(a));

17 (4) NATIONAL LABORATORY.—The term ‘‘Na18 tional Laboratory’’ means any of the following multi19 purpose laboratories owned by the Department of

20 Energy—

21 (A) Argonne National Laboratory;

22 (B) Brookhaven National Laboratory;

23 (C) Idaho National Engineering and Envi24 ronmental Laboratory;
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1 (D) Lawrence Berkeley National Labora2 tory;

3 (E) Lawrence Livermore National Labora4 tory;

5 (F) Los Alamos National Laboratory;

6 (G) National Energy Technology Labora7 tory;

8 (H) National Renewable Energy Labora9 tory;

10 (I) Oak Ridge National Laboratory;

11 (J) Pacific Northwest National Laboratory;

12 or

13 (K) Sandia National Laboratory.

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

15 the Secretary of Energy.

16 (6) TECHNOLOGY DEPLOYMENT.—The term

17 ‘‘technology deployment’’ means activities to promote

18 acceptance and utilization of technologies in commer19 cial application, including activities undertaken pur20 suant to section 7 of the Federal Nonnuclear Energy

21 Research and Development Act of 1974 (42 U.S.C.

22 5906) or section 6 of the Renewable Energy and En23 ergy Efficiency Technology Competitiveness Act of

24 1989 (42 U.S.C. 12007).
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1 SEC. 1204. CONSTRUCTION WITH OTHER LAWS.

2 Except as otherwise provided in this title and title

3 XIV, the Secretary shall carry out the research, develop4 ment, demonstration, and technology deployment programs

5 authorized by this title in accordance with the Atomic En6 ergy Act of 1954 (42 U.S.C. 2011 et seq.), the Federal Non7 nuclear Research and Development Act of 1974 (42 U.S.C.

8 5901 et seq.), the Energy Policy Act of 1992 (42 U.S.C.

9 13201 et seq.), or any other Act under which the Secretary

10 is authorized to carry out such activities.

11 Subtitle A—Energy Efficiency

12 SEC. 1211. ENHANCED ENERGY EFFICIENCY RESEARCH AND

13 DEVELOPMENT.

14 (a) PROGRAM DIRECTION.—The Secretary shall con15 duct balanced energy research, development, demonstration,

16 and technology deployment programs to enhance energy ef17 ficiency in buildings, industry, power technologies, and

18 transportation.

19 (b) PROGRAM GOALS.—

20 (1) ENERGY-EFFICIENT HOUSING.—The goal of

21 the energy-efficient housing program shall be to de22 velop, in partnership with industry, enabling tech23 nologies (including lighting technologies), designs,

24 production methods, and supporting activities that

25 will, by 2010—
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1 (A) cut the energy use of new housing by 50

2 percent, and

3 (B) reduce energy use in existing homes by

4 30 percent.

5 (2) INDUSTRIAL ENERGY EFFICIENCY.—The goal

6 of the industrial energy efficiency program shall be to

7 develop, in partnership with industry, enabling tech8 nologies, designs, production methods, and supporting

9 activities that will, by 2010, enable energy-intensive

10 industries such as the following industries to reduce

11 their energy intensity by at least 25 percent—

12 (A) the wood product manufacturing indus13 try;

14 (B) the pulp and paper industry;

15 (C) the petroleum and coal products manu16 facturing industry;

17 (D) the mining industry;

18 (E) the chemical manufacturing industry;

19 (F) the glass and glass product manufac20 turing industry;

21 (G) the iron and steel mills and ferroalloy

22 manufacturing industry;

23 (H) the primary aluminum production in24 dustry;

25 (I) the foundries industry; and
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1 (J) United States agriculture.

2 (3) TRANSPORTATION ENERGY EFFICIENCY.—The

3 goal of the transportation energy efficiency program

4 shall be to develop, in partnership with industry,

5 technologies that will enable the achievement—

6 (A) by 2010, passenger automobiles with a

7 fuel economy of 80 miles per gallon;

8 (B) by 2010, light trucks (classes 1 and 2a)

9 with a fuel economy of 60 miles per gallon;

10 (C) by 2010, medium trucks and buses

11 (classes 2b through 6 and class 8 transit buses)

12 with a fuel economy, in ton-miles per gallon,

13 that is three times that of year 2000 equivalent

14 vehicles;

15 (D) by 2010, heavy trucks (classes 7 and 8)

16 with a fuel economy, in ton-miles per gallon,

17 that is two times that of year 2000 equivalent

18 vehicles; and

19 (E) by 2015, the production of fuel-cell pow20 ered passenger vehicles with a fuel economy of

21 110 miles per gallon.

22 (4) ENERGY EFFICIENT DISTRIBUTED GENERA23 TION.—The goals of the energy efficient on-site gen24 eration program shall be to help remove environ25 mental and regulatory barriers to on-site, or distrib-
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1 uted, generation and combined heat and power by de2 veloping technologies by 2015 that achieve—

3 (A) electricity generating efficiencies greater

4 than 40 percent for on-site generation tech5 nologies based upon natural gas, including fuel

6 cells, microturbines, reciprocating engines and

7 industrial gas turbines;

8 (B) combined heat and power total (electric

9 and thermal) efficiencies of more than 85 per10 cent;

11 (C) fuel flexibility to include hydrogen,

12 biofuels and natural gas;

13 (D) near zero emissions of pollutants that

14 form smog and acid rain;

15 (E) reduction of carbon dioxide emissions

16 by at least 40 percent;

17 (F) packaged system integration at end user

18 facilities providing complete services in heating,

19 cooling, electricity and air quality; and

20 (G) increased reliability for the consumer

21 and greater stability for the national electricity

22 grid.

23 (c) AUTHORIZATION OF APPROPRIATIONS.—There are

24 authorized to be appropriated to the Secretary for carrying
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1 out research, development, demonstration, and technology

2 deployment activities under this subtitle—

3 (1) $700,000,000 for fiscal year 2003;

4 (2) $784,000,000 for fiscal year 2004;

5 (3) $878,000,000 for fiscal year 2005; and

6 (4) $983,000,000 for fiscal year 2006.

7 (d) LIMITATION ON USE OF FUNDS.—None of the

8 funds authorized to be appropriated in subsection (c) may

9 be used for the following programs of the Department—

10 (1) Weatherization Assistance Program;

11 (2) State Energy Program; or

12 (3) Federal Energy Management Program.

13 SEC. 1212. ENERGY EFFICIENCY SCIENCE INITIATIVE.

14 (a) ESTABLISHMENT AND AUTHORIZATION OF APPRO15 PRIATIONS.—From amounts authorized under section

16 1211(c), there are authorized to be appropriated not more

17 than $50,000,000 in any fiscal year, for an Energy Effi18 ciency Science Initiative to be managed by the Assistant

19 Secretary in the Department with responsibility for energy

20 conservation under section 203(a)(9) of the Department of

21 Energy Organization Act (42 U.S.C. 7133(a)(9)), in con22 sultation with the Director of the Office of Science, for

23 grants to be competitively awarded and subject to peer re24 view for research relating to energy efficiency.
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1 (b) REPORT.—The Secretary of Energy shall submit

2 to the Committee on Science and the Committee on Appro3 priations of the United States House of Representatives,

4 and to the Committee on Energy and Natural Resources

5 and the Committee on Appropriations of the United States

6 Senate, an annual report on the activities of the Energy

7 Efficiency Science Initiative, including a description of the

8 process used to award the funds and an explanation of how

9 the research relates to energy efficiency.

10 SEC. 1213. NEXT GENERATION LIGHTING INITIATIVE.

11 (a) ESTABLISHMENT.—There is established in the De12 partment a Next Generation Lighting Initiative to research,

13 develop, and conduct demonstration activities on advanced

14 solid-state lighting technologies based on white light emit15 ting diodes.

16 (b) OBJECTIVES.—

17 (1) IN GENERAL.—The objectives of the initiative

18 shall be to develop, by 2011, advanced solid-state

19 lighting technologies based on white light emitting di20 odes that, compared to incandescent and fluorescent

21 lighting technologies, are—

22 (A) longer lasting;

23 (B) more energy-efficient; and

24 (C) cost-competitive.
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1 (2) INORGANIC WHITE LIGHT EMITTING DIODE.—

2 The objective of the initiative with respect to inor3 ganic white light emitting diodes shall be to develop

4 an inorganic white light emitting diode that has an

5 efficiency of 160 lumens per watt and a 10-year life6 time.

7 (3) ORGANIC WHITE LIGHT EMITTING DIODE.—

8 The objective of the initiative with respect to organic

9 white light emitting diodes shall be to develop an or10 ganic white light emitting diode with an efficiency of

11 100 lumens per watt with a 5-year lifetime that—

12 (A) illuminates over a full color spectrum;

13 (B) covers large areas over flexible surfaces;

14 and

15 (C) does not contain harmful pollutants

16 typical of fluorescent lamps such as mercury.

17 (c) CONSORTIUM.—

18 (1) IN GENERAL.—The Secretary shall initiate

19 and manage basic and manufacturing-related re20 search on advanced solid-state lighting technologies

21 based on white light emitting diodes for the initiative,

22 in cooperation with the Next Generation Lighting

23 Initiative Consortium.

24 (2) COMPOSITION.—The consortium shall be

25 composed of firms, national laboratories, and other
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1 entities so that the consortium is representative of the

2 United States solid-state lighting research, develop3 ment, and manufacturing expertise as a whole.

4 (3) FUNDING.—The consortium shall be funded

5 by—

6 (A) participation fees; and

7 (B) grants provided under subsection (e)(1).

8 (4) ELIGIBILITY.—To be eligible to receive a

9 grant under subsection (e)(1), the consortium shall—

10 (A) enter into a consortium participation

11 agreement that—

12 (i) is agreed to by all participants;

13 and

14 (ii) describes the responsibilities of

15 participants, participation fees, and the

16 scope of research activities; and

17 (B) develop an annual program plan.

18 (5) INTELLECTUAL PROPERTY.—Participants in

19 the consortium shall have royalty-free nonexclusive

20 rights to use intellectual property derived from con21 sortium research conducted under subsection (e)(1).

22 (d) PLANNING BOARD.—

23 (1) IN GENERAL.—Not later than 90 days after

24 the establishment of the consortium, the Secretary

25 shall establish and appoint the members of a plan-
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1 ning board, to be known as the ‘‘Next Generation

2 Lighting Initiative Planning Board’’, to assist the

3 Secretary in carrying out this section.

4 (2) COMPOSITION.—The planning board shall be

5 composed of—

6 (A) four members from universities, na7 tional laboratories, and other individuals with

8 expertise in advanced solid-state lighting and

9 technologies based on white light emitting diodes;

10 and

11 (B) three members from a list of not less

12 than six nominees from industry submitted by

13 the consortium.

14 (3) STUDY.—

15 (A) IN GENERAL.—Not later than 90 days

16 after the date on which the Secretary appoints

17 members to the planning board, the planning

18 board shall complete a study on strategies for the

19 development and implementation of advanced

20 solid-state lighting technologies based on white

21 light emitting diodes.

22 (B) REQUIREMENTS.—The study shall de23 velop a comprehensive strategy to implement,

24 through the initiative, the use of white light
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1 emitting diodes to increase energy efficiency and

2 enhance United States competitiveness.

3 (C) IMPLEMENTATION.—As soon as prac4 ticable after the study is submitted to the Sec5 retary, the Secretary shall implement the initia6 tive in accordance with the recommendations of

7 the planning board.

8 (4) TERMINATION.—The planning board shall

9 terminate upon completion of the study under para10 graph (3).

11 (e) GRANTS.—

12 (1) FUNDAMENTAL RESEARCH.—The Secretary,

13 through the consortium, shall make grants to conduct

14 basic and manufacturing-related research related to

15 advanced solid-state lighting technologies based on

16 white light emitting diode technologies.

17 (2) TECHNOLOGY DEVELOPMENT AND DEM18 ONSTRATION.—The Secretary shall enter into grants,

19 contracts, and cooperative agreements to conduct or

20 promote technology research, development, or dem21 onstration activities. In providing funding under this

22 paragraph, the Secretary shall give preference to par23 ticipants in the consortium.

24 (3) CONTINUING ASSESSMENT.—The consortium,

25 in collaboration with the Secretary, shall formulate
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1 annual operating and performance objectives, develop

2 technology roadmaps, and recommend research and

3 development priorities for the initiative. The Sec4 retary may also establish or utilize advisory commit5 tees, or enter into appropriate arrangements with the

6 National Academy of Sciences, to conduct periodic re7 views of the initiative. The Secretary shall consider

8 the results of such assessment and review activities in

9 making funding decisions under paragraphs (1) and

10 (2) of this subsection.

11 (4) TECHNICAL ASSISTANCE.—The National

12 Laboratories shall cooperate with and provide tech13 nical assistance to persons carrying out projects

14 under the initiative.

15 (5) AUDITS.—

16 (A) IN GENERAL.—The Secretary shall re17 tain an independent, commercial auditor to de18 termine the extent to which funds made available

19 under this section have been expended in a man20 ner that is consistent with the objectives under

21 subsection (b) and, in the case of funds made

22 available to the consortium, the annual program

23 plan of the consortium under subsection

24 (c)(4)(B).
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1 (B) REPORTS.—The auditor shall submit to

2 Congress, the Secretary, and the Comptroller

3 General of the United States an annual report

4 containing the results of the audit.

5 (6) APPLICABLE LAW.—Grants, contracts, and

6 cooperative agreements under this section shall not be

7 subject to the Federal Acquisition Regulation.

8 (f) PROTECTION OF INFORMATION.—Information ob9 tained by the Federal Government on a confidential basis

10 under this section shall be considered to constitute trade se11 crets and commercial or financial information obtained

12 from a person and privileged or confidential under section

13 552(b)(4) of title 5, United States Code.

14 (g) AUTHORIZATION OF APPROPRIATIONS.—In addi15 tion to amounts authorized under section 1211(c), there are

16 authorized to be appropriated for activities under this sec17 tion $50,000,000 for each of fiscal years 2003 through 2011.

18 (h) DEFINITIONS.—In this section:

19 (1) ADVANCED SOLID-STATE LIGHTING.—The

20 term ‘‘advanced solid-state lighting’’ means a

21 semiconducting device package and delivery system

22 that produces white light using externally applied

23 voltage.
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1 (2) CONSORTIUM.—The term ‘‘consortium’’

2 means the Next Generation Lighting Initiative Con3 sortium under subsection (c).

4 (3) INITIATIVE.—The term ‘‘initiative’’ means

5 the Next Generation Lighting Initiative established

6 under subsection (a).

7 (4) INORGANIC WHITE LIGHT EMITTING DIODE.—

8 The term ‘‘inorganic white light emitting diode’’

9 means an inorganic semiconducting package that pro10 duces white light using externally applied voltage.

11 (5) ORGANIC WHITE LIGHT EMITTING DIODE.—

12 The term ‘‘organic white light emitting diode’’ means

13 an organic semiconducting compound that produces

14 white light using externally applied voltage.

15 (6) WHITE LIGHT EMITTING DIODE.—The term

16 ‘‘white light emitting diode’’ means—

17 (A) an inorganic white light emitting diode;

18 or

19 (B) an organic white light emitting diode.

20 SEC. 1214. RAILROAD EFFICIENCY.

21 (a) ESTABLISHMENT.—The Secretary shall, in co22 operation with the Secretaries of Transportation and De23 fense, and the Administrator of the Environmental Protec24 tion Agency, establish a public-private research partnership

25 involving the Federal Government, railroad carriers, loco-
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1 motive manufacturers, and the Association of American

2 Railroads. The goal of the initiative shall include devel3 oping and demonstrating locomotive technologies that in4 crease fuel economy, reduce emissions, improve safety, and

5 lower costs.

6 (b) AUTHORIZATION OF APPROPRIATIONS.—There are

7 authorized to be appropriated to carry out the requirements

8 of this section $60,000,000 for fiscal year 2003 and

9 $70,000,000 for fiscal year 2004.

10 SEC. 1215. HIGH POWER DENSITY INDUSTRY PROGRAM.

11 The Secretary shall establish a comprehensive research,

12 development, demonstration and deployment program to

13 improve energy efficiency of high power density facilities,

14 including data centers, server farms, and telecommuni15 cations facilities. Such program shall consider technologies

16 that provide significant improvement in thermal controls,

17 metering, load management, peak load reduction, or the ef18 ficient cooling of electronics.

19 SEC. 1216. RESEARCH REGARDING PRECIOUS METAL CA20 TALYSIS.

21 The Secretary of Energy may, for the purpose of devel22 oping improved industrial and automotive catalysts, carry

23 out research in the use of precious metals (excluding plat24 inum, palladium, and rhodium) in catalysis directly,

25 through national laboratories, or through grants to or coop-
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1 erative agreements or contracts with public or nonprofit en2 tities. There are authorized to be appropriated to carry out

3 this section such sums as are necessary for fiscal years 2003

4 through 2006.

5 Subtitle B—Renewable Energy

6 SEC. 1221. ENHANCED RENEWABLE ENERGY RESEARCH

7 AND DEVELOPMENT.

8 (a) PROGRAM DIRECTION.—The Secretary shall con9 duct balanced energy research, development, demonstration,

10 and technology deployment programs to enhance the use of

11 renewable energy.

12 (b) PROGRAM GOALS.—

13 (1) WIND POWER.—The goals of the wind power

14 program shall be to develop, in partnership with in15 dustry, a variety of advanced wind turbine designs

16 and manufacturing technologies that are cost-competi17 tive with fossil-fuel generated electricity, with a focus

18 on developing advanced low wind speed technologies

19 that, by 2007, will enable the expanding utilization

20 of widespread class 3 and 4 winds.

21 (2) PHOTOVOLTAICS.—The goal of the photo22 voltaic program shall be to develop, in partnership

23 with industry, total photovoltaic systems with in24 stalled costs of $4,000 per peak kilowatt by 2005 and

25 $2,000 per peak kilowatt by 2015.
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1 (3) SOLAR THERMAL ELECTRIC SYSTEMS.—The

2 goal of the solar thermal electric systems program

3 shall be to develop, in partnership with industry,

4 solar power technologies (including baseload solar

5 power) that are competitive with fossil-fuel generated

6 electricity by 2015, by combining high-efficiency and

7 high-temperature receivers with advanced thermal

8 storage and power cycles.

9 (4) BIOMASS-BASED POWER SYSTEMS.—The goal

10 of the biomass program shall be to develop, in part11 nership with industry, integrated power-generating

12 systems, advanced conversion, and feedstock tech13 nologies capable of producing electric power that is

14 cost-competitive with fossil-fuel generated electricity

15 by 2010, together with the production of fuels, chemi16 cals, and other products under paragraph (6).

17 (5) GEOTHERMAL ENERGY.—The goal of the geo18 thermal program shall be to develop, in partnership

19 with industry, technologies and processes based on ad20 vanced hydrothermal systems and advanced heat and

21 power systems, including geothermal heat pump tech22 nology, with a specific focus on—

23 (A) improving exploration and character24 ization technology to increase the probability of
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1 drilling successful wells from 20 percent to 40

2 percent by 2006;

3 (B) reducing the cost of drilling by 2008 to

4 an average cost of $150 per foot; and

5 (C) developing enhanced geothermal systems

6 technology with the potential to double the use7 able geothermal resource base.

8 (6) BIOFUELS.—The goal of the biofuels program

9 shall be to develop, in partnership with industry—

10 (A) advanced biochemical and thermo11 chemical conversion technologies capable of mak12 ing liquid and gaseous fuels from cellulosic feed13 stocks that are price-competitive with gasoline or

14 diesel in either internal combustion engines or

15 fuel cell vehicles by 2010; and

16 (B) advanced biotechnology processes capa17 ble of making biofuels, biobased polymers, and

18 chemicals, with particular emphasis on the de19 velopment of biorefineries that use enzyme based

20 processing systems.

21 For purposes of this paragraph, the term ‘‘cellulosic

22 feedstock’’ means any portion of a food crop not nor23 mally used in food production or any nonfood crop

24 grown for the purpose of producing biomass feedstock.
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1 (7) HYDROGEN-BASED ENERGY SYSTEMS.—The

2 goals of the hydrogen program shall be to support re3 search and development on technologies for produc4 tion, storage, and use of hydrogen, including fuel cells

5 and, specifically, fuel-cell vehicle development activi6 ties under section 1211.

7 (8) HYDROPOWER.—The goal of the hydropower

8 program shall be to develop, in partnership with in9 dustry, a new generation of turbine technologies that

10 are less damaging to fish and aquatic ecosystems.

11 (9) ELECTRIC ENERGY SYSTEMS AND STOR12 AGE.—The goals of the electric energy and storage

13 program shall be to develop, in partnership with

14 industry—

15 (A) generators and transmission, distribu16 tion, and storage systems that combine high ca17 pacity with high efficiency;

18 (B) technologies to interconnect distributed

19 energy resources with electric power systems,

20 comply with any national interconnection stand21 ards, have a minimum 10-year useful life;

22 (C) advanced technologies to increase the

23 average efficiency of electric transmission facili24 ties in rural and remote areas, giving priority

25 for demonstrations to advanced transmission
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1 technologies that are being or have been field

2 tested;

3 (D) the use of new transmission tech4 nologies, including flexible alternating current

5 transmission systems, composite conductor mate6 rials, advanced protection devices, controllers,

7 and other cost-effective methods and technologies;

8 (E) the use of superconducting materials in

9 power delivery equipment such as transmission

10 and distribution cables, transformers, and gen11 erators;

12 (F) energy management technologies for en13 terprises with aggregated loads and distributed

14 generation, such as power parks;

15 (G) economic and system models to measure

16 the costs and benefits of improved system per17 formance;

18 (H) hybrid distributed energy systems to

19 optimize two or more distributed or on-site gen20 eration technologies; and

21 (I) real-time transmission and distribution

22 system control technologies that provide for con23 tinual exchange of information between genera24 tion, transmission, distribution, and end-user fa25 cilities.
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1 (c) SPECIAL PROJECTS.—In carrying out this section,

2 the Secretary shall demonstrate—

3 (1) the use of advanced wind power technology,

4 biomass, geothermal energy systems, and other renew5 able energy technologies to assist in delivering elec6 tricity to rural and remote locations;

7 (2) the combined use of wind power and coal

8 gasification technologies; and

9 (3) the use of high temperature superconducting

10 technology in projects to demonstrate the development

11 of superconductors that enhance the reliability, oper12 ational flexibility, or power-carrying capability of

13 electric transmission systems or increase the electrical

14 or operational efficiency of electric energy generation,

15 transmission, distribution and storage systems.

16 (d) FINANCIAL ASSISTANCE TO RURAL AREAS.—In

17 carrying out special projects under subsection (c), the Sec18 retary may provide financial assistance to rural electric co19 operatives and other rural entities.

20 (e) AUTHORIZATION OF APPROPRIATIONS.—There are

21 authorized to be appropriated to the Secretary for carrying

22 out research, development, demonstration, and technology

23 deployment activities under this subtitle—

24 (1) $500,000,000 for fiscal year 2003;

25 (2) $595,000,000 for fiscal year 2004;
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1 (3) $683,000,000 for fiscal year 2005; and

2 (4) $733,000,000 for fiscal year 2006, of which

3 $100,000,000 may be allocated to meet the goals of

4 subsection (b)(1).

5 SEC. 1222. BIOENERGY PROGRAMS.

6 (a) PROGRAM DIRECTION.—The Secretary shall carry

7 out research, development, demonstration, and technology

8 development activities related to bioenergy, including pro9 grams under paragraphs (4) and (6) of section 1221(b).

10 (b) AUTHORIZATION OF APPROPRIATIONS.—

11 (1) BIOPOWER ENERGY SYSTEMS.—From

12 amounts authorized under section 1221(e), there are

13 authorized to be appropriated to the Secretary for

14 biopower energy systems—

15 (A) $60,300,000 for fiscal year 2003;

16 (B) $69,300,000 for fiscal year 2004;

17 (C) $79,600,000 for fiscal year 2005; and

18 (D) $86,250,000 for fiscal year 2006.

19 (2) BIOFUELS ENERGY SYSTEMS.—From

20 amounts authorized under section 1221(e), there are

21 authorized to be appropriated to the Secretary for

22 biofuels energy systems—

23 (A) $57,500,000 for fiscal year 2003;

24 (B) $66,125,000 for fiscal year 2004;

25 (C) $76,000,000 for fiscal year 2005; and
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1 (D) $81,400,000 for fiscal year 2006.

2 (3) INTEGRATED BIOENERGY RESEARCH AND DE3 VELOPMENT.—The Secretary may use funds author4 ized under paragraph (1) or (2) for programs,

5 projects, or activities that integrate applications for

6 both biopower and biofuels, including cross-cutting re7 search and development in feedstocks and economic

8 analysis.

9 SEC. 1223. HYDROGEN RESEARCH AND DEVELOPMENT.

10 (a) SHORT TITLE.—This section may be cited as the

11 ‘‘Hydrogen Future Act of 2003’’.

12 (b) PURPOSES.—Section 102(b) of the Spark M. Mat13 sunaga Hydrogen Research, Development, and Demonstra14 tion Act of 1990 (42 U.S.C. 12401(b)) is amended by strik15 ing paragraphs (2) and (3) and inserting the following:

16 ‘‘(2) to direct the Secretary to develop a program

17 of technology assessment, information transfer, and

18 education in which Federal agencies, members of the

19 transportation, energy, and other industries, and

20 other entities may participate;

21 ‘‘(3) to develop methods of hydrogen production

22 that minimize production of greenhouse gases, includ23 ing developing—

24 ‘‘(A) efficient production from nonrenewable

25 resources; and
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1 ‘‘(B) cost-effective production from renew2 able resources such as biomass, geothermal, wind,

3 and solar energy; and

4 ‘‘(4) to foster the use of hydrogen as a major en5 ergy source, including developing the use of hydrogen

6 in—

7 ‘‘(A) isolated villages, islands, and commu8 nities in which other energy sources are not

9 available or are very expensive; and

10 ‘‘(B) foreign economic development, to avoid

11 environmental damage from increased fossil fuel

12 use.’’.

13 (c) REPORT TO CONGRESS.—Section 103 of the Spark

14 M. Matsunaga Hydrogen Research, Development, and Dem15 onstration Act of 1990 (42 U.S.C. 12402) is amended—

16 (1) in subsection (a), by striking ‘‘January 1,

17 1999,’’ and inserting ‘‘1 year after the date of enact18 ment of the Hydrogen Future Act of 2003, and bien19 nially thereafter,’’;

20 (2) in subsection (b), by striking paragraphs (1)

21 and (2) and inserting the following:

22 ‘‘(1) an analysis of hydrogen-related activities

23 throughout the United States Government to identify

24 productive areas for increased intragovernmental col25 laboration;
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1 ‘‘(2) recommendations of the Hydrogen Technical

2 Advisory Panel established by section 108 for any im3 provements in the program that are needed, including

4 recommendations for additional legislation; and

5 ‘‘(3) to the extent practicable, an analysis of

6 State and local hydrogen-related activities.’’; and

7 (3) by adding at the end the following:

8 ‘‘(c) COORDINATION PLAN.—The report under sub9 section (a) shall be based on a comprehensive coordination

10 plan for hydrogen energy prepared by the Secretary in con11 sultation with other Federal agencies.’’.

12 (d) HYDROGEN RESEARCH AND DEVELOPMENT.—Sec13 tion 104 of the Spark M. Matsunaga Hydrogen Research,

14 Development, and Demonstration Act of 1990 (42 U.S.C.

15 12403) is amended—

16 (1) in subsection (b)(1), by striking ‘‘market17 place;’’ and inserting ‘‘marketplace, including foreign

18 markets, particularly where an energy infrastructure

19 is not well developed;’’;

20 (2) in subsection (e), by striking ‘‘this chapter’’

21 and inserting ‘‘this Act’’;

22 (3) by striking subsection (g) and inserting the

23 following:

24 ‘‘(g) COST SHARING.—
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1 ‘‘(1) INABILITY TO FUND ENTIRE COST.—The

2 Secretary shall not consider a proposal submitted by

3 a person from industry unless the proposal contains

4 a certification that—

5 ‘‘(A) reasonable efforts to obtain non-Fed6 eral funding in the amount necessary to pay 100

7 percent of the cost of the project have been made;

8 and

9 ‘‘(B) non-Federal funding in that amount

10 could not reasonably be obtained.

11 ‘‘(2) NON-FEDERAL SHARE.—

12 ‘‘(A) IN GENERAL.—The Secretary shall re13 quire a commitment from non-Federal sources of

14 at least 25 percent of the cost of the project.

15 ‘‘(B) REDUCTION OR ELIMINATION.—The

16 Secretary may reduce or eliminate the cost-shar17 ing requirement under subparagraph (A) for the

18 proposed research and development project, in19 cluding for technical analyses, economic anal20 yses, outreach activities, and educational pro21 grams, if the Secretary determines that reduction

22 or elimination is necessary to achieve the objec23 tives of this Act.’’;

24 (4) in subsection (i), by striking ‘‘this chapter’’

25 and inserting ‘‘this Act’’.
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1 (e) DEMONSTRATIONS.—Section 105 of the Spark M.

2 Matsunaga Hydrogen Research, Development, and Dem3 onstration Act of 1990 (42 U.S.C. 12404) is amended by

4 striking subsection (c) and inserting the following:

5 ‘‘(c) NON-FEDERAL SHARE.—

6 ‘‘(1) IN GENERAL.—Except as provided in para7 graph (2), the Secretary shall require a commitment

8 from non-Federal sources of at least 50 percent of the

9 costs directly relating to a demonstration project

10 under this section.

11 ‘‘(2) REDUCTION.—The Secretary may reduce

12 the non-Federal requirement under paragraph (1) if

13 the Secretary determines that the reduction is appro14 priate considering the technological risks involved in

15 the project and is necessary to meet the objectives of

16 this Act.’’.

17 (f) TECHNOLOGY TRANSFER.—Section 106 of the

18 Spark M. Matsunaga Hydrogen Research, Development,

19 and Demonstration Act of 1990 (42 U.S.C. 12405) is

20 amended—

21 (1) in subsection (a)—

22 (A) in the first sentence—

23 (i) by striking ‘‘The Secretary shall

24 conduct a program designed to accelerate
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1 wider application’’ and inserting the fol2 lowing:

3 ‘‘(1) IN GENERAL.—The Secretary shall conduct

4 a program designed to—

5 ‘‘(A) accelerate wider application’’; and

6 (ii) by striking ‘‘private sector’’ and

7 inserting ‘‘private sector; and

8 ‘‘(B) accelerate wider application of hydro9 gen technologies in foreign countries to increase

10 the global market for the technologies and foster

11 global economic development without harmful en12 vironmental effects.’’; and

13 (B) in the second sentence, by striking ‘‘The

14 Secretary’’ and inserting the following:

15 ‘‘(2) ADVICE AND ASSISTANCE.—The Secretary’’;

16 and

17 (2) in subsection (b)—

18 (A) in paragraph (2), by redesignating sub19 paragraphs (A) through (D) as clauses (i)

20 through (iv), respectively, and indenting appro21 priately;

22 (B) by redesignating paragraphs (1) and

23 (2) as subparagraphs (A) and (B), respectively,

24 and indenting appropriately;
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1 (C) by striking ‘‘The Secretary, in’’ and in2 serting the following:

3 ‘‘(1) IN GENERAL.—The Secretary, in’’;

4 (D) by striking ‘‘The information’’ and in5 serting the following:

6 ‘‘(2) ACTIVITIES.—The information’’; and

7 (E) in paragraph (1) (as designated by sub8 paragraph (C))—

9 (i) in subparagraph (A) (as redesig10 nated by subparagraph (B)), by striking

11 ‘‘an inventory’’ and inserting ‘‘an update of

12 the inventory’’; and

13 (ii) in subparagraph (B) (as redesig14 nated by subparagraph (B)), by striking

15 ‘‘develop’’ and all that follows through ‘‘to

16 improve’’ and inserting ‘‘develop with the

17 National Aeronautics and Space Adminis18 tration, the Department of Energy, other

19 Federal agencies as appropriate, and indus20 try, an information exchange program to

21 improve’’.

22 (g) TECHNICAL PANEL REVIEW.—

23 (1) IN GENERAL.—Section 108 of the Spark M.

24 Matsunaga Hydrogen Research, Development, and
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1 Demonstration Act of 1990 (42 U.S.C. 12407) is

2 amended—

3 (A) in subsection (b)—

4 (i) by striking ‘‘(b) MEMBERSHIP.—

5 The technical panel shall be appointed’’ and

6 inserting the following:

7 ‘‘(b) MEMBERSHIP.—

8 ‘‘(1) IN GENERAL.—The technical panel shall be

9 comprised of not fewer than 9 nor more than 15

10 members appointed’’;

11 (ii) by striking the second sentence and

12 inserting the following:

13 ‘‘(2) TERMS.—

14 ‘‘(A) IN GENERAL.—The term of a member

15 of the technical panel shall be not more than 3

16 years.

17 ‘‘(B) STAGGERED TERMS.—The Secretary

18 may appoint members of the technical panel in

19 a manner that allows the terms of the members

20 serving at any time to expire at spaced intervals

21 so as to ensure continuity in the functioning of

22 the technical panel.

23 ‘‘(C) REAPPOINTMENT.—A member of the

24 technical panel whose term expires may be re25 appointed.’’; and
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1 (iii) by striking ‘‘The technical panel

2 shall have a chairman,’’ and inserting the

3 following:

4 ‘‘(3) CHAIRPERSON.—The technical panel shall

5 have a chairperson,’’; and

6 (B) in subsection (d)—

7 (i) in the matter preceding paragraph

8 (1), by striking ‘‘the following items’’;

9 (ii) in paragraph (1), by striking

10 ‘‘and’’ at the end;

11 (iii) in paragraph (2), by striking the

12 period at the end and inserting ‘‘; and’’;

13 and

14 (iv) by adding at the end the following:

15 ‘‘(3) the plan developed by the interagency task

16 force under section 202(b) of the Hydrogen Future Act

17 of 1996.’’.

18 (2) NEW APPOINTMENTS.—Not later than 180

19 days after the date of enactment of this Act, the

20 Secretary—

21 (A) shall review the membership composi22 tion of the Hydrogen Technical Advisory Panel;

23 and

24 (B) may appoint new members consistent

25 with the amendments made by subsection (a).
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1 (h) AUTHORIZATION OF APPROPRIATIONS.—Section

2 109 of the Spark M. Matsunaga Hydrogen Research, Devel3 opment, and Demonstration Act of 1990 (42 U.S.C. 12408)

4 is amended—

5 (1) in paragraph (8), by striking ‘‘and’’;

6 (2) in paragraph (9), by striking the period and

7 inserting a semicolon; and

8 (3) by adding at the end the following:

9 ‘‘(10) $65,000,000 for fiscal year 2003;

10 ‘‘(11) $70,000,000 for fiscal year 2004;

11 ‘‘(12) $75,000,000 for fiscal year 2005; and

12 ‘‘(13) $80,000,000 for fiscal year 2006.’’.

13 (i) FUEL CELLS.—

14 (1) INTEGRATION OF FUEL CELLS WITH HYDRO15 GEN PRODUCTION SYSTEMS.—Section 201 of the Hy16 drogen Future Act of 1996 is amended—

17 (A) in subsection (a) by striking ‘‘(a) Not

18 later than 180 days after the date of enactment

19 of this section, and subject’’ and inserting ‘‘(a)

20 IN GENERAL.—Subject’’;

21 (B) by striking ‘‘with—’’ and all that fol22 lows and inserting ‘‘into Federal, State, and

23 local government facilities for stationary and

24 transportation applications.’’;
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1 (C) in subsection (b), by striking ‘‘gas is’’

2 and inserting ‘‘basis’’;

3 (D) in subsection (c)(2), by striking ‘‘sys4 tems described in subsections (a)(1) and (a)(2)’’

5 and inserting ‘‘projects proposed’’; and

6 (E) by striking subsection (d) and inserting

7 the following:

8 ‘‘(d) NON-FEDERAL SHARE.—

9 ‘‘(1) IN GENERAL.—Except as provided in para10 graph (2), the Secretary shall require a commitment

11 from non-Federal sources of at least 50 percent of the

12 costs directly relating to a demonstration project

13 under this section.

14 ‘‘(2) REDUCTION.—The Secretary may reduce

15 the non-Federal requirement under paragraph (1) if

16 the Secretary determines that the reduction is appro17 priate considering the technological risks involved in

18 the project and is necessary to meet the objectives of

19 this Act.’’.

20 (2) COOPERATIVE AND COST-SHARING AGREE21 MENTS; INTEGRATION OF TECHNICAL INFORMATION.—

22 Title II of the Hydrogen Future Act of 1996 (42

23 U.S.C. 12403 note; Public Law 104–271) is amended

24 by striking section 202 and inserting the following:
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1 ‘‘SEC. 202. INTERAGENCY TASK FORCE.

2 ‘‘(a) ESTABLISHMENT.—Not later than 120 days after

3 the date of enactment of this section, the Secretary shall

4 establish an interagency task force led by a Deputy Assist5 ant Secretary of the Department of Energy and comprised

6 of representatives of—

7 ‘‘(1) the Office of Science and Technology Policy;

8 ‘‘(2) the Department of Transportation;

9 ‘‘(3) the Department of Defense;

10 ‘‘(4) the Department of Commerce (including the

11 National Institute for Standards and Technology);

12 ‘‘(5) the Environmental Protection Agency;

13 ‘‘(6) the National Aeronautics and Space Ad14 ministration; and

15 ‘‘(7) other agencies as appropriate.

16 ‘‘(b) DUTIES.—

17 ‘‘(1) IN GENERAL.—The task force shall develop

18 a plan for carrying out this title.

19 ‘‘(2) FOCUS OF PLAN.—The plan shall focus on

20 development and demonstration of integrated systems

21 and components for—

22 ‘‘(A) hydrogen production, storage, and use

23 in Federal, State, and local government build24 ings and vehicles;
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1 ‘‘(B) hydrogen-based infrastructure for buses

2 and other fleet transportation systems that in3 clude zero-emission vehicles; and

4 ‘‘(C) hydrogen-based distributed power gen5 eration, including the generation of combined

6 heat, power, and hydrogen.

7 ‘‘SEC. 203. COOPERATIVE AND COST-SHARING AGREE8 MENTS.

9 ‘‘The Secretary shall enter into cooperative and cost10 sharing agreements with Federal, State, and local agencies

11 for participation by the agencies in demonstrations at fa12 cilities administered by the agencies, with the aim of inte13 grating high efficiency hydrogen systems using fuel cells

14 into the facilities to provide immediate benefits and pro15 mote a smooth transition to hydrogen as an energy source.

16 ‘‘SEC. 204. INTEGRATION AND DISSEMINATION OF TECH17 NICAL INFORMATION.

18 ‘‘The Secretary shall—

19 ‘‘(1) integrate all the technical information that

20 becomes available as a result of development and dem21 onstration projects under this title;

22 ‘‘(2) make the information available to all Fed23 eral and State agencies for dissemination to all inter24 ested persons; and
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1 ‘‘(3) foster the exchange of generic, nonpropri2 etary information and technology developed under

3 this title among industry, academia, and Federal,

4 State, and local governments, to help the United

5 States economy attain the economic benefits of the in6 formation and technology.

7 ‘‘SEC. 205. AUTHORIZATION OF APPROPRIATIONS.

8 ‘‘There are authorized to be appropriated, for activities

9 under this title—

10 ‘‘(1) $25,000,000 for fiscal year 2003;

11 ‘‘(2) $30,000,000 for fiscal year 2004;

12 ‘‘(3) $35,000,000 for fiscal year 2005; and

13 ‘‘(4) $40,000,000 for fiscal year 2006.’’.

14 Subtitle C—Fossil Energy

15 SEC. 1231. ENHANCED FOSSIL ENERGY RESEARCH AND DE16 VELOPMENT.

17 (a) PROGRAM DIRECTION.—The Secretary shall con18 duct a balanced energy research, development, demonstra19 tion, and technology deployment program to enhance fossil

20 energy.

21 (b) PROGRAM GOALS.—

22 (1) CORE FOSSIL RESEARCH AND DEVELOP23 MENT.—The goals of the core fossil research and devel24 opment program shall be to reduce emissions from fos25 sil fuel use by developing technologies, including
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1 precombustion technologies, by 2015 with the capa2 bility of realizing—

3 (A) electricity generating efficiencies of 60

4 percent for coal and 75 percent for natural gas;

5 (B) combined heat and power thermal effi6 ciencies of more than 85 percent;

7 (C) fuels utilization efficiency of 75 percent

8 for the production of liquid transportation fuels

9 from coal;

10 (D) near zero emissions of mercury and of

11 emissions that form fine particles, smog, and

12 acid rain;

13 (E) reduction of carbon dioxide emissions

14 by at least 40 percent through efficiency im15 provements and 100 percent with sequestration;

16 and

17 (F) improved reliability, efficiency, reduc18 tions of air pollutant emissions, or reductions in

19 solid waste disposal requirements.

20 (2) OFFSHORE OIL AND NATURAL GAS RE21 SOURCES.—The goal of the offshore oil and natural

22 gas resources program shall be to develop technologies

23 to—

24 (A) extract methane hydrates in coastal wa25 ters of the United States, and
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1 (B) develop natural gas and oil reserves in

2 the ultra-deepwater of the Central and Western

3 Gulf of Mexico.

4 (3) ONSHORE OIL AND NATURAL GAS RE5 SOURCES.—The goal of the onshore oil and natural

6 gas resources program shall be to advance the science

7 and technology available to domestic onshore petro8 leum producers, particularly independent operators,

9 through—

10 (A) advances in technology for exploration

11 and production of domestic petroleum resources,

12 particularly those not accessible with current

13 technology;

14 (B) improvement in the ability to extract

15 hydrocarbons from known reservoirs and classes

16 of reservoirs; and

17 (C) development of technologies and prac18 tices that reduce the threat to the environment

19 from petroleum exploration and production and

20 decrease the cost of effective environmental com21 pliance.

22 (4) TRANSPORTATION FUELS.—The goals of the

23 transportation fuels program shall be to increase the

24 price elasticity of oil supply and demand by focusing

25 research on—
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1 (A) reducing the cost of producing transpor2 tation fuels from coal and natural gas; and

3 (B) indirect liquefaction of coal and bio4 mass.

5 (c) AUTHORIZATION OF APPROPRIATIONS.—

6 (1) IN GENERAL.—There are authorized to be ap7 propriated to the Secretary for carrying out research,

8 development, demonstration, and technology deploy9 ment activities under this section—

10 (A) $485,000,000 for fiscal year 2003;

11 (B) $508,000,000 for fiscal year 2004;

12 (C) $532,000,000 for fiscal year 2005; and

13 (D) $558,000,000 for fiscal year 2006.

14 (2) LIMITS ON USE OF FUNDS.—None of the

15 funds authorized in paragraph (1) may be used for—

16 (A) fossil energy environmental restoration;

17 (B) import/export authorization;

18 (C) program direction; or

19 (D) general plant projects.

20 (3) COAL-BASED PROJECTS.—The coal-based

21 projects funded under this section shall be consistent

22 with the goals in subsection (b). The program shall

23 emphasize carbon capture and sequestration tech24 nologies and gasification technologies, including gas25 ification combined cycle, gasification fuel cells, gasifi-
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1 cation co-production, hybrid gasification/combustion,

2 or other technology with the potential to address the

3 goals in subparagraphs (D) or (E) of subsection

4 (b)(1).

5 SEC. 1232. POWER PLANT IMPROVEMENT INITIATIVE.

6 (a) PROGRAM DIRECTION.—The Secretary shall con7 duct a balanced energy research, development, demonstra8 tion, and technology deployment program to demonstrate

9 commercial applications of advanced lignite and coal-based

10 technologies applicable to new or existing power plants (in11 cluding co-production plants) that advance the efficiency,

12 environmental performance, and cost-competitiveness sub13 stantially beyond technologies that are in operation or have

14 been demonstrated by the date of enactment of this subtitle.

15 (b) TECHNICAL MILESTONES.—

16 (1) IN GENERAL.—The Secretary shall set tech17 nical milestones specifying efficiency and emissions

18 levels that projects shall be designed to achieve. The

19 milestones shall become more restrictive over the life

20 of the program.

21 (2) 2010 EFFICIENCY MILESTONES.—The mile22 stones shall be designed to achieve by 2010 interim

23 thermal efficiency of—

24 (A) forty-five percent for coal of more than

25 9,000 Btu;
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1 (B) forty-four percent for coal of 7,000 to

2 9,000 Btu; and

3 (C) forty-two percent for coal of less than

4 7,000 Btu.

5 (3) 2020 EFFICIENCY MILESTONES.—The mile6 stones shall be designed to achieve by 2020 thermal ef7 ficiency of—

8 (A) sixty percent for coal of more than

9 9,000 Btu;

10 (B) fifty-nine percent for coal of 7,000 to

11 9,000 Btu; and

12 (C) fifty-seven percent for coal of less than

13 7,000 Btu.

14 (4) EMISSIONS MILESTONES.—The milestones

15 shall include near zero emissions of mercury and

16 greenhouse gases and of emissions that form fine par17 ticles, smog, and acid rain.

18 (5) REGIONAL AND QUALITY DIFFERENCES.—The

19 Secretary may consider regional and quality dif20 ferences in developing the efficiency milestones.

21 (c) PROJECT CRITERIA.—The demonstration activities

22 proposed to be conducted at a new or existing coal-based

23 electric generation unit having a nameplate rating of not

24 less than 100 megawatts, excluding a co-production plant,

25 shall include at least one of the following—
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1 (1) a means of recycling or reusing a significant

2 portion of coal combustion wastes produced by coal3 based generating units, excluding practices that are

4 commercially available by the date of enactment of

5 this subtitle;

6 (2) a means of capture and sequestering emis7 sions, including greenhouse gases, in a manner that

8 is more effective and substantially below the cost of

9 technologies that are in operation or that have been

10 demonstrated by the date of enactment of this subtitle;

11 (3) a means of controlling sulfur dioxide and ni12 trogen oxide or mercury in a manner that improves

13 environmental performance beyond technologies that

14 are in operation or that have been demonstrated by

15 the date of enactment of this subtitle—

16 (A) in the case of an existing unit, achieve

17 an overall thermal design efficiency improvement

18 compared to the efficiency of the unit as oper19 ated, of not less than—

20 (i) 7 percent for coal of more than

21 9,000 Btu;

22 (ii) 6 percent for coal of 7,000 to 9,000

23 Btu; or

24 (iii) 4 percent for coal of less than

25 7,000 Btu; or
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1 (B) in the case of a new unit, achieve the

2 efficiency milestones set for in subsection (b)

3 compared to the efficiency of a typical unit as

4 operated on the date of enactment of this subtitle,

5 before any retrofit, repowering, replacement, or

6 installation.

7 (d) STUDY.—The Secretary, in consultation with the

8 Administrator of the Environmental Protection Agency, the

9 Secretary of the Interior, and interested entities (including

10 coal producers, industries using coal, organizations to pro11 mote coal or advanced coal technologies, environmental or12 ganizations, and organizations representing workers), shall

13 conduct an assessment that identifies performance criteria

14 that would be necessary for coal-based technologies to meet,

15 to enable future reliance on coal in an environmentally sus16 tainable manner for electricity generation, use as a chem17 ical feedstock, and use as a transportation fuel.

18 (e) AUTHORIZATION OF APPROPRIATIONS.—

19 (1) IN GENERAL.—There are authorized to be ap20 propriated to the Secretary for carrying out activities

21 under this section $200,000,000 for each of fiscal

22 years 2003 through 2011.

23 (2) LIMITATION ON FUNDING OF PROJECTS.—

24 Eighty percent of the funding under this section shall

25 be limited to—
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1 (A) carbon capture and sequestration tech2 nologies;

3 (B) gasification technologies, including gas4 ification combined cycle, gasification fuel cells,

5 gasification co-production, or hybrid gasifi6 cation/combustion; or

7 (C) other technology either by itself or in

8 conjunction with other technologies that has the

9 potential to achieve near zero emissions.

10 SEC. 1233. RESEARCH AND DEVELOPMENT FOR ADVANCED

11 SAFE AND EFFICIENT COAL MINING TECH12 NOLOGIES.

13 (a) ESTABLISHMENT.—The Secretary of Energy shall

14 establish a cooperative research partnership involving ap15 propriate Federal agencies, coal producers, including asso16 ciations, equipment manufacturers, universities with min17 ing engineering departments, and other relevant entities

18 to—

19 (1) develop mining research priorities identified

20 by the Mining Industry of the Future Program and

21 in the recommendations from relevant reports of the

22 National Academy of Sciences on mining technologies;

23 (2) establish a process for conducting joint in24 dustry-Government research and development; and
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1 (3) expand mining research capabilities at insti2 tutions of higher education.

3 (b) AUTHORIZATION OF APPROPRIATIONS.—

4 (1) IN GENERAL.—There are authorized to be ap5 propriated to carry out activities under this section,

6 $12,000,000 in fiscal year 2003 and $15,000,000 in

7 fiscal year 2004.

8 (2) LIMIT ON USE OF FUNDS.—Not less than 20

9 percent of any funds appropriated in a given fiscal

10 year under this subsection shall be dedicated to re11 search carried out at institutions of higher education.

12 SEC. 1234. ULTRA-DEEPWATER AND UNCONVENTIONAL RE13 SOURCE EXPLORATION AND PRODUCTION

14 TECHNOLOGIES.

15 (a) DEFINITIONS.—In this section:

16 (1) ADVISORY COMMITTEE.—The term ‘‘Advisory

17 Committee’’ means the Ultra-Deepwater and Uncon18 ventional Resource Technology Advisory Committee

19 established under subsection (c).

20 (2) AWARD.—The term ‘‘award’’ means a cooper21 ative agreement, contract, award or other types of

22 agreement as appropriate.

23 (3) DEEPWATER.—The term ‘‘deepwater’’ means

24 a water depth that is greater than 200 but less than

25 1,500 meters.
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1 (4) ELIGIBLE AWARD RECIPIENT.—The term ‘‘el2 igible award recipient’’ includes—

3 (A) a research institution;

4 (B) an institution of higher education;

5 (C) a corporation; and

6 (D) a managing consortium formed among

7 entities described in subparagraphs (A) through

8 (C).

9 (5) INSTITUTION OF HIGHER EDUCATION.—The

10 term ‘‘institution of higher education’’ has the mean11 ing given the term in section 101 of the Higher Edu12 cation Act of 1965 (20 U.S.C. 1001).

13 (6) MANAGING CONSORTIUM.—The term ‘‘man14 aging consortium’’ means an entity that—

15 (A) exists as of the date of enactment of this

16 section;

17 (B)(i) is an organization described in sec18 tion 501(c)(3) of the Internal Revenue Code of

19 1986; and

20 (ii) is exempt from taxation under section

21 501(a) of that Code;

22 (C) is experienced in planning and man23 aging programs in natural gas or other petro24 leum exploration and production research, devel25 opment, and demonstration; and
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1 (D) has demonstrated capabilities and expe2 rience in representing the views and priorities of

3 industry, institutions of higher education and

4 other research institutions in formulating com5 prehensive research and development plans and

6 programs.

7 (7) PROGRAM.—The term ‘‘program’’ means the

8 program of research, development, and demonstration

9 established under subsection (b)(1)(A).

10 (8) ULTRA-DEEPWATER.—The term ‘‘ultra-deep11 water’’ means a water depth that is equal to or great12 er than 1,500 meters.

13 (9) ULTRA-DEEPWATER ARCHITECTURE.—The

14 term ‘‘ultra-deepwater architecture’’ means the inte15 gration of technologies to explore and produce natural

16 gas or petroleum products located at ultra-deepwater

17 depths.

18 (10) ULTRA-DEEPWATER RESOURCE.—The term

19 ‘‘ultra-deepwater resource’’ means natural gas or any

20 other petroleum resource (including methane hydrate)

21 located in an ultra-deepwater area.

22 (11) UNCONVENTIONAL RESOURCE.—The term

23 ‘‘unconventional resource’’ means natural gas or any

24 other petroleum resource located in a formation on

25 physically or economically inaccessible land currently
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1 available for lease for purposes of natural gas or other

2 petroleum exploration or production.

3 (b) ULTRA-DEEPWATER AND UNCONVENTIONAL EX4 PLORATION AND PRODUCTION PROGRAM.—

5 (1) ESTABLISHMENT.—

6 (A) IN GENERAL.—The Secretary shall es7 tablish a program of research into, and develop8 ment and demonstration of, ultra-deepwater re9 source and unconventional resource exploration

10 and production technologies.

11 (B) LOCATION; IMPLEMENTATION.—The

12 program under this subsection shall be carried

13 out—

14 (i) in areas on the outer Continental

15 Shelf that, as of the date of enactment of

16 this section, are available for leasing; and

17 (ii) on unconventional resources.

18 (2) COMPONENTS.—The program shall include

19 one or more programs for long-term research into—

20 (A) new deepwater ultra-deepwater resource

21 and unconventional resource exploration and

22 production technologies; or

23 (B) environmental mitigation technologies

24 for production of ultra-deepwater resource and

25 unconventional resource.
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1 (c) ADVISORY COMMITTEE.—

2 (1) ESTABLISHMENT.—Not later than 30 days

3 after the date of enactment of this section, the Sec4 retary shall establish an advisory committee to be

5 known as the ‘‘Ultra-Deepwater and Unconventional

6 Resource Technology Advisory Committee’’.

7 (2) MEMBERSHIP.—

8 (A) COMPOSITION.—Subject to subpara9 graph (B), the advisory committee shall be com10 posed of seven members appointed by the Sec11 retary that—

12 (i) have extensive operational knowl13 edge of and experience in the natural gas

14 and other petroleum exploration and pro15 duction industry; and

16 (ii) are not Federal employees or em17 ployees of contractors to a Federal agency.

18 (B) EXPERTISE.—Of the members of the ad19 visory committee appointed under subparagraph

20 (A)—

21 (i) at least four members shall have ex22 tensive knowledge of ultra-deepwater re23 source exploration and production tech24 nologies;
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1 (ii) at least three members shall have

2 extensive knowledge of unconventional re3 source exploration and production tech4 nologies.

5 (3) DUTIES.—The advisory committee shall ad6 vise the Secretary in the implementation of this sec7 tion.

8 (4) COMPENSATION.—A member of the advisory

9 committee shall serve without compensation but shall

10 receive travel expenses, including per diem in lieu of

11 subsistence, in accordance with applicable provisions

12 under subchapter I of chapter 57 of title 5, United

13 States Code.

14 (d) AWARDS.—

15 (1) TYPES OF AWARDS.—

16 (A) ULTRA-DEEPWATER RESOURCES.—

17 (i) IN GENERAL.—The Secretary shall

18 make awards for research into, and develop19 ment and demonstration of, ultra-deepwater

20 resource exploration and production

21 technologies—

22 (I) to maximize the value of the

23 ultra-deepwater resources of the United

24 States;
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1 (II) to increase the supply of

2 ultra-deepwater resources by lowering

3 the cost and improving the efficiency of

4 exploration and production of such re5 sources; and

6 (III) to improve safety and mini7 mize negative environmental impacts

8 of that exploration and production.

9 (ii) ULTRA-DEEPWATER ARCHITEC10 TURE.—In furtherance of the purposes de11 scribed in clause (i), the Secretary shall,

12 where appropriate, solicit proposals from a

13 managing consortium to develop and dem14 onstrate next-generation architecture for

15 ultra-deepwater resource production.

16 (B) UNCONVENTIONAL RESOURCES.—The

17 Secretary shall make awards—

18 (i) to carry out research into, and de19 velopment and demonstration of, tech20 nologies to maximize the value of unconven21 tional resources; and

22 (ii) to develop technologies to

23 simultaneously—

24 (I) increase the supply of uncon25 ventional resources by lowering the cost
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1 and improving the efficiency of explo2 ration and production of unconven3 tional resources; and

4 (II) improve safety and minimize

5 negative environmental impacts of that

6 exploration and production.

7 (2) CONDITIONS.—An award made under this

8 subsection shall be subject to the following conditions:

9 (A) MULTIPLE ENTITIES.—If an award re10 cipient is composed of more than one eligible or11 ganization, the recipient shall provide a signed

12 contract, agreed to by all eligible organizations

13 comprising the award recipient, that defines, in

14 a manner that is consistent with all applicable

15 law in effect as of the date of the contract, all

16 rights to intellectual property for—

17 (i) technology in existence as of that

18 date; and

19 (ii) future inventions conceived and de20 veloped using funds provided under the

21 award.

22 (B) COMPONENTS OF APPLICATION.—An

23 application for an award for a demonstration

24 project shall describe with specificity any in-
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1 tended commercial applications of the technology

2 to be demonstrated.

3 (C) COST SHARING.—Non-Federal cost shar4 ing shall be in accordance with section 1403.

5 (e) PLAN AND FUNDING.—

6 (1) IN GENERAL.—The Secretary, and where ap7 propriate, a managing consortium under subsection

8 (d)(1)(A)(ii), shall formulate annual operating and

9 performance objectives, develop multiyear technology

10 roadmaps, and establish research and development

11 priorities for the funding of activities under this sec12 tion which will serve as guidelines for making awards

13 including cost-matching objectives.

14 (2) INDUSTRY INPUT.—In carrying out this pro15 gram, the Secretary shall promote maximum industry

16 input through the use of managing consortia or other

17 organizations in planning and executing the research

18 areas and conducting workshops or reviews to ensure

19 that this program focuses on industry problems and

20 needs.

21 (f) AUDITING.—

22 (1) IN GENERAL.—The Secretary shall retain an

23 independent, commercial auditor to determine the ex24 tent to which funds authorized by this section, pro25 vided through a managing consortium, are expended
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1 in a manner consistent with the purposes of this sec2 tion.

3 (2) REPORTS.—The auditor retained under

4 paragraph (1) shall submit to the Secretary, and the

5 Secretary shall transmit to the appropriate congres6 sional committees, an annual report that describes—

7 (A) the findings of the auditor under para8 graph (1); and

9 (B) a plan under which the Secretary may

10 remedy any deficiencies identified by the audi11 tor.

12 (g) AUTHORIZATION OF APPROPRIATIONS.—There are

13 authorized to be appropriated to the Secretary such sums

14 as may be necessary to carry out this section.

15 (h) TERMINATION OF AUTHORITY.—The authority pro16 vided by this section shall terminate on September 30, 2009.

17 (i) SAVINGS PROVISION.—Nothing in this section is

18 intended to displace, duplicate or diminish any previously

19 authorized research activities of the Department of Energy.

20 SEC. 1235. RESEARCH AND DEVELOPMENT FOR NEW NAT21 URAL GAS TRANSPORTATION TECH22 NOLOGIES.

23 The Secretary of Energy shall conduct a comprehensive

24 5-year program for research, development and demonstra25 tion to improve the reliability, efficiency, safety and integ-
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1 rity of the natural gas transportation and distribution in2 frastructure and for distributed energy resources (including

3 microturbines, fuel cells, advanced engine-generators, gas

4 turbines, reciprocating engines, hybrid power generation

5 systems, and all ancillary equipment for dispatch, control

6 and maintenance).

7 SEC. 1236. AUTHORIZATION OF APPROPRIATIONS FOR OF8 FICE OF ARCTIC ENERGY.

9 There are authorized to be appropriated to the Sec10 retary for the Office of Arctic Energy under section 3197

11 of the Floyd D. Spence National Defense Authorization Act

12 for Fiscal Year 2001 (Public Law 106–398) such sums as

13 may be necessary, but not to exceed $25,000,000 for each

14 of fiscal years 2003 through 2011.

15 SEC. 1237. CLEAN COAL TECHNOLOGY LOAN.

16 There is authorized to be appropriated not to exceed

17 $125,000,000 to the Secretary of Energy to provide a loan

18 to the owner of the experimental plant constructed under

19 United States Department of Energy cooperative agreement

20 number DE–FC22–91PC99544 on such terms and condi21 tions as the Secretary determines, including interest rates

22 and upfront payments.
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1 Subtitle D—Nuclear Energy

2 SEC. 1241. ENHANCED NUCLEAR ENERGY RESEARCH AND

3 DEVELOPMENT.

4 (a) PROGRAM DIRECTION.—The Secretary shall con5 duct an energy research, development, demonstration, and

6 technology deployment program to enhance nuclear energy.

7 (b) PROGRAM GOALS.—The program shall—

8 (1) support research related to existing United

9 States nuclear power reactors to extend their lifetimes

10 and increase their reliability while optimizing their

11 current operations for greater efficiencies;

12 (2) examine—

13 (A) advanced proliferation-resistant and

14 passively safe reactor designs;

15 (B) new reactor designs with higher effi16 ciency, lower cost, and improved safety;

17 (C) in coordination with activities carried

18 out under the amendments made by section

19 1223, designs for a high temperature reactor ca20 pable of producing large-scale quantities of hy21 drogen using thermochemical processes;

22 (D) proliferation-resistant and high-burn23 up nuclear fuels;

24 (E) minimization of generation of radio25 active materials;
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1 (F) improved nuclear waste management

2 technologies; and

3 (G) improved instrumentation science;

4 (3) attract new students and faculty to the nu5 clear sciences and nuclear engineering and related

6 fields (including health physics and nuclear and

7 radiochemistry) through—

8 (A) university-based fundamental research

9 for existing faculty and new junior faculty;

10 (B) support for the re-licensing of existing

11 training reactors at universities in conjunction

12 with industry; and

13 (C) completing the conversion of existing

14 training reactors with proliferation-resistant

15 fuels that are low enriched and to adapt those re16 actors to new investigative uses;

17 (4) maintain a national capability and infra18 structure to produce medical isotopes and ensure a

19 well trained cadre of nuclear medicine specialists in

20 partnership with industry;

21 (5) ensure that our nation has adequate capa22 bility to power future satellite and space missions;

23 and

24 (6) maintain, where appropriate through a

25 prioritization process, a balanced research infrastruc-
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1 ture so that future research programs can use these

2 facilities.

3 (c) AUTHORIZATION OF APPROPRIATIONS.—

4 (1) CORE NUCLEAR RESEARCH PROGRAMS.—

5 There are authorized to be appropriated to the Sec6 retary for carrying out research, development, dem7 onstration, and technology deployment activities

8 under subsection (b)(1) through (3)—

9 (A) $100,000,000 for fiscal year 2003;

10 (B) $110,000,000 for fiscal year 2004;

11 (C) $120,000,000 for fiscal year 2005; and

12 (D) $130,000,000 for fiscal year 2006.

13 (2) SUPPORTING NUCLEAR ACTIVITIES.—There

14 are authorized to be appropriated to the Secretary for

15 carrying out activities under subsection (b)(4)

16 through (6), as well as nuclear facilities management

17 and program direction—

18 (A) $200,000,000 for fiscal year 2003;

19 (B) $202,000,000 for fiscal year 2004;

20 (C) $207,000,000 for fiscal year 2005; and

21 (D) $212,000,000 for fiscal year 2006.

22 SEC. 1242. UNIVERSITY NUCLEAR SCIENCE AND ENGINEER23 ING SUPPORT.

24 (a) ESTABLISHMENT.—The Secretary shall support a

25 program to maintain the nation’s human resource invest-
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1 ment and infrastructure in the nuclear sciences and engi2 neering and related fields (including health physics and nu3 clear and radiochemistry), consistent with departmental

4 missions related to civilian nuclear research and develop5 ment.

6 (b) DUTIES.—In carrying out the program under this

7 section, the Secretary shall—

8 (1) develop a graduate and undergraduate fel9 lowship program to attract new and talented stu10 dents;

11 (2) assist universities in recruiting and retain12 ing new faculty in the nuclear sciences and engineer13 ing through a Junior Faculty Research Initiation

14 Grant Program;

15 (3) support fundamental nuclear sciences and

16 engineering research through the Nuclear Engineering

17 Education Research Program;

18 (4) encourage collaborative nuclear research be19 tween industry, national laboratories and universities

20 through the Nuclear Energy Research Initiative; and

21 (5) support communication and outreach related

22 to nuclear science and engineering.

23 (c) MAINTAINING UNIVERSITY RESEARCH AND TRAIN24 ING REACTORS AND ASSOCIATED INFRASTRUCTURE.—Ac25 tivities under this section may include:
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1 (1) Converting research reactors to low-enrich2 ment fuels, upgrading operational instrumentation,

3 and sharing of reactors among universities.

4 (2) Providing technical assistance, in collabora5 tion with the United States nuclear industry, in re6 licensing and upgrading training reactors as part of

7 a student training program.

8 (3) Providing funding for reactor improvements

9 as part of a focused effort that emphasizes research,

10 training, and education.

11 (d) UNIVERSITY-NATIONAL LABORATORY INTER12 ACTIONS.—The Secretary shall develop—

13 (1) a sabbatical fellowship program for univer14 sity professors to spend extended periods of time at

15 National Laboratories in the areas of nuclear science

16 and technology; and

17 (2) a visiting scientist program in which Na18 tional Laboratory staff can spend time in academic

19 nuclear science and engineering departments. The

20 Secretary may provide for fellowships for students to

21 spend time at National Laboratories in the area of

22 nuclear science with a member of the Laboratory staff

23 acting as a mentor.

24 (e) OPERATING AND MAINTENANCE COSTS.—Funding

25 for a research project provided under this section may be
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1 used to offset a portion of the operating and maintenance

2 costs of a university research reactor used in the research

3 project, on a cost-shared basis with the university.

4 (f) AUTHORIZATION OF APPROPRIATIONS.—From

5 amounts authorized under section 1241(c)(1), the following

6 amounts are authorized for activities under this section—

7 (1) $33,000,000 for fiscal year 2003;

8 (2) $37,900,000 for fiscal year 2004;

9 (3) $43,600,000 for fiscal year 2005; and

10 (4) $50,100,000 for fiscal year 2006.

11 SEC. 1243. NUCLEAR ENERGY RESEARCH INITIATIVE.

12 (a) ESTABLISHMENT.—The Secretary shall support a

13 Nuclear Energy Research Initiative for grants for research

14 relating to nuclear energy.

15 (b) AUTHORIZATION OF APPROPRIATIONS.—From

16 amounts authorized under section 1241(c), there are author17 ized to be appropriated to the Secretary for activities under

18 this section such sums as are necessary for each fiscal year.

19 SEC. 1244. NUCLEAR ENERGY PLANT OPTIMIZATION PRO20 GRAM.

21 (a) ESTABLISHMENT.—The Secretary shall support a

22 Nuclear Energy Plant Optimization Program for grants to

23 improve nuclear energy plant reliability, availability, and

24 productivity. Notwithstanding section 1403, the program

25 shall require industry cost-sharing of at least 50 percent
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1 and be subject to annual review by the Nuclear Energy Re2 search Advisory Committee of the Department.

3 (b) AUTHORIZATION OF APPROPRIATIONS.—From

4 amounts authorized under section 1241(c), there are author5 ized to be appropriated to the Secretary for activities under

6 this section such sums as are necessary for each fiscal year.

7 SEC. 1245. NUCLEAR ENERGY TECHNOLOGY DEVELOPMENT

8 PROGRAM.

9 (a) ESTABLISHMENT.—The Secretary shall support a

10 Nuclear Energy Technology Development Program to de11 velop a technology roadmap to design and develop new nu12 clear energy powerplants in the United States.

13 (b) GENERATION IV REACTOR STUDY.—The Secretary

14 shall, as part of the program under subsection (a), also con15 duct a study of Generation IV nuclear energy systems, in16 cluding development of a technology roadmap and perform17 ance of research and development necessary to make an in18 formed technical decision regarding the most promising

19 candidates for commercial deployment. The study shall ex20 amine advanced proliferation-resistant and passively safe

21 reactor designs, new reactor designs with higher efficiency,

22 lower cost and improved safety, proliferation-resistant and

23 high burn-up fuels, minimization of generation of radio24 active materials, improved nuclear waste management tech25 nologies, and improved instrumentation science. Not later
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1 than December 31, 2002, the Secretary shall submit to Con2 gress a report describing the results of the study.

3 (c) AUTHORIZATION OF APPROPRIATIONS.—From

4 amounts authorized to be appropriated under section

5 1241(c), there are authorized to be appropriated to the Sec6 retary for activities under this section such sums as are

7 necessary for each fiscal year.

8 Subtitle E—Fundamental Energy

9 Science

10 SEC. 1251. ENHANCED PROGRAMS IN FUNDAMENTAL EN11 ERGY SCIENCE.

12 (a) PROGRAM DIRECTION.—The Secretary, acting

13 through the Office of Science, shall—

14 (1) conduct a comprehensive program of funda15 mental research, including research on chemical

16 sciences, physics, materials sciences, biological and

17 environmental sciences, geosciences, engineering

18 sciences, plasma sciences, mathematics, and advanced

19 scientific computing;

20 (2) maintain, upgrade and expand the scientific

21 user facilities maintained by the Office of Science and

22 ensure that they are an integral part of the depart23 mental mission for exploring the frontiers of funda24 mental science;
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1 (3) maintain a leading-edge research capability

2 in the energy-related aspects of nanoscience and

3 nanotechnology, advanced scientific computing and

4 genome research; and

5 (4) ensure that its fundamental science pro6 grams, where appropriate, help inform the applied re7 search and development programs of the Department.

8 (b) AUTHORIZATION OF APPROPRIATIONS.—There are

9 authorized to be appropriated to the Secretary for carrying

10 out research, development, demonstration, and technology

11 deployment activities under this subtitle—

12 (1) $3,785,000,000 for fiscal year 2003;

13 (2) $4,153,000,000 for fiscal year 2004;

14 (3) $4,586,000,000 for fiscal year 2005; and

15 (4) $5,000,000,000 for fiscal year 2006.

16 SEC. 1252. NANOSCALE SCIENCE AND ENGINEERING RE17 SEARCH.

18 (a) ESTABLISHMENT.—The Secretary, acting through

19 the Office of Science, shall support a program of research

20 and development in nanoscience and nanoengineering con21 sistent with the Department’s statutory authorities related

22 to research and development. The program shall include ef23 forts to further the understanding of the chemistry, physics,

24 materials science and engineering of phenomena on the

25 scale of 1 to 100 nanometers.
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1 (b) DUTIES OF THE OFFICE OF SCIENCE.—In car2 rying out the program under this section, the Office of

3 Science shall—

4 (1) support both individual investigators and

5 multidisciplinary teams of investigators;

6 (2) pursuant to subsection (c), develop, plan,

7 construct, acquire, or operate special equipment or fa8 cilities for the use of investigators conducting research

9 and development in nanoscience and

10 nanoengineering;

11 (3) support technology transfer activities to ben12 efit industry and other users of nanoscience and

13 nanoengineering; and

14 (4) coordinate research and development activi15 ties with industry and other Federal agencies.

16 (c) NANOSCIENCE AND NANOENGINEERING RESEARCH

17 CENTERS AND MAJOR INSTRUMENTATION.—

18 (1) AUTHORIZATION.—From amounts authorized

19 to be appropriated under section 1251(b), the

20 amounts specified under subsection (d)(2) shall, sub21 ject to appropriations, be available for projects to de22 velop, plan, construct, acquire, or operate special

23 equipment, instrumentation, or facilities for inves24 tigators conducting research and development in

25 nanoscience and nanoengineering.
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1 (2) PROJECTS.—Projects under paragraph (1)

2 may include the measurement of properties at the

3 scale of 1 to 100 nanometers, manipulation at such

4 scales, and the integration of technologies based on

5 nanoscience or nanoengineering into bulk materials

6 or other technologies.

7 (3) FACILITIES.—Facilities under paragraph (1)

8 may include electron microcharacterization facilities,

9 microlithography facilities, scanning probe facilities

10 and related instrumentation science.

11 (4) COLLABORATION.—The Secretary shall en12 courage collaborations among universities, labora13 tories and industry at facilities under this subsection.

14 At least one facility under this subsection shall have

15 a specific mission of technology transfer to other in16 stitutions and to industry.

17 (d) AUTHORIZATION OF APPROPRIATIONS.—

18 (1) TOTAL AUTHORIZATION.—From amounts au19 thorized to be appropriated under section 1251(b), the

20 following amounts are authorized for activities under

21 this section—

22 (A) $270,000,000 for fiscal year 2003;

23 (B) $290,000,000 for fiscal year 2004;

24 (C) $310,000,000 for fiscal year 2005; and

25 (D) $330,000,000 for fiscal year 2006.
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1 (2) NANOSCIENCE AND NANOENGINEERING RE2 SEARCH CENTERS AND MAJOR INSTRUMENTATION.—

3 Of the amounts under paragraph (1), the following

4 amounts are authorized to carry out subsection (c)—

5 (A) $135,000,000 for fiscal year 2003;

6 (B) $150,000,000 for fiscal year 2004;

7 (C) $120,000,000 for fiscal year 2005; and

8 (D) $100,000,000 for fiscal year 2006.

9 SEC. 1253. ADVANCED SCIENTIFIC COMPUTING FOR EN10 ERGY MISSIONS.

11 (a) ESTABLISHMENT.—The Secretary, acting through

12 the Office of Science, shall support a program to advance

13 the Nation’s computing capability across a diverse set of

14 grand challenge computationally based science problems re15 lated to departmental missions.

16 (b) DUTIES OF THE OFFICE OF SCIENCE.—In car17 rying out the program under this section, the Office of

18 Science shall—

19 (1) advance basic science through computation

20 by developing software to solve grand challenge

21 science problems on new generations of computing

22 platforms;

23 (2) enhance the foundations for scientific com24 puting by developing the basic mathematical and

25 computing systems software needed to take full advan-
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1 tage of the computing capabilities of computers with

2 peak speeds of 100 teraflops or more, some of which

3 may be unique to the scientific problem of interest;

4 (3) enhance national collaboratory and net5 working capabilities by developing software to inte6 grate geographically separated researchers into effec7 tive research teams and to facilitate access to and

8 movement and analysis of large (petabyte) data sets;

9 and

10 (4) maintain a robust scientific computing hard11 ware infrastructure to ensure that the computing re12 sources needed to address DOE missions are avail13 able; explore new computing approaches and tech14 nologies that promise to advance scientific computing.

15 (c) HIGH-PERFORMANCE COMPUTING ACT PRO16 GRAM.—Section 203(a) of the High-Performance Com17 puting Act of 1991 (15 U.S.C. 5523(a)) is amended—

18 (1) in paragraph (3), by striking ‘‘and’’;

19 (2) in paragraph (4), by striking the period and

20 inserting ‘‘; and’’; and

21 (3) by adding after paragraph (4) the following:

22 ‘‘(5) conduct an integrated program of research,

23 development, and provision of facilities to develop

24 and deploy to scientific and technical users the high25 performance computing and collaboration tools needed
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1 to fulfill the statutory missions of the Department of

2 Energy in conducting basic and applied energy re3 search.’’.

4 (d) COORDINATION WITH THE DOE NATIONAL NU5 CLEAR SECURITY AGENCY ACCELERATED STRATEGIC COM6 PUTING INITIATIVE AND OTHER NATIONAL COMPUTING

7 PROGRAMS.—The Secretary shall ensure that this program,

8 to the extent feasible, is integrated and consistent with—

9 (1) the Accelerated Strategic Computing Initia10 tive of the National Nuclear Security Agency; and

11 (2) other national efforts related to advanced sci12 entific computing for science and engineering.

13 (e) AUTHORIZATION OF APPROPRIATIONS.—From

14 amounts authorized under section 1251(b), the following

15 amounts are authorized for activities under this section—

16 (1) $285,000,000 for fiscal year 2003;

17 (2) $300,000,000 for fiscal year 2004;

18 (3) $310,000,000 for fiscal year 2005; and

19 (4) $320,000,000 for fiscal year 2006.

20 SEC. 1254. FUSION ENERGY SCIENCES PROGRAM AND PLAN21 NING.

22 (a) OVERALL PLAN FOR FUSION ENERGY SCIENCES

23 PROGRAM.—

24 (1) IN GENERAL.—Not later than 6 months after

25 the date of enactment of this subtitle, the Secretary,
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1 after consultation with the Fusion Energy Sciences

2 Advisory Committee, shall develop and transmit to

3 the Congress a plan to ensure a strong scientific base

4 for the Fusion Energy Sciences Program within the

5 Office of Science and to enable the experiments de6 scribed in subsections (b) and (c).

7 (2) OBJECTIVES OF PLAN.—The plan under this

8 subsection shall include as its objectives—

9 (A) to ensure that existing fusion research

10 facilities and equipment are more fully utilized

11 with appropriate measurements and control

12 tools;

13 (B) to ensure a strengthened fusion science

14 theory and computational base;

15 (C) to encourage and ensure that the selec16 tion of and funding for new magnetic and iner17 tial fusion research facilities is based on sci18 entific innovation and cost effectiveness;

19 (D) to improve the communication of sci20 entific results and methods between the fusion

21 science community and the wider scientific com22 munity;

23 (E) to ensure that adequate support is pro24 vided to optimize the design of the magnetic fu-
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1 sion burning plasma experiments referred to in

2 subsections (b) and (c); and

3 (F) to ensure that inertial confinement fu4 sion facilities are utilized to the extent prac5 ticable for the purpose of inertial fusion energy

6 research and development.

7 (b) PLAN FOR UNITED STATES FUSION EXPERI8 MENT.—

9 (1) IN GENERAL.—The Secretary, after consulta10 tion with the Fusion Energy Sciences Advisory Com11 mittee, shall develop a plan for construction in the

12 United States of a magnetic fusion burning plasma

13 experiment for the purpose of accelerating scientific

14 understanding of fusion plasmas. The Secretary shall

15 request a review of the plan by the National Academy

16 of Sciences and shall transmit the plan and the re17 view to the Congress by July 1, 2004.

18 (2) REQUIREMENTS OF PLAN.—The plan de19 scribed in paragraph (1) shall—

20 (A) address key burning plasma physics

21 issues; and

22 (B) include specific information on the sci23 entific capabilities of the proposed experiment,

24 the relevance of these capabilities to the goal of

25 practical fusion energy, and the overall design of
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1 the experiment including its estimated cost and

2 potential construction sites.

3 (c) PLAN FOR PARTICIPATION IN AN INTERNATIONAL

4 EXPERIMENT.—In addition to the plan described in sub5 section (b), the Secretary, after consultation with the Fusion

6 Energy Sciences Advisory Committee, may also develop a

7 plan for United States participation in an international

8 burning plasma experiment for the same purpose, whose

9 construction is found by the Secretary to be highly likely

10 and where United States participation is cost-effective rel11 ative to the cost and scientific benefits of a domestic experi12 ment described in subsection (b). If the Secretary elects to

13 develop a plan under this subsection, he shall include the

14 information described in subsection (b)(2), and an estimate

15 of the cost of United States participation in such an inter16 national experiment. The Secretary shall request a review

17 by the National Academy of Sciences of a plan developed

18 under this subsection, and shall transmit the plan and the

19 review to the Congress no later than July 1, 2004.

20 (d) AUTHORIZATION FOR RESEARCH AND DEVELOP21 MENT.—The Secretary, through the Office of Science, may

22 conduct any research and development necessary to fully

23 develop the plans described in this section.

24 (e) AUTHORIZATION OF APPROPRIATIONS.—From

25 amounts authorized under section 1251, the following
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1 amounts are authorized for activities under this section and

2 for activities of the Fusion Energy Science Program—

3 (1) for fiscal year 2003, $335,000,000;

4 (2) for fiscal year 2004, $349,000,000;

5 (3) for fiscal year 2005, $362,000,000; and

6 (4) for fiscal year 2006, $377,000,000.

7 Subtitle F—Energy, Safety, and

8 Environmental Protection

9 SEC. 1261. CRITICAL ENERGY INFRASTRUCTURE PROTEC10 TION RESEARCH AND DEVELOPMENT.

11 (a) IN GENERAL.—The Secretary shall carry out a re12 search, development, demonstration and technology deploy13 ment program, in partnership with industry, on critical

14 energy infrastructure protection, consistent with the roles

15 and missions outlined for the Secretary in Presidential De16 cision Directive 63, entitled ‘‘Critical Infrastructure Protec17 tion’’. The program shall have the following goals:

18 (1) Increase the understanding of physical and

19 information system disruptions to the energy infra20 structure that could result in cascading or widespread

21 regional outages.

22 (2) Develop energy infrastructure assurance

23 ‘‘best practices’’ through vulnerability and risk assess24 ments.
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1 (3) Protect against, mitigate the effect of, and

2 improve the ability to recover from disruptive inci3 dents within the energy infrastructure.

4 (b) PROGRAM SCOPE.—The program under subsection

5 (a) shall include research, development, deployment, tech6 nology demonstration for—

7 (1) analysis of energy infrastructure inter8 dependencies to quantify the impacts of system

9 vulnerabilities in relation to each other;

10 (2) probabilistic risk assessment of the energy in11 frastructure to account for unconventional and ter12 rorist threats;

13 (3) incident tracking and trend analysis tools to

14 assess the severity of threats and reported incidents to

15 the energy infrastructure; and

16 (4) integrated multisensor, warning and mitiga17 tion technologies to detect, integrate, and localize

18 events affecting the energy infrastructure including

19 real time control to permit the reconfiguration of en20 ergy delivery systems.

21 (c) REGIONAL COORDINATION.—The program under

22 this section shall cooperate with Departmental activities to

23 promote regional coordination under section 102 of this Act,

24 to ensure that the technologies and assessments developed
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1 by the program are transferred in a timely manner to State

2 and local authorities, and to the energy industries.

3 (d) COORDINATION WITH INDUSTRY RESEARCH ORGA4 NIZATIONS.—The Secretary may enter into grants, con5 tracts, and cooperative agreements with industry research

6 organizations to facilitate industry participation in re7 search under this section and to fulfill applicable cost-shar8 ing requirements.

9 (e) AUTHORIZATION OF APPROPRIATIONS.—There is

10 authorized to be appropriated to the Secretary to carry out

11 this section—

12 (1) $25,000,000 for fiscal year 2003;

13 (2) $26,000,000 for fiscal year 2004;

14 (3) $27,000,000 for fiscal year 2005; and

15 (4) $28,000,000 for fiscal year 2006.

16 (f) CRITICAL ENERGY INFRASTRUCTURE FACILITY DE17 FINED.—For purposes of this section, the term ‘‘critical en18 ergy infrastructure facility’’ means a physical or cyber19 based system or service for the generation, transmission or

20 distribution of electrical energy, or the production, refining,

21 transportation, or storage of petroleum, natural gas, or pe22 troleum product, the incapacity or destruction of which

23 would have a debilitating impact on the defense or economic

24 security of the United States. The term shall not include

25 a facility that is licensed by the Nuclear Regulatory Com-
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1 mission under section 103 or 104b of the Atomic Energy

2 Act of 1954 (42 U.S.C. 2133 and 2134(b)).

3 SEC. 1262. RESEARCH AND DEMONSTRATION FOR REMEDI4 ATION OF GROUNDWATER FROM ENERGY AC5 TIVITIES.

6 (a) IN GENERAL.—The Secretary shall carry out a re7 search, development, demonstration, and technology deploy8 ment program to improve methods for environmental res9 toration of groundwater contaminated by energy activities,

10 including oil and gas production, surface and underground

11 mining of coal, and in-situ extraction of energy resources.

12 (b) AUTHORIZATION OF APPROPRIATIONS.—There are

13 authorized to be appropriated to the Secretary to carry out

14 this section $10,000,000 for each of fiscal years 2003

15 through 2006.

16 TITLE XIII—CLIMATE CHANGE

17 SCIENCE AND TECHNOLOGY

18 Subtitle A—Department of Energy

19 Programs

20 SEC. 1301. DEPARTMENT OF ENERGY GLOBAL CHANGE RE21 SEARCH.

22 (a) PROGRAM DIRECTION.—The Secretary, acting

23 through the Office of Science, shall conduct a comprehensive

24 research program to understand and address the effects of

25 energy production and use on the global climate system.
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1 (b) PROGRAM ELEMENTS.—

2 (1) CLIMATE MODELING.—The Secretary shall—

3 (A) conduct observational and analytical

4 research to acquire and interpret the data needed

5 to describe the radiation balance from the surface

6 of the Earth to the top of the atmosphere;

7 (B) determine the factors responsible for the

8 Earth’s radiation balance and incorporate im9 proved understanding of such factors in climate

10 models;

11 (C) improve the treatment of aerosols and

12 clouds in climate models;

13 (D) reduce the uncertainty in decade-to-cen14 tury model-based projections of climate change;

15 and

16 (E) increase the availability and utility of

17 climate change simulations to researchers and

18 policy makers interested in assessing the rela19 tionship between energy and climate change.

20 (2) CARBON CYCLE.—The Secretary shall—

21 (A) carry out field research and modeling

22 activities—

23 (i) to understand and document the net

24 exchange of carbon dioxide between major
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1 terrestrial ecosystems and the atmosphere;

2 or

3 (ii) to evaluate the potential of pro4 posed methods of carbon sequestration;

5 (B) develop and test carbon cycle models;

6 and

7 (C) acquire data and develop and test mod8 els to simulate and predict the transport, trans9 formation, and fate of energy-related emissions

10 in the atmosphere.

11 (3) ECOLOGICAL PROCESSES.—The Secretary

12 shall carry out long-term experiments of the response

13 of intact terrestrial ecosystems to—

14 (A) alterations in climate and atmospheric

15 composition; or

16 (B) land-use changes that affect ecosystem

17 extent and function.

18 (4) INTEGRATED ASSESSMENT.—The Secretary

19 shall develop and improve methods and tools for inte20 grated analyses of the climate change system from

21 emissions of aerosols and greenhouse gases to the con22 sequences of these emissions on climate and the result23 ing effects of human-induced climate change on eco24 nomic and social systems, with emphasis on critical

25 gaps in integrated assessment modeling, including
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1 modeling of technology innovation and diffusion and

2 the development of metrics of economic costs of cli3 mate change and policies for mitigating or adapting

4 to climate change.

5 (c) AUTHORIZATION OF APPROPRIATIONS.—From

6 amounts authorized under section 1251(b), there are au7 thorized to be appropriated to the Secretary for carrying

8 out activities under this section—

9 (1) $150,000,000 for fiscal year 2003;

10 (2) $175,000,000 for fiscal year 2004;

11 (3) $200,000,000 for fiscal year 2005; and

12 (4) $230,000,000 for fiscal year 2006.

13 (d) LIMITATION ON FUNDS.—Funds authorized to be

14 appropriated under this section shall not be used for the

15 development, demonstration, or deployment of technology to

16 reduce, avoid, or sequester greenhouse gas emissions.

17 SEC. 1302. AMENDMENTS TO THE FEDERAL NONNUCLEAR

18 RESEARCH AND DEVELOPMENT ACT OF 1974.

19 Section 6 of the Federal Nonnuclear Energy Research

20 and Development Act of 1974 (42 U.S.C. 5905) is

21 amended—

22 (1) in subsection (a)—

23 (A) in paragraph (2), by striking ‘‘and’’ at

24 the end;
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1 (B) in paragraph (3) by striking the period

2 at the end and inserting ‘‘, and’’; and

3 (C) by adding at the end the following:

4 ‘‘(4) solutions to the effective management of

5 greenhouse gas emissions in the long term by the de6 velopment of technologies and practices designed to—

7 ‘‘(A) reduce or avoid anthropogenic emis8 sions of greenhouse gases;

9 ‘‘(B) remove and sequester greenhouse gases

10 from emissions streams; and

11 ‘‘(C) remove and sequester greenhouse gases

12 from the atmosphere.’’; and

13 (2) in subsection (b)—

14 (A) in paragraph (2), by striking ‘‘sub15 section (a)(1) through (3)’’ and inserting ‘‘para16 graphs (1) through (4) of subsection (a)’’; and

17 (B) in paragraph (3)—

18 (i) in subparagraph (R), by striking

19 ‘‘and’’ at the end;

20 (ii) in subparagraph (S), by striking

21 the period at the end and inserting ‘‘; and’’;

22 and

23 (iii) by adding at the end the fol24 lowing:
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1 ‘‘(T) to pursue a long-term climate tech2 nology strategy designed to demonstrate a vari3 ety of technologies by which stabilization of

4 greenhouse gases might be best achieved, includ5 ing accelerated research, development, dem6 onstration and deployment of—

7 ‘‘(i) renewable energy systems;

8 ‘‘(ii) advanced fossil energy technology;

9 ‘‘(iii) advanced nuclear power plant

10 design;

11 ‘‘(iv) fuel cell technology for residen12 tial, industrial and transportation applica13 tions;

14 ‘‘(v) carbon sequestration practices and

15 technologies, including agricultural and for16 estry practices that store and sequester car17 bon;

18 ‘‘(vi) efficient electrical generation,

19 transmission and distribution technologies;

20 and

21 ‘‘(vii) efficient end use energy tech22 nologies.’’.
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1 Subtitle B—Department of

2 Agriculture Programs

3 SEC. 1311. CARBON SEQUESTRATION BASIC AND APPLIED

4 RESEARCH.

5 (a) BASIC RESEARCH.—

6 (1) IN GENERAL.—The Secretary of Agriculture

7 shall carry out research in the areas of soil science

8 that promote understanding of—

9 (A) the net sequestration of organic carbon

10 in soil; and

11 (B) net emissions of other greenhouse gases

12 from agriculture.

13 (2) AGRICULTURAL RESEARCH SERVICE.—The

14 Secretary of Agriculture, acting through the Agricul15 tural Research Service, shall collaborate with other

16 Federal agencies in developing data and carrying out

17 research addressing soil carbon fluxes (losses and

18 gains) and net emissions of methane and nitrous

19 oxide from cultivation and animal management ac20 tivities.

21 (3) COOPERATIVE STATE RESEARCH, EXTENSION,

22 AND EDUCATION SERVICE.—

23 (A) IN GENERAL.—The Secretary of Agri24 culture, acting through the Cooperative State Re25 search, Extension, and Education Service, shall
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1 establish a competitive grant program to carry

2 out research on the matters described in para3 graph (1) in land grant universities and other

4 research institutions.

5 (B) CONSULTATION ON RESEARCH TOP6 ICS.—Before issuing a request for proposals for

7 basic research under paragraph (1), the Coopera8 tive State Research, Extension, and Education

9 Service shall consult with the Agricultural Re10 search Service to ensure that proposed research

11 areas are complementary with and do not dupli12 cate research projects underway at the Agricul13 tural Research Service or other Federal agencies.

14 (b) APPLIED RESEARCH.—

15 (1) IN GENERAL.—The Secretary of Agriculture

16 shall carry out applied research in the areas of soil

17 science, agronomy, agricultural economics and other

18 agricultural sciences to—

19 (A) promote understanding of—

20 (i) how agricultural and forestry prac21 tices affect the sequestration of organic and

22 inorganic carbon in soil and net emissions

23 of other greenhouse gases;
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1 (ii) how changes in soil carbon pools

2 are cost-effectively measured, monitored,

3 and verified; and

4 (iii) how public programs and private

5 market approaches can be devised to incor6 porate carbon sequestration in a broader so7 cietal greenhouse gas emission reduction ef8 fort;

9 (B) develop methods for establishing base10 lines for measuring the quantities of carbon and

11 other greenhouse gases sequestered; and

12 (C) evaluate leakage and performance

13 issues.

14 (2) REQUIREMENTS.—To the maximum extent

15 practicable, applied research under paragraph (1)

16 shall—

17 (A) draw on existing technologies and meth18 ods; and

19 (B) strive to provide methodologies that are

20 accessible to a nontechnical audience.

21 (3) MINIMIZATION OF ADVERSE ENVIRONMENTAL

22 IMPACTS.—All applied research under paragraph (1)

23 shall be conducted with an emphasis on minimizing

24 adverse environmental impacts.
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1 (4) NATURAL RESOURCES CONSERVATION SERV2 ICE.—The Secretary of Agriculture, acting through

3 the Natural Resources Conservation Service, shall col4 laborate with other Federal agencies, including the

5 National Institute of Standards and Technology, in

6 developing new measuring techniques and equipment

7 or adapting existing techniques and equipment to en8 able cost-effective and accurate monitoring and

9 verification, for a wide range of agricultural and for10 estry practices, of—

11 (A) changes in soil carbon content in agri12 cultural soils, plants, and trees; and

13 (B) net emissions of other greenhouse gases.

14 (5) COOPERATIVE STATE RESEARCH, EXTENSION,

15 AND EDUCATION SERVICE.—

16 (A) IN GENERAL.—The Secretary of Agri17 culture, acting through the Cooperative State Re18 search, Extension, and Education Service, shall

19 establish a competitive grant program to encour20 age research on the matters described in para21 graph (1) by land grant universities and other

22 research institutions.

23 (B) CONSULTATION ON RESEARCH TOP24 ICS.—Before issuing a request for proposals for

25 applied research under paragraph (1), the Coop-
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1 erative State Research, Extension, and Edu2 cation Service shall consult with the National

3 Resources Conservation Service and the Agricul4 tural Research Service to ensure that proposed

5 research areas are complementary with and do

6 not duplicate research projects underway at the

7 Agricultural Research Service or other Federal

8 agencies.

9 (c) RESEARCH CONSORTIA.—

10 (1) IN GENERAL.—The Secretary of Agriculture

11 may designate not more than two research consortia

12 to carry out research projects under this section, with

13 the requirement that the consortia propose to conduct

14 basic research under subsection (a) and applied re15 search under subsection (b).

16 (2) SELECTION.—The consortia shall be selected

17 in a competitive manner by the Cooperative State Re18 search, Extension, and Education Service.

19 (3) ELIGIBLE CONSORTIUM PARTICIPANTS.—En20 tities eligible to participate in a consortium

21 include—

22 (A) land grant colleges and universities;

23 (B) private research institutions;

24 (C) State geological surveys;
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1 (D) agencies of the Department of Agri2 culture;

3 (E) research centers of the National Aero4 nautics and Space Administration and the De5 partment of Energy;

6 (F) other Federal agencies;

7 (G) representatives of agricultural busi8 nesses and organizations with demonstrated ex9 pertise in these areas; and

10 (H) representatives of the private sector

11 with demonstrated expertise in these areas.

12 (4) RESERVATION OF FUNDING.—If the Secretary

13 of Agriculture designates one or two consortia, the

14 Secretary of Agriculture shall reserve for research

15 projects carried out by the consortium or consortia

16 not more than 25 percent of the amounts made avail17 able to carry out this section for a fiscal year.

18 (d) STANDARDS OF PRECISION.—

19 (1) CONFERENCE.—Not later than 3 years after

20 the date of enactment of this subtitle, the Secretary of

21 Agriculture, acting through the Agricultural Research

22 Service and in consultation with the Natural Re23 sources Conservation Service, shall convene a con24 ference of key scientific experts on carbon sequestra25 tion and measurement techniques from various sectors
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1 (including the Government, academic, and private

2 sectors) to—

3 (A) discuss benchmark standards of preci4 sion for measuring soil carbon content and net

5 emissions of other greenhouse gases;

6 (B) designate packages of measurement

7 techniques and modeling approaches to achieve a

8 level of precision agreed on by the participants

9 in the conference; and

10 (C) evaluate results of analyses on baseline,

11 permanence, and leakage issues.

12 (2) DEVELOPMENT OF BENCHMARK STAND13 ARDS.—

14 (A) IN GENERAL.—The Secretary shall de15 velop benchmark standards for measuring the

16 carbon content of soils and plants (including

17 trees) based on—

18 (i) information from the conference

19 under paragraph (1);

20 (ii) research conducted under this sec21 tion; and

22 (iii) other information available to the

23 Secretary.

24 (B) OPPORTUNITY FOR PUBLIC COMMENT.—

25 The Secretary shall provide an opportunity for
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1 the public to comment on benchmark standards

2 developed under subparagraph (A).

3 (3) REPORT.—Not later than 180 days after the

4 conclusion of the conference under paragraph (1), the

5 Secretary of Agriculture shall submit to the Com6 mittee on Agriculture of the House of Representatives

7 and the Committee on Agriculture, Nutrition, and

8 Forestry of the Senate a report on the results of the

9 conference.

10 (e) AUTHORIZATION OF APPROPRIATIONS.—

11 (1) IN GENERAL.—There are authorized to be ap12 propriated to carry out this section $25,000,000 for

13 each of fiscal years 2003 through 2006.

14 (2) ALLOCATION.—Of the amounts made avail15 able to carry out this section for a fiscal year, at least

16 50 percent shall be allocated for competitive grants by

17 the Cooperative State Research, Extension, and Edu18 cation Service.

19 SEC. 1312. CARBON SEQUESTRATION DEMONSTRATION

20 PROJECTS AND OUTREACH.

21 (a) DEMONSTRATION PROJECTS.—

22 (1) DEVELOPMENT OF MONITORING PRO23 GRAMS.—

24 (A) IN GENERAL.—The Secretary of Agri25 culture, acting through the Natural Resources
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1 Conservation Service and in cooperation with

2 local extension agents, experts from land grant

3 universities, and other local agricultural or con4 servation organizations, shall develop user5 friendly programs that combine measurement

6 tools and modeling techniques into integrated

7 packages to monitor the carbon sequestering ben8 efits of conservation practices and net changes in

9 greenhouse gas emissions.

10 (B) BENCHMARK LEVELS OF PRECISION.—

11 The programs developed under subparagraph (A)

12 shall strive to achieve benchmark levels of preci13 sion in measurement in a cost-effective manner.

14 (2) PROJECTS.—

15 (A) IN GENERAL.—The Secretary of Agri16 culture, acting through the Farm Service Agency,

17 shall establish a program under which projects

18 use the monitoring programs developed under

19 paragraph (1) to demonstrate the feasibility of

20 methods of measuring, verifying, and

21 monitoring—

22 (i) changes in organic carbon content

23 and other carbon pools in agricultural soils,

24 plants, and trees; and
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1 (ii) net changes in emissions of other

2 greenhouse gases.

3 (B) EVALUATION OF IMPLICATIONS.—The

4 projects under subparagraph (A) shall include

5 evaluation of the implications for reassessed

6 baselines, carbon or other greenhouse gas leakage,

7 and permanence of sequestration.

8 (C) SUBMISSION OF PROPOSALS.—Proposals

9 for projects under subparagraph (A) shall be sub10 mitted by the appropriate agency of each State,

11 in cooperation with interested local jurisdictions

12 and State agricultural and conservation organi13 zations.

14 (D) LIMITATION.—Not more than 10

15 projects under subparagraph (A) may be ap16 proved in conjunction with applied research

17 projects under section 1311(b) until benchmark

18 measurement and assessment standards are es19 tablished under section 1311(d).

20 (E) NATIONAL FOREST SYSTEM LAND.—The

21 Secretary of Agriculture shall consider the use of

22 National Forest System land as sites to dem23 onstrate the feasibility of monitoring programs

24 developed under paragraph (1).

25 (b) OUTREACH.—
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1 (1) IN GENERAL.—The Cooperative State Re2 search, Extension, and Education Service shall widely

3 disseminate information about the economic and envi4 ronmental benefits that can be generated by adoption

5 of conservation practices (including benefits from in6 creased sequestration of carbon and reduced emission

7 of other greenhouse gases).

8 (2) PROJECT RESULTS.—The Cooperative State

9 Research, Extension, and Education Service shall in10 form farmers, ranchers, and State agricultural and

11 energy offices in each State of—

12 (A) the results of demonstration projects

13 under subsection (a)(2) in the State; and

14 (B) the ways in which the methods dem15 onstrated in the projects might be applicable to

16 the operations of those farmers and ranchers.

17 (3) POLICY OUTREACH.—On a periodic basis, the

18 Cooperative State Research, Extension, and Edu19 cation Service shall disseminate information on the

20 policy nexus between global climate change mitigation

21 strategies and agriculture, so that farmers and ranch22 ers may better understand the global implications of

23 the activities of farmers and ranchers.

24 (c) AUTHORIZATION OF APPROPRIATIONS.—
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1 (1) IN GENERAL.—There are authorized to be ap2 propriated to carry out this section $10,000,000 for

3 each of fiscal years 2003 through 2006.

4 (2) ALLOCATION.—Of the amounts made avail5 able to carry out this section for a fiscal year, at least

6 50 percent shall be allocated for demonstration

7 projects under subsection (a)(2).

8 SEC. 1313. CARBON STORAGE AND SEQUESTRATION AC9 COUNTING RESEARCH.

10 (a) IN GENERAL.—The Secretary of Agriculture, in

11 collaboration with the heads of other Federal agencies, shall

12 conduct research on, develop, and publish as appropriate,

13 carbon storage and sequestration accounting models, ref14 erence tables, or other tools that can assist landowners and

15 others in cost-effective and reliable quantification of the car16 bon release, sequestration, and storage expected to result

17 from various resource uses, land uses, practices, activities

18 or forest, agricultural, or cropland management practices

19 over various periods of time.

20 (b) PILOT PROGRAMS.—The Secretary of Agriculture

21 shall make competitive grants to not more than five eligible

22 entities to carry out pilot programs to demonstrate and as23 sess the potential for development and use of carbon inven24 tories and accounting systems that can assist in developing

25 and assessing carbon storage and sequestration policies and
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1 programs. Not later than 1 year after the date of enactment

2 of this section, the Secretary of Agriculture, in collaboration

3 with the heads of other Federal agencies and with other in4 terested parties, shall develop guidelines for such pilot pro5 grams, including eligibility for awards, application con6 tents, reporting requirements, and mechanisms for peer re7 view.

8 (c) REPORT.—Not later than 5 years after the date of

9 enactment of this section, the Secretary of Agriculture, in

10 collaboration with the heads of other Federal agencies, shall

11 submit to Congress a report on the technical, institutional,

12 infrastructure, design and funding needs to establish and

13 maintain a national carbon storage and sequestration base14 line and accounting system. The report shall include docu15 mentation of the results of each of the pilot programs.

16 (d) AUTHORIZATION OF APPROPRIATIONS.—For the

17 purposes of this section, there are authorized to be appro18 priated to the Secretary of Agriculture $20,000,000 for fis19 cal years 2003 through 2007.

20 Subtitle C—International Energy

21 Technology Transfer

22 SEC. 1321. CLEAN ENERGY TECHNOLOGY EXPORTS PRO23 GRAM.

24 (a) DEFINITIONS.—In this section:
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1 (1) CLEAN ENERGY TECHNOLOGY.—The term

2 ‘‘clean energy technology’’ means an energy supply or

3 end-use technology that, over its lifecycle and com4 pared to a similar technology already in commercial

5 use in developing countries, countries in transition,

6 and other partner countries—

7 (A) emits substantially lower levels of pol8 lutants or greenhouse gases; and

9 (B) may generate substantially smaller or

10 less toxic volumes of solid or liquid waste.

11 (2) INTERAGENCY WORKING GROUP.—The term

12 ‘‘interagency working group’’ means the Interagency

13 Working Group on Clean Energy Technology Exports

14 established under subsection (b).

15 (b) INTERAGENCY WORKING GROUP.—

16 (1) ESTABLISHMENT.—Not later than 90 days

17 after the date of enactment of this section, the Sec18 retary of Energy, the Secretary of Commerce, and the

19 Administrator of the United States Agency for Inter20 national Development shall jointly establish a Inter21 agency Working Group on Clean Energy Technology

22 Exports. The interagency working group will focus on

23 opening and expanding energy markets and transfer24 ring clean energy technology to the developing coun25 tries, countries in transition, and other partner coun-
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1 tries that are expected to experience, over the next 20

2 years, the most significant growth in energy produc3 tion and associated greenhouse gas emissions, includ4 ing through technology transfer programs under the

5 Framework Convention on Climate Change, other

6 international agreements, and relevant Federal ef7 forts.

8 (2) MEMBERSHIP.—The interagency working

9 group shall be jointly chaired by representatives ap10 pointed by the agency heads under paragraph (1) and

11 shall also include representatives from the Depart12 ment of State, the Department of the Treasury, the

13 Environmental Protection Agency, the Export-Import

14 Bank, the Overseas Private Investment Corporation,

15 the Trade and Development Agency, and other Fed16 eral agencies as deemed appropriate by all three agen17 cy heads under paragraph (1).

18 (3) DUTIES.—The interagency working group

19 shall—

20 (A) analyze technology, policy, and market

21 opportunities for international development,

22 demonstration, and deployment of clean energy

23 technology;

24 (B) investigate issues associated with build25 ing capacity to deploy clean energy technology
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1 in developing countries, countries in transition,

2 and other partner countries, including—

3 (i) energy-sector reform;

4 (ii) creation of open, transparent, and

5 competitive markets for energy technologies;

6 (iii) availability of trained personnel

7 to deploy and maintain the technology; and

8 (iv) demonstration and cost-buydown

9 mechanisms to promote first adoption of the

10 technology;

11 (C) examine relevant trade, tax, inter12 national, and other policy issues to assess what

13 policies would help open markets and improve

14 United States clean energy technology exports in

15 support of the following areas—

16 (i) enhancing energy innovation and

17 cooperation, including energy sector and

18 market reform, capacity building, and fi19 nancing measures;

20 (ii) improving energy end-use effi21 ciency technologies, including buildings and

22 facilities, vehicle, industrial, and co-genera23 tion technology initiatives; and
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1 (iii) promoting energy supply tech2 nologies, including fossil, nuclear, and re3 newable technology initiatives;

4 (D) establish an advisory committee involv5 ing the private sector and other interested groups

6 on the export and deployment of clean energy

7 technology;

8 (E) monitor each agency’s progress towards

9 meeting goals in the 5-year strategic plan sub10 mitted to Congress pursuant to the Energy and

11 Water Development Appropriations Act, 2001,

12 and the Energy and Water Development Appro13 priations Act, 2002;

14 (F) make recommendations to heads of ap15 propriate Federal agencies on ways to streamline

16 Federal programs and policies to improve each

17 agency’s role in the international development,

18 demonstration, and deployment of clean energy

19 technology;

20 (G) make assessments and recommendations

21 regarding the distinct technological, market, re22 gional, and stakeholder challenges necessary to

23 carry out the program; and

24 (H) recommend conditions and criteria that

25 will help ensure that United States funds pro-
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1 mote sound energy policies in participating

2 countries while simultaneously opening their

3 markets and exporting United States energy

4 technology.

5 (c) FEDERAL SUPPORT FOR CLEAN ENERGY TECH6 NOLOGY TRANSFER.—Notwithstanding any other provision

7 of law, each Federal agency or Government corporation car8 rying out an assistance program in support of the activities

9 of United States persons in the environment or energy sec10 tor of a developing country, country in transition, or other

11 partner country shall support, to the maximum extent prac12 ticable, the transfer of United States clean energy tech13 nology as part of that program.

14 (d) ANNUAL REPORT.—Not later than 90 days after

15 the date of the enactment of this Act, and on April 1st of

16 each year thereafter, the Interagency Working Group shall

17 submit a report to Congress on its activities during the pre18 ceding calendar year. The report shall include a description

19 of the technology, policy, and market opportunities for

20 international development, demonstration, and deployment

21 of clean energy technology investigated by the Interagency

22 Working Group in that year, as well as any policy rec23 ommendations to improve the expansion of clean energy

24 markets and United States clean energy technology exports.
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1 (e) REPORT ON USE OF FUNDS.—Not later than Octo2 ber 1, 2002, and each year thereafter, the Secretary of State,

3 in consultation with other Federal agencies, shall submit

4 a report to Congress indicating how United States funds

5 appropriated for clean energy technology exports and other

6 relevant Federal programs are being directed in a manner

7 that promotes sound energy policy commitments in devel8 oping countries, countries in transition, and other partner

9 countries, including efforts pursuant to multilateral envi10 ronmental agreements.

11 (f) AUTHORIZATION OF APPROPRIATIONS.—There are

12 authorized to be appropriated to the departments, agencies,

13 and entities of the United States described in subsection (b)

14 such sums as may be necessary to support the transfer of

15 clean energy technology, consistent with the subsidy codes

16 of the World Trade Organization, as part of assistance pro17 grams carried out by those departments, agencies, and enti18 ties in support of activities of United States persons in the

19 energy sector of a developing country, country in transition,

20 or other partner country.

21 SEC. 1322. INTERNATIONAL ENERGY TECHNOLOGY DEPLOY22 MENT PROGRAM.

23 Section 1608 of the Energy Policy Act of 1992 (42

24 U.S.C. 13387) is amended by striking subsection (l) and

25 inserting the following:
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1 ‘‘(l) INTERNATIONAL ENERGY TECHNOLOGY DEPLOY2 MENT PROGRAM.—

3 ‘‘(1) DEFINITIONS.—In this subsection:

4 ‘‘(A) INTERNATIONAL ENERGY DEPLOYMENT

5 PROJECT.—The term ‘international energy de6 ployment project’ means a project to construct

7 an energy production facility outside the United

8 States—

9 ‘‘(i) the output of which will be con10 sumed outside the United States; and

11 ‘‘(ii) the deployment of which will re12 sult in a greenhouse gas reduction per unit

13 of energy produced when compared to the

14 technology that would otherwise be

15 implemented—

16 ‘‘(I) 10 percentage points or more,

17 in the case of a unit placed in service

18 before January 1, 2010;

19 ‘‘(II) 20 percentage points or

20 more, in the case of a unit placed in

21 service after December 31, 2009, and

22 before January 1, 2020; or

23 ‘‘(III) 30 percentage points or

24 more, in the case of a unit placed in
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1 service after December 31, 2019, and

2 before January 1, 2030.

3 ‘‘(B) QUALIFYING INTERNATIONAL ENERGY

4 DEPLOYMENT PROJECT.—The term ‘qualifying

5 international energy deployment project’ means

6 an international energy deployment project

7 that—

8 ‘‘(i) is submitted by a United States

9 firm to the Secretary in accordance with

10 procedures established by the Secretary by

11 regulation;

12 ‘‘(ii) uses technology that has been suc13 cessfully developed or deployed in the

14 United States;

15 ‘‘(iii) meets the criteria of subsection

16 (k);

17 ‘‘(iv) is approved by the Secretary,

18 with notice of the approval being published

19 in the Federal Register; and

20 ‘‘(v) complies with such terms and con21 ditions as the Secretary establishes by regu22 lation.

23 ‘‘(C) UNITED STATES.—For purposes of this

24 paragraph, the term ‘United States’, when used

25 in a geographical sense, means the 50 States, the
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1 District of Columbia, Puerto Rico, Guam, the

2 Virgin Islands, American Samoa, and the Com3 monwealth of the Northern Mariana Islands.

4 ‘‘(2) PILOT PROGRAM FOR FINANCIAL ASSIST5 ANCE.—

6 ‘‘(A) IN GENERAL.—Not later than 180

7 days after the date of enactment of this sub8 section, the Secretary shall, by regulation, pro9 vide for a pilot program for financial assistance

10 for qualifying international energy deployment

11 projects.

12 ‘‘(B) SELECTION CRITERIA.—After consulta13 tion with the Secretary of State, the Secretary of

14 Commerce, and the United States Trade Rep15 resentative, the Secretary shall select projects for

16 participation in the program based solely on the

17 criteria under this title and without regard to

18 the country in which the project is located.

19 ‘‘(C) FINANCIAL ASSISTANCE.—

20 ‘‘(i) IN GENERAL.—A United States

21 firm that undertakes a qualifying inter22 national energy deployment project that is

23 selected to participate in the pilot program

24 shall be eligible to receive a loan or a loan

25 guarantee from the Secretary.
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1 ‘‘(ii) RATE OF INTEREST.—The rate of

2 interest of any loan made under clause (i)

3 shall be equal to the rate for Treasury obli4 gations then issued for periods of com5 parable maturities.

6 ‘‘(iii) AMOUNT.—The amount of a loan

7 or loan guarantee under clause (i) shall not

8 exceed 50 percent of the total cost of the

9 qualified international energy deployment

10 project.

11 ‘‘(iv) DEVELOPED COUNTRIES.—Loans

12 or loan guarantees made for projects to be

13 located in a developed country, as listed in

14 Annex I of the United Nations Framework

15 Convention on Climate Change, shall re16 quire at least a 50 percent contribution to17 wards the total cost of the loan or loan

18 guarantee by the host country.

19 ‘‘(v) DEVELOPING COUNTRIES.—Loans

20 or loan guarantees made for projects to be

21 located in a developing country (those coun22 tries not listed in Annex I of the United

23 Nations Framework Convention on Climate

24 Change) shall require at least a 10 percent
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1 contribution towards the total cost of the

2 loan or loan guarantee by the host country.

3 ‘‘(vi) CAPACITY BUILDING RE4 SEARCH.—Proposals made for projects to be

5 located in a developing country may in6 clude a research component intended to

7 build technological capacity within the host

8 country. Such research must be related to

9 the technologies being deployed and must

10 involve both an institution in the host coun11 try and an industry, university or national

12 laboratory participant from the United

13 States. The host institution shall contribute

14 at least 50 percent of funds provided for the

15 capacity building research.

16 ‘‘(D) COORDINATION WITH OTHER PRO17 GRAMS.—A qualifying international energy de18 ployment project funded under this section shall

19 not be eligible as a qualifying clean coal tech20 nology under section 415 of the Clean Air Act

21 (42 U.S.C. 7651n).

22 ‘‘(E) REPORT.—Not later than 5 years after

23 the date of enactment of this subsection, the Sec24 retary shall submit to the President a report on

25 the results of the pilot projects.
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1 ‘‘(F) RECOMMENDATION.—Not later than 60

2 days after receiving the report under subpara3 graph (E), the President shall submit to Con4 gress a recommendation, based on the results of

5 the pilot projects as reported by the Secretary of

6 Energy, concerning whether the financial assist7 ance program under this section should be con8 tinued, expanded, reduced, or eliminated.

9 ‘‘(3) AUTHORIZATION OF APPROPRIATIONS.—

10 There are authorized to be appropriated to the Sec11 retary to carry out this section $100,000,000 for each

12 of fiscal years 2003 through 2011, to remain available

13 until expended.’’.

14 Subtitle D—Climate Change

15 Science and Information

16 PART I—AMENDMENTS TO THE GLOBAL

17 CHANGE RESEARCH ACT OF 1990

18 SEC. 1331. AMENDMENT OF GLOBAL CHANGE RESEARCH

19 ACT OF 1990.

20 Except as otherwise expressly provided, whenever in

21 this subtitle an amendment or repeal is expressed in terms

22 of an amendment to, or repeal of, a section or other provi23 sion, the reference shall be considered to be made to a section

24 or other provision of the Global Change Research Act of

25 1990 (15 U.S.C. 2921 et seq.).
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1 SEC. 1332. CHANGES IN DEFINITIONS.

2 Paragraph (1) of section 2 (15 U.S.C. 2921) is amend3 ed by striking ‘‘Earth and Environmental Sciences’’ insert4 ing ‘‘Global Change Research’’.

5 SEC. 1333. CHANGE IN COMMITTEE NAME AND STRUCTURE.

6 Section 102 (15 U.S.C. 2932) is amended—

7 (1) by striking ‘‘EARTH AND ENVIRON8 MENTAL SCIENCES’’ in the section heading and in9 serting ‘‘GLOBAL CHANGE RESEARCH’’;

10 (2) by striking ‘‘Earth and Environmental

11 Sciences’’ in subsection (a) and inserting ‘‘Global

12 Change Research’’;

13 (3) by striking the last sentence of subsection (b)

14 and inserting ‘‘The representatives shall be the Dep15 uty Secretary or the Deputy Secretary’s designee (or,

16 in the case of an agency other than a department, the

17 deputy head of that agency or the deputy’s des18 ignee).’’;

19 (4) by striking ‘‘Chairman of the Council,’’ in

20 subsection (c) and inserting ‘‘Director of the Office of

21 National Climate Change Policy with advice from the

22 Chairman of the Council, and’’;

23 (5) by redesignating subsections (d) and (e) as

24 subsections (e) and (f), respectively; and

25 (6) by inserting after subsection (c) the fol26 lowing:
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1 ‘‘(d) SUBCOMMITTEES AND WORKING GROUPS.—

2 ‘‘(1) IN GENERAL.—There shall be a Sub3 committee on Global Change Research, which shall

4 carry out such functions of the Committee as the

5 Committee may assign to it.

6 ‘‘(2) MEMBERSHIP.—The membership of the

7 Subcommittee shall consist of—

8 ‘‘(A) the membership of the Subcommittee

9 on Global Change Research of the Committee on

10 Environment and Natural Resources (the func11 tions of which are transferred to the Sub12 committee established by this subsection) estab13 lished by the National Science and Technology

14 Council; and

15 ‘‘(B) such additional members as the Chair

16 of the Committee may, from time to time, ap17 point.

18 ‘‘(3) CHAIR.—A high ranking official of one of

19 the departments or agencies described in subsection

20 (b), appointed by the Chair of the Committee with ad21 vice from the Chairman of the Council, shall chair the

22 subcommittee. The Chairperson shall be knowledgeable

23 and experienced with regard to the administration of

24 scientific research programs, and shall be a represent25 ative of an agency that contributes substantially, in
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1 terms of scientific research capability and budget, to

2 the Program.

3 ‘‘(4) OTHER SUBCOMMITTEES AND WORKING

4 GROUPS.—The Committee may establish such addi5 tional subcommittees and working groups as it sees

6 fit.’’.

7 SEC. 1334. CHANGE IN NATIONAL GLOBAL CHANGE RE8 SEARCH PLAN.

9 Section 104 (15 U.S.C. 2934) is amended—

10 (1) by inserting ‘‘short-term and long-term’’ be11 fore ‘‘goals’’ in subsection (b)(1);

12 (2) by striking ‘‘usable information on which to

13 base policy decisions related to’’ in subsection (b)(1)

14 and inserting ‘‘information relevant and readily usa15 ble by local, State, and Federal decisionmakers, as

16 well as other end-users, for the formulation of effective

17 decisions and strategies for measuring, predicting,

18 preventing, mitigating, and adapting to’’;

19 (3) by adding at the end of subsection (c) the fol20 lowing:

21 ‘‘(6) Methods for integrating information to pro22 vide predictive and other tools for planning and deci23 sionmaking by governments, communities and the

24 private sector.’’;
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1 (4) by striking subsection (d)(3) and inserting

2 the following:

3 ‘‘(3) combine and interpret data from various

4 sources to produce information readily usable by

5 local, State, and Federal policymakers, and other end6 users, attempting to formulate effective decisions and

7 strategies for preventing, mitigating, and adapting to

8 the effects of global change.’’;

9 (5) by striking ‘‘and’’ in subsection (d)(2);

10 (6) by striking ‘‘change.’’ in subsection (d)(3)

11 and inserting ‘‘change; and’’;

12 (7) by adding at the end of subsection (d) the fol13 lowing:

14 ‘‘(4) establish a common assessment and mod15 eling framework that may be used in both research

16 and operations to predict and assess the vulnerability

17 of natural and managed ecosystems and of human so18 ciety in the context of other environmental and social

19 changes.’’; and

20 (8) by adding at the end the following:

21 ‘‘(g) STRATEGIC PLAN; REVISED IMPLEMENTATION

22 PLAN.—The Chairman of the Council, through the Com23 mittee, shall develop a strategic plan for the United States

24 Global Climate Change Research Program for the 10-year

25 period beginning in 2002 and submit the plan to the Con-
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1 gress within 180 days after the date of enactment of the

2 Global Climate Change Act of 2002. The Chairman, through

3 the Committee, shall also submit revised implementation

4 plans as required under subsection (a).’’.

5 SEC. 1335. INTEGRATED PROGRAM OFFICE.

6 Section 105 (15 U.S.C. 2935) is amended—

7 (1) by redesignating subsections (a), (b), and (c)

8 as subsections (b), (c), and (d), respectively; and

9 (2) by inserting before subsection (b), as redesig10 nated, the following:

11 ‘‘(a) INTEGRATED PROGRAM OFFICE.—

12 ‘‘(1) ESTABLISHMENT.—There is established in

13 the Office of Science and Technology Policy an inte14 grated program office for the global change research

15 program.

16 ‘‘(2) ORGANIZATION.—The integrated program

17 office established under paragraph (1) shall be headed

18 by the associate director with responsibility for cli19 mate change science and technology and shall include,

20 to the maximum extent feasible, a representative from

21 each Federal agency participating in the global

22 change research program.

23 ‘‘(3) FUNCTION.—The integrated program office

24 shall—
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1 ‘‘(A) manage, working in conjunction with

2 the Committee, interagency coordination and

3 program integration of global change research

4 activities and budget requests;

5 ‘‘(B) ensure that the activities and pro6 grams of each Federal agency or department

7 participating in the program address the goals

8 and objectives identified in the strategic research

9 plan and interagency implementation plans;

10 ‘‘(C) ensure program and budget rec11 ommendations of the Committee are commu12 nicated to the President and are integrated into

13 the climate change action strategy;

14 ‘‘(D) review, solicit, and identify, and allo15 cate funds for, partnership projects that address

16 critical research objectives or operational goals of

17 the program, including projects that would fill

18 research gaps identified by the program, and for

19 which project resources are shared among at

20 least two agencies participating in the program;

21 and

22 ‘‘(E) review and provide recommendations

23 on, in conjunction with the Committee, all an24 nual appropriations requests from Federal agen-
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1 cies or departments participating in the pro2 gram.’’;

3 (3) by striking ‘‘Committee.’’ in paragraph (2)

4 of subsection (c), as redesignated, and inserting

5 ‘‘Committee and the Integrated Program Office.’’; and

6 (4) by inserting ‘‘and the Integrated Program

7 Office’’ after ‘‘Committee’’ in paragraph (1) of sub8 section (d), as redesignated.

9 SEC. 1336. RESEARCH GRANTS.

10 Section 105 (15 U.S.C. 2935) is amended—

11 (1) by redesignating subsection (c) as subsection

12 (d); and

13 (2) by inserting after subsection (b) the fol14 lowing:

15 ‘‘(c) RESEARCH GRANTS.—

16 ‘‘(1) COMMITTEE TO DEVELOP LIST OF PRIORITY

17 RESEARCH AREAS.—The Committee shall develop a

18 list of priority areas for research and development on

19 climate change that are not being addressed by Fed20 eral agencies.

21 ‘‘(2) DIRECTOR OF OSTP TO TRANSMIT LIST TO

22 NSF.—The Director of the Office of Science and Tech23 nology Policy shall transmit the list to the National

24 Science Foundation.

25 ‘‘(3) FUNDING THROUGH NSF.—
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1 ‘‘(A) BUDGET REQUEST.—The National

2 Science Foundation shall include, as part of the

3 annual request for appropriations for the Science

4 and Technology Policy Institute, a request for

5 appropriations to fund research in the priority

6 areas on the list developed under paragraph (1).

7 ‘‘(B) AUTHORIZATION.—For fiscal year

8 2003 and each fiscal year thereafter, there are

9 authorized to be appropriated to the National

10 Science Foundation not less than $17,000,000, to

11 be made available through the Science and Tech12 nology Policy Institute, for research in those pri13 ority areas.’’.

14 SEC. 1337. EVALUATION OF INFORMATION.

15 Section 106 (15 U.S.C. 2936) is amended—

16 (1) by striking ‘‘Scientific’’ in the section

17 heading;

18 (2) by striking ‘‘and’’ after the semicolon in

19 paragraph (2); and

20 (3) by striking ‘‘years.’’ in paragraph (3) and

21 inserting ‘‘years; and’’; and

22 (4) by adding at the end the following:

23 ‘‘(4) evaluates the information being developed

24 under this title, considering in particular its useful25 ness to local, State, and national decisionmakers, as
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1 well as to other stakeholders such as the private sector,

2 after providing a meaningful opportunity for the con3 sideration of the views of such stakeholders on the ef4 fectiveness of the Program and the usefulness of the

5 information.’’.

6 PART II—NATIONAL CLIMATE SERVICES

7 AND MONITORING

8 SEC. 1341. AMENDMENT OF NATIONAL CLIMATE PROGRAM

9 ACT.

10 Except as otherwise expressly provided, whenever in

11 this subtitle an amendment or repeal is expressed in terms

12 of an amendment to, or repeal of, a section or other provi13 sion, the reference shall be considered to be made to a section

14 or other provision of the National Climate Program Act (15

15 U.S.C. 2901 et seq.).

16 SEC. 1342. CHANGES IN FINDINGS.

17 Section 2 (15 U.S.C. 2901) is amended—

18 (1) by striking ‘‘Weather and climate change af19 fect’’ in paragraph (1) and inserting ‘‘Weather, cli20 mate change, and climate variability affect public

21 safety, environmental security, human health,’’;

22 (2) by striking ‘‘climate’’ in paragraph (2) and

23 inserting ‘‘climate, including seasonal and decadal

24 fluctuations,’’;
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1 (3) by striking ‘‘changes.’’ in paragraph (5) and

2 inserting ‘‘changes and providing free exchange of me3 teorological data.’’; and

4 (4) by adding at the end the following:

5 ‘‘(7) The present rate of advance in research and

6 development and application of such advances is in7 adequate and new developments must be incorporated

8 rapidly into services for the benefit of the public.

9 ‘‘(8) The United States lacks adequate infra10 structure and research to meet national climate moni11 toring and prediction needs.’’.

12 SEC. 1343. TOOLS FOR REGIONAL PLANNING.

13 Section 5(d) (15 U.S.C. 2904(d)) is amended—

14 (1) by redesignating paragraphs (4) through (9)

15 as paragraphs (5) through (10), respectively;

16 (2) by inserting after paragraph (3) the fol17 lowing:

18 ‘‘(4) methods for improving modeling and pre19 dictive capabilities and developing assessment meth20 ods to guide national, regional, and local planning

21 and decisionmaking on land use, water hazards, and

22 related issues;’’;

23 (3) by inserting ‘‘sharing,’’ after ‘‘collection,’’ in

24 paragraph (5), as redesignated;
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1 (4) by striking ‘‘experimental’’ each place it ap2 pears in paragraph (9), as redesignated;

3 (5) by striking ‘‘preliminary’’ in paragraph

4 (10), as redesignated;

5 (6) by striking ‘‘this Act,’’ the first place it ap6 pears in paragraph (10), as redesignated, and insert7 ing ‘‘the Global Climate Change Act of 2002,’’; and

8 (7) by striking ‘‘this Act,’’ the second place it ap9 pears in paragraph (10), as redesignated, and insert10 ing ‘‘that Act,’’.

11 SEC. 1344. AUTHORIZATION OF APPROPRIATIONS.

12 Section 9 (15 U.S.C. 2908) is amended—

13 (1) by striking ‘‘1979,’’ and inserting ‘‘2002,’’;

14 (2) by striking ‘‘1980,’’ and inserting ‘‘2003,’’;

15 (3) by striking ‘‘1981,’’ and inserting ‘‘2004,’’;

16 and

17 (4) by striking ‘‘$25,500,000’’ and inserting

18 ‘‘$75,500,000’’.

19 SEC. 1345. NATIONAL CLIMATE SERVICE PLAN.

20 The Act (15 U.S.C. 2901 et seq.) is amended by insert21 ing after section 5 the following:

22 ‘‘SEC. 6. NATIONAL CLIMATE SERVICE PLAN.

23 ‘‘Within 1 year after the date of enactment of the Glob24 al Climate Change Act of 2002, the Secretary of Commerce

25 shall submit to the Senate Committee on Commerce,
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1 Science, and Transportation and the House Science Com2 mittee a plan of action for a National Climate Service

3 under the National Climate Program. The plan shall set

4 forth recommendations and funding estimates for—

5 ‘‘(1) a national center for operational climate

6 monitoring and predicting with the functional capac7 ity to monitor and adjust observing systems as nec8 essary to reduce bias;

9 ‘‘(2) the design, deployment, and operation of an

10 adequate national climate observing system that

11 builds upon existing environmental monitoring sys12 tems and closes gaps in coverage by existing systems;

13 ‘‘(3) the establishment of a national coordinated

14 modeling strategy, including a national climate mod15 eling center to provide a dedicated capability for cli16 mate modeling and a regular schedule of projections

17 on a long- and short-term time schedule and at a

18 range of spatial scales;

19 ‘‘(4) improvements in modeling and assessment

20 capabilities needed to integrate information to predict

21 regional and local climate changes and impacts;

22 ‘‘(5) in coordination with the private sector, im23 proving the capacity to assess the impacts of pre24 dicted and projected climate changes and variations;
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1 ‘‘(6) a program for long-term stewardship, qual2 ity control, development of relevant climate products,

3 and efficient access to all relevant climate data, prod4 ucts, and critical model simulations; and

5 ‘‘(7) mechanisms to coordinate among Federal

6 agencies, State, and local government entities and the

7 academic community to ensure timely and full shar8 ing and dissemination of climate information and

9 services, both domestically and internationally.’’.

10 SEC. 1346. INTERNATIONAL PACIFIC RESEARCH AND CO11 OPERATION.

12 The Secretary of Commerce, in cooperation with the

13 Administrator of the National Aeronautics and Space Ad14 ministration, shall conduct international research in the

15 Pacific region that will increase understanding of the na16 ture and predictability of climate variability in the Asia17 Pacific sector, including regional aspects of global environ18 mental change. Such research activities shall be conducted

19 in cooperation with other nations of the region. There are

20 authorized to be appropriated for purposes of this section

21 $1,500,000 to the National Oceanic and Atmospheric Ad22 ministration, $1,500,000 to the National Aeronautics and

23 Space Administration, and $500,000 for the Pacific ENSO

24 Applications Center.
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1 SEC. 1347. REPORTING ON TRENDS.

2 (a) ATMOSPHERIC MONITORING AND VERIFICATION

3 PROGRAM.—The Secretary of Commerce, in coordination

4 with relevant Federal agencies, shall, as part of the Na5 tional Climate Service, establish an atmospheric moni6 toring and verification program utilizing aircraft, satellite,

7 ground sensors, and modeling capabilities to monitor, meas8 ure, and verify atmospheric greenhouse gas levels, dates,

9 and emissions. Where feasible, the program shall measure

10 emissions from identified sources participating in the re11 porting system for verification purposes. The program shall

12 use measurements and standards that are consistent with

13 those utilized in the greenhouse gas measurement and re14 porting system established under subsection (a) and the reg15 istry established under section 1102.

16 (b) ANNUAL REPORTING.—The Secretary of Commerce

17 shall issue an annual report that identifies greenhouse emis18 sions and trends on a local, regional, and national level.

19 The report shall also identify emissions or reductions attrib20 utable to individual or multiple sources covered by the

21 greenhouse gas measurement and reporting system estab22 lished under section 1102.

23 SEC. 1348. ARCTIC RESEARCH AND POLICY.

24 (a) ARCTIC RESEARCH COMMISSION.—Section 103(d)

25 of the Arctic Research and Policy Act of 1984 (15 U.S.C.

26 4102(d)) is amended—
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1 (1) by striking ‘‘exceed 90 days’’ in the second

2 sentence of paragraph (1) and inserting ‘‘exceed, in

3 the case of the chairperson of the Commission, 120

4 days, and, in the case of any other member of the

5 Commission, 90 days,’’;

6 (2) by striking ‘‘Chairman’’ in paragraph (2)

7 and inserting ‘‘chairperson’’.

8 (b) GRANTS.—Section 104 of the Arctic Research and

9 Policy Act of 1984 (15 U.S.C. 4103) is amended by adding

10 at the end the following:

11 ‘‘(c) FUNDING FOR ARCTIC RESEARCH.—

12 ‘‘(1) IN GENERAL.—With the prior approval of

13 the commission, or under authority delegated by the

14 Commission, and subject to such conditions as the

15 Commission may specify, the Executive Director ap16 pointed under section 106(a) may—

17 ‘‘(A) make grants to persons to conduct re18 search concerning the Arctic; and

19 ‘‘(B) make funds available to the National

20 Science Foundation or to Federal agencies for

21 the conduct of research concerning the Arctic.

22 ‘‘(2) EFFECT OF ACTION BY EXECUTIVE DIREC23 TOR.—An action taken by the executive director

24 under paragraph (1) shall be final and binding on

25 the Commission.
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1 ‘‘(3) AUTHORIZATION OF APPROPRIATIONS.—

2 There are authorized to be appropriated to the Com3 mission such sums as are necessary to carry out this

4 section.’’.

5 SEC. 1349. ABRUPT CLIMATE CHANGE RESEARCH.

6 (a) IN GENERAL.—The Secretary of Commerce,

7 through the National Oceanic and Atmospheric Adminis8 tration, shall carry out a program of scientific research on

9 potential abrupt climate change designed—

10 (1) to develop a global array of terrestrial and

11 oceanographic indicators of paleoclimate in order suf12 ficiently to identify and describe past instances of ab13 rupt climate change;

14 (2) to improve understanding of thresholds and

15 nonlinearities in geophysical systems related to the

16 mechanisms of abrupt climate change;

17 (3) to incorporate these mechanisms into ad18 vanced geophysical models of climate change; and

19 (4) to test the output of these models against an

20 improved global array of records of past abrupt cli21 mate changes.

22 (b) ABRUPT CLIMATE CHANGE DEFINED.—In this sec23 tion, the term ‘‘abrupt climate change’’ means a change in

24 climate that occurs so rapidly or unexpectedly that human

25 or natural systems may have difficulty adapting to it.
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1 (c) AUTHORIZATION OF APPROPRIATIONS.—There are

2 authorized to be appropriated to the Secretary of Commerce

3 $10,000,000 for each of the fiscal years 2003 through 2008,

4 and such sums as may be necessary for fiscal years after

5 fiscal year 2008, to carry out subsection (a).

6 PART III—OCEAN AND COASTAL

7 OBSERVING SYSTEM

8 SEC. 1351. OCEAN AND COASTAL OBSERVING SYSTEM.

9 (a) ESTABLISHMENT.—The President, through the Na10 tional Ocean Research Leadership Council, established by

11 section 7902(a) of title 10, United States Code, shall estab12 lish and maintain an integrated ocean and coastal observ13 ing system that provides for long-term, continuous, and

14 real-time observations of the oceans and coasts for the pur15 poses of—

16 (1) understanding, assessing and responding to

17 human-induced and natural processes of global

18 change;

19 (2) improving weather forecasts and public

20 warnings;

21 (3) strengthening national security and military

22 preparedness;

23 (4) enhancing the safety and efficiency of marine

24 operations;
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1 (5) supporting efforts to restore the health of and

2 manage coastal and marine ecosystems and living re3 sources;

4 (6) monitoring and evaluating the effectiveness of

5 ocean and coastal environmental policies;

6 (7) reducing and mitigating ocean and coastal

7 pollution; and

8 (8) providing information that contributes to

9 public awareness of the state and importance of the

10 oceans.

11 (b) COUNCIL FUNCTIONS.—In addition to its respon12 sibilities under section 7902(a) of such title, the Council

13 shall be responsible for planning and coordinating the ob14 serving system and in carrying out this responsibility

15 shall—

16 (1) develop and submit to the Congress, within

17 6 months after the date of enactment of this Act, a

18 plan for implementing a national ocean and coastal

19 observing system that—

20 (A) uses an end-to-end engineering and de21 velopment approach to develop a system design

22 and schedule for operational implementation;

23 (B) determines how current and planned

24 observing activities can be integrated in a cost25 effective manner;
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1 (C) provides for regional and concept dem2 onstration projects;

3 (D) describes the role and estimated budget

4 of each Federal agency in implementing the

5 plan;

6 (E) contributes, to the extent practicable, to

7 the National Global Change Research Plan under

8 section 104 of the Global Change Research Act of

9 1990 (15 U.S.C. 2934); and

10 (F) makes recommendations for coordina11 tion of ocean observing activities of the United

12 States with those of other nations and inter13 national organizations;

14 (2) serve as the mechanism for coordinating Fed15 eral ocean observing requirements and activities;

16 (3) work with academic, State, industry and

17 other actual and potential users of the observing sys18 tem to make effective use of existing capabilities and

19 incorporate new technologies;

20 (4) approve standards and protocols for the ad21 ministration of the system, including—

22 (A) a common set of measurements to be

23 collected and distributed routinely and by uni24 form methods;
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1 (B) standards for quality control and as2 sessment of data;

3 (C) design, testing and employment of fore4 cast models for ocean conditions;

5 (D) data management, including data

6 transfer protocols and archiving; and

7 (E) designation of coastal ocean observing

8 regions; and

9 (5) in consultation with the Secretary of State,

10 provide representation at international meetings on

11 ocean observing programs and coordinate relevant

12 Federal activities with those of other nations.

13 (c) SYSTEM ELEMENTS.—The integrated ocean and

14 coastal observing system shall include the following ele15 ments:

16 (1) A nationally coordinated network of regional

17 coastal ocean observing systems that measure and dis18 seminate a common set of ocean observations and re19 lated products in a uniform manner and according to

20 sound scientific practice, but that are adapted to local

21 and regional needs.

22 (2) Ocean sensors for climate observations, in23 cluding the Arctic Ocean and sub-polar seas.

24 (3) Coastal, relocatable, and cabled sea floor ob25 servatories.
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1 (4) Broad bandwidth communications that are

2 capable of transmitting high volumes of data from

3 open ocean locations at low cost and in real time.

4 (5) Ocean data management and assimilation

5 systems that ensure full use of new sources of data

6 from space-borne and in situ sensors.

7 (6) Focused research programs.

8 (7) Technology development program to develop

9 new observing technologies and techniques, including

10 data management and dissemination.

11 (8) Public outreach and education.

12 SEC. 1352. AUTHORIZATION OF APPROPRIATIONS.

13 For development and implementation of an integrated

14 ocean and coastal observation system under this title, in15 cluding financial assistance to regional coastal ocean ob16 serving systems, there are authorized to be appropriated

17 $235,000,000 in fiscal year 2003, $315,000,000 in fiscal

18 year 2004, $390,000,000 in fiscal year 2005, and

19 $445,000,000 in fiscal year 2006.

20 Subtitle E—Climate Change

21 Technology

22 SEC. 1361. NIST GREENHOUSE GAS FUNCTIONS.

23 Section 2(c) of the National Institute of Standards and

24 Technology Act (15 U.S.C. 272(c)) is amended—
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1 (1) by striking ‘‘and’’ after the semicolon in

2 paragraph (21);

3 (2) by redesignating paragraph (22) as para4 graph (23); and

5 (3) by inserting after paragraph (21) the fol6 lowing:

7 ‘‘(22) perform research to develop enhanced

8 measurements, calibrations, standards, and tech9 nologies which will enable the reduced production in

10 the United States of greenhouse gases associated with

11 global warming, including carbon dioxide, methane,

12 nitrous oxide, ozone, perfluorocarbons, hydro13 fluorocarbons, and sulfur hexafluoride; and’’.

14 SEC. 1362. DEVELOPMENT OF NEW MEASUREMENT TECH15 NOLOGIES.

16 The Secretary of Commerce shall initiate a program

17 to develop, with technical assistance from appropriate Fed18 eral agencies, innovative standards and measurement tech19 nologies (including technologies to measure carbon changes

20 due to changes in land use cover) to calculate—

21 (1) greenhouse gas emissions and reductions

22 from agriculture, forestry, and other land use prac23 tices;

24 (2) noncarbon dioxide greenhouse gas emissions

25 from transportation;
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1 (3) greenhouse gas emissions from facilities or

2 sources using remote sensing technology; and

3 (4) any other greenhouse gas emission or reduc4 tions for which no accurate or reliable measurement

5 technology exists.

6 SEC. 1363. ENHANCED ENVIRONMENTAL MEASUREMENTS

7 AND STANDARDS.

8 The National Institute of Standards and Technology

9 Act (15 U.S.C. 271 et seq.) is amended—

10 (1) by redesignating sections 17 through 32 as

11 sections 18 through 33, respectively; and

12 (2) by inserting after section 16 the following:

13 ‘‘SEC. 17. CLIMATE CHANGE STANDARDS AND PROCESSES.

14 ‘‘(a) IN GENERAL.—The Director shall establish with15 in the Institute a program to perform and support research

16 on global climate change standards and processes, with the

17 goal of providing scientific and technical knowledge appli18 cable to the reduction of greenhouse gases (as defined in sec19 tion 4 of the Global Climate Change Act of 2002).

20 ‘‘(b) RESEARCH PROGRAM.—

21 ‘‘(1) IN GENERAL.—The Director is authorized to

22 conduct, directly or through contracts or grants, a

23 global climate change standards and processes re24 search program.
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1 ‘‘(2) RESEARCH PROJECTS.—The specific con2 tents and priorities of the research program shall be

3 determined in consultation with appropriate Federal

4 agencies, including the Environmental Protection

5 Agency, the National Oceanic and Atmospheric Ad6 ministration, and the National Aeronautics and

7 Space Administration. The program generally shall

8 include basic and applied research—

9 ‘‘(A) to develop and provide the enhanced

10 measurements, calibrations, data, models, and

11 reference material standards which will enable

12 the monitoring of greenhouse gases;

13 ‘‘(B) to assist in establishing a baseline ref14 erence point for future trading in greenhouse

15 gases and the measurement of progress in emis16 sions reduction;

17 ‘‘(C) that will be exchanged internationally

18 as scientific or technical information which has

19 the stated purpose of developing mutually recog20 nized measurements, standards, and procedures

21 for reducing greenhouse gases; and

22 ‘‘(D) to assist in developing improved in23 dustrial processes designed to reduce or eliminate

24 greenhouse gases.

25 ‘‘(c) NATIONAL MEASUREMENT LABORATORIES.—
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1 ‘‘(1) IN GENERAL.—In carrying out this section,

2 the Director shall utilize the collective skills of the Na3 tional Measurement Laboratories of the National In4 stitute of Standards and Technology to improve the

5 accuracy of measurements that will permit better un6 derstanding and control of these industrial chemical

7 processes and result in the reduction or elimination

8 of greenhouse gases.

9 ‘‘(2) MATERIAL, PROCESS, AND BUILDING RE10 SEARCH.—The National Measurement Laboratories

11 shall conduct research under this subsection that

12 includes—

13 ‘‘(A) developing material and manufac14 turing processes which are designed for energy ef15 ficiency and reduced greenhouse gas emissions

16 into the environment;

17 ‘‘(B) developing environmentally-friendly,

18 ‘green’ chemical processes to be used by industry;

19 and

20 ‘‘(C) enhancing building performance with

21 a focus in developing standards or tools which

22 will help incorporate low- or no-emission tech23 nologies into building designs.

24 ‘‘(3) STANDARDS AND TOOLS.—The National

25 Measurement Laboratories shall develop standards
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1 and tools under this subsection that include software

2 to assist designers in selecting alternate building ma3 terials, performance data on materials, artificial in4 telligence-aided design procedures for building sub5 systems and ‘smart buildings’, and improved test

6 methods and rating procedures for evaluating the en7 ergy performance of residential and commercial ap8 pliances and products.

9 ‘‘(d) NATIONAL VOLUNTARY LABORATORY ACCREDITA10 TION PROGRAM.—The Director shall utilize the National

11 Voluntary Laboratory Accreditation Program under this

12 section to establish a program to include specific calibration

13 or test standards and related methods and protocols assem14 bled to satisfy the unique needs for accreditation in meas15 uring the production of greenhouse gases. In carrying out

16 this subsection the Director may cooperate with other de17 partments and agencies of the Federal Government, State

18 and local governments, and private organizations.’’.

19 SEC. 1364. TECHNOLOGY DEVELOPMENT AND DIFFUSION.

20 The Director of the National Institute of Standards and

21 Technology, through the Manufacturing Extension Partner22 ship Program, may develop a program to support the im23 plementation of new ‘‘green’’ manufacturing technologies

24 and techniques by the more than 380,000 small manufac25 turers.
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1 SEC. 1365. AUTHORIZATION OF APPROPRIATIONS.

2 There are authorized to be appropriated to the Director

3 to carry out functions pursuant to sections 1345, 1351, and

4 1361 through 1363, $10,000,000 for fiscal years 2002

5 through 2006.

6 Subtitle F—Climate Adaptation

7 and Hazards Prevention

8 PART I—ASSESSMENT AND ADAPTATION

9 SEC. 1371. REGIONAL CLIMATE ASSESSMENT AND ADAPTA10 TION PROGRAM.

11 (a) IN GENERAL.—The President shall establish with12 in the Department of Commerce a National Climate Change

13 Vulnerability and Adaptation Program for regional im14 pacts related to increasing concentrations of greenhouse

15 gases in the atmosphere and climate variability.

16 (b) COORDINATION.—In designing such program the

17 Secretary shall consult with the Federal Emergency Man18 agement Agency, the Environmental Protection Agency, the

19 Army Corps of Engineers, the Department of Transpor20 tation, and other appropriate Federal, State, and local gov21 ernment entities.

22 (c) VULNERABILITY ASSESSMENTS.—The program

23 shall—

24 (1) evaluate, based on predictions and other in25 formation developed under this Act and the National

26 Climate Program Act (15 U.S.C. 2901 et seq.), re-
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1 gional vulnerability to phenomena associated with

2 climate change and climate variability, including—

3 (A) increases in severe weather events;

4 (B) sea level rise and shifts in the

5 hydrological cycle;

6 (C) natural hazards, including tsunami,

7 drought, flood and fire; and

8 (D) alteration of ecological communities, in9 cluding at the ecosystem or watershed levels; and

10 (2) build upon predictions and other information

11 developed in the National Assessments prepared under

12 the Global Change Research Act of 1990 (15 U.S.C.

13 2921 et seq.).

14 (d) PREPAREDNESS RECOMMENDATIONS.—The pro15 gram shall submit a report to Congress within 2 years after

16 the date of enactment of this Act that identifies and rec17 ommends implementation and funding strategies for short18 and long-term actions that may be taken at the national,

19 regional, State, and local level—

20 (1) to reduce vulnerability of human life and

21 property;

22 (2) to improve resilience to hazards;

23 (3) to minimize economic impacts; and

24 (4) to reduce threats to critical biological and ec25 ological processes.
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1 (e) INFORMATION AND TECHNOLOGY.—The Secretary

2 shall make available appropriate information and other

3 technologies and products that will assist national, re4 gional, State, and local efforts, as well as efforts by other

5 end-users, to reduce loss of life and property, and coordinate

6 dissemination of such technologies and products.

7 (f) AUTHORIZATION OF APPROPRIATIONS.—There are

8 authorized to be appropriated to the Secretary of Commerce

9 $4,500,000 to implement the requirements of this section.

10 SEC. 1372. COASTAL VULNERABILITY AND ADAPTATION.

11 (a) COASTAL VULNERABILITY.—Within 2 years after

12 the date of enactment of this Act, the Secretary shall, in

13 consultation with the appropriate Federal, State, and local

14 governmental entities, conduct regional assessments of the

15 vulnerability of coastal areas to hazards associated with cli16 mate change, climate variability, sea level rise, and fluctua17 tion of Great Lakes water levels. The Secretary may also

18 establish, as warranted, longer term regional assessment

19 programs. The Secretary may also consult with the govern20 ments of Canada and Mexico as appropriate in developing

21 such regional assessments. In preparing the regional assess22 ments, the Secretary shall collect and compile current infor23 mation on climate change, sea level rise, natural hazards,

24 and coastal erosion and mapping, and specifically address

25 impacts on Arctic regions and the Central, Western, and
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1 South Pacific regions. The regional assessments shall in2 clude an evaluation of—

3 (1) social impacts associated with threats to and

4 potential losses of housing, communities, and infra5 structure;

6 (2) physical impacts such as coastal erosion,

7 flooding and loss of estuarine habitat, saltwater in8 trusion of aquifers and saltwater encroachment, and

9 species migration; and

10 (3) economic impact on local, State, and re11 gional economies, including the impact on abundance

12 or distribution of economically important living ma13 rine resources.

14 (b) COASTAL ADAPTATION PLAN.—The Secretary shall,

15 within 3 years after the date of enactment of this Act, sub16 mit to the Congress a national coastal adaptation plan,

17 composed of individual regional adaptation plans that rec18 ommend targets and strategies to address coastal impacts

19 associated with climate change, sea level rise, or climate

20 variability. The plan shall be developed with the participa21 tion of other Federal, State, and local government agencies

22 that will be critical in the implementation of the plan at

23 the State and local levels. The regional plans that will make

24 up the national coastal adaptation plan shall be based on

25 the information contained in the regional assessments and
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1 shall identify special needs associated with Arctic areas and

2 the Central, Western, and South Pacific regions. The Plan

3 shall recommend both short- and long-term adaptation

4 strategies and shall include recommendations regarding—

5 (1) Federal flood insurance program modifica6 tions;

7 (2) areas that have been identified as high risk

8 through mapping and assessment;

9 (3) mitigation incentives such as rolling ease10 ments, strategic retreat, State or Federal acquisition

11 in fee simple or other interest in land, construction

12 standards, and zoning;

13 (4) land and property owner education;

14 (5) economic planning for small communities de15 pendent upon affected coastal resources, including

16 fisheries; and

17 (6) funding requirements and mechanisms.

18 (c) TECHNICAL PLANNING ASSISTANCE.—The Sec19 retary, through the National Ocean Service, shall establish

20 a coordinated program to provide technical planning assist21 ance and products to coastal States and local governments

22 as they develop and implement adaptation or mitigation

23 strategies and plans. Products, information, tools and tech24 nical expertise generated from the development of the re25 gional assessments and the regional adaptation plans will
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1 be made available to coastal States for the purposes of devel2 oping their own State and local plans.

3 (d) COASTAL ADAPTATION GRANTS.—The Secretary

4 shall provide grants of financial assistance to coastal States

5 with federally approved coastal zone management programs

6 to develop and begin implementing coastal adaptation pro7 grams if the State provides a Federal-to-State match of 4

8 to 1 in the first fiscal year, 2.3 to 1 in the second fiscal

9 year, 2 to 1 in the third fiscal year, and 1 to 1 thereafter.

10 Distribution of these funds to coastal States shall be based

11 upon the formula established under section 306(c) of the

12 Coastal Zone Management Act of 1972 (16 U.S.C. 1455(c)),

13 adjusted in consultation with the States as necessary to pro14 vide assistance to particularly vulnerable coastlines.

15 (e) COASTAL RESPONSE PILOT PROGRAM.—

16 (1) IN GENERAL.—The Secretary shall establish

17 a 4-year pilot program to provide financial assistance

18 to coastal communities most adversely affected by the

19 impact of climate change or climate variability that

20 are located in States with federally approved coastal

21 zone management programs.

22 (2) ELIGIBLE PROJECTS.—A project is eligible

23 for financial assistance under the pilot program if

24 it—
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1 (A) will restore or strengthen coastal re2 sources, facilities, or infrastructure that have

3 been damaged by such an impact, as determined

4 by the Secretary;

5 (B) meets the requirements of the Coastal

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

7 and is consistent with the coastal zone manage8 ment plan of the State in which it is located;

9 and

10 (C) will not cost more than $100,000.

11 (3) FUNDING SHARE.—The Federal funding

12 share of any project under this subsection may not ex13 ceed 75 percent of the total cost of the project. In the

14 administration of this paragraph—

15 (A) the Secretary may take into account in16 kind contributions and other noncash support of

17 any project to determine the Federal funding

18 share for that project; and

19 (B) the Secretary may waive the require20 ments of this paragraph for a project in a com21 munity if—

22 (i) the Secretary determines that the

23 project is important; and

24 (ii) the economy and available re25 sources of the community in which the
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1 project is to be conducted are insufficient to

2 meet the non-Federal share of the project’s

3 costs.

4 (f) DEFINITIONS.—Any term used in this section that

5 is defined in section 304 of the Coastal Zone Management

6 Act of 1972 (16 U.S.C. 1453) has the meaning given it by

7 that section.

8 (g) AUTHORIZATION OF APPROPRIATIONS.—There are

9 authorized to be appropriated $3,000,000 annually for re10 gional assessments under subsection (a), and $3,000,000 an11 nually for coastal adaptation grants under subsection (d).

12 SEC. 1373. ARCTIC RESEARCH CENTER.

13 (a) ESTABLISHMENT.—The Secretary of Commerce, in

14 consultation with the Secretaries of Energy and the Inte15 rior, the Director of the National Science Foundation, and

16 the Administrator of the Environmental Protection Agency,

17 shall establish a joint research facility, to be known as the

18 Barrow Arctic Research Center, to support climate change

19 and other scientific research activities in the Arctic.

20 (b) AUTHORIZATION OF APPROPRIATIONS.—There are

21 authorized to be appropriated to the Secretaries of Com22 merce, Energy, and the Interior, the Director of the Na23 tional Science Foundation, and the Administrator of the

24 Environmental Protection Agency, $35,000,000 for the
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1 planning, design, construction, and support of the Barrow

2 Arctic Research Center.

3 PART II—FORECASTING AND PLANNING

4 PILOT PROGRAMS

5 SEC. 1381. REMOTE SENSING PILOT PROJECTS.

6 (a) IN GENERAL.—The Administrator of the National

7 Aeronautics and Space Administration may establish,

8 through the National Oceanic and Atmospheric Adminis9 tration’s Coastal Services Center, a program of grants for

10 competitively awarded pilot projects to explore the inte11 grated use of sources of remote sensing and other geospatial

12 information to address State, local, regional, and tribal

13 agency needs to forecast a plan for adaptation to coastal

14 zone and land use changes that may result as a consequence

15 of global climate change or climate variability.

16 (b) PREFERRED PROJECTS.—In awarding grants

17 under this section, the Center shall give preference to

18 projects that—

19 (1) focus on areas that are most sensitive to the

20 consequences of global climate change or climate vari21 ability;

22 (2) make use of existing public or commercial

23 data sets;

24 (3) integrate multiple sources of geospatial infor25 mation, such as geographic information system data,
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1 satellite-provided positioning data, and remotely

2 sensed data, in innovative ways;

3 (4) offer diverse, innovative approaches that may

4 serve as models for establishing a future coordinated

5 framework for planning strategies for adaptation to

6 coastal zone and land use changes related to global

7 climate change or climate variability;

8 (5) include funds or in-kind contributions from

9 non-Federal sources;

10 (6) involve the participation of commercial enti11 ties that process raw or lightly processed data, often

12 merging that data with other geospatial information,

13 to create data products that have significant value

14 added to the original data; and

15 (7) taken together demonstrate as diverse a set of

16 public sector applications as possible.

17 (c) OPPORTUNITIES.—In carrying out this section, the

18 Center shall seek opportunities to assist—

19 (1) in the development of commercial applica20 tions potentially available from the remote sensing in21 dustry; and

22 (2) State, local, regional, and tribal agencies in

23 applying remote sensing and other geospatial infor24 mation technologies for management and adaptation
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1 to coastal and land use consequences of global climate

2 change or climate variability.

3 (d) DURATION.—Assistance for a pilot project under

4 subsection (a) shall be provided for a period of not more

5 than 3 years.

6 (e) RESPONSIBILITIES OF GRANTEES.—Within 180

7 days after completion of a grant project, each recipient of

8 a grant under subsection (a) shall transmit a report to the

9 Center on the results of the pilot project and conduct at

10 least one workshop for potential users to disseminate the

11 lessons learned from the pilot project as widely as feasible.

12 (f) REGULATIONS.—The Center shall issue regulations

13 establishing application, selection, and implementation

14 procedures for pilot projects, and guidelines for reports and

15 workshops required by this section.

16 SEC. 1382. DATABASE ESTABLISHMENT.

17 The Center shall establish and maintain an electronic,

18 Internet-accessible database of the results of each pilot

19 project completed under section 1381.

20 SEC. 1383. AIR QUALITY RESEARCH, FORECASTS AND WARN21 INGS.

22 (a) REGIONAL STUDIES.—The Secretary of Commerce,

23 through the Administrator of the National Oceanographic

24 and Atmospheric Administration, shall, in order of priority

25 as listed in section (c), conduct regional studies of the air
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1 quality within specific regions of the United States. Such

2 studies should assess the effects of in situ emissions of air

3 pollutants and their precursors, transport of such emissions

4 and precursors from outside the region, and production of

5 air pollutants within the region via chemical reactions.

6 (b) FORECASTS AND WARNINGS.—The Secretary of

7 Commerce, through the Administrator of the National

8 Oceanographic and Atmospheric Administration, shall, in

9 order of priority as listed in section (c), establish a program

10 to provide operational air quality forecasts and warnings

11 for specific regions of the United States.

12 (c) DEFINITION.—For the purposes of this section, the

13 term ‘‘specific regions of the United States’’ means the fol14 lowing geographical areas:

15 (1) the Northeast, composed of Main, New

16 Hampshire, Vermont, Massachusetts, Rhode Island,

17 Connecticut, New York, New Jersey, Pennsylvania,

18 Maryland, Delaware, the District of Columbia, and

19 West Virginia;

20 (2) the Southeast, composed of Virginia, North

21 Carolina, South Carolina, Georgia, Alabama, and

22 Florida;

23 (3) the Midwest, composed of Minnesota, Wis24 consin, Iowa, Missouri, Illinois, Kentucky, Indiana,

25 Ohio, and Michigan;
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1 (4) the South, composed of Tennessee, Mis2 sissippi, Louisiana, Arkansas, Oklahoma, and Texas;

3 (5) the High Plains, composed of North Dakota,

4 South Dakota, Nebraska, and Kansas;

5 (6) the Northwest, composed of Washington, Or6 egon, Idaho, Montana, and Wyoming;

7 (7) the Southwest, composed of California, Ne8 vada, Utah, Colorado, Arizona, and New Mexico;

9 (8) Alaska; and

10 (9) Hawaii.

11 (d) AUTHORIZATION OF APPROPRIATIONS.—There are

12 authorized to be appropriated to the Secretary of Commerce

13 $3,000,000 for each of fiscal years 2003 through 2006 for

14 studies pursuant to subsection (b) of this section, and

15 $5,000,000 for fiscal year 2003 and such sums as may be

16 necessary for subsequent fiscal years for the forecast and

17 warning program pursuant to subsection (c) of this section.

18 SEC. 1384. DEFINITIONS.

19 In this subtitle:

20 (1) CENTER.—The term ‘‘Center’’ means the

21 Coastal Services Center of the National Oceanic and

22 Atmospheric Administration.

23 (2) GEOSPATIAL INFORMATION.—The term

24 ‘‘geospatial information’’ means knowledge of the na25 ture and distribution of physical and cultural fea-
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1 tures on the landscape based on analysis of data from

2 airborne or spaceborne platforms or other types and

3 sources of data.

4 (3) INSTITUTION OF HIGHER EDUCATION.—The

5 term ‘‘institution of higher education’’ has the mean6 ing given that term in section 101(a) of the Higher

7 Education Act of 1965 (20 U.S.C. 1001(a)).

8 SEC. 1385. AUTHORIZATION OF APPROPRIATIONS.

9 There are authorized to be appropriated to the Admin10 istrator to carry out the provisions of this subtitle—

11 (1) $17,500,000 for fiscal year 2003;

12 (2) $20,000,000 for fiscal year 2004;

13 (3) $22,500,000 for fiscal year 2005; and

14 (4) $25,000,000 for fiscal year 2006.

15 TITLE XIV—MANAGEMENT OF

16 DOE SCIENCE AND TECH17 NOLOGY PROGRAMS

18 SEC. 1401. DEFINITIONS.

19 In this title:

20 (1) APPLICABILITY OF DEFINITIONS.—The defi21 nitions in section 1203 shall apply.

22 (2) SINGLE-PURPOSE RESEARCH FACILITY.—The

23 term ‘‘single-purpose research facility’’ means any of

24 the following primarily single purpose entities owned

25 by the Department of Energy—
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1 (A) Ames Laboratory;

2 (B) East Tennessee Technology Park;

3 (C) Environmental Measurement Labora4 tory;

5 (D) Fernald Environmental Management

6 Project;

7 (E) Fermi National Accelerator Laboratory;

8 (F) Kansas City Plant;

9 (G) Nevada Test Site;

10 (H) New Brunswick Laboratory;

11 (I) Pantex Weapons Facility;

12 (J) Princeton Plasma Physics Laboratory;

13 (K) Savannah River Technology Center;

14 (L) Stanford Linear Accelerator Center;

15 (M) Thomas Jefferson National Accelerator

16 Facility;

17 (N) Y–12 facility at Oak Ridge National

18 Laboratory;

19 (O) Waste Isolation Pilot Plant; or

20 (P) other similar organization of the De21 partment designated by the Secretary that en22 gages in technology transfer, partnering, or li23 censing activities.
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1 SEC. 1402. AVAILABILITY OF FUNDS.

2 Funds authorized to be appropriated to the Depart3 ment of Energy under title XII, title XIII, and title XV

4 shall remain available until expended.

5 SEC. 1403. COST SHARING.

6 (a) RESEARCH AND DEVELOPMENT.—For research

7 and development projects funded from appropriations au8 thorized under subtitles A through D of title XII, the Sec9 retary shall require a commitment from non-Federal

10 sources of at least 20 percent of the cost of the project. The

11 Secretary may reduce or eliminate the non-Federal require12 ment under this subsection if the Secretary determines that

13 the research and development is of a basic or fundamental

14 nature.

15 (b) DEMONSTRATION AND DEPLOYMENT.—For dem16 onstration and technology deployment activities funded

17 from appropriations authorized under subtitles A through

18 D of title XII, the Secretary shall require a commitment

19 from non-Federal sources of at least 50 percent of the costs

20 of the project directly and specifically related to any dem21 onstration or technology deployment activity. The Secretary

22 may reduce or eliminate the non-Federal requirement under

23 this subsection if the Secretary determines that the reduc24 tion is necessary and appropriate considering the techno25 logical risks involved in the project and is necessary to meet

26 one or more goals of this title.
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1 (c) CALCULATION OF AMOUNT.—In calculating the

2 amount of the non-Federal commitment under subsection

3 (a) or (b), the Secretary shall include cash, personnel, serv4 ices, equipment, and other resources.

5 SEC. 1404. MERIT REVIEW OF PROPOSALS.

6 Awards of funds authorized under title XII, subtitle

7 A of title XIII, and title XV shall be made only after an

8 independent review of the scientific and technical merit of

9 the proposals for such awards has been made by the Depart10 ment of Energy.

11 SEC. 1405. EXTERNAL TECHNICAL REVIEW OF DEPART12 MENTAL PROGRAMS.

13 (a) NATIONAL ENERGY RESEARCH AND DEVELOPMENT

14 ADVISORY BOARDS.—(1) The Secretary shall establish an

15 advisory board to oversee Department research and develop16 ment programs in each of the following areas—

17 (A) energy efficiency;

18 (B) renewable energy;

19 (C) fossil energy;

20 (D) nuclear energy; and

21 (E) climate change technology, with emphasis on

22 integration, collaboration, and other special features

23 of the cross-cutting technologies supported by the Of24 fice of Climate Change Technology.
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1 (2) The Secretary may designate an existing advisory

2 board within the Department to fulfill the responsibilities

3 of an advisory board under this subsection, or may enter

4 into appropriate arrangements with the National Academy

5 of Sciences to establish such an advisory board.

6 (b) UTILIZATION OF EXISTING COMMITTEES.—The

7 Secretary of Energy shall continue to use the scientific pro8 gram advisory committees chartered under the Federal Ad9 visory Committee Act by the Office of Science to oversee re10 search and development programs under that Office.

11 (c) MEMBERSHIP.—Each advisory board under this

12 section shall consist of experts drawn from industry, aca13 demia, Federal laboratories, research institutions, or State,

14 local, or tribal governments, as appropriate.

15 (d) MEETINGS AND PURPOSES.—Each advisory board

16 under this section shall meet at least semi-annually to re17 view and advise on the progress made by the respective re18 search, development, demonstration, and technology deploy19 ment program. The advisory board shall also review the

20 adequacy and relevance of the goals established for each pro21 gram by Congress and the President, and may otherwise

22 advise on promising future directions in research and devel23 opment that should be considered by each program.
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1 SEC. 1406. IMPROVED COORDINATION AND MANAGEMENT

2 OF CIVILIAN SCIENCE AND TECHNOLOGY

3 PROGRAMS.

4 (a) EFFECTIVE TOP-LEVEL COORDINATION OF RE5 SEARCH AND DEVELOPMENT PROGRAMS.—Section 202(b)

6 of the Department of Energy Organization Act (42 U.S.C.

7 7132(b)) is amended to read as follows:

8 ‘‘(b)(1) There shall be in the Department an Under

9 Secretary for Energy and Science, who shall be appointed

10 by the President, by and with the advice and consent of

11 the Senate. The Under Secretary shall be compensated at

12 the rate provided for at level III of the Executive Schedule

13 under section 5314 of title 5, United States Code.

14 ‘‘(2) The Under Secretary for Energy and Science

15 shall be appointed from among persons who—

16 ‘‘(A) have extensive background in scientific or

17 engineering fields; and

18 ‘‘(B) are well qualified to manage the civilian

19 research and development programs of the Depart20 ment of Energy.

21 ‘‘(3) The Under Secretary for Energy and Science

22 shall—

23 ‘‘(A) serve as the Science and Technology Advi24 sor to the Secretary;

25 ‘‘(B) monitor the Department’s research and de26 velopment programs in order to advise the Secretary
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1 with respect to any undesirable duplication or gaps

2 in such programs;

3 ‘‘(C) advise the Secretary with respect to the

4 well-being and management of the multipurpose lab5 oratories under the jurisdiction of the Department;

6 ‘‘(D) advise the Secretary with respect to edu7 cation and training activities required for effective

8 short- and long-term basic and applied research ac9 tivities of the Department;

10 ‘‘(E) advise the Secretary with respect to grants

11 and other forms of financial assistance required for

12 effective short- and long-term basic and applied re13 search activities of the Department; and

14 ‘‘(F) exercise authority and responsibility over

15 Assistant Secretaries carrying out energy research

16 and development and energy technology functions

17 under sections 203 and 209, as well as other elements

18 of the Department assigned by the Secretary.’’.

19 (b) RECONFIGURATION OF POSITION OF DIRECTOR OF

20 THE OFFICE OF SCIENCE.—Section 209 of the Department

21 of Energy Organization Act (41 U.S.C. 7139) is amended

22 to read as follows:

23 ‘‘(a) There shall be within the Department an Office

24 of Science, to be headed by an Assistant Secretary of

25 Science, who shall be appointed by the President, by and
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1 with the advice and consent of the Senate, and who shall

2 be compensated at the rate provided for level IV of the Exec3 utive Schedule under section 5315 of title 5, United States

4 Code.

5 ‘‘(b) The Assistant Secretary of Science shall be in ad6 dition to the Assistant Secretaries provided for under sec7 tion 203 of this Act.

8 ‘‘(c) It shall be the duty and responsibility of the As9 sistant Secretary of Science to carry out the fundamental

10 science and engineering research functions of the Depart11 ment, including the responsibility for policy and manage12 ment of such research, as well as other functions vested in

13 the Secretary which he may assign to the Assistant Sec14 retary.’’.

15 (c) ADDITIONAL ASSISTANT SECRETARY POSITION TO

16 ENABLE IMPROVED MANAGEMENT OF NUCLEAR ENERGY

17 ISSUES.—

18 (1) Section 203(a) of the Department of Energy

19 Organization Act (42 U.S.C. 7133(a)) is amended by

20 striking ‘‘There shall be in the Department six Assist21 ant Secretaries’’ and inserting ‘‘Except as provided

22 in section 209, there shall be in the Department seven

23 Assistant Secretaries’’.
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1 (2) It is the sense of the Senate that the leader2 ship for departmental missions in nuclear energy

3 should be at the Assistant Secretary level.

4 (d) TECHNICAL AND CONFORMING AMENDMENTS.—

5 (1) Section 202 of the Department of Energy Or6 ganization Act (42 U.S.C. 7132) is further amended

7 by adding the following at the end:

8 ‘‘(d) There shall be in the Department an Under Sec9 retary, who shall be appointed by the President, by and

10 with the advice and consent of the Senate, and who shall

11 perform such functions and duties as the Secretary shall

12 prescribe, consistent with this section. The Under Secretary

13 shall be compensated at the rate provided for level III of

14 the Executive Schedule under section 5314 of title 5, United

15 States Code.

16 ‘‘(e) There shall be in the Department a General Coun17 sel, who shall be appointed by the President, by and with

18 the advice and consent of the Senate. The General Counsel

19 shall be compensated at the rate provided for level IV of

20 the Executive Schedule under section 5315 of title 5, United

21 States Code.’’.

22 (2) Section 5314 of title 5, United States Code,

23 is amended by striking ‘‘Under Secretaries of Energy

24 (2)’’ and inserting ‘‘Under Secretaries of Energy (3)’’.
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1 (3) Section 5315 of title 5, United States Code,

2 is amended by—

3 (A) striking ‘‘Director, Office of Science,

4 Department of Energy.’’; and

5 (B) striking ‘‘Assistant Secretaries of En6 ergy (6)’’ and inserting ‘‘Assistant Secretaries of

7 Energy (8)’’.

8 (4) The table of contents for the Department of

9 Energy Organization Act (42 U.S.C. 7101 note) is

10 amended—

11 (A) by striking ‘‘Section 209’’ and inserting

12 ‘‘Sec. 209’’;

13 (B) by striking ‘‘213.’’ and inserting ‘‘Sec.

14 213.’’;

15 (C) by striking ‘‘214.’’ and inserting ‘‘Sec.

16 214.’’;

17 (D) by striking ‘‘215.’’ and inserting ‘‘Sec.

18 215.’’; and

19 (E) by striking ‘‘216.’’ and inserting ‘‘Sec.

20 216.’’.

21 SEC. 1407. IMPROVED COORDINATION OF TECHNOLOGY

22 TRANSFER ACTIVITIES.

23 (a) TECHNOLOGY TRANSFER COORDINATOR.—The

24 Secretary shall appoint a Technology Transfer Coordinator

25 to perform oversight of and policy development for tech-
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1 nology transfer activities at the Department. The Tech2 nology Transfer Coordinator shall coordinate the activities

3 of the Technology Partnerships Working Group, and shall

4 oversee the expenditure of funds allocated to the Technology

5 Partnership Working Group.

6 (b) TECHNOLOGY PARTNERSHIP WORKING GROUP.—

7 The Secretary shall establish a Technology Partnership

8 Working Group, which shall consist of representatives of the

9 National Laboratories and single-purpose research facili10 ties, to—

11 (1) coordinate technology transfer activities oc12 curring at National Laboratories and single-purpose

13 research facilities;

14 (2) exchange information about technology trans15 fer practices; and

16 (3) develop and disseminate to the public and

17 prospective technology partners information about op18 portunities and procedures for technology transfer

19 with the Department.

20 SEC. 1408. TECHNOLOGY INFRASTRUCTURE PROGRAM.

21 (a) ESTABLISHMENT.—The Secretary shall establish a

22 Technology Infrastructure Program in accordance with this

23 section.

24 (b) PURPOSE.—The purpose of the Technology Infra25 structure Program shall be to improve the ability of Na-
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1 tional Laboratories or single-purpose research facilities to

2 support departmental missions by—

3 (1) stimulating the development of technology

4 clusters that can support departmental missions at

5 the National Laboratories or single-purpose research

6 facilities;

7 (2) improving the ability of National Labora8 tories or single-purpose research facilities to leverage

9 and benefit from commercial research, technology,

10 products, processes, and services; and

11 (3) encouraging the exchange of scientific and

12 technological expertise between National Laboratories

13 or single-purpose research facilities and—

14 (A) institutions of higher education,

15 (B) technology-related business concerns,

16 (C) nonprofit institutions, and

17 (D) agencies of State, tribal, or local gov18 ernments,

19 that can support departmental missions at the Na20 tional Laboratories and single-purpose research facili21 ties.

22 (c) PROJECTS.—The Secretary shall authorize the Di23 rector of each National Laboratory or facility to implement

24 the Technology Infrastructure Program at such National

25 Laboratory or single-purpose research facility through
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1 projects that meet the requirements of subsections (d) and

2 (e).

3 (d) PROGRAM REQUIREMENTS.—Each project funded

4 under this section shall meet the following requirements:

5 (1) MINIMUM PARTICIPANTS.—Each project shall

6 at a minimum include—

7 (A) a National Laboratory or single-pur8 pose research facility; and

9 (B) one of the following entities—

10 (i) a business,

11 (ii) an institution of higher education,

12 (iii) a nonprofit institution, or

13 (iv) an agency of a State, local, or

14 tribal government.

15 (2) COST SHARING.—

16 (A) MINIMUM AMOUNT.—Not less than 50

17 percent of the costs of each project funded under

18 this section shall be provided from non-Federal

19 sources.

20 (B) QUALIFIED FUNDING AND RE21 SOURCES.—(i) The calculation of costs paid by

22 the non-Federal sources to a project shall include

23 cash, personnel, services, equipment, and other

24 resources expended on the project.
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1 (ii) Independent research and development

2 expenses of Government contractors that qualify

3 for reimbursement under section 31–205–18(e) of

4 the Federal Acquisition Regulations issued pur5 suant to section 25(c)(1) of the Office of Federal

6 Procurement Policy Act (41 U.S.C. 421(c)(1))

7 may be credited towards costs paid by non-Fed8 eral sources to a project, if the expenses meet the

9 other requirements of this section.

10 (iii) No funds or other resources expended

11 either before the start of a project under this sec12 tion or outside the project’s scope of work shall

13 be credited toward the costs paid by the non-Fed14 eral sources to the project.

15 (3) COMPETITIVE SELECTION.—All projects in

16 which a party other than the Department, a National

17 Laboratory, or a single-purpose research facility re18 ceives funding under this section shall, to the extent

19 practicable, be competitively selected by the National

20 Laboratory or facility using procedures determined to

21 be appropriate by the Secretary.

22 (4) ACCOUNTING STANDARDS.—Any participant

23 that receives funds under this section, other than a

24 National Laboratory or single-purpose research facil25 ity, may use generally accepted accounting principles
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1 for maintaining accounts, books, and records relating

2 to the project.

3 (5) LIMITATIONS.—No Federal funds shall be

4 made available under this section for—

5 (A) construction; or

6 (B) any project for more than 5 years.

7 (e) SELECTION CRITERIA.—

8 (1) THRESHOLD FUNDING CRITERIA.—The Sec9 retary shall allocate funds under this section only if

10 the Director of the National Laboratory or single-pur11 pose research facility managing the project determines

12 that the project is likely to improve the ability of the

13 National Laboratory or single-purpose research facil14 ity to achieve technical success in meeting depart15 mental missions.

16 (2) ADDITIONAL CRITERIA.—The Secretary shall

17 require the Director of the National Laboratory or

18 single-purpose research facility managing a project

19 under this section to consider the following criteria in

20 selecting a project to receive Federal funds—

21 (A) the potential of the project to succeed,

22 based on its technical merit, team members,

23 management approach, resources, and project

24 plan;
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1 (B) the potential of the project to promote

2 the development of a commercially sustainable

3 technology cluster, which will derive most of the

4 demand for its products or services from the pri5 vate sector, and which will support departmental

6 missions at the participating National Labora7 tory or single-purpose research facility;

8 (C) the potential of the project to promote

9 the use of commercial research, technology, prod10 ucts, processes, and services by the participating

11 National Laboratory or single-purpose research

12 facility to achieve its departmental mission or

13 the commercial development of technological in14 novations made at the participating National

15 Laboratory or single-purpose research facility;

16 (D) the commitment shown by non-Federal

17 organizations to the project, based primarily on

18 the nature and amount of the financial and

19 other resources they will risk on the project;

20 (E) the extent to which the project involves

21 a wide variety and number of institutions of

22 higher education, nonprofit institutions, and

23 technology-related business concerns that can

24 support the missions of the participating Na25 tional Laboratory or single-purpose research fa-
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1 cility and that will make substantive contribu2 tions to achieving the goals of the project;

3 (F) the extent of participation in the project

4 by agencies of State, tribal, or local governments

5 that will make substantive contributions to

6 achieving the goals of the project;

7 (G) the extent to which the project focuses

8 on promoting the development of technology-re9 lated business concerns that are small business

10 concerns or involves such small business concerns

11 substantively in the project; and

12 (H) such other criteria as the Secretary de13 termines to be appropriate.

14 (f) REPORT TO CONGRESS.—Not later than January

15 1, 2004, the Secretary shall report to Congress on whether

16 the Technology Infrastructure Program should be continued

17 and, if so, how the program should be managed.

18 (g) DEFINITIONS.—In this section:

19 (1) TECHNOLOGY CLUSTER.—The term ‘‘tech20 nology cluster’’ means a concentration of—

21 (A) technology-related business concerns;

22 (B) institutions of higher education; or

23 (C) other nonprofit institutions;
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1 that reinforce each other’s performance in the areas of

2 technology development through formal or informal

3 relationships.

4 (2) TECHNOLOGY-RELATED BUSINESS CON5 CERN.—The term ‘‘technology-related business con6 cern’’ means a for-profit corporation, company, asso7 ciation, firm, partnership, or small business concern

8 that—

9 (A) conducts scientific or engineering re10 search,

11 (B) develops new technologies,

12 (C) manufactures products based on new

13 technologies, or

14 (D) performs technological services.

15 (h) AUTHORIZATION OF APPROPRIATIONS.—There are

16 authorized to be appropriated to the Secretary for activities

17 under this section $10,000,000 for each of fiscal years 2003

18 and 2004.

19 SEC. 1409. SMALL BUSINESS ADVOCACY AND ASSISTANCE.

20 (a) SMALL BUSINESS ADVOCATE.—The Secretary

21 shall require the Director of each National Laboratory, and

22 may require the Director of a single-purpose research facil23 ity, to appoint a small business advocate to—

24 (1) increase the participation of small business

25 concerns, including socially and economically dis-
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1 advantaged small business concerns, in procurement,

2 collaborative research, technology licensing, and tech3 nology transfer activities conducted by the National

4 Laboratory or single-purpose research facility;

5 (2) report to the Director of the National Lab6 oratory or single-purpose research facility on the ac7 tual participation of small business concerns in pro8 curement and collaborative research along with rec9 ommendations, if appropriate, on how to improve

10 participation;

11 (3) make available to small business concerns

12 training, mentoring, and clear, up-to-date informa13 tion on how to participate in the procurement and

14 collaborative research, including how to submit effec15 tive proposals;

16 (4) increase the awareness inside the National

17 Laboratory or single-purpose research facility of the

18 capabilities and opportunities presented by small

19 business concerns; and

20 (5) establish guidelines for the program under

21 subsection (b) and report on the effectiveness of such

22 program to the Director of the National Laboratory

23 or single-purpose research facility.

24 (b) ESTABLISHMENT OF SMALL BUSINESS ASSIST25 ANCE PROGRAM.—The Secretary shall require the Director
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1 of each National Laboratory, and may require the director

2 of a single-purpose research facility, to establish a program

3 to provide small business concerns—

4 (1) assistance directed at making them more ef5 fective and efficient subcontractors or suppliers to the

6 National Laboratory or single-purpose research facil7 ity; or

8 (2) general technical assistance, the cost of which

9 shall not exceed $10,000 per instance of assistance, to

10 improve the small business concern’s products or serv11 ices.

12 (c) USE OF FUNDS.—None of the funds expended

13 under subsection (b) may be used for direct grants to the

14 small business concerns.

15 (d) DEFINITIONS.—In this section:

16 (1) SMALL BUSINESS CONCERN.—The term

17 ‘‘small business concern’’ has the meaning given such

18 term in section 3 of the Small Business Act (15

19 U.S.C. 632).

20 (2) SOCIALLY AND ECONOMICALLY DISADVAN21 TAGED SMALL BUSINESS CONCERNS.—The term ‘‘so22 cially and economically disadvantaged small business

23 concerns’’ has the meaning given such term in section

24 8(a)(4) of the Small Business Act (15 U.S.C.

25 637(a)(4)).
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1 SEC. 1410. OTHER TRANSACTIONS.

2 (a) IN GENERAL.—Section 646 of the Department of

3 Energy Organization Act (42 U.S.C. 7256) is amended by

4 adding at the end the following:

5 ‘‘(g) OTHER TRANSACTIONS AUTHORITY.—(1) In ad6 dition to other authorities granted to the Secretary to enter

7 into procurement contracts, leases, cooperative agreements,

8 grants, and other similar arrangements, the Secretary may

9 enter into other transactions with public agencies, private

10 organizations, or persons on such terms as the Secretary

11 may deem appropriate in furtherance of basic, applied, and

12 advanced research functions now or hereafter vested in the

13 Secretary. Such other transactions shall not be subject to

14 the provisions of section 9 of the Federal Nonnuclear En15 ergy Research and Development Act of 1974 (42 U.S.C.

16 5908).

17 ‘‘(2)(A) The Secretary of Energy shall ensure that—

18 ‘‘(i) to the maximum extent practicable, no

19 transaction entered into under paragraph (1) pro20 vides for research that duplicates research being con21 ducted under existing programs carried out by the

22 Department of Energy; and

23 ‘‘(ii) to the extent that the Secretary determines

24 practicable, the funds provided by the Government

25 under a transaction authorized by paragraph (1) do
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1 not exceed the total amount provided by other parties

2 to the transaction.

3 ‘‘(B) A transaction authorized by paragraph (1) may

4 be used for a research project when the use of a standard

5 contract, grant, or cooperative agreement for such project

6 is not feasible or appropriate.

7 ‘‘(3)(A) The Secretary shall not disclose any trade se8 cret or commercial or financial information submitted by

9 a non-Federal entity under paragraph (1) that is privileged

10 and confidential.

11 ‘‘(B) The Secretary shall not disclose, for 5 years after

12 the date the information is received, any other information

13 submitted by a non-Federal entity under paragraph (1), in14 cluding any proposal, proposal abstract, document sup15 porting a proposal, business plan, or technical information

16 that is privileged and confidential.

17 ‘‘(C) The Secretary may protect from disclosure, for

18 up to 5 years, any information developed pursuant to a

19 transaction under paragraph (1) that would be protected

20 from disclosure under section 552(b)(4) of title 5, United

21 States Code, if obtained from a person other than a Federal

22 agency.’’.

23 (b) IMPLEMENTATION.—Not later than 6 months after

24 the date of enactment of this section, the Department shall

25 establish guidelines for the use of other transactions.
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1 SEC. 1411. MOBILITY OF SCIENTIFIC AND TECHNICAL PER2 SONNEL.

3 Not later than 2 years after the enactment of this sec4 tion, the Secretary, acting through the Technology Transfer

5 Coordinator under section 1407, shall determine whether

6 each contractor operating a National Laboratory or single7 purpose research facility has policies and procedures that

8 do not create disincentives to the transfer of scientific and

9 technical personnel among the contractor-operated National

10 Laboratories or contractor-operated single-purpose research

11 facilities.

12 SEC. 1412. NATIONAL ACADEMY OF SCIENCES REPORT.

13 Within 90 days after the date of enactment of this Act,

14 the Secretary shall contract with the National Academy of

15 Sciences to—

16 (1) conduct a study on the obstacles to accel17 erating the innovation cycle for energy technology,

18 and

19 (2) report to the Congress recommendations for

20 shortening the cycle of research, development, and de21 ployment.

22 SEC. 1413. REPORT ON TECHNOLOGY READINESS AND BAR23 RIERS TO TECHNOLOGY TRANSFER.

24 (a) IN GENERAL.—The Secretary, acting through the

25 Technology Partnership Working Group and in consulta-
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1 tion with representatives of affected industries, universities,

2 and small business concerns, shall—

3 (1) assess the readiness for technology transfer of

4 energy technologies developed through projects funded

5 from appropriations authorized under subtitles A

6 through D of title XIV, and

7 (2) identify barriers to technology transfer and

8 cooperative research and development agreements be9 tween the Department or a National Laboratory and

10 a non-Federal person; and

11 (3) make recommendations for administrative or

12 legislative actions needed to reduce or eliminate such

13 barriers.

14 (b) REPORT.—The Secretary shall provide a report to

15 Congress and the President on activities carried out under

16 this section not later than 1 year after the date of enactment

17 of this section, and shall update such report on a biennial

18 basis, taking into account progress toward eliminating bar19 riers to technology transfer identified in previous reports

20 under this section.

21 SEC. 1414. UNITED STATES-MEXICO ENERGY TECHNOLOGY

22 COOPERATION.

23 (a) FINDING.—Congress finds that the economic and

24 energy security of the United States and Mexico is furthered
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1 through collaboration between the United States and Mexico

2 on research related to energy technologies.

3 (b) PROGRAM.—

4 (1) IN GENERAL.—The Secretary, acting through

5 the Assistant Secretary for Environmental Manage6 ment, shall establish a collaborative research, develop7 ment, and deployment program to promote energy ef8 ficient, environmentally sound economic development

9 along the United States-Mexico border to—

10 (A) mitigate hazardous waste;

11 (B) promote energy efficient materials proc12 essing technologies that minimize environmental

13 damage; and

14 (C) protect the public health.

15 (2) CONSULTATION.—The Secretary, acting

16 through the Assistant Secretary for Environmental

17 Management, shall consult with the Office of Energy

18 Efficiency and Renewable Energy in carrying out

19 paragraph (1)(B).

20 (c) PROGRAM MANAGEMENT.—The program under

21 subsection (b) shall be managed by the Department of En22 ergy Carlsbad Environmental Management Field Office.

23 (d) COST SHARING.—The cost of any project or activ24 ity carried out using funds provided under this section shall

25 be shared as provided in section 1403.
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1 (e) TECHNOLOGY TRANSFER.—In carrying out

2 projects and activities under this section to mitigate haz3 ardous waste, the Secretary shall emphasize the transfer of

4 technology developed under the Environmental Management

5 Science Program of the Department of Energy.

6 (f) INTELLECTUAL PROPERTY.—In carrying out this

7 section, the Secretary shall comply with the requirements

8 of any agreement entered between the United States and

9 Mexico regarding intellectual property protection.

10 (g) AUTHORIZATION OF APPROPRIATIONS.—There are

11 authorized to be appropriated to carry out this section

12 $5,000,000 for fiscal year 2003 and $6,000,000 for each of

13 fiscal years 2004 through 2006, to remain available until

14 expended.

15 TITLE XV—PERSONNEL AND

16 TRAINING

17 SEC. 1501. WORKFORCE TRENDS AND TRAINEESHIP

18 GRANTS.

19 (a) WORKFORCE TRENDS.—

20 (1) MONITORING.—The Secretary of Energy (in

21 this title referred to as the ‘‘Secretary’’), acting

22 through the Administrator of the Energy Information

23 Administration, in consultation with the Secretary of

24 Labor, shall monitor trends in the workforce of skilled

25 technical personnel supporting energy technology in-
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1 dustries, including renewable energy industries, com2 panies developing and commercializing devices to in3 crease energy-efficiency, the oil and gas industry, the

4 electric power generation industry (including the nu5 clear power industry), the coal industry, and other

6 industrial sectors as the Secretary may deem appro7 priate.

8 (2) ANNUAL REPORTS.—The Administrator of

9 the Energy Information Administration shall include

10 statistics on energy industry workforce trends in the

11 annual reports of the Energy Information Adminis12 tration.

13 (3) SPECIAL REPORTS.—The Secretary shall re14 port to the appropriate committees of Congress when15 ever the Secretary determines that significant short16 falls of technical personnel in one or more energy in17 dustry segments are forecast or have occurred.

18 (b) TRAINEESHIP GRANTS FOR TECHNICALLY SKILLED

19 PERSONNEL.—

20 (1) GRANT PROGRAMS.—The Secretary shall es21 tablish grant programs in the appropriate offices of

22 the Department to enhance training of technically

23 skilled personnel for which a shortfall is determined

24 under subsection (a).
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1 (2) ELIGIBLE INSTITUTIONS.—As determined by

2 the Secretary to be appropriate to the particular

3 workforce shortfall, the Secretary shall make grants

4 under paragraph (1) to—

5 (A) an institution of higher education;

6 (B) a postsecondary educational institution

7 providing vocational and technical education

8 (within the meaning given those terms in section

9 3 of the Carl D. Perkins Vocational and Tech10 nical Education Act of 1998 (20 U.S.C. 2302));

11 (C) appropriate agencies of State, local, or

12 tribal governments; or

13 (D) joint labor and management training

14 organizations with State or federally recognized

15 apprenticeship programs and other employee16 based training organizations as the Secretary

17 considers appropriate.

18 (c) DEFINITION.—For purposes of this section, the

19 term ‘‘skilled technical personnel’’ means journey and ap20 prentice level workers who are enrolled in or have completed

21 a State or federally recognized apprenticeship program and

22 other skilled workers in energy technology industries.

23 (d) AUTHORIZATION OF APPROPRIATIONS.—From

24 amounts authorized under section 1241(c), there are author25 ized to be appropriated to the Secretary for activities under
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1 this section such sums as may be necessary for each fiscal

2 year.

3 SEC. 1502. POSTDOCTORAL AND SENIOR RESEARCH FEL4 LOWSHIPS IN ENERGY RESEARCH.

5 (a) POSTDOCTORAL FELLOWSHIPS.—The Secretary

6 shall establish a program of fellowships to encourage out7 standing young scientists and engineers to pursue

8 postdoctoral research appointments in energy research and

9 development at institutions of higher education of their

10 choice. In establishing a program under this subsection, the

11 Secretary may enter into appropriate arrangements with

12 the National Academy of Sciences to help administer the

13 program.

14 (b) DISTINGUISHED SENIOR RESEARCH FELLOW15 SHIPS.—The Secretary shall establish a program of fellow16 ships to allow outstanding senior researchers in energy re17 search and development and their research groups to explore

18 research and development topics of their choosing for a fixed

19 period of time. Awards under this program shall be made

20 on the basis of past scientific or technical accomplishment

21 and promise for continued accomplishment during the pe22 riod of support, which shall not be less than 3 years.

23 (c) AUTHORIZATION OF APPROPRIATIONS.—From

24 amounts authorized under section 1241(c), there are author25 ized to be appropriated to the Secretary for activities under
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1 this section such sums as may be necessary for each fiscal

2 year.

3 SEC. 1503. TRAINING GUIDELINES FOR ELECTRIC ENERGY

4 INDUSTRY PERSONNEL.

5 (a) MODEL GUIDELINES.—The Secretary shall, in co6 operation with electric generation, transmission, and dis7 tribution companies and recognized representatives of em8 ployees of those entities, develop model employee training

9 guidelines to support electric supply system reliability and

10 safety.

11 (b) CONTENT OF GUIDELINES.—The guidelines under

12 this section shall include—

13 (1) requirements for worker training, com14 petency, and certification, developed using criteria set

15 forth by the Utility Industry Group recognized by the

16 National Skill Standards Board; and

17 (2) consolidation of existing guidelines on the

18 construction, operation, maintenance, and inspection

19 of electric supply generation, transmission and dis20 tribution facilities such as those established by the

21 National Electric Safety Code and other industry

22 consensus standards.
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1 SEC. 1504. NATIONAL CENTER ON ENERGY MANAGEMENT

2 AND BUILDING TECHNOLOGIES.

3 The Secretary shall establish a National Center on En4 ergy Management and Building Technologies, to carry out

5 research, education, and training activities to facilitate the

6 improvement of energy efficiency and indoor air quality in

7 industrial, commercial and residential buildings. The Na8 tional Center shall be established in cooperation with—

9 (1) recognized representatives of employees in the

10 heating, ventilation, and air-conditioning industry;

11 (2) contractors that install and maintain heat12 ing, ventilation and air-conditioning systems and

13 equipment;

14 (3) manufacturers of heating, ventilation and

15 air-conditioning systems and equipment;

16 (4) representatives of the advanced building en17 velope industry, including design, windows, lighting,

18 and insulation industries; and

19 (5) other entities as appropriate.

20 SEC. 1505. IMPROVED ACCESS TO ENERGY-RELATED SCI21 ENTIFIC AND TECHNICAL CAREERS.

22 (a) DEPARTMENT OF ENERGY SCIENCE EDUCATION

23 PROGRAMS.—Section 3164 of the Department of Energy

24 Science Education Enhancement Act (42 U.S.C. 7381a) is

25 amended by adding at the end the following:
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1 ‘‘(c) PROGRAMS FOR WOMEN AND MINORITY STU2 DENTS.—In carrying out a program under subsection (a),

3 the Secretary shall give priority to activities that are de4 signed to encourage women and minority students to pursue

5 scientific and technical careers.’’.

6 (b) PARTNERSHIPS WITH HISTORICALLY BLACK COL7 LEGES AND UNIVERSITIES, HISPANIC-SERVICING INSTITU8 TIONS, AND TRIBAL COLLEGES.—The Department of En9 ergy Science Education Enhancement Act (42 U.S.C. 7381

10 et seq.) is amended—

11 (1) by redesignating sections 3167 and 3168 as

12 sections 3168 and 3169, respectively; and

13 (2) by inserting after section 3166 the following:

14 ‘‘SEC. 3167. PARTNERSHIPS WITH HISTORICALLY BLACK

15 COLLEGES AND UNIVERSITIES, HISPANIC16 SERVING INSTITUTIONS, AND TRIBAL COL17 LEGES.

18 ‘‘(a) DEFINITIONS.—In this section:

19 ‘‘(1) HISPANIC-SERVING INSTITUTION.—The term

20 ‘Hispanic-serving institution’ has the meaning given

21 the term in section 502(a) of the Higher Education

22 Act of 1965 (20 U.S.C. 1101a(a)).

23 ‘‘(2) HISTORICALLY BLACK COLLEGE OR UNIVER24 SITY.—The term ‘historically Black college or univer25 sity’ has the meaning given the term ‘part B institu-
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1 tion’ in section 322 of the Higher Education Act of

2 1965 (20 U.S.C. 1061).

3 ‘‘(3) NATIONAL LABORATORY.—The term ‘Na4 tional Laboratory’ has the meaning given the term in

5 section 1203 of the Energy Science and Technology

6 Enhancement Act of 2003.

7 ‘‘(4) SCIENCE FACILITY.—The term ‘science facil8 ity’ has the meaning given the term ‘single-purpose

9 research facility’ in section 1401 of the Energy

10 Science and Technology Enhancement Act of 2003.

11 ‘‘(5) TRIBAL COLLEGE.—The term ‘tribal college’

12 has the meaning given the term ‘tribally controlled

13 college or university’ in section 2(a) of the Tribally

14 Controlled College or University Assistance Act of

15 1978 (25 U.S.C. 1801(a)).

16 ‘‘(b) EDUCATION PARTNERSHIP.—

17 ‘‘(1) IN GENERAL.—The Secretary shall direct

18 the Director of each National Laboratory, and may

19 direct the head of any science facility, to increase the

20 participation of historically Black colleges or univer21 sities, Hispanic-serving institutions, or tribal colleges

22 in activities that increase the capacity of the histori23 cally Black colleges or universities, Hispanic-serving

24 institutions, or tribal colleges to train personnel in

25 science or engineering.
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1 ‘‘(2) ACTIVITIES.—An activity under paragraph

2 (1) may include—

3 ‘‘(A) collaborative research;

4 ‘‘(B) a transfer of equipment;

5 ‘‘(C) training of personnel at a National

6 Laboratory or science facility; and

7 ‘‘(D) a mentoring activity by personnel at

8 a National Laboratory or science facility.

9 ‘‘(c) REPORT.—Not later than 2 years after the date

10 of enactment of this section, the Secretary shall submit to

11 the Committee on Science of the House of Representatives

12 and the Committee on Energy and Natural Resources of

13 the Senate a report on the activities carried out under this

14 section.’’.

15 SEC. 1506. NATIONAL POWER PLANT OPERATIONS TECH16 NOLOGY AND EDUCATION CENTER.

17 (a) ESTABLISHMENT.—The Secretary shall establish a

18 National Power Plant Operations Technology and Edu19 cation Center (the ‘‘Center’’), to address the need for train20 ing and educating certified operators for electric power gen21 eration plants.

22 (b) ROLE.—The Center shall provide both training

23 and continuing education relating to electric power genera24 tion plant technologies and operations. The Center shall

25 conduct training and education activities on site and
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1 through Internet-based information technologies that allow

2 for learning at remote sites.

3 (c) CRITERIA FOR COMPETITIVE SELECTION.—The

4 Secretary shall establish the Center at an institution of

5 higher education with expertise in plant technology and op6 eration and that can provide on-site as well as Internet7 based training.

8 SEC. 1507. FEDERAL MINE INSPECTORS.

9 In light of projected retirements of Federal mine in10 spectors and the need for additional personnel, the Sec11 retary of Labor shall hire, train, and deploy such addi12 tional skilled mine inspectors (particularly inspectors with

13 practical experience as a practical mining engineer) as nec14 essary to ensure the availability of skilled and experienced

15 individuals and to maintain the number of Federal mine

16 inspectors at or above the levels authorized by law or estab17 lished by regulation.
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1 DIVISION F—TECHNOLOGY

2 ASSESSMENT AND STUDIES

3 TITLE XVI—TECHNOLOGY

4 ASSESSMENT

5 SEC. 1601. NATIONAL SCIENCE AND TECHNOLOGY ASSESS6 MENT SERVICE.

7 The National Science and Technology Policy, Organi8 zation, and Priorities Act of 1976 (42 U.S.C. 6601 et seq.)

9 is amended by adding at the end the following:

10 ‘‘TITLE VII—NATIONAL SCIENCE

11 AND TECHNOLOGY ASSESS12 MENT SERVICE

13 ‘‘SEC. 701. ESTABLISHMENT.

14 ‘‘There is hereby created a Science and Technology As15 sessment Service (hereinafter referred to as the ‘Service’),

16 which shall be within and responsible to the legislative

17 branch of the Government.

18 ‘‘SEC. 702. COMPOSITION.

19 ‘‘The Service shall consist of a Science and Technology

20 Board (hereinafter referred to as the ‘Board’) which shall

21 formulate and promulgate the policies of the Service, and

22 a Director who shall carry out such policies and administer

23 the operations of the Service.
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1 ‘‘SEC. 703. FUNCTIONS AND DUTIES.

2 ‘‘The Service shall coordinate and develop information

3 for Congress relating to the uses and application of tech4 nology to address current national science and technology

5 policy issues. In developing such technical assessments for

6 Congress, the Service shall utilize, to the extent practicable,

7 experts selected in coordination with the National Research

8 Council.

9 ‘‘SEC. 704. INITIATION OF ACTIVITIES.

10 ‘‘Science and technology assessment activities under11 taken by the Service may be initiated upon the request of—

12 ‘‘(1) the Chairman of any standing, special, or

13 select committee of either House of the Congress, or of

14 any joint committee of the Congress, acting for him15 self or at the request of the ranking minority member

16 or a majority of the committee members;

17 ‘‘(2) the Board; or

18 ‘‘(3) the Director.

19 ‘‘SEC. 705. ADMINISTRATION AND SUPPORT.

20 ‘‘The Director of the Science and Technology Assess21 ment Service shall be appointed by the Board and shall

22 serve for a term of 6 years unless sooner removed by the

23 Board. The Director shall receive basic pay at the rate pro24 vided for level III of the Executive Schedule under section

25 5314 of title 5, United States Code. The Director shall con-
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1 tract for administrative support from the Library of Con2 gress.

3 ‘‘SEC. 706. AUTHORITY.

4 ‘‘The Service shall have the authority, within the lim5 its of available appropriations, to do all things necessary

6 to carry out the provisions of this section, including, but

7 without being limited to, the authority to—

8 ‘‘(1) make full use of competent personnel and

9 organizations outside the Office, public or private,

10 and form special ad hoc task forces or make other ar11 rangements when appropriate;

12 ‘‘(2) enter into contracts or other arrangements

13 as may be necessary for the conduct of the work of the

14 Office with any agency or instrumentality of the

15 United States, with any State, territory, or possession

16 or any political subdivision thereof, or with any per17 son, firm, association, corporation, or educational in18 stitution, with or without reimbursement, without

19 performance or other bonds, and without regard to

20 section 3709 of the Revised Statutes (41 U.S.C. 51);

21 ‘‘(3) accept and utilize the services of voluntary

22 and uncompensated personnel necessary for the con23 duct of the work of the Service and provide transpor24 tation and subsistence as authorized by section 5703
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1 of title 5, United States Code, for persons serving

2 without compensation; and

3 ‘‘(4) prescribe such rules and regulations as it

4 deems necessary governing the operation and organi5 zation of the Service.

6 ‘‘SEC. 707. BOARD.

7 ‘‘The Board shall consist of 13 members as follows—

8 ‘‘(1) six Members of the Senate, appointed by the

9 President pro tempore of the Senate, three from the

10 majority party and three from the minority party;

11 ‘‘(2) six Members of the House of Representatives

12 appointed by the Speaker of the House of Representa13 tives, three from the majority party and three from

14 the minority party; and

15 ‘‘(3) the Director, who shall not be a voting

16 member.

17 ‘‘SEC. 708. REPORT TO CONGRESS.

18 ‘‘The Service shall submit to the Congress an annual

19 report which shall include, but not be limited to, an evalua20 tion of technology assessment techniques and identification,

21 insofar as may be feasible, of technological areas and pro22 grams requiring future analysis. The annual report shall

23 be submitted not later than March 15 of each year.
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1 ‘‘SEC. 709. AUTHORIZATION OF APPROPRIATIONS.

2 ‘‘There are authorized to be appropriated to the Service

3 such sums as are necessary to fulfill the requirements of

4 this title.’’.

5 TITLE XVII—STUDIES

6 SEC. 1701. REGULATORY REVIEWS.

7 (a) REGULATORY REVIEWS.—Not later than 1 year

8 after the date of enactment of this section and every 5 years

9 thereafter, each Federal agency shall review relevant regula10 tions and standards to identify—

11 (1) existing regulations and standards that act

12 as barriers to—

13 (A) market entry for emerging energy tech14 nologies (including fuel cells, combined heat and

15 power, distributed power generation, and small16 scale renewable energy), and

17 (B) market development and expansion for

18 existing energy technologies (including combined

19 heat and power, small-scale renewable energy,

20 geothermal heat pump technology, and energy re21 covery in industrial processes), and

22 (2) actions the agency is taking or could take

23 to—

24 (A) remove barriers to market entry for

25 emerging energy technologies and to market ex26 pansion for existing technologies,
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1 (B) increase energy efficiency and conserva2 tion, or

3 (C) encourage the use of new and existing

4 processes to meet energy and environmental

5 goals.

6 (b) REPORT TO CONGRESS.—Not later than 18 months

7 after the date of enactment of this section, and every 5 years

8 thereafter, the Director of the Office of Science and Tech9 nology Policy shall report to the Congress on the results of

10 the agency reviews conducted under subsection (a).

11 (c) CONTENTS OF THE REPORT.—The report shall—

12 (1) identify all regulatory barriers to—

13 (A) the development and commercialization

14 of emerging energy technologies and processes,

15 and

16 (B) the further development and expansion

17 of existing energy conservation technologies and

18 processes,

19 (2) actions taken, or proposed to be taken, to re20 move such barriers, and

21 (3) recommendations for changes in laws or reg22 ulations that may be needed to—

23 (A) expedite the siting and development of

24 energy production and distribution facilities,
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1 (B) encourage the adoption of energy effi2 ciency and process improvements,

3 (C) facilitate the expanded use of existing

4 energy conservation technologies, and

5 (D) reduce the environmental impacts of en6 ergy facilities and processes through transparent

7 and flexible compliance methods.

8 SEC. 1702. ASSESSMENT OF DEPENDENCE OF STATE OF HA9 WAII ON OIL.

10 (a) ASSESSMENT.—The Secretary of Energy shall as11 sess the economic implications of the dependence of the State

12 of Hawaii on oil as the principal source of energy for the

13 State, including—

14 (1) the short- and long-term prospects for crude

15 oil supply disruption and price volatility and poten16 tial impacts on the economy of Hawaii;

17 (2) the economic relationship between oil-fired

18 generation of electricity from residual fuel and refined

19 petroleum products consumed for ground, marine,

20 and air transportation;

21 (3) the technical and economic feasibility of in22 creasing the contribution of renewable energy re23 sources for generation of electricity, on an island-by24 island basis, including—

25 (A) siting and facility configuration;
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1 (B) environmental, operational, and safety

2 considerations;

3 (C) the availability of technology;

4 (D) effects on the utility system, including

5 reliability;

6 (E) infrastructure and transport require7 ments;

8 (F) community support; and

9 (G) other factors affecting the economic im10 pact of such an increase and any effect on the

11 economic relationship described in paragraph

12 (2);

13 (4) the technical and economic feasibility of

14 using liquefied natural gas to displace residual fuel

15 oil for electric generation, including neighbor island

16 opportunities, and the effect of such displacement on

17 the economic relationship described in paragraph (2),

18 including—

19 (A) the availability of supply;

20 (B) siting and facility configuration for on21 shore and offshore liquefied natural gas receiving

22 terminals;

23 (C) the factors described in subparagraphs

24 (B) through (F) of paragraph (3); and

25 (D) other economic factors;
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1 (5) the technical and economic feasibility of

2 using renewable energy sources (including hydrogen)

3 for ground, marine, and air transportation energy

4 applications to displace the use of refined petroleum

5 products, on an island-by-island basis, and the eco6 nomic impact of such displacement on the relation7 ship described in paragraph (2); and

8 (6) an island-by-island approach to—

9 (A) the development of hydrogen from re10 newable resources; and

11 (B) the application of hydrogen to the en12 ergy needs of Hawaii.

13 (b) CONTRACTING AUTHORITY.—The Secretary may

14 carry out the assessment under subsection (a) directly or,

15 in whole or in part, through one or more contracts with

16 qualified public or private entities.

17 (c) REPORT.—Not later than 300 days after the date

18 of enactment of this Act, the Secretary shall prepare, in

19 consultation with agencies of the State of Hawaii and other

20 stakeholders, as appropriate, and submit to Congress, a re21 port detailing the findings, conclusions, and recommenda22 tions resulting from the assessment.

23 (d) AUTHORIZATION OF APPROPRIATIONS.—There are

24 authorized to be appropriated such sums as are necessary

25 to carry out this section.
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1 SEC. 1703. STUDY OF SITING AN ELECTRIC TRANSMISSION

2 SYSTEM ON AMTRAK RIGHT-OF-WAY.

3 (a) STUDY.—The Secretary of Energy shall contract

4 with Amtrak to conduct a study of the feasibility of building

5 and operating a new electric transmission system on the

6 Amtrak right-of-way in the Northeast Corridor.

7 (b) SCOPE OF THE STUDY.—The study shall focus on

8 siting the new system on the Amtrak right-of-way within

9 the Northeast Corridor between Washington, D.C., and New

10 Rochelle, New York, including the Amtrak right-of-way be11 tween Philadelphia, Pennsylvania and Harrisburg, Penn12 sylvania.

13 (c) CONTENTS OF THE STUDY.—The study shall

14 consider—

15 (1) alternative geographic configuration of a new

16 electronic transmission system on the Amtrak right17 of-way;

18 (2) alternative technologies for the system;

19 (3) the estimated costs of building and operating

20 each alternative;

21 (4) alternative means of financing the system;

22 (5) the environmental risks and benefits of build23 ing and operating each alternative as well as environ24 mental risks and benefits of building and operating

25 the system on the Northeast Corridor rather than at

26 other locations;
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1 (6) engineering and technological obstacles to

2 building and operating each alternative; and

3 (7) the extent to which each alternative would

4 enhance the reliability of the electric transmission

5 grid and enhance competition in the sale of electric

6 energy at wholesale within the Northeast Corridor.

7 (d) RECOMMENDATIONS.—The study shall recommend

8 the optimal geographic configuration, the optimal tech9 nology, the optimal engineering design, and the optimal

10 means of financing for the new system from among the al11 ternatives considered.

12 (e) REPORT.—The Secretary of Energy shall submit

13 the completed study to the Committee on Energy and Nat14 ural Resources of the United States Senate and the Com15 mittee on Energy and Commerce of the House of Represent16 atives not later than 270 days after the date of enactment

17 of this section.

18 (f) DEFINITIONS.—For purposes of this section—

19 (1) the term ‘‘Amtrak’’ means the National Rail20 road Passenger Corporation established under chapter

21 243 of title 49, United States Code; and

22 (2) the term ‘‘Northeast Corridor’’ shall have the

23 meaning given such term under section 24102(7) of

24 title 49, United States Code.
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1 SEC. 1704. UPDATING OF INSULAR AREA RENEWABLE EN2 ERGY AND ENERGY EFFICIENCY PLANS.

3 Section 604 of Public Law 96–597 (48 U.S.C. 1492)

4 is amended—

5 (1) in subsection (a) at the end of paragraph (4)

6 by striking ‘‘resources.’’ and inserting ‘‘resources; and

7 ‘‘(5) the development of renewable energy and en8 ergy efficiency technologies since publication of the

9 1982 Territorial Energy Assessment prepared under

10 subsection (c) reveals the need to reassess the state of

11 energy production, consumption, efficiency, infra12 structure, reliance on imported energy, and potential

13 of the indigenous renewable energy resources and en14 ergy efficiency in regard to the insular areas.’’; and

15 (2) by adding at the end of subsection (e) ‘‘The

16 Secretary of Energy, in consultation with the Sec17 retary of the Interior and the chief executive officer of

18 each insular area, shall update the plans required

19 under subsection (c) and draft long-term energy plans

20 for each insular area that will reduce, to the extent

21 feasible, the reliance of the insular area on energy im22 ports by the year 2010, and maximize, to the extent

23 feasible, use of renewable energy resources and energy

24 efficiency opportunities. Not later than December 31,

25 2002, the Secretary of Energy shall submit the up26 dated plans to Congress.’’.
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1 SEC. 1705. CONSUMER ENERGY COMMISSION.

2 (a) ESTABLISHMENT OF COMMISSION.—There is estab3 lished a commission to be known as the ‘‘Consumer Energy

4 Commission’’.

5 (b) MEMBERSHIP.—

6 (1) IN GENERAL.—The Commission shall be com7 prised of 11 members who shall be appointed within

8 30 days from the date of enactment of this section and

9 who shall serve for the life of the Commission.

10 (2) APPOINTMENTS IN THE SENATE AND THE

11 HOUSE.—The Majority Leader and the Minority

12 Leader of the Senate and the Speaker and Minority

13 Leader of the House of Representatives shall each ap14 point 2 members—

15 (A) one of whom shall represent consumer

16 groups focusing on energy issues; and

17 (B) one of whom shall represent the energy

18 industry.

19 (3) APPOINTMENTS BY THE PRESIDENT.—The

20 President shall appoint three members—

21 (A) one of whom shall represent consumer

22 groups focusing on energy issues;

23 (B) one of whom shall represent the energy

24 industry; and

25 (C) one of whom shall represent the Depart26 ment of Energy.
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1 (c) INITIAL MEETING.—Not later than 60 days after

2 the date of enactment of this Act, the Commission shall hold

3 the first meeting of the Commission regardless of the num4 ber of members that have been appointed and shall select

5 a Chairperson and Vice Chairperson from among the mem6 bers of the Commission.

7 (d) ADMINISTRATIVE EXPENSES.—Members of the

8 Commission shall serve without compensation, except for

9 per diem and travel expenses which shall be reimbursed,

10 and the Department of Energy shall pay expenses as nec11 essary to carry out this section, with the expenses not to

12 exceed $400,000.

13 (e) STUDIES.—The Commission shall conduct a na14 tionwide study of significant price spikes since 1990 in

15 major United States consumer energy products, including

16 electricity, gasoline, home heating oil, natural gas and pro17 pane with a focus on their causes including insufficient in18 ventories, supply disruptions, refinery capacity limits, in19 sufficient infrastructure, regulatory failures, demand

20 growth, reliance on imported supplies, insufficient avail21 ability of alternative energy sources, abuse of market power,

22 market concentration and any other relevant factors.

23 (f) REPORT.—Not later than 180 days after the date

24 of the first meeting of the Commission, the Commission

25 shall submit to Congress a report that contains the findings
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1 and conclusions of the Commission and any recommenda2 tions for legislation, administrative actions, and voluntary

3 actions by industry and consumers to protect consumers

4 and small businesses from future price spikes in consumer

5 energy products.

6 (g) CONSULTATION.—The Commission shall consult

7 with the Federal Trade Commission, the Federal Energy

8 Regulatory Commission, the Department of Energy and

9 other Federal and State agencies as appropriate.

10 (h) SUNSET.—The Commission shall terminate within

11 30 days after the submission of the report to Congress.

12 SEC. 1706. STUDY OF NATURAL GAS AND OTHER ENERGY

13 TRANSMISSION INFRASTRUCTURE ACROSS

14 THE GREAT LAKES.

15 (a) DEFINITIONS.—In this section:

16 (1) GREAT LAKE.—The term ‘‘Great Lake’’

17 means Lake Erie, Lake Huron (including Lake Saint

18 Clair), Lake Michigan, Lake Ontario (including the

19 Saint Lawrence River from Lake Ontario to the 45th

20 parallel of latitude), and Lake Superior.

21 (2) SECRETARY.—The term ‘‘Secretary’’ means

22 the Secretary of Energy.

23 (b) STUDY.—
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1 (1) IN GENERAL.—The Secretary, in consultation

2 with representatives of appropriate Federal and State

3 agencies, shall—

4 (A) conduct a study of—

5 (i) the location and extent of antici6 pated growth of natural gas and other en7 ergy transmission infrastructure proposed

8 to be constructed across the Great Lakes;

9 and

10 (ii) the environmental impacts of any

11 natural gas or other energy transmission

12 infrastructure proposed to be constructed

13 across the Great Lakes; and

14 (B) make recommendations for minimizing

15 the environmental impact of pipelines and other

16 energy transmission infrastructure on the Great

17 Lakes ecosystem.

18 (2) ADVISORY COMMITTEE.—Not later than 30

19 days after the date of enactment of this Act, the Sec20 retary shall enter into an agreement with the Na21 tional Academy of Sciences to establish an advisory

22 committee to ensure that the study is complete, objec23 tive, and of good quality.

24 (c) REPORT.—Not later than 1 year after the date of

25 enactment of this Act, the Secretary shall submit to Con-
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1 gress a report that describes the findings and recommenda2 tions resulting from the study under subsection (b).

3 SEC. 1707. NATIONAL ACADEMY OF SCIENCES STUDY OF

4 PROCEDURES FOR SELECTION AND ASSESS5 MENT OF CERTAIN ROUTES FOR SHIPMENT

6 OF SPENT NUCLEAR FUEL FROM RESEARCH

7 NUCLEAR REACTORS.

8 (a) IN GENERAL.—The Secretary of Transportation

9 shall enter into an agreement with the National Academy

10 of Sciences under which agreement the National Academy

11 of Sciences shall conduct a study of the procedures by which

12 the Department of Energy, together with the Department

13 of Transportation and the Nuclear Regulatory Commission,

14 selects routes for the shipment of spent nuclear fuel from

15 research nuclear reactors between or among existing De16 partment of Energy facilities currently licensed to accept

17 such spent nuclear fuel.

18 (b) ELEMENTS OF STUDY.—In conducting the study

19 under subsection (a), the National Academy of Sciences

20 shall analyze the manner in which the Department of

21 Energy—

22 (1) selects potential routes for the shipment of

23 spent nuclear fuel from research nuclear reactors be24 tween or among existing Department facilities cur25 rently licensed to accept such spent nuclear fuel;
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1 (2) selects such a route for a specific shipment of

2 such spent nuclear fuel; and

3 (3) conducts assessments of the risks associated

4 with shipments of such spent nuclear fuel along such

5 a route.

6 (c) CONSIDERATIONS REGARDING ROUTE SELEC7 TION.—The analysis under subsection (b) shall include a

8 consideration whether, and to what extent, the procedures

9 analyzed for purposes of that subsection take into account

10 the following:

11 (1) The proximity of the routes under consider12 ation to major population centers and the risks asso13 ciated with shipments of spent nuclear fuel from re14 search nuclear reactors through densely populated

15 areas.

16 (2) Current traffic and accident data with re17 spect to the routes under consideration.

18 (3) The quality of the roads comprising the

19 routes under consideration.

20 (4) Emergency response capabilities along the

21 routes under consideration.

22 (5) The proximity of the routes under consider23 ation to places or venues (including sports stadiums,

24 convention centers, concert halls and theaters, and

25 other venues) where large numbers of people gather.
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1 (d) RECOMMENDATIONS.—In conducting the study

2 under subsection (a), the National Academy of Sciences

3 shall also make such recommendations regarding the mat4 ters studied as the National Academy of Sciences considers

5 appropriate.

6 (e) DEADLINE FOR DISPERSAL OF FUNDS FOR

7 STUDY.—The Secretary shall disperse to the National Acad8 emy of Sciences the funds for the cost of the study required

9 by subsection (a) not later than 30 days after the date of

10 the enactment of this Act.

11 (f) REPORT ON RESULTS OF STUDY.—Not later than

12 6 months after the date of the dispersal of funds under sub13 section (e), the National Academy of Sciences shall submit

14 to the appropriate committees of Congress a report on the

15 study conducted under subsection (a), including the rec16 ommendations required by subsection (d).

17 (g) APPROPRIATE COMMITTEES OF CONGRESS DE18 FINED.—In this section, the term ‘‘appropriate committees

19 of Congress’’ means—

20 (1) the Committees on Commerce, Science, and

21 Transportation, Energy and Natural Resources, and

22 Environment and Public Works of the Senate; and

23 (2) the Committee on Energy and Commerce of

24 the House of Representatives.
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1 SEC. 1708. REPORT ON ENERGY SAVINGS AND WATER USE.

2 (a) REPORT.—The Secretary of Energy shall conduct

3 a study of opportunities to reduce energy use by cost-effec4 tive improvements in the efficiency of municipal water and

5 wastewater treatment and use, including water pumps, mo6 tors, and delivery systems; purification, conveyance and

7 distribution; upgrading of aging water infrastructure, and

8 improved methods for leakage monitoring, measuring, and

9 reporting; and public education.

10 (b) SUBMISSION OF REPORT.—The Secretary of En11 ergy shall submit a report on the results of the study, in12 cluding any recommendations for implementation of meas13 ures and estimates of costs and resource savings, no later

14 than 2 years from the date of enactment of this section.

15 (c) AUTHORIZATION.—There is hereby authorized to be

16 appropriated such sums as may be necessary to carry out

17 the purposes of this section.

18 SEC. 1709. REPORT ON RESEARCH ON HYDROGEN PRODUC19 TION AND USE.

20 Not later than 120 days after the date of enactment

21 of this Act, the Secretary of Energy shall submit to Congress

22 a report that identifies current or potential research

23 projects at Department of Energy nuclear facilities relating

24 to the production or use of hydrogen in fuel cell development

25 or any other method or process enhancing alternative en26 ergy production technologies.
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1 DIVISION G—ENERGY

2 INFRASTRUCTURE SECURITY

3 TITLE XVIII—CRITICAL ENERGY

4 INFRASTRUCTURE

5 Subtitle A—Department of Energy

6 Programs

7 SEC. 1801. DEFINITIONS.

8 In this title:

9 (1) CRITICAL ENERGY INFRASTRUCTURE.—

10 (A) IN GENERAL.—The term ‘‘critical en11 ergy infrastructure’’ means a physical or cyber12 based system or service for—

13 (i) the generation, transmission or dis14 tribution of electric energy; or

15 (ii) the production, refining, or storage

16 of petroleum, natural gas, or petroleum

17 product—

18 the incapacity or destruction of which would

19 have a debilitating impact on the defense or eco20 nomic security of the United States.

21 (B) EXCLUSION.—The term shall not in22 clude a facility that is licensed by the Nuclear

23 Regulatory Commission under section 103 or

24 104b. of the Atomic Energy Act of 1954 (42

25 U.S.C. 2133 and 2134(b)).
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1 (2) DEPARTMENT; NATIONAL LABORATORY; SEC2 RETARY.—The terms ‘‘Department’’, ‘‘National Lab3 oratory’’, and ‘‘Secretary’’ have the meaning given

4 such terms in section 1203.

5 SEC. 1802. ROLE OF THE DEPARTMENT OF ENERGY.

6 Section 102 of the Department of Energy Organization

7 Act (42 U.S.C. 7112) is amended by adding at the end the

8 following:

9 ‘‘(20) To ensure the safety, reliability, and secu10 rity of the Nation’s energy infrastructure, and to re11 spond to any threat to or disruption of such infra12 structure, through activities including—

13 ‘‘(A) research and development;

14 ‘‘(B) financial assistance, technical assist15 ance, and cooperative activities with States, in16 dustry, and other interested parties; and

17 ‘‘(C) education and public outreach activi18 ties.’’.

19 SEC. 1803. CRITICAL ENERGY INFRASTRUCTURE PRO20 GRAMS.

21 (a) PROGRAMS.—In addition to the authorities other22 wise provided by law (including section 1261), the Sec23 retary is authorized to establish programs of financial, tech24 nical, or administrative assistance to—
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1 (1) enhance the security of critical energy infra2 structure in the United States;

3 (2) develop and disseminate, in cooperation with

4 industry, best practices for critical energy infrastruc5 ture assurance; and

6 (3) protect against, mitigate the effect of, and

7 improve the ability to recover from disruptive inci8 dents affecting critical energy infrastructure.

9 (b) REQUIREMENTS.—A program established under

10 this section shall—

11 (1) be undertaken in consultation with the advi12 sory committee established under section 1804;

13 (2) have available to it the scientific and tech14 nical resources of the Department, including resources

15 at a National Laboratory; and

16 (3) be consistent with any overall Federal plan

17 for national infrastructure security developed by the

18 President or his designee.

19 SEC. 1804. ADVISORY COMMITTEE ON ENERGY INFRA20 STRUCTURE SECURITY.

21 (a) ESTABLISHMENT.—The Secretary shall establish

22 an advisory committee, or utilize an existing advisory com23 mittee within the Department, to advise the Secretary on

24 policies and programs related to the security of United

25 States energy infrastructure.
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1 (b) BALANCED MEMBERSHIP.—The Secretary shall en2 sure that the advisory committee established or utilized

3 under subsection (a) has a membership with an appropriate

4 balance among the various interests related to energy infra5 structure security, including—

6 (1) scientific and technical experts;

7 (2) industrial managers;

8 (3) worker representatives;

9 (4) insurance companies or organizations;

10 (5) environmental organizations;

11 (6) representatives of State, local, and tribal gov12 ernments; and

13 (7) such other interests as the Secretary may

14 deem appropriate.

15 (c) EXPENSES.—Members of the advisory committee

16 established or utilized under subsection (a) shall serve with17 out compensation, and shall be allowed travel expenses, in18 cluding per diem in lieu of subsistence, at rates authorized

19 for an employee of an agency under subchapter I of chapter

20 57 of title 5, United States Code, while away from the home

21 or regular place of business of the member in the perform22 ance of the duties of the committee.
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1 SEC. 1805. BEST PRACTICES AND STANDARDS FOR ENERGY

2 INFRASTRUCTURE SECURITY.

3 The Secretary, in consultation with the advisory com4 mittee under section 1804, shall enter into appropriate ar5 rangements with one or more standard-setting organiza6 tions, or similar organizations, to assist the development

7 of industry best practices and standards for security related

8 to protecting critical energy infrastructure.

9 Subtitle B—Department of the

10 Interior Programs

11 SEC. 1811. OUTER CONTINENTAL SHELF ENERGY INFRA12 STRUCTURE SECURITY.

13 (a) DEFINITIONS.—In this section:

14 (1) APPROVED STATE PLAN.—The term ‘‘ap15 proved State plan’’ means a State plan approved by

16 the Secretary under subsection (c)(3).

17 (2) COASTLINE.—The term ‘‘coastline’’ has the

18 same meaning as the term ‘‘coast line’’ as defined in

19 subsection 2(c) of the Submerged Lands Act (43

20 U.S.C. 1301(c)).

21 (3) CRITICAL OCS ENERGY INFRASTRUCTURE FA22 CILITY.—The term ‘‘OCS critical energy infrastruc23 ture facility’’ means—

24 (A) a facility located in an OCS Production

25 State or in the waters of such State related to the
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1 production of oil or gas on the Outer Continental

2 Shelf; or

3 (B) a related facility located in an OCS

4 Production State or in the waters of such State

5 that carries out a public service, transportation,

6 or infrastructure activity critical to the oper7 ation of an Outer Continental Shelf energy in8 frastructure facility, as determined by the Sec9 retary.

10 (4) DISTANCE.—The term ‘‘distance’’ means the

11 minimum great circle distance, measured in statute

12 miles.

13 (5) LEASED TRACT.—

14 (A) IN GENERAL.—The term ‘‘leased tract’’

15 means a tract that—

16 (i) is subject to a lease under section 6

17 or 8 of the Outer Continental Shelf Lands

18 Act (43 U.S.C. 1335, 1337) for the purpose

19 of drilling for, developing, and producing

20 oil or natural gas resources; and

21 (ii) consists of a block, a portion of a

22 block, a combination of blocks or portions of

23 blocks, or a combination of portions of

24 blocks, as—

25 (I) specified in the lease; and
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1 (II) depicted on an outer Conti2 nental Shelf official protraction dia3 gram.

4 (B) EXCLUSION.—The term ‘‘leased tract’’

5 does not include a tract described in subpara6 graph (A) that is located in a geographic area

7 subject to a leasing moratorium on January 1,

8 2001, unless the lease was in production on that

9 date.

10 (6) OCS POLITICAL SUBDIVISION.—The term

11 ‘‘OCS political subdivision’’ means a county, parish,

12 borough or any equivalent subdivision of an OCS

13 Production State all or part of which subdivision lies

14 within the coastal zone (as defined in section 304(1)

15 of the Coastal Zone Management Act of 1972 (16

16 U.S.C. 1453(1)).

17 (7) OCS PRODUCTION STATE.—The term ‘‘OCS

18 Production State’’ means the State of—

19 (A) Alaska;

20 (B) Alabama;

21 (C) California;

22 (D) Florida;

23 (E) Louisiana;

24 (F) Mississippi; or

25 (G) Texas.
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1 (8) PRODUCTION.—The term ‘‘production’’ has

2 the meaning given the term in section 2 of the Outer

3 Continental Shelf Lands Act (43 U.S.C. 1331).

4 (9) PROGRAM.—The term ‘‘program’’ means the

5 Outer Continental Shelf Energy Infrastructure Secu6 rity Program established under subsection (b).

7 (10) QUALIFIED OUTER CONTINENTAL SHELF

8 REVENUES.—The term ‘‘qualified Outer Continental

9 Shelf revenues’’ means all amounts received by the

10 United States from each leased tract or portion of a

11 leased tract lying seaward of the zone defined and

12 governed by section 8(g) of the Outer Continental

13 Shelf Lands Act (43 U.S.C. 1331 et seq.), or lying

14 within such zone but to which section 8(g) does not

15 apply, the geographic center of which lies within a

16 distance of 200 miles from any part of the coastline

17 of any State, including bonus bids, rents, royalties

18 (including payments for royalties taken in kind and

19 sold), net profit share payments, and related late pay20 ment interest. Such term does not include any reve21 nues from a leased tract or portion of a leased tract

22 that is included within any area of the Outer Conti23 nental Shelf where a moratorium on new leasing was

24 in effect as of January 1, 2001, unless the lease was
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1 issued prior to the establishment of the moratorium

2 and was in production on January 1, 2001.

3 (11) SECRETARY.—The term ‘‘Secretary’’ means

4 the Secretary of the Interior.

5 (12) STATE PLAN.—The term ‘‘State plan’’

6 means a State plan described in subsection (b).

7 (b) ESTABLISHMENT.—The Secretary shall establish a

8 program, to be known as the ‘‘Outer Continental Shelf En9 ergy Infrastructure Security Program’’, under which the

10 Secretary shall provide funds to OCS Production States to

11 implement approved State plans to provide security against

12 hostile and natural threats to critical OCS energy infra13 structure facilities and support of any necessary public

14 service or transportation activities that are needed to main15 tain the safety and operation of critical energy infrastruc16 ture activities. For purposes of this program, restoration

17 of any coastal wetland shall be considered to be an activity

18 that secures critical OCS energy infrastructure facilities

19 from a natural threat.

20 (c) STATE PLANS.—

21 (1) INITIAL PLAN.—Not later than 180 days

22 after the date of enactment of this Act, to be eligible

23 to receive funds under the program, the Governor of

24 an OCS Production State shall submit to the Sec25 retary a plan to provide security against hostile and
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1 natural threats to critical energy infrastructure facili2 ties in the OCS Production State and to support any

3 of the necessary public service or transportation ac4 tivities that are needed to maintain the safety and

5 operation of critical energy infrastructure facilities.

6 Such plan shall include—

7 (A) the name of the State agency that will

8 have the authority to represent and act for the

9 State in dealing with the Secretary for purposes

10 of this section;

11 (B) a program for the implementation of

12 the plan which describes how the amounts pro13 vided under this section will be used;

14 (C) a contact for each OCS political sub15 division and description of how such political

16 subdivisions will use amounts provided under

17 this section, including a certification by the Gov18 ernor that such uses are consistent with the re19 quirements of this section; and

20 (D) measures for taking into account other

21 relevant Federal resources and programs.

22 (2) ANNUAL REVIEWS.—Not later than 1 year

23 after the date of submission of the plan and annually

24 thereafter, the Governor of an OCS Production State

25 shall—
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1 (A) review the approved State plan; and

2 (B) submit to the Secretary any revised

3 State plan resulting from the review.

4 (3) APPROVAL OF PLANS.—

5 (A) IN GENERAL.—In consultation with ap6 propriate Federal security officials and the Sec7 retaries of Commerce and Energy, the Secretary

8 shall—

9 (i) approve each State plan; or

10 (ii) recommend changes to the State

11 plan.

12 (B) RESUBMISSION OF STATE PLANS.—If

13 the Secretary recommends changes to a State

14 plan under subparagraph (A)(ii), the Governor

15 of the OCS Production State may resubmit a re16 vised State plan to the Secretary for approval.

17 (4) AVAILABILITY OF PLANS.—The Secretary

18 shall provide to Congress a copy of each approved

19 State plan.

20 (5) CONSULTATION AND PUBLIC COMMENT.—

21 (A) CONSULTATION.—The Governor of an

22 OCS Production State shall develop the State

23 plan in consultation with Federal, State, and

24 local law enforcement and public safety officials,
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1 industry, Indian tribes, the scientific commu2 nity, and other persons as appropriate.

3 (B) PUBLIC COMMENT.—The Governor of

4 an OCS Production State may solicit public

5 comments on the State plan to the extent that the

6 Governor determines to be appropriate.

7 (d) ALLOCATION OF AMOUNTS BY THE SECRETARY.—

8 The Secretary shall allocate the amounts made available for

9 the purposes of carrying out the program provided for by

10 this section among OCS Production States as follows:

11 (1) twenty-five percent of the amounts shall be

12 divided equally among OCS Production States.

13 (2) seventy-five percent of the amounts shall be

14 divided among OCS Production States on the basis of

15 the proximity of each OCS Production State to off16 shore locations at which oil and gas are being pro17 duced.

18 (e) CALCULATION.—The amount for each OCS Produc19 tion State under paragraph (d)(2) shall be calculated based

20 on the ratio of qualified OCS revenues generated off the

21 coastline of the OCS Production State to the qualified OCS

22 revenues generated off the coastlines of all OCS Production

23 States for the prior 5-year period. Where there is more than

24 one OCS Production State within 200 miles of a leased

25 tract, the amount of each OCS Production State’s payment
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1 under paragraph (d)(2) for such leased tract shall be in2 versely proportional to the distance between the nearest

3 point on the coastline of such State and the geographic cen4 ter of each leased tract or portion of the leased tract (to

5 the nearest whole mile) that is within 200 miles of that

6 coastline, as determined by the Secretary. A leased tract or

7 portion of a leased tract shall be excluded if the tract or

8 portion is located in a geographic area where a moratorium

9 on new leasing was in effect on January 1, 2001, unless

10 the lease was issued prior to the establishment of the mora11 torium and was in production on January 1, 2001.

12 (f) PAYMENTS TO OCS POLITICAL SUBDIVISIONS.—

13 Thirty-five percent of each OCS Production State’s allo14 cable share as determined under subsection (e) shall be paid

15 directly to the OCS political subdivisions by the Secretary

16 based on the following formula:

17 (1) twenty-five percent shall be allocated based

18 on the ratio of such OCS political subdivision’s popu19 lation to the population of all OCS political subdivi20 sions in the OCS Production State.

21 (2) twenty-five percent shall be allocated based

22 on the ratio of such OCS political subdivision’s coast23 line miles to the coastline miles of all OCS political

24 subdivisions in the OCS Production State. For pur25 poses of this subsection, those OCS political subdivi-
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1 sions without coastlines shall be considered to have a

2 coastline that is the average length of the coastlines of

3 all political subdivisions in the State.

4 (3) fifty percent shall be allocated based on the

5 relative distance of such OCS political subdivision

6 from any leased tract used to calculate that OCS Pro7 duction State’s allocation using ratios that are in8 versely proportional to the distance between the point

9 in the coastal political subdivision closest to the geo10 graphic center of each leased tract or portion, as de11 termined by the Secretary. For purposes of the cal12 culations under this subparagraph, a leased tract or

13 portion of a leased tract shall be excluded if the leased

14 tract or portion is located in a geographic area where

15 a moratorium on new leasing was in effect on Janu16 ary 1, 2001, unless the lease was issued prior to the

17 establishment of the moratorium and was in produc18 tion on January 1, 2001.

19 (g) FAILURE TO HAVE PLAN APPROVED.—Any

20 amount allocated to an OCS Production State or OCS po21 litical subdivision but not disbursed because of a failure to

22 have an approved Plan under this section shall be allocated

23 equally by the Secretary among all other OCS Production

24 States in a manner consistent with this subsection except

25 that the Secretary shall hold in escrow such amount until
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1 the final resolution of any appeal regarding the disapproval

2 of a plan submitted under this section. The Secretary may

3 waive the provisions of this paragraph and hold an OCS

4 Production State’s allocable share in escrow if the Secretary

5 determines that such State is making a good faith effort

6 to develop and submit, or update, a Plan.

7 (h) USE OF AMOUNTS ALLOCATED BY THE SEC8 RETARY.—

9 (1) IN GENERAL.—Amounts allocated by the Sec10 retary under subsection (d) may be used only in ac11 cordance with a plan approved pursuant to sub12 section (c) for—

13 (A) activities to secure critical OCS energy

14 infrastructure facilities from human or natural

15 threats; and

16 (B) support of any necessary public service

17 or transportation activities that are needed to

18 maintain the safety and operation of critical

19 OCS energy infrastructure facilities.

20 (2) RESTORATION OF COASTAL WETLAND.—For

21 the purpose of subparagraph (1)(A), restoration of

22 any coastal wetland shall be considered to be an ac23 tivity that secures critical OCS energy infrastructure

24 facilities from a natural threat.
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1 (i) FAILURE TO HAVE USE.—Any amount allocated

2 to an OCS political subdivision but not disbursed because

3 of a failure to have a qualifying use as described in sub4 section (h) shall be allocated by the Secretary to the OCS

5 Production State in which the OCS political subdivision

6 is located except that the Secretary shall hold in escrow such

7 amount until the final resolution of any appeal regarding

8 the use of the funds.

9 (j) COMPLIANCE WITH AUTHORIZED USES.—If the

10 Secretary determines that any expenditure made by an

11 OCS Production State or an OCS political subdivision is

12 not consistent with the uses authorized in subsection (h),

13 the Secretary shall not disburse any further amounts under

14 this section to that OCS Production State or OCS political

15 subdivision until the amounts used for the inconsistent ex16 penditure have been repaid or obligated for authorized uses.

17 (k) RULEMAKING.—The Secretary may promulgate

18 such rules and regulations as may be necessary to carry

19 out the purposes of this section, including rules and regula20 tions setting forth an appropriate process for appeals.

21 (l) AUTHORIZATION OF APPROPRIATIONS.—There are

22 hereby authorized to be appropriated $450,000,000 for each

23 of the fiscal years 2003 through 2008 to carry out the pur24 poses of this section.
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1 DIVISION H—ENERGY TAX

2 INCENTIVES

3 SEC. 1900. SHORT TITLE; ETC.

4 (a) SHORT TITLE.—This division may be cited as the

5 ‘‘Energy Tax Incentives Act of 2003’’.

6 (b) AMENDMENT OF 1986 CODE.—Except as otherwise

7 expressly provided, whenever in this division an amend8 ment or repeal is expressed in terms of an amendment to,

9 or repeal of, a section or other provision, the reference shall

10 be considered to be made to a section or other provision

11 of the Internal Revenue Code of 1986.

12 TITLE XIX—EXTENSION AND

13 MODIFICATION OF RENEW14 ABLE ELECTRICITY PRODUC15 TION TAX CREDIT

16 SEC. 1901. THREE-YEAR EXTENSION OF CREDIT FOR PRO17 DUCING ELECTRICITY FROM WIND AND POUL18 TRY WASTE.

19 (a) IN GENERAL.—Subparagraphs (A) and (C) of sec20 tion 45(c)(3) (relating to qualified facility), as amended by

21 section 603(a) of the Job Creation and Worker Assistance

22 Act of 2002, are each amended by striking ‘‘January 1,

23 2004’’ and inserting ‘‘January 1, 2007’’.

24 (b) EFFECTIVE DATE.—The amendments made by this

25 section shall apply to electricity sold after the date of the
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1 enactment of this Act, in taxable years ending after such

2 date.

3 SEC. 1902. CREDIT FOR ELECTRICITY PRODUCED FROM BIO4 MASS.

5 (a) EXTENSION AND MODIFICATION OF PLACED-IN6 SERVICE RULES.—Paragraph (3) of section 45(c) is

7 amended—

8 (1) by striking subparagraph (B) and inserting

9 the following new subparagraph:

10 ‘‘(B) CLOSED-LOOP BIOMASS FACILITY.—

11 ‘‘(i) IN GENERAL.—In the case of a fa12 cility using closed-loop biomass to produce

13 electricity, the term ‘qualified facility’

14 means any facility—

15 ‘‘(I) owned by the taxpayer which

16 is originally placed in service after De17 cember 31, 1992, and before January

18 1, 2007, or

19 ‘‘(II) owned by the taxpayer

20 which is originally placed in service

21 before January 1, 1993, and modified

22 to use closed-loop biomass to co-fire

23 with coal before January 1, 2007, as

24 approved under the Biomass Power for

25 Rural Development Programs or under
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1 a pilot project of the Commodity Cred2 it Corporation as described in 65 Fed.

3 Reg. 63052.

4 ‘‘(ii) SPECIAL RULES.—In the case of a

5 qualified facility described in clause

6 (i)(II)—

7 ‘‘(I) the 10-year period referred to

8 in subsection (a) shall be treated as be9 ginning no earlier than the date of the

10 enactment of this subclause, and

11 ‘‘(II) if the owner of such facility

12 is not the producer of the electricity,

13 the person eligible for the credit allow14 able under subsection (a) is the lessee

15 or the operator of such facility.’’, and

16 (2) by adding at the end the following new sub17 paragraph:

18 ‘‘(D) BIOMASS FACILITY.—

19 ‘‘(i) IN GENERAL.—In the case of a fa20 cility using biomass (other than closed-loop

21 biomass) to produce electricity, the term

22 ‘qualified facility’ means any facility owned

23 by the taxpayer which is originally placed

24 in service before January 1, 2005.
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1 ‘‘(ii) SPECIAL RULE FOR

2 POSTEFFECTIVE DATE FACILITIES.—In the

3 case of any facility described in clause (i)

4 which is placed in service after the date of

5 the enactment of this clause, the 3-year pe6 riod beginning on the date the facility is

7 originally placed in service shall be sub8 stituted for the 10-year period in subsection

9 (a)(2)(A)(ii).

10 ‘‘(iii) SPECIAL RULES FOR

11 PREEFFECTIVE DATE FACILITIES.—In the

12 case of any facility described in clause (i)

13 which is placed in service before the date of

14 the enactment of this clause—

15 ‘‘(I) subsection (a)(1) shall be ap16 plied by substituting ‘1.0 cents’ for ‘1.5

17 cents’, and

18 ‘‘(II) the 3-year period beginning

19 after December 31, 2002, shall be sub20 stituted for the 10-year period in sub21 section (a)(2)(A)(ii).

22 ‘‘(iv) CREDIT ELIGIBILITY.—In the

23 case of any facility described in clause (i),

24 if the owner of such facility is not the pro25 ducer of the electricity, the person eligible
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1 for the credit allowable under subsection (a)

2 is the lessee or the operator of such facil3 ity.’’.

4 (b) DEFINITION OF BIOMASS.—

5 (1) IN GENERAL.—Section 45(c)(1) (defining

6 qualified energy resources) is amended—

7 (A) by striking ‘‘and’’ at the end of sub8 paragraph (B),

9 (B) by striking the period at the end of sub10 paragraph (C) and inserting ‘‘, and’’, and

11 (C) by adding at the end the following new

12 subparagraph:

13 ‘‘(D) biomass (other than closed-loop bio14 mass).’’.

15 (2) BIOMASS DEFINED.—Section 45(c) (relating

16 to definitions) is amended by adding at the end the

17 following new paragraph:

18 ‘‘(5) BIOMASS.—The term ‘biomass’ means any

19 solid, nonhazardous, cellulosic waste material which

20 is segregated from other waste materials and which is

21 derived from—

22 ‘‘(A) any of the following forest-related re23 sources: mill residues, precommercial thinnings,

24 slash, and brush, but not including old-growth

25 timber (other than old-growth timber which has
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1 been permitted or contracted for removal by any

2 appropriate Federal authority through the Na3 tional Environmental Policy Act or by any ap4 propriate State authority),

5 ‘‘(B) solid wood waste materials, including

6 waste pallets, crates, dunnage, manufacturing

7 and construction wood wastes (other than pres8 sure-treated, chemically-treated, or painted wood

9 wastes), and landscape or right-of-way tree trim10 mings, but not including municipal solid waste

11 (garbage), gas derived from the biodegradation of

12 solid waste, or paper that is commonly recycled,

13 or

14 ‘‘(C) agriculture sources, including orchard

15 tree crops, vineyard, grain, legumes, sugar, and

16 other crop by-products or residues.’’.

17 (c) COORDINATION WITH SECTION 29.—Section 45(c)

18 (relating to definitions) is amended by adding at the end

19 the following new paragraph:

20 ‘‘(6) COORDINATION WITH SECTION 29.—The

21 term ‘qualified facility’ shall not include any facility

22 the production from which is taken into account in

23 determining any credit under section 29 for the tax24 able year or any prior taxable year.’’.

25 (d) CLERICAL AMENDMENTS.—
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1 (1) The heading for subsection (c) of section 45

2 is amended by inserting ‘‘AND SPECIAL RULES’’ after

3 ‘‘DEFINITIONS’’.

4 (2) The heading for subsection (d) of section 45

5 is amended by inserting ‘‘ADDITIONAL’’ before ‘‘DEFI6 NITIONS’’.

7 (e) EFFECTIVE DATES.—

8 (1) IN GENERAL.—Except as provided in para9 graph (2), the amendments made by this section shall

10 apply to electricity sold after the date of the enact11 ment of this Act.

12 (2) CERTAIN BIOMASS FACILITIES.—With respect

13 to any facility described in section 45(c)(3)(D)(i) of

14 the Internal Revenue Code of 1986, as added by this

15 section, which is placed in service before the date of

16 the enactment of this Act, the amendments made by

17 this section shall apply to electricity sold after Decem18 ber 31, 2002.

19 SEC. 1903. CREDIT FOR ELECTRICITY PRODUCED FROM

20 SWINE AND BOVINE WASTE NUTRIENTS, GEO21 THERMAL ENERGY, AND SOLAR ENERGY.

22 (a) EXPANSION OF QUALIFIED ENERGY RE23 SOURCES.—

24 (1) IN GENERAL.—Section 45(c)(1) (defining

25 qualified energy resources), as amended by this Act,
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1 is amended by striking ‘‘and’’ at the end of subpara2 graph (C), by striking the period at the end of sub3 paragraph (D) and inserting a comma, and by add4 ing at the end the following new subparagraphs:

5 ‘‘(E) swine and bovine waste nutrients,

6 ‘‘(F) geothermal energy, and

7 ‘‘(G) solar energy.’’.

8 (2) DEFINITIONS.—Section 45(c) (relating to

9 definitions and special rules), as amended by this

10 Act, is amended by redesignating paragraph (6) as

11 paragraph (8) and by inserting after paragraph (5)

12 the following new paragraphs:

13 ‘‘(6) SWINE AND BOVINE WASTE NUTRIENTS.—

14 The term ‘swine and bovine waste nutrients’ means

15 swine and bovine manure and litter, including bed16 ding material for the disposition of manure.

17 ‘‘(7) GEOTHERMAL ENERGY.—The term ‘geo18 thermal energy’ means energy derived from a geo19 thermal deposit (within the meaning of section

20 613(e)(2)).’’.

21 (b) EXTENSION AND MODIFICATION OF PLACED22 IN-SERVICE RULES.—Section 45(c)(3) (relating to

23 qualified facility), as amended by this Act, is amend24 ed by adding at the end the following new subpara25 graphs:
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1 ‘‘(E) SWINE AND BOVINE WASTE NUTRIENTS

2 FACILITY.—In the case of a facility using swine

3 and bovine waste nutrients to produce electricity,

4 the term ‘qualified facility’ means any facility

5 owned by the taxpayer which is originally placed

6 in service after the date of the enactment of this

7 subparagraph and before January 1, 2007.

8 ‘‘(F) GEOTHERMAL OR SOLAR ENERGY FA9 CILITY.—

10 ‘‘(i) IN GENERAL.—In the case of a fa11 cility using geothermal or solar energy to

12 produce electricity, the term ‘qualified facil13 ity’ means any facility owned by the tax14 payer which is originally placed in service

15 after the date of the enactment of this clause

16 and before January 1, 2007.

17 ‘‘(ii) SPECIAL RULE.—In the case of

18 any facility described in clause (i), the 5-

19 year period beginning on the date the facil20 ity was originally placed in service shall be

21 substituted for the 10-year period in sub22 section (a)(2)(A)(ii).’’.

23 (d) EFFECTIVE DATE.—The amendments made by this

24 section shall apply to electricity sold after the date of the
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1 enactment of this Act, in taxable years ending after such

2 date.

3 SEC. 1904. TREATMENT OF PERSONS NOT ABLE TO USE EN4 TIRE CREDIT.

5 (a) IN GENERAL.—Section 45(d) (relating to addi6 tional definitions and special rules), as amended by this

7 Act, is amended by adding at the end the following new

8 paragraph:

9 ‘‘(8) TREATMENT OF PERSONS NOT ABLE TO USE

10 ENTIRE CREDIT.—

11 ‘‘(A) ALLOWANCE OF CREDIT.—

12 ‘‘(i) IN GENERAL.—Except as otherwise

13 provided in this subsection—

14 ‘‘(I) any credit allowable under

15 subsection (a) with respect to a quali16 fied facility owned by a person de17 scribed in clause (ii) may be trans18 ferred or used as provided in this

19 paragraph, and

20 ‘‘(II) the determination as to

21 whether the credit is allowable shall be

22 made without regard to the tax-exempt

23 status of the person.

24 ‘‘(ii) PERSONS DESCRIBED.—A person

25 is described in this clause if the person is—
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1 ‘‘(I) an organization described in

2 section 501(c)(12)(C) and exempt from

3 tax under section 501(a),

4 ‘‘(II) an organization described in

5 section 1381(a)(2)(C),

6 ‘‘(III) a public utility (as defined

7 in section 136(c)(2)(B)), which is ex8 empt from income tax under this sub9 title,

10 ‘‘(IV) any State or political sub11 division thereof, the District of Colum12 bia, any possession of the United

13 States, or any agency or instrumen14 tality of any of the foregoing, or

15 ‘‘(V) any Indian tribal govern16 ment (within the meaning of section

17 7871) or any agency or instrumen18 tality thereof.

19 ‘‘(B) TRANSFER OF CREDIT.—

20 ‘‘(i) IN GENERAL.—A person described

21 in subparagraph (A)(ii) may transfer any

22 credit to which subparagraph (A)(i) applies

23 through an assignment to any other person

24 not described in subparagraph (A)(ii). Such
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1 transfer may be revoked only with the con2 sent of the Secretary.

3 ‘‘(ii) REGULATIONS.—The Secretary

4 shall prescribe such regulations as necessary

5 to ensure that any credit described in clause

6 (i) is claimed once and not reassigned by

7 such other person.

8 ‘‘(iii) TRANSFER PROCEEDS TREATED

9 AS ARISING FROM ESSENTIAL GOVERNMENT

10 FUNCTION.—Any proceeds derived by a per11 son described in subclause (III), (IV), or (V)

12 of subparagraph (A)(ii) from the transfer of

13 any credit under clause (i) shall be treated

14 as arising from the exercise of an essential

15 government function.

16 ‘‘(C) USE OF CREDIT AS AN OFFSET.—Not17 withstanding any other provision of law, in the

18 case of a person described in subclause (I), (II),

19 or (V) of subparagraph (A)(ii), any credit to

20 which subparagraph (A)(i) applies may be ap21 plied by such person, to the extent provided by

22 the Secretary of Agriculture, as a prepayment of

23 any loan, debt, or other obligation the entity has

24 incurred under subchapter I of chapter 31 of title

25 7 of the Rural Electrification Act of 1936 (7
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1 U.S.C. 901 et seq.), as in effect on the date of the

2 enactment of the Energy Tax Incentives Act of

3 2003.

4 ‘‘(D) CREDIT NOT INCOME.—Any transfer

5 under subparagraph (B) or use under subpara6 graph (C) of any credit to which subparagraph

7 (A)(i) applies shall not be treated as income for

8 purposes of section 501(c)(12).

9 ‘‘(E) TREATMENT OF UNRELATED PER10 SONS.—For purposes of subsection (a)(2)(B),

11 sales among and between persons described in

12 subparagraph (A)(ii) shall be treated as sales be13 tween unrelated parties.’’.

14 (b) CREDITS NOT REDUCED BY TAX-EXEMPT BONDS

15 OR CERTAIN OTHER SUBSIDIES.—Section 45(b)(3) (relat16 ing to credit reduced for grants, tax-exempt bonds, sub17 sidized energy financing, and other credits) is amended—

18 (1) by striking clause (ii),

19 (2) by redesignating clauses (iii) and (iv) as

20 clauses (ii) and (iii),

21 (3) by inserting ‘‘(other than any loan, debt, or

22 other obligation incurred under subchapter I of chap23 ter 31 of title 7 of the Rural Electrification Act of

24 1936 (7 U.S.C. 901 et seq.), as in effect on the date

25 of the enactment of the Energy Tax Incentives Act of
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1 2003)’’ after ‘‘project’’ in clause (ii) (as so redesig2 nated),

3 (4) by adding at the end the following new sen4 tence: ‘‘This paragraph shall not apply with respect

5 to any facility described in subsection

6 (c)(3)(B)(i)(II).’’, and

7 (5) by striking ‘‘TAX-EXEMPT BONDS,’’ in the

8 heading and inserting ‘‘CERTAIN’’.

9 (c) EFFECTIVE DATE.—The amendments made by this

10 section shall apply to electricity sold after the date of the

11 enactment of this Act, in taxable years ending after such

12 date.

13 SEC. 1905. CREDIT FOR ELECTRICITY PRODUCED FROM

14 SMALL IRRIGATION POWER.

15 (a) IN GENERAL.—Section 45(c)(1) (defining qualified

16 energy resources), as amended by this Act, is amended by

17 striking ‘‘and’’ at the end of subparagraph (F), by striking

18 the period at the end of subparagraph (G) and inserting

19 ‘‘, and’’, and by adding at the end the following new sub20 paragraph:

21 ‘‘(H) small irrigation power.’’.

22 (b) QUALIFIED FACILITY.—Section 45(c)(3) (relating

23 to qualified facility), as amended by this Act, is amended

24 by adding at the end the following new subparagraph:
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1 ‘‘(G) SMALL IRRIGATION POWER FACIL2 ITY.—In the case of a facility using small irriga3 tion power to produce electricity, the term ‘quali4 fied facility’ means any facility owned by the

5 taxpayer which is originally placed in service

6 after date of the enactment of this subparagraph

7 and before January 1, 2007.’’.

8 (c) DEFINITION.—Section 45(c), as amended by this

9 Act, is amended by redesignating paragraph (8) as para10 graph (9) and by inserting after paragraph (7) the fol11 lowing new paragraph:

12 ‘‘(8) SMALL IRRIGATION POWER.—The term

13 ‘small irrigation power’ means power—

14 ‘‘(A) generated without any dam or im15 poundment of water through an irrigation sys16 tem canal or ditch, and

17 ‘‘(B) the installed capacity of which is less

18 than 5 megawatts.’’.

19 (d) EFFECTIVE DATE.—The amendments made by this

20 section shall apply to electricity sold after the date of the

21 enactment of this Act, in taxable years ending after such

22 date.
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1 SEC. 1906. CREDIT FOR ELECTRICITY PRODUCED FROM MU2 NICIPAL BIOSOLIDS AND RECYCLED SLUDGE.

3 (a) IN GENERAL.—Section 45(c)(1) (defining qualified

4 energy resources), as amended by this Act, is amended by

5 striking ‘‘and’’ at the end of subparagraph (F), by striking

6 the period at the end of subparagraph (G), and by adding

7 at the end the following new subparagraphs:

8 ‘‘(H) municipal biosolids, and

9 ‘‘(I) recycled sludge.’’.

10 (b) QUALIFIED FACILITIES.—Section 45(c)(3) (relat11 ing to qualified facility), as amended by this Act, is amend12 ed by adding at the end the following new subparagraphs:

13 ‘‘(G) MUNICIPAL BIOSOLIDS FACILITY.—In

14 the case of a facility using municipal biosolids

15 to produce electricity, the term ‘qualified facility’

16 means any facility owned by the taxpayer which

17 is originally placed in service after December 31,

18 2001, and before January 1, 2007.

19 ‘‘(H) RECYCLED SLUDGE FACILITY.—

20 ‘‘(i) IN GENERAL.—In the case of a fa21 cility using recycled sludge to produce elec22 tricity, the term ‘qualified facility’ means

23 any facility owned by the taxpayer which is

24 originally placed in service before January

25 1, 2007.
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1 ‘‘(ii) SPECIAL RULE.—In the case of a

2 qualified facility described in clause (i), the

3 10-year period referred to in subsection (a)

4 shall be treated as beginning no earlier than

5 the date of the enactment of this subpara6 graph.’’.

7 (c) DEFINITIONS.—Section 45(c), as amended by this

8 Act, is amended by redesignating paragraph (8) as para9 graph (10) and by inserting after paragraph (7) the fol10 lowing new paragraphs:

11 ‘‘(8) MUNICIPAL BIOSOLIDS.—The term ‘munic12 ipal biosolids’ means the residue or solids removed by

13 a municipal wastewater treatment facility.

14 ‘‘(9) RECYCLED SLUDGE.—

15 ‘‘(A) IN GENERAL.—The term ‘recycled

16 sludge’ means the recycled residue byproduct cre17 ated in the treatment of commercial, industrial,

18 municipal, or navigational wastewater.

19 ‘‘(B) RECYCLED.—The term ‘recycled’

20 means the processing of residue into a market21 able product, but does not include incineration

22 for the purpose of volume reduction.’’.

23 (d) EFFECTIVE DATE.—The amendments made by this

24 section shall apply to electricity sold after the date of the
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1 enactment of this Act, in taxable years ending after such

2 date.

3 TITLE XX—ALTERNATIVE MOTOR

4 VEHICLES AND FUELS INCEN5 TIVES

6 SEC. 2001. ALTERNATIVE MOTOR VEHICLE CREDIT.

7 (a) IN GENERAL.—Subpart B of part IV of subchapter

8 A of chapter 1 (relating to foreign tax credit, etc.) is amend9 ed by adding at the end the following new section:

10 ‘‘SEC. 30B. ALTERNATIVE MOTOR VEHICLE CREDIT.

11 ‘‘(a) ALLOWANCE OF CREDIT.—There shall be allowed

12 as a credit against the tax imposed by this chapter for the

13 taxable year an amount equal to the sum of—

14 ‘‘(1) the new qualified fuel cell motor vehicle

15 credit determined under subsection (b),

16 ‘‘(2) the new qualified hybrid motor vehicle cred17 it determined under subsection (c), and

18 ‘‘(3) the new qualified alternative fuel motor ve19 hicle credit determined under subsection (d).

20 ‘‘(b) NEW QUALIFIED FUEL CELL MOTOR VEHICLE

21 CREDIT.—

22 ‘‘(1) IN GENERAL.—For purposes of subsection

23 (a), the new qualified fuel cell motor vehicle credit de24 termined under this subsection with respect to a new
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1 qualified fuel cell motor vehicle placed in service by

2 the taxpayer during the taxable year is—

3 ‘‘(A) $4,000, if such vehicle has a gross ve4 hicle weight rating of not more than 8,500

5 pounds,

6 ‘‘(B) $10,000, if such vehicle has a gross ve7 hicle weight rating of more than 8,500 pounds

8 but not more than 14,000 pounds,

9 ‘‘(C) $20,000, if such vehicle has a gross ve10 hicle weight rating of more than 14,000 pounds

11 but not more than 26,000 pounds, and

12 ‘‘(D) $40,000, if such vehicle has a gross ve13 hicle weight rating of more than 26,000 pounds.

14 ‘‘(2) INCREASE FOR FUEL EFFICIENCY.—

15 ‘‘(A) IN GENERAL.—The amount determined

16 under paragraph (1)(A) with respect to a new

17 qualified fuel cell motor vehicle which is a pas18 senger automobile or light truck shall be in19 creased by—

20 ‘‘(i) $1,000, if such vehicle achieves at

21 least 150 percent but less than 175 percent

22 of the 2000 model year city fuel economy,

23 ‘‘(ii) $1,500, if such vehicle achieves at

24 least 175 percent but less than 200 percent

25 of the 2000 model year city fuel economy,
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1 ‘‘(iii) $2,000, if such vehicle achieves

2 at least 200 percent but less than 225 per3 cent of the 2000 model year city fuel econ4 omy,

5 ‘‘(iv) $2,500, if such vehicle achieves at

6 least 225 percent but less than 250 percent

7 of the 2000 model year city fuel economy,

8 ‘‘(v) $3,000, if such vehicle achieves at

9 least 250 percent but less than 275 percent

10 of the 2000 model year city fuel economy,

11 ‘‘(vi) $3,500, if such vehicle achieves at

12 least 275 percent but less than 300 percent

13 of the 2000 model year city fuel economy,

14 and

15 ‘‘(vii) $4,000, if such vehicle achieves

16 at least 300 percent of the 2000 model year

17 city fuel economy.

18 ‘‘(B) 2000 MODEL YEAR CITY FUEL ECON19 OMY.—For purposes of subparagraph (A), the

20 2000 model year city fuel economy with respect

21 to a vehicle shall be determined in accordance

22 with the following tables:

23 ‘‘(i) In the case of a passenger auto24 mobile:

The 2000 model year city

‘‘If vehicle inertia weight class is: fuel economy is:

1,500 or 1,750 lbs .......................................................................... 43.7 mpg

2,000 lbs .......................................................................................... 38.3 mpg
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The 2000 model year city

‘‘If vehicle inertia weight class is: fuel economy is:

2,250 lbs .......................................................................................... 34.1 mpg

2,500 lbs .......................................................................................... 30.7 mpg

2,750 lbs .......................................................................................... 27.9 mpg

3,000 lbs .......................................................................................... 25.6 mpg

3,500 lbs .......................................................................................... 22.0 mpg

4,000 lbs .......................................................................................... 19.3 mpg

4,500 lbs .......................................................................................... 17.2 mpg

5,000 lbs .......................................................................................... 15.5 mpg

5,500 lbs .......................................................................................... 14.1 mpg

6,000 lbs .......................................................................................... 12.9 mpg

6,500 lbs .......................................................................................... 11.9 mpg

7,000 to 8,500 lbs ........................................................................... 11.1 mpg.

1 ‘‘(ii) In the case of a light truck:

The 2000 model year city

‘‘If vehicle inertia weight class is: fuel 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 to 8,500 lbs ........................................................................... 12.0 mpg.

2 ‘‘(C) VEHICLE INERTIA WEIGHT CLASS.—

3 For purposes of subparagraph (B), the term ‘ve4 hicle inertia weight class’ has the same meaning

5 as when defined in regulations prescribed by the

6 Administrator of the Environmental Protection

7 Agency for purposes of the administration of title

8 II of the Clean Air Act (42 U.S.C. 7521 et seq.).

9 ‘‘(3) NEW QUALIFIED FUEL CELL MOTOR VEHI10 CLE.—For purposes of this subsection, the term ‘new
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1 qualified fuel cell motor vehicle’ means a motor

2 vehicle—

3 ‘‘(A) which is propelled by power derived

4 from one or more cells which convert chemical

5 energy directly into electricity by combining ox6 ygen with hydrogen fuel which is stored on board

7 the vehicle in any form and may or may not re8 quire reformation prior to use,

9 ‘‘(B) which, in the case of a passenger auto10 mobile or light truck—

11 ‘‘(i) for 2002 and later model vehicles,

12 has received a certificate of conformity

13 under the Clean Air Act and meets or ex14 ceeds the equivalent qualifying California

15 low emission vehicle standard under section

16 243(e)(2) of the Clean Air Act for that make

17 and model year, and

18 ‘‘(ii) for 2004 and later model vehicles,

19 has received a certificate that such vehicle

20 meets or exceeds the Bin 5 Tier II emission

21 level established in regulations prescribed by

22 the Administrator of the Environmental

23 Protection Agency under section 202(i) of

24 the Clean Air Act for that make and model

25 year vehicle,
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1 ‘‘(C) the original use of which commences

2 with the taxpayer,

3 ‘‘(D) which is acquired for use or lease by

4 the taxpayer and not for resale, and

5 ‘‘(E) which is made by a manufacturer.

6 ‘‘(c) NEW QUALIFIED HYBRID MOTOR VEHICLE CRED7 IT.—

8 ‘‘(1) IN GENERAL.—For purposes of subsection

9 (a), the new qualified hybrid motor vehicle credit de10 termined under this subsection with respect to a new

11 qualified hybrid motor vehicle placed in service by the

12 taxpayer during the taxable year is the credit amount

13 determined under paragraph (2).

14 ‘‘(2) CREDIT AMOUNT.—

15 ‘‘(A) IN GENERAL.—The credit amount de16 termined under this paragraph shall be deter17 mined in accordance with the following tables:

18 ‘‘(i) In the case of a new qualified hy19 brid motor vehicle which is a passenger

20 automobile or light truck and which pro21 vides the following percentage of the max22 imum available power:

‘‘If percentage of the maximum

available power is: The credit amount is:

At least 5 percent but less than 10 percent ................................. $250

At least 10 percent but less than 20 percent ............................... $500

At least 20 percent but less than 30 percent ............................... $750

At least 30 percent ......................................................................... $1,000.
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1 ‘‘(ii) In the case of a new qualified hy2 brid motor vehicle which is a heavy duty

3 hybrid motor vehicle and which provides the

4 following percentage of the maximum avail5 able power:

6 ‘‘(I) If such vehicle has a gross ve7 hicle weight rating of not more than

8 14,000 pounds:

‘‘If percentage of the maximum

available power is: The credit amount is:

At least 20 percent but less than 30 percent ............................... $1,000

At least 30 percent but less than 40 percent ............................... $1,750

At least 40 percent but less than 50 percent ............................... $2,000

At least 50 percent but less than 60 percent ............................... $2,250

At least 60 percent ......................................................................... $2,500.

9 ‘‘(II) If such vehicle has a gross

10 vehicle weight rating of more than

11 14,000 but not more than 26,000

12 pounds:

‘‘If percentage of the maximum

available power is: The credit amount is:

At least 20 percent but less than 30 percent ............................... $4,000

At least 30 percent but less than 40 percent ............................... $4,500

At least 40 percent but less than 50 percent ............................... $5,000

At least 50 percent but less than 60 percent ............................... $5,500

At least 60 percent ......................................................................... $6,000.

13 ‘‘(III) If such vehicle has a gross

14 vehicle weight rating of more than

15 26,000 pounds:

‘‘If percentage of the maximum

available power is: The credit amount is:

At least 20 percent but less than 30 percent ............................... $6,000

At least 30 percent but less than 40 percent ............................... $7,000

At least 40 percent but less than 50 percent ............................... $8,000

At least 50 percent but less than 60 percent ............................... $9,000

At least 60 percent ......................................................................... $10,000.
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1 ‘‘(B) INCREASE FOR FUEL EFFICIENCY.—

2 ‘‘(i) AMOUNT.—The amount deter3 mined under subparagraph (A)(i) with re4 spect to a new qualified hybrid motor vehi5 cle which is a passenger automobile or light

6 truck shall be increased by—

7 ‘‘(I) $500, if such vehicle achieves

8 at least 125 percent but less than 150

9 percent of the 2000 model year city

10 fuel economy,

11 ‘‘(II) $1,000, if such vehicle

12 achieves at least 150 percent but less

13 than 175 percent of the 2000 model

14 year city fuel economy,

15 ‘‘(III) $1,500, if such vehicle

16 achieves at least 175 percent but less

17 than 200 percent of the 2000 model

18 year city fuel economy,

19 ‘‘(IV) $2,000, if such vehicle

20 achieves at least 200 percent but less

21 than 225 percent of the 2000 model

22 year city fuel economy,

23 ‘‘(V) $2,500, if such vehicle

24 achieves at least 225 percent but less
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1 than 250 percent of the 2000 model

2 year city fuel economy, and

3 ‘‘(VI) $3,000, if such vehicle

4 achieves at least 250 percent of the

5 2000 model year city fuel economy.

6 ‘‘(ii) 2000 MODEL YEAR CITY FUEL

7 ECONOMY.—For purposes of clause (i), the

8 2000 model year city fuel economy with re9 spect to a vehicle shall be determined using

10 the tables provided in subsection (b)(2)(B)

11 with respect to such vehicle.

12 ‘‘(C) INCREASE FOR ACCELERATED EMIS13 SIONS PERFORMANCE.—The amount determined

14 under subparagraph (A)(ii) with respect to an

15 applicable heavy duty hybrid motor vehicle shall

16 be increased by the increased credit amount de17 termined in accordance with the following tables:

18 ‘‘(i) In the case of a vehicle which has

19 a gross vehicle weight rating of not more

20 than 14,000 pounds:

‘‘If the model year is: The increased credit amount is:

2002 ................................................................................................ $3,500

2003 ................................................................................................ $3,000

2004 ................................................................................................ $2,500

2005 ................................................................................................ $2,000

2006 ................................................................................................ $1,500.

21 ‘‘(ii) In the case of a vehicle which has

22 a gross vehicle weight rating of more than
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1 14,000 pounds but not more than 26,000

2 pounds:

‘‘If the model year is: The increased credit amount is:

2002 ................................................................................................ $9,000

2003 ................................................................................................ $7,750

2004 ................................................................................................ $6,500

2005 ................................................................................................ $5,250

2006 ................................................................................................ $4,000.

3 ‘‘(iii) In the case of a vehicle which has

4 a gross vehicle weight rating of more than

5 26,000 pounds:

‘‘If the model year is: The increased credit amount is:

2002 ................................................................................................ $14,000

2003 ................................................................................................ $12,000

2004 ................................................................................................ $10,000

2005 ................................................................................................ $8,000

2006 ................................................................................................ $6,000.

6 ‘‘(D) DEFINITIONS.—

7 ‘‘(i) APPLICABLE HEAVY DUTY HYBRID

8 MOTOR VEHICLE.—For purposes of subpara9 graph (C), the term ‘applicable heavy duty

10 hybrid motor vehicle’ means a heavy duty

11 hybrid motor vehicle which is powered by

12 an internal combustion or heat engine

13 which is certified as meeting the emission

14 standards set in the regulations prescribed

15 by the Administrator of the Environmental

16 Protection Agency for 2007 and later model

17 year diesel heavy duty engines, or for 2008

18 and later model year ottocycle heavy duty

19 engines, as applicable.
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1 ‘‘(ii) HEAVY DUTY HYBRID MOTOR VE2 HICLE.—For purposes of this paragraph,

3 the term ‘heavy duty hybrid motor vehicle’

4 means a new qualified hybrid motor vehicle

5 which has a gross vehicle weight rating of

6 more than 10,000 pounds and draws pro7 pulsion energy from both of the following

8 onboard sources of stored energy:

9 ‘‘(I) An internal combustion or

10 heat engine using consumable fuel

11 which, for 2002 and later model vehi12 cles, has received a certificate of con13 formity under the Clean Air Act and

14 meets or exceeds a level of not greater

15 than 3.0 grams per brake horsepower–

16 hour of oxides of nitrogen and 0.01 per

17 brake horsepower–hour of particulate

18 matter.

19 ‘‘(II) A rechargeable energy stor20 age system.

21 ‘‘(iii) MAXIMUM AVAILABLE POWER.—

22 ‘‘(I) PASSENGER AUTOMOBILE OR

23 LIGHT TRUCK.—For purposes of sub24 paragraph (A)(i), the term ‘maximum

25 available power’ means the maximum
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1 power available from the rechargeable

2 energy storage system, during a stand3 ard 10 second pulse power or equiva4 lent test, divided by such maximum

5 power and the SAE net power of the

6 heat engine.

7 ‘‘(II) HEAVY DUTY HYBRID MOTOR

8 VEHICLE.—For purposes of subpara9 graph (A)(ii), the term ‘maximum

10 available power’ means the maximum

11 power available from the rechargeable

12 energy storage system, during a stand13 ard 10 second pulse power or equiva14 lent test, divided by the vehicle’s total

15 traction power. The term ‘total trac16 tion power’ means the sum of the peak

17 power from the rechargeable energy

18 storage system and the heat engine

19 peak power of the vehicle, except that if

20 such storage system is the sole means

21 by which the vehicle can be driven, the

22 total traction power is the peak power

23 of such storage system.

24 ‘‘(3) NEW QUALIFIED HYBRID MOTOR VEHI25 CLE.—For purposes of this subsection, the term ‘new
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1 qualified hybrid motor vehicle’ means a motor

2 vehicle—

3 ‘‘(A) which draws propulsion energy from

4 onboard sources of stored energy which are

5 both—

6 ‘‘(i) an internal combustion or heat en7 gine using combustible fuel, and

8 ‘‘(ii) a rechargeable energy storage sys9 tem,

10 ‘‘(B) which, in the case of a passenger auto11 mobile or light truck—

12 ‘‘(i) for 2002 and later model vehicles,

13 has received a certificate of conformity

14 under the Clean Air Act and meets or ex15 ceeds the equivalent qualifying California

16 low emission vehicle standard under section

17 243(e)(2) of the Clean Air Act for that make

18 and model year, and

19 ‘‘(ii) for 2004 and later model vehicles,

20 has received a certificate that such vehicle

21 meets or exceeds the Bin 5 Tier II emission

22 level established in regulations prescribed by

23 the Administrator of the Environmental

24 Protection Agency under section 202(i) of
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1 the Clean Air Act for that make and model

2 year vehicle,

3 ‘‘(C) the original use of which commences

4 with the taxpayer,

5 ‘‘(D) which is acquired for use or lease by

6 the taxpayer and not for resale, and

7 ‘‘(E) which is made by a manufacturer.

8 ‘‘(d) NEW QUALIFIED ALTERNATIVE FUEL MOTOR VE9 HICLE CREDIT.—

10 ‘‘(1) ALLOWANCE OF CREDIT.—Except as pro11 vided in paragraph (5), the credit determined under

12 this subsection is an amount equal to the applicable

13 percentage of the incremental cost of any new quali14 fied alternative fuel motor vehicle placed in service by

15 the taxpayer during the taxable year.

16 ‘‘(2) APPLICABLE PERCENTAGE.—For purposes

17 of paragraph (1), the applicable percentage with re18 spect to any new qualified alternative fuel motor vehi19 cle is—

20 ‘‘(A) 40 percent, plus

21 ‘‘(B) 30 percent, if such vehicle—

22 ‘‘(i) has received a certificate of con23 formity under the Clean Air Act and meets

24 or exceeds the most stringent standard

25 available for certification under the Clean
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1 Air Act for that make and model year vehi2 cle (other than a zero emission standard), or

3 ‘‘(ii) has received an order certifying

4 the vehicle as meeting the same require5 ments as vehicles which may be sold or

6 leased in California and meets or exceeds

7 the most stringent standard available for

8 certification under the State laws of Cali9 fornia (enacted in accordance with a waiver

10 granted under section 209(b) of the Clean

11 Air Act) for that make and model year vehi12 cle (other than a zero emission standard).

13 ‘‘(3) INCREMENTAL COST.—For purposes of this

14 subsection, the incremental cost of any new qualified

15 alternative fuel motor vehicle is equal to the amount

16 of the excess of the manufacturer’s suggested retail

17 price for such vehicle over such price for a gasoline

18 or diesel fuel motor vehicle of the same model, to the

19 extent such amount does not exceed—

20 ‘‘(A) $5,000, if such vehicle has a gross ve21 hicle weight rating of not more than 8,500

22 pounds,

23 ‘‘(B) $10,000, if such vehicle has a gross ve24 hicle weight rating of more than 8,500 pounds

25 but not more than 14,000 pounds,
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1 ‘‘(C) $25,000, if such vehicle has a gross ve2 hicle weight rating of more than 14,000 pounds

3 but not more than 26,000 pounds, and

4 ‘‘(D) $40,000, if such vehicle has a gross ve5 hicle weight rating of more than 26,000 pounds.

6 ‘‘(4) QUALIFIED ALTERNATIVE FUEL MOTOR VE7 HICLE DEFINED.—For purposes of this subsection—

8 ‘‘(A) IN GENERAL.—The term ‘qualified al9 ternative fuel motor vehicle’ means any motor

10 vehicle—

11 ‘‘(i) which is only capable of operating

12 on an alternative fuel,

13 ‘‘(ii) the original use of which com14 mences with the taxpayer,

15 ‘‘(iii) which is acquired by the tax16 payer for use or lease, but not for resale,

17 and

18 ‘‘(iv) which is made by a manufac19 turer.

20 ‘‘(B) ALTERNATIVE FUEL.—The term ‘alter21 native fuel’ means compressed natural gas, lique22 fied natural gas, liquefied petroleum gas, hydro23 gen, and any liquid at least 85 percent of the

24 volume of which consists of methanol.

25 ‘‘(5) CREDIT FOR MIXED-FUEL VEHICLES.—
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1 ‘‘(A) IN GENERAL.—In the case of a mixed2 fuel vehicle placed in service by the taxpayer

3 during the taxable year, the credit determined

4 under this subsection is an amount equal to—

5 ‘‘(i) in the case of a 75/25 mixed-fuel

6 vehicle, 70 percent of the credit which would

7 have been allowed under this subsection if

8 such vehicle was a qualified alternative fuel

9 motor vehicle, and

10 ‘‘(ii) in the case of a 90/10 mixed-fuel

11 vehicle, 90 percent of the credit which would

12 have been allowed under this subsection if

13 such vehicle was a qualified alternative fuel

14 motor vehicle.

15 ‘‘(B) MIXED-FUEL VEHICLE.—For purposes

16 of this subsection, the term ‘mixed-fuel vehicle’

17 means any motor vehicle described in subpara18 graph (C) or (D) of paragraph (3), which—

19 ‘‘(i) is certified by the manufacturer as

20 being able to perform efficiently in normal

21 operation on a combination of an alter22 native fuel and a petroleum-based fuel,

23 ‘‘(ii) either—

24 ‘‘(I) has received a certificate of

25 conformity under the Clean Air Act, or
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1 ‘‘(II) has received an order certi2 fying the vehicle as meeting the same

3 requirements as vehicles which may be

4 sold or leased in California and meets

5 or exceeds the low emission vehicle

6 standard under section 88.105-94 of

7 title 40, Code of Federal Regulations,

8 for that make and model year vehicle,

9 ‘‘(iii) the original use of which com10 mences with the taxpayer,

11 ‘‘(iv) which is acquired by the tax12 payer for use or lease, but not for resale,

13 and

14 ‘‘(v) which is made by a manufacturer.

15 ‘‘(C) 75/25 MIXED-FUEL VEHICLE.—For

16 purposes of this subsection, the term ‘75/25

17 mixed-fuel vehicle’ means a mixed-fuel vehicle

18 which operates using at least 75 percent alter19 native fuel and not more than 25 percent petro20 leum-based fuel.

21 ‘‘(D) 90/10 MIXED-FUEL VEHICLE.—For

22 purposes of this subsection, the term ‘90/10

23 mixed-fuel vehicle’ means a mixed-fuel vehicle

24 which operates using at least 90 percent alter-
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1 native fuel and not more than 10 percent petro2 leum-based fuel.

3 ‘‘(e) APPLICATION WITH OTHER CREDITS.—The credit

4 allowed under subsection (a) for any taxable year shall not

5 exceed the excess (if any) of—

6 ‘‘(1) the regular tax for the taxable year reduced

7 by the sum of the credits allowable under subpart A

8 and sections 27, 29, and 30, over

9 ‘‘(2) the tentative minimum tax for the taxable

10 year.

11 ‘‘(f) OTHER DEFINITIONS AND SPECIAL RULES.—For

12 purposes of this section—

13 ‘‘(1) CONSUMABLE FUEL.—The term ‘consumable

14 fuel’ means any solid, liquid, or gaseous matter which

15 releases energy when consumed by an auxiliary power

16 unit.

17 ‘‘(2) MOTOR VEHICLE.—The term ‘motor vehicle’

18 has the meaning given such term by section 30(c)(2).

19 ‘‘(3) CITY FUEL ECONOMY.—The city fuel econ20 omy with respect to any vehicle shall be measured in

21 a manner which is substantially similar to the man22 ner city fuel economy is measured in accordance with

23 procedures under part 600 of subchapter Q of chapter

24 I of title 40, Code of Federal Regulations, as in effect

25 on the date of the enactment of this section.
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1 ‘‘(4) OTHER TERMS.—The terms ‘automobile’,

2 ‘passenger automobile’, ‘light truck’, and ‘manufac3 turer’ have the meanings given such terms in regula4 tions prescribed by the Administrator of the Environ5 mental Protection Agency for purposes of the admin6 istration of title II of the Clean Air Act (42 U.S.C.

7 7521 et seq.).

8 ‘‘(5) REDUCTION IN BASIS.—For purposes of this

9 subtitle, the basis of any property for which a credit

10 is allowable under subsection (a) shall be reduced by

11 the amount of such credit so allowed (determined

12 without regard to subsection (e)).

13 ‘‘(6) NO DOUBLE BENEFIT.—The amount of any

14 deduction or other credit allowable under this

15 chapter—

16 ‘‘(A) for any incremental cost taken into ac17 count in computing the amount of the credit de18 termined under subsection (d) shall be reduced

19 by the amount of such credit attributable to such

20 cost, and

21 ‘‘(B) with respect to a vehicle described

22 under subsection (b) or (c), shall be reduced by

23 the amount of credit allowed under subsection

24 (a) for such vehicle for the taxable year.
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1 ‘‘(7) PROPERTY USED BY TAX-EXEMPT ENTI2 TIES.—In the case of a credit amount which is allow3 able with respect to a motor vehicle which is acquired

4 by an entity exempt from tax under this chapter, the

5 person which sells or leases such vehicle to the entity

6 shall be treated as the taxpayer with respect to the ve7 hicle for purposes of this section and the credit shall

8 be allowed to such person, but only if the person

9 clearly discloses to the entity at the time of any sale

10 or lease the specific amount of any credit otherwise

11 allowable to the entity under this section.

12 ‘‘(8) RECAPTURE.—The Secretary shall, by regu13 lations, provide for recapturing the benefit of any

14 credit allowable under subsection (a) with respect to

15 any property which ceases to be property eligible for

16 such credit (including recapture in the case of a lease

17 period of less than the economic life of a vehicle).

18 ‘‘(9) PROPERTY USED OUTSIDE UNITED STATES,

19 ETC., NOT QUALIFIED.—No credit shall be allowed

20 under subsection (a) with respect to any property re21 ferred to in section 50(b) or with respect to the por22 tion of the cost of any property taken into account

23 under section 179.

24 ‘‘(10) ELECTION TO NOT TAKE CREDIT.—No

25 credit shall be allowed under subsection (a) for any
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1 vehicle if the taxpayer elects to not have this section

2 apply to such vehicle.

3 ‘‘(11) CARRYBACK AND CARRYFORWARD AL4 LOWED.—

5 ‘‘(A) IN GENERAL.—If the credit amount al6 lowable under subsection (a) for a taxable year

7 exceeds the amount of the limitation under sub8 section (e) for such taxable year (in this para9 graph referred to as the ‘unused credit year’),

10 such excess shall be allowed as a credit carryback

11 for each of the 3 taxable years beginning after

12 September 30, 2002, which precede the unused

13 credit year and a credit carryforward for each of

14 the 20 taxable years which succeed the unused

15 credit year.

16 ‘‘(B) RULES.—Rules similar to the rules of

17 section 39 shall apply with respect to the credit

18 carryback and credit carryforward under sub19 paragraph (A).

20 ‘‘(12) INTERACTION WITH AIR QUALITY AND

21 MOTOR VEHICLE SAFETY STANDARDS.—Unless other22 wise provided in this section, a motor vehicle shall

23 not be considered eligible for a credit under this sec24 tion unless such vehicle is in compliance with—
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1 ‘‘(A) the applicable provisions of the Clean

2 Air Act for the applicable make and model year

3 of the vehicle (or applicable air quality provi4 sions of State law in the case of a State which

5 has adopted such provision under a waiver

6 under section 209(b) of the Clean Air Act), and

7 ‘‘(B) the motor vehicle safety provisions of

8 sections 30101 through 30169 of title 49, United

9 States Code.

10 ‘‘(g) REGULATIONS.—

11 ‘‘(1) IN GENERAL.—Except as provided in para12 graph (2), the Secretary shall promulgate such regula13 tions as necessary to carry out the provisions of this

14 section.

15 ‘‘(2) COORDINATION IN PRESCRIPTION OF CER16 TAIN REGULATIONS.—The Secretary of the Treasury,

17 in coordination with the Secretary of Transportation

18 and the Administrator of the Environmental Protec19 tion Agency, shall prescribe such regulations as nec20 essary to determine whether a motor vehicle meets the

21 requirements to be eligible for a credit under this sec22 tion.

23 ‘‘(h) TERMINATION.—This section shall not apply to

24 any property purchased after—
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1 ‘‘(1) in the case of a new qualified fuel cell motor

2 vehicle (as described in subsection (b)), December 31,

3 2011, and

4 ‘‘(2) in the case of any other property, December

5 31, 2006.’’.

6 (b) CONFORMING AMENDMENTS.—

7 (1) Section 1016(a) is amended by striking

8 ‘‘and’’ at the end of paragraph (27), by striking the

9 period at the end of paragraph (28) and inserting ‘‘,

10 and’’, and by adding at the end the following new

11 paragraph:

12 ‘‘(29) to the extent provided in section

13 30B(f)(5).’’.

14 (2) Section 55(c)(2) is amended by inserting

15 ‘‘30B(e),’’ after ‘‘30(b)(3)’’.

16 (3) Section 6501(m) is amended by inserting

17 ‘‘30B(f)(10),’’ after ‘‘30(d)(4),’’.

18 (4) The table of sections for subpart B of part IV

19 of subchapter A of chapter 1 is amended by inserting

20 after the item relating to section 30A the following

21 new item:

‘‘Sec. 30B. Alternative motor vehicle credit.’’.

22 (e) EFFECTIVE DATE.—The amendments made by this

23 section shall apply to property placed in service after Sep24 tember 30, 2002, in taxable years ending after such date.
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1 SEC. 2002. MODIFICATION OF CREDIT FOR QUALIFIED

2 ELECTRIC VEHICLES.

3 (a) AMOUNT OF CREDIT.—

4 (1) IN GENERAL.—Section 30(a) (relating to al5 lowance of credit) is amended by striking ‘‘10 percent

6 of’’.

7 (2) LIMITATION OF CREDIT ACCORDING TO TYPE

8 OF VEHICLE.—Section 30(b) (relating to limitations)

9 is amended—

10 (A) by striking paragraphs (1) and (2) and

11 inserting the following new paragraph:

12 ‘‘(1) LIMITATION ACCORDING TO TYPE OF VEHI13 CLE.—The amount of the credit allowed under sub14 section (a) for any vehicle shall not exceed the greatest

15 of the following amounts applicable to such vehicle:

16 ‘‘(A) In the case of a vehicle which conforms

17 to the Motor Vehicle Safety Standard 500 pre18 scribed by the Secretary of Transportation, as in

19 effect on the date of the enactment of the Energy

20 Tax Incentives Act of 2003, the lesser of—

21 ‘‘(i) 10 percent of the manufacturer’s

22 suggested retail price of the vehicle, or

23 ‘‘(ii) $1,500.

24 ‘‘(B) In the case of a vehicle not described

25 in subparagraph (A) with a gross vehicle weight

26 rating not exceeding 8,500 pounds—
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1 ‘‘(i) $3,500, or

2 ‘‘(ii) $6,000, if such vehicle is—

3 ‘‘(I) capable of a driving range of

4 at least 100 miles on a single charge of

5 the vehicle’s rechargeable batteries as

6 measured pursuant to the urban dyna7 mometer schedules under appendix I to

8 part 86 of title 40, Code of Federal

9 Regulations, or

10 ‘‘(II) capable of a payload capac11 ity of at least 1,000 pounds.

12 ‘‘(C) In the case of a vehicle with a gross

13 vehicle weight rating exceeding 8,500 but not ex14 ceeding 14,000 pounds, $10,000.

15 ‘‘(D) In the case of a vehicle with a gross

16 vehicle weight rating exceeding 14,000 but not

17 exceeding 26,000 pounds, $20,000.

18 ‘‘(E) In the case of a vehicle with a gross

19 vehicle weight rating exceeding 26,000 pounds,

20 $40,000.’’, and

21 (B) by redesignating paragraph (3) as

22 paragraph (2).

23 (3) CONFORMING AMENDMENTS.—
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1 (A) Section 53(d)(1)(B)(iii) is amended by

2 striking ‘‘section 30(b)(3)(B)’’ and inserting

3 ‘‘section 30(b)(2)(B)’’.

4 (3) Section 55(c)(2), as amended by this Act, is

5 amended by striking ‘‘30(b)(3)’’ and inserting

6 ‘‘30(b)(2)’’.

7 (b) QUALIFIED BATTERY ELECTRIC VEHICLE.—

8 (1) IN GENERAL.—Section 30(c)(1)(A) (defining

9 qualified electric vehicle) is amended to read as fol10 lows:

11 ‘‘(A) which is—

12 ‘‘(i) operated solely by use of a battery

13 or battery pack, or

14 ‘‘(ii) powered primarily through the

15 use of an electric battery or battery pack

16 using a flywheel or capacitor which stores

17 energy produced by an electric motor

18 through regenerative braking to assist in ve19 hicle operation,’’.

20 (2) LEASED VEHICLES.—Section 30(c)(1)(C) is

21 amended by inserting ‘‘or lease’’ after ‘‘use’’.

22 (3) CONFORMING AMENDMENTS.—

23 (A) Subsections (a), (b)(2), and (c) of sec24 tion 30 are each amended by inserting ‘‘battery’’

25 after ‘‘qualified’’ each place it appears.
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1 (B) The heading of subsection (c) of section

2 30 is amended by inserting ‘‘BATTERY’’ after

3 ‘‘QUALIFIED’’.

4 (C) The heading of section 30 is amended

5 by inserting ‘‘BATTERY’’ after ‘‘QUALIFIED’’.

6 (D) The item relating to section 30 in the

7 table of sections for subpart B of part IV of sub8 chapter A of chapter 1 is amended by inserting

9 ‘‘battery’’ after ‘‘qualified’’.

10 (E) Section 179A(c)(3) is amended by in11 serting ‘‘battery’’ before ‘‘electric’’.

12 (F) The heading of paragraph (3) of section

13 179A(c) is amended by inserting ‘‘BATTERY’’ be14 fore ‘‘ELECTRIC’’.

15 (c) ADDITIONAL SPECIAL RULES.—Section 30(d) (re16 lating to special rules) is amended by adding at the end

17 the following new paragraphs:

18 ‘‘(5) NO DOUBLE BENEFIT.—The amount of any

19 deduction or other credit allowable under this chapter

20 for any cost taken into account in computing the

21 amount of the credit determined under subsection (a)

22 shall be reduced by the amount of such credit attrib23 utable to such cost.

24 ‘‘(6) PROPERTY USED BY TAX-EXEMPT ENTI25 TIES.—In the case of a credit amount which is allow-
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1 able with respect to a vehicle which is acquired by an

2 entity exempt from tax under this chapter, the person

3 which sells or leases such vehicle to the entity shall be

4 treated as the taxpayer with respect to the vehicle for

5 purposes of this section and the credit shall be allowed

6 to such person, but only if the person clearly discloses

7 to the entity at the time of any sale or lease the spe8 cific amount of any credit otherwise allowable to the

9 entity under this section.

10 ‘‘(7) CARRYBACK AND CARRYFORWARD AL11 LOWED.—

12 ‘‘(A) IN GENERAL.—If the credit amount al13 lowable under subsection (a) for a taxable year

14 exceeds the amount of the limitation under sub15 section (b)(2) for such taxable year (in this para16 graph referred to as the ‘unused credit year’),

17 such excess shall be allowed as a credit carryback

18 for each of the 3 taxable years beginning after

19 September 30, 2002, which precede the unused

20 credit year and a credit carryforward for each of

21 the 20 taxable years which succeed the unused

22 credit year.

23 ‘‘(B) RULES.—Rules similar to the rules of

24 section 39 shall apply with respect to the credit
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1 carryback and credit carryforward under sub2 paragraph (A).’’.

3 (d) EFFECTIVE DATE.—The amendments made by this

4 section shall apply to property placed in service after Sep5 tember 30, 2002, in taxable years ending after such date.

6 SEC. 2003. CREDIT FOR INSTALLATION OF ALTERNATIVE

7 FUELING STATIONS.

8 (a) IN GENERAL.—Subpart B of part IV of subchapter

9 A of chapter 1 (relating to foreign tax credit, etc.), as

10 amended by this Act, is amended by adding at the end the

11 following new section:

12 ‘‘SEC. 30C. CLEAN-FUEL VEHICLE REFUELING PROPERTY

13 CREDIT.

14 ‘‘(a) CREDIT ALLOWED.—There shall be allowed as a

15 credit against the tax imposed by this chapter for the tax16 able year an amount equal to 50 percent of the amount

17 paid or incurred by the taxpayer during the taxable year

18 for the installation of qualified clean-fuel vehicle refueling

19 property.

20 ‘‘(b) LIMITATION.—The credit allowed under sub21 section (a)—

22 ‘‘(1) with respect to any retail clean-fuel vehicle

23 refueling property, shall not exceed $30,000, and

24 ‘‘(2) with respect to any residential clean-fuel ve25 hicle refueling property, shall not exceed $1,000.
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1 ‘‘(c) YEAR CREDIT ALLOWED.—The credit allowed

2 under subsection (a) shall be allowed in the taxable year

3 in which the qualified clean-fuel vehicle refueling property

4 is placed in service by the taxpayer.

5 ‘‘(d) DEFINITIONS.—For purposes of this section—

6 ‘‘(1) QUALIFIED CLEAN-FUEL VEHICLE REFUEL7 ING PROPERTY.—The term ‘qualified clean-fuel vehicle

8 refueling property’ has the same meaning given such

9 term by section 179A(d).

10 ‘‘(2) RESIDENTIAL CLEAN-FUEL VEHICLE RE11 FUELING PROPERTY.—The term ‘residential clean-fuel

12 vehicle refueling property’ means qualified clean-fuel

13 vehicle refueling property which is installed on prop14 erty which is used as the principal residence (within

15 the meaning of section 121) of the taxpayer.

16 ‘‘(3) RETAIL CLEAN-FUEL VEHICLE REFUELING

17 PROPERTY.—The term ‘retail clean-fuel vehicle refuel18 ing property’ means qualified clean-fuel vehicle refuel19 ing property which is installed on property (other

20 than property described in paragraph (2)) used in a

21 trade or business of the taxpayer.

22 ‘‘(e) APPLICATION WITH OTHER CREDITS.—The credit

23 allowed under subsection (a) for any taxable year shall not

24 exceed the excess (if any) of—
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1 ‘‘(1) the regular tax for the taxable year reduced

2 by the sum of the credits allowable under subpart A

3 and sections 27, 29, 30, and 30B, over

4 ‘‘(2) the tentative minimum tax for the taxable

5 year.

6 ‘‘(f) BASIS REDUCTION.—For purposes of this title, the

7 basis of any property shall be reduced by the portion of

8 the cost of such property taken into account under sub9 section (a).

10 ‘‘(g) NO DOUBLE BENEFIT.—No deduction shall be al11 lowed under section 179A with respect to any property with

12 respect to which a credit is allowed under subsection (a).

13 ‘‘(h) REFUELING PROPERTY INSTALLED FOR TAX-EX14 EMPT ENTITIES.—In the case of qualified clean-fuel vehicle

15 refueling property installed on property owned or used by

16 an entity exempt from tax under this chapter, the person

17 which installs such refueling property for the entity shall

18 be treated as the taxpayer with respect to the refueling prop19 erty for purposes of this section (and such refueling prop20 erty shall be treated as retail clean-fuel vehicle refueling

21 property) and the credit shall be allowed to such person,

22 but only if the person clearly discloses to the entity in any

23 installation contract the specific amount of the credit allow24 able under this section.

25 ‘‘(i) CARRYFORWARD ALLOWED.—
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1 ‘‘(1) IN GENERAL.—If the credit amount allow2 able under subsection (a) for a taxable year exceeds

3 the amount of the limitation under subsection (e) for

4 such taxable year (referred to as the ‘unused credit

5 year’ in this subsection), such excess shall be allowed

6 as a credit carryforward for each of the 20 taxable

7 years following the unused credit year.

8 ‘‘(2) RULES.—Rules similar to the rules of sec9 tion 39 shall apply with respect to the credit

10 carryforward under paragraph (1).

11 ‘‘(j) SPECIAL RULES.—Rules similar to the rules of

12 paragraphs (4) and (5) of section 179A(e) shall apply.

13 ‘‘(k) REGULATIONS.—The Secretary shall prescribe

14 such regulations as necessary to carry out the provisions

15 of this section.

16 ‘‘(l) TERMINATION.—This section shall not apply to

17 any property placed in service—

18 ‘‘(1) in the case of property relating to hydrogen,

19 after December 31, 2011, and

20 ‘‘(2) in the case of any other property, after De21 cember 31, 2006.’’.

22 (b) INCENTIVE FOR PRODUCTION OF HYDROGEN AT

23 QUALIFIED CLEAN-FUEL VEHICLE REFUELING PROP24 ERTY.—Section 179A(d) (defining qualified clean-fuel vehi-
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1 cle refueling property) is amended by adding at the end

2 the following new flush sentence:

3 ‘‘In the case of clean-burning fuel which is hydrogen pro4 duced from another clean-burning fuel, paragraph (3)(A)

5 shall be applied by substituting ‘production, storage, or dis6 pensing’ for ‘storage or dispensing’ both places it appears.’’.

7 (c) CONFORMING AMENDMENTS.—(1) Section 1016(a),

8 as amended by this Act, is amended by striking ‘‘and’’ at

9 the end of paragraph (28), by striking the period at the

10 end of paragraph (29) and inserting ‘‘, and’’, and by add11 ing at the end the following new paragraph:

12 ‘‘(30) to the extent provided in section 30C(f).’’.

13 (2) Section 55(c)(2), as amended by this Act, is

14 amended by inserting ‘‘30C(e),’’ after ‘‘30B(e)’’.

15 (3) The table of sections for subpart B of part IV of

16 subchapter A of chapter 1, as amended by this Act, is

17 amended by inserting after the item relating to section 30B

18 the following new item:

‘‘Sec. 30C. Clean-fuel vehicle refueling property credit.’’.

19 (c) EFFECTIVE DATE.—The amendments made by this

20 section shall apply to property placed in service after Sep21 tember 30, 2002, in taxable years ending after such date.

22 SEC. 2004. CREDIT FOR RETAIL SALE OF ALTERNATIVE

23 FUELS AS MOTOR VEHICLE FUEL.

24 (a) IN GENERAL.—Subpart D of part IV of subchapter

25 A of chapter 1 (relating to business related credits) is
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1 amended by inserting after section 40 the following new sec2 tion:

3 ‘‘SEC. 40A. CREDIT FOR RETAIL SALE OF ALTERNATIVE

4 FUELS AS MOTOR VEHICLE FUEL.

5 ‘‘(a) GENERAL RULE.—For purposes of section 38, the

6 alternative fuel retail sales credit for any taxable year is

7 the applicable amount for each gasoline gallon equivalent

8 of alternative fuel sold at retail by the taxpayer during such

9 year as a fuel to propel any qualified motor vehicle.

10 ‘‘(b) DEFINITIONS.—For purposes of this section—

11 ‘‘(1) APPLICABLE AMOUNT.—The term ‘applica12 ble amount’ means the amount determined in accord13 ance with the following table:

‘‘In the case of any taxable year

ending in— The applicable amount is—

2002 and 2003 ............................................................................... 30 cents

2004 ................................................................................................ 40 cents

2005 and 2006 ............................................................................... 50 cents.

14 ‘‘(2) ALTERNATIVE FUEL.—The term ‘alternative

15 fuel’ means compressed natural gas, liquefied natural

16 gas, liquefied petroleum gas, hydrogen, and any liq17 uid at least 85 percent of the volume of which consists

18 of methanol or ethanol.

19 ‘‘(3) GASOLINE GALLON EQUIVALENT.—The term

20 ‘gasoline gallon equivalent’ means, with respect to

21 any alternative fuel, the amount (determined by the

22 Secretary) of such fuel having a Btu content of

23 114,000.
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1 ‘‘(4) QUALIFIED MOTOR VEHICLE.—The term

2 ‘qualified motor vehicle’ means any motor vehicle (as

3 defined in section 30(c)(2)) which meets any applica4 ble Federal or State emissions standards with respect

5 to each fuel by which such vehicle is designed to be

6 propelled.

7 ‘‘(5) SOLD AT RETAIL.—

8 ‘‘(A) IN GENERAL.—The term ‘sold at retail’

9 means the sale, for a purpose other than resale,

10 after manufacture, production, or importation.

11 ‘‘(B) USE TREATED AS SALE.—If any per12 son uses alternative fuel (including any use after

13 importation) as a fuel to propel any qualified

14 alternative fuel motor vehicle (as defined in sec15 tion 30B(d)(4)) before such fuel is sold at retail,

16 then such use shall be treated in the same man17 ner as if such fuel were sold at retail as a fuel

18 to propel such a vehicle by such person.

19 ‘‘(c) NO DOUBLE BENEFIT.—The amount of any de20 duction or other credit allowable under this chapter for any

21 fuel taken into account in computing the amount of the

22 credit determined under subsection (a) shall be reduced by

23 the amount of such credit attributable to such fuel.

24 ‘‘(d) PASS-THRU IN THE CASE OF ESTATES AND

25 TRUSTS.—Under regulations prescribed by the Secretary,
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1 rules similar to the rules of subsection (d) of section 52 shall

2 apply.

3 ‘‘(e) TERMINATION.—This section shall not apply to

4 any fuel sold at retail after December 31, 2006.’’.

5 (b) CREDIT TREATED AS BUSINESS CREDIT.—Section

6 38(b) (relating to current year business credit) is amended

7 by striking ‘‘plus’’ at the end of paragraph (14), by striking

8 the period at the end of paragraph (15) and inserting ‘‘,

9 plus’’, and by adding at the end the following new para10 graph:

11 ‘‘(16) the alternative fuel retail sales credit deter12 mined under section 40A(a).’’.

13 (c) TRANSITIONAL RULE.—Section 39(d) (relating to

14 transitional rules) is amended by adding at the end the fol15 lowing new paragraph:

16 ‘‘(11) NO CARRYBACK OF SECTION 40A CREDIT

17 BEFORE EFFECTIVE DATE.—No portion of the unused

18 business credit for any taxable year which is attrib19 utable to the alternative fuel retail sales credit deter20 mined under section 40A(a) may be carried back to

21 a taxable year ending before January 1, 2002.’’.

22 (d) CLERICAL AMENDMENT.—The table of sections for

23 subpart D of part IV of subchapter A of chapter 1 is amend24 ed by inserting after the item relating to section 40 the fol25 lowing new item:

‘‘Sec. 40A. Credit for retail sale of alternative fuels as motor vehicle fuel.’’.
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1 (e) EFFECTIVE DATE.—The amendments made by this

2 section shall apply to fuel sold at retail after September

3 30, 2002, in taxable years ending after such date.

4 SEC. 2005. SMALL ETHANOL PRODUCER CREDIT.

5 (a) ALLOCATION OF ALCOHOL FUELS CREDIT TO PA6 TRONS OF A COOPERATIVE.—Section 40(g) (relating to al7 cohol used as fuel) is amended by adding at the end the

8 following new paragraph:

9 ‘‘(6) ALLOCATION OF SMALL ETHANOL PRO10 DUCER CREDIT TO PATRONS OF COOPERATIVE.—

11 ‘‘(A) ELECTION TO ALLOCATE.—

12 ‘‘(i) IN GENERAL.—In the case of a co13 operative organization described in section

14 1381(a), any portion of the credit deter15 mined under subsection (a)(3) for the tax16 able year may, at the election of the organi17 zation, be apportioned pro rata among pa18 trons of the organization on the basis of the

19 quantity or value of business done with or

20 for such patrons for the taxable year.

21 ‘‘(ii) FORM AND EFFECT OF ELEC22 TION.—An election under clause (i) for any

23 taxable year shall be made on a timely filed

24 return for such year. Such election, once
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1 made, shall be irrevocable for such taxable

2 year.

3 ‘‘(B) TREATMENT OF ORGANIZATIONS AND

4 PATRONS.—The amount of the credit apportioned

5 to patrons under subparagraph (A)—

6 ‘‘(i) shall not be included in the

7 amount determined under subsection (a)

8 with respect to the organization for the tax9 able year,

10 ‘‘(ii) shall be included in the amount

11 determined under subsection (a) for the tax12 able year of each patron for which the pa13 tronage dividends for the taxable year de14 scribed in subparagraph (A) are included in

15 gross income, and

16 ‘‘(iii) shall be included in gross income

17 of such patrons for the taxable year in the

18 manner and to the extent provided in sec19 tion 87.

20 ‘‘(C) SPECIAL RULES FOR DECREASE IN

21 CREDITS FOR TAXABLE YEAR.—If the amount of

22 the credit of a cooperative organization deter23 mined under subsection (a)(3) for a taxable year

24 is less than the amount of such credit shown on
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1 the return of the cooperative organization for

2 such year, an amount equal to the excess of—

3 ‘‘(i) such reduction, over

4 ‘‘(ii) the amount not apportioned to

5 such patrons under subparagraph (A) for

6 the taxable year,

7 shall be treated as an increase in tax imposed by

8 this chapter on the organization. Such increase

9 shall not be treated as tax imposed by this chap10 ter for purposes of determining the amount of

11 any credit under this chapter or for purposes of

12 section 55.’’.

13 (b) IMPROVEMENTS TO SMALL ETHANOL PRODUCER

14 CREDIT.—

15 (1) DEFINITION OF SMALL ETHANOL PRO16 DUCER.—Section 40(g) (relating to definitions and

17 special rules for eligible small ethanol producer cred18 it) is amended by striking ‘‘30,000,000’’ each place it

19 appears and inserting ‘‘60,000,000’’.

20 (2) SMALL ETHANOL PRODUCER CREDIT NOT A

21 PASSIVE ACTIVITY CREDIT.—Clause (i) of section

22 469(d)(2)(A) is amended by striking ‘‘subpart D’’ and

23 inserting ‘‘subpart D, other than section 40(a)(3),’’.

24 (3) ALLOWING CREDIT AGAINST ENTIRE REG25 ULAR TAX AND MINIMUM TAX.—
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1 (A) IN GENERAL.—Subsection (c) of section

2 38 (relating to limitation based on amount of

3 tax), as amended by section 301(b) of the Job

4 Creation and Worker Assistance Act of 2002, is

5 amended by redesignating paragraph (4) as

6 paragraph (5) and by inserting after paragraph

7 (3) the following new paragraph:

8 ‘‘(4) SPECIAL RULES FOR SMALL ETHANOL PRO9 DUCER CREDIT.—

10 ‘‘(A) IN GENERAL.—In the case of the small

11 ethanol producer credit—

12 ‘‘(i) this section and section 39 shall be

13 applied separately with respect to the cred14 it, and

15 ‘‘(ii) in applying paragraph (1) to the

16 credit—

17 ‘‘(I) the amounts in subpara18 graphs (A) and (B) thereof shall be

19 treated as being zero, and

20 ‘‘(II) the limitation under para21 graph (1) (as modified by subclause

22 (I)) shall be reduced by the credit al23 lowed under subsection (a) for the tax24 able year (other than the small ethanol

25 producer credit).
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1 ‘‘(B) SMALL ETHANOL PRODUCER CRED2 IT.—For purposes of this subsection, the term

3 ‘small ethanol producer credit’ means the credit

4 allowable under subsection (a) by reason of sec5 tion 40(a)(3).’’.

6 (B) CONFORMING AMENDMENTS.—Subclause

7 (II) of section 38(c)(2)(A)(ii), as amended by

8 section 301(b)(2) of the Job Creation and Worker

9 Assistance Act of 2002, and subclause (II) of sec10 tion 38(c)(3)(A)(ii), as added by section

11 301(b)(1) of such Act, are each amended by in12 serting ‘‘or the small ethanol producer credit’’

13 after ‘‘employee credit’’.

14 (4) SMALL ETHANOL PRODUCER CREDIT NOT

15 ADDED BACK TO INCOME UNDER SECTION 87.—Sec16 tion 87 (relating to income inclusion of alcohol fuel

17 credit) is amended to read as follows:

18 ‘‘SEC. 87. ALCOHOL FUEL CREDIT.

19 ‘‘Gross income includes an amount equal to the sum

20 of—

21 ‘‘(1) the amount of the alcohol mixture credit de22 termined with respect to the taxpayer for the taxable

23 year under section 40(a)(1), and
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1 ‘‘(2) the alcohol credit determined with respect to

2 the taxpayer for the taxable year under section

3 40(a)(2).’’.

4 (c) CONFORMING AMENDMENT.—Section 1388 (relat5 ing to definitions and special rules for cooperative organi6 zations) is amended by adding at the end the following new

7 subsection:

8 ‘‘(k) CROSS REFERENCE.—For provisions relating to

9 the apportionment of the alcohol fuels credit between cooper10 ative organizations and their patrons, see section

11 40(g)(6).’’.

12 (d) EFFECTIVE DATE.—The amendments made by this

13 section shall apply to taxable years beginning after the date

14 of the enactment of this Act.

15 SEC. 2006. ALL ALCOHOL FUELS TAXES TRANSFERRED TO

16 HIGHWAY TRUST FUND.

17 (a) IN GENERAL.—Section 9503(b)(4) (relating to cer18 tain taxes not transferred to Highway Trust Fund) is

19 amended—

20 (1) by adding ‘‘or’’ at the end of subparagraph

21 (C),

22 (2) by striking the comma at the end of subpara23 graph (D)(iii) and inserting a period, and

24 (3) by striking subparagraphs (E) and (F).
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1 (b) EFFECTIVE DATE.—The amendments made by this

2 section shall apply to taxes imposed after September 30,

3 2003.

4 SEC. 2007. INCREASED FLEXIBILITY IN ALCOHOL FUELS

5 TAX CREDIT.

6 (a) ALCOHOL FUELS CREDIT MAY BE TRANS7 FERRED.—Section 40 (relating to alcohol used as fuel) is

8 amended by adding at the end the following new subsection:

9 ‘‘(i) CREDIT MAY BE TRANSFERRED.—

10 ‘‘(1) IN GENERAL.—A taxpayer may transfer

11 any credit allowable under paragraph (1) or (2) of

12 subsection (a) with respect to alcohol used in the pro13 duction of ethyl tertiary butyl ether through an as14 signment to a qualified assignee. Such transfer may

15 be revoked only with the consent of the Secretary.

16 ‘‘(2) QUALIFIED ASSIGNEE.—For purposes of

17 this subsection, the term ‘qualified assignee’ means

18 any person who—

19 ‘‘(A) is liable for taxes imposed under sec20 tion 4081,

21 ‘‘(B) is required to register under section

22 4101, and

23 ‘‘(C) obtains a certificate from the taxpayer

24 described in paragraph (1) which identifies the

25 amount of alcohol used in such production.
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1 ‘‘(3) REGULATIONS.—The Secretary shall pre2 scribe such regulations as necessary to insure that

3 any credit described in paragraph (1) is claimed once

4 and not reassigned by a qualified assignee.’’.

5 (b) ALCOHOL FUELS CREDIT MAY BE TAKEN AGAINST

6 MOTOR FUELS TAX LIABILITY.—

7 (1) IN GENERAL.—Subpart C of part III of sub8 chapter A of chapter 32 (relating to special provisions

9 applicable to petroleum products) is amended by add10 ing at the end the following new section:

11 ‘‘SEC. 4104. CREDIT AGAINST MOTOR FUELS TAXES.

12 ‘‘(a) ELECTION TO USE CREDIT AGAINST MOTOR

13 FUELS TAXES.—There is hereby allowed as a credit against

14 the taxes imposed by section 4081, any credit allowed under

15 paragraph (1) or (2) of section 40(a) with respect to alcohol

16 used in the production of ethyl tertiary butyl ether to the

17 extent—

18 ‘‘(1) such credit is not claimed by the taxpayer

19 or the qualified assignee under section 40(i) as a

20 credit under section 40, and

21 ‘‘(2) the taxpayer or qualified assignee elects to

22 claim such credit under this section.

23 ‘‘(b) ELECTION IRREVOCABLE.—Any election under

24 subsection (a) shall be irrevocable.
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1 ‘‘(c) REQUIRED STATEMENT.—Any return claiming a

2 credit pursuant to an election under this section shall be

3 accompanied by a statement that the credit was not, and

4 will not, be claimed on an income tax return.

5 ‘‘(d) REGULATIONS.—The Secretary shall prescribe

6 such regulations as necessary to avoid the claiming of dou7 ble benefits and to prescribe the taxable periods with respect

8 to which the credit may be claimed.’’.

9 (2) CONFORMING AMENDMENT.—Section 40(c) is

10 amended by striking ‘‘or section 4091(c)’’ and insert11 ing ‘‘section 4091(c), or section 4104’’.

12 (3) CLERICAL AMENDMENT.—The table of sec13 tions for subpart C of part III of subchapter A of

14 chapter 32 is amended by adding at the end the fol15 lowing new item:

‘‘Sec. 4104. Credit against motor fuels taxes.’’.

16 (c) EFFECTIVE DATE.—The amendments made by this

17 section shall take effect on and after the date of the enact18 ment of this Act.

19 SEC. 2008. INCENTIVES FOR BIODIESEL.

20 (a) CREDIT FOR BIODIESEL USED AS A FUEL.—

21 (1) IN GENERAL.—Subpart D of part IV of sub22 chapter A of chapter 1 (relating to business related

23 credits), as amended by this Act, is amended by in24 serting after section 40A the following new section:
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1 ‘‘SEC. 40B. BIODIESEL USED AS FUEL.

2 ‘‘(a) GENERAL RULE.—For purposes of section 38, the

3 biodiesel fuels credit determined under this section for the

4 taxable year is an amount equal to the biodiesel mixture

5 credit.

6 ‘‘(b) DEFINITION OF BIODIESEL MIXTURE CREDIT.—

7 For purposes of this section—

8 ‘‘(1) BIODIESEL MIXTURE CREDIT.—

9 ‘‘(A) IN GENERAL.—The biodiesel mixture

10 credit of any taxpayer for any taxable year is

11 the sum of the products of the biodiesel mixture

12 rate for each qualified biodiesel mixture and the

13 number of gallons of such mixture of the tax14 payer for the taxable year.

15 ‘‘(B) BIODIESEL MIXTURE RATE.—For pur16 poses of subparagraph (A), the biodiesel mixture

17 rate for each qualified biodiesel mixture shall

18 be—

19 ‘‘(i) in the case of a mixture with only

20 biodiesel V, 1 cent for each whole percentage

21 point (not exceeding 20 percentage points)

22 of biodiesel V in such mixture, and

23 ‘‘(ii) in the case of a mixture with bio24 diesel NV, or a combination of biodiesel V

25 and biodiesel NV, 0.5 cent for each whole

26 percentage point (not exceeding 20 percent-
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1 age points) of such biodiesel in such mix2 ture.

3 ‘‘(2) QUALIFIED BIODIESEL MIXTURE.—

4 ‘‘(A) IN GENERAL.—The term ‘qualified bio5 diesel mixture’ means a mixture of diesel and

6 biodiesel V or biodiesel NV which—

7 ‘‘(i) is sold by the taxpayer producing

8 such mixture to any person for use as a

9 fuel, or

10 ‘‘(ii) is used as a fuel by the taxpayer

11 producing such mixture.

12 ‘‘(B) SALE OR USE MUST BE IN TRADE OR

13 BUSINESS, ETC.—

14 ‘‘(i) IN GENERAL.—Biodiesel V or bio15 diesel NV used in the production of a quali16 fied biodiesel mixture shall be taken into

17 account—

18 ‘‘(I) only if the sale or use de19 scribed in subparagraph (A) is in a

20 trade or business of the taxpayer, and

21 ‘‘(II) for the taxable year in which

22 such sale or use occurs.

23 ‘‘(ii) CERTIFICATION FOR BIODIESEL

24 V.—Biodiesel V used in the production of a

25 qualified biodiesel mixture shall be taken
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1 into account only if the taxpayer described

2 in subparagraph (A) obtains a certification

3 from the producer of the biodiesel V which

4 identifies the product produced.

5 ‘‘(C) CASUAL OFF-FARM PRODUCTION NOT

6 ELIGIBLE.—No credit shall be allowed under this

7 section with respect to any casual off-farm pro8 duction of a qualified biodiesel mixture.

9 ‘‘(c) COORDINATION WITH EXEMPTION FROM EXCISE

10 TAX.—The amount of the credit determined under this sec11 tion with respect to any biodiesel V shall, under regulations

12 prescribed by the Secretary, be properly reduced to take into

13 account any benefit provided with respect to such biodiesel

14 V solely by reason of the application of section 4041(n) or

15 section 4081(f).

16 ‘‘(d) DEFINITIONS AND SPECIAL RULES.—For pur17 poses of this section—

18 ‘‘(1) BIODIESEL V DEFINED.—The term ‘biodiesel

19 V’ means the monoalkyl esters of long chain fatty

20 acids derived solely from virgin vegetable oils for use

21 in compressional-ignition (diesel) engines. Such term

22 shall include esters derived from vegetable oils from

23 corn, soybeans, sunflower seeds, cottonseeds, canola,

24 crambe, rapeseeds, safflowers, flaxseeds, rice bran, and

25 mustard seeds.
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1 ‘‘(2) BIODIESEL NV DEFINED.—The term ‘bio2 diesel nv’ means the monoalkyl esters of long chain

3 fatty acids derived from nonvirgin vegetable oils or

4 animal fats for use in compressional-ignition (diesel)

5 engines.

6 ‘‘(3) REGISTRATION REQUIREMENTS.—The terms

7 ‘biodiesel V’ and ‘biodiesel NV’ shall only include a

8 biodiesel which meets—

9 ‘‘(i) the registration requirements for

10 fuels and fuel additives established by the

11 Environmental Protection Agency under

12 section 211 of the Clean Air Act (42 U.S.C.

13 7545), and

14 ‘‘(ii) the requirements of the American

15 Society of Testing and Materials D6751.

16 ‘‘(2) BIODIESEL MIXTURE NOT USED AS A FUEL,

17 ETC.—

18 ‘‘(A) IMPOSITION OF TAX.—If—

19 ‘‘(i) any credit was determined under

20 this section with respect to biodiesel V or

21 biodiesel NV used in the production of any

22 qualified biodiesel mixture, and

23 ‘‘(ii) any person—

24 ‘‘(I) separates such biodiesel from

25 the mixture, or
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1 ‘‘(II) without separation, uses the

2 mixture other than as a fuel,

3 then there is hereby imposed on such person

4 a tax equal to the product of the biodiesel

5 mixture rate applicable under subsection

6 (b)(1)(B) and the number of gallons of the

7 mixture.

8 ‘‘(B) APPLICABLE LAWS.—All provisions of

9 law, including penalties, shall, insofar as appli10 cable and not inconsistent with this section,

11 apply in respect of any tax imposed under sub12 paragraph (A) as if such tax were imposed by

13 section 4081 and not by this chapter.

14 ‘‘(3) PASS-THRU IN THE CASE OF ESTATES AND

15 TRUSTS.—Under regulations prescribed by the Sec16 retary, rules similar to the rules of subsection (d) of

17 section 52 shall apply.

18 ‘‘(e) ELECTION TO HAVE BIODIESEL FUELS CREDIT

19 NOT APPLY.—

20 ‘‘(1) IN GENERAL.—A taxpayer may elect to

21 have this section not apply for any taxable year.

22 ‘‘(2) TIME FOR MAKING ELECTION.—An election

23 under paragraph (1) for any taxable year may be

24 made (or revoked) at any time before the expiration

25 of the 3-year period beginning on the last date pre-
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1 scribed by law for filing the return for such taxable

2 year (determined without regard to extensions).

3 ‘‘(3) MANNER OF MAKING ELECTION.—An elec4 tion under paragraph (1) (or revocation thereof) shall

5 be made in such manner as the Secretary may by reg6 ulations prescribe.’’.

7 ‘‘(f) TERMINATION.—This section shall not apply to

8 any fuel sold after December 31, 2005.’’.

9 (2) CREDIT TREATED AS PART OF GENERAL

10 BUSINESS CREDIT.—Section 38(b), as amended by

11 this Act, is amended by striking ‘‘plus’’ at the end of

12 paragraph (15), by striking the period at the end of

13 paragraph (16) and inserting ‘‘, plus’’, and by add14 ing at the end the following new paragraph:

15 ‘‘(17) the biodiesel fuels credit determined under

16 section 40B(a).’’.

17 (3) CONFORMING AMENDMENTS.—

18 (A) Section 39(d), as amended by this Act,

19 is amended by adding at the end the following

20 new paragraph:

21 ‘‘(12) NO CARRYBACK OF BIODIESEL FUELS

22 CREDIT BEFORE JANUARY 1, 2003.—No portion of the

23 unused business credit for any taxable year which is

24 attributable to the biodiesel fuels credit determined
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1 under section 40B may be carried back to a taxable

2 year beginning before January 1, 2003.’’.

3 (B) Section 196(c) is amended by striking

4 ‘‘and’’ at the end of paragraph (9), by striking

5 the period at the end of paragraph (10), and by

6 adding at the end the following new paragraph:

7 ‘‘(11) the biodiesel fuels credit determined under

8 section 40B(a).’’.

9 (C) Section 6501(m), as amended by this

10 Act, is amended by inserting ‘‘40B(e),’’ after

11 ‘‘40(f),’’.

12 (D) The table of sections for subpart D of

13 part IV of subchapter A of chapter 1, as amend14 ed by this Act, is amended by adding after the

15 item relating to section 40A the following new

16 item:

‘‘Sec. 40B. Biodiesel used as fuel.’’.

17 (4) EFFECTIVE DATE.—The amendments made

18 by this subsection shall apply to taxable years begin19 ning after December 31, 2002.

20 (b) REDUCTION OF MOTOR FUEL EXCISE TAXES ON

21 BIODIESEL V MIXTURES.—

22 (1) IN GENERAL.—Section 4081 (relating to

23 manufacturers tax on petroleum products) is amended

24 by adding at the end the following new subsection:
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1 ‘‘(f) BIODIESEL V MIXTURES.—Under regulations pre2 scribed by the Secretary—

3 ‘‘(1) IN GENERAL.—In the case of the removal or

4 entry of a qualified biodiesel mixture with biodiesel V,

5 the rate of tax under subsection (a) shall be the other6 wise applicable rate reduced by the biodiesel mixture

7 rate (if any) applicable to the mixture.

8 ‘‘(2) TAX PRIOR TO MIXING.—

9 ‘‘(A) IN GENERAL.—In the case of the re10 moval or entry of diesel fuel for use in producing

11 at the time of such removal or entry a qualified

12 biodiesel mixture with biodiesel V, the rate of tax

13 under subsection (a) shall be the rate determined

14 under subparagraph (B).

15 ‘‘(B) DETERMINATION OF RATE.—For pur16 poses of subparagraph (A), the rate determined

17 under this subparagraph is the rate determined

18 under paragraph (1), divided by a percentage

19 equal to 100 percent minus the percentage of bio20 diesel V which will be in the mixture.

21 ‘‘(3) DEFINITIONS.—For purposes of this sub22 section, any term used in this subsection which is also

23 used in section 40B shall have the meaning given

24 such term by section 40B.
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1 ‘‘(4) CERTAIN RULES TO APPLY.—Rules similar

2 to the rules of paragraphs (6) and (7) of subsection

3 (c) shall apply for purposes of this subsection.’’.

4 (2) CONFORMING AMENDMENTS.—

5 (A) Section 4041 is amended by adding at

6 the end the following new subsection:

7 ‘‘(n) BIODIESEL V MIXTURES.—Under regulations

8 prescribed by the Secretary, in the case of the sale or use

9 of a qualified biodiesel mixture (as defined in section

10 40B(b)(2)) with biodiesel V, the rates under paragraphs (1)

11 and (2) of subsection (a) shall be the otherwise applicable

12 rates, reduced by any applicable biodiesel mixture rate (as

13 defined in section 40B(b)(1)(B)).’’.

14 (B) Section 6427 is amended by redesig15 nating subsection (p) as subsection (q) and by

16 inserting after subsection (o) the following new

17 subsection:

18 ‘‘(p) BIODIESEL V MIXTURES.—Except as provided in

19 subsection (k), if any diesel fuel on which tax was imposed

20 by section 4081 at a rate not determined under section

21 4081(f) is used by any person in producing a qualified bio22 diesel mixture (as defined in section 40B(b)(2)) with bio23 diesel V which is sold or used in such person’s trade or busi24 ness, the Secretary shall pay (without interest) to such per25 son an amount equal to the per gallon applicable biodiesel
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1 mixture rate (as defined in section 40B(b)(1)(B)) with re2 spect to such fuel.’’.

3 (3) EFFECTIVE DATE.—The amendments made

4 by this subsection shall apply to any fuel sold after

5 December 31, 2002, and before January 1, 2006.

6 (c) HIGHWAY TRUST FUND HELD HARMLESS.—There

7 are hereby transferred (from time to time) from the funds

8 of the Commodity Credit Corporation amounts determined

9 by the Secretary of the Treasury to be equivalent to the re10 ductions that would occur (but for this subsection) in the

11 receipts of the Highway Trust Fund by reason of the

12 amendments made by this section.

13 SEC. 2009. CREDIT FOR TAXPAYERS OWNING COMMERCIAL

14 POWER TAKEOFF VEHICLES.

15 (a) IN GENERAL.—Subpart D of part IV of subchapter

16 A of chapter 1 (relating to business-related credits), as

17 amended by this Act, is amended by adding at the end the

18 following new section:

19 ‘‘SEC. 45N. COMMERCIAL POWER TAKEOFF VEHICLES CRED20 IT.

21 ‘‘(a) GENERAL RULE.—For purposes of section 38, the

22 amount of the commercial power takeoff vehicles credit de23 termined under this section for the taxable year is $250 for

24 each qualified commercial power takeoff vehicle owned by
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1 the taxpayer as of the close of the calendar year in which

2 or with which the taxable year of the taxpayer ends.

3 ‘‘(b) DEFINITIONS.—For purposes of this section—

4 ‘‘(1) QUALIFIED COMMERCIAL POWER TAKEOFF

5 VEHICLE.—The term ‘qualified commercial power

6 takeoff vehicle’ means any highway vehicle described

7 in paragraph (2) which is propelled by any fuel sub8 ject to tax under section 4041 or 4081 if such vehicle

9 is used in a trade or business or for the production

10 of income (and is licensed and insured for such use).

11 ‘‘(2) HIGHWAY VEHICLE DESCRIBED.—A high12 way vehicle is described in this paragraph if such ve13 hicle is—

14 ‘‘(A) designed to engage in the daily collec15 tion of refuse or recyclables from homes or busi16 nesses and is equipped with a mechanism under

17 which the vehicle’s propulsion engine provides

18 the power to operate a load compactor, or

19 ‘‘(B) designed to deliver ready mixed con20 crete on a daily basis and is equipped with a

21 mechanism under which the vehicle’s propulsion

22 engine provides the power to operate a mixer

23 drum to agitate and mix the product en route to

24 the delivery site.
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1 ‘‘(c) EXCEPTION FOR VEHICLES USED BY GOVERN2 MENTS, ETC.—No credit shall be allowed under this section

3 for any vehicle owned by any person at the close of a cal4 endar year if such vehicle is used at any time during such

5 year by—

6 ‘‘(1) the United States or an agency or instru7 mentality thereof, a State, a political subdivision of

8 a State, or an agency or instrumentality of one or

9 more States or political subdivisions, or

10 ‘‘(2) an organization exempt from tax under sec11 tion 501(a).

12 ‘‘(d) DENIAL OF DOUBLE BENEFIT.—The amount of

13 any deduction under this subtitle for any tax imposed by

14 subchapter B of chapter 31 or part III of subchapter A of

15 chapter 32 for any taxable year shall be reduced (but not

16 below zero) by the amount of the credit determined under

17 this subsection for such taxable year.

18 ‘‘(e) TERMINATION.—This section shall not apply with

19 respect to any calendar year after 2004.’’.

20 (b) CREDIT MADE PART OF GENERAL BUSINESS

21 CREDIT.—Subsection (b) of section 38 (relating to general

22 business credit), as amended by this Act, is amended by

23 striking ‘‘plus’’ at the end of paragraph (22), by striking

24 the period at the end of paragraph (23) and inserting ‘‘,
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1 plus’’, and by adding at the end the following new para2 graph:

3 ‘‘(24) the commercial power takeoff vehicles cred4 it under section 45N(a).’’.

5 (c) CLERICAL AMENDMENT.—The table of sections for

6 subpart D of part IV of subchapter A of chapter 1, as

7 amended by this Act, is amended by adding at the end the

8 following new item:

‘‘Sec. 45N. Commercial power takeoff vehicles credit.’’.

9 (d) REGULATIONS.—Not later than January 1, 2005,

10 the Secretary of the Treasury, in consultation with the Sec11 retary of Energy, shall by regulation provide for the method

12 of determining the exemption from any excise tax imposed

13 under section 4041 or 4081 of the Internal Revenue Code

14 of 1986 on fuel used through a mechanism to power equip15 ment attached to a highway vehicle as described in section

16 45N(b)(2) of such Code, as added by subsection (a).

17 (e) EFFECTIVE DATE.—The amendments made by this

18 section shall apply to taxable years beginning after the date

19 of the enactment of this Act.

20 SEC. 2010. MODIFICATIONS TO THE INCENTIVES FOR AL21 TERNATIVE VEHICLES AND FUELS.

22 (a) MODIFICATION TO NEW QUALIFIED HYBRID

23 MOTOR VEHICLE CREDIT.—The table in section

24 30B(c)(2)(A) of the Internal Revenue Code of 1986, as
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1 added by this Act, is amended by striking ‘‘5 percent’’ and

2 inserting ‘‘4 percent’’.

3 (b) MODIFICATIONS TO EXTENSION OF DEDUCTION

4 FOR CERTAIN REFUELING PROPERTY.—

5 (1) IN GENERAL.—Subsection (f) of section 179A

6 of the Internal Revenue Code of 1986 is amended to

7 read as follows:

8 ‘‘(f) TERMINATION.—This section shall not apply to

9 any property placed in service—

10 ‘‘(1) in the case of property relating to hydrogen,

11 after December 31, 2011, and

12 ‘‘(2) in the case of any other property, after De13 cember 31, 2007.’’.

14 (2) EXTENSION OF PHASEOUT.—Section

15 179A(b)(1)(B) of such Code, as amended by section

16 606(a) of the Job Creation and Worker Assistance Act

17 of 2002, is amended—

18 (A) by striking ‘‘calendar year 2004’’ in

19 clause (i) and inserting ‘‘calendar years 2004

20 and 2005 (calendar years 2004 through 2009 in

21 the case of property relating to hydrogen) ’’,

22 (B) by striking ‘‘2005’’ in clause (ii) and

23 inserting ‘‘2006 (calendar year 2010 in the case

24 of property relating to hydrogen)’’, and
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1 (C) by striking ‘‘2006’’ in clause (iii) and

2 inserting ‘‘2007 (calendar year 2011 in the case

3 of property relating to hydrogen)’’.

4 (3) EFFECTIVE DATE.—The amendments made

5 by this subsection shall apply to property placed in

6 service after December 31, 2003, in taxable years end7 ing after such date.

8 (c) MODIFICATION TO CREDIT FOR INSTALLATION OF

9 ALTERNATIVE FUELING STATIONS.—Subsection (l) of sec10 tion 30C of the Internal Revenue Code of 1986, as added

11 by this Act, is amended to read as follows:

12 ‘‘(l) TERMINATION.—This section shall not apply to

13 any property placed in service—

14 ‘‘(1) in the case of property relating to hydrogen,

15 after December 31, 2011, and

16 ‘‘(2) in the case of any other property, after De17 cember 31, 2007.’’.

18 (d) EFFECTIVE DATE.—Except as provided in sub19 section (b)(3), the amendments made by this section shall

20 apply to property placed in service after September 30,

21 2002, in taxable years ending after such date.
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1 TITLE XXI—CONSERVATION AND

2 ENERGY EFFICIENCY PROVI3 SIONS

4 SEC. 2101. CREDIT FOR CONSTRUCTION OF NEW ENERGY

5 EFFICIENT HOME.

6 (a) IN GENERAL.—Subpart D of part IV of subchapter

7 A of chapter 1 (relating to business related credits), as

8 amended by this Act, is amended by adding at the end the

9 following new section:

10 ‘‘SEC. 45G. NEW ENERGY EFFICIENT HOME CREDIT.

11 ‘‘(a) IN GENERAL.—For purposes of section 38, in the

12 case of an eligible contractor, the credit determined under

13 this section for the taxable year is an amount equal to the

14 aggregate adjusted bases of all energy efficient property in15 stalled in a qualifying new home during construction of

16 such home.

17 ‘‘(b) LIMITATIONS.—

18 ‘‘(1) MAXIMUM CREDIT.—

19 ‘‘(A) IN GENERAL.—The credit allowed by

20 this section with respect to a qualifying new

21 home shall not exceed—

22 ‘‘(i) in the case of a 30-percent home,

23 $1,250, and

24 ‘‘(ii) in the case of a 50-percent home,

25 $2,000.
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1 ‘‘(B) 30- OR 50-PERCENT HOME.—For pur2 poses of subparagraph (A)—

3 ‘‘(i) 30-PERCENT HOME.—The term

4 ‘30-percent home’ means a qualifying new

5 home which is certified to have a projected

6 level of annual heating and cooling energy

7 consumption, measured in terms of average

8 annual energy cost to the homeowner, which

9 is at least 30 percent less than the annual

10 level of heating and cooling energy con11 sumption of a reference qualifying new

12 home constructed in accordance with the

13 standards of chapter 4 of the 2000 Inter14 national Energy Conservation Code, or a

15 qualifying new home which is a manufac16 tured home which meets the applicable

17 standards of the Energy Star program

18 managed jointly by the Environmental Pro19 tection Agency and the Department of En20 ergy.

21 ‘‘(ii) 50-PERCENT HOME.—The term

22 ‘50-percent home’ means a qualifying new

23 home which is certified to have a projected

24 level of annual heating and cooling energy

25 consumption, measured in terms of average
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1 annual energy cost to the homeowner, which

2 is at least 50 percent less than such annual

3 level of heating and cooling energy con4 sumption.

5 ‘‘(C) PRIOR CREDIT AMOUNTS ON SAME

6 HOME TAKEN INTO ACCOUNT.—If a credit was

7 allowed under subsection (a) with respect to a

8 qualifying new home in 1 or more prior taxable

9 years, the amount of the credit otherwise allow10 able for the taxable year with respect to that

11 home shall not exceed the amount under clause

12 (i) or (ii) of subparagraph (A) (as the case may

13 be), reduced by the sum of the credits allowed

14 under subsection (a) with respect to the home for

15 all prior taxable years.

16 ‘‘(2) COORDINATION WITH REHABILITATION AND

17 ENERGY CREDITS.—For purposes of this section—

18 ‘‘(A) the basis of any property referred to in

19 subsection (a) shall be reduced by that portion of

20 the basis of any property which is attributable to

21 the rehabilitation credit (as determined under

22 section 47(a)) or to the energy percentage of en23 ergy property (as determined under section

24 48(a)), and
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1 ‘‘(B) expenditures taken into account under

2 either section 47 or 48(a) shall not be taken into

3 account under this section.

4 ‘‘(c) DEFINITIONS.—For purposes of this section—

5 ‘‘(1) ELIGIBLE CONTRACTOR.—The term ‘eligible

6 contractor’ means the person who constructed the

7 qualifying new home, or in the case of a manufac8 tured home which conforms to Federal Manufactured

9 Home Construction and Safety Standards (24 C.F.R.

10 3280), the manufactured home producer of such home.

11 ‘‘(2) ENERGY EFFICIENT PROPERTY.—The term

12 ‘energy efficient property’ means any energy efficient

13 building envelope component, and any energy effi14 cient heating or cooling equipment which can, indi15 vidually or in combination with other components,

16 meet the requirements of this section.

17 ‘‘(3) QUALIFYING NEW HOME.—The term ‘quali18 fying new home’ means a dwelling—

19 ‘‘(A) located in the United States,

20 ‘‘(B) the construction of which is substan21 tially completed after the date of the enactment

22 of this section, and

23 ‘‘(C) the first use of which after construction

24 is as a principal residence (within the meaning

25 of section 121).
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1 ‘‘(4) CONSTRUCTION.—The term ‘construction’

2 includes reconstruction and rehabilitation.

3 ‘‘(5) BUILDING ENVELOPE COMPONENT.—The

4 term ‘building envelope component’ means—

5 ‘‘(A) any insulation material or system

6 which is specifically and primarily designed to

7 reduce the heat loss or gain of a qualifying new

8 home when installed in or on such home, and

9 ‘‘(B) exterior windows (including skylights)

10 and doors.

11 ‘‘(6) MANUFACTURED HOME INCLUDED.—The

12 term ‘qualifying new home’ includes a manufactured

13 home conforming to Federal Manufactured Home

14 Construction and Safety Standards (24 C.F.R. 3280).

15 ‘‘(d) CERTIFICATION.—

16 ‘‘(1) METHOD OF CERTIFICATION.—

17 ‘‘(A) IN GENERAL.—A certification de18 scribed in subsection (b)(1)(B) shall be deter19 mined either by a component-based method or a

20 performance-based method.

21 ‘‘(B) COMPONENT-BASED METHOD.—A com22 ponent-based method is a method which uses the

23 applicable technical energy efficiency specifica24 tions or ratings (including product labeling re25 quirements) for the energy efficient building en-
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1 velope component or energy efficient heating or

2 cooling equipment. The Secretary shall, in con3 sultation with the Administrator of the Environ4 mental Protection Agency, develop prescriptive

5 component-based packages that are equivalent in

6 energy performance to properties that qualify

7 under subparagraph (C).

8 ‘‘(C) PERFORMANCE-BASED METHOD.—

9 ‘‘(i) IN GENERAL.—A performance10 based method is a method which calculates

11 projected energy usage and cost reductions

12 in the qualifying new home in relation to a

13 reference qualifying new home—

14 ‘‘(I) heated by the same energy

15 source and heating system type, and

16 ‘‘(II) constructed in accordance

17 with the standards of chapter 4 of the

18 2000 International Energy Conserva19 tion Code.

20 ‘‘(ii) COMPUTER SOFTWARE.—Com21 puter software shall be used in support of a

22 performance-based method certification

23 under clause (i). Such software shall meet

24 procedures and methods for calculating en25 ergy and cost savings in regulations pro-
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1 mulgated by the Secretary of Energy. Such

2 regulations on the specifications for software

3 and verification protocols shall be based on

4 the 2001 California Residential Alternative

5 Calculation Method Approval Manual.

6 ‘‘(2) PROVIDER.—A certification described in

7 subsection (b)(1)(B) shall be provided by—

8 ‘‘(A) in the case of a component-based meth9 od, a local building regulatory authority, a util10 ity, a manufactured home production inspection

11 primary inspection agency (IPIA), or a home

12 energy rating organization, or

13 ‘‘(B) in the case of a performance-based

14 method, an individual recognized by an organi15 zation designated by the Secretary for such pur16 poses.

17 ‘‘(3) FORM.—

18 ‘‘(A) IN GENERAL.—A certification de19 scribed in subsection (b)(1)(B) shall be made in

20 writing in a manner that specifies in readily

21 verifiable fashion the energy efficient building

22 envelope components and energy efficient heating

23 or cooling equipment installed and their respec24 tive rated energy efficiency performance, and in

25 the case of a performance-based method, accom-
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1 panied by a written analysis documenting the

2 proper application of a permissible energy per3 formance calculation method to the specific cir4 cumstances of such qualifying new home.

5 ‘‘(B) FORM PROVIDED TO BUYER.—A form

6 documenting the energy efficient building enve7 lope components and energy efficient heating or

8 cooling equipment installed and their rated en9 ergy efficiency performance shall be provided to

10 the buyer of the qualifying new home. The form

11 shall include labeled R-value for insulation prod12 ucts, NFRC-labeled U-factor and Solar Heat

13 Gain Coefficient for windows, skylights, and

14 doors, labeled AFUE ratings for furnaces and

15 boilers, labeled HSPF ratings for electric heat

16 pumps, and labeled SEER ratings for air condi17 tioners.

18 ‘‘(C) RATINGS LABEL AFFIXED IN DWELL19 ING.—A permanent label documenting the rat20 ings in subparagraph (B) shall be affixed to the

21 front of the electrical distribution panel of the

22 qualifying new home, or shall be otherwise per23 manently displayed in a readily inspectable lo24 cation in such home.

25 ‘‘(4) REGULATIONS.—
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1 ‘‘(A) IN GENERAL.—In prescribing regula2 tions under this subsection for performance-based

3 certification methods, the Secretary, after exam4 ining the requirements for energy consultants

5 and home energy ratings providers specified by

6 the Mortgage Industry National Accreditation

7 Procedures for Home Energy Rating Systems,

8 shall prescribe procedures for calculating annual

9 energy usage and cost reductions for heating and

10 cooling and for the reporting of the results. Such

11 regulations shall—

12 ‘‘(i) provide that any calculation pro13 cedures be fuel neutral such that the same

14 energy efficiency measures allow a quali15 fying new home to be eligible for the credit

16 under this section regardless of whether such

17 home uses a gas or oil furnace or boiler or

18 an electric heat pump, and

19 ‘‘(ii) require that any computer soft20 ware allow for the printing of the Federal

21 tax forms necessary for the credit under this

22 section and for the printing of forms for

23 disclosure to the homebuyer.

24 ‘‘(B) PROVIDERS.—For purposes of para25 graph (2)(B), the Secretary shall establish re-
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1 quirements for the designation of individuals

2 based on the requirements for energy consultants

3 and home energy raters specified by the Mort4 gage Industry National Accreditation Procedures

5 for Home Energy Rating Systems.

6 ‘‘(e) TERMINATION.—Subsection (a) shall apply to

7 qualifying new homes purchased during the period begin8 ning on the date of the enactment of this section and ending

9 on December 31, 2007.’’.

10 (b) CREDIT MADE PART OF GENERAL BUSINESS

11 CREDIT.—Subsection (b) of section 38 (relating to current

12 year business credit), as amended by this Act, is amended

13 by striking ‘‘plus’’ at the end of paragraph (16), by striking

14 the period at the end of paragraph (17) and inserting ‘‘,

15 plus’’, and by adding at the end the following new para16 graph:

17 ‘‘(18) the new energy efficient home credit deter18 mined under section 45G(a).’’.

19 (c) DENIAL OF DOUBLE BENEFIT.—Section 280C (re20 lating to certain expenses for which credits are allowable)

21 is amended by adding at the end the following new sub22 section:

23 ‘‘(d) NEW ENERGY EFFICIENT HOME EXPENSES.—No

24 deduction shall be allowed for that portion of expenses for

25 a qualifying new home otherwise allowable as a deduction
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1 for the taxable year which is equal to the amount of the

2 credit determined for such taxable year under section

3 45G(a).’’.

4 (d) LIMITATION ON CARRYBACK.—Subsection (d) of

5 section 39, as amended by this Act, is amended by adding

6 at the end the following new paragraph:

7 ‘‘(13) NO CARRYBACK OF NEW ENERGY EFFI8 CIENT HOME CREDIT BEFORE EFFECTIVE DATE.—No

9 portion of the unused business credit for any taxable

10 year which is attributable to the credit determined

11 under section 45G may be carried back to any taxable

12 year ending on or before the date of the enactment of

13 section 45G.’’.

14 (e) DEDUCTION FOR CERTAIN UNUSED BUSINESS

15 CREDITS.—Subsection (c) of section 196, as amended by

16 this Act, is amended by striking ‘‘and’’ at the end of para17 graph (10), by striking the period at the end of paragraph

18 (11) and inserting ‘‘, and’’, and by adding after paragraph

19 (11) the following new paragraph:

20 ‘‘(12) the new energy efficient home credit deter21 mined under section 45G(a).’’.

22 (f) CLERICAL AMENDMENT.—The table of sections for

23 subpart D of part IV of subchapter A of chapter 1, as

24 amended by this Act, is amended by adding at the end the

25 following new item:

‘‘Sec. 45G. New energy efficient home credit.’’.
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1 (g) EFFECTIVE DATE.—The amendments made by this

2 section shall apply to taxable years ending after the date

3 of the enactment of this Act.

4 SEC. 2102. CREDIT FOR ENERGY EFFICIENT APPLIANCES.

5 (a) IN GENERAL.—Subpart D of part IV of subchapter

6 A of chapter 1 (relating to business-related credits), as

7 amended by this Act, is amended by adding at the end the

8 following new section:

9 ‘‘SEC. 45H. ENERGY EFFICIENT APPLIANCE CREDIT.

10 ‘‘(a) GENERAL RULE.—For purposes of section 38, the

11 energy efficient appliance credit determined under this sec12 tion for the taxable year is an amount equal to the applica13 ble amount determined under subsection (b) with respect

14 to the eligible production of qualified energy efficient appli15 ances produced by the taxpayer during the calendar year

16 ending with or within the taxable year.

17 ‘‘(b) APPLICABLE AMOUNT; ELIGIBLE PRODUCTION.—

18 For purposes of subsection (a)—

19 ‘‘(1) APPLICABLE AMOUNT.—The applicable

20 amount is—

21 ‘‘(A) $50, in the case of—

22 ‘‘(i) a clothes washer which is manu23 factured with at least a 1.26 MEF, or

24 ‘‘(ii) a refrigerator which consumes at

25 least 10 percent less kWh per year than the
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1 energy conservation standards for refrig2 erators promulgated by the Department of

3 Energy effective July 1, 2001, and

4 ‘‘(B) $100, in the case of—

5 ‘‘(i) a clothes washer which is manu6 factured with at least a 1.42 MEF (at least

7 1.5 MEF for washers produced after 2004),

8 or

9 ‘‘(ii) a refrigerator which consumes at

10 least 15 percent less kWh per year than

11 such energy conservation standards.

12 ‘‘(2) ELIGIBLE PRODUCTION.—

13 ‘‘(A) IN GENERAL.—The eligible production

14 of each category of qualified energy efficient ap15 pliances is the excess of—

16 ‘‘(i) the number of appliances in such

17 category which are produced by the tax18 payer during such calendar year, over

19 ‘‘(ii) the average number of appliances

20 in such category which were produced by

21 the taxpayer during calendar years 1999,

22 2000, and 2001.

23 ‘‘(B) CATEGORIES.—For purposes of sub24 paragraph (A), the categories are—
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1 ‘‘(i) clothes washers described in para2 graph (1)(A)(i),

3 ‘‘(ii) clothes washers described in para4 graph (1)(B)(i),

5 ‘‘(iii) refrigerators described in para6 graph (1)(A)(ii), and

7 ‘‘(iv) refrigerators described in para8 graph (1)(B)(ii).

9 ‘‘(c) LIMITATION ON MAXIMUM CREDIT.—

10 ‘‘(1) IN GENERAL.—The maximum amount of

11 credit allowed under subsection (a) with respect to a

12 taxpayer for all taxable years shall be—

13 ‘‘(A) $30,000,000 with respect to the credit

14 determined under subsection (b)(1)(A), and

15 ‘‘(B) $30,000,000 with respect to the credit

16 determined under subsection (b)(1)(B).

17 ‘‘(2) LIMITATION BASED ON GROSS RECEIPTS.—

18 The credit allowed under subsection (a) with respect

19 to a taxpayer for the taxable year shall not exceed an

20 amount equal to 2 percent of the average annual gross

21 receipts of the taxpayer for the 3 taxable years pre22 ceding the taxable year in which the credit is deter23 mined.
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1 ‘‘(3) GROSS RECEIPTS.—For purposes of this

2 subsection, the rules of paragraphs (2) and (3) of sec3 tion 448(c) shall apply.

4 ‘‘(d) DEFINITIONS.—For purposes of this section—

5 ‘‘(1) QUALIFIED ENERGY EFFICIENT APPLI6 ANCE.—The term ‘qualified energy efficient appliance’

7 means—

8 ‘‘(A) a clothes washer described in subpara9 graph (A)(i) or (B)(i) of subsection (b)(1), or

10 ‘‘(B) a refrigerator described in subpara11 graph (A)(ii) or (B)(ii) of subsection (b)(1).

12 ‘‘(2) CLOTHES WASHER.—The term ‘clothes

13 washer’ means a residential clothes washer, including

14 a residential style coin operated washer.

15 ‘‘(3) REFRIGERATOR.—The term ‘refrigerator’

16 means an automatic defrost refrigerator-freezer which

17 has an internal volume of at least 16.5 cubic feet.

18 ‘‘(4) MEF.—The term ‘MEF’ means Modified

19 Energy Factor (as determined by the Secretary of En20 ergy).

21 ‘‘(e) SPECIAL RULES.—

22 ‘‘(1) IN GENERAL.—Rules similar to the rules of

23 subsections (c), (d), and (e) of section 52 shall apply

24 for purposes of this section.
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1 ‘‘(2) AGGREGATION RULES.—All persons treated

2 as a single employer under subsection (a) or (b) of

3 section 52 or subsection (m) or (o) of section 414 shall

4 be treated as 1 person for purposes of subsection (a).

5 ‘‘(f) VERIFICATION.—The taxpayer shall submit such

6 information or certification as the Secretary, in consulta7 tion with the Secretary of Energy, determines necessary to

8 claim the credit amount under subsection (a).

9 ‘‘(g) TERMINATION.—This section shall not apply—

10 ‘‘(1) with respect to refrigerators described in

11 subsection (b)(1)(A)(ii) produced after December 31,

12 2004, and

13 ‘‘(2) with respect to all other qualified energy ef14 ficient appliances produced after December 31,

15 2006.’’.

16 (b) LIMITATION ON CARRYBACK.—Section 39(d) (relat17 ing to transition rules), as amended by this Act, is amended

18 by adding at the end the following new paragraph:

19 ‘‘(14) NO CARRYBACK OF ENERGY EFFICIENT AP20 PLIANCE CREDIT BEFORE EFFECTIVE DATE.—No por21 tion of the unused business credit for any taxable year

22 which is attributable to the energy efficient appliance

23 credit determined under section 45H may be carried

24 to a taxable year ending before January 1, 2003.’’.
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1 (c) CONFORMING AMENDMENT.—Section 38(b) (relat2 ing to general business credit), as amended by this Act, is

3 amended by striking ‘‘plus’’ at the end of paragraph (17),

4 by striking the period at the end of paragraph (18) and

5 inserting ‘‘, plus’’, and by adding at the end the following

6 new paragraph:

7 ‘‘(19) the energy efficient appliance credit deter8 mined under section 45H(a).’’.

9 (d) CLERICAL AMENDMENT.—The table of sections for

10 subpart D of part IV of subchapter A of chapter 1, as

11 amended by this Act, is amended by adding at the end the

12 following new item:

‘‘Sec. 45H. Energy efficient appliance credit.’’.

13 (e) EFFECTIVE DATE.—The amendments made by this

14 section shall apply to appliances produced after December

15 31, 2002, in taxable years ending after such date.

16 SEC. 2103. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT

17 PROPERTY.

18 (a) IN GENERAL.—Subpart A of part IV of subchapter

19 A of chapter 1 (relating to nonrefundable personal credits)

20 is amended by inserting after section 25B the following new

21 section:

22 ‘‘SEC. 25C. RESIDENTIAL ENERGY EFFICIENT PROPERTY.

23 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an indi24 vidual, there shall be allowed as a credit against the tax
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1 imposed by this chapter for the taxable year an amount

2 equal to the sum of—

3 ‘‘(1) 15 percent of the qualified photovoltaic

4 property expenditures made by the taxpayer during

5 such year,

6 ‘‘(2) 15 percent of the qualified solar water heat7 ing property expenditures made by the taxpayer dur8 ing such year,

9 ‘‘(3) 30 percent of the qualified fuel cell property

10 expenditures made by the taxpayer during such year,

11 ‘‘(4) 30 percent of the qualified wind energy

12 property expenditures made by the taxpayer during

13 such year, and

14 ‘‘(5) the sum of the qualified Tier 2 energy effi15 cient building property expenditures made by the tax16 payer during such year.

17 ‘‘(b) LIMITATIONS.—

18 ‘‘(1) MAXIMUM CREDIT.—The credit allowed

19 under subsection (a) shall not exceed—

20 ‘‘(A) $2,000 for property described in sub21 section (d)(1),

22 ‘‘(B) $2,000 for property described in sub23 section (d)(2),

24 ‘‘(C) $1,000 for each kilowatt of capacity of

25 property described in subsection (d)(4),
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1 ‘‘(D) $2,000 for property described in sub2 section (d)(5), and

3 ‘‘(E) for property described in subsection

4 (d)(6)—

5 ‘‘(i) $75 for each electric heat pump

6 water heater,

7 ‘‘(ii) $250 for each electric heat pump,

8 ‘‘(iii) $250 for each advanced natural

9 gas furnace,

10 ‘‘(iv) $250 for each central air condi11 tioner,

12 ‘‘(v) $75 for each natural gas water

13 heater, and

14 ‘‘(vi) $250 for each geothermal heat

15 pump.

16 ‘‘(2) SAFETY CERTIFICATIONS.—No credit shall

17 be allowed under this section for an item of property

18 unless—

19 ‘‘(A) in the case of solar water heating

20 property, such property is certified for perform21 ance and safety by the non-profit Solar Rating

22 Certification Corporation or a comparable entity

23 endorsed by the government of the State in which

24 such property is installed,
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1 ‘‘(B) in the case of a photovoltaic property,

2 a fuel cell property, or a wind energy property,

3 such property meets appropriate fire and electric

4 code requirements, and

5 ‘‘(C) in the case of property described in

6 subsection (d)(6), such property meets the per7 formance and quality standards, and the certifi8 cation requirements (if any), which—

9 ‘‘(i) have been prescribed by the Sec10 retary by regulations (after consultation

11 with the Secretary of Energy or the Admin12 istrator of the Environmental Protection

13 Agency, as appropriate),

14 ‘‘(ii) in the case of the energy efficiency

15 ratio (EER)—

16 ‘‘(I) require measurements to be

17 based on published data which is tested

18 by manufacturers at 95 degrees Fahr19 enheit, and

20 ‘‘(II) do not require ratings to be

21 based on certified data of the Air Con22 ditioning and Refrigeration Institute,

23 and

24 ‘‘(iii) are in effect at the time of the

25 acquisition of the property.
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1 ‘‘(c) CARRYFORWARD OF UNUSED CREDIT.—If the

2 credit allowable under subsection (a) exceeds the limitation

3 imposed by section 26(a) for such taxable year reduced by

4 the sum of the credits allowable under this subpart (other

5 than this section and section 25D), such excess shall be car6 ried to the succeeding taxable year and added to the credit

7 allowable under subsection (a) for such succeeding taxable

8 year.

9 ‘‘(d) DEFINITIONS.—For purposes of this section—

10 ‘‘(1) QUALIFIED SOLAR WATER HEATING PROP11 ERTY EXPENDITURE.—The term ‘qualified solar water

12 heating property expenditure’ means an expenditure

13 for property to heat water for use in a dwelling unit

14 located in the United States and used as a residence

15 by the taxpayer if at least half of the energy used by

16 such property for such purpose is derived from the

17 sun.

18 ‘‘(2) QUALIFIED PHOTOVOLTAIC PROPERTY EX19 PENDITURE.—The term ‘qualified photovoltaic prop20 erty expenditure’ means an expenditure for property

21 that uses solar energy to generate electricity for use

22 in such a dwelling unit.

23 ‘‘(3) SOLAR PANELS.—No expenditure relating to

24 a solar panel or other property installed as a roof (or

25 portion thereof) shall fail to be treated as property de-
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1 scribed in paragraph (1) or (2) solely because it con2 stitutes a structural component of the structure on

3 which it is installed.

4 ‘‘(4) QUALIFIED FUEL CELL PROPERTY EXPENDI5 TURE.—The term ‘qualified fuel cell property expend6 iture’ means an expenditure for qualified fuel cell

7 property (as defined in section 48(a)(4)) installed on

8 or in connection with such a dwelling unit.

9 ‘‘(5) QUALIFIED WIND ENERGY PROPERTY EX10 PENDITURE.—The term ‘qualified wind energy prop11 erty expenditure’ means an expenditure for property

12 which uses wind energy to generate electricity for use

13 in such a dwelling unit.

14 ‘‘(6) QUALIFIED TIER 2 ENERGY EFFICIENT

15 BUILDING PROPERTY EXPENDITURE.—

16 ‘‘(A) IN GENERAL.—The term ‘qualified

17 Tier 2 energy efficient building property expend18 iture’ means an expenditure for any Tier 2 en19 ergy efficient building property.

20 ‘‘(B) TIER 2 ENERGY EFFICIENT BUILDING

21 PROPERTY.—The term ‘Tier 2 energy efficient

22 building property’ means—

23 ‘‘(i) an electric heat pump water heater

24 which yields an energy factor of at least 1.7
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1 in the standard Department of Energy test

2 procedure,

3 ‘‘(ii) an electric heat pump which has

4 a heating seasonal performance factor

5 (HSPF) of at least 9, a seasonal energy effi6 ciency ratio (SEER) of at least 15, and an

7 energy efficiency ratio (EER) of at least

8 12.5,

9 ‘‘(iii) an advanced natural gas furnace

10 which achieves at least 95 percent annual

11 fuel utilization efficiency (AFUE),

12 ‘‘(iv) a central air conditioner which

13 has a seasonal energy efficiency ratio

14 (SEER) of at least 15 and an energy effi15 ciency ratio (EER) of at least 12.5,

16 ‘‘(v) a natural gas water heater which

17 has an energy factor of at least 0.80 in the

18 standard Department of Energy test proce19 dure, and

20 ‘‘(vi) a geothermal heat pump which

21 has an energy efficiency ratio (EER) of at

22 least 21.

23 ‘‘(7) LABOR COSTS.—Expenditures for labor

24 costs properly allocable to the onsite preparation, as25 sembly, or original installation of the property de-
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1 scribed in paragraph (1), (2), (4), (5), or (6) and for

2 piping or wiring to interconnect such property to the

3 dwelling unit shall be taken into account for purposes

4 of this section.

5 ‘‘(8) SWIMMING POOLS, ETC., USED AS STORAGE

6 MEDIUM.—Expenditures which are properly allocable

7 to a swimming pool, hot tub, or any other energy

8 storage medium which has a function other than the

9 function of such storage shall not be taken into ac10 count for purposes of this section.

11 ‘‘(e) SPECIAL RULES.—For purposes of this section—

12 ‘‘(1) DOLLAR AMOUNTS IN CASE OF JOINT OCCU13 PANCY.—In the case of any dwelling unit which is

14 jointly occupied and used during any calendar year

15 as a residence by 2 or more individuals the following

16 shall apply:

17 ‘‘(A) The amount of the credit allowable,

18 under subsection (a) by reason of expenditures

19 (as the case may be) made during such calendar

20 year by any of such individuals with respect to

21 such dwelling unit shall be determined by treat22 ing all of such individuals as 1 taxpayer whose

23 taxable year is such calendar year.

24 ‘‘(B) There shall be allowable, with respect

25 to such expenditures to each of such individuals,
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1 a credit under subsection (a) for the taxable year

2 in which such calendar year ends in an amount

3 which bears the same ratio to the amount deter4 mined under subparagraph (A) as the amount of

5 such expenditures made by such individual dur6 ing such calendar year bears to the aggregate of

7 such expenditures made by all of such individ8 uals during such calendar year.

9 ‘‘(2) TENANT-STOCKHOLDER IN COOPERATIVE

10 HOUSING CORPORATION.—In the case of an indi11 vidual who is a tenant-stockholder (as defined in sec12 tion 216) in a cooperative housing corporation (as de13 fined in such section), such individual shall be treated

14 as having made his tenant-stockholder’s proportionate

15 share (as defined in section 216(b)(3)) of any expend16 itures of such corporation.

17 ‘‘(3) CONDOMINIUMS.—

18 ‘‘(A) IN GENERAL.—In the case of an indi19 vidual who is a member of a condominium man20 agement association with respect to a condo21 minium which the individual owns, such indi22 vidual shall be treated as having made the indi23 vidual’s proportionate share of any expenditures

24 of such association.
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1 ‘‘(B) CONDOMINIUM MANAGEMENT ASSOCIA2 TION.—For purposes of this paragraph, the term

3 ‘condominium management association’ means

4 an organization which meets the requirements of

5 paragraph (1) of section 528(c) (other than sub6 paragraph (E) thereof) with respect to a condo7 minium project substantially all of the units of

8 which are used as residences.

9 ‘‘(4) ALLOCATION IN CERTAIN CASES.—Except in

10 the case of qualified wind energy property expendi11 tures, if less than 80 percent of the use of an item is

12 for nonbusiness purposes, only that portion of the ex13 penditures for such item which is properly allocable

14 to use for nonbusiness purposes shall be taken into ac15 count.

16 ‘‘(5) WHEN EXPENDITURE MADE; AMOUNT OF

17 EXPENDITURE.—

18 ‘‘(A) IN GENERAL.—Except as provided in

19 subparagraph (B), an expenditure with respect

20 to an item shall be treated as made when the

21 original installation of the item is completed.

22 ‘‘(B) EXPENDITURES PART OF BUILDING

23 CONSTRUCTION.—In the case of an expenditure

24 in connection with the construction or recon25 struction of a structure, such expenditure shall be
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1 treated as made when the original use of the con2 structed or reconstructed structure by the tax3 payer begins.

4 ‘‘(C) AMOUNT.—The amount of any expend5 iture shall be the cost thereof.

6 ‘‘(6) PROPERTY FINANCED BY SUBSIDIZED EN7 ERGY FINANCING.—For purposes of determining the

8 amount of expenditures made by any individual with

9 respect to any dwelling unit, there shall not be taken

10 in to account expenditures which are made from sub11 sidized energy financing (as defined in section

12 48(a)(5)(C)).

13 ‘‘(f) BASIS ADJUSTMENTS.—For purposes of this sub14 title, if a credit is allowed under this section for any ex15 penditure with respect to any property, the increase in the

16 basis of such property which would (but for this subsection)

17 result from such expenditure shall be reduced by the amount

18 of the credit so allowed.

19 ‘‘(g) TERMINATION.—The credit allowed under this

20 section shall not apply to expenditures after December 31,

21 2007.’’.

22 (b) CREDIT ALLOWED AGAINST REGULAR TAX AND

23 ALTERNATIVE MINIMUM TAX.—
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1 (1) IN GENERAL.—Section 25C(b), as added by

2 subsection (a), is amended by adding at the end the

3 following new paragraph:

4 ‘‘(3) LIMITATION BASED ON AMOUNT OF TAX.—

5 The credit allowed under subsection (a) for the tax6 able year shall not exceed the excess of—

7 ‘‘(A) the sum of the regular tax liability (as

8 defined in section 26(b)) plus the tax imposed by

9 section 55, over

10 ‘‘(B) the sum of the credits allowable under

11 this subpart (other than this section and section

12 25D) and section 27 for the taxable year.’’.

13 (2) CONFORMING AMENDMENTS.—

14 (A) Section 25C(c), as added by subsection

15 (a), is amended by striking ‘‘section 26(a) for

16 such taxable year reduced by the sum of the cred17 its allowable under this subpart (other than this

18 section and section 25D)’’ and inserting ‘‘sub19 section (b)(3)’’.

20 (B) Section 23(b)(4)(B) is amended by in21 serting ‘‘and section 25C’’ after ‘‘this section’’.

22 (C) Section 24(b)(3)(B) is amended by

23 striking ‘‘23 and 25B’’ and inserting ‘‘23, 25B,

24 and 25C’’.
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1 (D) Section 25(e)(1)(C) is amended by in2 serting ‘‘25C,’’ after ‘‘25B,’’.

3 (E) Section 25B(g)(2) is amended by strik4 ing ‘‘section 23’’ and inserting ‘‘sections 23 and

5 25C’’.

6 (F) Section 26(a)(1) is amended by striking

7 ‘‘and 25B’’ and inserting ‘‘25B, and 25C’’.

8 (G) Section 904(h) is amended by striking

9 ‘‘and 25B’’ and inserting ‘‘25B, and 25C’’.

10 (H) Section 1400C(d) is amended by strik11 ing ‘‘and 25B’’ and inserting ‘‘25B, and 25C’’.

12 (c) ADDITIONAL CONFORMING AMENDMENTS.—

13 (1) Section 23(c), as in effect for taxable years

14 beginning before January 1, 2004, is amended by

15 striking ‘‘section 1400C’’ and inserting ‘‘sections 25C

16 and 1400C’’.

17 (2) Section 25(e)(1)(C), as in effect for taxable

18 years beginning before January 1, 2004, is amended

19 by inserting ‘‘, 25Cs,’’ after ‘‘sections 23’’.

20 (3) Subsection (a) of section 1016, as amended

21 by this Act, is amended by striking ‘‘and’’ at the end

22 of paragraph (29), by striking the period at the end

23 of paragraph (30) and inserting ‘‘, and’’, and by add24 ing at the end the following new paragraph:
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1 ‘‘(31) to the extent provided in section 25C(f), in

2 the case of amounts with respect to which a credit has

3 been allowed under section 25C.’’.

4 (4) Section 1400C(d), as in effect for taxable

5 years beginning before January 1, 2004, is amended

6 by inserting ‘‘and section 25C’’ after ‘‘this section’’.

7 (5) The table of sections for subpart A of part IV

8 of subchapter A of chapter 1 is amended by inserting

9 after the item relating to section 25B the following

10 new item:

‘‘Sec. 25C. Residential energy efficient property.’’.

11 (d) EFFECTIVE DATES.—

12 (1) IN GENERAL.—Except as provided by para13 graph (2), the amendments made by this section shall

14 apply to expenditures after December 31, 2002, in

15 taxable years ending after such date.

16 (2) SUBSECTION (b).—The amendments made by

17 subsection (b) shall apply to taxable years beginning

18 after December 31, 2003.

19 SEC. 2104. CREDIT FOR BUSINESS INSTALLATION OF QUALI20 FIED FUEL CELLS AND STATIONARY MICRO21 TURBINE POWER PLANTS.

22 (a) IN GENERAL.—Subparagraph (A) of section

23 48(a)(3) (defining energy property) is amended by striking

24 ‘‘or’’ at the end of clause (i), by adding ‘‘or’’ at the end
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1 of clause (ii), and by inserting after clause (ii) the following

2 new clause:

3 ‘‘(iii) qualified fuel cell property or

4 qualified microturbine property,’’.

5 (b) QUALIFIED FUEL CELL PROPERTY; QUALIFIED

6 MICROTURBINE PROPERTY.—Subsection (a) of section 48

7 is amended by redesignating paragraphs (4) and (5) as

8 paragraphs (5) and (6), respectively, and by inserting after

9 paragraph (3) the following new paragraph:

10 ‘‘(4) QUALIFIED FUEL CELL PROPERTY; QUALI11 FIED MICROTURBINE PROPERTY.—For purposes of

12 this subsection—

13 ‘‘(A) QUALIFIED FUEL CELL PROPERTY.—

14 ‘‘(i) IN GENERAL.—The term ‘qualified

15 fuel cell property’ means a fuel cell power

16 plant that—

17 ‘‘(I) generates at least 0.5 kilowatt

18 of electricity using an electrochemical

19 process, and

20 ‘‘(II) has an electricity-only gen21 eration efficiency greater than 30 per22 cent.

23 ‘‘(ii) LIMITATION.—In the case of

24 qualified fuel cell property placed in service

25 during the taxable year, the credit deter-
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1 mined under paragraph (1) for such year

2 with respect to such property shall not ex3 ceed an amount equal to the lesser of—

4 ‘‘(I) 30 percent of the basis of such

5 property, or

6 ‘‘(II) $500 for each 0.5 kilowatt of

7 capacity of such property.

8 ‘‘(iii) FUEL CELL POWER PLANT.—The

9 term ‘fuel cell power plant’ means an inte10 grated system comprised of a fuel cell stack

11 assembly and associated balance of plant

12 components that converts a fuel into elec13 tricity using electrochemical means.

14 ‘‘(iv) TERMINATION.—Such term shall

15 not include any property placed in service

16 after December 31, 2007.

17 ‘‘(B) QUALIFIED MICROTURBINE PROP18 ERTY.—

19 ‘‘(i) IN GENERAL.—The term ‘‘quali20 fied microturbine property’ means a sta21 tionary microturbine power plant which

22 has an electricity-only generation efficiency

23 not less than 26 percent at International

24 Standard Organization conditions.
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1 ‘‘(ii) LIMITATION.—In the case of

2 qualified microturbine property placed in

3 service during the taxable year, the credit

4 determined under paragraph (1) for such

5 year with respect to such property shall not

6 exceed an amount equal to the lesser of—

7 ‘‘(I) 10 percent of the basis of such

8 property, or

9 ‘‘(II) $200 for each kilowatt of ca10 pacity of such property.

11 ‘‘(iii) STATIONARY MICROTURBINE

12 POWER PLANT.—The term ‘stationary

13 microturbine power plant means a system

14 comprising of a rotary engine which is ac15 tuated by the aerodynamic reaction or im16 pulse or both on radial or axial curved full17 circumferential-admission airfoils on a cen18 tral axial rotating spindle. Such system—

19 ‘‘(I) commonly includes an air

20 compressor, combustor, gas pathways

21 which lead compressed air to the com22 bustor and which lead hot combusted

23 gases from the combustor to 1 or more

24 rotating turbine spools, which in turn
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1 drive the compressor and power output

2 shaft,

3 ‘‘(II) includes a fuel compressor,

4 recuperator/regenerator, generator or

5 alternator, integrated combined cycle

6 equipment, cooling-heating-and-power

7 equipment, sound attenuation appa8 ratus, and power conditioning equip9 ment, and

10 ‘‘(III) includes all secondary com11 ponents located between the existing in12 frastructure for fuel delivery and the

13 existing infrastructure for power dis14 tribution, including equipment and

15 controls for meeting relevant power

16 standards, such as voltage, frequency,

17 and power factors.

18 ‘‘(iv) TERMINATION.—Such term shall

19 not include any property placed in service

20 after December 31, 2006.’’.

21 (c) LIMITATION.—Section 48(a)(2)(A) (relating to en22 ergy percentage) is amended to read as follows:

23 ‘‘(A) IN GENERAL.—The energy percentage

24 is—
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1 ‘‘(i) in the case of qualified fuel cell

2 property, 30 percent, and

3 ‘‘(ii) in the case of any other energy

4 property, 10 percent.’’.

5 (d) CONFORMING AMENDMENTS.—

6 (A) Section 29(b)(3)(A)(i)(III) is amended

7 by striking ‘‘section 48(a)(4)(C)’’ and inserting

8 ‘‘section 48(a)(5)(C)’’.

9 (B) Section 48(a)(1) is amended by insert10 ing ‘‘except as provided in subparagraph (A)(ii)

11 or (B)(ii) of paragraph (4),’’ before ‘‘the energy’’.

12 (e) EFFECTIVE DATE.—The amendments made by this

13 subsection shall apply to property placed in service after

14 December 31, 2002, under rules similar to the rules of sec15 tion 48(m) of the Internal Revenue Code of 1986 (as in

16 effect on the day before the date of the enactment of the Rev17 enue Reconciliation Act of 1990).

18 SEC. 2105. ENERGY EFFICIENT COMMERCIAL BUILDINGS

19 DEDUCTION.

20 (a) IN GENERAL.—Part VI of subchapter B of chapter

21 1 is amended by inserting after section 179A the following

22 new section:
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1 ‘‘SEC. 179B. ENERGY EFFICIENT COMMERCIAL BUILDINGS

2 DEDUCTION.

3 ‘‘(a) IN GENERAL.—There shall be allowed as a deduc4 tion for the taxable year an amount equal to the energy

5 efficient commercial building property expenditures made

6 by a taxpayer for the taxable year.

7 ‘‘(b) MAXIMUM AMOUNT OF DEDUCTION.—The amount

8 of energy efficient commercial building property expendi9 tures taken into account under subsection (a) shall not ex10 ceed an amount equal to the product of—

11 ‘‘(1) $2.25, and

12 ‘‘(2) the square footage of the building with re13 spect to which the expenditures are made.

14 ‘‘(c) YEAR DEDUCTION ALLOWED.—The deduction

15 under subsection (a) shall be allowed in the taxable year

16 in which the construction of the building is completed.

17 ‘‘(d) ENERGY EFFICIENT COMMERCIAL BUILDING

18 PROPERTY EXPENDITURES.—For purposes of this section—

19 ‘‘(1) IN GENERAL.—The term ‘energy efficient

20 commercial building property expenditures’ means an

21 amount paid or incurred for energy efficient commer22 cial building property installed on or in connection

23 with new construction or reconstruction of property—

24 ‘‘(A) for which depreciation is allowable

25 under section 167,
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1 ‘‘(B) which is located in the United States,

2 and

3 ‘‘(C) the construction or erection of which is

4 completed by the taxpayer.

5 Such property includes all residential rental prop6 erty, including low-rise multifamily structures and

7 single family housing property which is not within

8 the scope of Standard 90.1–1999 (described in para9 graph (2)). Such term includes expenditures for labor

10 costs properly allocable to the onsite preparation, as11 sembly, or original installation of the property.

12 ‘‘(2) ENERGY EFFICIENT COMMERCIAL BUILDING

13 PROPERTY.—For purposes of paragraph (1)—

14 ‘‘(A) IN GENERAL.—The term ‘energy effi15 cient commercial building property’ means any

16 property which reduces total annual energy and

17 power costs with respect to the lighting, heating,

18 cooling, ventilation, and hot water supply sys19 tems of the building by 50 percent or more in

20 comparison to a reference building which meets

21 the requirements of Standard 90.1–1999 of the

22 American Society of Heating, Refrigerating, and

23 Air Conditioning Engineers and the Illu24 minating Engineering Society of North America

25 using methods of calculation under subpara-
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1 graph (B) and certified by qualified profes2 sionals as provided under paragraph (5).

3 ‘‘(B) METHODS OF CALCULATION.—The

4 Secretary, in consultation with the Secretary of

5 Energy, shall promulgate regulations which de6 scribe in detail methods for calculating and

7 verifying energy and power consumption and

8 cost, taking into consideration the provisions of

9 the 2001 California Nonresidential Alternative

10 Calculation Method Approval Manual. These reg11 ulations shall meet the following requirements:

12 ‘‘(i) In calculating tradeoffs and en13 ergy performance, the regulations shall pre14 scribe the costs per unit of energy and

15 power, such as kilowatt hour, kilowatt, gal16 lon of fuel oil, and cubic foot or Btu of nat17 ural gas, which may be dependent on time

18 of usage.

19 ‘‘(ii) The calculational methodology

20 shall require that compliance be dem21 onstrated for a whole building. If some sys22 tems of the building, such as lighting, are

23 designed later than other systems of the

24 building, the method shall provide that

25 either—
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1 ‘‘(I) the expenses taken into ac2 count under paragraph (1) shall not

3 occur until the date designs for all en4 ergy-using systems of the building are

5 completed,

6 ‘‘(II) the energy performance of

7 all systems and components not yet de8 signed shall be assumed to comply

9 minimally with the requirements of

10 such Standard 90.1–1999, or

11 ‘‘(III) the expenses taken into ac12 count under paragraph (1) shall be a

13 fraction of such expenses based on the

14 performance of less than all energy15 using systems in accordance with

16 clause (iii).

17 ‘‘(iii) The expenditures in connection

18 with the design of subsystems in the build19 ing, such as the envelope, the heating, ven20 tilation, air conditioning and water heating

21 system, and the lighting system shall be al22 located to the appropriate building sub23 system based on system-specific energy cost

24 savings targets in regulations promulgated

25 by the Secretary of Energy which are equiv-
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1 alent, using the calculation methodology, to

2 the whole building requirement of 50 per3 cent savings.

4 ‘‘(iv) The calculational methods under

5 this subparagraph need not comply fully

6 with section 11 of such Standard 90.1–

7 1999.

8 ‘‘(v) The calculational methods shall be

9 fuel neutral, such that the same energy effi10 ciency features shall qualify a building for

11 the deduction under this subsection regard12 less of whether the heating source is a gas

13 or oil furnace or an electric heat pump.

14 ‘‘(vi) The calculational methods shall

15 provide appropriate calculated energy sav16 ings for design methods and technologies not

17 otherwise credited in either such Standard

18 90.1–1999 or in the 2001 California Non19 residential Alternative Calculation Method

20 Approval Manual, including the following:

21 ‘‘(I) Natural ventilation.

22 ‘‘(II) Evaporative cooling.

23 ‘‘(III) Automatic lighting controls

24 such as occupancy sensors, photocells,

25 and timeclocks.
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1 ‘‘(IV) Daylighting.

2 ‘‘(V) Designs utilizing semi-condi3 tioned spaces that maintain adequate

4 comfort conditions without air condi5 tioning or without heating.

6 ‘‘(VI) Improved fan system effi7 ciency, including reductions in static

8 pressure.

9 ‘‘(VII) Advanced unloading mech10 anisms for mechanical cooling, such as

11 multiple or variable speed compressors.

12 ‘‘(VIII) The calculational methods

13 may take into account the extent of

14 commissioning in the building, and

15 allow the taxpayer to take into account

16 measured performance that exceeds

17 typical performance.

18 ‘‘(C) COMPUTER SOFTWARE.—

19 ‘‘(i) IN GENERAL.—Any calculation

20 under this paragraph shall be prepared by

21 qualified computer software.

22 ‘‘(ii) QUALIFIED COMPUTER SOFT23 WARE.—For purposes of this subparagraph,

24 the term ‘qualified computer software’

25 means software—
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1 ‘‘(I) for which the software de2 signer has certified that the software

3 meets all procedures and detailed meth4 ods for calculating energy and power

5 consumption and costs as required by

6 the Secretary,

7 ‘‘(II) which provides such forms

8 as required to be filed by the Secretary

9 in connection with energy efficiency of

10 property and the deduction allowed

11 under this subsection, and

12 ‘‘(III) which provides a notice

13 form which summarizes the energy effi14 ciency features of the building and its

15 projected annual energy costs.

16 ‘‘(3) ALLOCATION OF DEDUCTION FOR PUBLIC

17 PROPERTY.—In the case of energy efficient commer18 cial building property installed on or in public prop19 erty, the Secretary shall promulgate a regulation to

20 allow the allocation of the deduction to the person

21 primarily responsible for designing the property in

22 lieu of the public entity which is the owner of such

23 property. Such person shall be treated as the taxpayer

24 for purposes of this subsection.
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1 ‘‘(4) NOTICE TO OWNER.—The qualified indi2 vidual shall provide an explanation to the owner of

3 the building regarding the energy efficiency features

4 of the building and its projected annual energy costs

5 as provided in the notice under paragraph

6 (2)(C)(ii)(III).

7 ‘‘(5) CERTIFICATION.—

8 ‘‘(A) IN GENERAL.—Except as provided in

9 this paragraph, the Secretary shall prescribe pro10 cedures for the inspection and testing for compli11 ance of buildings that are comparable, given the

12 difference between commercial and residential

13 buildings, to the requirements in the Mortgage

14 Industry National Accreditation Procedures for

15 Home Energy Rating Systems.

16 ‘‘(B) QUALIFIED INDIVIDUALS.—Individ17 uals qualified to determine compliance shall be

18 only those individuals who are recognized by an

19 organization certified by the Secretary for such

20 purposes. The Secretary may qualify a Home

21 Ratings Systems Organization, a local building

22 code agency, a State or local energy office, a util23 ity, or any other organization which meets the

24 requirements prescribed under this section.
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1 ‘‘(C) PROFICIENCY OF QUALIFIED INDIVID2 UALS.—The Secretary shall consult with non3 profit organizations and State agencies with ex4 pertise in energy efficiency calculations and in5 spections to develop proficiency tests and train6 ing programs to qualify individuals to determine

7 compliance.

8 ‘‘(e) BASIS REDUCTION.—For purposes of this subtitle,

9 if a deduction is allowed under this section with respect

10 to any energy efficient commercial building property, the

11 basis of such property shall be reduced by the amount of

12 the deduction so allowed.

13 ‘‘(f) REGULATIONS.—The Secretary shall promulgate

14 such regulations as necessary to take into account new tech15 nologies regarding energy efficiency and renewable energy

16 for purposes of determining energy efficiency and savings

17 under this section.

18 ‘‘(g) TERMINATION.—This section shall not apply with

19 respect to any energy efficient commercial building prop20 erty expenditures in connection with property—

21 ‘‘(1) the plans for which are not certified under

22 subsection (d)(5) on or before December 31, 2007, and

23 ‘‘(2) the construction of which is not completed

24 on or before December 31, 2009.’’.

25 (b) CONFORMING AMENDMENTS.—
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1 (1) Section 1016(a), as amended by this Act, is

2 amended by striking ‘‘and’’ at the end of paragraph

3 (30), by striking the period at the end of paragraph

4 (31) and inserting ‘‘, and’’, and by adding at the end

5 the following new paragraph:

6 ‘‘(32) to the extent provided in section 179B(e).’’.

7 (2) Section 1245(a) is amended by inserting

8 ‘‘179B,’’ after ‘‘179A,’’ both places it appears in

9 paragraphs (2)(C) and (3)(C).

10 (3) Section 1250(b)(3) is amended by inserting

11 before the period at the end of the first sentence ‘‘or

12 by section 179B’’.

13 (4) Section 263(a)(1) is amended by striking

14 ‘‘or’’ at the end of subparagraph (G), by striking the

15 period at the end of subparagraph (H) and inserting

16 ‘‘, or’’, and by inserting after subparagraph (H) the

17 following new subparagraph:

18 ‘‘(I) expenditures for which a deduction is

19 allowed under section 179B.’’.

20 (5) Section 312(k)(3)(B) is amended by striking

21 ‘‘or 179A’’ each place it appears in the heading and

22 text and inserting ‘‘, 179A, or 179B’’.

23 (c) CLERICAL AMENDMENT.—The table of sections for

24 part VI of subchapter B of chapter 1 is amended by insert25 ing after section 179A the following new item:

‘‘Sec. 179B. Energy efficient commercial buildings deduction.’’.
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1 (d) EFFECTIVE DATE.—The amendments made by this

2 section shall apply to taxable years beginning after Sep3 tember 30, 2002.

4 SEC. 2106. ALLOWANCE OF DEDUCTION FOR QUALIFIED

5 NEW OR RETROFITTED ENERGY MANAGE6 MENT DEVICES.

7 (a) IN GENERAL.—Part VI of subchapter B of chapter

8 1 (relating to itemized deductions for individuals and cor9 porations), as amended by this Act, is amended by inserting

10 after section 179B the following new section:

11 ‘‘SEC. 179C. DEDUCTION FOR QUALIFIED NEW OR RETRO12 FITTED ENERGY MANAGEMENT DEVICES.

13 ‘‘(a) ALLOWANCE OF DEDUCTION.—In the case of a

14 taxpayer who is a supplier of electric energy or natural

15 gas or a provider of electric energy or natural gas services,

16 there shall be allowed as a deduction an amount equal to

17 the cost of each qualified energy management device placed

18 in service during the taxable year.

19 ‘‘(b) MAXIMUM DEDUCTION.—The deduction allowed

20 by this section with respect to each qualified energy man21 agement device shall not exceed $30.

22 ‘‘(c) QUALIFIED ENERGY MANAGEMENT DEVICE.—The

23 term ‘qualified energy management device’ means any tan24 gible property to which section 168 applies if such property

25 is a meter or metering device—
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1 ‘‘(1) which is acquired and used by the taxpayer

2 to enable consumers to manage their purchase or use

3 of electricity or natural gas in response to energy

4 price and usage signals, and

5 ‘‘(2) which permits reading of energy price and

6 usage signals on at least a daily basis.

7 ‘‘(d) PROPERTY USED OUTSIDE THE UNITED STATES

8 NOT QUALIFIED.—No deduction shall be allowed under sub9 section (a) with respect to property which is used predomi10 nantly outside the United States or with respect to the por11 tion of the cost of any property taken into account under

12 section 179.

13 ‘‘(e) BASIS REDUCTION.—

14 ‘‘(1) IN GENERAL.—For purposes of this title, the

15 basis of any property shall be reduced by the amount

16 of the deduction with respect to such property which

17 is allowed by subsection (a).

18 ‘‘(2) ORDINARY INCOME RECAPTURE.—For pur19 poses of section 1245, the amount of the deduction al20 lowable under subsection (a) with respect to any

21 property that is of a character subject to the allow22 ance for depreciation shall be treated as a deduction

23 allowed for depreciation under section 167.’’.

24 (b) CONFORMING AMENDMENTS.—
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1 (1) Section 263(a)(1), as amended by this Act, is

2 amended by striking ‘‘or’’ at the end of subparagraph

3 (H), by striking the period at the end of subpara4 graph (I) and inserting ‘‘, or’’, and by inserting after

5 subparagraph (I) the following new subparagraph:

6 ‘‘(J) expenditures for which a deduction is

7 allowed under section 179C.’’.

8 (2) Section 312(k)(3)(B), as amended by this

9 Act, is amended by striking ‘‘or 179B’’ each place it

10 appears in the heading and text and inserting ‘‘,

11 179B, or 179C’’.

12 (3) Section 1016(a), as amended by this Act, is

13 amended by striking ‘‘and’’ at the end of paragraph

14 (31), by striking the period at the end of paragraph

15 (32) and inserting ‘‘, and’’, and by adding at the end

16 the following new paragraph:

17 ‘‘(33) to the extent provided in section

18 179C(e)(1).’’.

19 (4) Section 1245(a), as amended by this Act, is

20 amended by inserting ‘‘179C,’’ after ‘‘179B,’’ both

21 places it appears in paragraphs (2)(C) and (3)(C).

22 (5) The table of contents for subpart B of part

23 IV of subchapter A of chapter 1, as amended by this

24 Act, is amended by inserting after the item relating

25 to section 179B the following new item:
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‘‘Sec. 179C. Deduction for qualified new or retrofitted energy management devices.’’.

1 (c) EFFECTIVE DATE.—The amendments made by this

2 section shall apply to qualified energy management devices

3 placed in service after the date of the enactment of this Act,

4 in taxable years ending after such date.

5 SEC. 2107. THREE-YEAR APPLICABLE RECOVERY PERIOD

6 FOR DEPRECIATION OF QUALIFIED ENERGY

7 MANAGEMENT DEVICES.

8 (a) IN GENERAL.—Subparagraph (A) of section

9 168(e)(3) (relating to classification of property) is amended

10 by striking ‘‘and’’ at the end of clause (ii), by striking the

11 period at the end of clause (iii) and inserting ‘‘, and’’, and

12 by adding at the end the following new clause:

13 ‘‘(iv) any qualified energy manage14 ment device.’’.

15 (b) DEFINITION OF QUALIFIED ENERGY MANAGEMENT

16 DEVICE.—Section 168(i) (relating to definitions and spe17 cial rules) is amended by inserting at the end the following

18 new paragraph:

19 ‘‘(15) QUALIFIED ENERGY MANAGEMENT DE20 VICE.—The term ‘qualified energy management de21 vice’ means any qualified energy management device

22 as defined in section 179C(c) which is placed in serv23 ice by a taxpayer who is a supplier of electric energy
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1 or natural gas or a provider of electric energy or nat2 ural gas services.’’.

3 (c) EFFECTIVE DATE.—The amendments made by this

4 section shall apply to property placed in service after the

5 date of the enactment of this Act, in taxable years ending

6 after such date.

7 SEC. 2108. ENERGY CREDIT FOR COMBINED HEAT AND

8 POWER SYSTEM PROPERTY.

9 (a) IN GENERAL.—Subparagraph (A) of section

10 48(a)(3) (defining energy property), as amended by this

11 Act, is amended by striking ‘‘or’’ at the end of clause (ii),

12 by adding ‘‘or’’ at the end of clause (iii), and by inserting

13 after clause (iii) the following new clause:

14 ‘‘(iv) combined heat and power system

15 property,’’.

16 (b) COMBINED HEAT AND POWER SYSTEM PROP17 ERTY.—Subsection (a) of section 48, as amended by this

18 Act, is amended by redesignating paragraphs (5) and (6)

19 as paragraphs (6) and (7), respectively, and by inserting

20 after paragraph (4) the following new paragraph:

21 ‘‘(5) COMBINED HEAT AND POWER SYSTEM PROP22 ERTY.—For purposes of this subsection—

23 ‘‘(A) COMBINED HEAT AND POWER SYSTEM

24 PROPERTY.—The term ‘combined heat and power
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1 system property’ means property comprising a

2 system—

3 ‘‘(i) which uses the same energy source

4 for the simultaneous or sequential genera5 tion of electrical power, mechanical shaft

6 power, or both, in combination with the

7 generation of steam or other forms of useful

8 thermal energy (including heating and cool9 ing applications),

10 ‘‘(ii) which has an electrical capacity

11 of more than 50 kilowatts or a mechanical

12 energy capacity of more than 67 horsepower

13 or an equivalent combination of electrical

14 and mechanical energy capacities,

15 ‘‘(iii) which produces—

16 ‘‘(I) at least 20 percent of its total

17 useful energy in the form of thermal

18 energy, and

19 ‘‘(II) at least 20 percent of its

20 total useful energy in the form of elec21 trical or mechanical power (or com22 bination thereof),

23 ‘‘(iv) the energy efficiency percentage

24 of which exceeds 60 percent (70 percent in

25 the case of a system with an electrical ca-
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1 pacity in excess of 50 megawatts or a me2 chanical energy capacity in excess of 67,000

3 horsepower, or an equivalent combination of

4 electrical and mechanical energy capac5 ities), and

6 ‘‘(v) which is placed in service after

7 December 31, 2002, and before January 1,

8 2007.

9 ‘‘(B) SPECIAL RULES.—

10 ‘‘(i) ENERGY EFFICIENCY PERCENT11 AGE.—For purposes of subparagraph

12 (A)(iv), the energy efficiency percentage of a

13 system is the fraction—

14 ‘‘(I) the numerator of which is the

15 total useful electrical, thermal, and me16 chanical power produced by the system

17 at normal operating rates, and ex18 pected to be consumed in its normal

19 application, and

20 ‘‘(II) the denominator of which is

21 the lower heating value of the primary

22 fuel source for the system.

23 ‘‘(ii) DETERMINATIONS MADE ON BTU

24 BASIS.—The energy efficiency percentage
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1 and the percentages under subparagraph

2 (A)(iii) shall be determined on a Btu basis.

3 ‘‘(iii) INPUT AND OUTPUT PROPERTY

4 NOT INCLUDED.—The term ‘combined heat

5 and power system property’ does not in6 clude property used to transport the energy

7 source to the facility or to distribute energy

8 produced by the facility.

9 ‘‘(iv) PUBLIC UTILITY PROPERTY.—

10 ‘‘(I) ACCOUNTING RULE FOR PUB11 LIC UTILITY PROPERTY.—If the com12 bined heat and power system property

13 is public utility property (as defined

14 in section 168(i)(10)), the taxpayer

15 may only claim the credit under the

16 subsection if, with respect to such prop17 erty, the taxpayer uses a normalization

18 method of accounting.

19 ‘‘(II) CERTAIN EXCEPTION NOT TO

20 APPLY.—The matter following para21 graph (3)(D) shall not apply to com22 bined heat and power system property.

23 ‘‘(v) NONAPPLICATION OF CERTAIN

24 RULES.—For purposes of determining if the

25 term ‘combined heat and power system
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1 property’ includes technologies which gen2 erate electricity or mechanical power using

3 back-pressure steam turbines in place of ex4 isting pressure-reducing valves or which

5 make use of waste heat from industrial

6 processes such as by using organic rankin,

7 stirling, or kalina heat engine systems, sub8 paragraph (A) shall be applied without re9 gard to clauses (iii) and (iv) thereof.

10 ‘‘(C) EXTENSION OF DEPRECIATION RECOV11 ERY PERIOD.—If a taxpayer is allowed credit

12 under this section for combined heat and power

13 system property and such property would (but

14 for this subparagraph) have a class life of 15

15 years or less under section 168, such property

16 shall be treated as having a 22-year class life for

17 purposes of section 168.’’.

18 (c) NO CARRYBACK OF ENERGY CREDIT BEFORE EF19 FECTIVE DATE.—Subsection (d) of section 39, as amended

20 by this Act, is amended by adding at the end the following

21 new paragraph:

22 ‘‘(15) NO CARRYBACK OF ENERGY CREDIT BE23 FORE EFFECTIVE DATE.—No portion of the unused

24 business credit for any taxable year which is attrib25 utable to the energy credit with respect to property
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1 described in section 48(a)(5) may be carried back to

2 a taxable year ending before January 1, 2003.’’.

3 (d) CONFORMING AMENDMENTS.—

4 (A) Section 25C(e)(6), as added by this Act,

5 is amended by striking ‘‘section 48(a)(5)(C)’’

6 and inserting ‘‘section 48(a)(6)(C)’’.

7 (B) Section 29(b)(3)(A)(i)(III), as amended

8 by this Act, is amended by striking ‘‘section

9 48(a)(5)(C)’’ and inserting ‘‘section

10 48(a)(6)(C)’’.

11 (e) EFFECTIVE DATE.—The amendments made by this

12 section shall apply to property placed in service after De13 cember 31, 2002, in taxable years ending after such date.

14 SEC. 2109. CREDIT FOR ENERGY EFFICIENCY IMPROVE15 MENTS TO EXISTING HOMES.

16 (a) IN GENERAL.—Subpart A of part IV of subchapter

17 A of chapter 1 (relating to nonrefundable personal credits),

18 as amended by this Act, is amended by inserting after sec19 tion 25C the following new section:

20 ‘‘SEC. 25D. ENERGY EFFICIENCY IMPROVEMENTS TO EXIST21 ING HOMES.

22 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an indi23 vidual, there shall be allowed as a credit against the tax

24 imposed by this chapter for the taxable year an amount

25 equal to 10 percent of the amount paid or incurred by the
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1 taxpayer for qualified energy efficiency improvements in2 stalled during such taxable year.

3 ‘‘(b) LIMITATIONS.—

4 ‘‘(1) MAXIMUM CREDIT.—The credit allowed by

5 this section with respect to a dwelling shall not exceed

6 $300.

7 ‘‘(2) PRIOR CREDIT AMOUNTS FOR TAXPAYER ON

8 SAME DWELLING TAKEN INTO ACCOUNT.—If a credit

9 was allowed to the taxpayer under subsection (a) with

10 respect to a dwelling in 1 or more prior taxable years,

11 the amount of the credit otherwise allowable for the

12 taxable year with respect to that dwelling shall not

13 exceed the amount of $300 reduced by the sum of the

14 credits allowed under subsection (a) to the taxpayer

15 with respect to the dwelling for all prior taxable

16 years.

17 ‘‘(c) CARRYFORWARD OF UNUSED CREDIT.—If the

18 credit allowable under subsection (a) exceeds the limitation

19 imposed by section 26(a) for such taxable year reduced by

20 the sum of the credits allowable under this subpart (other

21 than this section) for any taxable year, such excess shall

22 be carried to the succeeding taxable year and added to the

23 credit allowable under subsection (a) for such succeeding

24 taxable year.
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1 ‘‘(d) QUALIFIED ENERGY EFFICIENCY IMPROVE2 MENTS.—For purposes of this section, the term ‘qualified

3 energy efficiency improvements’ means any energy efficient

4 building envelope component which is certified to meet or

5 exceed the prescriptive criteria for such component in the

6 2000 International Energy Conservation Code, any energy

7 efficient building envelope component which is described in

8 subsection (f)(4)(B) and is certified by the Energy Star pro9 gram managed jointly by the Environmental Protection

10 Agency and the Department of Energy, or any combination

11 of energy efficiency measures which are certified as achiev12 ing at least a 30 percent reduction in heating and cooling

13 energy usage for the dwelling (as measured in terms of en14 ergy cost to the taxpayer), if—

15 ‘‘(1) such component or combination of measures

16 is installed in or on a dwelling—

17 ‘‘(A) located in the United States, and

18 ‘‘(B) owned and used by the taxpayer as the

19 taxpayer’s principal residence (within the mean20 ing of section 121),

21 ‘‘(2) the original use of such component or com22 bination of measures commences with the taxpayer,

23 and
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1 ‘‘(3) such component or combination of measures

2 reasonably can be expected to remain in use for at

3 least 5 years.

4 ‘‘(e) CERTIFICATION.—

5 ‘‘(1) METHODS OF CERTIFICATION.—

6 ‘‘(A) COMPONENT-BASED METHOD.—The

7 certification described in subsection (d) for any

8 component described in such subsection shall be

9 determined on the basis of applicable energy effi10 ciency ratings (including product labeling re11 quirements) for affected building envelope compo12 nents.

13 ‘‘(B) PERFORMANCE-BASED METHOD.—

14 ‘‘(i) IN GENERAL.—The certification

15 described in subsection (d) for any combina16 tion of measures described in such sub17 section shall be—

18 ‘‘(I) determined by comparing the

19 projected heating and cooling energy

20 usage for the dwelling to such usage for

21 such dwelling in its original condition,

22 and

23 ‘‘(II) accompanied by a written

24 analysis documenting the proper ap25 plication of a permissible energy per-
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1 formance calculation method to the

2 specific circumstances of such dwelling.

3 ‘‘(ii) COMPUTER SOFTWARE.—Com4 puter software shall be used in support of a

5 performance-based method certification

6 under clause (i). Such software shall meet

7 procedures and methods for calculating en8 ergy and cost savings in regulations pro9 mulgated by the Secretary of Energy. Such

10 regulations on the specifications for software

11 and verification protocols shall be based on

12 the 2001 California Residential Alternative

13 Calculation Method Approval Manual.

14 ‘‘(2) PROVIDER.—A certification described in

15 subsection (d) shall be provided by—

16 ‘‘(A) in the case of the method described in

17 paragraph (1)(A), by a third party, such as a

18 local building regulatory authority, a utility, a

19 manufactured home production inspection pri20 mary inspection agency (IPIA), or a home en21 ergy rating organization, or

22 ‘‘(B) in the case of the method described in

23 paragraph (1)(B), an individual recognized by

24 an organization designated by the Secretary for

25 such purposes.
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1 ‘‘(3) FORM.—A certification described in sub2 section (d) shall be made in writing on forms which

3 specify in readily inspectable fashion the energy effi4 cient components and other measures and their re5 spective efficiency ratings, and which include a per6 manent label affixed to the electrical distribution

7 panel of the dwelling.

8 ‘‘(4) REGULATIONS.—

9 ‘‘(A) IN GENERAL.—In prescribing regula10 tions under this subsection for certification meth11 ods described in paragraph (1)(B), the Secretary,

12 after examining the requirements for energy con13 sultants and home energy ratings providers spec14 ified by the Mortgage Industry National Accredi15 tation Procedures for Home Energy Rating Sys16 tems, shall prescribe procedures for calculating

17 annual energy usage and cost reductions for

18 heating and cooling and for the reporting of the

19 results. Such regulations shall—

20 ‘‘(i) provide that any calculation pro21 cedures be fuel neutral such that the same

22 energy efficiency measures allow a dwelling

23 to be eligible for the credit under this sec24 tion regardless of whether such dwelling uses
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1 a gas or oil furnace or boiler or an electric

2 heat pump, and

3 ‘‘(ii) require that any computer soft4 ware allow for the printing of the Federal

5 tax forms necessary for the credit under this

6 section and for the printing of forms for

7 disclosure to the owner of the dwelling.

8 ‘‘(B) PROVIDERS.—For purposes of para9 graph (2)(B), the Secretary shall establish re10 quirements for the designation of individuals

11 based on the requirements for energy consultants

12 and home energy raters specified by the Mort13 gage Industry National Accreditation Procedures

14 for Home Energy Rating Systems.

15 ‘‘(f) DEFINITIONS AND SPECIAL RULES.—For pur16 poses of this section—

17 ‘‘(1) DOLLAR AMOUNTS IN CASE OF JOINT OCCU18 PANCY.—In the case of any dwelling unit which is

19 jointly occupied and used during any calendar year

20 as a residence by 2 or more individuals the following

21 shall apply:

22 ‘‘(A) The amount of the credit allowable

23 under subsection (a) by reason of expenditures

24 for the qualified energy efficiency improvements

25 made during such calendar year by any of such
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1 individuals with respect to such dwelling unit

2 shall be determined by treating all of such indi3 viduals as 1 taxpayer whose taxable year is such

4 calendar year.

5 ‘‘(B) There shall be allowable, with respect

6 to such expenditures to each of such individuals,

7 a credit under subsection (a) for the taxable year

8 in which such calendar year ends in an amount

9 which bears the same ratio to the amount deter10 mined under subparagraph (A) as the amount of

11 such expenditures made by such individual dur12 ing such calendar year bears to the aggregate of

13 such expenditures made by all of such individ14 uals during such calendar year.

15 ‘‘(2) TENANT-STOCKHOLDER IN COOPERATIVE

16 HOUSING CORPORATION.—In the case of an indi17 vidual who is a tenant-stockholder (as defined in sec18 tion 216) in a cooperative housing corporation (as de19 fined in such section), such individual shall be treated

20 as having paid his tenant-stockholder’s proportionate

21 share (as defined in section 216(b)(3)) of the cost of

22 qualified energy efficiency improvements made by

23 such corporation.

24 ‘‘(3) CONDOMINIUMS.—
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1 ‘‘(A) IN GENERAL.—In the case of an indi2 vidual who is a member of a condominium man3 agement association with respect to a condo4 minium which the individual owns, such indi5 vidual shall be treated as having paid the indi6 vidual’s proportionate share of the cost of quali7 fied energy efficiency improvements made by

8 such association.

9 ‘‘(B) CONDOMINIUM MANAGEMENT ASSOCIA10 TION.—For purposes of this paragraph, the term

11 ‘condominium management association’ means

12 an organization which meets the requirements of

13 paragraph (1) of section 528(c) (other than sub14 paragraph (E) thereof) with respect to a condo15 minium project substantially all of the units of

16 which are used as residences.

17 ‘‘(4) BUILDING ENVELOPE COMPONENT.—The

18 term ‘building envelope component’ means—

19 ‘‘(A) insulation material or system which is

20 specifically and primarily designed to reduce the

21 heat loss or gain or a dwelling when installed in

22 or on such dwelling,

23 ‘‘(B) exterior windows (including skylights),

24 and

25 ‘‘(C) exterior doors.
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1 ‘‘(5) MANUFACTURED HOMES INCLUDED.—For

2 purposes of this section, the term ‘dwelling’ includes

3 a manufactured home which conforms to Federal

4 Manufactured Home Construction and Safety Stand5 ards (24 C.F.R. 3280).

6 ‘‘(g) BASIS ADJUSTMENT.—For purposes of this sub7 title, if a credit is allowed under this section for any ex8 penditure with respect to any property, the increase in the

9 basis of such property which would (but for this subsection)

10 result from such expenditure shall be reduced by the amount

11 of the credit so allowed.

12 ‘‘(h) APPLICATION OF SECTION.—Subsection (a) shall

13 apply to qualified energy efficiency improvements installed

14 during the period beginning on the date of the enactment

15 of this section and ending on December 31, 2006.’’.

16 (b) CREDIT ALLOWED AGAINST REGULAR TAX AND

17 ALTERNATIVE MINIMUM TAX.—

18 (1) IN GENERAL.—Section 25D(b), as added by

19 subsection (a), is amended by adding at the end the

20 following new paragraph:

21 ‘‘(3) LIMITATION BASED ON AMOUNT OF TAX.—

22 The credit allowed under subsection (a) for the tax23 able year shall not exceed the excess of—
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1 ‘‘(A) the sum of the regular tax liability (as

2 defined in section 26(b)) plus the tax imposed by

3 section 55, over

4 ‘‘(B) the sum of the credits allowable under

5 this subpart (other than this section) and section

6 27 for the taxable year.’’.

7 (2) CONFORMING AMENDMENTS.—

8 (A) Section 25D(c), as added by subsection

9 (a), is amended by striking ‘‘section 26(a) for

10 such taxable year reduced by the sum of the cred11 its allowable under this subpart (other than this

12 section)’’ and inserting ‘‘subsection (b)(3)’’.

13 (B) Section 23(b)(4)(B), as amended by this

14 Act, is amended by striking ‘‘section 25C’’ and

15 inserting ‘‘sections 25C and 25D’’.

16 (C) Section 24(b)(3)(B), as amended by this

17 Act, is amended by striking ‘‘and 25C’’ and in18 serting ‘‘25C, and 25D’’.

19 (D) Section 25(e)(1)(C), as amended by this

20 Act, is amended by inserting ‘‘25D,’’ after

21 ‘‘25C,’’.

22 (E) Section 25B(g)(2), as amended by this

23 Act, is amended by striking ‘‘23 and 25C’’ and

24 inserting ‘‘23, 25C, and 25D’’.
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1 (F) Section 26(a)(1), as amended by this

2 Act, is amended by striking ‘‘and 25C’’ and in3 serting ‘‘25C, and 25D’’.

4 (G) Section 904(h), as amended by this Act,

5 is amended by striking ‘‘and 25C’’ and inserting

6 ‘‘25C, and 25D’’.

7 (H) Section 1400C(d), as amended by this

8 Act, is amended by striking ‘‘and 25C’’ and in9 serting ‘‘25C, and 25D’’.

10 (c) ADDITIONAL CONFORMING AMENDMENTS.—

11 (1) Section 23(c), as in effect for taxable years

12 beginning before January 1, 2004, and as amended

13 by this Act, is amended by inserting ‘‘, 25D,’’ after

14 ‘‘sections 25C’’.

15 (2) Section 25(e)(1)(C), as in effect for taxable

16 years beginning before January 1, 2004, and as

17 amended by this Act, is amended by inserting ‘‘25D,’’

18 after ‘‘25C,’’.

19 (3) Subsection (a) of section 1016, as amended

20 by this Act, is amended by striking ‘‘and’’ at the end

21 of paragraph (32), by striking the period at the end

22 of paragraph (33) and inserting ‘‘; and’’, and by add23 ing at the end the following new paragraph:
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1 ‘‘(34) to the extent provided in section 25D(f), in

2 the case of amounts with respect to which a credit has

3 been allowed under section 25D.’’.

4 (4) Section 1400C(d), as in effect for taxable

5 years beginning before January 1, 2004, and as

6 amended by this Act, is amended by striking ‘‘section

7 25C’’ and inserting ‘‘sections 25C and 25D’’.

8 (5) The table of sections for subpart A of part IV

9 of subchapter A of chapter 1, as amended by this Act,

10 is amended by inserting after the item relating to sec11 tion 25C the following new item:

‘‘Sec. 25D. Energy efficiency improvements to existing homes.’’.

12 (d) EFFECTIVE DATES.—

13 (1) IN GENERAL.—Except as provided by para14 graph (2), the amendments made by this section shall

15 apply to expenditures after December 31, 2002, in

16 taxable years ending after such date.

17 (2) SUBSECTION (b).—The amendments made by

18 subsection (b) shall apply to taxable years beginning

19 after December 31, 2003.

20 SEC. 2110. ALLOWANCE OF DEDUCTION FOR QUALIFIED

21 NEW OR RETROFITTED WATER SUBMETERING

22 DEVICES.

23 (a) IN GENERAL.—Part VI of subchapter B of chapter

24 1 (relating to itemized deductions for individuals and cor-
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1 porations), as amended by this Act, is amended by inserting

2 after section 179D the following new section:

3 ‘‘SEC. 179E. DEDUCTION FOR QUALIFIED NEW OR RETRO4 FITTED WATER SUBMETERING DEVICES.

5 ‘‘(a) ALLOWANCE OF DEDUCTION.—In the case of a

6 taxpayer who is an eligible resupplier, there shall be allowed

7 as a deduction an amount equal to the cost of each qualified

8 water submetering device placed in service during the tax9 able year.

10 ‘‘(b) MAXIMUM DEDUCTION.—The deduction allowed

11 by this section with respect to each qualified water sub12 metering device shall not exceed $30.

13 ‘‘(c) ELIGIBLE RESUPPLIER.—For purposes of this

14 section, the term ‘eligible resupplier’ means any taxpayer

15 who purchases and installs qualified water submetering de16 vices in every unit in any multi-unit property.

17 ‘‘(d) QUALIFIED WATER SUBMETERING DEVICE.—The

18 term ‘qualified water submetering device’ means any tan19 gible property to which section 168 applies if such property

20 is a submetering device (including ancillary equipment)—

21 ‘‘(1) which is purchased and installed by the tax22 payer to enable consumers to manage their purchase

23 or use of water in response to water price and usage

24 signals, and
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1 ‘‘(2) which permits reading of water price and

2 usage signals on at least a daily basis.

3 ‘‘(e) PROPERTY USED OUTSIDE THE UNITED STATES

4 NOT QUALIFIED.—No deduction shall be allowed under sub5 section (a) with respect to property which is used predomi6 nantly outside the United States or with respect to the por7 tion of the cost of any property taken into account under

8 section 179.

9 ‘‘(f) BASIS REDUCTION.—

10 ‘‘(1) IN GENERAL.—For purposes of this title, the

11 basis of any property shall be reduced by the amount

12 of the deduction with respect to such property which

13 is allowed by subsection (a).

14 ‘‘(2) ORDINARY INCOME RECAPTURE.—For pur15 poses of section 1245, the amount of the deduction al16 lowable under subsection (a) with respect to any

17 property that is of a character subject to the allow18 ance for depreciation shall be treated as a deduction

19 allowed for depreciation under section 167.

20 ‘‘(g) TERMINATION.—This section shall not apply to

21 any property placed in service after December 31, 2007.’’.

22 (b) CONFORMING AMENDMENTS.—

23 (1) Section 263(a)(1), as amended by this Act, is

24 amended by striking ‘‘or’’ at the end of subparagraph

25 (J), by striking the period at the end of subparagraph
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1 (K) and inserting ‘‘, or’’, and by inserting after sub2 paragraph (K) the following new subparagraph:

3 ‘‘(L) expenditures for which a deduction is

4 allowed under section 179E.’’.

5 (2) Section 312(k)(3)(B), as amended by this

6 Act, is amended by striking ‘‘or 179D’’ each place it

7 appears in the heading and text and inserting ‘‘,

8 179D, or 179E’’.

9 (3) Section 1016(a), as amended by this Act, is

10 amended by striking ‘‘and’’ at the end of paragraph

11 (34), by striking the period at the end of paragraph

12 (35) and inserting ‘‘, and’’, and by adding at the end

13 the following new paragraph:

14 ‘‘(36) to the extent provided in section

15 179E(f)(1).’’.

16 (4) Section 1245(a), as amended by this Act, is

17 amended by inserting ‘‘179E,’’ after ‘‘179D,’’ both

18 places it appears in paragraphs (2)(C) and (3)(C).

19 (5) The table of contents for subpart B of part

20 IV of subchapter A of chapter 1, as amended by this

21 Act, is amended by inserting after the item relating

22 to section 179D the following new item:

‘‘Sec. 179E. Deduction for qualified new or retrofitted water submetering devices.’’.

23 (c) EFFECTIVE DATE.—The amendments made by this

24 section shall apply to qualified water submetering devices
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1 placed in service after the date of the enactment of this Act,

2 in taxable years ending after such date.

3 SEC. 2111. THREE-YEAR APPLICABLE RECOVERY PERIOD

4 FOR DEPRECIATION OF QUALIFIED WATER

5 SUBMETERING DEVICES.

6 (a) IN GENERAL.—Subparagraph (A) of section

7 168(e)(3) (relating to classification of property) is amended

8 by striking ‘‘and’’ at the end of clause (iii), by striking the

9 period at the end of clause (iv) and inserting ‘‘, and’’, and

10 by adding at the end the following new clause:

11 ‘‘(v) any qualified water submetering

12 device.’’.

13 (b) DEFINITION OF QUALIFIED WATER SUBMETERING

14 DEVICE.—Section 168(i) (relating to definitions and spe15 cial rules), as amended by this Act, is amended by inserting

16 at the end the following new paragraph:

17 ‘‘(16) QUALIFIED WATER SUBMETERING DE18 VICE.—The term ‘qualified water submetering device’

19 means any qualified water submetering device (as de20 fined in section 179E(d)) which is placed in service

21 before January 1, 2008, by a taxpayer who is an eli22 gible resupplier (as defined in section 179E(c)).’’.

23 (c) EFFECTIVE DATE.—The amendments made by this

24 section shall apply to property placed in service after the
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1 date of the enactment of this Act, in taxable years ending

2 after such date.

3 TITLE XXII—CLEAN COAL

4 INCENTIVES

5 Subtitle A—Credit for Emission Re6 ductions and Efficiency Improve7 ments in Existing Coal-Based

8 Electricity Generation Facilities

9 SEC. 2201. CREDIT FOR PRODUCTION FROM A QUALIFYING

10 CLEAN COAL TECHNOLOGY UNIT.

11 (a) CREDIT FOR PRODUCTION FROM A QUALIFYING

12 CLEAN COAL TECHNOLOGY UNIT.—Subpart D of part IV

13 of subchapter A of chapter 1 (relating to business related

14 credits), as amended by this Act, is amended by adding at

15 the end the following new section:

16 ‘‘SEC. 45I. CREDIT FOR PRODUCTION FROM A QUALIFYING

17 CLEAN COAL TECHNOLOGY UNIT.

18 ‘‘(a) GENERAL RULE.—For purposes of section 38, the

19 qualifying clean coal technology production credit of any

20 taxpayer for any taxable year is equal to the product of—

21 ‘‘(1) the applicable amount of clean coal tech22 nology production credit, multiplied by

23 ‘‘(2) the applicable percentage of the kilowatt

24 hours of electricity produced by the taxpayer during

25 such taxable year at a qualifying clean coal tech-
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1 nology unit, but only if such production occurs dur2 ing the 10-year period beginning on the date the unit

3 was returned to service after becoming a qualifying

4 clean coal technology unit.

5 ‘‘(b) APPLICABLE AMOUNT.—

6 ‘‘(1) IN GENERAL.—For purposes of this section,

7 the applicable amount of clean coal technology pro8 duction credit is equal to $0.0034.

9 ‘‘(2) INFLATION ADJUSTMENT.—For calendar

10 years after 2003, the applicable amount of clean coal

11 technology production credit shall be adjusted by mul12 tiplying such amount by the inflation adjustment fac13 tor for the calendar year in which the amount is ap14 plied. If any amount as increased under the pre15 ceding sentence is not a multiple of 0.01 cent, such

16 amount shall be rounded to the nearest multiple of

17 0.01 cent.

18 ‘‘(c) APPLICABLE PERCENTAGE.—For purposes of this

19 section, with respect to any qualifying clean coal technology

20 unit, the applicable percentage is the percentage equal to

21 the ratio which the portion of the national megawatt capac22 ity limitation allocated to the taxpayer with respect to such

23 unit under subsection (e) bears to the total megawatt capac24 ity of such unit.
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1 ‘‘(d) DEFINITIONS AND SPECIAL RULES.—For pur2 poses of this section—

3 ‘‘(1) QUALIFYING CLEAN COAL TECHNOLOGY

4 UNIT.—The term ‘qualifying clean coal technology

5 unit’ means a clean coal technology unit of the tax6 payer which—

7 ‘‘(A) on the date of the enactment of this

8 section was a coal-based electricity generating

9 steam generator-turbine unit which was not a

10 clean coal technology unit,

11 ‘‘(B) has a nameplate capacity rating of

12 not more than 300,000 kilowatts,

13 ‘‘(C) becomes a clean coal technology unit

14 as the result of the retrofitting, repowering, or

15 replacement of the unit with clean coal tech16 nology during the 10-year period beginning on

17 the date of the enactment of this section,

18 ‘‘(D) is not receiving nor is scheduled to re19 ceive funding under the Clean Coal Technology

20 Program, the Power Plant Improvement Initia21 tive, or the Clean Coal Power Initiative admin22 istered by the Secretary of Energy, and

23 ‘‘(E) receives an allocation of a portion of

24 the national megawatt capacity limitation under

25 subsection (e).
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1 ‘‘(2) CLEAN COAL TECHNOLOGY UNIT.—The term

2 ‘clean coal technology unit’ means a unit which—

3 ‘‘(A) uses clean coal technology, including

4 advanced pulverized coal or atmospheric fluid5 ized bed combustion, pressurized fluidized bed

6 combustion, integrated gasification combined

7 cycle, or any other technology for the production

8 of electricity,

9 ‘‘(B) uses coal to produce 75 percent or

10 more of its thermal output as electricity,

11 ‘‘(C) has a design net heat rate of at least

12 500 less than that of such unit as described in

13 paragraph (1)(A),

14 ‘‘(D) has a maximum design net heat rate

15 of not more than 9,500, and

16 ‘‘(E) meets the pollution control require17 ments of paragraph (3).

18 ‘‘(3) POLLUTION CONTROL REQUIREMENTS.—

19 ‘‘(A) IN GENERAL.—A unit meets the re20 quirements of this paragraph if—

21 ‘‘(i) its emissions of sulfur dioxide, ni22 trogen oxide, or particulates meet the lower

23 of the emission levels for each such emission

24 specified in—

25 ‘‘(I) subparagraph (B), or
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1 ‘‘(II) the new source performance

2 standards of the Clean Air Act (42

3 U.S.C. 7411) which are in effect for the

4 category of source at the time of the

5 retrofitting, repowering, or replacement

6 of the unit, and

7 ‘‘(ii) its emissions do not exceed any

8 relevant emission level specified by regula9 tion pursuant to the hazardous air pollut10 ant requirements of the Clean Air Act (42

11 U.S.C. 7412) in effect at the time of the ret12 rofitting, repowering, or replacement.

13 ‘‘(B) SPECIFIC LEVELS.—The levels speci14 fied in this subparagraph are—

15 ‘‘(i) in the case of sulfur dioxide emis16 sions, 50 percent of the sulfur dioxide emis17 sion levels specified in the new source per18 formance standards of the Clean Air Act

19 (42 U.S.C. 7411) in effect on the date of the

20 enactment of this section for the category of

21 source,

22 ‘‘(ii) in the case of nitrogen oxide

23 emissions—
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1 ‘‘(I) 0.1 pound per million Btu of

2 heat input if the unit is not a cyclone3 fired boiler, and

4 ‘‘(II) if the unit is a cyclone-fired

5 boiler, 15 percent of the uncontrolled

6 nitrogen oxide emissions from such

7 boilers, and

8 ‘‘(iii) in the case of particulate emis9 sions, 0.02 pound per million Btu of heat

10 input.

11 ‘‘(4) DESIGN NET HEAT RATE.—The design net

12 heat rate with respect to any unit, measured in Btu

13 per kilowatt hour (HHV)—

14 ‘‘(A) shall be based on the design annual

15 heat input to and the design annual net elec16 trical output from such unit (determined without

17 regard to such unit’s co-generation of steam),

18 ‘‘(B) shall be adjusted for the heat content

19 of the design coal to be used by the unit if it is

20 less than 12,000 Btu per pound according to the

21 following formula:

22 Design net heat rate = Unit net heat rate X [l23 {((12,000-design coal heat content, Btu per pound)/

24 1,000) X 0.013}], and
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1 ‘‘(C) shall be corrected for the site reference

2 conditions of—

3 ‘‘(i) elevation above sea level of 500 feet,

4 ‘‘(ii) air pressure of 14.4 pounds per square inch

5 absolute (psia),

6 ‘‘(iii) temperature, dry bulb of 63°F,

7 ‘‘(iv) temperature, wet bulb of 54°F, and

8 ‘‘(v) relative humidity of 55 percent.

9 ‘‘(5) HHV.—The term ‘HHV’ means higher

10 heating value.

11 ‘‘(6) APPLICATION OF CERTAIN RULES.—The

12 rules of paragraphs (3), (4), and (5) of section 45(d)

13 shall apply.

14 ‘‘(7) INFLATION ADJUSTMENT FACTOR.—

15 ‘‘(A) IN GENERAL.—The term ‘inflation ad16 justment factor’ means, with respect to a cal17 endar year, a fraction the numerator of which is

18 the GDP implicit price deflator for the preceding

19 calendar year and the denominator of which is

20 the GDP implicit price deflator for the calendar

21 year 2002.

22 ‘‘(B) GDP IMPLICIT PRICE DEFLATOR.—

23 The term ‘GDP implicit price deflator’ means

24 the most recent revision of the implicit price

25 deflator for the gross domestic product as com-
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1 puted by the Department of Commerce before

2 March 15 of the calendar year.

3 ‘‘(8) NONCOMPLIANCE WITH POLLUTION LAWS.—

4 For purposes of this section, a unit which is not in

5 compliance with the applicable State and Federal pol6 lution prevention, control, and permit requirements

7 for any period of time shall not be considered to be

8 a qualifying clean coal technology unit during such

9 period.

10 ‘‘(e) NATIONAL LIMITATION ON THE AGGREGATE CA11 PACITY OF QUALIFYING CLEAN COAL TECHNOLOGY

12 UNITS.—

13 ‘‘(1) IN GENERAL.—For purposes of subsection

14 (d)(1)(E), the national megawatt capacity limitation

15 for qualifying clean coal technology units is 4,000

16 megawatts.

17 ‘‘(2) ALLOCATION OF LIMITATION.—The Sec18 retary shall allocate the national megawatt capacity

19 limitation for qualifying clean coal technology units

20 in such manner as the Secretary may prescribe under

21 the regulations under paragraph (3).

22 ‘‘(3) REGULATIONS.—Not later than 6 months

23 after the date of the enactment of this section, the Sec24 retary shall prescribe such regulations as may be nec25 essary or appropriate—
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1 ‘‘(A) to carry out the purposes of this sub2 section,

3 ‘‘(B) to limit the capacity of any qualifying

4 clean coal technology unit to which this section

5 applies so that the combined megawatt capacity

6 allocated to all such units under this subsection

7 when all such units are placed in service during

8 the 10-year period described in subsection

9 (d)(1)(C), does not exceed 4,000 megawatts,

10 ‘‘(C) to provide a certification process under

11 which the Secretary, in consultation with the

12 Secretary of Energy, shall approve and allocate

13 the national megawatt capacity limitation—

14 ‘‘(i) to encourage that units with the

15 highest thermal efficiencies, when adjusted

16 for the heat content of the design coal and

17 site reference conditions described in sub18 section (d)(4)(C), and environmental per19 formance be placed in service as soon as

20 possible,

21 ‘‘(ii) to allocate capacity to taxpayers

22 that have a definite and credible plan for

23 placing into commercial operation a quali24 fying clean coal technology unit,

25 including—
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1 ‘‘(I) a site,

2 ‘‘(II) contractual commitments for

3 procurement and construction or, in

4 the case of regulated utilities, the

5 agreement of the State utility commis6 sion,

7 ‘‘(III) filings for all necessary

8 preconstruction approvals,

9 ‘‘(IV) a demonstrated record of

10 having successfully completed com11 parable projects on a timely basis, and

12 ‘‘(V) such other factors that the

13 Secretary determines are appropriate,

14 ‘‘(D) to allocate the national megawatt ca15 pacity limitation to a portion of the capacity of

16 a qualifying clean coal technology unit if the

17 Secretary determines that such an allocation

18 would maximize the amount of efficient produc19 tion encouraged with the available tax credits,

20 ‘‘(E) to set progress requirements and con21 ditional approvals so that capacity allocations

22 for clean coal technology units that become un23 likely to meet the necessary conditions for quali24 fying can be reallocated by the Secretary to other

25 clean coal technology units, and
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1 ‘‘(F) to provide taxpayers with opportuni2 ties to correct administrative errors and omis3 sions with respect to allocations and record keep4 ing within a reasonable period after discovery,

5 taking into account the availability of regula6 tions and other administrative guidance from

7 the Secretary.’’.

8 (b) CREDIT TREATED AS BUSINESS CREDIT.—Section

9 38(b), as amended by this Act, is amended by striking

10 ‘‘plus’’ at the end of paragraph (18), by striking the period

11 at the end of paragraph (19) and inserting ‘‘, plus’’, and

12 by adding at the end the following new paragraph:

13 ‘‘(20) the qualifying clean coal technology pro14 duction credit determined under section 45I(a).’’.

15 (c) TRANSITIONAL RULE.—Section 39(d) (relating to

16 transitional rules), as amended by this Act, is amended by

17 adding at the end the following new paragraph:

18 ‘‘(16) NO CARRYBACK OF SECTION 45I CREDIT

19 BEFORE EFFECTIVE DATE.—No portion of the unused

20 business credit for any taxable year which is attrib21 utable to the qualifying clean coal technology produc22 tion credit determined under section 45I may be car23 ried back to a taxable year ending on or before the

24 date of the enactment of section 45I.’’.
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1 (d) CLERICAL AMENDMENT.—The table of sections for

2 subpart D of part IV of subchapter A of chapter 1, as

3 amended by this Act, is amended by adding at the end the

4 following new item:

‘‘Sec. 45I. Credit for production from a qualifying clean coal technology unit.’’.

5 (e) EFFECTIVE DATE.—The amendments made by this

6 section shall apply to production after the date of the enact7 ment of this Act, in taxable years ending after such date.

8 Subtitle B—Incentives for Early

9 Commercial Applications of Ad10 vanced Clean Coal Technologies

11 SEC. 2211. CREDIT FOR INVESTMENT IN QUALIFYING AD12 VANCED CLEAN COAL TECHNOLOGY.

13 (a) ALLOWANCE OF QUALIFYING ADVANCED CLEAN

14 COAL TECHNOLOGY UNIT CREDIT.—Section 46 (relating to

15 amount of credit) is amended by striking ‘‘and’’ at the end

16 of paragraph (2), by striking the period at the end of para17 graph (3) and inserting ‘‘, and’’, and by adding at the end

18 the following new paragraph:

19 ‘‘(4) the qualifying advanced clean coal tech20 nology unit credit.’’.

21 (b) AMOUNT OF QUALIFYING ADVANCED CLEAN COAL

22 TECHNOLOGY UNIT CREDIT.—Subpart E of part IV of sub23 chapter A of chapter 1 (relating to rules for computing in24 vestment credit) is amended by inserting after section 48

25 the following new section:
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1 ‘‘SEC. 48A. QUALIFYING ADVANCED CLEAN COAL TECH2 NOLOGY UNIT CREDIT.

3 ‘‘(a) IN GENERAL.—For purposes of section 46, the

4 qualifying advanced clean coal technology unit credit for

5 any taxable year is an amount equal to 10 percent of the

6 applicable percentage of the qualified investment in a quali7 fying advanced clean coal technology unit for such taxable

8 year.

9 ‘‘(b) QUALIFYING ADVANCED CLEAN COAL TECH10 NOLOGY UNIT.—

11 ‘‘(1) IN GENERAL.—For purposes of subsection

12 (a), the term ‘qualifying advanced clean coal tech13 nology unit’ means an advanced clean coal technology

14 unit of the taxpayer—

15 ‘‘(A)(i)(I) in the case of a unit first placed

16 in service after the date of the enactment of this

17 section, the original use of which commences

18 with the taxpayer, or

19 ‘‘(II) in the case of the retrofitting or

20 repowering of a unit first placed in service before

21 such date of enactment, the retrofitting or

22 repowering of which is completed by the tax23 payer after such date, or

24 ‘‘(ii) which is acquired through purchase

25 (as defined by section 179(d)(2)),

26 ‘‘(B) which is depreciable under section 167,
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1 ‘‘(C) which has a useful life of not less than

2 4 years,

3 ‘‘(D) which is located in the United States,

4 ‘‘(E) which is not receiving nor is scheduled

5 to receive funding under the Clean Coal Tech6 nology Program, the Power Plant Improvement

7 Initiative, or the Clean Coal Power Initiative

8 administered by the Secretary of Energy,

9 ‘‘(F) which is not a qualifying clean coal

10 technology unit, and

11 ‘‘(G) which receives an allocation of a por12 tion of the national megawatt capacity limita13 tion under subsection (f).

14 ‘‘(2) SPECIAL RULE FOR SALE-LEASEBACKS.—

15 For purposes of subparagraph (A) of paragraph (1),

16 in the case of a unit which—

17 ‘‘(A) is originally placed in service by a

18 person, and

19 ‘‘(B) is sold and leased back by such person,

20 or is leased to such person, within 3 months after

21 the date such unit was originally placed in serv22 ice, for a period of not less than 12 years,

23 such unit shall be treated as originally placed in serv24 ice not earlier than the date on which such unit is

25 used under the leaseback (or lease) referred to in sub-
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1 paragraph (B). The preceding sentence shall not

2 apply to any property if the lessee and lessor of such

3 property make an election under this sentence. Such

4 an election, once made, may be revoked only with the

5 consent of the Secretary.

6 ‘‘(3) NONCOMPLIANCE WITH POLLUTION LAWS.—

7 For purposes of this subsection, a unit which is not

8 in compliance with the applicable State and Federal

9 pollution prevention, control, and permit require10 ments for any period of time shall not be considered

11 to be a qualifying advanced clean coal technology

12 unit during such period.

13 ‘‘(c) APPLICABLE PERCENTAGE.—For purposes of this

14 section, with respect to any qualifying advanced clean coal

15 technology unit, the applicable percentage is the percentage

16 equal to the ratio which the portion of the national mega17 watt capacity limitation allocated to the taxpayer with re18 spect to such unit under subsection (f) bears to the total

19 megawatt capacity of such unit.

20 ‘‘(d) ADVANCED CLEAN COAL TECHNOLOGY UNIT.—

21 For purposes of this section—

22 ‘‘(1) IN GENERAL.—The term ‘advanced clean

23 coal technology unit’ means a new, retrofit, or

24 repowering unit of the taxpayer which—

25 ‘‘(A) is—
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1 ‘‘(i) an eligible advanced pulverized

2 coal or atmospheric fluidized bed combus3 tion technology unit,

4 ‘‘(ii) an eligible pressurized fluidized

5 bed combustion technology unit,

6 ‘‘(iii) an eligible integrated gasifi7 cation combined cycle technology unit, or

8 ‘‘(iv) an eligible other technology unit,

9 and

10 ‘‘(B) meets the carbon emission rate require11 ments of paragraph (6).

12 ‘‘(2) ELIGIBLE ADVANCED PULVERIZED COAL OR

13 ATMOSPHERIC FLUIDIZED BED COMBUSTION TECH14 NOLOGY UNIT.—The term ‘eligible advanced pulver15 ized coal or atmospheric fluidized bed combustion

16 technology unit’ means a clean coal technology unit

17 using advanced pulverized coal or atmospheric fluid18 ized bed combustion technology which—

19 ‘‘(A) is placed in service after the date of

20 the enactment of this section and before January

21 1, 2013, and

22 ‘‘(B) has a design net heat rate of not more

23 than 8,350 (8,750 in the case of units placed in

24 service before 2009).
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1 ‘‘(3) ELIGIBLE PRESSURIZED FLUIDIZED BED

2 COMBUSTION TECHNOLOGY UNIT.—The term ‘eligible

3 pressurized fluidized bed combustion technology unit’

4 means a clean coal technology unit using pressurized

5 fluidized bed combustion technology which—

6 ‘‘(A) is placed in service after the date of

7 the enactment of this section and before January

8 1, 2017, and

9 ‘‘(B) has a design net heat rate of not more

10 than 7,720 (8,750 in the case of units placed in

11 service before 2009, and 8,350 in the case of

12 units placed in service after 2008 and before

13 2013).

14 ‘‘(4) ELIGIBLE INTEGRATED GASIFICATION COM15 BINED CYCLE TECHNOLOGY UNIT.—The term ‘eligible

16 integrated gasification combined cycle technology

17 unit’ means a clean coal technology unit using inte18 grated gasification combined cycle technology, with or

19 without fuel or chemical co-production, which—

20 ‘‘(A) is placed in service after the date of

21 the enactment of this section and before January

22 1, 2017,

23 ‘‘(B) has a design net heat rate of not more

24 than 7,720 (8,750 in the case of units placed in

25 service before 2009, and 8,350 in the case of
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1 units placed in service after 2008 and before

2 2013), and

3 ‘‘(C) has a net thermal efficiency (HHV)

4 using coal with fuel or chemical co-production of

5 not less than 43.9 percent (39 percent in the case

6 of units placed in service before 2009, and 40.9

7 percent in the case of units placed in service

8 after 2008 and before 2013).

9 ‘‘(5) ELIGIBLE OTHER TECHNOLOGY UNIT.—The

10 term ‘eligible other technology unit’ means a clean

11 coal technology unit using any other technology for

12 the production of electricity which is placed in service

13 after the date of the enactment of this section and be14 fore January 1, 2017.

15 ‘‘(6) CARBON EMISSION RATE REQUIREMENTS.—

16 ‘‘(A) IN GENERAL.—Except as provided in

17 subparagraph (B), a unit meets the requirements

18 of this paragraph if—

19 ‘‘(i) in the case of a unit using design

20 coal with a heat content of not more than

21 9,000 Btu per pound, the carbon emission

22 rate is less than 0.60 pound of carbon per

23 kilowatt hour, and

24 ‘‘(ii) in the case of a unit using design

25 coal with a heat content of more than 9,000
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1 Btu per pound, the carbon emission rate is

2 less than 0.54 pound of carbon per kilowatt

3 hour.

4 ‘‘(B) ELIGIBLE OTHER TECHNOLOGY

5 UNIT.—In the case of an eligible other technology

6 unit, subparagraph (A) shall be applied by sub7 stituting ‘0.51’ and ‘0.459’ for ‘0.60’ and ‘0.54’,

8 respectively.

9 ‘‘(e) GENERAL DEFINITIONS.—Any term used in this

10 section which is also used in section 45I shall have the

11 meaning given such term in section 45I.

12 ‘‘(f) NATIONAL LIMITATION ON THE AGGREGATE CA13 PACITY OF ADVANCED CLEAN COAL TECHNOLOGY UNITS.—

14 ‘‘(1) IN GENERAL.—For purposes of subsection

15 (b)(1)(G), the national megawatt capacity limitation

16 is—

17 ‘‘(A) for qualifying advanced clean coal

18 technology units using advanced pulverized coal

19 or atmospheric fluidized bed combustion tech20 nology, not more than 1,000 megawatts (not

21 more than 500 megawatts in the case of units

22 placed in service before 2009),

23 ‘‘(B) for such units using pressurized fluid24 ized bed combustion technology, not more than
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1 500 megawatts (not more than 250 megawatts in

2 the case of units placed in service before 2009),

3 ‘‘(C) for such units using integrated gasifi4 cation combined cycle technology, with or with5 out fuel or chemical co-production, not more

6 than 2,000 megawatts (not more than 1,000

7 megawatts in the case of units placed in service

8 before 2009 and not more than 1,500 megawatts

9 in the case of units placed in service after 2008

10 and before 2013), and

11 ‘‘(D) for such units using other technology

12 for the production of electricity, not more than

13 500 megawatts (not more than 250 megawatts in

14 the case of units placed in service before 2009).

15 ‘‘(2) ALLOCATION OF LIMITATION.—The Sec16 retary shall allocate the national megawatt capacity

17 limitation for qualifying advanced clean coal tech18 nology units in such manner as the Secretary may

19 prescribe under the regulations under paragraph (3).

20 ‘‘(3) REGULATIONS.—Not later than 6 months

21 after the date of the enactment of this section, the Sec22 retary shall prescribe such regulations as may be nec23 essary or appropriate—

24 ‘‘(A) to carry out the purposes of this sub25 section and section 45J,
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1 ‘‘(B) to limit the capacity of any qualifying

2 advanced clean coal technology unit to which

3 this section applies so that the combined mega4 watt capacity of all such units to which this sec5 tion applies does not exceed 4,000 megawatts,

6 ‘‘(C) to provide a certification process de7 scribed in section 45I(e)(3)(C),

8 ‘‘(D) to carry out the purposes described in

9 subparagraphs (D), (E), and (F) of section

10 45I(e)(3), and

11 ‘‘(E) to reallocate capacity which is not al12 located to any technology described in subpara13 graphs (A) through (D) of paragraph (1) because

14 an insufficient number of qualifying units re15 quest an allocation for such technology, to an16 other technology described in such subparagraphs

17 in order to maximize the amount of energy effi18 cient production encouraged with the available

19 tax credits.

20 ‘‘(4) SELECTION CRITERIA.—For purposes of

21 paragraph (3)(C), the selection criteria for allocating

22 the national megawatt capacity limitation to quali23 fying advanced clean coal technology units—

24 ‘‘(A) shall be established by the Secretary of

25 Energy as part of a competitive solicitation,
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1 ‘‘(B) shall include primary criteria of min2 imum design net heat rate, maximum design

3 thermal efficiency, environmental performance,

4 and lowest cost to the Government, and

5 ‘‘(C) shall include supplemental criteria as

6 determined appropriate by the Secretary of En7 ergy.

8 ‘‘(g) QUALIFIED INVESTMENT.—For purposes of sub9 section (a), the term ‘qualified investment’ means, with re10 spect to any taxable year, the basis of a qualifying advanced

11 clean coal technology unit placed in service by the taxpayer

12 during such taxable year (in the case of a unit described

13 in subsection (b)(1)(A)(i)(II), only that portion of the basis

14 of such unit which is properly attributable to the retro15 fitting or repowering of such unit).

16 ‘‘(h) QUALIFIED PROGRESS EXPENDITURES.—

17 ‘‘(1) INCREASE IN QUALIFIED INVESTMENT.—In

18 the case of a taxpayer who has made an election

19 under paragraph (5), the amount of the qualified in20 vestment of such taxpayer for the taxable year (deter21 mined under subsection (g) without regard to this

22 subsection) shall be increased by an amount equal to

23 the aggregate of each qualified progress expenditure

24 for the taxable year with respect to progress expendi25 ture property.
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1 ‘‘(2) PROGRESS EXPENDITURE PROPERTY DE2 FINED.—For purposes of this subsection, the term

3 ‘progress expenditure property’ means any property

4 being constructed by or for the taxpayer and which it

5 is reasonable to believe will qualify as a qualifying

6 advanced clean coal technology unit which is being

7 constructed by or for the taxpayer when it is placed

8 in service.

9 ‘‘(3) QUALIFIED PROGRESS EXPENDITURES DE10 FINED.—For purposes of this subsection—

11 ‘‘(A) SELF-CONSTRUCTED PROPERTY.—In

12 the case of any self-constructed property, the

13 term ‘qualified progress expenditures’ means the

14 amount which, for purposes of this subpart, is

15 properly chargeable (during such taxable year)

16 to capital account with respect to such property.

17 ‘‘(B) NONSELF-CONSTRUCTED PROPERTY.—

18 In the case of nonself-constructed property, the

19 term ‘qualified progress expenditures’ means the

20 amount paid during the taxable year to another

21 person for the construction of such property.

22 ‘‘(4) OTHER DEFINITIONS.—For purposes of this

23 subsection—

24 ‘‘(A) SELF-CONSTRUCTED PROPERTY.—The

25 term ‘self-constructed property’ means property
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1 for which it is reasonable to believe that more

2 than half of the construction expenditures will be

3 made directly by the taxpayer.

4 ‘‘(B) NONSELF-CONSTRUCTED PROPERTY.—

5 The term ‘nonself-constructed property’ means

6 property which is not self-constructed property.

7 ‘‘(C) CONSTRUCTION, ETC.—The term ‘con8 struction’ includes reconstruction and erection,

9 and the term ‘constructed’ includes reconstructed

10 and erected.

11 ‘‘(D) ONLY CONSTRUCTION OF QUALIFYING

12 ADVANCED CLEAN COAL TECHNOLOGY UNIT TO

13 BE TAKEN INTO ACCOUNT.—Construction shall be

14 taken into account only if, for purposes of this

15 subpart, expenditures therefor are properly

16 chargeable to capital account with respect to the

17 property.

18 ‘‘(5) ELECTION.—An election under this sub19 section may be made at such time and in such man20 ner as the Secretary may by regulations prescribe.

21 Such an election shall apply to the taxable year for

22 which made and to all subsequent taxable years. Such

23 an election, once made, may not be revoked except

24 with the consent of the Secretary.
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1 ‘‘(i) COORDINATION WITH OTHER CREDITS.—This

2 section shall not apply to any property with respect to

3 which the rehabilitation credit under section 47 or the en4 ergy credit under section 48 is allowed unless the taxpayer

5 elects to waive the application of such credit to such prop6 erty.’’.

7 (c) RECAPTURE.—Section 50(a) (relating to other spe8 cial rules) is amended by adding at the end the following

9 new paragraph:

10 ‘‘(6) SPECIAL RULES RELATING TO QUALIFYING

11 ADVANCED CLEAN COAL TECHNOLOGY UNIT.—For

12 purposes of applying this subsection in the case of

13 any credit allowable by reason of section 48A, the fol14 lowing shall apply:

15 ‘‘(A) GENERAL RULE.—In lieu of the

16 amount of the increase in tax under paragraph

17 (1), the increase in tax shall be an amount equal

18 to the investment tax credit allowed under sec19 tion 38 for all prior taxable years with respect

20 to a qualifying advanced clean coal technology

21 unit (as defined by section 48A(b)(1)) multiplied

22 by a fraction whose numerator is the number of

23 years remaining to fully depreciate under this

24 title the qualifying advanced clean coal tech25 nology unit disposed of, and whose denominator
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1 is the total number of years over which such unit

2 would otherwise have been subject to deprecia3 tion. For purposes of the preceding sentence, the

4 year of disposition of the qualifying advanced

5 clean coal technology unit shall be treated as a

6 year of remaining depreciation.

7 ‘‘(B) PROPERTY CEASES TO QUALIFY FOR

8 PROGRESS EXPENDITURES.—Rules similar to the

9 rules of paragraph (2) shall apply in the case of

10 qualified progress expenditures for a qualifying

11 advanced clean coal technology unit under sec12 tion 48A, except that the amount of the increase

13 in tax under subparagraph (A) of this para14 graph shall be substituted for the amount de15 scribed in such paragraph (2).

16 ‘‘(C) APPLICATION OF PARAGRAPH.—This

17 paragraph shall be applied separately with re18 spect to the credit allowed under section 38 re19 garding a qualifying advanced clean coal tech20 nology unit.’’.

21 (d) TRANSITIONAL RULE.—Section 39(d) (relating to

22 transitional rules), as amended by this Act, is amended by

23 adding at the end the following new paragraph:

24 ‘‘(17) NO CARRYBACK OF SECTION 48A CREDIT

25 BEFORE EFFECTIVE DATE.—No portion of the unused
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1 business credit for any taxable year which is attrib2 utable to the qualifying advanced clean coal tech3 nology unit credit determined under section 48A may

4 be carried back to a taxable year ending on or before

5 the date of the enactment of section 48A.’’.

6 (e) TECHNICAL AMENDMENTS.—

7 (1) Section 49(a)(1)(C) is amended by striking

8 ‘‘and’’ at the end of clause (ii), by striking the period

9 at the end of clause (iii) and inserting ‘‘, and’’, and

10 by adding at the end the following new clause:

11 ‘‘(iv) the portion of the basis of any

12 qualifying advanced clean coal technology

13 unit attributable to any qualified invest14 ment (as defined by section 48A(g)).’’.

15 (2) Section 50(a)(4) is amended by striking

16 ‘‘and (2)’’ and inserting ‘‘(2), and (6)’’.

17 (3) Section 50(c) is amended by adding at the

18 end the following new paragraph:

19 ‘‘(6) NONAPPLICATION.—Paragraphs (1) and (2)

20 shall not apply to any qualifying advanced clean coal

21 technology unit credit under section 48A.’’.

22 (4) The table of sections for subpart E of part IV

23 of subchapter A of chapter 1 is amended by inserting

24 after the item relating to section 48 the following new

25 item:

‘‘Sec. 48A. Qualifying advanced clean coal technology unit credit.’’.
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1 (f) EFFECTIVE DATE.—The amendments made by this

2 section shall apply to periods after the date of the enactment

3 of this Act, under rules similar to the rules of section 48(m)

4 of the Internal Revenue Code of 1986 (as in effect on the

5 day before the date of the enactment of the Revenue Rec6 onciliation Act of 1990).

7 SEC. 2212. CREDIT FOR PRODUCTION FROM A QUALIFYING

8 ADVANCED CLEAN COAL TECHNOLOGY UNIT.

9 (a) IN GENERAL.—Subpart D of part IV of subchapter

10 A of chapter 1 (relating to business related credits), as

11 amended by this Act, is amended by adding at the end the

12 following new section:

13 ‘‘SEC. 45J. CREDIT FOR PRODUCTION FROM A QUALIFYING

14 ADVANCED CLEAN COAL TECHNOLOGY UNIT.

15 ‘‘(a) GENERAL RULE.—For purposes of section 38, the

16 qualifying advanced clean coal technology production credit

17 of any taxpayer for any taxable year is equal to—

18 ‘‘(1) the applicable amount of advanced clean

19 coal technology production credit, multiplied by

20 ‘‘(2) the applicable percentage (as determined

21 under section 48A(c)) of the sum of—

22 ‘‘(A) the kilowatt hours of electricity, plus

23 ‘‘(B) each 3,413 Btu of fuels or chemicals,

24 produced by the taxpayer during such taxable year at

25 a qualifying advanced clean coal technology unit dur-
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1 ing the 10-year period beginning on the date the unit

2 was originally placed in service (or returned to serv3 ice after becoming a qualifying advanced clean coal

4 technology unit).

5 ‘‘(b) APPLICABLE AMOUNT.—For purposes of this sec6 tion, the applicable amount of advanced clean coal tech7 nology production credit with respect to production from

8 a qualifying advanced clean coal technology unit shall be

9 determined as follows:

10 ‘‘(1) Where the qualifying advanced clean coal

11 technology unit is producing electricity only:

12 ‘‘(A) In the case of a unit originally placed

13 in service before 2009, if—

‘‘The design net heat rate is:

The applicable amount is:

For 1st 5 years of

such service

For 2d 5 years of

such service

Not more than 8,400 ....................................................... $.0060 $.0038

More than 8,400 but not more than 8,550 .................... $.0025 $.0010

More than 8,550 but less than 8,750 ............................. $.0010 $.0010.

14 ‘‘(B) In the case of a unit originally placed

15 in service after 2008 and before 2013, if—

‘‘The design net heat rate is:

The applicable amount is:

For 1st 5 years of

such service

For 2d 5 years of

such service

Not more than 7,770 ....................................................... $.0105 $.0090

More than 7,770 but not more than 8,125 .................... $.0085 $.0068

More than 8,125 but less than 8,350 ............................. $.0075 $.0055.
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1 ‘‘(C) In the case of a unit originally placed

2 in service after 2012 and before 2017, if—

‘‘The design net heat rate is:

The applicable amount is:

For 1st 5 years of

such service

For 2d 5 years of

such service

Not more than 7,380 ....................................................... $.0140 $.0115

More than 7,380 but not more than 7,720 .................... $.0120 $.0090.

3 ‘‘(2) Where the qualifying advanced clean coal

4 technology unit is producing fuel or chemicals:

5 ‘‘(A) In the case of a unit originally placed

6 in service before 2009, if—

‘‘The unit design net thermal efficiency (HHV) is:

The applicable amount is:

For 1st 5 years of

such service

For 2d 5 years of

such service

Not less than 40.6 percent .............................................. $.0060 $.0038

Less than 40.6 but not less than 40 percent ................. $.0025 $.0010

Less than 40 but not less than 39 percent .................... $.0010 $.0010.

7 ‘‘(B) In the case of a unit originally placed

8 in service after 2008 and before 2013, if—

‘‘The unit design net thermal efficiency (HHV) is:

The applicable amount is:

For 1st 5 years of

such service

For 2d 5 years of

such service

Not less than 43.6 percent .............................................. $.0105 $.0090

Less than 43.6 but not less than 42 percent ................. $.0085 $.0068

Less than 42 but not less than 40.9 percent ................. $.0075 $.0055.

9 ‘‘(C) In the case of a unit originally placed

10 in service after 2012 and before 2017, if—
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‘‘The unit design net thermal efficiency (HHV) is:

The applicable amount is:

For 1st 5 years of

such service

For 2d 5 years of

such service

Not less than 44.2 percent .............................................. $.0140 $.0115

Less than 44.2 but not less than 43.9 percent .............. $.0120 $.0090.

1 ‘‘(c) INFLATION ADJUSTMENT.—For calendar years

2 after 2003, each amount in paragraphs (1) and (2) of sub3 section (b) shall be adjusted by multiplying such amount

4 by the inflation adjustment factor for the calendar year in

5 which the amount is applied. If any amount as increased

6 under the preceding sentence is not a multiple of 0.01 cent,

7 such amount shall be rounded to the nearest multiple of 0.01

8 cent.

9 ‘‘(d) DEFINITIONS AND SPECIAL RULES.—For pur10 poses of this section—

11 ‘‘(1) IN GENERAL.—Any term used in this sec12 tion which is also used in section 45I or 48A shall

13 have the meaning given such term in such section.

14 ‘‘(2) APPLICABLE RULES.—The rules of para15 graphs (3), (4), and (5) of section 45(d) shall apply.’’.

16 (b) CREDIT TREATED AS BUSINESS CREDIT.—Section

17 38(b), as amended by this Act, is amended by striking

18 ‘‘plus’’ at the end of paragraph (19), by striking the period

19 at the end of paragraph (20) and inserting ‘‘, plus’’, and

20 by adding at the end the following new paragraph:
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1 ‘‘(21) the qualifying advanced clean coal tech2 nology production credit determined under section

3 45J(a).’’.

4 (c) TRANSITIONAL RULE.—Section 39(d) (relating to

5 transitional rules), as amended by this Act, is amended by

6 adding at the end the following new paragraph:

7 ‘‘(18) NO CARRYBACK OF SECTION 45J CREDIT

8 BEFORE EFFECTIVE DATE.—No portion of the unused

9 business credit for any taxable year which is attrib10 utable to the qualifying advanced clean coal tech11 nology production credit determined under section

12 45J may be carried back to a taxable year ending on

13 or before the date of the enactment of section 45J.’’.

14 (d) DENIAL OF DOUBLE BENEFIT.—Section 29(d) (re15 lating to other definitions and special rules) is amended

16 by adding at the end the following new paragraph:

17 ‘‘(9) DENIAL OF DOUBLE BENEFIT.—This section

18 shall not apply with respect to any qualified fuel the

19 production of which may be taken into account for

20 purposes of determining the credit under section

21 45J.’’.

22 (e) CLERICAL AMENDMENT.—The table of sections for

23 subpart D of part IV of subchapter A of chapter 1, as

24 amended by this Act, is amended by adding at the end the

25 following new item:
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‘‘Sec. 45J. Credit for production from a qualifying advanced clean coal technology

unit.’’.

1 (f) EFFECTIVE DATE.—The amendments made by this

2 section shall apply to production after the date of the enact3 ment of this Act, in taxable years ending after such date.

4 Subtitle C—Treatment of Persons

5 Not Able To Use Entire Credit

6 SEC. 2221. TREATMENT OF PERSONS NOT ABLE TO USE EN7 TIRE CREDIT.

8 (a) IN GENERAL.—Section 45I, as added by this Act,

9 is amended by adding at the end the following new sub10 section:

11 ‘‘(f) TREATMENT OF PERSON NOT ABLE TO USE EN12 TIRE CREDIT.—

13 ‘‘(1) ALLOWANCE OF CREDITS.—

14 ‘‘(A) IN GENERAL.—Any credit allowable

15 under this section, section 45J, or section 48A

16 with respect to a facility owned by a person de17 scribed in subparagraph (B) may be transferred

18 or used as provided in this subsection, and the

19 determination as to whether the credit is allow20 able shall be made without regard to the tax-ex21 empt status of the person.

22 ‘‘(B) PERSONS DESCRIBED.—A person is

23 described in this subparagraph if the person is—
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1 ‘‘(i) an organization described in sec2 tion 501(c)(12)(C) and exempt from tax

3 under section 501(a),

4 ‘‘(ii) an organization described in sec5 tion 1381(a)(2)(C),

6 ‘‘(iii) a public utility (as defined in

7 section 136(c)(2)(B)),

8 ‘‘(iv) any State or political subdivision

9 thereof, the District of Columbia, or any

10 agency or instrumentality of any of the

11 foregoing,

12 ‘‘(v) any Indian tribal government

13 (within the meaning of section 7871) or any

14 agency or instrumentality thereof, or

15 ‘‘(vi) the Tennessee Valley Authority.

16 ‘‘(2) TRANSFER OF CREDIT.—

17 ‘‘(A) IN GENERAL.—A person described in

18 clause (i), (ii), (iii), (iv), or (v) of paragraph

19 (1)(B) may transfer any credit to which para20 graph (1)(A) applies through an assignment to

21 any other person not described in paragraph

22 (1)(B). Such transfer may be revoked only with

23 the consent of the Secretary.

24 ‘‘(B) REGULATIONS.—The Secretary shall

25 prescribe such regulations as necessary to insure
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1 that any credit described in subparagraph (A) is

2 claimed once and not reassigned by such other

3 person.

4 ‘‘(C) TRANSFER PROCEEDS TREATED AS

5 ARISING FROM ESSENTIAL GOVERNMENT FUNC6 TION.—Any proceeds derived by a person de7 scribed in clause (iii), (iv), or (v) of paragraph

8 (1)(B) from the transfer of any credit under sub9 paragraph (A) shall be treated as arising from

10 the exercise of an essential government function.

11 ‘‘(3) USE OF CREDIT AS AN OFFSET.—Notwith12 standing any other provision of law, in the case of a

13 person described in clause (i), (ii), or (v) of para14 graph (1)(B), any credit to which paragraph (1)(A)

15 applies may be applied by such person, to the extent

16 provided by the Secretary of Agriculture, as a pre17 payment of any loan, debt, or other obligation the en18 tity has incurred under subchapter I of chapter 31 of

19 title 7 of the Rural Electrification Act of 1936 (7

20 U.S.C. 901 et seq.), as in effect on the date of the en21 actment of this section.

22 ‘‘(4) USE BY TVA.—

23 ‘‘(A) IN GENERAL.—Notwithstanding any

24 other provision of law, in the case of a person de25 scribed in paragraph (1)(B)(vi), any credit to
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1 which paragraph (1)(A) applies may be applied

2 as a credit against the payments required to be

3 made in any fiscal year under section 15d(e) of

4 the Tennessee Valley Authority Act of 1933 (16

5 U.S.C. 831n–4(e)) as an annual return on the

6 appropriations investment and an annual re7 payment sum.

8 ‘‘(B) TREATMENT OF CREDITS.—The aggre9 gate amount of credits described in paragraph

10 (1)(A) with respect to such person shall be treat11 ed in the same manner and to the same extent

12 as if such credits were a payment in cash and

13 shall be applied first against the annual return

14 on the appropriations investment.

15 ‘‘(C) CREDIT CARRYOVER.—With respect to

16 any fiscal year, if the aggregate amount of cred17 its described paragraph (1)(A) with respect to

18 such person exceeds the aggregate amount of pay19 ment obligations described in subparagraph (A),

20 the excess amount shall remain available for ap21 plication as credits against the amounts of such

22 payment obligations in succeeding fiscal years in

23 the same manner as described in this paragraph.

24 ‘‘(5) CREDIT NOT INCOME.—Any transfer under

25 paragraph (2) or use under paragraph (3) of any
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1 credit to which paragraph (1)(A) applies shall not be

2 treated as income for purposes of section 501(c)(12).

3 ‘‘(6) TREATMENT OF UNRELATED PERSONS.—

4 For purposes of this subsection, sales among and be5 tween persons described in clauses (i), (ii), (iii), (iv),

6 and (v) of paragraph (1)(A) shall be treated as sales

7 between unrelated parties.’’.

8 (b) EFFECTIVE DATE.—The amendment made by this

9 section shall apply to production after the date of the enact10 ment of this Act, in taxable years ending after such date.

11 TITLE XXIII—OIL AND GAS

12 PROVISIONS

13 SEC. 2301. OIL AND GAS FROM MARGINAL WELLS.

14 (a) IN GENERAL.—Subpart D of part IV of subchapter

15 A of chapter 1 (relating to business credits), as amended

16 by this Act, is amended by adding at the end the following

17 new section:

18 ‘‘SEC. 45K. CREDIT FOR PRODUCING OIL AND GAS FROM

19 MARGINAL WELLS.

20 ‘‘(a) GENERAL RULE.—For purposes of section 38, the

21 marginal well production credit for any taxable year is an

22 amount equal to the product of—

23 ‘‘(1) the credit amount, and
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1 ‘‘(2) the qualified credit oil production and the

2 qualified natural gas production which is attributable

3 to the taxpayer.

4 ‘‘(b) CREDIT AMOUNT.—For purposes of this section—

5 ‘‘(1) IN GENERAL.—The credit amount is—

6 ‘‘(A) $3 per barrel of qualified crude oil

7 production, and

8 ‘‘(B) 50 cents per 1,000 cubic feet of quali9 fied natural gas production.

10 ‘‘(2) REDUCTION AS OIL AND GAS PRICES IN11 CREASE.—

12 ‘‘(A) IN GENERAL.—The $3 and 50 cents

13 amounts under paragraph (1) shall each be re14 duced (but not below zero) by an amount which

15 bears the same ratio to such amount (determined

16 without regard to this paragraph) as—

17 ‘‘(i) the excess (if any) of the applica18 ble reference price over $15 ($1.67 for quali19 fied natural gas production), bears to

20 ‘‘(ii) $3 ($0.33 for qualified natural

21 gas production).

22 The applicable reference price for a taxable year

23 is the reference price of the calendar year pre24 ceding the calendar year in which the taxable

25 year begins.
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1 ‘‘(B) INFLATION ADJUSTMENT.—In the case

2 of any taxable year beginning in a calendar year

3 after 2002, each of the dollar amounts contained

4 in subparagraph (A) shall be increased to an

5 amount equal to such dollar amount multiplied

6 by the inflation adjustment factor for such cal7 endar year (determined under section

8 43(b)(3)(B) by substituting ‘2001’ for ‘1990’).

9 ‘‘(C) REFERENCE PRICE.—For purposes of

10 this paragraph, the term ‘reference price’ means,

11 with respect to any calendar year—

12 ‘‘(i) in the case of qualified crude oil

13 production, the reference price determined

14 under section 29(d)(2)(C), and

15 ‘‘(ii) in the case of qualified natural

16 gas production, the Secretary’s estimate of

17 the annual average wellhead price per 1,000

18 cubic feet for all domestic natural gas.

19 ‘‘(c) QUALIFIED CRUDE OIL AND NATURAL GAS PRO20 DUCTION.—For purposes of this section—

21 ‘‘(1) IN GENERAL.—The terms ‘qualified crude

22 oil production’ and ‘qualified natural gas production’

23 mean domestic crude oil or natural gas which is pro24 duced from a qualified marginal well.
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1 ‘‘(2) LIMITATION ON AMOUNT OF PRODUCTION

2 WHICH MAY QUALIFY.—

3 ‘‘(A) IN GENERAL.—Crude oil or natural

4 gas produced during any taxable year from any

5 well shall not be treated as qualified crude oil

6 production or qualified natural gas production

7 to the extent production from the well during the

8 taxable year exceeds 1,095 barrels or barrel

9 equivalents.

10 ‘‘(B) PROPORTIONATE REDUCTIONS.—

11 ‘‘(i) SHORT TAXABLE YEARS.—In the

12 case of a short taxable year, the limitations

13 under this paragraph shall be proportion14 ately reduced to reflect the ratio which the

15 number of days in such taxable year bears

16 to 365.

17 ‘‘(ii) WELLS NOT IN PRODUCTION EN18 TIRE YEAR.—In the case of a well which is

19 not capable of production during each day

20 of a taxable year, the limitations under this

21 paragraph applicable to the well shall be

22 proportionately reduced to reflect the ratio

23 which the number of days of production

24 bears to the total number of days in the tax25 able year.
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1 ‘‘(3) DEFINITIONS.—

2 ‘‘(A) QUALIFIED MARGINAL WELL.—The

3 term ‘qualified marginal well’ means a domestic

4 well—

5 ‘‘(i) the production from which during

6 the taxable year is treated as marginal pro7 duction under section 613A(c)(6), or

8 ‘‘(ii) which, during the taxable year—

9 ‘‘(I) has average daily production

10 of not more than 25 barrel equivalents,

11 and

12 ‘‘(II) produces water at a rate not

13 less than 95 percent of total well efflu14 ent.

15 ‘‘(B) CRUDE OIL, ETC.—The terms ‘crude

16 oil’, ‘natural gas’, ‘domestic’, and ‘barrel’ have

17 the meanings given such terms by section

18 613A(e).

19 ‘‘(C) BARREL EQUIVALENT.—The term ‘bar20 rel equivalent’ means, with respect to natural

21 gas, a conversation ratio of 6,000 cubic feet of

22 natural gas to 1 barrel of crude oil.

23 ‘‘(d) OTHER RULES.—

24 ‘‘(1) PRODUCTION ATTRIBUTABLE TO THE TAX25 PAYER.—In the case of a qualified marginal well in
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1 which there is more than one owner of operating in2 terests in the well and the crude oil or natural gas

3 production exceeds the limitation under subsection

4 (c)(2), qualifying crude oil production or qualifying

5 natural gas production attributable to the taxpayer

6 shall be determined on the basis of the ratio which

7 taxpayer’s revenue interest in the production bears to

8 the aggregate of the revenue interests of all operating

9 interest owners in the production.

10 ‘‘(2) OPERATING INTEREST REQUIRED.—Any

11 credit under this section may be claimed only on pro12 duction which is attributable to the holder of an oper13 ating interest.

14 ‘‘(3) PRODUCTION FROM NONCONVENTIONAL

15 SOURCES EXCLUDED.—In the case of production from

16 a qualified marginal well which is eligible for the

17 credit allowed under section 29 for the taxable year,

18 no credit shall be allowable under this section unless

19 the taxpayer elects not to claim the credit under sec20 tion 29 with respect to the well.

21 ‘‘(4) NONCOMPLIANCE WITH POLLUTION LAWS.—

22 For purposes of subsection (c)(3)(A), a marginal well

23 which is not in compliance with the applicable State

24 and Federal pollution prevention, control, and permit

25 requirements for any period of time shall not be con-
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1 sidered to be a qualified marginal well during such

2 period.’’.

3 (b) CREDIT TREATED AS BUSINESS CREDIT.—Section

4 38(b), as amended by this Act, is amended by striking

5 ‘‘plus’’ at the end of paragraph (20), by striking the period

6 at the end of paragraph (21) and inserting ‘‘, plus’’, and

7 by adding at the end the following new paragraph:

8 ‘‘(22) the marginal oil and gas well production

9 credit determined under section 45K(a).’’.

10 (c) NO CARRYBACK OF MARGINAL OIL AND GAS WELL

11 PRODUCTION CREDIT BEFORE EFFECTIVE DATE.—Sub12 section (d) of section 39, as amended by this Act, is amend13 ed by adding at the end the following new paragraph:

14 ‘‘(19) NO CARRYBACK OF MARGINAL OIL AND GAS

15 WELL PRODUCTION CREDIT BEFORE EFFECTIVE

16 DATE.—No portion of the unused business credit for

17 any taxable year which is attributable to the mar18 ginal oil and gas well production credit determined

19 under section 45K may be carried back to a taxable

20 year ending on or before the date of the enactment of

21 section 45K.’’.

22 (d) COORDINATION WITH SECTION 29.—Section 29(a)

23 is amended by striking ‘‘There’’ and inserting ‘‘At the elec24 tion of the taxpayer, there’’.
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1 (e) CLERICAL AMENDMENT.—The table of sections for

2 subpart D of part IV of subchapter A of chapter 1, as

3 amended by this Act, is amended by adding at the end the

4 following new item:

‘‘Sec. 45K. Credit for producing oil and gas from marginal wells.’’.

5 (f) EFFECTIVE DATE.—The amendments made by this

6 section shall apply to production in taxable years beginning

7 after the date of the enactment of this Act.

8 SEC. 2302. NATURAL GAS GATHERING LINES TREATED AS 7-

9 YEAR PROPERTY.

10 (a) IN GENERAL.—Subparagraph (C) of section

11 168(e)(3) (relating to classification of certain property) is

12 amended by striking ‘‘and’’ at the end of clause (i), by re13 designating clause (ii) as clause (iii), and by inserting after

14 clause (i) the following new clause:

15 ‘‘(ii) any natural gas gathering line,

16 and’’.

17 (b) NATURAL GAS GATHERING LINE.—Subsection (i)

18 of section 168, as amended by this Act, is amended by add19 ing at the end the following new paragraph:

20 ‘‘(16) NATURAL GAS GATHERING LINE.—The

21 term ‘natural gas gathering line’ means—

22 ‘‘(A) the pipe, equipment, and appur23 tenances determined to be a gathering line by the

24 Federal Energy Regulatory Commission, or
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1 ‘‘(B) the pipe, equipment, and appur2 tenances used to deliver natural gas from the

3 wellhead or a commonpoint to the point at which

4 such gas first reaches—

5 ‘‘(i) a gas processing plant,

6 ‘‘(ii) an interconnection with a trans7 mission pipeline certificated by the Federal

8 Energy Regulatory Commission as an

9 interstate transmission pipeline,

10 ‘‘(iii) an interconnection with an

11 intrastate transmission pipeline, or

12 ‘‘(iv) a direct interconnection with a

13 local distribution company, a gas storage

14 facility, or an industrial consumer.’’.

15 (c) ALTERNATIVE SYSTEM.—The table contained in

16 section 168(g)(3)(B) is amended by inserting after the item

17 relating to subparagraph (C)(i) the following new item:

‘‘(C)(ii) .............................................................................................................. 10’’.

18 (d) EFFECTIVE DATE.—The amendments made by this

19 section shall apply to property placed in service after the

20 date of the enactment of this Act, in taxable years ending

21 after such date.
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1 SEC. 2303. EXPENSING OF CAPITAL COSTS INCURRED IN

2 COMPLYING WITH ENVIRONMENTAL PROTEC3 TION AGENCY SULFUR REGULATIONS.

4 (a) IN GENERAL.—Part VI of subchapter B of chapter

5 1 (relating to itemized deductions for individuals and cor6 porations), as amended by this Act, is amended by inserting

7 after section 179C the following new section:

8 ‘‘SEC. 179D. DEDUCTION FOR CAPITAL COSTS INCURRED IN

9 COMPLYING WITH ENVIRONMENTAL PROTEC10 TION AGENCY SULFUR REGULATIONS.

11 ‘‘(a) TREATMENT AS EXPENSE.—

12 ‘‘(1) IN GENERAL.—A small business refiner may

13 elect to treat any qualified capital costs as an expense

14 which is not chargeable to capital account. Any quali15 fied cost which is so treated shall be allowed as a de16 duction for the taxable year in which the cost is paid

17 or incurred.

18 ‘‘(2) LIMITATION.—

19 ‘‘(A) IN GENERAL.—The aggregate costs

20 which may be taken into account under this sub21 section for any taxable year may not exceed the

22 applicable percentage of the qualified capital

23 costs paid or incurred for the taxable year.

24 ‘‘(B) APPLICABLE PERCENTAGE.—For pur25 poses of subparagraph (A)—
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1 ‘‘(i) IN GENERAL.—Except as provided

2 in clause (ii), the applicable percentage is

3 75 percent.

4 ‘‘(ii) REDUCED PERCENTAGE.—In the

5 case of a small business refiner with average

6 daily refinery runs for the period described

7 in subsection (b)(2) in excess of 155,000

8 barrels, the percentage described in clause

9 (i) shall be reduced (not below zero) by the

10 product of such percentage (before the appli11 cation of this clause) and the ratio of such

12 excess to 50,000 barrels.

13 ‘‘(b) DEFINITIONS.—For purposes of this section—

14 ‘‘(1) QUALIFIED CAPITAL COSTS.—The term

15 ‘qualified capital costs’ means any costs which—

16 ‘‘(A) are otherwise chargeable to capital ac17 count, and

18 ‘‘(B) are paid or incurred for the purpose

19 of complying with the Highway Diesel Fuel Sul20 fur Control Requirement of the Environmental

21 Protection Agency, as in effect on the date of the

22 enactment of this section, with respect to a facil23 ity placed in service by the taxpayer before such

24 date.
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1 ‘‘(2) SMALL BUSINESS REFINER.—The term

2 ‘small business refiner’ means, with respect to any

3 taxable year, a refiner of crude oil, which, within the

4 refinery operations of the business, employs not more

5 than 1,500 employees on any day during such taxable

6 year and whose average daily refinery run for the 1-

7 year period ending on the date of the enactment of

8 this section did not exceed 205,000 barrels.

9 ‘‘(c) COORDINATION WITH OTHER PROVISIONS.—Sec10 tion 280B shall not apply to amounts which are treated

11 as expenses under this section.

12 ‘‘(d) BASIS REDUCTION.—For purposes of this title,

13 the basis of any property shall be reduced by the portion

14 of the cost of such property taken into account under sub15 section (a).

16 ‘‘(e) CONTROLLED GROUPS.—For purposes of this sec17 tion, all persons treated as a single employer under sub18 section (b), (c), (m), or (o) of section 414 shall be treated

19 as a single employer.’’.

20 (b) CONFORMING AMENDMENTS.—

21 (1) Section 263(a)(1), as amended by this Act, is

22 amended by striking ‘‘or’’ at the end of subparagraph

23 (I), by striking the period at the end of subparagraph

24 (J) and inserting ‘‘, or’’, and by inserting after sub25 paragraph (J) the following new subparagraph:
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1 ‘‘(K) expenditures for which a deduction is

2 allowed under section 179D.’’.

3 (2) Section 263A(c)(3) is amended by inserting

4 ‘‘179C,’’ after ‘‘section’’.

5 (3) Section 312(k)(3)(B), as amended by this

6 Act, is amended by striking ‘‘or 179C’’ each place it

7 appears in the heading and text and inserting ‘‘,

8 179C, or 179D’’.

9 (4) Section 1016(a), as amended by this Act, is

10 amended by striking ‘‘and’’ at the end of paragraph

11 (33), by striking the period at the end of paragraph

12 (34) and inserting ‘‘, and’’, and by adding at the end

13 the following new paragraph:

14 ‘‘(35) to the extent provided in section

15 179D(d).’’.

16 (5) Section 1245(a), as amended by this Act, is

17 amended by inserting ‘‘179D,’’ after ‘‘179C,’’ both

18 places it appears in paragraphs (2)(C) and (3)(C).

19 (6) The table of sections for part VI of sub20 chapter B of chapter 1, as amended by this Act, is

21 amended by inserting after section 179C the following

22 new item:

‘‘Sec. 179D. Deduction for capital costs incurred in complying with Environmental Protection Agency sulfur regulations.’’.

23 (c) EFFECTIVE DATE.—The amendment made by this

24 section shall apply to expenses paid or incurred after the
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1 date of the enactment of this Act, in taxable years ending

2 after such date.

3 SEC. 2304. ENVIRONMENTAL TAX CREDIT.

4 (a) IN GENERAL.—Subpart D of part IV of subchapter

5 A of chapter 1 (relating to business-related credits), as

6 amended by this Act, is amended by adding at the end the

7 following new section:

8 ‘‘SEC. 45L. ENVIRONMENTAL TAX CREDIT.

9 ‘‘(a) IN GENERAL.—For purposes of section 38, the

10 amount of the environmental tax credit determined under

11 this section with respect to any small business refiner for

12 any taxable year is an amount equal to 5 cents for every

13 gallon of 15 parts per million or less sulfur diesel produced

14 at a facility by such small business refiner during such tax15 able year.

16 ‘‘(b) MAXIMUM CREDIT.—

17 ‘‘(1) IN GENERAL.—For any small business re18 finer, the aggregate amount determined under sub19 section (a) for any taxable year with respect to any

20 facility shall not exceed the applicable percentage of

21 the qualified capital costs paid or incurred by such

22 small business refiner with respect to such facility

23 during the applicable period, reduced by the credit al24 lowed under subsection (a) for any preceding year.
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1 ‘‘(2) APPLICABLE PERCENTAGE.—For purposes

2 of paragraph (1)—

3 ‘‘(A) IN GENERAL.—Except as provided in

4 subparagraph (B), the applicable percentage is

5 25 percent.

6 ‘‘(B) REDUCED PERCENTAGE.—The percent7 age described in subparagraph (A) shall be re8 duced in the same manner as under section

9 179D(a)(2)(B)(ii).

10 ‘‘(c) DEFINITIONS.—For purposes of this section—

11 ‘‘(1) IN GENERAL.—The terms ‘small business re12 finer’ and ‘qualified capital costs’ have the same

13 meaning as given in section 179D.

14 ‘‘(2) APPLICABLE PERIOD.—The term ‘applicable

15 period’ means, with respect to any facility, the period

16 beginning on the day after the date which is 1 year

17 after the date of the enactment of this section and

18 ending with the date which is 1 year after the date

19 on which the taxpayer must comply with the applica20 ble EPA regulations with respect to such facility.

21 ‘‘(3) APPLICABLE EPA REGULATIONS.—The term

22 ‘applicable EPA regulations’ means the Highway

23 Diesel Fuel Sulfur Control Requirements of the Envi24 ronmental Protection Agency, as in effect on the date

25 of the enactment of this section.
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1 ‘‘(d) CERTIFICATION.—

2 ‘‘(1) REQUIRED.—Not later than the date which

3 is 30 months after the first day of the first taxable

4 year in which the environmental tax credit is allowed

5 with respect to qualified capital costs paid or in6 curred with respect to a facility, the small business

7 refiner shall obtain a certification from the Secretary,

8 in consultation with the Administrator of the Envi9 ronmental Protection Agency, that the taxpayer’s

10 qualified capital costs with respect to such facility

11 will result in compliance with the applicable EPA

12 regulations.

13 ‘‘(2) CONTENTS OF APPLICATION.—An applica14 tion for certification shall include relevant informa15 tion regarding unit capacities and operating charac16 teristics sufficient for the Secretary, in consultation

17 with the Administrator of the Environmental Protec18 tion Agency, to determine that such qualified capital

19 costs are necessary for compliance with the applicable

20 EPA regulations.

21 ‘‘(3) REVIEW PERIOD.—Any application shall be

22 reviewed and notice of certification, if applicable,

23 shall be made within 60 days of receipt of such appli24 cation. In the event the Secretary does not notify the

25 taxpayer of the results of such certification within
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1 such period, the taxpayer may presume the certifi2 cation to be issued until so notified.

3 ‘‘(4) STATUTE OF LIMITATIONS.—With respect to

4 the credit allowed under this section—

5 ‘‘(A) the statutory period for the assessment

6 of any deficiency attributable to such credit shall

7 not expire before the end of the 3-year period

8 ending on the date that the review period de9 scribed in paragraph (3) ends, and

10 ‘‘(B) such deficiency may be assessed before

11 the expiration of such 3-year period notwith12 standing the provisions of any other law or rule

13 of law which would otherwise prevent such as14 sessment.

15 ‘‘(e) CONTROLLED GROUPS.—For purposes of this sec16 tion, all persons treated as a single employer under sub17 section (b), (c), (m), or (o) of section 414 shall be treated

18 as a single employer.

19 ‘‘(f) COOPERATIVE ORGANIZATIONS.—

20 ‘‘(1) APPORTIONMENT OF CREDIT.—In the case

21 of a cooperative organization described in section

22 1381(a), any portion of the credit determined under

23 subsection (a) of this section, for the taxable year

24 may, at the election of the organization, be appor25 tioned among patrons eligible to share in patronage
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1 dividends on the basis of the quantity or value of

2 business done with or for such patrons for the taxable

3 year. Such an election shall be irrevocable for such

4 taxable year.

5 ‘‘(2) TREATMENT OF ORGANIZATIONS AND PA6 TRONS.—

7 ‘‘(A) ORGANIZATIONS.—The amount of the

8 credit not apportioned to patrons pursuant to

9 paragraph (1) shall be included in the amount

10 determined under subsection (a) for the taxable

11 year of the organization.

12 ‘‘(B) PATRONS.—The amount of the credit

13 apportioned to patrons pursuant to paragraph

14 (1) shall be included in the amount determined

15 under subsection (a) for the first taxable year of

16 each patron ending on or after the last day of

17 the payment period (as defined in section

18 1382(d)) for the taxable year of the organization

19 or, if earlier, for the taxable year of each patron

20 ending on or after the date on which the patron

21 receives notice from the cooperative of the appor22 tionment.’’.

23 (b) CREDIT MADE PART OF GENERAL BUSINESS

24 CREDIT.—Subsection (b) of section 38 (relating to general

25 business credit), as amended by this Act, is amended by
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1 striking ‘‘plus’’ at the end of paragraph (21), by striking

2 the period at the end of paragraph (22) and inserting ‘‘,

3 plus’’, and by adding at the end the following new para4 graph:

5 ‘‘(23) in the case of a small business refiner, the

6 environmental tax credit determined under section

7 45L(a).’’.

8 (c) DENIAL OF DOUBLE BENEFIT.—Section 280C (re9 lating to certain expenses for which credits are allowable),

10 as amended by this Act, is amended by adding after sub11 section (d) the following new subsection:

12 ‘‘(e) ENVIRONMENTAL TAX CREDIT.—No deduction

13 shall be allowed for that portion of the expenses otherwise

14 allowable as a deduction for the taxable year which is equal

15 to the amount of the credit determined for the taxable year

16 under section 45L(a).’’.

17 (d) CLERICAL AMENDMENT.—The table of sections for

18 subpart D of part IV of subchapter A of chapter 1, as

19 amended by this Act, is amended by adding at the end the

20 following new item:

‘‘Sec. 45L. Environmental tax credit.’’.

21 (e) EFFECTIVE DATE.—The amendments made by this

22 section shall apply to expenses paid or incurred after the

23 date of the enactment of this Act, in taxable years ending

24 after such date.
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1 SEC. 2305. DETERMINATION OF SMALL REFINER EXCEP2 TION TO OIL DEPLETION DEDUCTION.

3 (a) IN GENERAL.—Paragraph (4) of section 613A(d)

4 (relating to certain refiners excluded) is amended to read

5 as follows:

6 ‘‘(4) CERTAIN REFINERS EXCLUDED.—If the tax7 payer or 1 or more related persons engages in the re8 fining of crude oil, subsection (c) shall not apply to

9 the taxpayer for a taxable year if the average daily

10 refinery runs of the taxpayer and such persons for the

11 taxable year exceed 60,000 barrels. For purposes of

12 this paragraph, the average daily refinery runs for

13 any taxable year shall be determined by dividing the

14 aggregate refinery runs for the taxable year by the

15 number of days in the taxable year.’’.

16 (b) EFFECTIVE DATE.—The amendment made by this

17 section shall apply to taxable years beginning after Decem18 ber 31, 2002.

19 SEC. 2306. MARGINAL PRODUCTION INCOME LIMIT EXTEN20 SION.

21 Section 613A(c)(6)(H) (relating to temporary suspen22 sion of taxable income limit with respect to marginal pro23 duction), as amended by section 607(a) of the Job Creation

24 and Worker Assistance Act of 2002, is amended by striking

25 ‘‘2004’’ and inserting ‘‘2007’’.
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1 SEC. 2307. AMORTIZATION OF GEOLOGICAL AND GEO2 PHYSICAL EXPENDITURES.

3 (a) IN GENERAL.—Part VI of subchapter B of chapter

4 1, as amended by this Act, is amended by adding at the

5 end the following new section:

6 ‘‘SEC. 199. AMORTIZATION OF GEOLOGICAL AND GEO7 PHYSICAL EXPENDITURES FOR DOMESTIC

8 OIL AND GAS WELLS.

9 ‘‘A taxpayer shall be entitled to an amortization de10 duction with respect to any geological and geophysical ex11 penses incurred in connection with the exploration for, or

12 development of, oil or gas within the United States (as de13 fined in section 638) based on a period of 24 months begin14 ning with the month in which such expenses were in15 curred.’’.

16 (b) CLERICAL AMENDMENT.—The table of sections for

17 part VI of subchapter B of chapter 1, as amended by this

18 Act, is amended by adding at the end the following new

19 item:

‘‘Sec. 199. Amortization of geological and geophysical expenditures for domestic

oil and gas wells.’’.

20 (c) EFFECTIVE DATE.—The amendments made by this

21 section shall apply to costs paid or incurred in taxable

22 years beginning after December 31, 2002.
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1 SEC. 2308. AMORTIZATION OF DELAY RENTAL PAYMENTS.

2 (a) IN GENERAL.—Part VI of subchapter B of chapter

3 1, as amended by this Act, is amended by adding at the

4 end the following new section:

5 ‘‘SEC. 199A. AMORTIZATION OF DELAY RENTAL PAYMENTS

6 FOR DOMESTIC OIL AND GAS WELLS.

7 ‘‘(a) IN GENERAL.—A taxpayer shall be entitled to an

8 amortization deduction with respect to any delay rental

9 payments incurred in connection with the development of

10 oil or gas within the United States (as defined in section

11 638) based on a period of 24 months beginning with the

12 month in which such payments were incurred.’’.

13 ‘‘(b) DELAY RENTAL PAYMENTS.—For purposes of this

14 section, the term ‘delay rental payment’ means an amount

15 paid for the privilege of deferring development of an oil or

16 gas well under an oil or gas lease.’’.

17 (b) CLERICAL AMENDMENT.—The table of sections for

18 part VI of subchapter B of chapter 1, as amended by this

19 Act, is amended by adding at the end the following new

20 item:

‘‘Sec. 199A. Amortization of delay rental payments for domestic oil and gas

wells.’’.

21 (c) EFFECTIVE DATE.—The amendments made by this

22 section shall apply to amounts paid or incurred in taxable

23 years beginning after December 31, 2002.
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1 SEC. 2309. STUDY OF COAL BED METHANE.

2 (a) IN GENERAL.—The Secretary of the Treasury shall

3 study the effect of section 29 of the Internal Revenue Code

4 of 1986 on the production of coal bed methane. Such study

5 shall be made in conjunction with the study to be under6 taken by the Secretary of the Interior on the effects of coal

7 bed methane production on surface and water resources, as

8 provided in section 607 of the Energy Policy Act of 2003.

9 (b) CONTENTS OF STUDY.—The study under subsection

10 (a) shall estimate the total amount of credits under section

11 29 of the Internal Revenue Code of 1986 claimed annually

12 and in the aggregate which are related to the production

13 of coal bed methane since the date of the enactment of such

14 section 29. Such study shall report the annual value of such

15 credits allowable for coal bed methane compared to the aver16 age annual wellhead price of natural gas (per thousand

17 cubic feet of natural gas). Such study shall also estimate

18 the incremental increase in production of coal bed methane

19 that has resulted from the enactment of such section 29, and

20 the cost to the Federal Government, in terms of the net tax

21 benefits claimed, per thousand cubic feet of incremental coal

22 bed methane produced annually and in the aggregate since

23 such enactment.
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1 SEC. 2310. EXTENSION AND MODIFICATION OF CREDIT FOR

2 PRODUCING FUEL FROM A NONCONVEN3 TIONAL SOURCE.

4 (a) IN GENERAL.—Section 29 is amended by adding

5 at the end the following new subsection:

6 ‘‘(h) EXTENSION FOR OTHER FACILITIES.—

7 ‘‘(1) OIL AND GAS.—In the case of a well or fa8 cility for producing qualified fuels described in sub9 paragraph (A) or (B) of subsection (c)(1) which was

10 drilled or placed in service after the date of the enact11 ment of this subsection and before January 1, 2005,

12 notwithstanding subsection (f), this section shall

13 apply with respect to such fuels produced at such well

14 or facility not later than the close of the 3-year period

15 beginning on the date that such well is drilled or such

16 facility is placed in service.

17 ‘‘(2) FACILITIES PRODUCING REFINED COAL.—

18 ‘‘(A) IN GENERAL.—In the case of a facility

19 described in subparagraph (C) for producing re20 fined coal which was placed in service after the

21 date of the enactment of this subsection and be22 fore January 1, 2007, this section shall apply

23 with respect to fuel produced at such facility not

24 later than the close of the 5-year period begin25 ning on the date such facility is placed in serv26 ice.
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1 ‘‘(B) REFINED COAL.—For purposes of this

2 paragraph, the term ‘refined coal’ means a fuel

3 which is a liquid, gaseous, or solid synthetic fuel

4 produced from coal (including lignite) or high

5 carbon fly ash, including such fuel used as a

6 feedstock.

7 ‘‘(C) COVERED FACILITIES.—

8 ‘‘(i) IN GENERAL.—A facility is de9 scribed in this subparagraph if such facility

10 produces refined coal using a technology

11 that results in—

12 ‘‘(I) a qualified emission reduc13 tion, and

14 ‘‘(II) a qualified enhanced value.

15 ‘‘(ii) QUALIFIED EMISSION REDUC16 TION.—For purposes of this subparagraph,

17 the term ‘qualified emission reduction’

18 means a reduction of at least 20 percent of

19 the emissions of nitrogen oxide and either

20 sulfur dioxide or mercury released when

21 burning the refined coal (excluding any di22 lution caused by materials combined or

23 added during the production process), as

24 compared to the emissions released when

25 burning the feedstock coal or comparable
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1 coal predominantly available in the market2 place as of January 1, 2002.

3 ‘‘(iii) QUALIFIED ENHANCED VALUE.—

4 For purposes of this subparagraph, the term

5 ‘qualified enhanced value’ means an in6 crease of at least 50 percent in the market

7 value of the refined coal (excluding any in8 crease caused by materials combined or

9 added during the production process), as

10 compared to the value of the feedstock coal.

11 ‘‘(iii) QUALIFYING ADVANCED CLEAN

12 COAL TECHNOLOGY FACILITIES EX13 CLUDED.—A facility described in this sub14 paragraph shall not include a qualifying

15 advanced clean coal technology facility (as

16 defined in section 48A(b)).

17 ‘‘(3) WELLS PRODUCING VISCOUS OIL.—

18 ‘‘(A) IN GENERAL.—In the case of a well for

19 producing viscous oil which was placed in serv20 ice after the date of the enactment of this sub21 section and before January 1, 2005, this section

22 shall apply with respect to fuel produced at such

23 well not later than the close of the 3-year period

24 beginning on the date such well is placed in serv25 ice.
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1 ‘‘(B) VISCOUS OIL.—The term ‘‘viscous oil’

2 means heavy oil, as defined in section

3 613A(c)(6), except that—

4 ‘‘(i) ‘22 degrees’ shall be substituted for

5 ‘20 degrees’ in applying subparagraph (F)

6 thereof, and

7 ‘‘(ii) in all cases, the oil gravity shall

8 be measured from the initial well-head sam9 ples, drill cuttings, or down hole samples.

10 ‘‘(C) WAIVER OF UNRELATED PERSON RE11 QUIREMENT.—In the case of viscous oil, the re12 quirement under subsection (a)(1)(B)(i) of a sale

13 to an unrelated person shall not apply to any

14 sale to the extent that the viscous oil is not con15 sumed in the immediate vicinity of the wellhead.

16 ‘‘(4) COALMINE METHANE GAS.—

17 ‘‘(A) IN GENERAL.—This section shall apply

18 to coalmine methane gas—

19 ‘‘(i) captured or extracted by the tax20 payer after the date of the enactment of this

21 subsection and before January 1, 2005, and

22 ‘‘(ii) utilized as a fuel source or sold by

23 or on behalf of the taxpayer to an unrelated

24 person after the date of the enactment of

25 this subsection and before January 1, 2005.
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1 ‘‘(B) COALMINE METHANE GAS.—For pur2 poses of this paragraph, the term ‘coalmine

3 methane gas’ means any methane gas which is—

4 ‘‘(i) liberated during qualified coal

5 mining operations, or

6 ‘‘(ii) extracted up to 5 years in ad7 vance of qualified coal mining operations as

8 part of a specific plan to mine a coal de9 posit.

10 ‘‘(C) SPECIAL RULE FOR ADVANCED EX11 TRACTION.—In the case of coalmine methane gas

12 which is captured in advance of qualified coal

13 mining operations, the credit under subsection

14 (a) shall be allowed only after the date the coal

15 extraction occurs in the immediate area where

16 the coalmine methane gas was removed.

17 ‘‘(D) NONCOMPLIANCE WITH POLLUTION

18 LAWS.—For purposes of subparagraphs (B) and

19 (C), coal mining operations which are not in

20 compliance with the applicable State and Fed21 eral pollution prevention, control, and permit re22 quirements for any period of time shall not be

23 considered to be qualified coal mining operations

24 during such period.
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1 ‘‘(5) FACILITIES PRODUCING FUELS FROM AGRI2 CULTURAL AND ANIMAL WASTE.—

3 ‘‘(A) IN GENERAL.—In the case of facility

4 for producing liquid, gaseous, or solid fuels from

5 qualified agricultural and animal wastes, in6 cluding such fuels when used as feedstocks, which

7 was placed in service after the date of the enact8 ment of this subsection and before January 1,

9 2005, this section shall apply with respect to fuel

10 produced at such facility not later than the close

11 of the 3-year period beginning on the date such

12 facility is placed in service.

13 ‘‘(B) QUALIFIED AGRICULTURAL AND ANI14 MAL WASTE.—For purposes of this paragraph,

15 the term ‘qualified agricultural and animal

16 waste’ means agriculture and animal waste, in17 cluding by-products, packaging, and any mate18 rials associated with the processing, feeding, sell19 ing, transporting, or disposal of agricultural or

20 animal products or wastes, including wood

21 shavings, straw, rice hulls, and other bedding for

22 the disposition of manure.

23 ‘‘(6) CREDIT AMOUNT.—In determining the

24 amount of credit allowable under this section solely

25 by reason of this subsection, the dollar amount appli-
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1 cable under subsection (a)(1) shall be $3 (without re2 gard to subsection (b)(2)).’’.

3 (b) EXTENSION FOR CERTAIN FUEL PRODUCED

4 AT EXISTING FACILITIES.—Paragraph (2) of section

5 29(f) (relating to application of section) is amended

6 by inserting ‘‘(January 1, 2005, in the case of any

7 coke, coke gas, or natural gas and byproducts pro8 duced by coal gasification from lignite in a facility

9 described in paragraph (1)(B))’’ after ‘‘January 1,

10 2003’’.

11 (c) EFFECTIVE DATE.—The amendment made by this

12 section shall apply to fuel sold after the date of the enact13 ment of this Act.

14 SEC. 2311. NATURAL GAS DISTRIBUTION LINES TREATED AS

15 15-YEAR PROPERTY.

16 (a) IN GENERAL.—Subparagraph (E) of section

17 168(e)(3) (relating to classification of certain property) is

18 amended by striking ‘‘and’’ at the end of clause (ii), by

19 striking the period at the end of clause (iii) and by insert20 ing ‘‘, and’’, and by adding at the end the following new

21 clause:

22 ‘‘(iv) any natural gas distribution

23 line.’’.

24 (b) ALTERNATIVE SYSTEM.—The table contained in

25 section 168(g)(3)(B), as amended by this Act, is amended
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1 by adding after the item relating to subparagraph (E)(iii)

2 the following new item:

‘‘(E)(iv) .............................................................................................................. 20’’.

3 (c) EFFECTIVE DATE.—The amendments made by this

4 section shall apply to property placed in service after the

5 date of the enactment of this Act, in taxable years ending

6 after such date.

7 TITLE XXIV—ELECTRIC UTILITY

8 RESTRUCTURING PROVISIONS

9 SEC. 2401. ONGOING STUDY AND REPORTS REGARDING TAX

10 ISSUES RESULTING FROM FUTURE RESTRUC11 TURING DECISIONS.

12 (a) ONGOING STUDY.—The Secretary of the Treasury,

13 after consultation with the Federal Energy Regulatory

14 Commission, shall undertake an ongoing study of Federal

15 tax issues resulting from nontax decisions on the restruc16 turing of the electric industry. In particular, the study shall

17 focus on the effect on tax-exempt bonding authority of pub18 lic power entities and on corporate restructuring which re19 sults from the restructuring of the electric industry.

20 (b) REGULATORY RELIEF.—In connection with the

21 study described in subsection (a), the Secretary of the Treas22 ury should exercise the Secretary’s authority, as appro23 priate, to modify or suspend regulations that may impede

24 an electric utility company’s ability to reorganize its cap25 ital stock structure to respond to a competitive marketplace.
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1 (c) REPORTS.—The Secretary of the Treasury shall re2 port to the Committee on Finance of the Senate and the

3 Committee on Ways and Means of the House of Representa4 tives not later than December 31, 2002, regarding Federal

5 tax issues identified under the study described in subsection

6 (a), and at least annually thereafter, regarding such issues

7 identified since the preceding report. Such reports shall also

8 include such legislative recommendations regarding changes

9 to the private business use rules under subpart A of part

10 IV of subchapter B of chapter 1 of the Internal Revenue

11 Code of 1986 as the Secretary of the Treasury deems nec12 essary. The reports shall continue until such time as the

13 Federal Energy Regulatory Commission has completed the

14 restructuring of the electric industry.

15 SEC. 2402. MODIFICATIONS TO SPECIAL RULES FOR NU16 CLEAR DECOMMISSIONING COSTS.

17 (a) REPEAL OF LIMITATION ON DEPOSITS INTO FUND

18 BASED ON COST OF SERVICE; CONTRIBUTIONS AFTER

19 FUNDING PERIOD.—Subsection (b) of section 468A is

20 amended to read as follows:

21 ‘‘(b) LIMITATION ON AMOUNTS PAID INTO FUND.—The

22 amount which a taxpayer may pay into the Fund for any

23 taxable year shall not exceed the ruling amount applicable

24 to such taxable year.’’.
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1 (b) CLARIFICATION OF TREATMENT OF FUND TRANS2 FERS.—Subsection (e) of section 468A is amended by add3 ing at the end the following new paragraph:

4 ‘‘(8) TREATMENT OF FUND TRANSFERS.—If, in

5 connection with the transfer of the taxpayer’s interest

6 in a nuclear power plant, the taxpayer transfers the

7 Fund with respect to such power plant to the trans8 feree of such interest and the transferee elects to con9 tinue the application of this section to such Fund—

10 ‘‘(A) the transfer of such Fund shall not

11 cause such Fund to be disqualified from the ap12 plication of this section, and

13 ‘‘(B) no amount shall be treated as distrib14 uted from such Fund, or be includible in gross

15 income, by reason of such transfer.’’.

16 (c) DEDUCTION FOR NUCLEAR DECOMMISSIONING

17 COSTS WHEN PAID.—Paragraph (2) of section 468A(c) is

18 amended to read as follows:

19 ‘‘(2) DEDUCTION OF NUCLEAR DECOMMISSIONING

20 COSTS.—In addition to any deduction under sub21 section (a), nuclear decommissioning costs paid or in22 curred by the taxpayer during any taxable year shall

23 constitute ordinary and necessary expenses in car24 rying on a trade or business under section 162.’’.
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1 (d) EFFECTIVE DATE.—The amendments made by this

2 section shall apply to taxable years beginning after Decem3 ber 31, 2002.

4 SEC. 2403. TREATMENT OF CERTAIN INCOME OF COOPERA5 TIVES.

6 (a) INCOME FROM OPEN ACCESS AND NUCLEAR DE7 COMMISSIONING TRANSACTIONS.—

8 (1) IN GENERAL.—Subparagraph (C) of section

9 501(c)(12) is amended by striking ‘‘or’’ at the end of

10 clause (i), by striking clause (ii), and by adding at

11 the end the following new clauses:

12 ‘‘(ii) from any open access transaction

13 (other than income received or accrued di14 rectly or indirectly from a member),

15 ‘‘(iii) from any nuclear decommis16 sioning transaction,

17 ‘‘(iv) from any asset exchange or con18 version transaction, or

19 ‘‘(v) from the prepayment of any loan,

20 debt, or obligation made, insured, or guar21 anteed under the Rural Electrification Act

22 of 1936.’’.

23 (2) DEFINITIONS AND SPECIAL RULES.—Para24 graph (12) of section 501(c) is amended by adding at

25 the end the following new subparagraphs:
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1 ‘‘(E) For purposes of subparagraph

2 (C)(ii)—

3 ‘‘(i) The term ‘open access transaction’

4 means any transaction meeting the open ac5 cess requirements of any of the following

6 subclauses with respect to a mutual or coop7 erative electric company:

8 ‘‘(I) The provision or sale of

9 transmission service or ancillary serv10 ices meets the open access requirements

11 of this subclause only if such services

12 are provided on a nondiscriminatory

13 open access basis pursuant to an open

14 access transmission tariff filed with

15 and approved by FERC, including an

16 acceptable reciprocity tariff, or under a

17 regional transmission organization

18 agreement approved by FERC.

19 ‘‘(II) The provision or sale of elec20 tric energy distribution services or an21 cillary services meets the open access

22 requirements of this subclause only if

23 such services are provided on a non24 discriminatory open access basis to

25 end-users served by distribution facili-
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1 ties owned by the mutual or coopera2 tive electric company (or its members).

3 ‘‘(III) The delivery or sale of elec4 tric energy generated by a generation

5 facility meets the open access require6 ments of this subclause only if such fa7 cility is directly connected to distribu8 tion facilities owned by the mutual or

9 cooperative electric company (or its

10 members) which owns the generation

11 facility, and such distribution facilities

12 meet the open access requirements of

13 subclause (II).

14 ‘‘(ii) Clause (i)(I) shall apply in the

15 case of a voluntarily filed tariff only if the

16 mutual or cooperative electric company files

17 a report with FERC within 90 days after

18 the date of the enactment of this subpara19 graph relating to whether or not such com20 pany will join a regional transmission or21 ganization.

22 ‘‘(iii) A mutual or cooperative electric

23 company shall be treated as meeting the

24 open access requirements of clause (i)(I) if
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1 a regional transmission organization con2 trols the transmission facilities.

3 ‘‘(iv) References to FERC in this sub4 paragraph shall be treated as including ref5 erences to the Public Utility Commission of

6 Texas with respect to any ERCOT utility

7 (as defined in section 212(k)(2)(B) of the

8 Federal Power Act (16 U.S.C.

9 824k(k)(2)(B))) or references to the Rural

10 Utilities Service with respect to any other

11 facility not subject to FERC jurisdiction.

12 ‘‘(v) For purposes of this

13 subparagraph—

14 ‘‘(I) The term ‘transmission facil15 ity’ means an electric output facility

16 (other than a generation facility) that

17 operates at an electric voltage of 69 kV

18 or greater. To the extent provided in

19 regulations, such term includes any

20 output facility that FERC determines

21 is a transmission facility under stand22 ards applied by FERC under the Fed23 eral Power Act (as in effect on the date

24 of the enactment of the Energy Tax In25 centives Act of 2003).
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1 ‘‘(II) The term ‘regional trans2 mission organization’ includes an

3 independent system operator.

4 ‘‘(III) The term ‘FERC’ means

5 the Federal Energy Regulatory Com6 mission.

7 ‘‘(F) The term ‘nuclear decommissioning

8 transaction’ means—

9 ‘‘(i) any transfer into a trust, fund, or

10 instrument established to pay any nuclear

11 decommissioning costs if the transfer is in

12 connection with the transfer of the mutual

13 or cooperative electric company’s interest in

14 a nuclear power plant or nuclear power

15 plant unit,

16 ‘‘(ii) any distribution from any trust,

17 fund, or instrument established to pay any

18 nuclear decommissioning costs, or

19 ‘‘(iii) any earnings from any trust,

20 fund, or instrument established to pay any

21 nuclear decommissioning costs.

22 ‘‘(G) The term ‘asset exchange or conversion

23 transaction’ means any voluntary exchange or

24 involuntary conversion of any property related

25 to generating, transmitting, distributing, or sell-
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1 ing electric energy by a mutual or cooperative

2 electric company, the gain from which qualifies

3 for deferred recognition under section 1031 or

4 1033, but only if the replacement property ac5 quired by such company pursuant to such sec6 tion constitutes property which is used, or to be

7 used, for—

8 ‘‘(i) generating, transmitting, distrib9 uting, or selling electric energy, or

10 ‘‘(ii) producing, transmitting, distrib11 uting, or selling natural gas.’’.

12 (b) TREATMENT OF INCOME FROM LOAD LOSS TRANS13 ACTIONS.—Paragraph (12) of section 501(c), as amended

14 by subsection (a)(2), is amended by adding after subpara15 graph (G) the following new subparagraph:

16 ‘‘(H)(i) In the case of a mutual or coopera17 tive electric company described in this para18 graph or an organization described in section

19 1381(a)(2)(C), income received or accrued from a

20 load loss transaction shall be treated as an

21 amount collected from members for the sole pur22 pose of meeting losses and expenses.

23 ‘‘(ii) For purposes of clause (i), the term

24 ‘load loss transaction’ means any wholesale or

25 retail sale of electric energy (other than to mem-
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1 bers) to the extent that the aggregate sales during

2 the recovery period does not exceed the load loss

3 mitigation sales limit for such period.

4 ‘‘(iii) For purposes of clause (ii), the load

5 loss mitigation sales limit for the recovery period

6 is the sum of the annual load losses for each year

7 of such period.

8 ‘‘(iv) For purposes of clause (iii), a mutual

9 or cooperative electric company’s annual load

10 loss for each year of the recovery period is the

11 amount (if any) by which—

12 ‘‘(I) the megawatt hours of electric en13 ergy sold during such year to members of

14 such electric company are less than

15 ‘‘(II) the megawatt hours of electric en16 ergy sold during the base year to such mem17 bers.

18 ‘‘(v) For purposes of clause (iv)(II), the

19 term ‘base year’ means—

20 ‘‘(I) the calendar year preceding the

21 start-up year, or

22 ‘‘(II) at the election of the electric com23 pany, the second or third calendar years

24 preceding the start-up year.
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1 ‘‘(vi) For purposes of this subparagraph, the

2 recovery period is the 7-year period beginning

3 with the start-up year.

4 ‘‘(vii) For purposes of this subparagraph,

5 the start-up year is the calendar year which in6 cludes the date of the enactment of this subpara7 graph or, if later, at the election of the mutual

8 or cooperative electric company—

9 ‘‘(I) the first year that such electric

10 company offers nondiscriminatory open ac11 cess, or

12 ‘‘(II) the first year in which at least 10

13 percent of such electric company’s sales are

14 not to members of such electric company.

15 ‘‘(viii) A company shall not fail to be treat16 ed as a mutual or cooperative company for pur17 poses of this paragraph or as a corporation oper18 ating on a cooperative basis for purposes of sec19 tion 1381(a)(2)(C) by reason of the treatment

20 under clause (i).

21 ‘‘(ix) In the case of a mutual or cooperative

22 electric company, income from any open access

23 transaction received, or accrued, indirectly from

24 a member shall be treated as an amount collected
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1 from members for the sole purpose of meeting

2 losses and expenses.’’.

3 (c) EXCEPTION FROM UNRELATED BUSINESS TAX4 ABLE INCOME.—Subsection (b) of section 512 (relating to

5 modifications) is amended by adding at the end the fol6 lowing new paragraph:

7 ‘‘(18) TREATMENT OF MUTUAL OR COOPERATIVE

8 ELECTRIC COMPANIES.—In the case of a mutual or

9 cooperative electric company described in section

10 501(c)(12), there shall be excluded income which is

11 treated as member income under subparagraph (H)

12 thereof.’’.

13 (d) CROSS REFERENCE.—Section 1381 is amended by

14 adding at the end the following new subsection:

15 ‘‘(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).’’.

16 (e) EFFECTIVE DATE.—The amendments made by this

17 section shall apply to taxable years beginning after the date

18 of the enactment of this Act.

19 SEC. 2404. SALES OR DISPOSITIONS TO IMPLEMENT FED20 ERAL ENERGY REGULATORY COMMISSION OR

21 STATE ELECTRIC RESTRUCTURING POLICY.

22 (a) IN GENERAL.—Section 451 (relating to general

23 rule for taxable year of inclusion) is amended by adding

24 at the end the following new subsection:
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1 ‘‘(i) SPECIAL RULE FOR SALES OR DISPOSITIONS TO

2 IMPLEMENT FEDERAL ENERGY REGULATORY COMMISSION

3 OR STATE ELECTRIC RESTRUCTURING POLICY.—

4 ‘‘(1) IN GENERAL.—For purposes of this subtitle,

5 if a taxpayer elects the application of this subsection

6 to a qualifying electric transmission transaction in

7 any taxable year—

8 ‘‘(A) any ordinary income derived from

9 such transaction which would be required to be

10 recognized under section 1245 or 1250 for such

11 taxable year (determined without regard to this

12 subsection), and

13 ‘‘(B) any income derived from such trans14 action in excess of such ordinary income which

15 is required to be included in gross income for

16 such taxable year,

17 shall be so recognized and included ratably over the

18 8-taxable year period beginning with such taxable

19 year.

20 ‘‘(2) QUALIFYING ELECTRIC TRANSMISSION

21 TRANSACTION.—For purposes of this subsection, the

22 term ‘qualifying electric transmission transaction’

23 means any sale or other disposition before January 1,

24 2007, of—
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1 ‘‘(A) property used by the taxpayer in the

2 trade or business of providing electric trans3 mission services, or

4 ‘‘(B) any stock or partnership interest in a

5 corporation or partnership, as the case may be,

6 whose principal trade or business consists of pro7 viding electric transmission services,

8 but only if such sale or disposition is to an inde9 pendent transmission company.

10 ‘‘(3) INDEPENDENT TRANSMISSION COMPANY.—

11 For purposes of this subsection, the term ‘independent

12 transmission company’ means—

13 ‘‘(A) a regional transmission organization

14 approved by the Federal Energy Regulatory

15 Commission,

16 ‘‘(B) a person—

17 ‘‘(i) who the Federal Energy Regu18 latory Commission determines in its au19 thorization of the transaction under section

20 203 of the Federal Power Act (16 U.S.C.

21 824b) is not a market participant within

22 the meaning of such Commission’s rules ap23 plicable to regional transmission organiza24 tions, and
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1 ‘‘(ii) whose transmission facilities to

2 which the election under this subsection ap3 plies are under the operational control of a

4 Federal Energy Regulatory Commission-ap5 proved regional transmission organization

6 before the close of the period specified in

7 such authorization, but not later than the

8 close of the period applicable under para9 graph (1), or

10 ‘‘(C) in the case of facilities subject to the

11 exclusive jurisdiction of the Public Utility Com12 mission of Texas, a person which is approved by

13 that Commission as consistent with Texas State

14 law regarding an independent transmission or15 ganization.

16 ‘‘(4) ELECTION.—An election under paragraph

17 (1), once made, shall be irrevocable.

18 ‘‘(5) NONAPPLICATION OF INSTALLMENT SALES

19 TREATMENT.—Section 453 shall not apply to any

20 qualifying electric transmission transaction with re21 spect to which an election to apply this subsection is

22 made.’’.

23 (b) EFFECTIVE DATE.—The amendment made by this

24 section shall apply to transactions occurring after the date

25 of the enactment of this Act.
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1 SEC. 2405. APPLICATION OF TEMPORARY REGULATIONS TO

2 CERTAIN OUTPUT CONTRACTS.

3 In the application of section 1–141–7(c)(4) of the

4 Treasury Temporary Regulations to output contracts en5 tered into after February 22, 1998, with respect to an issuer

6 participating in open access with respect to the issuer’s

7 transmission facilities, an output contract in existence on

8 or before such date that is amended after such date shall

9 be treated as a contract entered into after such date only

10 if the amendment increases the amount of output sold under

11 such contract by extending the term of the contract or in12 creasing the amount of output sold, but such treatment as

13 a contract entered into after such date shall begin on the

14 effective date of the amendment and shall apply only with

15 respect to the increased output to be provided under such

16 contract.

17 SEC. 2406. TREATMENT OF CERTAIN DEVELOPMENT IN18 COME OF COOPERATIVES.

19 (a) IN GENERAL.—Subparagraph (C) of section

20 501(c)(12), as amended by this Act, is amended by striking

21 ‘‘or’’ at the end of clause (iv), by striking the period at the

22 end of clause (v) and insert ‘‘, or’’, and by adding at the

23 end the following new clause:

24 ‘‘(vi) from the receipt before January

25 1, 2007, of any money, property, capital, or

26 any other contribution in aid of construc-
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1 tion or connection charge intended to facili2 tate the provision of electric service for the

3 purpose of developing qualified fuels from

4 nonconventional sources (within the mean5 ing of section 29).’’.

6 (b) EFFECTIVE DATE.—The amendments made by this

7 section shall apply to taxable years beginning after the date

8 of the enactment of this Act.

9 TITLE XXV—ADDITIONAL

10 PROVISIONS

11 SEC. 2501. EXTENSION OF ACCELERATED DEPRECIATION

12 AND WAGE CREDIT BENEFITS ON INDIAN RES13 ERVATIONS.

14 (a) SPECIAL RECOVERY PERIOD FOR PROPERTY ON

15 INDIAN RESERVATIONS.—Section 168(j)(8) (relating to ter16 mination), as amended by section 613(b) of the Job Cre17 ation and Worker Assistance Act of 2002, is amended by

18 striking ‘‘2004’’ and inserting ‘‘2005’’.

19 (b) INDIAN EMPLOYMENT CREDIT.—Section 45A(f)

20 (relating to termination), as amended by section 613(a) of

21 the Job Creation and Worker Assistance Act of 2002, is

22 amended by striking ‘‘2004’’ and inserting ‘‘2005’’.
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1 SEC. 2502. STUDY OF EFFECTIVENESS OF CERTAIN PROVI2 SIONS BY GAO.

3 (a) STUDY.—The Comptroller General of the United

4 States shall undertake an ongoing analysis of—

5 (1) the effectiveness of the alternative motor vehi6 cles and fuel incentives provisions under title II and

7 the conservation and energy efficiency provisions

8 under title III, and

9 (2) the recipients of the tax benefits contained in

10 such provisions, including an identification of such

11 recipients by income and other appropriate measure12 ments.

13 Such analysis shall quantify the effectiveness of such provi14 sions by examining and comparing the Federal Govern15 ment’s forgone revenue to the aggregate amount of energy

16 actually conserved and tangible environmental benefits

17 gained as a result of such provisions.

18 (b) REPORTS.—The Comptroller General of the United

19 States shall report the analysis required under subsection

20 (a) to Congress not later than December 31, 2002, and an21 nually thereafter.

22 SEC. 2503. CREDIT FOR PRODUCTION OF ALASKA NATURAL

23 GAS.

24 (a) IN GENERAL.—Subpart D of part IV of subchapter

25 A of chapter 1 (relating to business related credits), as
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1 amended by this Act, is amended by adding at the end the

2 following new section:

3 ‘‘SEC. 45M. ALASKA NATURAL GAS.

4 ‘‘(a) IN GENERAL.—For purposes of section 38, the

5 Alaska natural gas credit of any taxpayer for any taxable

6 year is the credit amount per 1,000,000 Btu of Alaska nat7 ural gas entering any intake or tie-in point which was de8 rived from an area of the State of Alaska lying north of

9 64 degrees North latitude, which is attributable to the tax10 payer and sold by or on behalf of the taxpayer to an unre11 lated person during such taxable year (within the meaning

12 of section 45).

13 ‘‘(b) CREDIT AMOUNT.—For purposes of this section—

14 ‘‘(1) IN GENERAL.—The credit amount per

15 1,000,000 Btu of Alaska natural gas entering any in16 take or tie-in point which was derived from an area

17 of the State of Alaska lying north of 64 degrees North

18 latitude (determined in United States dollars), is the

19 excess of—

20 ‘‘(A) $3.25, over

21 ‘‘(B) the average monthly price at the

22 AECO C Hub in Alberta, Canada, for Alaska

23 natural gas for the month in which occurs the

24 date of such entering.
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1 ‘‘(2) INFLATION ADJUSTMENT.—In the case of

2 any taxable year beginning in a calendar year after

3 the first calendar year ending after the date described

4 in subsection (g)(1), the dollar amount contained in

5 paragraph (1)(A) shall be increased to an amount

6 equal to such dollar amount multiplied by the infla7 tion adjustment factor for such calendar year (deter8 mined under section 43(b)(3)(B) by substituting ‘the

9 calendar year ending before the date described in sec10 tion 45M(g)(1)’ for ‘1990’).

11 ‘‘(c) ALASKA NATURAL GAS.—For purposes of this sec12 tion, the term ‘Alaska natural gas’ means natural gas enter13 ing any intake or tie-in point which was derived from an

14 area of the State of Alaska lying north of 64 degrees North

15 latitude produced in compliance with the applicable State

16 and Federal pollution prevention, control, and permit re17 quirements from the area generally known as the North

18 Slope of Alaska (including the continental shelf thereof

19 within the meaning of section 638(l)), determined without

20 regard to the area of the Alaska National Wildlife Refuge

21 (including the continental shelf thereof within the meaning

22 of section 638(l)).

23 ‘‘(d) RECAPTURE.—

24 ‘‘(1) IN GENERAL.—With respect to each

25 1,000,000 Btu of Alaska natural gas entering any in-
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1 take or tie-in point which was derived from an area

2 of the State of Alaska lying north of 64 degrees North

3 latitude after the date which is 3 years after the date

4 described in subsection (g)(1), if the average monthly

5 price described in subsection (b)(1)(B) exceeds 150

6 percent of the amount described in subsection

7 (b)(1)(A) for the month in which occurs the date of

8 such entering, the taxpayer’s tax under this chapter

9 for the taxable year shall be increased by an amount

10 equal to the lesser of—

11 ‘‘(A) such excess, or

12 ‘‘(B) the aggregate decrease in the credits

13 allowed under section 38 for all prior taxable

14 years which would have resulted if the Alaska

15 natural gas credit received by the taxpayer for

16 such years had been zero.

17 ‘‘(2) SPECIAL RULES.—

18 ‘‘(A) TAX BENEFIT RULE.—The tax for the

19 taxable year shall be increased under paragraph

20 (1) only with respect to credits allowed by reason

21 of this section which were used to reduce tax li22 ability. In the case of credits not so used to re23 duce tax liability, the carryforwards and

24 carrybacks under section 39 shall be appro25 priately adjusted.
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1 ‘‘(B) NO CREDITS AGAINST TAX.—Any in2 crease in tax under this subsection shall not be

3 treated as a tax imposed by this chapter for pur4 poses of determining the amount of any credit

5 under this chapter or for purposes of section 55.

6 ‘‘(e) APPLICATION OF RULES.—For purposes of this

7 section, rules similar to the rules of paragraphs (3), (4),

8 and (5) of section 45(d) shall apply.

9 ‘‘(f) NO DOUBLE BENEFIT.—The amount of any de10 duction or other credit allowable under this chapter for any

11 fuel taken into account in computing the amount of the

12 credit determined under subsection (a) shall be reduced by

13 the amount of such credit attributable to such fuel.

14 ‘‘(g) APPLICATION OF SECTION.—This section shall

15 apply to Alaska natural gas entering any intake or tie-in

16 point which was derived from an area of the State of Alaska

17 lying north of 64 degrees North latitude for the period—

18 ‘‘(1) beginning with the later of—

19 ‘‘(A) January 1, 2010, or

20 ‘‘(B) the initial date for the interstate

21 transportation of such Alaska natural gas, and

22 ‘‘(2) except with respect to subsection (d), ending

23 with the date which is 15 years after the date de24 scribed in paragraph (1).’’.
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1 (b) CREDIT TREATED AS BUSINESS CREDIT.—Section

2 38(b), as amended by this Act, is amended by striking

3 ‘‘plus’’ at the end of paragraph (22), by striking the period

4 at the end of paragraph (23) and inserting ‘‘, plus’’, and

5 by adding at the end the following new paragraph:

6 ‘‘(24) The Alaska natural gas credit determined

7 under section 45M(a).’’.

8 (c) ALLOWING CREDIT AGAINST ENTIRE REGULAR

9 TAX AND MINIMUM TAX.—

10 (1) IN GENERAL.—Subsection (c) of section 38

11 (relating to limitation based on amount of tax), as

12 amended by this Act, is amended by redesignating

13 paragraph (5) as paragraph (6) and by inserting

14 after paragraph (4) the following new paragraph:

15 ‘‘(5) SPECIAL RULES FOR ALASKA NATURAL GAS

16 CREDIT.—

17 ‘‘(A) IN GENERAL.—In the case of the Alas18 ka natural gas credit—

19 ‘‘(i) this section and section 39 shall be

20 applied separately with respect to the cred21 it, and

22 ‘‘(ii) in applying paragraph (1) to the

23 credit—
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1 ‘‘(I) the amounts in subpara2 graphs (A) and (B) thereof shall be

3 treated as being zero, and

4 ‘‘(II) the limitation under para5 graph (1) (as modified by subclause

6 (I)) shall be reduced by the credit al7 lowed under subsection (a) for the tax8 able year (other than the Alaska nat9 ural gas credit).

10 ‘‘(B) ALASKA NATURAL GAS CREDIT.—For

11 purposes of this subsection, the term ‘Alaska nat12 ural gas credit’ means the credit allowable under

13 subsection (a) by reason of section 45M(a).’’.

14 (2) CONFORMING AMENDMENTS.—Subclause (II)

15 of section 38(c)(2)(A)(ii), as amended by this Act,

16 subclause (II) of section 38(c)(3)(A)(ii), as amended

17 by this Act, and subclause (II) of section

18 38(c)(4)(A)(ii), as added by this Act, are each amend19 ed by inserting ‘‘or the Alaska natural gas credit’’

20 after ‘‘producer credit’’.

21 (d) CLERICAL AMENDMENT.—The table of sections for

22 subpart D of part IV of subchapter A of chapter 1, as

23 amended by this Act, is amended by adding at the end the

24 following new item:

‘‘Sec. 45M. Alaska natural gas.’’.
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1 SEC. 2504. SALE OF GASOLINE AND DIESEL FUEL AT DUTY2 FREE SALES ENTERPRISES.

3 (a) PROHIBITION.—Section 555(b) of the Tariff Act of

4 1930 (19 U.S.C. 1555(b)) is amended—

5 (1) by redesignating paragraphs (6) through (8)

6 as paragraphs (7) through (9), respectively; and

7 (2) by inserting after paragraph (5) the fol8 lowing:

9 ‘‘(6) Any gasoline or diesel fuel sold at a duty10 free sales enterprise shall be considered to be entered

11 for consumption into the customs territory of the

12 United States.’’.

13 (b) CONSTRUCTION.—The amendments made by this

14 section shall not be construed to create any inference with

15 respect to the interpretation of any provision of law as such

16 provision was in effect on the day before the date of enact17 ment of this Act.

18 (c) EFFECTIVE DATE.—The amendments made by this

19 section shall take effect on the date of enactment of this Act.

20 SEC. 2505. TREATMENT OF DAIRY PROPERTY.

21 (a) QUALIFIED DISPOSITION OF DAIRY PROPERTY

22 TREATED AS INVOLUNTARY CONVERSION.—

23 (1) IN GENERAL.—Section 1033 (relating to in24 voluntary conversions) is amended by designating

25 subsection (k) as subsection (l) and inserting after

26 subsection (j) the following new subsection:
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1 ‘‘(k) QUALIFIED DISPOSITION TO IMPLEMENT BOVINE

2 TUBERCULOSIS ERADICATION PROGRAM.—

3 ‘‘(1) IN GENERAL.—For purposes of this subtitle,

4 if a taxpayer elects the application of this subsection

5 to a qualified disposition:

6 ‘‘(A) TREATMENT AS INVOLUNTARY CONVER7 SION.—Such disposition shall be treated as an

8 involuntary conversion to which this section ap9 plies.

10 ‘‘(B) MODIFICATION OF SIMILAR PROPERTY

11 REQUIREMENT.—Property to be held by the tax12 payer either for productive use in a trade or

13 business or for investment shall be treated as

14 property similar or related in service or use to

15 the property disposed of.

16 ‘‘(C) EXTENSION OF PERIOD FOR REPLAC17 ING PROPERTY.—Subsection (a)(2)(B)(i) shall be

18 applied by substituting ‘4 years’ for ‘2 years’.

19 ‘‘(D) WAIVER OF UNRELATED PERSON RE20 QUIREMENT.—Subsection (i) (relating to replace21 ment property must be acquired from unrelated

22 person in certain cases) shall not apply.

23 ‘‘(E) EXPANDED CAPITAL GAIN FOR CATTLE

24 AND HORSES.—Section 1231(b)(3)(A) shall be
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1 applied by substituting ‘1 month’ for ‘24

2 months’.

3 ‘‘(2) QUALIFIED DISPOSITION.—

4 ‘‘(A) IN GENERAL.—For purposes of this

5 subsection, the term ‘qualified disposition’ means

6 the disposition of dairy property which is cer7 tified by the Secretary of Agriculture as having

8 been the subject of an agreement under the bovine

9 tuberculosis eradication program, as imple10 mented pursuant to the Declaration of Emer11 gency Because of Bovine Tuberculosis (65 Fed12 eral Register 63,227 (2000)).

13 ‘‘(B) PAYMENTS RECEIVED IN CONNECTION

14 WITH THE BOVINE TUBERCULOSIS ERADICATION

15 PROGRAM.—For purposes of this subsection, any

16 amount received by a taxpayer in connection

17 with an agreement under such bovine tuber18 culosis eradication program shall be treated as

19 received in a qualified disposition.

20 ‘‘(C) TRANSMITTAL OF CERTIFICATIONS.—

21 The Secretary of Agriculture shall transmit cop22 ies of certifications under this paragraph to the

23 Secretary.

24 ‘‘(3) ALLOWANCE OF THE ADJUSTED BASIS OF

25 CERTIFIED DAIRY PROPERTY AS A DEPRECIATION DE-
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1 DUCTION.—The adjusted basis of any property cer2 tified under paragraph (2)(A) shall be allowed as a

3 depreciation deduction under section 167 for the tax4 able year which includes the date of the certification

5 described in paragraph (2)(A).

6 ‘‘(4) DAIRY PROPERTY.—For purposes of this

7 subsection, the term ‘dairy property’ means all tan8 gible or intangible property used in connection with

9 a dairy business or a dairy processing plant.

10 ‘‘(5) SPECIAL RULES FOR CERTAIN BUSINESS

11 ORGANIZATIONS.—

12 ‘‘(A) S CORPORATIONS.—In the case of an

13 S corporation, gain on a qualified disposition

14 shall not be treated as recognized for the pur15 poses of section 1374 (relating to tax imposed on

16 certain built-in gains).

17 ‘‘(B) PARTNERSHIPS.—In the case of a

18 partnership which dissolves in anticipation of a

19 qualified disposition (including in anticipation

20 of receiving the amount described in paragraph

21 (2)(B)), the dairy property owned by the part22 ners of such partnership at the time of such dis23 position shall be treated, for the purposes of this

24 section and notwithstanding any regulation or
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1 rule of law, as owned by such partners at the

2 time of such disposition.

3 ‘‘(6) TERMINATION.—This subsection shall not

4 apply to dispositions made after December 31, 2006.’’.

5 (2) EFFECTIVE DATE.—The amendment made by

6 this subsection shall apply to dispositions made and

7 amounts received in taxable years ending after May

8 22, 2001.

9 (b) DEDUCTION OF QUALIFIED RECLAMATION EX10 PENDITURES.—

11 (1) IN GENERAL.—Part VI of subchapter B of

12 chapter 1 (relating to itemized deductions for individ13 uals and corporations), as amended by this Act, is

14 amended by adding at the end the following new sec15 tion:

16 ‘‘SEC. 199B. EXPENSING OF DAIRY PROPERTY RECLAMA17 TION COSTS.

18 ‘‘(a) IN GENERAL.—Notwithstanding section 280B (re19 lating to demolition of structures), a taxpayer may elect

20 to treat any qualified reclamation expenditure which is

21 paid or incurred by the taxpayer as an expense which is

22 not chargeable to capital account. Any expenditure which

23 is so treated shall be allowed as a deduction for the taxable

24 year in which it is paid or incurred.

25 ‘‘(b) QUALIFIED RECLAMATION EXPENDITURE.—
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1 ‘‘(1) IN GENERAL.—For purposes of this sub2 paragraph, the term ‘qualified reclamation expendi3 ture’ means amounts otherwise chargeable to capital

4 account and paid or incurred to convert any real

5 property certified under section 1033(k)(2) (relating

6 to qualified disposition) into unimproved land.

7 ‘‘(2) SPECIAL RULE FOR EXPENDITURES FOR DE8 PRECIABLE PROPERTY.—A rule similar to the rule of

9 section 198(b)(2) (relating to special rule for expendi10 tures for depreciable property) shall apply for pur11 poses of paragraph (1).

12 ‘‘(c) DEDUCTION RECAPTURED AS ORDINARY IN13 COME.—Rules similar to the rules of section 198(e) (relating

14 to deduction recaptured as ordinary income on sale, etc.)

15 shall apply with respect to any qualified reclamation ex16 penditure.

17 ‘‘(d) TERMINATION.—This section shall not apply to

18 expenditures paid or incurred after December 31, 2006.’’.

19 (2) CLERICAL AMENDMENT.—The table of sec20 tions for part VI of subchapter B of chapter 1, as

21 amended by this Act, is amended by adding at the

22 end the following new item:

‘‘Sec. 199B. Expensing of dairy property reclamation costs.’’.

23 (3) EFFECTIVE DATE.—The amendments made

24 by this subsection shall apply to expenditures paid or

25 incurred in taxable years ending after May 22, 2001.
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1 SEC. 2506. CLARIFICATION OF EXCISE TAX EXEMPTIONS

2 FOR AGRICULTURAL AERIAL APPLICATORS.

3 (a) NO WAIVER BY FARM OWNER, TENANT, OR OPER4 ATOR NECESSARY.—Subparagraph (B) of section

5 6420(c)(4) (relating to certain farming use other than by

6 owner, etc.) is amended to read as follows:

7 ‘‘(B) if the person so using the gasoline is

8 an aerial or other applicator of fertilizers or

9 other substances and is the ultimate purchaser of

10 the gasoline, then subparagraph (A) of this para11 graph shall not apply and the aerial or other ap12 plicator shall be treated as having used such gas13 oline on a farm for farming purposes.’’.

14 (b) EXEMPTION INCLUDES FUEL USED BETWEEN AIR15 FIELD AND FARM.—Section 6420(c)(4), as amended by sub16 section (a), is amended by adding at the end the following

17 new flush sentence:

18 ‘‘For purposes of this paragraph, in the case of an

19 aerial applicator, gasoline shall be treated as used on

20 a farm for farming purposes if the gasoline is used

21 for the direct flight between the airfield and 1 or more

22 farms.’’.

23 (c) EXEMPTION FROM TAX ON AIR TRANSPORTATION

24 OF PERSONS FOR FORESTRY PURPOSES EXTENDED TO

25 FIXED-WING AIRCRAFT.—Subsection (f) of section 4261 (re-
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1 lating to tax on air transportation of persons) is amended

2 to read as follows:

3 ‘‘(f) EXEMPTION FOR CERTAIN USES.—No tax shall be

4 imposed under subsection (a) or (b) on air transportation—

5 ‘‘(1) by helicopter for the purpose of transporting

6 individuals, equipment, or supplies in the exploration

7 for, or the development or removal of, hard minerals,

8 oil, or gas, or

9 ‘‘(2) by helicopter or by fixed-wing aircraft for

10 the purpose of the planting, cultivation, cutting, or

11 transportation of, or caring for, trees (including log12 ging operations),

13 but only if the helicopter or fixed-wing aircraft does not

14 take off from, or land at, a facility eligible for assistance

15 under the Airport and Airway Development Act of 1970,

16 or otherwise use services provided pursuant to section 44509

17 or 44913(b) or subchapter I of chapter 471 of title 49,

18 United States Code, during such use. In the case of heli19 copter transportation described in paragraph (1), this sub20 section shall be applied by treating each flight segment as

21 a distinct flight.’’.

22 (d) EFFECTIVE DATE.—The amendments made by this

23 section shall apply to fuel use or air transportation after

24 December 31, 2001, and before January 1, 2003.
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1 SEC. 2507. MODIFICATION OF RURAL AIRPORT DEFINITION.

2 (a) IN GENERAL.—Clause (ii) of section 4261(e)(1)(B)

3 (defining rural airport) is amended by striking the period

4 at the end of subclause (II) and inserting ‘‘, or’’ and by

5 adding at the end the following new subclause:

6 ‘‘(III) is not connected by paved

7 roads to another airport.’’.

8 (b) EFFECTIVE DATE.—The amendments made by this

9 section shall apply to calendar years beginning after 2002.

10 SEC. 2508. EXEMPTION FROM TICKET TAXES FOR TRANS11 PORTATION PROVIDED BY SEAPLANES.

12 (a) IN GENERAL.—The taxes imposed by sections 4261

13 and 4271 shall not apply to transportation by a seaplane

14 with respect to any segment consisting of a takeoff from,

15 and a landing on, water.

16 (b) EFFECTIVE DATE.—The amendments made by this

17 section shall apply to calendar years beginning after 2002.

18 DIVISION I—IRAQ OIL IMPORT

19 RESTRICTION

20 TITLE XXVI—IRAQ OIL IMPORT

21 RESTRICTION

22 SEC. 2601. SHORT TITLE AND FINDINGS.

23 (a) SHORT TITLE.—This title can be cited as the ‘‘Iraq

24 Petroleum Import Restriction Act of 2003’’.

25 (b) FINDINGS.—Congress finds that—

26 (1) the Government of the Republic of Iraq—
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1 (A) has failed to comply with the terms of

2 United Nations Security Council Resolution 687

3 regarding unconditional Iraqi acceptance of the

4 destruction, removal, or rendering harmless,

5 under international supervision, of all nuclear,

6 chemical and biological weapons and all stocks of

7 agents and all related subsystems and compo8 nents and all research, development, support and

9 manufacturing facilities, as well as all ballistic

10 missiles with a range greater than 150 kilo11 meters and related major parts, and repair and

12 production facilities and has failed to allow

13 United Nations inspectors access to sites used for

14 the production or storage of weapons of mass de15 struction;

16 (B) routinely contravenes the terms and.

17 conditions of UNSC Resolution 661, authorizing

18 the export of petroleum products from Iraq in ex19 change for food, medicine and other humani20 tarian products by conducting a routine and ex21 tensive program to sell such products outside of

22 the channels established by UNSC Resolution

23 661 in exchange for military equipment and ma24 terials to be used in pursuit of its program to de25 velop weapons of mass destruction in order to
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1 threaten the United States and its allies in the

2 Persian Gulf and surrounding regions;

3 (C) has failed to adequately draw down

4 upon the amounts received in the Escrow Ac5 count established by UNSC Resolution 986 to

6 purchase food, medicine and other humanitarian

7 products required by its citizens, resulting in

8 massive humanitarian suffering by the Iraqi

9 people;

10 (D) conducts a periodic and systematic

11 campaign to harass and obstruct the enforcement

12 of the United States- and United Kingdom-en13 forced ‘‘No-Fly Zones’’ in effect in the Republic

14 of Iraq;

15 (E) routinely manipulates the petroleum ex16 port production volumes permitted under UNSC

17 Resolution 661 in order to create uncertainty in

18 global energy markets, and therefore threatens

19 the economic security of the United States;

20 (F) pays bounties to the families of suicide

21 bombers in order to encourage the murder of

22 Israeli civilians;

23 (2) further imports of petroleum products from

24 the Republic of Iraq are inconsistent with the na25 tional security and foreign policy interests of the
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1 United States and should be eliminated until such

2 time as they are not so inconsistent.

3 SEC. 2602. PROHIBITION ON IRAQI-ORIGIN PETROLEUM IM4 PORTS.

5 The direct or indirect import from Iraq of Iraqi-origin

6 petroleum and petroleum products is prohibited, notwith7 standing an authorization by the Committee established by

8 UNSC Resolution 661 or its designee, or any other order

9 to the contrary.

10 SEC. 2603. TERMINATION/PRESIDENTIAL CERTIFICATION.

11 This title will remain in effect until such time as the

12 President, after consultation with the relevant committees

13 in Congress, certifies to the Congress that—

14 (1) Iraq is in substantial compliance with the

15 terms of—

16 (A) UNSC Resolution 687; and

17 (B) UNSC Resolution 986 prohibiting

18 smuggling of oil in circumvention of the ‘‘Oil19 for-Food’’ program; and

20 (2) ceases the practice of compensating the fami21 lies of suicide bombers in order to encourage the mur22 der of Israeli citizens; or that

23 (3) resuming the importation of Iraqi-origin pe24 troleum and petroleum products would not be incon-
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1 sistent with the national security and foreign policy

2 interests of the United States.

3 SEC. 2604. HUMANITARIAN INTERESTS.

4 It is the sense of the Senate that the President should

5 make all appropriate efforts to ensure that the humani6 tarian needs of the Iraqi people are not negatively affected

7 by this Act, and should encourage through public, private,

8 domestic and international means the direct or indirect

9 sale, donation or other transfer to appropriate nongovern10 mental health and humanitarian organizations and indi11 viduals within Iraq of food, medicine and other humani12 tarian products.

13 SEC. 2605. DEFINITIONS.

14 (a) 661 COMMITTEE.—The term 661 Committee means

15 the Security Council Committee established by UNSC Reso16 lution 661, and persons acting for or on behalf of the Com17 mittee under its specific delegation of authority for the rel18 evant matter or category of activity, including the overseers

19 appointed by the United Nations Secretary-General to ex20 amine and approve agreements for purchases of petroleum

21 and petroleum products from the Government of Iraq pur22 suant to UNSC Resolution 986.

23 (b) UNSC RESOLUTION 661.—The term UNSC Reso24 lution 661 means United Nations Security Council Resolu-
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1 tion No. 661, adopted August 6, 1990, prohibiting certain

2 transactions with respect to Iraq and Kuwait.

3 (c) UNSC RESOLUTION 687.—The term UNSC Reso4 lution 687 means United Nations Security Council Resolu5 tion 687, adopted April 3, 1991.

6 (d) UNSC RESOLUTION 986.—The term UNSC Reso7 lution 986 means United Nations Security Council Resolu8 tion 986, adopted April 14, 1995.

9 SEC. 2606. EFFECTIVE DATE.

10 The prohibition on importation of Iraqi-origin petro11 leum and petroleum products shall be effective 30 days after

12 enactment of this Act.

13 DIVISION J—MISCELLANEOUS

14 TITLE XXVII—MISCELLANEOUS

15 PROVISION

16 SEC. 2701. FAIR TREATMENT OF PRESIDENTIAL JUDICIAL

17 NOMINEES.

18 It is the sense of the Senate that, in the interests of

19 the administration of justice, the Senate Judiciary Com20 mittee should along with its other legislative and oversight

21 responsibilities, continue to hold regular hearings on judi22 cial nominees and should, in accordance with the precedents

23 and practices of the Committee, schedule hearings on the
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1 nominees submitted by the President on May 9, 2001, and

2 resubmitted on September 5, 2001, expeditiously.

Attest:

Secretary.
108TH CONGRESS

1ST SESSION H. R. 6

AMENDMENT

September 2, 2003

Ordered to be printed as passed