129
establish and publish in the Federal register grant require-
ments on eligibility for assistance, and on implementation 
of the program established under subsection (a), including 
certification requirements to ensure compliance with this 
title. 
(c) SOLICITATION.—Not later than 6 months after 
the date of the enactment of this Act, the Secretary shall 
solicit proposals for grants under this section. 
(d) ELIGIBLE RECIPIENTS.—A grant shall be award-
ed under this section only—
(1) to a local or State governmental entity re-
sponsible for providing school bus service to one or 
more public school systems or responsible for the 
purchase of school buses; or 
(2) to a contracting entity that provides school 
bus service to one or more public school systems, if 
the grant application is submitted jointly with the 
school system or systems which the buses will serve. 
(e) TYPES OF GRANTS.—
(1) IN
GENERAL.—Grants under this section 
shall be for the demonstration and commercial appli-
cation of technologies to facilitate the use of alter-
native fuel school buses and ultra-low sulfur diesel 
school buses in lieu of buses manufactured before
130
model year 1977 and diesel-powered buses manufac-
tured before model year 1991. 
(2) NO ECONOMIC BENEFIT.—Other than the 
receipt of the grant, a recipient of a grant under this 
section may not receive any economic benefit in con-
nection with the receipt of the grant. 
(3) PRIORITY OF GRANT APPLICATIONS.—The 
Secretary shall give priority to awarding grants to 
applicants who can demonstrate the use of alter-
native fuel buses and ultra-low sulfur diesel school 
buses in lieu of buses manufactured before model 
year 1977. 
(f) CONDITIONS OF GRANT.—A grant provided under 
this section shall include the following conditions: 
(1) All buses acquired with funds provided 
under the grant shall be operated as part of the 
school bus fleet for which the grant was made for a 
minimum of 5 years. 
(2) Funds provided under the grant may only 
be used—
(A) to pay the cost, except as provided in 
paragraph (3), of new alternative fuel school 
buses or ultra-low sulfur diesel school buses, in-
cluding State taxes and contract fees; and 
(B) to provide—
131
(i) up to 10 percent of the price of the 
alternative fuel buses acquired, for nec-
essary alternative fuel infrastructure if the 
infrastructure will only be available to the 
grant recipient; and 
(ii) up to 15 percent of the price of 
the alternative fuel buses acquired, for nec-
essary alternative fuel infrastructure if the 
infrastructure will be available to the grant 
recipient and to other bus fleets. 
(3) The grant recipient shall be required to pro-
vide at least the lesser of 15 percent of the total cost 
of each bus received or $15,000 per bus. 
(4) In the case of a grant recipient receiving a 
grant to demonstrate ultra-low sulfur diesel school 
buses, the grant recipient shall be required to pro-
vide documentation to the satisfaction of the Sec-
retary that diesel fuel containing sulfur at not more 
than 15 parts per million is available for carrying 
out the purposes of the grant, and a commitment by 
the applicant to use such fuel in carrying out the 
purposes of the grant. 
(g) BUSES.—Funding under a grant made under this 
section may be used to demonstrate the use only of new
132
alternative fuel school buses or ultra-low sulfur diesel 
school buses—
(1) with a gross vehicle weight of greater than 
14,000 pounds; 
(2) that are powered by a heavy duty engine; 
(3) that, in the case of alternative fuel school 
buses manufactured in model years 2003 through 
2006, emit not more than 1.8 grams per brake 
horsepower-hour of nonmethane hydrocarbons and 
oxides of nitrogen and .01 grams per brake horse-
power-hour of particulate matter; and 
(4) that, in the case of ultra-low sulfur diesel 
school buses, emit not more than—
(A) for buses manufactured in model year 
2003, 3.0 grams per brake horsepower-hour of 
oxides of nitrogen and .01 grams per brake 
horsepower-hour of particulate matter; and 
(B) for buses manufactured in model years 
2004 through 2006, 2.5 grams per brake horse-
power-hour of nonmethane hydrocarbons and 
oxides of nitrogen and .01 grams per brake 
horsepower-hour of particulate matter, 
except that under no circumstances shall buses be 
acquired under this section that emit nonmethane 
hydrocarbons, oxides of nitrogen, or particulate mat-
133
ter at a rate greater than the best performing tech-
nology of the same class of ultra-low sulfur diesel 
school buses commercially available at the time the 
grant is made. 
(h) DEPLOYMENT
AND DISTRIBUTION.—The Sec-
retary shall seek to the maximum extent practicable to 
achieve nationwide deployment of alternative fuel school 
buses and ultra-low sulfur diesel school buses through the 
program under this section, and shall ensure a broad geo-
graphic distribution of grant awards, with a goal of no 
State receiving more than 10 percent of the grant funding 
made available under this section for a fiscal year. 
(i) LIMIT ON FUNDING.—The Secretary shall provide 
not less than 20 percent and not more than 25 percent 
of the grant funding made available under this section for 
any fiscal year for the acquisition of ultra-low sulfur diesel 
school buses. 
(j) ANNUAL REPORT.—Not later than January 31 of 
each year, the Secretary of Energy shall provide a report 
evaluating implementation of the program under this title 
to the Congress. Such report shall include the total num-
ber of grant applications received, the number and types 
of alternative fuel buses and ultra-low sulfur diesel school 
buses requested in grant applications, a list of grants 
awarded and the criteria used to select the grant recipi-
134
ents, certified engine emission levels of all buses purchased 
under the program, and any other information the Sec-
retary considers appropriate. 
(k) DEFINITIONS.—For purposes of this section—
(1) the term ‘‘alternative fuel school bus’’ 
means a bus powered substantially by electricity (in-
cluding electricity supplied by a fuel cell), or by liq-
uefied natural gas, compressed natural gas, liquefied 
petroleum gas, hydrogen, propane, or methanol or 
ethanol at no less than 85 percent by volume; and 
(2) the term ‘‘ultra-low sulfur diesel school 
bus’’ means a school bus powered by diesel fuel 
which contains sulfur at not more than 15 parts per 
million. 
SEC. 302. FUEL CELL BUS DEVELOPMENT AND DEM-
ONSTRATION PROGRAM. 
(a) ESTABLISHMENT OF PROGRAM.—The Secretary 
shall establish a program for entering into cooperative 
agreements with private sector fuel cell bus developers for 
the development of fuel cell-powered school buses, and 
subsequently with not less than 2 units of local govern-
ment using natural gas-powered school buses and such 
private sector fuel cell bus developers to demonstrate the 
use of fuel cell-powered school buses.
135
(b) COST SHARING.—The non-Federal contribution 
for activities funded under this section shall be not less 
than—
(1) 20 percent for fuel infrastructure develop-
ment activities; and 
(2) 50 percent for demonstration activities and 
for development activities not described in paragraph 
(1). 
(c) FUNDING.—No more than $25,000,000 of the 
amounts authorized under section 303 may be used for 
carrying out this section for the period encompassing fis-
cal years 2004 through 2006. 
(d) REPORTS TO CONGRESS.—Not later than 3 years 
after the date of the enactment of this Act, and not later 
than October 1, 2006, the Secretary shall transmit to the 
Congress a report that—
(1) evaluates the process of converting natural 
gas infrastructure to accommodate fuel cell-powered 
school buses; and 
(2) assesses the results of the development and 
demonstration program under this section. 
SEC. 303. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated to the Sec-
retary for carrying out this title, to remain available until 
expended—
136
(1) $60,000,000 for fiscal year 2003; 
(2) $70,000,000 for fiscal year 2004; 
(3) $80,000,000 for fiscal year 2005; and 
(4) $90,000,000 for fiscal year 2006. 
TITLE 
IV—ALTERNATIVE 
FUELED AND ADVANCED VE-
HICLES 
SEC. 401. DEFINITIONS. 
For the purposes of this title, the following defini-
tions apply: 
(1) ALTERNATIVE
FUELED
VEHICLE.—The 
term ‘‘alternative fueled vehicle’’ means a vehicle 
propelled solely on an alternative fuel as defined in 
section 301 of the Energy Policy Act (42 U.S.C. 
13211), except the term does not include any vehicle 
that the Secretary determines, by rule, does not 
yield substantial environmental benefits over a vehi-
cle operating solely on gasoline or diesel derived 
from fossil fuels. 
(2) FUEL CELL VEHICLE.—The term ‘‘fuel cell 
vehicle’’ means a vehicle propelled by one or more 
cells that convert chemical energy directly into elec-
tricity by combining oxygen with hydrogen fuel 
which is stored on board the vehicle in any form and 
may or may not require reformation prior to use.
137
(3) HYBRID VEHICLE.—The term ‘‘hybrid vehi-
cle’’ means a medium or heavy duty vehicle propelled 
by an internal combustion engine using any combus-
tible fuel and an onboard rechargeable battery stor-
age system. 
(4) NEIGHBORHOOD ELECTRIC VEHICLE.—The 
term ‘‘neighborhood electric vehicle’’ means a motor 
vehicle that qualifies as both—
(A) a low-speed vehicle, as such term is de-
fined in section 571.3(b) of title 49, Code of 
Federal Regulations; and 
(B) a zero-emission vehicle, as such term is 
defined in section 86.1702–99 of title 40, Code 
of Federal Regulations. 
(5) PILOT
PROGRAM.—The term ‘‘pilot pro-
gram’’ means the competitive grant program estab-
lished under section 402. 
(6) ULTRA-LOW
SULFUR
DIESEL
VEHICLE.—
The term ‘‘ultra-low sulfur diesel vehicle’’ means a 
vehicle manufactured in model years 2004 through 
2006 powered by a heavy-duty diesel engine that—
(A) is fueled by diesel fuel which contains 
sulfur at not more than 15 parts per million; 
and 
(B) emits not more than the lesser of—
138
(i) for vehicles manufactured in—
(I) model year 2003, 3.0 grams 
per brake horsepower-hour of oxides 
of nitrogen and .01 grams per brake 
horsepower-hour of particulate matter; 
and 
(II) model years 2004 through 
2006, 2.5 grams per brake horse-
power-hour of nonmethane hydro-
carbons and oxides of nitrogen and 
.01 grams per brake horsepower-hour 
of particulate matter; or 
(ii) the emissions of nonmethane hy-
drocarbons, oxides of nitrogen, and partic-
ulate matter of the best performing tech-
nology of ultra-low sulfur diesel vehicles of 
the same class and application that are 
commercially available. 
SEC. 402. PILOT PROGRAM. 
(a) ESTABLISHMENT.—The Secretary shall establish 
a competitive grant pilot program, to be administered 
through the Clean Cities Program of the Department of 
Energy, to provide not more than 15 geographically dis-
persed project grants to State governments, local govern-
ments, or metropolitan transportation authorities to carry
139
out a project or projects for the purposes described in sub-
section (b). 
(b) GRANT PURPOSES.—Grants under this section 
may be used for the following purposes: 
(1) The acquisition of alternative fueled vehicles 
or fuel cell vehicles, including—
(A) passenger vehicles including neighbor-
hood electric vehicles; and 
(B) motorized two-wheel bicycles, scooters, 
or other vehicles for use by law enforcement 
personnel or other State or local government or 
metropolitan transportation authority employ-
ees. 
(2) The acquisition of alternative fueled vehi-
cles, hybrid vehicles, or fuel cell vehicles, including—
(A) buses used for public transportation or 
transportation to and from schools; 
(B) delivery vehicles for goods or services; 
and 
(C) ground support vehicles at public air-
ports, including vehicles to carry baggage or 
push airplanes away from terminal gates. 
(3) The acquisition of ultra-low sulfur diesel ve-
hicles.
140
(4) Infrastructure necessary to directly support 
an alternative fueled vehicle, fuel cell vehicle, or hy-
brid vehicle project funded by the grant, including 
fueling and other support equipment. 
(5) Operation and maintenance of vehicles, in-
frastructure, and equipment acquired as part of a 
project funded by the grant. 
(c) APPLICATIONS.—
(1) REQUIREMENTS.—The Secretary shall issue 
requirements for applying for grants under the pilot 
program. At a minimum, the Secretary shall require 
that applications be submitted by the head of a 
State or local government or a metropolitan trans-
portation authority, or any combination thereof, and 
a registered participant in the Clean Cities Program 
of the Department of Energy, and shall include—
(A) at least one project to enable pas-
sengers or goods to be transferred directly from 
vehicles acquired under this section to a local, 
regional, or national transportation system; 
(B) a description of the projects proposed 
in the application, including how they meet the 
requirements of this title;
141
(C) an estimate of the ridership or degree 
of use of the projects proposed in the applica-
tion; 
(D) an estimate of the air pollution emis-
sions reduced and fossil fuel displaced as a re-
sult of the projects proposed in the application, 
and a plan to collect and disseminate environ-
mental data, related to the projects to be fund-
ed under the grant, over the life of the projects; 
(E) a description of how the projects pro-
posed in the application will be sustainable 
without Federal assistance after the completion 
of the term of the grant; 
(F) a complete description of the costs of 
each project proposed in the application, includ-
ing acquisition, construction, operation, and 
maintenance costs over the expected life of the 
project; 
(G) a description of which costs of the 
projects proposed in the application will be sup-
ported by Federal assistance under this title; 
and 
(H) documentation to the satisfaction of 
the Secretary that diesel fuel containing sulfur 
at not more than 15 parts per million is avail-
142
able for carrying out the projects, and a com-
mitment by the applicant to use such fuel in 
carrying out the projects. 
(2) PARTNERS.—An applicant under paragraph 
(1) may carry out projects under the pilot program 
in partnership with public and private entities. 
(d) SELECTION CRITERIA.—In evaluating applica-
tions under the pilot program, the Secretary shall consider 
each applicant’s previous experience with similar projects 
and shall give priority consideration to applications that—
(1) are most likely to maximize protection of 
the environment; 
(2) demonstrate the greatest commitment on 
the part of the applicant to ensure funding for the 
proposed projects and the greatest likelihood that 
each project proposed in the application will be 
maintained or expanded after Federal assistance 
under this title is completed; and 
(3) exceed the minimum requirements of sub-
section (c)(1)(A). 
(e) PILOT PROJECT REQUIREMENTS.—
(1) MAXIMUM
AMOUNT.—The Secretary shall 
not provide more than $20,000,000 in Federal as-
sistance under the pilot program to any applicant.
143
(2) COST SHARING.—The Secretary shall not 
provide more than 50 percent of the cost, incurred 
during the period of the grant, of any project under 
the pilot program. 
(3) MAXIMUM PERIOD OF GRANTS.—The Sec-
retary shall not fund any applicant under the pilot 
program for more than 5 years. 
(4) DEPLOYMENT
AND
DISTRIBUTION.—The 
Secretary shall seek to the maximum extent prac-
ticable to ensure a broad geographic distribution of 
project sites. 
(5) TRANSFER OF INFORMATION AND KNOWL-
EDGE.—The Secretary shall establish mechanisms to 
ensure that the information and knowledge gained 
by participants in the pilot program are transferred 
among the pilot program participants and to other 
interested parties, including other applicants that 
submitted applications. 
(f) SCHEDULE.—
(1) PUBLICATION.—Not later than 3 months 
after the date of the enactment of this Act, the Sec-
retary shall publish in the Federal Register, Com-
merce Business Daily, and elsewhere as appropriate, 
a request for applications to undertake projects
144
under the pilot program. Applications shall be due 
within 6 months of the publication of the notice. 
(2) SELECTION.—Not later than 6 months after 
the date by which applications for grants are due, 
the Secretary shall select by competitive, peer review 
all applications for projects to be awarded a grant 
under the pilot program. 
(g) LIMIT ON FUNDING.—The Secretary shall pro-
vide not less than 20 percent and not more than 25 per-
cent of the grant funding made available under this sec-
tion for the acquisition of ultra-low sulfur diesel vehicles. 
SEC. 403. REPORTS TO CONGRESS. 
(a) INITIAL REPORT.—Not later than 2 months after 
the date grants are awarded under this title, the Secretary 
shall transmit to the Congress a report containing—
(1) an identification of the grant recipients and 
a description of the projects to be funded; 
(2) an identification of other applicants that 
submitted applications for the pilot program; and 
(3) a description of the mechanisms used by the 
Secretary to ensure that the information and knowl-
edge gained by participants in the pilot program are 
transferred among the pilot program participants 
and to other interested parties, including other ap-
plicants that submitted applications.
145
(b) EVALUATION.—Not later than 3 years after the 
date of the enactment of this Act, and annually thereafter 
until the pilot program ends, the Secretary shall transmit 
to the Congress a report containing an evaluation of the 
effectiveness of the pilot program, including an assessment 
of the benefits to the environment derived from the 
projects included in the pilot program as well as an esti-
mate of the potential benefits to the environment to be 
derived from widespread application of alternative fueled 
vehicles and ultra-low sulfur diesel vehicles. 
SEC. 404. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated to the Sec-
retary $200,000,000 to carry out this title, to remain 
available until expended.
TITLE V—CLEAN COAL 
SEC. 501. AUTHORIZATION OF APPROPRIATIONS. 
(a) CLEAN COAL POWER INITIATIVE.—Except as 
provided in subsection (b), there are authorized to be ap-
propriated to the Secretary to carry out the activities au-
thorized by this title $200,000,000 for each of the fiscal 
years 2003 through 2011, to remain available until ex-
pended. 
(b) LIMIT
ON USE
OF FUNDS.—Notwithstanding 
subsection (a), no funds may be used to carry out the ac-
tivities authorized by this title after September 30, 2003,
146
unless the Secretary has transmitted to the Committee on 
Energy and Commerce and the Committee on Science of 
the House of Representatives, and to the Senate, the re-
port required by this subsection and one month has 
elapsed since that transmission. The report shall include, 
with respect to subsection (a), a 10-year plan containing—
(1) a detailed assessment of whether the aggre-
gate funding levels provided under subsection (a) are 
the appropriate funding levels for that program; 
(2) a detailed description of how proposals will 
be solicited and evaluated, including a list of all ac-
tivities expected to be undertaken; 
(3) a detailed list of technical milestones for 
each coal and related technology that will be pur-
sued; and 
(4) a detailed description of how the program 
will avoid problems enumerated in General Account-
ing Office reports on the Clean Coal Technology 
Program, including problems that have resulted in 
unspent funds and projects that failed either finan-
cially or scientifically. 
(c) APPLICABILITY.—Subsection (b) shall not apply 
to any project begun before September 30, 2003.
147
SEC. 502. PROJECT CRITERIA. 
(a) IN GENERAL.—The Secretary shall not provide 
funding under this title for any project that does not ad-
vance efficiency, environmental performance, and cost 
competitiveness well beyond the level of technologies that 
are in operation or have been demonstrated as of the date 
of the enactment of this Act. 
(b) TECHNICAL CRITERIA FOR CLEAN COAL POWER 
INITIATIVE.—
(1) GASIFICATION.—(A) In allocating the funds 
made available under section 501(a), the Secretary 
shall ensure that at least 80 percent of the funds are 
used only for projects on coal-based gasification 
technologies, including gasification combined cycle, 
gasification fuel cells, gasification coproduction, and 
hybrid gasification/combustion. 
(B) The Secretary shall set technical milestones 
specifying emissions levels that coal gasification 
projects must be designed to and reasonably ex-
pected to achieve. The milestones shall get more re-
strictive through the life of the program. The mile-
stones shall be designed to achieve by 2020 coal gas-
ification projects able—
(i) to remove 99 percent of sulfur dioxide; 
(ii) to emit no more than .05 lbs of NOx 
per million BTU;
148
(iii) to achieve substantial reductions in 
mercury emissions; and 
(iv) to achieve a thermal efficiency of— 
(I) 60 percent for coal of more than 
9,000 Btu; 
(II) 59 percent for coal of 7,000 to 
9,000 Btu; and 
(III) 57 percent for coal of less than 
7,000 Btu. 
(2) OTHER PROJECTS.—For projects not de-
scribed in paragraph (1), the Secretary shall set 
technical milestones specifying emissions levels that 
the projects must be designed to and reasonably ex-
pected to achieve. The milestones shall get more re-
strictive through the life of the program. The mile-
stones shall be designed to achieve by 2010 projects 
able—
(A) to remove 97 percent of sulfur dioxide; 
(B) to emit no more than .08 lbs of NOx 
per million BTU; 
(C) to achieve substantial reductions in 
mercury emissions; and 
(D) to achieve a thermal efficiency of—
(i) 45 percent for coal of more than 
9,000 Btu;
149
(ii) 44 percent for coal of 7,000 to 
9,000 Btu; and 
(iii) 42 percent for coal of less than 
7,000 Btu. 
(3) CONSULTATION.—Before setting the tech-
nical milestones under paragraphs (1)(B) and (2), 
the Secretary shall consult with the Administrator of 
the Environmental Protection Agency and interested 
entities, including coal producers, industries using 
coal, organizations to promote coal or advanced coal 
technologies, environmental organizations, and orga-
nizations representing workers. 
(4) EXISTING UNITS.—In the case of projects 
at existing units, in lieu of the thermal efficiency re-
quirements set forth in paragraph (1)(B)(iv) and 
(2)(D), the projects shall be designed to achieve an 
overall thermal design efficiency improvement com-
pared to the efficiency of the unit as operated, of not 
less than— 
(A) 7 percent for coal of more than 9,000 
Btu; 
(B) 6 percent for coal of 7,000 to 9,000 
Btu; or 
(C) 4 percent for coal of less than 7,000 
Btu.
150
(5) PERMITTED
USES.—In allocating funds 
made available under section 501, the Secretary may 
fund projects that include, as part of the project, the 
separation and capture of carbon dioxide. 
(c) FINANCIAL CRITERIA.—The Secretary shall not 
provide a funding award under this title unless the recipi-
ent has documented to the satisfaction of the Secretary 
that—
(1) the award recipient is financially viable 
without the receipt of additional Federal funding; 
(2) the recipient will provide sufficient informa-
tion to the Secretary for the Secretary to ensure 
that the award funds are spent efficiently and effec-
tively; and 
(3) a market exists for the technology being 
demonstrated or applied, as evidenced by statements 
of interest in writing from potential purchasers of 
the technology. 
(d) FINANCIAL ASSISTANCE.—The Secretary shall 
provide financial assistance to projects that meet the re-
quirements of subsections (a), (b), and (c) and are likely 
to—
(1) achieve overall cost reductions in the utiliza-
tion of coal to generate useful forms of energy;
151
(2) improve the competitiveness of coal among 
various forms of energy in order to maintain a diver-
sity of fuel choices in the United States to meet elec-
tricity generation requirements; and 
(3) demonstrate methods and equipment that 
are applicable to 25 percent of the electricity gener-
ating facilities that use coal as the primary feedstock 
as of the date of the enactment of this Act. 
(e) FEDERAL SHARE.—The Federal share of the cost 
of a coal or related technology project funded by the Sec-
retary shall not exceed 50 percent. 
(f) APPLICABILITY.—No technology, or level of emis-
sion reduction, shall be treated as adequately dem-
onstrated for purposes of section 111 of the Clean Air Act, 
achievable for purposes of section 169 of that Act, or 
achievable in practice for purposes of section 171 of that 
Act solely by reason of the use of such technology, or the 
achievement of such emission reduction, by one or more 
facilities receiving assistance under this title. 
SEC. 503. REPORT. 
Not later than 1 year after the date of the enactment 
of this Act, and once every 2 years thereafter through 
2011, the Secretary, in consultation with other appro-
priate Federal agencies, shall transmit to the Committee 
on Energy and Commerce and the Committee on Science