110 
coproduction, hybrid gasification/combustion, or other 
technologies with the potential to address the capabilities 
described in paragraphs (4) and (5) of subsection (a). 
SEC. 603. OIL AND GAS RESEARCH AND DEVELOPMENT. 
The Secretary shall conduct a program of oil and gas 
research, development, demonstration, and commercial ap-
plication, whose objective shall be to advance the science 
and technology available to domestic petroleum producers, 
particularly independent operators, to minimize the eco-
nomic dislocation caused by the decline of domestic sup-
plies of oil and natural gas resources by focusing research 
on— 
(1) assisting small domestic producers of oil 
and gas to develop new and improved technologies to 
discover and extract additional supplies; 
(2) developing technologies to extract methane 
hydrates in an environmentally sound manner; 
(3) improving the ability of the domestic indus-
try to extract hydrocarbons from known reservoirs 
and classes of reservoirs; and 
(4) reducing the cost, and improving the effi-
ciency and environmental performance, of oil and 
gas exploration and extraction activities, focusing es-
pecially on unconventional sources such as tar sands, 
heavy oil, and shale oil.
111 
SEC. 604. TRANSPORTATION FUELS. 
The Secretary shall conduct a program of transpor-
tation fuels research, development, demonstration, and 
commercial application, whose objective shall be to in-
crease the price elasticity of oil supply and demand by fo-
cusing research on— 
(1) reducing the cost of producing transpor-
tation fuels from coal and natural gas; and 
(2) indirect liquefaction of coal and biomass. 
SEC. 605. FUEL CELLS. 
(a) PROGRAM.—The Secretary shall conduct a pro-
gram of research, development, demonstration, and com-
mercial application of fuel cells for low-cost, high-effi-
ciency, fuel-flexible, modular power systems. 
(b) DEMONSTRATION.—The program under this sec-
tion shall include demonstration of fuel cell proton ex-
change membrane technology for commercial, residential, 
and transportation applications, and distributed genera-
tion systems, utilizing improved manufacturing production 
and processes. 
SEC. 606. AUTHORIZATION OF APPROPRIATIONS. 
The following sums are authorized to be appropriated 
to the Secretary for the purposes of carrying out this sub-
title: 
(1) For fiscal year 2006, $583,000,000. 
(2) For fiscal year 2007, $611,000,000.
112 
(3) For fiscal year 2008, $626,000,000. 
(4) For fiscal year 2009, $641,000,000. 
(5) For fiscal year 2010, $657,000,000. 
Subtitle B—Ultra-Deepwater and 
Unconventional 
Natural 
Gas 
and Other Petroleum Resources 
SEC. 611. PROGRAM AUTHORITY. 
(a) IN GENERAL.—The Secretary shall carry out a 
program under this subtitle of research, development, 
demonstration, and commercial application of technologies 
for ultra-deepwater and unconventional natural gas and 
other petroleum resource exploration and production, in-
cluding addressing the technology challenges for small 
producers, safe operations, and environmental mitigation 
(including reduction of greenhouse gas emissions and se-
questration of carbon). 
(b) METHANE HYDRATE REPORT.—Within 6 months 
of enactment, the Secretary shall report to Congress on 
whether the activities described in the Methane Hydrates 
Act of 2000 (114 Stat. 234 or 30 U.S.C. 1902 note) 
should be carried out under this subtitle. 
(c) PROGRAM ELEMENTS.—The program under this 
subtitle shall address the following areas, including im-
proving safety and minimizing environmental impacts of 
activities within each area:
113 
(1) Ultra-deepwater technology, including drill-
ing to formations in the Outer Continental Shelf to 
depths greater than 15,000 feet. 
(2) Ultra-deepwater architecture. 
(3) Unconventional natural gas and other petro-
leum resource exploration and production tech-
nology, including the technology challenges of small 
producers. 
(d) LIMITATION ON LOCATION OF FIELD ACTIVI-
TIES.—Field activities under the program under this sub-
title shall be carried out only— 
(1) in— 
(A) areas in the territorial waters of the 
United States not under any Outer Continental 
Shelf moratorium as of September 30, 2002; 
(B) areas onshore in the United States on 
public land administered by the Secretary of the 
Interior available for oil and gas leasing, where 
consistent with applicable law and land use 
plans; and 
(C) areas onshore in the United States on 
State or private land, subject to applicable law; 
and
114 
(2) with the approval of the appropriate Fed-
eral or State land management agency or private 
land owner. 
(e) RESEARCH AT NATIONAL ENERGY TECHNOLOGY 
LABORATORY.—The Secretary, through the National En-
ergy Technology Laboratory, shall carry out research com-
plementary to research under subsection (b). 
(f) CONSULTATION WITH SECRETARY OF THE INTE-
RIOR.—In carrying out this subtitle, the Secretary shall 
consult regularly with the Secretary of the Interior. 
SEC. 612. ULTRA-DEEPWATER PROGRAM. 
(a) IN GENERAL.—The Secretary shall carry out the 
activities under section 611(a), to maximize the use of the 
ultra-deepwater natural gas and other petroleum resources 
of the United States by increasing the supply of such re-
sources, through reducing the cost and increasing the effi-
ciency of exploration for and production of such resources, 
while improving safety and minimizing environmental im-
pacts. 
(b) ROLE OF THE SECRETARY.—The Secretary shall 
have ultimate responsibility for, and oversight of, all as-
pects of the program under this section. 
(c) ROLE OF THE PROGRAM CONSORTIUM.— 
(1) IN GENERAL.—The Secretary may contract 
with a consortium to—
115 
(A) manage awards pursuant to subsection 
(f)(4); 
(B) make recommendations to the Sec-
retary for project solicitations; 
(C) disburse funds awarded under sub-
section (f) as directed by the Secretary in ac-
cordance with the annual plan under subsection 
(e); and 
(D) carry out other activities assigned to 
the program consortium by this section. 
(2) LIMITATION.—The Secretary may not as-
sign any activities to the program consortium except 
as specifically authorized under this section. 
(3) CONFLICT OF INTEREST.— 
(A) PROCEDURES.—The Secretary shall 
establish procedures— 
(i) to ensure that each board member, 
officer, or employee of the program consor-
tium who is in a decision-making capacity 
under subsection (f)(3) or (4) shall disclose 
to the Secretary any financial interests in, 
or financial relationships with, applicants 
for or recipients of awards under this sec-
tion, including those of his or her spouse 
or minor child, unless such relationships or
116 
interests would be considered to be remote 
or inconsequential; and 
(ii) to require any board member, offi-
cer, or employee with a financial relation-
ship or interest disclosed under clause (i) 
to recuse himself or herself from any re-
view under subsection (f)(3) or oversight 
under subsection (f)(4) with respect to 
such applicant or recipient. 
(B) FAILURE TO COMPLY.—The Secretary 
may disqualify an application or revoke an 
award under this section if a board member, of-
ficer, or employee has failed to comply with pro-
cedures required under subparagraph (A)(ii). 
(d) SELECTION OF THE PROGRAM CONSORTIUM.— 
(1) IN GENERAL.—The Secretary shall select 
the program consortium through an open, competi-
tive process. 
(2) MEMBERS.—The program consortium may 
include corporations, trade associations, institutions 
of higher education, National Laboratories, or other 
research institutions. After submitting a proposal 
under paragraph (4), the program consortium may 
not add members without the consent of the Sec-
retary.
117 
(3) TAX
STATUS.—The program consortium 
shall be an entity that is exempt from tax under sec-
tion 501(c)(3) of the Internal Revenue Code of 
1986. 
(4) SCHEDULE.—Not later than 180 days after 
the date of enactment of this Act, the Secretary 
shall solicit proposals from eligible consortia to per-
form the duties in subsection (c)(1), which shall be 
submitted not later than 360 days after the date of 
enactment of this Act. The Secretary shall select the 
program consortium not later than 18 months after 
such date of enactment. 
(5) APPLICATION.—Applicants shall submit a 
proposal including such information as the Secretary 
may require. At a minimum, each proposal shall— 
(A) list all members of the consortium; 
(B) fully describe the structure of the con-
sortium, including any provisions relating to in-
tellectual property; and 
(C) describe how the applicant would carry 
out the activities of the program consortium 
under this section. 
(6) ELIGIBILITY.—To be eligible to be selected 
as the program consortium, an applicant must be an 
entity whose members collectively have demonstrated
118 
capabilities in planning and managing research, de-
velopment, demonstration, and commercial applica-
tion programs in natural gas or other petroleum ex-
ploration or production. 
(7) CRITERION.—The Secretary shall consider 
the amount of the fee an applicant proposes to re-
ceive under subsection (g) in selecting a consortium 
under this section. 
(e) ANNUAL PLAN.— 
(1) IN GENERAL.—The program under this sec-
tion shall be carried out pursuant to an annual plan 
prepared by the Secretary in accordance with para-
graph (2). 
(2) DEVELOPMENT.— 
(A) 
SOLICITATION
OF
RECOMMENDA-
TIONS.—Before drafting an annual plan under 
this subsection, the Secretary shall solicit spe-
cific written recommendations from the pro-
gram consortium for each element to be ad-
dressed in the plan, including those described in 
paragraph (4). The Secretary may request that 
the 
program 
consortium 
submit 
its 
rec-
ommendations in the form of a draft annual 
plan.
119 
(B) SUBMISSION
OF
RECOMMENDATIONS; 
OTHER COMMENT.—The Secretary shall submit 
the recommendations of the program consor-
tium under subparagraph (A) to the Ultra- 
Deepwater Advisory Committee established 
under section 615(a) for review, and such Advi-
sory Committee shall provide to the Secretary 
written comments by a date determined by the 
Secretary. The Secretary may also solicit com-
ments from any other experts. 
(C) CONSULTATION.—The Secretary shall 
consult regularly with the program consortium 
throughout the preparation of the annual plan. 
(3) PUBLICATION.—The Secretary shall trans-
mit to Congress and publish in the Federal Register 
the annual plan, along with any written comments 
received under paragraph (2)(A) and (B). 
(4) CONTENTS.—The annual plan shall describe 
the ongoing and prospective activities of the pro-
gram under this section and shall include— 
(A) a list of any solicitations for awards 
that the Secretary plans to issue to carry out 
research, development, demonstration, or com-
mercial application activities, including the top-
ics for such work, who would be eligible to
120 
apply, selection criteria, and the duration of 
awards; and 
(B) a description of the activities expected 
of the program consortium to carry out sub-
section (f)(4). 
(5) ESTIMATES
OF
INCREASED
ROYALTY
RE-
CEIPTS.—The Secretary, in consultation with the 
Secretary of the Interior, shall provide an annual re-
port to Congress with the President’s budget on the 
estimated cumulative increase in Federal royalty re-
ceipts (if any) resulting from the implementation of 
this subtitle. The initial report under this paragraph 
shall be submitted in the first President’s budget fol-
lowing the completion of the first annual plan re-
quired under this subsection. 
(f) AWARDS.— 
(1) IN GENERAL.—The Secretary shall make 
awards to carry out research, development, dem-
onstration, and commercial application activities 
under the program under this section. The program 
consortium shall not be eligible to receive such 
awards, but members of the program consortium 
may receive such awards. 
(2) PROPOSALS.—The Secretary shall solicit 
proposals for awards under this subsection in such
121 
manner and at such time as the Secretary may pre-
scribe, in consultation with the program consortium. 
(3) REVIEW.—The Secretary shall make awards 
under this subsection through a competitive process, 
which shall include a review by individuals selected 
by the Secretary. Such individuals shall include, for 
each application, Federal officials, the program con-
sortium, and non-Federal experts who are not board 
members, officers, or employees of the program con-
sortium or of a member of the program consortium. 
(4) OVERSIGHT.— 
(A) IN
GENERAL.—The program consor-
tium shall oversee the implementation of 
awards under this subsection, consistent with 
the annual plan under subsection (e), including 
disbursing funds and monitoring activities car-
ried out under such awards for compliance with 
the terms and conditions of the awards. 
(B) EFFECT.—Nothing in subparagraph 
(A) shall limit the authority or responsibility of 
the Secretary to oversee awards, or limit the 
authority of the Secretary to review or revoke 
awards. 
(C) PROVISION
OF
INFORMATION.—The 
Secretary shall provide to the program consor-
122 
tium the information necessary for the program 
consortium to carry out its responsibilities 
under this paragraph. 
(g) ADMINISTRATIVE COSTS.— 
(1) IN GENERAL.—To compensate the program 
consortium for carrying out its activities under this 
section, the Secretary shall provide to the program 
consortium funds sufficient to administer the pro-
gram. This compensation may include a manage-
ment fee consistent with Department of Energy con-
tracting practices and procedures. 
(2) ADVANCE.—The Secretary shall advance 
funds to the program consortium upon selection of 
the consortium, which shall be deducted from 
amounts to be provided under paragraph (1). 
(h) AUDIT.—The Secretary shall retain an inde-
pendent, commercial auditor to determine the extent to 
which funds provided to the program consortium, and 
funds provided under awards made under subsection (f), 
have been expended in a manner consistent with the pur-
poses and requirements of this subtitle. The auditor shall 
transmit a report annually to the Secretary, who shall 
transmit the report to Congress, along with a plan to rem-
edy any deficiencies cited in the report.
123 
SEC. 613. UNCONVENTIONAL NATURAL GAS AND OTHER PE-
TROLEUM RESOURCES PROGRAM. 
(a) IN GENERAL.—The Secretary shall carry out ac-
tivities under section 611(b)(3), to maximize the use of 
the onshore unconventional natural gas and other petro-
leum resources of the United States, by increasing the 
supply of such resources, through reducing the cost and 
increasing the efficiency of exploration for and production 
of such resources, while improving safety and minimizing 
environmental impacts. 
(b) AWARDS.— 
(1) IN
GENERAL.—The Secretary shall carry 
out this section through awards to research con-
sortia made through an open, competitive process. 
As a condition of award of funds, qualified research 
consortia shall— 
(A) demonstrate capability and experience 
in unconventional onshore natural gas or other 
petroleum research and development; 
(B) provide a research plan that dem-
onstrates how additional natural gas or oil pro-
duction will be achieved; and 
(C) at the request of the Secretary, provide 
technical advice to the Secretary for the pur-
poses of developing the annual plan required 
under subsection (e).
124 
(2) PRODUCTION
POTENTIAL.—The Secretary 
shall seek to ensure that the number and types of 
awards made under this subsection have reasonable 
potential to lead to additional oil and natural gas 
production on Federal lands. 
(3) SCHEDULE.—To carry out this subsection, 
not later than 180 days after the date of enactment 
of this Act, the Secretary shall solicit proposals from 
research consortia, which shall be submitted not 
later than 360 days after the date of enactment of 
this Act. The Secretary shall select the first group 
of research consortia to receive awards under this 
subsection not later than 18 months after such date 
of enactment. 
(c) AUDIT.—The Secretary shall retain an inde-
pendent, commercial auditor to determine the extent to 
which funds provided under awards made under this sec-
tion have been expended in a manner consistent with the 
purposes and requirements of this subtitle. The auditor 
shall transmit a report annually to the Secretary, who 
shall transmit the report to Congress, along with a plan 
to remedy any deficiencies cited in the report. 
(d) FOCUS AREAS FOR AWARDS.— 
(1) UNCONVENTIONAL
RESOURCES.—Awards 
from allocations under section 619(d)(2) shall focus
125 
on areas including advanced coalbed methane, deep 
drilling, natural gas production from tight sands, 
natural gas production from gas shales, stranded 
gas, innovative exploration and production tech-
niques, enhanced recovery techniques, and environ-
mental mitigation of unconventional natural gas and 
other petroleum resources exploration and produc-
tion. 
(2) SMALL PRODUCERS.—Awards from alloca-
tions under section 619(d)(3) shall be made to con-
sortia consisting of small producers or organized pri-
marily for the benefit of small producers, and shall 
focus on areas including complex geology involving 
rapid changes in the type and quality of the oil and 
gas reservoirs across the reservoir; low reservoir 
pressure; unconventional natural gas reservoirs in 
coalbeds, deep reservoirs, tight sands, or shales; and 
unconventional oil reservoirs in tar sands and oil 
shales. 
(e) ANNUAL PLAN.— 
(1) IN GENERAL.—The program under this sec-
tion shall be carried out pursuant to an annual plan 
prepared by the Secretary in accordance with para-
graph (2). 
(2) DEVELOPMENT.—
126 
(A) WRITTEN
RECOMMENDATIONS.—Be-
fore drafting an annual plan under this sub-
section, the Secretary shall solicit specific writ-
ten recommendations from the research con-
sortia receiving awards under subsection (b) 
and the Unconventional Resources Technology 
Advisory Committee for each element to be ad-
dressed in the plan, including those described in 
subparagraph (D). 
(B) CONSULTATION.—The Secretary shall 
consult regularly with the research consortia 
throughout the preparation of the annual plan. 
(C) PUBLICATION.—The Secretary shall 
transmit to Congress and publish in the Fed-
eral Register the annual plan, along with any 
written comments received under subparagraph 
(A). 
(D) CONTENTS.—The annual plan shall 
describe the ongoing and prospective activities 
under this section and shall include a list of any 
solicitations for awards that the Secretary plans 
to issue to carry out research, development, 
demonstration, or commercial application activi-
ties, including the topics for such work, who
127 
would be eligible to apply, selection criteria, and 
the duration of awards. 
(3) ESTIMATES
OF
INCREASED
ROYALTY
RE-
CEIPTS.—The Secretary, in consultation with the 
Secretary of the Interior, shall provide an annual re-
port to Congress with the President’s budget on the 
estimated cumulative increase in Federal royalty re-
ceipts (if any) resulting from the implementation of 
this subtitle. The initial report under this paragraph 
shall be submitted in the first President’s budget fol-
lowing the completion of the first annual plan re-
quired under this subsection. 
(f) ACTIVITIES BY THE UNITED STATES GEOLOGI-
CAL SURVEY.—The Secretary of the Interior, through the 
United States Geological Survey, shall, where appropriate, 
carry out programs of long-term research to complement 
the programs under this section. 
SEC. 614. ADDITIONAL REQUIREMENTS FOR AWARDS. 
(a) DEMONSTRATION PROJECTS.—An application for 
an award under this subtitle for a demonstration project 
shall describe with specificity the intended commercial use 
of the technology to be demonstrated. 
(b) FLEXIBILITY
IN LOCATING DEMONSTRATION 
PROJECTS.—Subject to the limitation in section 611(c), 
a demonstration project under this subtitle relating to an
128 
ultra-deepwater technology or an ultra-deepwater architec-
ture may be conducted in deepwater depths. 
(c) INTELLECTUAL PROPERTY AGREEMENTS.—If an 
award under this subtitle is made to a consortium (other 
than the program consortium), the consortium shall pro-
vide to the Secretary a signed contract agreed to by all 
members of the consortium describing the rights of each 
member to intellectual property used or developed under 
the award. 
(d) TECHNOLOGY TRANSFER.—2.5 percent of the 
amount of each award made under this subtitle shall be 
designated for technology transfer and outreach activities 
under this subtitle. 
(e) COST SHARING REDUCTION FOR INDEPENDENT 
PRODUCERS.—In applying the cost sharing requirements 
under section ll to an award under this subtitle the 
Secretary may reduce or eliminate the non-Federal re-
quirement if the Secretary determines that the reduction 
is necessary and appropriate considering the technological 
risks involved in the project. 
SEC. 615. ADVISORY COMMITTEES. 
(a) ULTRA-DEEPWATER ADVISORY COMMITTEE.— 
(1) ESTABLISHMENT.—Not later than 270 days 
after the date of enactment of this Act, the Sec-
129 
retary shall establish an advisory committee to be 
known as the Ultra-Deepwater Advisory Committee. 
(2) MEMBERSHIP.—The advisory committee 
under this subsection shall be composed of members 
appointed by the Secretary including— 
(A) individuals with extensive research ex-
perience or operational knowledge of offshore 
natural gas and other petroleum exploration 
and production; 
(B) individuals broadly representative of 
the affected interests in ultra-deepwater natural 
gas and other petroleum production, including 
interests in environmental protection and safe 
operations; 
(C) no individuals who are Federal employ-
ees; and 
(D) no individuals who are board members, 
officers, or employees of the program consor-
tium. 
(3) DUTIES.—The advisory committee under 
this subsection shall— 
(A) advise the Secretary on the develop-
ment and implementation of programs under 
this subtitle related to ultra-deepwater natural 
gas and other petroleum resources; and
130 
(B) carry out section 612(e)(2)(B). 
(4) COMPENSATION.—A member of the advi-
sory committee under this subsection shall serve 
without compensation but shall receive travel ex-
penses in accordance with applicable provisions 
under subchapter I of chapter 57 of title 5, United 
States Code. 
(b) UNCONVENTIONAL
RESOURCES
TECHNOLOGY 
ADVISORY COMMITTEE.— 
(1) ESTABLISHMENT.—Not later than 270 days 
after the date of enactment of this Act, the Sec-
retary shall establish an advisory committee to be 
known as the Unconventional Resources Technology 
Advisory Committee. 
(2) MEMBERSHIP.—The advisory committee 
under this subsection shall be composed of members 
appointed by the Secretary including— 
(A) a majority of members who are em-
ployees or representatives of independent pro-
ducers of natural gas and other petroleum, in-
cluding small producers; 
(B) individuals with extensive research ex-
perience or operational knowledge of unconven-
tional natural gas and other petroleum resource 
exploration and production;
131 
(C) individuals broadly representative of 
the affected interests in unconventional natural 
gas and other petroleum resource exploration 
and production, including interests in environ-
mental protection and safe operations; and 
(D) no individuals who are Federal em-
ployees. 
(3) DUTIES.—The advisory committee under 
this subsection shall advise the Secretary on the de-
velopment and implementation of activities under 
this subtitle related to unconventional natural gas 
and other petroleum resources. 
(4) COMPENSATION.—A member of the advi-
sory committee under this subsection shall serve 
without compensation but shall receive travel ex-
penses in accordance with applicable provisions 
under subchapter I of chapter 57 of title 5, United 
States Code. 
(c) PROHIBITION.—No advisory committee estab-
lished under this section shall make recommendations on 
funding awards to particular consortia or other entities, 
or for specific projects. 
SEC. 616. LIMITS ON PARTICIPATION. 
An entity shall be eligible to receive an award under 
this subtitle only if the Secretary finds—
132 
(1) that the entity’s participation in the pro-
gram under this subtitle would be in the economic 
interest of the United States; and 
(2) that either— 
(A) the entity is a United States-owned en-
tity organized under the laws of the United 
States; or 
(B) the entity is organized under the laws 
of the United States and has a parent entity or-
ganized under the laws of a country that af-
fords— 
(i) to United States-owned entities op-
portunities, comparable to those afforded 
to any other entity, to participate in any 
cooperative research venture similar to 
those authorized under this subtitle; 
(ii) to United States-owned entities 
local investment opportunities comparable 
to those afforded to any other entity; and 
(iii) adequate and effective protection 
for the intellectual property rights of 
United States-owned entities. 
SEC. 617. SUNSET. 
The authority provided by this subtitle shall termi-
nate on September 30, 2015.
133 
SEC. 618. DEFINITIONS. 
In this subtitle: 
(1) 
DEEPWATER.—The 
term 
‘‘deepwater’’ 
means a water depth that is greater than 200 but 
less than 1,500 meters. 
(2) INDEPENDENT
PRODUCER
OF
OIL
OR 
GAS.— 
(A) IN GENERAL.—The term ‘‘independent 
producer of oil or gas’’ means any person that 
produces oil or gas other than a person to 
whom subsection (c) of section 613A of the In-
ternal Revenue Code of 1986 does not apply by 
reason of paragraph (2) (relating to certain re-
tailers) or paragraph (4) (relating to certain re-
finers) of section 613A(d) of such Code. 
(B) RULES FOR APPLYING PARAGRAPHS (2) 
AND (4) OF SECTION 613A(d).—For purposes of 
subparagraph (A), paragraphs (2) and (4) of 
section 613A(d) of the Internal Revenue Code 
of 1986 shall be applied by substituting ‘‘cal-
endar year’’ for ‘‘taxable year’’ each place it ap-
pears in such paragraphs. 
(3) PROGRAM CONSORTIUM.—The term ‘‘pro-
gram consortium’’ means the consortium selected 
under section 612(d).
134 
(4) REMOTE OR INCONSEQUENTIAL.—The term 
‘‘remote or inconsequential’’ has the meaning given 
that term in regulations issued by the Office of Gov-
ernment Ethics under section 208(b)(2) of title 18, 
United States Code. 
(5) SMALL PRODUCER.—The term ‘‘small pro-
ducer’’ means an entity organized under the laws of 
the United States with production levels of less than 
1,000 barrels per day of oil equivalent. 
(6) ULTRA-DEEPWATER.—The term ‘‘ultra- 
deepwater’’ means a water depth that is equal to or 
greater than 1,500 meters. 
(7) ULTRA-DEEPWATER
ARCHITECTURE.—The 
term ‘‘ultra-deepwater architecture’’ means the inte-
gration of technologies for the exploration for, or 
production of, natural gas or other petroleum re-
sources located at ultra-deepwater depths. 
(8) ULTRA-DEEPWATER
TECHNOLOGY.—The 
term ‘‘ultra-deepwater technology’’ means a discrete 
technology that is specially suited to address 1 or 
more challenges associated with the exploration for, 
or production of, natural gas or other petroleum re-
sources located at ultra-deepwater depths. 
(9) UNCONVENTIONAL
NATURAL
GAS
AND 
OTHER PETROLEUM RESOURCE.—The term ‘‘uncon-
135 
ventional natural gas and other petroleum resource’’ 
means natural gas and other petroleum resource lo-
cated onshore in an economically inaccessible geo-
logical formation, including resources of small pro-
ducers. 
SEC. 619. FUNDING. 
(a) IN GENERAL.— 
(1) OIL AND GAS LEASE INCOME.—For each of 
fiscal years 2006 through 2015, from any Federal 
royalties, rents, and bonuses derived from Federal 
onshore and offshore oil and gas leases issued under 
the Outer Continental Shelf Lands Act and the Min-
eral Leasing Act which are deposited in the Treas-
ury, and after distribution of any such funds as de-
scribed in subsection (c), $150,000,000 shall be de-
posited into the Ultra-Deepwater and Unconven-
tional Natural Gas and Other Petroleum Research 
Fund (in this section referred to as the Fund). For 
purposes of this section, the term ‘‘royalties’’ ex-
cludes proceeds from the sale of royalty production 
taken in kind and royalty production that is trans-
ferred under section 27(a)(3) of the Outer Conti-
nental Shelf Lands Act (43 U.S.C. 1353(a)(3)). 
(2) AUTHORIZATION OF APPROPRIATIONS.—In 
addition to amounts described in paragraph (1),
136 
there are authorized to be appropriated to the Sec-
retary, to be deposited in the Fund, $50,000,000 for 
each of the fiscal years 2006 through 2015, to re-
main available until expended. 
(b) OBLIGATIONAL
AUTHORITY.—Monies in the 
Fund shall be available to the Secretary for obligation 
under this subtitle without fiscal year limitation, to remain 
available until expended. 
(c) PRIOR DISTRIBUTIONS.—The distributions de-
scribed in subsection (a) are those required by law— 
(1) to States and to the Reclamation Fund 
under the Mineral Leasing Act (30 U.S.C. 191(a)); 
and 
(2) to other funds receiving monies from Fed-
eral oil and gas leasing programs, including— 
(A) any recipients pursuant to section 8(g) 
of the Outer Continental Shelf Lands Act (43 
U.S.C. 1337(g)); 
(B) the Land and Water Conservation 
Fund, pursuant to section 2(c) of the Land and 
Water Conservation Fund Act of 1965 (16 
U.S.C. 4601–5(c)); 
(C) the Historic Preservation Fund, pursu-
ant to section 108 of the National Historic 
Preservation Act (16 U.S.C. 470h); and
137 
(D) the Secure Energy Reinvestment 
Fund. 
(d) ALLOCATION.—Amounts obligated from the Fund 
under this section in each fiscal year shall be allocated 
as follows: 
(1) 50 percent shall be for activities under sec-
tion 612. 
(2) 35 percent shall be for activities under sec-
tion 613(d)(1). 
(3) 10 percent shall be for activities under sec-
tion 613(d)(2). 
(4) 5 percent shall be for research under section 
611(d). 
(e) FUND.—There is hereby established in the Treas-
ury of the United States a separate fund to be known as 
the ‘‘Ultra-Deepwater and Unconventional Natural Gas 
and Other Petroleum Research Fund’’. 
TITLE VII—HYDROGEN 
SEC. 701. DEFINITIONS. 
In this title: 
(1) ADVISORY COMMITTEE.—The term ‘‘Advi-
sory Committee’’ means the Hydrogen Technical and 
Fuel Cell Advisory Committee established under sec-
tion 705.
138 
(2) FUEL CELL.—The term ‘‘fuel cell’’ means a 
device that directly converts the chemical energy of 
a fuel and an oxidant into electricity by an electro-
chemical process taking place at separate electrodes 
in the device. 
(3) INFRASTRUCTURE.—The term ‘‘infrastruc-
ture’’ means the equipment, systems, or facilities 
used to produce, distribute, deliver, or store hydro-
gen. 
(4) LIGHT DUTY VEHICLE.—The term ‘‘light 
duty vehicle’’ means a car or truck classified by the 
Department of Transportation as a Class I or IIA 
vehicle. 
SEC. 702. PLAN. 
Not later than 6 months after the date of enactment 
of this Act, the Secretary shall transmit to Congress a 
coordinated plan for the programs described in this title 
and any other programs of the Department that are di-
rectly related to fuel cells or hydrogen. The plan shall de-
scribe, at a minimum— 
(1) the agenda for the next 5 years for the pro-
grams authorized under this title, including the 
agenda for each activity enumerated in section 
703(a);
139 
(2) the types of entities that will carry out the 
activities under this title and what role each entity 
is expected to play; 
(3) the milestones that will be used to evaluate 
the programs for the next 5 years; 
(4) the most significant technical and nontech-
nical hurdles that stand in the way of achieving the 
goals described in section 703(b), and how the pro-
grams will address those hurdles; and 
(5) the policy assumptions that are implicit in 
the plan, including any assumptions that would af-
fect the sources of hydrogen or the marketability of 
hydrogen-related products. 
SEC. 703. PROGRAMS. 
(a) ACTIVITIES.—The Secretary, in partnership with 
the private sector, shall conduct programs to address— 
(1) production of hydrogen from diverse energy 
sources, including— 
(A) fossil fuels, which may include carbon 
capture and sequestration; 
(B) hydrogen-carrier fuels (including eth-
anol and methanol); 
(C) renewable energy resources, including 
biomass; and 
(D) nuclear energy;
140 
(2) use of hydrogen for commercial, industrial, 
and residential electric power generation; 
(3) safe delivery of hydrogen or hydrogen-car-
rier fuels, including— 
(A) transmission by pipeline and other dis-
tribution methods; and 
(B) convenient and economic refueling of 
vehicles either at central refueling stations or 
through distributed on-site generation; 
(4) advanced vehicle technologies, including— 
(A) engine and emission control systems; 
(B) energy storage, electric propulsion, and 
hybrid systems; 
(C) automotive materials; and 
(D) other advanced vehicle technologies; 
(5) storage of hydrogen or hydrogen-carrier 
fuels, including development of materials for safe 
and economic storage in gaseous, liquid, or solid 
form at refueling facilities and onboard vehicles; 
(6) development of safe, durable, affordable, 
and efficient fuel cells, including fuel-flexible fuel cell 
power systems, improved manufacturing processes, 
high-temperature membranes, cost-effective fuel 
processing for natural gas, fuel cell stack and system
141 
reliability, low temperature operation, and cold start 
capability; 
(7) development, after consultation with the pri-
vate sector, of necessary codes and standards (in-
cluding international codes and standards and vol-
untary consensus standards adopted in accordance 
with OMB Circular A–119) and safety practices for 
the production, distribution, storage, and use of hy-
drogen, hydrogen-carrier fuels, and related products; 
and 
(8) a public education program to develop im-
proved knowledge and acceptability of hydrogen- 
based systems. 
(b) PROGRAM GOALS.— 
(1) VEHICLES.—For vehicles, the goals of the 
program are— 
(A) to enable a commitment by auto-
makers no later than year 2015 to offer safe, 
affordable, and technically viable hydrogen fuel 
cell vehicles in the mass consumer market; and 
(B) to enable production, delivery, and ac-
ceptance by consumers of model year 2020 hy-
drogen fuel cell and other hydrogen-powered ve-
hicles that will have— 
(i) a range of at least 300 miles;
142 
(ii) improved performance and ease of 
driving; 
(iii) safety and performance com-
parable to vehicle technologies in the mar-
ket; and 
(iv) when compared to light duty vehi-
cles in model year 2003— 
(I) fuel economy that is substan-
tially higher; 
(II) substantially lower emissions 
of air pollutants; and 
(III) equivalent or improved vehi-
cle fuel system crash integrity and oc-
cupant protection. 
(2) HYDROGEN ENERGY AND ENERGY INFRA-
STRUCTURE.—For hydrogen energy and energy in-
frastructure, the goals of the program are to enable 
a commitment not later than 2015 that will lead to 
infrastructure by 2020 that will provide— 
(A) safe and convenient refueling; 
(B) improved overall efficiency; 
(C) widespread availability of hydrogen 
from domestic energy sources through— 
(i) production, with consideration of 
emissions levels;
143 
(ii) delivery, including transmission by 
pipeline and other distribution methods for 
hydrogen; and 
(iii) storage, including storage in sur-
face transportation vehicles; 
(D) hydrogen for fuel cells, internal com-
bustion engines, and other energy conversion 
devices for portable, stationary, and transpor-
tation applications; and 
(E) other technologies consistent with the 
Department’s plan. 
(3) FUEL CELLS.—The goals for fuel cells and 
their portable, stationary, and transportation appli-
cations are to enable— 
(A) safe, economical, and environmentally 
sound hydrogen fuel cells; 
(B) fuel cells for light duty and other vehi-
cles; and 
(C) other technologies consistent with the 
Department’s plan. 
(c) DEMONSTRATION.—In carrying out the programs 
under this section, the Secretary shall fund a limited num-
ber of demonstration projects, consistent with a deter-
mination of the maturity, cost-effectiveness, and environ-
mental impacts of technologies supporting each project. In
144 
selecting projects under this subsection, the Secretary 
shall, to the extent practicable and in the public interest, 
select projects that— 
(1) involve using hydrogen and related products 
at existing facilities or installations, such as existing 
office buildings, military bases, vehicle fleet centers, 
transit bus authorities, or units of the National Park 
System; 
(2) depend on reliable power from hydrogen to 
carry out essential activities; 
(3) lead to the replication of hydrogen tech-
nologies and draw such technologies into the market-
place; 
(4) include vehicle, portable, and stationary 
demonstrations of fuel cell and hydrogen-based en-
ergy technologies; 
(5) address the interdependency of demand for 
hydrogen fuel cell applications and hydrogen fuel in-
frastructure; 
(6) raise awareness of hydrogen technology 
among the public; 
(7) facilitate identification of an optimum tech-
nology among competing alternatives; 
(8) address distributed generation using renew-
able sources; and
145 
(9) address applications specific to rural or re-
mote locations, including isolated villages and is-
lands, the National Park System, and tribal entities. 
The Secretary shall give preference to projects which ad-
dress multiple elements contained in paragraphs (1) 
through (9). 
(d) DEPLOYMENT.—In carrying out the programs 
under this section, the Secretary shall, in partnership with 
the private sector, conduct activities to facilitate the de-
ployment of hydrogen energy and energy infrastructure, 
fuel cells, and advanced vehicle technologies. 
(e) FUNDING.— 
(1) IN
GENERAL.—The Secretary shall carry 
out the programs under this section using a competi-
tive, merit-based review process and consistent with 
the generally applicable Federal laws and regulations 
governing awards of financial assistance, contracts, 
or other agreements. 
(2) RESEARCH CENTERS.—Activities under this 
section may be carried out by funding nationally rec-
ognized university-based or Federal laboratory re-
search centers. 
(f) DISCLOSURE.—Section 623 of the Energy Policy 
Act of 1992 (42 U.S.C. 13293) relating to the protection 
of information shall apply to projects carried out through
146 
grants, cooperative agreements, or contracts under this 
title. 
SEC. 704. INTERAGENCY TASK FORCE. 
(a) ESTABLISHMENT.—Not later than 120 days after 
the date of enactment of this Act, the President shall es-
tablish an interagency task force chaired by the Secretary 
with representatives from each of the following: 
(1) The Office of Science and Technology Pol-
icy within the Executive Office of the President. 
(2) The Department of Transportation. 
(3) The Department of Defense. 
(4) The Department of Commerce (including 
the National Institute of Standards and Tech-
nology). 
(5) The Department of State. 
(6) The Environmental Protection Agency. 
(7) The National Aeronautics and Space Ad-
ministration. 
(8) Other Federal agencies as the Secretary de-
termines appropriate. 
(b) DUTIES.— 
(1) PLANNING.—The interagency task force 
shall work toward— 
(A) a safe, economical, and environ-
mentally sound fuel infrastructure for hydrogen
147 
and hydrogen-carrier fuels, including an infra-
structure that supports buses and other fleet 
transportation; 
(B) fuel cells in government and other ap-
plications, including portable, stationary, and 
transportation applications; 
(C) distributed power generation, including 
the generation of combined heat, power, and 
clean fuels including hydrogen; 
(D) uniform hydrogen codes, standards, 
and safety protocols; and 
(E) vehicle hydrogen fuel system integrity 
safety performance. 
(2) ACTIVITIES.—The interagency task force 
may organize workshops and conferences, may issue 
publications, and may create databases to carry out 
its duties. The interagency task force shall— 
(A) foster the exchange of generic, non-
proprietary information and technology among 
industry, academia, and government; 
(B) develop and maintain an inventory and 
assessment of hydrogen, fuel cells, and other 
advanced technologies, including the commercial 
capability of each technology for the economic
148 
and environmentally safe production, distribu-
tion, delivery, storage, and use of hydrogen; 
(C) integrate technical and other informa-
tion made available as a result of the programs 
and activities under this title; 
(D) promote the marketplace introduction 
of infrastructure for hydrogen fuel vehicles; and 
(E) conduct an education program to pro-
vide hydrogen and fuel cell information to po-
tential end-users. 
(c) AGENCY COOPERATION.—The heads of all agen-
cies, including those whose agencies are not represented 
on the interagency task force, shall cooperate with and 
furnish information to the interagency task force, the Ad-
visory Committee, and the Department. 
SEC. 705. ADVISORY COMMITTEE. 
(a) ESTABLISHMENT.—The Hydrogen Technical and 
Fuel Cell Advisory Committee is established to advise the 
Secretary on the programs and activities under this title. 
(b) MEMBERSHIP.— 
(1) MEMBERS.—The Advisory Committee shall 
be comprised of not fewer than 12 nor more than 25 
members. The members shall be appointed by the 
Secretary to represent domestic industry, academia, 
professional societies, government agencies, Federal
149 
laboratories, previous advisory panels, and financial, 
environmental, and other appropriate organizations 
based on the Department’s assessment of the tech-
nical and other qualifications of committee members 
and the needs of the Advisory Committee. 
(2) TERMS.—The term of a member of the Ad-
visory Committee shall not be more than 3 years. 
The Secretary may appoint members of the Advisory 
Committee in a manner that allows the terms of the 
members serving at any time to expire at spaced in-
tervals so as to ensure continuity in the functioning 
of the Advisory Committee. A member of the Advi-
sory Committee whose term is expiring may be re-
appointed. 
(3) CHAIRPERSON.—The Advisory Committee 
shall have a chairperson, who is elected by the mem-
bers from among their number. 
(c) REVIEW.—The Advisory Committee shall review 
and make recommendations to the Secretary on— 
(1) the implementation of programs and activi-
ties under this title; 
(2) the safety, economical, and environmental 
consequences of technologies for the production, dis-
tribution, delivery, storage, or use of hydrogen en-
ergy and fuel cells; and
150 
(3) the plan under section 702. 
(d) RESPONSE.— 
(1) CONSIDERATION OF RECOMMENDATIONS.— 
The Secretary shall consider, but need not adopt, 
any recommendations of the Advisory Committee 
under subsection (c). 
(2) BIENNIAL
REPORT.—The Secretary shall 
transmit a biennial report to Congress describing 
any recommendations made by the Advisory Com-
mittee since the previous report. The report shall in-
clude a description of how the Secretary has imple-
mented or plans to implement the recommendations, 
or an explanation of the reasons that a recommenda-
tion will not be implemented. The report shall be 
transmitted along with the President’s budget pro-
posal. 
(e) SUPPORT.—The Secretary shall provide resources 
necessary in the judgment of the Secretary for the Advi-
sory Committee to carry out its responsibilities under this 
title. 
SEC. 706. EXTERNAL REVIEW. 
(a) PLAN.—The Secretary shall enter into an ar-
rangement with the National Academy of Sciences to re-
view the plan prepared under section 702, which shall be 
completed not later than 6 months after the Academy re-
151 
ceives the plan. Not later than 45 days after receiving the 
review, the Secretary shall transmit the review to Congress 
along with a plan to implement the review’s recommenda-
tions or an explanation of the reasons that a recommenda-
tion will not be implemented. 
(b) ADDITIONAL REVIEW.—The Secretary shall enter 
into an arrangement with the National Academy of 
Sciences under which the Academy will review the pro-
grams under section 703 during the fourth year following 
the date of enactment of this Act. The Academy’s review 
shall include the research priorities and technical mile-
stones, and evaluate the progress toward achieving them. 
The review shall be completed not later than 5 years after 
the date of enactment of this Act. Not later than 45 days 
after receiving the review, the Secretary shall transmit the 
review to Congress along with a plan to implement the 
review’s recommendations or an explanation for the rea-
sons that a recommendation will not be implemented. 
SEC. 707. MISCELLANEOUS PROVISIONS. 
(a) REPRESENTATION.—The Secretary may rep-
resent the United States interests with respect to activities 
and programs under this title, in coordination with the 
Department of Transportation, the National Institute of 
Standards and Technology, and other relevant Federal
152 
agencies, before governments and nongovernmental orga-
nizations including— 
(1) other Federal, State, regional, and local 
governments and their representatives; 
(2) industry and its representatives, including 
members of the energy and transportation indus-
tries; and 
(3) in consultation with the Department of 
State, foreign governments and their representatives 
including international organizations. 
(b) REGULATORY AUTHORITY.—Nothing in this title 
shall be construed to alter the regulatory authority of the 
Department. 
SEC. 708. SAVINGS CLAUSE. 
Nothing in this title shall be construed to affect the 
authority of the Secretary of Transportation that may 
exist prior to the date of enactment of this Act with re-
spect to— 
(1) research into, and regulation of, hydrogen- 
powered vehicles fuel systems integrity, standards, 
and safety under subtitle VI of title 49, United 
States Code; 
(2) regulation of hazardous materials transpor-
tation under chapter 51 of title 49, United States 
Code;
153 
(3) regulation of pipeline safety under chapter 
601 of title 49, United States Code; 
(4) encouragement and promotion of research, 
development, and deployment activities relating to 
advanced vehicle technologies under section 5506 of 
title 49, United States Code; 
(5) regulation of motor vehicle safety under 
chapter 301 of title 49, United States Code; 
(6) automobile fuel economy under chapter 329 
of title 49, United States Code; or 
(7) representation of the interests of the United 
States with respect to the activities and programs 
under the authority of title 49, United States Code. 
SEC. 709. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated to the Sec-
retary to carry out this title, in addition to any amounts 
made available for these purposes under other Acts— 
(1) $273,500,000 for fiscal year 2006; 
(2) $375,000,000 for fiscal year 2007; 
(3) $450,000,000 for fiscal year 2008; 
(4) $500,000,000 for fiscal year 2009; and 
(5) $550,000,000 for fiscal year 2010.
154 
TITLE VIII—ADVANCED 
VEHICLES 
Subtitle A—Pilot Program 
SEC. 801. DEFINITIONS. 
In this subtitle: 
(1) ALTERNATIVE FUELED VEHICLE.— 
(A) IN GENERAL.—The term ‘‘alternative 
fueled vehicle’’ means a vehicle propelled solely 
on an alternative fuel (as defined in section 301 
of the Energy Policy Act of 1992 (42 U.S.C. 
13211)). 
(B) EXCLUSION.—The term ‘‘alternative 
fueled vehicle’’ does not include a vehicle that 
the Secretary determines, by regulation, does 
not yield substantial environmental benefits 
over a vehicle operating solely on gasoline or 
diesel derived from fossil fuels. 
(2) FUEL CELL VEHICLE.—The term ‘‘fuel cell 
vehicle’’ means a vehicle propelled by an electric 
motor powered by a fuel cell system that converts 
chemical energy into electricity by combining oxygen 
(from air) with hydrogen fuel that is stored on the 
vehicle or is produced onboard by reformation of a 
hydrocarbon fuel. Such fuel cell system may or may
155 
not include the use of auxiliary energy storage sys-
tems to enhance vehicle performance. 
(3) HYBRID VEHICLE.—The term ‘‘hybrid vehi-
cle’’ means a medium or heavy duty vehicle propelled 
by an internal combustion engine or heat engine 
using any combustible fuel and an onboard recharge-
able energy storage device. 
(4) NEIGHBORHOOD ELECTRIC VEHICLE.—The 
term ‘‘neighborhood electric vehicle’’ means a motor 
vehicle that— 
(A) meets the definition of a low-speed ve-
hicle (as defined in part 571 of title 49, Code 
of Federal Regulations); 
(B) meets the definition of a zero-emission 
vehicle (as defined in section 86.1702–99 of 
title 40, Code of Federal Regulations); 
(C) meets the requirements of Federal 
Motor Vehicle Safety Standard No. 500; and 
(D) has a maximum speed of not greater 
than 25 miles per hour. 
(5) PILOT
PROGRAM.—The term ‘‘pilot pro-
gram’’ means the competitive grant program estab-
lished under section 802. 
(6) ULTRA-LOW
SULFUR
DIESEL
VEHICLE.— 
The term ‘‘ultra-low sulfur diesel vehicle’’ means a
156 
vehicle manufactured in model year 2005 or 2006 
powered by a heavy-duty diesel engine that— 
(A) is fueled by diesel fuel that contains 
sulfur at not more than 15 parts per million; 
and 
(B) emits not more than the lesser of— 
(i) 2.5 grams per brake horsepower- 
hour of nonmethane hydrocarbons and ox-
ides of nitrogen and .01 grams per brake 
horsepower-hour of particulate matter; or 
(ii) the quantity of emissions of non-
methane hydrocarbons, oxides of nitrogen, 
and particulate matter of the best-per-
forming technology of ultra-low sulfur die-
sel vehicles of the same class and applica-
tion that are commercially available. 
SEC. 802. PILOT PROGRAM. 
(a) ESTABLISHMENT.—The Secretary, in consulta-
tion with the Secretary of Transportation, 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
157 
out a project or projects for the purposes described in sub-
section (b). 
(b) GRANT PURPOSES.—A grant 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 2-wheel bicycles, scooters, or 
other vehicles for use by law enforcement per-
sonnel 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 or pull airplanes toward or away from ter-
minal gates). 
(3) The acquisition of ultra-low sulfur diesel ve-
hicles.
158 
(4) Installation or acquisition of infrastructure 
necessary to directly support an alternative fueled 
vehicle, fuel cell vehicle, or hybrid vehicle project 
funded by the grant, including fueling and other 
support equipment. 
(5) Operation and maintenance of vehicles, in-
frastructure, and equipment acquired as part of a 
project funded by the grant. 
(c) APPLICATIONS.— 
(1) REQUIREMENTS.— 
(A) IN
GENERAL.—The Secretary shall 
issue requirements for applying for grants 
under the pilot program. 
(B) MINIMUM REQUIREMENTS.—At a min-
imum, the Secretary shall require that an appli-
cation for a grant— 
(i) be submitted by the head of a 
State or local government or a metropoli-
tan transportation authority, or any com-
bination thereof, and a registered partici-
pant in the Clean Cities Program of the 
Department of Energy; and 
(ii) include— 
(I) a description of the project 
proposed in the application, including
159 
how the project meets the require-
ments of this subtitle; 
(II) an estimate of the ridership 
or degree of use of the project; 
(III) an estimate of the air pollu-
tion emissions reduced and fossil fuel 
displaced as a result of the project, 
and a plan to collect and disseminate 
environmental data, related to the 
project to be funded under the grant, 
over the life of the project; 
(IV) a description of how the 
project will be sustainable without 
Federal assistance after the comple-
tion of the term of the grant; 
(V) a complete description of the 
costs of the project, including acquisi-
tion, 
construction, 
operation, 
and 
maintenance costs over the expected 
life of the project; 
(VI) a description of which costs 
of the project will be supported by 
Federal assistance under this subtitle; 
and
160 
(VII) documentation to the satis-
faction of the Secretary that diesel 
fuel containing sulfur at not more 
than 15 parts per million is available 
for carrying out the project, and a 
commitment by the applicant to use 
such fuel in carrying out the project. 
(2) PARTNERS.—An applicant under paragraph 
(1) may carry out a project 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— 
(1) consider each applicant’s previous experi-
ence with similar projects; and 
(2) give priority consideration to applications 
that— 
(A) are most likely to maximize protection 
of the environment; 
(B) demonstrate the greatest commitment 
on the part of the applicant to ensure funding 
for the proposed project and the greatest likeli-
hood that the project will be maintained or ex-
panded after Federal assistance under this sub-
title is completed; and
161 
(C) exceed the minimum requirements of 
subsection (c)(1)(B)(ii). 
(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. 
(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.—
162 
(1) PUBLICATION.—Not later than 90 days 
after the date of 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 
under the pilot program. Applications shall be due 
not later than 180 days after the date of publication 
of the notice. 
(2) SELECTION.—Not later than 180 days after 
the date by which applications for grants are due, 
the Secretary shall select by competitive, peer re-
viewed proposal, 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 nor more than 25 percent of the 
grant funding made available under this section for the 
acquisition of ultra-low sulfur diesel vehicles. 
SEC. 803. REPORTS TO CONGRESS. 
(a) INITIAL REPORT.—Not later than 60 days after 
the date on which grants are awarded under this subtitle, 
the Secretary shall submit to Congress a report con-
taining— 
(1) an identification of the grant recipients and 
a description of the projects to be funded;
163 
(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. 
(b) EVALUATION.—Not later than 3 years after the 
date of enactment of this Act, and annually thereafter 
until the pilot program ends, the Secretary shall submit 
to Congress a report containing an evaluation of the effec-
tiveness of the pilot program, including— 
(1) an assessment of the benefits to the envi-
ronment derived from the projects included in the 
pilot program; and 
(2) an estimate of the potential benefits to the 
environment to be derived from widespread applica-
tion of alternative fueled vehicles and ultra-low sul-
fur diesel vehicles. 
SEC. 804. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated to the Sec-
retary to carry out this subtitle $200,000,000, to remain 
available until expended.
164 
Subtitle B—Clean School Buses 
SEC. 811. DEFINITIONS. 
In this subtitle: 
(1) ADMINISTRATOR.—The term ‘‘Adminis-
trator’’ means the Administrator of the Environ-
mental Protection Agency. 
(2) ALTERNATIVE
FUEL.—The term ‘‘alter-
native fuel’’ means liquefied natural gas, compressed 
natural gas, liquefied petroleum gas, hydrogen, pro-
pane, or methanol or ethanol at no less than 85 per-
cent by volume. 
(3) ALTERNATIVE
FUEL
SCHOOL
BUS.—The 
term ‘‘alternative fuel school bus’’ means a school 
bus that meets all of the requirements of this sub-
title and is operated solely on an alternative fuel. 
(4) EMISSIONS
CONTROL
RETROFIT
TECH-
NOLOGY.—The term ‘‘emissions control retrofit tech-
nology’’ means a particulate filter or other emissions 
control equipment that is verified or certified by the 
Administrator or the California Air Resources Board 
as an effective emission reduction technology when 
installed on an existing school bus. 
(5) IDLING.—The term ‘‘idling’’ means oper-
ating an engine while remaining stationary for more 
than approximately 15 minutes, except that the term
165 
does not apply to routine stoppages associated with 
traffic movement or congestion. 
(6) ULTRA-LOW SULFUR DIESEL FUEL.—The 
term ‘‘ultra-low sulfur diesel fuel’’ means diesel fuel 
that contains sulfur at not more than 15 parts per 
million. 
(7) ULTRA-LOW SULFUR DIESEL FUEL SCHOOL 
BUS.—The term ‘‘ultra-low sulfur diesel fuel school 
bus’’ means a school bus that meets all of the re-
quirements of this subtitle and is operated solely on 
ultra-low sulfur diesel fuel. 
SEC. 812. PROGRAM FOR REPLACEMENT OF CERTAIN 
SCHOOL BUSES WITH CLEAN SCHOOL BUSES. 
(a) ESTABLISHMENT.—The Administrator, in con-
sultation with the Secretary and other appropriate Federal 
departments and agencies, shall establish a program for 
awarding grants on a competitive basis to eligible entities 
for the replacement of existing school buses manufactured 
before model year 1991 with alternative fuel school buses 
and ultra-low sulfur diesel fuel school buses. 
(b) REQUIREMENTS.— 
(1) IN GENERAL.—Not later than 90 days after 
the date of enactment of this Act, the Administrator 
shall establish and publish in the Federal Register 
grant requirements on eligibility for assistance, and
166 
on implementation of the program established under 
subsection (a), including instructions for the submis-
sion of grant applications and certification require-
ments to ensure compliance with this subtitle. 
(2) APPLICATION
DEADLINES.—The require-
ments established under paragraph (1) shall require 
submission of grant applications not later than— 
(A) in the case of the first year of program 
implementation, the date that is 180 days after 
the publication of the requirements in the Fed-
eral Register; and 
(B) in the case of each subsequent year, 
June 1 of the year. 
(c) ELIGIBLE RECIPIENTS.—A grant shall be award-
ed under this section only— 
(1) to 1 or more local or State governmental 
entities responsible for providing school bus service 
to 1 or more public school systems or responsible for 
the purchase of school buses; 
(2) to 1 or more contracting entities that pro-
vide school bus service to 1 or more public school 
systems, if the grant application is submitted jointly 
with the 1 or more school systems to be served by 
the buses, except that the application may provide 
that buses purchased using funds awarded shall be
167 
owned, operated, and maintained exclusively by the 
1 or more contracting entities; or 
(3) to a nonprofit school transportation associa-
tion representing private contracting entities, if the 
association has notified and received approval from 
the 1 or more school systems to be served by the 
buses. 
(d) AWARD DEADLINES.— 
(1) IN GENERAL.—Subject to paragraph (2), 
the Administrator shall award a grant made to a 
qualified applicant for a fiscal year— 
(A) in the case of the first fiscal year of 
program implementation, not later than the 
date that is 90 days after the application dead-
line established under subsection (b)(2); and 
(B) in the case of each subsequent fiscal 
year, not later than August 1 of the fiscal year. 
(2) INSUFFICIENT
NUMBER
OF
QUALIFIED 
GRANT
APPLICATIONS.—If the Administrator does 
not receive a sufficient number of qualified grant ap-
plications to meet the requirements of subsection 
(i)(1) for a fiscal year, the Administrator shall 
award a grant made to a qualified applicant under 
subsection (i)(2) not later than September 30 of the 
fiscal year.
168 
(e) TYPES OF GRANTS.— 
(1) IN GENERAL.—A grant under this section 
shall be used for the replacement of school buses 
manufactured before model year 1991 with alter-
native fuel school buses and ultra-low sulfur diesel 
fuel school buses. 
(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 
Administrator shall give priority to applicants that 
propose to replace school buses manufactured before 
model year 1977. 
(f) CONDITIONS OF GRANT.—A grant provided under 
this section shall include the following conditions: 
(1) SCHOOL BUS FLEET.—All buses acquired 
with funds provided under the grant shall be oper-
ated as part of the school bus fleet for which the 
grant was made for a minimum of 5 years. 
(2) USE OF FUNDS.—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 fuel school
169 
buses, including State taxes and contract fees 
associated with the acquisition of such buses; 
and 
(B) to provide— 
(i) up to 20 percent of the price of the 
alternative fuel school buses acquired, for 
necessary alternative fuel infrastructure if 
the infrastructure will only be available to 
the grant recipient; and 
(ii) up to 25 percent of the price of 
the alternative fuel school buses acquired, 
for necessary alternative fuel infrastructure 
if the infrastructure will be available to the 
grant recipient and to other bus fleets. 
(3) GRANT RECIPIENT FUNDS.—The grant re-
cipient shall be required to provide at least— 
(A) in the case of a grant recipient de-
scribed in paragraph (1) or (3) of subsection 
(c), the lesser of— 
(i) an amount equal to 15 percent of 
the total cost of each bus received; or 
(ii) $15,000 per bus; and 
(B) in the case of a grant recipient de-
scribed in subsection (c)(2), the lesser of—
170 
(i) an amount equal to 20 percent of 
the total cost of each bus received; or 
(ii) $20,000 per bus. 
(4) ULTRA-LOW SULFUR DIESEL FUEL.—In the 
case of a grant recipient receiving a grant for ultra- 
low sulfur diesel fuel school buses, the grant recipi-
ent shall be required to provide documentation to 
the satisfaction of the Administrator that diesel fuel 
containing sulfur at not more than 15 parts per mil-
lion 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. 
(5) TIMING.—All alternative fuel school buses, 
ultra-low sulfur diesel fuel school buses, or alter-
native fuel infrastructure acquired under a grant 
awarded under this section shall be purchased and 
placed in service as soon as practicable. 
(g) BUSES.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), funding under a grant made under this 
section for the acquisition of new alternative fuel 
school buses or ultra-low sulfur diesel fuel school 
buses shall only be used to acquire school buses— 
(A) with a gross vehicle weight of greater 
than 14,000 pounds;
171 
(B) that are powered by a heavy duty en-
gine; 
(C) in the case of alternative fuel school 
buses manufactured in model years 2005 and 
2006, that emit not more than 1.8 grams per 
brake horsepower-hour of nonmethane hydro-
carbons and oxides of nitrogen and .01 grams 
per brake horsepower-hour of particulate mat-
ter; and 
(D) in the case of ultra-low sulfur diesel 
fuel school buses manufactured in model years 
2005 and 2006, that emit not more than 2.5 
grams per brake horsepower-hour of non-
methane hydrocarbons and oxides of nitrogen 
and .01 grams per brake horsepower-hour of 
particulate matter. 
(2) LIMITATIONS.—A bus shall not be acquired 
under this section that emits nonmethane hydro-
carbons, oxides of nitrogen, or particulate matter at 
a rate greater than the best performing technology 
of the same class of ultra-low sulfur diesel fuel 
school buses commercially available at the time the 
grant is made. 
(h) DEPLOYMENT AND DISTRIBUTION.—The Admin-
istrator shall—
172 
(1) seek, to the maximum extent practicable, to 
achieve nationwide deployment of alternative fuel 
school buses and ultra-low sulfur diesel fuel school 
buses through the program under this section; and 
(2) ensure a broad geographic distribution of 
grant awards, with a goal of no State receiving more 
than 10 percent of the grant funding made available 
under this section for a fiscal year. 
(i) ALLOCATION OF FUNDS.— 
(1) IN GENERAL.—Subject to paragraph (2), of 
the amount of grant funding made available to carry 
out this section for any fiscal year, the Adminis-
trator shall use— 
(A) 70 percent for the acquisition of alter-
native fuel school buses or supporting infra-
structure; and 
(B) 30 percent for the acquisition of ultra- 
low sulfur diesel fuel school buses. 
(2) INSUFFICIENT
NUMBER
OF
QUALIFIED 
GRANT APPLICATIONS.—After the first fiscal year in 
which this program is in effect, if the Administrator 
does not receive a sufficient number of qualified 
grant applications to meet the requirements of sub-
paragraph (A) or (B) of paragraph (1) for a fiscal 
year, effective beginning on August 1 of the fiscal
173 
year, the Administrator shall make the remaining 
funds available to other qualified grant applicants 
under this section. 
(j) REDUCTION
OF SCHOOL BUS IDLING.—Each 
local educational agency (as defined in section 9101 of the 
Elementary and Secondary Education Act of 1965 (20 
U.S.C. 7801)) that receives Federal funds under the Ele-
mentary and Secondary Education Act of 1965 (20 U.S.C. 
6301 et seq.) is encouraged to develop a policy, consistent 
with the health, safety, and welfare of students and the 
proper operation and maintenance of school buses, to re-
duce the incidence of unnecessary school bus idling at 
schools when picking up and unloading students. 
(k) ANNUAL REPORT.— 
(1) IN GENERAL.—Not later than January 31 
of each year, the Administrator shall transmit to 
Congress a report evaluating implementation of the 
programs under this section and section 813. 
(2) COMPONENTS.—The reports shall include a 
description of— 
(A) the total number of grant applications 
received; 
(B) the number and types of alternative 
fuel school buses, ultra-low sulfur diesel fuel
174 
school buses, and retrofitted buses requested in 
grant applications; 
(C) grants awarded and the criteria used 
to select the grant recipients; 
(D) certified engine emission levels of all 
buses purchased or retrofitted under the pro-
grams under this section and section 813; 
(E) an evaluation of the in-use emission 
level of buses purchased or retrofitted under the 
programs under this section and section 813; 
and 
(F) any other information the Adminis-
trator considers appropriate. 
(l) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Administrator to 
carry out this section— 
(1) $45,000,000 for fiscal year 2006; and 
(2) $65,000,000 for fiscal year 2007. 
SEC. 813. DIESEL RETROFIT PROGRAM. 
(a) ESTABLISHMENT.—The Administrator, in con-
sultation with the Secretary, shall establish a program for 
awarding grants on a competitive basis to entities for the 
installation of retrofit technologies for diesel school buses. 
(b) ELIGIBLE RECIPIENTS.—A grant shall be award-
ed under this section only—
175 
(1) to a local or State governmental entity re-
sponsible for providing school bus service to 1 or 
more public school systems; 
(2) to 1 or more contracting entities that pro-
vide school bus service to 1 or more public school 
systems, if the grant application is submitted jointly 
with the 1 or more school systems that the buses 
will serve, except that the application may provide 
that buses purchased using funds awarded shall be 
owned, operated, and maintained exclusively by the 
1 or more contracting entities; or 
(3) to a nonprofit school transportation associa-
tion representing private contracting entities, if the 
association has notified and received approval from 
the 1 or more school systems to be served by the 
buses. 
(c) AWARDS.— 
(1) IN
GENERAL.—The Administrator shall 
seek, to the maximum extent practicable, to ensure 
a broad geographic distribution of grants under this 
section. 
(2) PREFERENCES.—In making awards of 
grants under this section, the Administrator shall 
give preference to proposals that—
176 
(A) will achieve the greatest reductions in 
emissions of nonmethane hydrocarbons, oxides 
of nitrogen, or particulate matter per proposal 
or per bus; or 
(B) involve the use of emissions control 
retrofit technology on diesel school buses that 
operate solely on ultra-low sulfur diesel fuel. 
(d) CONDITIONS OF GRANT.—A grant shall be pro-
vided under this section on the conditions that— 
(1) buses on which retrofit emissions-control 
technology are to be demonstrated— 
(A) will operate on ultra-low sulfur diesel 
fuel where such fuel is reasonably available or 
required for sale by State or local law or regula-
tion; 
(B) were manufactured in model year 1991 
or later; and 
(C) will be used for the transportation of 
school children to and from school for a min-
imum of 5 years; 
(2) grant funds will be used for the purchase of 
emission control retrofit technology, including State 
taxes and contract fees; and 
(3) grant recipients will provide at least 15 per-
cent of the total cost of the retrofit, including the
177 
purchase of emission control retrofit technology and 
all necessary labor for installation of the retrofit. 
(e) VERIFICATION.—Not later than 90 days after the 
date of enactment of this Act, the Administrator shall 
publish in the Federal Register procedures to verify— 
(1) the retrofit emissions-control technology to 
be demonstrated; 
(2) that buses powered by ultra-low sulfur die-
sel fuel on which retrofit emissions-control tech-
nology are to be demonstrated will operate on diesel 
fuel containing not more than 15 parts per million 
of sulfur; and 
(3) that grants are administered in accordance 
with this section. 
(f) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Administrator to 
carry out this section— 
(1) $20,000,000 for fiscal year 2006; and 
(2) $35,000,000 for fiscal year 2007. 
SEC. 814. FUEL CELL SCHOOL BUSES. 
(a) ESTABLISHMENT.—The Secretary shall establish 
a program for entering into cooperative agreements— 
(1) with private sector fuel cell bus developers 
for the development of fuel cell-powered school 
buses; and
178 
(2) subsequently, with not less than 2 units of 
local government using natural gas-powered school 
buses and such private sector fuel cell bus developers 
to demonstrate the use of fuel cell-powered school 
buses. 
(b) COST SHARING.—The non-Federal contribution 
for activities funded under this section shall be not less 
than— 
(1) 20 percent for fuel infrastructure develop-
ment activities; and 
(2) 50 percent for demonstration activities and 
for development activities not described in paragraph 
(1). 
(c) REPORTS TO CONGRESS.—Not later than 3 years 
after the date of enactment of this Act, the Secretary shall 
transmit to 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. 
(d) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary to carry 
out this section $25,000,000 for the period of fiscal years 
2006 through 2008.
179 
Subtitle C—Fuel Cell Transit Bus 
Demonstration 
SEC. 821. FUEL CELL TRANSIT BUS DEMONSTRATION. 
(a) IN GENERAL.—The Secretary, in consultation 
with the Secretary of Transportation, shall establish a 
transit bus demonstration program to make competitive, 
merit-based awards for 5-year projects to demonstrate not 
more than 25 fuel cell transit buses (and necessary infra-
structure) in 5 geographically dispersed localities. 
(b) PREFERENCE.—In selecting projects under this 
section, the Secretary shall give preference to projects that 
are most likely to mitigate congestion and improve air 
quality. 
(c) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary to carry 
out this section $10,000,000 for each of fiscal years 2006 
through 2010. 
TITLE IX—CLEAN COAL POWER 
INITIATIVE 
SEC. 901. AUTHORIZATION OF APPROPRIATIONS. 
(a) CLEAN COAL POWER INITIATIVE.—There are au-
thorized to be appropriated to the Secretary to carry out 
the activities authorized by this title $200,000,000 for 
each of fiscal years 2006 through 2012, to remain avail-
able until expended.