369
(2) providing technical assistance, in collabora-
tion with the United States nuclear industry, in reli-
censing and upgrading training reactors as part of 
a student training program; and 
(3) providing funding, through the Innovations 
in Nuclear Infrastructure and Education Program, 
for reactor improvements as part of a focused effort 
that emphasizes research, training, and education. 
(d) UNIVERSITY-NATIONAL
LABORATORY
INTER-
ACTIONS.—The Secretary shall develop—
(1) a sabbatical fellowship program for profes-
sors at institutions of higher education to spend ex-
tended periods of time at National Laboratories in 
the areas of nuclear science and technology; and 
(2) a visiting scientist program in which Na-
tional Laboratory staff can spend time in academic 
nuclear science and engineering departments. 
The Secretary may provide fellowships for students to 
spend time at National Laboratories in the area of nuclear 
science with a member of the Laboratory staff acting as 
a mentor. 
(e) OPERATING AND MAINTENANCE COSTS.—Fund-
ing for a research project provided under this section may 
be used to offset a portion of the operating and mainte-
370
nance costs of a research reactor at an institution of high-
er education used in the research project. 
PART 5—GEOLOGICAL ISOLATION OF SPENT 
FUEL 
SEC. 21441. GEOLOGICAL ISOLATION OF SPENT FUEL. 
The Secretary shall conduct a study to determine the 
feasibility of deep borehole disposal of spent nuclear fuel 
and high-level radioactive waste. The study shall empha-
size geological, chemical, and hydrological characterization 
of, and design of engineered structures for, deep borehole 
environments. Not later than 1 year after the date of en-
actment of this Act, the Secretary shall transmit the study 
to the Congress. 
Subtitle E—Fossil Energy 
PART 1—AUTHORIZATION OF APPROPRIATIONS 
SEC. 21501. FOSSIL ENERGY. 
(a) IN GENERAL.—The following sums are author-
ized to be appropriated to the Secretary for fossil energy 
research, development, demonstration, and commercial ap-
plication activities, other than those described in sub-
section (b), including activities authorized under this sub-
title but not including activities authorized under division 
E: 
(1) For fiscal year 2004, $530,000,000. 
(2) For fiscal year 2005, $556,000,000.
371
(3) For fiscal year 2006, $583,000,000. 
(4) For fiscal year 2007, $611,000,000. 
No less than 60 percent of the amount appropriated for 
each fiscal year under this subsection shall be available 
for activities related to the coal research program under 
section 21511(a). 
(b) ULTRA-DEEPWATER AND UNCONVENTIONAL RE-
SOURCES.—
(1) OIL AND GAS LEASE INCOME.—For each of 
fiscal years 2004 through 2010, from any royalties, 
rents, and bonuses derived from Federal onshore 
and offshore oil and gas leases issued under the 
Outer Continental Shelf Lands Act and the Mineral 
Leasing Act which are deposited in the Treasury, 
and after distribution of any such funds as described 
in paragraph (2), an amount equal to 7.5 percent of 
the amount of royalties, rents, and bonuses derived 
from those leases deposited in the Treasury shall be 
deposited into the Ultra-Deepwater and Unconven-
tional Natural Gas and Other Petroleum Research 
Fund (in this subsection referred to as the Fund). 
For purposes of this subsection, the term ‘‘royalties’’ 
excludes proceeds from the sale of royalty production 
taken in kind and royalty production that is trans-
ferred under section 27(a)(3) of the Outer Conti-
372
nental Shelf Lands Act (43 U.S.C. 1353(a)(3)). 
Monies in the Fund shall be available to the Sec-
retary for obligation under part 3, without fiscal 
year limitation, to the extent provided in advance in 
appropriations Acts. 
(2) PRIOR DISTRIBUTIONS.—The distributions 
described in paragraph (1) are those required by 
law—
(A) to States and to the Reclamation Fund 
under the Mineral Leasing Act (30 U.S.C. 
191(a)); and 
(B) to other funds receiving monies from 
Federal oil and gas leasing programs, includ-
ing—
(i) any recipients pursuant to section 
8(g) of the Outer Continental Shelf Lands 
Act (43 U.S.C. 1337(g)); 
(ii) the Land and Water Conservation 
Fund, pursuant to section 2(c) of the Land 
and Water Conservation Fund Act of 1965 
(16 U.S.C. 4601–5(c)); and 
(iii) the Historic Preservation Fund, 
pursuant to section 108 of the National 
Historic Preservation Act (16 U.S.C. 
470h).
373
(3) ALLOCATION.—Amounts made available 
under this subsection in each fiscal year shall be al-
located as follows: 
(A) 67.5 percent shall be for ultra-deep-
water natural gas and other petroleum activities 
under section 21522; 
(B) 22.5 percent shall be for unconven-
tional natural gas and other petroleum resource 
activities under section 21523; and 
(C) 10 percent shall be for research com-
plementary 
to 
research 
under 
section 
21521(b)(1) through (3). 
(c) ALLOCATIONS.—From amounts authorized under 
subsection (a), the following sums are authorized: 
(1) FUEL CELL PROTON EXCHANGE MEMBRANE 
TECHNOLOGY.—For 
activities 
under 
section 
21511(c)(2), $28,000,000 for each of the fiscal 
years 2004 through 2007. 
(2) COAL MINING TECHNOLOGIES.—For activi-
ties under section 21512—
(A) for fiscal year 2004, $12,000,000; and 
(B) for fiscal year 2005, $15,000,000. 
(3) OFFICE OF ARCTIC ENERGY.—For the Of-
fice of Arctic Energy under section 3197 of the 
Floyd D. Spence National Defense Authorization
374
Act for Fiscal Year 2001 (Public Law 106–398), 
$25,000,000 for each of fiscal years 2004 through 
2007. 
(d) EXTENDED AUTHORIZATION.—There are author-
ized to be appropriated to the Secretary for the Office of 
Arctic Energy under section 3197 of the Floyd D. Spence 
National Defense Authorization Act for Fiscal Year 2001 
(Public Law 106–398), $25,000,000 for each of fiscal 
years 2008 through 2011. 
(e) LIMITS ON USE OF FUNDS.—
(1) EXCLUSIONS.—None of the funds author-
ized under this section may be used for—
(A) Fossil Energy Environmental Restora-
tion; or 
(B) Import/Export Authorization. 
(2) UNIVERSITY COAL MINING RESEARCH.—Of 
the funds authorized under subsection (c)(2), not 
less than 20 percent of the funds appropriated for 
each fiscal year shall be dedicated to research and 
development carried out at institutions of higher 
education. 
PART 2—RESEARCH PROGRAMS 
SEC. 21511. FOSSIL ENERGY RESEARCH PROGRAMS. 
(a) COAL RESEARCH.—(1) In addition to the Clean 
Coal Power Initiative authorized under division E, the
375
Secretary shall conduct a program of research, develop-
ment, demonstration, and commercial application for coal 
and power systems, including—
(A) central systems; 
(B) sequestration research and development; 
(C) fuels; 
(D) advanced research; and 
(E) advanced separation technologies. 
(2) Not later than 6 months after the date of enact-
ment of this Act, the Secretary shall transmit to the Con-
gress a report providing—
(A) a detailed description of how proposals will 
be solicited and evaluated;
(B) a list of activities and technical milestones; 
and 
(C) a description of how these activities will 
complement and not duplicate the Clean Coal Power 
Initiative authorized under division E. 
(b) OIL AND GAS RESEARCH.—The Secretary shall 
conduct a program of research, development, demonstra-
tion, and commercial application on oil and gas, includ-
ing—
(1) exploration and production; 
(2) gas hydrates; 
(3) reservoir life and extension;
376
(4) transportation and distribution infrastruc-
ture; 
(5) ultraclean fuels; 
(6) heavy oil and oil shale; and 
(7) environmental research. 
(c) FUEL CELLS.—(1) The Secretary shall conduct 
a program of research, development, demonstration, and 
commercial application on fuel cells for low-cost, high-effi-
ciency, fuel-flexible, modular power systems. 
(2) The demonstrations shall include fuel cell proton 
exchange membrane technology for commercial, residen-
tial, and transportation applications, and distributed gen-
eration systems, utilizing improved manufacturing produc-
tion and processes. 
(d) TECHNOLOGY TRANSFER.—To the maximum ex-
tent practicable, existing technology transfer mechanisms 
shall be used to implement oil and gas exploration and 
production technology transfer programs. 
SEC. 21512. RESEARCH AND DEVELOPMENT FOR COAL MIN-
ING TECHNOLOGIES. 
(a) ESTABLISHMENT.—The Secretary shall carry out 
a program of research and development on coal mining 
technologies. The Secretary shall cooperate with appro-
priate Federal agencies, coal producers, trade associations, 
equipment manufacturers, institutions of higher education
377
with mining engineering departments, and other relevant 
entities. 
(b) PROGRAM.—The research and development activi-
ties carried out under this section shall—
(1) be based on the mining research and devel-
opment priorities identified by the Mining Industry 
of the Future Program and in the recommendations 
from relevant reports of the National Academy of 
Sciences on mining technologies; and 
(2) expand mining research capabilities at insti-
tutions of higher education.
PART 3—ULTRA-DEEPWATER AND UNCONVEN-
TIONAL NATURAL GAS AND OTHER PETRO-
LEUM RESOURCES 
SEC. 21521. PROGRAM AUTHORITY. 
(a) IN GENERAL.—The Secretary shall carry out a 
program under this part of research, development, dem-
onstration, and commercial application of technologies for 
ultra-deepwater and unconventional natural gas and other 
petroleum resource exploration and production, including 
safe operations and environmental mitigation (including 
reduction of greenhouse gas emissions and sequestration 
of carbon). 
(b) PROGRAM ELEMENTS.—The program under this 
part shall address the following areas, including improving
378
safety and minimizing environmental impacts of activities 
within each area: 
(1) Ultra-deepwater technology. 
(2) Ultra-deepwater architecture. 
(3) Unconventional natural gas and other petro-
leum resource exploration and production tech-
nology. 
(c) LIMITATION ON LOCATION OF FIELD ACTIVI-
TIES.—Field activities under the program under this part 
shall be carried out only—
(1) in—
(A) areas in the territorial waters of the 
United States not under any Outer Continental 
Shelf moratorium as of September 30, 2002; 
(B) areas onshore in the United States on 
public land administered by the Secretary of the 
Interior available for oil and gas leasing, where 
consistent with applicable law and land use 
plans; and 
(C) areas onshore in the United States on 
State or private land, subject to applicable law; 
and 
(2) with the approval of the appropriate Fed-
eral or State land management agency or private 
land owner.
379
(d) 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).
(e) CONSULTATION WITH SECRETARY OF THE INTE-
RIOR.—In carrying out this part, the Secretary shall con-
sult regularly with the Secretary of the Interior. 
SEC. 21522. ULTRA-DEEPWATER PROGRAM. 
(a) IN GENERAL.—The Secretary shall carry out the 
activities under paragraphs (1) and (2) of section 
21521(b), to maximize the value of the ultra-deepwater 
natural gas and other petroleum resources of the United 
States by increasing the supply of such resources and by 
reducing the cost and increasing the efficiency of explo-
ration for and production of such resources, while improv-
ing safety and minimizing environmental impacts. 
(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 shall contract 
with a consortium to—
(A) manage awards pursuant to subsection 
(f)(4);
380
(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) The Sec-
retary shall establish procedures—
(i) to ensure that each board member, offi-
cer, or employee of the program consortium 
who is in a decisionmaking capacity under sub-
section (f)(3) or (4) shall disclose to the Sec-
retary any financial interests in, or financial re-
lationships with, applicants for or recipients of 
awards under this section, including those of 
his or her spouse or minor child, unless such re-
lationships or interests would be considered to 
be remote or inconsequential; and 
(ii) to require any board member, officer, 
or employee with a financial relationship or in-
381
terest disclosed under clause (i) to recuse him-
self or herself from any review under subsection 
(f)(3) or oversight under subsection (f)(4) with 
respect to such applicant or recipient. 
(B) The Secretary may disqualify an applica-
tion or revoke an award under this section if a board 
member, officer, or employee has failed to comply 
with 
procedures 
required 
under 
subparagraph 
(A)(ii). 
(d) SELECTION OF THE PROGRAM CONSORTIUM.—
(1) IN GENERAL.—The Secretary shall select 
the program consortium through an open, competi-
tive process. 
(2) MEMBERS.—The program consortium may 
include corporations, institutions of higher edu-
cation, National Laboratories, or other research in-
stitutions. After submitting a proposal under para-
graph (4), the program consortium may not add 
members without the consent of the Secretary. 
(3) TAX
STATUS.—The program consortium 
shall be an entity that is exempt from tax under sec-
tion 501(c)(3) of the Internal Revenue Code of 
1986. 
(4) SCHEDULE.—Not later than 90 days after 
the date of enactment of this Act, the Secretary
382
shall solicit proposals for the creation of the pro-
gram consortium, which must be submitted not less 
than 180 days after the date of enactment of this 
Act. The Secretary shall select the program consor-
tium not later than 240 days after such date of en-
actment. 
(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 
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 may consider 
the amount of the fee an applicant proposes to re-
383
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) Before drafting an 
annual plan under this subsection, the Secretary 
shall solicit specific written recommendations from 
the program 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 recommendations in 
the form of a draft annual plan. 
(B) The Secretary shall submit the rec-
ommendations of the program consortium under 
subparagraph (A) to the Ultra-Deepwater Advisory 
Committee established under section 21525(a) for 
review, and such Advisory Committee shall provide 
to the Secretary written comments by a date deter-
mined by the Secretary. The Secretary may also so-
licit comments from any other experts.
384
(C) The Secretary shall consult regularly with 
the program consortium throughout the preparation 
of the annual plan. 
(3) PUBLICATION.—The Secretary shall trans-
mit to the Congress and publish in the Federal Reg-
ister the annual plan, along with any written com-
ments received under paragraph (2)(A) and (B). 
The annual plan shall be transmitted and published 
not later than 60 days after the date of enactment 
of an Act making appropriations for a fiscal year for 
the program under this section. 
(4) CONTENTS.—The annual plan shall describe 
the ongoing and prospective activities of the 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 
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). 
(f) AWARDS.—
385
(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 
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) The program consortium 
shall oversee the implementation of awards under 
this subsection, consistent with the annual plan 
under subsection (e), including disbursing funds and 
monitoring activities carried out under such awards
386
for compliance with the terms and conditions of the 
awards. 
(B) Nothing in subparagraph (A) shall limit the 
authority or responsibility of the Secretary to over-
see awards, or limit the authority of the Secretary 
to review or revoke awards. 
(C) The Secretary shall provide to the program 
consortium the information necessary for the pro-
gram consortium to carry out its responsibilities 
under this paragraph. 
(g) FEE.—
(1) IN GENERAL.—To compensate the program 
consortium for carrying out its activities under this 
section, the Secretary shall provide to the program 
consortium a fee in an amount not to exceed 7.5 
percent of the amounts awarded under subsection (f) 
for each fiscal year. 
(2) ADVANCE.—The Secretary shall advance 
funds to the program consortium upon selection of 
the consortium, which shall be deducted from 
amounts to be provided under paragraph (1). 
(h) AUDIT.—The Secretary shall retain an 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),
387
have been expended in a manner consistent with the pur-
poses and requirements of this part. The auditor shall 
transmit a report annually to the Secretary, who shall 
transmit the report to Congress, along with a plan to rem-
edy any deficiencies cited in the report. 
SEC. 21523. UNCONVENTIONAL NATURAL GAS AND OTHER 
PETROLEUM RESOURCES PROGRAM. 
(a) IN GENERAL.—The Secretary shall carry out ac-
tivities under section 21521(b)(3), to maximize the value 
of the onshore unconventional natural gas and other petro-
leum resources of the United States by increasing the sup-
ply of such resources and by reducing the cost and increas-
ing the efficiency of exploration for and production of such 
resources, while improving safety and minimizing environ-
mental impacts. 
(b) AWARDS.—
(1) IN
GENERAL.—The Secretary shall carry 
out this section through awards made through an 
open, competitive process. 
(2) CONSORTIA.—In carrying out paragraph 
(1), the Secretary shall give preference to making 
awards to consortia. 
(c) AUDIT.—The Secretary shall retain an inde-
pendent, commercial auditor to determine the extent to 
which funds provided under awards made under this sec-
388
tion have been expended in a manner consistent with the 
purposes and requirements of this part. The auditor shall 
transmit a report annually to the Secretary, who shall 
transmit the report to Congress, along with a plan to rem-
edy any deficiencies cited in the report.
(d) FOCUS AREAS.—Awards under this section may 
focus on areas including advanced coal-bed methane, deep 
drilling, natural gas production from tight sands, natural 
gas production from gas shales, innovative exploration and 
production techniques, enhanced recovery techniques, and 
environmental mitigation of unconventional natural gas 
and other petroleum resources exploration and production. 
(e) ACTIVITIES BY THE UNITED STATES 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. 21524. ADDITIONAL REQUIREMENTS FOR AWARDS. 
(a) DEMONSTRATION PROJECTS.—An application for 
an award under this part for a demonstration project shall 
describe with specificity the intended commercial use of 
the technology to be demonstrated. 
(b) FLEXIBILITY
IN LOCATING DEMONSTRATION 
PROJECTS.—Subject to the limitation in section 21521(c), 
a demonstration project under this part relating to an
389
ultra-deepwater technology or an ultra-deepwater architec-
ture may be conducted in deepwater depths. 
(c) INTELLECTUAL PROPERTY AGREEMENTS.—If an 
award under this part is made to a consortium (other than 
the program consortium), the consortium shall provide to 
the Secretary a signed contract agreed to by all members 
of the consortium describing the rights of each member 
to intellectual property used or developed under the award. 
(d) TECHNOLOGY TRANSFER.—Each recipient of an 
award under this part shall conduct technology transfer 
activities, as appropriate, and outreach activities pursuant 
to section 21809. 
(e) COST-SHARING REDUCTION FOR INDEPENDENT 
PRODUCERS.—In applying the cost-sharing requirements 
under section 21802 to an award under this part made 
solely to an independent producer of oil or gas, the Sec-
retary may reduce the applicable non-Federal requirement 
in such section to a level not less than 10 percent of the 
cost of the project. 
SEC. 21525. ADVISORY COMMITTEES. 
(a) ULTRA-DEEPWATER ADVISORY COMMITTEE.—
(1) ESTABLISHMENT.—Not later than 270 days 
after the date of enactment of this section, the Sec-
retary shall establish an advisory committee to be 
known as the Ultra-Deepwater Advisory Committee.
390
(2) MEMBERSHIP.—The advisory committee 
under this subsection shall be composed of members 
appointed by the Secretary and 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 part related to ultra-deepwater natural gas 
and other petroleum resources; and 
(B) carry out section 21522(e)(2)(B).
391
(4) COMPENSATION.—A member of the advi-
sory committee under this subsection shall serve 
without compensation but shall receive travel ex-
penses, including per diem in lieu of subsistence, in 
accordance with applicable provisions under sub-
chapter I of chapter 57 of title 5, United States 
Code. 
(b) UNCONVENTIONAL
RESOURCES
TECHNOLOGY 
ADVISORY COMMITTEE.—
(1) ESTABLISHMENT.—Not later than 270 days 
after the date of enactment of this section, the 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 and including—
(A) individuals with extensive research ex-
perience or operational knowledge of unconven-
tional natural gas and other petroleum resource 
exploration and production, including inde-
pendent oil and gas producers; 
(B) individuals broadly representative of 
the affected interests in unconventional natural 
gas and other petroleum resource exploration
392
and production, including interests in environ-
mental protection and safe operations; and 
(C) no individuals who are Federal employ-
ees. 
(3) DUTIES.—The advisory committee under 
this subsection shall advise the Secretary on the de-
velopment and implementation of activities under 
this part 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, including per diem in lieu of subsistence, in 
accordance with applicable provisions under sub-
chapter 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 consortia or for specific projects. 
SEC. 21526. LIMITS ON PARTICIPATION. 
(a) IN GENERAL.—An entity shall be eligible to re-
ceive an award under this part only if the Secretary 
finds—
393
(1) that the entity’s participation in the pro-
gram under this part would be in the economic in-
terest 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 which 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 part; 
(ii) to United States-owned entities 
local investment opportunities comparable 
to those afforded to any other entity; and 
(iii) adequate and effective protection 
for the intellectual property rights of 
United States-owned entities. 
(b) SENSE OF CONGRESS AND REPORT.—It is the 
Sense of the Congress that ultra-deepwater technology de-
veloped under this part is to be developed primarily for
394
production of ultra-deepwater natural gas and other petro-
leum resources of the United States, and that this priority 
is to be reflected in the terms of grants, contracts, and 
cooperative agreements entered under this part. As part 
of the annual Departmental budget submission, the Sec-
retary shall report on all steps taken to implement the pol-
icy described in this subsection. 
SEC. 21527. FUND. 
There is hereby established in the Treasury of the 
United States a separate fund to be known as the ‘‘Ultra-
Deepwater and Unconventional Natural Gas and Other 
Petroleum Research Fund’’.
SEC. 21528. TRANSFER OF ADVANCED OIL AND GAS EXPLO-
RATION AND PRODUCTION TECHNOLOGIES. 
(a) ASSESSMENT.—The Secretary shall review tech-
nology programs throughout the Federal Government to 
assess the suitability of technologies developed thereunder 
for use in ultradeep drilling research, development, dem-
onstration, and commercial application. 
(b) TECHNOLOGY TRANSFER.—Not later than 1 year 
after the date of enactment of this Act, the Secretary shall 
issue a solicitation seeking organizations knowledgeable of 
the technology needs of the ultradeep drilling industry. 
The Secretary shall select the most qualified applicant to 
manage a program to transfer technologies the Secretary
395
determines suitable under subsection (a) to appropriate 
entities. The organization selected under section 21522(d) 
shall not be eligible for selection under this subsection. 
(c) FUNDING.—From the funds available under sec-
tion 21501(b)(3)(C), $1,000,000 shall be available to 
carry out this section in each of the fiscal years 2004 
through 2007. 
SEC. 21529. SUNSET. 
The authority provided by this part shall terminate 
on September 30, 2010. 
SEC. 21530. DEFINITIONS. 
In this part: 
(1) 
DEEPWATER.—The 
term 
‘‘deepwater’’ 
means a water depth that is greater than 200 but 
less than 1,500 meters. 
(2) PROGRAM CONSORTIUM.—The term ‘‘pro-
gram consortium’’ means the consortium selected 
under section 21522(d). 
(3) REMOTE OR INCONSEQUENTIAL.—The term 
‘‘remote or inconsequential’’ has the meaning given 
that term in regulations issued by the Office of Gov-
ernment Ethics under section 208(b)(2) of title 18, 
United States Code.
396
(4) ULTRA-DEEPWATER.—The term ‘‘ultra-
deepwater’’ means a water depth that is equal to or 
greater than 1,500 meters. 
(5) ULTRA-DEEPWATER
ARCHITECTURE.—The 
term ‘‘ultra-deepwater architecture’’ means the inte-
gration of technologies for the exploration for, or 
production of, natural gas or other petroleum re-
sources located at ultra-deepwater depths. 
(6) ULTRA-DEEPWATER
TECHNOLOGY.—The 
term ‘‘ultra-deepwater technology’’ means a discrete 
technology that is specially suited to address one or 
more challenges associated with the exploration for, 
or production of, natural gas or other petroleum re-
sources located at ultra-deepwater depths. 
(7) UNCONVENTIONAL
NATURAL
GAS
AND 
OTHER PETROLEUM RESOURCE.—The term ‘‘uncon-
ventional natural gas and other petroleum resource’’ 
means natural gas and other petroleum resource lo-
cated onshore in an economically inaccessible geo-
logical formation. 
Subtitle F—Science 
PART 1—AUTHORIZATION OF APPROPRIATIONS 
SEC. 21601. SCIENCE. 
(a) IN GENERAL.—The following sums are author-
ized to be appropriated to the Secretary for research, de-
397
velopment, demonstration, and commercial application ac-
tivities of the Office of Science, including activities author-
ized under this subtitle, including the amounts authorized 
under the amendment made by section 21634(c)(2)(C), 
and including basic energy sciences, advanced scientific 
and computing research, biological and environmental re-
search, fusion energy sciences, high energy physics, nu-
clear physics, and research analysis and infrastructure 
support: 
(1) For fiscal year 2004, $3,785,000,000. 
(2) For fiscal year 2005, $4,153,000,000. 
(3) For fiscal year 2006, $4,618,000,000. 
(4) For fiscal year 2007, $5,310,000,000. 
(b) ALLOCATIONS.—From amounts authorized under 
subsection (a), the following sums are authorized: 
(1) FUSION ENERGY SCIENCES.—(A) For the 
Fusion Energy Sciences Program, excluding activi-
ties under sections 21611 and 21612—
(i) for fiscal year 2004, $276,000,000; 
(ii) for fiscal year 2005, $300,000,000;. 
(iii) for fiscal year 2006, $340,000,000; 
and 
(iv) for fiscal year 2007, $350,000,000. 
(B) For activities under section 21611 and for 
the project described in section 21612—
398
(i) for fiscal year 2004, $12,000,000; 
(ii) for fiscal year 2005, $20,000,000; 
(iii) for fiscal year 2006, $50,000,000; and 
(iv) for fiscal year 2007, $75,000,000. 
(2) SPALLATION NEUTRON SOURCE.—
(A) CONSTRUCTION.—For construction of 
the Spallation Neutron Source—
(i) for fiscal year 2004, $124,600,000; 
(ii) for fiscal year 2005, $79,800,000; 
and 
(iii) for fiscal year 2006, $41,100,000 
for completion of construction. 
(B) 
OTHER
PROJECT
FUNDING.—For 
other project costs (including research and de-
velopment necessary to complete the project, 
preoperations costs, and capital equipment re-
lated to construction) of the Spallation Neutron 
Source, $103,279,000 for the period encom-
passing fiscal years 2003 through 2006, to re-
main available until expended through Sep-
tember 30, 2006. 
(3) NANOTECHNOLOGY RESEARCH AND DEVEL-
OPMENT.—For activities under section 21633—
(A) for fiscal year 2004, $265,000,000; 
(B) for fiscal year 2005, $292,000,000;
399
(C) for fiscal year 2006, $322,000,000; 
and 
(D) for fiscal year 2007, $355,000,000. 
(4) SCIENCE AND TECHNOLOGY SCHOLARSHIP 
PROGRAM.—For activities under section 21636—
(A) for fiscal year 2004, $800,000; 
(B) for fiscal year 2005, $1,600,000; 
(C) for fiscal year 2006, $2,000,000; and 
(D) for fiscal year 2007, $2,000,000. 
(5) GENOMES TO LIFE.—For activities under 
section 21641—
(A) $100,000,000 for fiscal year 2004; and 
(B) such sums as may be necessary for fis-
cal years 2005 through 2007. 
(c) LIMITS ON USE OF FUNDS.—Of the funds au-
thorized under subsection (b)(1), no funds shall be avail-
able for implementation of the plan described in section 
21612. 
PART 2—FUSION ENERGY SCIENCES 
SEC. 21611. ITER. 
(a) IN GENERAL.—The United States is authorized 
to participate in ITER in accordance with the provisions 
of this section.
400
(b) AGREEMENT.—(1) The Secretary is authorized to 
negotiate an agreement for United States participation in 
ITER. 
(2) Any agreement for United States participation in 
ITER shall, at a minimum—
(A) clearly define the United States financial 
contribution to construction and operating costs; 
(B) ensure that the share of ITER’s high-tech-
nology components manufactured in the United 
States is at least proportionate to the United States 
financial contribution to ITER; 
(C) ensure that the United States will not be fi-
nancially responsible for cost overruns in compo-
nents manufactured in other ITER participating 
countries; 
(D) guarantee the United States full access to 
all data generated by ITER; 
(E) enable United States researchers to propose 
and carry out an equitable share of the experiments 
at ITER; 
(F) provide the United States with a role in all 
collective decisionmaking related to ITER; and 
(G) describe the process for discontinuing or 
decommissioning ITER and any United States role 
in those processes.
401
(c) PLAN.—The Secretary, in consultation with the 
Fusion Energy Sciences Advisory Committee, shall de-
velop a plan for the participation of United States sci-
entists in ITER that shall include the United States re-
search agenda for ITER, methods to evaluate whether 
ITER is promoting progress toward making fusion a reli-
able and affordable source of power, and a description of 
how work at ITER will relate to other elements of the 
United States fusion program. The Secretary shall request 
a review of the plan by the National Academy of Sciences. 
(d) LIMITATION.—No funds shall be expended for the 
construction of ITER until the Secretary has transmitted 
to the Congress—
(1) the agreement negotiated pursuant to sub-
section (b) and 120 days have elapsed since that 
transmission; 
(2) a report describing the management struc-
ture of ITER and providing a fixed dollar estimate 
of the cost of United States participation in the con-
struction of ITER, and 120 days have elapsed since 
that transmission; 
(3) a report describing how United States par-
ticipation in ITER will be funded without reducing 
funding for other programs in the Office of Science,
402
including other fusion programs, and 60 days have 
elapsed since that transmission; and 
(4) the plan required by subsection (c) (but not 
the National Academy of Sciences review of that 
plan), and 60 days have elapsed since that trans-
mission. 
(e) DEFINITIONS.—In this section—
(1) the term ‘‘construction’’ means the physical 
construction of the ITER facility, and the physical 
construction, purchase, or manufacture of equipment 
or components that are specifically designed for the 
ITER facility, but does not mean the design of the 
facility, equipment, or components; and 
(2) the term ‘‘ITER’’ means the international 
burning plasma fusion research project in which the 
President announced United States participation on 
January 30, 2003.
SEC. 21612. PLAN FOR FUSION EXPERIMENT. 
(a) IN GENERAL.—If at any time during the negotia-
tions on ITER, the Secretary determines that construction 
and operation of ITER is unlikely or infeasible, the Sec-
retary shall send to Congress, as part of the budget re-
quest for the following year, a plan for implementing the 
domestic burning plasma experiment known as FIRE, in-
cluding costs and schedules for such a plan. The Secretary
403
shall refine such plan in full consultation with the Fusion 
Energy Sciences Advisory Committee and shall also trans-
mit such plan to the National Academy of Sciences for 
review. 
(b) DEFINITIONS.—As used in this section—
(1) the term ‘‘ITER’’ has the meaning given 
that term in section 21611; and 
(2) the term ‘‘FIRE’’ means the Fusion Igni-
tion Research Experiment, the fusion research ex-
periment for which design work has been supported 
by the Department as a possible alternative burning 
plasma experiment in the event that ITER fails to 
move forward. 
SEC. 21613. PLAN FOR FUSION ENERGY SCIENCES PRO-
GRAM. 
(a) DECLARATION OF POLICY.—It shall be the policy 
of the United States to conduct research, development, 
demonstration, and commercial application to provide for 
the scientific, engineering, and commercial infrastructure 
necessary to ensure that the United States is competitive 
with other nations in providing fusion energy for its own 
needs and the needs of other nations, including by dem-
onstrating electric power or hydrogen production for the 
United States energy grid utilizing fusion energy at the 
earliest date possible.
404
(b) FUSION ENERGY PLAN.—
(1) IN GENERAL.—Within 6 months after the 
date of enactment of this Act, the Secretary shall 
transmit to Congress a plan for carrying out the pol-
icy set forth in subsection (a), including cost esti-
mates, proposed budgets, potential international 
partners, and specific programs for implementing 
such policy. 
(2) REQUIREMENTS OF PLAN.—Such plan shall 
also ensure that—
(A) existing fusion research facilities are 
more fully utilized; 
(B) fusion science, technology, theory, ad-
vanced computation, modeling, and simulation 
are strengthened; 
(C) new magnetic and inertial fusion re-
search facilities are selected based on scientific 
innovation, cost effectiveness, and their poten-
tial to advance the goal of practical fusion en-
ergy at the earliest date possible; 
(D) such facilities that are selected are 
funded at a cost-effective rate; 
(E) communication of scientific results and 
methods between the fusion energy science com-
405
munity and the broader scientific and tech-
nology communities is improved; 
(F) inertial confinement fusion facilities 
are utilized to the extent practicable for the 
purpose of inertial fusion energy research and 
development; and 
(G) attractive alternative inertial and mag-
netic fusion energy approaches are more fully 
explored. 
(3) REPORT ON FUSION MATERIALS AND TECH-
NOLOGY PROJECT.—In addition, the plan required 
by this subsection shall also address the status of, 
and to the degree possible, the costs and schedules 
for—
(A) the design and implementation of 
international or national facilities for the test-
ing of fusion materials; and 
(B) the design and implementation of 
international or national facilities for the test-
ing and development of key fusion technologies. 
PART 3—SPALLATION NEUTRON SOURCE 
SEC. 21621. DEFINITION. 
For the purposes of this part, the term ‘‘Spallation 
Neutron Source’’ means Department Project 99–E–334, 
Oak Ridge National Laboratory, Oak Ridge, Tennessee.
406
SEC. 21622. REPORT. 
The Secretary shall report on the Spallation Neutron 
Source as part of the Department’s annual budget submis-
sion, including a description of the achievement of mile-
stones, a comparison of actual costs to estimated costs, 
and any changes in estimated project costs or schedule. 
SEC. 21623. LIMITATIONS. 
The total amount obligated by the Department, in-
cluding prior year appropriations, for the Spallation Neu-
tron Source may not exceed—
(1) $1,192,700,000 for costs of construction; 
(2) $219,000,000 for other project costs; and 
(3) $1,411,700,000 for total project cost. 
PART 4—MISCELLANEOUS 
SEC. 21631. FACILITY AND INFRASTRUCTURE SUPPORT 
FOR NONMILITARY ENERGY LABORATORIES. 
(a) FACILITY POLICY.—The Secretary shall develop 
and implement a strategy for the nonmilitary energy lab-
oratories and facilities of the Office of Science. Such strat-
egy shall provide a cost-effective means for—
(1) maintaining existing facilities and infra-
structure, as needed; 
(2) closing unneeded facilities; 
(3) making facility modifications; and 
(4) building new facilities. 
(b) REPORT.—
407
(1) TRANSMITTAL.—The Secretary shall pre-
pare and transmit, along with the President’s budget 
request to the Congress for fiscal year 2005, a re-
port containing the strategy developed under sub-
section (a). 
(2) CONTENTS.—For each nonmilitary energy 
laboratory and facility, such report shall contain—
(A) the current priority list of proposed fa-
cilities and infrastructure projects, including 
cost and schedule requirements; 
(B) a current ten-year plan that dem-
onstrates the reconfiguration of its facilities and 
infrastructure to meet its missions and to ad-
dress its long-term operational costs and return 
on investment; 
(C) the total current budget for all facili-
ties and infrastructure funding; and 
(D) the current status of each facilities 
and infrastructure project compared to the 
original baseline cost, schedule, and scope. 
SEC. 21632. RESEARCH REGARDING PRECIOUS METAL CA-
TALYSIS. 
From the amounts authorized to be appropriated to 
the Secretary under section 21601, such sums as may be 
necessary for each of the fiscal years 2004, 2005, and
408
2006 may be used to carry out research in the use of pre-
cious metals (excluding platinum, palladium, and rho-
dium) in catalysis. 
SEC. 21633. NANOTECHNOLOGY RESEARCH AND DEVELOP-
MENT. 
(a) IN GENERAL.—The Secretary, acting through the 
Office of Science, shall implement a Nanotechnology Re-
search 
and 
Development 
Program 
to 
promote 
nanotechnology research, development, demonstration, 
education, technology transfer, and commercial applica-
tion activities as necessary to ensure continued United 
States leadership in nanotechnology across scientific and 
engineering disciplines. 
(b) PROGRAM ACTIVITIES.—The activities of the 
Nanotechnology Research and Development Program shall 
be designed to—
(1) 
provide 
sustained 
support 
for 
nanotechnology research and development through—
(A) grants to individual investigators and 
interdisciplinary teams of investigators; and 
(B) establishment of interdisciplinary re-
search centers and advanced technology user fa-
cilities;
409
(2) ensure that solicitation and evaluation of 
proposals under the Program encourage interdiscipli-
nary research; 
(3) expand education and training of under-
graduate and graduate students in interdisciplinary 
nanotechnology science and engineering; 
(4) accelerate the commercial application of 
nanotechnology innovations in the private sector; 
(5) ensure that societal and ethical concerns 
will be addressed as the technology is developed by—
(A) establishing a research program to 
identify societal and ethical concerns related to 
nanotechnology, and ensuring that the results 
of such research are widely disseminated; and 
(B) integrating, insofar as possible, re-
search on societal and ethical concerns with 
nanotechnology research and development; and 
(6) ensure that the potential of nanotechnology 
to produce or facilitate the production of clean, inex-
pensive 
energy 
is 
realized 
by 
supporting 
nanotechnology energy applications research and de-
velopment. 
(c) DEFINITIONS.—For the purposes of this sec-
tion—
410
(1) the term ‘‘nanotechnology’’ means science 
and engineering aimed at creating materials, devices, 
and systems at the atomic and molecular level; and 
(2) the term ‘‘advanced technology user facil-
ity’’ means a nanotechnology research and develop-
ment facility supported, in whole or in part, by Fed-
eral funds that is open to all United States research-
ers on a competitive, merit-reviewed basis.
(d) REPORT.—Within 2 years after the date of enact-
ment of this Act, the Secretary shall transmit to the Con-
gress a report describing the projects to identify societal 
and ethical concerns related to nanotechnology and the 
funding provided to support these projects. 
SEC. 21634. ADVANCED SCIENTIFIC COMPUTING FOR EN-
ERGY MISSIONS. 
(a) IN GENERAL.—The Secretary, acting through the 
Office of Science, shall support a program to advance the 
Nation’s computing capability across a diverse set of 
grand challenge computationally based science problems 
related to departmental missions. 
(b) DUTIES OF THE OFFICE OF SCIENCE.—In car-
rying out the program under this section, the Office of 
Science shall—
(1) advance basic science through computation 
by developing software to solve grand challenge
411
science problems on new generations of computing 
platforms; 
(2) enhance the foundations for scientific com-
puting by developing the basic mathematical and 
computing systems software needed to take full ad-
vantage of the computing capabilities of computers 
with peak speeds of 100 teraflops or more, some of 
which may be unique to the scientific problem of in-
terest; 
(3) enhance national collaboratory and net-
working capabilities by developing software to inte-
grate geographically separated researchers into ef-
fective research teams and to facilitate access to and 
movement and analysis of large (petabyte) data sets; 
(4) develop and maintain a robust scientific 
computing hardware infrastructure to ensure that 
the computing resources needed to address depart-
mental missions are available; and 
(5) explore new computing approaches and 
technologies that promise to advance scientific com-
puting. 
(c) HIGH-PERFORMANCE COMPUTING ACT OF 1991 
AMENDMENTS.—The High-Performance Computing Act 
of 1991 is amended—
(1) in section 4 (15 U.S.C. 5503)—
412
(A) in paragraph (3)—
(i) by striking ‘‘means’’ and inserting 
‘‘and ‘networking and information tech-
nology’ mean’’; and 
(ii) by striking ‘‘(including vector 
supercomputers and large scale parallel 
systems)’’; and 
(B) in paragraph (4), by striking ‘‘packet 
switched’’; and 
(2) in section 203 (15 U.S.C. 5523)—
(A) in subsection (a), by striking all after 
‘‘As part of the’’ and inserting ‘‘Networking 
and Information Technology Research and De-
velopment Program, the Secretary of Energy 
shall conduct basic and applied research in net-
working and information technology, with em-
phasis on—
‘‘(1) supporting fundamental research in the 
physical sciences and engineering, and energy appli-
cations; 
‘‘(2) providing supercomputer access and ad-
vanced communication capabilities and facilities to 
scientific researchers; and 
‘‘(3) developing tools for distributed scientific 
collaboration.’’;
413
(B) in subsection (b), by striking ‘‘Pro-
gram’’ and inserting ‘‘Networking and Informa-
tion Technology Research and Development 
Program’’; and 
(C) by amending subsection (e) to read as 
follows: 
‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary of En-
ergy to carry out the Networking and Information Tech-
nology Research and Development Program such sums as 
may be necessary for fiscal years 2004 through 2007.’’. 
(d) COORDINATION.—The Secretary shall ensure that 
the program under this section is integrated and con-
sistent with—
(1) the Accelerated Strategic Computing Initia-
tive of the National Nuclear Security Administra-
tion; and 
(2) other national efforts related to advanced 
scientific computing for science and engineering.
(e) REPORT.—(1) Before undertaking any new initia-
tive to develop new advanced architecture for high-speed 
computing, the Secretary, through the Director of the Of-
fice of Science, shall transmit a report to the Congress 
describing—
414
(A) the expected duration and cost of the initia-
tive; 
(B) the technical milestones the initiative is de-
signed to achieve; 
(C) how institutions of higher education and 
private firms will participate in the initiative; and 
(D) why the goals of the initiative could not be 
achieved through existing programs. 
(2) No funds may be expended on any initiative de-
scribed in paragraph (1) until 30 days after the report 
required by that paragraph is transmitted to the Congress. 
SEC. 21635. NITROGEN FIXATION. 
The Secretary, acting through the Office of Science, 
shall support a program of research, development, dem-
onstration, and commercial application on biological nitro-
gen fixation, including plant genomics research relevant 
to the development of commercial crop varieties with en-
hanced nitrogen fixation efficiency and ability.
SEC. 21636. DEPARTMENT OF ENERGY SCIENCE AND TECH-
NOLOGY SCHOLARSHIP PROGRAM. 
(a) ESTABLISHMENT OF PROGRAM.—
(1) IN GENERAL.—The Secretary shall establish 
a Department of Energy Science and Technology 
Scholarship Program to award scholarships to indi-
415
viduals that is designed to recruit and prepare stu-
dents for careers in the Department. 
(2) COMPETITIVE PROCESS.—Individuals shall 
be selected to receive scholarships under this section 
through a competitive process primarily on the basis 
of academic merit, with consideration given to finan-
cial need and the goal of promoting the participation 
of individuals identified in section 33 or 34 of the 
Science and Engineering Equal Opportunities Act 
(42 U.S.C. 1885a or 1885b). 
(3) SERVICE AGREEMENTS.—To carry out the 
Program the Secretary shall enter into contractual 
agreements with individuals selected under para-
graph (2) under which the individuals agree to serve 
as full-time employees of the Department, for the 
period described in subsection (f)(1), in positions 
needed by the Department and for which the individ-
uals are qualified, in exchange for receiving a schol-
arship. 
(b) SCHOLARSHIP ELIGIBILITY.—In order to be eligi-
ble to participate in the Program, an individual must—
(1) be enrolled or accepted for enrollment as a 
full-time student at an institution of higher edu-
cation in an academic program or field of study de-
416
scribed in the list made available under subsection 
(d); 
(2) be a United States citizen; and 
(3) at the time of the initial scholarship award, 
not be a Federal employee as defined in section 
2105 of title 5 of the United States Code. 
(c) APPLICATION REQUIRED.—An individual seeking 
a scholarship under this section shall submit an applica-
tion to the Secretary at such time, in such manner, and 
containing such information, agreements, or assurances as 
the Secretary may require. 
(d) ELIGIBLE ACADEMIC PROGRAMS.—The Secretary 
shall make publicly available a list of academic programs 
and fields of study for which scholarships under the Pro-
gram may be utilized, and shall update the list as nec-
essary. 
(e) SCHOLARSHIP REQUIREMENT.—
(1) IN GENERAL.—The Secretary may provide a 
scholarship under the Program for an academic year 
if the individual applying for the scholarship has 
submitted to the Secretary, as part of the applica-
tion required under subsection (c), a proposed aca-
demic program leading to a degree in a program or 
field of study on the list made available under sub-
section (d).
417
(2) DURATION OF ELIGIBILITY.—An individual 
may not receive a scholarship under this section for 
more than 4 academic years, unless the Secretary 
grants a waiver. 
(3) 
SCHOLARSHIP
AMOUNT.—The 
dollar 
amount of a scholarship under this section for an 
academic year shall be determined under regulations 
issued by the Secretary, but shall in no case exceed 
the cost of attendance. 
(4) AUTHORIZED
USES.—A scholarship pro-
vided under this section may be expended for tuition, 
fees, and other authorized expenses as established by 
the Secretary by regulation. 
(5) CONTRACTS REGARDING DIRECT PAYMENTS 
TO INSTITUTIONS.—The Secretary may enter into a 
contractual agreement with an institution of higher 
education under which the amounts provided for a 
scholarship under this section for tuition, fees, and 
other authorized expenses are paid directly to the in-
stitution with respect to which the scholarship is 
provided. 
(f) PERIOD OF OBLIGATED SERVICE.—
(1) DURATION
OF
SERVICE.—The period of 
service for which an individual shall be obligated to 
serve as an employee of the Department is, except
418
as provided in subsection (h)(2), 24 months for each 
academic year for which a scholarship under this 
section is provided. 
(2) SCHEDULE FOR SERVICE.—(A) Except as 
provided in subparagraph (B), obligated service 
under paragraph (1) shall begin not later than 60 
days after the individual obtains the educational de-
gree for which the scholarship was provided. 
(B) The Secretary may defer the obligation of 
an individual to provide a period of service under 
paragraph (1) if the Secretary determines that such 
a deferral is appropriate. The Secretary shall pre-
scribe the terms and conditions under which a serv-
ice obligation may be deferred through regulation. 
(g) PENALTIES
FOR
BREACH
OF
SCHOLARSHIP 
AGREEMENT.—
(1) FAILURE TO COMPLETE ACADEMIC TRAIN-
ING.—Scholarship recipients who fail to maintain a 
high level of academic standing, as defined by the 
Secretary by regulation, who are dismissed from 
their educational institutions for disciplinary rea-
sons, or who voluntarily terminate academic training 
before graduation from the educational program for 
which the scholarship was awarded, shall be in 
breach of their contractual agreement and, in lieu of
419
any service obligation arising under such agreement, 
shall be liable to the United States for repayment 
within 1 year after the date of default of all scholar-
ship funds paid to them and to the institution of 
higher education on their behalf under the agree-
ment, except as provided in subsection (h)(2). The 
repayment period may be extended by the Secretary 
when determined to be necessary, as established by 
regulation. 
(2) FAILURE
TO
BEGIN
OR
COMPLETE
THE 
SERVICE
OBLIGATION
OR
MEET
THE
TERMS
AND 
CONDITIONS
OF
DEFERMENT.—Scholarship recipi-
ents who, for any reason, fail to begin or complete 
their service obligation after completion of academic 
training, or fail to comply with the terms and condi-
tions of deferment established by the Secretary pur-
suant to subsection (f)(2)(B), shall be in breach of 
their contractual agreement. When recipients breach 
their agreements for the reasons stated in the pre-
ceding sentence, the recipient shall be liable to the 
United States for an amount equal to—
(A) the total amount of scholarships re-
ceived by such individual under this section; 
plus
420
(B) the interest on the amounts of such 
awards which would be payable if at the time 
the awards were received they were loans bear-
ing interest at the maximum legal prevailing 
rate, as determined by the Treasurer of the 
United States, 
multiplied by 3. 
(h) WAIVER OR SUSPENSION OF OBLIGATION.—
(1) DEATH OF INDIVIDUAL.—Any obligation of 
an individual incurred under the Program (or a con-
tractual agreement thereunder) for service or pay-
ment shall be canceled upon the death of the indi-
vidual. 
(2) IMPOSSIBILITY OR EXTREME HARDSHIP.—
The Secretary shall by regulation provide for the 
partial or total waiver or suspension of any obliga-
tion of service or payment incurred by an individual 
under the Program (or a contractual agreement 
thereunder) whenever compliance by the individual is 
impossible or would involve extreme hardship to the 
individual, or if enforcement of such obligation with 
respect to the individual would be contrary to the 
best interests of the Government. 
(i) DEFINITIONS.—In this section the following defi-
nitions apply:
421
(1) COST OF ATTENDANCE.—The term ‘‘cost of 
attendance’’ has the meaning given that term in sec-
tion 472 of the Higher Education Act of 1965 (20 
U.S.C. 1087ll). 
(2) INSTITUTION OF HIGHER EDUCATION.—The 
term ‘‘institution of higher education’’ has the 
meaning given that term in section 101(a) of the 
Higher Education Act of 1965 (20 U.S.C. 1001(a)). 
(3) PROGRAM.—The term ‘‘Program’’ means 
the Department of Energy Science and Technology 
Scholarship Program established under this section.
PART 5—GENOMES TO LIFE 
SEC. 21641. GENOMES TO LIFE. 
(a) PROGRAM.—
(1) ESTABLISHMENT.—The Secretary shall es-
tablish a research, development, and demonstration 
program in genetics, protein science, and computa-
tional biology of microbes and plants to support the 
energy and environmental mission of the Depart-
ment. 
(2) GRANTS.—The program shall support indi-
vidual investigators and multidisciplinary teams of 
investigators through competitive, merit-reviewed 
grants.
422
(3) CONSULTATION.—In carrying out the pro-
gram, the Secretary shall consult with other Federal 
agencies that conduct genetic and protein research. 
(b) GOALS.—The program shall have the goal of de-
veloping technologies and methods based on the biological 
functions of microbes and plants that —
(1) can facilitate the production of fuels, includ-
ing hydrogen; 
(2) convert carbon dioxide to organic carbon; 
and 
(3) detoxify soils and water at Department fa-
cilities contaminated with heavy metals and radio-
logical materials. 
(c) PLAN.—
(1) DEVELOPMENT OF PLAN.—Within one year 
after the date of enactment of this Act, the Sec-
retary shall prepare and transmit to the Congress a 
research plan describing how the program author-
ized pursuant to this section will be undertaken to 
accomplish the program goals established in sub-
section (b). 
(2) REVIEW
OF
PLAN.—The Secretary shall 
contract with the National Academy of Sciences to 
review the research plan developed under this sub-
section. The Secretary shall transmit the review to
423
the Congress not later than 6 months after trans-
mittal of the research plan under paragraph (1), 
along with the Secretary’s response to the rec-
ommendations contained in the review. 
(d) FACILITIES.—In carrying out the program under 
this section, the Secretary may construct, acquire, and op-
erate facilities necessary to carry out this section. 
(e) PROHIBITION ON BIOMEDICAL OR HUMAN SUB-
JECT RESEARCH.—(1) In carrying out this program, the 
Secretary shall not conduct biomedical research. 
(2) Nothing in this section shall authorize the Sec-
retary to conduct any research or demonstrations—
(A) on human cells or human subjects; or 
(B) designed to have any application with re-
spect to human cells or human subjects. 
Subtitle G—Energy and 
Environment 
SEC. 21701. AUTHORIZATION OF APPROPRIATIONS. 
(a) UNITED STATES-MEXICO ENERGY TECHNOLOGY 
COOPERATION.—The following sums are authorized to be 
appropriated to the Secretary to carry out activities under 
section 21702: 
(1) For fiscal year 2004, $5,000,000. 
(2) For fiscal year 2005, $6,000,000. 
(3) For fiscal year 2006, $6,000,000.
424
(4) For fiscal year 2007, $6,000,000. 
(b) WASTE
REDUCTION
AND
USE
OF
ALTER-
NATIVES.—There are authorized to be appropriated to the 
Secretary to carry out activities under section 21703, 
$500,000 for fiscal year 2004. 
SEC. 21702. UNITED STATES-MEXICO ENERGY TECHNOLOGY 
COOPERATION. 
(a) PROGRAM.—The Secretary shall establish a re-
search, development, demonstration, and commercial ap-
plication program to be carried out in collaboration with 
entities in Mexico and the United States to promote en-
ergy efficient, environmentally sound economic develop-
ment along the United States-Mexico border. 
(b) PROGRAM MANAGEMENT.—The program under 
subsection (a) shall be managed by the Department of En-
ergy Carlsbad Environmental Management Field Office. 
(c) TECHNOLOGY
TRANSFER.—In carrying out 
projects and activities under this section, the Secretary 
shall assess the applicability of technology developed under 
the Environmental Management Science Program of the 
Department. 
(d) INTELLECTUAL PROPERTY.—In carrying out this 
section, the Secretary shall comply with the requirements 
of any agreement entered into between the United States 
and Mexico regarding intellectual property protection.
425
SEC. 21703. WASTE REDUCTION AND USE OF ALTER-
NATIVES. 
(a) GRANT AUTHORITY.—The Secretary is author-
ized to make a single grant to a qualified institution to 
examine and develop the feasibility of burning post-con-
sumer carpet in cement kilns as an alternative energy 
source. The purposes of the grant shall include deter-
mining—
(1) how post-consumer carpet can be burned 
without disrupting kiln operations; 
(2) the extent to which overall kiln emissions 
may be reduced; 
(3) the emissions of air pollutants and other 
relevant environmental impacts; and 
(4) how this process provides benefits to both 
cement kiln operations and carpet suppliers. 
(b) QUALIFIED INSTITUTION.—For the purposes of 
subsection (a), a qualified institution is a research-inten-
sive institution of higher education with demonstrated ex-
pertise in the fields of fiber recycling and logistical mod-
eling of carpet waste collection and preparation. 
SEC. 21704. COAL GASIFICATION. 
The Secretary is authorized to provide loan guaran-
tees for a project to produce energy from a plant using 
integrated gasification combined cycle technology of at 
least 400 megawatts in capacity that produces power at
426
competitive rates in deregulated energy generation mar-
kets and that does not receive any subsidy (direct or indi-
rect) from ratepayers. 
SEC. 21705. PETROLEUM COKE GASIFICATION. 
The Secretary is authorized to provide loan guaran-
tees for at least one petroleum coke gasification 
polygeneration project. 
SEC. 21706. OTHER BIOPOWER AND BIOENERGY. 
The Secretary shall conduct a program to assist in 
the planning, design, and implementation of projects to 
convert rice straw, rice hulls, soybean matter, poultry fat, 
poultry waste, sugarcane bagasse, forest thinnings, and 
barley grain into biopower and biofuels.
SEC. 21707. COAL TECHNOLOGY LOAN. 
There are authorized to be appropriated to the Sec-
retary $125,000,000 to provide a loan to the owner of the 
experimental plant constructed under United States De-
partment of Energy cooperative agreement number DE–
FC22–91PC99544 on such terms and conditions as the 
Secretary determines, including interest rates and upfront 
payments. 
SEC. 21708. FUEL CELL TEST CENTER. 
(a) STUDY.—Not later than 1 year after the date of 
enactment of this Act, the Secretary shall transmit to the 
Congress a report on the results of a study of the estab-
427
lishment of a test center for next-generation fuel cells at 
an institution of higher education that has available a con-
tinuous source of hydrogen and access to the electric 
transmission grid. Such report shall include a conceptual 
design for such test center and a projection of the costs 
of establishing the test center. 
(b) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary for car-
rying out this section $500,000. 
SEC. 21709. FUEL CELL TRANSIT BUS DEMONSTRATION. 
The Secretary shall establish a transit bus dem-
onstration program to make competitive, merit-based 
awards for five-year projects to demonstrate not more 
than 12 fuel cell transit buses (and necessary infrastruc-
ture) in three geographically dispersed localities. In select-
ing projects under this section, the Secretary shall give 
preference to projects that are most likely to mitigate con-
gestion and improve air quality. There are authorized to 
be appropriated to the Secretary $10,000,000 for each of 
the fiscal years 2004 through 2007 for carrying out this 
section. 
Subtitle H—Management 
SEC. 21801. AVAILABILITY OF FUNDS. 
Funds authorized to be appropriated to the Depart-
ment under this title shall remain available until expended.
428
SEC. 21802. COST SHARING. 
(a) RESEARCH AND DEVELOPMENT.—Except as oth-
erwise provided in this title, for research and development 
programs carried out under this title, the Secretary shall 
require a commitment from non-Federal sources of at 
least 20 percent of the cost of the project. The Secretary 
may reduce or eliminate the non-Federal requirement 
under this subsection if the Secretary determines that the 
research and development is of a basic or fundamental na-
ture. 
(b) DEMONSTRATION
AND COMMERCIAL APPLICA-
TION.—Except as otherwise provided in this title, the Sec-
retary shall require at least 50 percent of the costs directly 
and specifically related to any demonstration or commer-
cial application project under this title to be provided from 
non-Federal sources. The Secretary may reduce the non-
Federal requirement under this subsection if the Secretary 
determines that the reduction is necessary and appropriate 
considering the technological risks involved in the project 
and is necessary to meet the objectives of this title. 
(c) CALCULATION OF AMOUNT.—In calculating the 
amount of the non-Federal commitment under subsection 
(a) or (b), the Secretary may include personnel, services, 
equipment, and other resources.
429
SEC. 21803. MERIT REVIEW OF PROPOSALS. 
Awards of funds authorized under this title shall be 
made only after an impartial review of the scientific and 
technical merit of the proposals for such awards has been 
carried out by or for the Department. 
SEC. 21804. EXTERNAL TECHNICAL REVIEW OF DEPART-
MENTAL PROGRAMS. 
(a) NATIONAL ENERGY RESEARCH AND DEVELOP-
MENT ADVISORY BOARDS.—(1) The Secretary shall estab-
lish one or more advisory boards to review Department 
research, development, demonstration, and commercial ap-
plication programs in the following areas: 
(A) Energy efficiency. 
(B) Renewable energy. 
(C) Nuclear energy. 
(D) Fossil energy. 
(2) The Secretary may designate an existing advisory 
board within the Department to fulfill the responsibilities 
of an advisory board under this subsection, and may enter 
into appropriate arrangements with the National Academy 
of Sciences to establish such an advisory board. 
(b) OFFICE OF SCIENCE ADVISORY COMMITTEES.—
(1) UTILIZATION OF EXISTING COMMITTEES.—
The Secretary shall continue to use the scientific 
program advisory committees chartered under the 
Federal Advisory Committee Act by the Office of
430
Science to oversee research and development pro-
grams under that Office. 
(2) SCIENCE ADVISORY COMMITTEE.—
(A) ESTABLISHMENT.—There shall be in 
the Office of Science a Science Advisory Com-
mittee that includes the chairs of each of the 
advisory committees described in paragraph (1). 
(B) RESPONSIBILITIES.—The Science Ad-
visory Committee shall—
(i) serve as the science advisor to the 
Assistant Secretary for Science created 
under section 209 of the Department of 
Energy Organization Act, as added by sec-
tion 22001 of this Act; 
(ii) advise the Assistant Secretary 
with respect to the well-being and manage-
ment of the National Laboratories and sin-
gle-purpose research facilities; 
(iii) advise the Assistant Secretary 
with respect to education and workforce 
training activities required for effective 
short-term and long-term basic and applied 
research activities of the Office of Science; 
and
431
(iv) advise the Assistant Secretary 
with respect to the well being of the uni-
versity research programs supported by the 
Office of Science. 
(c) MEMBERSHIP.—Each advisory board under this 
section shall consist of persons with appropriate expertise 
representing a diverse range of interests. 
(d) MEETINGS
AND
PURPOSES.—Each advisory 
board under this section shall meet at least semi-annually 
to review and advise on the progress made by the respec-
tive research, development, demonstration, and commer-
cial application program or programs. The advisory board 
shall also review the measurable cost and performance-
based goals for such programs as established under sec-
tion 20002, and the progress on meeting such goals. 
(e) PERIODIC REVIEWS
AND ASSESSMENTS.—The 
Secretary shall enter into appropriate arrangements with 
the National Academy of Sciences to conduct periodic re-
views and assessments of the programs authorized by this 
title, the measurable cost and performance-based goals for 
such programs as established under section 20002, if any, 
and the progress on meeting such goals. Such reviews and 
assessments shall be conducted every 5 years, or more 
often as the Secretary considers necessary, and the Sec-
432
retary shall transmit to the Congress reports containing 
the results of all such reviews and assessments. 
SEC. 21805. IMPROVED COORDINATION OF TECHNOLOGY 
TRANSFER ACTIVITIES. 
(a) TECHNOLOGY TRANSFER COORDINATOR.—The 
Secretary shall designate a Technology Transfer Coordi-
nator to perform oversight of and policy development for 
technology transfer activities at the Department. The 
Technology Transfer Coordinator shall coordinate the ac-
tivities of the Technology Transfer Working Group, and 
shall oversee the expenditure of funds allocated to the 
Technology Transfer Working Group, and shall coordinate 
with each technology partnership ombudsman appointed 
under section 11 of the Technology Transfer Commer-
cialization Act of 2000 (42 U.S.C. 7261c). 
(b) TECHNOLOGY TRANSFER WORKING GROUP.—
The Secretary shall establish a Technology Transfer 
Working Group, which shall consist of representatives of 
the National Laboratories and single-purpose research fa-
cilities, to— 
(1) coordinate technology transfer activities oc-
curring at National Laboratories and single-purpose 
research facilities; 
(2) exchange information about technology 
transfer practices, including alternative approaches
433
to resolution of disputes involving intellectual prop-
erty rights and other technology transfer matters; 
and 
(3) develop and disseminate to the public and 
prospective technology partners information about 
opportunities and procedures for technology transfer 
with the Department, including those related to al-
ternative approaches to resolution of disputes involv-
ing intellectual property rights and other technology 
transfer matters.
(c) TECHNOLOGY
TRANSFER
RESPONSIBILITY.—
Nothing in this section shall affect the technology transfer 
responsibilities of Federal employees under the Stevenson-
Wydler Technology Innovation Act of 1980. 
SEC. 21806. SMALL BUSINESS ADVOCACY AND ASSISTANCE. 
(a) SMALL BUSINESS ADVOCATE.—The Secretary 
shall require the Director of each National Laboratory, 
and may require the Director of a single-purpose research 
facility, to designate a small business advocate to— 
(1) increase the participation of small business 
concerns, including socially and economically dis-
advantaged small business concerns, in procurement, 
collaborative research, technology licensing, and 
technology transfer activities conducted by the Na-
tional Laboratory or single-purpose research facility;
434
(2) report to the Director of the National Lab-
oratory or single-purpose research facility on the ac-
tual participation of small business concerns in pro-
curement and collaborative research along with rec-
ommendations, if appropriate, on how to improve 
participation; 
(3) make available to small business concerns 
training, mentoring, and clear, up-to-date informa-
tion on how to participate in the procurement and 
collaborative research, including how to submit effec-
tive proposals, and information related to alternative 
approaches to resolution of disputes involving intel-
lectual property rights and other technology transfer 
matters; 
(4) increase the awareness inside the National 
Laboratory or single-purpose research facility of the 
capabilities and opportunities presented by small 
business concerns; and 
(5) establish guidelines for the program under 
subsection (b) and report on the effectiveness of 
such program to the Director of the National Lab-
oratory or single-purpose research facility. 
(b) ESTABLISHMENT OF SMALL BUSINESS ASSIST-
ANCE PROGRAM.—The Secretary shall require the Direc-
tor of each National Laboratory, and may require the Di-
435
rector of a single-purpose research facility, to establish a 
program to provide small business concerns— 
(1) assistance directed at making them more ef-
fective and efficient subcontractors or suppliers to 
the National Laboratory or single-purpose research 
facility; or 
(2) general technical assistance, the cost of 
which shall not exceed $10,000 per instance of as-
sistance, to improve the small business concern’s 
products or services. 
(c) USE OF FUNDS.—None of the funds expended 
under subsection (b) may be used for direct grants to the 
small business concerns. 
(d) DEFINITIONS.—In this section: 
(1) SMALL
BUSINESS
CONCERN.—The term 
‘‘small business concern’’ has the meaning given 
such term in section 3 of the Small Business Act 
(15 U.S.C. 632). 
(2) SOCIALLY AND ECONOMICALLY DISADVAN-
TAGED SMALL BUSINESS CONCERNS.—The term ‘‘so-
cially and economically disadvantaged small business 
concerns’’ has the meaning given such term in sec-
tion 8(a)(4) of the Small Business Act (15 U.S.C. 
637(a)(4)).
436
SEC. 21807. MOBILITY OF SCIENTIFIC AND TECHNICAL PER-
SONNEL. 
Not later than 2 years after the date of enactment 
of this section, the Secretary shall transmit a report to 
the Congress identifying any policies or procedures of a 
contractor operating a National Laboratory or single-pur-
pose research facility that create disincentives to the tem-
porary transfer of scientific and technical personnel 
among the contractor-operated National Laboratories or 
contractor-operated single-purpose research facilities.
SEC. 21808. NATIONAL ACADEMY OF SCIENCES REPORT. 
Within 90 days after the date of enactment of this 
Act, the Secretary shall enter into an arrangement with 
the National Academy of Sciences for the Academy to—
(1) conduct studies on—
(A) the obstacles to accelerating the com-
mercial application of energy technology; and 
(B) the adequacy of Department policies 
and procedures for, and oversight of, technology 
transfer-related disputes between contractors of 
the Department and the private sector; and 
(2) report to the Congress on recommendations 
developed as a result of the studies. 
SEC. 21809. OUTREACH. 
The Secretary shall ensure that each program au-
thorized by this title includes an outreach component to
437
provide information, as appropriate, to manufacturers, 
consumers, engineers, architects, builders, energy service 
companies, institutions of higher education, facility plan-
ners and managers, State and local governments, and 
other entities. 
SEC. 21810. LIMITS ON USE OF FUNDS. 
(a) COMPETITIVE
PROCEDURE
REQUIREMENT.—
None of the funds authorized to be appropriated to the 
Secretary by this title may be used to award a manage-
ment and operating contract for a nonmilitary energy lab-
oratory of the Department unless such contract is com-
petitively awarded or the Secretary grants, on a case-by-
case basis, a waiver to allow for such a deviation. The Sec-
retary may not delegate the authority to grant such a 
waiver. 
(b) CONGRESSIONAL NOTICE.—At least 2 months be-
fore a contract award for which the Secretary intends to 
grant such a waiver, the Secretary shall submit to the 
Congress a report notifying the Congress of the waiver 
and setting forth the reasons for the waiver. 
SEC. 21811. REPROGRAMMING. 
(a) DISTRIBUTION REPORT.—Not later than 60 days 
after the date of the enactment of an Act appropriating 
amounts authorized under this title, the Secretary shall 
transmit to the appropriate authorizing committees of the
438
Congress a report explaining how such amounts will be 
distributed among the authorizations contained in this 
title. 
(b) PROHIBITION.—(1) No amount identified under 
subsection (a) shall be reprogrammed if such reprogram-
ming would result in an obligation which changes an indi-
vidual distribution required to be reported under sub-
section (a) by more than 5 percent unless the Secretary 
has transmitted to the appropriate authorizing committees 
of the Congress a report described in subsection (c) and 
a period of 30 days has elapsed after such committees re-
ceive the report. 
(2) In the computation of the 30-day period described 
in paragraph (1), there shall be excluded any day on which 
either House of Congress is not in session because of an 
adjournment of more than 3 days to a day certain. 
(c) REPROGRAMMING REPORT.—A report referred to 
in subsection (b)(1) shall contain a full and complete 
statement of the action proposed to be taken and the facts 
and circumstances relied on in support of the proposed 
action. 
SEC. 21812. CONSTRUCTION WITH OTHER LAWS. 
Except as otherwise provided in this title, the Sec-
retary shall carry out the research, development, dem-
onstration, 
and 
commercial 
application 
programs,
439
projects, and activities authorized by this title in accord-
ance with the applicable provisions of the Atomic Energy 
Act of 1954 (42 U.S.C. et seq.), the Federal Nonnuclear 
Research and Development Act of 1974 (42 U.S.C. 5901 
et seq.), the Energy Policy Act of 1992 (42 U.S.C. 13201 
et seq.), the Stevenson-Wydler Technology Innovation Act 
of 1980 (15 U.S.C. 3701 et seq.), chapter 18 of title 35, 
United States Code (commonly referred to as the Bayh-
Dole Act), and any other Act under which the Secretary 
is authorized to carry out such activities.
SEC. 21813. UNIVERSITY COLLABORATION. 
Not later than 2 years after the date of enactment 
of this Act, the Secretary shall transmit to the Congress 
a report that examines the feasibility of promoting collabo-
rations between large institutions of higher education and 
small institutions of higher education through grants, con-
tracts, and cooperative agreements made by the Secretary 
for energy projects. The Secretary shall also consider pro-
viding incentives for the inclusion of small institutions of 
higher education, including minority-serving institutions, 
in energy research grants, contracts, and cooperative 
agreements.
440
SEC. 21814. FEDERAL LABORATORY EDUCATIONAL PART-
NERS. 
(a) DISTRIBUTION
OF ROYALTIES RECEIVED
BY 
FEDERAL AGENCIES.—Section 14(a)(1)(B)(v) of the Ste-
venson-Wydler Technology Innovation Act of 1980 (15 
U.S.C. 3710c(a)(1)(B)(v)), is amended to read as follows: 
‘‘(v) for scientific research and develop-
ment and for educational assistance and other 
purposes consistent with the missions and ob-
jectives of the Department of Energy and the 
laboratory.’’. 
(b) COOPERATIVE RESEARCH AND DEVELOPMENT 
AGREEMENTS.—Section 12(b)(5)(C) of the Stevenson-
Wydler Technology Innovation Act of 1980 (15 U.S.C. 
3710a(b)(5)(C)) is amended to read as follows: 
‘‘(C) for scientific research and development 
and for educational assistance consistent with the 
missions and objectives of the Department of Energy 
and the laboratory.’’.
SEC. 21815. INTERAGENCY COOPERATION. 
The Secretary shall enter into discussions with the 
Administrator of the National Aeronautics and Space Ad-
ministration with the goal of reaching an interagency 
working agreement between the 2 agencies that would 
make the National Aeronautics and Space Administra-
tion’s expertise in energy, gained from its existing and
441
planned programs, more readily available to the relevant 
research, development, demonstration, and commercial ap-
plications programs of the Department. Technologies to 
be discussed should include the National Aeronautics and 
Space Administration’s modeling, research, development, 
testing, and evaluation of new energy technologies, includ-
ing solar, wind, fuel cells, and hydrogen storage and dis-
tribution.
TITLE II—DEPARTMENT OF 
ENERGY MANAGEMENT
SEC. 22001. EXTERNAL REGULATION OF DEPARTMENT OF 
ENERGY. 
(a) DEPARTMENT OF ENERGY REPORT.—Not later 
than 18 months after the date of enactment of this Act, 
the Secretary shall transmit to the Congress a report on 
the assumption by the Nuclear Regulatory Commission of 
the Department’s regulatory and enforcement responsibil-
ities with respect to nuclear safety, and the assumption 
by the Occupational Safety and Health Administration of 
the Department’s regulatory and enforcement responsibil-
ities with respect to occupational safety and health, at any 
nonmilitary energy laboratory owned or operated by the 
Department. The report shall include—
(1) a detailed transition plan, drafted in coordi-
nation with the Nuclear Regulatory Commission and
442
the Occupational Safety and Health Administration, 
for termination of self-regulation authority, includ-
ing the activities to be coordinated with the Nuclear 
Regulatory Commission and the Occupational Safety 
and Health Administration; 
(2) a description of any issues that would re-
quire resolution with the Nuclear Regulatory Com-
mission, the Occupational Safety and Health Admin-
istration, or other external regulators; and 
(3) an estimate of—
(A) the annual cost of administering and 
implementing external regulation of the nuclear 
safety and occupational safety and health re-
sponsibilities at nonmilitary energy laboratories 
owned or operated by the Department; 
(B) the number of Federal and contractor 
employees required to administer and imple-
ment such external regulation; and 
(C) the extent and schedule by which the 
Department and the staffs at its nonmilitary 
energy laboratories would be reduced, and the 
anticipated cost savings from that reduction. 
(b) GENERAL ACCOUNTING OFFICE REPORTING RE-
QUIREMENT.—The Comptroller General shall provide a re-
port not later than 20 months after the date of enactment
443
of this Act that compares the Department’s transition 
plan with the Department’s implementation of nuclear 
safety and occupational safety and health responsibilities 
under sections 234A and 234C of the Atomic Energy Act 
of 1954.
SEC. 22002. IMPROVED COORDINATION AND MANAGEMENT 
OF CIVILIAN SCIENCE AND TECHNOLOGY 
PROGRAMS. 
(a) RECONFIGURATION OF POSITION OF DIRECTOR 
OF THE OFFICE OF SCIENCE.—Section 209 of the Depart-
ment of Energy Organization Act (42 U.S.C. 7139) is 
amended by—
(1) striking ‘‘a Director’’ and inserting ‘‘an As-
sistant Secretary, in addition to those appointed 
under section 203(a),’’; and 
(2) striking ‘‘Director’’ and inserting ‘‘Assistant 
Secretary’’. 
(b) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) Section 5315 of title 5, United States Code, is amend-
ed by—
(A) striking ‘‘Director, Office of Science, De-
partment of Energy.’’; and 
(B) striking ‘‘Assistant Secretaries of Energy 
(6)’’ and inserting ‘‘Assistant Secretaries of Energy 
(7)’’.
444
(2) The table of contents for the Department of En-
ergy Organization Act (42 U.S.C. 7101 note) is amend-
ed— 
(A) by striking ‘‘Section 209’’ and inserting 
‘‘Sec. 209’’; 
(B) by striking ‘‘213.’’ and inserting ‘‘Sec. 
213.’’; 
(C) by striking ‘‘214.’’ and inserting ‘‘Sec. 
214.’’; 
(D) by striking ‘‘215.’’ and inserting ‘‘Sec. 
215.’’; and 
(E) by striking ‘‘216.’’ and inserting ‘‘Sec. 
216.’’. 
TITLE III—CLEAN SCHOOL 
BUSES 
SEC. 23001. ESTABLISHMENT OF PILOT PROGRAM. 
(a) ESTABLISHMENT.—The Secretary of Energy, in 
consultation with the Administrator of the Environmental 
Protection Agency, shall establish a pilot program for 
awarding grants on a competitive basis to eligible entities 
for the demonstration and commercial application of alter-
native fuel school buses and ultra-low sulfur diesel school 
buses. 
(b) REQUIREMENTS.—Not later than 3 months after 
the date of the enactment of this Act, the Secretary shall
445
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
446
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—
447
(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
448
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-
449
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) 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-
450
duce the incidence of unnecessary school bus idling at 
schools when picking up and unloading students. 
(k) ANNUAL REPORT.—Not later than January 31 
of each year, the Secretary of Energy shall provide a re-
port evaluating implementation of the program under this 
title to the Congress. Such report shall include the total 
number of grant applications received, the number and 
types of alternative fuel buses and ultra-low sulfur diesel 
school buses requested in grant applications, a list of 
grants awarded and the criteria used to select the grant 
recipients, certified engine emission levels of all buses pur-
chased under the program, and any other information the 
Secretary considers appropriate. 
(l) DEFINITIONS.—For purposes of this section—
(1) the term ‘‘alternative fuel school bus’’ 
means a bus powered substantially by electricity (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; 
(2) the term ‘‘idling’’ means operating an en-
gine while remaining stationary for more than ap-
proximately 15 minutes, except that such term does 
not apply to routine stoppages associated with traf-
fic movement or congestion; and
451
(3) the term ‘‘ultra-low sulfur diesel school 
bus’’ means a school bus powered by diesel fuel 
which contains sulfur at not more than 15 parts per 
million. 
SEC. 23002. FUEL CELL BUS DEVELOPMENT AND 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. 
(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 23004(a) may be used
452
for carrying out this section for the period encompassing 
fiscal years 2004 through 2006. 
(d) REPORTS TO CONGRESS.—Not later than 3 years 
after the date of the enactment of this Act, and not later 
than October 1, 2006, the Secretary shall transmit to the 
Congress a report that—
(1) evaluates the process of converting natural 
gas infrastructure to accommodate fuel cell-powered 
school buses; and 
(2) assesses the results of the development and 
demonstration program under this section. 
SEC. 23003. DIESEL RETROFIT PROGRAM. 
(a) ESTABLISHMENT.—The Administrator of the En-
vironmental Protection Agency and the Secretary shall es-
tablish a pilot program for awarding grants on a competi-
tive basis to eligible recipients for the demonstration and 
commercial application of retrofit technologies for diesel 
school buses. 
(b) 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 
(2) to a contracting entity that provides school 
bus service to one or more public school systems, if
453
the grant application is submitted jointly with the 
school system or systems which the buses will serve. 
(c) CONDITIONS OF GRANT.—A grant provided under 
this section may be used only to demonstrate the use of 
retrofit emissions-control technology on diesel buses 
that—
(1) operate on ultra-low sulfur diesel fuel; and 
(2) were manufactured in model year 1991 or 
later. 
(d) VERIFICATION.—Not later than 3 months after 
the date of enactment of this Act, the Administrator shall 
publish in the Federal Register procedures to verify—
(1) the retrofit emissions-control technology to 
be demonstrated; and 
(2) that buses on which retrofit emissions-con-
trol technology are to be demonstrated will operate 
on diesel fuel containing not more than 15 parts per 
million of sulfur. 
SEC. 23004. AUTHORIZATION OF APPROPRIATIONS. 
(a) SCHOOL BUS GRANTS.—There are authorized to 
be appropriated to the Secretary for carrying out this title, 
to remain available until expended—
(1) $90,000,000 for fiscal year 2004; 
(2) $100,000,000 for fiscal year 2005; and 
(3) $110,000,000 for fiscal year 2006.
454
(b) RETROFIT GRANTS.—There are authorized to be 
appropriated to the Administrator of the Environmental 
Protection Agency and the Secretary such sums as may 
be necessary for carrying out section 23003.
DIVISION C—RESOURCES
TITLE I—INDIAN ENERGY 
SEC. 30101. INDIAN ENERGY. 
Title XXVI of the Energy Policy Act of 1992 (25 
U.S.C. 3501 et seq.) is amended to read as follows: 
‘‘TITLE XXVI—INDIAN ENERGY 
‘‘SEC. 2601. DEFINITIONS. 
‘‘In this title: 
‘‘(1) INDIAN.—The term ‘Indian’ means an in-
dividual member of an Indian tribe who owns land 
or an interest in land, the title to which land—
‘‘(A) is held in trust by the United States; 
or 
‘‘(B) is subject to a restriction against 
alienation imposed by the United States. 
‘‘(2) INDIAN
LAND.—The term ‘Indian land’ 
means—
‘‘(A) any land located within the bound-
aries of an Indian reservation, pueblo, or 
rancheria; or
455
‘‘(B) any land not located within the 
boundaries of an Indian reservation, pueblo, or 
rancheria, the title to which is held—
‘‘(i) in trust by the United States for 
the benefit of an Indian tribe; 
‘‘(ii) by an Indian tribe, subject to re-
striction by the United States against 
alienation; or 
‘‘(iii) by a dependent Indian commu-
nity. 
‘‘(3) INDIAN RESERVATION.—The term ‘Indian 
reservation’ includes—
‘‘(A) an Indian reservation in existence as 
of the date of the enactment of this paragraph; 
‘‘(B) a public domain Indian allotment; 
‘‘(C) a former reservation in the State of 
Oklahoma; and 
‘‘(D) a dependent Indian community lo-
cated within the borders of the United States, 
regardless of whether the community is lo-
cated—
‘‘(i) on original or acquired territory 
of the community; or 
‘‘(ii) within or outside the boundaries 
of any particular State.
456
‘‘(4) INDIAN TRIBE.—The term ‘Indian tribe’ 
has the meaning given that term in section 4 of the 
Indian Self-Determination and Education Assistance 
Act (25 U.S.C. 450b), except the term, for the pur-
poses of this title, shall not include any Native Cor-
poration. 
‘‘(5) NATIVE CORPORATION.—The term ‘Native 
Corporation’ has the meaning given the term in sec-
tion 3 of the Alaska Native Claims Settlement Act 
(43 U.S.C. 1602). 
‘‘(6) SECRETARY.—The term ‘Secretary’ means 
the Secretary of the Interior. 
‘‘(7) TRIBAL
CONSORTIUM.—The term ‘tribal 
consortium’ means an organization that consists of 
at least 3 entities, at least 1 of which is an Indian 
tribe. 
‘‘SEC. 2602. INDIAN TRIBAL RESOURCE REGULATION. 
‘‘To the maximum extent practicable, the Secretary 
and the Secretary of Energy shall make available to In-
dian tribes, tribal consortia, and Native Corporations sci-
entific and technical data for use in the development and 
management of energy resources on Indian land and on 
land conveyed to a Native Corporation.
457
‘‘SEC. 2603. LEASES, BUSINESS AGREEMENTS, AND RIGHTS-
OF-WAY INVOLVING ENERGY DEVELOPMENT 
OR TRANSMISSION. 
‘‘(a) IN GENERAL.—Notwithstanding any other pro-
vision of law—
‘‘(1) an Indian or Indian tribe may enter into 
a lease or business agreement for the purpose of en-
ergy development, including a lease or business 
agreement for—
‘‘(A) exploration for, extraction of, proc-
essing of, or other development of energy re-
sources; and 
‘‘(B) construction or operation of—
‘‘(i) an electric generation, trans-
mission, or distribution facility located on 
Indian land; or 
‘‘(ii) a facility to process or refine en-
ergy resources developed on Indian land; 
and 
‘‘(2) a lease or business agreement described in 
paragraph (1) shall not require the approval of the 
Secretary if—
‘‘(A) the lease or business agreement is ex-
ecuted under tribal regulations approved by the 
Secretary under subsection (e); and
458
‘‘(B) the term of the lease or business 
agreement does not exceed 30 years. 
‘‘(b) RIGHTS-OF-WAY FOR PIPELINES OR ELECTRIC 
TRANSMISSION
OR DISTRIBUTION LINES.—An Indian 
tribe may grant a right-of-way over the Indian land of the 
Indian tribe for a pipeline or an electric transmission or 
distribution line without specific approval by the Secretary 
if—
‘‘(1) the right-of-way is executed under and 
complies with tribal regulations approved by the Sec-
retary under subsection (e); 
‘‘(2) the term of the right-of-way does not ex-
ceed 30 years; and 
‘‘(3) the pipeline or electric transmission or dis-
tribution line serves—
‘‘(A) an electric generation, transmission, 
or distribution facility located on Indian land; 
or 
‘‘(B) a facility located on Indian land that 
processes or refines renewable or nonrenewable 
energy resources developed on Indian land. 
‘‘(c) RENEWALS.—A lease or business agreement en-
tered into or a right-of-way granted by an Indian tribe 
under this section may be renewed at the discretion of the 
Indian tribe, in accordance with this section.
459
‘‘(d) VALIDITY.—No lease, business agreement, or 
right-of-way under this section shall be valid unless the 
lease, business agreement, or right-of-way is authorized in 
accordance with tribal regulations approved by the Sec-
retary under subsection (e). 
‘‘(e) TRIBAL REGULATORY REQUIREMENTS.—
‘‘(1) IN GENERAL.—An Indian tribe may sub-
mit to the Secretary for approval tribal regulations 
governing leases, business agreements, and rights-of-
way under this section. 
‘‘(2) APPROVAL OR DISAPPROVAL.—
‘‘(A) IN
GENERAL.—Not later than 120 
days after the date on which the Secretary re-
ceives tribal regulations submitted by an Indian 
tribe under paragraph (1) (or such later date as 
may be agreed to by the Secretary and the In-
dian tribe), the Secretary shall approve or dis-
approve the regulations. 
‘‘(B) CONDITIONS
FOR
APPROVAL.—The 
Secretary shall approve tribal regulations sub-
mitted under paragraph (1) only if the regula-
tions include provisions that, with respect to a 
lease, business agreement, or right-of-way 
under this section—
460
‘‘(i) ensure the acquisition of nec-
essary information from the applicant for 
the lease, business agreement, or right-of-
way; 
‘‘(ii) address the term of the lease or 
business agreement or the term of convey-
ance of the right-of-way; 
‘‘(iii) address amendments and renew-
als; 
‘‘(iv) address consideration for the 
lease, business agreement, or right-of-way; 
‘‘(v) address technical or other rel-
evant requirements; 
‘‘(vi) establish requirements for envi-
ronmental review in accordance with sub-
paragraph (C); 
‘‘(vii) ensure compliance with all ap-
plicable environmental laws; 
‘‘(viii) identify final approval author-
ity; 
‘‘(ix) provide for public notification of 
final approvals; and 
‘‘(x) establish a process for consulta-
tion with any affected States concerning 
potential off-reservation impacts associated
461
with the lease, business agreement, or 
right-of-way. 
‘‘(C) 
ENVIRONMENTAL
REVIEW
PROC-
ESS.—Tribal regulations submitted under para-
graph (1) shall establish, and include provisions 
to ensure compliance with, an environmental re-
view process that, with respect to a lease, busi-
ness agreement, or right-of-way under this sec-
tion, provides for—
‘‘(i) the identification and evaluation 
of all significant environmental impacts (as 
compared with a no-action alternative); 
‘‘(ii) the identification of proposed 
mitigation; 
‘‘(iii) a process for ensuring that the 
public is informed of and has an oppor-
tunity to comment on any proposed lease, 
business agreement, or right-of-way before 
tribal approval of the lease, business agree-
ment, or right-of-way (or any amendment 
to or renewal of a lease, business agree-
ment, or right-of-way); and 
‘‘(iv) sufficient administrative support 
and technical capability to carry out the 
environmental review process.
462
‘‘(3) PUBLIC
PARTICIPATION.—The Secretary 
may provide notice and opportunity for public com-
ment on tribal regulations submitted under para-
graph (1). 
‘‘(4) DISAPPROVAL.—If the Secretary dis-
approves tribal regulations submitted by an Indian 
tribe under paragraph (1), the Secretary shall—
‘‘(A) notify the Indian tribe in writing of 
the basis for the disapproval; 
‘‘(B) identify what changes or other ac-
tions are required to address the concerns of 
the Secretary; and 
‘‘(C) provide the Indian tribe with an op-
portunity to revise and resubmit the regula-
tions. 
‘‘(5) EXECUTION
OF
LEASE
OR
BUSINESS 
AGREEMENT OR GRANTING OF RIGHT-OF-WAY.—If 
an Indian tribe executes a lease or business agree-
ment or grants a right-of-way in accordance with 
tribal regulations approved under this subsection, 
the Indian tribe shall provide to the Secretary—
‘‘(A) a copy of the lease, business agree-
ment, or right-of-way document (including all 
amendments to and renewals of the document); 
and
463
‘‘(B) in the case of tribal regulations or a 
lease, business agreement, or right-of-way that 
permits payment to be made directly to the In-
dian tribe, documentation of those payments 
sufficient to enable the Secretary to discharge 
the trust responsibility of the United States as 
appropriate under applicable law. 
‘‘(6) LIABILITY.—The United States shall not 
be liable for any loss or injury sustained by any 
party (including an Indian tribe or any member of 
an Indian tribe) to a lease, business agreement, or 
right-of-way executed in accordance with tribal regu-
lations approved under this subsection. 
‘‘(7) COMPLIANCE REVIEW.—
‘‘(A) IN
GENERAL.—After exhaustion of 
tribal remedies, any person may submit to the 
Secretary, in a timely manner, a petition to re-
view compliance of an Indian tribe with tribal 
regulations of the Indian tribe approved under 
this subsection. 
‘‘(B) ACTION BY SECRETARY.—The Sec-
retary shall—
‘‘(i) not later than 60 days after the 
date on which the Secretary receives a pe-
tition under subparagraph (A), review
464
compliance of an Indian tribe described in 
subparagraph (A); and 
‘‘(ii) on completion of the review, if 
the Secretary determines that an Indian 
tribe is not in compliance with tribal regu-
lations approved under this subsection, 
take such action as is necessary to compel 
compliance, including—
‘‘(I)(aa) rescinding a lease, busi-
ness agreement, or right-of-way under 
this section; or 
‘‘(bb) suspending a lease, busi-
ness agreement, or right-of-way under 
this section until an Indian tribe is in 
compliance with tribal regulations; 
and 
‘‘(II) rescinding approval of the 
tribal regulations and reassuming the 
responsibility for approval of leases, 
business agreements, or rights-of-way 
associated with an energy pipeline or 
distribution line described in sub-
section (b). 
‘‘(C) COMPLIANCE.—If the Secretary seeks 
to compel compliance of an Indian tribe with
465
tribal regulations under subparagraph (B)(ii), 
the Secretary shall—
‘‘(i) make a written determination 
that describes the manner in which the 
tribal regulations have been violated; 
‘‘(ii) provide the Indian tribe with a 
written notice of the violation together 
with the written determination; and 
‘‘(iii) before taking any action de-
scribed in subparagraph (B)(ii) or seeking 
any other remedy, provide the Indian tribe 
with a hearing and a reasonable oppor-
tunity to attain compliance with the tribal 
regulations. 
‘‘(D) APPEAL.—An Indian tribe described 
in subparagraph (C) shall retain all rights to 
appeal as provided in regulations promulgated 
by the Secretary. 
‘‘(f) AGREEMENTS.—
‘‘(1) IN GENERAL.—Any agreement by an In-
dian tribe that relates to the development of an elec-
tric generation, transmission, or distribution facility, 
or a facility to process or refine renewable or non-
renewable energy resources developed on Indian 
land, shall not require the specific approval of the
466
Secretary under section 2103 of the Revised Stat-
utes (25 U.S.C. 81) if the activity that is the subject 
of the agreement is carried out in accordance with 
this section. 
‘‘(2) LIABILITY.—The United States shall not 
be liable for any loss or injury sustained by any per-
son (including an Indian tribe or any member of an 
Indian tribe) resulting from an action taken in per-
formance of an agreement entered into under this 
subsection. 
‘‘(g) NO EFFECT ON OTHER LAW.—Nothing in this 
section affects the application of any provision of—
‘‘(1) the Act of May 11, 1938 (commonly 
known as the Indian Mineral Leasing Act of 1938; 
25 U.S.C. 396a et seq.); 
‘‘(2) the Indian Mineral Development Act of 
1982 (25 U.S.C. 2101 et seq.); 
‘‘(3) the Surface Mining Control and Reclama-
tion Act of 1977 (30 U.S.C. 1201 et seq.); or 
‘‘(4) any Federal environmental law. 
‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated such sums as are nec-
essary to carry out this section, to remain available until 
expended.’’.
467
TITLE II—OIL AND GAS 
SEC. 30201. PROGRAM ON OIL AND GAS ROYALTIES IN-
KIND. 
(a) APPLICABILITY OF SECTION.—Notwithstanding 
any other provision of law, the provisions of this section 
shall apply to all royalty in-kind accepted by the Secretary 
of the Interior on or after the date of the enactment of 
this Act under any Federal oil or gas lease or permit under 
section 36 of the Mineral Leasing Act (30 U.S.C. 192), 
section 27 of the Outer Continental Shelf Lands Act (43 
U.S.C. 1353), or any other Federal law governing leasing 
of Federal lands for oil and gas development. 
(b) TERMS AND CONDITIONS.—All royalty accruing 
to the United States shall, on the demand of the Secretary 
of the Interior, be paid in oil or gas. If the Secretary of 
the Interior makes such a demand, the following provi-
sions apply to such payment: 
(1) Delivery by, or on behalf of, the lessee of 
the royalty amount and quality due under the lease 
satisfies the lessee’s royalty obligation for the 
amount delivered, except that transportation and 
processing reimbursements paid to, or deductions 
claimed by, the lessee shall be subject to review and 
audit.
468
(2)(A) Royalty production shall be placed in 
marketable condition by the lessee at no cost to the 
United States. 
(B) In this paragraph, the term ‘‘in marketable 
condition’’ means sufficiently free from impurities 
and otherwise in a condition that it will be accepted 
by a purchaser under a sales contract typical of the 
field or area in which the royalty production was 
produced. 
(3) The Secretary of the Interior may—
(A) sell or otherwise dispose of any royalty 
production taken in-kind (other than oil or gas 
transferred under section 27(a)(3) of the Outer 
Continental Shelf Lands Act (43 U.S.C. 
1353(a)(3)) for not less than the market price; 
and 
(B) transport or process (or both) any roy-
alty production taken in-kind. 
(4) The Secretary of the Interior may, notwith-
standing section 3302 of title 31, United States 
Code, retain and use a portion of the revenues from 
the sale of oil and gas royalties taken in-kind that 
otherwise would be deposited to miscellaneous re-
ceipts, without regard to fiscal year limitation, or 
may use royalty production, to pay the cost of—
469
(A) transporting the royalty production; 
(B) processing the royalty production; 
(C) disposing of the royalty production; or 
(D) any combination of transporting, proc-
essing, and disposing of the royalty production. 
(5) The Secretary of the Interior may use a 
portion of the revenues from the sale of oil royalties 
taken in-kind, without fiscal year limitation, to pay 
transportation costs, salaries, and other administra-
tive costs directly related to filling the Strategic Pe-
troleum Reserve. 
(c) REIMBURSEMENT OF COST.—If the lessee, pursu-
ant to an agreement with the United States or as provided 
in the lease, processes the royalty gas or delivers the roy-
alty oil or gas at a point not on or adjacent to the lease 
area, the Secretary of the Interior shall—
(1) reimburse the lessee for the reasonable costs 
of transportation (not including gathering) from the 
lease to the point of delivery or for processing costs; 
or 
(2) at the discretion of the Secretary of the In-
terior, allow the lessee to deduct such transportation 
or processing costs in reporting and paying royalties 
in value for other Federal oil and gas leases.
470
(d) BENEFIT TO THE UNITED STATES REQUIRED.—
The Secretary of the Interior may receive oil or gas royal-
ties in-kind only if the Secretary determines that receiving 
such royalties provides benefits to the United States great-
er than or equal to those likely to have been received had 
royalties been taken in value. 
(e) REPORT TO CONGRESS.—By June 30, 2004, the 
Secretary of the Interior shall provide a report to the Con-
gress that describes actions taken to develop an organiza-
tion, business processes, and automated systems to sup-
port a full royalty in-kind capability to be used in tandem 
with the royalty in value approach to managing Federal 
oil and gas revenues.
(f) DEDUCTION OF EXPENSES.—
(1) IN
GENERAL.—Before making payments 
under section 35 of the Mineral Leasing Act (30 
U.S.C. 191) or section 8(g) of the Outer Continental 
Shelf Lands Act (43 U.S.C. 1337(g)) of revenues 
derived from the sale of royalty production taken in-
kind from a lease, the Secretary of the Interior shall 
deduct amounts paid or deducted under subsections 
(b)(4) and (c), and shall deposit such amounts to 
miscellaneous receipts. 
(2) ACCOUNTING
FOR
DEDUCTIONS.—If the 
Secretary of the Interior allows the lessee to deduct
471
transportation or processing costs under subsection 
(c), the Secretary may not reduce any payments to 
recipients of revenues derived from any other Fed-
eral oil and gas lease as a consequence of that de-
duction. 
(g) CONSULTATION WITH STATES.—The Secretary 
of the Interior—
(1) shall consult with a State before conducting 
a royalty in-kind program under this title within the 
State, and may delegate management of any portion 
of the Federal royalty in-kind program to such State 
except as otherwise prohibited by Federal law; and 
(2) shall consult annually with any State from 
which Federal oil or gas royalty is being taken in-
kind to ensure to the maximum extent practicable 
that the royalty in-kind program provides revenues 
to the State greater than or equal to those likely to 
have been received had royalties been taken in-value. 
(h) PROVISIONS FOR SMALL REFINERIES.—
(1) PREFERENCE.—If the Secretary of the In-
terior determines that sufficient supplies of crude oil 
are not available in the open market to refineries not 
having their own source of supply for crude oil, the 
Secretary may grant preference to such refineries in 
the sale of any royalty oil accruing or reserved to the
472
United States under Federal oil and gas leases 
issued under any mineral leasing law, for processing 
or use in such refineries at private sale at not less 
than the market price. 
(2) PRORATION
AMONG
REFINERIES
IN
PRO-
DUCTION AREA.—In disposing of oil under this sub-
section, the Secretary of the Interior may, at the 
discretion of the Secretary, prorate such oil among 
such refineries in the area in which the oil is pro-
duced. 
(i) DISPOSITION TO FEDERAL AGENCIES.—
(1) ONSHORE ROYALTY.—Any royalty oil or gas 
taken by the Secretary of the Interior in-kind from 
onshore oil and gas leases may be sold at not less 
than the market price to any department or agency 
of the United States. 
(2) OFFSHORE ROYALTY.—Any royalty oil or 
gas taken in-kind from Federal oil and gas leases on 
the outer Continental Shelf may be disposed of only 
under section 27 of the Outer Continental Shelf 
Lands Act (43 U.S.C. 1353). 
(j) PREFERENCE FOR FEDERAL LOW-INCOME EN-
ERGY ASSISTANCE PROGRAMS.—In disposing of royalty oil 
or gas taken in-kind under this section, the Secretary may 
grant a preference to any person, including any State or
473
Federal agency, for the purpose of providing additional re-
sources to any Federal low-income energy assistance pro-
gram. 
SEC. 30202. CLARIFICATION OF FAIR MARKET RENTAL 
VALUE 
DETERMINATIONS 
FOR 
PUBLIC 
LANDS AND FOREST SERVICE RIGHTS-OF-
WAY. 
(a) LINEAR
RIGHTS-OF-WAY
UNDER
FEDERAL 
LAND POLICY AND MANAGEMENT ACT.—Section 504 of 
the Federal Land Policy and Management Act of 1976 
(43 U.S.C. 1764) is amended by adding at the end the 
following: 
‘‘(k) DETERMINATION OF FAIR MARKET VALUE OF 
LINEAR
RIGHTS-OF-WAY.—(1) 
Effective 
upon 
the 
issuance of the rules required by paragraph (2), for pur-
poses of subsection (g), the Secretary concerned shall de-
termine the fair market rental for the use of land encum-
bered by a linear right-of-way granted, issued, or renewed 
under this title using the valuation method described in 
paragraphs (2), (3), and (4). 
‘‘(2) Not later than 1 year after the date of enact-
ment of this subsection, and in accordance with subsection 
(k), the Secretary of the Interior shall amend section 
2803.1–2 of title 43, Code of Federal Regulations, as in 
effect on the date of enactment of this subsection, to revise
474
the per acre rental fee zone value schedule by State, coun-
ty, and type of linear right-of-way use to reflect current 
values of land in each zone. The Secretary of Agriculture 
shall make the same revisions for linear rights-of-way 
granted, issued, or renewed under this title on National 
Forest System lands. 
‘‘(3) The Secretary concerned shall update annually 
the schedule revised under paragraph (2) by multiplying 
the current year’s rental per acre by the annual change, 
second quarter to the second quarter (June 30 to June 
30) in the Gross National Product Implicit Price Deflator 
Index published in the Survey of Current Business of the 
Department of Commerce, Bureau of Economic Analysis. 
‘‘(4) Whenever the cumulative change in the index 
referred to in paragraph (3) exceeds 30 percent, or the 
change in the 3-year average of the 1-year Treasury inter-
est rate used to determine per acre rental fee zone values 
exceeds plus or minus 50 percent, the Secretary concerned 
shall conduct a review of the zones and rental per acre 
figures to determine whether the value of Federal land has 
differed sufficiently from the index referred to in para-
graph (3) to warrant a revision in the base zones and rent-
al per acre figures. If, as a result of the review, the Sec-
retary concerned determines that such a revision is war-
475
ranted, the Secretary concerned shall revise the base zones 
and rental per acre figures accordingly.’’. 
(b) RIGHTS-OF-WAY
UNDER
MINERAL
LEASING 
ACT.—Section 28(l) of the Mineral Leasing Act (30 
U.S.C. 185(l)) is amended by inserting before the period 
at the end the following: ‘‘using the valuation method de-
scribed in section 2803.1–2 of title 43, Code of Federal 
Regulations, as revised pursuant to section 504(k) of the 
Federal Land Policy and Management Act of 1976 (43 
U.S.C. 1764(k))’’.
SEC. 30203. USGS ESTIMATES OF OIL AND GAS RESOURCES 
UNDERLYING ONSHORE FEDERAL LANDS. 
Section 604(a) of the Energy Act of 2000 (42 U.S.C. 
6217) is amended—
(1) in subsection (a)(1)—
(A) by striking ‘‘reserve’’; and 
(B) by striking ‘‘and’’ after the semicolon; 
(2) by striking subsection (a)(2) and inserting 
the following: 
‘‘(2) the extent and nature of any restrictions 
or impediments to the development of such re-
sources, including—
‘‘(A) impediments to the timely granting of 
leases; and
476
‘‘(B) post-lease restrictions, impediments, 
or delays on development, involving conditions 
of approval, applications for permits to drill, or 
processing of environmental permits; and 
‘‘(C) permits or restrictions associated with 
transporting the resources for entry into com-
merce; and 
‘‘(3) the amount of resources not produced or 
introduced into commerce because of those restric-
tions.’’; and 
(3) in subsection (b)—
(A) by striking ‘‘reserve’’ and inserting 
‘‘resource’’; and 
(B) by striking ‘‘publically’’ and inserting 
‘‘publicly’’.
SEC. 30204. ROYALTY INCENTIVES FOR CERTAIN OFF-
SHORE AREAS.
(a) OUTER CONTINENTAL SHELF SHALLOW WATER 
DEEP GAS ROYALTY RELIEF.—
(1) SHORT
TITLE.—This subsection may be 
cited as the ‘‘Outer Continental Shelf Shallow Water 
Deep Gas Royalty Relief Act’’. 
(2) PURPOSES.—The purposes of this sub-
section are the following:
477
(A) To accelerate natural gas exploration, 
development, and production from wells drilled 
to deep depths on existing shallow water lease 
tracts on the Outer Continental Shelf. 
(B) To provide royalty incentives for the 
production of natural gas from such tracts. 
(C) To provide royalty incentives for devel-
opment of new technologies and the exploration 
and development of the new frontier of deep 
drilling on the Outer Continental Shelf. 
(3) ROYALTY
INCENTIVES
UNDER
EXISTING 
LEASES FOR PRODUCTION OF DEEP GAS IN SHAL-
LOW WATER IN THE GULF OF MEXICO.—
(A) SUSPENSION OF ROYALTIES.—
(i) IN
GENERAL.—The Secretary of 
the Interior shall grant royalty relief for 
natural gas produced under leases issued 
under the Outer Continental Shelf Lands 
Act (43 U.S.C. 1301 et seq.) prior to Jan-
uary 1, 2001, from deep wells on oil and 
gas lease tracts in shallow waters of the 
Gulf of Mexico located wholly west of 87 
degrees, 30 minutes west longitude.
478
(ii) AMOUNT OF RELIEF.—The Sec-
retary shall grant royalty relief to eligible 
leases in the following amounts: 
(I) A suspension volume of at 
least 15 billion cubic feet of natural 
gas produced from a successful deep 
well with a total vertical depth of 
15,000 feet to 17,999 feet. 
(II) A suspension volume of at 
least 25 billion cubic feet of natural 
gas produced from a successful deep 
well with a total vertical depth of 
18,000 feet to 19,999 feet. 
(III) A suspension volume of at 
least 35 billion cubic feet of natural 
gas produced from any ultra deep 
well. 
(IV) A suspension volume of at 
least 5 billion cubic feet of natural gas 
per well for up to 2 unsuccessful wells 
drilled to a depth of at least 18,000 
feet on a lease tract that subsequently 
produces natural gas from a success-
ful deep well.
479
(iii) 
LIMITATION.—The 
Secretary 
shall not grant the royalty incentives out-
lined in this subparagraph if the average 
annual NYMEX natural gas price exceeds 
for one full calendar year the threshold 
price of $5 per million Btu, adjusted from 
the year 2000 for inflation.
(B) DEFINITIONS.—For purposes of this 
paragraph: 
(i) The term ‘‘deep well’’ means a well 
drilled with a perforated interval, the top 
of which is at least 15,000 feet true 
vertical depth below the datum at mean 
sea level. 
(ii) The term ‘‘eligible lease’’ means a 
lease that—
(I) was issued in a lease sale held 
before January 1, 2001;
(II) is for a tract located in the 
Gulf of Mexico entirely in water 
depths less than 200 meters on a 
block wholly west of 87 degrees, 30 
minutes west longitude; and
(III) is for a tract that has not 
produced gas or oil from a well that
480
commenced drilling before March 26, 
2003, with a completion 15,000 feet 
true vertical depth below the datum at 
mean sea level or deeper. 
(iii) The term ‘‘shallow water’’ means 
water less than 200 meters deep. 
(iv) The term ‘‘ultra deep well’’ means 
a well drilled with a perforated interval, 
the top of which is at least 20,000 feet 
true vertical depth below the datum at 
mean sea level. 
(4) SUNSET.—This subsection shall have no 
force or effect after the end of the 5-year period be-
ginning on the date of the enactment of this Act. 
(b) DEEP WATER AREAS.—Section 8(a) of the Outer 
Continental Shelf Lands Act (43 U.S.C. 1337(a)) is 
amended by adding at the end the following: 
‘‘(9)(A) For all tracts located in water depths of 
greater than 400 meters in the Western and Central Plan-
ning Area of the Gulf of Mexico, including that portion 
of the Eastern Planning Area of the Gulf of Mexico en-
compassing whole lease blocks lying west of 87 degrees, 
30 minutes West longitude, and for all tracts in a frontier 
area offshore Alaska, any oil or gas lease sale under this 
Act occurring after the date of the enactment of this para-
481
graph and before July 1, 2007, shall use the bidding sys-
tem authorized in paragraph (1)(H), except that the sus-
pension of royalties shall be set at a volume of not less 
than the following: 
‘‘(i) 5 million barrels of oil equivalent for each 
lease in water depths of 400 to 800 meters. 
‘‘(ii) 9 million barrels of oil equivalent for each 
lease in water depths of 800 to 1,600 meters. 
‘‘(iii) 12 million barrels of oil equivalent for 
each lease in water depths greater than 1,600 me-
ters. 
‘‘(B) For purposes of this paragraph, the term ‘fron-
tier area offshore Alaska’ includes, at a minimum, those 
areas offshore Alaska with seasonal ice, long distances to 
existing pipelines and ports, or a lack of production infra-
structure.’’.
(c) APPLICATION OF OTHER EXISTING AUTHORITY 
TO OFFSHORE ALASKA.—Section 8(a)(3)(B) of the Outer 
Continental Shelf Lands Act (43 U.S.C. 1337(a)(3)(B)) 
is amended—
(1) by striking ‘‘and the portion’’ and inserting 
‘‘, the portion’’; and 
(2) by inserting after ‘‘longitude,’’ the fol-
lowing: ‘‘and in the planning areas offshore Alas-
ka,’’.
482
(d) RELATIONSHIP TO EXISTING AUTHORITY.—Ex-
cept as expressly provided in this section, nothing in this 
section is intended to limit the authority of the Secretary 
of the Interior under the Outer Continental Shelf Lands 
Act (43 U.S.C. 1331 et seq.) to provide royalty suspen-
sion. 
(e) SAVINGS CLAUSE.—Nothing in this section shall 
be construed to affect any offshore preleasing, leasing, or 
development moratorium, including any moratorium appli-
cable to the Eastern Planning Area of the Gulf of Mexico 
located off the Gulf Coast of Florida. 
SEC. 30205. MARGINAL PROPERTY PRODUCTION INCEN-
TIVES. 
(a) PURPOSE.—The purpose of this section is to pro-
vide to independent producers incentives for extended pro-
duction from Federal oil and gas leases that are still pro-
ducible but approaching abandonment due to economic 
factors. 
(b) MARGINAL PROPERTY DEFINED.—
(1) IN GENERAL.—Until such time as the Sec-
retary of the Interior promulgates rules under sub-
section (f) that prescribe a different definition, for 
purposes of the royalty relief granted under this sec-
tion the term ‘‘marginal property’’ means an on-
shore unit, communitization agreement, or lease not
483
within a unit or communitization agreement, that 
produces on average the combined equivalent of less 
than 15 barrels of oil per well per day or 90 million 
British thermal units of gas per well per day. 
(2) CALCULATION OF AVERAGE PER WELL PRO-
DUCTION.—In calculating the average per well pro-
duction under paragraph (1), the lessee and the Sec-
retary shall—
(A) include those wells that produce more 
than half the days in the three most recent pro-
duction months; and 
(B) calculate the average over the three 
most recent production months. 
(c) CONDITIONS
FOR
REDUCTION
OF
ROYALTY 
RATE.—Until such time as the Secretary of the Interior 
promulgates rules under subsection (f) that prescribe dif-
ferent thresholds or standards— 
(1) the Secretary shall, upon request by the op-
erator of a marginal property who is an independent 
producer, reduce the royalty rate on oil production 
from the marginal property as prescribed in sub-
section (d) when the spot price of West Texas Inter-
mediate crude oil at Cushing, Oklahoma, is, on aver-
age, less than $15 per barrel for 90 consecutive 
trading days; and
484
(2) the Secretary shall, upon request by the op-
erator of a marginal property who is an independent 
producer, reduce the royalty rate on gas production 
from the marginal property to the rate prescribed in 
subsection (d) when the spot price of natural gas de-
livered at Henry Hub, Louisiana, is, on average, less 
than $2 per million British thermal units for 90 con-
secutive trading days. 
(d) REDUCED ROYALTY RATE.—
(1) IN
GENERAL.—The reduced royalty rate 
under this subsection shall be the lesser of—
(A) 5 percent; or 
(B) the applicable rate under any other 
statutory or regulatory royalty relief provision 
that applies to the affected production. 
(2) EFFECTIVE
DATE.—The reduced royalty 
rate under this subsection shall be effective on the 
first day of the production month following the date 
on which the applicable price standard prescribed in 
subsection (c) is met. 
(e) TERMINATION OF REDUCED ROYALTY RATE.—
A royalty rate prescribed in subsection (d)(1) shall termi-
nate—
486
lieu of those prescribed in subsections (b) through 
(d). 
(2) MARGINAL PROPERTIES.—The Secretary of 
the Interior, after consultation with the Secretary of 
Energy, and within 1 year after the date of enact-
ment of this Act, shall—
(A) by rule prescribe standards and re-
quirements for, and the extent of royalty relief 
for, marginal properties for oil and gas leases 
on the outer Continental Shelf; and 
(B) by rule define what constitutes a mar-
ginal property on the outer Continental Shelf 
for purposes of this section. 
(3) CONSIDERATIONS.—In promulgating rules 
under this subsection, the Secretary of the Interior 
may consider—
(A) oil and gas prices and market trends; 
(B) production costs; 
(C) abandonment costs; 
(D) Federal and State tax provisions and 
their effects on production economics; 
(E) other royalty relief programs; 
(F) regional differences in average well-
head prices; 
(G) national energy security issues; and
487
(H) other relevant matters. 
(g) SAVINGS PROVISION.—Nothing in this section 
shall prevent a lessee from receiving royalty relief or a roy-
alty reduction pursuant to any other law or regulation that 
provides more relief than the amounts provided by this 
section.
(h) INDEPENDENT PRODUCER DEFINED.—In this 
section the term ‘‘independent producer’’ means a person 
who is not an integrated oil company, as that term is de-
fined in section 219(b)(4) of the Internal Revenue Code 
of 1986 (26 U.S.C. 291(b)(4)).
SEC. 30206. FEDERAL ONSHORE OIL AND GAS LEASING AND 
PERMITTING PRACTICES. 
(a) REVIEW OF ONSHORE OIL AND GAS LEASING 
PRACTICES.—The Secretary of the Interior, in cooperation 
with the Secretary of Agriculture with respect to National 
Forest System lands under the jurisdiction of the Depart-
ment of Agriculture, shall perform an internal review of 
Federal onshore oil and gas leasing and permitting prac-
tices. The review shall include the following: 
(1) The process by which Federal land man-
agers accept or reject an offer to lease, including the 
timeframes in which such offers are acted upon, and 
any recommendations for improving and expediting 
the process.
488
(2) The process for considering applications for 
permits to drill, including the timeframes in which 
such applications are considered, and any rec-
ommendations for improving and expediting the 
process. 
(3) The process for considering surface use 
plans of operation, including the timeframes in 
which such plans are considered, and any rec-
ommendations for improving and expediting the 
process. 
(4) The process for administrative appeal of de-
cisions or orders of officers or employees of the Bu-
reau of Land Management with respect to a Federal 
oil or gas lease, including the timeframes in which 
such appeals are heard and decided, and any rec-
ommendations for improving and expediting the 
process. 
(5) The process by which Federal land man-
agers identify stipulations to address site-specific 
concerns and conditions, including those relating to 
the environment and resource use conflicts, whether 
stipulations are effective in addressing resource val-
ues, and any recommendations for expediting and 
improving the identification and effectiveness of stip-
ulations.
489
(6) The process by which the Federal land 
management agencies coordinate planning and anal-
ysis with planning of Federal, State, and local agen-
cies having jurisdiction over adjacent areas and 
other land uses, and any recommendations for im-
proving and expediting the process. 
(7) The documentation provided to lease appli-
cants and lessees with respect to determinations to 
reject lease applications or to require modification of 
proposed surface use plans of operation and rec-
ommendations regarding improvement of such docu-
mentation to more clearly set forth the basis for the 
decision. 
(b) REPORT.—The Secretaries shall report to the 
Committee on Resources of the House of Representatives 
and to the Committee on Energy and Natural Resources 
of the Senate no later than 1 year after the date of the 
enactment of this Act, summarizing the findings of their 
respective reviews undertaken pursuant to this section and 
the actions they have taken or plan to take to improve 
the Federal onshore oil and gas leasing program.
SEC. 30207. MANAGEMENT OF FEDERAL OIL AND GAS LEAS-
ING PROGRAMS. 
(a) TIMELY ACTION ON LEASES AND PERMITS.—To 
ensure timely action on oil and gas leases and applications
490
for permits to drill on lands otherwise available for leasing, 
the Secretary of the Interior shall—
(1) ensure expeditious compliance with the re-
quirements of section 102(2)(C) of the National En-
vironmental Policy Act of 1969 (42 U.S.C. 
4332(2)(C)); 
(2) improve consultation and coordination with 
the States and the public; and 
(3) improve the collection, storage, and retrieval 
of information related to such leasing activities. 
(b) BEST MANAGEMENT PRACTICES.—
(1) IN GENERAL.—Within 18 months after the 
date of enactment of this Act, the Secretary of the 
Interior shall develop and implement best manage-
ment practices to improve the administration of the 
onshore oil and gas leasing program pursuant to the 
Mineral Leasing Act (30 U.S.C. 181, et seq.) and 
ensure timely action on oil and gas leases and appli-
cations for permits to drill on lands otherwise avail-
able for leasing. 
(2) CONSIDERATION AND CONSULTATION.—In 
developing such best management practices the Sec-
retary shall consider the recommendations resulting 
from the review under section 30206.
491
(3) REGULATIONS.—Within 180 days after the 
development of best management practices under 
paragraph (1), the Secretary shall publish for public 
comment proposed regulations that set forth specific 
timeframes for processing leases and applications in 
accordance with those practices, including deadlines 
for—
(A) approving or disapproving—
(i) resource management plans and 
related documents; 
(ii) lease applications; 
(iii) applications for permits to drill; 
and 
(iv) surface use plans; and 
(B) related administrative appeals.
SEC. 30208. CONSULTATION REGARDING OIL AND GAS 
LEASING ON PUBLIC LANDS. 
(a) IN GENERAL.—Not later than six months after 
the date of enactment of this Act, the Secretary of the 
Interior and the Secretary of Agriculture shall enter into, 
and submit to the Congress, a memorandum of under-
standing in accordance with this section regarding oil and 
gas leasing on public lands within the jurisdiction of the 
Secretary of the Interior and National Forest System
492
lands within the jurisdiction of the Secretary of Agri-
culture. 
(b) CONTENTS.—The memorandum of understanding 
shall include provisions that—
(1) establish an administrative procedure for 
timely processing of oil and gas lease applications, 
including lines of authority, steps in application 
processing, and timeframes for application proc-
essing; 
(2) establish an administrative procedure for 
timely processing of surface use plans of operation 
and applications for permits to drill, including lines 
of authority and steps for processing such plans and 
applications within 30 days after receipt by the Sec-
retary concerned; 
(3) provide for coordination of planning relating 
to oil and gas development; 
(4) provide for coordination of environmental 
compliance efforts to avoid duplication of effort; 
(5) provide for coordination of use of lease stip-
ulations to achieve consistency; 
(6) ensure that lease stipulations are only as re-
strictive as is necessary to protect the resource for 
which the stipulations are applied; and
493
(7) establish reasonable timeframes to process 
applications for permits to drill. 
(c) DATA RETRIEVAL SYSTEM.—
(1) IN GENERAL.—The Secretary of the Inte-
rior and the Secretary of Agriculture shall establish 
a joint data retrieval system that is capable of track-
ing applications and formal requests made pursuant 
to procedures of the Federal onshore oil and gas 
leasing program and providing information as to the 
status of such applications and requests within the 
Department of the Interior and the Department of 
Agriculture. 
(2) AVAILABILITY OF DATA.—Data in the joint 
data retrieval system shall be made available to the 
public, consistent with applicable laws and regula-
tions regarding confidentiality and proprietary data. 
(3) RESOURCE MAPPING.—The Secretary of the 
Interior and the Secretary of Agriculture shall estab-
lish a joint GIS mapping system for use in tracking 
surface resource values to aid in resource manage-
ment and processing of surface use plans of oper-
ation and applications for permits to drill.
SEC. 30209. OIL AND GAS LEASE ACREAGE LIMITATIONS. 
Section 27(d)(1) of the Mineral Leasing Act (30 
U.S.C. 184(d)(1)) is amended by inserting after ‘‘acreage
494
held in special tar sand areas’’ the following: ‘‘as well as 
acreage under any lease any portion of which has been 
committed to a federally approved unit or cooperative plan 
or communitization agreement, or for which royalty, in-
cluding compensatory royalty or royalty in kind, was paid 
in the preceding calendar year,’’.
SEC. 30210. FEDERAL REIMBURSEMENT FOR ORPHAN WELL 
RECLAMATION. 
(a) DEFINITIONS.—In this section: 
(1) LESSEE.—The term ‘‘lessee’’ means a per-
son who owns a lease, working interest, or operating 
rights in an oil and gas lease on lands owned by the 
United States. 
(2) ORPHAN WELL.—The term ‘‘orphan well’’ 
means any oil or gas well—
(A) that is located on lands owned by the 
United States; 
(B) that requires plugging and abandon-
ment under the regulations of the Department 
of the Interior; and 
(C) for which the Secretary is unable to 
find any person who is legally responsible and 
has the financial resources to reclaim the well.
495
(3) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of the Interior or the Secretary’s des-
ignee. 
(b) REIMBURSEMENT FOR RECLAIMING WELLS ON 
LANDS SUBJECT
TO NEW LEASES.—If the Secretary 
issues a new oil and gas lease on federally owned lands 
on which 1 or more orphaned wells are located, the Sec-
retary—
(1) may require, as a condition of the lease, 
that the lessee reclaim pursuant to the Secretary’s 
standards all orphaned wells on the land leased; and 
(2) shall provide to the lessee a credit against 
royalties due under the lease for 100 percent of the 
reasonable actual costs of reclaiming the orphaned 
well pursuant to such requirement. 
(c) ROYALTY CREDITS FOR RECLAIMING ORPHAN 
WELLS ON OTHER LANDS.—The Secretary—
(1) may authorize any lessee under an oil and 
gas lease on federally owned lands to reclaim pursu-
ant to the Secretary’s standards—
(A) an orphan well on unleased federally 
owned lands or unleased lands on the outer 
Continental Shelf; or 
(B) an orphan well located on an existing 
lease on federally owned lands or the outer Con-
496
tinental Shelf for the reclamation of which the 
lessee is not legally responsible; and 
(2) shall provide to the lessee a credit against 
royalties under the lessee’s lease of 115 percent of 
the reasonable actual costs of reclaiming the orphan 
well. 
(d) REPORTING
AND APPLICATION
OF ROYALTY 
CREDITS.—
(1) IN GENERAL.—Any credit against royalties 
required to be provided to a lessee under this section 
may be reported against royalties on production 
from any oil and gas lease on federally owned lands, 
or on the outer Continental Shelf, administered by 
the Secretary, that are owed by—
(A) a lessee; 
(B) any wholly owned affiliate or wholly 
commonly owned affiliate of a lessee; or 
(C) any wholly owned affiliate or wholly 
commonly owned affiliate of the person con-
ducting the reclamation work on an orphan 
well. 
(2) 
REPORTING
BY
DESIGNEES.—Credits 
against royalties required to be provided to a lessee 
under this section may be reported by a designee (as 
defined in section 3 of the Federal Oil and Gas Roy-
497
alty Simplification and Fairness Act of 1982 (30 
U.S.C. 1702)), when the designee reports and pays 
royalty on behalf of the lessee. 
(e) IMPLEMENTING REGULATIONS.—The Secretary 
may promulgate such regulations as may be necessary and 
appropriate to implement this section. 
(f) PROTECTION AGAINST LIABILITY.—No person 
who reclaims an orphan well under this section shall be 
liable under any provision of Federal law for any costs 
or damages as a result of action taken or omitted in the 
course of carrying out a reclamation plan approved by the 
Secretary under this section. This section shall not pre-
clude liability for costs or damages as a result of a gross 
negligence or intentional misconduct by the person car-
rying out an approved reclamation plan. For purposes of 
the preceding sentence, reckless, willful, or wanton mis-
conduct shall constitute gross negligence. 
SEC. 30211. PRESERVATION OF GEOLOGICAL AND GEO-
PHYSICAL DATA. 
(a) SHORT TITLE.—This section may be cited as the 
‘‘National Geological and Geophysical Data Preservation 
Program Act of 2003’’. 
(b) PROGRAM.—The Secretary of the Interior shall 
carry out a National Geological and Geophysical Data 
Preservation Program in accordance with this section—
498
(1) to archive geologic, geophysical, and engi-
neering data, maps, well logs, and samples; 
(2) to provide a national catalog of such archi-
val material; and 
(3) to provide technical and financial assistance 
related to the archival material. 
(c) PLAN.—Within 1 year after the date of the enact-
ment of this Act, the Secretary shall develop and submit 
to the Committee on Resources of the House of Represent-
atives and the Committee on Energy and Natural Re-
sources of the Senate a plan for the implementation of 
the Program. 
(d) DATA ARCHIVE SYSTEM.— 
(1) ESTABLISHMENT.—The Secretary shall es-
tablish, as a component of the Program, a data ar-
chive system, which shall provide for the storage, 
preservation, and archiving of subsurface, surface, 
geological, geophysical and engineering data and 
samples. The Secretary, in consultation with the Ad-
visory Committee, shall develop guidelines relating to 
the data archive system, including the types of data 
and samples to be preserved. 
(2) SYSTEM COMPONENTS.—The system shall 
be comprised of State agencies and agencies within 
the Department of the Interior that maintain geo-
499
logical and geophysical data and samples that are 
designated by the Secretary in accordance with this 
subsection. The Program shall provide for the stor-
age of data and samples through data repositories 
operated by such agencies. 
(3) LIMITATION
OF
DESIGNATION.—The Sec-
retary may not designate a State agency as a com-
ponent of the data archive system unless it is the 
agency that acts as the geological survey in the 
State. 
(4) DATA FROM FEDERAL LANDS.—The data 
archive system shall provide for the archiving of rel-
evant subsurface data and samples obtained from 
Federal lands—
(A) in the most appropriate repository des-
ignated under paragraph (2), with preference 
being given to archiving data in the State in 
which the data was collected; and 
(B) consistent with all applicable law and 
requirements relating to confidentiality and pro-
prietary data. 
(e) NATIONAL CATALOG.—
(1) IN GENERAL.—As soon as practicable after 
the date of the enactment of this section, the Sec-
500
retary shall develop and maintain, as a component 
of the Program, a national catalog that identifies—
(A) data and samples available in the data 
archive system established under subsection (d); 
(B) the repository for particular material 
in such system; and 
(C) the means of accessing the material. 
(2) AVAILABILITY.—The Secretary shall make 
the national catalog accessible to the public on the 
site of the Survey on the World Wide Web, con-
sistent with all applicable requirements related to 
confidentiality and proprietary data.
(f) ADVISORY COMMITTEE.—
(1) IN
GENERAL.—The Advisory Committee 
shall advise the Secretary on planning and imple-
mentation of the Program. 
(2) NEW
DUTIES.—In addition to its duties 
under the National Geologic Mapping Act of 1992 
(43 U.S.C. 31b et seq.), the Advisory Committee 
shall perform the following duties: 
(A) Advise the Secretary on developing 
guidelines and procedures for providing assist-
ance for facilities in subsection (g)(1).
501
(B) Review and critique the draft imple-
mentation plan prepared by the Secretary pur-
suant to subsection (c). 
(C) Identify useful studies of data archived 
under the Program that will advance under-
standing of the Nation’s energy and mineral re-
sources, geologic hazards, and engineering geol-
ogy. 
(D) Review the progress of the Program in 
archiving significant data and preventing the 
loss of such data, and the scientific progress of 
the studies funded under the Program. 
(E) Include in the annual report to the 
Secretary required under section 5(b)(3) of the 
National Geologic Mapping Act of 1992 (43 
U.S.C. 31d(b)(3)) an evaluation of the progress 
of the Program toward fulfilling the purposes of 
the Program under subsection (b). 
(g) FINANCIAL ASSISTANCE.—
(1) ARCHIVE FACILITIES.—Subject to the avail-
ability of appropriations, the Secretary shall provide 
financial assistance to a State agency that is des-
ignated under subsection (d)(2), for providing facili-
ties to archive energy material.
502
(2) STUDIES.—Subject to the availability of ap-
propriations, the Secretary shall provide financial as-
sistance to any State agency designated under sub-
section (d)(2) for studies that enhance under-
standing, interpretation, and use of materials 
archived in the data archive system established 
under subsection (d).
(3) FEDERAL SHARE.—The Federal share of 
the cost of an activity carried out with assistance 
under this subsection shall be no more than 50 per-
cent of the total cost of that activity. 
(4) PRIVATE CONTRIBUTIONS.—The Secretary 
shall apply to the non-Federal share of the cost of 
an activity carried out with assistance under this 
subsection the value of private contributions of prop-
erty and services used for that activity. 
(h) REPORT.—The Secretary shall include in each re-
port under section 8 of the National Geologic Mapping Act 
of 1992 (43 U.S.C. 31g)—
(1) a description of the status of the Program; 
(2) an evaluation of the progress achieved in 
developing the Program during the period covered by 
the report; and 
(3) any recommendations for legislative or other 
action the Secretary considers necessary and appro-
503
priate to fulfill the purposes of the Program under 
subsection (b). 
(i) DEFINITIONS.—As used in this section: 
(1) ADVISORY COMMITTEE.—The term ‘‘Advi-
sory Committee’’ means the advisory committee es-
tablished under section 5 of the National Geologic 
Mapping Act of 1992 (43 U.S.C. 31d). 
(2) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of the Interior acting through the Di-
rector of the United States Geological Survey. 
(3) PROGRAM.—The term ‘‘Program’’ means 
the National Energy Data Preservation Program 
carried out under this section. 
(4) SURVEY.—The term ‘‘Survey’’ means the 
United States Geological Survey. 
(j) MAINTENANCE OF STATE EFFORT.—It is the in-
tent of the Congress that the States not use this section 
as an opportunity to reduce State resources applied to the 
activities that are the subject of the Program. 
(k) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized 
to 
be 
appropriated 
to 
the 
Secretary 
$30,000,000 for each of fiscal years 2004 through 2008 
for carrying out this section.–
504
SEC. 30212. COMPLIANCE WITH EXECUTIVE ORDER 13211; 
ACTIONS CONCERNING REGULATIONS THAT 
SIGNIFICANTLY AFFECT ENERGY SUPPLY, 
DISTRIBUTION, OR USE. 
(a) REQUIREMENT.—The Secretary of the Interior 
shall—
(1) require that before any person takes any ac-
tion that could have a significant adverse effect on 
the supply of domestic energy resources from Fed-
eral public lands, the person shall comply with Exec-
utive Order 13211; and 
(2) within 180 days after the date of the enact-
ment of this Act, publish guidance for purposes of 
this section describing what constitutes a significant 
adverse effect on the supply of domestic energy re-
sources under Executive Order 13211. 
(b) MOU.—The Secretary of the Interior and the 
Secretary of Agriculture shall include in the memorandum 
of understanding under section 30208 provisions regard-
ing implementation of subsection (a)(1) of this section. 
SEC. 30213. REIMBURSEMENT FOR COSTS OF NEPA ANAL-
YSES, DOCUMENTATION, AND STUDIES. 
(a) IN GENERAL.—The Mineral Leasing Act (30 
U.S.C. 181 et seq.) is amended by inserting after section 
37 the following:
505
‘‘REIMBURSEMENT FOR COSTS OF CERTAIN ANALYSES, 
DOCUMENTATION, AND STUDIES 
‘‘SEC. 38. (a) IN GENERAL.—The Secretary of the 
Interior may, through royalty credits, reimburse a person 
who is a lessee, operator, operating rights owner, or appli-
cant for any lease under this Act for reasonable amounts 
paid by the person for preparation by the Secretary (or 
a contractor or other person selected by the Secretary) of 
any project-level analysis, documentation, or related study 
required under the National Environmental Policy Act of 
1969 (42 U.S.C. 4321 et seq.) with respect to the lease. 
‘‘(b) CONDITIONS.—The Secretary may provide reim-
bursement under subsection (b) only if—
‘‘(1) adequate funding to enable the Secretary 
to timely prepare the analysis, documentation, or re-
lated study is not appropriated; 
‘‘(2) the person paid the costs voluntarily; and 
‘‘(3) the person maintains records of its costs 
in accordance with regulations prescribed by the 
Secretary.’’. 
(b) APPLICATION.—The amendment made by this 
section shall apply with respect to any lease entered into 
before, on, or after the date of the enactment of this Act. 
(c) DEADLINE FOR REGULATIONS.—The Secretary of 
the Interior shall issue regulations implementing the
506
amendment made by this section by not later than 90 days 
after the date of the enactment of this Act.
SEC. 30214. ALTERNATE ENERGY-RELATED USES ON THE 
OUTER CONTINENTAL SHELF. 
(a) PURPOSES.—The purposes of this section are as 
follows: 
(1) To protect the economic and land use inter-
ests of the Federal Government in the management 
of the Outer Continental Shelf for energy-related 
and certain other purposes. 
(2) To provide an administrative framework for 
the oversight and management of energy-related ac-
tivities on the Outer Continental Shelf, consistent 
with other applicable laws. 
(3) To expedite projects to increase the produc-
tion, transmission, or conservation of energy on the 
Outer Continental Shelf. 
(4) To provide for interagency coordination in 
the siting and permitting of energy-related activities 
on the Outer Continental Shelf. 
(5) To ensure that energy-related activities on 
the Outer Continental Shelf are conducted in a man-
ner that provides for safety, protection of the envi-
ronment, prevention of waste, conservation of nat-
507
ural resources, protection of correlative rights, and 
protection of national security interests. 
(6) To authorize alternate uses of existing 
structures and facilities previously permitted under 
the Outer Continental Shelf Lands Act (43 U.S.C. 
1331 note). 
(7) To ensure that the Federal Government re-
ceives a fair return for any easement or right-of-way 
granted under section 8(p) of the Outer Continental 
Shelf Lands Act. 
(b) AMENDMENT TO OUTER CONTINENTAL SHELF 
LANDS ACT.—Section 8 of the Outer Continental Shelf 
Lands Act (43 U.S.C. 1337) is amended by adding at the 
end the following new subsection: 
‘‘(p) EASEMENTS OR RIGHTS-OF-WAY FOR ENERGY 
AND RELATED PURPOSES.—
‘‘(1) The Secretary, in consultation with the 
Secretary of the Department in which the Coast 
Guard is operating and other relevant departments 
and agencies of the Federal Government, may grant 
an easement or right-of-way on the Outer Conti-
nental Shelf for activities not otherwise authorized 
in this Act, the Deepwater Port Act of 1974 (33 
U.S.C. 1501 et seq.), or the Ocean Thermal Energy
508
Conversion Act of 1980 (42 U.S.C. 9101 et seq.), or 
other applicable law when such activities—
‘‘(A) support exploration, development, 
production, transportation, or storage of oil, 
natural gas, or other minerals; 
‘‘(B) produce or support production, trans-
portation, or transmission of energy from 
sources other than oil and gas; or 
‘‘(C) use facilities currently or previously 
used for activities authorized under this Act. 
‘‘(2)(A) The Secretary shall establish reason-
able forms of annual or one-time payments for any 
easement or right-of-way granted under this sub-
section. Such payments shall not be assessed on the 
basis of throughput or production. The Secretary 
may establish fees, rentals, bonus, or other payments 
by rule or by agreement with the party to whom the 
easement or right-of-way is granted. 
‘‘(B) Before exercising the authority granted 
under this subsection, the Secretary shall consult 
with the Secretary of Defense and other appropriate 
agencies concerning issues related to national secu-
rity and navigational obstruction. 
‘‘(C) The Secretary is authorized to issue an 
easement or right-of-way for energy and related pur-
509
poses as described in paragraph (1) on a competitive 
or noncompetitive basis. In determining whether 
such easement or right-of-way shall be granted com-
petitively or noncompetitively, the Secretary shall 
consider such factors as prevention of waste and 
conservation of natural resources, economic viability 
of an energy project, protection of the environment, 
national interest, national security, human safety, 
protection of correlative rights, and potential return 
for the easement or right-of-way. 
‘‘(3) The Secretary, in consultation with the 
Secretary of the Department in which the Coast 
Guard is operating and other relevant departments 
and agencies of the Federal Government and af-
fected States, shall prescribe any necessary regula-
tions to assure safety, protection of the environment, 
prevention of waste, and conservation of the natural 
resources of the Outer Continental Shelf, protection 
of national security interests, and protection of cor-
relative rights therein. 
‘‘(4) The Secretary shall require the holder of 
an easement or right-of-way granted under this sub-
section to furnish a surety bond or other form of se-
curity, as prescribed by the Secretary, and to comply 
with such other requirements as the Secretary may
510
deem necessary to protect the interests of the United 
States. 
‘‘(5) Nothing in this subsection shall be con-
strued to displace, supersede, limit, or modify the ju-
risdiction, responsibility, or authority of any Federal 
or State agency under any other Federal law. 
‘‘(6) This subsection shall not apply to any area 
on the Outer Continental Shelf designated as a Na-
tional Marine Sanctuary.’’. 
(c) CONFORMING AMENDMENT.—The text of the 
heading for section 8 of the Outer Continental Shelf 
Lands Act is amended to read as follows: ‘‘LEASES, EASE-
MENTS, AND RIGHTS-OF-WAY ON THE OUTER CONTI-
NENTAL SHELF.’’.
SEC. 30215. DEADLINE FOR DECISION ON APPEALS OF CON-
SISTENCY 
DETERMINATIONS 
UNDER 
THE 
COASTAL ZONE MANAGEMENT ACT OF 1972. 
(a) IN GENERAL.—Section 319 of the Coastal Zone 
Management Act of 1972 (16 U.S.C. 1465) is amended 
to read as follows: 
‘‘APPEALS TO THE SECRETARY 
‘‘SEC. 319. (a) NOTICE.—The Secretary shall publish 
an initial notice in the Federal Register within 30 days 
after the date of the filing of any appeal to the Secretary 
of a consistency determination under section 307.
511
‘‘(b) CLOSURE OF RECORD.—(1) No later than the 
end of 360-day period beginning on the date of publication 
of an initial notice under subsection (a), the Secretary 
shall receive no more filings on the appeal and the record 
of decision regarding the appeal shall be closed. 
‘‘(2) Upon the closure of the record of decision, the 
Secretary shall immediately publish a notice that the 
record of decision has been closed. 
‘‘(3) The Secretary may extend the period specified 
in paragraph (1) with respect to an appeal—
‘‘(A) in accordance with the mutual agreement 
of the parties to the appeal; or 
‘‘(B) as needed to complete the development of 
any environmental analyses required under the Na-
tional Environmental Policy Act of 1969 (42 U.S.C. 
4331 et seq.). 
‘‘(c) DEADLINE FOR DECISION.—The Secretary shall 
issue a decision in any appeal filed under section 307 no 
later than 90 days after the publication of a notice under 
subsection (b)(2). 
‘‘(d) APPLICATION.— This section applies to appeals 
initiated by the Secretary and appeals filed by an appli-
cant.’’. 
(b) APPLICATION.—The amendment made by sub-
section (a)—
512
(1) shall apply with respect to any appeal initi-
ated or filed on or after the date of the enactment 
of this Act; and 
(2) shall not affect any appeal initiated or filed 
before the date of the enactment of this Act.
SEC. 30216. TASK FORCE ON ENERGY PROJECT STREAM-
LINING. 
(a) FINDINGS.—The Congress finds that—
(1) increased production and transmission of 
energy in a safe and environmentally sound manner 
is essential to the well-being of the American people; 
(2) on May 18, 2001, President George W. 
Bush signed Executive Order 13212 requiring agen-
cies to expedite their review of permits of other ac-
tions as necessary to accelerate the completion of en-
ergy-related projects, while maintaining safety, pub-
lic health, and environmental protections; and 
(3) Executive Order 13212 established an inter-
agency task force chaired by the Chairman of the 
Council on Environmental Quality to monitor and 
assist agencies in their efforts to expedite review of 
actions consistent with the Executive order, and to 
monitor and assist agencies in setting up appro-
priate mechanisms to coordinate Federal, State,
513
tribal, and local permitting in geographic areas 
where increased permitting activity is expected. 
(b) SENSE OF CONGRESS.—It is the sense of the 
Congress that the Task Force established pursuant to Ex-
ecutive Order 13212 should remain in existence until such 
time as the President finds that the needs for which it 
was established have been met. 
SEC. 30217. PILOT PROGRAM ON NORTHERN ROCKY MOUN-
TAINS ENERGY RESOURCE MANAGEMENT. 
(a) FINDINGS.—The Congress finds that the task 
force established by President George W. Bush by the 
issuance of Executive Order 13212, and headed by the 
Chairman of the Council on Environmental Quality, has 
developed a pilot project the goals of which are—
(1) to reduce conflict, uncertainty, and the time 
involved in making decisions on energy resource 
management in the Northern Rocky Mountains; 
(2) to establish a mechanism to provide for the 
coordination of Federal and State policy guidance 
regarding the development of regional energy re-
sources and their transmission to markets; 
(3) to institutionalize early collaboration and 
participation of all parties involved in regional deci-
sions on environmental, economic and energy issues
514
related to the exploration, development, and produc-
tion of energy resources; and 
(4) to take a long-term and regional view on 
how best to manage the energy resources in the 
Northern Rocky Mountains. 
(b) SENSE OF THE CONGRESS.—It is the sense of 
the Congress that the task force should carry out this pilot 
project and report to the Congress no later than 36 
months after the date of enactment of this Act on the 
progress it has made in accomplishing the goals set forth 
in subsection (a) of this section. 
SEC. 30218. ENERGY DEVELOPMENT FACILITATOR STUDY. 
(a) IN GENERAL.—The Chairman of the Council on 
Environmental Quality shall conduct a study to determine 
the feasibility of establishing under the Council the posi-
tion of Facilitator for Energy Development, to coordinate 
Federal agency actions relating to energy project permit-
ting. The study shall consider, among other matters—
(1) the ways in which a facilitator can facilitate 
the long-term coordination of energy projects on 
Federal lands; and 
(2) the role of a facilitator in ensuring that the 
questions or concerns of permit applicants and other 
persons involved in energy projects are addressed in 
the agency.
515
(b) REPORT.—Not later than 12 months after the 
date of enactment of this section, the Chairman shall sub-
mit a report to the Committee on Resources of the House 
of Representatives and the Committee on Energy and 
Natural Resources of the Senate detailing the findings of 
the study required by subsection (a), and including any 
legislative recommendations of the Chairman with respect 
to the establishment of the position studied.
SEC. 30219. COMBINED HYDROCARBON LEASING. 
(a) SPECIAL PROVISIONS REGARDING LEASING.—
Section 17(b)(2) of the Mineral Leasing Act (30 U.S.C. 
226(b)(2)) is amended—
(1) by inserting ‘‘(A)’’ after ‘‘(2)’’; and 
(2) by adding at the end the following: 
‘‘(B) For any area that contains any combination of 
tar sand and oil or gas (or both), the Secretary may issue 
under this Act, separately—
‘‘(i) a lease for exploration for and extraction of 
tar sand; and 
‘‘(ii) a lease for exploration for and development 
of oil and gas. 
‘‘(C) A lease issued for tar sand shall be issued using 
the same bidding process, annual rental, and posting pe-
riod as a lease issued for oil and gas, except that the min-
516
imum acceptable bid required for a lease issued for tar 
sand shall be $2 per acre. 
‘‘(D) The Secretary may waive, suspend, or alter any 
requirement under section 26 that a permittee under a 
permit authorizing prospecting for tar sand must exercise 
due diligence, to promote any resource covered by a com-
bined hydrocarbon lease.’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
17(b)(1)(B) of the Mineral Leasing Act (30 U.S.C. 
226(b)(1)(B)) is amended in the second sentence by in-
serting ‘‘, subject to paragraph (2)(B),’’ after ‘‘The Sec-
retary’’.
(c) REGULATIONS.—Within 45 days after the date of 
the enactment of this Act, the Secretary of the Interior 
shall issue final regulations to implement this section. 
SEC. 30220. COMPREHENSIVE INVENTORY OF OCS OIL AND 
NATURAL GAS RESOURCES. 
(a) IN GENERAL.—The Secretary of the Interior, in 
consultation with the Secretary of Energy, key stake-
holders including coastal States, and the oil and gas indus-
try, shall conduct an inventory and analysis of oil and nat-
ural gas resources for areas beneath all of the United 
States waters of the Outer Continental Shelf. The inven-
tory and analysis shall—
517
(1) provide resource estimates of oil and gas re-
sources underlying those waters and estimate how 
those resource estimates may change if—
(A) geological and geophysical data could 
be gathered and analyzed; 
(B) targeted exploration was allowed; and 
(C) full resource development was allowed 
following successful exploration; 
(2) analyze how resource estimates for such 
areas, including areas such as the deepwater and 
subsalt areas in the Gulf of Mexico, have changed 
over time as—
(A) geological and geophysical data was 
gathered; 
(B) initial exploration occurred; and 
(C) full field development occurred; 
(3) identify and explain how legislative, regu-
latory, and administrative programs or processes re-
strict or impede the development of identified re-
sources and the extent to which they will affect do-
mestic supply, including with respect to—
(A) leasing moratoria; 
(B) lease terms and conditions; 
(C) operational stipulations and require-
ments;
518
(D) approval delays by the Federal govern-
ment and coastal States; and 
(E) local zoning restrictions for onshore 
processing facilities and pipeline landings; and 
(4) analyze the effect that understated oil and 
gas resource inventories have on domestic energy in-
vestments. 
(b) PROCESS RECOMMENDATIONS.—In conjunction 
with the inventory and analysis, the Secretary of the Inte-
rior, in consultation with the Secretary of Energy, shall 
consult with key stakeholders to make recommendations 
for achieving a more balanced and environmentally sound 
energy policy for the Outer Continental Shelf. Key stake-
holders to be consulted include Governors, conservation 
and environmental organizations, academia, the oil and 
gas industry, and the scientific and business communities. 
The Secretary of the Interior shall also make rec-
ommendations regarding processes that could be imple-
mented that would lead to additional Outer Continental 
Shelf leasing and development of those resources for the 
benefit of the American public. 
(c) REGULAR UPDATES.—After completion of the in-
ventory, the Secretary shall regularly update estimates 
and identifications of restrictions to offshore development
519
included in the inventory, and make such updates publicly 
available. 
(d) SUBMISSION
TO
CONGRESS.—The inventory, 
analysis, and recommendations shall be provided to the 
Committee on Resources of the House of Representatives 
and the Committee on Energy and Natural Resources of 
the Senate within 6 months after the date of enactment 
of this section. 
(e) METHANE HYDRATE STUDY.—
(1) IN GENERAL.—The Secretary of the Inte-
rior shall study the occurrence and distribution of 
methane hydrates in the United States. 
(2) REPORT.—The Secretary of the Interior 
shall submit a report to the Congress on the results 
of the study by not later than 3 years after the date 
of the enactment of this Act, including an estimate 
of the methane hydrate resources in the United 
States.
SEC. 30221. ROYALTY PAYMENTS UNDER LEASES UNDER 
THE OUTER CONTINENTAL SHELF LANDS 
ACT. 
(a) ROYALTY RELIEF.—
(1) IN GENERAL.—For purposes of providing 
compensation for lessees and a State for which 
amounts are authorized by section 6004(c) of the Oil
520
Pollution Act of 1980 (Public Law 101–380), a les-
see may withhold from payment any royalty due and 
owing to the United States under any lease under 
the Outer Continental Shelf Lands Act (43 U.S.C. 
1301 et seq.) for offshore oil or gas production from 
a covered lease tract if, on or before the date that 
the payment is due and payable to the United 
States, the lessee makes a payment to the State of 
44 cents for every $1 of royalty withheld. 
(2) TREATMENT
OF
WITHHELD
AMOUNTS.—
Any royalty withheld by a lessee in accordance with 
this section shall be treated as paid for purposes of 
satisfaction of the royalty obligations of the lessee to 
the United States. 
(3) CERTIFICATION OF WITHHELD AMOUNTS.—
The Secretary of the Treasury shall—
(A) determine the amount of royalty with-
held by a lessee under this section; and 
(B) promptly publish a certification when 
the total amount of royalty withheld by the les-
see under this section is equal to the lessee’s 
share of the total drainage claim for the West 
Delta field (with interest) as described at page 
47 of Senate Report number 101–534.
521
(b) PERIOD OF ROYALTY RELIEF.—Subsection (a) 
shall apply to royalty amounts that are due and payable 
in the period beginning on January 1, 2003, and ending 
on the date on which the Secretary publishes a certifi-
cation under subsection (a)(3)(B). 
(c) DEFINITIONS.—As used in this section: 
(1) COVERED LEASE TRACT.—The term ‘‘cov-
ered lease tract’’ means a leased tract (or portion of 
a leased tract)—
(A) lying seaward of the zone defined and 
governed by section 8(g) of the Outer Conti-
nental Shelf Lands Act (43 U.S.C. 1337(g)); or 
(B) lying within such zone but to which 
such section does not apply. 
(2) LESSEE.—The term ‘‘lessee’’ means a per-
son (including a successor or assign of a person) 
that, on the date of the enactment of the Oil Pollu-
tion Act of 1980, was a lessee referred to in section 
6004(c) of that Act (as in effect on that date of the 
enactment), but did not hold lease rights in Federal 
offshore lease OCS–G–5669.
522
TITLE III—BIOMASS ENERGY 
SEC. 30301. GRANTS TO IMPROVE THE COMMERCIAL VALUE 
OF FOREST BIOMASS FOR ELECTRIC ENERGY, 
USEFUL HEAT, TRANSPORTATION FUELS, PE-
TROLEUM-BASED 
PRODUCT 
SUBSTITUTES, 
AND OTHER COMMERCIAL PURPOSES. 
(a) FINDINGS.—Congress finds the following: 
(1) Thousands of communities in the United 
States, many located near Federal lands, are at risk 
to wildfire. Approximately 190,000,000 acres of land 
managed by the Secretary of Agriculture and the 
Secretary of the Interior are at risk of catastrophic 
fire in the near future. The accumulation of heavy 
forest fuel loads continues to increase as a result of 
disease, insect infestations, and drought, further 
raising the risk of fire each year. 
(2) In addition, more than 70,000,000 acres 
across all land ownerships are at risk to higher than 
normal mortality over the next 15 years from insect 
infestation and disease. High levels of tree mortality 
from insects and disease result in increased fire risk, 
loss of old growth, degraded watershed conditions, 
and changes in species diversity and productivity, as 
well as diminished fish and wildlife habitat and de-
creased timber values.
523
(3) Preventive treatments such as removing fuel 
loading, ladder fuels, and hazard trees, planting 
proper species mix and restoring and protecting 
early successional habitat, and other specific restora-
tion treatments designed to reduce the susceptibility 
of forest land, woodland, and rangeland to insect 
outbreaks, disease, and catastrophic fire present the 
greatest opportunity for long-term forest health by 
creating a mosaic of species-mix and age distribu-
tion. Such prevention treatments are widely acknowl-
edged to be more successful and cost effective than 
suppression treatments in the case of insects, dis-
ease, and fire. 
(4) The by-products of preventive treatment 
(wood, brush, thinnings, chips, slash, and other haz-
ardous fuels) removed from forest lands, woodlands 
and rangelands represent an abundant supply of bio-
mass for biomass-to-energy facilities and raw mate-
rial for business. There are currently few markets 
for the extraordinary volumes of by-products being 
generated as a result of the necessary large-scale 
preventive treatment activities. 
(5) The United States should—
(A) promote economic and entrepreneurial 
opportunities in using by-products removed
524
through preventive treatment activities related 
to hazardous fuels reduction, disease, and insect 
infestation; and 
(B) develop and expand markets for tradi-
tionally underused wood and biomass as an out-
let for by-products of preventive treatment ac-
tivities. 
(b) DEFINITIONS.—In this section: 
(1) BIOMASS.—The term ‘‘biomass’’ means 
trees and woody plants, including limbs, tops, nee-
dles, and other woody parts, and by-products of pre-
ventive treatment, such as wood, brush, thinnings, 
chips, and slash, that are removed—
(A) to reduce hazardous fuels; or 
(B) to reduce the risk of or to contain dis-
ease or insect infestation. 
(2) INDIAN TRIBE.—The term ‘‘Indian tribe’’ 
has the meaning given the term in section 4(e) of 
the Indian Self-Determination and Education Assist-
ance Act (25 U.S.C. 450b(e)). 
(3) PERSON.—The term ‘‘person’’ includes—
(A) an individual; 
(B) a community (as determined by the 
Secretary concerned); 
(C) an Indian tribe;
525
(D) a small business, micro-business, or a 
corporation that is incorporated in the United 
States; and 
(E) a nonprofit organization. 
(4) PREFERRED COMMUNITY.—The term ‘‘pre-
ferred community’’ means—
(A) any town, township, municipality, or 
other similar unit of local government (as deter-
mined by the Secretary concerned) that—
(i) has a population of not more than 
50,000 individuals; and 
(ii) the Secretary concerned, in the 
sole discretion of the Secretary concerned, 
determines contains or is located near 
land, the condition of which is at signifi-
cant risk of catastrophic wildfire, disease, 
or insect infestation or which suffers from 
disease or insect infestation; or 
(B) any county that—
(i) is not contained within a metro-
politan statistical area; and 
(ii) the Secretary concerned, in the 
sole discretion of the Secretary concerned, 
determines contains or is located near 
land, the condition of which is at signifi-
526
cant risk of catastrophic wildfire, disease, 
or insect infestation or which suffers from 
disease or insect infestation. 
(5) SECRETARY CONCERNED.—The term ‘‘Sec-
retary concerned’’ means—
(A) the Secretary of Agriculture with re-
spect to National Forest System lands; and 
(B) the Secretary of the Interior with re-
spect to Federal lands under the jurisdiction of 
the Secretary of the Interior and Indian lands. 
(c) BIOMASS COMMERCIAL USE GRANT PROGRAM.—
(1) IN
GENERAL.—The Secretary concerned 
may make grants to any person that owns or oper-
ates a facility that uses biomass as a raw material 
to produce electric energy, sensible heat, transpor-
tation fuels, or substitutes for petroleum-based prod-
ucts to offset the costs incurred to purchase biomass 
for use by such facility. 
(2) GRANT AMOUNTS.—A grant under this sub-
section may not exceed $20 per green ton of biomass 
delivered. 
(3) MONITORING OF GRANT RECIPIENT ACTIVI-
TIES.—As a condition of a grant under this sub-
section, the grant recipient shall keep such records 
as the Secretary concerned may require to fully and
527
correctly disclose the use of the grant funds and all 
transactions involved in the purchase of biomass. 
Upon notice by a representative of the Secretary 
concerned, the grant recipient shall afford the rep-
resentative reasonable access to the facility that pur-
chases or uses biomass and an opportunity to exam-
ine the inventory and records of the facility. 
(d) IMPROVED BIOMASS USE GRANT PROGRAM.—
(1) IN
GENERAL.—The Secretary concerned 
may make grants to persons to offset the cost of 
projects to develop or research opportunities to im-
prove the use of, or add value to, biomass. In mak-
ing such grants, the Secretary concerned shall give 
preference to persons in preferred communities. 
(2) SELECTION.—The Secretary concerned shall 
select a grant recipient under paragraph (1) after 
giving consideration to the anticipated public bene-
fits of the project, including the potential to develop 
thermal or electric energy resources or affordable en-
ergy, opportunities for the creation or expansion of 
small businesses and micro-businesses, and the po-
tential for new job creation. 
(3) GRANT AMOUNT.—A grant under this sub-
section may not exceed $100,000.
528
(e) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated $50,000,000 for each of the 
fiscal years 2004 through 2014 to carry out this section. 
(f) REPORT.—Not later than October 1, 2010, the 
Secretary of Agriculture, in consultation with the Sec-
retary of the Interior, shall submit to the Committee on 
Energy and Natural Resources and the Committee on Ag-
riculture, Nutrition, and Forestry of the Senate and the 
Committee on Resources and the Committee on Agri-
culture of the House of Representatives a report describ-
ing the results of the grant programs authorized by this 
section. The report shall include the following: 
(1) An identification of the size, type, and the 
use of biomass by persons that receive grants under 
this section. 
(2) The distance between the land from which 
the biomass was removed and the facility that used 
the biomass. 
(3) The economic impacts, particularly new job 
creation, resulting from the grants to and operation 
of the eligible operations.
529
TITLE IV—ARCTIC COASTAL 
PLAIN DOMESTIC ENERGY 
SEC. 30401. SHORT TITLE. 
This title may be cited as the ‘‘Arctic Coastal Plain 
Domestic Energy Security Act of 2003’’. 
SEC. 30402. DEFINITIONS. 
In this title: 
(1) COASTAL
PLAIN.—The term ‘‘Coastal 
Plain’’ means that area identified as such in the 
map entitled ‘‘Arctic National Wildlife Refuge’’, 
dated August 1980, as referenced in section 1002(b) 
of the Alaska National Interest Lands Conservation 
Act of 1980 (16 U.S.C. 3142(b)(1)), comprising ap-
proximately 1,549,000 acres, and as described in ap-
pendix I to part 37 of title 50, Code of Federal Reg-
ulations. 
(2) SECRETARY.—The term ‘‘Secretary’’, except 
as otherwise provided, means the Secretary of the 
Interior or the Secretary’s designee. 
SEC. 30403. LEASING PROGRAM FOR LANDS WITHIN THE 
COASTAL PLAIN. 
(a) IN GENERAL.—The Secretary shall take such ac-
tions as are necessary—
(1) to establish and implement in accordance 
with this Act a competitive oil and gas leasing pro-
530
gram under the Mineral Leasing Act (30 U.S.C. 181 
et seq.) that will result in an environmentally sound 
program for the exploration, development, and pro-
duction of the oil and gas resources of the Coastal 
Plain; and 
(2) to administer the provisions of this title 
through regulations, lease terms, conditions, restric-
tions, prohibitions, stipulations, and other provisions 
that ensure the oil and gas exploration, development, 
and production activities on the Coastal Plain will 
result in no significant adverse effect on fish and 
wildlife, their habitat, subsistence resources, and the 
environment, and including, in furtherance of this 
goal, by requiring the application of the best com-
mercially available technology for oil and gas explo-
ration, development, and production to all explo-
ration, development, and production operations 
under this title in a manner that ensures the receipt 
of fair market value by the public for the mineral re-
sources to be leased. 
(b) REPEAL.—Section 1003 of the Alaska National 
Interest Lands Conservation Act of 1980 (16 U.S.C. 
3143) is repealed. 
(c) COMPLIANCE WITH REQUIREMENTS UNDER CER-
TAIN OTHER LAWS.—
531
(1) COMPATIBILITY.—For purposes of the Na-
tional Wildlife Refuge System Administration Act of 
1966, the oil and gas leasing program and activities 
authorized by this section in the Coastal Plain are 
deemed to be compatible with the purposes for which 
the Arctic National Wildlife Refuge was established, 
and that no further findings or decisions are re-
quired to implement this determination. 
(2) ADEQUACY OF THE DEPARTMENT OF THE 
INTERIOR’S LEGISLATIVE ENVIRONMENTAL IMPACT 
STATEMENT.—The 
‘‘Final 
Legislative 
Environ-
mental Impact Statement’’ (April 1987) on the 
Coastal Plain prepared pursuant to section 1002 of 
the Alaska National Interest Lands Conservation 
Act of 1980 (16 U.S.C. 3142) and section 102(2)(C) 
of the National Environmental Policy Act of 1969 
(42 U.S.C. 4332(2)(C)) is deemed to satisfy the re-
quirements under the National Environmental Policy 
Act of 1969 that apply with respect to actions au-
thorized to be taken by the Secretary to develop and 
promulgate the regulations for the establishment of 
a leasing program authorized by this title before the 
conduct of the first lease sale. 
(3) COMPLIANCE WITH NEPA FOR OTHER AC-
TIONS.—Before conducting the first lease sale under
532
this title, the Secretary shall prepare an environ-
mental impact statement under the National Envi-
ronmental Policy Act of 1969 with respect to the ac-
tions authorized by this title that are not referred to 
in paragraph (2). Notwithstanding any other law, 
the Secretary is not required to identify nonleasing 
alternative courses of action or to analyze the envi-
ronmental effects of such courses of action. The Sec-
retary shall only identify a preferred action for such 
leasing and a single leasing alternative, and analyze 
the environmental effects and potential mitigation 
measures for those two alternatives. The identifica-
tion of the preferred action and related analysis for 
the first lease sale under this title shall be completed 
within 18 months after the date of the enactment of 
this Act. The Secretary shall only consider public 
comments that specifically address the Secretary’s 
preferred action and that are filed within 20 days 
after publication of an environmental analysis. Not-
withstanding any other law, compliance with this 
paragraph is deemed to satisfy all requirements for 
the analysis and consideration of the environmental 
effects of proposed leasing under this title.
533
(d) RELATIONSHIP TO STATE AND LOCAL AUTHOR-
ITY.—Nothing in this title shall be considered to expand 
or limit State and local regulatory authority. 
(e) SPECIAL AREAS.—
(1) IN
GENERAL.—The Secretary, after con-
sultation with the State of Alaska, the city of 
Kaktovik, and the North Slope Borough, may des-
ignate up to a total of 45,000 acres of the Coastal 
Plain as a Special Area if the Secretary determines 
that the Special Area is of such unique character 
and interest so as to require special management 
and regulatory protection. The Secretary shall des-
ignate as such a Special Area the Sadlerochit Spring 
area, comprising approximately 4,000 acres as de-
picted on the map referred to in section 402(1). 
(2) MANAGEMENT.—Each such Special Area 
shall be managed so as to protect and preserve the 
area’s unique and diverse character including its 
fish, wildlife, and subsistence resource values. 
(3) EXCLUSION
FROM
LEASING
OR
SURFACE 
OCCUPANCY.—The Secretary may exclude any Spe-
cial Area from leasing. If the Secretary leases a Spe-
cial Area, or any part thereof, for purposes of oil 
and gas exploration, development, production, and
534
related activities, there shall be no surface occu-
pancy of the lands comprising the Special Area. 
(4) DIRECTIONAL DRILLING.—Notwithstanding 
the other provisions of this subsection, the Secretary 
may lease all or a portion of a Special Area under 
terms that permit the use of horizontal drilling tech-
nology from sites on leases located outside the area. 
(f) LIMITATION
ON
CLOSED
AREAS.—The Sec-
retary’s sole authority to close lands within the Coastal 
Plain to oil and gas leasing and to exploration, develop-
ment, and production is that set forth in this title. 
(g) REGULATIONS.—
(1) IN
GENERAL.—The Secretary shall pre-
scribe such regulations as may be necessary to carry 
out this title, including rules and regulations relating 
to protection of the fish and wildlife, their habitat, 
subsistence resources, and environment of the Coast-
al Plain, by no later than 15 months after the date 
of the enactment of this Act. 
(2) REVISION
OF
REGULATIONS.—The Sec-
retary shall periodically review and, if appropriate, 
revise the rules and regulations issued under sub-
section (a) to reflect any significant biological, envi-
ronmental, or engineering data that come to the Sec-
retary’s attention.
535
SEC. 30404. LEASE SALES. 
(a) IN GENERAL.—Lands may be leased pursuant to 
this title to any person qualified to obtain a lease for de-
posits of oil and gas under the Mineral Leasing Act (30 
U.S.C. 181 et seq.). 
(b) PROCEDURES.—The Secretary shall, by regula-
tion, establish procedures for—
(1) receipt and consideration of sealed nomina-
tions for any area in the Coastal Plain for inclusion 
in, or exclusion (as provided in subsection (c)) from, 
a lease sale; 
(2) the holding of lease sales after such nomina-
tion process; and 
(3) public notice of and comment on designa-
tion of areas to be included in, or excluded from, a 
lease sale. 
(c) LEASE SALE BIDS.—Bidding for leases under 
this title shall be by sealed competitive cash bonus bids. 
(d) ACREAGE MINIMUM IN FIRST SALE.—In the first 
lease sale under this title, the Secretary shall offer for 
lease those tracts the Secretary considers to have the 
greatest potential for the discovery of hydrocarbons, tak-
ing into consideration nominations received pursuant to 
subsection (b)(1), but in no case less than 200,000 acres. 
(e) TIMING
OF
LEASE
SALES.—The Secretary 
shall—
536
(1) conduct the first lease sale under this title 
within 22 months after the date of the enactment of 
this Act; and 
(2) conduct additional sales so long as sufficient 
interest in development exists to warrant, in the Sec-
retary’s judgment, the conduct of such sales. 
SEC. 30405. GRANT OF LEASES BY THE SECRETARY. 
(a) IN GENERAL.—The Secretary may grant to the 
highest responsible qualified bidder in a lease sale con-
ducted pursuant to section 30404 any lands to be leased 
on the Coastal Plain upon payment by the lessee of such 
bonus as may be accepted by the Secretary. 
(b) SUBSEQUENT
TRANSFERS.—No lease issued 
under this title may be sold, exchanged, assigned, sublet, 
or otherwise transferred except with the approval of the 
Secretary. Prior to any such approval the Secretary shall 
consult with, and give due consideration to the views of, 
the Attorney General. 
SEC. 30406. LEASE TERMS AND CONDITIONS. 
(a) IN GENERAL.—An oil or gas lease issued pursu-
ant to this title shall—
(1) provide for the payment of a royalty of not 
less than 121⁄2 percent in amount or value of the 
production removed or sold from the lease, as deter-
537
mined by the Secretary under the regulations appli-
cable to other Federal oil and gas leases; 
(2) provide that the Secretary may close, on a 
seasonal basis, portions of the Coastal Plain to ex-
ploratory drilling activities as necessary to protect 
caribou calving areas and other species of fish and 
wildlife;
(3) require that the lessee of lands within the 
Coastal Plain shall be fully responsible and liable for 
the reclamation of lands within the Coastal Plain 
and any other Federal lands that are adversely af-
fected in connection with exploration, development, 
production, or transportation activities conducted 
under the lease and within the Coastal Plain by the 
lessee or by any of the subcontractors or agents of 
the lessee; 
(4) provide that the lessee may not delegate or 
convey, by contract or otherwise, the reclamation re-
sponsibility and liability to another person without 
the express written approval of the Secretary; 
(5) provide that the standard of reclamation for 
lands required to be reclaimed under this title shall 
be, as nearly as practicable, a condition capable of 
supporting the uses which the lands were capable of 
supporting prior to any exploration, development, or
538
production activities, or upon application by the les-
see, to a higher or better use as approved by the 
Secretary; 
(6) contain terms and conditions relating to 
protection of fish and wildlife, their habitat, and the 
environment 
as 
required 
pursuant 
to 
section 
30403(a)(2); 
(7) provide that the lessee, its agents, and its 
contractors use best efforts to provide a fair share, 
as determined by the level of obligation previously 
agreed to in the 1974 agreement implementing sec-
tion 29 of the Federal Agreement and Grant of 
Right of Way for the Operation of the Trans-Alaska 
Pipeline, of employment and contracting for Alaska 
Natives and Alaska Native Corporations from 
throughout the State; 
(8) prohibit the export of oil produced under 
the lease; and 
(9) contain such other provisions as the Sec-
retary determines necessary to ensure compliance 
with the provisions of this title and the regulations 
issued under this title. 
(b) PROJECT LABOR AGREEMENTS.—The Secretary, 
as a term and condition of each lease under this title and 
in recognizing the Government’s proprietary interest in
539
labor stability and in the ability of construction labor and 
management to meet the particular needs and conditions 
of projects to be developed under the leases issued pursu-
ant to this title and the special concerns of the parties 
to such leases, shall require that the lessee and its agents 
and contractors negotiate to obtain a project labor agree-
ment for the employment of laborers and mechanics on 
production, maintenance, and construction under the 
lease. 
SEC. 30407. COASTAL PLAIN ENVIRONMENTAL PROTEC-
TION. 
(a) NO SIGNIFICANT ADVERSE EFFECT STANDARD 
TO GOVERN AUTHORIZED COASTAL PLAIN ACTIVITIES.—
The Secretary shall, consistent with the requirements of 
section 30403, administer the provisions of this title 
through regulations, lease terms, conditions, restrictions, 
prohibitions, stipulations, and other provisions that—
(1) ensure the oil and gas exploration, develop-
ment, and production activities on the Coastal Plain 
will result in no significant adverse effect on fish 
and wildlife, their habitat, and the environment; and 
(2) require the application of the best commer-
cially available technology for oil and gas explo-
ration, development, and production on all new ex-
ploration, development, and production operations.
540
(b) SITE-SPECIFIC ASSESSMENT AND MITIGATION.—
The Secretary shall also require, with respect to any pro-
posed drilling and related activities, that—
(1) a site-specific analysis be made of the prob-
able effects, if any, that the drilling or related activi-
ties will have on fish and wildlife, their habitat, and 
the environment; 
(2) a plan be implemented to avoid, minimize, 
and mitigate (in that order and to the extent prac-
ticable) any significant adverse effect identified 
under paragraph (1); and 
(3) the development of the plan shall occur 
after consultation with the agency or agencies hav-
ing jurisdiction over matters mitigated by the plan. 
(c) REGULATIONS TO PROTECT COASTAL PLAIN 
FISH AND WILDLIFE RESOURCES, SUBSISTENCE USERS, 
AND THE ENVIRONMENT.—Before implementing the leas-
ing program authorized by this title, the Secretary shall 
prepare and promulgate regulations, lease terms, condi-
tions, restrictions, prohibitions, stipulations, and other 
measures designed to ensure that the activities undertaken 
on the Coastal Plain under this title are conducted in a 
manner consistent with the purposes and environmental 
requirements of this title.
541
(d) COMPLIANCE WITH FEDERAL AND STATE ENVI-
RONMENTAL LAWS AND OTHER REQUIREMENTS.—The 
proposed regulations, lease terms, conditions, restrictions, 
prohibitions, and stipulations for the leasing program 
under this title shall require compliance with all applicable 
provisions of Federal and State environmental law and 
shall also require the following: 
(1) Standards at least as effective as the safety 
and environmental mitigation measures set forth in 
items 1 through 29 at pages 167 through 169 of the 
‘‘Final Legislative Environmental Impact State-
ment’’ (April 1987) on the Coastal Plain. 
(2) Seasonal limitations on exploration, develop-
ment, and related activities, where necessary, to 
avoid significant adverse effects during periods of 
concentrated fish and wildlife breeding, denning, 
nesting, spawning, and migration. 
(3) That exploration activities, except for sur-
face geological studies, be limited to the period be-
tween approximately November 1 and May 1 each 
year and that exploration activities shall be sup-
ported by ice roads, winter trails with adequate snow 
cover, ice pads, ice airstrips, and air transport meth-
ods, except that such exploration activities may 
occur at other times, if the Secretary finds that such
542
exploration will have no significant adverse effect on 
the fish and wildlife, their habitat, and the environ-
ment of the Coastal Plain. 
(4) Design safety and construction standards 
for all pipelines and any access and service roads, 
that—
(A) minimize, to the maximum extent pos-
sible, adverse effects upon the passage of mi-
gratory species such as caribou; and 
(B) minimize adverse effects upon the flow 
of surface water by requiring the use of cul-
verts, bridges, and other structural devices. 
(5) Prohibitions on public access and use on all 
pipeline access and service roads. 
(6) Stringent reclamation and rehabilitation re-
quirements, consistent with the standards set forth 
in this title, requiring the removal from the Coastal 
Plain of all oil and gas development and production 
facilities, structures, and equipment upon completion 
of oil and gas production operations, except that the 
Secretary may exempt from the requirements of this 
paragraph those facilities, structures, or equipment 
that the Secretary determines would assist in the 
management of the Arctic National Wildlife Refuge
543
and that are donated to the United States for that 
purpose. 
(7) Appropriate prohibitions or restrictions on 
access by all modes of transportation. 
(8) Appropriate prohibitions or restrictions on 
sand and gravel extraction. 
(9) Consolidation of facility siting. 
(10) Appropriate prohibitions or restrictions on 
use of explosives. 
(11) Avoidance, to the extent practicable, of 
springs, streams, and river system; the protection of 
natural surface drainage patterns, wetlands, and ri-
parian habitats; and the regulation of methods or 
techniques for developing or transporting adequate 
supplies of water for exploratory drilling. 
(12) Avoidance or reduction of air traffic-re-
lated disturbance to fish and wildlife. 
(13) Treatment and disposal of hazardous and 
toxic wastes, solid wastes, reserve pit fluids, drilling 
muds and cuttings, and domestic wastewater, includ-
ing an annual waste management report, a haz-
ardous materials tracking system, and a prohibition 
on chlorinated solvents, in accordance with applica-
ble Federal and State environmental law.
544
(14) Fuel storage and oil spill contingency plan-
ning. 
(15) Research, monitoring, and reporting re-
quirements. 
(16) Field crew environmental briefings. 
(17) Avoidance of significant adverse effects 
upon subsistence hunting, fishing, and trapping by 
subsistence users. 
(18) Compliance with applicable air and water 
quality standards. 
(19) Appropriate seasonal and safety zone des-
ignations around well sites, within which subsistence 
hunting and trapping shall be limited. 
(20) Reasonable stipulations for protection of 
cultural and archeological resources. 
(21) All other protective environmental stipula-
tions, restrictions, terms, and conditions deemed 
necessary by the Secretary. 
(e) CONSIDERATIONS.—In preparing and promul-
gating regulations, lease terms, conditions, restrictions, 
prohibitions, and stipulations under this section, the Sec-
retary shall consider the following: 
(1) The stipulations and conditions that govern 
the National Petroleum Reserve-Alaska leasing pro-
gram, as set forth in the 1999 Northeast National
545
Petroleum Reserve-Alaska Final Integrated Activity 
Plan/Environmental Impact Statement. 
(2) The environmental protection standards 
that governed the initial Coastal Plain seismic explo-
ration program under parts 37.31 to 37.33 of title 
50, Code of Federal Regulations. 
(3) The land use stipulations for exploratory 
drilling on the KIC–ASRC private lands that are set 
forth in Appendix 2 of the August 9, 1983, agree-
ment between Arctic Slope Regional Corporation and 
the United States. 
(f) FACILITY CONSOLIDATION PLANNING.—
(1) IN GENERAL.—The Secretary shall, after 
providing for public notice and comment, prepare 
and update periodically a plan to govern, guide, and 
direct the siting and construction of facilities for the 
exploration, development, production, and transpor-
tation of Coastal Plain oil and gas resources. 
(2) OBJECTIVES.—The plan shall have the fol-
lowing objectives: 
(A) Avoiding unnecessary duplication of fa-
cilities and activities. 
(B) Encouraging consolidation of common 
facilities and activities.
546
(C) Locating or confining facilities and ac-
tivities to areas that will minimize impact on 
fish and wildlife, their habitat, and the environ-
ment. 
(D) Utilizing existing facilities wherever 
practicable. 
(E) Enhancing compatibility between wild-
life values and development activities. 
(g) ACCESS
TO PUBLIC LANDS.—The Secretary 
shall—
(1) manage public lands in the Coastal Plain 
subject to section subsections (a) and (b) of section 
811 of the Alaska National Interest Lands Con-
servation Act (16 U.S.C. 3121); and 
(2) ensure that local residents shall have rea-
sonable access to public lands in the Coastal Plain 
for traditional uses. 
SEC. 30408. EXPEDITED JUDICIAL REVIEW. 
(a) FILING OF COMPLAINT.—
(1) DEADLINE.—Subject to paragraph (2), any 
complaint seeking judicial review of any provision of 
this title or any action of the Secretary under this 
title shall be filed in any appropriate district court 
of the United States—
547
(A) except as provided in subparagraph 
(B), within the 90-day period beginning on the 
date of the action being challenged; or 
(B) in the case of a complaint based solely 
on grounds arising after such period, within 90 
days after the complainant knew or reasonably 
should have known of the grounds for the com-
plaint. 
(2) VENUE.—Any complaint seeking judicial re-
view of an action of the Secretary under this title 
may be filed only in the United States Court of Ap-
peals for the District of Columbia.
(3) LIMITATION
ON
SCOPE
OF
CERTAIN
RE-
VIEW.—Judicial review of a Secretarial decision to 
conduct a lease sale under this title, including the 
environmental analysis thereof, shall be limited to 
whether the Secretary has complied with the terms 
of this title and shall be based upon the administra-
tive record of that decision. The Secretary’s identi-
fication of a preferred course of action to enable 
leasing to proceed and the Secretary’s analysis of 
environmental effects under this title shall be pre-
sumed to be correct unless shown otherwise by clear 
and convincing evidence to the contrary.
548
(b) LIMITATION ON OTHER REVIEW.—Actions of the 
Secretary with respect to which review could have been 
obtained under this section shall not be subject to judicial 
review in any civil or criminal proceeding for enforcement. 
SEC. 30409. FEDERAL AND STATE DISTRIBUTION OF REVE-
NUES. 
(a) IN GENERAL.—Notwithstanding any other provi-
sion of law, of the amount of adjusted bonus, rental, and 
royalty revenues from oil and gas leasing and operations 
authorized under this title—
(1) 50 percent shall be paid to the State of 
Alaska; and 
(2) except as provided in section 30412(d) the 
balance shall be deposited into the Treasury as mis-
cellaneous receipts. 
(b) PAYMENTS TO ALASKA.—Payments to the 
State of Alaska under this section shall be made 
semiannually. 
SEC. 30410. RIGHTS-OF-WAY ACROSS THE COASTAL PLAIN. 
(a) EXEMPTION.—Title XI of the Alaska National In-
terest Lands Conservation Act of 1980 (16 U.S.C. 3161 
et seq.) shall not apply to the issuance by the Secretary 
under section 28 of the Mineral Leasing Act (30 U.S.C. 
185) of rights-of-way and easements across the Coastal 
Plain for the transportation of oil and gas.
549
(b) TERMS AND CONDITIONS.—The Secretary shall 
include in any right-of-way or easement referred to in sub-
section (a) such terms and conditions as may be necessary 
to ensure that transportation of oil and gas does not result 
in a significant adverse effect on the fish and wildlife, sub-
sistence resources, their habitat, and the environment of 
the Coastal Plain, including requirements that facilities be 
sited or designed so as to avoid unnecessary duplication 
of roads and pipelines. 
(c) REGULATIONS.—The Secretary shall include in 
regulations under section 30403(g) provisions granting 
rights-of-way and easements described in subsection (a) 
of this section. 
SEC. 30411. CONVEYANCE. 
In order to maximize Federal revenues by removing 
clouds on title to lands and clarifying land ownership pat-
terns within the Coastal Plain, the Secretary, notwith-
standing the provisions of section 1302(h)(2) of the Alas-
ka National Interest Lands Conservation Act (16 U.S.C. 
3192(h)(2)), shall convey—
(1) to the Kaktovik Inupiat Corporation the 
surface estate of the lands described in paragraph 1 
of Public Land Order 6959, to the extent necessary 
to fulfill the Corporation’s entitlement under section 
12 of the Alaska Native Claims Settlement Act (43
550
U.S.C. 1611) in accordance with the terms and con-
ditions of the Agreement between the Department of 
the Interior, the United States Fish and Wildlife 
Service, the Bureau of Land Management, and the 
Kaktovik Inupiat Corporation effective January 22, 
1993; and 
(2) to the Arctic Slope Regional Corporation 
the remaining subsurface estate to which it is enti-
tled pursuant to the August 9, 1983, agreement be-
tween the Arctic Slope Regional Corporation and the 
United States of America. 
SEC. 30412. LOCAL GOVERNMENT IMPACT AID AND COMMU-
NITY SERVICE ASSISTANCE. 
(a) FINANCIAL ASSISTANCE AUTHORIZED.—
(1) IN
GENERAL.—The Secretary may use 
amounts available from the Coastal Plain Local Gov-
ernment Impact Aid Assistance Fund established by 
subsection (d) to provide timely financial assistance 
to entities that are eligible under paragraph (2) and 
that are directly impacted by the exploration for or 
production of oil and gas on the Coastal Plain under 
this title. 
(2) ELIGIBLE
ENTITIES.—The North Slope 
Borough, Kaktovik, and other boroughs, municipal 
subdivisions, villages, and any other community or-