SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Energy Policy Act of 2004’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—ENERGY EFFICIENCY
Subtitle A—Federal programs
Sec. 101. Energy and water saving measures in congressional buildings.
Sec. 102. Energy management requirements.
Sec. 103. Energy use measurement and accountability.
Sec. 104. Procurement of energy efficient products.
Sec. 105. Energy Savings Performance Contracts.
Sec. 106. Energy Savings Performance Contracts pilot program for nonbuilding
applications.
Sec. 107. Voluntary commitments to reduce industrial energy intensity.
Sec. 108. Advanced Building Efficiency Testbed.
Sec. 109. Federal building performance standards.
Sec. 110. Increased use of recovered mineral component in Federally funded
projects involving procurement of cement or concrete.
Subtitle B—Energy assistance and State programs
Sec. 121. Low income home energy assistance program.
Sec. 122. Weatherization assistance.
Sec. 123. State energy programs.
Sec. 124. Energy efficient appliance rebate programs.
Sec. 125. Energy efficient public buildings.
Sec. 126. Low income community energy efficiency pilot program.
Subtitle C—Energy efficient products
Sec. 131. Energy Star Program.
Sec. 132. HVAC maintenance consumer education program.
Sec. 133. Energy conservation standards for additional products.
Sec. 134. Energy labeling.
Subtitle D—Public housing
Sec. 141. Capacity building for energy-efficient, affordable housing.
Sec. 142. Increase of cdbg public services cap for energy conservation and effi-
ciency activities.
Sec. 143. FHA mortgage insurance incentives for energy efficient housing.
Sec. 144. Public housing capital fund.
Sec. 145. Grants for energy-conserving improvements for assisted housing.
Sec. 146. North American Development Bank.
Sec. 147. Energy-efficient appliances.
Sec. 148. Energy efficiency standards.
Sec. 149. Energy strategy for HUD.
TITLE II—RENEWABLE ENERGY
Subtitle A—General provisions
Sec. 201. Assessment of renewable energy resources.
Sec. 202. Renewable energy production incentive.
Sec. 203. Federal purchase requirement.
Sec. 204. Insular areas energy security.
Sec. 205. Use of photovoltaic energy in public buildings.
Sec. 206. Grants to improve the commercial value of forest biomass for electric
energy, useful heat, transportation fuels, petroleum-based prod-
uct substitutes, and other commercial purposes.
Sec. 207. Biobased products.
Subtitle B—Geothermal energy
Sec. 211. Short title.
Sec. 212. Competitive lease sale requirements.
Sec. 213. Direct use.
Sec. 214. Royalties and near-term production incentives.
Sec. 215. Geothermal leasing and permitting on Federal lands.
Sec. 216. Review and report to Congress.
Sec. 217. Reimbursement for costs of NEPA analyses, documentation, and
studies.
Sec. 218. Assessment of Geothermal energy potential.
Sec. 219. Cooperative or Unit plans.
Sec. 220. Royalty on byproducts.
Sec. 221. Repeal of authorities of Secretary to readjust terms, conditions, rent-
als, and royalties.
Sec. 222. Crediting of rental toward royalty.
Sec. 223. Lease duration and work commitment requirements.
Sec. 224. Advanced royalties required for suspension of production.
Sec. 225. Annual rental.
Sec. 226. Leasing and permitting on Federal lands withdrawn for military pur-
poses.
Sec. 227. Technical amendments.
Subtitle C—Hydroelectric
PART I—ALTERNATIVE CONDITIONS
Sec. 231. Alternative conditions and fishways.
PART II—ADDITIONAL HYDROPOWER
Sec. 241. Hydroelectric production incentives.
Sec. 242. Hydroelectric efficiency improvement.
Sec. 243. Small hydroelectric power projects.
Sec. 244. Increased hydroelectric generation at existing Federal facilities.
Sec. 245. Shift of project loads to off-peak periods.
Sec. 246. Corps of Engineers hydropower operation and maintenance funding.
Sec. 247. Limitation on certain charges assessed to the flint creek project,
Montana.
Sec. 248. Reinstatement and transfer.
TITLE III—OIL AND GAS
Subtitle A—Petroleum Reserve and home heating oil
Sec. 301. Permanent authority to operate the Strategic Petroleum Reserve and
other energy programs.
Sec. 302. National Oilheat Research Alliance.
Subtitle B—Production incentives
Sec. 311. Definition of Secretary.
Sec. 312. Program on oil and gas royalties in-kind.
Sec. 313. Marginal property production incentives.
Sec. 314. Incentives for natural gas production from deep wells in the shallow
waters of the Gulf of Mexico.
Sec. 315. Royalty Relief for deep water production.
Sec. 316. Alaska offshore royalty suspension.
Sec. 317. Oil and gas leasing in the National Petroleum Reserve in Alaska.
Sec. 318. Orphaned, abandoned, or idled wells on Federal land.
Sec. 319. Combined hydrocarbon leasing.
Sec. 320. Liquified natural gas.
Sec. 321. Alternate energy-related uses on the outer Continental Shelf.
Sec. 322. Preservation of geological and geophysical data.
Sec. 323. Oil and gas lease acreage limitations.
Sec. 324. Assessment of dependence of State of Hawaii on oil.
Sec. 325. Deadline for decision on appeals of consistency determination under
the Coastal Zone Management Act of 1972.
Sec. 326. Reimbursement for costs of NEPA analyses, documentation, and
studies.
Sec. 327. Hydraulic fracturing.
Sec. 328. Oil and gas exploration and production defined.
Sec. 329. Outer Continental Shelf provisions.
Sec. 330. Appeals relating to pipeline construction or offshore mineral develop-
ment projects.
Sec. 331. Bilateral international oil supply agreements.
Sec. 332. Natural gas market reform.
Sec. 333. Natural gas market transparency.
Subtitle C—Access to Federal land
Sec. 341. Office of Federal Energy Project Coordination.
Sec. 342. Federal onshore oil and gas leasing and permitting practices.
Sec. 343. Management of Federal oil and gas leasing programs.
Sec. 344. Consultation regarding oil and gas leasing on public land.
Sec. 345. Estimates of oil and gas resources underlying onshore Federal land.
Sec. 346. Compliance with Executive Order No. 13211; actions concerning reg-
ulations that significantly affect energy supply, distribution, or
use.
Sec. 347. Pilot Project to improve Federal permit coordination.
Sec. 348. Deadline for consideration of applications for permits.
Sec. 349. Clarification of fair market rental value determinations for public
land and Forest Service rights-of-way.
Sec. 350. Energy facility rights-of-way and corridors on Federal land.
Sec. 351. Consultation regarding energy rights-of-way on public land.
Sec. 352. Renewable energy on Federal land.
Sec. 353. Electricity transmission line right-of-way, cleveland national forest
and adjacent public land, California.
Sec. 354. Sense of Congress regarding development of MINERALS under
Padre Island National Seashore.
Sec. 355. Encouraging prohibition of off-shore Drilling in the Great Lakes.
Sec. 356. Finger Lakes National Forest withdrawal.
Sec. 357. Study on lease exchanges in the rocky mountain front.
Sec. 358. Federal coalbed methane regulation.
Sec. 359. Livingston parish mineral rights transfer.
Subtitle D—Alaska Natural Gas Pipeline
Sec. 371. Short title.
Sec. 372. Definitions.
Sec. 373. Issuance of certificate of public convenience and necessity.
Sec. 374. Environmental reviews.
Sec. 375. Pipeline expansion.
Sec. 376. Federal Coordinator.
Sec. 377. Judicial review.
Sec. 378. State jurisdiction over in-State delivery of natural gas.
Sec. 379. Study of alternative means of construction.
Sec. 380. Clarification of angta status and authorities.
Sec. 381. Sense of Congress concerning use of steel manufactured in North
America negotiation of a project labor Agreement.
Sec. 382. Sense of Congress and study concerning participation by small busi-
ness concerns.
Sec. 383. Alaska pipeline construction training Program.
Sec. 384. Sense of Congress concerning natural gas demand.
Sec. 385. Sense of Congress concerning Alaskan ownership.
Sec. 386. Loan guarantees.
TITLE IV—COAL
Subtitle A—Clean Coal Power Initiative
Sec. 401. Authorization of appropriations.
Sec. 402. Project criteria.
Sec. 403. Report.
Sec. 404. Clean coal centers of excellence.
Subtitle B—Clean Power Projects
Sec. 411. Coal technology loan.
Sec. 412. Coal gasification.
Sec. 413. Integrated gasification combined cycle technology.
Sec. 414. Petroleum coke gasification.
Sec. 415. Integrated coal/renewable energy system.
Sec. 416. Electron scrubbing demonstration.
Subtitle C—Federal Coal Leases
Sec. 421. Repeal of the 160-acre limitation for coal leases.
Sec. 422. Mining plans.
Sec. 423. Payment of advance royalties under coal leases.
Sec. 424. Elimination of deadline for submission of coal lease operation and
reclamation plan.
Sec. 425. Amendment relating to financial assurances with respect to bonus
bids.
Sec. 426. Inventory requirement.
Sec. 427. Application of amendments.
Subtitle D—Coal and related programs
Sec. 441. Clean air coal program.
TITLE V—INDIAN ENERGY
Sec. 501. Short title.
Sec. 502. Office of Indian Energy Policy and Programs.
Sec. 503. Indian energy.
Sec. 504. Four corners transmission line project.
Sec. 505. Energy efficiency in federally assisted housing.
Sec. 506. Consultation with Indian tribes.
TITLE VI—NUCLEAR MATTERS
Subtitle A—Price-Anderson Act Amendments
Sec. 601. Short title.
Sec. 602. Extension of indemnification authority.
Sec. 603. Maximum assessment.
Sec. 604. Department of energy liability limit.
Sec. 605. Incidents outside the United States.
Sec. 606. Reports.
Sec. 607. Inflation adjustment.
Sec. 608. Treatment of modular reactors.
Sec. 609. Applicability.
Sec. 610. Prohibition on assumption by United States government of liability
for certain foreign incidents.
Sec. 611. Civil penalties.
Subtitle B—General Nuclear Matters
Sec. 621. Licenses.
Sec. 622. NRC training program.
Sec. 623. Cost recovery from government agencies.
Sec. 624. Elimination of pension offset.
Sec. 625. Antitrust review.
Sec. 626. Decommissioning.
Sec. 627. Limitation on legal fee reimbursement.
Sec. 628. Decommissioning pilot program.
Sec. 629. Report on feasibility of developing commercial nuclear energy genera-
tion facilities at existing Department of Energy sites.
Sec. 630. Uranium sales.
Sec. 631. Cooperative research and development and special demonstration
projects for the uranium mining industry.
Sec. 632. Whistleblower protection.
Sec. 633. Medical isotope production.
Sec. 634. Fernald byproduct material.
Sec. 635. Safe disposal of greater-than-class c radioactive waste.
Sec. 636. Prohibition on nuclear exports to countries that sponsor terrorism.
Sec. 637. Uranium enrichment facilities.
Sec. 638. National uranium stockpile.
Subtitle C—Advanced Reactor Hydrogen Cogeneration Project
Sec. 651. Project establishment.
Sec. 652. Project definition.
Sec. 653. Project management.
Sec. 654. Project requirements.
Sec. 655. Authorization of appropriations.
Subtitle D—Nuclear Security
Sec. 661. Nuclear facility threats.
Sec. 662. Fingerprinting for criminal history record checks.
Sec. 663. Use of firearms by security personnel of licensees and certificate hold-
ers of the commission.
Sec. 664. Unauthorized introduction of dangerous weapons.
Sec. 665. Sabotage of nuclear facilities or fuel.
Sec. 666. Secure transfer of nuclear materials.
Sec. 667. Department of homeland security consultation.
Sec. 668. Authorization of appropriations.
TITLE VII—VEHICLES AND FUELS
Subtitle A—Existing programs
Sec. 701. Use of alternative fuels by dual-fueled vehicles.
Sec. 702. Neighborhood electric vehicles.
Sec. 703. Credits for medium and heavy duty dedicated vehicles.
Sec. 704. Incremental cost allocation.
Sec. 705. Alternative compliance and flexibility.
Sec. 706. Review of Energy Policy Act of 1992 programs.
Sec. 707. Report concerning compliance with alternative fueled vehicle pur-
chasing requirements.
Subtitle B—Hybrid vehicles, advanced vehicles, and fuel cell buses
PART I—HYBRID VEHICLES
Sec. 711. Hybrid vehicles.
PART II—ADVANCED VEHICLES
Sec. 721. Definitions.
Sec. 722. Pilot program.
Sec. 723. Reports to Congress.
Sec. 724. Authorization of appropriations.
PART III—FUEL CELL BUSES
Sec. 731. Fuel cell transit bus demonstration.
Subtitle C—Clean school buses
Sec. 741. Definitions.
Sec. 742. Program for replacement of certain school buses with clean school
buses.
Sec. 743. Diesel retrofit program.
Sec. 744. Fuel cell school buses.
Subtitle D—Miscellaneous
Sec. 751. Railroad efficiency.
Sec. 752. Mobile emission reductions trading and crediting.
Sec. 753. Aviation fuel conservation and emissions.
Sec. 754. Diesel fueled vehicles.
Sec. 755. Conserve by Bicycling Program.
Sec. 756. Reduction of engine idling of heavy-duty vehicles.
Sec. 757. Biodiesel engine testing program.
Sec. 758. High occupancy vehicle exception.
Subtitle E—Automobile efficiency
Sec. 771. Authorization of appropriations for implementation and enforcement
of fuel economy standards.
Sec. 772. Revised considerations for decisions on maximum feasible average
fuel economy.
Sec. 773. Extension of maximum fuel economy increase for alternative fueled
vehicles.
Sec. 774. Study of feasibility and effects of reducing use of fuel for auto-
mobiles.
TITLE VIII—HYDROGEN
Sec. 801. Definitions.
Sec. 802. Plan.
Sec. 803. Programs.
Sec. 804. Interagency task force.
Sec. 805. Advisory Committee.
Sec. 806. External review.
Sec. 807. Miscellaneous provisions.
Sec. 808. Savings clause.
Sec. 809. Authorization of appropriations.
TITLE IX—RESEARCH AND DEVELOPMENT
Sec. 901. Goals.
Sec. 902. Definitions.
Subtitle A—Energy Efficiency
Sec. 904. Energy efficiency.
Sec. 905. Next generation lighting initiative.
Sec. 906. National building performance initiative.
Sec. 907. Secondary electric vehicle battery use program.
Sec. 908. Energy efficiency science initiative.
Sec. 909. Electric motor control technology.
Sec. 910. Advanced energy technology transfer centers.
Subtitle B—Distributed Energy and Electric Energy Systems
Sec. 911. Distributed energy and electric energy systems.
Sec. 912. Hybrid distributed power systems.
Sec. 913. High power density industry program.
Sec. 914. Micro-cogeneration energy technology.
Sec. 915. Distributed energy technology demonstration program.
Sec. 916. Reciprocating power.
Subtitle C—Renewable energy
Sec. 918. Renewable energy.
Sec. 919. Bioenergy programs.
Sec. 920. Concentrating solar power research and development Program.
Sec. 921. Miscellaneous projects.
Sec. 922. Renewable energy in public buildings.
Sec. 923. Study of marine renewable energy options.
Subtitle D—Nuclear energy
Sec. 924. Nuclear energy.
Sec. 925. Nuclear energy research and development programs.
Sec. 926. Advanced fuel cycle Initiative.
Sec. 927. University nuclear science and engineering support.
Sec. 928. Security of reactor designs.
Sec. 929. Alternatives to industrial radioactive sources.
Sec. 930. Geological isolation of spent fuel.
Subtitle E—Fossil energy
PART I—RESEARCH PROGRAMS
Sec. 931. Fossil energy.
Sec. 932. Oil and gas research programs.
Sec. 933. Technology transfer.
Sec. 934. Research and development for coal mining technologies.
Sec. 935. Coal and related technologies Program.
Sec. 936. Complex Well Technology Testing Facility.
Sec. 937. Fischer-Tropsch diesel fuel loan guarantee Program.
PART II—ULTRA-DEEPWATER AND UNCONVENTIONAL NATURAL GAS AND
OTHER PETROLEUM RESOURCES
Sec. 941. Program authority.
Sec. 942. Ultra-deepwater Program.
Sec. 943. Unconventional natural gas and other petroleum resources Program.
Sec. 944. Additional requirements for awards.
Sec. 945. Advisory committees.
Sec. 946. Limits on participation.
Sec. 947. Sunset.
Sec. 948. Definitions.
Sec. 949. Funding.
Subtitle F—Science
Sec. 951. Science.
Sec. 952. United States participation in ITER.
Sec. 953. Plan for Fusion Energy Sciences Program.
Sec. 954. Spallation Neutron Source.
Sec. 955. Support for science and energy facilities and infrastructure.
Sec. 956. Catalysis Research and development Program.
Sec. 957. Nanoscale Science and Engineering Research, development, dem-
onstration, and commercial application.
Sec. 958. Advanced scientific computing for energy missions.
Sec. 959. Genomes to Life Program.
Sec. 960. Fission and fusion energy materials research Program.
Sec. 961. Energy-Water Supply Program.
Sec. 962. Nitrogen fixation.
Subtitle G—Energy and environment
Sec. 964. United States-Mexico energy Technology cooperation.
Sec. 965. Western Hemisphere energy cooperation.
Sec. 966. Waste reduction and use of alternatives.
Sec. 967. Report on fuel cell test Center.
Sec. 968. Arctic Engineering Research Center.
Sec. 969. Barrow Geophysical Research Facility.
Sec. 970. Western Michigan demonstration project.
Subtitle H—Management
Sec. 971. Availability of funds.
Sec. 972. Cost sharing.
Sec. 973. Merit review of proposals.
Sec. 974. External technical review of departmental programs.
Sec. 975. Improved coordination of Technology transfer activities.
Sec. 976. Federal laboratory educational partners.
Sec. 977. Interagency cooperation.
Sec. 978. Technology Infrastructure Program.
Sec. 979. Reprogramming.
Sec. 980. Construction with other laws.
Sec. 981. Report on research and development Program evaluation methodolo-
gies.
Sec. 982. Department of Energy Science and Technology Scholarship Program.
Sec. 983. Report on equal employment opportunity practices.
Sec. 984. Small business advocacy and assistance.
Sec. 985. Report on mobility of scientific and technical personnel.
Sec. 986. National Academy of Sciences report.
Sec. 987. Outreach.
Sec. 988. Competitive award of management contracts.
Sec. 989. Educational programs in science and mathematics.
TITLE X—DEPARTMENT OF ENERGY MANAGEMENT
Sec. 1001. Additional Assistant Secretary position.
Sec. 1002. Other transactions authority.
TITLE XI—PERSONNEL AND TRAINING
Sec. 1101. Training guidelines for electric energy industry personnel.
Sec. 1102. Improved access to energy-related scientific and technical careers.
Sec. 1103. National Power Plant Operations Technology and Education Center.
Sec. 1104. International energy training.
TITLE XII—ELECTRICITY
Sec. 1201. Short title.
Subtitle A—Reliability standards
Sec. 1211. Electric reliability standards.
Subtitle B—Transmission infrastructure modernization
Sec. 1221. Siting of interstate electric transmission facilities.
Sec. 1222. Third-party finance.
Sec. 1223. Transmission system monitoring.
Sec. 1224. Advanced transmission technologies.
Sec. 1225. Electric transmission and distribution programs.
Sec. 1226. Advanced Power System Technology Incentive Program.
Sec. 1227. Office of Electric Transmission and Distribution.
Subtitle C—Transmission operation improvements
Sec. 1231. Open nondiscriminatory access.
Sec. 1232. Sense of Congress on Regional Transmission Organizations.
Sec. 1233. Regional Transmission Organization applications progress report.
Sec. 1234. Federal utility participation in Regional Transmission Organiza-
tions.
Sec. 1235. Standard market design.
Sec. 1236. Native load service obligation.
Sec. 1237. Study on the benefits of economic dispatch.
Subtitle D—Transmission rate reform
Sec. 1241. Transmission infrastructure investment.
Sec. 1242. Voluntary transmission pricing plans.
Subtitle E—Amendments to PURPA
Sec. 1251. Net metering and additional standards.
Sec. 1252. Smart metering.
Sec. 1253. Cogeneration and small power production purchase and sale require-
ments.
Subtitle F—Repeal of PUHCA
Sec. 1261. Short title.
Sec. 1262. Definitions.
Sec. 1263. Repeal of the Public Utility Holding Company Act of 1935.
Sec. 1264. Federal access to books and records.
Sec. 1265. State access to books and records.
Sec. 1266. Exemption authority.
Sec. 1267. Affiliate transactions.
Sec. 1268. Applicability.
Sec. 1269. Effect on other regulations.
Sec. 1270. Enforcement.
Sec. 1271. Savings provisions.
Sec. 1272. Implementation.
Sec. 1273. Transfer of resources.
Sec. 1274. Effective date.
Sec. 1275. Service allocation.
Sec. 1276. Authorization of appropriations.
Sec. 1277. Conforming amendments to the Federal Power Act.
Subtitle G—Market transparency, enforcement, and consumer protection
Sec. 1281. Market transparency rules.
Sec. 1282. Market manipulation.
Sec. 1283. Enforcement.
Sec. 1284. Refund effective date.
Sec. 1285. Refund authority.
Sec. 1286. Sanctity of contract.
Sec. 1287. Consumer privacy and unfair trade practices.
Subtitle H—Merger reform
Sec. 1291. Merger review reform and accountability.
Sec. 1292. Electric utility mergers.
Subtitle I—Definitions
Sec. 1295. Definitions.
Subtitle J—Technical and conforming amendments
Sec. 1297. Conforming amendments.
TITLE XIII—ENERGY TAX INCENTIVES
Sec. 1300. Short title; amendment of 1986 Code.
Subtitle A—Conservation
PART I—RESIDENTIAL AND BUSINESS PROPERTY
Sec. 1301. Credit for residential energy efficient property.
Sec. 1302. Extension and expansion of credit for electricity produced from cer-
tain renewable resources.
Sec. 1303. Credit for business installation of qualified fuel cells.
Sec. 1304. Credit for energy efficiency improvements to existing homes.
Sec. 1305. Credit for construction of new energy efficient homes.
Sec. 1306. Energy credit for combined heat and power system property.
Sec. 1307. Credit for energy efficient appliances.
Sec. 1308. Energy efficient commercial buildings deduction.
Sec. 1309. Three-year applicable recovery period for depreciation of qualified
energy management devices.
Sec. 1310. Credit for production from advanced nuclear power facilities.
PART II—FUELS AND ALTERNATIVE MOTOR VEHICLES
Sec. 1311. Repeal of 4.3-cent motor fuel excise taxes on railroads and inland
waterway transportation which remain in general Fund.
Sec. 1312. Reduced motor fuel excise tax on certain mixtures of diesel fuel.
Sec. 1313. Small ethanol producer credit.
Sec. 1314. Incentives for biodiesel.
Sec. 1315. Alcohol fuel and biodiesel mixtures excise tax credit.
Sec. 1316. Nonapplication of export exemption to delivery of fuel to motor vehi-
cles removed from United States.
Sec. 1317. Repeal of phaseouts for qualified electric vehicle credit and deduc-
tion for clean fuel-vehicles.
Sec. 1318. Alternative motor vehicle credit.
Sec. 1319. Modifications of deduction for certain refueling property.
Subtitle B—Reliability
Sec. 1321. Natural gas gathering lines treated as 7–YEAR property.
Sec. 1322. Natural gas distribution lines treated as 15-year property.
Sec. 1323. Electric transmission property treated as 15-year property.
Sec. 1324. Expensing of capital costs incurred in complying with Environ-
mental Protection Agency sulfur regulations.
Sec. 1325. Credit for production of low sulfur diesel fuel.
Sec. 1326. Determination of small refiner exception to oil depletion deduction.
Sec. 1327. Sales or dispositions to implement Federal Energy Regulatory Com-
mission or State electric restructuring policy.
Sec. 1328. Modifications to special rules for nuclear decommissioning costs.
Sec. 1329. Treatment of certain income of cooperatives.
Sec. 1330. Arbitrage rules not to apply to prepayments for natural gas.
Subtitle C—Production
PART I—OIL AND GAS PROVISIONS
Sec. 1341. Oil and gas from marginal wells.
Sec. 1342. Temporary suspension of limitation based on 65 percent of taxable
income and extension of suspension of taxable income limit
with respect to marginal production.
Sec. 1343. Amortization of delay rental payments.
Sec. 1344. Amortization of geological and geophysical expenditures.
Sec. 1345. Extension and modification of credit for producing fuel from a non-
conventional source.
PART II—ALTERNATIVE MINIMUM TAX PROVISIONS
Sec. 1346. New nonrefundable personal credits allowed against regular and
minimum taxes.
Sec. 1347. Business related energy credits allowed against regular and min-
imum tax.
Sec. 1348. Temporary repeal of alternative minimum tax preference for intan-
gible drilling costs.
PART III—CLEAN COAL INCENTIVES
Sec. 1351. Credit for clean coal technology units.
Sec. 1352. Expansion of amortization for certain pollution control facilities.
Sec. 1353. 5-year recovery period for eligible integrated gasification combined
cycle technology unit eligible for credit.
PART IV—HIGH VOLUME NATURAL GAS PROVISIONS
Sec. 1355. High volume natural gas pipe treated as 7-year property.
Sec. 1356. Extension of enhanced oil recovery credit to high volume natural gas
facilities.
Subtitle D—Additional provisions
Sec. 1361. Extension of accelerated depreciation benefit for energy-related busi-
nesses on indian reservations.
Sec. 1362. Payment of dividends on stock of cooperatives without reducing pa-
tronage dividends.
Sec. 1363. Distributions from publicly traded partnerships treated as qualifying
income of regulated investment companies.
Sec. 1364. Ceiling fans.
Sec. 1365. Certain steam generators, and certain reactor vessel heads, used in
nuclear facilities.
Sec. 1366. Brownfields demonstration program for qualified green building and
sustainable design projects.
TITLE XIV—MISCELLANEOUS
Subtitle A—Rural and Remote Electricity Construction
Sec. 1401. Denali Commission programs.
Sec. 1402. Rural and remote community assistance.
Subtitle B—Coastal programs
Sec. 1411. Royalty payments under leases under the Outer Continental Shelf
Lands Act.
Sec. 1412. Domestic offshore energy reinvestment.
Subtitle C—Reforms to the Board of Directors of the Tennessee Valley
Authority
Sec. 1431. Change in composition, operation, and duties of the Board of Direc-
tors of the Tennessee Valley Authority.
Sec. 1432. Change in manner of appointment of staff.
Sec. 1433. Conforming amendments.
Sec. 1434. Appointments; effective date; transition.
Subtitle D—Other provisions
Sec. 1441. Continuation of transmission security order.
Sec. 1442. Review of agency determinations.
Sec. 1443. Attainment dates for downwind ozone nonattainment areas.
Sec. 1444. Energy production incentives.
Sec. 1445. Use of granular mine tailings.
TITLE XV—ETHANOL AND MOTOR FUELS
Subtitle A—General provisions
Sec. 1501. Renewable content of motor vehicle fuel.
Sec. 1502. Fuels safe harbor.
Sec. 1503. Findings and MTBE transition assistance.
Sec. 1504. Use of MTBE.
Sec. 1505. National Academy of Sciences review and presidential determina-
tion.
Sec. 1506. Elimination of oxygen content requirement for reformulated gaso-
line.
Sec. 1507. Analyses of motor vehicle fuel changes.
Sec. 1508. Data collection.
Sec. 1509. Reducing the proliferation of State fuel controls.
Sec. 1510. Fuel system requirements harmonization study.
Sec. 1511. Commercial byproducts from municipal solid waste and cellulosic
biomass loan guarantee program.
Sec. 1512. Resource Center.
Sec. 1513. Cellulosic biomass and waste-derived ethanol conversion assistance.
Sec. 1514. Blending of compliant reformulated gasolines.
Subtitle B—Underground storage tank compliance
Sec. 1521. Short title.
Sec. 1522. Leaking underground storage tanks.
Sec. 1523. Inspection of underground storage tanks.
Sec. 1524. Operator training.
Sec. 1525. Remediation from oxygenated fuel additives.
Sec. 1526. Release prevention, compliance, and enforcement.
Sec. 1527. Delivery prohibition.
Sec. 1528. Federal facilities.
Sec. 1529. Tanks on Tribal lands.
Sec. 1530. Future release containment technology.
Sec. 1531. Authorization of appropriations.
Sec. 1532. Conforming amendments.
Sec. 1533. Technical amendments.
TITLE XVI—STUDIES
Sec. 1601. Study on inventory of petroleum and natural gas storage.
Sec. 1602. Natural gas supply shortage report.
Sec. 1603. Split-estate Federal oil and gas leasing and development practices.
Sec. 1604. Resolution of Federal resource development conflicts in the Powder
River Basin.
Sec. 1605. Study of energy efficiency standards.
Sec. 1606. Telecommuting study.
Sec. 1607. Liheap report.
Sec. 1608. Oil bypass filtration technology.
Sec. 1609. Total integrated thermal systems.
Sec. 1610. University collaboration.
Sec. 1611. Reliability and consumer protection assessment.
TITLE I—ENERGY EFFICIENCY
Subtitle A—Federal Programs
SEC. 101. ENERGY AND WATER SAVING MEASURES IN CON-
GRESSIONAL BUILDINGS.
(a) IN GENERAL.—Part 3 of title V of the National
Energy Conservation Policy Act (42 U.S.C. 8251 et seq.)
is amended by adding at the end the following:
‘‘SEC. 552. ENERGY AND WATER SAVINGS MEASURES IN
CONGRESSIONAL BUILDINGS.
‘‘(a) IN GENERAL.—The Architect of the Capitol—
‘‘(1) shall develop, update, and implement a
cost-effective energy conservation and management
plan (referred to in this section as the ‘plan’) for all
facilities administered by Congress (referred to in
this section as ‘congressional buildings’) to meet the
energy performance requirements for Federal build-
ings established under section 543(a)(1); and
‘‘(2) shall submit the plan to Congress, not
later than 180 days after the date of enactment of
this section.
‘‘(b) 
PLAN
REQUIREMENTS.—The 
plan 
shall
include—
‘‘(1) a description of the life cycle cost analysis
used to determine the cost-effectiveness of proposed
energy efficiency projects;
‘‘(2) a schedule of energy surveys to ensure
complete surveys of all congressional buildings every
5 years to determine the cost and payback period of
energy and water conservation measures;
‘‘(3) a strategy for installation of life cycle cost-
effective energy and water conservation measures;
‘‘(4) the results of a study of the costs and ben-
efits of installation of submetering in congressional
buildings; and
‘‘(5) information packages and ‘how-to’ guides
for each Member and employing authority of Con-
gress that detail simple, cost-effective methods to
save energy and taxpayer dollars in the workplace.
‘‘(c) ANNUAL REPORT.—The Architect of the Capitol
shall submit to Congress annually a report on congres-
sional energy management and conservation programs re-
quired under this section that describes in detail—
‘‘(1) energy expenditures and savings estimates
for each facility;
‘‘(2) energy management and conservation
projects; and
‘‘(3) future priorities to ensure compliance with
this section.’’.
(b) TABLE OF CONTENTS AMENDMENT.—The table
of contents of the National Energy Conservation Policy
Act is amended by adding at the end of the items relating
to part 3 of title V the following new item:
‘‘Sec. 552. Energy and water savings measures in congressional buildings.’’.
(c) REPEAL.—Section 310 of the Legislative Branch
Appropriations Act, 1999 (2 U.S.C. 1815), is repealed.
(d) ENERGY INFRASTRUCTURE.—The Architect of
the Capitol, building on the Master Plan Study completed
in July 2000, shall commission a study to evaluate the
energy infrastructure of the Capital Complex to determine
how the infrastructure could be augmented to become
more energy efficient, using unconventional and renewable
energy resources, in a way that would enable the Complex
to have reliable utility service in the event of power fluc-
tuations, shortages, or outages.
(e) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to the Architect of the
Capitol to carry out subsection (d), $2,000,000 for each
of fiscal years 2004 through 2008.
SEC. 102. ENERGY MANAGEMENT REQUIREMENTS.
(a) ENERGY REDUCTION GOALS.—
(1) AMENDMENT.—Section 543(a)(1) of the
National Energy Conservation Policy Act (42 U.S.C.
8253(a)(1)) is amended by striking ‘‘its Federal
buildings so that’’ and all that follows through the
end and inserting ‘‘the Federal buildings of the
agency (including each industrial or laboratory facil-
ity) so that the energy consumption per gross square
foot of the Federal buildings of the agency in fiscal
years 2004 through 2013 is reduced, as compared
with the energy consumption per gross square foot
of the Federal buildings of the agency in fiscal year
2001, by the percentage specified in the following
table:
‘‘Fiscal Year
Percentage reduction
2004 ...................................................................................................
2005 ...................................................................................................
2006 ...................................................................................................
2007 ...................................................................................................
2008 ...................................................................................................
2009 ...................................................................................................
2010 ...................................................................................................
2011 ...................................................................................................
2012 ...................................................................................................
2013 ...................................................................................................
20.’’.
(2) REPORTING BASELINE.—The energy reduc-
tion goals and baseline established in paragraph (1)
of section 543(a) of the National Energy Conserva-
tion Policy Act (42 U.S.C. 8253(a)(1)), as amended
by this subsection, supersede all previous goals and
baselines under such paragraph, and related report-
ing requirements.
(b) REVIEW AND REVISION OF ENERGY PERFORM-
ANCE REQUIREMENT.—Section 543(a) of the National
Energy Conservation Policy Act (42 U.S.C. 8253(a)) is
further amended by adding at the end the following:
‘‘(3) Not later than December 31, 2012, the Sec-
retary shall review the results of the implementation of
the energy performance requirement established under
paragraph (1) and submit to Congress recommendations
concerning energy performance requirements for fiscal
years 2014 through 2023.’’.
(c) EXCLUSIONS.—Section 543(c)(1) of the National
Energy Conservation Policy Act (42 U.S.C. 8253(c)(1))
is amended by striking ‘‘An agency may exclude’’ and all
that follows through the end and inserting ‘‘(A) An agency
may exclude, from the energy performance requirement
for a fiscal year established under subsection (a) and the
energy management requirement established under sub-
section (b), any Federal building or collection of Federal
buildings, if the head of the agency finds that—
‘‘(i) compliance with those requirements would
be impracticable;
‘‘(ii) the agency has completed and submitted
all federally required energy management reports;
‘‘(iii) the agency has achieved compliance with
the energy efficiency requirements of this Act, the
Energy Policy Act of 1992, Executive orders, and
other Federal law; and
‘‘(iv) the agency has implemented all prac-
ticable, life cycle cost-effective projects with respect
to the Federal building or collection of Federal
buildings to be excluded.
‘‘(B) A finding of impracticability under subpara-
graph (A)(i) shall be based on—
‘‘(i) the energy intensiveness of activities car-
ried out in the Federal building or collection of Fed-
eral buildings; or
‘‘(ii) the fact that the Federal building or col-
lection of Federal buildings is used in the perform-
ance of a national security function.’’.
(d) REVIEW BY SECRETARY.—Section 543(c)(2) of
the National Energy Conservation Policy Act (42 U.S.C.
8253(c)(2)) is amended—
(1) by striking ‘‘impracticability standards’’ and
inserting ‘‘standards for exclusion’’;
(2) by striking ‘‘a finding of impracticability’’
and inserting ‘‘the exclusion’’; and
(3) by striking ‘‘energy consumption require-
ments’’ and inserting ‘‘requirements of subsections
(a) and (b)(1)’’.
(e) CRITERIA.—Section 543(c) of the National En-
ergy Conservation Policy Act (42 U.S.C. 8253(c)) is fur-
ther amended by adding at the end the following:
‘‘(3) Not later than 180 days after the date of enact-
ment of this paragraph, the Secretary shall issue guide-
lines that establish criteria for exclusions under paragraph
(1).’’.
(f) RETENTION OF ENERGY AND WATER SAVINGS.—
Section 546 of the National Energy Conservation Policy
Act (42 U.S.C. 8256) is amended by adding at the end
the following new subsection:
‘‘(e) RETENTION
OF ENERGY
AND WATER SAV-
INGS.—An agency may retain any funds appropriated to
that agency for energy expenditures, water expenditures,
or wastewater treatment expenditures, at buildings subject
to the requirements of section 543(a) and (b), that are
not made because of energy savings or water savings. Ex-
cept as otherwise provided by law, such funds may be used
only for energy efficiency, water conservation, or uncon-
ventional and renewable energy resources projects.’’.
(g) REPORTS.—Section 548(b) of the National En-
ergy Conservation Policy Act (42 U.S.C. 8258(b)) is
amended—
(1) in the subsection heading, by inserting
‘‘THE PRESIDENT AND’’ before ‘‘CONGRESS’’; and
(2) by inserting ‘‘President and’’ before ‘‘Con-
gress’’.
(h) CONFORMING AMENDMENT.—Section 550(d) of
the National Energy Conservation Policy Act (42 U.S.C.
8258b(d)) is amended in the second sentence by striking
‘‘the 20 percent reduction goal established under section
543(a) of the National Energy Conservation Policy Act
(42 U.S.C. 8253(a)).’’ and inserting ‘‘each of the energy
reduction goals established under section 543(a).’’.
SEC. 103. ENERGY USE MEASUREMENT AND ACCOUNT-
ABILITY.
Section 543 of the National Energy Conservation
Policy Act (42 U.S.C. 8253) is further amended by adding
at the end the following:
‘‘(e) METERING OF ENERGY USE.—
‘‘(1) DEADLINE.—By October 1, 2010, in ac-
cordance with guidelines established by the Sec-
retary under paragraph (2), all Federal buildings
shall, for the purposes of efficient use of energy and
reduction in the cost of electricity used in such
buildings, be metered or submetered. Each agency
shall use, to the maximum extent practicable, ad-
vanced meters or advanced metering devices that
provide data at least daily and that measure at least
hourly consumption of electricity in the Federal
buildings of the agency. Such data shall be incor-
porated into existing Federal energy tracking sys-
tems and made available to Federal facility energy
managers.
‘‘(2) GUIDELINES.—
‘‘(A) IN
GENERAL.—Not later than 180
days after the date of enactment of this sub-
section, the Secretary, in consultation with the
Department of Defense, the General Services
Administration, representatives from the meter-
ing industry, utility industry, energy services in-
dustry, energy efficiency industry, energy effi-
ciency advocacy organizations, national labora-
tories, universities, and Federal facility energy
managers, shall establish guidelines for agencies
to carry out paragraph (1).
‘‘(B) REQUIREMENTS FOR GUIDELINES.—
The guidelines shall—
‘‘(i) take into consideration—
‘‘(I) the cost of metering and
submetering and the reduced cost of
operation and maintenance expected
to result from metering and sub-
metering;
‘‘(II) the extent to which meter-
ing and submetering are expected to
result in increased potential for en-
ergy management, increased potential
for energy savings and energy effi-
ciency improvement, and cost and en-
ergy savings due to utility contract
aggregation; and
‘‘(III) 
the 
measurement 
and
verification protocols of the Depart-
ment of Energy;
‘‘(ii) include recommendations con-
cerning the amount of funds and the num-
ber of trained personnel necessary to gath-
er and use the metering information to
track and reduce energy use;
‘‘(iii) establish priorities for types and
locations of buildings to be metered and
submetered based on cost-effectiveness and
a schedule of 1 or more dates, not later
than 1 year after the date of issuance of
the guidelines, on which the requirements
specified in paragraph (1) shall take effect;
and
‘‘(iv) establish exclusions from the re-
quirements specified in paragraph (1)
based on the de minimis quantity of energy
use of a Federal building, industrial proc-
ess, or structure.
‘‘(3) PLAN.—Not later than 6 months after the
date guidelines are established under paragraph (2),
in a report submitted by the agency under section
548(a), each agency shall submit to the Secretary a
plan describing how the agency will implement the
requirements of paragraph (1), including (A) how
the agency will designate personnel primarily respon-
sible for achieving the requirements and (B) dem-
onstration by the agency, complete with documenta-
tion, of any finding that advanced meters or ad-
vanced metering devices, as defined in paragraph
(1), are not practicable.’’.
SEC. 104. PROCUREMENT OF ENERGY EFFICIENT PROD-
UCTS.
(a) REQUIREMENTS.—Part 3 of title V of the Na-
tional Energy Conservation Policy Act (42 U.S.C. 8251
et seq.), as amended by section 101, is amended by adding
at the end the following:
‘‘SEC. 553. FEDERAL PROCUREMENT OF ENERGY EFFI-
CIENT PRODUCTS.
‘‘(a) DEFINITIONS.—In this section:
‘‘(1) ENERGY STAR PRODUCT.—The term ‘En-
ergy Star product’ means a product that is rated for
energy efficiency under an Energy Star program.
‘‘(2) ENERGY STAR PROGRAM.—The term ‘En-
ergy Star program’ means the program established
by section 324A of the Energy Policy and Conserva-
tion Act.
‘‘(3) EXECUTIVE AGENCY.—The term ‘executive
agency’ has the meaning given the term in section
4 of the Office of Federal Procurement Policy Act
(41 U.S.C. 403).
‘‘(4) FEMP DESIGNATED PRODUCT.—The term
‘FEMP designated product’ means a product that is
designated under the Federal Energy Management
Program of the Department of Energy as being
among the highest 25 percent of equivalent products
for energy efficiency.
‘‘(b) PROCUREMENT OF ENERGY EFFICIENT PROD-
UCTS.—
‘‘(1) REQUIREMENT.—To meet the require-
ments of an executive agency for an energy con-
suming product, the head of the executive agency
shall, except as provided in paragraph (2), procure—
‘‘(A) an Energy Star product; or
‘‘(B) a FEMP designated product.
‘‘(2) EXCEPTIONS.—The head of an executive
agency is not required to procure an Energy Star
product or FEMP designated product under para-
graph (1) if the head of the executive agency finds
in writing that—
‘‘(A) an Energy Star product or FEMP
designated product is not cost-effective over the
life of the product taking energy cost savings
into account; or
‘‘(B) no Energy Star product or FEMP
designated product is reasonably available that
meets the functional requirements of the execu-
tive agency.
‘‘(3) PROCUREMENT PLANNING.—The head of
an executive agency shall incorporate into the speci-
fications for all procurements involving energy con-
suming products and systems, including guide speci-
fications, project specifications, and construction,
renovation, and services contracts that include provi-
sion of energy consuming products and systems, and
into the factors for the evaluation of offers received
for the procurement, criteria for energy efficiency
that are consistent with the criteria used for rating
Energy Star products and for rating FEMP des-
ignated products.
‘‘(c) LISTING OF ENERGY EFFICIENT PRODUCTS IN
FEDERAL CATALOGS.—Energy Star products and FEMP
designated products shall be clearly identified and promi-
nently displayed in any inventory or listing of products
by the General Services Administration or the Defense Lo-
gistics Agency. The General Services Administration or
the Defense Logistics Agency shall supply only Energy
Star products or FEMP designated products for all prod-
uct categories covered by the Energy Star program or the
Federal Energy Management Program, except in cases
where the agency ordering a product specifies in writing
that no Energy Star product or FEMP designated product
is available to meet the buyer’s functional requirements,
or that no Energy Star product or FEMP designated
product is cost-effective for the intended application over
the life of the product, taking energy cost savings into ac-
count.
‘‘(d) SPECIFIC PRODUCTS.—(1) In the case of elec-
tric motors of 1 to 500 horsepower, agencies shall select
only premium efficient motors that meet a standard des-
ignated by the Secretary. The Secretary shall designate
such a standard not later than 120 days after the date
of the enactment of this section, after considering the rec-
ommendations of associated electric motor manufacturers
and energy efficiency groups.
‘‘(2) All Federal agencies are encouraged to take ac-
tions to maximize the efficiency of air conditioning and
refrigeration equipment, including appropriate cleaning
and maintenance, including the use of any system treat-
ment or additive that will reduce the electricity consumed
by air conditioning and refrigeration equipment. Any such
treatment or additive must be—
‘‘(A) determined by the Secretary to be effective
in increasing the efficiency of air conditioning and
refrigeration equipment without having an adverse
impact on air conditioning performance (including
cooling capacity) or equipment useful life;
‘‘(B) determined by the Administrator of the
Environmental Protection Agency to be environ-
mentally safe; and
‘‘(C) shown to increase seasonal energy effi-
ciency ratio (SEER) or energy efficiency ratio
(EER) when tested by the National Institute of
Standards and Technology according to Department
of Energy test procedures without causing any ad-
verse impact on the system, system components, the
refrigerant or lubricant, or other materials in the
system.
Results of testing described in subparagraph (C) shall be
published in the Federal Register for public review and
comment. For purposes of this section, a hardware device
or primary refrigerant shall not be considered an additive.
‘‘(e) REGULATIONS.—Not later than 180 days after
the date of the enactment of this section, the Secretary
shall issue guidelines to carry out this section.’’.
(b) CONFORMING AMENDMENT.—The table of con-
tents of the National Energy Conservation Policy Act is
further amended by inserting after the item relating to
section 552 the following new item:
‘‘Sec. 553. Federal procurement of energy efficient products.’’.
SEC. 105. ENERGY SAVINGS PERFORMANCE CONTRACTS.
(a) PERMANENT EXTENSION.—Effective September
30, 2003, section 801(c) of the National Energy Conserva-
tion Policy Act (42 U.S.C. 8287(c)) is repealed.
(b) PAYMENT OF COSTS.—Section 802 of the Na-
tional Energy Conservation Policy Act (42 U.S.C. 8287a)
is amended by inserting ‘‘, water, or wastewater treat-
ment’’ after ‘‘payment of energy’’.
(c) ENERGY SAVINGS.—Section 804(2) of the Na-
tional Energy Conservation Policy Act (42 U.S.C.
8287c(2)) is amended to read as follows:
‘‘(2) The term ‘energy savings’ means a reduc-
tion in the cost of energy, water, or wastewater
treatment, from a base cost established through a
methodology set forth in the contract, used in an ex-
isting federally owned building or buildings or other
federally owned facilities as a result of—
‘‘(A) the lease or purchase of operating
equipment, improvements, altered operation and
maintenance, or technical services;
‘‘(B) the increased efficient use of existing
energy sources by cogeneration or heat recov-
ery, excluding any cogeneration process for
other than a federally owned building or build-
ings or other federally owned facilities; or
‘‘(C) the increased efficient use of existing
water sources in either interior or exterior ap-
plications.’’.
(d) ENERGY SAVINGS CONTRACT.—Section 804(3) of
the National Energy Conservation Policy Act (42 U.S.C.
8287c(3)) is amended to read as follows:
‘‘(3) The terms ‘energy savings contract’ and
‘energy savings performance contract’ mean a con-
tract that provides for the performance of services
for the design, acquisition, installation, testing, and,
where appropriate, operation, maintenance, and re-
pair, of an identified energy or water conservation
measure or series of measures at 1 or more loca-
tions. Such contracts shall, with respect to an agen-
cy facility that is a public building (as such term is
defined in section 3301 of title 40, United States
Code), be in compliance with the prospectus require-
ments and procedures of section 3307 of title 40,
United States Code.’’.
(e) ENERGY OR WATER CONSERVATION MEASURE.—
Section 804(4) of the National Energy Conservation Pol-
icy Act (42 U.S.C. 8287c(4)) is amended to read as fol-
lows:
‘‘(4) The term ‘energy or water conservation
measure’ means—
‘‘(A) an energy conservation measure, as
defined in section 551; or
‘‘(B) a water conservation measure that
improves the efficiency of water use, is life-cycle
cost-effective, and involves water conservation,
water recycling or reuse, more efficient treat-
ment of wastewater or stormwater, improve-
ments in operation or maintenance efficiencies,
retrofit activities, or other related activities, not
at a Federal hydroelectric facility.’’.
(f) REVIEW.—Not later than 180 days after the date
of the enactment of this Act, the Secretary of Energy shall
complete a review of the Energy Savings Performance
Contract program to identify statutory, regulatory, and
administrative obstacles that prevent Federal agencies
from fully utilizing the program. In addition, this review
shall identify all areas for increasing program flexibility
and effectiveness, including audit and measurement
verification requirements, accounting for energy use in de-
termining savings, contracting requirements, including the
identification of additional qualified contractors, and en-
ergy efficiency services covered. The Secretary shall report
these findings to Congress and shall implement identified
administrative and regulatory changes to increase pro-
gram flexibility and effectiveness to the extent that such
changes are consistent with statutory authority.
(g) EXTENSION OF AUTHORITY.—Any energy sav-
ings performance contract entered into under section 801
of the National Energy Conservation Policy Act (42
U.S.C. 8287) after October 1, 2003, and before the date
of enactment of this Act, shall be deemed to have been
entered into pursuant to such section 801 as amended by
subsection (a) of this section.
SEC. 106. ENERGY SAVINGS PERFORMANCE CONTRACTS
PILOT PROGRAM FOR NONBUILDING APPLI-
CATIONS.
(a) IN GENERAL.—The Secretary of Defense and the
heads of other interested Federal agencies are authorized
to enter into up to 10 energy savings performance con-
tracts using procedures, established under subsection (b),
based on the procedures under title VIII of the National
Energy Conservation Policy Act (42 U.S.C. 8287 et seq.),
for the purpose of achieving energy or water savings, sec-
ondary savings, and benefits incidental to those purposes,
in nonbuilding applications. The payments to be made by
the Federal Government under such contracts shall not
exceed a total of $200,000,000 for all such contracts com-
bined.
(b) PROCEDURES.—The Secretary of Energy, in con-
sultation with the Administrator of General Services and
the Secretary of Defense, shall establish procedures based
on the procedures under title VIII of the National Energy
Conservation Policy Act (42 U.S.C. 8287 et seq.), for im-
plementing this section.
(c) DEFINITIONS.—In this section:
(1) NONBUILDING
APPLICATION.—The term
‘‘nonbuilding application’’ means—
(A) any class of vehicles, devices, or equip-
ment that are transportable under their own
power by land, sea, or air that consume energy
from any fuel source for the purpose of such
transportability, or to maintain a controlled en-
vironment within such vehicle, device, or equip-
ment; or
(B) any Federally owned equipment used
to generate electricity or transport water.
(2) SECONDARY
SAVINGS.—The term ‘‘sec-
ondary savings’’ means additional energy or cost
savings that are a direct consequence of the energy
or water savings that result from the financing and
implementation of the energy savings performance
contract, including, but not limited to, energy or cost
savings that result from a reduction in the need for
fuel delivery and logistical support, or the increased
efficiency in the production of electricity.
(d) REPORT.—Not later than 3 years after the date
of enactment of this section, the Secretary of Energy shall
report to Congress on the progress and results of the
projects funded pursuant to this section. Such report shall
include a description of projects undertaken; the energy,
water, and cost savings, secondary savings, and other ben-
efits that resulted from such projects; and recommenda-
tions on whether the pilot program should be extended,
expanded, or authorized permanently as a part of the pro-
gram authorized under title VIII of the National Energy
Conservation Policy Act (42 U.S.C. 8287 et seq.).
SEC. 107. VOLUNTARY COMMITMENTS TO REDUCE INDUS-
TRIAL ENERGY INTENSITY.
(a) VOLUNTARY AGREEMENTS.—The Secretary of
Energy is authorized to enter into voluntary agreements
with 1 or more persons in industrial sectors that consume
significant amounts of primary energy per unit of physical
output to reduce the energy intensity of their production
activities by a significant amount relative to improvements
in each sector in recent years.
(b) RECOGNITION.—The Secretary of Energy, in co-
operation with the Administrator of the Environmental
Protection Agency and other appropriate Federal agen-
cies, shall recognize and publicize the achievements of par-
ticipants in voluntary agreements under this section.
(c) DEFINITION.—In this section, the term ‘‘energy
intensity’’ means the primary energy consumed per unit
of physical output in an industrial process.
SEC. 108. ADVANCED BUILDING EFFICIENCY TESTBED.
(a) ESTABLISHMENT.—The Secretary of Energy, in
consultation with the Administrator of General Services,
shall establish an Advanced Building Efficiency Testbed
program for the development, testing, and demonstration
of advanced engineering systems, components, and mate-
rials to enable innovations in building technologies. The
program shall evaluate efficiency concepts for government
and industry buildings, and demonstrate the ability of
next generation buildings to support individual and orga-
nizational productivity and health (including by improving
indoor air quality) as well as flexibility and technological
change to improve environmental sustainability. Such pro-
gram shall complement and not duplicate existing national
programs.
(b) PARTICIPANTS.—The program established under
subsection (a) shall be led by a university with the ability
to combine the expertise from numerous academic fields
including, at a minimum, intelligent workplaces and ad-
vanced building systems and engineering, electrical and
computer engineering, computer science, architecture,
urban design, and environmental and mechanical engi-
neering. Such university shall partner with other univer-
sities and entities who have established programs and the
capability of advancing innovative building efficiency tech-
nologies.
(c) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to the Secretary of En-
ergy to carry out this section $6,000,000 for each of the
fiscal years 2004 through 2006, to remain available until
expended. For any fiscal year in which funds are expended
under this section, the Secretary shall provide 1⁄3 of the
total amount to the lead university described in subsection
(b), and provide the remaining 2⁄3 to the other participants
referred to in subsection (b) on an equal basis.
SEC. 109. FEDERAL BUILDING PERFORMANCE STANDARDS.
Section 305(a) of the Energy Conservation and Pro-
duction Act (42 U.S.C. 6834(a)) is amended—
(1) in paragraph (2)(A), by striking ‘‘CABO
Model Energy Code, 1992’’ and inserting ‘‘the 2003
International Energy Conservation Code’’; and
(2) by adding at the end the following:
‘‘(3) REVISED FEDERAL BUILDING ENERGY EFFI-
CIENCY PERFORMANCE STANDARDS.—
‘‘(A) IN GENERAL.—Not later than 1 year after
the date of enactment of this paragraph, the Sec-
retary of Energy shall establish, by rule, revised
Federal building energy efficiency performance
standards that require that—
‘‘(i) if life-cycle cost-effective, for new Fed-
eral buildings—
‘‘(I) such buildings be designed so as
to achieve energy consumption levels at
least 30 percent below those of the version
current as of the date of enactment of this
paragraph of the ASHRAE Standard or
the International Energy Conservation
Code, as appropriate; and
‘‘(II) sustainable design principles are
applied to the siting, design, and construc-
tion of all new and replacement buildings;
and
‘‘(ii) where water is used to achieve energy
efficiency, water conservation technologies shall
be applied to the extent they are life-cycle cost
effective.
‘‘(B) ADDITIONAL REVISIONS.—Not later than
1 year after the date of approval of each subsequent
revision of the ASHRAE Standard or the Inter-
national Energy Conservation Code, as appropriate,
the Secretary of Energy shall determine, based on
the cost-effectiveness of the requirements under the
amendments, whether the revised standards estab-
lished under this paragraph should be updated to re-
flect the amendments.
‘‘(C) STATEMENT
ON
COMPLIANCE
OF
NEW
BUILDINGS.—In the budget request of the Federal
agency for each fiscal year and each report sub-
mitted by the Federal agency under section 548(a)
of the National Energy Conservation Policy Act (42
U.S.C. 8258(a)), the head of each Federal agency
shall include—
‘‘(i) a list of all new Federal buildings
owned, operated, or controlled by the Federal
agency; and
‘‘(ii) a statement concerning whether the
Federal buildings meet or exceed the revised
standards established under this paragraph.’’.
SEC. 110. INCREASED USE OF RECOVERED MINERAL COM-
PONENT IN FEDERALLY FUNDED PROJECTS
INVOLVING PROCUREMENT OF CEMENT OR
CONCRETE.
(a) AMENDMENT.—Subtitle F of the Solid Waste
Disposal Act (42 U.S.C. 6961 et seq.) is amended by add-
ing at the end the following new section:
‘‘INCREASED USE OF RECOVERED MINERAL COMPONENT
IN FEDERALLY FUNDED PROJECTS INVOLVING PRO-
CUREMENT OF CEMENT OR CONCRETE
‘‘SEC. 6005. (a) DEFINITIONS.—In this section:
‘‘(1) AGENCY HEAD.—The term ‘agency head’
means—
‘‘(A) the Secretary of Transportation; and
‘‘(B) the head of each other Federal agen-
cy that on a regular basis procures, or provides
Federal funds to pay or assist in paying the
cost of procuring, material for cement or con-
crete projects.
‘‘(2) CEMENT
OR
CONCRETE
PROJECT.—The
term ‘cement or concrete project’ means a project
for the construction or maintenance of a highway or
other transportation facility or a Federal, State, or
local government building or other public facility
that—
‘‘(A) involves the procurement of cement
or concrete; and
‘‘(B) is carried out in whole or in part
using Federal funds.
‘‘(3) RECOVERED MINERAL COMPONENT.—The
term ‘recovered mineral component’ means—
‘‘(A) ground granulated blast furnace slag;
‘‘(B) coal combustion fly ash; and
‘‘(C) any other waste material or byprod-
uct recovered or diverted from solid waste that
the Administrator, in consultation with an
agency head, determines should be treated as
recovered mineral component under this section
for use in cement or concrete projects paid for,
in whole or in part, by the agency head.
‘‘(b) IMPLEMENTATION OF REQUIREMENTS.—
‘‘(1) IN GENERAL.—Not later than 1 year after
the date of enactment of this section, the Adminis-
trator and each agency head shall take such actions
as are necessary to implement fully all procurement
requirements and incentives in effect as of the date
of enactment of this section (including guidelines
under section 6002) that provide for the use of ce-
ment and concrete incorporating recovered mineral
component in cement or concrete projects.
‘‘(2) PRIORITY.—In carrying out paragraph (1)
an agency head shall give priority to achieving great-
er use of recovered mineral component in cement or
concrete projects for which recovered mineral compo-
nents historically have not been used or have been
used only minimally.
‘‘(3) CONFORMANCE.—The Administrator and
each agency head shall carry out this subsection in
accordance with section 6002.
‘‘(c) FULL IMPLEMENTATION STUDY.—
‘‘(1) IN GENERAL.—The Administrator, in co-
operation with the Secretary of Transportation and
the Secretary of Energy, shall conduct a study to de-
termine the extent to which current procurement re-
quirements, when fully implemented in accordance
with subsection (b), may realize energy savings and
environmental benefits attainable with substitution
of recovered mineral component in cement used in
cement or concrete projects.
‘‘(2) MATTERS TO BE ADDRESSED.—The study
shall—
‘‘(A) quantify the extent to which recov-
ered mineral components are being substituted
for Portland cement, particularly as a result of
current procurement requirements, and the en-
ergy savings and environmental benefits associ-
ated with that substitution;
‘‘(B) identify all barriers in procurement
requirements to greater realization of energy
savings and environmental benefits, including
barriers resulting from exceptions from current
law; and
‘‘(C)(i) identify potential mechanisms to
achieve greater substitution of recovered min-
eral component in types of cement or concrete
projects for which recovered mineral compo-
nents historically have not been used or have
been used only minimally;
‘‘(ii) evaluate the feasibility of establishing
guidelines or standards for optimized substi-
tution rates of recovered mineral component in
those cement or concrete projects; and
‘‘(iii) identify any potential environmental
or economic effects that may result from great-
er substitution of recovered mineral component
in those cement or concrete projects.
‘‘(3) REPORT.—Not later than 30 months after
the date of enactment of this section, the Adminis-
trator shall submit to Congress a report on the
study.
‘‘(d) ADDITIONAL PROCUREMENT REQUIREMENTS.—
Unless the study conducted under subsection (c) identifies
any effects or other problems described in subsection
(c)(2)(C)(iii) that warrant further review or delay, the Ad-
ministrator and each agency head shall, not later than 1
year after the release of the report in accordance with sub-
section (c)(3), take additional actions authorized under
this Act to establish procurement requirements and incen-
tives that provide for the use of cement and concrete with
increased substitution of recovered mineral component in
the construction and maintenance of cement or concrete
projects, so as to—
‘‘(1) realize more fully the energy savings and
environmental benefits associated with increased
substitution; and
‘‘(2) eliminate barriers identified under sub-
section (c).
‘‘(e) EFFECT OF SECTION.—Nothing in this section
affects the requirements of section 6002 (including the
guidelines and specifications for implementing those re-
quirements).’’.
(b) TABLE OF CONTENTS AMENDMENT.—The table
of contents of the Solid Waste Disposal Act is amended
by adding after the item relating to section 6004 the fol-
lowing new item:
‘‘Sec. 6005. Increased use of recovered mineral component in federally funded
projects involving procurement of cement or concrete.’’.
Subtitle B—Energy Assistance and
State Programs
SEC. 121. LOW INCOME HOME ENERGY ASSISTANCE PRO-
GRAM.
Section 2602(b) of the Low-Income Home Energy
Assistance Act of 1981 (42 U.S.C. 8621(b)) is amended
by striking ‘‘and $2,000,000,000 for each of fiscal years
2002 through 2004’’ and inserting ‘‘$2,000,000,000 for
fiscal years 2002 and 2003, and $3,400,000,000 for each
of fiscal years 2004 through 2006’’.
SEC. 122. WEATHERIZATION ASSISTANCE.
Section 422 of the Energy Conservation and Produc-
tion Act (42 U.S.C. 6872) is amended by striking ‘‘for
fiscal years 1999 through 2003 such sums as may be nec-
essary’’ and inserting ‘‘$325,000,000 for fiscal year 2004,
$400,000,000 for fiscal year 2005, and $500,000,000 for
fiscal year 2006’’.
SEC. 123. STATE ENERGY PROGRAMS.
(a) STATE ENERGY CONSERVATION PLANS.—Section
362 of the Energy Policy and Conservation Act (42 U.S.C.
6322) is amended by inserting at the end the following
new subsection:
‘‘(g) The Secretary shall, at least once every 3 years,
invite the Governor of each State to review and, if nec-
essary, revise the energy conservation plan of such State
submitted under subsection (b) or (e). Such reviews should
consider the energy conservation plans of other States
within the region, and identify opportunities and actions
carried out in pursuit of common energy conservation
goals.’’.
(b) STATE ENERGY EFFICIENCY GOALS.—Section
364 of the Energy Policy and Conservation Act (42 U.S.C.
6324) is amended to read as follows:
‘‘STATE ENERGY EFFICIENCY GOALS
‘‘SEC. 364. Each State energy conservation plan with
respect to which assistance is made available under this
part on or after the date of enactment of the Energy Pol-
icy Act of 2003 shall contain a goal, consisting of an im-
provement of 25 percent or more in the efficiency of use
of energy in the State concerned in calendar year 2010
as compared to calendar year 1990, and may contain in-
terim goals.’’.
(c) AUTHORIZATION OF APPROPRIATIONS.—Section
365(f) of the Energy Policy and Conservation Act (42
U.S.C. 6325(f)) is amended by striking ‘‘for fiscal years
1999 through 2003 such sums as may be necessary’’ and
inserting ‘‘$100,000,000 for each of the fiscal years 2004
and 2005 and $125,000,000 for fiscal year 2006’’.
SEC. 124. ENERGY EFFICIENT APPLIANCE REBATE PRO-
GRAMS.
(a) DEFINITIONS.—In this section:
(1) ELIGIBLE
STATE.—The term ‘‘eligible
State’’ means a State that meets the requirements
of subsection (b).
(2) ENERGY STAR PROGRAM.—The term ‘‘En-
ergy Star program’’ means the program established
by section 324A of the Energy Policy and Conserva-
tion Act.
(3) RESIDENTIAL
ENERGY
STAR
PRODUCT.—
The term ‘‘residential Energy Star product’’ means
a product for a residence that is rated for energy ef-
ficiency under the Energy Star program.
(4) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of Energy.
(5) STATE ENERGY OFFICE.—The term ‘‘State
energy office’’ means the State agency responsible
for developing State energy conservation plans under
section 362 of the Energy Policy and Conservation
Act (42 U.S.C. 6322).
(6) STATE PROGRAM.—The term ‘‘State pro-
gram’’ means a State energy efficient appliance re-
bate program described in subsection (b)(1).
(b) ELIGIBLE STATES.—A State shall be eligible to
receive an allocation under subsection (c) if the State—
(1) establishes (or has established) a State en-
ergy efficient appliance rebate program to provide
rebates to residential consumers for the purchase of
residential Energy Star products to replace used ap-
pliances of the same type;
(2) submits an application for the allocation at
such time, in such form, and containing such infor-
mation as the Secretary may require; and
(3) provides assurances satisfactory to the Sec-
retary that the State will use the allocation to sup-
plement, but not supplant, funds made available to
carry out the State program.
(c) AMOUNT OF ALLOCATIONS.—
(1) IN GENERAL.—Subject to paragraph (2),
for each fiscal year, the Secretary shall allocate to
the State energy office of each eligible State to carry
out subsection (d) an amount equal to the product
obtained by multiplying the amount made available
under subsection (f) for the fiscal year by the ratio
that the population of the State in the most recent
calendar year for which data are available bears to
the total population of all eligible States in that cal-
endar year.
(2) MINIMUM ALLOCATIONS.—For each fiscal
year, the amounts allocated under this subsection
shall be adjusted proportionately so that no eligible
State is allocated a sum that is less than an amount
determined by the Secretary.
(d) USE OF ALLOCATED FUNDS.—The allocation to
a State energy office under subsection (c) may be used
to pay up to 50 percent of the cost of establishing and
carrying out a State program.
(e) ISSUANCE OF REBATES.—Rebates may be pro-
vided to residential consumers that meet the requirements
of the State program. The amount of a rebate shall be
determined by the State energy office, taking into
consideration—
(1) the amount of the allocation to the State
energy office under subsection (c);
(2) the amount of any Federal or State tax in-
centive available for the purchase of the residential
Energy Star product; and
(3) the difference between the cost of the resi-
dential Energy Star product and the cost of an ap-
pliance that is not a residential Energy Star prod-
uct, but is of the same type as, and is the nearest
capacity, performance, and other relevant character-
istics (as determined by the State energy office) to,
the residential Energy Star product.
(f) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to the Secretary to carry
out this section $50,000,000 for each of the fiscal years
2004 through 2008.
SEC. 125. ENERGY EFFICIENT PUBLIC BUILDINGS.
(a) GRANTS.—The Secretary of Energy may make
grants to the State agency responsible for developing State
energy conservation plans under section 362 of the Energy
Policy and Conservation Act (42 U.S.C. 6322), or, if no
such agency exists, a State agency designated by the Gov-
ernor of the State, to assist units of local government in
the State in improving the energy efficiency of public
buildings and facilities—
(1) through construction of new energy efficient
public buildings that use at least 30 percent less en-
ergy than a comparable public building constructed
in compliance with standards prescribed in the most
recent version of the International Energy Conserva-
tion Code, or a similar State code intended to
achieve substantially equivalent efficiency levels; or
(2) through renovation of existing public build-
ings to achieve reductions in energy use of at least
30 percent as compared to the baseline energy use
in such buildings prior to renovation, assuming a 3-
year, weather-normalized average for calculating
such baseline.
(b) ADMINISTRATION.—State energy offices receiving
grants under this section shall—
(1) maintain such records and evidence of com-
pliance as the Secretary may require; and
(2) develop and distribute information and ma-
terials and conduct programs to provide technical
services and assistance to encourage planning, fi-
nancing, and design of energy efficient public build-
ings by units of local government.
(c) AUTHORIZATION OF APPROPRIATIONS.—For the
purposes of this section, there are authorized to be appro-
priated to the Secretary of Energy $30,000,000 for each
of fiscal years 2004 through 2008. Not more than 10 per-
cent of appropriated funds shall be used for administra-
tion.
SEC. 126. LOW INCOME COMMUNITY ENERGY EFFICIENCY
PILOT PROGRAM.
(a) GRANTS.—The Secretary of Energy is authorized
to make grants to units of local government, private, non-
profit community development organizations, and Indian
tribe economic development entities to improve energy effi-
ciency; identify and develop alternative, renewable, and
distributed energy supplies; and increase energy conserva-
tion in low income rural and urban communities.
(b) PURPOSE OF GRANTS.—The Secretary may make
grants on a competitive basis for—
(1) investments that develop alternative, renew-
able, and distributed energy supplies;
(2) energy efficiency projects and energy con-
servation programs;
(3) studies and other activities that improve en-
ergy efficiency in low income rural and urban com-
munities;
(4) planning and development assistance for in-
creasing the energy efficiency of buildings and facili-
ties; and
(5) technical and financial assistance to local
government and private entities on developing new
renewable and distributed sources of power or com-
bined heat and power generation.
(c) DEFINITION.—For purposes of this section, the
term ‘‘Indian tribe’’ means any Indian tribe, band, nation,
or other organized group or community, including any
Alaskan Native village or regional or village corporation
as defined in or established pursuant to the Alaska Native
Claims Settlement Act (43 U.S.C. 1601 et seq.), that is
recognized as eligible for the special programs and services
provided by the United States to Indians because of their
status as Indians.
(d) AUTHORIZATION OF APPROPRIATIONS.—For the
purposes of this section there are authorized to be appro-
priated to the Secretary of Energy $20,000,000 for each
of fiscal years 2004 through 2006.
Subtitle C—Energy Efficient
Products
SEC. 131. ENERGY STAR PROGRAM.
(a) AMENDMENT.—The Energy Policy and Conserva-
tion Act (42 U.S.C. 6201 et seq.) is amended by inserting
the following after section 324:
‘‘SEC. 324A. ENERGY STAR PROGRAM.
‘‘There is established at the Department of Energy
and the Environmental Protection Agency a voluntary
program to identify and promote energy-efficient products
and buildings in order to reduce energy consumption, im-
prove energy security, and reduce pollution through vol-
untary labeling of or other forms of communication about
products and buildings that meet the highest energy effi-
ciency standards. Responsibilities under the program shall
be divided between the Department of Energy and the En-
vironmental Protection Agency consistent with the terms
of agreements between the 2 agencies. The Administrator
and the Secretary shall—
‘‘(1) promote Energy Star compliant tech-
nologies as the preferred technologies in the market-
place for achieving energy efficiency and to reduce
pollution;
‘‘(2) work to enhance public awareness of the
Energy Star label, including special outreach to
small businesses;
‘‘(3) preserve the integrity of the Energy Star
label;
‘‘(4) solicit comments from interested parties
prior to establishing or revising an Energy Star
product category, specification, or criterion (or effec-
tive dates for any of the foregoing);
‘‘(5) upon adoption of a new or revised product
category, specification, or criterion, provide reason-
able notice to interested parties of any changes (in-
cluding effective dates) in product categories, speci-
fications, or criteria along with an explanation of
such changes and, where appropriate, responses to
comments submitted by interested parties; and
‘‘(6) provide appropriate lead time (which shall
be 9 months, unless the Agency or Department de-
termines otherwise) prior to the effective date for a
new or a significant revision to a product category,
specification, or criterion, taking into account the
timing requirements of the manufacturing, product
marketing, and distribution process for the specific
product addressed.’’.
(b) TABLE OF CONTENTS AMENDMENT.—The table
of contents of the Energy Policy and Conservation Act is
amended by inserting after the item relating to section
324 the following new item:
‘‘Sec. 324A. Energy Star program.’’.
SEC. 132. HVAC MAINTENANCE CONSUMER EDUCATION
PROGRAM.
Section 337 of the Energy Policy and Conservation
Act (42 U.S.C. 6307) is amended by adding at the end
the following:
‘‘(c) HVAC MAINTENANCE.—For the purpose of en-
suring that installed air conditioning and heating systems
operate at their maximum rated efficiency levels, the Sec-
retary shall, not later than 180 days after the date of en-
actment of this subsection, carry out a program to educate
homeowners and small business owners concerning the en-
ergy savings resulting from properly conducted mainte-
nance of air conditioning, heating, and ventilating sys-
tems. The Secretary shall carry out the program in a cost-
shared manner in cooperation with the Administrator of
the Environmental Protection Agency and such other enti-
ties as the Secretary considers appropriate, including in-
dustry trade associations, industry members, and energy
efficiency organizations.
‘‘(d) SMALL BUSINESS EDUCATION
AND ASSIST-
ANCE.—The Administrator of the Small Business Admin-
istration, in consultation with the Secretary of Energy and
the Administrator of the Environmental Protection Agen-
cy, shall develop and coordinate a Government-wide pro-
gram, building on the existing Energy Star for Small
Business Program, to assist small businesses to become
more energy efficient, understand the cost savings obtain-
able through efficiencies, and identify financing options
for energy efficiency upgrades. The Secretary and the Ad-
ministrator of the Small Business Administration shall
make the program information available directly to small
businesses and through other Federal agencies, including
the Federal Emergency Management Program and the
Department of Agriculture.’’.
SEC. 133. ENERGY CONSERVATION STANDARDS FOR ADDI-
TIONAL PRODUCTS.
(a) DEFINITIONS.—Section 321 of the Energy Policy
and Conservation Act (42 U.S.C. 6291) is amended—
(1) in paragraph (30)(S), by striking the period
and adding at the end the following: ‘‘but does not
include any lamp specifically designed to be used for
special purpose applications and that is unlikely to
be used in general purpose applications such as
those described in subparagraph (D), and also does
not include any lamp not described in subparagraph
(D) that is excluded by the Secretary, by rule, be-
cause the lamp is designed for special applications
and is unlikely to be used in general purpose appli-
cations.’’; and
(2) by adding at the end the following:
‘‘(32) The term ‘battery charger’ means a de-
vice that charges batteries for consumer products
and includes battery chargers embedded in other
consumer products.
‘‘(33) The term ‘commercial refrigerators,
freezers, and refrigerator-freezers’ means refrig-
erators, freezers, or refrigerator-freezers that—
‘‘(A) are not consumer products regulated
under this Act; and
‘‘(B) incorporate most components involved
in the vapor-compression cycle and the refrig-
erated compartment in a single package.
‘‘(34) The term ‘external power supply’ means
an external power supply circuit that is used to con-
vert household electric current into either DC cur-
rent or lower-voltage AC current to operate a con-
sumer product.
‘‘(35) The term ‘illuminated exit sign’ means a
sign that—
‘‘(A) is designed to be permanently fixed in
place to identify an exit; and
‘‘(B) consists of an electrically powered in-
tegral light source that illuminates the legend
‘EXIT’ and any directional indicators and pro-
vides contrast between the legend, any direc-
tional indicators, and the background.
‘‘(36)(A) Except as provided in subparagraph
(B), the term ‘distribution transformer’ means a
transformer that—
‘‘(i) has an input voltage of 34.5 kilovolts
or less;
‘‘(ii) has an output voltage of 600 volts or
less; and
‘‘(iii) is rated for operation at a frequency
of 60 Hertz.
‘‘(B) The term ‘distribution transformer’ does
not include—
‘‘(i) transformers with multiple voltage
taps, with the highest voltage tap equaling at
least 20 percent more than the lowest voltage
tap;
‘‘(ii) transformers, such as those commonly
known as drive transformers, rectifier trans-
formers, 
auto-transformers, 
Uninterruptible
Power System transformers, impedance trans-
formers, harmonic transformers, regulating
transformers, sealed and nonventilating trans-
formers, machine tool transformers, welding
transformers, grounding transformers, or test-
ing transformers, that are designed to be used
in a special purpose application and are unlikely
to be used in general purpose applications; or
‘‘(iii) any transformer not listed in clause
(ii) that is excluded by the Secretary by rule
because—
‘‘(I) the transformer is designed for a
special application;
‘‘(II) the transformer is unlikely to be
used in general purpose applications; and
‘‘(III) the application of standards to
the transformer would not result in signifi-
cant energy savings.
‘‘(37) The term ‘low-voltage dry-type distribu-
tion transformer’ means a distribution transformer
that—
‘‘(A) has an input voltage of 600 volts or
less;
‘‘(B) is air-cooled; and
‘‘(C) does not use oil as a coolant.
‘‘(38) The term ‘standby mode’ means the low-
est power consumption mode that—
‘‘(A) cannot be switched off or influenced
by the user; and
‘‘(B) may persist for an indefinite time
when an appliance is connected to the main
electricity supply and used in accordance with
the manufacturer’s instructions,
as defined on an individual product basis by the Sec-
retary.
‘‘(39) The term ‘torchiere’ means a portable
electric lamp with a reflector bowl that directs light
upward so as to give indirect illumination.
‘‘(40) The term ‘traffic signal module’ means a
standard 8-inch (200mm) or 12-inch (300mm) traf-
fic signal indication, consisting of a light source, a
lens, and all other parts necessary for operation,
that communicates movement messages to drivers
through red, amber, and green colors.
‘‘(41) The term ‘transformer’ means a device
consisting of 2 or more coils of insulated wire that
transfers alternating current by electromagnetic in-
duction from 1 coil to another to change the original
voltage or current value.
‘‘(42) The term ‘unit heater’ means a self-con-
tained fan-type heater designed to be installed with-
in the heated space, except that such term does not
include a warm air furnace.’’.
(b) TEST PROCEDURES.—Section 323 of the Energy
Policy and Conservation Act (42 U.S.C. 6293) is
amended—
(1) in subsection (b), by adding at the end the
following:
‘‘(9) Test procedures for illuminated exit signs
shall be based on the test method used under
Version 2.0 of the Energy Star program of the Envi-
ronmental Protection Agency for illuminated exit
signs.
‘‘(10) Test procedures for distribution trans-
formers and low voltage dry-type distribution trans-
formers shall be based on the ‘Standard Test Meth-
od for Measuring the Energy Consumption of Dis-
tribution Transformers’ prescribed by the National
Electrical Manufacturers Association (NEMA TP 2–
1998). The Secretary may review and revise this test
procedure. For purposes of section 346(a), this test
procedure shall be deemed to be testing require-
ments prescribed by the Secretary under section
346(a)(1) for distribution transformers for which the
Secretary makes a determination that energy con-
servation standards would be technologically feasible
and economically justified, and would result in sig-
nificant energy savings.
‘‘(11) Test procedures for traffic signal modules
shall be based on the test method used under the
Energy Star program of the Environmental Protec-
tion Agency for traffic signal modules, as in effect
on the date of enactment of this paragraph.
‘‘(12) Test procedures for medium base com-
pact fluorescent lamps shall be based on the test
methods used under the August 9, 2001, version of
the Energy Star program of the Environmental Pro-
tection Agency and Department of Energy for com-
pact fluorescent lamps. Covered products shall meet
all test requirements for regulated parameters in
section 325(bb). However, covered products may be
marketed prior to completion of lamp life and lumen
maintenance at 40 percent of rated life testing pro-
vided manufacturers document engineering pre-
dictions and analysis that support expected attain-
ment of lumen maintenance at 40 percent rated life
and lamp life time.’’; and
(2) by adding at the end the following:
‘‘(f) ADDITIONAL
CONSUMER
AND
COMMERCIAL
PRODUCTS.—The Secretary shall, not later than 24
months after the date of enactment of this subsection, pre-
scribe testing requirements for suspended ceiling fans, re-
frigerated bottled or canned beverage vending machines,
and commercial refrigerators, freezers, and refrigerator-
freezers. Such testing requirements shall be based on ex-
isting test procedures used in industry to the extent prac-
tical and reasonable. In the case of suspended ceiling fans,
such test procedures shall include efficiency at both max-
imum output and at an output no more than 50 percent
of the maximum output.’’.
(c) NEW STANDARDS.—Section 325 of the Energy
Policy and Conservation Act (42 U.S.C. 6295) is amended
by adding at the end the following:
‘‘(u) BATTERY CHARGER AND EXTERNAL POWER
SUPPLY ELECTRIC ENERGY CONSUMPTION.—
‘‘(1) INITIAL RULEMAKING.—(A) The Secretary
shall, within 18 months after the date of enactment
of this subsection, prescribe by notice and comment,
definitions and test procedures for the power use of
battery chargers and external power supplies. In es-
tablishing these test procedures, the Secretary shall
consider, among other factors, existing definitions
and test procedures used for measuring energy con-
sumption in standby mode and other modes and as-
sess the current and projected future market for
battery chargers and external power supplies. This
assessment shall include estimates of the significance
of potential energy savings from technical improve-
ments to these products and suggested product
classes for standards. Prior to the end of this time
period, the Secretary shall hold a scoping workshop
to discuss and receive comments on plans for devel-
oping energy conservation standards for energy use
for these products.
‘‘(B) The Secretary shall, within 3 years after
the date of enactment of this subsection, issue a
final rule that determines whether energy conserva-
tion standards shall be issued for battery chargers
and external power supplies or classes thereof. For
each product class, any such standards shall be set
at the lowest level of energy use that—
‘‘(i) meets the criteria and procedures of
subsections (o), (p), (q), (r), (s), and (t); and
‘‘(ii) will result in significant overall an-
nual energy savings, considering both standby
mode and other operating modes.
‘‘(2) REVIEW
OF
STANDBY
ENERGY
USE
IN
COVERED PRODUCTS.—In determining pursuant to
section 323 whether test procedures and energy con-
servation standards pursuant to this section should
be revised, the Secretary shall consider, for covered
products that are major sources of standby mode en-
ergy consumption, whether to incorporate standby
mode into such test procedures and energy conserva-
tion standards, taking into account, among other
relevant factors, standby mode power consumption
compared to overall product energy consumption.
‘‘(3) RULEMAKING.—The Secretary shall not
propose a standard under this section unless the
Secretary has issued applicable test procedures for
each product pursuant to section 323.
‘‘(4) EFFECTIVE DATE.—Any standard issued
under this subsection shall be applicable to products
manufactured or imported 3 years after the date of
issuance.
‘‘(5) VOLUNTARY
PROGRAMS.—The Secretary
and the Administrator shall collaborate and develop
programs, including programs pursuant to section
324A (relating to Energy Star Programs) and other
voluntary industry agreements or codes of conduct,
that are designed to reduce standby mode energy
use.
‘‘(v) SUSPENDED CEILING FANS, VENDING MA-
CHINES, AND COMMERCIAL REFRIGERATORS, FREEZERS,
AND REFRIGERATOR-FREEZERS.—The Secretary shall not
later than 36 months after the date on which testing re-
quirements are prescribed by the Secretary pursuant to
section 323(f), prescribe, by rule, energy conservation
standards for suspended ceiling fans, refrigerated bottled
or canned beverage vending machines, and commercial re-
frigerators, freezers, and refrigerator-freezers. In estab-
lishing standards under this subsection, the Secretary
shall use the criteria and procedures contained in sub-
sections (o) and (p). Any standard prescribed under this
subsection shall apply to products manufactured 3 years
after the date of publication of a final rule establishing
such standard.
‘‘(w) ILLUMINATED EXIT SIGNS.—Illuminated exit
signs manufactured on or after January 1, 2005, shall
meet the Version 2.0 Energy Star Program performance
requirements for illuminated exit signs prescribed by the
Environmental Protection Agency.
‘‘(x) TORCHIERES.—Torchieres manufactured on or
after January 1, 2005—
‘‘(1) shall consume not more than 190 watts of
power; and
‘‘(2) shall not be capable of operating with
lamps that total more than 190 watts.
‘‘(y) LOW
VOLTAGE
DRY-TYPE
DISTRIBUTION
TRANSFORMERS.—The efficiency of low voltage dry-type
distribution transformers manufactured on or after Janu-
ary 1, 2005, shall be the Class I Efficiency Levels for dis-
tribution transformers specified in Table 4–2 of the ‘Guide
for Determining Energy Efficiency for Distribution Trans-
formers’ published by the National Electrical Manufactur-
ers Association (NEMA TP–1–2002).
‘‘(z) TRAFFIC SIGNAL MODULES.—Traffic signal
modules manufactured on or after January 1, 2006, shall
meet the performance requirements used under the En-
ergy Star program of the Environmental Protection Agen-
cy for traffic signals, as in effect on the date of enactment
of this subsection, and shall be installed with compatible,
electrically connected signal control interface devices and
conflict monitoring systems.
‘‘(aa) UNIT HEATERS.—Unit heaters manufactured
on or after the date that is 3 years after the date of enact-
ment of this subsection shall be equipped with an intermit-
tent ignition device and shall have either power venting
or an automatic flue damper.
‘‘(bb) MEDIUM
BASE
COMPACT
FLUORESCENT
LAMPS.—Bare lamp and covered lamp (no reflector) me-
dium base compact fluorescent lamps manufactured on or
after January 1, 2005, shall meet the following require-
ments prescribed by the August 9, 2001, version of the
Energy Star Program Requirements for Compact Fluores-
cent Lamps, Energy Star Eligibility Criteria, Energy-Effi-
ciency Specification issued by the Environmental Protec-
tion Agency and Department of Energy: minimum initial
efficacy; lumen maintenance at 1000 hours; lumen mainte-
nance at 40 percent of rated life; rapid cycle stress test;
and lamp life. The Secretary may, by rule, establish re-
quirements for color quality (CRI); power factor; oper-
ating frequency; and maximum allowable start time based
on the requirements prescribed by the August 9, 2001,
version of the Energy Star Program Requirements for
Compact Fluorescent Lamps. The Secretary may, by rule,
revise these requirements or establish other requirements
considering energy savings, cost effectiveness, and con-
sumer satisfaction.
‘‘(cc) EFFECTIVE DATE.—Section 327 shall apply—
‘‘(1) to products for which standards are to be
established under subsections (u) and (v) on the
date on which a final rule is issued by the Depart-
ment of Energy, except that any State or local
standards prescribed or enacted for any such prod-
uct prior to the date on which such final rule is
issued shall not be preempted until the standard es-
tablished under subsection (u) or (v) for that prod-
uct takes effect; and
‘‘(2) to products for which standards are estab-
lished under subsections (w) through (bb) on the
date of enactment of those subsections, except that
any State or local standards prescribed or enacted
prior to the date of enactment of those subsections
shall not be preempted until the standards estab-
lished under subsections (w) through (bb) take ef-
fect.’’.
(d) 
RESIDENTIAL
FURNACE
FANS.—Section
325(f)(3) of the Energy Policy and Conservation Act (42
U.S.C. 6295(f)(3)) is amended by adding the following
new subparagraph at the end:
‘‘(D) Notwithstanding any provision of this Act, the
Secretary may consider, and prescribe, if the requirements
of subsection (o) of this section are met, energy efficiency
or energy use standards for electricity used for purposes
of circulating air through duct work.’’.
SEC. 134. ENERGY LABELING.
(a) RULEMAKING ON EFFECTIVENESS OF CONSUMER
PRODUCT LABELING.—Section 324(a)(2) of the Energy
Policy and Conservation Act (42 U.S.C. 6294(a)(2)) is
amended by adding at the end the following:
‘‘(F) Not later than 3 months after the date of enact-
ment of this subparagraph, the Commission shall initiate
a rulemaking to consider the effectiveness of the current
consumer products labeling program in assisting con-
sumers in making purchasing decisions and improving en-
ergy efficiency and to consider changes to the labeling
rules that would improve the effectiveness of consumer
product labels. Such rulemaking shall be completed not
later than 2 years after the date of enactment of this sub-
paragraph.’’.
(b) RULEMAKING ON LABELING FOR ADDITIONAL
PRODUCTS.—Section 324(a) of the Energy Policy and
Conservation Act (42 U.S.C. 6294(a)) is further amended
by adding at the end the following:
‘‘(5) The Secretary or the Commission, as appro-
priate, may, for covered products referred to in sub-
sections (u) through (aa) of section 325, prescribe, by rule,
pursuant to this section, labeling requirements for such
products after a test procedure has been set pursuant to
section 323. In the case of products to which TP–1 stand-
ards under section 325(y) apply, labeling requirements
shall be based on the ‘Standard for the Labeling of Dis-
tribution Transformer Efficiency’ prescribed by the Na-
tional Electrical Manufacturers Association (NEMA TP–
3) as in effect upon the date of enactment of this para-
graph.’’.
Subtitle D—Public Housing
SEC. 141. CAPACITY BUILDING FOR ENERGY-EFFICIENT, AF-
FORDABLE HOUSING.
Section 4(b) of the HUD Demonstration Act of 1993
(42 U.S.C. 9816 note) is amended—
(1) in paragraph (1), by inserting before the
semicolon at the end the following: ‘‘, including ca-
pabilities regarding the provision of energy efficient,
affordable housing and residential energy conserva-
tion measures’’; and
(2) in paragraph (2), by inserting before the
semicolon the following: ‘‘, including such activities
relating to the provision of energy efficient, afford-
able housing and residential energy conservation
measures that benefit low-income families’’.
SEC. 142. INCREASE OF CDBG PUBLIC SERVICES CAP FOR
ENERGY CONSERVATION AND EFFICIENCY
ACTIVITIES.
Section 105(a)(8) of the Housing and Community
Development Act of 1974 (42 U.S.C. 5305(a)(8)) is
amended—
(1) by inserting ‘‘or efficiency’’ after ‘‘energy
conservation’’;
(2) by striking ‘‘, and except that’’ and insert-
ing ‘‘; except that’’; and
(3) by inserting before the semicolon at the end
the following: ‘‘; and except that each percentage
limitation under this paragraph on the amount of
assistance provided under this title that may be used
for the provision of public services is hereby in-
creased by 10 percent, but such percentage increase
may be used only for the provision of public services
concerning energy conservation or efficiency’’.
SEC. 143. FHA MORTGAGE INSURANCE INCENTIVES FOR
ENERGY EFFICIENT HOUSING.
(a) SINGLE FAMILY HOUSING MORTGAGE INSUR-
ANCE.—Section 203(b)(2) of the National Housing Act
(12 U.S.C. 1709(b)(2)) is amended, in the first undesig-
nated paragraph beginning after subparagraph (B)(ii)(IV)
(relating to solar energy systems), by striking ‘‘20 per-
cent’’ and inserting ‘‘30 percent’’.
(b) MULTIFAMILY
HOUSING
MORTGAGE
INSUR-
ANCE.—Section 207(c) of the National Housing Act (12
U.S.C. 1713(c)) is amended, in the last undesignated
paragraph beginning after paragraph (3) (relating to solar
energy systems and residential energy conservation meas-
ures), by striking ‘‘20 percent’’ and inserting ‘‘30 per-
cent’’.
(c) COOPERATIVE
HOUSING
MORTGAGE
INSUR-
ANCE.—Section 213(p) of the National Housing Act (12
U.S.C. 1715e(p)) is amended by striking ‘‘20 per centum’’
and inserting ‘‘30 percent’’.
(d) REHABILITATION
AND NEIGHBORHOOD CON-
SERVATION HOUSING MORTGAGE INSURANCE.—Section
220(d)(3)(B)(iii)(IV) of the National Housing Act (12
U.S.C. 1715k(d)(3)(B)(iii)(IV)) is amended—
(1) by striking ‘‘with respect to rehabilitation
projects involving not more than five family units,’’;
and
(2) by striking ‘‘20 per centum’’ and inserting
‘‘30 percent’’.
(e) LOW-INCOME MULTIFAMILY HOUSING MORT-
GAGE INSURANCE.—Section 221(k) of the National Hous-
ing Act (12 U.S.C. 1715l(k)) is amended by striking ‘‘20
per centum’’ and inserting ‘‘30 percent’’.
(f) ELDERLY HOUSING MORTGAGE INSURANCE.—
Section 231(c)(2)(C) of the National Housing Act (12
U.S.C. 1715v(c)(2)(C)) is amended by striking ‘‘20 per
centum’’ and inserting ‘‘30 percent’’.
(g) CONDOMINIUM
HOUSING
MORTGAGE
INSUR-
ANCE.—Section 234(j) of the National Housing Act (12
U.S.C. 1715y(j)) is amended by striking ‘‘20 per centum’’
and inserting ‘‘30 percent’’.
SEC. 144. PUBLIC HOUSING CAPITAL FUND.
Section 9 of the United States Housing Act of 1937
(42 U.S.C. 1437g) is amended—
(1) in subsection (d)(1)—
(A) in subparagraph (I), by striking ‘‘and’’
at the end;
(B) in subparagraph (J), by striking the
period at the end and inserting a semicolon;
and
(C) by adding at the end the following new
subparagraphs:
‘‘(K) improvement of energy and water-use
efficiency by installing fixtures and fittings that
conform to the American Society of Mechanical
Engineers/American National Standards Insti-
tute 
standards 
A112.19.2–1998 
and
A112.18.1–2000, or any revision thereto, appli-
cable at the time of installation, and by increas-
ing energy efficiency and water conservation by
such other means as the Secretary determines
are appropriate; and
‘‘(L) integrated utility management and
capital planning to maximize energy conserva-
tion and efficiency measures.’’; and
(2) in subsection (e)(2)(C)—
(A) by striking ‘‘The’’ and inserting the
following:
‘‘(i) IN GENERAL.—The’’; and
(B) by adding at the end the following:
‘‘(ii) THIRD
PARTY
CONTRACTS.—
Contracts described in clause (i) may in-
clude contracts for equipment conversions
to less costly utility sources, projects with
resident-paid utilities, and adjustments to
frozen base year consumption, including
systems repaired to meet applicable build-
ing and safety codes and adjustments for
occupancy rates increased by rehabilita-
tion.
‘‘(iii) TERM OF CONTRACT.—The total
term of a contract described in clause (i)
shall not exceed 20 years to allow longer
payback periods for retrofits, including
windows, heating system replacements,
wall insulation, site-based generation, ad-
vanced energy savings technologies, includ-
ing renewable energy generation, and other
such retrofits.’’.
SEC. 145. GRANTS FOR ENERGY-CONSERVING IMPROVE-
MENTS FOR ASSISTED HOUSING.
Section 251(b)(1) of the National Energy Conserva-
tion Policy Act (42 U.S.C. 8231(1)) is amended—
(1) by striking ‘‘financed with loans’’ and in-
serting ‘‘assisted’’;
(2) by inserting after ‘‘1959,’’ the following:
‘‘which are eligible multifamily housing projects (as
such term is defined in section 512 of the Multi-
family Assisted Housing Reform and Affordability
Act of 1997 (42 U.S.C. 1437f note)) and are subject
to mortgage restructuring and rental assistance suf-
ficiency plans under such Act,’’; and
(3) by inserting after the period at the end of
the first sentence the following new sentence: ‘‘Such
improvements may also include the installation of
energy and water conserving fixtures and fittings
that conform to the American Society of Mechanical
Engineers/American National Standards Institute
standards A112.19.2–1998 and A112.18.1–2000, or
any revision thereto, applicable at the time of instal-
lation.’’.
SEC. 146. NORTH AMERICAN DEVELOPMENT BANK.
Part 2 of subtitle D of title V of the North American
Free Trade Agreement Implementation Act (22 U.S.C.
290m–290m-3) is amended by adding at the end the fol-
lowing:
‘‘SEC. 545. SUPPORT FOR CERTAIN ENERGY POLICIES.
‘‘Consistent with the focus of the Bank’s Charter on
environmental infrastructure projects, the Board members
representing the United States should use their voice and
vote to encourage the Bank to finance projects related to
clean and efficient energy, including energy conservation,
that prevent, control, or reduce environmental pollutants
or contaminants.’’.
SEC. 147. ENERGY-EFFICIENT APPLIANCES.
In purchasing appliances, a public housing agency
shall purchase energy-efficient appliances that are Energy
Star products or FEMP-designated products, as such
terms are defined in section 553 of the National Energy
Conservation Policy Act (as amended by this title), unless
the purchase of energy-efficient appliances is not cost-ef-
fective to the agency.
SEC. 148. ENERGY EFFICIENCY STANDARDS.
Section 109 of the Cranston-Gonzalez National Af-
fordable Housing Act (42 U.S.C. 12709) is amended—
(1) in subsection (a)—
(A) in paragraph (1)—
(i) by striking ‘‘1 year after the date
of the enactment of the Energy Policy Act
of 1992’’ and inserting ‘‘September 30,
2004’’;
(ii) in subparagraph (A), by striking
‘‘and’’ at the end;
(iii) in subparagraph (B), by striking
the period at the end and inserting ‘‘;
and’’; and
(iv) by adding at the end the fol-
lowing:
‘‘(C) rehabilitation and new construction of
public and assisted housing funded by HOPE
VI revitalization grants under section 24 of the
United States Housing Act of 1937 (42 U.S.C.
1437v), where such standards are determined
to be cost effective by the Secretary of Housing
and Urban Development.’’; and
(B) in paragraph (2), by striking ‘‘Council
of American’’ and all that follows through
‘‘90.1–1989’)’’ and inserting ‘‘2003 Inter-
national Energy Conservation Code’’;
(2) in subsection (b)—
(A) by striking ‘‘within 1 year after the
date of the enactment of the Energy Policy Act
of 1992’’ and inserting ‘‘by September 30,
2004’’; and
(B) by striking ‘‘CABO’’ and all that fol-
lows through ‘‘1989’’ and inserting ‘‘the 2003
International Energy Conservation Code’’; and
(3) in subsection (c)—
(A) in the heading, by striking ‘‘MODEL
ENERGY CODE’’ and inserting ‘‘THE INTER-
NATIONAL
ENERGY
CONSERVATION
CODE’’;
and
(B) by striking ‘‘CABO’’ and all that fol-
lows through ‘‘1989’’ and inserting ‘‘the 2003
International Energy Conservation Code’’.
SEC. 149. ENERGY STRATEGY FOR HUD.
The Secretary of Housing and Urban Development
shall develop and implement an integrated strategy to re-
duce utility expenses through cost-effective energy con-
servation and efficiency measures and energy efficient de-
sign and construction of public and assisted housing. The
energy strategy shall include the development of energy
reduction goals and incentives for public housing agencies.
The Secretary shall submit a report to Congress, not later
than 1 year after the date of the enactment of this Act,
on the energy strategy and the actions taken by the De-
partment of Housing and Urban Development to monitor
the energy usage of public housing agencies and shall sub-
mit an update every 2 years thereafter on progress in im-
plementing the strategy.
TITLE II—RENEWABLE ENERGY
Subtitle A—General Provisions
SEC. 201. ASSESSMENT OF RENEWABLE ENERGY RE-
SOURCES.
(a) RESOURCE ASSESSMENT.—Not later than 6
months after the date of enactment of this Act, and each
year thereafter, the Secretary of Energy shall review the
available assessments of renewable energy resources with-
in the United States, including solar, wind, biomass, ocean
(tidal, wave, current, and thermal), geothermal, and hy-
droelectric energy resources, and undertake new assess-
ments as necessary, taking into account changes in market
conditions, available technologies, and other relevant fac-
tors.
(b) CONTENTS OF REPORTS.—Not later than 1 year
after the date of enactment of this Act, and each year
thereafter, the Secretary shall publish a report based on
the assessment under subsection (a). The report shall
contain—
(1) a detailed inventory describing the available
amount and characteristics of the renewable energy
resources; and
(2) such other information as the Secretary be-
lieves would be useful in developing such renewable
energy resources, including descriptions of sur-
rounding terrain, population and load centers, near-
by energy infrastructure, location of energy and
water resources, and available estimates of the costs
needed to develop each resource, together with an
identification of any barriers to providing adequate
transmission for remote sources of renewable energy
resources to current and emerging markets, rec-
ommendations for removing or addressing such bar-
riers, and ways to provide access to the grid that do
not unfairly disadvantage renewable or other energy
producers.
(c) AUTHORIZATION OF APPROPRIATIONS.—For the
purposes of this section, there are authorized to be appro-
priated to the Secretary of Energy $10,000,000 for each
of fiscal years 2004 through 2008.
SEC. 202. RENEWABLE ENERGY PRODUCTION INCENTIVE.
(a) INCENTIVE PAYMENTS.—Section 1212(a) of the
Energy Policy Act of 1992 (42 U.S.C. 13317(a)) is
amended by striking ‘‘and which satisfies’’ and all that
follows through ‘‘Secretary shall establish.’’ and inserting
‘‘. If there are insufficient appropriations to make full pay-
ments for electric production from all qualified renewable
energy facilities in any given year, the Secretary shall as-
sign 60 percent of appropriated funds for that year to fa-
cilities that use solar, wind, geothermal, or closed-loop
(dedicated energy crops) biomass technologies to generate
electricity, and assign the remaining 40 percent to other
projects. The Secretary may, after transmitting to Con-
gress an explanation of the reasons therefor, alter the per-
centage requirements of the preceding sentence.’’.
(b) QUALIFIED RENEWABLE ENERGY FACILITY.—
Section 1212(b) of the Energy Policy Act of 1992 (42
U.S.C. 13317(b)) is amended—
(1) by striking ‘‘a State or any political’’ and
all that follows through ‘‘nonprofit electrical cooper-
ative’’ and inserting ‘‘a not-for-profit electric cooper-
ative, a public utility described in section 115 of the
Internal Revenue Code of 1986, a State, Common-
wealth, territory, or possession of the United States
or the District of Columbia, or a political subdivision
thereof, or an Indian tribal government or subdivi-
sion thereof,’’; and
(2) by inserting ‘‘landfill gas,’’ after ‘‘wind, bio-
mass,’’.
(c) ELIGIBILITY WINDOW.—Section 1212(c) of the
Energy Policy Act of 1992 (42 U.S.C. 13317(c)) is
amended by striking ‘‘during the 10-fiscal year period be-
ginning with the first full fiscal year occurring after the
enactment of this section’’ and inserting ‘‘after October
1, 2003, and before October 1, 2013’’.
(d) AMOUNT OF PAYMENT.—Section 1212(e)(1) of
the Energy Policy Act of 1992 (42 U.S.C. 13317(e)(1))
is amended by inserting ‘‘landfill gas,’’ after ‘‘wind, bio-
mass,’’.
(e) SUNSET.—Section 1212(f) of the Energy Policy
Act of 1992 (42 U.S.C. 13317(f)) is amended by striking
‘‘the expiration of’’ and all that follows through ‘‘of this
section’’ and inserting ‘‘September 30, 2023’’.
(f) AUTHORIZATION OF APPROPRIATIONS.—Section
1212(g) of the Energy Policy Act of 1992 (42 U.S.C.
13317(g)) is amended to read as follows:
‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—
‘‘(1) IN GENERAL.—Subject to paragraph (2),
there are authorized to be appropriated such sums
as may be necessary to carry out this section for fis-
cal years 2003 through 2023.
‘‘(2) AVAILABILITY OF FUNDS.—Funds made
available under paragraph (1) shall remain available
until expended.’’.
SEC. 203. FEDERAL PURCHASE REQUIREMENT.
(a) REQUIREMENT.—The President, acting through
the Secretary of Energy, shall seek to ensure that, to the
extent economically feasible and technically practicable, of
the total amount of electric energy the Federal Govern-
ment consumes during any fiscal year, the following
amounts shall be renewable energy:
(1) Not less than 3 percent in fiscal years 2005
through 2007.
(2) Not less than 5 percent in fiscal years 2008
through 2010.
(3) Not less than 7.5 percent in fiscal year
2011 and each fiscal year thereafter.
(b) DEFINITIONS.—In this section:
(1) BIOMASS.—The term ‘‘biomass’’ means any
solid, nonhazardous, cellulosic material that is de-
rived from—
(A) any of the following forest-related re-
sources: mill residues, precommercial thinnings,
slash, and brush, or nonmerchantable material;
(B) solid wood waste materials, including
waste pallets, crates, dunnage, manufacturing
and construction wood wastes (other than pres-
sure-treated, 
chemically-treated, 
or 
painted
wood wastes), and landscape or right-of-way
tree trimmings, but not including municipal
solid waste (garbage), gas derived from the bio-
degradation of solid waste, or paper that is
commonly recycled;
(C) agriculture wastes, including orchard
tree crops, vineyard, grain, legumes, sugar, and
other crop by-products or residues, and live-
stock waste nutrients; or
(D) a plant that is grown exclusively as a
fuel for the production of electricity.
(2) RENEWABLE ENERGY.—The term ‘‘renew-
able energy’’ means electric energy generated from
solar, wind, biomass, landfill gas, geothermal, munic-
ipal solid waste, or new hydroelectric generation ca-
pacity achieved from increased efficiency or addi-
tions of new capacity at an existing hydroelectric
project.
(c) CALCULATION.—For purposes of determining
compliance with the requirement of this section, the
amount of renewable energy shall be doubled if—
(1) the renewable energy is produced and used
on-site at a Federal facility;
(2) the renewable energy is produced on Fed-
eral lands and used at a Federal facility; or
(3) the renewable energy is produced on Indian
land as defined in title XXVI of the Energy Policy
Act of 1992 (25 U.S.C. 3501 et. seq.) and used at
a Federal facility.
(d) REPORT.—Not later than April 15, 2005, and
every 2 years thereafter, the Secretary of Energy shall
provide a report to Congress on the progress of the Fed-
eral Government in meeting the goals established by this
section.
SEC. 204. INSULAR AREAS ENERGY SECURITY.
Section 604 of the Act entitled ‘‘An Act to authorize
appropriations for certain insular areas of the United
States, and for other purposes’’, approved December 24,
1980 (48 U.S.C. 1492), is amended—
(1) in subsection (a)(4) by striking the period
and inserting a semicolon;
(2) by adding at the end of subsection (a) the
following new paragraphs:
‘‘(5) electric power transmission and distribu-
tion lines in insular areas are inadequate to with-
stand damage caused by the hurricanes and ty-
phoons which frequently occur in insular areas and
such damage often costs millions of dollars to repair;
and
‘‘(6) the refinement of renewable energy tech-
nologies since the publication of the 1982 Territorial
Energy Assessment prepared pursuant to subsection
(c) reveals the need to reassess the state of energy
production, consumption, infrastructure, reliance on
imported energy, opportunities for energy conserva-
tion and increased energy efficiency, and indigenous
sources in regard to the insular areas.’’;
(3) by amending subsection (e) to read as fol-
lows:
‘‘(e)(1) The Secretary of the Interior, in consultation
with the Secretary of Energy and the head of government
of each insular area, shall update the plans required under
subsection (c) by—
‘‘(A) updating the contents required by sub-
section (c);
‘‘(B) drafting long-term energy plans for such
insular areas with the objective of reducing, to the
extent feasible, their reliance on energy imports by
the year 2010, increasing energy conservation and
energy efficiency, and maximizing, to the extent fea-
sible, use of indigenous energy sources; and
‘‘(C) drafting long-term energy transmission
line plans for such insular areas with the objective
that the maximum percentage feasible of electric
power transmission and distribution lines in each in-
sular area be protected from damage caused by hur-
ricanes and typhoons.
‘‘(2) Not later than December 31, 2005, the Sec-
retary of the Interior shall submit to Congress the updated
plans for each insular area required by this subsection.’’;
and
(4) by amending subsection (g)(4) to read as
follows:
‘‘(4) POWER
LINE
GRANTS
FOR
INSULAR
AREAS.—
‘‘(A) IN GENERAL.—The Secretary of the
Interior is authorized to make grants to govern-
ments of insular areas of the United States to
carry out eligible projects to protect electric
power transmission and distribution lines in
such insular areas from damage caused by hur-
ricanes and typhoons.
‘‘(B) ELIGIBLE PROJECTS.—The Secretary
may award grants under subparagraph (A) only
to governments of insular areas of the United
States that submit written project plans to the
Secretary for projects that meet the following
criteria:
‘‘(i) The project is designed to protect
electric power transmission and distribu-
tion lines located in 1 or more of the insu-
lar areas of the United States from dam-
age caused by hurricanes and typhoons.
‘‘(ii) The project is likely to substan-
tially reduce the risk of future damage,
hardship, loss, or suffering.
‘‘(iii) The project addresses 1 or more
problems that have been repetitive or that
pose a significant risk to public health and
safety.
‘‘(iv) The project is not likely to cost
more than the value of the reduction in di-
rect damage and other negative impacts
that the project is designed to prevent or
mitigate. The cost benefit analysis required
by this criterion shall be computed on a
net present value basis.
‘‘(v) The project design has taken into
consideration long-term changes to the
areas and persons it is designed to protect
and has manageable future maintenance
and modification requirements.
‘‘(vi) The project plan includes an
analysis of a range of options to address
the problem it is designed to prevent or
mitigate and a justification for the selec-
tion of the project in light of that analysis.
‘‘(vii) The applicant has demonstrated
to the Secretary that the matching funds
required by subparagraph (D) are avail-
able.
‘‘(C) PRIORITY.—When making grants
under this paragraph, the Secretary shall give
priority to grants for projects which are likely
to—
‘‘(i) have the greatest impact on re-
ducing future disaster losses; and
‘‘(ii) best conform with plans that
have been approved by the Federal Govern-
ment or the government of the insular area
where the project is to be carried out for
development or hazard mitigation for that
insular area.
‘‘(D) 
MATCHING
REQUIREMENT.—The
Federal share of the cost for a project for which
a grant is provided under this paragraph shall
not exceed 75 percent of the total cost of that
project. The non-Federal share of the cost may
be provided in the form of cash or services.
‘‘(E) TREATMENT OF FUNDS FOR CERTAIN
PURPOSES.—Grants provided under this para-
graph shall not be considered as income, a re-
source, or a duplicative program when deter-
mining eligibility or benefit levels for Federal
major disaster and emergency assistance.
‘‘(F) 
AUTHORIZATION
OF
APPROPRIA-
TIONS.—There are authorized to be appro-
priated to carry out this paragraph $5,000,000
for each fiscal year beginning after the date of
the enactment of this paragraph.’’.
SEC. 205. USE OF PHOTOVOLTAIC ENERGY IN PUBLIC
BUILDINGS.
(a) IN GENERAL.—Subchapter VI of chapter 31 of
title 40, United States Code, is amended by adding at the
end the following:
‘‘§ 3177. Use of photovoltaic energy in public build-
ings
‘‘(a) PHOTOVOLTAIC ENERGY COMMERCIALIZATION
PROGRAM.—
‘‘(1) IN GENERAL.—The Administrator of Gen-
eral Services may establish a photovoltaic energy
commercialization program for the procurement and
installation of photovoltaic solar electric systems for
electric production in new and existing public build-
ings.
‘‘(2) PURPOSES.—The purposes of the program
shall be to accomplish the following:
‘‘(A) To accelerate the growth of a com-
mercially viable photovoltaic industry to make
this energy system available to the general pub-
lic as an option which can reduce the national
consumption of fossil fuel.
‘‘(B) To reduce the fossil fuel consumption
and costs of the Federal Government.
‘‘(C) To attain the goal of installing solar
energy systems in 20,000 Federal buildings by
2010, as contained in the Federal Government’s
Million Solar Roof Initiative of 1997.
‘‘(D) To stimulate the general use within
the Federal Government of life-cycle costing
and innovative procurement methods.
‘‘(E) To develop program performance
data to support policy decisions on future incen-
tive programs with respect to energy.
‘‘(3) ACQUISITION
OF
PHOTOVOLTAIC
SOLAR
ELECTRIC SYSTEMS.—
‘‘(A) IN
GENERAL.—The program shall
provide for the acquisition of photovoltaic solar
electric systems and associated storage capa-
bility for use in public buildings.
‘‘(B) ACQUISITION LEVELS.—The acquisi-
tion of photovoltaic electric systems shall be at
a level substantial enough to allow use of low-
cost production techniques with at least 150
megawatts (peak) cumulative acquired during
the 5 years of the program.
‘‘(4) 
ADMINISTRATION.—The 
Administrator
shall administer the program and shall—
‘‘(A) issue such rules and regulations as
may be appropriate to monitor and assess the
performance and operation of photovoltaic solar
electric systems installed pursuant to this sub-
section;
‘‘(B) develop innovative procurement strat-
egies for the acquisition of such systems; and
‘‘(C) transmit to Congress an annual re-
port on the results of the program.
‘‘(b) PHOTOVOLTAIC SYSTEMS EVALUATION PRO-
GRAM.—
‘‘(1) IN
GENERAL.—Not later than 60 days
after the date of enactment of this section, the Ad-
ministrator, in consultation with the Secretary of
Energy, shall establish a photovoltaic solar energy
systems evaluation program to evaluate such photo-
voltaic solar energy systems as are required in public
buildings.
‘‘(2) PROGRAM REQUIREMENT.—In evaluating
photovoltaic solar energy systems under the pro-
gram, the Administrator shall ensure that such sys-
tems reflect the most advanced technology.
‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—
‘‘(1) PHOTOVOLTAIC ENERGY COMMERCIALIZA-
TION PROGRAM.—There are authorized to be appro-
priated to carry out subsection (a) $50,000,000 for
each of fiscal years 2004 through 2008. Such sums
shall remain available until expended.
‘‘(2) PHOTOVOLTAIC
SYSTEMS
EVALUATION
PROGRAM.—There are authorized to be appropriated
to carry out subsection (b) $10,000,000 for each of
fiscal years 2004 through 2008. Such sums shall re-
main available until expended.’’.
(b) CONFORMING AMENDMENT.—The section anal-
ysis for such chapter is amended by inserting after the
item relating to section 3176 the following:
‘‘3177. Use of photovoltaic energy in public buildings.’’.
SEC. 206. 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.
(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 byproducts 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 byproducts 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 byproducts removed
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 byproducts 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 byproducts 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;
(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-
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.
100
(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
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
101
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 $500,000.
(e) AUTHORIZATION
OF APPROPRIATIONS.—There
are 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, the Committee on Energy and
Commerce, and the Committee on Agriculture of the
House of Representatives a report describing the results
of the grant programs authorized by this section. The re-
port shall include the following:
(1) An identification of the size, type, and the
use of biomass by persons that receive grants under
this section.
102
(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.
SEC. 207. BIOBASED PRODUCTS.
Section 9002(c)(1) of the Farm Security and Rural
Investment Act of 2002 (7 U.S.C. 8102(c)(1)) is amended
by inserting ‘‘or such items that comply with the regula-
tions issued under section 103 of Public Law 100–556 (42
U.S.C. 6914b–1)’’ after ‘‘practicable’’.
Subtitle B—Geothermal Energy
SEC. 211. SHORT TITLE.
This subtitle may be cited as the ‘‘John Rishel Geo-
thermal Steam Act Amendments of 2004’’.
SEC. 212. COMPETITIVE LEASE SALE REQUIREMENTS.
Section 4 of the Geothermal Steam Act of 1970 (30
U.S.C. 1003) is amended to read as follows:
‘‘SEC. 4. LEASING PROCEDURES.
‘‘(a) NOMINATIONS.—The Secretary shall accept
nominations of lands to be leased at any time from quali-
fied companies and individuals under this Act.
‘‘(b) COMPETITIVE LEASE SALE REQUIRED.—The
Secretary shall hold a competitive lease sale at least once
103
every 2 years for lands in a State which has nominations
pending under subsection (a) if such lands are otherwise
available for leasing.
‘‘(c) NONCOMPETITIVE
LEASING.—The Secretary
shall make available for a period of 2 years for non-
competitive leasing any tract for which a competitive lease
sale is held, but for which the Secretary does not receive
any bids in a competitive lease sale.
‘‘(d) LEASES SOLD AS A BLOCK.—If information is
available to the Secretary indicating a geothermal resource
that could be produced as 1 unit can reasonably be ex-
pected to underlie more than 1 parcel to be offered in a
competitive lease sale, the parcels for such a resource may
be offered for bidding as a block in the competitive lease
sale.
‘‘(e) PENDING LEASE APPLICATIONS ON APRIL 1,
2003.—It shall be a priority for the Secretary of the Inte-
rior, and for the Secretary of Agriculture with respect to
National Forest Systems lands, to ensure timely comple-
tion of administrative actions necessary to process applica-
tions for geothermal leasing pending on April 1, 2003.
Such an application, and any lease issued pursuant to
such an application—
104
‘‘(1) except as provided in paragraph (2), shall
be subject to this section as in effect on April 1,
2003; or
‘‘(2) at the election of the applicant, shall be
subject to this section as in effect on the effective
date of this paragraph.’’.
SEC. 213. DIRECT USE.
(a) FEES FOR DIRECT USE.—Section 5 of the Geo-
thermal Steam Act of 1970 (30 U.S.C. 1004) is
amended—
(1) in paragraph (c) by redesignating subpara-
graphs (1) and (2) as subparagraphs (A) and (B);
(2) by redesignating paragraphs (a) through (d)
in order as paragraphs (1) through (4);
(3) by inserting ‘‘(a) IN GENERAL.—’’ after
‘‘SEC. 5.’’; and
(4) by adding at the end the following:
‘‘(b) DIRECT
USE.—Notwithstanding subsection
(a)(1), with respect to the direct use of geothermal re-
sources for purposes other than the commercial generation
of electricity, the Secretary of the Interior shall establish
a schedule of fees and collect fees pursuant to such a
schedule in lieu of royalties based upon the total amount
of the geothermal resources used. The schedule of fees
shall ensure that there is a fair return to the public for
105
the use of a geothermal resource based upon comparable
fees charged for direct use of geothermal resources by
States or private persons. For direct use by a State or
local government for public purposes there shall be no roy-
alty and the fee charged shall be nominal. Leases in exist-
ence on the date of enactment of the Energy Policy Act
of 2003 shall be modified in order to reflect the provisions
of this subsection.’’.
(b) LEASING FOR DIRECT USE.—Section 4 of the
Geothermal Steam Act of 1970 (30 U.S.C. 1003) is fur-
ther amended by adding at the end the following:
‘‘(f) LEASING FOR DIRECT USE OF GEOTHERMAL
RESOURCES.—Lands leased under this Act exclusively for
direct use of geothermal resources shall be leased to any
qualified applicant who first applies for such a lease under
regulations issued by the Secretary, if—
‘‘(1) the Secretary publishes a notice of the
lands proposed for leasing 60 days before the date
of the issuance of the lease; and
‘‘(2) the Secretary does not receive in the 60-
day period beginning on the date of such publication
any nomination to include the lands concerned in the
next competitive lease sale.
‘‘(g) AREA SUBJECT TO LEASE FOR DIRECT USE.—
A geothermal lease for the direct use of geothermal re-
106
sources shall embrace not more than the amount of acre-
age determined by the Secretary to be reasonably nec-
essary for such proposed utilization.’’.
(c) EXISTING LEASES WITH A DIRECT USE FACIL-
ITY.—
(1) APPLICATION
TO
CONVERT.—Any lessee
under a lease under the Geothermal Steam Act of
1970 that was issued before the date of the enact-
ment of this Act may apply to the Secretary of the
Interior, by not later than 18 months after the date
of the enactment of this Act, to convert such lease
to a lease for direct utilization of geothermal re-
sources in accordance with the amendments made by
this section.
(2) CONVERSION.—The Secretary shall approve
such an application and convert such a lease to a
lease in accordance with the amendments by not
later than 180 days after receipt of such application,
unless the Secretary determines that the applicant is
not a qualified applicant with respect to the lease.
(3) APPLICATION OF NEW LEASE TERMS.—The
amendment made by subsection (a)(4) shall apply
with respect to payments under a lease converted
under this subsection that are due and owing to the
United States on or after July 16, 2003.
107
SEC. 214. ROYALTIES AND NEAR-TERM PRODUCTION IN-
CENTIVES.
(a) ROYALTY.—Section 5 of the Geothermal Steam
Act of 1970 (30 U.S.C. 1004) is further amended—
(1) in subsection (a) by striking paragraph (1)
and inserting the following:
‘‘(1) a royalty on electricity produced using geo-
thermal steam and associated geothermal resources,
other than direct use of geothermal resources, that
shall be—
‘‘(A) not less than 1 percent and not more
than 2.5 percent of the gross proceeds from the
sale of electricity produced from such resources
during the first 10 years of production under
the lease; and
‘‘(B) not less than 2 and not more than 5
percent of the gross proceeds from the sale of
electricity produced from such resources during
each year after such 10-year period;’’; and
(2) by adding at the end the following:
‘‘(c) FINAL REGULATION ESTABLISHING ROYALTY
RATES.—In issuing any final regulation establishing roy-
alty rates under this section, the Secretary shall seek—
‘‘(1) to provide lessees a simplified administra-
tive system;
‘‘(2) to encourage new development; and
108
‘‘(3) to achieve the same long-term level of roy-
alty revenues to States and counties as the regula-
tion in effect on the date of enactment of this sub-
section.
‘‘(d) CREDITS FOR IN-KIND PAYMENTS OF ELEC-
TRICITY.—The Secretary may provide to a lessee a credit
against royalties owed under this Act, in an amount equal
to the value of electricity provided under contract to a
State or county government that is entitled to a portion
of such royalties under section 20 of this Act, section 35
of the Mineral Leasing Act (30 U.S.C. 191), or section
6 of the Mineral Leasing Act for Acquired Lands (30
U.S.C. 355), if—
‘‘(1) the Secretary has approved in advance the
contract between the lessee and the State or county
government for such in-kind payments;
‘‘(2) the contract establishes a specific method-
ology to determine the value of such credits; and
‘‘(3) the maximum credit will be equal to the
royalty value owed to the State or county that is a
party to the contract and the electricity received will
serve as the royalty payment from the Federal Gov-
ernment to that entity.’’.
(b) DISPOSAL OF MONEYS FROM SALES, BONUSES,
ROYALTIES, AND RENTALS.—Section 20 of the Geo-
109
thermal Steam Act of 1970 (30 U.S.C. 1019) is amended
to read as follows:
‘‘SEC. 20. DISPOSAL OF MONEYS FROM SALES, BONUSES,
RENTALS, AND ROYALTIES.
‘‘(a) IN GENERAL.—Except with respect to lands in
the State of Alaska, all monies received by the United
States from sales, bonuses, rentals, and royalties under
this Act shall be paid into the Treasury of the United
States. Of amounts deposited under this subsection, sub-
ject to the provisions of section 35 of the Mineral Leasing
Act (30 U.S.C. 191(b)) and section 5(a)(2) of this Act—
‘‘(1) 50 percent shall be paid to the State with-
in the boundaries of which the leased lands or geo-
thermal resources are or were located; and
‘‘(2) 25 percent shall be paid to the County
within the boundaries of which the leased lands or
geothermal resources are or were located.
‘‘(b) USE OF PAYMENTS.—Amounts paid to a State
or county under subsection (a) shall be used consistent
with the terms of section 35 of the Mineral Leasing Act
(30 U.S.C. 191).’’.
(c) NEAR-TERM PRODUCTION INCENTIVE FOR EX-
ISTING LEASES.—
(1) IN
GENERAL.—Notwithstanding section
5(a) of the Geothermal Steam Act of 1970, the roy-
110
alty required to be paid shall be 50 percent of the
amount of the royalty otherwise required, on any
lease issued before the date of enactment of this Act
that does not convert to new royalty terms under
subsection (e)—
(A) with respect to commercial production
of energy from a facility that begins such pro-
duction in the 6-year period beginning on the
date of the enactment of this Act; or
(B) on qualified expansion geothermal en-
ergy.
(2) 4-YEAR APPLICATION.—Paragraph (1) ap-
plies only to new commercial production of energy
from a facility in the first 4 years of such produc-
tion.
(d) DEFINITION OF QUALIFIED EXPANSION GEO-
THERMAL ENERGY.—In this section, the term ‘‘qualified
expansion geothermal energy’’ means geothermal energy
produced from a generation facility for which—
(1) the production is increased by more than 10
percent as a result of expansion of the facility car-
ried out in the 6-year period beginning on the date
of the enactment of this Act; and
(2) such production increase is greater than 10
percent of the average production by the facility dur-
111
ing the 5-year period preceding the expansion of the
facility.
(e) ROYALTY UNDER EXISTING LEASES.—
(1) IN
GENERAL.—Any lessee under a lease
issued under the Geothermal Steam Act of 1970 be-
fore the date of the enactment of this Act may mod-
ify the terms of the lease relating to payment of roy-
alties to comply with the amendment made by sub-
section (a), by applying to the Secretary of the Inte-
rior by not later than 18 months after the date of
the enactment of this Act.
(2) APPLICATION
OF
MODIFICATION.—Such
modification shall apply to any use of geothermal
steam and any associated geothermal resources to
which the amendment applies that occurs after the
date of that application.
(3) CONSULTATION.—The Secretary—
(A) shall consult with the State and local
governments affected by any proposed changes
in lease royalty terms under this subsection;
and
(B) may establish a gross proceeds per-
centage within the range specified in the
amendment made by subsection (a)(1) and with
the concurrence of the lessee and the State.
112
SEC. 215. GEOTHERMAL LEASING AND PERMITTING ON
FEDERAL LANDS.
(a) IN GENERAL.—Not later than 180 days after the
date of the enactment of this section, the Secretary of the
Interior and the Secretary of Agriculture shall enter into
and submit to Congress a memorandum of understanding
in accordance with this section regarding leasing and per-
mitting for geothermal development of public lands and
National Forest System lands under their respective juris-
dictions.
(b) LEASE AND PERMIT APPLICATIONS.—The memo-
randum of understanding shall—
(1) identify areas with geothermal potential on
lands included in the National Forest System and,
when necessary, require review of management plans
to consider leasing under the Geothermal Steam Act
of 1970 (30 U.S.C. 1001 et seq.) as a land use; and
(2) establish an administrative procedure for
processing geothermal lease applications, including
lines of authority, steps in application processing,
and time limits for application procession.
(c) DATA RETRIEVAL SYSTEM.—The memorandum
of understanding shall establish a joint data retrieval sys-
tem that is capable of tracking lease and permit applica-
tions and providing to the applicant information as to
their status within the Departments of the Interior and
113
Agriculture, including an estimate of the time required for
administrative action.
SEC. 216. REVIEW AND REPORT TO CONGRESS.
The Secretary of the Interior shall promptly review
and report to Congress not later than 3 years after the
date of the enactment of this Act regarding the status of
all withdrawals from leasing under the Geothermal Steam
Act of 1970 (30 U.S.C. 1001 et seq.) of Federal lands,
specifying for each such area whether the basis for such
withdrawal still applies.
SEC. 217. REIMBURSEMENT FOR COSTS OF NEPA ANAL-
YSES, DOCUMENTATION, AND STUDIES.
(a) IN GENERAL.—The Geothermal Steam Act of
1970 (30 U.S.C. 1001 et seq.) is amended by adding at
the end the following:
‘‘SEC. 30. REIMBURSEMENT FOR COSTS OF CERTAIN ANAL-
YSES, DOCUMENTATION, AND STUDIES.
‘‘(a) IN GENERAL.—The Secretary of the Interior
may reimburse a person that is a lessee, operator, oper-
ating rights owner, or applicant for any lease under this
Act for reasonable amounts paid by the person for prepa-
ration for the Secretary by a contractor or other person
selected by the Secretary of any project-level analysis, doc-
umentation, or related study required pursuant to the Na-
114
tional 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 (a) 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;
‘‘(3) the person maintains records of its costs
in accordance with regulations issued by the Sec-
retary;
‘‘(4) the reimbursement is in the form of a re-
duction in the Federal share of the royalty required
to be paid for the lease for which the analysis, docu-
mentation, or related study is conducted, and is
agreed to by the Secretary and the person reim-
bursed prior to commencing the analysis, docu-
mentation, or related study; and
‘‘(5) the agreement required under paragraph
(4) contains provisions—
‘‘(A) reducing royalties owed on lease pro-
duction based on market prices;
‘‘(B) stipulating an automatic termination
of the royalty reduction upon recovery of docu-
mented costs; and
115
‘‘(C) providing a process by which the les-
see may seek reimbursement for circumstances
in which production from the specified lease is
not possible.’’.
(b) APPLICATION.—The amendment made by this
section shall apply with respect to an analysis, documenta-
tion, or a related study conducted on or after the date
of enactment of this Act for any lease entered into before,
on, or after the date of enactment of this Act.
(c) DEADLINE FOR REGULATIONS.—The Secretary
shall issue regulations implementing the amendment made
by this section by not later than 1 year after the date
of enactment of this Act.
SEC. 218. ASSESSMENT OF GEOTHERMAL ENERGY POTEN-
TIAL.
The Secretary of Interior, acting through the Direc-
tor of the United States Geological Survey and in coopera-
tion with the States, shall update the 1978 Assessment
of Geothermal Resources, and submit that updated assess-
ment to Congress—
(1) not later than 3 years after the date of en-
actment of this Act; and
(2) thereafter as the availability of data and de-
velopments in technology warrant.
116
SEC. 219. COOPERATIVE OR UNIT PLANS.
Section 18 of the Geothermal Steam Act of 1970 (30
U.S.C. 1017) is amended to read as follows:
‘‘SEC. 18. UNIT AND COMMUNITIZATION AGREEMENTS.
‘‘(a) ADOPTION OF UNITS BY LESSEES.—
‘‘(1) IN GENERAL.—For the purpose of more
properly conserving the natural resources of any
geothermal reservoir, field, or like area, or any part
thereof (whether or not any part of the geothermal
field, or like area, is then subject to any Unit Agree-
ment (cooperative plan of development or oper-
ation)), lessees thereof and their representatives may
unite with each other, or jointly or separately with
others, in collectively adopting and operating under
a Unit Agreement for such field, or like area, or any
part thereof including direct use resources, if deter-
mined and certified by the Secretary to be necessary
or advisable in the public interest. A majority inter-
est of owners of any single lease shall have the au-
thority to commit that lease to a Unit Agreement.
The Secretary of the Interior may also initiate the
formation of a Unit Agreement if in the public inter-
est.
‘‘(2) MODIFICATION OF LEASE REQUIREMENTS
BY SECRETARY.—The Secretary may, in the discre-
tion of the Secretary, and with the consent of the
117
holders of leases involved, establish, alter, change, or
revoke rates of operations (including drilling, oper-
ations, production, and other requirements) of such
leases and make conditions with reference to such
leases, with the consent of the lessees, in connection
with the creation and operation of any such Unit
Agreement as the Secretary may deem necessary or
proper to secure the proper protection of the public
interest. Leases with unlike lease terms or royalty
rates do not need to be modified to be in the same
unit.
‘‘(b) REQUIREMENT
OF
PLANS
UNDER
NEW
LEASES.—The Secretary—
‘‘(1) may provide that geothermal leases issued
under this Act shall contain a provision requiring
the lessee to operate under such a reasonable Unit
Agreement; and
‘‘(2) may prescribe such an Agreement under
which such lessee shall operate, which shall ade-
quately protect the rights of all parties in interest,
including the United States.
‘‘(c) MODIFICATION OF RATE OF PROSPECTING, DE-
VELOPMENT, AND PRODUCTION.—The Secretary may re-
quire that any Agreement authorized by this section that
applies to lands owned by the United States contain a pro-
118
vision under which authority is vested in the Secretary,
or any person, committee, or State or Federal officer or
agency as may be designated in the Agreement to alter
or modify from time to time the rate of prospecting and
development and the quantity and rate of production
under such an Agreement.
‘‘(d) EXCLUSION FROM DETERMINATION OF HOLD-
ING OR CONTROL.—Any lands that are subject to any
Agreement approved or prescribed by the Secretary under
this section shall not be considered in determining hold-
ings or control under any provision of this Act.
‘‘(e) POOLING
OF CERTAIN LANDS.—If separate
tracts of lands cannot be independently developed and op-
erated to use geothermal steam and associated geothermal
resources pursuant to any section of this Act—
‘‘(1) such lands, or a portion thereof, may be
pooled with other lands, whether or not owned by
the United States, for purposes of development and
operation under a Communitization Agreement pro-
viding for an apportionment of production or royal-
ties among the separate tracts of land comprising
the production unit, if such pooling is determined by
the Secretary to be in the public interest; and
‘‘(2) operation or production pursuant to such
an Agreement shall be treated as operation or pro-
119
duction with respect to each tract of land that is
subject to the agreement.
‘‘(f) UNIT AGREEMENT REVIEW.—No more than 5
years after approval of any cooperative or Unit Agreement
and at least every 5 years thereafter, the Secretary shall
review each such Agreement and, after notice and oppor-
tunity for comment, eliminate from inclusion in such
Agreement any lands that the Secretary determines are
not reasonably necessary for Unit operations under the
Agreement. Such elimination shall be based on scientific
evidence, and shall occur only if it is determined by the
Secretary to be for the purpose of conserving and properly
managing the geothermal resource. Any land so eliminated
shall be eligible for an extension under subsection (g) of
section 6 if it meets the requirements for such an exten-
sion.
‘‘(g) DRILLING
OR DEVELOPMENT CONTRACTS.—
The Secretary may, on such conditions as the Secretary
may prescribe, approve drilling or development contracts
made by 1 or more lessees of geothermal leases, with 1
or more persons, associations, or corporations if, in the
discretion of the Secretary, the conservation of natural re-
sources or the public convenience or necessity may require
or the interests of the United States may be best served
thereby. All leases operated under such approved drilling
120
or development contracts, and interests thereunder, shall
be excepted in determining holdings or control under sec-
tion 7.
‘‘(h) COORDINATION WITH STATE GOVERNMENTS.—
The Secretary shall coordinate unitization and pooling ac-
tivities with the appropriate State agencies and shall en-
sure that State leases included in any unitization or pool-
ing arrangement are treated equally with Federal leases.’’.
SEC. 220. ROYALTY ON BYPRODUCTS.
Section 5 of the Geothermal Steam Act of 1970 (30
U.S.C. 1004) is further amended in subsection (a) by
striking paragraph (2) and inserting the following:
‘‘(2) a royalty on any byproduct that is a min-
eral named in the first section of the Mineral Leas-
ing Act (30 U.S.C. 181), and that is derived from
production under the lease, at the rate of the royalty
that applies under that Act to production of such
mineral under a lease under that Act;’’.
SEC. 221. REPEAL OF AUTHORITIES OF SECRETARY TO RE-
ADJUST TERMS, CONDITIONS, RENTALS, AND
ROYALTIES.
Section 8 of the Geothermal Steam Act of 1970 (30
U.S.C. 1007) is amended by repealing subsection (b), and
by redesignating subsection (c) as subsection (b).
121
SEC. 222. CREDITING OF RENTAL TOWARD ROYALTY.
Section 5 of the Geothermal Steam Act of 1970 (30
U.S.C. 1004) is further amended—
(1) in subsection (a)(2) by inserting ‘‘and’’
after the semicolon at the end;
(2) in subsection (a)(3) by striking ‘‘; and’’ and
inserting a period;
(3) by striking paragraph (4) of subsection (a);
and
(4) by adding at the end the following:
‘‘(e) CREDITING OF RENTAL TOWARD ROYALTY.—
Any annual rental under this section that is paid with re-
spect to a lease before the first day of the year for which
the annual rental is owed shall be credited to the amount
of royalty that is required to be paid under the lease for
that year.’’.
SEC. 223. LEASE DURATION AND WORK COMMITMENT RE-
QUIREMENTS.
Section 6 of the Geothermal Steam Act of 1970 (30
U.S.C. 1005) is amended—
(1) by striking so much as precedes subsection
(c), and striking subsections (e), (g), (h), (i), and
(j);
(2) by redesignating subsections (c), (d), and
(f) in order as subsections (g), (h), and (i); and
122
(3) by inserting before subsection (g), as so re-
designated, the following:
‘‘SEC. 6. LEASE TERM AND WORK COMMITMENT REQUIRE-
MENTS.
‘‘(a) IN GENERAL.—
‘‘(1) PRIMARY TERM.—A geothermal lease shall
be for a primary term of 10 years.
‘‘(2) INITIAL EXTENSION.—The Secretary shall
extend the primary term of a geothermal lease for
5 years if, for each year after the fifth year of the
lease—
‘‘(A) the Secretary determined under sub-
section (c) that the lessee satisfied the work
commitment requirements that applied to the
lease for that year; or
‘‘(B) the lessee paid in accordance with
subsection (d) the value of any work that was
not completed in accordance with those require-
ments.
‘‘(3) ADDITIONAL EXTENSION.—The Secretary
shall extend the primary term of a geothermal lease
(after an initial extension under paragraph (2)) for
an additional 5 years if, for each year of the initial
extension under paragraph (2), the Secretary deter-
mined under subsection (c) that the lessee satisfied
123
the work commitment requirements that applied to
the lease for that year.
‘‘(b) REQUIREMENT
TO SATISFY ANNUAL WORK
COMMITMENT REQUIREMENT.—
‘‘(1) IN GENERAL.—The lessee for a geothermal
lease shall, for each year after the fifth year of the
lease, satisfy work commitment requirements pre-
scribed by the Secretary that apply to the lease for
that year.
‘‘(2) PRESCRIPTION OF WORK COMMITMENT RE-
QUIREMENTS.—The Secretary shall issue regulations
prescribing minimum equivalent dollar value work
commitment requirements for geothermal leases,
that—
‘‘(A) require that a lessee, in each year
after the fifth year of the primary term of a
geothermal lease, diligently work to achieve
commercial production or utilization of steam
under the lease;
‘‘(B) require that in each year to which
work commitment requirements under the regu-
lations apply, the lessee shall significantly re-
duce the amount of work that remains to be
done to achieve such production or utilization;
124
‘‘(C) describe specific work that must be
completed by a lessee by the end of each year
to which the work commitment requirements
apply and factors, such as force majeure events,
that suspend or modify the work commitment
obligation;
‘‘(D) carry forward and apply to work
commitment requirements for a year, work
completed in any year in the preceding 3-year
period that was in excess of the work required
to be performed in that preceding year;
‘‘(E) establish transition rules for leases
issued before the date of the enactment of this
subsection, including terms under which a lease
that is near the end of its term on the date of
enactment of this subsection may be extended
for up to 2 years—
‘‘(i) to allow achievement of produc-
tion under the lease; or
‘‘(ii) to allow the lease to be included
in a producing unit; and
‘‘(F) establish an annual payment that, at
the option of the lessee, may be exercised in lieu
of meeting any work requirement for a limited
number of years that the Secretary determines
125
will not impair achieving diligent development
of the geothermal resource.
‘‘(3) TERMINATION
OF
APPLICATION
OF
RE-
QUIREMENTS.—Work commitment requirements pre-
scribed under this subsection shall not apply to a
geothermal lease after the date on which geothermal
steam is produced or utilized under the lease in com-
mercial quantities.
‘‘(c) DETERMINATION OF WHETHER REQUIREMENTS
SATISFIED.—The Secretary shall, by not later than 90
days after the end of each year for which work commit-
ment requirements under subsection (b) apply to a geo-
thermal lease—
‘‘(1) determine whether the lessee has satisfied
the requirements that apply for that year;
‘‘(2) notify the lessee of that determination; and
‘‘(3) in the case of a notification that the lessee
did not satisfy work commitment requirements for
the year, include in the notification—
‘‘(A) a description of the specific work that
was not completed by the lessee in accordance
with the requirements; and
‘‘(B) the amount of the dollar value of
such work that was not completed, reduced by
the amount of expenditures made for work com-
126
pleted in a prior year that is carried forward
pursuant to subsection (b)(2)(D).
‘‘(d) PAYMENT
OF
VALUE
OF
UNCOMPLETED
WORK.—
‘‘(1) IN GENERAL.—If the Secretary notifies a
lessee that the lessee failed to satisfy work commit-
ment requirements under subsection (b), the lessee
shall pay to the Secretary, by not later than the end
of the 60-day period beginning on the date of the
notification, the dollar value of work that was not
completed by the lessee, in the amount stated in the
notification (as reduced under subsection (c)(3)(B)).
‘‘(2) 
FAILURE
TO
PAY
VALUE
OF
UNCOMPLETED WORK.—If a lessee fails to pay such
amount to the Secretary before the end of that pe-
riod, the lease shall terminate upon the expiration of
the period.
‘‘(e) CONTINUATION AFTER COMMERCIAL PRODUC-
TION OR UTILIZATION.—If geothermal steam is produced
or utilized in commercial quantities within the primary
term of the lease under subsection (a) (including any ex-
tension of the lease under subsection (a)), such lease shall
continue until the date on which geothermal steam is no
longer produced or utilized in commercial quantities.
127
‘‘(f) CONVERSION OF GEOTHERMAL LEASE TO MIN-
ERAL LEASE.—The lessee under a lease that has produced
geothermal steam for electrical generation, has been deter-
mined by the Secretary to be incapable of any further com-
mercial production or utilization of geothermal steam, and
that is producing any valuable byproduct in payable quan-
tities may, within 6 months after such determination—
‘‘(1) convert the lease to a mineral lease under
the Mineral Leasing Act (30 U.S.C. 181 et seq.) or
under the Mineral Leasing Act for Acquired Lands
(30 U.S.C. 351 et seq.), if the lands that are subject
to the lease can be leased under that Act for the
production of such byproduct; or
‘‘(2) convert the lease to a mining claim under
the general mining laws, if the byproduct is a
locatable mineral.’’.
SEC. 224. ADVANCED ROYALTIES REQUIRED FOR SUSPEN-
SION OF PRODUCTION.
Section 5 of the Geothermal Steam Act of 1970 (30
U.S.C. 1004) is further amended by adding at the end
the following:
‘‘(f) ADVANCED ROYALTIES REQUIRED FOR SUSPEN-
SION OF PRODUCTION.—
‘‘(1) CONTINUATION
OF
LEASE
FOLLOWING
CESSATION OF PRODUCTION.—If, at any time after
128
commercial production under a lease is achieved,
production ceases for any cause the lease shall re-
main in full force and effect—
‘‘(A) during the 1-year period beginning on
the date production ceases; and
‘‘(B) after such period if, and so long as,
the lessee commences and continues diligently
and in good faith until such production is re-
sumed the steps, operations, or procedures nec-
essary to cause a resumption of such produc-
tion.
‘‘(2) If production of heat or energy under a
geothermal lease is suspended after the date of any
such production for which royalty is required under
subsection (a) and the terms of paragraph (1) are
not met, the Secretary shall require the lessee, until
the end of such suspension, to pay royalty in ad-
vance at the monthly pro-rata rate of the average
annual rate at which such royalty was paid each
year in the 5-year-period preceding the date of sus-
pension.
‘‘(3) Paragraph (2) shall not apply if the sus-
pension is required or otherwise caused by the Sec-
retary, the Secretary of a military department, a
State or local government, or a force majeure.’’.
129
SEC. 225. ANNUAL RENTAL.
(a) ANNUAL RENTAL RATE.—Section 5 of the Geo-
thermal Steam Act of 1970 (30 U.S.C. 1004) is further
amended in subsection (a) in paragraph (3) by striking
‘‘$1 per acre or fraction thereof for each year of the lease’’
and all that follows through the end of the paragraph and
inserting ‘‘$1 per acre or fraction thereof for each year
of the lease through the tenth year in the case of a lease
awarded in a noncompetitive lease sale; or $2 per acre or
fraction thereof for the first year, $3 per acre or fraction
thereof for each of the second through tenth years, in the
case of a lease awarded in a competitive lease sale; and
$5 per acre or fraction thereof for each year after the 10th
year thereof for all leases.’’.
(b) TERMINATION OF LEASE FOR FAILURE TO PAY
RENTAL.—Section 5 of the Geothermal Steam Act of
1970 (30 U.S.C. 1004) is further amended by adding at
the end the following:
‘‘(g) TERMINATION OF LEASE FOR FAILURE TO PAY
RENTAL.—
‘‘(1) IN GENERAL.—The Secretary shall termi-
nate any lease with respect to which rental is not
paid in accordance with this Act and the terms of
the lease under which the rental is required, upon
the expiration of the 45-day period beginning on the
date of the failure to pay such rental.
130
‘‘(2) 
NOTIFICATION.—The 
Secretary 
shall
promptly notify a lessee that has not paid rental re-
quired under the lease that the lease will be termi-
nated at the end of the period referred to in para-
graph (1).
‘‘(3) REINSTATEMENT.—A lease that would
otherwise terminate under paragraph (1) shall not
terminate under that paragraph if the lessee pays to
the Secretary, before the end of the period referred
to in paragraph (1), the amount of rental due plus
a late fee equal to 10 percent of such amount.’’.
SEC. 226. LEASING AND PERMITTING ON FEDERAL LANDS
WITHDRAWN FOR MILITARY PURPOSES.
Not later than 2 years after the date of enactment
of this Act, the Secretary of the Interior and the Secretary
of Defense, in consultation with each military service and
with interested States, counties, representatives of the
geothermal industry, and other persons, shall submit to
Congress a joint report concerning leasing and permitting
activities for geothermal energy on Federal lands with-
drawn for military purposes. Such report shall include the
following:
(1) A description of the Military Geothermal
Program, including any differences between it and
the non-Military Geothermal Program, including re-
131
quired security procedures, and operational consider-
ations, and discussions as to the differences, and
why they are important. Further, the report shall
describe revenues or energy provided to the Depart-
ment of Defense and its facilities, royalty structures,
where applicable, and any revenue sharing with
States and counties or other benefits between—
(A) the implementation of the Geothermal
Steam Act of 1970 (30 U.S.C 1001 et seq.) and
other applicable Federal law by the Secretary of
the Interior; and
(B) the administration of geothermal leas-
ing under section 2689 of title 10, United
States Code, by the Secretary of Defense.
(2) If appropriate, a description of the current
methods and procedures used to ensure interagency
coordination, where needed, in developing renewable
energy sources on Federal lands withdrawn for mili-
tary purposes, and an identification of any new pro-
cedures that might be required in the future for the
improvement of interagency coordination to ensure
efficient processing and administration of leases or
contracts for geothermal energy on Federal lands
withdrawn for military purposes, consistent with the
defense purposes of such withdrawals.
132
(3) Recommendations for any legislative or ad-
ministrative actions that might better achieve in-
creased geothermal production, including a common
royalty structure, leasing procedures, or other
changes that increase production, offset military op-
eration costs, or enhance the Federal agencies’ abil-
ity to develop geothermal resources.
Except as provided in this section, nothing in this subtitle
shall affect the legal status of the Department of the Inte-
rior and the Department of the Defense with respect to
each other regarding geothermal leasing and development
until such status is changed by law.
SEC. 227. TECHNICAL AMENDMENTS.
The Geothermal Steam Act of 1970 (30 U.S.C. 1001
et seq.) is further amended as follows:
(1) By striking ‘‘geothermal steam and associ-
ated geothermal resources’’ each place it appears
and inserting ‘‘geothermal resources’’.
(2) Section 2(e) (30 U.S.C. 1001(e)) is amend-
ed to read as follows:
‘‘(e) ‘direct use’ means utilization of geothermal
resources for commercial, residential, agricultural,
public facilities, or other energy needs other than the
commercial production of electricity; and’’.
133
(3) Section 21 (30 U.S.C. 1020) is amended by
striking ‘‘(a) Within one hundred’’ and all that fol-
lows through ‘‘(b) Geothermal’’ and inserting ‘‘Geo-
thermal’’.
(4) The first section (30 U.S.C. 1001 note) is
amended by striking ‘‘That this’’ and inserting the
following:
‘‘SEC. 1. SHORT TITLE.
‘‘This’’.
(5) Section 2 (30 U.S.C. 1001) is amended by
striking ‘‘SEC. 2. As’’ and inserting the following:
‘‘SEC. 2. DEFINITIONS.
‘‘As’’.
(6) Section 3 (30 U.S.C. 1002) is amended by
striking ‘‘SEC. 3. Subject’’ and inserting the fol-
lowing:
‘‘SEC. 3 . LANDS SUBJECT TO GEOTHERMAL LEASING.
‘‘Subject’’.
(7) Section 5 (30 U.S.C. 1004) is further
amended by striking ‘‘SEC. 5.’’, and by inserting im-
mediately before and above subsection (a) the fol-
lowing:
134
‘‘SEC. 5. RENTS AND ROYALTIES. ’’.
(8) Section 7 (30 U.S.C. 1006) is amended by
striking ‘‘SEC. 7. A geothermal’’ and inserting the
following:
‘‘SEC. 7. ACREAGE OF GEOTHERMAL LEASE.
‘‘A geothermal’’.
(9) Section 8 (30 U.S.C. 1007) is amended by
striking ‘‘SEC. 8. (a) The’’ and inserting the fol-
lowing:
‘‘SEC. 8. READJUSTMENT OF LEASE TERMS AND CONDI-
TIONS.
‘‘(a) The’’.
(10) Section 9 (30 U.S.C. 1008) is amended by
striking ‘‘SEC. 9. If’’ and inserting the following:
‘‘SEC. 9. BYPRODUCTS.
‘‘If’’.
(11) Section 10 (30 U.S.C. 1009) is amended
by striking ‘‘SEC. 10. The’’ and inserting the fol-
lowing:
‘‘SEC. 10. RELINQUISHMENT OF GEOTHERMAL RIGHTS.
‘‘The’’.
(12) Section 11 (30 U.S.C. 1010) is amended
by striking ‘‘SEC. 11. The’’ and inserting the fol-
lowing:
‘‘SEC. 11. SUSPENSION OF OPERATIONS AND PRODUCTION.
‘‘The’’.
135
(13) Section 12 (30 U.S.C. 1011) is amended
by striking ‘‘SEC. 12. Leases’’ and inserting the fol-
lowing:
‘‘SEC. 12. TERMINATION OF LEASES.
‘‘Leases’’.
(14) Section 13 (30 U.S.C. 1012) is amended
by striking ‘‘SEC. 13. The’’ and inserting the fol-
lowing:
‘‘SEC. 13. WAIVER, SUSPENSION, OR REDUCTION OF RENT-
AL OR ROYALTY.
‘‘The’’.
(15) Section 14 (30 U.S.C. 1013) is amended
by striking ‘‘SEC. 14. Subject’’ and inserting the fol-
lowing:
‘‘SEC. 14. SURFACE LAND USE.
‘‘Subject’’.
(16) Section 15 (30 U.S.C. 1014) is amended
by striking ‘‘SEC. 15. (a) Geothermal’’ and inserting
the following:
‘‘SEC. 15. LANDS SUBJECT TO GEOTHERMAL LEASING.
‘‘(a) Geothermal’’.
(17) Section 16 (30 U.S.C. 1015) is amended
by striking ‘‘SEC. 16. Leases’’ and inserting the fol-
lowing:
136
‘‘SEC. 16. REQUIREMENT FOR LESSEES.
‘‘Leases’’.
(18) Section 17 (30 U.S.C. 1016) is amended
by striking ‘‘SEC. 17. Administration’’ and inserting
the following:
‘‘SEC. 17. ADMINISTRATION.
‘‘Administration’’.
(19) Section 19 (30 U.S.C. 1018) is amended
by striking ‘‘SEC. 19. Upon’’ and inserting the fol-
lowing:
‘‘SEC. 19. DATA FROM FEDERAL AGENCIES.
‘‘Upon’’.
(20) Section 21 (30 U.S.C. 1020) is further
amended by striking ‘‘SEC. 21.’’, and by inserting
immediately before and above the remainder of that
section the following:
‘‘SEC. 21. PUBLICATION IN FEDERAL REGISTER; RESERVA-
TION OF MINERAL RIGHTS. ’’.
(21) Section 22 (30 U.S.C. 1021) is amended
by striking ‘‘SEC. 22. Nothing’’ and inserting the
following:
‘‘SEC. 22. FEDERAL EXEMPTION FROM STATE WATER LAWS.
‘‘Nothing’’.
(22) Section 23 (30 U.S.C. 1022) is amended
by striking ‘‘SEC. 23. (a) All’’ and inserting the fol-
lowing:
137
‘‘SEC. 23. PREVENTION OF WASTE; EXCLUSIVITY.
‘‘(a) All’’.
(23) Section 24 (30 U.S.C. 1023) is amended
by striking ‘‘SEC. 24. The’’ and inserting the fol-
lowing:
‘‘SEC. 24. RULES AND REGULATIONS.
‘‘The’’.
(24) Section 25 (30 U.S.C. 1024) is amended
by striking ‘‘SEC. 25. As’’ and inserting the fol-
lowing:
‘‘SEC. 25. INCLUSION OF GEOTHERMAL LEASING UNDER
CERTAIN OTHER LAWS.
‘‘As’’.
(25) Section 26 is amended by striking ‘‘SEC.
26. The’’ and inserting the following:
‘‘SEC. 26. AMENDMENT.
‘‘The’’.
(26) Section 27 (30 U.S.C. 1025) is amended
by striking ‘‘SEC. 27. The’’ and inserting the fol-
lowing:
‘‘SEC. 27. FEDERAL RESERVATION OF CERTAIN MINERAL
RIGHTS.
‘‘The’’.
(27) Section 28 (30 U.S.C. 1026) is amended
by striking ‘‘SEC. 28. (a)(1) The’’ and inserting the
following:
138
‘‘SEC. 28. SIGNIFICANT THERMAL FEATURES.
‘‘(a)(1) The’’.
(28) Section 29 (30 U.S.C. 1027) is amended
by striking ‘‘SEC. 29. The’’ and inserting the fol-
lowing:
‘‘SEC. 29. LAND SUBJECT TO PROHIBITION ON LEASING.
‘‘The’’.
Subtitle C—Hydroelectric
PART I—ALTERNATIVE CONDITIONS
SEC. 231. ALTERNATIVE CONDITIONS AND FISHWAYS.
(a) FEDERAL RESERVATIONS.—Section 4(e) of the
Federal Power Act (16 U.S.C. 797(e)) is amended by in-
serting after ‘‘adequate protection and utilization of such
reservation.’’ at the end of the first proviso the following:
‘‘The license applicant shall be entitled to a determination
on the record, after opportunity for an expedited agency
trial-type hearing of any disputed issues of material fact,
with respect to such conditions. Such hearing may be con-
ducted in accordance with procedures established by agen-
cy regulation in consultation with the Federal Energy
Regulatory Commission.’’.
(b) FISHWAYS.—Section 18 of the Federal Power Act
(16 U.S.C. 811) is amended by inserting after ‘‘and such
fishways as may be prescribed by the Secretary of Com-
merce.’’ the following: ‘‘The license applicant shall be enti-
tled to a determination on the record, after opportunity
139
for an expedited agency trial-type hearing of any disputed
issues of material fact, with respect to such fishways. Such
hearing may be conducted in accordance with procedures
established by agency regulation in consultation with the
Federal Energy Regulatory Commission.’’.
(c) ALTERNATIVE
CONDITIONS
AND
PRESCRIP-
TIONS.—Part I of the Federal Power Act (16 U.S.C. 791a
et seq.) is amended by adding the following new section
at the end thereof:
‘‘SEC. 33. ALTERNATIVE CONDITIONS AND PRESCRIPTIONS.
‘‘(a) ALTERNATIVE CONDITIONS.—(1) Whenever any
person applies for a license for any project works within
any reservation of the United States, and the Secretary
of the department under whose supervision such reserva-
tion falls (referred to in this subsection as ‘the Secretary’)
deems a condition to such license to be necessary under
the first proviso of section 4(e), the license applicant may
propose an alternative condition.
‘‘(2) Notwithstanding the first proviso of section 4(e),
the Secretary shall accept the proposed alternative condi-
tion referred to in paragraph (1), and the Commission
shall include in the license such alternative condition, if
the Secretary determines, based on substantial evidence
provided by the license applicant or otherwise available to
the Secretary, that such alternative condition—
140
‘‘(A) provides for the adequate protection and
utilization of the reservation; and
‘‘(B) will either—
‘‘(i) cost less to implement; or
‘‘(ii) result in improved operation of the
project works for electricity production,
as compared to the condition initially deemed nec-
essary by the Secretary.
‘‘(3) The Secretary shall submit into the public
record of the Commission proceeding with any condition
under section 4(e) or alternative condition it accepts under
this section, a written statement explaining the basis for
such condition, and reason for not accepting any alter-
native condition under this section. The written statement
must demonstrate that the Secretary gave equal consider-
ation to the effects of the condition adopted and alter-
natives not accepted on energy supply, distribution, cost,
and use; flood control; navigation; water supply; and air
quality (in addition to the preservation of other aspects
of environmental quality); based on such information as
may be available to the Secretary, including information
voluntarily provided in a timely manner by the applicant
and others. The Secretary shall also submit, together with
the aforementioned written statement, all studies, data,
141
and other factual information available to the Secretary
and relevant to the Secretary’s decision.
‘‘(4) Nothing in this section shall prohibit other inter-
ested parties from proposing alternative conditions.
‘‘(5) If the Secretary does not accept an applicant’s
alternative condition under this section, and the Commis-
sion finds that the Secretary’s condition would be incon-
sistent with the purposes of this part, or other applicable
law, the Commission may refer the dispute to the Commis-
sion’s Dispute Resolution Service. The Dispute Resolution
Service shall consult with the Secretary and the Commis-
sion and issue a non-binding advisory within 90 days. The
Secretary may accept the Dispute Resolution Service advi-
sory unless the Secretary finds that the recommendation
will not provide for the adequate protection and utilization
of the reservation. The Secretary shall submit the advisory
and the Secretary’s final written determination into the
record of the Commission’s proceeding.
‘‘(b) ALTERNATIVE PRESCRIPTIONS.—(1) Whenever
the Secretary of the Interior or the Secretary of Commerce
prescribes a fishway under section 18, the license appli-
cant or licensee may propose an alternative to such pre-
scription to construct, maintain, or operate a fishway.
‘‘(2) Notwithstanding section 18, the Secretary of the
Interior or the Secretary of Commerce, as appropriate,
142
shall accept and prescribe, and the Commission shall re-
quire, the proposed alternative referred to in paragraph
(1), if the Secretary of the appropriate department deter-
mines, based on substantial evidence provided by the li-
censee or otherwise available to the Secretary, that such
alternative—
‘‘(A) will be no less protective than the fishway
initially prescribed by the Secretary; and
‘‘(B) will either—
‘‘(i) cost less to implement; or
‘‘(ii) result in improved operation of the
project works for electricity production,
as compared to the fishway initially deemed nec-
essary by the Secretary.
‘‘(3) The Secretary concerned shall submit into the
public record of the Commission proceeding with any pre-
scription under section 18 or alternative prescription it ac-
cepts under this section, a written statement explaining
the basis for such prescription, and reason for not accept-
ing any alternative prescription under this section. The
written statement must demonstrate that the Secretary
gave equal consideration to the effects of the condition
adopted and alternatives not accepted on energy supply,
distribution, cost, and use; flood control; navigation; water
supply; and air quality (in addition to the preservation of
143
other aspects of environmental quality); based on such in-
formation as may be available to the Secretary, including
information voluntarily provided in a timely manner by the
applicant and others. The Secretary shall also submit, to-
gether with the aforementioned written statement, all
studies, data, and other factual information available to
the Secretary and relevant to the Secretary’s decision.
‘‘(4) Nothing in this section shall prohibit other inter-
ested parties from proposing alternative prescriptions.
‘‘(5) If the Secretary concerned does not accept an
applicant’s alternative prescription under this section, and
the Commission finds that the Secretary’s prescription
would be inconsistent with the purposes of this part, or
other applicable law, the Commission may refer the dis-
pute to the Commission’s Dispute Resolution Service. The
Dispute Resolution Service shall consult with the Sec-
retary and the Commission and issue a non-binding advi-
sory within 90 days. The Secretary may accept the Dis-
pute Resolution Service advisory unless the Secretary
finds that the recommendation will be less protective than
the fishway initially prescribed by the Secretary. The Sec-
retary shall submit the advisory and the Secretary’s final
written determination into the record of the Commission’s
proceeding.’’.
144
PART II—ADDITIONAL HYDROPOWER
SEC. 241. HYDROELECTRIC PRODUCTION INCENTIVES.
(a) INCENTIVE PAYMENTS.—For electric energy gen-
erated and sold by a qualified hydroelectric facility during
the incentive period, the Secretary of Energy (referred to
in this section as the ‘‘Secretary’’) shall make, subject to
the availability of appropriations, incentive payments to
the owner or operator of such facility. The amount of such
payment made to any such owner or operator shall be as
determined under subsection (e) of this section. Payments
under this section may only be made upon receipt by the
Secretary of an incentive payment application which estab-
lishes that the applicant is eligible to receive such payment
and which satisfies such other requirements as the Sec-
retary deems necessary. Such application shall be in such
form, and shall be submitted at such time, as the Sec-
retary shall establish.
(b) DEFINITIONS.—For purposes of this section:
(1) QUALIFIED
HYDROELECTRIC
FACILITY.—
The term ‘‘qualified hydroelectric facility’’ means a
turbine or other generating device owned or solely
operated by a non-Federal entity which generates
hydroelectric energy for sale and which is added to
an existing dam or conduit.
(2) EXISTING
DAM
OR
CONDUIT.—The term
‘‘existing dam or conduit’’ means any dam or con-
145
duit the construction of which was completed before
the date of the enactment of this section and which
does not require any construction or enlargement of
impoundment or diversion structures (other than re-
pair or reconstruction) in connection with the instal-
lation of a turbine or other generating device.
(3) CONDUIT.—The term ‘‘conduit’’ has the
same meaning as when used in section 30(a)(2) of
the Federal Power Act (16 U.S.C. 823a(a)(2)).
The terms defined in this subsection shall apply without
regard to the hydroelectric kilowatt capacity of the facility
concerned, without regard to whether the facility uses a
dam owned by a governmental or nongovernmental entity,
and without regard to whether the facility begins oper-
ation on or after the date of the enactment of this section.
(c) ELIGIBILITY WINDOW.—Payments may be made
under this section only for electric energy generated from
a qualified hydroelectric facility which begins operation
during the period of 10 fiscal years beginning with the
first full fiscal year occurring after the date of enactment
of this subtitle.
(d) INCENTIVE PERIOD.—A qualified hydroelectric
facility may receive payments under this section for a pe-
riod of 10 fiscal years (referred to in this section as the
‘‘incentive period’’). Such period shall begin with the fiscal
146
year in which electric energy generated from the facility
is first eligible for such payments.
(e) AMOUNT OF PAYMENT.—
(1) IN GENERAL.—Payments made by the Sec-
retary under this section to the owner or operator of
a qualified hydroelectric facility shall be based on
the number of kilowatt hours of hydroelectric energy
generated by the facility during the incentive period.
For any such facility, the amount of such payment
shall be 1.8 cents per kilowatt hour (adjusted as
provided in paragraph (2)), subject to the avail-
ability of appropriations under subsection (g), except
that no facility may receive more than $750,000 in
1 calendar year.
(2) ADJUSTMENTS.—The amount of the pay-
ment made to any person under this section as pro-
vided in paragraph (1) shall be adjusted for inflation
for each fiscal year beginning after calendar year
2003 in the same manner as provided in the provi-
sions of section 29(d)(2)(B) of the Internal Revenue
Code of 1986, except that in applying such provi-
sions the calendar year 2003 shall be substituted for
calendar year 1979.
(f) SUNSET.—No payment may be made under this
section to any qualified hydroelectric facility after the ex-
147
piration of the period of 20 fiscal years beginning with
the first full fiscal year occurring after the date of enact-
ment of this subtitle, and no payment may be made under
this section to any such facility after a payment has been
made with respect to such facility for a period of 10 fiscal
years.
(g) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to the Secretary to carry
out the purposes of this section $10,000,000 for each of
the fiscal years 2004 through 2013.
SEC. 242. HYDROELECTRIC EFFICIENCY IMPROVEMENT.
(a) INCENTIVE PAYMENTS.—The Secretary of En-
ergy shall make incentive payments to the owners or oper-
ators of hydroelectric facilities at existing dams to be used
to make capital improvements in the facilities that are di-
rectly related to improving the efficiency of such facilities
by at least 3 percent.
(b) LIMITATIONS.—Incentive payments under this
section shall not exceed 10 percent of the costs of the cap-
ital improvement concerned and not more than 1 payment
may be made with respect to improvements at a single
facility. No payment in excess of $750,000 may be made
with respect to improvements at a single facility.
(c) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to carry out this section
148
not more than $10,000,000 for each of the fiscal years
2004 through 2013.
SEC. 243. SMALL HYDROELECTRIC POWER PROJECTS.
Section 408(a)(6) of the Public Utility Regulatory
Policies Act of 1978 (16 U.S.C. 2708(a)(6)) is amended
by striking ‘‘April 20, 1977’’ and inserting ‘‘March 4,
2003’’.
SEC. 244. INCREASED HYDROELECTRIC GENERATION AT
EXISTING FEDERAL FACILITIES.
(a) IN GENERAL.—The Secretary of the Interior and
the Secretary of Energy, in consultation with the Sec-
retary of the Army, shall jointly conduct a study of the
potential for increasing electric power production capa-
bility at federally owned or operated water regulation,
storage, and conveyance facilities.
(b) CONTENT.—The study under this section shall in-
clude identification and description in detail of each facil-
ity that is capable, with or without modification, of pro-
ducing additional hydroelectric power, including esti-
mation of the existing potential for the facility to generate
hydroelectric power.
(c) REPORT.—The Secretaries shall submit to the
Committees on Energy and Commerce, Resources, and
Transportation and Infrastructure of the House of Rep-
resentatives and the Committee on Energy and Natural
149
Resources of the Senate a report on the findings, conclu-
sions, and recommendations of the study under this sec-
tion by not later than 18 months after the date of the
enactment of this Act. The report shall include each of
the following:
(1) The identifications, descriptions, and esti-
mations referred to in subsection (b).
(2) A description of activities currently con-
ducted or considered, or that could be considered, to
produce additional hydroelectric power from each
identified facility.
(3) A summary of prior actions taken by the
Secretaries to produce additional hydroelectric power
from each identified facility.
(4) The costs to install, upgrade, or modify
equipment or take other actions to produce addi-
tional hydroelectric power from each identified facil-
ity and the level of Federal power customer involve-
ment in the determination of such costs.
(5) The benefits that would be achieved by such
installation, upgrade, modification, or other action,
including quantified estimates of any additional en-
ergy or capacity from each facility identified under
subsection (b).
150
(6) A description of actions that are planned,
underway, or might reasonably be considered to in-
crease hydroelectric power production by replacing
turbine runners, by performing generator upgrades
or rewinds, or construction of pumped storage facili-
ties.
(7) The impact of increased hydroelectric power
production on irrigation, fish, wildlife, Indian tribes,
river health, water quality, navigation, recreation,
fishing, and flood control.
(8) Any additional recommendations to increase
hydroelectric power production from, and reduce
costs and improve efficiency at, federally owned or
operated water regulation, storage, and conveyance
facilities.
SEC. 245. SHIFT OF PROJECT LOADS TO OFF-PEAK PERI-
ODS.
(a) IN GENERAL.—The Secretary of the Interior
shall—
(1) review electric power consumption by Bu-
reau of Reclamation facilities for water pumping
purposes; and
(2) make such adjustments in such pumping as
possible to minimize the amount of electric power
consumed for such pumping during periods of peak
151
electric power consumption, including by performing
as much of such pumping as possible during off-
peak hours at night.
(b) CONSENT OF AFFECTED IRRIGATION CUSTOMERS
REQUIRED.—The Secretary may not under this section
make any adjustment in pumping at a facility without the
consent of each person that has contracted with the
United States for delivery of water from the facility for
use for irrigation and that would be affected by such ad-
justment.
(c) EXISTING OBLIGATIONS NOT AFFECTED.—This
section shall not be construed to affect any existing obliga-
tion of the Secretary to provide electric power, water, or
other benefits from Bureau of Reclamation facilities, in-
cluding recreational releases.
SEC. 246. CORPS OF ENGINEERS HYDROPOWER OPERATION
AND MAINTENANCE FUNDING.
(a) IN GENERAL.—Notwithstanding the last sentence
of section 5 of the Act of December 22, 1944 (commonly
known as the ‘‘Flood Control Act of 1944’’) (58 Stat. 890,
chapter 665; 16 U.S.C. 825s), the 11th paragraph under
the heading ‘‘OFFICE OF THE SECRETARY’’ in title I of
the Act of October 12, 1949 (63 Stat. 767, chapter 680;
16 U.S.C. 825s–1), the matter under the heading ‘‘CON-
TINUING
FUND, SOUTHEASTERN
POWER
ADMINISTRA-
152
TION’’ in title I of the Act of August 31, 1951 (65 Stat.
249, chapter 375; 16 U.S.C. 825s–2), section 3302 of title
31, United States Code, or any other law, and without
further appropriation or fiscal year limitation, for fiscal
year 2004, the Administrator of the Southeastern Power
Administration, the Administrator of the Southwestern
Power Administration, and the Administrator of the West-
ern Area Power Administration may credit to the Sec-
retary of the Army (referred to in this section as the ‘‘Sec-
retary’’), receipts, in an amount determined under sub-
section (c), from the sale of power and related services.
(b) USE OF FUNDS.—
(1) IN GENERAL.—The Secretary—
(A) shall, except as provided in paragraph
(2), use the amounts credited under subsection
(a) to fund only the Corps of Engineers annual
operation and maintenance activities that are
allocated exclusively to the power function and
assigned to the respective power marketing ad-
ministration and respective project system as
applicable for repayment; and
(B) shall not use the amounts for any
costs allocated to non-power functions of Corps
of Engineer operations.
153
(2) EXCEPTION.—The Secretary may use
amounts credited by the Southwestern Power Ad-
ministration under subsection (a) for capital and
nonrecurring costs.
(c) AMOUNT.—The amount of the receipts credited
under subsection (a) shall be equal to such amount as—
(1) the Secretary of the Army requests; and
(2) the appropriate Administrator, in consulta-
tion with the power customers of the Administrator’s
power marketing administration, determines to be
appropriate to apply to the costs referred to in sub-
section (b).
(d) APPLICABLE LAW.—The amounts credited under
subsection (a) are exempt from sequestration under the
Balanced Budget and Emergency Deficit Control Act of
1985 (2 U.S.C. 901 et seq.).
SEC. 247. LIMITATION ON CERTAIN CHARGES ASSESSED TO
THE FLINT CREEK PROJECT, MONTANA.
Notwithstanding section 10(e)(1) of the Federal
Power Act (16 U.S.C. 803(e)(1)) or any other provision
of Federal law providing for the payment to the United
States of charges for the use of Federal land for the pur-
poses of operating and maintaining a hydroelectric devel-
opment licensed by the Federal Energy Regulatory Com-
mission (referred to in this section as the ‘‘Commission’’),
154
any political subdivision of the State of Montana that
holds a license for Commission Project No. 1473 in Gran-
ite and Deer Lodge Counties, Montana, shall be required
to pay to the United States for the use of that land for
each year during which the political subdivision continues
to hold the license for the project, the lesser of—
(1) $25,000; or
(2) such annual charge as the Commission or
any other department or agency of the Federal Gov-
ernment may assess.
SEC. 248. REINSTATEMENT AND TRANSFER.
(a) REINSTATEMENT AND TRANSFER OF FEDERAL
LICENSE
FOR PROJECT NUMBERED 2696.—Notwith-
standing section 8 of the Federal Power Act (16 U.S.C.
801) or any other provision of such Act, the Federal En-
ergy Regulatory Commission shall reinstate the license for
Project No. 2696 and transfer the license, without delay
or the institution of any proceedings, to the Town of
Stuyvesant, New York, holder of Federal Energy Regu-
latory Commission Preliminary Permit No. 11787, within
30 days after the date of enactment of this Act.
(b) HYDROELECTRIC
INCENTIVES.—Project No.
2696 shall be entitled to the full benefit of any Federal
legislation that promotes hydroelectric development that
155
is enacted within 2 years either before or after the date
of enactment of this Act.
(c) PROJECT DEVELOPMENT AND FINANCING.—The
Federal Energy Regulatory Commission shall permit the
Town of Stuyvesant to add as a colicensee any private or
public entity or entities to the reinstated license at any
time, notwithstanding the issuance of a preliminary permit
to the Town of Stuyvesant and any consideration of mu-
nicipal preference. The town shall be entitled, to the extent
that funds are available or shall be made available, to re-
ceive loans under sections 402 and 403 of the Public Util-
ity Regulatory Policies Act of 1978 (16 U.S.C. 2702 and
2703), or similar programs, for the reimbursement of fea-
sibility studies or development costs, or both, incurred
since January 1, 2001, through and including December
31, 2006. All power produced by the project shall be
deemed incremental hydropower for purpose of qualifying
for any energy credit or similar benefits.
156
TITLE III—OIL AND GAS
Subtitle A—Petroleum Reserve and
Home Heating Oil
SEC. 301. PERMANENT AUTHORITY TO OPERATE THE STRA-
TEGIC PETROLEUM RESERVE AND OTHER
ENERGY PROGRAMS.
(a) AMENDMENT TO TITLE I OF THE ENERGY POL-
ICY AND CONSERVATION ACT.—Title I of the Energy Pol-
icy and Conservation Act (42 U.S.C. 6211 et seq.) is
amended—
(1) by striking section 166 (42 U.S.C. 6246)
and inserting the following:
‘‘AUTHORIZATION OF APPROPRIATIONS
‘‘SEC. 166. There are authorized to be appropriated
to the Secretary such sums as may be necessary to carry
out this part and part D, to remain available until ex-
pended.’’;
(2) by striking section 186 (42 U.S.C. 6250e);
and
(3) by striking part E (42 U.S.C. 6251; relat-
ing to the expiration of title I of the Act).
(b) AMENDMENT TO TITLE II OF THE ENERGY POL-
ICY AND CONSERVATION ACT.—Title II of the Energy
Policy and Conservation Act (42 U.S.C. 6271 et seq.) is
amended—
157
(1) by inserting before section 273 (42 U.S.C.
6283) the following:
‘‘PART C—SUMMER FILL AND FUEL BUDGETING
PROGRAMS’’;
(2) by striking section 273(e) (42 U.S.C.
6283(e); relating to the expiration of summer fill
and fuel budgeting programs); and
(3) by striking part D (42 U.S.C. 6285; relat-
ing to the expiration of title II of the Act).
(c) TECHNICAL AMENDMENTS.—The table of con-
tents for the Energy Policy and Conservation Act is
amended—
(1) by inserting after the items relating to part
C of title I the following:
‘‘PART D—NORTHEAST HOME HEATING OIL RESERVE
‘‘Sec. 181. Establishment.
‘‘Sec. 182. Authority.
‘‘Sec. 183. Conditions for release; plan.
‘‘Sec. 184. Northeast Home Heating Oil Reserve Account.
‘‘Sec. 185. Exemptions.’’;
(2) by amending the items relating to part C of
title II to read as follows:
‘‘PART C—SUMMER FILL AND FUEL BUDGETING PROGRAMS
‘‘Sec. 273. Summer fill and fuel budgeting programs.’’; and
(3) by striking the items relating to part D of
title II.
(d) AMENDMENT TO THE ENERGY POLICY AND CON-
SERVATION ACT.—Section 183(b)(1) of the Energy Policy
158
and Conservation Act (42 U.S.C. 6250(b)(1)) is amended
by striking all after ‘‘increases’’ through to ‘‘mid-October
through March’’ and inserting ‘‘by more than 60 percent
over its 5-year rolling average for the months of mid-Octo-
ber through March (considered as a heating season aver-
age)’’.
(e) FILL STRATEGIC PETROLEUM RESERVE TO CA-
PACITY.—The Secretary of Energy shall, as expeditiously
as practicable, acquire petroleum in amounts sufficient to
fill the Strategic Petroleum Reserve to the 1,000,000,000
barrel capacity authorized under section 154(a) of the En-
ergy Policy and Conservation Act (42 U.S.C. 6234(a)),
consistent with the provisions of sections 159 and 160 of
such Act (42 U.S.C. 6239, 6240).
SEC. 302. NATIONAL OILHEAT RESEARCH ALLIANCE.
Section 713 of the Energy Act of 2000 (42 U.S.C.
6201 note) is amended by striking ‘‘4’’ and inserting ‘‘9’’.
Subtitle B—Production Incentives
SEC. 311. DEFINITION OF SECRETARY.
In this subtitle, the term ‘‘Secretary’’ means the Sec-
retary of the Interior.
SEC. 312. PROGRAM ON OIL AND GAS ROYALTIES IN-KIND.
(a) APPLICABILITY OF SECTION.—Notwithstanding
any other provision of law, this section applies to all roy-
alty in-kind accepted by the Secretary on or after the date
159
of 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 land for oil and gas develop-
ment.
(b) TERMS AND CONDITIONS.—All royalty accruing
to the United States shall, on the demand of the Sec-
retary, be paid in oil or gas. If the Secretary makes such
a demand, the following provisions apply to such payment:
(1) SATISFACTION OF ROYALTY OBLIGATION.—
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 reimburse-
ments paid to, or deductions claimed by, the lessee
shall be subject to review and audit.
(2) MARKETABLE CONDITION.—
(A) IN
GENERAL.—Royalty production
shall be placed in marketable condition by the
lessee at no cost to the United States.
(B) DEFINITION OF MARKETABLE CONDI-
TION.—In this paragraph, the term ‘‘in market-
able condition’’ means sufficiently free from im-
purities and otherwise in a condition that the
160
royalty production will be accepted by a pur-
chaser under a sales contract typical of the field
or area in which the royalty production was
produced.
(3) DISPOSITION
BY
THE
SECRETARY.—The
Secretary 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) RETENTION BY THE SECRETARY.—The Sec-
retary may, notwithstanding section 3302 of title 31,
United States Code, retain and use a portion of the
revenues from the sale of oil and gas taken in-kind
that otherwise would be deposited to miscellaneous
receipts, without regard to fiscal year limitation, or
may use oil or gas received as royalty taken in-kind
(in this paragraph referred to as ‘‘royalty produc-
tion’’) to pay the cost of—
(A) transporting the royalty production;
(B) processing the royalty production;
161
(C) disposing of the royalty production; or
(D) any combination of transporting, proc-
essing, and disposing of the royalty production.
(5) LIMITATION.—
(A) IN GENERAL.—Except as provided in
subparagraph (B), the Secretary may not use
revenues from the sale of oil and gas taken in-
kind to pay for personnel, travel, or other ad-
ministrative costs of the Federal Government.
(B) EXCEPTION.—Notwithstanding sub-
paragraph (A), the Secretary may use a portion
of the revenues from the sale of oil taken in-
kind, without fiscal year limitation, to pay
transportation costs, salaries, and other admin-
istrative costs directly related to filling the
Strategic Petroleum 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 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
162
(2) allow the lessee to deduct the transportation
or processing costs in reporting and paying royalties
in-value for other Federal oil and gas leases.
(d) BENEFIT TO THE UNITED STATES REQUIRED.—
The Secretary may receive oil or gas royalties in-kind only
if the Secretary determines that receiving royalties in-kind
provides benefits to the United States that are greater
than or equal to the benefits that are likely to have been
received had royalties been taken in-value.
(e) REPORTS.—
(1) IN GENERAL.—Not later than September
30, 2005, the Secretary shall submit to Congress a
report that addresses—
(A) actions taken to develop businesses
processes and automated systems to fully sup-
port the royalty-in-kind capability to be used in
tandem with the royalty-in-value approach in
managing Federal oil and gas revenue; and
(B) future royalty-in-kind businesses oper-
ation plans and objectives.
(2) REPORTS ON OIL OR GAS ROYALTIES TAKEN
IN-KIND.—For each of fiscal years 2004 through
2013 in which the United States takes oil or gas
royalties in-kind from production in any State or
from the outer Continental Shelf, excluding royalties
163
taken in-kind and sold to refineries under subsection
(h), the Secretary shall submit to Congress a report
that describes—
(A) the methodology or methodologies used
by the Secretary to determine compliance with
subsection (d), including the performance
standard for comparing amounts received by
the United States derived from royalties in-kind
to amounts likely to have been received had roy-
alties been taken in-value;
(B) an explanation of the evaluation that
led the Secretary to take royalties in-kind from
a lease or group of leases, including the ex-
pected revenue effect of taking royalties in-kind;
(C) actual amounts received by the United
States derived from taking royalties in-kind and
costs and savings incurred by the United States
associated with taking royalties in-kind, includ-
ing, but not limited to, administrative savings
and any new or increased administrative costs;
and
(D) an evaluation of other relevant public
benefits or detriments associated with taking
royalties in-kind.
(f) DEDUCTION OF EXPENSES.—
164
(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 shall deduct
amounts paid or deducted under subsections (b)(4)
and (c) and deposit the amount of the deductions in
the miscellaneous receipts of the United States
Treasury.
(2) ACCOUNTING FOR DEDUCTIONS.—When the
Secretary allows the lessee to deduct transportation
or processing costs under subsection (c), the Sec-
retary may not reduce any payments to recipients of
revenues derived from any other Federal oil and gas
lease as a consequence of that deduction.
(g) 
CONSULTATION
WITH
STATES.—The
Secretary—
(1) shall consult with a State before conducting
a royalty in-kind program under this subtitle within
the State, and may delegate management of any
portion of the Federal royalty in-kind program to
the State except as otherwise prohibited by Federal
law; and
165
(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) SMALL REFINERIES.—
(1) PREFERENCE.—If the Secretary finds that
sufficient supplies of crude oil are not available in
the open market to refineries that do not have their
own source of supply for crude oil, the Secretary
may grant preference to such refineries in the sale
of any royalty oil accruing or reserved to the United
States under Federal oil and gas leases issued under
any mineral leasing law, for processing or use in
such refineries at private sale at not less than the
market price.
(2) PRORATION
AMONG
REFINERIES
IN
PRO-
DUCTION AREA.—In disposing of oil under this sub-
section, the Secretary of Energy may, at the discre-
tion of the Secretary, prorate the oil among refin-
eries described in paragraph (1) in the area in which
the oil is produced.
(i) DISPOSITION TO FEDERAL AGENCIES.—
166
(1) ONSHORE ROYALTY.—Any royalty oil or gas
taken by the Secretary in-kind from onshore oil and
gas leases may be sold at not less than the market
price to any Federal agency.
(2) OFFSHORE ROYALTY.—Any royalty oil or
gas taken in-kind from a Federal oil or gas lease 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) FEDERAL LOW-INCOME ENERGY ASSISTANCE
PROGRAMS.—
(1) PREFERENCE.—In disposing of royalty oil
or gas taken in-kind under this section, the Sec-
retary may grant a preference to any person, includ-
ing any Federal or State agency, for the purpose of
providing additional resources to any Federal low-in-
come energy assistance program.
(2) REPORT.—Not later than 3 years after the
date of enactment of this Act, the Secretary shall
transmit a report to Congress, assessing the effec-
tiveness of granting preferences specified in para-
graph (1) and providing a specific recommendation
on the continuation of authority to grant pref-
erences.
167
SEC. 313. MARGINAL PROPERTY PRODUCTION INCENTIVES.
(a) DEFINITION OF MARGINAL PROPERTY.—Until
such time as the Secretary issues regulations under sub-
section (e) that prescribe a different definition, in this sec-
tion the term ‘‘marginal property’’ means an onshore unit,
communitization agreement, or lease not within a unit or
communitization agreement, that produces on average the
combined equivalent of less than 15 barrels of oil per well
per day or 90 million British thermal units of gas per well
per day calculated based on the average over the 3 most
recent production months, including only wells that
produce on more than half of the days during those 3 pro-
duction months.
(b) CONDITIONS
FOR
REDUCTION
OF
ROYALTY
RATE.—Until such time as the Secretary issues regula-
tions under subsection (e) that prescribe different thresh-
olds or standards, the Secretary shall reduce the royalty
rate on—
(1) oil production from marginal properties as
prescribed in subsection (c) when the spot price of
West Texas Intermediate crude oil at Cushing, Okla-
homa, is, on average, less than $15 per barrel for 90
consecutive trading days; and
(2) gas production from marginal properties as
prescribed in subsection (c) when the spot price of
natural gas delivered at Henry Hub, Louisiana, is,