tions 328 through 336 shall apply with respect to commer-
cial refrigerators, freezers, and refrigerator-freezers to the 
same extent and in the same manner as those provisions 
apply under part A. 
‘‘(B) In applying those provisions to commercial re-
frigerators, freezers, and refrigerator-freezers, paragraphs 
(1), (2), (3), and (4) of subsection (a) shall apply. 
‘‘(2)(A) Section 327 shall apply to commercial refrig-
erators, freezers, and refrigerator-freezers for which 
standards are established under paragraphs (2) and (3) 
of section 342(c) to the same extent and in the same man-
ner as those provisions apply under part A on the date 
of enactment of this subsection, except that any State or 
local standard issued before the date of enactment of this 
subsection shall not be preempted until the standards es-
tablished under paragraphs (2) and (3) of section 342(c) 
take effect. 
‘‘(B) In applying section 327 in accordance with sub-
paragraph (A), paragraphs (1), (2), and (3) of subsection 
(a) shall apply. 
‘‘(3)(A) Section 327 shall apply to commercial refrig-
erators, freezers, and refrigerator-freezers for which 
standards are established under section 342(c)(4) to the 
same extent and in the same manner as the provisions 
apply under part A on the date of publication of the final
rule by the Secretary, except that any State or local stand-
ard issued before the date of publication of the final rule 
by the Secretary shall not be preempted until the stand-
ards take effect. 
‘‘(B) In applying section 327 in accordance with sub-
paragraph (A), paragraphs (1), (2), and (3) of subsection 
(a) shall apply. 
‘‘(4)(A) If the Secretary does not issue a final rule 
for a specific type of commercial refrigerator, freezer, or 
refrigerator-freezer within the time frame specified in sec-
tion 342(c)(5), subsections (b) and (c) of section 327 shall 
not apply to that specific type of refrigerator, freezer, or 
refrigerator-freezer for the period beginning on the date 
that is 2 years after the scheduled date for a final rule 
and ending on the date on which the Secretary publishes 
a final rule covering the specific type of refrigerator, freez-
er, or refrigerator-freezer. 
‘‘(B) Any State or local standard issued before the 
date of publication of the final rule shall not be preempted 
until the final rule takes effect. 
‘‘(5)(A) In the case of any commercial refrigerator, 
freezer, or refrigerator-freezer to which standards are ap-
plicable under paragraphs (2) and (3) of section 342(c), 
the Secretary shall require manufacturers to certify, 
through an independent, nationally recognized testing or
certification program, that the commercial refrigerator, 
freezer, or refrigerator-freezer meets the applicable stand-
ard. 
‘‘(B) The Secretary shall, to the maximum extent 
practicable, encourage the establishment of at least 2 inde-
pendent testing and certification programs. 
‘‘(C) As part of certification, information on equip-
ment energy use and interior volume shall be made avail-
able to the Secretary. 
‘‘(e)(1)(A)(i) Except as provided in clause (ii), section 
327 shall apply to automatic commercial ice makers for 
which standards have been established under section 
342(d)(1) to the same extent and in the same manner as 
the section applies under part A on the date of enactment 
of this subsection. 
‘‘(ii) Any State standard issued before the date of en-
actment of this subsection shall not be preempted until 
the standards established under section 342(d)(1) take ef-
fect. 
‘‘(B) In applying section 327 to the equipment under 
subparagraph (A), paragraphs (1), (2), and (3) of sub-
section (a) shall apply. 
‘‘(2)(A)(i) Except as provided in clause (ii), section 
327 shall apply to automatic commercial ice makers for 
which standards have been established under section
342(d)(2) to the same extent and in the same manner as 
the section applies under part A on the date of publication 
of the final rule by the Secretary. 
‘‘(ii) Any State standard issued before the date of 
publication of the final rule by the Secretary shall not be 
preempted until the standards established under section 
342(d)(2) take effect. 
‘‘(B) In applying section 327 in accordance with sub-
paragraph (A), paragraphs (1), (2), and (3) of subsection 
(a) shall apply. 
‘‘(3)(A) If the Secretary does not issue a final rule 
for a specific type of automatic commercial ice maker 
within the time frame specified in subsection 342(d), sub-
sections (b) and (c) of section 327 shall no longer apply 
to the specific type of automatic commercial ice maker for 
the period beginning on the day after the scheduled date 
for a final rule and ending on the date on which the Sec-
retary publishes a final rule covering the specific type of 
automatic commercial ice maker. 
‘‘(B) Any State standard issued before the publica-
tion of the final rule shall not be preempted until the 
standards established in the final rule take effect. 
‘‘(4)(A) The Secretary shall monitor whether manu-
facturers are reducing harvest rates below tested values
for the purpose of bringing non-complying equipment into 
compliance. 
‘‘(B) If the Secretary finds that there has been a sub-
stantial amount of manipulation with respect to harvest 
rates under subparagraph (A), the Secretary shall take 
steps to minimize the manipulation, such as requiring har-
vest rates to be within 5 percent of tested values. 
‘‘(g)(1)(A) If the Secretary does not issue a final rule 
for commercial clothes washers within the timeframe spec-
ified in section 342(e)(2), subsections (b) and (c) of sec-
tion 327 shall not apply to commercial clothes washers for 
the period beginning on the day after the scheduled date 
for a final rule and ending on the date on which the Sec-
retary publishes a final rule covering commercial clothes 
washers. 
‘‘(B) Any State or local standard issued before the 
date on which the Secretary publishes a final rule shall 
not be preempted until the standards established under 
section 342(e)(2) take effect. 
‘‘(2) The Secretary shall undertake an educational 
program to inform owners of laundromats, multifamily 
housing, and other sites where commercial clothes washers 
are located about the new standard, including impacts on 
washer purchase costs and options for recovering those 
costs through coin collection.’’.
SEC. 103. 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)(i) Not later than 90 days after the 
date of enactment of this subparagraph, the 
Commission shall initiate a rulemaking to con-
sider— 
‘‘(I) the effectiveness of the consumer 
products labeling program in assisting con-
sumers in making purchasing decisions 
and improving energy efficiency; and 
‘‘(II) changes to the labeling rules (in-
cluding categorical labeling) that would im-
prove the effectiveness of consumer prod-
uct labels. 
‘‘(ii) Not later than 2 years after the date 
of enactment of this subparagraph, the Com-
mission shall complete the rulemaking initiated 
under clause (i).’’. 
(b) RULEMAKING ON LABELING FOR ADDITIONAL 
PRODUCTS.—Section 324(a) of the Energy Policy and 
Conservation Act (42 U.S.C. 6294(a)) is amended by add-
ing at the end the following:
‘‘(5)(A) For covered products described in sub-
sections (u) through (ee) of section 325, after a test 
procedure has been prescribed under section 323, 
the Secretary or the Commission, as appropriate, 
may prescribe, by rule, under this section labeling 
requirements for the products. 
‘‘(B) In the case of products to which TP–1 
standards under section 325(y) apply, labeling re-
quirements shall be based on the ‘Standard for the 
Labeling of Distribution Transformer Efficiency’ 
prescribed by the National Electrical Manufacturers 
Association (NEMA TP–3) as in effect on the date 
of enactment of this paragraph. 
‘‘(C) In the case of dehumidifiers covered under 
section 325(dd), the Commission shall not require 
an ‘Energy Guide’ label.’’. 
SEC. 104. EQUIPMENT STANDARDS AND ANALYSIS PRO-
GRAM. 
(a) IN GENERAL.—Not later than 180 days after the 
date of enactment of this Act, the Secretary shall submit 
to Congress a report that— 
(1) explains the reasons for the failure of the 
Secretary to complete, by any applicable deadlines, 
required rulemakings under the equipment stand-
ards and analysis program for issuance of appliance 
and equipment standards; and 
(2) provides plans and timetables for comple-
tion of each of the rulemakings described in para-
graph (1) that has not been completed as of the date 
of enactment of this Act. 
(b) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary to carry 
out the equipment standards and analysis program of the 
Department of Energy— 
(1) $20,000,000 for fiscal year 2006; 
(2) $25,000,000 for fiscal year 2007; 
(3) $30,000,000 for fiscal year 2008; 
(4) $35,000,000 for fiscal year 2009; and 
(5) $40,000,000 for fiscal year 2010. 
Subtitle B—Building Energy Codes 
SEC. 111. STATE BUILDING ENERGY EFFICIENCY CODES IN-
CENTIVES. 
Section 304 of the Energy Conservation and Produc-
tion Act (42 U.S.C. 6833) is amended in subsection (e)— 
(1) in paragraph (1) by inserting at the end of 
the first sentence ‘‘, including increasing and 
verifying compliance with such codes’’; and 
(2) by striking paragraph (2) and inserting the 
following:
‘‘(2) Additional funding shall be provided under 
this subsection for implementations of a plan to 
achieve and document at least 90 percent rate of 
compliance with residential and commercial building 
energy efficiency codes, based on energy perform-
ance— 
‘‘(A) to a State that has adopted and is 
implementing, on a statewide basis— 
‘‘(i) a residential building energy effi-
ciency code that meets or exceeds the re-
quirements of the 2004 International En-
ergy Conservation Code, or any succeeding 
version of this code that has received an 
affirmative determination from the Sec-
retary under subsection (a)(5)(A) of this 
section; and 
‘‘(ii) a commercial building energy ef-
ficiency code that meets or exceeds the re-
quirements of the ASHRAE Standard 
90.1–2004, or any succeeding version of 
this standard that has received an affirma-
tive determination from the Secretary 
under subsection (b)(2)(A) of this section; 
or
‘‘(B) in States in which there is no state-
wide energy code either for residential buildings 
or for commercial buildings, to a local govern-
ment that has adopted and is implementing res-
idential and commercial building energy effi-
ciency codes as described in subparagraph (A). 
‘‘(3) Of the amounts made available under this 
part, the Secretary may use $500,000 for each fiscal 
year to train State and local officials. 
‘‘(4)(A) There is authorized to be appropriated 
to carry out this subsection $25,000,000 for each of 
fiscal years 2006 through 2010, and such sums as 
may be necessary for each fiscal year after 2010. 
‘‘(B) Funding to States under paragraph (2) in 
each fiscal year shall not exceed half of the excess 
of funding under this subsection over $5,000,000.’’. 
SEC. 112. ENERGY CODE APPLICABLE TO MANUFACTURED 
HOUSING. 
Section 604 of the National Manufacturing Housing 
Construction and Safety Standards Act of 1974 (42 
U.S.C. 5403) is amended in subsection (g) by striking 
paragraphs (2) and (3) and inserting the following: 
‘‘(2) The energy conservation standards estab-
lished under this subsection shall be based on the 
most recent version of the International Energy
Conservation Code (including supplements) except 
where the Secretary finds that such code is not cost- 
effective, or a more stringent standard would be 
more cost-effective, based on total life-cycle con-
struction and operating costs. 
‘‘(3) The energy conservation standards estab-
lished under this subsection may— 
‘‘(A) take into consideration the design 
and factory construction techniques of manufac-
tured homes; 
‘‘(B) be based on the climate zones estab-
lished by the Department of Housing and 
Urban Development rather than those under 
the International Energy Conservation Code; 
and 
‘‘(C) provide for alternative practices that 
result in net estimated energy consumption 
equal to or less than the specified standards.’’. 
SEC. 113. 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, 
2006’’; 
(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 ‘‘2004 International 
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, 
2006’’; and
(B) by striking ‘‘CABO’’ and all that fol-
lows through ‘‘1989’’ and inserting ‘‘the 2004 
International Energy Conservation Code’’; and 
(3) in subsection (c)— 
(A) in the heading, by striking ‘‘MODEL 
ENERGY
CODE’’ and inserting ‘‘and the 
INTERNATIONAL
ENERGY
CONSERVATION 
CODE’’ after ; and 
(B) by striking ‘‘CABO’’ and alll that fol-
lows through ‘‘1989’’ and inserting ‘‘the 2004 
International Energy Conservation Code’’. 
(4) by adding at the end the following: 
‘‘(d) If the Secretaries have not, within 1 year after 
the requirements of the 2004 International Energy Con-
servation Code are revised, amended the standards or 
made a determination under subsection (c) of this section, 
and if the Secretary of Energy has made a determination 
under section 304 of the Energy Conservation and Pro-
duction Act (42 U.S.C. 6833) that the revised code would 
improve energy efficiency, all new construction of housing 
specified in subsection (a) shall meet the requirements of 
the revised International Energy Conservation Code.’’.
Subtitle C—Energy Star 
SEC. 121. ENERGY STAR PROGRAM. 
(a) IN GENERAL.—The Energy Policy and Conserva-
tion Act is amended by inserting after section 324 (42 
U.S.C. 6294) the following: 
‘‘ENERGY STAR PROGRAM 
‘‘SEC. 324A. (a) IN GENERAL.—There is established 
within 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, improve energy security, 
and reduce pollution through voluntary labeling of, or 
other forms of communication about, products and build-
ings that meet the highest energy efficiency standards. 
‘‘(b) DIVISION OF RESPONSIBILITIES.—Responsibil-
ities under the program shall be divided between the De-
partment of Energy and the Environmental Protection 
Agency in accordance with the terms of applicable agree-
ments between those agencies. 
‘‘(c) DUTIES.—The Administrator and the Secretary 
shall— 
‘‘(1) promote Energy Star compliant tech-
nologies as the preferred technologies in the market-
place for— 
‘‘(A) achieving energy efficiency; and
‘‘(B) reducing pollution; 
‘‘(2) work to enhance public awareness of the 
Energy Star label, including by providing special 
outreach to small businesses; 
‘‘(3) preserve the integrity of the Energy Star 
label by— 
‘‘(A) regularly updating Energy Star cri-
teria; and 
‘‘(B) ensuring, in general, that— 
‘‘(i) not more than 25 percent of 
available models in a product class receive 
the Energy Star designation; and 
‘‘(ii) Energy Star designated products 
and buildings are at least 10 percent more 
efficient than— 
‘‘(I) appliance standards in effect 
on the date of enactment of this sec-
tion; and 
‘‘(II) the most recent model en-
ergy code; 
‘‘(4) solicit comments from interested parties 
prior to establishing or revising an Energy Star 
product category, specification, or criterion (or prior 
to effective dates for any such product category, 
specification, or criterion);
‘‘(5) on 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— 
‘‘(A) an explanation of the changes; and 
‘‘(B) as appropriate, responses to com-
ments submitted by interested parties; and 
‘‘(6) provide appropriate lead time (which shall 
be 270 days, unless the Agency or Department 
specifies otherwise) prior to the applicable effective 
date for a new or a significant revision to a product 
category, specification, or criterion, taking into ac-
count the timing requirements of the manufacturing, 
product marketing, and distribution process for the 
specific product addressed. 
‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this sec-
tion— 
‘‘(1) $70,000,000 for fiscal year 2006; 
‘‘(2) $90,000,000 for fiscal year 2007; 
‘‘(3) $110,000,000 for fiscal year 2008; 
‘‘(4) $130,000,000 for fiscal year 2009; and 
‘‘(5) $150,000,000 for fiscal year 2010.’’.
(b) TABLE OF CONTENTS AMENDMENT.—The table 
of contents of the Energy Policy and Conservation Act (42 
U.S.C. prec. 6201) is amended by inserting after the item 
relating to section 324 the following: 
‘‘324A. Energy Star program.’’. 
Subtitle D—Federal Buildings 
SEC. 131. 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)— 
(A) by striking ‘‘CABO Model Energy 
Code, 1992’’ and inserting ‘‘the 2004 Inter-
national Energy Conservation Code’’; and 
(B) by striking ‘‘90.1–1989’’ and inserting 
‘‘90.1–2004’’; and 
(2) by adding at the end the following: 
‘‘(3)(A)(i) Unless demonstrated not to be life-cycle 
cost-effective, for each new and renovated Federal build-
ing— 
‘‘(I) such building be designed, constructed, 
commissioned, and operated 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 appro-
priate; and
‘‘(II) sustainable design principles are applied 
to the siting, design, construction, operation, and 
maintenance of all new and replacement buildings; 
and 
‘‘(ii) where water is used to achieve energy efficiency, 
water conservation technologies shall be applied to the ex-
tent they are life-cycle cost effective. 
‘‘(B) Not later than 1 year after the date of approval 
of each subsequent revision of the ASHRAE Standard or 
the International Energy Conservation Code, as appro-
priate, the Secretary of Energy shall determine (based on 
the cost-effectiveness of the requirements under the 
amendments) whether the revised standards established 
under this paragraph should be updated to reflect the 
amendments. 
‘‘(C) In the budget request of the Federal agency for 
each fiscal year and each report submitted by the Federal 
agency under section 548(a) of the National Energy Con-
servation 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 Fed-
eral buildings meet or exceed the revised standards 
established under this paragraph.
‘‘(4) All housing constructed under the military hous-
ing privatization initiative of the Department of Defense 
shall, where such designations and products are avail-
able— 
‘‘(A) be Energy Star qualified; 
‘‘(B) be equipped with Energy Star appliances 
and FEMP designated appliances; and 
‘‘(C) include Energy Star lighting.’’. 
TITLE II—TRANSPORTATION 
SEC. 201. ALTERNATIVE COMPLIANCE WITH FLEET RULES. 
(a) USE OF ALTERNATIVE FUELS BY DUAL-FUELED 
VEHICLES.—Section 400AA(a)(3)(E) of the Energy Pol-
icy and Conservation Act (42 U.S.C. 6374(a)(3)(E)) is 
amended to read as follows: 
‘‘(E)(i) Dual fueled vehicles acquired pursuant to this 
section shall be operated on alternative fuels unless the 
Secretary determines that an agency qualifies for a waiver 
of that requirement for vehicles operated by the agency 
in a particular geographic area in which— 
‘‘(I) the alternative fuel otherwise required to 
be used in the vehicle is not reasonably available to 
retail purchasers of the fuel, as certified to the Sec-
retary by the head of the agency; or 
‘‘(II) the cost of the alternative fuel otherwise 
required to be used in the vehicle is unreasonably
more expensive compared to gasoline, as certified to 
the Secretary by the head of the agency. 
‘‘(ii) The Secretary shall monitor compliance with 
this subparagraph by all agency fleets and shall submit 
annually to Congress a report that— 
‘‘(I) describes the extent to which the require-
ments of this subparagraph are being achieved; and 
‘‘(II) includes information on annual reductions 
achieved from the use of petroleum-based fuels and 
the problems, if any, encountered in acquiring alter-
native fuels.’’. 
(b) ALTERNATIVE COMPLIANCE AND FLEXIBILITY.— 
(1) ALTERNATIVE COMPLIANCE.—Title V of the 
Energy Policy Act of 1992 (42 U.S.C. 13251 et 
seq.) is amended— 
(A) by redesignating section 514 as section 
515; and 
(B) by inserting after section 513 the fol-
lowing: 
‘‘SEC. 514. ALTERNATIVE COMPLIANCE. 
‘‘(a) APPLICATION FOR WAIVER.—Any head of a 
Federal agency described in section 303(b)(3), any cov-
ered person subject to section 501, and any State subject 
to section 507(o) may petition the Secretary for a waiver
of the applicable requirements of section 303, 501, or 
507(o). 
‘‘(b) GRANT OF WAIVER.—The Secretary may grant 
a waiver of the requirements of section 303, 501, or 
507(o) upon a showing that the fleet owned, operated, 
leased, or otherwise controlled by the Federal agency, 
State, or covered person— 
‘‘(1) will achieve a reduction in its annual con-
sumption of petroleum fuels equal to the reduction 
in consumption of petroleum that would result from 
100 percent compliance with fuel use requirements 
in section 501 or 303, as appropriate, or, for entities 
covered under section 507(o), a reduction equal to 
the covered State entity’s consumption of alternative 
fuels if all its alternative fuel vehicles given credit 
under section 508 were to use alternative fuel 100 
percent of the time; and 
‘‘(2) is in compliance with all applicable vehicle 
emission standards established by the Administrator 
under the Clean Air Act (42 U.S.C. 7401 et seq.). 
‘‘(c) REVOCATION OF WAIVER.—The Secretary shall 
revoke any waiver granted under this section if the Fed-
eral agency, State, or covered person fails to comply with 
subsection (b).’’.
(2) TABLE OF CONTENTS AMENDMENT.—The 
table of contents of the Energy Policy Act of 1992 
(42 U.S.C. prec. 13201) is amended by striking the 
item relating to section 514 and inserting the fol-
lowing: 
‘‘514. Alternative compliance. 
‘‘515. Authorization of appropriations.’’. 
(c) CREDITS.—Section 508(a) of the Energy Policy 
Act of 1992 (42 U.S.C. 13258(a)) is amended— 
(1) by striking ‘‘The Secretary’’ and inserting 
the following: 
‘‘(1) The Secretary’’; and 
(2) by adding at the end the following: 
‘‘(2) Not later than January 31, 2007, the Sec-
retary shall— 
‘‘(A) allocate credit in an amount to be de-
termined by the Secretary for— 
‘‘(i) acquisition of— 
‘‘(I) a light-duty hybrid electric 
vehicle; 
‘‘(II) a plug-in hybrid electric ve-
hicle; 
‘‘(III) a fuel cell electric vehicle; 
‘‘(IV) a medium- or heavy-duty 
hybrid electric vehicle;
‘‘(V) a neighborhood electric ve-
hicle; or 
‘‘(VI) a medium- or heavy-duty 
dedicated vehicle; and 
‘‘(ii) investment in qualified alter-
native fuel infrastructure or nonroad 
equipment, as determined by the Sec-
retary; and 
‘‘(B) allocate more than 1, but not to ex-
ceed 5, credits for investment in an emerging 
technology relating to any vehicle described in 
subparagraph (A) to encourage— 
‘‘(i) a reduction in petroleum demand; 
‘‘(ii) technological advancement; and 
‘‘(iii) environmental safety.’’. 
(d) FEDERAL FLEET.—Section 303 of the Energy 
Policy Act of 1992 (42 U.S.C. 13212) is amended— 
(1) by redesignating subsection (f) as sub-
section (g); and 
(2) by inserting after subsection (e) the fol-
lowing: 
‘‘(f) CREDIT.—The Secretary shall allocate to a Fed-
eral fleet credits toward meeting the requirements of sub-
section (b) of this section under the same allocation as 
determined under subsection (a)(2)of section 508.’’.
SEC. 202. STANDARDS FOR EXECUTIVE AGENCY AUTO-
MOBILES. 
Section 32917 of title 49, United States Code, is 
amended to read as follows: 
‘‘§ 32917. Standards for Executive agency automobiles 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) The term ‘automobile’ does not include 
any vehicle designed for combat-related missions, 
law enforcement work, or emergency rescue work. 
‘‘(2) The term ‘executive agency’ has the mean-
ing given that term in section 105 of title 5. 
‘‘(3) The term ‘new automobile’, with respect to 
the fleet of automobiles of an executive agency, 
means an automobile that is leased for at least 60 
consecutive days or bought, by or for the agency, 
after September 30, 2004.’’. 
‘‘(b) BASELINE AVERAGE FUEL ECONOMY.— 
‘‘(1) IN GENERAL.—In accordance with guid-
ance issued under subsection (d), the head of each 
executive agency shall calculate, for all automobiles 
in the agency’s fleet of automobiles that were leased 
or bought as a new vehicle in fiscal year 2004, the 
average fuel economy for the automobiles. 
‘‘(2) BASELINE.—In this section, the average 
fuel economy as calculated in paragraph (1) shall be
the baseline average fuel economy for the agency’s 
fleet of automobiles. 
‘‘(c) INCREASE OF AVERAGE FUEL ECONOMY.—The 
head of an executive agency shall manage the procurement 
of automobiles for that agency so that not later than Sep-
tember 30, 2008, the average fuel economy of the new 
automobiles in the agency’s fleet of automobiles is not less 
than 3 miles per gallon higher than the baseline average 
fuel economy determined under subsection (b) for that 
fleet. 
‘‘(d) CALCULATION OF AVERAGE FUEL ECONOMY.— 
The Secretary of Transportation shall issue guidance to 
carry out this section, including guidance for the calcula-
tion of average fuel economy.’’. 
TITLE III—INDUSTRY 
SEC. 301. VOLUNTARY COMMITMENTS TO REDUCE INDUS-
TRIAL ENERGY INTENSITY. 
(a) DEFINITIONS.—In this section: 
(1) ENERGY INTENSITY.—The term ‘‘energy in-
tensity’’ means the primary energy consumed for 
each unit of physical output in an industrial process. 
(2) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Energy, acting in cooperation with 
the Administrator of the Environmental Protection 
Agency.
(b) VOLUNTARY AGREEMENTS.—The Secretary shall 
enter into voluntary agreements with 1 or more entities 
in industrial sectors that consume significant quantities 
of primary energy for each unit of physical output to re-
duce the energy intensity of the production activities of 
the entities. 
(c) GOAL.—Voluntary agreements under this section 
shall have as a goal the reduction of energy intensity by 
not less than 2.5 percent each year during the period of 
calendar years 2007 through 2016. 
(d) RECOGNITION.—The Secretary, in cooperation 
with other appropriate Federal agencies, shall develop 
mechanisms to recognize and publicize the achievements 
of participants in voluntary agreements under this section. 
(e) TECHNICAL ASSISTANCE.—An entity that enters 
into an agreement under this section and continues to 
make a good faith effort to achieve the energy efficiency 
goals specified in the agreement shall be eligible to receive 
from the Secretary a grant or technical assistance, as ap-
propriate, to assist in the achievement of those goals. 
(f) REPORT.—Not later than each of June 30, 2012, 
and June 30, 2016, the Secretary shall submit to Con-
gress a report that— 
(1) evaluates the success of the voluntary agree-
ments under this section;
(2) provides independent verification of any en-
ergy savings achieved as a result of the voluntary 
agreements below a no-commitment baseline for each 
participating firm; and 
(3) identifies incentives and other measures 
needed to assist industries in achieving energy inten-
sity reductions. 
(g) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to carry out this section 
$15,000,000 for each of fiscal years 2006 through 2010, 
and such sums as may be necessary for each fiscal year 
after 2010. 
TITLE 
IV—ELECTRICITY 
AND 
NATURAL GAS UTILITIES AND 
SUPPLIERS 
SEC. 401. ENERGY EFFICIENT ELECTRIC AND NATURAL GAS 
UTILITIES STUDY. 
(a) IN GENERAL.—Not later than 1 year after the 
date of enactment of this Act, the Secretary, in consulta-
tion with the National Association of Regulatory Utility 
Commissioners and the National Association of State En-
ergy Officials, shall conduct a study of State and regional 
policies that promote cost-effective programs to reduce en-
ergy consumption (including energy efficiency programs) 
that are carried out by—
(1) utilities that are subject to State regulation; 
and 
(2) nonregulated utilities. 
(b) CONSIDERATION.—In conducting the study under 
subsection (a), the Secretary shall take into consider-
ation— 
(1) performance standards for achieving energy 
use and demand reduction targets; 
(2) funding sources, including rate surcharges; 
(3) infrastructure planning approaches (includ-
ing energy efficiency programs) and infrastructure 
improvements; 
(4) the costs and benefits of consumer edu-
cation programs conducted by State and local gov-
ernments and local utilities to increase consumer 
awareness of energy efficiency technologies and 
measures; and 
(5) methods of— 
(A) removing disincentives for utilities to 
implement energy efficiency programs; 
(B) encouraging utilities to undertake vol-
untary energy efficiency programs; and 
(C) ensuring appropriate returns on energy 
efficiency programs.
(c) REPORT.—Not later than 1 year after the date 
of enactment of this Act, the Secretary shall submit to 
Congress a report that includes— 
(1) the findings of the study; and 
(2) any recommendations of the Secretary, in-
cluding recommendations on model policies to pro-
mote energy efficiency programs. 
SEC. 402. ENERGY EFFICIENCY PILOT PROGRAM. 
(a) IN GENERAL.—The Secretary shall establish a 
pilot program under which the Secretary provides financial 
assistance to at least 3, but not more than 7, States to 
carry out pilot projects in the States for— 
(1) planning and adopting statewide programs 
that encourage, for each year in which the pilot 
project is carried out— 
(A) energy efficiency; and 
(B) reduction of consumption of electricity 
or natural gas in the State by at least 0.75 per-
cent, as compared to a baseline determined by 
the Secretary for the period preceding the im-
plementation of the program; or 
(2) for any State that has adopted a statewide 
program as of the date of enactment of this Act, ac-
tivities that reduce energy consumption in the State 
by expanding and improving the program.
(b) VERIFICATION.—A State that receives financial 
assistance under subsection (a)(1) shall submit to the Sec-
retary independent verification of any energy savings 
achieved through the statewide program. 
(c) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to carry out this section 
$5,000,000 for each of fiscal years 2006 through 2010, 
to remain available until expended. 
SEC. 403. ENERGY EFFICIENCY RESOURCE PROGRAMS. 
(a) ELECTRIC UTILITY PROGRAMS.—Section 111 of 
the Public Utilities Regulatory Policy Act of 1978 (16 
U.S.C. 2621) is amended by adding at the end the fol-
lowing: 
‘‘(e) ENERGY EFFICIENCY RESOURCE PROGRAMS.— 
‘‘(1) DEFINITIONS.—In this subsection: 
‘‘(A) DEMAND BASELINE.—The term ‘de-
mand baseline’ means the baseline determined 
by the Secretary for an appropriate period pre-
ceding the implementation of an energy effi-
ciency resource program. 
‘‘(B) ENERGY EFFICIENCY RESOURCE PRO-
GRAMS.—The term ‘energy efficiency resource 
program’ means an energy efficiency or other 
demand reduction program that is designed to 
reduce annual electricity consumption or peak
demand of consumers served by an electric util-
ity by a percentage of the demand baseline of 
the utility that is equal to not less than 0.75 
percent of the number of years during which 
the program is in effect. 
‘‘(2) PUBLIC HEARINGS; DETERMINATIONS.— 
‘‘(A) As soon as practicable after the date 
of enactment of this subsection, but not later 
than 3 years after that date, each State regu-
latory authority (with respect to each electric 
utility over which the State has ratemaking au-
thority) and each nonregulated electric utility 
shall, after notice, conduct a public hearing on 
the benefits and feasibility of implementing an 
energy efficiency resource program. 
‘‘(B) A State regulatory authority or non-
regulated utility shall implement an energy effi-
ciency resource program if, on the basis of a 
hearing under subparagraph (A), the State reg-
ulatory authority or nonregulated utility deter-
mines that the program would— 
‘‘(i) benefit end-use customers; 
‘‘(ii) be cost-effective based on total 
resource cost; 
‘‘(iii) serve the public welfare; and
‘‘(iv) be feasible to implement. 
‘‘(3) IMPLEMENTATION.— 
‘‘(A) STATE REGULATORY AUTHORITIES.— 
If a State regulatory authority makes a deter-
mination under paragraph (2)(B), the State 
regulatory authority shall— 
‘‘(i) require each electric utility over 
which the State has ratemaking authority 
to implement an energy efficiency resource 
program; and 
‘‘(ii) allow such a utility to recover 
any expenditures incurred by the utility in 
implementing the energy efficiency re-
source program. 
‘‘(B) NONREGULATED
ELECTRIC
UTILI-
TIES.—If a nonregulated electric utility makes 
a determination under paragraph (2)(B), the 
utility shall implement an energy efficiency re-
source program. 
‘‘(4) UPDATING REGULATIONS.—A State regu-
latory authority or nonregulated utility may update 
periodically a determination under paragraph (2)(B) 
to determine whether an energy efficiency resource 
program should be— 
‘‘(A) continued;,
‘‘(B) modified; or 
‘‘(C) terminated. 
‘‘(5) EXCEPTION.—Paragraph (2) shall not 
apply to a State regulatory authority (or any non-
regulated electric utility operating in the State) that 
demonstrates to the Secretary that an energy effi-
ciency resource program is in effect in the State.’’. 
(b) GAS UTILITIES.—Section 303 of the Public Utili-
ties Regulatory Policy Act of 1978 (15 U.S.C. 3203) is 
amended by adding at the end the following: 
‘‘(e) ENERGY EFFICIENCY RESOURCE PROGRAMS.— 
‘‘(1) DEFINITIONS.—In this subsection: 
‘‘(A) DEMAND BASELINE.—The term ‘de-
mand baseline’ means the baseline determined 
by the Secretary for an appropriate period pre-
ceding the implementation of an energy effi-
ciency resource program. 
‘‘(B) ENERGY EFFICIENCY RESOURCE PRO-
GRAMS.—The term ‘energy efficiency resource 
program’ means an energy efficiency or other 
demand reduction program that is designed to 
reduce annual gas consumption or peak demand 
of consumers served by a gas utility by a per-
centage of the demand baseline of the utility 
that is equal to not less than 0.75 percent of
the number of years during which the program 
is in effect. 
‘‘(2) PUBLIC HEARINGS; DETERMINATIONS.— 
‘‘(A) As soon as practicable after the date 
of enactment of this subsection, but not later 
than 3 years after that date, each State regu-
latory authority (with respect to each gas utility 
over which the State has ratemaking authority) 
and each nonregulated gas utility shall, after 
notice, conduct a public hearing on the benefits 
and feasibility of implementing an energy effi-
ciency resource program. 
‘‘(B) A State regulatory authority or non-
regulated utility shall implement an energy effi-
ciency resource program if, on the basis of a 
hearing under subparagraph (A), the State reg-
ulatory authority or nonregulated utility deter-
mines that the program would— 
‘‘(i) benefit end-use customers; 
‘‘(ii) be cost-effective based on total 
resource cost; 
‘‘(iii) serve the public welfare; and 
‘‘(iv) be feasible to implement. 
‘‘(3) IMPLEMENTATION.—
‘‘(A) STATE REGULATORY AUTHORITIES.— 
If a State regulatory authority makes a deter-
mination under paragraph (2)(B), the State 
regulatory authority shall— 
‘‘(i) require each gas utility over 
which the State has ratemaking authority 
to implement an energy efficiency resource 
program; and 
‘‘(ii) allow such a utility to recover 
any expenditures incurred by the utility in 
implementing the energy efficiency re-
source program. 
‘‘(B) NONREGULATED GAS UTILITIES.—If 
a nonregulated gas utility makes a determina-
tion under paragraph (2)(B), the utility shall 
implement an energy efficiency resource pro-
gram. 
‘‘(4) UPDATING REGULATIONS.—A State regu-
latory authority or nonregulated utility may update 
periodically a determination under paragraph (2)(B) 
to determine whether an energy efficiency resource 
program should be— 
‘‘(A) continued; 
‘‘(B) modified; or 
‘‘(C) terminated.
‘‘(5) EXCEPTION.—Paragraph (2) shall not 
apply to a State regulatory authority (or any non-
regulated gas utility operating in the State) that 
demonstrates to the Secretary that an energy effi-
ciency resource program is in effect in the State.’’. 
TITLE V—TAX INCENTIVES 
SEC. 500. AMENDMENT OF 1986 CODE. 
Except as otherwise expressly provided, whenever in 
this title an amendment or repeal is expressed in terms 
of an amendment to, or repeal of, a section or other provi-
sion, the reference shall be considered to be made to a 
section or other provision of the Internal Revenue Code 
of 1986. 
Subtitle A—Buildings and 
Equipment Incentives 
SEC. 501. CREDIT FOR CONSTRUCTION OF NEW ENERGY EF-
FICIENT HOMES. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 (relating to business related cred-
its) is amended by adding at the end the following new 
section: 
‘‘SEC. 45J. NEW ENERGY EFFICIENT HOME CREDIT. 
‘‘(a) IN GENERAL.—For purposes of section 38, in 
the case of an eligible contractor with respect to a quali-
fied new energy efficient home, the credit determined
under this section for the taxable year with respect to such 
home is an amount equal to the aggregate adjusted bases 
of all energy efficient property installed in such home dur-
ing construction of such home. 
‘‘(b) LIMITATIONS.— 
‘‘(1) MAXIMUM CREDIT.— 
‘‘(A) IN GENERAL.—The credit allowed by 
this section with respect to a dwelling unit shall 
not exceed— 
‘‘(i) in the case of a dwelling unit de-
scribed in clause (i) or (iii) of subsection 
(c)(3)(C), $1,000, and 
‘‘(ii) in the case of a dwelling unit de-
scribed in clause (ii) or (iv) of subsection 
(c)(3)(C), $2,000. 
‘‘(B) PRIOR CREDIT AMOUNTS ON SAME 
DWELLING UNIT TAKEN INTO ACCOUNT.—If a 
credit was allowed under subsection (a) with re-
spect to a dwelling unit in 1 or more prior tax-
able years, the amount of the credit otherwise 
allowable for the taxable year with respect to 
such dwelling unit shall be reduced by the sum 
of the credits allowed under subsection (a) with 
respect to the dwelling unit for all prior taxable 
years.
‘‘(2) COORDINATION WITH CERTAIN CREDITS.— 
For purposes of this section— 
‘‘(A) the basis of any property referred to 
in subsection (a) shall be reduced by that por-
tion of the basis of any property which is attrib-
utable to qualified rehabilitation expenditures 
(as defined in section 47(c)(2)) or to the energy 
percentage of energy property (as determined 
under section 48(a)), and 
‘‘(B) expenditures taken into account 
under section 47 or 48(a) shall not be taken 
into account under this section. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) ELIGIBLE CONTRACTOR.—The term ‘eligi-
ble contractor’ means— 
‘‘(A) the person who constructed the quali-
fied new energy efficient home, or 
‘‘(B) in the case of a qualified new energy 
efficient home which is a manufactured home, 
the manufactured home producer of such home. 
If more than 1 person is described in subparagraph 
(A) or (B) with respect to any qualified new energy 
efficient home, such term means the person des-
ignated as such by the owner of such home.
‘‘(2) ENERGY
EFFICIENT
PROPERTY.—The 
term ‘energy efficient property’ means any energy 
efficient building envelope component, and any en-
ergy efficient heating or cooling equipment or sys-
tem, which can, individually or in combination with 
other components, result in a dwelling unit meeting 
the requirements of this section. 
‘‘(3) QUALIFIED
NEW
ENERGY
EFFICIENT 
HOME.—The term ‘qualified new energy efficient 
home’ means a dwelling unit— 
‘‘(A) located in the United States, 
‘‘(B) the construction of which is substan-
tially completed after the date of the enactment 
of this section, and 
‘‘(C) which is— 
‘‘(i) certified to have a level of annual 
heating and cooling energy consumption 
which is at least 30 percent below the an-
nual level of heating and cooling energy 
consumption of a comparable dwelling unit 
constructed in accordance with the stand-
ards of chapter 4 of the 2003 International 
Energy Conservation Code, as such Code 
(including supplements) is in effect on the 
date of the enactment of this section, and
for which the heating and cooling equip-
ment efficiencies correspond to the min-
imum allowed under the regulations estab-
lished by the Department of Energy pursu-
ant to the National Appliance Energy Con-
servation Act of 1987 and in effect at the 
time of construction, and to have building 
envelope component improvements account 
for at least 1⁄3 of such 30 percent, 
‘‘(ii) certified to have a level of annual 
heating and cooling energy consumption 
which is at least 50 percent below such an-
nual level and to have building envelope 
component improvements account for at 
least 1⁄5 of such 50 percent, 
‘‘(iii) a manufactured home which 
meets the requirements of clause (i) and 
which conforms to Federal Manufactured 
Home Construction and Safety Standards 
(section 3280 of title 24, Code of Federal 
Regulations), or 
‘‘(iv) a manufactured home which 
meets the requirements of clause (ii) and 
which conforms to Federal Manufactured 
Home Construction and Safety Standards
(section 3280 of title 24, Code of Federal 
Regulations). 
‘‘(4) CONSTRUCTION.—The term ‘construction’ 
includes substantial reconstruction and rehabilita-
tion. 
‘‘(5) ACQUIRE.—The term ‘acquire’ includes 
purchase and, in the case of reconstruction and re-
habilitation, such term includes a binding written 
contract for such reconstruction or rehabilitation. 
‘‘(6) BUILDING ENVELOPE COMPONENT.—The 
term ‘building envelope component’ means— 
‘‘(A) any sealant or insulation material or 
system which is specifically and primarily de-
signed to reduce the heat loss or gain of a 
dwelling unit when installed in or on such 
dwelling unit, 
‘‘(B) exterior windows (including sky-
lights), 
‘‘(C) exterior doors, and 
‘‘(D) any metal roof installed on a dwelling 
unit, but only if such roof has appropriate pig-
mented coatings which— 
‘‘(i) are specifically and primarily de-
signed to reduce the heat gain of such 
dwelling unit, and
‘‘(ii) meet the Energy Star program 
requirements. 
‘‘(d) CERTIFICATION.— 
‘‘(1) METHOD OF CERTIFICATION.—A certifi-
cation described in subsection (c)(3)(C) shall be de-
termined in accordance with guidance prescribed by 
the Secretary, after consultation with the Secretary 
of Energy. Such guidance shall specify procedures 
and methods for calculating energy and cost savings. 
‘‘(2) FORM.—A certification described in sub-
section (c)(3)(C) shall be made in writing in a man-
ner which specifies in readily verifiable fashion the 
energy efficient building envelope components and 
energy efficient heating or cooling equipment in-
stalled and their respective rated energy efficiency 
performance. 
‘‘(e) BASIS ADJUSTMENT.—For purposes of this sub-
title, if a credit is determined under this section for any 
expenditure with respect to any property, the increase in 
the basis of such property which would (but for this sub-
section) result from such expenditure shall be reduced by 
the amount of the credit so determined. 
‘‘(f) SPECIAL RULE WITH RESPECT TO BUILDINGS 
WITH ENERGY EFFICIENT PROPERTY.—In any case in 
which a deduction under section 200 or a credit under sec-
tion 25C has been allowed with respect to property in con-
nection with a dwelling unit, the level of annual heating 
and cooling energy consumption of the comparable dwell-
ing unit referred to in clauses (i) and (ii) of subsection 
(c)(3)(C) shall be determined assuming such comparable 
dwelling unit contains the property for which such deduc-
tion or credit has been allowed. 
‘‘(g) APPLICATION OF SECTION.— 
‘‘(1) 50 PERCENT HOMES.—In the case of any 
dwelling unit described in clause (ii) or (iv) of sub-
section (c)(3)(C), subsection (a) shall apply to quali-
fied new energy efficient homes acquired during the 
period beginning on the date of the enactment of 
this section, and ending on December 31, 2009. 
‘‘(2) 30 PERCENT HOMES.—In the case of any 
dwelling unit described in clause (i) or (iii) of sub-
section (c)(3)(C), subsection (a) shall apply to quali-
fied new energy efficient homes acquired during the 
period beginning on the date of the enactment of 
this section, and ending on December 31, 2007.’’. 
(b) CREDIT MADE PART OF GENERAL BUSINESS 
CREDIT.—Section 38(b) (relating to current year business 
credit) is amended by striking ‘‘plus’’ at the end of para-
graph (18), by striking the period at the end of paragraph
(19) and inserting ‘‘, plus’’, and by adding at the end the 
following new paragraph: 
‘‘(20) the new energy efficient home credit de-
termined under section 45J(a).’’. 
(c) BASIS ADJUSTMENT.—Subsection (a) of section 
1016, as amended by section 101, is amended by striking 
‘‘and’’ at the end of paragraph (30), by striking the period 
at the end of paragraph (31) and inserting ‘‘, and’’, and 
by adding at the end the following new paragraph: 
‘‘(32) to the extent provided in section 45J(e), 
in the case of amounts with respect to which a credit 
has been allowed under section 45J.’’. 
(d) DEDUCTION FOR CERTAIN UNUSED BUSINESS 
CREDITS.—Section 196(c) (defining qualified business 
credits) is amended by striking ‘‘and’’ at the end of para-
graph (11), by striking the period at the end of paragraph 
(12) and inserting ‘‘, and’’, and by adding after paragraph 
(12) the following new paragraph: 
‘‘(13) the new energy efficient home credit de-
termined under section 45J(a).’’. 
(e) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
is amended by adding at the end the following new item: 
‘‘45J. New energy efficient home credit.’’.
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years ending after the 
date of the enactment of this Act. 
SEC. 502. CREDIT FOR ENERGY EFFICIENCY IMPROVE-
MENTS TO EXISTING HOMES. 
(a) ALLOWANCE OF CREDIT.— 
(1) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 (relating to nonrefundable 
personal credits) is amended by inserting after sec-
tion 25B the following new section: 
‘‘SEC. 25C. ENERGY EFFICIENCY IMPROVEMENTS TO EXIST-
ING HOMES. 
‘‘(a) ALLOWANCE OF CREDIT.— 
‘‘(1) IN
GENERAL.—In the case of an indi-
vidual, there shall be allowed as a credit against the 
tax imposed by this chapter for the taxable year an 
amount equal to so much of the credit amount speci-
fied in paragraph (2) which does not exceed the ex-
penditures made by the taxpayer in connection with 
the construction, reconstruction, erection, or reha-
bilitation of a dwelling unit of the taxpayer which re-
sults in the unit being a highly energy-efficient prin-
cipal residence. Such expenditures may include labor 
costs properly allocable to the onsite preparation, as-
sembly, or original installation of such property.