115
HR 6 PCS 
hearing of any disputed issues of material fact, with re-
spect to such conditions.’’. 
(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 
for an agency trial-type hearing of any disputed issues of 
material fact, with respect to such fishways.’’. 
(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
116
HR 6 PCS 
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—
‘‘(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
117
HR 6 PCS 
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, 
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 adequately protect the reservation. The Secretary 
shall submit the advisory and the Secretary’s final written 
determination into the record of the Commission’s pro-
ceeding. 
‘‘(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-
118
HR 6 PCS 
scription to construct, maintain, or operate a fishway. The 
alternative may include a fishway or an alternative to a 
fishway. 
‘‘(2) Notwithstanding section 18, the Secretary of the 
Interior or the Secretary of Commerce, as appropriate, 
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 of the fish re-
sources 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-
119
HR 6 PCS 
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 
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
120
HR 6 PCS 
finds that the recommendation will not adequately protect 
the fish resources. The Secretary shall submit the advisory 
and the Secretary’s final written determination into the 
record of the Commission’s proceeding.’’.
Subtitle B—Additional Hydropower 
SEC. 13201. 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
121
HR 6 PCS 
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-
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. 
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
122
HR 6 PCS 
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 
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 
one 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-
123
HR 6 PCS 
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-
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. 13202. 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-
124
HR 6 PCS 
ital improvement concerned and not more than one pay-
ment may be made with respect to improvements at a sin-
gle facility. No payment in excess of $750,000 may be 
made with respect to improvements at a single facility. 
(c) AUTHORIZATION.—There is authorized to be ap-
propriated to carry out this section not more than 
$10,000,000 for each of the fiscal years 2004 through 
2013. 
SEC. 13203. SMALL HYDROELECTRIC POWER PROJECTS. 
Section 408(a)(6) of the Public Utility Regulatory 
Policies Act of 1978 is amended by striking ‘‘April 20, 
1977’’ and inserting ‘‘March 4, 2003’’. 
SEC. 13204. INCREASED HYDROELECTRIC GENERATION AT 
EXISTING FEDERAL FACILITIES. 
(a) IN GENERAL.—The Secretary of Energy, in con-
sultation with the Secretary of the Interior and Secretary 
of the Army, shall conduct studies of the cost-effective op-
portunities to increase hydropower generation at existing 
federally-owned or operated water regulation, storage, and 
conveyance facilities. Such studies shall be completed with-
in two years after the date of enactment of this subtitle 
and transmitted to the Committee on Commerce of the 
House of Representatives and the Committee on Energy 
and Natural Resources of the Senate. An individual study 
shall be prepared for each of the Nation’s principal river
125
HR 6 PCS 
basins. Each such study shall identify and describe with 
specificity the following matters: 
(1) Opportunities to improve the efficiency of 
hydropower generation at such facilities through, but 
not limited to, mechanical, structural, or operational 
changes. 
(2) Opportunities to improve the efficiency of 
the use of water supplied or regulated by Federal 
projects where such improvement could, in the ab-
sence of legal or administrative constraints, make 
additional water supplies available for hydropower 
generation or reduce project energy use. 
(3) Opportunities to create additional hydro-
power generating capacity at existing facilities 
through, but not limited to, the construction of addi-
tional generating facilities, the uprating of genera-
tors and turbines, and the construction of pumped 
storage facilities. 
(4) Preliminary assessment of the costs and the 
economic and environmental consequences of such 
measures. 
(b) PREVIOUS STUDIES.—If studies of the type re-
quired by subsection (a) have been prepared by any agency 
of the United States and published within the five years 
prior to the date of enactment of this subtitle, the Sec-
126
HR 6 PCS 
retary of Energy may choose not to perform new studies 
and incorporate the information in such studies into the 
studies required by subsection (a). 
(c) AUTHORIZATION.—There is authorized to be ap-
propriated such sums as may be necessary to carry out 
the purposes of this section.
TITLE IV—NUCLEAR MATTERS 
Subtitle A—Price-Anderson Act 
Amendments 
SEC. 14001. SHORT TITLE. 
This subtitle may be cited as the ‘‘Price-Anderson 
Amendments Act of 2003’’. 
SEC. 14002. EXTENSION OF INDEMNIFICATION AUTHORITY. 
(a) INDEMNIFICATION
OF NUCLEAR REGULATORY 
COMMISSION LICENSEES.—Section 170 c. of the Atomic 
Energy Act of 1954 (42 U.S.C. 2210(c)) is amended—
(1) in the subsection heading, by striking ‘‘LI-
CENSES’’ and inserting ‘‘LICENSEES’’; and 
(2) by striking ‘‘December 31, 2003’’ each 
place it appears and inserting ‘‘August 1, 2017’’. 
(b) INDEMNIFICATION OF DEPARTMENT OF ENERGY 
CONTRACTORS.—Section 170 d.(1)(A) of the Atomic En-
ergy Act of 1954 (42 U.S.C. 2210(d)(1)(A)) is amended 
by striking ‘‘December 31, 2004’’ and inserting ‘‘August 
1, 2017’’.
127
HR 6 PCS 
(c) INDEMNIFICATION OF NONPROFIT EDUCATIONAL 
INSTITUTIONS.—Section 170 k. of the Atomic Energy Act 
of 1954 (42 U.S.C. 2210(k)) is amended by striking ‘‘Au-
gust 1, 2002’’ each place it appears and inserting ‘‘August 
1, 2017’’. 
SEC. 14003. MAXIMUM ASSESSMENT. 
Section 170 of the Atomic Energy Act of 1954 (42 
U.S.C. 2210) is amended—
(1) in subsection b.(1), in the second proviso of 
the third sentence—
(A) by striking ‘‘$63,000,000’’ and insert-
ing ‘‘$94,000,000’’; and 
(B) by striking ‘‘$10,000,000 in any 1 
year’’ and inserting ‘‘$15,000,000 in any 1 year 
(subject to adjustment for inflation under sub-
section t.)’’; and 
(2) in subsection t.—
(A) by inserting ‘‘total and annual’’ after 
‘‘amount of the maximum’’; 
(B) by striking ‘‘the date of the enactment 
of the Price-Anderson Amendments Act of 
1988’’ and inserting ‘‘July 1, 2002’’; and 
(C) by striking ‘‘such date of enactment’’ 
and inserting ‘‘July 1, 2002’’.
128
HR 6 PCS 
SEC. 14004. DEPARTMENT OF ENERGY LIABILITY LIMIT. 
(a) INDEMNIFICATION OF DEPARTMENT OF ENERGY 
CONTRACTORS.—Section 170 d. of the Atomic Energy Act 
of 1954 (42 U.S.C. 2210(d)) is amended by striking para-
graph (2) and inserting the following: 
‘‘(2) In an agreement of indemnification entered into 
under paragraph (1), the Secretary—
‘‘(A) may require the contractor to provide and 
maintain the financial protection of such a type and 
in such amounts as the Secretary shall determine to 
be appropriate to cover public liability arising out of 
or in connection with the contractual activity; and 
‘‘(B) shall indemnify the persons indemnified 
against such liability above the amount of the finan-
cial 
protection 
required, 
in 
the 
amount 
of 
$10,000,000,000 (subject to adjustment for inflation 
under subsection t.), in the aggregate, for all per-
sons indemnified in connection with the contract and 
for each nuclear incident, including such legal costs 
of the contractor as are approved by the Secretary.’’. 
(b) CONTRACT AMENDMENTS.—Section 170 d. of the 
Atomic Energy Act of 1954 (42 U.S.C. 2210(d)) is 
amended by striking paragraph (3) and inserting the fol-
lowing: 
‘‘(3) All agreements of indemnification under which 
the Department of Energy (or its predecessor agencies)
129
HR 6 PCS 
may be required to indemnify any person under this sec-
tion shall be deemed to be amended, on the date of enact-
ment of the Price-Anderson Amendments Act of 2003, to 
reflect the amount of indemnity for public liability and any 
applicable financial protection required of the contractor 
under this subsection.’’. 
(c) LIABILITY LIMIT.—Section 170 e.(1)(B) of the 
Atomic Energy Act of 1954 (42 U.S.C. 2210(e)(1)(B)) is 
amended—
(1) by striking ‘‘the maximum amount of finan-
cial protection required under subsection b. or’’; and 
(2) by striking ‘‘paragraph (3) of subsection d., 
whichever amount is more’’ and inserting ‘‘para-
graph (2) of subsection d.’’. 
SEC. 14005. INCIDENTS OUTSIDE THE UNITED STATES. 
(a) AMOUNT
OF INDEMNIFICATION.—Section 170 
d.(5) of the Atomic Energy Act of 1954 (42 U.S.C. 
2210(d)(5)) is amended by striking ‘‘$100,000,000’’ and 
inserting ‘‘$500,000,000’’. 
(b) LIABILITY LIMIT.—Section 170 e.(4) of the 
Atomic Energy Act of 1954 (42 U.S.C. 2210(e)(4)) is 
amended by striking ‘‘$100,000,000’’ and inserting 
‘‘$500,000,000’’.
130
HR 6 PCS 
SEC. 14006. REPORTS. 
Section 170 p. of the Atomic Energy Act of 1954 (42 
U.S.C. 2210(p)) is amended by striking ‘‘August 1, 1998’’ 
and inserting ‘‘August 1, 2013’’. 
SEC. 14007. INFLATION ADJUSTMENT. 
Section 170 t. of the Atomic Energy Act of 1954 (42 
U.S.C. 2210(t)) is amended—
(1) by redesignating paragraph (2) as para-
graph (3); and 
(2) by adding after paragraph (1) the following:
‘‘(2) The Secretary shall adjust the amount of indem-
nification provided under an agreement of indemnification 
under subsection d. not less than once during each 5-year 
period following July 1, 2002, in accordance with the ag-
gregate percentage change in the Consumer Price Index 
since—
‘‘(A) that date, in the case of the first adjust-
ment under this paragraph; or 
‘‘(B) the previous adjustment under this para-
graph.’’. 
SEC. 14008. PRICE-ANDERSON TREATMENT OF MODULAR 
REACTORS. 
Section 170 b. of the Atomic Energy Act of 1954 (42 
U.S.C. 2210(b)) is amended by adding at the end the fol-
lowing new paragraph:
131
HR 6 PCS 
‘‘(5)(A) For purposes of this section only, the Com-
mission shall consider a combination of facilities described 
in subparagraph (B) to be a single facility having a rated 
capacity of 100,000 electrical kilowatts or more. 
‘‘(B) A combination of facilities referred to in sub-
paragraph (A) is 2 or more facilities located at a single 
site, each of which has a rated capacity of 100,000 elec-
trical kilowatts or more but not more than 300,000 elec-
trical kilowatts, with a combined rated capacity of not 
more than 1,300,000 electrical kilowatts.’’. 
SEC. 14009. APPLICABILITY. 
The amendments made by sections 14003, 14004, 
and 14005 do not apply to a nuclear incident that occurs 
before the date of enactment of this Act.
SEC. 14010. PROHIBITION ON ASSUMPTION BY UNITED 
STATES GOVERNMENT OF LIABILITY FOR 
CERTAIN FOREIGN ACCIDENTS. 
Section 170 of the Atomic Energy Act of 1954 (42 
U.S.C. 2210) is amended by adding at the end the fol-
lowing new subsection: 
‘‘u. PROHIBITION ON ASSUMPTION OF LIABILITY FOR 
CERTAIN FOREIGN ACCIDENTS.—Notwithstanding this 
section or any other provision of law, no officer of the 
United States or of any department, agency, or instrumen-
tality of the United States Government may enter into any
132
HR 6 PCS 
contract or other arrangement, or into any amendment or 
modification of a contract or other arrangement, the pur-
pose or effect of which would be to directly or indirectly 
impose liability on the United States Government, or any 
department, agency, or instrumentality of the United 
States Government, or to otherwise directly or indirectly 
require an indemnity by the United States Government, 
for nuclear accidents occurring in connection with the de-
sign, construction, or operation of a production facility or 
utilization facility in any country whose government has 
been identified by the Secretary of State as engaged in 
state sponsorship of terrorist activities (specifically includ-
ing any country the government of which, as of September 
11, 2001, had been determined by the Secretary of State 
under section 620A(a) of the Foreign Assistance Act of 
1961, section 6(j)(1) of the Export Administration Act of 
1979, or section 40(d) of the Arms Export Control Act 
to have repeatedly provided support for acts of inter-
national terrorism).’’.
SEC. 14011. SECURE TRANSFER OF NUCLEAR MATERIALS. 
(a) AMENDMENT.—Chapter 14 of the Atomic Energy 
Act of 1954 (42 U.S.C. 2201–2210b) is amended by add-
ing at the end the following new section: 
‘‘SEC. 170C. SECURE TRANSFER OF NUCLEAR MA-
TERIALS.—
133
HR 6 PCS 
‘‘a. The Nuclear Regulatory Commission shall estab-
lish a system to ensure that, with respect to activities by 
any party pursuant to a license issued under this Act—
‘‘(1) materials described in subsection b., when 
transferred or received in the United States—
‘‘(A) from a facility licensed by the Nu-
clear Regulatory Commission; 
‘‘(B) from a facility licensed by an agree-
ment State; or 
‘‘(C) from a country with whom the United 
States has an agreement for cooperation under 
section 123, 
are accompanied by a manifest describing the type 
and amount of materials being transferred; 
‘‘(2) each individual transferring or accom-
panying the transfer of such materials has been sub-
ject to a security background check by appropriate 
Federal entities; and 
‘‘(3) such materials are not transferred to or 
received at a destination other than a facility li-
censed by the Nuclear Regulatory Commission or an 
agreement State under this Act or other appropriate 
Federal facility, or a destination outside the United 
States in a country with whom the United States 
has an agreement for cooperation under section 123.
134
HR 6 PCS 
‘‘b. Except as otherwise provided by the Commission 
by regulation, the materials referred to in subsection a. 
are byproduct materials, source materials, special nuclear 
materials, high-level radioactive waste, spent nuclear fuel, 
transuranic waste, and low-level radioactive waste (as de-
fined in section 2(16) of the Nuclear Waste Policy Act 
of 1982 (42 U.S.C. 10101(16))).’’. 
(b) REGULATIONS.—Not later than 1 year after the 
date of the enactment of this Act, and from time to time 
thereafter as it considers necessary, the Nuclear Regu-
latory Commission shall issue regulations identifying ra-
dioactive materials that, consistent with the protection of 
public health and safety and the common defense and se-
curity, are appropriate exceptions to the requirements of 
section 170C of the Atomic Energy Act of 1954, as added 
by subsection (a) of this section. 
(c) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect upon the issuance of regu-
lations under subsection (b). 
(d) EFFECT ON OTHER LAW.—Nothing in this sec-
tion or the amendment made by this section shall waive, 
modify, or affect the application of chapter 51 of title 49, 
United States Code, part A of subtitle V of title 49, 
United States Code, part B of subtitle VI of title 49, 
United States Code, and title 23, United States Code.
135
HR 6 PCS 
(e) TABLE OF SECTIONS AMENDMENT.—The table of 
sections for chapter 14 of the Atomic Energy Act of 1954 
is amended by adding at the end the following new item:
‘‘Sec. 170C. Secure transfer of nuclear materials.’’.
SEC. 14012. NUCLEAR FACILITY THREATS. 
(a) STUDY.—The President, in consultation with the 
Nuclear Regulatory Commission and other appropriate 
Federal, State, and local agencies and private entities, 
shall conduct a study to identify the types of threats that 
pose an appreciable risk to the security of the various 
classes of facilities licensed by the Nuclear Regulatory 
Commission under the Atomic Energy Act of 1954. Such 
study shall take into account, but not be limited to—
(1) the events of September 11, 2001; 
(2) an assessment of physical, cyber, bio-
chemical, and other terrorist threats; 
(3) the potential for attack on facilities by mul-
tiple coordinated teams of a large number of individ-
uals; 
(4) the potential for assistance in an attack 
from several persons employed at the facility; 
(5) the potential for suicide attacks; 
(6) the potential for water-based and air-based 
threats; 
(7) the potential use of explosive devices of con-
siderable size and other modern weaponry;
136
HR 6 PCS 
(8) the potential for attacks by persons with a 
sophisticated knowledge of facility operations; 
(9) the potential for fires, especially fires of 
long duration; and 
(10) the potential for attacks on spent fuel 
shipments by multiple coordinated teams of a large 
number of individuals. 
(b) SUMMARY AND CLASSIFICATION REPORT.—Not 
later than 180 days after the date of the enactment of 
this Act, the President shall transmit to the Congress and 
the Nuclear Regulatory Commission a report—
(1) summarizing the types of threats identified 
under subsection (a); and 
(2) classifying each type of threat identified 
under subsection (a), in accordance with existing 
laws and regulations, as either—
(A) involving attacks and destructive acts, 
including sabotage, directed against the facility 
by an enemy of the United States, whether a 
foreign government or other person, or other-
wise falling under the responsibilities of the 
Federal Government; or 
(B) involving the type of risks that Nu-
clear Regulatory Commission licensees should 
be responsible for guarding against.
137
HR 6 PCS 
(c) FEDERAL ACTION REPORT.—Not later than 90 
days after the date on which a report is transmitted under 
subsection (b), the President shall transmit to the Con-
gress a report on actions taken, or to be taken, to address 
the types of threats identified under subsection (b)(2)(A). 
Such report may include a classified annex as appropriate. 
(d) REGULATIONS.—Not later than 270 days after 
the date on which a report is transmitted under subsection 
(b), the Nuclear Regulatory Commission shall issue regu-
lations, including changes to the design basis threat, to 
ensure that licensees address the threats identified under 
subsection (b)(2)(B). 
(e) PHYSICAL SECURITY PROGRAM.—The Nuclear 
Regulatory Commission shall establish an operational 
safeguards response evaluation program that ensures that 
the physical protection capability and operational safe-
guards response for sensitive nuclear facilities, as deter-
mined by the Commission consistent with the protection 
of public health and the common defense and security, 
shall be tested periodically through Commission approved 
or designed, observed, and evaluated force-on-force exer-
cises to determine whether the ability to defeat the design 
basis threat is being maintained. For purposes of this sub-
section, the term ‘‘sensitive nuclear facilities’’ includes at 
a minimum commercial nuclear power plants, including
138
HR 6 PCS 
associated spent fuel storage facilities, spent fuel storage 
pools and dry cask storage at closed reactors, independent 
spent fuel storage facilities and geologic repository oper-
ations areas, category I fuel cycle facilities, and gaseous 
diffusion plants. 
(f) CONTROL OF INFORMATION.—In carrying out this 
section, the President and the Nuclear Regulatory Com-
mission shall control the dissemination of restricted data, 
safeguards information, and other classified national secu-
rity information in a manner so as to ensure the common 
defense and security, consistent with chapter 12 of the 
Atomic Energy Act of 1954. 
SEC. 14013. UNREASONABLE RISK CONSULTATION. 
Section 170 of the Atomic Energy Act of 1954 (42 
U.S.C. 2210) is amended by adding at the end the fol-
lowing new subsection:
‘‘v. UNREASONABLE RISK CONSULTATION.—(1) Be-
fore entering into an agreement of indemnification under 
this section with respect to a utilization facility, the Nu-
clear Regulatory Commission shall consult with the Assist-
ant to the President for Homeland Security (or any suc-
cessor official) concerning whether the location of the pro-
posed facility and the design of that type of facility ensure 
that the facility provides for adequate protection of public 
health and safety if subject to a terrorist attack.
139
HR 6 PCS 
‘‘(2) Before issuing a license or a license renewal for 
a sensitive nuclear facility, the Nuclear Regulatory Com-
mission shall consult with the Secretary of Homeland Se-
curity or his designee concerning the emergency evacu-
ation plan for the communities living near the sensitive 
nuclear facility. For purposes of this paragraph, the term 
‘sensitive nuclear facility’ has the meaning given that term 
in section 14012 of the Energy Policy Act of 2003.’’.
SEC. 14014. FINANCIAL ACCOUNTABILITY. 
(a) AMENDMENT.—Section 170 of the Atomic En-
ergy Act of 1954 (42 U.S.C. 2210) is amended by adding 
at the end the following new subsection: 
‘‘w. FINANCIAL
ACCOUNTABILITY.—(1) Notwith-
standing subsection d., the Attorney General may bring 
an action in the appropriate United States district court 
to recover from a contractor of the Secretary (or subcon-
tractor or supplier of such contractor) amounts paid by 
the Federal Government under an agreement of indem-
nification under subsection d. for public liability resulting 
from conduct which constitutes intentional misconduct of 
any corporate officer, manager, or superintendent of such 
contractor (or subcontractor or supplier of such con-
tractor).
140
HR 6 PCS 
‘‘(2) The Attorney General may recover under para-
graph (1) an amount not to exceed the amount of the prof-
it derived by the defendant from the contract. 
‘‘(3) No amount recovered from any contractor (or 
subcontractor or supplier of such contractor) under para-
graph (1) may be reimbursed directly or indirectly by the 
Department of Energy. 
‘‘(4) Paragraph (1) shall not apply to any nonprofit 
entity conducting activities under contract for the Sec-
retary. 
‘‘(5) No waiver of a defense required under this sec-
tion shall prevent a defendant from asserting such defense 
in an action brought under this subsection. 
‘‘(6) The Secretary shall, by rule, define the terms 
‘profit’ and ‘nonprofit entity’ for purposes of this sub-
section. Such rulemaking shall be completed not later than 
180 days after the date of the enactment of this sub-
section.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall not apply to any agreement of indem-
nification entered into under section 170 d. of the Atomic 
Energy Act of 1954 (42 U.S.C. 2210(d)) before the date 
of the enactment of this Act.
141
HR 6 PCS 
SEC. 14015. CIVIL PENALTIES. 
(a) REPEAL
OF AUTOMATIC REMISSION.—Section 
234A b. (2) of the Atomic Energy Act of 1954 (42 U.S.C. 
2282a(b)(2)) is amended by striking the last sentence. 
(b) LIMITATION FOR NONPROFIT INSTITUTIONS.—
Subsection d. of section 234A of the Atomic Energy Act 
of 1954 (42 U.S.C. 2282a(d)) is amended to read as fol-
lows: 
‘‘d. Notwithstanding subsection a., a civil penalty for 
a violation under subsection a. shall not exceed the amount 
of any discretionary fee paid under the contract under 
which such violation occurs for any nonprofit contractor, 
subcontractor, or supplier—
‘‘(1) described in section 501(c)(3) of the Inter-
nal Revenue Code of 1986 and exempt from tax 
under section 501(a) of such Code; or 
‘‘(2) identified by the Secretary by rule as ap-
propriate to be treated the same under this sub-
section as an entity described in paragraph (1), con-
sistent with the purposes of this section.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall not apply to any violation of the Atomic 
Energy Act of 1954 occurring under a contract entered 
into before the date of the enactment of this Act. 
(d) RULEMAKING.—Not later than 6 months after 
the date of the enactment of this Act, the Secretary of
142
HR 6 PCS 
Energy shall issue a rule for the implementation of the 
amendment made by subsection (b). 
Subtitle B—Miscellaneous Matters 
SEC. 14021. LICENSES. 
Section 103 c. of the Atomic Energy Act of 1954 (42 
U.S.C. 2133(c)) is amended by inserting ‘‘from the au-
thorization to commence operations’’ after ‘‘forty years’’. 
SEC. 14022. NUCLEAR REGULATORY COMMISSION MEET-
INGS. 
If a quorum of the Nuclear Regulatory Commission 
gathers to discuss official Commission business the discus-
sions shall be recorded, and the Commission shall notify 
the public of such discussions within 15 days after they 
occur. The Commission shall promptly make a transcript 
of the recording available to the public on request, except 
to the extent that public disclosure is exempted or prohib-
ited by law. This section shall not apply to a meeting, 
within the meaning of that term under section 552b(a)(2) 
of title 5, United States Code.
SEC. 14023. NRC TRAINING PROGRAM. 
(a) IN GENERAL.—In order to maintain the human 
resource investment and infrastructure of the United 
States in the nuclear sciences, health physics, and engi-
neering fields, in accordance with the statutory authorities 
of the Commission relating to the civilian nuclear energy
143
HR 6 PCS 
program, the Nuclear Regulatory Commission shall carry 
out a training and fellowship program to address short-
ages of individuals with critical nuclear safety regulatory 
skills. 
(b) AUTHORIZATION OF APPROPRIATIONS.—
(1) IN GENERAL.—There are authorized to be 
appropriated to carry out this section $1,000,000 for 
each of fiscal years 2004 through 2007. 
(2) 
AVAILABILITY.—Funds 
made 
available 
under paragraph (1) shall remain available until ex-
pended.
SEC. 14024. COST RECOVERY FROM GOVERNMENT AGEN-
CIES. 
Section 161 w. of the Atomic Energy Act of 1954 
(42 U.S.C. 2201(w)) is amended—
(1) by striking ‘‘for or is issued’’ and all that 
follows through ‘‘1702’’ and inserting ‘‘to the Com-
mission for, or is issued by the Commission, a li-
cense or certificate’’; 
(2) by striking ‘‘483a’’ and inserting ‘‘9701’’; 
and 
(3) by striking ‘‘, of applicants for, or holders 
of, such licenses or certificates’’.
144
HR 6 PCS 
SEC. 14025. ELIMINATION OF PENSION OFFSET. 
Section 161 of the Atomic Energy Act of 1954 (42 
U.S.C. 2201) is amended by adding at the end the fol-
lowing: 
‘‘y. exempt from the application of sections 
8344 and 8468 of title 5, United States Code, an 
annuitant who was formerly an employee of the 
Commission who is hired by the Commission as a 
consultant, if the Commission finds that the annu-
itant has a skill that is critical to the performance 
of the duties of the Commission.’’.
SEC. 14026. CARRYING OF FIREARMS BY LICENSEE EM-
PLOYEES. 
Section 161 k. of the Atomic Energy Act of 1954 (42 
U.S.C. 2201(k)) is amended to read as follows: 
‘‘k. authorize such of its members, officers, and 
employees as it deems necessary in the interest of 
the common defense and security to carry firearms 
while in the discharge of their official duties. The 
Commission may also authorize—
‘‘(1) such of those employees of its con-
tractors and subcontractors (at any tier) en-
gaged in the protection of property under the 
jurisdiction of the United States located at fa-
cilities owned by or contracted to the United 
States or being transported to or from such fa-
145
HR 6 PCS 
cilities as it deems necessary in the interests of 
the common defense and security; and 
‘‘(2) such of those employees of persons li-
censed or certified by the Commission (includ-
ing employees of contractors of licensees or cer-
tificate holders) engaged in the protection of 
property of (A) facilities owned or operated by 
a Commission licensee or certificate holder that 
are designated by the Commission, or (B) prop-
erty of significance to the common defense and 
security located at facilities owned or operated 
by a Commission licensee or certificate holder 
or being transported to or from such facilities; 
to carry firearms while in the discharge of their offi-
cial duties. A person authorized to carry firearms 
under this subsection may, while in the performance 
of, and in connection with, official duties, make ar-
rests without warrant for any offense against the 
United States committed in that person’s presence 
or for any felony cognizable under the laws of the 
United States if that person has reasonable grounds 
to believe that the individual to be arrested has com-
mitted or is committing such felony. An employee of 
a contractor or subcontractor or of a Commission li-
censee or certificate holder (or a contractor of a li-
146
HR 6 PCS 
censee or certificate holder) authorized to carry fire-
arms under this subsection may make such arrests 
only when the individual to be arrested is within, or 
in direct flight from, the area of such offense. A per-
son granted authority to make arrests by this sub-
section may exercise that authority only in the en-
forcement of laws regarding the property of the 
United States in the custody of the Department of 
Energy, the Nuclear Regulatory Commission, or a 
contractor of the Department of Energy or Nuclear 
Regulatory Commission or of a licensee or certificate 
holder of the Commission, laws applicable to facili-
ties owned or operated by a Commission licensee or 
certificate holder that are designated by the Com-
mission pursuant to this subsection and property of 
significance to the common defense and security that 
is in the custody of a licensee or certificate holder 
or a contractor of a licensee or certificate holder of 
the Commission, or any provision of this Act that 
may subject an offender to a fine, imprisonment, or 
both. The arrest authority conferred by this sub-
section is in addition to any arrest authority under 
other laws. The Secretary and the Commission, with 
the approval of the Attorney General, shall issue 
guidelines to implement this subsection;’’.
147
HR 6 PCS 
SEC. 
14027. 
UNAUTHORIZED 
INTRODUCTION 
OF 
DAN-
GEROUS WEAPONS. 
Section 229 a. of the Atomic Energy Act of 1954 (42 
U.S.C. 2278a(a)) is amended by adding after ‘‘custody of 
the Commission’’ the following: ‘‘or subject to its licensing 
authority or to certification by the Commission under this 
Act or any other Act’’. 
SEC. 14028. SABOTAGE OF NUCLEAR FACILITIES OR FUEL. 
Section 236 a. of the Atomic Energy Act of 1954 (42 
U.S.C. 2284(a)) is amended to read as follows: 
‘‘a. Any person who intentionally and willfully de-
stroys or causes physical damage to, or who intentionally 
and willfully attempts to destroy or cause physical damage 
to—
‘‘(1) any production facility or utilization facil-
ity licensed under this Act; 
‘‘(2) any nuclear waste storage, treatment, or 
disposal facility licensed under this Act; 
‘‘(3) any nuclear fuel for a utilization facility li-
censed under this Act or any spent nuclear fuel from 
such a facility; 
‘‘(4) any uranium enrichment or nuclear fuel 
fabrication facility licensed or certified by the Nu-
clear Regulatory Commission; or 
‘‘(5) any production, utilization, waste storage, 
waste treatment, waste disposal, uranium enrich-
148
HR 6 PCS 
ment, or nuclear fuel fabrication facility subject to 
licensing or certification under this Act during its 
construction where the destruction or damage 
caused or attempted to be caused could affect public 
health and safety during the operation of the facil-
ity, 
shall be fined not more than $1,000,000 or imprisoned 
for up to life in prison without parole, or both.’’. 
SEC. 14029. COOPERATIVE RESEARCH AND DEVELOPMENT 
AND SPECIAL DEMONSTRATION PROJECTS 
FOR THE URANIUM MINING INDUSTRY. 
(a) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary of En-
ergy $10,000,000 for each of fiscal years 2004, 2005, and 
2006 for—
(1) cooperative, cost-shared agreements between 
the Department of Energy and domestic uranium 
producers to identify, test, and develop improved in 
situ leaching mining technologies, including low-cost 
environmental restoration technologies that may be 
applied to sites after completion of in situ leaching 
operations; and 
(2) funding for competitively selected dem-
onstration projects with domestic uranium producers 
relating to—
149
HR 6 PCS 
(A) enhanced production with minimal en-
vironmental impacts; 
(B) restoration of well fields; and 
(C) decommissioning and decontamination 
activities. 
(b) DOMESTIC URANIUM PRODUCER.—For purposes 
of this section, the term ‘‘domestic uranium producer’’ has 
the meaning given that term in section 1018(4) of the En-
ergy Policy Act of 1992 (42 U.S.C. 2296b–7(4)), except 
that the term shall not include any producer that has not 
produced uranium from domestic reserves on or after July 
30, 1998, in Colorado, Nebraska, Texas, Utah, or Wyo-
ming. 
SEC. 14030. URANIUM SALES. 
(a) RESTRICTIONS ON INVENTORY SALES.—Section 
3112(d) of the USEC Privatization Act (42 U.S.C. 
2297h–10(d)) is amended to read as follows: 
‘‘(d) INVENTORY SALES.—(1) In addition to the 
transfers and sales authorized under subsections (b), (c), 
and (e), the Secretary of Energy or the Secretary of the 
Army may transfer or sell uranium subject to paragraph 
(2). 
‘‘(2) Except as provided in subsections (b), (c), and 
(e), no sale or transfer of uranium shall be made under
150
HR 6 PCS 
this subsection by the Secretary of Energy or the Sec-
retary of the Army unless—
‘‘(A) the President determines that the material 
is not necessary for national security needs; 
‘‘(B) the price paid to the appropriate Sec-
retary, if the transaction is a sale, will not be less 
that the fair market value of the material; and 
‘‘(C) the sale or transfer to end users is made 
pursuant to a contract of at least 3 years duration. 
‘‘(3) The Secretary of Energy shall not make any 
transfer or sale of uranium under this subsection that 
would cause the total amount of uranium transferred or 
sold pursuant to this subsection that is delivered for con-
sumption by end users to exceed—
‘‘(A) 3 million pounds of U3O8 equivalent in fis-
cal year 2004, 2005, 2006, 2007, 2008, or 2009; 
‘‘(B) 5 million pounds of U3O8 equivalent in 
fiscal year 2010 or 2011; 
‘‘(C) 7 million pounds of U3O8 equivalent in fis-
cal year 2012; and 
‘‘(D) 10 million pounds of U3O8 equivalent in 
fiscal year 2013 or any fiscal year thereafter. 
‘‘(4) For the purposes of this subsection, the recovery 
of uranium from uranium bearing materials transferred 
or sold by the Secretary of Energy or the Secretary of
151
HR 6 PCS 
the Army to the domestic uranium industry shall be the 
preferred method of making uranium available. The recov-
ered uranium shall be counted against the annual max-
imum deliveries set for in this section, when such uranium 
is sold to end users.’’. 
(b) TRANSFERS TO CORPORATION.—Section 3112 of 
the USEC Privatization Act (42 U.S.C. 2297h–10) is fur-
ther amended by adding at the end the following new sub-
section: 
‘‘(g) 
TRANSFERS
TO
CORPORATION.—Notwith-
standing subsection (b)(2) and subsection (d)(2), the Sec-
retary may transfer up to 9,550 metric tons of uranium 
to the Corporation to replace uranium that the Secretary 
transferred to the Corporation on or about June 30, 1993, 
April 20, 1998, and May 18, 1998, and that does not meet 
commercial specifications.’’.
(c) SERVICES.—Section 3112 of the USEC Privatiza-
tion Act (42 U.S.C. 2297h–10) is further amended by 
adding at the end the following new subsection: 
‘‘(h) SERVICES.—(1) Notwithstanding any other pro-
vision of this section, if the Secretary determines that if 
the Corporation has failed, or may fail, to perform any 
obligation under the Agreement between the Department 
of Energy and the Corporation dated June 17, 2002, and 
as amended thereafter, which failure could result in termi-
152
HR 6 PCS 
nation of the Agreement, the Secretary shall notify the 
Committee on Energy and Commerce of the House of 
Representatives and the Committee on Energy and Nat-
ural Resources of the Senate, in such a manner that af-
fords the Committees an opportunity to comment, prior 
to a determination by the Secretary whether termination, 
waiver, or modification of the Agreement is required. The 
Secretary is authorized to take such action as he deter-
mines necessary under the Agreement to terminate, waive, 
or modify provisions of the Agreement to achieve its pur-
poses. 
‘‘(2) Notwithstanding any other provision of this sec-
tion, if the Secretary determines in accordance with Arti-
cle 2D of the Agreement between the Department of En-
ergy and the Corporation dated June 17, 2002, and as 
amended thereafter, to transition operation of the Padu-
cah gaseous diffusion plant, the Secretary may provide 
uranium enrichment services in a manner consistent with 
Article 2D of such Agreement.’’. 
(d) REPORT.—Within 3 years after the date of enact-
ment of this Act, the Secretary shall report to the Con-
gress on the implementation of this section. The report 
shall include a discussion of available excess uranium in-
ventories, all sales or transfers made by the Secretary of 
Energy or the Secretary of the Army, the impact of such
153
HR 6 PCS 
sales or transfers on the domestic uranium industry, the 
spot market uranium price, and the national security in-
terests of the United States, and any steps taken to reme-
diate any adverse impacts of such sales or transfers. 
SEC. 14031. MEDICAL ISOTOPE PRODUCTION. 
Section 134 of the Atomic Energy Act of 1954 (42 
U.S.C. 2160d) is amended—
(1) by redesignating subsection b. as subsection 
f.; 
(2) by inserting after subsection a. the fol-
lowing: 
‘‘b. The Commission may issue a license authorizing 
the export (including shipment to and use at intermediate 
and ultimate consignees specified in the license) to a Re-
cipient Country of highly enriched uranium for medical 
isotope production if, in addition to any other require-
ments of this Act, the Commission determines that—
‘‘(1) a Recipient Country that supplies an as-
surance letter to the United States Government in 
connection with the Commission’s consideration of 
the export license application has informed the 
United States Government that any intermediate 
consignees and the ultimate consignee specified in 
the application are required to use such highly en-
155
HR 6 PCS 
the Physical Protection of Nuclear Material and will re-
ceive such highly enriched uranium pursuant to an agree-
ment with the United States concerning peaceful uses of 
nuclear energy. 
‘‘e. The Commission shall review the adequacy of 
physical protection requirements that are currently appli-
cable to the transportation of highly enriched uranium for 
medical isotope production. If it determines that addi-
tional physical protection measures are necessary, includ-
ing any limits that the Commission finds are necessary 
on the quantity of highly enriched uranium contained in 
a single shipment for medical isotope production, the Com-
mission shall impose such requirements, as license condi-
tions or through other appropriate means.’’; and 
(3) in subsection f., as so redesignated by para-
graph (1) of this section—
(A) by striking ‘‘and’’ at the end of para-
graph (2); 
(B) by striking the period at the end of 
paragraph (3)(B) and inserting a semicolon; 
and 
(C) by adding at the end the following: 
‘‘(4) the term ‘medical isotopes’ means radio-
active isotopes, including Molybdenum 99, Iodine 
131, and Xenon 133, that are used to produce radio-
156
HR 6 PCS 
pharmaceuticals for diagnostic or therapeutic proce-
dures on patients, or in connection with research 
and development of radiopharmaceuticals; 
‘‘(5) the term ‘highly enriched uranium for 
medical isotope production’ means highly enriched 
uranium contained in, or for use in, targets to be ir-
radiated for the sole purpose of producing medical 
isotopes; –
‘‘(6) the term ‘radiopharmaceuticals’ means ra-
dioactive isotopes containing byproduct material 
combined with chemical or biological material that 
are designed to accumulate temporarily in a part of 
the body, for therapeutic purposes or for enabling 
the production of a useful image of the appropriate 
body organ or function for use in diagnosis of med-
ical conditions; and 
‘‘(7) the term ‘Recipient Country’ means Can-
ada, Belgium, France, Germany, and the Nether-
lands.’’.
SEC. 
14032. 
HIGHLY 
ENRICHED 
URANIUM 
DIVERSION 
THREAT REPORT. 
Section 307 of the Energy Reorganization Act of 
1974 (42 U.S.C. 5877) is amended by adding at the end 
the following new subsection:
157
HR 6 PCS 
‘‘(d) Not later than 6 months after the date of the 
enactment of this Act, the Secretary of Energy shall trans-
mit to the Congress a report with recommendations on re-
ducing the threat resulting from the theft or diversion of 
highly enriched uranium. Such report shall address—
‘‘(1) monitoring of highly enriched uranium 
supplies at any commercial companies who have ac-
cess to substantial amounts of highly enriched ura-
nium; 
‘‘(2) assistance to companies described in para-
graph (1) with security and personnel checks; 
‘‘(3) acceleration of the process of blending 
down excess highly enriched uranium into low-en-
riched uranium; 
‘‘(4) purchasing highly enriched uranium (ex-
cept for production of medical isotopes); 
‘‘(5) paying the cost of shipping highly enriched 
uranium; 
‘‘(6) accelerating the conversion of commercial 
research reactors and energy reactors to the use of 
low-enriched uranium fuel where they now use high-
ly enriched uranium fuel; 
‘‘(7) minimizing, and encouraging transparency 
in, the further enrichment of low-enriched uranium 
to highly enriched uranium; and
158
HR 6 PCS 
‘‘(8) accelerating the purchase of excess weap-
ons grade plutonium and uranium from Russia to 
reduce the likelihood that such plutonium and ura-
nium could be stolen or sold to terrorists.’’. 
SEC. 14033. WHISTLEBLOWER PROTECTION. 
(a) DEFINITION OF EMPLOYER.—Section 211(a)(2) 
of the Energy Reorganization Act of 1974 (42 U.S.C. 
5851(a)(2)) is amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (C); 
(2) in subparagraph (D), by striking ‘‘that is 
indemnified’’ and all that follows through ‘‘12344.’’ 
and inserting ‘‘or the Commission; and’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(E) the Department of Energy and the Com-
mission.’’. 
(b) DE NOVO REVIEW.—Subsection (b) of such sec-
tion 211 is amended by adding at the end the following 
new paragraph: 
‘‘(4) If the Secretary has not issued a final decision 
within 180 days after the filing of a complaint under para-
graph (1), and there is no showing that such delay is due 
to the bad faith of the claimant, the claimant may bring 
an action at law or equity for de novo review in the appro-
159
HR 6 PCS 
priate district court of the United States, which shall have 
jurisdiction over such an action without regard to the 
amount in controversy.’’. 
SEC. 14034. PREVENTING THE MISUSE OF NUCLEAR MATE-
RIALS AND TECHNOLOGY. 
(a) AMENDMENT.—Chapter 14 of the Atomic Energy 
Act of 1954 (42 U.S.C. 2201 et seq.) is amended by add-
ing at the end the following new section: 
‘‘SEC. 170D. PREVENTING
THE MISUSE
OF NU-
CLEAR MATERIALS AND TECHNOLOGY.—
‘‘a. In order to successfully promote the development 
of nuclear energy as a safe and reliable source of electrical 
energy, it is the policy of the United States to prevent 
any nuclear materials, technology, components, sub-
stances, technical information, or related goods or services 
from being misused or diverted from peaceful nuclear en-
ergy purposes. 
‘‘b. In order to further advance the policy set forth 
in subsection a., notwithstanding any other provision of 
law, no Federal agency shall issue any license, approval, 
or authorization for the export or reexport, or the transfer 
or retransfer, either directly or indirectly, to any country 
whose government has been identified by the Secretary of 
State as engaged in state sponsorship of terrorist activities 
(specifically including any country the government of
160
HR 6 PCS 
which, as of September 11, 2001, had been determined 
by the Secretary of State under section 620A(a) of the 
Foreign Assistance Act of 1961, section 6(j)(1) of the Ex-
port Administration Act of 1979, or section 40(d) of the 
Arms Export Control Act to have repeatedly provided sup-
port for acts of international terrorism) of—
‘‘(1) any special nuclear material or byproduct 
material; 
‘‘(2) any nuclear production or utilization facili-
ties; or 
‘‘(3) any components, technologies, substances, 
technical information, or related goods or services 
used (or which could be used) in a nuclear produc-
tion or utilization facility. 
‘‘c. Any license, approval, or authorization described 
in subsection b. made prior to the date of enactment of 
this section is hereby revoked.’’. 
(b) TABLE OF CONTENTS AMENDMENT.—The table 
of contents of such chapter 14 is amended by adding at 
the end the following item:
‘‘Sec. 170D. Preventing the misuse of nuclear materials and technology.’’.
SEC. 14035. LIMITATION ON LEGAL FEE REIMBURSEMENT. 
The Department of Energy shall not, except as re-
quired under a contract entered into before the date of 
enactment of this Act, reimburse any contractor or sub-
contractor of the Department for any legal fees or ex-
161
HR 6 PCS 
penses incurred with respect to a complaint subsequent 
to—
(1) an adverse determination on the merits with 
respect to such complaint against the contractor or 
subcontractor by the Director of the Department of 
Energy’s Office of Hearings and Appeals pursuant 
to section 708 of title 10, Code of Federal Regula-
tions, or by a Department of Labor Administrative 
Law Judge pursuant to section 211 of the Energy 
Reorganization Act of 1974 (42 U.S.C. 5851); or 
(2) an adverse final judgment by any State or 
Federal court with respect to such complaint against 
the contractor or subcontractor for wrongful termi-
nation or retaliation due to the making of disclo-
sures protected under chapter 12 of title 5, United 
States Code, section 211 of the Energy Reorganiza-
tion Act of 1974 (42 U.S.C. 5851), or any com-
parable State law, 
unless the adverse determination or final judgment is re-
versed upon further administrative or judicial review. 
SEC. 14036. TRANSFER. 
Not later than December 31, 2003, the Secretary of 
Energy shall transmit to the Congress a plan for the 
transfer to the Secretary of title to, and full responsibility 
for the possession, transportation, disposal, stewardship,
162
HR 6 PCS 
maintenance, and monitoring of, all facilities, property, 
and radioactive waste at the Western New York Service 
Center in West Valley, New York. The Secretary shall con-
sult with the President of the New York State Energy Re-
search and Development Authority in developing such 
plan. 
SEC. 14037. STUDY TO DETERMINE FEASIBILITY OF DEVEL-
OPING COMMERCIAL NUCLEAR ENERGY PRO-
DUCTION FACILITIES AT EXISTING DEPART-
MENT OF ENERGY SITES. 
(a) IN GENERAL.—The Secretary of Energy shall 
conduct a study to determine the feasibility of developing 
commercial nuclear energy production facilities at Depart-
ment of Energy sites in existence on the date of the enact-
ment of this Act, including—
(1) options for how and where nuclear power 
plants can be developed on existing Department of 
Energy sites; 
(2) estimates on cost savings to the Federal 
Government that may be realized by locating new 
nuclear power plants on Federal sites; 
(3) the feasibility of incorporating new tech-
nology into nuclear power plants located on Federal 
sites;
163
HR 6 PCS 
(4) potential improvements in the licensing and 
safety oversight procedures of nuclear power plants 
located on Federal sites; 
(5) an assessment of the effects of nuclear 
waste management policies and projects as a result 
of locating nuclear power plants located on Federal 
sites; and 
(6) any other factors that the Secretary believes 
would be relevant in making the determination. 
(b) REPORT.—Not later than 90 days after the date 
of the enactment of this Act, the Secretary shall submit 
to Congress a report describing the results of the study 
under subsection (a).
TITLE V—VEHICLES AND FUELS 
Subtitle A—Energy Policy Act 
Amendments 
SEC. 15011. CREDIT FOR SUBSTANTIAL CONTRIBUTION TO-
WARD NONCOVERED FLEETS. 
Section 508 of the Energy Policy Act of 1992 (42 
U.S.C. 13258) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(e) CREDIT FOR SUBSTANTIAL CONTRIBUTION TO-
WARD USE OF DEDICATED VEHICLES IN NONCOVERED 
FLEETS.—
‘‘(1) DEFINITIONS.—In this subsection:
164
HR 6 PCS 
‘‘(A) MEDIUM
OR
HEAVY
DUTY
VEHI-
CLE.—The term ‘medium or heavy duty vehicle’ 
means a dedicated vehicle that—
‘‘(i) in the case of a medium duty ve-
hicle, has a gross vehicle weight rating of 
more than 8,500 pounds but not more 
than 14,000 pounds; or 
‘‘(ii) in the case of a heavy duty vehi-
cle, has a gross vehicle weight rating of 
more than 14,000 pounds. 
‘‘(B) SUBSTANTIAL
CONTRIBUTION.—The 
term ‘substantial contribution’ means not less 
than $15,000 in cash or in kind services, as de-
termined by the Secretary. 
‘‘(2) ALLOCATION OF CREDITS.—The Secretary 
shall allocate a credit to a fleet or covered person 
under this section if the fleet or person makes a sub-
stantial contribution toward the acquisition and use 
of dedicated vehicles or neighborhood electric vehi-
cles by a person that owns, operates, leases, or oth-
erwise controls a fleet that is not covered by this 
title. 
‘‘(3) MULTIPLE
CREDITS
FOR
MEDIUM
AND 
HEAVY DUTY VEHICLES.—The Secretary shall issue 
2 full credits to a fleet or covered person under this
165
HR 6 PCS 
section if the fleet or person makes a substantial 
contribution toward the acquisition and use of a me-
dium or heavy duty vehicle. 
‘‘(4) USE OF CREDITS.—At the request of a 
fleet or covered person allocated a credit under this 
subsection, the Secretary shall, for the year in which 
the acquisition of the dedicated vehicle or neighbor-
hood electric vehicle is made, treat that credit as the 
acquisition of 1 alternative fueled vehicle that the 
fleet or covered person is required to acquire under 
this title. 
‘‘(5) LIMITATION.—Except as provided in para-
graph (3), no more than 1 credit shall be allocated 
under this subsection for each vehicle.’’. 
SEC. 15012. CREDIT FOR ALTERNATIVE FUEL INFRASTRUC-
TURE. 
Section 508 of the Energy Policy Act of 1992 (42 
U.S.C. 13258), as amended by this division, is further 
amended by adding at the end the following new sub-
section: 
‘‘(f) CREDIT
FOR INVESTMENT
IN ALTERNATIVE 
FUEL INFRASTRUCTURE.—
‘‘(1) DEFINITION.—In this subsection, the term 
‘qualifying infrastructure’ means—
166
HR 6 PCS 
‘‘(A) equipment required to refuel or re-
charge alternative fueled vehicles; 
‘‘(B) facilities or equipment required to 
maintain, repair, or operate alternative fueled 
vehicles; 
‘‘(C) training programs, educational mate-
rials, or other activities necessary to provide in-
formation regarding the operation, mainte-
nance, or benefits associated with alternative 
fueled vehicles; and 
‘‘(D) such other activities the Secretary 
considers to constitute an appropriate expendi-
ture in support of the operation, maintenance, 
or further widespread adoption of or utilization 
of alternative fueled vehicles. 
‘‘(2) ALLOCATION OF CREDITS.—The Secretary 
shall allocate a credit to a fleet or covered person 
under this section for investment in qualifying infra-
structure if the qualifying infrastructure is open to 
the general public during regular business hours. 
‘‘(3) AMOUNT.—For the purposes of credits 
under this subsection—
‘‘(A) 1 credit shall be equal to a minimum 
investment of $25,000 in cash or in kind serv-
ices, as determined by the Secretary; and
167
HR 6 PCS 
‘‘(B) except in the case of a Federal or 
State fleet, no part of the investment may be 
provided by Federal or State funds. 
‘‘(4) USE OF CREDITS.—At the request of a 
fleet or covered person allocated a credit under this 
subsection, the Secretary shall, for the year in which 
the investment is made, treat that credit as the ac-
quisition of 1 alternative fueled vehicle that the fleet 
or covered person is required to acquire under this 
title.’’. 
SEC. 15013. ALTERNATIVE FUELED VEHICLE REPORT. 
(a) DEFINITIONS.—In this section: 
(1) ALTERNATIVE
FUEL.—The term ‘‘alter-
native fuel’’ has the meaning given the term in sec-
tion 301 of the Energy Policy Act of 1992 (42 
U.S.C. 13211). 
(2) ALTERNATIVE
FUELED
VEHICLE.—The 
term ‘‘alternative fueled vehicle’’ has the meaning 
given the term in section 301 of the Energy Policy 
Act of 1992 (42 U.S.C. 13211). 
(3) LIGHT DUTY MOTOR VEHICLE.—The term 
‘‘light duty motor vehicle’’ has the meaning given 
the term in section 301 of the Energy Policy Act of 
1992 (42 U.S.C. 13211).
168
HR 6 PCS 
(4) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Energy. 
(b) REPORT.—Not later than 1 year after the date 
of enactment of this Act, the Secretary shall submit to 
Congress a report on the effect that titles III, IV, and 
V of the Energy Policy Act of 1992 have had on the devel-
opment of alternative fueled vehicle technology, the avail-
ability of alternative fueled vehicles in the market, the cost 
of light duty motor vehicles that are alternative fueled ve-
hicles, and the availability, cost, and use of alternative 
fuels and biodiesel. Such report shall include any rec-
ommendations of the Secretary for legislation concerning 
the alternative fueled vehicle requirements under the En-
ergy Policy Act of 1992, and shall examine, discuss, and 
determine the following: 
(1) The number of alternative fueled vehicles 
acquired by fleets or covered persons required to ac-
quire alternative fueled vehicles. 
(2) The extent to which fleets subject to alter-
native fueled vehicle acquisition requirements have 
met those requirements through the use of fuel mix-
tures that contain at least 20 percent biodiesel pur-
suant to section 312 of the Energy Policy Act of 
1992 (42 U.S.C. 13220).
169
HR 6 PCS 
(3) The amount of alternative fuel used in al-
ternative fueled vehicles acquired by fleets required 
to acquire alternative fueled vehicles under the En-
ergy Policy Act of 1992. 
(4) The amount of petroleum displaced by the 
use of alternative fueled vehicles acquired by fleets 
or covered persons. 
(5) The cost of compliance with vehicle acquisi-
tion requirements under the Energy Policy Act of 
1992, and the benefits of using such fuel and vehi-
cles. 
(6) Projections of the amount of biodiesel, the 
number of alternative fueled vehicles, and the 
amount of alternative fuel that will be used over the 
next decade by fleets required to acquire alternative 
fueled vehicles under the Energy Policy Act of 1992. 
(7) The existence of any obstacles to increased 
use of alternative fuel and biodiesel in vehicles ac-
quired or maintained by fleets required to acquire al-
ternative fueled vehicles under the Energy Policy 
Act of 1992, and the benefits of using such fuel and 
vehicles.
170
HR 6 PCS 
SEC. 15014. ALLOCATION OF INCREMENTAL COSTS. 
Section 303(c) of the Energy Policy Act of 1992 (42 
U.S.C. 13212(c)) is amended by striking ‘‘may’’ and in-
serting ‘‘shall’’. 
Subtitle B—Advanced Vehicles 
SEC. 15021. DEFINITIONS. 
For the purposes of this subtitle, the following defini-
tions apply: 
(1) ALTERNATIVE
FUELED
VEHICLE..—The 
term ‘‘alternative fueled vehicle’’ means a vehicle 
propelled solely on an alternative fuel as defined in 
section 301 of the Energy Policy Act of 1992 (42 
U.S.C. 13211), except the term does not include any 
vehicle that the Secretary determines, by rule, does 
not yield substantial environmental benefits over a 
vehicle operating solely on gasoline or diesel derived 
from fossil fuels. 
(2) FUEL CELL VEHICLE.—The term ‘‘fuel cell 
vehicle’’ means a vehicle propelled by an electric 
motor powered by a fuel cell system that converts 
chemical energy into electricity by combining oxygen 
(from air) with hydrogen fuel that is stored on the 
vehicle or is produced onboard by reformation of a 
hydrocarbon fuel. Such fuel cell system may or may 
not include the use of auxiliary energy storage sys-
tems to enhance vehicle performance.
171
HR 6 PCS 
(3) HYBRID VEHICLE.—The term ‘‘hybrid vehi-
cle’’ means a medium or heavy duty vehicle propelled 
by an internal combustion engine or heat engine 
using any combustible fuel and an onboard recharge-
able energy storage device. 
(4) NEIGHBORHOOD ELECTRIC VEHICLE.—The 
term ‘‘neighborhood electric vehicle’’ means a motor 
vehicle capable of traveling at speeds of 25 miles per 
hour that is—
(A) a low-speed vehicle, as such term is de-
fined in section 571.3(b) of title 49, Code of 
Federal Regulations; 
(B) a zero-emission vehicle, as such term is 
defined in section 86.1702–99 of title 40, Code 
of Federal Regulations; and 
(C) otherwise lawful to use on local streets. 
(5) PILOT
PROGRAM.—The term ‘‘pilot pro-
gram’’ means the competitive grant program estab-
lished under section 15022. 
(6) ULTRA-LOW
SULFUR
DIESEL
VEHICLE.—
The term ‘‘ultra-low sulfur diesel vehicle’’ means a 
vehicle manufactured in model years 2002 through 
2006 powered by a heavy-duty diesel engine that—
172
HR 6 PCS 
(A) is fueled by diesel fuel which contains 
sulfur at not more than 15 parts per million; 
and 
(B) emits not more than the lesser of—
(i) for vehicles manufactured in—
(I) model years 2002 and 2003, 
3.0 grams per brake horsepower-hour 
of oxides of nitrogen and .01 grams 
per brake horsepower-hour of particu-
late matter; and 
(II) model years 2004 through 
2006, 2.5 grams per brake horse-
power-hour of nonmethane hydro-
carbons and oxides of nitrogen and 
.01 grams per brake horsepower-hour 
of particulate matter; or 
(ii) the emissions of nonmethane hy-
drocarbons, oxides of nitrogen, and partic-
ulate matter of the best performing tech-
nology of ultra-low sulfur diesel vehicles of 
the same class and application that are 
commercially available. 
SEC. 15022. PILOT PROGRAM. 
(a) ESTABLISHMENT.—The Secretary shall establish 
a competitive grant pilot program, to be administered
173
HR 6 PCS 
through the Clean Cities Program of the Department of 
Energy, to provide not more than 10 geographically dis-
persed project grants to State governments, local govern-
ments, or metropolitan transportation authorities to carry 
out a project or projects for the purposes described in sub-
section (b). 
(b) GRANT PURPOSES.—Grants under this section 
may be used for the following purposes: 
(1) The acquisition of alternative fueled vehicles 
or fuel cell vehicles, including—
(A) passenger vehicles including neighbor-
hood electric vehicles; and 
(B) motorized two-wheel bicycles, scooters, 
or other vehicles for use by law enforcement 
personnel or other State or local government or 
metropolitan transportation authority employ-
ees. 
(2) The acquisition of alternative fueled vehi-
cles, hybrid vehicles, or fuel cell vehicles, including—
(A) buses used for public transportation or 
transportation to and from schools; 
(B) delivery vehicles for goods or services; 
and
174
HR 6 PCS 
(C) ground support vehicles at public air-
ports, including vehicles to carry baggage or 
push airplanes away from terminal gates. 
(3) The acquisition of ultra-low sulfur diesel ve-
hicles. 
(4) Infrastructure necessary to directly support 
an alternative fueled vehicle, fuel cell vehicle, or hy-
brid vehicle project funded by the grant, including 
fueling and other support equipment. 
(5) Operation and maintenance of vehicles, in-
frastructure, and equipment acquired as part of a 
project funded by the grant. 
(c) APPLICATIONS.—
(1) REQUIREMENTS.—The Secretary shall issue 
requirements for applying for grants under the pilot 
program. At a minimum, the Secretary shall require 
that applications be submitted by the head of a 
State or local government or a metropolitan trans-
portation authority, or any combination thereof, and 
a registered participant in the Clean Cities Program 
of the Department of Energy, and shall include—
(A) a description of the projects proposed 
in the application, including how they meet the 
requirements of this subtitle;
175
HR 6 PCS 
(B) an estimate of the ridership or degree 
of use of the projects proposed in the applica-
tion; 
(C) an estimate of the air pollution emis-
sions reduced and fossil fuel displaced as a re-
sult of the projects proposed in the application, 
and a plan to collect and disseminate environ-
mental data, related to the projects to be fund-
ed under the grant, over the life of the projects; 
(D) a description of how the projects pro-
posed in the application will be sustainable 
without Federal assistance after the completion 
of the term of the grant; 
(E) a complete description of the costs of 
each project proposed in the application, includ-
ing acquisition, construction, operation, and 
maintenance costs over the expected life of the 
project; 
(F) a description of which costs of the 
projects proposed in the application will be sup-
ported by Federal assistance under this subtitle; 
and 
(G) documentation to the satisfaction of 
the Secretary that diesel fuel containing sulfur 
at not more than 15 parts per million is avail-
176
HR 6 PCS 
able for carrying out the projects, and a com-
mitment by the applicant to use such fuel in 
carrying out the projects. 
(2) PARTNERS.—An applicant under paragraph 
(1) may carry out projects under the pilot program 
in partnership with public and private entities. 
(d) SELECTION CRITERIA.—In evaluating applica-
tions under the pilot program, the Secretary shall consider 
each applicant’s previous experience with similar projects 
and shall give priority consideration to applications that—
(1) are most likely to maximize protection of 
the environment; 
(2) demonstrate the greatest commitment on 
the part of the applicant to ensure funding for the 
proposed projects and the greatest likelihood that 
each project proposed in the application will be 
maintained or expanded after Federal assistance 
under this subtitle is completed; and 
(3) exceed the minimum requirements of sub-
section (c)(1)(A). 
(e) PILOT PROJECT REQUIREMENTS.—
(1) MAXIMUM
AMOUNT.—The Secretary shall 
not provide more than $20,000,000 in Federal as-
sistance under the pilot program to any applicant.
177
HR 6 PCS 
(2) COST SHARING.—The Secretary shall not 
provide more than 50 percent of the cost, incurred 
during the period of the grant, of any project under 
the pilot program. 
(3) MAXIMUM PERIOD OF GRANTS.—The Sec-
retary shall not fund any applicant under the pilot 
program for more than 5 years. 
(4) DEPLOYMENT
AND
DISTRIBUTION.—The 
Secretary shall seek to the maximum extent prac-
ticable to ensure a broad geographic distribution of 
project sites. 
(5) TRANSFER OF INFORMATION AND KNOWL-
EDGE.—The Secretary shall establish mechanisms to 
ensure that the information and knowledge gained 
by participants in the pilot program are transferred 
among the pilot program participants and to other 
interested parties, including other applicants that 
submitted applications. 
(f) SCHEDULE.—
(1) PUBLICATION.—Not later than 3 months 
after the date of the enactment of this Act, the Sec-
retary shall publish in the Federal Register, Com-
merce Business Daily, and elsewhere as appropriate, 
a request for applications to undertake projects
178
HR 6 PCS 
under the pilot program. Applications shall be due 
within 6 months of the publication of the notice. 
(2) SELECTION.—Not later than 6 months after 
the date by which applications for grants are due, 
the Secretary shall select by competitive, peer review 
all applications for projects to be awarded a grant 
under the pilot program. 
(g) LIMIT ON FUNDING.—The Secretary shall pro-
vide not less than 20 percent and not more than 25 per-
cent of the grant funding made available under this sec-
tion for the acquisition of ultra-low sulfur diesel vehicles. 
SEC. 15023. REPORTS TO CONGRESS. 
(a) INITIAL REPORT.—Not later than 2 months after 
the date grants are awarded under this subtitle, the Sec-
retary shall transmit to the Congress a report con-
taining—
(1) an identification of the grant recipients and 
a description of the projects to be funded; 
(2) an identification of other applicants that 
submitted applications for the pilot program; and 
(3) a description of the mechanisms used by the 
Secretary to ensure that the information and knowl-
edge gained by participants in the pilot program are 
transferred among the pilot program participants
179
HR 6 PCS 
and to other interested parties, including other ap-
plicants that submitted applications. 
(b) EVALUATION.—Not later than 3 years after the 
date of the enactment of this Act, and annually thereafter 
until the pilot program ends, the Secretary shall transmit 
to the Congress a report containing an evaluation of the 
effectiveness of the pilot program, including an assessment 
of the benefits to the environment derived from the 
projects included in the pilot program as well as an esti-
mate of the potential benefits to the environment to be 
derived from widespread application of alternative fueled 
vehicles and ultra-low sulfur diesel vehicles. 
SEC. 15024. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated to the Sec-
retary $200,000,000 to carry out this subtitle, to remain 
available until expended. 
Subtitle C—Hydrogen Fuel Cell 
Heavy-Duty Vehicles 
SEC. 15031. DEFINITION. 
For the purposes of this subtitle, the term ‘‘advanced 
vehicle technologies program’’ means the program created 
pursuant to section 5506 of title 49, United States Code. 
SEC. 15032. FINDINGS. 
The Congress makes the following findings:
180
HR 6 PCS 
(1) The Department of Energy and the Depart-
ment of Transportation jointly developed the consor-
tium-based advanced vehicle technologies program to 
develop energy efficient and clean heavy-duty vehi-
cles in 1998. 
(2) The majority of clean fuel vehicles in oper-
ation today are transit buses. 
(3) Hydrogen fuel cell heavy-duty vehicle bus 
deployments can most appropriately advance hydro-
gen fuel cell technology development due to central-
ized refueling, stable duty cycles, and fixed routes. 
(4) Hydrogen fuel cell heavy-duty vehicle bus 
deployments are the most effective manner in which 
to advance technology developments for public 
awareness, consumption, and acceptance. 
SEC. 15033. HYDROGEN FUEL CELL BUSES. 
The Secretary of Energy, through the advanced vehi-
cle technologies program, in coordination with the Sec-
retary of Transportation, shall advance the development 
of fuel cell bus technologies by providing funding for 4 
demonstration sites that—
(1) have or will soon have hydrogen infrastruc-
ture for fuel cell bus operation; and 
(2) are operated by entities with experience in 
the development of fuel cell bus technologies,
181
HR 6 PCS 
to enable the widespread utilization of fuel cell buses. Such 
demonstrations shall address the reliability of fuel cell 
heavy-duty vehicles, expense, infrastructure, containment, 
storage, safety, training, and other issues. 
SEC. 15034. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated to the Sec-
retary of Energy $10,000,000 for each of the fiscal years 
2004 through 2008 for carrying out this subtitle. 
Subtitle D—Miscellaneous 
SEC. 15041. RAILROAD EFFICIENCY. 
(a) ESTABLISHMENT.—The Secretary shall, in con-
junction with the Secretary of Transportation and the Ad-
ministrator of the Environmental Protection Agency, es-
tablish a public-private research partnership involving the 
Federal Government, the railroad industry, locomotive 
manufacturers and equipment suppliers, and the research 
facility owned by the Federal Railroad Administration and 
operated by contract. The goal of the research partnership 
shall include developing and demonstrating locomotive 
technologies that increase fuel economy, reduce emissions, 
and lower costs. 
(b) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out the require-
ments of this section $25,000,000 for fiscal year 2004,
182
HR 6 PCS 
$30,000,000 for fiscal year 2005, and $35,000,000 for fis-
cal year 2006. 
SEC. 15042. MOBILE EMISSION REDUCTIONS TRADING AND 
CREDITING. 
Within 180 days after the date of enactment of this 
Act, the Administrator of the Environmental Protection 
Agency shall provide a report to the Congress on the Envi-
ronmental Protection Agency’s experience with the trading 
of mobile source emission reduction credits for use by own-
ers and operators of stationary source emission sources 
to meet emission offset requirements within a nonattain-
ment area. The report shall describe—
(1) projects approved by the Environmental 
Protection Agency that include the trading of mobile 
source emission reduction credits for use by sta-
tionary sources in complying with offset require-
ments, including project and stationary sources loca-
tion, volumes of emissions offset and traded, a de-
scription of the sources of mobile emission reduction 
credits, and, if available, the cost of the credits; 
(2) the significant issues identified by the Envi-
ronmental Protection Agency in its consideration 
and approval of trading in such projects; 
(3) the requirements for monitoring and assess-
ing the air quality benefits of any approved project;
183
HR 6 PCS 
(4) the statutory authority upon which the En-
vironmental Protection Agency has based approval 
of such projects; 
(5) an evaluation of how the resolution of issues 
in approved projects could be utilized in other 
projects; and 
(6) any other issues the Environmental Protec-
tion Agency considers relevant to the trading and 
generation of mobile source emission reduction cred-
its for use by stationary sources or for other pur-
poses. 
SEC. 15043. IDLE REDUCTION TECHNOLOGIES. 
(a) DEFINITIONS.—For purposes of this section: 
(1) IDLE REDUCTION TECHNOLOGY.—The term 
‘‘idle reduction technology’’ means a device or sys-
tem of devices utilized to reduce long-duration idling 
of a heavy-duty vehicle. 
(2) HEAVY-DUTY VEHICLE.—The term ‘‘heavy-
duty vehicle’’ means a vehicle that has a gross vehi-
cle weight rating greater than 26,000 pounds and is 
powered by a diesel engine. 
(3) LONG-DURATION IDLING.—The term ‘‘long-
duration idling’’ means the operation of a main drive 
engine, for a period greater than 15 consecutive 
minutes, where the main drive engine is not engaged
184
HR 6 PCS 
in gear. Such term does not apply to routine stop-
pages associated with traffic movement or conges-
tion. 
(b) STUDIES OF THE BENEFITS OF IDLE REDUCTION 
TECHNOLOGIES.—
(1) POTENTIAL FUEL SAVINGS.—Not later than 
90 days after the date of enactment of this section, 
the Secretary of Energy shall, in consultation with 
the Secretary of Transportation, commence a study 
to analyze the potential fuel savings resulting from 
use of idle reduction technologies. 
(2) RECOGNITION OF BENEFITS OF ADVANCED 
IDLE REDUCTION TECHNOLOGIES.—Within 90 days 
after the date of enactment of this section, the Ad-
ministrator of the Environmental Protection Agency 
is directed to commence a review of the Agency’s 
mobile source air emissions models used under the 
Clean Air Act to determine whether such models ac-
curately reflect the emissions resulting from long-du-
ration idling of heavy-duty trucks and other vehicles 
and engines, and shall update those models as the 
Administrator deems appropriate. Additionally, with-
in 90 days after the date of enactment of this sec-
tion, the Administrator shall commence a review as 
to the appropriate emissions reductions credit that
185
HR 6 PCS 
should be allotted under the Clean Air Act for the 
use of advanced idle reduction technologies, and 
whether such credits should be subject to an emis-
sions trading system, and shall revise Agency regula-
tions and guidance as the Administrator deems ap-
propriate. 
(3) IDLING
TECHNOLOGIES.—Not later than 
180 days after the date of the enactment of this sec-
tion, the Secretary of Energy, in consultation with 
the Secretary of Transportation and the Adminis-
trator of the Environmental Protection Agency, shall 
commence a study to analyze where heavy duty and 
other vehicles stop for long duration idling. 
(c) VEHICLE WEIGHT EXEMPTION.—Section 127(a) 
of title 23, United States Code, is amended by adding at 
the end the following: ‘‘In instances where an idle reduc-
tion technology is installed onboard a motor vehicle, the 
maximum gross vehicle weight limit and the axle weight 
limit for any motor vehicle equipped with an idling reduc-
tion system may be increased by an amount necessary to 
compensate for the additional weight of the idling reduc-
tion system, except that the weight limit increase shall be 
no greater than 400 pounds.’’.
186
HR 6 PCS 
SEC. 15044. STUDY OF AVIATION FUEL CONSERVATION AND 
EMISSIONS. 
The Administrator of the Federal Aviation Adminis-
tration and the Administrator of the Environmental Pro-
tection Agency shall jointly commence a study within 60 
days after the date of enactment of this Act to identify 
the impact of aircraft emissions on air quality in non-
attainment areas and to identify ways to promote fuel con-
servation measures for aviation, enhance fuel efficiency, 
and reduce emissions. As part of this study, the Adminis-
trator of the Federal Aviation Administration and the Ad-
ministrator of the Environmental Protection Agency shall 
focus on how air traffic management inefficiencies, such 
as aircraft idling at airports, result in unnecessary fuel 
burn and air emissions. Within 180 days after the com-
mencement of the study, the Administrator of the Federal 
Aviation Administration and the Administrator of the En-
vironmental Protection Agency shall submit a report to 
the Committees on Energy and Commerce and Transpor-
tation and Infrastructure of the House of Representatives 
and the Committees on Environment and Public Works 
and Commerce, Science, and Transportation of the Senate 
containing the results of the study and recommendations 
as to how unnecessary fuel use and emissions affecting 
air quality may be reduced, without impacting safety and 
security, increasing individual aircraft noise, and taking
187
HR 6 PCS 
into account all aircraft emissions and their relative im-
pact on human health. 
SEC. 15045. DIESEL FUELED VEHICLES. 
(a) DIESEL COMBUSTION AND AFTER TREATMENT 
TECHNOLOGIES.—The Secretary of Energy shall accel-
erate efforts to improve diesel combustion and after-treat-
ment technologies for use in diesel fueled motor vehicles. 
(b) GOAL.—
(1) COMPLIANCE
WITH
TIER
EMISSION 
STANDARDS BY 2010.—The Secretary shall carry out 
subsection (a) with a view to developing and dem-
onstrating diesel technology meeting tier 2 emission 
standards not later than 2010. 
(2) TIER 2 EMISSION STANDARDS DEFINED.—
In this subsection, the term ‘‘tier 2 emission stand-
ards’’ means the motor vehicle emission standards 
promulgated by the Administrator of the Environ-
mental Protection Agency on February 10, 2000, 
under sections 202 and 211 of the Clean Air Act to 
apply to passenger cars, light trucks, and larger pas-
senger vehicles of model years after the 2003 vehicle 
model year.
188
HR 6 PCS 
SEC. 15046. WAIVERS OF ALTERNATIVE FUELED VEHICLE 
FUELING REQUIREMENT. 
Section 400AA(a)(3)(E) of the Energy Policy 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 needs a waiver of 
such requirement for vehicles in the fleet of the agency 
in a particular geographic area where—
‘‘(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 by 
the head of the agency. 
‘‘(ii) The Secretary shall monitor compliance with 
this subparagraph by all such fleets and shall report annu-
ally to the Congress on the extent to which the require-
ments of this subparagraph are being achieved. The report 
shall include information on annual reductions achieved 
of petroleum-based fuels and the problems, if any, encoun-
tered in acquiring alternative fuels.’’.
189
HR 6 PCS 
SEC. 15047. TOTAL INTEGRATED THERMAL SYSTEMS. 
The Secretary shall—
(1) conduct a study of the benefits of total inte-
grated thermal systems in reducing demand for oil 
and protecting the environment; and 
(2) examine the feasibility of using total inte-
grated thermal systems in Department of Defense 
and other Federal motor vehicle fleets. 
SEC. 15048. OIL BYPASS FILTRATION TECHNOLOGY. 
The Secretary of Energy and the Administrator of 
the Environmental Protection Agency shall—
(1) conduct a joint study of the benefits of oil 
bypass filtration technology in reducing demand for 
oil and protecting the environment; and 
(2) examine the feasibility of using oil bypass 
filtration technology in Federal motor vehicle fleets.
SEC. 15049. NATURAL GAS CONDENSATE STUDY. 
Not later than 18 months after the date of enactment 
of this Act, the Secretary of Energy, in consultation with 
the Administrator of the Environmental Protection Agen-
cy, shall transmit to the Congress the results of a study 
to consider fuels derived from natural gas condensate and 
the appropriate blending of such condensates. The study 
shall consider—
(1) usage options; 
(2) potential volume capacities;
190
HR 6 PCS 
(3) costs; 
(4) air emissions; 
(5) fuel efficiencies; and 
(6) potential use in the Federal fleet program 
under title III of the Energy Policy Act of 1992 (42 
U.S.C. 13201 et seq.). 
SEC. 15050. STUDY ON REDUCING PETROLEUM CONSUMP-
TION. 
(a) IN GENERAL.—The Administrator of General 
Services, in cooperation with the Secretary of Energy, 
shall conduct a study to consider the merits of establishing 
performance measures to guide the reduction of petroleum 
consumption by Federal fleets. 
(b) MATTERS TO BE ADDRESSED.—The study shall 
assess the feasibility of performance measures—
(1) to enable agency and congressional decision-
makers to establish annual and long-term perform-
ance goals to define the level of petroleum consump-
tion reduction to be achieved by Federal fleets; 
(2) to improve the effectiveness and account-
ability of Federal efforts to reduce petroleum con-
sumption and dependency; 
(3) to enhance decisionmaking by providing ob-
jective information on achieving performance objec-
tives; and
191
HR 6 PCS 
(4) to provide an alternative to the mandated 
alternative fueled vehicle requirements in section 
303 of the Energy Policy Act of 1992 (42 U.S.C. 
13212). 
(c) REPORT.—Not later than 12 months after the 
date of enactment of this Act, the Administrator shall sub-
mit to the Committees on Environment and Public Works 
and Governmental Affairs of the Senate and the Commit-
tees on Energy and Commerce and Government Reform 
of the House of Representatives a report on the study. 
SEC. 15051. CONSERVE BY BICYCLING PROGRAM. 
(a) DEFINITIONS.—In this section: 
(1) PROGRAM.—The term ‘‘program’’ means 
the Conserve by Bicycling Program established by 
subsection (b). 
(2) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Transportation. 
(b) ESTABLISHMENT.—There is established within 
the Department of Transportation a program to be known 
as the ‘‘Conserve by Bicycling Program’’. 
(c) PROJECTS.—
(1) IN GENERAL.—In carrying out the program, 
the Secretary shall establish not more than 10 pilot 
projects that are—
192
HR 6 PCS 
(A) dispersed geographically throughout 
the United States; and 
(B) designed to conserve energy resources 
by encouraging the use of bicycles in place of 
motor vehicles. 
(2) REQUIREMENTS.—A pilot project described 
in paragraph (1) shall—
(A) use education and marketing to con-
vert motor vehicle trips to bicycle trips; 
(B) document project results and energy 
savings (in estimated units of energy con-
served); 
(C) facilitate partnerships among inter-
ested parties in at least 2 of the fields of—
(i) transportation; 
(ii) law enforcement; 
(iii) education; 
(iv) public health; 
(v) environment; and 
(vi) energy; 
(D) maximize bicycle facility investments; 
(E) demonstrate methods that may be 
used in other regions of the United States; and 
(F) facilitate the continuation of ongoing 
programs that are sustained by local resources.
193
HR 6 PCS 
(3) COST SHARING.—At least 20 percent of the 
cost of each pilot project described in paragraph (1) 
shall be provided from State or local sources. 
(d) ENERGY AND BICYCLING RESEARCH STUDY.—
(1) IN GENERAL.—Not later than 2 years after 
the date of enactment of this Act, the Secretary 
shall enter into a contract with the National Acad-
emy of Sciences for, and the National Academy of 
Sciences shall conduct and submit to Congress a re-
port on, a study on the feasibility of converting 
motor vehicle trips to bicycle trips. 
(2) COMPONENTS.—The study shall—
(A) document the results or progress of 
the pilot projects under subsection (c); 
(B) determine the type and duration of 
motor vehicle trips that people in the United 
States may feasibly make by bicycle, taking into 
consideration factors such as—
(i) weather; 
(ii) land use and traffic patterns; 
(iii) the carrying capacity of bicycles; 
and 
(iv) bicycle infrastructure;
194
HR 6 PCS 
(C) determine any energy savings that 
would result from the conversion of motor vehi-
cle trips to bicycle trips; 
(D) include a cost-benefit analysis of bicy-
cle infrastructure investments; and 
(E) include a description of any factors 
that would encourage more motor vehicle trips 
to be replaced with bicycle trips. 
(e) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to carry out this section 
$6,200,000, to remain available until expended, of 
which—
(1) $5,150,000 shall be used to carry out pilot 
projects described in subsection (c); 
(2) $300,000 shall be used by the Secretary to 
coordinate, publicize, and disseminate the results of 
the program; and 
(3) $750,000 shall be used to carry out sub-
section (d).
195
HR 6 PCS 
TITLE VI—ELECTRICITY 
Subtitle A—Transmission Capacity 
SEC. 16011. TRANSMISSION INFRASTRUCTURE IMPROVE-
MENT RULEMAKING. 
Part II of the Federal Power Act (16 U.S.C. 824 et 
seq.) is amended by adding the following new section at 
the end thereof: 
‘‘SEC. 215. TRANSMISSION INFRASTRUCTURE IMPROVE-
MENT RULEMAKING. 
‘‘(a) RULEMAKING REQUIREMENT.—Within 1 year 
after the enactment of this section, the Commission shall 
establish, by rule, incentive-based (including but not lim-
ited to performance-based) transmission rate treatments 
to promote capital investment in the enlargement and im-
provement of facilities for the transmission of electric en-
ergy in interstate commerce as appropriate to—
‘‘(1) promote economically efficient trans-
mission and generation of electricity; 
‘‘(2) provide a return on equity that attracts 
new investment in transmission facilities and reason-
ably reflects the risks taken by public utilities in re-
structuring control of transmission assets; and 
‘‘(3) encourage deployment of transmission 
technologies and other measures to increase the ca-
196
HR 6 PCS 
pacity and efficiency of existing transmission facili-
ties and improve the operation of such facilities. 
The Commission may, from time to time, revise such rule. 
‘‘(b) FUNDING OF CERTAIN FACILITIES.—The rule 
promulgated pursuant to this section shall provide that, 
upon the request of a regional transmission organization 
or other Commission-approved transmission organization, 
new transmission facilities that increase the transfer capa-
bility of the transmission system shall be participant fund-
ed. In such rules, the Commission shall also provide guid-
ance as to what types of facilities may be participant fund-
ed. 
‘‘(c) JUST AND REASONABLE RATES.—With respect 
to any transmission rate filed with the Commission on or 
after the effective date of the rule promulgated under this 
section, the Commission shall, in its review of such rate 
under sections 205 and 206, apply the rules adopted pur-
suant to this section, including any revisions thereto. 
Nothing in this section shall be construed to override, 
weaken, or conflict with the procedural and other require-
ments of this part, including the requirement of sections 
205 and 206 that all rates, charges, terms, and conditions 
be just and reasonable and not unduly discriminatory or 
preferential.’’.
197
HR 6 PCS 
SEC. 16012. SITING OF INTERSTATE ELECTRICAL TRANS-
MISSION FACILITIES. 
(a) AMENDMENT OF FEDERAL POWER ACT.—Part 
II of the Federal Power Act is amended by adding at the 
end the following: 
‘‘SEC. 216. SITING OF INTERSTATE ELECTRICAL TRANS-
MISSION FACILITIES. 
‘‘(a) TRANSMISSION
STUDIES.—Within one year 
after the enactment of this section, and every 3 years 
thereafter, the Secretary of Energy shall conduct a study 
of electric transmission congestion. After considering al-
ternatives and recommendations from interested parties 
the Secretary shall issue a report, based on such study, 
which may designate one or more geographic areas experi-
encing electric energy transmission congestion as ‘inter-
state congestion areas’. 
‘‘(b) CONSTRUCTION PERMIT.—The Commission is 
authorized, after notice and an opportunity for hearing, 
to issue permits for the construction or modification of 
electric transmission facilities in interstate congestion 
areas designated by the Secretary under subsection (a) if 
the Commission makes each of the following findings: 
‘‘(1) A finding that—
‘‘(A) the State in which the transmission 
facilities are to be constructed or modified is
198
HR 6 PCS 
without authority to approve the siting of the 
facilities, or 
‘‘(B) a State commission or body in the 
State in which the transmission facilities are to 
be constructed or modified that has authority to 
approve the siting of the facilities has withheld 
approval, conditioned its approval in such a 
manner that the proposed construction or modi-
fication will not significantly reduce trans-
mission congestion in interstate commerce and 
is otherwise not economically feasible, or de-
layed final approval for more than one year 
after the filing of an application seeking ap-
proval or one year after the designation of the 
relevant interstate congestion area, whichever is 
later. 
‘‘(2) A finding that the facilities to be author-
ized by the permit will be used for the transmission 
of electric energy in interstate commerce. 
‘‘(3) A finding that the proposed construction 
or modification is consistent with the public interest. 
‘‘(4) A finding that the proposed construction 
or modification will significantly reduce transmission 
congestion in interstate commerce.
199
HR 6 PCS 
The Commission may include in a permit issued under this 
section conditions consistent with the public interest. 
‘‘(c) PERMIT APPLICATIONS.—Permit applications 
under subsection (b) shall be made in writing to the Com-
mission and verified under oath. The Commission shall 
issue rules setting forth the form of the application, the 
information it is to contain, and the manner of service of 
notice of the permit application upon interested persons. 
‘‘(d) COMMENTS.—In any proceeding before the 
Commission under subsection (b), the Commission shall 
afford each State in which a transmission facility covered 
by the permit is or will be located, each affected Federal 
agency and Indian tribe, private property owners, and 
other interested persons, a reasonable opportunity to 
present their views and recommendations with respect to 
the need for and impact of a facility covered by the permit. 
‘‘(e) RIGHTS-OF-WAY.—In the case of a permit under 
subsection (b) for electric transmission facilities to be lo-
cated on property other than property owned by the 
United States or a State, if the permit holder cannot ac-
quire by contract, or is unable to agree with the owner 
of the property to the compensation to be paid for, the 
necessary right-of-way to construct or modify such trans-
mission facilities, the permit holder may acquire the right-
of-way by the exercise of the right of eminent domain in
200
HR 6 PCS 
the district court of the United States for the district in 
which the property concerned is located, or in the appro-
priate court of the State in which the property is located. 
The practice and procedure in any action or proceeding 
for that purpose in the district court of the United States 
shall conform as nearly as may be with the practice and 
procedure in similar action or proceeding in the courts of 
the State where the property is situated. 
‘‘(f) STATE LAW.—Nothing in this section shall pre-
clude any person from constructing any transmission fa-
cilities pursuant to State law. 
‘‘(g) COMPLIANCE WITH OTHER LAWS.—Commis-
sion action under this section shall be subject to the Na-
tional Environmental Policy Act of 1969 (42 U.S.C. 4321 
et seq.) and all other applicable Federal laws. 
‘‘(h) COMPENSATION.—Any exercise of eminent do-
main authority pursuant to this section shall be considered 
a taking of private property for which just compensation 
is due. Just compensation shall be an amount equal to 
the full fair market value of the property taken on the 
date of the exercise of eminent domain authority, except 
that the compensation shall exceed fair market value if 
necessary to make the landowner whole for decreases in 
the value of any portion of the land not subject to eminent 
domain. Any parcel of land acquired by eminent domain
201
HR 6 PCS 
under this subsection shall be transferred back to the 
owner from whom it was acquired (or his heirs or assigns) 
if the land is not used for power line construction or modi-
fication within a reasonable period of time after the acqui-
sition. Property acquired under this subsection may not 
be used for any heritage area, recreational trail, or park, 
or for any other purpose (other than power line construc-
tion or modification, and for power line operation and 
maintenance) without the consent of the owner of the par-
cel from whom the property was acquired (or his heirs or 
assigns). 
‘‘(i) ERCOT.—Nothing in this section shall be con-
strued to authorize any interconnection with any facility 
owned or operated by an entity referred to in section 
212(k)(2)(B). 
‘‘(j) RIGHTS OF WAY ON FEDERAL LANDS.—
‘‘(1) LEAD AGENCY.—If an applicant, or pro-
spective applicant, for Federal authorization related 
to an electricity transmission or distribution facility 
so requests, the Department of Energy (DOE) shall 
act as the lead agency for purposes of coordinating 
all applicable Federal authorization and related envi-
ronmental review of the facility. The term ‘Federal 
authorization’ shall mean any authorization required 
under Federal law in order to site a transmission or
202
HR 6 PCS 
distribution facility, including but not limited to 
such permits, special use authorizations, certifi-
cations, opinions, or other approvals as may be re-
quired, whether issued by a Federal or a State agen-
cy. To the maximum extent practicable under appli-
cable Federal law, the Secretary of Energy shall co-
ordinate this Federal authorization and review proc-
ess with any Indian tribes, multi-State entities, and 
State agencies that are responsible for conducting 
any separate permitting and environmental reviews 
of the facility, to ensure timely and efficient review 
and permit decisions. 
‘‘(2) AUTHORITY TO SET DEADLINES.—As lead 
agency, the Department of Energy, in consultation 
with other Federal and, as appropriate, with Indian 
tribes, multi-State entities, and State agencies that 
are willing to coordinate their own separate permit-
ting and environmental reviews with the Federal au-
thorization and environmental reviews, shall estab-
lish prompt and binding intermediate milestones and 
ultimate deadlines for the review of and Federal au-
thorization decisions relating to the proposed facil-
ity. The Secretary of Energy shall ensure that once 
an application has been submitted with such data as 
the Secretary deems necessary, all permit decisions
203
HR 6 PCS 
and related environmental reviews under all applica-
ble Federal laws shall be completed within 1 year or, 
if a requirement of another provision of Federal law 
makes this impossible, as soon thereafter as is prac-
ticable. The Secretary of Energy also shall provide 
an expeditious pre-application mechanism for pro-
spective applicants to confer with the agencies in-
volved to have each such agency determine and com-
municate to the prospective applicant within 60 days 
of when the prospective applicant submits a request 
for such information concerning—
‘‘(A) the likelihood of approval for a poten-
tial facility; and 
‘‘(B) key issues of concern to the agencies 
and public. 
‘‘(3) CONSOLIDATED ENVIRONMENTAL REVIEW 
AND RECORD OF DECISION.—The Secretary of En-
ergy, in consultation with the affected agencies, shall 
prepare a single environmental review document, 
which shall be used as the basis for all decisions on 
the proposed project under Federal law. The docu-
ment may be an environmental assessment or envi-
ronmental impact statement under the National En-
vironmental Policy Act of 1969 if warranted, or such 
other form of analysis as may be warranted. DOE
204
HR 6 PCS 
and other agencies shall streamline the review and 
permitting of transmission and distribution facilities 
within corridors designated under section 503 of the 
Federal Land Policy and Management Act (43 
U.S.C. 1763) by fully taking into account prior anal-
yses and decisions as to the corridors. The document 
under this section may consist of or include an envi-
ronmental assessment, if allowed by law, or an envi-
ronmental impact statement, if warranted or re-
quired by law, or such other form of analysis as war-
ranted, consistent with any requirement of the Na-
tional Environmental Policy Act, the Federal Land 
Policy and Management Act, or any other applicable 
law. Such document shall include consideration by 
the relevant agencies of any applicable criteria or 
other matters as required under applicable laws. 
‘‘(4) APPEALS.—In the event that any agency 
has denied a Federal authorization required for a 
transmission or distribution facility, or has failed to 
act by the deadline established by the Secretary pur-
suant to this section for deciding whether to issue 
the authorization, the applicant or any State in 
which the facility would be located may file an ap-
peal with the Secretary of Energy, who shall, in con-
sultation with the affected agency, review the denial
205
HR 6 PCS 
or take action on the pending application. Based on 
the overall record and in consultation with the af-
fected agency, the Secretary may then either issue 
the necessary authorization with any appropriate 
conditions, or deny the application. The Secretary 
shall issue a decision within 90 days of the filing of 
the appeal. In making a decision under this para-
graph, the Secretary shall comply with all applicable 
requirements of Federal law, including any require-
ments of the Endangered Species Act, the Clean 
Water Act, the National Forest Management Act, 
the National Environmental Policy Act, and the 
Federal Land Management and Policy Act. 
‘‘(5) CONFORMING REGULATIONS AND MEMO-
RANDA OF AGREEMENT.—Not later than 18 months 
after the date of enactment of this section, the Sec-
retary of Energy shall issue any regulations nec-
essary to implement the foregoing provisions. Not 
later than 1 year after the date of enactment of this 
section, the Secretary and the heads of all relevant 
Federal departments and non-departmental agencies 
shall, and interested Indian tribes, multi-State enti-
ties, and State agencies may, enter into Memoranda 
of Agreement to ensure the timely and coordinated 
review and permitting of electricity transmission and
206
HR 6 PCS 
distribution facilities. The head of each Federal de-
partment or non-departmental agency with approval 
authority shall designate a senior responsible official 
and dedicate sufficient other staff and resources to 
ensure that the DOE regulations and any Memo-
randa are fully implemented. 
‘‘(6) MISCELLANEOUS.—Each Federal author-
ization for an electricity transmission or distribution 
facility shall be issued for a duration, as determined 
by the Secretary of Energy, commensurate with the 
anticipated use of the facility and with appropriate 
authority to manage the right-of-way for reliability 
and environmental protection. Further, when such 
authorizations expire, they shall be reviewed for re-
newal taking fully into account reliance on such elec-
tricity infrastructure, recognizing its importance for 
public health, safety and economic welfare and as a 
legitimate use of Federal lands. 
‘‘(7) MAINTAINING
AND
ENHANCING
THE 
TRANSMISSION INFRASTRUCTURE.—In exercising the 
responsibilities under this section, the Secretary of 
Energy shall consult regularly with the Federal En-
ergy Regulatory Commission (FERC) and FERC-
approved Regional Transmission Organizations and 
Independent System Operators.
207
HR 6 PCS 
‘‘(k) INTERSTATE COMPACTS.—The consent of Con-
gress is hereby given for States to enter into interstate 
compacts establishing regional transmission siting agen-
cies to facilitate coordination among the States within 
such areas for purposes of siting future electric energy 
transmission facilities and to carry out State electric en-
ergy transmission siting responsibilities. The Secretary of 
Energy may provide technical assistance to regional trans-
mission siting agencies established under this subsection. 
‘‘(l) SAVINGS CLAUSE.—Nothing in this section shall 
be construed to affect any requirement of the environ-
mental laws of the United States, including, but not lim-
ited to, the National Environmental Policy Act of 1969. 
This section shall not apply to any component of the Na-
tional Wilderness Preservation System, the National Wild 
and Scenic Rivers System, or the National Park system 
(including National Monuments therein).’’. 
(b) FEDERAL CORRIDORS.—The Secretary of the In-
terior, the Secretary of Energy, the Secretary of Agri-
culture, and the Chairman of the Council on Environ-
mental Quality shall, within 90 days of the date of enact-
ment of this subsection, submit a joint report to Congress 
identifying the following: 
(1) all existing designated transmission and dis-
tribution corridors on Federal land and the status of
208
HR 6 PCS 
work related to proposed transmission and distribu-
tion corridor designations, the schedule for com-
pleting such work, any impediments to completing 
the work, and steps that Congress could take to ex-
pedite the process; 
(2) the number of pending applications to lo-
cate transmission and distribution facilities on Fed-
eral lands, key information relating to each such fa-
cility, how long each application has been pending, 
the schedule for issuing a timely decision as to each 
facility, and progress in incorporating existing and 
new such rights-of-way into relevant land use and 
resource management plans or their equivalent; and 
(3) the number of existing transmission and 
distribution rights-of-way on Federal lands that will 
come up for renewal within the following 5, 10, and 
15 year periods, and a description of how the Secre-
taries plan to manage such renewals. 
SEC. 16013. TRANSMISSION TECHNOLOGIES. 
The Federal Energy Regulatory Commission shall 
shall take affirmative steps in the exercise of its authori-
ties under the Federal Power Act to encourage the deploy-
ment of transmission technologies that utilize real time 
monitoring and analytical software to increase and maxi-
209
HR 6 PCS 
mize the capacity and efficiency of transmission networks 
and to reduce line losses. 
Subtitle B—Transmission 
Operation 
SEC. 16021. OPEN ACCESS TRANSMISSION BY CERTAIN 
UTILITIES. 
Part II of the Federal Power Act (16 U.S.C. 824 et 
seq.) is amended by inserting after section 211 the fol-
lowing: 
‘‘SEC. 211A. OPEN ACCESS BY UNREGULATED TRANSMIT-
TING UTILITIES. 
‘‘(a) IN GENERAL.—Subject to section 212(h), the 
Commission may, by rule or order, require an unregulated 
transmitting utility to provide transmission services—
‘‘(1) at rates that are comparable to those that 
the unregulated transmitting utility charges itself, 
and 
‘‘(2) on terms and conditions (not relating to 
rates) that are comparable to those under which 
such unregulated transmitting utility provides trans-
mission services to itself and that are not unduly 
discriminatory or preferential. 
‘‘(b) EXEMPTIONS.—
210
HR 6 PCS 
‘‘(1) IN GENERAL.—The Commission shall ex-
empt from any rule or order under this subsection 
any unregulated transmitting utility that—
‘‘(A)(i) sells no more than 4,000,000 
megawatt hours of electricity per year; and 
‘‘(ii) is a distribution utility; or 
‘‘(B) does not own or operate any trans-
mission facilities that are necessary for oper-
ating an interconnected transmission system (or 
any portion thereof); or 
‘‘(C) meets other criteria the Commission 
determines to be in the public interest. 
‘‘(2) LOCAL DISTRIBUTION.— The requirements 
of subsection (a) shall not apply to facilities used in 
local distribution. 
‘‘(c) RATE
CHANGING
PROCEDURES.—The rate 
changing procedures applicable to public utilities under 
subsections (c) and (d) of section 205 are applicable to 
unregulated transmitting utilities for purposes of this sec-
tion. 
‘‘(d) REMAND.—In exercising its authority under 
paragraph (1), the Commission may remand transmission 
rates to an unregulated transmitting utility for review and 
revision where necessary to meet the requirements of sub-
section (a).
211
HR 6 PCS 
‘‘(e) SECTION 211 REQUESTS.—The provision of 
transmission services under subsection (a) does not pre-
clude a request for transmission services under section 
211. 
‘‘(f) DEFINITIONS.—For purposes of this section—
‘‘(1) The term ‘unregulated transmitting utility’ 
means an entity that—
‘‘(A) owns or operates facilities used for 
the transmission of electric energy in interstate 
commerce, and 
‘‘(B) is either an entity described in sec-
tion 201(f) or a rural electric cooperative. 
‘‘(2) The term ‘distribution utility’ means an 
unregulated transmitting utility that serves at least 
ninety percent of its electric customers at retail.’’. 
SEC. 16022. REGIONAL TRANSMISSION ORGANIZATIONS. 
(a) SENSE OF THE CONGRESS ON RTOS.—It is the 
sense of Congress that, in order to promote fair, open ac-
cess to electric transmission service, benefit retail con-
sumers, facilitate wholesale competition, improve effi-
ciencies in transmission grid management, promote grid 
reliability, remove opportunities for unduly discriminatory 
or preferential transmission practices, and provide for the 
efficient development of transmission infrastructure need-
ed to meet the growing demands of competitive wholesale
212
HR 6 PCS 
power markets, all transmitting utilities in interstate com-
merce should voluntarily become members of independ-
ently administered regional transmission organizations 
that have operational control of interstate transmission fa-
cilities and do not own or control generation facilities used 
to supply electric energy for sale at wholesale. 
(b) SENSE OF THE CONGRESS ON CAPITAL INVEST-
MENT.—It is the sense of the Congress that the Federal 
Energy Regulatory Commission should provide to any 
transmitting utility that becomes a member of an oper-
ational regional transmitting organization approved by the 
Commission a return on equity sufficient to attract new 
investment capital for expansion of transmission capacity, 
in accordance with sections 205 and 206 of the Federal 
Power Act (16 U.S.C. 824d and 824e), including the re-
quirement that rates be just and reasonable. 
(c) REPORT ON PENDING APPLICATIONS.—Not later 
than 120 days after the date of enactment of this section, 
the Federal Energy Regulatory Commission shall submit 
to the Committee on Energy and Commerce of the United 
States House of Representatives and the Committee on 
Energy and Natural Resources of the United States Sen-
ate a report containing the following: 
(1) A list of all regional transmission organiza-
tion applications filed at the Commission pursuant
213
HR 6 PCS 
to the Commission’s Order No. 2000, including an 
identification of each public utility and other entity 
included within the proposed membership of the re-
gional transmission organization. 
(2) A table showing the date each such applica-
tion was filed, the date of any revised filings of such 
application, the date of each preliminary or final 
Commission order regarding such application, and a 
statement of whether the application has been re-
jected, preliminarily approved, finally approved, or 
has some other status (including a description of 
that status). 
(3) For any application that has not been fi-
nally approved by the Commission, a detailed de-
scription of every aspect of the application that the 
Commission has determined does not conform to the 
requirements of Order No. 2000. 
(4) For any application that has not been fi-
nally approved by the Commission, an explanation 
by the Commission of why the items described pur-
suant to paragraph (3) constitute material non-
compliance with the requirements of the Commis-
sion’s Order No. 2000 sufficient to justify denial of 
approval by the Commission.
214
HR 6 PCS 
(5) For all regional transmission organization 
applications filed pursuant to the Commission’s 
Order No. 2000, whether finally approved or not—
(A) a discussion of that regional trans-
mission organization’s efforts to minimize rate 
seams between itself and—
(i) other regional transmission organi-
zations; and 
(ii) entities not participating in a re-
gional transmission organization; and 
(B) a discussion of the impact of such 
seams on consumers and wholesale competition; 
and 
(C) a discussion of minimizing cost-shifting 
on consumers. 
(d) FEDERAL UTILITY PARTICIPATION IN RTOS.—
(1) DEFINITIONS.—For purposes of this sec-
tion—
(A) The term ‘‘appropriate Federal regu-
latory authority’’ means— 
(i) with respect to a Federal power 
marketing agency, the Secretary of En-
ergy, except that the Secretary may des-
ignate the Administrator of a Federal 
power marketing agency to act as the ap-
215
HR 6 PCS 
propriate Federal regulatory authority with 
respect to the transmission system of that 
Federal power marketing agency; and 
(ii) with respect to the Tennessee Val-
ley Authority, the Board of Directors of 
the Tennessee Valley Authority. 
(B) The term ‘‘Federal utility’’ means a 
Federal power marketing agency or the Ten-
nessee Valley Authority. 
(C) The term ‘‘transmission system’’ 
means electric transmission facilities owned, 
leased, or contracted for by the United States 
and operated by a Federal utility. 
(2) TRANSFER.—The appropriate Federal regu-
latory authority is authorized to enter into a con-
tract, agreement or other arrangement transferring 
control and use of all or part of the Federal utility’s 
transmission system to a regional transmission orga-
nization approved by the Federal Energy Regulatory 
Commission. Such contract, agreement or arrange-
ment shall include—
(A) performance standards for operation 
and use of the transmission system that the 
head of the Federal utility determines necessary 
or appropriate, including standards that assure
216
HR 6 PCS 
recovery of all the Federal utility’s costs and 
expenses related to the transmission facilities 
that are the subject of the contract, agreement 
or other arrangement, consistency with existing 
contracts and third-party financing arrange-
ments, and consistency with said Federal util-
ity’s statutory authorities, obligations, and limi-
tations; 
(B) provisions for monitoring and over-
sight by the Federal utility of the regional 
transmission organization’s fulfillment of the 
terms and conditions of the contract, agreement 
or other arrangement, including a provision 
that may provide for the resolution of disputes 
through arbitration or other means with the re-
gional transmission organization or with other 
participants, notwithstanding the obligations 
and limitations of any other law regarding arbi-
tration; and 
(C) a provision that allows the Federal 
utility to withdraw from the regional trans-
mission organization and terminate the con-
tract, agreement or other arrangement in ac-
cordance with its terms.
217
HR 6 PCS 
Neither this section, actions taken pursuant to it, 
nor any other transaction of a Federal utility using 
a regional transmission organization shall serve to 
confer upon the Federal Energy Regulatory Com-
mission jurisdiction or authority over the Federal 
utility’s electric generation assets, electric capacity 
or energy that the Federal utility is authorized by 
law to market, or the Federal utility’s power sales 
activities. 
(3) EXISTING STATUTORY AND OTHER OBLIGA-
TIONS.—
(A) 
SYSTEM
OPERATION
REQUIRE-
MENTS.—Any statutory provision requiring or 
authorizing a Federal utility to transmit electric 
power or to construct, operate or maintain its 
transmission system shall not be construed to 
prohibit a transfer of control and use of its 
transmission system pursuant to, and subject to 
all requirements of paragraph (2). 
(B) 
OTHER
OBLIGATIONS.—This 
sub-
section shall not be construed to—
(i) suspend, or exempt any Federal 
utility from, any provision of existing Fed-
eral law, including but not limited to any 
requirement or direction relating to the use
218
HR 6 PCS 
of the Federal utility’s transmission sys-
tem, environmental protection, fish and 
wildlife protection, flood control, naviga-
tion, water delivery, or recreation; or 
(ii) authorize abrogation of any con-
tract or treaty obligation. 
SEC. 16023. NATIVE LOAD. 
Part II of the Federal Power Act (16 U.S.C. 824 et 
seq.) is amended by adding the following new section at 
the end thereof: 
‘‘SEC. 217. SERVICE OBLIGATIONS OF LOAD-SERVING ENTI-
TIES. 
‘‘(a) IN GENERAL.—In exercising authority under 
this Act, the Commission shall ensure that any load-serv-
ing entity that either—
‘‘(1) owns transmission facilities for the trans-
mission of electric energy in interstate commerce 
used to purchase or deliver electric energy to meet—
‘‘(A) a service obligation to customers; or 
‘‘(B) an existing wholesale contractual obli-
gation; or 
‘‘(2) holds a contract or service agreement for 
firm transmission service used to purchase or deliver 
electric energy to meet—
‘‘(A) a service obligation to customers; or
219
HR 6 PCS 
‘‘(B) an existing wholesale contractual obli-
gation, 
shall be entitled to use such transmission facilities or 
equivalent transmission rights to meet such obligations be-
fore transmission capacity is made available for other 
uses. 
‘‘(b) USE BY SUCCESSOR IN INTEREST.—To the ex-
tent that all or a portion of the service obligation or con-
tractual obligation covered by subsection (a) is transferred 
to another load serving entity, the successor shall be enti-
tled to use such transmission facilities or firm trans-
mission rights associated with the transferred service obli-
gation consistent with subsection (a). Subsequent trans-
fers to another load serving entity, or back to the original 
load-serving entity, shall be entitled to the same rights. 
‘‘(c) OTHER ENTITIES.—The Commission may exer-
cise authority under this Act to make transmission rights 
not used to meet an obligation covered by subsection (a) 
available to other entities in a manner determined by the 
Commission to be not unduly discriminatory or pref-
erential. 
‘‘(d) DEFINITIONS.—For the purposes of this section: 
‘‘(1) The term ‘load-serving entity’ means an 
electric utility, transmitting utility or Federal power 
marketing agency that has an obligation under Fed-
220
HR 6 PCS 
eral, State, or local law, or under long-term con-
tracts, to provide electric service to either—
‘‘(A) electric consumers (as defined in sec-
tion 3(5) of the Public Utility Regulatory Poli-
cies Act of 1978 (16 U.S.C. 2602(5)); or 
‘‘(B) an electric utility as defined in sec-
tion 3(4) of the Public Utility Regulatory Poli-
cies Act of 1978 (16 U.S.C. 2602(5)) that has 
an obligation to provide electric service to elec-
tric consumers. 
Such obligations shall be deemed ‘service obliga-
tions’. 
‘‘(2) The term ‘existing wholesale contractual 
obligation’ means an obligation under a firm long-
term wholesale contract that was in effect on March 
28, 2003. A contract modification after March 28, 
2003 (other than one that increases the quantity of 
electric energy sold under the contract) shall not af-
fect the status of such contract as an existing whole-
sale contractual obligation. 
‘‘(e) RELATIONSHIP TO OTHER PROVISIONS.—To the 
extent that a transmitting utility reserves transmission ca-
pacity (or reserves the equivalent amount of tradable 
transmission rights) to provide firm transmission service 
to meet service obligations or firm long-term wholesale
221
HR 6 PCS 
contractual obligations pursuant to subsection (a), that 
transmitting utility shall not be considered as engaging 
in undue discrimination or preference under this Act. 
‘‘(f) JURISDICTION.—This section shall not apply to 
an entity located in an area referred to in section 
212(k)(2)(A).
‘‘(g) SAVINGS CLAUSE.—Nothing in this section shall 
affect any allocation of transmission rights by the PJM 
Interconnection, the New York Independent System Oper-
ator, the New England Independent System Operator, the 
Midwest Independent System Operator, or the California 
Independent System Operator. Nothing in this section 
shall provide a basis for abrogating any contract for firm 
transmission service or rights in effect as of the date of 
enactment of this section.’’.
Subtitle C—Reliability 
SEC. 16031. ELECTRIC RELIABILITY STANDARDS. 
Part II of the Federal Power Act (16 U.S.C 824 et 
seq.) is amended by inserting the following new section 
at the end thereof: 
‘‘SEC. 218. ELECTRIC RELIABILITY. 
‘‘(a) DEFINITIONS.—For purposes of this section—
‘‘(1) The term ‘bulk-power system’ means—
‘‘(A) facilities and control systems nec-
essary for operating an interconnected electric
222
HR 6 PCS 
energy transmission network (or any portion 
thereof); and 
‘‘(B) electric energy from generation facili-
ties needed to maintain transmission system re-
liability. 
The term does not include facilities used in the local 
distribution of electric energy. 
‘‘(2) The terms ‘Electric Reliability Organiza-
tion’ and ‘ERO’ mean the organization certified by 
the Commission under subsection (c) the purpose of 
which is to establish and enforce reliability stand-
ards for the bulk-power system, subject to Commis-
sion review. 
‘‘(3) The term ‘reliability standard’ means a re-
quirement, approved by the Commission under this 
section, to provide for reliable operation of the bulk-
power system. The term includes requirements for 
the operation of existing bulk-power system facilities 
and the design of planned additions or modifications 
to such facilities to the extent necessary to provide 
for reliable operation of the bulk-power system, but 
the term does not include any requirement to en-
large such facilities or to construct new transmission 
capacity or generation capacity.
223
HR 6 PCS 
‘‘(4) The term ‘reliable operation’ means oper-
ating the elements of the bulk-power system within 
equipment and electric system thermal, voltage, and 
stability limits so that instability, uncontrolled sepa-
ration, or cascading failures of such system will not 
occur as a result of a sudden disturbance or unan-
ticipated failure of system elements. 
‘‘(5) The term ‘Interconnection’ means a geo-
graphic area in which the operation of bulk-power 
system components is synchronized such that the 
failure of one or more of such components may ad-
versely affect the ability of the operators of other 
components within the system to maintain reliable 
operation of the facilities within their control. 
‘‘(6) The term ‘transmission organization’ 
means a regional transmission organization, inde-
pendent system operator, independent transmission 
provider, or other transmission organization finally 
approved by the Commission for the operation of 
transmission facilities. 
‘‘(7) The term ‘regional entity’ means an entity 
having enforcement authority pursuant to subsection 
(e)(4). 
‘‘(b) JURISDICTION AND APPLICABILITY.—(1) The 
Commission shall have jurisdiction, within the United
224
HR 6 PCS 
States, over the ERO certified by the Commission under 
subsection (c), any regional entities, and all users, owners 
and operators of the bulk-power system, including but not 
limited to the entities described in section 201(f), for pur-
poses of approving reliability standards established under 
this section and enforcing compliance with this section. All 
users, owners and operators of the bulk-power system 
shall comply with reliability standards that take effect 
under this section. 
‘‘(2) The Commission shall issue a final rule to imple-
ment the requirements of this section not later than 180 
days after the date of enactment of this section. 
‘‘(c) CERTIFICATION.—Following the issuance of a 
Commission rule under subsection (b)(2), any person may 
submit an application to the Commission for certification 
as the Electric Reliability Organization (ERO). The Com-
mission may certify one such ERO if the Commission de-
termines that such ERO—
‘‘(1) has the ability to develop and enforce, sub-
ject to subsection (e)(2), reliability standards that 
provide for an adequate level of reliability of the 
bulk-power system; 
‘‘(2) has established rules that—
‘‘(A) assure its independence of the users 
and owners and operators of the bulk-power
225
HR 6 PCS 
system, while assuring fair stakeholder rep-
resentation in the selection of its directors and 
balanced decisionmaking in any ERO com-
mittee or subordinate organizational structure; 
‘‘(B) allocate equitably reasonable dues, 
fees, and other charges among end users for all 
activities under this section; 
‘‘(C) provide fair and impartial procedures 
for enforcement of reliability standards through 
the imposition of penalties in accordance with 
subsection (e) (including limitations on activi-
ties, functions, or operations, or other appro-
priate sanctions); 
‘‘(D) provide for reasonable notice and op-
portunity for public comment, due process, 
openness, and balance of interests in developing 
reliability standards and otherwise exercising its 
duties; and 
‘‘(E) provide for taking, after certification, 
appropriate steps to gain recognition in Canada 
and Mexico. 
‘‘(d) RELIABILITY STANDARDS.—(1) The Electric 
Reliability Organization shall file each reliability standard 
or modification to a reliability standard that it proposes
226
HR 6 PCS 
to be made effective under this section with the Commis-
sion. 
‘‘(2) The Commission may approve, by rule or order, 
a proposed reliability standard or modification to a reli-
ability standard if it determines that the standard is just, 
reasonable, not unduly discriminatory or preferential, and 
in the public interest. The Commission shall give due 
weight to the technical expertise of the Electric Reliability 
Organization with respect to the content of a proposed 
standard or modification to a reliability standard and to 
the technical expertise of a regional entity organized on 
an Interconnection-wide basis with respect to a reliability 
standard to be applicable within that Interconnection, but 
shall not defer with respect to the effect of a standard 
on competition. A proposed standard or modification shall 
take effect upon approval by the Commission. 
‘‘(3) The Electric Reliability Organization shall 
rebuttably presume that a proposal from a regional entity 
organized on an Interconnection-wide basis for a reliability 
standard or modification to a reliability standard to be ap-
plicable on an Interconnection-wide basis is just, reason-
able, and not unduly discriminatory or preferential, and 
in the public interest. 
‘‘(4) The Commission shall remand to the Electric 
Reliability Organization for further consideration a pro-
227
HR 6 PCS 
posed reliability standard or a modification to a reliability 
standard that the Commission disapproves in whole or in 
part. 
‘‘(5) The Commission, upon its own motion or upon 
complaint, may order the Electric Reliability Organization 
to submit to the Commission a proposed reliability stand-
ard or a modification to a reliability standard that ad-
dresses a specific matter if the Commission considers such 
a new or modified reliability standard appropriate to carry 
out this section. 
‘‘(6) The final rule adopted under subsection (b)(2) 
shall include fair processes for the identification and time-
ly resolution of any conflict between a reliability standard 
and any function, rule, order, tariff, rate schedule, or 
agreement accepted, approved, or ordered by the Commis-
sion applicable to a transmission organization. Such trans-
mission organization shall continue to comply with such 
function, rule, order, tariff, rate schedule or agreement ac-
cepted approved, or ordered by the Commission until—
‘‘(A) the Commission finds a conflict exists be-
tween a reliability standard and any such provision; 
‘‘(B) the Commission orders a change to such 
provision pursuant to section 206 of this part; and 
‘‘(C) the ordered change becomes effective 
under this part.
228
HR 6 PCS 
If the Commission determines that a reliability standard 
needs to be changed as a result of such a conflict, it shall 
order the ERO to develop and file with the Commission 
a modified reliability standard under paragraph (4) or (5) 
of this subsection. 
‘‘(e) ENFORCEMENT.—(1) The ERO may impose, 
subject to paragraph (2), a penalty on a user or owner 
or operator of the bulk-power system for a violation of a 
reliability standard approved by the Commission under 
subsection (d) if the ERO, after notice and an opportunity 
for a hearing—
‘‘(A) finds that the user or owner or operator 
has violated a reliability standard approved by the 
Commission under subsection (d); and 
‘‘(B) files notice and the record of the pro-
ceeding with the Commission. 
‘‘(2) A penalty imposed under paragraph (1) may 
take effect not earlier than the 31st day after the electric 
reliability organization files with the Commission notice of 
the penalty and the record of proceedings. Such penalty 
shall be subject to review by the Commission, on its own 
motion or upon application by the user, owner or operator 
that is the subject of the penalty filed within 30 days after 
the date such notice is filed with the Commission. Applica-
tion to the Commission for review, or the initiation of re-
229
HR 6 PCS 
view by the Commission on its own motion, shall not oper-
ate as a stay of such penalty unless the Commission other-
wise orders upon its own motion or upon application by 
the user, owner or operator that is the subject of such 
penalty. In any proceeding to review a penalty imposed 
under paragraph (1), the Commission, after notice and op-
portunity for hearing (which hearing may consist solely 
of the record before the electric reliability organization and 
opportunity for the presentation of supporting reasons to 
affirm, modify, or set aside the penalty), shall by order 
affirm, set aside, reinstate, or modify the penalty, and, 
if appropriate, remand to the electric reliability organiza-
tion for further proceedings. The Commission shall imple-
ment expedited procedures for such hearings. 
‘‘(3) On its own motion or upon complaint, the Com-
mission may order compliance with a reliability standard 
and may impose a penalty against a user or owner or oper-
ator of the bulk-power system, if the Commission finds, 
after notice and opportunity for a hearing, that the user 
or owner or operator of the bulk-power system has en-
gaged or is about to engage in any acts or practices that 
constitute or will constitute a violation of a reliability 
standard. 
‘‘(4) The Commission shall establish regulations au-
thorizing the ERO to enter into an agreement to delegate
230
HR 6 PCS 
authority to a regional entity for the purpose of proposing 
reliability standards to the ERO and enforcing reliability 
standards under paragraph (1) if—
‘‘(A) the regional entity is governed by—
‘‘(i) an independent board; 
‘‘(ii) a balanced stakeholder board; or 
‘‘(iii) a combination independent and bal-
anced stakeholder board. 
‘‘(B) the regional entity otherwise satisfies the 
provisions of subsection (c)(1) and (2); and 
‘‘(C) the agreement promotes effective and effi-
cient administration of bulk-power system reliability. 
The Commission may modify such delegation. The ERO 
and the Commission shall rebuttably presume that a pro-
posal for delegation to a regional entity organized on an 
Interconnection-wide basis promotes effective and efficient 
administration of bulk-power system reliability and should 
be approved. Such regulation may provide that the Com-
mission may assign the ERO’s authority to enforce reli-
ability standards under paragraph (1) directly to a re-
gional entity consistent with the requirements of this para-
graph. 
‘‘(5) The Commission may take such action as is nec-
essary or appropriate against the ERO or a regional entity
231
HR 6 PCS 
to ensure compliance with a reliability standard or any 
Commission order affecting the ERO or a regional entity. 
‘‘(6) Any penalty imposed under this section shall 
bear a reasonable relation to the seriousness of the viola-
tion and shall take into consideration the efforts of such 
user, owner, or operator to remedy the violation in a time-
ly manner. 
‘‘(f) CHANGES IN ELECTRICITY RELIABILITY ORGA-
NIZATION RULES.—The Electric Reliability Organization 
shall file with the Commission for approval any proposed 
rule or proposed rule change, accompanied by an expla-
nation of its basis and purpose. The Commission, upon 
its own motion or complaint, may propose a change to the 
rules of the Electric Reliability Organization. A proposed 
rule or proposed rule change shall take effect upon a find-
ing by the Commission, after notice and opportunity for 
comment, that the change is just, reasonable, not unduly 
discriminatory or preferential, is in the public interest, and 
satisfies the requirements of subsection (c). 
‘‘(g) RELIABILITY REPORTS.—The Electric Reli-
ability Organization shall conduct periodic assessments of 
the reliability and adequacy of the bulk-power system in 
North America. 
‘‘(h) COORDINATION WITH CANADA AND MEXICO.—
The President is urged to negotiate international agree-