II 
108TH CONGRESS 
2D SESSION 
H. R. 4503
IN THE SENATE OF THE UNITED STATES 
JUNE 17, 2004
Received 
AN ACT 
To enhance energy conservation and research and develop-
ment, to provide for security and diversity in the energy 
supply for the American people, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
HR 4503 RDS 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Energy Policy Act of 2004’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
TITLE I—ENERGY EFFICIENCY 
Subtitle A—Federal programs 
Sec. 101. Energy and water saving measures in congressional buildings. 
Sec. 102. Energy management requirements. 
Sec. 103. Energy use measurement and accountability. 
Sec. 104. Procurement of energy efficient products. 
Sec. 105. Energy Savings Performance Contracts. 
Sec. 106. Energy Savings Performance Contracts pilot program for nonbuilding 
applications. 
Sec. 107. Voluntary commitments to reduce industrial energy intensity. 
Sec. 108. Advanced Building Efficiency Testbed. 
Sec. 109. Federal building performance standards. 
Sec. 110. Increased use of recovered mineral component in Federally funded 
projects involving procurement of cement or concrete. 
Subtitle B—Energy assistance and State programs 
Sec. 121. Low income home energy assistance program. 
Sec. 122. Weatherization assistance. 
Sec. 123. State energy programs. 
Sec. 124. Energy efficient appliance rebate programs. 
Sec. 125. Energy efficient public buildings. 
Sec. 126. Low income community energy efficiency pilot program. 
Subtitle C—Energy efficient products 
Sec. 131. Energy Star Program. 
Sec. 132. HVAC maintenance consumer education program. 
Sec. 133. Energy conservation standards for additional products. 
Sec. 134. Energy labeling. 
Subtitle D—Public housing 
Sec. 141. Capacity building for energy-efficient, affordable housing. 
Sec. 142. Increase of cdbg public services cap for energy conservation and effi-
ciency activities. 
Sec. 143. FHA mortgage insurance incentives for energy efficient housing. 
Sec. 144. Public housing capital fund. 
Sec. 145. Grants for energy-conserving improvements for assisted housing. 
Sec. 146. North American Development Bank. 
Sec. 147. Energy-efficient appliances. 
Sec. 148. Energy efficiency standards. 
Sec. 149. Energy strategy for HUD.
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TITLE II—RENEWABLE ENERGY 
Subtitle A—General provisions 
Sec. 201. Assessment of renewable energy resources. 
Sec. 202. Renewable energy production incentive. 
Sec. 203. Federal purchase requirement. 
Sec. 204. Insular areas energy security. 
Sec. 205. Use of photovoltaic energy in public buildings. 
Sec. 206. Grants to improve the commercial value of forest biomass for electric 
energy, useful heat, transportation fuels, petroleum-based prod-
uct substitutes, and other commercial purposes. 
Sec. 207. Biobased products. 
Subtitle B—Geothermal energy 
Sec. 211. Short title. 
Sec. 212. Competitive lease sale requirements. 
Sec. 213. Direct use. 
Sec. 214. Royalties and near-term production incentives. 
Sec. 215. Geothermal leasing and permitting on Federal lands. 
Sec. 216. Review and report to Congress. 
Sec. 217. Reimbursement for costs of NEPA analyses, documentation, and 
studies. 
Sec. 218. Assessment of Geothermal energy potential. 
Sec. 219. Cooperative or Unit plans. 
Sec. 220. Royalty on byproducts. 
Sec. 221. Repeal of authorities of Secretary to readjust terms, conditions, rent-
als, and royalties. 
Sec. 222. Crediting of rental toward royalty. 
Sec. 223. Lease duration and work commitment requirements. 
Sec. 224. Advanced royalties required for suspension of production. 
Sec. 225. Annual rental. 
Sec. 226. Leasing and permitting on Federal lands withdrawn for military pur-
poses. 
Sec. 227. Technical amendments. 
Subtitle C—Hydroelectric 
PART I—ALTERNATIVE CONDITIONS 
Sec. 231. Alternative conditions and fishways. 
PART II—ADDITIONAL HYDROPOWER 
Sec. 241. Hydroelectric production incentives. 
Sec. 242. Hydroelectric efficiency improvement. 
Sec. 243. Small hydroelectric power projects. 
Sec. 244. Increased hydroelectric generation at existing Federal facilities. 
Sec. 245. Shift of project loads to off-peak periods. 
Sec. 246. Corps of Engineers hydropower operation and maintenance funding. 
Sec. 247. Limitation on certain charges assessed to the flint creek project, 
Montana. 
Sec. 248. Reinstatement and transfer. 
TITLE III—OIL AND GAS
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Subtitle A—Petroleum Reserve and home heating oil 
Sec. 301. Permanent authority to operate the Strategic Petroleum Reserve and 
other energy programs. 
Sec. 302. National Oilheat Research Alliance. 
Subtitle B—Production incentives 
Sec. 311. Definition of Secretary. 
Sec. 312. Program on oil and gas royalties in-kind. 
Sec. 313. Marginal property production incentives. 
Sec. 314. Incentives for natural gas production from deep wells in the shallow 
waters of the Gulf of Mexico. 
Sec. 315. Royalty Relief for deep water production. 
Sec. 316. Alaska offshore royalty suspension. 
Sec. 317. Oil and gas leasing in the National Petroleum Reserve in Alaska. 
Sec. 318. Orphaned, abandoned, or idled wells on Federal land. 
Sec. 319. Combined hydrocarbon leasing. 
Sec. 320. Liquified natural gas. 
Sec. 321. Alternate energy-related uses on the outer Continental Shelf. 
Sec. 322. Preservation of geological and geophysical data. 
Sec. 323. Oil and gas lease acreage limitations. 
Sec. 324. Assessment of dependence of State of Hawaii on oil. 
Sec. 325. Deadline for decision on appeals of consistency determination under 
the Coastal Zone Management Act of 1972. 
Sec. 326. Reimbursement for costs of NEPA analyses, documentation, and 
studies. 
Sec. 327. Hydraulic fracturing. 
Sec. 328. Oil and gas exploration and production defined. 
Sec. 329. Outer Continental Shelf provisions. 
Sec. 330. Appeals relating to pipeline construction or offshore mineral develop-
ment projects. 
Sec. 331. Bilateral international oil supply agreements. 
Sec. 332. Natural gas market reform. 
Sec. 333. Natural gas market transparency. 
Subtitle C—Access to Federal land 
Sec. 341. Office of Federal Energy Project Coordination. 
Sec. 342. Federal onshore oil and gas leasing and permitting practices. 
Sec. 343. Management of Federal oil and gas leasing programs. 
Sec. 344. Consultation regarding oil and gas leasing on public land. 
Sec. 345. Estimates of oil and gas resources underlying onshore Federal land. 
Sec. 346. Compliance with Executive Order No. 13211; actions concerning reg-
ulations that significantly affect energy supply, distribution, or 
use. 
Sec. 347. Pilot Project to improve Federal permit coordination. 
Sec. 348. Deadline for consideration of applications for permits. 
Sec. 349. Clarification of fair market rental value determinations for public 
land and Forest Service rights-of-way. 
Sec. 350. Energy facility rights-of-way and corridors on Federal land. 
Sec. 351. Consultation regarding energy rights-of-way on public land. 
Sec. 352. Renewable energy on Federal land. 
Sec. 353. Electricity transmission line right-of-way, cleveland national forest 
and adjacent public land, California.
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Sec. 354. Sense of Congress regarding development of MINERALS under 
Padre Island National Seashore. 
Sec. 355. Encouraging prohibition of off-shore Drilling in the Great Lakes. 
Sec. 356. Finger Lakes National Forest withdrawal. 
Sec. 357. Study on lease exchanges in the rocky mountain front. 
Sec. 358. Federal coalbed methane regulation. 
Sec. 359. Livingston parish mineral rights transfer. 
Subtitle D—Alaska Natural Gas Pipeline 
Sec. 371. Short title. 
Sec. 372. Definitions. 
Sec. 373. Issuance of certificate of public convenience and necessity. 
Sec. 374. Environmental reviews. 
Sec. 375. Pipeline expansion. 
Sec. 376. Federal Coordinator. 
Sec. 377. Judicial review. 
Sec. 378. State jurisdiction over in-State delivery of natural gas. 
Sec. 379. Study of alternative means of construction. 
Sec. 380. Clarification of angta status and authorities. 
Sec. 381. Sense of Congress concerning use of steel manufactured in North 
America negotiation of a project labor Agreement. 
Sec. 382. Sense of Congress and study concerning participation by small busi-
ness concerns. 
Sec. 383. Alaska pipeline construction training Program. 
Sec. 384. Sense of Congress concerning natural gas demand. 
Sec. 385. Sense of Congress concerning Alaskan ownership. 
Sec. 386. Loan guarantees. 
TITLE IV—COAL 
Subtitle A—Clean Coal Power Initiative 
Sec. 401. Authorization of appropriations. 
Sec. 402. Project criteria. 
Sec. 403. Report. 
Sec. 404. Clean coal centers of excellence. 
Subtitle B—Clean Power Projects 
Sec. 411. Coal technology loan. 
Sec. 412. Coal gasification. 
Sec. 413. Integrated gasification combined cycle technology. 
Sec. 414. Petroleum coke gasification. 
Sec. 415. Integrated coal/renewable energy system. 
Sec. 416. Electron scrubbing demonstration. 
Subtitle C—Federal Coal Leases 
Sec. 421. Repeal of the 160-acre limitation for coal leases. 
Sec. 422. Mining plans. 
Sec. 423. Payment of advance royalties under coal leases. 
Sec. 424. Elimination of deadline for submission of coal lease operation and 
reclamation plan. 
Sec. 425. Amendment relating to financial assurances with respect to bonus 
bids. 
Sec. 426. Inventory requirement.
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Sec. 427. Application of amendments. 
Subtitle D—Coal and related programs 
Sec. 441. Clean air coal program. 
TITLE V—INDIAN ENERGY 
Sec. 501. Short title. 
Sec. 502. Office of Indian Energy Policy and Programs. 
Sec. 503. Indian energy. 
Sec. 504. Four corners transmission line project. 
Sec. 505. Energy efficiency in federally assisted housing. 
Sec. 506. Consultation with Indian tribes. 
TITLE VI—NUCLEAR MATTERS 
Subtitle A—Price-Anderson Act Amendments 
Sec. 601. Short title. 
Sec. 602. Extension of indemnification authority. 
Sec. 603. Maximum assessment. 
Sec. 604. Department of energy liability limit. 
Sec. 605. Incidents outside the United States. 
Sec. 606. Reports. 
Sec. 607. Inflation adjustment. 
Sec. 608. Treatment of modular reactors. 
Sec. 609. Applicability. 
Sec. 610. Prohibition on assumption by United States government of liability 
for certain foreign incidents. 
Sec. 611. Civil penalties. 
Subtitle B—General Nuclear Matters 
Sec. 621. Licenses. 
Sec. 622. NRC training program. 
Sec. 623. Cost recovery from government agencies. 
Sec. 624. Elimination of pension offset. 
Sec. 625. Antitrust review. 
Sec. 626. Decommissioning. 
Sec. 627. Limitation on legal fee reimbursement. 
Sec. 628. Decommissioning pilot program. 
Sec. 629. Report on feasibility of developing commercial nuclear energy genera-
tion facilities at existing Department of Energy sites. 
Sec. 630. Uranium sales. 
Sec. 631. Cooperative research and development and special demonstration 
projects for the uranium mining industry. 
Sec. 632. Whistleblower protection. 
Sec. 633. Medical isotope production. 
Sec. 634. Fernald byproduct material. 
Sec. 635. Safe disposal of greater-than-class c radioactive waste. 
Sec. 636. Prohibition on nuclear exports to countries that sponsor terrorism. 
Sec. 637. Uranium enrichment facilities. 
Sec. 638. National uranium stockpile. 
Subtitle C—Advanced Reactor Hydrogen Cogeneration Project 
Sec. 651. Project establishment.
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Sec. 652. Project definition. 
Sec. 653. Project management. 
Sec. 654. Project requirements. 
Sec. 655. Authorization of appropriations. 
Subtitle D—Nuclear Security 
Sec. 661. Nuclear facility threats. 
Sec. 662. Fingerprinting for criminal history record checks. 
Sec. 663. Use of firearms by security personnel of licensees and certificate hold-
ers of the commission. 
Sec. 664. Unauthorized introduction of dangerous weapons. 
Sec. 665. Sabotage of nuclear facilities or fuel. 
Sec. 666. Secure transfer of nuclear materials. 
Sec. 667. Department of homeland security consultation. 
Sec. 668. Authorization of appropriations. 
TITLE VII—VEHICLES AND FUELS 
Subtitle A—Existing programs 
Sec. 701. Use of alternative fuels by dual-fueled vehicles. 
Sec. 702. Neighborhood electric vehicles. 
Sec. 703. Credits for medium and heavy duty dedicated vehicles. 
Sec. 704. Incremental cost allocation. 
Sec. 705. Alternative compliance and flexibility. 
Sec. 706. Review of Energy Policy Act of 1992 programs. 
Sec. 707. Report concerning compliance with alternative fueled vehicle pur-
chasing requirements. 
Subtitle B—Hybrid vehicles, advanced vehicles, and fuel cell buses 
PART I—HYBRID VEHICLES 
Sec. 711. Hybrid vehicles. 
PART II—ADVANCED VEHICLES 
Sec. 721. Definitions. 
Sec. 722. Pilot program. 
Sec. 723. Reports to Congress. 
Sec. 724. Authorization of appropriations. 
PART III—FUEL CELL BUSES 
Sec. 731. Fuel cell transit bus demonstration. 
Subtitle C—Clean school buses 
Sec. 741. Definitions. 
Sec. 742. Program for replacement of certain school buses with clean school 
buses. 
Sec. 743. Diesel retrofit program. 
Sec. 744. Fuel cell school buses. 
Subtitle D—Miscellaneous 
Sec. 751. Railroad efficiency. 
Sec. 752. Mobile emission reductions trading and crediting.
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Sec. 753. Aviation fuel conservation and emissions. 
Sec. 754. Diesel fueled vehicles. 
Sec. 755. Conserve by Bicycling Program. 
Sec. 756. Reduction of engine idling of heavy-duty vehicles. 
Sec. 757. Biodiesel engine testing program. 
Sec. 758. High occupancy vehicle exception. 
Subtitle E—Automobile efficiency 
Sec. 771. Authorization of appropriations for implementation and enforcement 
of fuel economy standards. 
Sec. 772. Revised considerations for decisions on maximum feasible average 
fuel economy. 
Sec. 773. Extension of maximum fuel economy increase for alternative fueled 
vehicles. 
Sec. 774. Study of feasibility and effects of reducing use of fuel for auto-
mobiles. 
TITLE VIII—HYDROGEN 
Sec. 801. Definitions. 
Sec. 802. Plan. 
Sec. 803. Programs. 
Sec. 804. Interagency task force. 
Sec. 805. Advisory Committee. 
Sec. 806. External review. 
Sec. 807. Miscellaneous provisions. 
Sec. 808. Savings clause. 
Sec. 809. Authorization of appropriations. 
TITLE IX—RESEARCH AND DEVELOPMENT 
Sec. 901. Goals. 
Sec. 902. Definitions. 
Subtitle A—Energy Efficiency 
Sec. 904. Energy efficiency. 
Sec. 905. Next generation lighting initiative. 
Sec. 906. National building performance initiative. 
Sec. 907. Secondary electric vehicle battery use program. 
Sec. 908. Energy efficiency science initiative. 
Sec. 909. Electric motor control technology. 
Sec. 910. Advanced energy technology transfer centers. 
Subtitle B—Distributed Energy and Electric Energy Systems 
Sec. 911. Distributed energy and electric energy systems. 
Sec. 912. Hybrid distributed power systems. 
Sec. 913. High power density industry program. 
Sec. 914. Micro-cogeneration energy technology. 
Sec. 915. Distributed energy technology demonstration program. 
Sec. 916. Reciprocating power. 
Subtitle C—Renewable energy 
Sec. 918. Renewable energy. 
Sec. 919. Bioenergy programs.
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Sec. 920. Concentrating solar power research and development Program. 
Sec. 921. Miscellaneous projects. 
Sec. 922. Renewable energy in public buildings. 
Sec. 923. Study of marine renewable energy options. 
Subtitle D—Nuclear energy 
Sec. 924. Nuclear energy. 
Sec. 925. Nuclear energy research and development programs. 
Sec. 926. Advanced fuel cycle Initiative. 
Sec. 927. University nuclear science and engineering support. 
Sec. 928. Security of reactor designs. 
Sec. 929. Alternatives to industrial radioactive sources. 
Sec. 930. Geological isolation of spent fuel. 
Subtitle E—Fossil energy 
PART I—RESEARCH PROGRAMS 
Sec. 931. Fossil energy. 
Sec. 932. Oil and gas research programs. 
Sec. 933. Technology transfer. 
Sec. 934. Research and development for coal mining technologies. 
Sec. 935. Coal and related technologies Program. 
Sec. 936. Complex Well Technology Testing Facility. 
Sec. 937. Fischer-Tropsch diesel fuel loan guarantee Program. 
PART II—ULTRA-DEEPWATER AND UNCONVENTIONAL NATURAL GAS AND 
OTHER PETROLEUM RESOURCES 
Sec. 941. Program authority. 
Sec. 942. Ultra-deepwater Program. 
Sec. 943. Unconventional natural gas and other petroleum resources Program. 
Sec. 944. Additional requirements for awards. 
Sec. 945. Advisory committees. 
Sec. 946. Limits on participation. 
Sec. 947. Sunset. 
Sec. 948. Definitions. 
Sec. 949. Funding. 
Subtitle F—Science 
Sec. 951. Science. 
Sec. 952. United States participation in ITER. 
Sec. 953. Plan for Fusion Energy Sciences Program. 
Sec. 954. Spallation Neutron Source. 
Sec. 955. Support for science and energy facilities and infrastructure. 
Sec. 956. Catalysis Research and development Program. 
Sec. 957. Nanoscale Science and Engineering Research, development, dem-
onstration, and commercial application. 
Sec. 958. Advanced scientific computing for energy missions. 
Sec. 959. Genomes to Life Program. 
Sec. 960. Fission and fusion energy materials research Program. 
Sec. 961. Energy-Water Supply Program. 
Sec. 962. Nitrogen fixation. 
Subtitle G—Energy and environment
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Sec. 964. United States-Mexico energy Technology cooperation. 
Sec. 965. Western Hemisphere energy cooperation. 
Sec. 966. Waste reduction and use of alternatives. 
Sec. 967. Report on fuel cell test Center. 
Sec. 968. Arctic Engineering Research Center. 
Sec. 969. Barrow Geophysical Research Facility. 
Sec. 970. Western Michigan demonstration project. 
Subtitle H—Management 
Sec. 971. Availability of funds. 
Sec. 972. Cost sharing. 
Sec. 973. Merit review of proposals. 
Sec. 974. External technical review of departmental programs. 
Sec. 975. Improved coordination of Technology transfer activities. 
Sec. 976. Federal laboratory educational partners. 
Sec. 977. Interagency cooperation. 
Sec. 978. Technology Infrastructure Program. 
Sec. 979. Reprogramming. 
Sec. 980. Construction with other laws. 
Sec. 981. Report on research and development Program evaluation methodolo-
gies. 
Sec. 982. Department of Energy Science and Technology Scholarship Program. 
Sec. 983. Report on equal employment opportunity practices. 
Sec. 984. Small business advocacy and assistance. 
Sec. 985. Report on mobility of scientific and technical personnel. 
Sec. 986. National Academy of Sciences report. 
Sec. 987. Outreach. 
Sec. 988. Competitive award of management contracts. 
Sec. 989. Educational programs in science and mathematics. 
TITLE X—DEPARTMENT OF ENERGY MANAGEMENT 
Sec. 1001. Additional Assistant Secretary position. 
Sec. 1002. Other transactions authority. 
TITLE XI—PERSONNEL AND TRAINING 
Sec. 1101. Training guidelines for electric energy industry personnel. 
Sec. 1102. Improved access to energy-related scientific and technical careers. 
Sec. 1103. National Power Plant Operations Technology and Education Center. 
Sec. 1104. International energy training. 
TITLE XII—ELECTRICITY 
Sec. 1201. Short title. 
Subtitle A—Reliability standards 
Sec. 1211. Electric reliability standards. 
Subtitle B—Transmission infrastructure modernization 
Sec. 1221. Siting of interstate electric transmission facilities. 
Sec. 1222. Third-party finance. 
Sec. 1223. Transmission system monitoring. 
Sec. 1224. Advanced transmission technologies. 
Sec. 1225. Electric transmission and distribution programs.
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Sec. 1226. Advanced Power System Technology Incentive Program. 
Sec. 1227. Office of Electric Transmission and Distribution. 
Subtitle C—Transmission operation improvements 
Sec. 1231. Open nondiscriminatory access. 
Sec. 1232. Sense of Congress on Regional Transmission Organizations. 
Sec. 1233. Regional Transmission Organization applications progress report. 
Sec. 1234. Federal utility participation in Regional Transmission Organiza-
tions. 
Sec. 1235. Standard market design. 
Sec. 1236. Native load service obligation. 
Sec. 1237. Study on the benefits of economic dispatch. 
Subtitle D—Transmission rate reform 
Sec. 1241. Transmission infrastructure investment. 
Sec. 1242. Voluntary transmission pricing plans. 
Subtitle E—Amendments to PURPA 
Sec. 1251. Net metering and additional standards. 
Sec. 1252. Smart metering. 
Sec. 1253. Cogeneration and small power production purchase and sale require-
ments. 
Subtitle F—Repeal of PUHCA 
Sec. 1261. Short title. 
Sec. 1262. Definitions. 
Sec. 1263. Repeal of the Public Utility Holding Company Act of 1935. 
Sec. 1264. Federal access to books and records. 
Sec. 1265. State access to books and records. 
Sec. 1266. Exemption authority. 
Sec. 1267. Affiliate transactions. 
Sec. 1268. Applicability. 
Sec. 1269. Effect on other regulations. 
Sec. 1270. Enforcement. 
Sec. 1271. Savings provisions. 
Sec. 1272. Implementation. 
Sec. 1273. Transfer of resources. 
Sec. 1274. Effective date. 
Sec. 1275. Service allocation. 
Sec. 1276. Authorization of appropriations. 
Sec. 1277. Conforming amendments to the Federal Power Act. 
Subtitle G—Market transparency, enforcement, and consumer protection 
Sec. 1281. Market transparency rules. 
Sec. 1282. Market manipulation. 
Sec. 1283. Enforcement. 
Sec. 1284. Refund effective date. 
Sec. 1285. Refund authority. 
Sec. 1286. Sanctity of contract. 
Sec. 1287. Consumer privacy and unfair trade practices. 
Subtitle H—Merger reform
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Sec. 1291. Merger review reform and accountability. 
Sec. 1292. Electric utility mergers. 
Subtitle I—Definitions 
Sec. 1295. Definitions. 
Subtitle J—Technical and conforming amendments 
Sec. 1297. Conforming amendments. 
TITLE XIII—ENERGY TAX INCENTIVES 
Sec. 1300. Short title; amendment of 1986 Code. 
Subtitle A—Conservation 
PART I—RESIDENTIAL AND BUSINESS PROPERTY 
Sec. 1301. Credit for residential energy efficient property. 
Sec. 1302. Extension and expansion of credit for electricity produced from cer-
tain renewable resources. 
Sec. 1303. Credit for business installation of qualified fuel cells. 
Sec. 1304. Credit for energy efficiency improvements to existing homes. 
Sec. 1305. Credit for construction of new energy efficient homes. 
Sec. 1306. Energy credit for combined heat and power system property. 
Sec. 1307. Credit for energy efficient appliances. 
Sec. 1308. Energy efficient commercial buildings deduction. 
Sec. 1309. Three-year applicable recovery period for depreciation of qualified 
energy management devices. 
Sec. 1310. Credit for production from advanced nuclear power facilities. 
PART II—FUELS AND ALTERNATIVE MOTOR VEHICLES 
Sec. 1311. Repeal of 4.3-cent motor fuel excise taxes on railroads and inland 
waterway transportation which remain in general Fund. 
Sec. 1312. Reduced motor fuel excise tax on certain mixtures of diesel fuel. 
Sec. 1313. Small ethanol producer credit. 
Sec. 1314. Incentives for biodiesel. 
Sec. 1315. Alcohol fuel and biodiesel mixtures excise tax credit. 
Sec. 1316. Nonapplication of export exemption to delivery of fuel to motor vehi-
cles removed from United States. 
Sec. 1317. Repeal of phaseouts for qualified electric vehicle credit and deduc-
tion for clean fuel-vehicles. 
Sec. 1318. Alternative motor vehicle credit. 
Sec. 1319. Modifications of deduction for certain refueling property. 
Subtitle B—Reliability 
Sec. 1321. Natural gas gathering lines treated as 7–YEAR property. 
Sec. 1322. Natural gas distribution lines treated as 15-year property. 
Sec. 1323. Electric transmission property treated as 15-year property. 
Sec. 1324. Expensing of capital costs incurred in complying with Environ-
mental Protection Agency sulfur regulations. 
Sec. 1325. Credit for production of low sulfur diesel fuel. 
Sec. 1326. Determination of small refiner exception to oil depletion deduction. 
Sec. 1327. Sales or dispositions to implement Federal Energy Regulatory Com-
mission or State electric restructuring policy.
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Sec. 1328. Modifications to special rules for nuclear decommissioning costs. 
Sec. 1329. Treatment of certain income of cooperatives. 
Sec. 1330. Arbitrage rules not to apply to prepayments for natural gas. 
Subtitle C—Production 
PART I—OIL AND GAS PROVISIONS 
Sec. 1341. Oil and gas from marginal wells. 
Sec. 1342. Temporary suspension of limitation based on 65 percent of taxable 
income and extension of suspension of taxable income limit 
with respect to marginal production. 
Sec. 1343. Amortization of delay rental payments. 
Sec. 1344. Amortization of geological and geophysical expenditures. 
Sec. 1345. Extension and modification of credit for producing fuel from a non-
conventional source. 
PART II—ALTERNATIVE MINIMUM TAX PROVISIONS 
Sec. 1346. New nonrefundable personal credits allowed against regular and 
minimum taxes. 
Sec. 1347. Business related energy credits allowed against regular and min-
imum tax. 
Sec. 1348. Temporary repeal of alternative minimum tax preference for intan-
gible drilling costs. 
PART III—CLEAN COAL INCENTIVES 
Sec. 1351. Credit for clean coal technology units. 
Sec. 1352. Expansion of amortization for certain pollution control facilities. 
Sec. 1353. 5-year recovery period for eligible integrated gasification combined 
cycle technology unit eligible for credit. 
PART IV—HIGH VOLUME NATURAL GAS PROVISIONS 
Sec. 1355. High volume natural gas pipe treated as 7-year property. 
Sec. 1356. Extension of enhanced oil recovery credit to high volume natural gas 
facilities. 
Subtitle D—Additional provisions 
Sec. 1361. Extension of accelerated depreciation benefit for energy-related busi-
nesses on indian reservations. 
Sec. 1362. Payment of dividends on stock of cooperatives without reducing pa-
tronage dividends. 
Sec. 1363. Distributions from publicly traded partnerships treated as qualifying 
income of regulated investment companies. 
Sec. 1364. Ceiling fans. 
Sec. 1365. Certain steam generators, and certain reactor vessel heads, used in 
nuclear facilities. 
Sec. 1366. Brownfields demonstration program for qualified green building and 
sustainable design projects. 
TITLE XIV—MISCELLANEOUS 
Subtitle A—Rural and Remote Electricity Construction 
Sec. 1401. Denali Commission programs.
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Sec. 1402. Rural and remote community assistance. 
Subtitle B—Coastal programs 
Sec. 1411. Royalty payments under leases under the Outer Continental Shelf 
Lands Act. 
Sec. 1412. Domestic offshore energy reinvestment. 
Subtitle C—Reforms to the Board of Directors of the Tennessee Valley 
Authority 
Sec. 1431. Change in composition, operation, and duties of the Board of Direc-
tors of the Tennessee Valley Authority. 
Sec. 1432. Change in manner of appointment of staff. 
Sec. 1433. Conforming amendments. 
Sec. 1434. Appointments; effective date; transition. 
Subtitle D—Other provisions 
Sec. 1441. Continuation of transmission security order. 
Sec. 1442. Review of agency determinations. 
Sec. 1443. Attainment dates for downwind ozone nonattainment areas. 
Sec. 1444. Energy production incentives. 
Sec. 1445. Use of granular mine tailings. 
TITLE XV—ETHANOL AND MOTOR FUELS 
Subtitle A—General provisions 
Sec. 1501. Renewable content of motor vehicle fuel. 
Sec. 1502. Fuels safe harbor. 
Sec. 1503. Findings and MTBE transition assistance. 
Sec. 1504. Use of MTBE. 
Sec. 1505. National Academy of Sciences review and presidential determina-
tion. 
Sec. 1506. Elimination of oxygen content requirement for reformulated gaso-
line. 
Sec. 1507. Analyses of motor vehicle fuel changes. 
Sec. 1508. Data collection. 
Sec. 1509. Reducing the proliferation of State fuel controls. 
Sec. 1510. Fuel system requirements harmonization study. 
Sec. 1511. Commercial byproducts from municipal solid waste and cellulosic 
biomass loan guarantee program. 
Sec. 1512. Resource Center. 
Sec. 1513. Cellulosic biomass and waste-derived ethanol conversion assistance. 
Sec. 1514. Blending of compliant reformulated gasolines. 
Subtitle B—Underground storage tank compliance 
Sec. 1521. Short title. 
Sec. 1522. Leaking underground storage tanks. 
Sec. 1523. Inspection of underground storage tanks. 
Sec. 1524. Operator training. 
Sec. 1525. Remediation from oxygenated fuel additives. 
Sec. 1526. Release prevention, compliance, and enforcement. 
Sec. 1527. Delivery prohibition. 
Sec. 1528. Federal facilities. 
Sec. 1529. Tanks on Tribal lands.
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Sec. 1530. Future release containment technology. 
Sec. 1531. Authorization of appropriations. 
Sec. 1532. Conforming amendments. 
Sec. 1533. Technical amendments. 
TITLE XVI—STUDIES 
Sec. 1601. Study on inventory of petroleum and natural gas storage. 
Sec. 1602. Natural gas supply shortage report. 
Sec. 1603. Split-estate Federal oil and gas leasing and development practices. 
Sec. 1604. Resolution of Federal resource development conflicts in the Powder 
River Basin. 
Sec. 1605. Study of energy efficiency standards. 
Sec. 1606. Telecommuting study. 
Sec. 1607. Liheap report. 
Sec. 1608. Oil bypass filtration technology. 
Sec. 1609. Total integrated thermal systems. 
Sec. 1610. University collaboration. 
Sec. 1611. Reliability and consumer protection assessment. 
TITLE I—ENERGY EFFICIENCY 
Subtitle A—Federal Programs 
SEC. 101. ENERGY AND WATER SAVING MEASURES IN CON-
GRESSIONAL BUILDINGS. 
(a) IN GENERAL.—Part 3 of title V of the National 
Energy Conservation Policy Act (42 U.S.C. 8251 et seq.) 
is amended by adding at the end the following: 
‘‘SEC. 552. ENERGY AND WATER SAVINGS MEASURES IN 
CONGRESSIONAL BUILDINGS. 
‘‘(a) IN GENERAL.—The Architect of the Capitol— 
‘‘(1) shall develop, update, and implement a 
cost-effective energy conservation and management 
plan (referred to in this section as the ‘plan’) for all 
facilities administered by Congress (referred to in 
this section as ‘congressional buildings’) to meet the 
energy performance requirements for Federal build-
ings established under section 543(a)(1); and
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‘‘(2) shall submit the plan to Congress, not 
later than 180 days after the date of enactment of 
this section. 
‘‘(b) PLAN REQUIREMENTS.—The plan shall in-
clude— 
‘‘(1) a description of the life cycle cost analysis 
used to determine the cost-effectiveness of proposed 
energy efficiency projects; 
‘‘(2) a schedule of energy surveys to ensure 
complete surveys of all congressional buildings every 
5 years to determine the cost and payback period of 
energy and water conservation measures; 
‘‘(3) a strategy for installation of life cycle cost- 
effective energy and water conservation measures; 
‘‘(4) the results of a study of the costs and ben-
efits of installation of submetering in congressional 
buildings; and 
‘‘(5) information packages and ‘how-to’ guides 
for each Member and employing authority of Con-
gress that detail simple, cost-effective methods to 
save energy and taxpayer dollars in the workplace. 
‘‘(c) ANNUAL REPORT.—The Architect of the Capitol 
shall submit to Congress annually a report on congres-
sional energy management and conservation programs re-
quired under this section that describes in detail—
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‘‘(1) energy expenditures and savings estimates 
for each facility; 
‘‘(2) energy management and conservation 
projects; and 
‘‘(3) future priorities to ensure compliance with 
this section.’’. 
(b) TABLE OF CONTENTS AMENDMENT.—The table 
of contents of the National Energy Conservation Policy 
Act is amended by adding at the end of the items relating 
to part 3 of title V the following new item: 
‘‘Sec. 552. Energy and water savings measures in congressional buildings.’’. 
(c) REPEAL.—Section 310 of the Legislative Branch 
Appropriations Act, 1999 (2 U.S.C. 1815), is repealed. 
(d) ENERGY INFRASTRUCTURE.—The Architect of 
the Capitol, building on the Master Plan Study completed 
in July 2000, shall commission a study to evaluate the 
energy infrastructure of the Capital Complex to determine 
how the infrastructure could be augmented to become 
more energy efficient, using unconventional and renewable 
energy resources, in a way that would enable the Complex 
to have reliable utility service in the event of power fluc-
tuations, shortages, or outages. 
(e) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Architect of the 
Capitol to carry out subsection (d), $2,000,000 for each 
of fiscal years 2004 through 2008.
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SEC. 102. ENERGY MANAGEMENT REQUIREMENTS. 
(a) ENERGY REDUCTION GOALS.— 
(1) AMENDMENT.—Section 543(a)(1) of the 
National Energy Conservation Policy Act (42 U.S.C. 
8253(a)(1)) is amended by striking ‘‘its Federal 
buildings so that’’ and all that follows through the 
end and inserting ‘‘the Federal buildings of the 
agency (including each industrial or laboratory facil-
ity) so that the energy consumption per gross square 
foot of the Federal buildings of the agency in fiscal 
years 2004 through 2013 is reduced, as compared 
with the energy consumption per gross square foot 
of the Federal buildings of the agency in fiscal year 
2001, by the percentage specified in the following 
table: 
‘‘Fiscal Year 
Percentage reduction 
2004 ...................................................................................................
2005 ...................................................................................................
2006 ...................................................................................................
2007 ...................................................................................................
2008 ...................................................................................................
2009 ...................................................................................................
2010 ...................................................................................................
2011 ...................................................................................................
2012 ...................................................................................................
2013 ...................................................................................................
20.’’. 
(2) REPORTING BASELINE.—The energy reduc-
tion goals and baseline established in paragraph (1) 
of section 543(a) of the National Energy Conserva-
tion Policy Act (42 U.S.C. 8253(a)(1)), as amended 
by this subsection, supersede all previous goals and
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(3) by striking ‘‘energy consumption require-
ments’’ and inserting ‘‘requirements of subsections 
(a) and (b)(1)’’. 
(e) CRITERIA.—Section 543(c) of the National En-
ergy Conservation Policy Act (42 U.S.C. 8253(c)) is fur-
ther amended by adding at the end the following: 
‘‘(3) Not later than 180 days after the date of enact-
ment of this paragraph, the Secretary shall issue guide-
lines that establish criteria for exclusions under paragraph 
(1).’’. 
(f) RETENTION OF ENERGY AND WATER SAVINGS.— 
Section 546 of the National Energy Conservation Policy 
Act (42 U.S.C. 8256) is amended by adding at the end 
the following new subsection: 
‘‘(e) RETENTION
OF ENERGY
AND WATER SAV-
INGS.—An agency may retain any funds appropriated to 
that agency for energy expenditures, water expenditures, 
or wastewater treatment expenditures, at buildings subject 
to the requirements of section 543(a) and (b), that are 
not made because of energy savings or water savings. Ex-
cept as otherwise provided by law, such funds may be used 
only for energy efficiency, water conservation, or uncon-
ventional and renewable energy resources projects.’’.
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(g) REPORTS.—Section 548(b) of the National En-
ergy Conservation Policy Act (42 U.S.C. 8258(b)) is 
amended— 
(1) in the subsection heading, by inserting 
‘‘THE PRESIDENT AND’’ before ‘‘CONGRESS’’; and 
(2) by inserting ‘‘President and’’ before ‘‘Con-
gress’’. 
(h) CONFORMING AMENDMENT.—Section 550(d) of 
the National Energy Conservation Policy Act (42 U.S.C. 
8258b(d)) is amended in the second sentence by striking 
‘‘the 20 percent reduction goal established under section 
543(a) of the National Energy Conservation Policy Act 
(42 U.S.C. 8253(a)).’’ and inserting ‘‘each of the energy 
reduction goals established under section 543(a).’’. 
SEC. 103. ENERGY USE MEASUREMENT AND ACCOUNT-
ABILITY. 
Section 543 of the National Energy Conservation 
Policy Act (42 U.S.C. 8253) is further amended by adding 
at the end the following: 
‘‘(e) METERING OF ENERGY USE.— 
‘‘(1) DEADLINE.—By October 1, 2010, in ac-
cordance with guidelines established by the Sec-
retary under paragraph (2), all Federal buildings 
shall, for the purposes of efficient use of energy and 
reduction in the cost of electricity used in such
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buildings, be metered or submetered. Each agency 
shall use, to the maximum extent practicable, ad-
vanced meters or advanced metering devices that 
provide data at least daily and that measure at least 
hourly consumption of electricity in the Federal 
buildings of the agency. Such data shall be incor-
porated into existing Federal energy tracking sys-
tems and made available to Federal facility energy 
managers. 
‘‘(2) GUIDELINES.— 
‘‘(A) IN
GENERAL.—Not later than 180 
days after the date of enactment of this sub-
section, the Secretary, in consultation with the 
Department of Defense, the General Services 
Administration, representatives from the meter-
ing industry, utility industry, energy services in-
dustry, energy efficiency industry, energy effi-
ciency advocacy organizations, national labora-
tories, universities, and Federal facility energy 
managers, shall establish guidelines for agencies 
to carry out paragraph (1). 
‘‘(B) REQUIREMENTS FOR GUIDELINES.— 
The guidelines shall— 
‘‘(i) take into consideration—
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‘‘(I) the cost of metering and 
submetering and the reduced cost of 
operation and maintenance expected 
to result from metering and sub-
metering; 
‘‘(II) the extent to which meter-
ing and submetering are expected to 
result in increased potential for en-
ergy management, increased potential 
for energy savings and energy effi-
ciency improvement, and cost and en-
ergy savings due to utility contract 
aggregation; and 
‘‘(III) 
the 
measurement 
and 
verification protocols of the Depart-
ment of Energy; 
‘‘(ii) include recommendations con-
cerning the amount of funds and the num-
ber of trained personnel necessary to gath-
er and use the metering information to 
track and reduce energy use; 
‘‘(iii) establish priorities for types and 
locations of buildings to be metered and 
submetered based on cost-effectiveness and 
a schedule of 1 or more dates, not later
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than 1 year after the date of issuance of 
the guidelines, on which the requirements 
specified in paragraph (1) shall take effect; 
and 
‘‘(iv) establish exclusions from the re-
quirements specified in paragraph (1) 
based on the de minimis quantity of energy 
use of a Federal building, industrial proc-
ess, or structure. 
‘‘(3) PLAN.—Not later than 6 months after the 
date guidelines are established under paragraph (2), 
in a report submitted by the agency under section 
548(a), each agency shall submit to the Secretary a 
plan describing how the agency will implement the 
requirements of paragraph (1), including (A) how 
the agency will designate personnel primarily respon-
sible for achieving the requirements and (B) dem-
onstration by the agency, complete with documenta-
tion, of any finding that advanced meters or ad-
vanced metering devices, as defined in paragraph 
(1), are not practicable.’’. 
SEC. 104. PROCUREMENT OF ENERGY EFFICIENT PROD-
UCTS. 
(a) REQUIREMENTS.—Part 3 of title V of the Na-
tional Energy Conservation Policy Act (42 U.S.C. 8251
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et seq.), as amended by section 101, is amended by adding 
at the end the following: 
‘‘SEC. 553. FEDERAL PROCUREMENT OF ENERGY EFFI-
CIENT PRODUCTS. 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) ENERGY STAR PRODUCT.—The term ‘En-
ergy Star product’ means a product that is rated for 
energy efficiency under an Energy Star program. 
‘‘(2) ENERGY STAR PROGRAM.—The term ‘En-
ergy Star program’ means the program established 
by section 324A of the Energy Policy and Conserva-
tion Act. 
‘‘(3) EXECUTIVE AGENCY.—The term ‘executive 
agency’ has the meaning given the term in section 
4 of the Office of Federal Procurement Policy Act 
(41 U.S.C. 403). 
‘‘(4) FEMP DESIGNATED PRODUCT.—The term 
‘FEMP designated product’ means a product that is 
designated under the Federal Energy Management 
Program of the Department of Energy as being 
among the highest 25 percent of equivalent products 
for energy efficiency. 
‘‘(b) PROCUREMENT OF ENERGY EFFICIENT PROD-
UCTS.—
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‘‘(1) REQUIREMENT.—To meet the require-
ments of an executive agency for an energy con-
suming product, the head of the executive agency 
shall, except as provided in paragraph (2), procure— 
‘‘(A) an Energy Star product; or 
‘‘(B) a FEMP designated product. 
‘‘(2) EXCEPTIONS.—The head of an executive 
agency is not required to procure an Energy Star 
product or FEMP designated product under para-
graph (1) if the head of the executive agency finds 
in writing that— 
‘‘(A) an Energy Star product or FEMP 
designated product is not cost-effective over the 
life of the product taking energy cost savings 
into account; or 
‘‘(B) no Energy Star product or FEMP 
designated product is reasonably available that 
meets the functional requirements of the execu-
tive agency. 
‘‘(3) PROCUREMENT PLANNING.—The head of 
an executive agency shall incorporate into the speci-
fications for all procurements involving energy con-
suming products and systems, including guide speci-
fications, project specifications, and construction, 
renovation, and services contracts that include provi-
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sion of energy consuming products and systems, and 
into the factors for the evaluation of offers received 
for the procurement, criteria for energy efficiency 
that are consistent with the criteria used for rating 
Energy Star products and for rating FEMP des-
ignated products. 
‘‘(c) LISTING OF ENERGY EFFICIENT PRODUCTS IN 
FEDERAL CATALOGS.—Energy Star products and FEMP 
designated products shall be clearly identified and promi-
nently displayed in any inventory or listing of products 
by the General Services Administration or the Defense Lo-
gistics Agency. The General Services Administration or 
the Defense Logistics Agency shall supply only Energy 
Star products or FEMP designated products for all prod-
uct categories covered by the Energy Star program or the 
Federal Energy Management Program, except in cases 
where the agency ordering a product specifies in writing 
that no Energy Star product or FEMP designated product 
is available to meet the buyer’s functional requirements, 
or that no Energy Star product or FEMP designated 
product is cost-effective for the intended application over 
the life of the product, taking energy cost savings into ac-
count. 
‘‘(d) SPECIFIC PRODUCTS.—(1) In the case of elec-
tric motors of 1 to 500 horsepower, agencies shall select
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only premium efficient motors that meet a standard des-
ignated by the Secretary. The Secretary shall designate 
such a standard not later than 120 days after the date 
of the enactment of this section, after considering the rec-
ommendations of associated electric motor manufacturers 
and energy efficiency groups. 
‘‘(2) All Federal agencies are encouraged to take ac-
tions to maximize the efficiency of air conditioning and 
refrigeration equipment, including appropriate cleaning 
and maintenance, including the use of any system treat-
ment or additive that will reduce the electricity consumed 
by air conditioning and refrigeration equipment. Any such 
treatment or additive must be— 
‘‘(A) determined by the Secretary to be effective 
in increasing the efficiency of air conditioning and 
refrigeration equipment without having an adverse 
impact on air conditioning performance (including 
cooling capacity) or equipment useful life; 
‘‘(B) determined by the Administrator of the 
Environmental Protection Agency to be environ-
mentally safe; and 
‘‘(C) shown to increase seasonal energy effi-
ciency ratio (SEER) or energy efficiency ratio 
(EER) when tested by the National Institute of 
Standards and Technology according to Department
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of Energy test procedures without causing any ad-
verse impact on the system, system components, the 
refrigerant or lubricant, or other materials in the 
system. 
Results of testing described in subparagraph (C) shall be 
published in the Federal Register for public review and 
comment. For purposes of this section, a hardware device 
or primary refrigerant shall not be considered an additive. 
‘‘(e) REGULATIONS.—Not later than 180 days after 
the date of the enactment of this section, the Secretary 
shall issue guidelines to carry out this section.’’. 
(b) CONFORMING AMENDMENT.—The table of con-
tents of the National Energy Conservation Policy Act is 
further amended by inserting after the item relating to 
section 552 the following new item: 
‘‘Sec. 553. Federal procurement of energy efficient products.’’. 
SEC. 105. ENERGY SAVINGS PERFORMANCE CONTRACTS. 
(a) PERMANENT EXTENSION.—Effective September 
30, 2003, section 801(c) of the National Energy Conserva-
tion Policy Act (42 U.S.C. 8287(c)) is repealed. 
(b) PAYMENT OF COSTS.—Section 802 of the Na-
tional Energy Conservation Policy Act (42 U.S.C. 8287a) 
is amended by inserting ‘‘, water, or wastewater treat-
ment’’ after ‘‘payment of energy’’.
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(c) ENERGY SAVINGS.—Section 804(2) of the Na-
tional Energy Conservation Policy Act (42 U.S.C. 
8287c(2)) is amended to read as follows: 
‘‘(2) The term ‘energy savings’ means a reduc-
tion in the cost of energy, water, or wastewater 
treatment, from a base cost established through a 
methodology set forth in the contract, used in an ex-
isting federally owned building or buildings or other 
federally owned facilities as a result of— 
‘‘(A) the lease or purchase of operating 
equipment, improvements, altered operation and 
maintenance, or technical services; 
‘‘(B) the increased efficient use of existing 
energy sources by cogeneration or heat recov-
ery, excluding any cogeneration process for 
other than a federally owned building or build-
ings or other federally owned facilities; or 
‘‘(C) the increased efficient use of existing 
water sources in either interior or exterior ap-
plications.’’. 
(d) ENERGY SAVINGS CONTRACT.—Section 804(3) of 
the National Energy Conservation Policy Act (42 U.S.C. 
8287c(3)) is amended to read as follows: 
‘‘(3) The terms ‘energy savings contract’ and 
‘energy savings performance contract’ mean a con-
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tract that provides for the performance of services 
for the design, acquisition, installation, testing, and, 
where appropriate, operation, maintenance, and re-
pair, of an identified energy or water conservation 
measure or series of measures at 1 or more loca-
tions. Such contracts shall, with respect to an agen-
cy facility that is a public building (as such term is 
defined in section 3301 of title 40, United States 
Code), be in compliance with the prospectus require-
ments and procedures of section 3307 of title 40, 
United States Code.’’. 
(e) ENERGY OR WATER CONSERVATION MEASURE.— 
Section 804(4) of the National Energy Conservation Pol-
icy Act (42 U.S.C. 8287c(4)) is amended to read as fol-
lows: 
‘‘(4) The term ‘energy or water conservation 
measure’ means— 
‘‘(A) an energy conservation measure, as 
defined in section 551; or 
‘‘(B) a water conservation measure that 
improves the efficiency of water use, is life-cycle 
cost-effective, and involves water conservation, 
water recycling or reuse, more efficient treat-
ment of wastewater or stormwater, improve-
ments in operation or maintenance efficiencies,
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retrofit activities, or other related activities, not 
at a Federal hydroelectric facility.’’. 
(f) REVIEW.—Not later than 180 days after the date 
of the enactment of this Act, the Secretary of Energy shall 
complete a review of the Energy Savings Performance 
Contract program to identify statutory, regulatory, and 
administrative obstacles that prevent Federal agencies 
from fully utilizing the program. In addition, this review 
shall identify all areas for increasing program flexibility 
and effectiveness, including audit and measurement 
verification requirements, accounting for energy use in de-
termining savings, contracting requirements, including the 
identification of additional qualified contractors, and en-
ergy efficiency services covered. The Secretary shall report 
these findings to Congress and shall implement identified 
administrative and regulatory changes to increase pro-
gram flexibility and effectiveness to the extent that such 
changes are consistent with statutory authority. 
(g) EXTENSION OF AUTHORITY.—Any energy sav-
ings performance contract entered into under section 801 
of the National Energy Conservation Policy Act (42 
U.S.C. 8287) after October 1, 2003, and before the date 
of enactment of this Act, shall be deemed to have been 
entered into pursuant to such section 801 as amended by 
subsection (a) of this section.
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SEC. 106. ENERGY SAVINGS PERFORMANCE CONTRACTS 
PILOT PROGRAM FOR NONBUILDING APPLI-
CATIONS. 
(a) IN GENERAL.—The Secretary of Defense and the 
heads of other interested Federal agencies are authorized 
to enter into up to 10 energy savings performance con-
tracts using procedures, established under subsection (b), 
based on the procedures under title VIII of the National 
Energy Conservation Policy Act (42 U.S.C. 8287 et seq.), 
for the purpose of achieving energy or water savings, sec-
ondary savings, and benefits incidental to those purposes, 
in nonbuilding applications. The payments to be made by 
the Federal Government under such contracts shall not 
exceed a total of $200,000,000 for all such contracts com-
bined. 
(b) PROCEDURES.—The Secretary of Energy, in con-
sultation with the Administrator of General Services and 
the Secretary of Defense, shall establish procedures based 
on the procedures under title VIII of the National Energy 
Conservation Policy Act (42 U.S.C. 8287 et seq.), for im-
plementing this section. 
(c) DEFINITIONS.—In this section: 
(1) NONBUILDING
APPLICATION.—The term 
‘‘nonbuilding application’’ means— 
(A) any class of vehicles, devices, or equip-
ment that are transportable under their own
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power by land, sea, or air that consume energy 
from any fuel source for the purpose of such 
transportability, or to maintain a controlled en-
vironment within such vehicle, device, or equip-
ment; or 
(B) any Federally owned equipment used 
to generate electricity or transport water. 
(2) SECONDARY
SAVINGS.—The term ‘‘sec-
ondary savings’’ means additional energy or cost 
savings that are a direct consequence of the energy 
or water savings that result from the financing and 
implementation of the energy savings performance 
contract, including, but not limited to, energy or cost 
savings that result from a reduction in the need for 
fuel delivery and logistical support, or the increased 
efficiency in the production of electricity. 
(d) REPORT.—Not later than 3 years after the date 
of enactment of this section, the Secretary of Energy shall 
report to Congress on the progress and results of the 
projects funded pursuant to this section. Such report shall 
include a description of projects undertaken; the energy, 
water, and cost savings, secondary savings, and other ben-
efits that resulted from such projects; and recommenda-
tions on whether the pilot program should be extended, 
expanded, or authorized permanently as a part of the pro-
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gram authorized under title VIII of the National Energy 
Conservation Policy Act (42 U.S.C. 8287 et seq.). 
SEC. 107. VOLUNTARY COMMITMENTS TO REDUCE INDUS-
TRIAL ENERGY INTENSITY. 
(a) VOLUNTARY AGREEMENTS.—The Secretary of 
Energy is authorized to enter into voluntary agreements 
with 1 or more persons in industrial sectors that consume 
significant amounts of primary energy per unit of physical 
output to reduce the energy intensity of their production 
activities by a significant amount relative to improvements 
in each sector in recent years. 
(b) RECOGNITION.—The Secretary of Energy, in co-
operation with the Administrator of the Environmental 
Protection Agency and other appropriate Federal agen-
cies, shall recognize and publicize the achievements of par-
ticipants in voluntary agreements under this section. 
(c) DEFINITION.—In this section, the term ‘‘energy 
intensity’’ means the primary energy consumed per unit 
of physical output in an industrial process. 
SEC. 108. ADVANCED BUILDING EFFICIENCY TESTBED. 
(a) ESTABLISHMENT.—The Secretary of Energy, in 
consultation with the Administrator of General Services, 
shall establish an Advanced Building Efficiency Testbed 
program for the development, testing, and demonstration 
of advanced engineering systems, components, and mate-
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rials to enable innovations in building technologies. The 
program shall evaluate efficiency concepts for government 
and industry buildings, and demonstrate the ability of 
next generation buildings to support individual and orga-
nizational productivity and health (including by improving 
indoor air quality) as well as flexibility and technological 
change to improve environmental sustainability. Such pro-
gram shall complement and not duplicate existing national 
programs. 
(b) PARTICIPANTS.—The program established under 
subsection (a) shall be led by a university with the ability 
to combine the expertise from numerous academic fields 
including, at a minimum, intelligent workplaces and ad-
vanced building systems and engineering, electrical and 
computer engineering, computer science, architecture, 
urban design, and environmental and mechanical engi-
neering. Such university shall partner with other univer-
sities and entities who have established programs and the 
capability of advancing innovative building efficiency tech-
nologies. 
(c) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary of En-
ergy to carry out this section $6,000,000 for each of the 
fiscal years 2004 through 2006, to remain available until 
expended. For any fiscal year in which funds are expended
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under this section, the Secretary shall provide 1⁄3 of the 
total amount to the lead university described in subsection 
(b), and provide the remaining 2⁄3 to the other participants 
referred to in subsection (b) on an equal basis. 
SEC. 109. FEDERAL BUILDING PERFORMANCE STANDARDS. 
Section 305(a) of the Energy Conservation and Pro-
duction Act (42 U.S.C. 6834(a)) is amended— 
(1) in paragraph (2)(A), by striking ‘‘CABO 
Model Energy Code, 1992’’ and inserting ‘‘the 2003 
International Energy Conservation Code’’; and 
(2) by adding at the end the following: 
‘‘(3) REVISED FEDERAL BUILDING ENERGY EFFI-
CIENCY PERFORMANCE STANDARDS.— 
‘‘(A) IN GENERAL.—Not later than 1 year after 
the date of enactment of this paragraph, the Sec-
retary of Energy shall establish, by rule, revised 
Federal building energy efficiency performance 
standards that require that— 
‘‘(i) if life-cycle cost-effective, for new Fed-
eral buildings— 
‘‘(I) such buildings be designed so as 
to achieve energy consumption levels at 
least 30 percent below those of the version 
current as of the date of enactment of this 
paragraph of the ASHRAE Standard or
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the International Energy Conservation 
Code, as appropriate; and 
‘‘(II) sustainable design principles are 
applied to the siting, design, and construc-
tion of all new and replacement buildings; 
and 
‘‘(ii) where water is used to achieve energy 
efficiency, water conservation technologies shall 
be applied to the extent they are life-cycle cost 
effective. 
‘‘(B) ADDITIONAL REVISIONS.—Not later than 
1 year after the date of approval of each subsequent 
revision of the ASHRAE Standard or the Inter-
national Energy Conservation Code, as appropriate, 
the Secretary of Energy shall determine, based on 
the cost-effectiveness of the requirements under the 
amendments, whether the revised standards estab-
lished under this paragraph should be updated to re-
flect the amendments. 
‘‘(C) STATEMENT
ON
COMPLIANCE
OF
NEW 
BUILDINGS.—In the budget request of the Federal 
agency for each fiscal year and each report sub-
mitted by the Federal agency under section 548(a) 
of the National Energy Conservation Policy Act (42
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U.S.C. 8258(a)), the head of each Federal agency 
shall include— 
‘‘(i) a list of all new Federal buildings 
owned, operated, or controlled by the Federal 
agency; and 
‘‘(ii) a statement concerning whether the 
Federal buildings meet or exceed the revised 
standards established under this paragraph.’’. 
SEC. 110. INCREASED USE OF RECOVERED MINERAL COM-
PONENT IN FEDERALLY FUNDED PROJECTS 
INVOLVING PROCUREMENT OF CEMENT OR 
CONCRETE. 
(a) AMENDMENT.—Subtitle F of the Solid Waste 
Disposal Act (42 U.S.C. 6961 et seq.) is amended by add-
ing at the end the following new section: 
‘‘INCREASED USE OF RECOVERED MINERAL COMPONENT 
IN FEDERALLY FUNDED PROJECTS INVOLVING PRO-
CUREMENT OF CEMENT OR CONCRETE 
‘‘SEC. 6005. (a) DEFINITIONS.—In this section: 
‘‘(1) AGENCY HEAD.—The term ‘agency head’ 
means— 
‘‘(A) the Secretary of Transportation; and 
‘‘(B) the head of each other Federal agen-
cy that on a regular basis procures, or provides 
Federal funds to pay or assist in paying the
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cost of procuring, material for cement or con-
crete projects. 
‘‘(2) CEMENT
OR
CONCRETE
PROJECT.—The 
term ‘cement or concrete project’ means a project 
for the construction or maintenance of a highway or 
other transportation facility or a Federal, State, or 
local government building or other public facility 
that— 
‘‘(A) involves the procurement of cement 
or concrete; and 
‘‘(B) is carried out in whole or in part 
using Federal funds. 
‘‘(3) RECOVERED MINERAL COMPONENT.—The 
term ‘recovered mineral component’ means— 
‘‘(A) ground granulated blast furnace slag; 
‘‘(B) coal combustion fly ash; and 
‘‘(C) any other waste material or byprod-
uct recovered or diverted from solid waste that 
the Administrator, in consultation with an 
agency head, determines should be treated as 
recovered mineral component under this section 
for use in cement or concrete projects paid for, 
in whole or in part, by the agency head. 
‘‘(b) IMPLEMENTATION OF REQUIREMENTS.—
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‘‘(1) IN GENERAL.—Not later than 1 year after 
the date of enactment of this section, the Adminis-
trator and each agency head shall take such actions 
as are necessary to implement fully all procurement 
requirements and incentives in effect as of the date 
of enactment of this section (including guidelines 
under section 6002) that provide for the use of ce-
ment and concrete incorporating recovered mineral 
component in cement or concrete projects. 
‘‘(2) PRIORITY.—In carrying out paragraph (1) 
an agency head shall give priority to achieving great-
er use of recovered mineral component in cement or 
concrete projects for which recovered mineral compo-
nents historically have not been used or have been 
used only minimally. 
‘‘(3) CONFORMANCE.—The Administrator and 
each agency head shall carry out this subsection in 
accordance with section 6002. 
‘‘(c) FULL IMPLEMENTATION STUDY.— 
‘‘(1) IN GENERAL.—The Administrator, in co-
operation with the Secretary of Transportation and 
the Secretary of Energy, shall conduct a study to de-
termine the extent to which current procurement re-
quirements, when fully implemented in accordance 
with subsection (b), may realize energy savings and
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environmental benefits attainable with substitution 
of recovered mineral component in cement used in 
cement or concrete projects. 
‘‘(2) MATTERS TO BE ADDRESSED.—The study 
shall— 
‘‘(A) quantify the extent to which recov-
ered mineral components are being substituted 
for Portland cement, particularly as a result of 
current procurement requirements, and the en-
ergy savings and environmental benefits associ-
ated with that substitution; 
‘‘(B) identify all barriers in procurement 
requirements to greater realization of energy 
savings and environmental benefits, including 
barriers resulting from exceptions from current 
law; and 
‘‘(C)(i) identify potential mechanisms to 
achieve greater substitution of recovered min-
eral component in types of cement or concrete 
projects for which recovered mineral compo-
nents historically have not been used or have 
been used only minimally; 
‘‘(ii) evaluate the feasibility of establishing 
guidelines or standards for optimized substi-
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tution rates of recovered mineral component in 
those cement or concrete projects; and 
‘‘(iii) identify any potential environmental 
or economic effects that may result from great-
er substitution of recovered mineral component 
in those cement or concrete projects. 
‘‘(3) REPORT.—Not later than 30 months after 
the date of enactment of this section, the Adminis-
trator shall submit to Congress a report on the 
study. 
‘‘(d) ADDITIONAL PROCUREMENT REQUIREMENTS.— 
Unless the study conducted under subsection (c) identifies 
any effects or other problems described in subsection 
(c)(2)(C)(iii) that warrant further review or delay, the Ad-
ministrator and each agency head shall, not later than 1 
year after the release of the report in accordance with sub-
section (c)(3), take additional actions authorized under 
this Act to establish procurement requirements and incen-
tives that provide for the use of cement and concrete with 
increased substitution of recovered mineral component in 
the construction and maintenance of cement or concrete 
projects, so as to— 
‘‘(1) realize more fully the energy savings and 
environmental benefits associated with increased 
substitution; and
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‘‘(2) eliminate barriers identified under sub-
section (c). 
‘‘(e) EFFECT OF SECTION.—Nothing in this section 
affects the requirements of section 6002 (including the 
guidelines and specifications for implementing those re-
quirements).’’. 
(b) TABLE OF CONTENTS AMENDMENT.—The table 
of contents of the Solid Waste Disposal Act is amended 
by adding after the item relating to section 6004 the fol-
lowing new item: 
‘‘Sec. 6005. Increased use of recovered mineral component in federally funded 
projects involving procurement of cement or concrete.’’. 
Subtitle B—Energy Assistance and 
State Programs 
SEC. 121. LOW INCOME HOME ENERGY ASSISTANCE PRO-
GRAM. 
Section 2602(b) of the Low-Income Home Energy 
Assistance Act of 1981 (42 U.S.C. 8621(b)) is amended 
by striking ‘‘and $2,000,000,000 for each of fiscal years 
2002 through 2004’’ and inserting ‘‘$2,000,000,000 for 
fiscal years 2002 and 2003, and $3,400,000,000 for each 
of fiscal years 2004 through 2006’’. 
SEC. 122. WEATHERIZATION ASSISTANCE. 
Section 422 of the Energy Conservation and Produc-
tion Act (42 U.S.C. 6872) is amended by striking ‘‘for 
fiscal years 1999 through 2003 such sums as may be nec-
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essary’’ and inserting ‘‘$325,000,000 for fiscal year 2004, 
$400,000,000 for fiscal year 2005, and $500,000,000 for 
fiscal year 2006’’. 
SEC. 123. STATE ENERGY PROGRAMS. 
(a) STATE ENERGY CONSERVATION PLANS.—Section 
362 of the Energy Policy and Conservation Act (42 U.S.C. 
6322) is amended by inserting at the end the following 
new subsection: 
‘‘(g) The Secretary shall, at least once every 3 years, 
invite the Governor of each State to review and, if nec-
essary, revise the energy conservation plan of such State 
submitted under subsection (b) or (e). Such reviews should 
consider the energy conservation plans of other States 
within the region, and identify opportunities and actions 
carried out in pursuit of common energy conservation 
goals.’’. 
(b) STATE ENERGY EFFICIENCY GOALS.—Section 
364 of the Energy Policy and Conservation Act (42 U.S.C. 
6324) is amended to read as follows: 
‘‘STATE ENERGY EFFICIENCY GOALS 
‘‘SEC. 364. Each State energy conservation plan with 
respect to which assistance is made available under this 
part on or after the date of enactment of the Energy Pol-
icy Act of 2003 shall contain a goal, consisting of an im-
provement of 25 percent or more in the efficiency of use 
of energy in the State concerned in calendar year 2010
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as compared to calendar year 1990, and may contain in-
terim goals.’’. 
(c) AUTHORIZATION OF APPROPRIATIONS.—Section 
365(f) of the Energy Policy and Conservation Act (42 
U.S.C. 6325(f)) is amended by striking ‘‘for fiscal years 
1999 through 2003 such sums as may be necessary’’ and 
inserting ‘‘$100,000,000 for each of the fiscal years 2004 
and 2005 and $125,000,000 for fiscal year 2006’’. 
SEC. 124. ENERGY EFFICIENT APPLIANCE REBATE PRO-
GRAMS. 
(a) DEFINITIONS.—In this section: 
(1) ELIGIBLE
STATE.—The term ‘‘eligible 
State’’ means a State that meets the requirements 
of subsection (b). 
(2) ENERGY STAR PROGRAM.—The term ‘‘En-
ergy Star program’’ means the program established 
by section 324A of the Energy Policy and Conserva-
tion Act. 
(3) RESIDENTIAL
ENERGY
STAR
PRODUCT.— 
The term ‘‘residential Energy Star product’’ means 
a product for a residence that is rated for energy ef-
ficiency under the Energy Star program. 
(4) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Energy.
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(5) STATE ENERGY OFFICE.—The term ‘‘State 
energy office’’ means the State agency responsible 
for developing State energy conservation plans under 
section 362 of the Energy Policy and Conservation 
Act (42 U.S.C. 6322). 
(6) STATE PROGRAM.—The term ‘‘State pro-
gram’’ means a State energy efficient appliance re-
bate program described in subsection (b)(1). 
(b) ELIGIBLE STATES.—A State shall be eligible to 
receive an allocation under subsection (c) if the State— 
(1) establishes (or has established) a State en-
ergy efficient appliance rebate program to provide 
rebates to residential consumers for the purchase of 
residential Energy Star products to replace used ap-
pliances of the same type; 
(2) submits an application for the allocation at 
such time, in such form, and containing such infor-
mation as the Secretary may require; and 
(3) provides assurances satisfactory to the Sec-
retary that the State will use the allocation to sup-
plement, but not supplant, funds made available to 
carry out the State program. 
(c) AMOUNT OF ALLOCATIONS.— 
(1) IN GENERAL.—Subject to paragraph (2), 
for each fiscal year, the Secretary shall allocate to
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the State energy office of each eligible State to carry 
out subsection (d) an amount equal to the product 
obtained by multiplying the amount made available 
under subsection (f) for the fiscal year by the ratio 
that the population of the State in the most recent 
calendar year for which data are available bears to 
the total population of all eligible States in that cal-
endar year. 
(2) MINIMUM ALLOCATIONS.—For each fiscal 
year, the amounts allocated under this subsection 
shall be adjusted proportionately so that no eligible 
State is allocated a sum that is less than an amount 
determined by the Secretary. 
(d) USE OF ALLOCATED FUNDS.—The allocation to 
a State energy office under subsection (c) may be used 
to pay up to 50 percent of the cost of establishing and 
carrying out a State program. 
(e) ISSUANCE OF REBATES.—Rebates may be pro-
vided to residential consumers that meet the requirements 
of the State program. The amount of a rebate shall be 
determined by the State energy office, taking into consid-
eration— 
(1) the amount of the allocation to the State 
energy office under subsection (c);
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(2) the amount of any Federal or State tax in-
centive available for the purchase of the residential 
Energy Star product; and 
(3) the difference between the cost of the resi-
dential Energy Star product and the cost of an ap-
pliance that is not a residential Energy Star prod-
uct, but is of the same type as, and is the nearest 
capacity, performance, and other relevant character-
istics (as determined by the State energy office) to, 
the residential Energy Star product. 
(f) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary to carry 
out this section $50,000,000 for each of the fiscal years 
2004 through 2008. 
SEC. 125. ENERGY EFFICIENT PUBLIC BUILDINGS. 
(a) GRANTS.—The Secretary of Energy may make 
grants to the State agency responsible for developing State 
energy conservation plans under section 362 of the Energy 
Policy and Conservation Act (42 U.S.C. 6322), or, if no 
such agency exists, a State agency designated by the Gov-
ernor of the State, to assist units of local government in 
the State in improving the energy efficiency of public 
buildings and facilities— 
(1) through construction of new energy efficient 
public buildings that use at least 30 percent less en-
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ergy than a comparable public building constructed 
in compliance with standards prescribed in the most 
recent version of the International Energy Conserva-
tion Code, or a similar State code intended to 
achieve substantially equivalent efficiency levels; or 
(2) through renovation of existing public build-
ings to achieve reductions in energy use of at least 
30 percent as compared to the baseline energy use 
in such buildings prior to renovation, assuming a 3- 
year, weather-normalized average for calculating 
such baseline. 
(b) ADMINISTRATION.—State energy offices receiving 
grants under this section shall— 
(1) maintain such records and evidence of com-
pliance as the Secretary may require; and 
(2) develop and distribute information and ma-
terials and conduct programs to provide technical 
services and assistance to encourage planning, fi-
nancing, and design of energy efficient public build-
ings by units of local government. 
(c) AUTHORIZATION OF APPROPRIATIONS.—For the 
purposes of this section, there are authorized to be appro-
priated to the Secretary of Energy $30,000,000 for each 
of fiscal years 2004 through 2008. Not more than 10 per-
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cent of appropriated funds shall be used for administra-
tion. 
SEC. 126. LOW INCOME COMMUNITY ENERGY EFFICIENCY 
PILOT PROGRAM. 
(a) GRANTS.—The Secretary of Energy is authorized 
to make grants to units of local government, private, non- 
profit community development organizations, and Indian 
tribe economic development entities to improve energy effi-
ciency; identify and develop alternative, renewable, and 
distributed energy supplies; and increase energy conserva-
tion in low income rural and urban communities. 
(b) PURPOSE OF GRANTS.—The Secretary may make 
grants on a competitive basis for— 
(1) investments that develop alternative, renew-
able, and distributed energy supplies; 
(2) energy efficiency projects and energy con-
servation programs; 
(3) studies and other activities that improve en-
ergy efficiency in low income rural and urban com-
munities; 
(4) planning and development assistance for in-
creasing the energy efficiency of buildings and facili-
ties; and 
(5) technical and financial assistance to local 
government and private entities on developing new
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renewable and distributed sources of power or com-
bined heat and power generation. 
(c) DEFINITION.—For purposes of this section, the 
term ‘‘Indian tribe’’ means any Indian tribe, band, nation, 
or other organized group or community, including any 
Alaskan Native village or regional or village corporation 
as defined in or established pursuant to the Alaska Native 
Claims Settlement Act (43 U.S.C. 1601 et seq.), that is 
recognized as eligible for the special programs and services 
provided by the United States to Indians because of their 
status as Indians. 
(d) AUTHORIZATION OF APPROPRIATIONS.—For the 
purposes of this section there are authorized to be appro-
priated to the Secretary of Energy $20,000,000 for each 
of fiscal years 2004 through 2006. 
Subtitle C—Energy Efficient 
Products 
SEC. 131. ENERGY STAR PROGRAM. 
(a) AMENDMENT.—The Energy Policy and Conserva-
tion Act (42 U.S.C. 6201 et seq.) is amended by inserting 
the following after section 324: 
‘‘SEC. 324A. ENERGY STAR PROGRAM. 
‘‘There is established at the Department of Energy 
and the Environmental Protection Agency a voluntary 
program to identify and promote energy-efficient products
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and buildings in order to reduce energy consumption, im-
prove energy security, and reduce pollution through vol-
untary labeling of or other forms of communication about 
products and buildings that meet the highest energy effi-
ciency standards. Responsibilities under the program shall 
be divided between the Department of Energy and the En-
vironmental Protection Agency consistent with the terms 
of agreements between the 2 agencies. The Administrator 
and the Secretary shall— 
‘‘(1) promote Energy Star compliant tech-
nologies as the preferred technologies in the market-
place for achieving energy efficiency and to reduce 
pollution; 
‘‘(2) work to enhance public awareness of the 
Energy Star label, including special outreach to 
small businesses; 
‘‘(3) preserve the integrity of the Energy Star 
label; 
‘‘(4) solicit comments from interested parties 
prior to establishing or revising an Energy Star 
product category, specification, or criterion (or effec-
tive dates for any of the foregoing); 
‘‘(5) upon adoption of a new or revised product 
category, specification, or criterion, provide reason-
able notice to interested parties of any changes (in-
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cluding effective dates) in product categories, speci-
fications, or criteria along with an explanation of 
such changes and, where appropriate, responses to 
comments submitted by interested parties; and 
‘‘(6) provide appropriate lead time (which shall 
be 9 months, unless the Agency or Department de-
termines otherwise) prior to the effective date for a 
new or a significant revision to a product category, 
specification, or criterion, taking into account the 
timing requirements of the manufacturing, product 
marketing, and distribution process for the specific 
product addressed.’’. 
(b) TABLE OF CONTENTS AMENDMENT.—The table 
of contents of the Energy Policy and Conservation Act is 
amended by inserting after the item relating to section 
324 the following new item: 
‘‘Sec. 324A. Energy Star program.’’. 
SEC. 132. HVAC MAINTENANCE CONSUMER EDUCATION 
PROGRAM. 
Section 337 of the Energy Policy and Conservation 
Act (42 U.S.C. 6307) is amended by adding at the end 
the following: 
‘‘(c) HVAC MAINTENANCE.—For the purpose of en-
suring that installed air conditioning and heating systems 
operate at their maximum rated efficiency levels, the Sec-
retary shall, not later than 180 days after the date of en-
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actment of this subsection, carry out a program to educate 
homeowners and small business owners concerning the en-
ergy savings resulting from properly conducted mainte-
nance of air conditioning, heating, and ventilating sys-
tems. The Secretary shall carry out the program in a cost- 
shared manner in cooperation with the Administrator of 
the Environmental Protection Agency and such other enti-
ties as the Secretary considers appropriate, including in-
dustry trade associations, industry members, and energy 
efficiency organizations. 
‘‘(d) SMALL BUSINESS EDUCATION
AND ASSIST-
ANCE.—The Administrator of the Small Business Admin-
istration, in consultation with the Secretary of Energy and 
the Administrator of the Environmental Protection Agen-
cy, shall develop and coordinate a Government-wide pro-
gram, building on the existing Energy Star for Small 
Business Program, to assist small businesses to become 
more energy efficient, understand the cost savings obtain-
able through efficiencies, and identify financing options 
for energy efficiency upgrades. The Secretary and the Ad-
ministrator of the Small Business Administration shall 
make the program information available directly to small 
businesses and through other Federal agencies, including 
the Federal Emergency Management Program and the 
Department of Agriculture.’’.
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SEC. 133. ENERGY CONSERVATION STANDARDS FOR ADDI-
TIONAL PRODUCTS. 
(a) DEFINITIONS.—Section 321 of the Energy Policy 
and Conservation Act (42 U.S.C. 6291) is amended— 
(1) in paragraph (30)(S), by striking the period 
and adding at the end the following: ‘‘but does not 
include any lamp specifically designed to be used for 
special purpose applications and that is unlikely to 
be used in general purpose applications such as 
those described in subparagraph (D), and also does 
not include any lamp not described in subparagraph 
(D) that is excluded by the Secretary, by rule, be-
cause the lamp is designed for special applications 
and is unlikely to be used in general purpose appli-
cations.’’; and 
(2) by adding at the end the following: 
‘‘(32) The term ‘battery charger’ means a de-
vice that charges batteries for consumer products 
and includes battery chargers embedded in other 
consumer products. 
‘‘(33) The term ‘commercial refrigerators, 
freezers, and refrigerator-freezers’ means refrig-
erators, freezers, or refrigerator-freezers that— 
‘‘(A) are not consumer products regulated 
under this Act; and
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‘‘(B) incorporate most components involved 
in the vapor-compression cycle and the refrig-
erated compartment in a single package. 
‘‘(34) The term ‘external power supply’ means 
an external power supply circuit that is used to con-
vert household electric current into either DC cur-
rent or lower-voltage AC current to operate a con-
sumer product. 
‘‘(35) The term ‘illuminated exit sign’ means a 
sign that— 
‘‘(A) is designed to be permanently fixed in 
place to identify an exit; and 
‘‘(B) consists of an electrically powered in-
tegral light source that illuminates the legend 
‘EXIT’ and any directional indicators and pro-
vides contrast between the legend, any direc-
tional indicators, and the background. 
‘‘(36)(A) Except as provided in subparagraph 
(B), the term ‘distribution transformer’ means a 
transformer that— 
‘‘(i) has an input voltage of 34.5 kilovolts 
or less; 
‘‘(ii) has an output voltage of 600 volts or 
less; and
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‘‘(iii) is rated for operation at a frequency 
of 60 Hertz. 
‘‘(B) The term ‘distribution transformer’ does 
not include— 
‘‘(i) transformers with multiple voltage 
taps, with the highest voltage tap equaling at 
least 20 percent more than the lowest voltage 
tap; 
‘‘(ii) transformers, such as those commonly 
known as drive transformers, rectifier trans-
formers, 
auto-transformers, 
Uninterruptible 
Power System transformers, impedance trans-
formers, harmonic transformers, regulating 
transformers, sealed and nonventilating trans-
formers, machine tool transformers, welding 
transformers, grounding transformers, or test-
ing transformers, that are designed to be used 
in a special purpose application and are unlikely 
to be used in general purpose applications; or 
‘‘(iii) any transformer not listed in clause 
(ii) that is excluded by the Secretary by rule be-
cause— 
‘‘(I) the transformer is designed for a 
special application;
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‘‘(II) the transformer is unlikely to be 
used in general purpose applications; and 
‘‘(III) the application of standards to 
the transformer would not result in signifi-
cant energy savings. 
‘‘(37) The term ‘low-voltage dry-type distribu-
tion transformer’ means a distribution transformer 
that— 
‘‘(A) has an input voltage of 600 volts or 
less; 
‘‘(B) is air-cooled; and 
‘‘(C) does not use oil as a coolant. 
‘‘(38) The term ‘standby mode’ means the low-
est power consumption mode that— 
‘‘(A) cannot be switched off or influenced 
by the user; and 
‘‘(B) may persist for an indefinite time 
when an appliance is connected to the main 
electricity supply and used in accordance with 
the manufacturer’s instructions, 
as defined on an individual product basis by the Sec-
retary. 
‘‘(39) The term ‘torchiere’ means a portable 
electric lamp with a reflector bowl that directs light 
upward so as to give indirect illumination.
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‘‘(40) The term ‘traffic signal module’ means a 
standard 8-inch (200mm) or 12-inch (300mm) traf-
fic signal indication, consisting of a light source, a 
lens, and all other parts necessary for operation, 
that communicates movement messages to drivers 
through red, amber, and green colors. 
‘‘(41) The term ‘transformer’ means a device 
consisting of 2 or more coils of insulated wire that 
transfers alternating current by electromagnetic in-
duction from 1 coil to another to change the original 
voltage or current value. 
‘‘(42) The term ‘unit heater’ means a self-con-
tained fan-type heater designed to be installed with-
in the heated space, except that such term does not 
include a warm air furnace.’’. 
(b) TEST PROCEDURES.—Section 323 of the Energy 
Policy and Conservation Act (42 U.S.C. 6293) is amend-
ed— 
(1) in subsection (b), by adding at the end the 
following: 
‘‘(9) Test procedures for illuminated exit signs 
shall be based on the test method used under 
Version 2.0 of the Energy Star program of the Envi-
ronmental Protection Agency for illuminated exit 
signs.
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‘‘(10) Test procedures for distribution trans-
formers and low voltage dry-type distribution trans-
formers shall be based on the ‘Standard Test Meth-
od for Measuring the Energy Consumption of Dis-
tribution Transformers’ prescribed by the National 
Electrical Manufacturers Association (NEMA TP 2– 
1998). The Secretary may review and revise this test 
procedure. For purposes of section 346(a), this test 
procedure shall be deemed to be testing require-
ments prescribed by the Secretary under section 
346(a)(1) for distribution transformers for which the 
Secretary makes a determination that energy con-
servation standards would be technologically feasible 
and economically justified, and would result in sig-
nificant energy savings. 
‘‘(11) Test procedures for traffic signal modules 
shall be based on the test method used under the 
Energy Star program of the Environmental Protec-
tion Agency for traffic signal modules, as in effect 
on the date of enactment of this paragraph. 
‘‘(12) Test procedures for medium base com-
pact fluorescent lamps shall be based on the test 
methods used under the August 9, 2001, version of 
the Energy Star program of the Environmental Pro-
tection Agency and Department of Energy for com-
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pact fluorescent lamps. Covered products shall meet 
all test requirements for regulated parameters in 
section 325(bb). However, covered products may be 
marketed prior to completion of lamp life and lumen 
maintenance at 40 percent of rated life testing pro-
vided manufacturers document engineering pre-
dictions and analysis that support expected attain-
ment of lumen maintenance at 40 percent rated life 
and lamp life time.’’; and 
(2) by adding at the end the following: 
‘‘(f) ADDITIONAL
CONSUMER
AND
COMMERCIAL 
PRODUCTS.—The Secretary shall, not later than 24 
months after the date of enactment of this subsection, pre-
scribe testing requirements for suspended ceiling fans, re-
frigerated bottled or canned beverage vending machines, 
and commercial refrigerators, freezers, and refrigerator- 
freezers. Such testing requirements shall be based on ex-
isting test procedures used in industry to the extent prac-
tical and reasonable. In the case of suspended ceiling fans, 
such test procedures shall include efficiency at both max-
imum output and at an output no more than 50 percent 
of the maximum output.’’. 
(c) NEW STANDARDS.—Section 325 of the Energy 
Policy and Conservation Act (42 U.S.C. 6295) is amended 
by adding at the end the following:
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‘‘(u) BATTERY CHARGER AND EXTERNAL POWER 
SUPPLY ELECTRIC ENERGY CONSUMPTION.— 
‘‘(1) INITIAL RULEMAKING.—(A) The Secretary 
shall, within 18 months after the date of enactment 
of this subsection, prescribe by notice and comment, 
definitions and test procedures for the power use of 
battery chargers and external power supplies. In es-
tablishing these test procedures, the Secretary shall 
consider, among other factors, existing definitions 
and test procedures used for measuring energy con-
sumption in standby mode and other modes and as-
sess the current and projected future market for 
battery chargers and external power supplies. This 
assessment shall include estimates of the significance 
of potential energy savings from technical improve-
ments to these products and suggested product 
classes for standards. Prior to the end of this time 
period, the Secretary shall hold a scoping workshop 
to discuss and receive comments on plans for devel-
oping energy conservation standards for energy use 
for these products. 
‘‘(B) The Secretary shall, within 3 years after 
the date of enactment of this subsection, issue a 
final rule that determines whether energy conserva-
tion standards shall be issued for battery chargers
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and external power supplies or classes thereof. For 
each product class, any such standards shall be set 
at the lowest level of energy use that— 
‘‘(i) meets the criteria and procedures of 
subsections (o), (p), (q), (r), (s), and (t); and 
‘‘(ii) will result in significant overall an-
nual energy savings, considering both standby 
mode and other operating modes. 
‘‘(2) REVIEW
OF
STANDBY
ENERGY
USE
IN 
COVERED PRODUCTS.—In determining pursuant to 
section 323 whether test procedures and energy con-
servation standards pursuant to this section should 
be revised, the Secretary shall consider, for covered 
products that are major sources of standby mode en-
ergy consumption, whether to incorporate standby 
mode into such test procedures and energy conserva-
tion standards, taking into account, among other 
relevant factors, standby mode power consumption 
compared to overall product energy consumption. 
‘‘(3) RULEMAKING.—The Secretary shall not 
propose a standard under this section unless the 
Secretary has issued applicable test procedures for 
each product pursuant to section 323. 
‘‘(4) EFFECTIVE DATE.—Any standard issued 
under this subsection shall be applicable to products
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manufactured or imported 3 years after the date of 
issuance. 
‘‘(5) VOLUNTARY
PROGRAMS.—The Secretary 
and the Administrator shall collaborate and develop 
programs, including programs pursuant to section 
324A (relating to Energy Star Programs) and other 
voluntary industry agreements or codes of conduct, 
that are designed to reduce standby mode energy 
use. 
‘‘(v) SUSPENDED CEILING FANS, VENDING MA-
CHINES, AND COMMERCIAL REFRIGERATORS, FREEZERS, 
AND REFRIGERATOR-FREEZERS.—The Secretary shall not 
later than 36 months after the date on which testing re-
quirements are prescribed by the Secretary pursuant to 
section 323(f), prescribe, by rule, energy conservation 
standards for suspended ceiling fans, refrigerated bottled 
or canned beverage vending machines, and commercial re-
frigerators, freezers, and refrigerator-freezers. In estab-
lishing standards under this subsection, the Secretary 
shall use the criteria and procedures contained in sub-
sections (o) and (p). Any standard prescribed under this 
subsection shall apply to products manufactured 3 years 
after the date of publication of a final rule establishing 
such standard.
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‘‘(w) ILLUMINATED EXIT SIGNS.—Illuminated exit 
signs manufactured on or after January 1, 2005, shall 
meet the Version 2.0 Energy Star Program performance 
requirements for illuminated exit signs prescribed by the 
Environmental Protection Agency. 
‘‘(x) TORCHIERES.—Torchieres manufactured on or 
after January 1, 2005— 
‘‘(1) shall consume not more than 190 watts of 
power; and 
‘‘(2) shall not be capable of operating with 
lamps that total more than 190 watts. 
‘‘(y) LOW
VOLTAGE
DRY-TYPE
DISTRIBUTION 
TRANSFORMERS.—The efficiency of low voltage dry-type 
distribution transformers manufactured on or after Janu-
ary 1, 2005, shall be the Class I Efficiency Levels for dis-
tribution transformers specified in Table 4–2 of the ‘Guide 
for Determining Energy Efficiency for Distribution Trans-
formers’ published by the National Electrical Manufactur-
ers Association (NEMA TP–1–2002). 
‘‘(z) TRAFFIC SIGNAL MODULES.—Traffic signal 
modules manufactured on or after January 1, 2006, shall 
meet the performance requirements used under the En-
ergy Star program of the Environmental Protection Agen-
cy for traffic signals, as in effect on the date of enactment 
of this subsection, and shall be installed with compatible,
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electrically connected signal control interface devices and 
conflict monitoring systems. 
‘‘(aa) UNIT HEATERS.—Unit heaters manufactured 
on or after the date that is 3 years after the date of enact-
ment of this subsection shall be equipped with an intermit-
tent ignition device and shall have either power venting 
or an automatic flue damper. 
‘‘(bb) MEDIUM
BASE
COMPACT
FLUORESCENT 
LAMPS.—Bare lamp and covered lamp (no reflector) me-
dium base compact fluorescent lamps manufactured on or 
after January 1, 2005, shall meet the following require-
ments prescribed by the August 9, 2001, version of the 
Energy Star Program Requirements for Compact Fluores-
cent Lamps, Energy Star Eligibility Criteria, Energy-Effi-
ciency Specification issued by the Environmental Protec-
tion Agency and Department of Energy: minimum initial 
efficacy; lumen maintenance at 1000 hours; lumen mainte-
nance at 40 percent of rated life; rapid cycle stress test; 
and lamp life. The Secretary may, by rule, establish re-
quirements for color quality (CRI); power factor; oper-
ating frequency; and maximum allowable start time based 
on the requirements prescribed by the August 9, 2001, 
version of the Energy Star Program Requirements for 
Compact Fluorescent Lamps. The Secretary may, by rule, 
revise these requirements or establish other requirements
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considering energy savings, cost effectiveness, and con-
sumer satisfaction. 
‘‘(cc) EFFECTIVE DATE.—Section 327 shall apply— 
‘‘(1) to products for which standards are to be 
established under subsections (u) and (v) on the 
date on which a final rule is issued by the Depart-
ment of Energy, except that any State or local 
standards prescribed or enacted for any such prod-
uct prior to the date on which such final rule is 
issued shall not be preempted until the standard es-
tablished under subsection (u) or (v) for that prod-
uct takes effect; and 
‘‘(2) to products for which standards are estab-
lished under subsections (w) through (bb) on the 
date of enactment of those subsections, except that 
any State or local standards prescribed or enacted 
prior to the date of enactment of those subsections 
shall not be preempted until the standards estab-
lished under subsections (w) through (bb) take ef-
fect.’’. 
(d) 
RESIDENTIAL
FURNACE
FANS.—Section 
325(f)(3) of the Energy Policy and Conservation Act (42 
U.S.C. 6295(f)(3)) is amended by adding the following 
new subparagraph at the end:
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‘‘(D) Notwithstanding any provision of this Act, the 
Secretary may consider, and prescribe, if the requirements 
of subsection (o) of this section are met, energy efficiency 
or energy use standards for electricity used for purposes 
of circulating air through duct work.’’. 
SEC. 134. ENERGY LABELING. 
(a) RULEMAKING ON EFFECTIVENESS OF CONSUMER 
PRODUCT LABELING.—Section 324(a)(2) of the Energy 
Policy and Conservation Act (42 U.S.C. 6294(a)(2)) is 
amended by adding at the end the following: 
‘‘(F) Not later than 3 months after the date of enact-
ment of this subparagraph, the Commission shall initiate 
a rulemaking to consider the effectiveness of the current 
consumer products labeling program in assisting con-
sumers in making purchasing decisions and improving en-
ergy efficiency and to consider changes to the labeling 
rules that would improve the effectiveness of consumer 
product labels. Such rulemaking shall be completed not 
later than 2 years after the date of enactment of this sub-
paragraph.’’. 
(b) RULEMAKING ON LABELING FOR ADDITIONAL 
PRODUCTS.—Section 324(a) of the Energy Policy and 
Conservation Act (42 U.S.C. 6294(a)) is further amended 
by adding at the end the following:
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‘‘(5) The Secretary or the Commission, as appro-
priate, may, for covered products referred to in sub-
sections (u) through (aa) of section 325, prescribe, by rule, 
pursuant to this section, labeling requirements for such 
products after a test procedure has been set pursuant to 
section 323. In the case of products to which TP–1 stand-
ards under section 325(y) apply, labeling requirements 
shall be based on the ‘Standard for the Labeling of Dis-
tribution Transformer Efficiency’ prescribed by the Na-
tional Electrical Manufacturers Association (NEMA TP– 
3) as in effect upon the date of enactment of this para-
graph.’’. 
Subtitle D—Public Housing 
SEC. 141. CAPACITY BUILDING FOR ENERGY-EFFICIENT, AF-
FORDABLE HOUSING. 
Section 4(b) of the HUD Demonstration Act of 1993 
(42 U.S.C. 9816 note) is amended— 
(1) in paragraph (1), by inserting before the 
semicolon at the end the following: ‘‘, including ca-
pabilities regarding the provision of energy efficient, 
affordable housing and residential energy conserva-
tion measures’’; and 
(2) in paragraph (2), by inserting before the 
semicolon the following: ‘‘, including such activities 
relating to the provision of energy efficient, afford-
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able housing and residential energy conservation 
measures that benefit low-income families’’. 
SEC. 142. INCREASE OF CDBG PUBLIC SERVICES CAP FOR 
ENERGY CONSERVATION AND EFFICIENCY 
ACTIVITIES. 
Section 105(a)(8) of the Housing and Community 
Development Act of 1974 (42 U.S.C. 5305(a)(8)) is 
amended— 
(1) by inserting ‘‘or efficiency’’ after ‘‘energy 
conservation’’; 
(2) by striking ‘‘, and except that’’ and insert-
ing ‘‘; except that’’; and 
(3) by inserting before the semicolon at the end 
the following: ‘‘; and except that each percentage 
limitation under this paragraph on the amount of 
assistance provided under this title that may be used 
for the provision of public services is hereby in-
creased by 10 percent, but such percentage increase 
may be used only for the provision of public services 
concerning energy conservation or efficiency’’. 
SEC. 143. FHA MORTGAGE INSURANCE INCENTIVES FOR 
ENERGY EFFICIENT HOUSING. 
(a) SINGLE FAMILY HOUSING MORTGAGE INSUR-
ANCE.—Section 203(b)(2) of the National Housing Act 
(12 U.S.C. 1709(b)(2)) is amended, in the first undesig-
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nated paragraph beginning after subparagraph (B)(ii)(IV) 
(relating to solar energy systems), by striking ‘‘20 per-
cent’’ and inserting ‘‘30 percent’’. 
(b) MULTIFAMILY
HOUSING
MORTGAGE
INSUR-
ANCE.—Section 207(c) of the National Housing Act (12 
U.S.C. 1713(c)) is amended, in the last undesignated 
paragraph beginning after paragraph (3) (relating to solar 
energy systems and residential energy conservation meas-
ures), by striking ‘‘20 percent’’ and inserting ‘‘30 per-
cent’’. 
(c) COOPERATIVE
HOUSING
MORTGAGE
INSUR-
ANCE.—Section 213(p) of the National Housing Act (12 
U.S.C. 1715e(p)) is amended by striking ‘‘20 per centum’’ 
and inserting ‘‘30 percent’’. 
(d) REHABILITATION
AND NEIGHBORHOOD CON-
SERVATION HOUSING MORTGAGE INSURANCE.—Section 
220(d)(3)(B)(iii)(IV) of the National Housing Act (12 
U.S.C. 1715k(d)(3)(B)(iii)(IV)) is amended— 
(1) by striking ‘‘with respect to rehabilitation 
projects involving not more than five family units,’’; 
and 
(2) by striking ‘‘20 per centum’’ and inserting 
‘‘30 percent’’. 
(e) LOW-INCOME MULTIFAMILY HOUSING MORT-
GAGE INSURANCE.—Section 221(k) of the National Hous-
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ing Act (12 U.S.C. 1715l(k)) is amended by striking ‘‘20 
per centum’’ and inserting ‘‘30 percent’’. 
(f) ELDERLY HOUSING MORTGAGE INSURANCE.— 
Section 231(c)(2)(C) of the National Housing Act (12 
U.S.C. 1715v(c)(2)(C)) is amended by striking ‘‘20 per 
centum’’ and inserting ‘‘30 percent’’. 
(g) CONDOMINIUM
HOUSING
MORTGAGE
INSUR-
ANCE.—Section 234(j) of the National Housing Act (12 
U.S.C. 1715y(j)) is amended by striking ‘‘20 per centum’’ 
and inserting ‘‘30 percent’’. 
SEC. 144. PUBLIC HOUSING CAPITAL FUND. 
Section 9 of the United States Housing Act of 1937 
(42 U.S.C. 1437g) is amended— 
(1) in subsection (d)(1)— 
(A) in subparagraph (I), by striking ‘‘and’’ 
at the end; 
(B) in subparagraph (J), by striking the 
period at the end and inserting a semicolon; 
and 
(C) by adding at the end the following new 
subparagraphs: 
‘‘(K) improvement of energy and water-use 
efficiency by installing fixtures and fittings that 
conform to the American Society of Mechanical 
Engineers/American National Standards Insti-
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tute 
standards 
A112.19.2–1998 
and 
A112.18.1–2000, or any revision thereto, appli-
cable at the time of installation, and by increas-
ing energy efficiency and water conservation by 
such other means as the Secretary determines 
are appropriate; and 
‘‘(L) integrated utility management and 
capital planning to maximize energy conserva-
tion and efficiency measures.’’; and 
(2) in subsection (e)(2)(C)— 
(A) by striking ‘‘The’’ and inserting the 
following: 
‘‘(i) IN GENERAL.—The’’; and 
(B) by adding at the end the following: 
‘‘(ii) THIRD
PARTY
CONTRACTS.— 
Contracts described in clause (i) may in-
clude contracts for equipment conversions 
to less costly utility sources, projects with 
resident-paid utilities, and adjustments to 
frozen base year consumption, including 
systems repaired to meet applicable build-
ing and safety codes and adjustments for 
occupancy rates increased by rehabilita-
tion.
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‘‘(iii) TERM OF CONTRACT.—The total 
term of a contract described in clause (i) 
shall not exceed 20 years to allow longer 
payback periods for retrofits, including 
windows, heating system replacements, 
wall insulation, site-based generation, ad-
vanced energy savings technologies, includ-
ing renewable energy generation, and other 
such retrofits.’’. 
SEC. 145. GRANTS FOR ENERGY-CONSERVING IMPROVE-
MENTS FOR ASSISTED HOUSING. 
Section 251(b)(1) of the National Energy Conserva-
tion Policy Act (42 U.S.C. 8231(1)) is amended— 
(1) by striking ‘‘financed with loans’’ and in-
serting ‘‘assisted’’; 
(2) by inserting after ‘‘1959,’’ the following: 
‘‘which are eligible multifamily housing projects (as 
such term is defined in section 512 of the Multi-
family Assisted Housing Reform and Affordability 
Act of 1997 (42 U.S.C. 1437f note)) and are subject 
to mortgage restructuring and rental assistance suf-
ficiency plans under such Act,’’; and 
(3) by inserting after the period at the end of 
the first sentence the following new sentence: ‘‘Such 
improvements may also include the installation of
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energy and water conserving fixtures and fittings 
that conform to the American Society of Mechanical 
Engineers/American National Standards Institute 
standards A112.19.2–1998 and A112.18.1–2000, or 
any revision thereto, applicable at the time of instal-
lation.’’. 
SEC. 146. NORTH AMERICAN DEVELOPMENT BANK. 
Part 2 of subtitle D of title V of the North American 
Free Trade Agreement Implementation Act (22 U.S.C. 
290m–290m-3) is amended by adding at the end the fol-
lowing: 
‘‘SEC. 545. SUPPORT FOR CERTAIN ENERGY POLICIES. 
‘‘Consistent with the focus of the Bank’s Charter on 
environmental infrastructure projects, the Board members 
representing the United States should use their voice and 
vote to encourage the Bank to finance projects related to 
clean and efficient energy, including energy conservation, 
that prevent, control, or reduce environmental pollutants 
or contaminants.’’. 
SEC. 147. ENERGY-EFFICIENT APPLIANCES. 
In purchasing appliances, a public housing agency 
shall purchase energy-efficient appliances that are Energy 
Star products or FEMP-designated products, as such 
terms are defined in section 553 of the National Energy 
Conservation Policy Act (as amended by this title), unless
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the purchase of energy-efficient appliances is not cost-ef-
fective to the agency. 
SEC. 148. ENERGY EFFICIENCY STANDARDS. 
Section 109 of the Cranston-Gonzalez National Af-
fordable Housing Act (42 U.S.C. 12709) is amended— 
(1) in subsection (a)— 
(A) in paragraph (1)— 
(i) by striking ‘‘1 year after the date 
of the enactment of the Energy Policy Act 
of 1992’’ and inserting ‘‘September 30, 
2004’’; 
(ii) in subparagraph (A), by striking 
‘‘and’’ at the end; 
(iii) in subparagraph (B), by striking 
the period at the end and inserting ‘‘; 
and’’; and 
(iv) by adding at the end the fol-
lowing: 
‘‘(C) rehabilitation and new construction of 
public and assisted housing funded by HOPE 
VI revitalization grants under section 24 of the 
United States Housing Act of 1937 (42 U.S.C. 
1437v), where such standards are determined 
to be cost effective by the Secretary of Housing 
and Urban Development.’’; and
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(B) in paragraph (2), by striking ‘‘Council 
of American’’ and all that follows through 
‘‘90.1–1989’)’’ and inserting ‘‘2003 Inter-
national Energy Conservation Code’’; 
(2) in subsection (b)— 
(A) by striking ‘‘within 1 year after the 
date of the enactment of the Energy Policy Act 
of 1992’’ and inserting ‘‘by September 30, 
2004’’; and 
(B) by striking ‘‘CABO’’ and all that fol-
lows through ‘‘1989’’ and inserting ‘‘the 2003 
International Energy Conservation Code’’; and 
(3) in subsection (c)— 
(A) in the heading, by striking ‘‘MODEL 
ENERGY CODE’’ and inserting ‘‘THE INTER-
NATIONAL
ENERGY
CONSERVATION
CODE’’; 
and 
(B) by striking ‘‘CABO’’ and all that fol-
lows through ‘‘1989’’ and inserting ‘‘the 2003 
International Energy Conservation Code’’. 
SEC. 149. ENERGY STRATEGY FOR HUD. 
The Secretary of Housing and Urban Development 
shall develop and implement an integrated strategy to re-
duce utility expenses through cost-effective energy con-
servation and efficiency measures and energy efficient de-
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sign and construction of public and assisted housing. The 
energy strategy shall include the development of energy 
reduction goals and incentives for public housing agencies. 
The Secretary shall submit a report to Congress, not later 
than 1 year after the date of the enactment of this Act, 
on the energy strategy and the actions taken by the De-
partment of Housing and Urban Development to monitor 
the energy usage of public housing agencies and shall sub-
mit an update every 2 years thereafter on progress in im-
plementing the strategy. 
TITLE II—RENEWABLE ENERGY 
Subtitle A—General Provisions 
SEC. 201. ASSESSMENT OF RENEWABLE ENERGY RE-
SOURCES. 
(a) RESOURCE ASSESSMENT.—Not later than 6 
months after the date of enactment of this Act, and each 
year thereafter, the Secretary of Energy shall review the 
available assessments of renewable energy resources with-
in the United States, including solar, wind, biomass, ocean 
(tidal, wave, current, and thermal), geothermal, and hy-
droelectric energy resources, and undertake new assess-
ments as necessary, taking into account changes in market 
conditions, available technologies, and other relevant fac-
tors.
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(b) CONTENTS OF REPORTS.—Not later than 1 year 
after the date of enactment of this Act, and each year 
thereafter, the Secretary shall publish a report based on 
the assessment under subsection (a). The report shall con-
tain— 
(1) a detailed inventory describing the available 
amount and characteristics of the renewable energy 
resources; and 
(2) such other information as the Secretary be-
lieves would be useful in developing such renewable 
energy resources, including descriptions of sur-
rounding terrain, population and load centers, near-
by energy infrastructure, location of energy and 
water resources, and available estimates of the costs 
needed to develop each resource, together with an 
identification of any barriers to providing adequate 
transmission for remote sources of renewable energy 
resources to current and emerging markets, rec-
ommendations for removing or addressing such bar-
riers, and ways to provide access to the grid that do 
not unfairly disadvantage renewable or other energy 
producers. 
(c) AUTHORIZATION OF APPROPRIATIONS.—For the 
purposes of this section, there are authorized to be appro-
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priated to the Secretary of Energy $10,000,000 for each 
of fiscal years 2004 through 2008. 
SEC. 202. RENEWABLE ENERGY PRODUCTION INCENTIVE. 
(a) INCENTIVE PAYMENTS.—Section 1212(a) of the 
Energy Policy Act of 1992 (42 U.S.C. 13317(a)) is 
amended by striking ‘‘and which satisfies’’ and all that 
follows through ‘‘Secretary shall establish.’’ and inserting 
‘‘. If there are insufficient appropriations to make full pay-
ments for electric production from all qualified renewable 
energy facilities in any given year, the Secretary shall as-
sign 60 percent of appropriated funds for that year to fa-
cilities that use solar, wind, geothermal, or closed-loop 
(dedicated energy crops) biomass technologies to generate 
electricity, and assign the remaining 40 percent to other 
projects. The Secretary may, after transmitting to Con-
gress an explanation of the reasons therefor, alter the per-
centage requirements of the preceding sentence.’’. 
(b) QUALIFIED RENEWABLE ENERGY FACILITY.— 
Section 1212(b) of the Energy Policy Act of 1992 (42 
U.S.C. 13317(b)) is amended— 
(1) by striking ‘‘a State or any political’’ and 
all that follows through ‘‘nonprofit electrical cooper-
ative’’ and inserting ‘‘a not-for-profit electric cooper-
ative, a public utility described in section 115 of the 
Internal Revenue Code of 1986, a State, Common-
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wealth, territory, or possession of the United States 
or the District of Columbia, or a political subdivision 
thereof, or an Indian tribal government or subdivi-
sion thereof,’’; and 
(2) by inserting ‘‘landfill gas,’’ after ‘‘wind, bio-
mass,’’. 
(c) ELIGIBILITY WINDOW.—Section 1212(c) of the 
Energy Policy Act of 1992 (42 U.S.C. 13317(c)) is 
amended by striking ‘‘during the 10-fiscal year period be-
ginning with the first full fiscal year occurring after the 
enactment of this section’’ and inserting ‘‘after October 
1, 2003, and before October 1, 2013’’. 
(d) AMOUNT OF PAYMENT.—Section 1212(e)(1) of 
the Energy Policy Act of 1992 (42 U.S.C. 13317(e)(1)) 
is amended by inserting ‘‘landfill gas,’’ after ‘‘wind, bio-
mass,’’. 
(e) SUNSET.—Section 1212(f) of the Energy Policy 
Act of 1992 (42 U.S.C. 13317(f)) is amended by striking 
‘‘the expiration of’’ and all that follows through ‘‘of this 
section’’ and inserting ‘‘September 30, 2023’’. 
(f) AUTHORIZATION OF APPROPRIATIONS.—Section 
1212(g) of the Energy Policy Act of 1992 (42 U.S.C. 
13317(g)) is amended to read as follows: 
‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—
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‘‘(1) IN GENERAL.—Subject to paragraph (2), 
there are authorized to be appropriated such sums 
as may be necessary to carry out this section for fis-
cal years 2003 through 2023. 
‘‘(2) AVAILABILITY OF FUNDS.—Funds made 
available under paragraph (1) shall remain available 
until expended.’’. 
SEC. 203. FEDERAL PURCHASE REQUIREMENT. 
(a) REQUIREMENT.—The President, acting through 
the Secretary of Energy, shall seek to ensure that, to the 
extent economically feasible and technically practicable, of 
the total amount of electric energy the Federal Govern-
ment consumes during any fiscal year, the following 
amounts shall be renewable energy: 
(1) Not less than 3 percent in fiscal years 2005 
through 2007. 
(2) Not less than 5 percent in fiscal years 2008 
through 2010. 
(3) Not less than 7.5 percent in fiscal year 
2011 and each fiscal year thereafter. 
(b) DEFINITIONS.—In this section: 
(1) BIOMASS.—The term ‘‘biomass’’ means any 
solid, nonhazardous, cellulosic material that is de-
rived from—
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(A) any of the following forest-related re-
sources: mill residues, precommercial thinnings, 
slash, and brush, or nonmerchantable material; 
(B) solid wood waste materials, including 
waste pallets, crates, dunnage, manufacturing 
and construction wood wastes (other than pres-
sure-treated, 
chemically-treated, 
or 
painted 
wood wastes), and landscape or right-of-way 
tree trimmings, but not including municipal 
solid waste (garbage), gas derived from the bio-
degradation of solid waste, or paper that is 
commonly recycled; 
(C) agriculture wastes, including orchard 
tree crops, vineyard, grain, legumes, sugar, and 
other crop by-products or residues, and live-
stock waste nutrients; or 
(D) a plant that is grown exclusively as a 
fuel for the production of electricity. 
(2) RENEWABLE ENERGY.—The term ‘‘renew-
able energy’’ means electric energy generated from 
solar, wind, biomass, landfill gas, geothermal, munic-
ipal solid waste, or new hydroelectric generation ca-
pacity achieved from increased efficiency or addi-
tions of new capacity at an existing hydroelectric 
project.
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(c) CALCULATION.—For purposes of determining 
compliance with the requirement of this section, the 
amount of renewable energy shall be doubled if— 
(1) the renewable energy is produced and used 
on-site at a Federal facility; 
(2) the renewable energy is produced on Fed-
eral lands and used at a Federal facility; or 
(3) the renewable energy is produced on Indian 
land as defined in title XXVI of the Energy Policy 
Act of 1992 (25 U.S.C. 3501 et. seq.) and used at 
a Federal facility. 
(d) REPORT.—Not later than April 15, 2005, and 
every 2 years thereafter, the Secretary of Energy shall 
provide a report to Congress on the progress of the Fed-
eral Government in meeting the goals established by this 
section. 
SEC. 204. INSULAR AREAS ENERGY SECURITY. 
Section 604 of the Act entitled ‘‘An Act to authorize 
appropriations for certain insular areas of the United 
States, and for other purposes’’, approved December 24, 
1980 (48 U.S.C. 1492), is amended— 
(1) in subsection (a)(4) by striking the period 
and inserting a semicolon; 
(2) by adding at the end of subsection (a) the 
following new paragraphs:
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‘‘(5) electric power transmission and distribu-
tion lines in insular areas are inadequate to with-
stand damage caused by the hurricanes and ty-
phoons which frequently occur in insular areas and 
such damage often costs millions of dollars to repair; 
and 
‘‘(6) the refinement of renewable energy tech-
nologies since the publication of the 1982 Territorial 
Energy Assessment prepared pursuant to subsection 
(c) reveals the need to reassess the state of energy 
production, consumption, infrastructure, reliance on 
imported energy, opportunities for energy conserva-
tion and increased energy efficiency, and indigenous 
sources in regard to the insular areas.’’; 
(3) by amending subsection (e) to read as fol-
lows: 
‘‘(e)(1) The Secretary of the Interior, in consultation 
with the Secretary of Energy and the head of government 
of each insular area, shall update the plans required under 
subsection (c) by— 
‘‘(A) updating the contents required by sub-
section (c); 
‘‘(B) drafting long-term energy plans for such 
insular areas with the objective of reducing, to the 
extent feasible, their reliance on energy imports by
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the year 2010, increasing energy conservation and 
energy efficiency, and maximizing, to the extent fea-
sible, use of indigenous energy sources; and 
‘‘(C) drafting long-term energy transmission 
line plans for such insular areas with the objective 
that the maximum percentage feasible of electric 
power transmission and distribution lines in each in-
sular area be protected from damage caused by hur-
ricanes and typhoons. 
‘‘(2) Not later than December 31, 2005, the Sec-
retary of the Interior shall submit to Congress the updated 
plans for each insular area required by this subsection.’’; 
and 
(4) by amending subsection (g)(4) to read as 
follows: 
‘‘(4) POWER
LINE
GRANTS
FOR
INSULAR 
AREAS.— 
‘‘(A) IN GENERAL.—The Secretary of the 
Interior is authorized to make grants to govern-
ments of insular areas of the United States to 
carry out eligible projects to protect electric 
power transmission and distribution lines in 
such insular areas from damage caused by hur-
ricanes and typhoons.
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‘‘(B) ELIGIBLE PROJECTS.—The Secretary 
may award grants under subparagraph (A) only 
to governments of insular areas of the United 
States that submit written project plans to the 
Secretary for projects that meet the following 
criteria: 
‘‘(i) The project is designed to protect 
electric power transmission and distribu-
tion lines located in 1 or more of the insu-
lar areas of the United States from dam-
age caused by hurricanes and typhoons. 
‘‘(ii) The project is likely to substan-
tially reduce the risk of future damage, 
hardship, loss, or suffering. 
‘‘(iii) The project addresses 1 or more 
problems that have been repetitive or that 
pose a significant risk to public health and 
safety. 
‘‘(iv) The project is not likely to cost 
more than the value of the reduction in di-
rect damage and other negative impacts 
that the project is designed to prevent or 
mitigate. The cost benefit analysis required 
by this criterion shall be computed on a 
net present value basis.
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‘‘(v) The project design has taken into 
consideration long-term changes to the 
areas and persons it is designed to protect 
and has manageable future maintenance 
and modification requirements. 
‘‘(vi) The project plan includes an 
analysis of a range of options to address 
the problem it is designed to prevent or 
mitigate and a justification for the selec-
tion of the project in light of that analysis. 
‘‘(vii) The applicant has demonstrated 
to the Secretary that the matching funds 
required by subparagraph (D) are avail-
able. 
‘‘(C) PRIORITY.—When making grants 
under this paragraph, the Secretary shall give 
priority to grants for projects which are likely 
to— 
‘‘(i) have the greatest impact on re-
ducing future disaster losses; and 
‘‘(ii) best conform with plans that 
have been approved by the Federal Govern-
ment or the government of the insular area 
where the project is to be carried out for
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development or hazard mitigation for that 
insular area. 
‘‘(D) 
MATCHING
REQUIREMENT.—The 
Federal share of the cost for a project for which 
a grant is provided under this paragraph shall 
not exceed 75 percent of the total cost of that 
project. The non-Federal share of the cost may 
be provided in the form of cash or services. 
‘‘(E) TREATMENT OF FUNDS FOR CERTAIN 
PURPOSES.—Grants provided under this para-
graph shall not be considered as income, a re-
source, or a duplicative program when deter-
mining eligibility or benefit levels for Federal 
major disaster and emergency assistance. 
‘‘(F) 
AUTHORIZATION
OF
APPROPRIA-
TIONS.—There are authorized to be appro-
priated to carry out this paragraph $5,000,000 
for each fiscal year beginning after the date of 
the enactment of this paragraph.’’. 
SEC. 205. USE OF PHOTOVOLTAIC ENERGY IN PUBLIC 
BUILDINGS. 
(a) IN GENERAL.—Subchapter VI of chapter 31 of 
title 40, United States Code, is amended by adding at the 
end the following:
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‘‘§ 3177. Use of photovoltaic energy in public build-
ings 
‘‘(a) PHOTOVOLTAIC ENERGY COMMERCIALIZATION 
PROGRAM.— 
‘‘(1) IN GENERAL.—The Administrator of Gen-
eral Services may establish a photovoltaic energy 
commercialization program for the procurement and 
installation of photovoltaic solar electric systems for 
electric production in new and existing public build-
ings. 
‘‘(2) PURPOSES.—The purposes of the program 
shall be to accomplish the following: 
‘‘(A) To accelerate the growth of a com-
mercially viable photovoltaic industry to make 
this energy system available to the general pub-
lic as an option which can reduce the national 
consumption of fossil fuel. 
‘‘(B) To reduce the fossil fuel consumption 
and costs of the Federal Government. 
‘‘(C) To attain the goal of installing solar 
energy systems in 20,000 Federal buildings by 
2010, as contained in the Federal Government’s 
Million Solar Roof Initiative of 1997. 
‘‘(D) To stimulate the general use within 
the Federal Government of life-cycle costing 
and innovative procurement methods.
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‘‘(E) To develop program performance 
data to support policy decisions on future incen-
tive programs with respect to energy. 
‘‘(3) ACQUISITION
OF
PHOTOVOLTAIC
SOLAR 
ELECTRIC SYSTEMS.— 
‘‘(A) IN
GENERAL.—The program shall 
provide for the acquisition of photovoltaic solar 
electric systems and associated storage capa-
bility for use in public buildings. 
‘‘(B) ACQUISITION LEVELS.—The acquisi-
tion of photovoltaic electric systems shall be at 
a level substantial enough to allow use of low- 
cost production techniques with at least 150 
megawatts (peak) cumulative acquired during 
the 5 years of the program. 
‘‘(4) 
ADMINISTRATION.—The 
Administrator 
shall administer the program and shall— 
‘‘(A) issue such rules and regulations as 
may be appropriate to monitor and assess the 
performance and operation of photovoltaic solar 
electric systems installed pursuant to this sub-
section; 
‘‘(B) develop innovative procurement strat-
egies for the acquisition of such systems; and
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‘‘(C) transmit to Congress an annual re-
port on the results of the program. 
‘‘(b) PHOTOVOLTAIC SYSTEMS EVALUATION PRO-
GRAM.— 
‘‘(1) IN
GENERAL.—Not later than 60 days 
after the date of enactment of this section, the Ad-
ministrator, in consultation with the Secretary of 
Energy, shall establish a photovoltaic solar energy 
systems evaluation program to evaluate such photo-
voltaic solar energy systems as are required in public 
buildings. 
‘‘(2) PROGRAM REQUIREMENT.—In evaluating 
photovoltaic solar energy systems under the pro-
gram, the Administrator shall ensure that such sys-
tems reflect the most advanced technology. 
‘‘(c) AUTHORIZATION OF APPROPRIATIONS.— 
‘‘(1) PHOTOVOLTAIC ENERGY COMMERCIALIZA-
TION PROGRAM.—There are authorized to be appro-
priated to carry out subsection (a) $50,000,000 for 
each of fiscal years 2004 through 2008. Such sums 
shall remain available until expended. 
‘‘(2) PHOTOVOLTAIC
SYSTEMS
EVALUATION 
PROGRAM.—There are authorized to be appropriated 
to carry out subsection (b) $10,000,000 for each of
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fiscal years 2004 through 2008. Such sums shall re-
main available until expended.’’. 
(b) CONFORMING AMENDMENT.—The section anal-
ysis for such chapter is amended by inserting after the 
item relating to section 3176 the following: 
‘‘3177. Use of photovoltaic energy in public buildings.’’. 
SEC. 206. GRANTS TO IMPROVE THE COMMERCIAL VALUE 
OF FOREST BIOMASS FOR ELECTRIC ENERGY, 
USEFUL HEAT, TRANSPORTATION FUELS, PE-
TROLEUM-BASED 
PRODUCT 
SUBSTITUTES, 
AND OTHER COMMERCIAL PURPOSES. 
(a) FINDINGS.—Congress finds the following: 
(1) Thousands of communities in the United 
States, many located near Federal lands, are at risk 
to wildfire. Approximately 190,000,000 acres of land 
managed by the Secretary of Agriculture and the 
Secretary of the Interior are at risk of catastrophic 
fire in the near future. The accumulation of heavy 
forest fuel loads continues to increase as a result of 
disease, insect infestations, and drought, further 
raising the risk of fire each year. 
(2) In addition, more than 70,000,000 acres 
across all land ownerships are at risk to higher than 
normal mortality over the next 15 years from insect 
infestation and disease. High levels of tree mortality 
from insects and disease result in increased fire risk,
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loss of old growth, degraded watershed conditions, 
and changes in species diversity and productivity, as 
well as diminished fish and wildlife habitat and de-
creased timber values. 
(3) Preventive treatments such as removing fuel 
loading, ladder fuels, and hazard trees, planting 
proper species mix and restoring and protecting 
early successional habitat, and other specific restora-
tion treatments designed to reduce the susceptibility 
of forest land, woodland, and rangeland to insect 
outbreaks, disease, and catastrophic fire present the 
greatest opportunity for long-term forest health by 
creating a mosaic of species-mix and age distribu-
tion. Such prevention treatments are widely acknowl-
edged to be more successful and cost effective than 
suppression treatments in the case of insects, dis-
ease, and fire. 
(4) The byproducts of preventive treatment 
(wood, brush, thinnings, chips, slash, and other haz-
ardous fuels) removed from forest lands, woodlands 
and rangelands represent an abundant supply of bio-
mass for biomass-to-energy facilities and raw mate-
rial for business. There are currently few markets 
for the extraordinary volumes of byproducts being
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generated as a result of the necessary large-scale 
preventive treatment activities. 
(5) The United States should— 
(A) promote economic and entrepreneurial 
opportunities in using byproducts removed 
through preventive treatment activities related 
to hazardous fuels reduction, disease, and insect 
infestation; and 
(B) develop and expand markets for tradi-
tionally underused wood and biomass as an out-
let for byproducts of preventive treatment ac-
tivities. 
(b) DEFINITIONS.—In this section: 
(1) BIOMASS.—The term ‘‘biomass’’ means 
trees and woody plants, including limbs, tops, nee-
dles, and other woody parts, and byproducts of pre-
ventive treatment, such as wood, brush, thinnings, 
chips, and slash, that are removed— 
(A) to reduce hazardous fuels; or 
(B) to reduce the risk of or to contain dis-
ease or insect infestation. 
(2) INDIAN TRIBE.—The term ‘‘Indian tribe’’ 
has the meaning given the term in section 4(e) of 
the Indian Self-Determination and Education Assist-
ance Act (25 U.S.C. 450b(e)).
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(3) PERSON.—The term ‘‘person’’ includes— 
(A) an individual; 
(B) a community (as determined by the 
Secretary concerned); 
(C) an Indian tribe; 
(D) a small business, micro-business, or a 
corporation that is incorporated in the United 
States; and 
(E) a nonprofit organization. 
(4) PREFERRED COMMUNITY.—The term ‘‘pre-
ferred community’’ means— 
(A) any town, township, municipality, or 
other similar unit of local government (as deter-
mined by the Secretary concerned) that— 
(i) has a population of not more than 
50,000 individuals; and 
(ii) the Secretary concerned, in the 
sole discretion of the Secretary concerned, 
determines contains or is located near 
land, the condition of which is at signifi-
cant risk of catastrophic wildfire, disease, 
or insect infestation or which suffers from 
disease or insect infestation; or 
(B) any county that—
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(i) is not contained within a metro-
politan statistical area; and 
(ii) the Secretary concerned, in the 
sole discretion of the Secretary concerned, 
determines contains or is located near 
land, the condition of which is at signifi-
cant risk of catastrophic wildfire, disease, 
or insect infestation or which suffers from 
disease or insect infestation. 
(5) SECRETARY CONCERNED.—The term ‘‘Sec-
retary concerned’’ means— 
(A) the Secretary of Agriculture with re-
spect to National Forest System lands; and 
(B) the Secretary of the Interior with re-
spect to Federal lands under the jurisdiction of 
the Secretary of the Interior and Indian lands. 
(c) BIOMASS COMMERCIAL USE GRANT PROGRAM.— 
(1) IN
GENERAL.—The Secretary concerned 
may make grants to any person that owns or oper-
ates a facility that uses biomass as a raw material 
to produce electric energy, sensible heat, transpor-
tation fuels, or substitutes for petroleum-based prod-
ucts to offset the costs incurred to purchase biomass 
for use by such facility.
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(2) GRANT AMOUNTS.—A grant under this sub-
section may not exceed $20 per green ton of biomass 
delivered. 
(3) MONITORING OF GRANT RECIPIENT ACTIVI-
TIES.—As a condition of a grant under this sub-
section, the grant recipient shall keep such records 
as the Secretary concerned may require to fully and 
correctly disclose the use of the grant funds and all 
transactions involved in the purchase of biomass. 
Upon notice by a representative of the Secretary 
concerned, the grant recipient shall afford the rep-
resentative reasonable access to the facility that pur-
chases or uses biomass and an opportunity to exam-
ine the inventory and records of the facility. 
(d) IMPROVED BIOMASS USE GRANT PROGRAM.— 
(1) IN
GENERAL.—The Secretary concerned 
may make grants to persons to offset the cost of 
projects to develop or research opportunities to im-
prove the use of, or add value to, biomass. In mak-
ing such grants, the Secretary concerned shall give 
preference to persons in preferred communities. 
(2) SELECTION.—The Secretary concerned shall 
select a grant recipient under paragraph (1) after 
giving consideration to the anticipated public bene-
fits of the project, including the potential to develop
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thermal or electric energy resources or affordable en-
ergy, opportunities for the creation or expansion of 
small businesses and micro-businesses, and the po-
tential for new job creation. 
(3) GRANT AMOUNT.—A grant under this sub-
section may not exceed $500,000. 
(e) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated $50,000,000 for each 
of the fiscal years 2004 through 2014 to carry out this 
section. 
(f) REPORT.—Not later than October 1, 2010, the 
Secretary of Agriculture, in consultation with the Sec-
retary of the Interior, shall submit to the Committee on 
Energy and Natural Resources and the Committee on Ag-
riculture, Nutrition, and Forestry of the Senate and the 
Committee on Resources, the Committee on Energy and 
Commerce, and the Committee on Agriculture of the 
House of Representatives a report describing the results 
of the grant programs authorized by this section. The re-
port shall include the following: 
(1) An identification of the size, type, and the 
use of biomass by persons that receive grants under 
this section.
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(2) The distance between the land from which 
the biomass was removed and the facility that used 
the biomass. 
(3) The economic impacts, particularly new job 
creation, resulting from the grants to and operation 
of the eligible operations. 
SEC. 207. BIOBASED PRODUCTS. 
Section 9002(c)(1) of the Farm Security and Rural 
Investment Act of 2002 (7 U.S.C. 8102(c)(1)) is amended 
by inserting ‘‘or such items that comply with the regula-
tions issued under section 103 of Public Law 100–556 (42 
U.S.C. 6914b–1)’’ after ‘‘practicable’’. 
Subtitle B—Geothermal Energy 
SEC. 211. SHORT TITLE. 
This subtitle may be cited as the ‘‘John Rishel Geo-
thermal Steam Act Amendments of 2004’’. 
SEC. 212. COMPETITIVE LEASE SALE REQUIREMENTS. 
Section 4 of the Geothermal Steam Act of 1970 (30 
U.S.C. 1003) is amended to read as follows: 
‘‘SEC. 4. LEASING PROCEDURES. 
‘‘(a) NOMINATIONS.—The Secretary shall accept 
nominations of lands to be leased at any time from quali-
fied companies and individuals under this Act. 
‘‘(b) COMPETITIVE LEASE SALE REQUIRED.—The 
Secretary shall hold a competitive lease sale at least once
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every 2 years for lands in a State which has nominations 
pending under subsection (a) if such lands are otherwise 
available for leasing. 
‘‘(c) NONCOMPETITIVE
LEASING.—The Secretary 
shall make available for a period of 2 years for non-
competitive leasing any tract for which a competitive lease 
sale is held, but for which the Secretary does not receive 
any bids in a competitive lease sale. 
‘‘(d) LEASES SOLD AS A BLOCK.—If information is 
available to the Secretary indicating a geothermal resource 
that could be produced as 1 unit can reasonably be ex-
pected to underlie more than 1 parcel to be offered in a 
competitive lease sale, the parcels for such a resource may 
be offered for bidding as a block in the competitive lease 
sale. 
‘‘(e) PENDING LEASE APPLICATIONS ON APRIL 1, 
2003.—It shall be a priority for the Secretary of the Inte-
rior, and for the Secretary of Agriculture with respect to 
National Forest Systems lands, to ensure timely comple-
tion of administrative actions necessary to process applica-
tions for geothermal leasing pending on April 1, 2003. 
Such an application, and any lease issued pursuant to 
such an application—
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‘‘(1) except as provided in paragraph (2), shall 
be subject to this section as in effect on April 1, 
2003; or 
‘‘(2) at the election of the applicant, shall be 
subject to this section as in effect on the effective 
date of this paragraph.’’. 
SEC. 213. DIRECT USE. 
(a) FEES FOR DIRECT USE.—Section 5 of the Geo-
thermal Steam Act of 1970 (30 U.S.C. 1004) is amend-
ed— 
(1) in paragraph (c) by redesignating subpara-
graphs (1) and (2) as subparagraphs (A) and (B); 
(2) by redesignating paragraphs (a) through (d) 
in order as paragraphs (1) through (4); 
(3) by inserting ‘‘(a) IN GENERAL.—’’ after 
‘‘SEC. 5.’’; and 
(4) by adding at the end the following: 
‘‘(b) DIRECT
USE.—Notwithstanding subsection 
(a)(1), with respect to the direct use of geothermal re-
sources for purposes other than the commercial generation 
of electricity, the Secretary of the Interior shall establish 
a schedule of fees and collect fees pursuant to such a 
schedule in lieu of royalties based upon the total amount 
of the geothermal resources used. The schedule of fees 
shall ensure that there is a fair return to the public for
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the use of a geothermal resource based upon comparable 
fees charged for direct use of geothermal resources by 
States or private persons. For direct use by a State or 
local government for public purposes there shall be no roy-
alty and the fee charged shall be nominal. Leases in exist-
ence on the date of enactment of the Energy Policy Act 
of 2003 shall be modified in order to reflect the provisions 
of this subsection.’’. 
(b) LEASING FOR DIRECT USE.—Section 4 of the 
Geothermal Steam Act of 1970 (30 U.S.C. 1003) is fur-
ther amended by adding at the end the following: 
‘‘(f) LEASING FOR DIRECT USE OF GEOTHERMAL 
RESOURCES.—Lands leased under this Act exclusively for 
direct use of geothermal resources shall be leased to any 
qualified applicant who first applies for such a lease under 
regulations issued by the Secretary, if— 
‘‘(1) the Secretary publishes a notice of the 
lands proposed for leasing 60 days before the date 
of the issuance of the lease; and 
‘‘(2) the Secretary does not receive in the 60- 
day period beginning on the date of such publication 
any nomination to include the lands concerned in the 
next competitive lease sale. 
‘‘(g) AREA SUBJECT TO LEASE FOR DIRECT USE.— 
A geothermal lease for the direct use of geothermal re-
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sources shall embrace not more than the amount of acre-
age determined by the Secretary to be reasonably nec-
essary for such proposed utilization.’’. 
(c) EXISTING LEASES WITH A DIRECT USE FACIL-
ITY.— 
(1) APPLICATION
TO
CONVERT.—Any lessee 
under a lease under the Geothermal Steam Act of 
1970 that was issued before the date of the enact-
ment of this Act may apply to the Secretary of the 
Interior, by not later than 18 months after the date 
of the enactment of this Act, to convert such lease 
to a lease for direct utilization of geothermal re-
sources in accordance with the amendments made by 
this section. 
(2) CONVERSION.—The Secretary shall approve 
such an application and convert such a lease to a 
lease in accordance with the amendments by not 
later than 180 days after receipt of such application, 
unless the Secretary determines that the applicant is 
not a qualified applicant with respect to the lease. 
(3) APPLICATION OF NEW LEASE TERMS.—The 
amendment made by subsection (a)(4) shall apply 
with respect to payments under a lease converted 
under this subsection that are due and owing to the 
United States on or after July 16, 2003.
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SEC. 214. ROYALTIES AND NEAR-TERM PRODUCTION IN-
CENTIVES. 
(a) ROYALTY.—Section 5 of the Geothermal Steam 
Act of 1970 (30 U.S.C. 1004) is further amended— 
(1) in subsection (a) by striking paragraph (1) 
and inserting the following: 
‘‘(1) a royalty on electricity produced using geo-
thermal steam and associated geothermal resources, 
other than direct use of geothermal resources, that 
shall be— 
‘‘(A) not less than 1 percent and not more 
than 2.5 percent of the gross proceeds from the 
sale of electricity produced from such resources 
during the first 10 years of production under 
the lease; and 
‘‘(B) not less than 2 and not more than 5 
percent of the gross proceeds from the sale of 
electricity produced from such resources during 
each year after such 10-year period;’’; and 
(2) by adding at the end the following: 
‘‘(c) FINAL REGULATION ESTABLISHING ROYALTY 
RATES.—In issuing any final regulation establishing roy-
alty rates under this section, the Secretary shall seek— 
‘‘(1) to provide lessees a simplified administra-
tive system; 
‘‘(2) to encourage new development; and
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‘‘(3) to achieve the same long-term level of roy-
alty revenues to States and counties as the regula-
tion in effect on the date of enactment of this sub-
section. 
‘‘(d) CREDITS FOR IN-KIND PAYMENTS OF ELEC-
TRICITY.—The Secretary may provide to a lessee a credit 
against royalties owed under this Act, in an amount equal 
to the value of electricity provided under contract to a 
State or county government that is entitled to a portion 
of such royalties under section 20 of this Act, section 35 
of the Mineral Leasing Act (30 U.S.C. 191), or section 
6 of the Mineral Leasing Act for Acquired Lands (30 
U.S.C. 355), if— 
‘‘(1) the Secretary has approved in advance the 
contract between the lessee and the State or county 
government for such in-kind payments; 
‘‘(2) the contract establishes a specific method-
ology to determine the value of such credits; and 
‘‘(3) the maximum credit will be equal to the 
royalty value owed to the State or county that is a 
party to the contract and the electricity received will 
serve as the royalty payment from the Federal Gov-
ernment to that entity.’’. 
(b) DISPOSAL OF MONEYS FROM SALES, BONUSES, 
ROYALTIES, AND RENTALS.—Section 20 of the Geo-
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thermal Steam Act of 1970 (30 U.S.C. 1019) is amended 
to read as follows: 
‘‘SEC. 20. DISPOSAL OF MONEYS FROM SALES, BONUSES, 
RENTALS, AND ROYALTIES. 
‘‘(a) IN GENERAL.—Except with respect to lands in 
the State of Alaska, all monies received by the United 
States from sales, bonuses, rentals, and royalties under 
this Act shall be paid into the Treasury of the United 
States. Of amounts deposited under this subsection, sub-
ject to the provisions of section 35 of the Mineral Leasing 
Act (30 U.S.C. 191(b)) and section 5(a)(2) of this Act— 
‘‘(1) 50 percent shall be paid to the State with-
in the boundaries of which the leased lands or geo-
thermal resources are or were located; and 
‘‘(2) 25 percent shall be paid to the County 
within the boundaries of which the leased lands or 
geothermal resources are or were located. 
‘‘(b) USE OF PAYMENTS.—Amounts paid to a State 
or county under subsection (a) shall be used consistent 
with the terms of section 35 of the Mineral Leasing Act 
(30 U.S.C. 191).’’. 
(c) NEAR-TERM PRODUCTION INCENTIVE FOR EX-
ISTING LEASES.— 
(1) IN
GENERAL.—Notwithstanding section 
5(a) of the Geothermal Steam Act of 1970, the roy-
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alty required to be paid shall be 50 percent of the 
amount of the royalty otherwise required, on any 
lease issued before the date of enactment of this Act 
that does not convert to new royalty terms under 
subsection (e)— 
(A) with respect to commercial production 
of energy from a facility that begins such pro-
duction in the 6-year period beginning on the 
date of the enactment of this Act; or 
(B) on qualified expansion geothermal en-
ergy. 
(2) 4-YEAR APPLICATION.—Paragraph (1) ap-
plies only to new commercial production of energy 
from a facility in the first 4 years of such produc-
tion. 
(d) DEFINITION OF QUALIFIED EXPANSION GEO-
THERMAL ENERGY.—In this section, the term ‘‘qualified 
expansion geothermal energy’’ means geothermal energy 
produced from a generation facility for which— 
(1) the production is increased by more than 10 
percent as a result of expansion of the facility car-
ried out in the 6-year period beginning on the date 
of the enactment of this Act; and 
(2) such production increase is greater than 10 
percent of the average production by the facility dur-
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ing the 5-year period preceding the expansion of the 
facility. 
(e) ROYALTY UNDER EXISTING LEASES.— 
(1) IN
GENERAL.—Any lessee under a lease 
issued under the Geothermal Steam Act of 1970 be-
fore the date of the enactment of this Act may mod-
ify the terms of the lease relating to payment of roy-
alties to comply with the amendment made by sub-
section (a), by applying to the Secretary of the Inte-
rior by not later than 18 months after the date of 
the enactment of this Act. 
(2) APPLICATION
OF
MODIFICATION.—Such 
modification shall apply to any use of geothermal 
steam and any associated geothermal resources to 
which the amendment applies that occurs after the 
date of that application. 
(3) CONSULTATION.—The Secretary— 
(A) shall consult with the State and local 
governments affected by any proposed changes 
in lease royalty terms under this subsection; 
and 
(B) may establish a gross proceeds per-
centage within the range specified in the 
amendment made by subsection (a)(1) and with 
the concurrence of the lessee and the State.
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SEC. 215. GEOTHERMAL LEASING AND PERMITTING ON 
FEDERAL LANDS. 
(a) IN GENERAL.—Not later than 180 days after the 
date of the enactment of this section, the Secretary of the 
Interior and the Secretary of Agriculture shall enter into 
and submit to Congress a memorandum of understanding 
in accordance with this section regarding leasing and per-
mitting for geothermal development of public lands and 
National Forest System lands under their respective juris-
dictions. 
(b) LEASE AND PERMIT APPLICATIONS.—The memo-
randum of understanding shall— 
(1) identify areas with geothermal potential on 
lands included in the National Forest System and, 
when necessary, require review of management plans 
to consider leasing under the Geothermal Steam Act 
of 1970 (30 U.S.C. 1001 et seq.) as a land use; and 
(2) establish an administrative procedure for 
processing geothermal lease applications, including 
lines of authority, steps in application processing, 
and time limits for application procession. 
(c) DATA RETRIEVAL SYSTEM.—The memorandum 
of understanding shall establish a joint data retrieval sys-
tem that is capable of tracking lease and permit applica-
tions and providing to the applicant information as to 
their status within the Departments of the Interior and
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Agriculture, including an estimate of the time required for 
administrative action. 
SEC. 216. REVIEW AND REPORT TO CONGRESS. 
The Secretary of the Interior shall promptly review 
and report to Congress not later than 3 years after the 
date of the enactment of this Act regarding the status of 
all withdrawals from leasing under the Geothermal Steam 
Act of 1970 (30 U.S.C. 1001 et seq.) of Federal lands, 
specifying for each such area whether the basis for such 
withdrawal still applies. 
SEC. 217. REIMBURSEMENT FOR COSTS OF NEPA ANAL-
YSES, DOCUMENTATION, AND STUDIES. 
(a) IN GENERAL.—The Geothermal Steam Act of 
1970 (30 U.S.C. 1001 et seq.) is amended by adding at 
the end the following: 
‘‘SEC. 30. REIMBURSEMENT FOR COSTS OF CERTAIN ANAL-
YSES, DOCUMENTATION, AND STUDIES. 
‘‘(a) IN GENERAL.—The Secretary of the Interior 
may reimburse a person that is a lessee, operator, oper-
ating rights owner, or applicant for any lease under this 
Act for reasonable amounts paid by the person for prepa-
ration for the Secretary by a contractor or other person 
selected by the Secretary of any project-level analysis, doc-
umentation, or related study required pursuant to the Na-
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tional Environmental Policy Act of 1969 (42 U.S.C. 4321 
et seq.) with respect to the lease. 
‘‘(b) CONDITIONS.—The Secretary may provide reim-
bursement under subsection (a) only if— 
‘‘(1) adequate funding to enable the Secretary 
to timely prepare the analysis, documentation, or re-
lated study is not appropriated; 
‘‘(2) the person paid the costs voluntarily; 
‘‘(3) the person maintains records of its costs 
in accordance with regulations issued by the Sec-
retary; 
‘‘(4) the reimbursement is in the form of a re-
duction in the Federal share of the royalty required 
to be paid for the lease for which the analysis, docu-
mentation, or related study is conducted, and is 
agreed to by the Secretary and the person reim-
bursed prior to commencing the analysis, docu-
mentation, or related study; and 
‘‘(5) the agreement required under paragraph 
(4) contains provisions— 
‘‘(A) reducing royalties owed on lease pro-
duction based on market prices; 
‘‘(B) stipulating an automatic termination 
of the royalty reduction upon recovery of docu-
mented costs; and
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‘‘(C) providing a process by which the les-
see may seek reimbursement for circumstances 
in which production from the specified lease is 
not possible.’’. 
(b) APPLICATION.—The amendment made by this 
section shall apply with respect to an analysis, documenta-
tion, or a related study conducted on or after the date 
of enactment of this Act for any lease entered into before, 
on, or after the date of enactment of this Act. 
(c) DEADLINE FOR REGULATIONS.—The Secretary 
shall issue regulations implementing the amendment made 
by this section by not later than 1 year after the date 
of enactment of this Act. 
SEC. 218. ASSESSMENT OF GEOTHERMAL ENERGY POTEN-
TIAL. 
The Secretary of Interior, acting through the Direc-
tor of the United States Geological Survey and in coopera-
tion with the States, shall update the 1978 Assessment 
of Geothermal Resources, and submit that updated assess-
ment to Congress— 
(1) not later than 3 years after the date of en-
actment of this Act; and 
(2) thereafter as the availability of data and de-
velopments in technology warrant.
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SEC. 219. COOPERATIVE OR UNIT PLANS. 
Section 18 of the Geothermal Steam Act of 1970 (30 
U.S.C. 1017) is amended to read as follows: 
‘‘SEC. 18. UNIT AND COMMUNITIZATION AGREEMENTS. 
‘‘(a) ADOPTION OF UNITS BY LESSEES.— 
‘‘(1) IN GENERAL.—For the purpose of more 
properly conserving the natural resources of any 
geothermal reservoir, field, or like area, or any part 
thereof (whether or not any part of the geothermal 
field, or like area, is then subject to any Unit Agree-
ment (cooperative plan of development or oper-
ation)), lessees thereof and their representatives may 
unite with each other, or jointly or separately with 
others, in collectively adopting and operating under 
a Unit Agreement for such field, or like area, or any 
part thereof including direct use resources, if deter-
mined and certified by the Secretary to be necessary 
or advisable in the public interest. A majority inter-
est of owners of any single lease shall have the au-
thority to commit that lease to a Unit Agreement. 
The Secretary of the Interior may also initiate the 
formation of a Unit Agreement if in the public inter-
est. 
‘‘(2) MODIFICATION OF LEASE REQUIREMENTS 
BY SECRETARY.—The Secretary may, in the discre-
tion of the Secretary, and with the consent of the
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holders of leases involved, establish, alter, change, or 
revoke rates of operations (including drilling, oper-
ations, production, and other requirements) of such 
leases and make conditions with reference to such 
leases, with the consent of the lessees, in connection 
with the creation and operation of any such Unit 
Agreement as the Secretary may deem necessary or 
proper to secure the proper protection of the public 
interest. Leases with unlike lease terms or royalty 
rates do not need to be modified to be in the same 
unit. 
‘‘(b) REQUIREMENT
OF
PLANS
UNDER
NEW 
LEASES.—The Secretary— 
‘‘(1) may provide that geothermal leases issued 
under this Act shall contain a provision requiring 
the lessee to operate under such a reasonable Unit 
Agreement; and 
‘‘(2) may prescribe such an Agreement under 
which such lessee shall operate, which shall ade-
quately protect the rights of all parties in interest, 
including the United States. 
‘‘(c) MODIFICATION OF RATE OF PROSPECTING, DE-
VELOPMENT, AND PRODUCTION.—The Secretary may re-
quire that any Agreement authorized by this section that 
applies to lands owned by the United States contain a pro-
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vision under which authority is vested in the Secretary, 
or any person, committee, or State or Federal officer or 
agency as may be designated in the Agreement to alter 
or modify from time to time the rate of prospecting and 
development and the quantity and rate of production 
under such an Agreement. 
‘‘(d) EXCLUSION FROM DETERMINATION OF HOLD-
ING OR CONTROL.—Any lands that are subject to any 
Agreement approved or prescribed by the Secretary under 
this section shall not be considered in determining hold-
ings or control under any provision of this Act. 
‘‘(e) POOLING
OF CERTAIN LANDS.—If separate 
tracts of lands cannot be independently developed and op-
erated to use geothermal steam and associated geothermal 
resources pursuant to any section of this Act— 
‘‘(1) such lands, or a portion thereof, may be 
pooled with other lands, whether or not owned by 
the United States, for purposes of development and 
operation under a Communitization Agreement pro-
viding for an apportionment of production or royal-
ties among the separate tracts of land comprising 
the production unit, if such pooling is determined by 
the Secretary to be in the public interest; and 
‘‘(2) operation or production pursuant to such 
an Agreement shall be treated as operation or pro-
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duction with respect to each tract of land that is 
subject to the agreement. 
‘‘(f) UNIT AGREEMENT REVIEW.—No more than 5 
years after approval of any cooperative or Unit Agreement 
and at least every 5 years thereafter, the Secretary shall 
review each such Agreement and, after notice and oppor-
tunity for comment, eliminate from inclusion in such 
Agreement any lands that the Secretary determines are 
not reasonably necessary for Unit operations under the 
Agreement. Such elimination shall be based on scientific 
evidence, and shall occur only if it is determined by the 
Secretary to be for the purpose of conserving and properly 
managing the geothermal resource. Any land so eliminated 
shall be eligible for an extension under subsection (g) of 
section 6 if it meets the requirements for such an exten-
sion. 
‘‘(g) DRILLING
OR DEVELOPMENT CONTRACTS.— 
The Secretary may, on such conditions as the Secretary 
may prescribe, approve drilling or development contracts 
made by 1 or more lessees of geothermal leases, with 1 
or more persons, associations, or corporations if, in the 
discretion of the Secretary, the conservation of natural re-
sources or the public convenience or necessity may require 
or the interests of the United States may be best served 
thereby. All leases operated under such approved drilling
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or development contracts, and interests thereunder, shall 
be excepted in determining holdings or control under sec-
tion 7. 
‘‘(h) COORDINATION WITH STATE GOVERNMENTS.— 
The Secretary shall coordinate unitization and pooling ac-
tivities with the appropriate State agencies and shall en-
sure that State leases included in any unitization or pool-
ing arrangement are treated equally with Federal leases.’’. 
SEC. 220. ROYALTY ON BYPRODUCTS. 
Section 5 of the Geothermal Steam Act of 1970 (30 
U.S.C. 1004) is further amended in subsection (a) by 
striking paragraph (2) and inserting the following: 
‘‘(2) a royalty on any byproduct that is a min-
eral named in the first section of the Mineral Leas-
ing Act (30 U.S.C. 181), and that is derived from 
production under the lease, at the rate of the royalty 
that applies under that Act to production of such 
mineral under a lease under that Act;’’. 
SEC. 221. REPEAL OF AUTHORITIES OF SECRETARY TO RE-
ADJUST TERMS, CONDITIONS, RENTALS, AND 
ROYALTIES. 
Section 8 of the Geothermal Steam Act of 1970 (30 
U.S.C. 1007) is amended by repealing subsection (b), and 
by redesignating subsection (c) as subsection (b).
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SEC. 222. CREDITING OF RENTAL TOWARD ROYALTY. 
Section 5 of the Geothermal Steam Act of 1970 (30 
U.S.C. 1004) is further amended— 
(1) in subsection (a)(2) by inserting ‘‘and’’ 
after the semicolon at the end; 
(2) in subsection (a)(3) by striking ‘‘; and’’ and 
inserting a period; 
(3) by striking paragraph (4) of subsection (a); 
and 
(4) by adding at the end the following: 
‘‘(e) CREDITING OF RENTAL TOWARD ROYALTY.— 
Any annual rental under this section that is paid with re-
spect to a lease before the first day of the year for which 
the annual rental is owed shall be credited to the amount 
of royalty that is required to be paid under the lease for 
that year.’’. 
SEC. 223. LEASE DURATION AND WORK COMMITMENT RE-
QUIREMENTS. 
Section 6 of the Geothermal Steam Act of 1970 (30 
U.S.C. 1005) is amended— 
(1) by striking so much as precedes subsection 
(c), and striking subsections (e), (g), (h), (i), and 
(j); 
(2) by redesignating subsections (c), (d), and 
(f) in order as subsections (g), (h), and (i); and
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(3) by inserting before subsection (g), as so re-
designated, the following: 
‘‘SEC. 6. LEASE TERM AND WORK COMMITMENT REQUIRE-
MENTS. 
‘‘(a) IN GENERAL.— 
‘‘(1) PRIMARY TERM.—A geothermal lease shall 
be for a primary term of 10 years. 
‘‘(2) INITIAL EXTENSION.—The Secretary shall 
extend the primary term of a geothermal lease for 
5 years if, for each year after the fifth year of the 
lease— 
‘‘(A) the Secretary determined under sub-
section (c) that the lessee satisfied the work 
commitment requirements that applied to the 
lease for that year; or 
‘‘(B) the lessee paid in accordance with 
subsection (d) the value of any work that was 
not completed in accordance with those require-
ments. 
‘‘(3) ADDITIONAL EXTENSION.—The Secretary 
shall extend the primary term of a geothermal lease 
(after an initial extension under paragraph (2)) for 
an additional 5 years if, for each year of the initial 
extension under paragraph (2), the Secretary deter-
mined under subsection (c) that the lessee satisfied
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the work commitment requirements that applied to 
the lease for that year. 
‘‘(b) REQUIREMENT
TO SATISFY ANNUAL WORK 
COMMITMENT REQUIREMENT.— 
‘‘(1) IN GENERAL.—The lessee for a geothermal 
lease shall, for each year after the fifth year of the 
lease, satisfy work commitment requirements pre-
scribed by the Secretary that apply to the lease for 
that year. 
‘‘(2) PRESCRIPTION OF WORK COMMITMENT RE-
QUIREMENTS.—The Secretary shall issue regulations 
prescribing minimum equivalent dollar value work 
commitment requirements for geothermal leases, 
that— 
‘‘(A) require that a lessee, in each year 
after the fifth year of the primary term of a 
geothermal lease, diligently work to achieve 
commercial production or utilization of steam 
under the lease; 
‘‘(B) require that in each year to which 
work commitment requirements under the regu-
lations apply, the lessee shall significantly re-
duce the amount of work that remains to be 
done to achieve such production or utilization;
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‘‘(C) describe specific work that must be 
completed by a lessee by the end of each year 
to which the work commitment requirements 
apply and factors, such as force majeure events, 
that suspend or modify the work commitment 
obligation; 
‘‘(D) carry forward and apply to work 
commitment requirements for a year, work 
completed in any year in the preceding 3-year 
period that was in excess of the work required 
to be performed in that preceding year; 
‘‘(E) establish transition rules for leases 
issued before the date of the enactment of this 
subsection, including terms under which a lease 
that is near the end of its term on the date of 
enactment of this subsection may be extended 
for up to 2 years— 
‘‘(i) to allow achievement of produc-
tion under the lease; or 
‘‘(ii) to allow the lease to be included 
in a producing unit; and 
‘‘(F) establish an annual payment that, at 
the option of the lessee, may be exercised in lieu 
of meeting any work requirement for a limited 
number of years that the Secretary determines
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will not impair achieving diligent development 
of the geothermal resource. 
‘‘(3) TERMINATION
OF
APPLICATION
OF
RE-
QUIREMENTS.—Work commitment requirements pre-
scribed under this subsection shall not apply to a 
geothermal lease after the date on which geothermal 
steam is produced or utilized under the lease in com-
mercial quantities. 
‘‘(c) DETERMINATION OF WHETHER REQUIREMENTS 
SATISFIED.—The Secretary shall, by not later than 90 
days after the end of each year for which work commit-
ment requirements under subsection (b) apply to a geo-
thermal lease— 
‘‘(1) determine whether the lessee has satisfied 
the requirements that apply for that year; 
‘‘(2) notify the lessee of that determination; and 
‘‘(3) in the case of a notification that the lessee 
did not satisfy work commitment requirements for 
the year, include in the notification— 
‘‘(A) a description of the specific work that 
was not completed by the lessee in accordance 
with the requirements; and 
‘‘(B) the amount of the dollar value of 
such work that was not completed, reduced by 
the amount of expenditures made for work com-
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pleted in a prior year that is carried forward 
pursuant to subsection (b)(2)(D). 
‘‘(d) PAYMENT
OF
VALUE
OF
UNCOMPLETED 
WORK.— 
‘‘(1) IN GENERAL.—If the Secretary notifies a 
lessee that the lessee failed to satisfy work commit-
ment requirements under subsection (b), the lessee 
shall pay to the Secretary, by not later than the end 
of the 60-day period beginning on the date of the 
notification, the dollar value of work that was not 
completed by the lessee, in the amount stated in the 
notification (as reduced under subsection (c)(3)(B)). 
‘‘(2) 
FAILURE
TO
PAY
VALUE
OF 
UNCOMPLETED WORK.—If a lessee fails to pay such 
amount to the Secretary before the end of that pe-
riod, the lease shall terminate upon the expiration of 
the period. 
‘‘(e) CONTINUATION AFTER COMMERCIAL PRODUC-
TION OR UTILIZATION.—If geothermal steam is produced 
or utilized in commercial quantities within the primary 
term of the lease under subsection (a) (including any ex-
tension of the lease under subsection (a)), such lease shall 
continue until the date on which geothermal steam is no 
longer produced or utilized in commercial quantities.
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‘‘(f) CONVERSION OF GEOTHERMAL LEASE TO MIN-
ERAL LEASE.—The lessee under a lease that has produced 
geothermal steam for electrical generation, has been deter-
mined by the Secretary to be incapable of any further com-
mercial production or utilization of geothermal steam, and 
that is producing any valuable byproduct in payable quan-
tities may, within 6 months after such determination— 
‘‘(1) convert the lease to a mineral lease under 
the Mineral Leasing Act (30 U.S.C. 181 et seq.) or 
under the Mineral Leasing Act for Acquired Lands 
(30 U.S.C. 351 et seq.), if the lands that are subject 
to the lease can be leased under that Act for the 
production of such byproduct; or 
‘‘(2) convert the lease to a mining claim under 
the general mining laws, if the byproduct is a 
locatable mineral.’’. 
SEC. 224. ADVANCED ROYALTIES REQUIRED FOR SUSPEN-
SION OF PRODUCTION. 
Section 5 of the Geothermal Steam Act of 1970 (30 
U.S.C. 1004) is further amended by adding at the end 
the following: 
‘‘(f) ADVANCED ROYALTIES REQUIRED FOR SUSPEN-
SION OF PRODUCTION.— 
‘‘(1) CONTINUATION
OF
LEASE
FOLLOWING 
CESSATION OF PRODUCTION.—If, at any time after
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commercial production under a lease is achieved, 
production ceases for any cause the lease shall re-
main in full force and effect— 
‘‘(A) during the 1-year period beginning on 
the date production ceases; and 
‘‘(B) after such period if, and so long as, 
the lessee commences and continues diligently 
and in good faith until such production is re-
sumed the steps, operations, or procedures nec-
essary to cause a resumption of such produc-
tion. 
‘‘(2) If production of heat or energy under a 
geothermal lease is suspended after the date of any 
such production for which royalty is required under 
subsection (a) and the terms of paragraph (1) are 
not met, the Secretary shall require the lessee, until 
the end of such suspension, to pay royalty in ad-
vance at the monthly pro-rata rate of the average 
annual rate at which such royalty was paid each 
year in the 5-year-period preceding the date of sus-
pension. 
‘‘(3) Paragraph (2) shall not apply if the sus-
pension is required or otherwise caused by the Sec-
retary, the Secretary of a military department, a 
State or local government, or a force majeure.’’.
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SEC. 225. ANNUAL RENTAL. 
(a) ANNUAL RENTAL RATE.—Section 5 of the Geo-
thermal Steam Act of 1970 (30 U.S.C. 1004) is further 
amended in subsection (a) in paragraph (3) by striking 
‘‘$1 per acre or fraction thereof for each year of the lease’’ 
and all that follows through the end of the paragraph and 
inserting ‘‘$1 per acre or fraction thereof for each year 
of the lease through the tenth year in the case of a lease 
awarded in a noncompetitive lease sale; or $2 per acre or 
fraction thereof for the first year, $3 per acre or fraction 
thereof for each of the second through tenth years, in the 
case of a lease awarded in a competitive lease sale; and 
$5 per acre or fraction thereof for each year after the 10th 
year thereof for all leases.’’. 
(b) TERMINATION OF LEASE FOR FAILURE TO PAY 
RENTAL.—Section 5 of the Geothermal Steam Act of 
1970 (30 U.S.C. 1004) is further amended by adding at 
the end the following: 
‘‘(g) TERMINATION OF LEASE FOR FAILURE TO PAY 
RENTAL.— 
‘‘(1) IN GENERAL.—The Secretary shall termi-
nate any lease with respect to which rental is not 
paid in accordance with this Act and the terms of 
the lease under which the rental is required, upon 
the expiration of the 45-day period beginning on the 
date of the failure to pay such rental.
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‘‘(2) 
NOTIFICATION.—The 
Secretary 
shall 
promptly notify a lessee that has not paid rental re-
quired under the lease that the lease will be termi-
nated at the end of the period referred to in para-
graph (1). 
‘‘(3) REINSTATEMENT.—A lease that would 
otherwise terminate under paragraph (1) shall not 
terminate under that paragraph if the lessee pays to 
the Secretary, before the end of the period referred 
to in paragraph (1), the amount of rental due plus 
a late fee equal to 10 percent of such amount.’’. 
SEC. 226. LEASING AND PERMITTING ON FEDERAL LANDS 
WITHDRAWN FOR MILITARY PURPOSES. 
Not later than 2 years after the date of enactment 
of this Act, the Secretary of the Interior and the Secretary 
of Defense, in consultation with each military service and 
with interested States, counties, representatives of the 
geothermal industry, and other persons, shall submit to 
Congress a joint report concerning leasing and permitting 
activities for geothermal energy on Federal lands with-
drawn for military purposes. Such report shall include the 
following: 
(1) A description of the Military Geothermal 
Program, including any differences between it and 
the non-Military Geothermal Program, including re-
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quired security procedures, and operational consider-
ations, and discussions as to the differences, and 
why they are important. Further, the report shall 
describe revenues or energy provided to the Depart-
ment of Defense and its facilities, royalty structures, 
where applicable, and any revenue sharing with 
States and counties or other benefits between— 
(A) the implementation of the Geothermal 
Steam Act of 1970 (30 U.S.C 1001 et seq.) and 
other applicable Federal law by the Secretary of 
the Interior; and 
(B) the administration of geothermal leas-
ing under section 2689 of title 10, United 
States Code, by the Secretary of Defense. 
(2) If appropriate, a description of the current 
methods and procedures used to ensure interagency 
coordination, where needed, in developing renewable 
energy sources on Federal lands withdrawn for mili-
tary purposes, and an identification of any new pro-
cedures that might be required in the future for the 
improvement of interagency coordination to ensure 
efficient processing and administration of leases or 
contracts for geothermal energy on Federal lands 
withdrawn for military purposes, consistent with the 
defense purposes of such withdrawals.
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(3) Recommendations for any legislative or ad-
ministrative actions that might better achieve in-
creased geothermal production, including a common 
royalty structure, leasing procedures, or other 
changes that increase production, offset military op-
eration costs, or enhance the Federal agencies’ abil-
ity to develop geothermal resources. 
Except as provided in this section, nothing in this subtitle 
shall affect the legal status of the Department of the Inte-
rior and the Department of the Defense with respect to 
each other regarding geothermal leasing and development 
until such status is changed by law. 
SEC. 227. TECHNICAL AMENDMENTS. 
The Geothermal Steam Act of 1970 (30 U.S.C. 1001 
et seq.) is further amended as follows: 
(1) By striking ‘‘geothermal steam and associ-
ated geothermal resources’’ each place it appears 
and inserting ‘‘geothermal resources’’. 
(2) Section 2(e) (30 U.S.C. 1001(e)) is amend-
ed to read as follows: 
‘‘(e) ‘direct use’ means utilization of geothermal 
resources for commercial, residential, agricultural, 
public facilities, or other energy needs other than the 
commercial production of electricity; and’’.
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(3) Section 21 (30 U.S.C. 1020) is amended by 
striking ‘‘(a) Within one hundred’’ and all that fol-
lows through ‘‘(b) Geothermal’’ and inserting ‘‘Geo-
thermal’’. 
(4) The first section (30 U.S.C. 1001 note) is 
amended by striking ‘‘That this’’ and inserting the 
following: 
‘‘SEC. 1. SHORT TITLE. 
‘‘This’’. 
(5) Section 2 (30 U.S.C. 1001) is amended by 
striking ‘‘SEC. 2. As’’ and inserting the following: 
‘‘SEC. 2. DEFINITIONS. 
‘‘As’’. 
(6) Section 3 (30 U.S.C. 1002) is amended by 
striking ‘‘SEC. 3. Subject’’ and inserting the fol-
lowing: 
‘‘SEC. 3 . LANDS SUBJECT TO GEOTHERMAL LEASING. 
‘‘Subject’’. 
(7) Section 5 (30 U.S.C. 1004) is further 
amended by striking ‘‘SEC. 5.’’, and by inserting im-
mediately before and above subsection (a) the fol-
lowing:
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HR 4503 RDS 
‘‘SEC. 5. RENTS AND ROYALTIES. ’’. 
(8) Section 7 (30 U.S.C. 1006) is amended by 
striking ‘‘SEC. 7. A geothermal’’ and inserting the 
following: 
‘‘SEC. 7. ACREAGE OF GEOTHERMAL LEASE. 
‘‘A geothermal’’. 
(9) Section 8 (30 U.S.C. 1007) is amended by 
striking ‘‘SEC. 8. (a) The’’ and inserting the fol-
lowing: 
‘‘SEC. 8. READJUSTMENT OF LEASE TERMS AND CONDI-
TIONS. 
‘‘(a) The’’. 
(10) Section 9 (30 U.S.C. 1008) is amended by 
striking ‘‘SEC. 9. If’’ and inserting the following: 
‘‘SEC. 9. BYPRODUCTS. 
‘‘If’’. 
(11) Section 10 (30 U.S.C. 1009) is amended 
by striking ‘‘SEC. 10. The’’ and inserting the fol-
lowing: 
‘‘SEC. 10. RELINQUISHMENT OF GEOTHERMAL RIGHTS. 
‘‘The’’. 
(12) Section 11 (30 U.S.C. 1010) is amended 
by striking ‘‘SEC. 11. The’’ and inserting the fol-
lowing: 
‘‘SEC. 11. SUSPENSION OF OPERATIONS AND PRODUCTION. 
‘‘The’’.
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HR 4503 RDS 
(13) Section 12 (30 U.S.C. 1011) is amended 
by striking ‘‘SEC. 12. Leases’’ and inserting the fol-
lowing: 
‘‘SEC. 12. TERMINATION OF LEASES. 
‘‘Leases’’. 
(14) Section 13 (30 U.S.C. 1012) is amended 
by striking ‘‘SEC. 13. The’’ and inserting the fol-
lowing: 
‘‘SEC. 13. WAIVER, SUSPENSION, OR REDUCTION OF RENT-
AL OR ROYALTY. 
‘‘The’’. 
(15) Section 14 (30 U.S.C. 1013) is amended 
by striking ‘‘SEC. 14. Subject’’ and inserting the fol-
lowing: 
‘‘SEC. 14. SURFACE LAND USE. 
‘‘Subject’’. 
(16) Section 15 (30 U.S.C. 1014) is amended 
by striking ‘‘SEC. 15. (a) Geothermal’’ and inserting 
the following: 
‘‘SEC. 15. LANDS SUBJECT TO GEOTHERMAL LEASING. 
‘‘(a) Geothermal’’. 
(17) Section 16 (30 U.S.C. 1015) is amended 
by striking ‘‘SEC. 16. Leases’’ and inserting the fol-
lowing:
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HR 4503 RDS 
‘‘SEC. 16. REQUIREMENT FOR LESSEES. 
‘‘Leases’’. 
(18) Section 17 (30 U.S.C. 1016) is amended 
by striking ‘‘SEC. 17. Administration’’ and inserting 
the following: 
‘‘SEC. 17. ADMINISTRATION. 
‘‘Administration’’. 
(19) Section 19 (30 U.S.C. 1018) is amended 
by striking ‘‘SEC. 19. Upon’’ and inserting the fol-
lowing: 
‘‘SEC. 19. DATA FROM FEDERAL AGENCIES. 
‘‘Upon’’. 
(20) Section 21 (30 U.S.C. 1020) is further 
amended by striking ‘‘SEC. 21.’’, and by inserting 
immediately before and above the remainder of that 
section the following: 
‘‘SEC. 21. PUBLICATION IN FEDERAL REGISTER; RESERVA-
TION OF MINERAL RIGHTS. ’’. 
(21) Section 22 (30 U.S.C. 1021) is amended 
by striking ‘‘SEC. 22. Nothing’’ and inserting the 
following: 
‘‘SEC. 22. FEDERAL EXEMPTION FROM STATE WATER LAWS. 
‘‘Nothing’’. 
(22) Section 23 (30 U.S.C. 1022) is amended 
by striking ‘‘SEC. 23. (a) All’’ and inserting the fol-
lowing:
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HR 4503 RDS 
‘‘SEC. 23. PREVENTION OF WASTE; EXCLUSIVITY. 
‘‘(a) All’’. 
(23) Section 24 (30 U.S.C. 1023) is amended 
by striking ‘‘SEC. 24. The’’ and inserting the fol-
lowing: 
‘‘SEC. 24. RULES AND REGULATIONS. 
‘‘The’’. 
(24) Section 25 (30 U.S.C. 1024) is amended 
by striking ‘‘SEC. 25. As’’ and inserting the fol-
lowing: 
‘‘SEC. 25. INCLUSION OF GEOTHERMAL LEASING UNDER 
CERTAIN OTHER LAWS. 
‘‘As’’. 
(25) Section 26 is amended by striking ‘‘SEC. 
26. The’’ and inserting the following: 
‘‘SEC. 26. AMENDMENT. 
‘‘The’’. 
(26) Section 27 (30 U.S.C. 1025) is amended 
by striking ‘‘SEC. 27. The’’ and inserting the fol-
lowing: 
‘‘SEC. 27. FEDERAL RESERVATION OF CERTAIN MINERAL 
RIGHTS. 
‘‘The’’. 
(27) Section 28 (30 U.S.C. 1026) is amended 
by striking ‘‘SEC. 28. (a)(1) The’’ and inserting the 
following:
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HR 4503 RDS 
‘‘SEC. 28. SIGNIFICANT THERMAL FEATURES. 
‘‘(a)(1) The’’. 
(28) Section 29 (30 U.S.C. 1027) is amended 
by striking ‘‘SEC. 29. The’’ and inserting the fol-
lowing: 
‘‘SEC. 29. LAND SUBJECT TO PROHIBITION ON LEASING. 
‘‘The’’. 
Subtitle C—Hydroelectric 
PART I—ALTERNATIVE CONDITIONS 
SEC. 231. ALTERNATIVE CONDITIONS AND FISHWAYS. 
(a) FEDERAL RESERVATIONS.—Section 4(e) of the 
Federal Power Act (16 U.S.C. 797(e)) is amended by in-
serting after ‘‘adequate protection and utilization of such 
reservation.’’ at the end of the first proviso the following: 
‘‘The license applicant shall be entitled to a determination 
on the record, after opportunity for an expedited agency 
trial-type hearing of any disputed issues of material fact, 
with respect to such conditions. Such hearing may be con-
ducted in accordance with procedures established by agen-
cy regulation in consultation with the Federal Energy 
Regulatory Commission.’’. 
(b) FISHWAYS.—Section 18 of the Federal Power Act 
(16 U.S.C. 811) is amended by inserting after ‘‘and such 
fishways as may be prescribed by the Secretary of Com-
merce.’’ the following: ‘‘The license applicant shall be enti-
tled to a determination on the record, after opportunity
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HR 4503 RDS 
for an expedited agency trial-type hearing of any disputed 
issues of material fact, with respect to such fishways. Such 
hearing may be conducted in accordance with procedures 
established by agency regulation in consultation with the 
Federal Energy Regulatory Commission.’’. 
(c) ALTERNATIVE
CONDITIONS
AND
PRESCRIP-
TIONS.—Part I of the Federal Power Act (16 U.S.C. 791a 
et seq.) is amended by adding the following new section 
at the end thereof: 
‘‘SEC. 33. ALTERNATIVE CONDITIONS AND PRESCRIPTIONS. 
‘‘(a) ALTERNATIVE CONDITIONS.—(1) Whenever any 
person applies for a license for any project works within 
any reservation of the United States, and the Secretary 
of the department under whose supervision such reserva-
tion falls (referred to in this subsection as ‘the Secretary’) 
deems a condition to such license to be necessary under 
the first proviso of section 4(e), the license applicant may 
propose an alternative condition. 
‘‘(2) Notwithstanding the first proviso of section 4(e), 
the Secretary shall accept the proposed alternative condi-
tion referred to in paragraph (1), and the Commission 
shall include in the license such alternative condition, if 
the Secretary determines, based on substantial evidence 
provided by the license applicant or otherwise available to 
the Secretary, that such alternative condition—
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‘‘(A) provides for the adequate protection and 
utilization of the reservation; and 
‘‘(B) will either— 
‘‘(i) cost less to implement; or 
‘‘(ii) result in improved operation of the 
project works for electricity production, 
as compared to the condition initially deemed nec-
essary by the Secretary. 
‘‘(3) The Secretary shall submit into the public 
record of the Commission proceeding with any condition 
under section 4(e) or alternative condition it accepts under 
this section, a written statement explaining the basis for 
such condition, and reason for not accepting any alter-
native condition under this section. The written statement 
must demonstrate that the Secretary gave equal consider-
ation to the effects of the condition adopted and alter-
natives not accepted on energy supply, distribution, cost, 
and use; flood control; navigation; water supply; and air 
quality (in addition to the preservation of other aspects 
of environmental quality); based on such information as 
may be available to the Secretary, including information 
voluntarily provided in a timely manner by the applicant 
and others. The Secretary shall also submit, together with 
the aforementioned written statement, all studies, data,
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and other factual information available to the Secretary 
and relevant to the Secretary’s decision. 
‘‘(4) Nothing in this section shall prohibit other inter-
ested parties from proposing alternative conditions. 
‘‘(5) If the Secretary does not accept an applicant’s 
alternative condition under this section, and the Commis-
sion finds that the Secretary’s condition would be incon-
sistent with the purposes of this part, or other applicable 
law, the Commission may refer the dispute to the Commis-
sion’s Dispute Resolution Service. The Dispute Resolution 
Service shall consult with the Secretary and the Commis-
sion and issue a non-binding advisory within 90 days. The 
Secretary may accept the Dispute Resolution Service advi-
sory unless the Secretary finds that the recommendation 
will not provide for the adequate protection and utilization 
of the reservation. The Secretary shall submit the advisory 
and the Secretary’s final written determination into the 
record of the Commission’s proceeding. 
‘‘(b) ALTERNATIVE PRESCRIPTIONS.—(1) Whenever 
the Secretary of the Interior or the Secretary of Commerce 
prescribes a fishway under section 18, the license appli-
cant or licensee may propose an alternative to such pre-
scription to construct, maintain, or operate a fishway. 
‘‘(2) Notwithstanding section 18, the Secretary of the 
Interior or the Secretary of Commerce, as appropriate,
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shall accept and prescribe, and the Commission shall re-
quire, the proposed alternative referred to in paragraph 
(1), if the Secretary of the appropriate department deter-
mines, based on substantial evidence provided by the li-
censee or otherwise available to the Secretary, that such 
alternative— 
‘‘(A) will be no less protective than the fishway 
initially prescribed by the Secretary; and 
‘‘(B) will either— 
‘‘(i) cost less to implement; or 
‘‘(ii) result in improved operation of the 
project works for electricity production, 
as compared to the fishway initially deemed nec-
essary by the Secretary. 
‘‘(3) The Secretary concerned shall submit into the 
public record of the Commission proceeding with any pre-
scription under section 18 or alternative prescription it ac-
cepts under this section, a written statement explaining 
the basis for such prescription, and reason for not accept-
ing any alternative prescription under this section. The 
written statement must demonstrate that the Secretary 
gave equal consideration to the effects of the condition 
adopted and alternatives not accepted on energy supply, 
distribution, cost, and use; flood control; navigation; water 
supply; and air quality (in addition to the preservation of
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other aspects of environmental quality); based on such in-
formation as may be available to the Secretary, including 
information voluntarily provided in a timely manner by the 
applicant and others. The Secretary shall also submit, to-
gether with the aforementioned written statement, all 
studies, data, and other factual information available to 
the Secretary and relevant to the Secretary’s decision. 
‘‘(4) Nothing in this section shall prohibit other inter-
ested parties from proposing alternative prescriptions. 
‘‘(5) If the Secretary concerned does not accept an 
applicant’s alternative prescription under this section, and 
the Commission finds that the Secretary’s prescription 
would be inconsistent with the purposes of this part, or 
other applicable law, the Commission may refer the dis-
pute to the Commission’s Dispute Resolution Service. The 
Dispute Resolution Service shall consult with the Sec-
retary and the Commission and issue a non-binding advi-
sory within 90 days. The Secretary may accept the Dis-
pute Resolution Service advisory unless the Secretary 
finds that the recommendation will be less protective than 
the fishway initially prescribed by the Secretary. The Sec-
retary shall submit the advisory and the Secretary’s final 
written determination into the record of the Commission’s 
proceeding.’’.
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PART II—ADDITIONAL HYDROPOWER 
SEC. 241. HYDROELECTRIC PRODUCTION INCENTIVES. 
(a) INCENTIVE PAYMENTS.—For electric energy gen-
erated and sold by a qualified hydroelectric facility during 
the incentive period, the Secretary of Energy (referred to 
in this section as the ‘‘Secretary’’) shall make, subject to 
the availability of appropriations, incentive payments to 
the owner or operator of such facility. The amount of such 
payment made to any such owner or operator shall be as 
determined under subsection (e) of this section. Payments 
under this section may only be made upon receipt by the 
Secretary of an incentive payment application which estab-
lishes that the applicant is eligible to receive such payment 
and which satisfies such other requirements as the Sec-
retary deems necessary. Such application shall be in such 
form, and shall be submitted at such time, as the Sec-
retary shall establish. 
(b) DEFINITIONS.—For purposes of this section: 
(1) QUALIFIED
HYDROELECTRIC
FACILITY.— 
The term ‘‘qualified hydroelectric facility’’ means a 
turbine or other generating device owned or solely 
operated by a non-Federal entity which generates 
hydroelectric energy for sale and which is added to 
an existing dam or conduit. 
(2) EXISTING
DAM
OR
CONDUIT.—The term 
‘‘existing dam or conduit’’ means any dam or con-
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duit the construction of which was completed before 
the date of the enactment of this section and which 
does not require any construction or enlargement of 
impoundment or diversion structures (other than re-
pair or reconstruction) in connection with the instal-
lation of a turbine or other generating device. 
(3) CONDUIT.—The term ‘‘conduit’’ has the 
same meaning as when used in section 30(a)(2) of 
the Federal Power Act (16 U.S.C. 823a(a)(2)). 
The terms defined in this subsection shall apply without 
regard to the hydroelectric kilowatt capacity of the facility 
concerned, without regard to whether the facility uses a 
dam owned by a governmental or nongovernmental entity, 
and without regard to whether the facility begins oper-
ation on or after the date of the enactment of this section. 
(c) ELIGIBILITY WINDOW.—Payments may be made 
under this section only for electric energy generated from 
a qualified hydroelectric facility which begins operation 
during the period of 10 fiscal years beginning with the 
first full fiscal year occurring after the date of enactment 
of this subtitle. 
(d) INCENTIVE PERIOD.—A qualified hydroelectric 
facility may receive payments under this section for a pe-
riod of 10 fiscal years (referred to in this section as the 
‘‘incentive period’’). Such period shall begin with the fiscal
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year in which electric energy generated from the facility 
is first eligible for such payments. 
(e) AMOUNT OF PAYMENT.— 
(1) IN GENERAL.—Payments made by the Sec-
retary under this section to the owner or operator of 
a qualified hydroelectric facility shall be based on 
the number of kilowatt hours of hydroelectric energy 
generated by the facility during the incentive period. 
For any such facility, the amount of such payment 
shall be 1.8 cents per kilowatt hour (adjusted as 
provided in paragraph (2)), subject to the avail-
ability of appropriations under subsection (g), except 
that no facility may receive more than $750,000 in 
1 calendar year. 
(2) ADJUSTMENTS.—The amount of the pay-
ment made to any person under this section as pro-
vided in paragraph (1) shall be adjusted for inflation 
for each fiscal year beginning after calendar year 
2003 in the same manner as provided in the provi-
sions of section 29(d)(2)(B) of the Internal Revenue 
Code of 1986, except that in applying such provi-
sions the calendar year 2003 shall be substituted for 
calendar year 1979. 
(f) SUNSET.—No payment may be made under this 
section to any qualified hydroelectric facility after the ex-
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piration of the period of 20 fiscal years beginning with 
the first full fiscal year occurring after the date of enact-
ment of this subtitle, and no payment may be made under 
this section to any such facility after a payment has been 
made with respect to such facility for a period of 10 fiscal 
years. 
(g) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary to carry 
out the purposes of this section $10,000,000 for each of 
the fiscal years 2004 through 2013. 
SEC. 242. HYDROELECTRIC EFFICIENCY IMPROVEMENT. 
(a) INCENTIVE PAYMENTS.—The Secretary of En-
ergy shall make incentive payments to the owners or oper-
ators of hydroelectric facilities at existing dams to be used 
to make capital improvements in the facilities that are di-
rectly related to improving the efficiency of such facilities 
by at least 3 percent. 
(b) LIMITATIONS.—Incentive payments under this 
section shall not exceed 10 percent of the costs of the cap-
ital improvement concerned and not more than 1 payment 
may be made with respect to improvements at a single 
facility. No payment in excess of $750,000 may be made 
with respect to improvements at a single facility. 
(c) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this section
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not more than $10,000,000 for each of the fiscal years 
2004 through 2013. 
SEC. 243. SMALL HYDROELECTRIC POWER PROJECTS. 
Section 408(a)(6) of the Public Utility Regulatory 
Policies Act of 1978 (16 U.S.C. 2708(a)(6)) is amended 
by striking ‘‘April 20, 1977’’ and inserting ‘‘March 4, 
2003’’. 
SEC. 244. INCREASED HYDROELECTRIC GENERATION AT 
EXISTING FEDERAL FACILITIES. 
(a) IN GENERAL.—The Secretary of the Interior and 
the Secretary of Energy, in consultation with the Sec-
retary of the Army, shall jointly conduct a study of the 
potential for increasing electric power production capa-
bility at federally owned or operated water regulation, 
storage, and conveyance facilities. 
(b) CONTENT.—The study under this section shall in-
clude identification and description in detail of each facil-
ity that is capable, with or without modification, of pro-
ducing additional hydroelectric power, including esti-
mation of the existing potential for the facility to generate 
hydroelectric power. 
(c) REPORT.—The Secretaries shall submit to the 
Committees on Energy and Commerce, Resources, and 
Transportation and Infrastructure of the House of Rep-
resentatives and the Committee on Energy and Natural
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Resources of the Senate a report on the findings, conclu-
sions, and recommendations of the study under this sec-
tion by not later than 18 months after the date of the 
enactment of this Act. The report shall include each of 
the following: 
(1) The identifications, descriptions, and esti-
mations referred to in subsection (b). 
(2) A description of activities currently con-
ducted or considered, or that could be considered, to 
produce additional hydroelectric power from each 
identified facility. 
(3) A summary of prior actions taken by the 
Secretaries to produce additional hydroelectric power 
from each identified facility. 
(4) The costs to install, upgrade, or modify 
equipment or take other actions to produce addi-
tional hydroelectric power from each identified facil-
ity and the level of Federal power customer involve-
ment in the determination of such costs. 
(5) The benefits that would be achieved by such 
installation, upgrade, modification, or other action, 
including quantified estimates of any additional en-
ergy or capacity from each facility identified under 
subsection (b).
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(6) A description of actions that are planned, 
underway, or might reasonably be considered to in-
crease hydroelectric power production by replacing 
turbine runners, by performing generator upgrades 
or rewinds, or construction of pumped storage facili-
ties. 
(7) The impact of increased hydroelectric power 
production on irrigation, fish, wildlife, Indian tribes, 
river health, water quality, navigation, recreation, 
fishing, and flood control. 
(8) Any additional recommendations to increase 
hydroelectric power production from, and reduce 
costs and improve efficiency at, federally owned or 
operated water regulation, storage, and conveyance 
facilities. 
SEC. 245. SHIFT OF PROJECT LOADS TO OFF-PEAK PERI-
ODS. 
(a) IN GENERAL.—The Secretary of the Interior 
shall— 
(1) review electric power consumption by Bu-
reau of Reclamation facilities for water pumping 
purposes; and 
(2) make such adjustments in such pumping as 
possible to minimize the amount of electric power 
consumed for such pumping during periods of peak
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electric power consumption, including by performing 
as much of such pumping as possible during off- 
peak hours at night. 
(b) CONSENT OF AFFECTED IRRIGATION CUSTOMERS 
REQUIRED.—The Secretary may not under this section 
make any adjustment in pumping at a facility without the 
consent of each person that has contracted with the 
United States for delivery of water from the facility for 
use for irrigation and that would be affected by such ad-
justment. 
(c) EXISTING OBLIGATIONS NOT AFFECTED.—This 
section shall not be construed to affect any existing obliga-
tion of the Secretary to provide electric power, water, or 
other benefits from Bureau of Reclamation facilities, in-
cluding recreational releases. 
SEC. 246. CORPS OF ENGINEERS HYDROPOWER OPERATION 
AND MAINTENANCE FUNDING. 
(a) IN GENERAL.—Notwithstanding the last sentence 
of section 5 of the Act of December 22, 1944 (commonly 
known as the ‘‘Flood Control Act of 1944’’) (58 Stat. 890, 
chapter 665; 16 U.S.C. 825s), the 11th paragraph under 
the heading ‘‘OFFICE OF THE SECRETARY’’ in title I of 
the Act of October 12, 1949 (63 Stat. 767, chapter 680; 
16 U.S.C. 825s–1), the matter under the heading ‘‘CON-
TINUING
FUND, SOUTHEASTERN
POWER
ADMINISTRA-
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TION’’ in title I of the Act of August 31, 1951 (65 Stat. 
249, chapter 375; 16 U.S.C. 825s–2), section 3302 of title 
31, United States Code, or any other law, and without 
further appropriation or fiscal year limitation, for fiscal 
year 2004, the Administrator of the Southeastern Power 
Administration, the Administrator of the Southwestern 
Power Administration, and the Administrator of the West-
ern Area Power Administration may credit to the Sec-
retary of the Army (referred to in this section as the ‘‘Sec-
retary’’), receipts, in an amount determined under sub-
section (c), from the sale of power and related services. 
(b) USE OF FUNDS.— 
(1) IN GENERAL.—The Secretary— 
(A) shall, except as provided in paragraph 
(2), use the amounts credited under subsection 
(a) to fund only the Corps of Engineers annual 
operation and maintenance activities that are 
allocated exclusively to the power function and 
assigned to the respective power marketing ad-
ministration and respective project system as 
applicable for repayment; and 
(B) shall not use the amounts for any 
costs allocated to non-power functions of Corps 
of Engineer operations.
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(2) EXCEPTION.—The Secretary may use 
amounts credited by the Southwestern Power Ad-
ministration under subsection (a) for capital and 
nonrecurring costs. 
(c) AMOUNT.—The amount of the receipts credited 
under subsection (a) shall be equal to such amount as— 
(1) the Secretary of the Army requests; and 
(2) the appropriate Administrator, in consulta-
tion with the power customers of the Administrator’s 
power marketing administration, determines to be 
appropriate to apply to the costs referred to in sub-
section (b). 
(d) APPLICABLE LAW.—The amounts credited under 
subsection (a) are exempt from sequestration under the 
Balanced Budget and Emergency Deficit Control Act of 
1985 (2 U.S.C. 901 et seq.). 
SEC. 247. LIMITATION ON CERTAIN CHARGES ASSESSED TO 
THE FLINT CREEK PROJECT, MONTANA. 
Notwithstanding section 10(e)(1) of the Federal 
Power Act (16 U.S.C. 803(e)(1)) or any other provision 
of Federal law providing for the payment to the United 
States of charges for the use of Federal land for the pur-
poses of operating and maintaining a hydroelectric devel-
opment licensed by the Federal Energy Regulatory Com-
mission (referred to in this section as the ‘‘Commission’’),
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any political subdivision of the State of Montana that 
holds a license for Commission Project No. 1473 in Gran-
ite and Deer Lodge Counties, Montana, shall be required 
to pay to the United States for the use of that land for 
each year during which the political subdivision continues 
to hold the license for the project, the lesser of— 
(1) $25,000; or 
(2) such annual charge as the Commission or 
any other department or agency of the Federal Gov-
ernment may assess. 
SEC. 248. REINSTATEMENT AND TRANSFER. 
(a) REINSTATEMENT AND TRANSFER OF FEDERAL 
LICENSE
FOR PROJECT NUMBERED 2696.—Notwith-
standing section 8 of the Federal Power Act (16 U.S.C. 
801) or any other provision of such Act, the Federal En-
ergy Regulatory Commission shall reinstate the license for 
Project No. 2696 and transfer the license, without delay 
or the institution of any proceedings, to the Town of 
Stuyvesant, New York, holder of Federal Energy Regu-
latory Commission Preliminary Permit No. 11787, within 
30 days after the date of enactment of this Act. 
(b) HYDROELECTRIC
INCENTIVES.—Project No. 
2696 shall be entitled to the full benefit of any Federal 
legislation that promotes hydroelectric development that
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is enacted within 2 years either before or after the date 
of enactment of this Act. 
(c) PROJECT DEVELOPMENT AND FINANCING.—The 
Federal Energy Regulatory Commission shall permit the 
Town of Stuyvesant to add as a colicensee any private or 
public entity or entities to the reinstated license at any 
time, notwithstanding the issuance of a preliminary permit 
to the Town of Stuyvesant and any consideration of mu-
nicipal preference. The town shall be entitled, to the extent 
that funds are available or shall be made available, to re-
ceive loans under sections 402 and 403 of the Public Util-
ity Regulatory Policies Act of 1978 (16 U.S.C. 2702 and 
2703), or similar programs, for the reimbursement of fea-
sibility studies or development costs, or both, incurred 
since January 1, 2001, through and including December 
31, 2006. All power produced by the project shall be 
deemed incremental hydropower for purpose of qualifying 
for any energy credit or similar benefits.
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TITLE III—OIL AND GAS 
Subtitle A—Petroleum Reserve and 
Home Heating Oil 
SEC. 301. PERMANENT AUTHORITY TO OPERATE THE STRA-
TEGIC PETROLEUM RESERVE AND OTHER 
ENERGY PROGRAMS. 
(a) AMENDMENT TO TITLE I OF THE ENERGY POL-
ICY AND CONSERVATION ACT.—Title I of the Energy Pol-
icy and Conservation Act (42 U.S.C. 6211 et seq.) is 
amended— 
(1) by striking section 166 (42 U.S.C. 6246) 
and inserting the following: 
‘‘AUTHORIZATION OF APPROPRIATIONS 
‘‘SEC. 166. There are authorized to be appropriated 
to the Secretary such sums as may be necessary to carry 
out this part and part D, to remain available until ex-
pended.’’; 
(2) by striking section 186 (42 U.S.C. 6250e); 
and 
(3) by striking part E (42 U.S.C. 6251; relat-
ing to the expiration of title I of the Act). 
(b) AMENDMENT TO TITLE II OF THE ENERGY POL-
ICY AND CONSERVATION ACT.—Title II of the Energy 
Policy and Conservation Act (42 U.S.C. 6271 et seq.) is 
amended—
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(1) by inserting before section 273 (42 U.S.C. 
6283) the following: 
‘‘PART C—SUMMER FILL AND FUEL BUDGETING 
PROGRAMS’’; 
(2) by striking section 273(e) (42 U.S.C. 
6283(e); relating to the expiration of summer fill 
and fuel budgeting programs); and 
(3) by striking part D (42 U.S.C. 6285; relat-
ing to the expiration of title II of the Act). 
(c) TECHNICAL AMENDMENTS.—The table of con-
tents for the Energy Policy and Conservation Act is 
amended— 
(1) by inserting after the items relating to part 
C of title I the following: 
‘‘PART D—NORTHEAST HOME HEATING OIL RESERVE 
‘‘Sec. 181. Establishment. 
‘‘Sec. 182. Authority. 
‘‘Sec. 183. Conditions for release; plan. 
‘‘Sec. 184. Northeast Home Heating Oil Reserve Account. 
‘‘Sec. 185. Exemptions.’’; 
(2) by amending the items relating to part C of 
title II to read as follows: 
‘‘PART C—SUMMER FILL AND FUEL BUDGETING PROGRAMS 
‘‘Sec. 273. Summer fill and fuel budgeting programs.’’; and 
(3) by striking the items relating to part D of 
title II. 
(d) AMENDMENT TO THE ENERGY POLICY AND CON-
SERVATION ACT.—Section 183(b)(1) of the Energy Policy
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and Conservation Act (42 U.S.C. 6250(b)(1)) is amended 
by striking all after ‘‘increases’’ through to ‘‘mid-October 
through March’’ and inserting ‘‘by more than 60 percent 
over its 5-year rolling average for the months of mid-Octo-
ber through March (considered as a heating season aver-
age)’’. 
(e) FILL STRATEGIC PETROLEUM RESERVE TO CA-
PACITY.—The Secretary of Energy shall, as expeditiously 
as practicable, acquire petroleum in amounts sufficient to 
fill the Strategic Petroleum Reserve to the 1,000,000,000 
barrel capacity authorized under section 154(a) of the En-
ergy Policy and Conservation Act (42 U.S.C. 6234(a)), 
consistent with the provisions of sections 159 and 160 of 
such Act (42 U.S.C. 6239, 6240). 
SEC. 302. NATIONAL OILHEAT RESEARCH ALLIANCE. 
Section 713 of the Energy Act of 2000 (42 U.S.C. 
6201 note) is amended by striking ‘‘4’’ and inserting ‘‘9’’. 
Subtitle B—Production Incentives 
SEC. 311. DEFINITION OF SECRETARY. 
In this subtitle, the term ‘‘Secretary’’ means the Sec-
retary of the Interior. 
SEC. 312. PROGRAM ON OIL AND GAS ROYALTIES IN-KIND. 
(a) APPLICABILITY OF SECTION.—Notwithstanding 
any other provision of law, this section applies to all roy-
alty in-kind accepted by the Secretary on or after the date
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of enactment of this Act under any Federal oil or gas lease 
or permit under section 36 of the Mineral Leasing Act 
(30 U.S.C. 192), section 27 of the Outer Continental Shelf 
Lands Act (43 U.S.C. 1353), or any other Federal law 
governing leasing of Federal land for oil and gas develop-
ment. 
(b) TERMS AND CONDITIONS.—All royalty accruing 
to the United States shall, on the demand of the Sec-
retary, be paid in oil or gas. If the Secretary makes such 
a demand, the following provisions apply to such payment: 
(1) SATISFACTION OF ROYALTY OBLIGATION.— 
Delivery by, or on behalf of, the lessee of the royalty 
amount and quality due under the lease satisfies the 
lessee’s royalty obligation for the amount delivered, 
except that transportation and processing reimburse-
ments paid to, or deductions claimed by, the lessee 
shall be subject to review and audit. 
(2) MARKETABLE CONDITION.— 
(A) IN
GENERAL.—Royalty production 
shall be placed in marketable condition by the 
lessee at no cost to the United States. 
(B) DEFINITION OF MARKETABLE CONDI-
TION.—In this paragraph, the term ‘‘in market-
able condition’’ means sufficiently free from im-
purities and otherwise in a condition that the
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royalty production will be accepted by a pur-
chaser under a sales contract typical of the field 
or area in which the royalty production was 
produced. 
(3) DISPOSITION
BY
THE
SECRETARY.—The 
Secretary may— 
(A) sell or otherwise dispose of any royalty 
production taken in-kind (other than oil or gas 
transferred under section 27(a)(3) of the Outer 
Continental Shelf Lands Act (43 U.S.C. 
1353(a)(3)) for not less than the market price; 
and 
(B) transport or process (or both) any roy-
alty production taken in-kind. 
(4) RETENTION BY THE SECRETARY.—The Sec-
retary may, notwithstanding section 3302 of title 31, 
United States Code, retain and use a portion of the 
revenues from the sale of oil and gas taken in-kind 
that otherwise would be deposited to miscellaneous 
receipts, without regard to fiscal year limitation, or 
may use oil or gas received as royalty taken in-kind 
(in this paragraph referred to as ‘‘royalty produc-
tion’’) to pay the cost of— 
(A) transporting the royalty production; 
(B) processing the royalty production;
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(C) disposing of the royalty production; or 
(D) any combination of transporting, proc-
essing, and disposing of the royalty production. 
(5) LIMITATION.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), the Secretary may not use 
revenues from the sale of oil and gas taken in- 
kind to pay for personnel, travel, or other ad-
ministrative costs of the Federal Government. 
(B) EXCEPTION.—Notwithstanding sub-
paragraph (A), the Secretary may use a portion 
of the revenues from the sale of oil taken in- 
kind, without fiscal year limitation, to pay 
transportation costs, salaries, and other admin-
istrative costs directly related to filling the 
Strategic Petroleum Reserve. 
(c) REIMBURSEMENT OF COST.—If the lessee, pursu-
ant to an agreement with the United States or as provided 
in the lease, processes the royalty gas or delivers the roy-
alty oil or gas at a point not on or adjacent to the lease 
area, the Secretary shall— 
(1) reimburse the lessee for the reasonable costs 
of transportation (not including gathering) from the 
lease to the point of delivery or for processing costs; 
or
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(2) allow the lessee to deduct the transportation 
or processing costs in reporting and paying royalties 
in-value for other Federal oil and gas leases. 
(d) BENEFIT TO THE UNITED STATES REQUIRED.— 
The Secretary may receive oil or gas royalties in-kind only 
if the Secretary determines that receiving royalties in-kind 
provides benefits to the United States that are greater 
than or equal to the benefits that are likely to have been 
received had royalties been taken in-value. 
(e) REPORTS.— 
(1) IN GENERAL.—Not later than September 
30, 2005, the Secretary shall submit to Congress a 
report that addresses— 
(A) actions taken to develop businesses 
processes and automated systems to fully sup-
port the royalty-in-kind capability to be used in 
tandem with the royalty-in-value approach in 
managing Federal oil and gas revenue; and 
(B) future royalty-in-kind businesses oper-
ation plans and objectives. 
(2) REPORTS ON OIL OR GAS ROYALTIES TAKEN 
IN-KIND.—For each of fiscal years 2004 through 
2013 in which the United States takes oil or gas 
royalties in-kind from production in any State or 
from the outer Continental Shelf, excluding royalties
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taken in-kind and sold to refineries under subsection 
(h), the Secretary shall submit to Congress a report 
that describes— 
(A) the methodology or methodologies used 
by the Secretary to determine compliance with 
subsection (d), including the performance 
standard for comparing amounts received by 
the United States derived from royalties in-kind 
to amounts likely to have been received had roy-
alties been taken in-value; 
(B) an explanation of the evaluation that 
led the Secretary to take royalties in-kind from 
a lease or group of leases, including the ex-
pected revenue effect of taking royalties in-kind; 
(C) actual amounts received by the United 
States derived from taking royalties in-kind and 
costs and savings incurred by the United States 
associated with taking royalties in-kind, includ-
ing, but not limited to, administrative savings 
and any new or increased administrative costs; 
and 
(D) an evaluation of other relevant public 
benefits or detriments associated with taking 
royalties in-kind. 
(f) DEDUCTION OF EXPENSES.—
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(1) IN
GENERAL.—Before making payments 
under section 35 of the Mineral Leasing Act (30 
U.S.C. 191) or section 8(g) of the Outer Continental 
Shelf Lands Act (43 U.S.C. 1337(g)) of revenues 
derived from the sale of royalty production taken in- 
kind from a lease, the Secretary shall deduct 
amounts paid or deducted under subsections (b)(4) 
and (c) and deposit the amount of the deductions in 
the miscellaneous receipts of the United States 
Treasury. 
(2) ACCOUNTING FOR DEDUCTIONS.—When the 
Secretary allows the lessee to deduct transportation 
or processing costs under subsection (c), the Sec-
retary may not reduce any payments to recipients of 
revenues derived from any other Federal oil and gas 
lease as a consequence of that deduction. 
(g) 
CONSULTATION
WITH
STATES.—The 
Sec-
retary— 
(1) shall consult with a State before conducting 
a royalty in-kind program under this subtitle within 
the State, and may delegate management of any 
portion of the Federal royalty in-kind program to 
the State except as otherwise prohibited by Federal 
law; and