To direct the Secretary of Energy to make incentive payments to the owners or operators of qualified desalination facilities to partially offset the cost of electrical energy required to operate such facilities, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Desalination Water Supply Shortage 
Prevention Act of 2005''.

SEC. 2. DEFINITIONS.

    (a) Qualified Desalination Facility.--The term ``qualified 
desalination facility'' means a facility that--
            (1) produces for sale to domestic customers desalinated 
        seawater, brackish groundwater, or surface water whose source 
        water is greater than 1000 parts per million total dissolved 
        solids; and
            (2) is owned or operated by--
                    (A) a State or any political subdivision, agency, 
                authority, or instrumentality of a State;
                    (B) an Indian tribe; or
                    (C) a corporation responsible for providing 
                municipal water service pursuant to State or tribal 
                law;
            (3) is first used to produce commercial desalinated water 
        for sale during the 10-year period beginning on October 1 of 
        the first fiscal year occurring after the date of the enactment 
        of this Act; and
            (4) uses the best available technology as determined by the 
        Secretary.
    (b) Indian Tribe.--The term ``Indian Tribe'' means with respect to 
the contiguous 48 states, any federally recognized Indian tribe, 
organized band, pueblo, or community and with respect to Alaska, the 
Metlakatla Indian Community.
    (c) Secretary.--The term ``Secretary '' means the Secretary of 
Energy.
    (d) State.--The term ``State'' means the several States, the 
District of Columbia, Puerto Rico, American Samoa, the Virgin Islands, 
Guam, and the Northern Mariana Islands.

SEC. 3. DESALINATED WATER PRODUCTION INCENTIVE PAYMENTS.

    (a) Incentive Payments.--The Secretary shall make incentive 
payments in an amount determined under subsection (d) to the owners or 
operators of qualified desalination facilities to partially offset the 
cost of electrical energy required to operate such facilities.
    (b) Agreement; Deadline.--The Secretary may not make any payment to 
the owner or operator of a qualified desalination facility under this 
section, unless, not later than the end of fiscal year 2016, the 
Secretary enters into a written agreement with the owner or operator to 
make such payment.
    (c) Payment Period.--The Secretary may make payments to the owner 
or operator of a qualified desalination facility under this section for 
a period not to exceed 10 years--
            (1) beginning on the date on which the facility is first 
        used to produce desalinated water; and
            (2) ending not later than September 30, 2026.
    (d) Amount of Payment.--
            (1) In general.--Payments made by the Secretary under this 
        section to the owner or operator of any qualified desalination 
        facility shall be based on the amount of desalinated water 
        produced by the facility during the payment period described in 
        subsection (c). For any facility, the amount of such payment 
        shall be 62 cents for every thousand gallons of desalinated 
        water produced and sold, adjusted as provided in paragraph (2).
            (2) Adjustments.--The amount of the payment made to any 
        person under this subsection as provided in paragraph (1) shall 
        be adjusted for inflation for each fiscal year beginning after 
        calendar year 2006 in the same manner as provided in the 
        provisions of section 29(d)(2)(B) of the Internal Revenue Code 
        of 1986 (26 U.S.C. 29(d)(2)(B)), except that in applying such 
        provisions the calendar year 2006 shall be substituted for 
        calendar year 1979.
    (e) Application.--The Secretary may not make a grant to the owner 
or operator of a qualified desalination facility under this section 
unless the facility submits an application to the Secretary in such 
form, at such time, and containing such information and assurances as 
the Secretary may require.
    (f) Limitation.--In any fiscal year not more than 60 percent of the 
funds made available by the Secretary under this section shall be made 
available to the owners or operators of qualified desalination 
facilities that obtain source water directly from the sea, an estuary, 
or from in-bank extraction wells that are of seawater origin
    (g) Priority.--In awarding incentive payments under this section, 
the Secretary shall give priority to any application for a project 
that--
            (1) uses innovative technologies to reduce the energy 
        demand of the project;
            (2) uses renewable energy supplies in the desalination 
        process;
            (3) provides regional water supply benefits;
            (4) provides a secure source of new water supplies for 
        national defense activities;
            (5) reduces the threat of a water supply disruption as a 
        result of a natural disaster or acts of terrorism;
            (6) uses technologies that minimize the damage to marine 
        life; or
            (7) provides significant water quality benefits.
    (h) Budget Act Compliance.--The authority provided by this section 
may be exercised only in such amounts or to such extent as provided in 
advance in appropriations Acts.
    (i) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary $200,000,000 to carry out this section 
from fiscal year 2006 through fiscal year 2016.

SEC. 4. NOVEL DESALINATION TECHNOLOGY.

    (a) In General.--The Secretary shall support research and 
development of promising novel technology approaches for the cost-
effective desalination of water.
    (b) Authorization of Appropriation.--There are authorized to be 
appropriated to the Secretary for carrying out this section $10,000,000 
from fiscal year 2006 through fiscal year 2016.

Summary: Desalination Water Supply Shortage Prevention Act of 2005 - Requires the Secretary of Energy to make incentive payments to the owners or operators of qualified desalination facilities (facilities first used to produce commercial desalinated water after enactment of this Act), including facilities owned or operated by Indian tribes, for up to ten years to partially offset the cost of electrical energy required to operate such facilities.

Provides that the qualified facilities shall receive 62 cents for every thousand gallons of desalinated water produced and sold, with an adjustment for inflation. Limits to 60% of the amount of funds made available in any fiscal year that the Secretary may provide to the owners or operators of qualified facilities that obtain source water directly from the sea, an estuary, or in-bank extraction wells of sea water origin.

Directs the Secretary, in awarding incentive payments, to give priority to any application for a project that: (1) uses innovative technologies to reduce energy demand; (2) uses renewable energy supplies in the desalination process; (3) provides regional water supply benefits; (4) provides a secure source of new water supplies for national defense activities; (5) reduces the threat of a water supply disruption as a result of a natural disaster or acts of terrorism; (6) uses technologies that minimize damage to marine life; or (7) provides significant water quality benefits.

Directs the Secretary to support research and development of promising novel technology approaches for the cost-effective desalination of water.

Authorizes appropriations.