H.R. 4503 (108th): Energy Policy Act of 2004

108th Congress, 2003–2004. Text as of Jun 15, 2004 (Passed the House (Engrossed)).

Status & Summary | PDF | Source: GPO

HR 4503 EH

108th CONGRESS

2d Session

H. R. 4503


AN ACT

To enhance energy conservation and research and development, 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 Representatives of the United States of America in Congress assembled,

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 efficiency activities.

      Sec. 143. FHA mortgage insurance incentives for energy efficient housing.

      Sec. 144. Public housing capital fund.

      Sec. 145. Grants for energy-conserving improvements for assisted housing.

      Sec. 146. North American Development Bank.

      Sec. 147. Energy-efficient appliances.

      Sec. 148. Energy efficiency standards.

      Sec. 149. Energy strategy for HUD.

TITLE II--RENEWABLE ENERGY

Subtitle A--General provisions

      Sec. 201. Assessment of renewable energy resources.

      Sec. 202. Renewable energy production incentive.

      Sec. 203. Federal purchase requirement.

      Sec. 204. Insular areas energy security.

      Sec. 205. Use of photovoltaic energy in public buildings.

      Sec. 206. Grants to improve the commercial value of forest biomass for electric energy, useful heat, transportation fuels, petroleum-based product 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, rentals, 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 purposes.

      Sec. 227. Technical amendments.

Subtitle C--Hydroelectric

Part I--Alternative conditions

      Sec. 231. Alternative conditions and fishways.

Part II--Additional hydropower

      Sec. 241. Hydroelectric production incentives.

      Sec. 242. Hydroelectric efficiency improvement.

      Sec. 243. Small hydroelectric power projects.

      Sec. 244. Increased hydroelectric generation at existing Federal facilities.

      Sec. 245. Shift of project loads to off-peak periods.

      Sec. 246. Corps of Engineers hydropower operation and maintenance funding.

      Sec. 247. Limitation on certain charges assessed to the flint creek project, Montana.

      Sec. 248. Reinstatement and transfer.

TITLE III--OIL AND GAS

Subtitle A--Petroleum Reserve and home heating oil

      Sec. 301. Permanent authority to operate the Strategic Petroleum Reserve and other energy programs.

      Sec. 302. National Oilheat Research Alliance.

Subtitle B--Production incentives

      Sec. 311. Definition of Secretary.

      Sec. 312. Program on oil and gas royalties in-kind.

      Sec. 313. Marginal property production incentives.

      Sec. 314. Incentives for natural gas production from deep wells in the shallow waters of the Gulf of Mexico.

      Sec. 315. Royalty Relief for deep water production.

      Sec. 316. Alaska offshore royalty suspension.

      Sec. 317. Oil and gas leasing in the National Petroleum Reserve in Alaska.

      Sec. 318. Orphaned, abandoned, or idled wells on Federal land.

      Sec. 319. Combined hydrocarbon leasing.

      Sec. 320. Liquified natural gas.

      Sec. 321. Alternate energy-related uses on the outer Continental Shelf.

      Sec. 322. Preservation of geological and geophysical data.

      Sec. 323. Oil and gas lease acreage limitations.

      Sec. 324. Assessment of dependence of State of Hawaii on oil.

      Sec. 325. Deadline for decision on appeals of consistency determination under the Coastal Zone Management Act of 1972.

      Sec. 326. Reimbursement for costs of NEPA analyses, documentation, and studies.

      Sec. 327. Hydraulic fracturing.

      Sec. 328. Oil and gas exploration and production defined.

      Sec. 329. Outer Continental Shelf provisions.

      Sec. 330. Appeals relating to pipeline construction or offshore mineral development 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 regulations that significantly affect energy supply, distribution, or use.

      Sec. 347. Pilot Project to improve Federal permit coordination.

      Sec. 348. Deadline for consideration of applications for permits.

      Sec. 349. Clarification of fair market rental value determinations for public land and Forest Service rights-of-way.

      Sec. 350. Energy facility rights-of-way and corridors on Federal land.

      Sec. 351. Consultation regarding energy rights-of-way on public land.

      Sec. 352. Renewable energy on Federal land.

      Sec. 353. Electricity transmission line right-of-way, cleveland national forest and adjacent public land, California.

      Sec. 354. Sense of Congress regarding development of MINERALS under Padre Island National Seashore.

      Sec. 355. Encouraging prohibition of off-shore Drilling in the Great Lakes.

      Sec. 356. Finger Lakes National Forest withdrawal.

      Sec. 357. Study on lease exchanges in the rocky mountain front.

      Sec. 358. Federal coalbed methane regulation.

      Sec. 359. Livingston parish mineral rights transfer.

Subtitle D--Alaska Natural Gas Pipeline

      Sec. 371. Short title.

      Sec. 372. Definitions.

      Sec. 373. Issuance of certificate of public convenience and necessity.

      Sec. 374. Environmental reviews.

      Sec. 375. Pipeline expansion.

      Sec. 376. Federal Coordinator.

      Sec. 377. Judicial review.

      Sec. 378. State jurisdiction over in-State delivery of natural gas.

      Sec. 379. Study of alternative means of construction.

      Sec. 380. Clarification of angta status and authorities.

      Sec. 381. Sense of Congress concerning use of steel manufactured in North America negotiation of a project labor Agreement.

      Sec. 382. Sense of Congress and study concerning participation by small business concerns.

      Sec. 383. Alaska pipeline construction training Program.

      Sec. 384. Sense of Congress concerning natural gas demand.

      Sec. 385. Sense of Congress concerning Alaskan ownership.

      Sec. 386. Loan guarantees.

TITLE IV--COAL

Subtitle A--Clean Coal Power Initiative

      Sec. 401. Authorization of appropriations.

      Sec. 402. Project criteria.

      Sec. 403. Report.

      Sec. 404. Clean coal centers of excellence.

Subtitle B--Clean Power Projects

      Sec. 411. Coal technology loan.

      Sec. 412. Coal gasification.

      Sec. 413. Integrated gasification combined cycle technology.

      Sec. 414. Petroleum coke gasification.

      Sec. 415. Integrated coal/renewable energy system.

      Sec. 416. Electron scrubbing demonstration.

Subtitle C--Federal Coal Leases

      Sec. 421. Repeal of the 160-acre limitation for coal leases.

      Sec. 422. Mining plans.

      Sec. 423. Payment of advance royalties under coal leases.

      Sec. 424. Elimination of deadline for submission of coal lease operation and reclamation plan.

      Sec. 425. Amendment relating to financial assurances with respect to bonus bids.

      Sec. 426. Inventory requirement.

      Sec. 427. Application of amendments.

Subtitle D--Coal and related programs

      Sec. 441. Clean air coal program.

TITLE V--INDIAN ENERGY

      Sec. 501. Short title.

      Sec. 502. Office of Indian Energy Policy and Programs.

      Sec. 503. Indian energy.

      Sec. 504. Four corners transmission line project.

      Sec. 505. Energy efficiency in federally assisted housing.

      Sec. 506. Consultation with Indian tribes.

TITLE VI--NUCLEAR MATTERS

Subtitle A--Price-Anderson Act Amendments

      Sec. 601. Short title.

      Sec. 602. Extension of indemnification authority.

      Sec. 603. Maximum assessment.

      Sec. 604. Department of energy liability limit.

      Sec. 605. Incidents outside the United States.

      Sec. 606. Reports.

      Sec. 607. Inflation adjustment.

      Sec. 608. Treatment of modular reactors.

      Sec. 609. Applicability.

      Sec. 610. Prohibition on assumption by United States government of liability for certain foreign incidents.

      Sec. 611. Civil penalties.

Subtitle B--General Nuclear Matters

      Sec. 621. Licenses.

      Sec. 622. NRC training program.

      Sec. 623. Cost recovery from government agencies.

      Sec. 624. Elimination of pension offset.

      Sec. 625. Antitrust review.

      Sec. 626. Decommissioning.

      Sec. 627. Limitation on legal fee reimbursement.

      Sec. 628. Decommissioning pilot program.

      Sec. 629. Report on feasibility of developing commercial nuclear energy generation facilities at existing Department of Energy sites.

      Sec. 630. Uranium sales.

      Sec. 631. Cooperative research and development and special demonstration projects for the uranium mining industry.

      Sec. 632. Whistleblower protection.

      Sec. 633. Medical isotope production.

      Sec. 634. Fernald byproduct material.

      Sec. 635. Safe disposal of greater-than-class c radioactive waste.

      Sec. 636. Prohibition on nuclear exports to countries that sponsor terrorism.

      Sec. 637. Uranium enrichment facilities.

      Sec. 638. National uranium stockpile.

Subtitle C--Advanced Reactor Hydrogen Cogeneration Project

      Sec. 651. Project establishment.

      Sec. 652. Project definition.

      Sec. 653. Project management.

      Sec. 654. Project requirements.

      Sec. 655. Authorization of appropriations.

Subtitle D--Nuclear Security

      Sec. 661. Nuclear facility threats.

      Sec. 662. Fingerprinting for criminal history record checks.

      Sec. 663. Use of firearms by security personnel of licensees and certificate holders 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 purchasing requirements.

Subtitle B--Hybrid vehicles, advanced vehicles, and fuel cell buses

Part I--Hybrid vehicles

      Sec. 711. Hybrid vehicles.

Part II--Advanced vehicles

      Sec. 721. Definitions.

      Sec. 722. Pilot program.

      Sec. 723. Reports to Congress.

      Sec. 724. Authorization of appropriations.

Part III--Fuel cell buses

      Sec. 731. Fuel cell transit bus demonstration.

Subtitle C--Clean school buses

      Sec. 741. Definitions.

      Sec. 742. Program for replacement of certain school buses with clean school buses.

      Sec. 743. Diesel retrofit program.

      Sec. 744. Fuel cell school buses.

Subtitle D--Miscellaneous

      Sec. 751. Railroad efficiency.

      Sec. 752. Mobile emission reductions trading and crediting.

      Sec. 753. Aviation fuel conservation and emissions.

      Sec. 754. Diesel fueled vehicles.

      Sec. 755. Conserve by Bicycling Program.

      Sec. 756. Reduction of engine idling of heavy-duty vehicles.

      Sec. 757. Biodiesel engine testing program.

      Sec. 758. High occupancy vehicle exception.

Subtitle E--Automobile efficiency

      Sec. 771. Authorization of appropriations for implementation and enforcement of fuel economy standards.

      Sec. 772. Revised considerations for decisions on maximum feasible average fuel economy.

      Sec. 773. Extension of maximum fuel economy increase for alternative fueled vehicles.

      Sec. 774. Study of feasibility and effects of reducing use of fuel for automobiles.

TITLE VIII--HYDROGEN

      Sec. 801. Definitions.

      Sec. 802. Plan.

      Sec. 803. Programs.

      Sec. 804. Interagency task force.

      Sec. 805. Advisory Committee.

      Sec. 806. External review.

      Sec. 807. Miscellaneous provisions.

      Sec. 808. Savings clause.

      Sec. 809. Authorization of appropriations.

TITLE IX--RESEARCH AND DEVELOPMENT

      Sec. 901. Goals.

      Sec. 902. Definitions.

Subtitle A--Energy Efficiency

      Sec. 904. Energy efficiency.

      Sec. 905. Next generation lighting initiative.

      Sec. 906. National building performance initiative.

      Sec. 907. Secondary electric vehicle battery use program.

      Sec. 908. Energy efficiency science initiative.

      Sec. 909. Electric motor control technology.

      Sec. 910. Advanced energy technology transfer centers.

Subtitle B--Distributed Energy and Electric Energy Systems

      Sec. 911. Distributed energy and electric energy systems.

      Sec. 912. Hybrid distributed power systems.

      Sec. 913. High power density industry program.

      Sec. 914. Micro-cogeneration energy technology.

      Sec. 915. Distributed energy technology demonstration program.

      Sec. 916. Reciprocating power.

Subtitle C--Renewable energy

      Sec. 918. Renewable energy.

      Sec. 919. Bioenergy programs.

      Sec. 920. Concentrating solar power research and development Program.

      Sec. 921. Miscellaneous projects.

      Sec. 922. Renewable energy in public buildings.

      Sec. 923. Study of marine renewable energy options.

Subtitle D--Nuclear energy

      Sec. 924. Nuclear energy.

      Sec. 925. Nuclear energy research and development programs.

      Sec. 926. Advanced fuel cycle Initiative.

      Sec. 927. University nuclear science and engineering support.

      Sec. 928. Security of reactor designs.

      Sec. 929. Alternatives to industrial radioactive sources.

      Sec. 930. Geological isolation of spent fuel.

Subtitle E--Fossil energy

Part I--Research programs

      Sec. 931. Fossil energy.

      Sec. 932. Oil and gas research programs.

      Sec. 933. Technology transfer.

      Sec. 934. Research and development for coal mining technologies.

      Sec. 935. Coal and related technologies Program.

      Sec. 936. Complex Well Technology Testing Facility.

      Sec. 937. Fischer-Tropsch diesel fuel loan guarantee Program.

Part II--Ultra-deepwater and unconventional natural gas and other petroleum resources

      Sec. 941. Program authority.

      Sec. 942. Ultra-deepwater Program.

      Sec. 943. Unconventional natural gas and other petroleum resources Program.

      Sec. 944. Additional requirements for awards.

      Sec. 945. Advisory committees.

      Sec. 946. Limits on participation.

      Sec. 947. Sunset.

      Sec. 948. Definitions.

      Sec. 949. Funding.

Subtitle F--Science

      Sec. 951. Science.

      Sec. 952. United States participation in ITER.

      Sec. 953. Plan for Fusion Energy Sciences Program.

      Sec. 954. Spallation Neutron Source.

      Sec. 955. Support for science and energy facilities and infrastructure.

      Sec. 956. Catalysis Research and development Program.

      Sec. 957. Nanoscale Science and Engineering Research, development, demonstration, and commercial application.

      Sec. 958. Advanced scientific computing for energy missions.

      Sec. 959. Genomes to Life Program.

      Sec. 960. Fission and fusion energy materials research Program.

      Sec. 961. Energy-Water Supply Program.

      Sec. 962. Nitrogen fixation.

Subtitle G--Energy and environment

      Sec. 964. United States-Mexico energy Technology cooperation.

      Sec. 965. Western Hemisphere energy cooperation.

      Sec. 966. Waste reduction and use of alternatives.

      Sec. 967. Report on fuel cell test Center.

      Sec. 968. Arctic Engineering Research Center.

      Sec. 969. Barrow Geophysical Research Facility.

      Sec. 970. Western Michigan demonstration project.

Subtitle H--Management

      Sec. 971. Availability of funds.

      Sec. 972. Cost sharing.

      Sec. 973. Merit review of proposals.

      Sec. 974. External technical review of departmental programs.

      Sec. 975. Improved coordination of Technology transfer activities.

      Sec. 976. Federal laboratory educational partners.

      Sec. 977. Interagency cooperation.

      Sec. 978. Technology Infrastructure Program.

      Sec. 979. Reprogramming.

      Sec. 980. Construction with other laws.

      Sec. 981. Report on research and development Program evaluation methodologies.

      Sec. 982. Department of Energy Science and Technology Scholarship Program.

      Sec. 983. Report on equal employment opportunity practices.

      Sec. 984. Small business advocacy and assistance.

      Sec. 985. Report on mobility of scientific and technical personnel.

      Sec. 986. National Academy of Sciences report.

      Sec. 987. Outreach.

      Sec. 988. Competitive award of management contracts.

      Sec. 989. Educational programs in science and mathematics.

TITLE X--DEPARTMENT OF ENERGY MANAGEMENT

      Sec. 1001. Additional Assistant Secretary position.

      Sec. 1002. Other transactions authority.

TITLE XI--PERSONNEL AND TRAINING

      Sec. 1101. Training guidelines for electric energy industry personnel.

      Sec. 1102. Improved access to energy-related scientific and technical careers.

      Sec. 1103. National Power Plant Operations Technology and Education Center.

      Sec. 1104. International energy training.

TITLE XII--ELECTRICITY

      Sec. 1201. Short title.

Subtitle A--Reliability standards

      Sec. 1211. Electric reliability standards.

Subtitle B--Transmission infrastructure modernization

      Sec. 1221. Siting of interstate electric transmission facilities.

      Sec. 1222. Third-party finance.

      Sec. 1223. Transmission system monitoring.

      Sec. 1224. Advanced transmission technologies.

      Sec. 1225. Electric transmission and distribution programs.

      Sec. 1226. Advanced Power System Technology Incentive Program.

      Sec. 1227. Office of Electric Transmission and Distribution.

Subtitle C--Transmission operation improvements

      Sec. 1231. Open nondiscriminatory access.

      Sec. 1232. Sense of Congress on Regional Transmission Organizations.

      Sec. 1233. Regional Transmission Organization applications progress report.

      Sec. 1234. Federal utility participation in Regional Transmission Organizations.

      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 requirements.

Subtitle F--Repeal of PUHCA

      Sec. 1261. Short title.

      Sec. 1262. Definitions.

      Sec. 1263. Repeal of the Public Utility Holding Company Act of 1935.

      Sec. 1264. Federal access to books and records.

      Sec. 1265. State access to books and records.

      Sec. 1266. Exemption authority.

      Sec. 1267. Affiliate transactions.

      Sec. 1268. Applicability.

      Sec. 1269. Effect on other regulations.

      Sec. 1270. Enforcement.

      Sec. 1271. Savings provisions.

      Sec. 1272. Implementation.

      Sec. 1273. Transfer of resources.

      Sec. 1274. Effective date.

      Sec. 1275. Service allocation.

      Sec. 1276. Authorization of appropriations.

      Sec. 1277. Conforming amendments to the Federal Power Act.

Subtitle G--Market transparency, enforcement, and consumer protection

      Sec. 1281. Market transparency rules.

      Sec. 1282. Market manipulation.

      Sec. 1283. Enforcement.

      Sec. 1284. Refund effective date.

      Sec. 1285. Refund authority.

      Sec. 1286. Sanctity of contract.

      Sec. 1287. Consumer privacy and unfair trade practices.

Subtitle H--Merger reform

      Sec. 1291. Merger review reform and accountability.

      Sec. 1292. Electric utility mergers.

Subtitle I--Definitions

      Sec. 1295. Definitions.

Subtitle J--Technical and conforming amendments

      Sec. 1297. Conforming amendments.

TITLE XIII--ENERGY TAX INCENTIVES

      Sec. 1300. Short title; amendment of 1986 Code.

Subtitle A--Conservation

Part I--Residential and business property

      Sec. 1301. Credit for residential energy efficient property.

      Sec. 1302. Extension and expansion of credit for electricity produced from certain 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 vehicles removed from United States.

      Sec. 1317. Repeal of phaseouts for qualified electric vehicle credit and deduction 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 Environmental 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 Commission or State electric restructuring policy.

      Sec. 1328. Modifications to special rules for nuclear decommissioning costs.

      Sec. 1329. Treatment of certain income of cooperatives.

      Sec. 1330. Arbitrage rules not to apply to prepayments for natural gas.

Subtitle C--Production

Part I--Oil and gas provisions

      Sec. 1341. Oil and gas from marginal wells.

      Sec. 1342. Temporary suspension of limitation based on 65 percent of taxable income and extension of suspension of taxable income limit with respect to marginal production.

      Sec. 1343. Amortization of delay rental payments.

      Sec. 1344. Amortization of geological and geophysical expenditures.

      Sec. 1345. Extension and modification of credit for producing fuel from a nonconventional 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 minimum tax.

      Sec. 1348. Temporary repeal of alternative minimum tax preference for intangible 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 businesses on indian reservations.

      Sec. 1362. Payment of dividends on stock of cooperatives without reducing patronage dividends.

      Sec. 1363. Distributions from publicly traded partnerships treated as qualifying income of regulated investment companies.

      Sec. 1364. Ceiling fans.

      Sec. 1365. Certain steam generators, and certain reactor vessel heads, used in nuclear facilities.

      Sec. 1366. Brownfields demonstration program for qualified green building and sustainable design projects.

TITLE XIV--MISCELLANEOUS

Subtitle A--Rural and Remote Electricity Construction

      Sec. 1401. Denali Commission programs.

      Sec. 1402. Rural and remote community assistance.

Subtitle B--Coastal programs

      Sec. 1411. Royalty payments under leases under the Outer Continental Shelf Lands Act.

      Sec. 1412. Domestic offshore energy reinvestment.

Subtitle C--Reforms to the Board of Directors of the Tennessee Valley Authority

      Sec. 1431. Change in composition, operation, and duties of the Board of Directors 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 determination.

      Sec. 1506. Elimination of oxygen content requirement for reformulated gasoline.

      Sec. 1507. Analyses of motor vehicle fuel changes.

      Sec. 1508. Data collection.

      Sec. 1509. Reducing the proliferation of State fuel controls.

      Sec. 1510. Fuel system requirements harmonization study.

      Sec. 1511. Commercial byproducts from municipal solid waste and cellulosic biomass loan guarantee program.

      Sec. 1512. Resource Center.

      Sec. 1513. Cellulosic biomass and waste-derived ethanol conversion assistance.

      Sec. 1514. Blending of compliant reformulated gasolines.

Subtitle B--Underground storage tank compliance

      Sec. 1521. Short title.

      Sec. 1522. Leaking underground storage tanks.

      Sec. 1523. Inspection of underground storage tanks.

      Sec. 1524. Operator training.

      Sec. 1525. Remediation from oxygenated fuel additives.

      Sec. 1526. Release prevention, compliance, and enforcement.

      Sec. 1527. Delivery prohibition.

      Sec. 1528. Federal facilities.

      Sec. 1529. Tanks on Tribal lands.

      Sec. 1530. Future release containment technology.

      Sec. 1531. Authorization of appropriations.

      Sec. 1532. Conforming amendments.

      Sec. 1533. Technical amendments.

TITLE XVI--STUDIES

      Sec. 1601. Study on inventory of petroleum and natural gas storage.

      Sec. 1602. Natural gas supply shortage report.

      Sec. 1603. Split-estate Federal oil and gas leasing and development practices.

      Sec. 1604. Resolution of Federal resource development conflicts in the Powder River Basin.

      Sec. 1605. Study of energy efficiency standards.

      Sec. 1606. Telecommuting study.

      Sec. 1607. Liheap report.

      Sec. 1608. Oil bypass filtration technology.

      Sec. 1609. Total integrated thermal systems.

      Sec. 1610. University collaboration.

      Sec. 1611. Reliability and consumer protection assessment.

TITLE I--ENERGY EFFICIENCY

Subtitle A--Federal Programs

SEC. 101. ENERGY AND WATER SAVING MEASURES IN CONGRESSIONAL 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 buildings established under section 543(a)(1); and

      ‘(2) shall submit the plan to Congress, not later than 180 days after the date of enactment of this section.

    ‘(b) Plan Requirements- The plan shall include--

      ‘(1) a description of the life cycle cost analysis used to determine the cost-effectiveness of proposed energy efficiency projects;

      ‘(2) a schedule of energy surveys to ensure complete surveys of all congressional buildings every 5 years to determine the cost and payback period of energy and water conservation measures;

      ‘(3) a strategy for installation of life cycle cost-effective energy and water conservation measures;

      ‘(4) the results of a study of the costs and benefits of installation of submetering in congressional buildings; and

      ‘(5) information packages and ‘how-to’ guides for each Member and employing authority of Congress 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 congressional energy management and conservation programs required under this section that describes in detail--

      ‘(1) energy expenditures and savings estimates for each facility;

      ‘(2) energy management and conservation projects; and

      ‘(3) future priorities to ensure compliance with this section.’.

    (b) Table of Contents Amendment- The table of contents of the National Energy Conservation Policy Act is amended by adding at the end of the items relating to part 3 of title V the following new item:

      ‘Sec. 552. Energy and water savings measures in congressional buildings.’.

    (c) Repeal- Section 310 of the Legislative Branch Appropriations Act, 1999 (2 U.S.C. 1815), is repealed.

    (d) Energy Infrastructure- The Architect of the Capitol, building on the Master Plan Study completed in July 2000, shall commission a study to evaluate the energy infrastructure of the Capital Complex to determine how the infrastructure could be augmented to become more energy efficient, using unconventional and renewable energy resources, in a way that would enable the Complex to have reliable utility service in the event of power fluctuations, shortages, or outages.

    (e) Authorization of Appropriations- There are authorized to be appropriated to the Architect of the Capitol to carry out subsection (d), $2,000,000 for each of fiscal years 2004 through 2008.

SEC. 102. ENERGY MANAGEMENT REQUIREMENTS.

    (a) Energy Reduction Goals-

      (1) AMENDMENT- Section 543(a)(1) of the National Energy Conservation Policy Act (42 U.S.C. 8253(a)(1)) is amended by striking ‘its Federal buildings so that’ and all that follows through the end and inserting ‘the Federal buildings of the agency (including each industrial or laboratory facility) 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

--2

2005

--4

2006

--6

2007

--8

2008

--10

2009

--12

2010

--14

2011

--16

2012

--18

2013

--20.’.

      (2) REPORTING BASELINE- The energy reduction goals and baseline established in paragraph (1) of section 543(a) of the National Energy Conservation Policy Act (42 U.S.C. 8253(a)(1)), as amended by this subsection, supersede all previous goals and baselines under such paragraph, and related reporting requirements.

    (b) Review and Revision of Energy Performance Requirement- Section 543(a) of the National Energy Conservation Policy Act (42 U.S.C. 8253(a)) is further amended by adding at the end the following:

    ‘(3) Not later than December 31, 2012, the Secretary shall review the results of the implementation of the energy performance requirement established under paragraph (1) and submit to Congress recommendations concerning energy performance requirements for fiscal years 2014 through 2023.’.

    (c) Exclusions- Section 543(c)(1) of the National Energy Conservation Policy Act (42 U.S.C. 8253(c)(1)) is amended by striking ‘An agency may exclude’ and all that follows through the end and inserting ‘(A) An agency may exclude, from the energy performance requirement for a fiscal year established under subsection (a) and the energy management requirement established under subsection (b), any Federal building or collection of Federal buildings, if the head of the agency finds that--

      ‘(i) compliance with those requirements would be impracticable;

      ‘(ii) the agency has completed and submitted all federally required energy management reports;

      ‘(iii) the agency has achieved compliance with the energy efficiency requirements of this Act, the Energy Policy Act of 1992, Executive orders, and other Federal law; and

      ‘(iv) the agency has implemented all practicable, life cycle cost-effective projects with respect to the Federal building or collection of Federal buildings to be excluded.

    ‘(B) A finding of impracticability under subparagraph (A)(i) shall be based on--

      ‘(i) the energy intensiveness of activities carried out in the Federal building or collection of Federal buildings; or

      ‘(ii) the fact that the Federal building or collection of Federal buildings is used in the performance of a national security function.’.

    (d) Review by Secretary- Section 543(c)(2) of the National Energy Conservation Policy Act (42 U.S.C. 8253(c)(2)) is amended--

      (1) by striking ‘impracticability standards’ and inserting ‘standards for exclusion’;

      (2) by striking ‘a finding of impracticability’ and inserting ‘the exclusion’; and

      (3) by striking ‘energy consumption requirements’ and inserting ‘requirements of subsections (a) and (b)(1)’.

    (e) Criteria- Section 543(c) of the National Energy Conservation Policy Act (42 U.S.C. 8253(c)) is further amended by adding at the end the following:

    ‘(3) Not later than 180 days after the date of enactment of this paragraph, the Secretary shall issue guidelines 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 Savings- 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. Except as otherwise provided by law, such funds may be used only for energy efficiency, water conservation, or unconventional and renewable energy resources projects.’.

    (g) Reports- Section 548(b) of the National Energy 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 ‘Congress’.

    (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 ACCOUNTABILITY.

    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 accordance with guidelines established by the Secretary under paragraph (2), all Federal buildings shall, for the purposes of efficient use of energy and reduction in the cost of electricity used in such buildings, be metered or submetered. Each agency shall use, to the maximum extent practicable, advanced 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 incorporated into existing Federal energy tracking systems 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 subsection, the Secretary, in consultation with the Department of Defense, the General Services Administration, representatives from the metering industry, utility industry, energy services industry, energy efficiency industry, energy efficiency advocacy organizations, national laboratories, universities, and Federal facility energy managers, shall establish guidelines for agencies to carry out paragraph (1).

        ‘(B) REQUIREMENTS FOR GUIDELINES- The guidelines shall--

          ‘(i) take into consideration--

            ‘(I) the cost of metering and submetering and the reduced cost of operation and maintenance expected to result from metering and submetering;

            ‘(II) the extent to which metering and submetering are expected to result in increased potential for energy management, increased potential for energy savings and energy efficiency improvement, and cost and energy savings due to utility contract aggregation; and

            ‘(III) the measurement and verification protocols of the Department of Energy;

          ‘(ii) include recommendations concerning the amount of funds and the number of trained personnel necessary to gather and use the metering information to track and reduce energy use;

          ‘(iii) establish priorities for types and locations of buildings to be metered and submetered based on cost-effectiveness and a schedule of 1 or more dates, not later than 1 year after the date of issuance of the guidelines, on which the requirements specified in paragraph (1) shall take effect; and

          ‘(iv) establish exclusions from the requirements specified in paragraph (1) based on the de minimis quantity of energy use of a Federal building, industrial process, 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 responsible for achieving the requirements and (B) demonstration by the agency, complete with documentation, of any finding that advanced meters or advanced metering devices, as defined in paragraph (1), are not practicable.’.

SEC. 104. PROCUREMENT OF ENERGY EFFICIENT PRODUCTS.

    (a) Requirements- Part 3 of title V of the National Energy Conservation Policy Act (42 U.S.C. 8251 et seq.), as amended by section 101, is amended by adding at the end the following:

‘SEC. 553. FEDERAL PROCUREMENT OF ENERGY EFFICIENT PRODUCTS.

    ‘(a) Definitions- In this section:

      ‘(1) ENERGY STAR PRODUCT- The term ‘Energy Star product’ means a product that is rated for energy efficiency under an Energy Star program.

      ‘(2) ENERGY STAR PROGRAM- The term ‘Energy Star program’ means the program established by section 324A of the Energy Policy and Conservation 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 Products-

      ‘(1) REQUIREMENT- To meet the requirements of an executive agency for an energy consuming 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 paragraph (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 executive agency.

      ‘(3) PROCUREMENT PLANNING- The head of an executive agency shall incorporate into the specifications for all procurements involving energy consuming products and systems, including guide specifications, project specifications, and construction, renovation, and services contracts that include provision 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 designated products.

    ‘(c) Listing of Energy Efficient Products in Federal Catalogs- Energy Star products and FEMP designated products shall be clearly identified and prominently displayed in any inventory or listing of products by the General Services Administration or the Defense Logistics Agency. The General Services Administration or the Defense Logistics Agency shall supply only Energy Star products or FEMP designated products for all product 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 account.

    ‘(d) Specific Products- (1) In the case of electric motors of 1 to 500 horsepower, agencies shall select only premium efficient motors that meet a standard designated 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 recommendations of associated electric motor manufacturers and energy efficiency groups.

    ‘(2) All Federal agencies are encouraged to take actions to maximize the efficiency of air conditioning and refrigeration equipment, including appropriate cleaning and maintenance, including the use of any system treatment 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 environmentally safe; and

      ‘(C) shown to increase seasonal energy efficiency ratio (SEER) or energy efficiency ratio (EER) when tested by the National Institute of Standards and Technology according to Department of Energy test procedures without causing any adverse 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 contents 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 Conservation Policy Act (42 U.S.C. 8287(c)) is repealed.

    (b) Payment of Costs- Section 802 of the National Energy Conservation Policy Act (42 U.S.C. 8287a) is amended by inserting ‘, water, or wastewater treatment’ after ‘payment of energy’.

    (c) Energy Savings- Section 804(2) of the National Energy Conservation Policy Act (42 U.S.C. 8287c(2)) is amended to read as follows:

      ‘(2) The term ‘energy savings’ means a reduction 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 existing 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 recovery, excluding any cogeneration process for other than a federally owned building or buildings or other federally owned facilities; or

        ‘(C) the increased efficient use of existing water sources in either interior or exterior applications.’.

    (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 contract that provides for the performance of services for the design, acquisition, installation, testing, and, where appropriate, operation, maintenance, and repair, of an identified energy or water conservation measure or series of measures at 1 or more locations. Such contracts shall, with respect to an agency 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 requirements 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 Policy Act (42 U.S.C. 8287c(4)) is amended to read as follows:

      ‘(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 treatment of wastewater or stormwater, improvements in operation or maintenance efficiencies, retrofit activities, or other related activities, not at a Federal hydroelectric facility.’.

    (f) Review- Not later than 180 days after the date of the enactment of this Act, the Secretary of Energy shall complete a review of the Energy Savings Performance Contract program to identify statutory, regulatory, and administrative obstacles that prevent Federal agencies from fully utilizing the program. In addition, this review shall identify all areas for increasing program flexibility and effectiveness, including audit and measurement verification requirements, accounting for energy use in determining savings, contracting requirements, including the identification of additional qualified contractors, and energy efficiency services covered. The Secretary shall report these findings to Congress and shall implement identified administrative and regulatory changes to increase program flexibility and effectiveness to the extent that such changes are consistent with statutory authority.

    (g) Extension of Authority- Any energy savings performance contract entered into under section 801 of the National Energy Conservation Policy Act (42 U.S.C. 8287) after October 1, 2003, and before the date of enactment of this Act, shall be deemed to have been entered into pursuant to such section 801 as amended by subsection (a) of this section.

SEC. 106. ENERGY SAVINGS PERFORMANCE CONTRACTS PILOT PROGRAM FOR NONBUILDING APPLICATIONS.

    (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 contracts 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, secondary 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 combined.

    (b) Procedures- The Secretary of Energy, in consultation 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 implementing this section.

    (c) Definitions- In this section:

      (1) NONBUILDING APPLICATION- The term ‘nonbuilding application’ means--

        (A) any class of vehicles, devices, or equipment that are transportable under their own power by land, sea, or air that consume energy from any fuel source for the purpose of such transportability, or to maintain a controlled environment within such vehicle, device, or equipment; or

        (B) any Federally owned equipment used to generate electricity or transport water.

      (2) SECONDARY SAVINGS- The term ‘secondary 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 benefits that resulted from such projects; and recommendations on whether the pilot program should be extended, expanded, or authorized permanently as a part of the program authorized under title VIII of the National Energy Conservation Policy Act (42 U.S.C. 8287 et seq.).

SEC. 107. VOLUNTARY COMMITMENTS TO REDUCE INDUSTRIAL 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 cooperation with the Administrator of the Environmental Protection Agency and other appropriate Federal agencies, shall recognize and publicize the achievements of participants 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 materials 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 organizational productivity and health (including by improving indoor air quality) as well as flexibility and technological change to improve environmental sustainability. Such program 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 advanced building systems and engineering, electrical and computer engineering, computer science, architecture, urban design, and environmental and mechanical engineering. Such university shall partner with other universities and entities who have established programs and the capability of advancing innovative building efficiency technologies.

    (c) Authorization of Appropriations- There are authorized to be appropriated to the Secretary of Energy to carry out this section $6,000,000 for each of the fiscal years 2004 through 2006, to remain available until expended. For any fiscal year in which funds are expended under this section, the Secretary shall provide 1/3 of the total amount to the lead university described in subsection (b), and provide the remaining 2/3 to the other participants referred to in subsection (b) on an equal basis.

SEC. 109. FEDERAL BUILDING PERFORMANCE STANDARDS.

    Section 305(a) of the Energy Conservation and Production 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 efficiency performance standards-

      ‘(A) IN GENERAL- Not later than 1 year after the date of enactment of this paragraph, the Secretary of Energy shall establish, by rule, revised Federal building energy efficiency performance standards that require that--

        ‘(i) if life-cycle cost-effective, for new Federal buildings--

          ‘(I) such buildings be designed so as to achieve energy consumption levels at least 30 percent below those of the version current as of the date of enactment of this paragraph of the ASHRAE Standard or the International Energy Conservation Code, as appropriate; and

          ‘(II) sustainable design principles are applied to the siting, design, and construction 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 International 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 established under this paragraph should be updated to reflect the amendments.

      ‘(C) STATEMENT ON COMPLIANCE OF NEW BUILDINGS- In the budget request of the Federal agency for each fiscal year and each report submitted by the Federal agency under section 548(a) of the National Energy Conservation Policy Act (42 U.S.C. 8258(a)), the head of each Federal agency shall include--

        ‘(i) a list of all new Federal buildings owned, operated, or controlled by the Federal agency; and

        ‘(ii) a statement concerning whether the Federal buildings meet or exceed the revised standards established under this paragraph.’.

SEC. 110. INCREASED USE OF RECOVERED MINERAL COMPONENT 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 adding at the end the following new section:

‘INCREASED USE OF RECOVERED MINERAL COMPONENT IN FEDERALLY FUNDED PROJECTS INVOLVING PROCUREMENT 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 agency that on a regular basis procures, or provides Federal funds to pay or assist in paying the cost of procuring, material for cement or concrete 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 byproduct recovered or diverted from solid waste that the Administrator, in consultation with an agency head, determines should be treated as recovered mineral component under this section for use in cement or concrete projects paid for, in whole or in part, by the agency head.

    ‘(b) Implementation of Requirements-

      ‘(1) IN GENERAL- Not later than 1 year after the date of enactment of this section, the Administrator 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 cement 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 greater use of recovered mineral component in cement or concrete projects for which recovered mineral components 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 cooperation with the Secretary of Transportation and the Secretary of Energy, shall conduct a study to determine the extent to which current procurement requirements, when fully implemented in accordance with subsection (b), may realize energy savings and environmental benefits attainable with substitution of recovered mineral component in cement used in cement or concrete projects.

      ‘(2) MATTERS TO BE ADDRESSED- The study shall--

        ‘(A) quantify the extent to which recovered mineral components are being substituted for Portland cement, particularly as a result of current procurement requirements, and the energy savings and environmental benefits associated 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 mineral component in types of cement or concrete projects for which recovered mineral components historically have not been used or have been used only minimally;

        ‘(ii) evaluate the feasibility of establishing guidelines or standards for optimized substitution rates of recovered mineral component in those cement or concrete projects; and

        ‘(iii) identify any potential environmental or economic effects that may result from greater 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 Administrator 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 Administrator and each agency head shall, not later than 1 year after the release of the report in accordance with subsection (c)(3), take additional actions authorized under this Act to establish procurement requirements and incentives that provide for the use of cement and concrete with increased substitution of recovered mineral component in the construction and maintenance of cement or concrete projects, so as to--

      ‘(1) realize more fully the energy savings and environmental benefits associated with increased substitution; and

      ‘(2) eliminate barriers identified under subsection (c).

    ‘(e) Effect of Section- Nothing in this section affects the requirements of section 6002 (including the guidelines and specifications for implementing those requirements).’.

    (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 following 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 PROGRAM.

    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 Production Act (42 U.S.C. 6872) is amended by striking ‘for fiscal years 1999 through 2003 such sums as may be necessary’ 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 necessary, 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 Policy Act of 2003 shall contain a goal, consisting of an improvement of 25 percent or more in the efficiency of use of energy in the State concerned in calendar year 2010 as compared to calendar year 1990, and may contain interim 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 PROGRAMS.

    (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 ‘Energy Star program’ means the program established by section 324A of the Energy Policy and Conservation Act.

      (3) RESIDENTIAL ENERGY STAR PRODUCT- The term ‘residential Energy Star product’ means a product for a residence that is rated for energy efficiency under the Energy Star program.

      (4) SECRETARY- The term ‘Secretary’ means the Secretary of Energy.

      (5) STATE ENERGY OFFICE- The term ‘State energy office’ means the State agency responsible for developing State energy conservation plans under section 362 of the Energy Policy and Conservation Act (42 U.S.C. 6322).

      (6) STATE PROGRAM- The term ‘State program’ means a State energy efficient appliance rebate 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 energy efficient appliance rebate program to provide rebates to residential consumers for the purchase of residential Energy Star products to replace used appliances of the same type;

      (2) submits an application for the allocation at such time, in such form, and containing such information as the Secretary may require; and

      (3) provides assurances satisfactory to the Secretary that the State will use the allocation to supplement, but not supplant, funds made available to carry out the State program.

    (c) Amount of Allocations-

      (1) IN GENERAL- Subject to paragraph (2), for each fiscal year, the Secretary shall allocate to the State energy office of each eligible State to carry out subsection (d) an amount equal to the product obtained by multiplying the amount made available under subsection (f) for the fiscal year by the ratio that the population of the State in the most recent calendar year for which data are available bears to the total population of all eligible States in that calendar 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 provided to residential consumers that meet the requirements of the State program. The amount of a rebate shall be determined by the State energy office, taking into consideration--

      (1) the amount of the allocation to the State energy office under subsection (c);

      (2) the amount of any Federal or State tax incentive available for the purchase of the residential Energy Star product; and

      (3) the difference between the cost of the residential Energy Star product and the cost of an appliance that is not a residential Energy Star product, but is of the same type as, and is the nearest capacity, performance, and other relevant characteristics (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 Governor 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 energy than a comparable public building constructed in compliance with standards prescribed in the most recent version of the International Energy Conservation Code, or a similar State code intended to achieve substantially equivalent efficiency levels; or

      (2) through renovation of existing public buildings 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 compliance as the Secretary may require; and

      (2) develop and distribute information and materials and conduct programs to provide technical services and assistance to encourage planning, financing, and design of energy efficient public buildings by units of local government.

    (c) Authorization of Appropriations- For the purposes of this section, there are authorized to be appropriated to the Secretary of Energy $30,000,000 for each of fiscal years 2004 through 2008. Not more than 10 percent of appropriated funds shall be used for administration.

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 efficiency; identify and develop alternative, renewable, and distributed energy supplies; and increase energy conservation 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, renewable, and distributed energy supplies;

      (2) energy efficiency projects and energy conservation programs;

      (3) studies and other activities that improve energy efficiency in low income rural and urban communities;

      (4) planning and development assistance for increasing the energy efficiency of buildings and facilities; and

      (5) technical and financial assistance to local government and private entities on developing new renewable and distributed sources of power or combined 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 appropriated 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 Conservation Act (42 U.S.C. 6201 et seq.) is amended by inserting the following after section 324:

‘SEC. 324A. ENERGY STAR PROGRAM.

    ‘There is established at the Department of Energy and the Environmental Protection Agency a voluntary program to identify and promote energy-efficient products and buildings in order to reduce energy consumption, improve energy security, and reduce pollution through voluntary labeling of or other forms of communication about products and buildings that meet the highest energy efficiency standards. Responsibilities under the program shall be divided between the Department of Energy and the Environmental Protection Agency consistent with the terms of agreements between the 2 agencies. The Administrator and the Secretary shall--

      ‘(1) promote Energy Star compliant technologies as the preferred technologies in the marketplace 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 effective dates for any of the foregoing);

      ‘(5) upon adoption of a new or revised product category, specification, or criterion, provide reasonable notice to interested parties of any changes (including effective dates) in product categories, specifications, 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 determines 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 ensuring that installed air conditioning and heating systems operate at their maximum rated efficiency levels, the Secretary shall, not later than 180 days after the date of enactment of this subsection, carry out a program to educate homeowners and small business owners concerning the energy savings resulting from properly conducted maintenance of air conditioning, heating, and ventilating systems. 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 entities as the Secretary considers appropriate, including industry trade associations, industry members, and energy efficiency organizations.

    ‘(d) Small Business Education and Assistance- The Administrator of the Small Business Administration, in consultation with the Secretary of Energy and the Administrator of the Environmental Protection Agency, shall develop and coordinate a Government-wide program, building on the existing Energy Star for Small Business Program, to assist small businesses to become more energy efficient, understand the cost savings obtainable through efficiencies, and identify financing options for energy efficiency upgrades. The Secretary and the Administrator of the Small Business Administration shall make the program information available directly to small businesses and through other Federal agencies, including the Federal Emergency Management Program and the Department of Agriculture.’.

SEC. 133. ENERGY CONSERVATION STANDARDS FOR ADDITIONAL 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, because the lamp is designed for special applications and is unlikely to be used in general purpose applications.’; and

      (2) by adding at the end the following:

      ‘(32) The term ‘battery charger’ means a device 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 refrigerators, freezers, or refrigerator-freezers that--

        ‘(A) are not consumer products regulated under this Act; and

        ‘(B) incorporate most components involved in the vapor-compression cycle and the refrigerated compartment in a single package.

      ‘(34) The term ‘external power supply’ means an external power supply circuit that is used to convert household electric current into either DC current or lower-voltage AC current to operate a consumer 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 integral light source that illuminates the legend ‘EXIT’ and any directional indicators and provides contrast between the legend, any directional indicators, and the background.

      ‘(36)(A) Except as provided in subparagraph (B), the term ‘distribution transformer’ means a transformer that--

        ‘(i) has an input voltage of 34.5 kilovolts or less;

        ‘(ii) has an output voltage of 600 volts or less; and

        ‘(iii) is rated for operation at a frequency of 60 Hertz.

      ‘(B) The term ‘distribution transformer’ does not include--

        ‘(i) transformers with multiple voltage taps, with the highest voltage tap equaling at least 20 percent more than the lowest voltage tap;

        ‘(ii) transformers, such as those commonly known as drive transformers, rectifier transformers, auto-transformers, Uninterruptible Power System transformers, impedance transformers, harmonic transformers, regulating transformers, sealed and nonventilating transformers, machine tool transformers, welding transformers, grounding transformers, or testing transformers, that are designed to be used in a special purpose application and are unlikely to be used in general purpose applications; or

        ‘(iii) any transformer not listed in clause (ii) that is excluded by the Secretary by rule because--

          ‘(I) the transformer is designed for a special application;

          ‘(II) the transformer is unlikely to be used in general purpose applications; and

          ‘(III) the application of standards to the transformer would not result in significant energy savings.

      ‘(37) The term ‘low-voltage dry-type distribution 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 lowest 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 Secretary.

      ‘(39) The term ‘torchiere’ means a portable electric lamp with a reflector bowl that directs light upward so as to give indirect illumination.

      ‘(40) The term ‘traffic signal module’ means a standard 8-inch (200mm) or 12-inch (300mm) traffic 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 induction from 1 coil to another to change the original voltage or current value.

      ‘(42) The term ‘unit heater’ means a self-contained fan-type heater designed to be installed within the heated space, except that such term does not include a warm air furnace.’.

    (b) Test Procedures- Section 323 of the Energy Policy and Conservation Act (42 U.S.C. 6293) is amended--

      (1) in subsection (b), by adding at the end the following:

      ‘(9) Test procedures for illuminated exit signs shall be based on the test method used under Version 2.0 of the Energy Star program of the Environmental Protection Agency for illuminated exit signs.

      ‘(10) Test procedures for distribution transformers and low voltage dry-type distribution transformers shall be based on the ‘Standard Test Method for Measuring the Energy Consumption of Distribution 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 requirements prescribed by the Secretary under section 346(a)(1) for distribution transformers for which the Secretary makes a determination that energy conservation standards would be technologically feasible and economically justified, and would result in significant 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 Protection Agency for traffic signal modules, as in effect on the date of enactment of this paragraph.

      ‘(12) Test procedures for medium base compact fluorescent lamps shall be based on the test methods used under the August 9, 2001, version of the Energy Star program of the Environmental Protection Agency and Department of Energy for compact 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 provided manufacturers document engineering predictions and analysis that support expected attainment 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, prescribe testing requirements for suspended ceiling fans, refrigerated bottled or canned beverage vending machines, and commercial refrigerators, freezers, and refrigerator-freezers. Such testing requirements shall be based on existing test procedures used in industry to the extent practical and reasonable. In the case of suspended ceiling fans, such test procedures shall include efficiency at both maximum output and at an output no more than 50 percent of the maximum output.’.

    (c) New Standards- Section 325 of the Energy Policy and Conservation Act (42 U.S.C. 6295) is amended by adding at the end the following:

    ‘(u) Battery Charger and External Power Supply Electric Energy Consumption-

      ‘(1) INITIAL RULEMAKING- (A) The Secretary shall, within 18 months after the date of enactment of this subsection, prescribe by notice and comment, definitions and test procedures for the power use of battery chargers and external power supplies. In establishing these test procedures, the Secretary shall consider, among other factors, existing definitions and test procedures used for measuring energy consumption in standby mode and other modes and assess 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 improvements 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 developing 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 conservation standards shall be issued for battery chargers and external power supplies or classes thereof. For each product class, any such standards shall be set at the lowest level of energy use that--

        ‘(i) meets the criteria and procedures of subsections (o), (p), (q), (r), (s), and (t); and

        ‘(ii) will result in significant overall annual 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 conservation standards pursuant to this section should be revised, the Secretary shall consider, for covered products that are major sources of standby mode energy consumption, whether to incorporate standby mode into such test procedures and energy conservation standards, taking into account, among other relevant factors, standby mode power consumption compared to overall product energy consumption.

      ‘(3) RULEMAKING- The Secretary shall not propose a standard under this section unless the Secretary has issued applicable test procedures for each product pursuant to section 323.

      ‘(4) EFFECTIVE DATE- Any standard issued under this subsection shall be applicable to products manufactured or imported 3 years after the date of issuance.

      ‘(5) VOLUNTARY PROGRAMS- The Secretary and the Administrator shall collaborate and develop programs, including programs pursuant to section 324A (relating to Energy Star Programs) and other voluntary industry agreements or codes of conduct, that are designed to reduce standby mode energy use.

    ‘(v) Suspended Ceiling Fans, Vending Machines, and Commercial Refrigerators, Freezers, and Refrigerator-Freezers- The Secretary shall not later than 36 months after the date on which testing requirements 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 refrigerators, freezers, and refrigerator-freezers. In establishing standards under this subsection, the Secretary shall use the criteria and procedures contained in subsections (o) and (p). Any standard prescribed under this subsection shall apply to products manufactured 3 years after the date of publication of a final rule establishing such standard.

    ‘(w) Illuminated Exit Signs- Illuminated exit signs manufactured on or after January 1, 2005, shall meet the Version 2.0 Energy Star Program performance requirements for illuminated exit signs prescribed by the Environmental Protection Agency.

    ‘(x) Torchieres- Torchieres manufactured on or after January 1, 2005--

      ‘(1) shall consume not more than 190 watts of power; and

      ‘(2) shall not be capable of operating with lamps that total more than 190 watts.

    ‘(y) Low Voltage Dry-Type Distribution Transformers- The efficiency of low voltage dry-type distribution transformers manufactured on or after January 1, 2005, shall be the Class I Efficiency Levels for distribution transformers specified in Table 4-2 of the ‘Guide for Determining Energy Efficiency for Distribution Transformers’ published by the National Electrical Manufacturers 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 Energy Star program of the Environmental Protection Agency for traffic signals, as in effect on the date of enactment of this subsection, and shall be installed with compatible, electrically connected signal control interface devices and conflict monitoring systems.

    ‘(aa) Unit Heaters- Unit heaters manufactured on or after the date that is 3 years after the date of enactment of this subsection shall be equipped with an intermittent 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) medium base compact fluorescent lamps manufactured on or after January 1, 2005, shall meet the following requirements prescribed by the August 9, 2001, version of the Energy Star Program Requirements for Compact Fluorescent Lamps, Energy Star Eligibility Criteria, Energy-Efficiency Specification issued by the Environmental Protection Agency and Department of Energy: minimum initial efficacy; lumen maintenance at 1000 hours; lumen maintenance at 40 percent of rated life; rapid cycle stress test; and lamp life. The Secretary may, by rule, establish requirements for color quality (CRI); power factor; operating frequency; and maximum allowable start time based on the requirements prescribed by the August 9, 2001, version of the Energy Star Program Requirements for Compact Fluorescent Lamps. The Secretary may, by rule, revise these requirements or establish other requirements considering energy savings, cost effectiveness, and consumer 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 Department of Energy, except that any State or local standards prescribed or enacted for any such product prior to the date on which such final rule is issued shall not be preempted until the standard established under subsection (u) or (v) for that product takes effect; and

      ‘(2) to products for which standards are established 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 established under subsections (w) through (bb) take effect.’.

    (d) Residential Furnace Fans- Section 325(f)(3) of the Energy Policy and Conservation Act (42 U.S.C. 6295(f)(3)) is amended by adding the following new subparagraph at the end:

    ‘(D) Notwithstanding any provision of this Act, the Secretary may consider, and prescribe, if the requirements of subsection (o) of this section are met, energy efficiency or energy use standards for electricity used for purposes of circulating air through duct work.’.

SEC. 134. ENERGY LABELING.

    (a) Rulemaking on Effectiveness of Consumer Product Labeling- Section 324(a)(2) of the Energy Policy and Conservation Act (42 U.S.C. 6294(a)(2)) is amended by adding at the end the following:

    ‘(F) Not later than 3 months after the date of enactment of this subparagraph, the Commission shall initiate a rulemaking to consider the effectiveness of the current consumer products labeling program in assisting consumers in making purchasing decisions and improving energy 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 subparagraph.’.

    (b) Rulemaking on Labeling for Additional Products- Section 324(a) of the Energy Policy and Conservation Act (42 U.S.C. 6294(a)) is further amended by adding at the end the following:

    ‘(5) The Secretary or the Commission, as appropriate, may, for covered products referred to in subsections (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 standards under section 325(y) apply, labeling requirements shall be based on the ‘Standard for the Labeling of Distribution Transformer Efficiency’ prescribed by the National Electrical Manufacturers Association (NEMA TP-3) as in effect upon the date of enactment of this paragraph.’.

Subtitle D--Public Housing

SEC. 141. CAPACITY BUILDING FOR ENERGY-EFFICIENT, AFFORDABLE 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 capabilities regarding the provision of energy efficient, affordable housing and residential energy conservation measures’; and

      (2) in paragraph (2), by inserting before the semicolon the following: ‘, including such activities relating to the provision of energy efficient, affordable 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 inserting ‘; 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 increased 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 Insurance- Section 203(b)(2) of the National Housing Act (12 U.S.C. 1709(b)(2)) is amended, in the first undesignated paragraph beginning after subparagraph (B)(ii)(IV) (relating to solar energy systems), by striking ‘20 percent’ and inserting ‘30 percent’.

    (b) Multifamily Housing Mortgage Insurance- 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 measures), by striking ‘20 percent’ and inserting ‘30 percent’.

    (c) Cooperative Housing Mortgage Insurance- 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 Conservation 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 Mortgage Insurance- Section 221(k) of the National Housing 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 Insurance- 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 Institute standards A112.19.2-1998 and A112.18.1-2000, or any revision thereto, applicable at the time of installation, and by increasing 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 conservation 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 include 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 building and safety codes and adjustments for occupancy rates increased by rehabilitation.

          ‘(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, advanced energy savings technologies, including renewable energy generation, and other such retrofits.’.

SEC. 145. GRANTS FOR ENERGY-CONSERVING IMPROVEMENTS FOR ASSISTED HOUSING.

    Section 251(b)(1) of the National Energy Conservation Policy Act (42 U.S.C. 8231(1)) is amended--

      (1) by striking ‘financed with loans’ and inserting ‘assisted’;

      (2) by inserting after ‘1959,’ the following: ‘which are eligible multifamily housing projects (as such term is defined in section 512 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note)) and are subject to mortgage restructuring and rental assistance sufficiency plans under such Act,’; and

      (3) by inserting after the period at the end of the first sentence the following new sentence: ‘Such improvements may also include the installation of energy and water conserving fixtures and fittings that conform to the American Society of Mechanical Engineers/American National Standards Institute standards A112.19.2-1998 and A112.18.1-2000, or any revision thereto, applicable at the time of installation.’.

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 following:

‘SEC. 545. SUPPORT FOR CERTAIN ENERGY POLICIES.

    ‘Consistent with the focus of the Bank’s Charter on environmental infrastructure projects, the Board members representing the United States should use their voice and vote to encourage the Bank to finance projects related to clean and efficient energy, including energy conservation, that prevent, control, or reduce environmental pollutants or contaminants.’.

SEC. 147. ENERGY-EFFICIENT APPLIANCES.

    In purchasing appliances, a public housing agency shall purchase energy-efficient appliances that are Energy Star products or FEMP-designated products, as such terms are defined in section 553 of the National Energy Conservation Policy Act (as amended by this title), unless the purchase of energy-efficient appliances is not cost-effective to the agency.

SEC. 148. ENERGY EFFICIENCY STANDARDS.

    Section 109 of the Cranston-Gonzalez National Affordable 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 following:

        ‘(C) rehabilitation and new construction of public and assisted housing funded by HOPE VI revitalization grants under section 24 of the United States Housing Act of 1937 (42 U.S.C. 1437v), where such standards are determined to be cost effective by the Secretary of Housing and Urban Development.’; and

        (B) in paragraph (2), by striking ‘Council of American’ and all that follows through ‘90.1-1989’)’ and inserting ‘2003 International Energy Conservation Code’;

      (2) in subsection (b)--

        (A) by striking ‘within 1 year after the date of the enactment of the Energy Policy Act of 1992’ and inserting ‘by September 30, 2004’; and

        (B) by striking ‘CABO’ and all that follows 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 International Energy Conservation Code’; and

        (B) by striking ‘CABO’ and all that follows 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 reduce utility expenses through cost-effective energy conservation and efficiency measures and energy efficient design 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 Department of Housing and Urban Development to monitor the energy usage of public housing agencies and shall submit an update every 2 years thereafter on progress in implementing the strategy.

TITLE II--RENEWABLE ENERGY

Subtitle A--General Provisions

SEC. 201. ASSESSMENT OF RENEWABLE ENERGY RESOURCES.

    (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 within the United States, including solar, wind, biomass, ocean (tidal, wave, current, and thermal), geothermal, and hydroelectric energy resources, and undertake new assessments as necessary, taking into account changes in market conditions, available technologies, and other relevant factors.

    (b) Contents of Reports- Not later than 1 year after the date of enactment of this Act, and each year thereafter, the Secretary shall publish a report based on the assessment under subsection (a). The report shall contain--

      (1) a detailed inventory describing the available amount and characteristics of the renewable energy resources; and

      (2) such other information as the Secretary believes would be useful in developing such renewable energy resources, including descriptions of surrounding terrain, population and load centers, nearby 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, recommendations for removing or addressing such barriers, 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 appropriated 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 payments for electric production from all qualified renewable energy facilities in any given year, the Secretary shall assign 60 percent of appropriated funds for that year to facilities 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 Congress an explanation of the reasons therefor, alter the percentage 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 cooperative’ and inserting ‘a not-for-profit electric cooperative, a public utility described in section 115 of the Internal Revenue Code of 1986, a State, Commonwealth, territory, or possession of the United States or the District of Columbia, or a political subdivision thereof, or an Indian tribal government or subdivision thereof,’; and

      (2) by inserting ‘landfill gas,’ after ‘wind, biomass,’.

    (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 beginning 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, biomass,’.

    (e) Sunset- Section 1212(f) of the Energy Policy Act of 1992 (42 U.S.C. 13317(f)) is amended by striking ‘the expiration of’ and all that follows through ‘of this section’ and inserting ‘September 30, 2023’.

    (f) Authorization of Appropriations- Section 1212(g) of the Energy Policy Act of 1992 (42 U.S.C. 13317(g)) is amended to read as follows:

    ‘(g) Authorization of Appropriations-

      ‘(1) IN GENERAL- Subject to paragraph (2), there are authorized to be appropriated such sums as may be necessary to carry out this section for fiscal 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 Government 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 derived from--

        (A) any of the following forest-related resources: 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 pressure-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 biodegradation 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 livestock waste nutrients; or

        (D) a plant that is grown exclusively as a fuel for the production of electricity.

      (2) RENEWABLE ENERGY- The term ‘renewable energy’ means electric energy generated from solar, wind, biomass, landfill gas, geothermal, municipal solid waste, or new hydroelectric generation capacity achieved from increased efficiency or additions of new capacity at an existing hydroelectric project.

    (c) Calculation- For purposes of determining compliance with the requirement of this section, the amount of renewable energy shall be doubled if--

      (1) the renewable energy is produced and used on-site at a Federal facility;

      (2) the renewable energy is produced on Federal 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 Federal Government in meeting the goals established by this section.

SEC. 204. INSULAR AREAS ENERGY SECURITY.

    Section 604 of the Act entitled ‘An Act to authorize appropriations for certain insular areas of the United States, and for other purposes’, approved December 24, 1980 (48 U.S.C. 1492), is amended--

      (1) in subsection (a)(4) by striking the period and inserting a semicolon;

      (2) by adding at the end of subsection (a) the following new paragraphs:

      ‘(5) electric power transmission and distribution lines in insular areas are inadequate to withstand damage caused by the hurricanes and typhoons which frequently occur in insular areas and such damage often costs millions of dollars to repair; and

      ‘(6) the refinement of renewable energy technologies 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 conservation and increased energy efficiency, and indigenous sources in regard to the insular areas.’;

      (3) by amending subsection (e) to read as follows:

    ‘(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 subsection (c);

      ‘(B) drafting long-term energy plans for such insular areas with the objective of reducing, to the extent feasible, their reliance on energy imports by the year 2010, increasing energy conservation and energy efficiency, and maximizing, to the extent feasible, 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 insular area be protected from damage caused by hurricanes and typhoons.

    ‘(2) Not later than December 31, 2005, the Secretary 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 governments 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 hurricanes and typhoons.

        ‘(B) ELIGIBLE PROJECTS- The Secretary may award grants under subparagraph (A) only to governments of insular areas of the United States that submit written project plans to the Secretary for projects that meet the following criteria:

          ‘(i) The project is designed to protect electric power transmission and distribution lines located in 1 or more of the insular areas of the United States from damage caused by hurricanes and typhoons.

          ‘(ii) The project is likely to substantially 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 direct damage and other negative impacts that the project is designed to prevent or mitigate. The cost benefit analysis required by this criterion shall be computed on a net present value basis.

          ‘(v) The project design has taken into consideration long-term changes to the areas and persons it is designed to protect and has manageable future maintenance and modification requirements.

          ‘(vi) The project plan includes an analysis of a range of options to address the problem it is designed to prevent or mitigate and a justification for the selection 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 available.

        ‘(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 reducing future disaster losses; and

          ‘(ii) best conform with plans that have been approved by the Federal Government or the government of the insular area where the project is to be carried out for development or hazard mitigation for that insular area.

        ‘(D) MATCHING REQUIREMENT- The Federal share of the cost for a project for which a grant is provided under this paragraph shall not exceed 75 percent of the total cost of that project. The non-Federal share of the cost may be provided in the form of cash or services.

        ‘(E) TREATMENT OF FUNDS FOR CERTAIN PURPOSES- Grants provided under this paragraph shall not be considered as income, a resource, or a duplicative program when determining eligibility or benefit levels for Federal major disaster and emergency assistance.

        ‘(F) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated 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:

‘Sec. 3177. Use of photovoltaic energy in public buildings

    ‘(a) Photovoltaic Energy Commercialization Program-

      ‘(1) IN GENERAL- The Administrator of General 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 buildings.

      ‘(2) PURPOSES- The purposes of the program shall be to accomplish the following:

        ‘(A) To accelerate the growth of a commercially viable photovoltaic industry to make this energy system available to the general public as an option which can reduce the national consumption of fossil fuel.

        ‘(B) To reduce the fossil fuel consumption and costs of the Federal Government.

        ‘(C) To attain the goal of installing solar energy systems in 20,000 Federal buildings by 2010, as contained in the Federal Government’s Million Solar Roof Initiative of 1997.

        ‘(D) To stimulate the general use within the Federal Government of life-cycle costing and innovative procurement methods.

        ‘(E) To develop program performance data to support policy decisions on future incentive 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 capability for use in public buildings.

        ‘(B) ACQUISITION LEVELS- The acquisition 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 subsection;

        ‘(B) develop innovative procurement strategies for the acquisition of such systems; and

        ‘(C) transmit to Congress an annual report on the results of the program.

    ‘(b) Photovoltaic Systems Evaluation Program-

      ‘(1) IN GENERAL- Not later than 60 days after the date of enactment of this section, the Administrator, in consultation with the Secretary of Energy, shall establish a photovoltaic solar energy systems evaluation program to evaluate such photovoltaic solar energy systems as are required in public buildings.

      ‘(2) PROGRAM REQUIREMENT- In evaluating photovoltaic solar energy systems under the program, the Administrator shall ensure that such systems reflect the most advanced technology.

    ‘(c) Authorization of Appropriations-

      ‘(1) PHOTOVOLTAIC ENERGY COMMERCIALIZATION PROGRAM- There are authorized to be appropriated to carry out subsection (a) $50,000,000 for each of fiscal years 2004 through 2008. Such sums shall remain available until expended.

      ‘(2) PHOTOVOLTAIC SYSTEMS EVALUATION PROGRAM- There are authorized to be appropriated to carry out subsection (b) $10,000,000 for each of fiscal years 2004 through 2008. Such sums shall remain available until expended.’.

    (b) Conforming Amendment- The section analysis 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, PETROLEUM-BASED PRODUCT SUBSTITUTES, AND OTHER COMMERCIAL PURPOSES.

    (a) Findings- Congress finds the following:

      (1) Thousands of communities in the United States, many located near Federal lands, are at risk to wildfire. Approximately 190,000,000 acres of land managed by the Secretary of Agriculture and the Secretary of the Interior are at risk of catastrophic fire in the near future. The accumulation of heavy forest fuel loads continues to increase as a result of disease, insect infestations, and drought, further raising the risk of fire each year.

      (2) In addition, more than 70,000,000 acres across all land ownerships are at risk to higher than normal mortality over the next 15 years from insect infestation and disease. High levels of tree mortality from insects and disease result in increased fire risk, loss of old growth, degraded watershed conditions, and changes in species diversity and productivity, as well as diminished fish and wildlife habitat and decreased 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 restoration 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 distribution. Such prevention treatments are widely acknowledged to be more successful and cost effective than suppression treatments in the case of insects, disease, and fire.

      (4) The byproducts of preventive treatment (wood, brush, thinnings, chips, slash, and other hazardous fuels) removed from forest lands, woodlands and rangelands represent an abundant supply of biomass for biomass-to-energy facilities and raw material for business. There are currently few markets for the extraordinary volumes of byproducts being generated as a result of the necessary large-scale preventive treatment activities.

      (5) The United States should--

        (A) promote economic and entrepreneurial opportunities in using byproducts removed through preventive treatment activities related to hazardous fuels reduction, disease, and insect infestation; and

        (B) develop and expand markets for traditionally underused wood and biomass as an outlet for byproducts of preventive treatment activities.

    (b) Definitions- In this section:

      (1) BIOMASS- The term ‘biomass’ means trees and woody plants, including limbs, tops, needles, and other woody parts, and byproducts of preventive 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 disease 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 Assistance Act (25 U.S.C. 450b(e)).

      (3) PERSON- The term ‘person’ includes--

        (A) an individual;

        (B) a community (as determined by the Secretary concerned);

        (C) an Indian tribe;

        (D) a small business, micro-business, or a corporation that is incorporated in the United States; and

        (E) a nonprofit organization.

      (4) PREFERRED COMMUNITY- The term ‘preferred community’ means--

        (A) any town, township, municipality, or other similar unit of local government (as determined 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 significant risk of catastrophic wildfire, disease, or insect infestation or which suffers from disease or insect infestation; or

        (B) any county that--

          (i) is not contained within a metropolitan 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 significant risk of catastrophic wildfire, disease, or insect infestation or which suffers from disease or insect infestation.

      (5) SECRETARY CONCERNED- The term ‘Secretary concerned’ means--

        (A) the Secretary of Agriculture with respect to National Forest System lands; and

        (B) the Secretary of the Interior with respect 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 operates a facility that uses biomass as a raw material to produce electric energy, sensible heat, transportation fuels, or substitutes for petroleum-based products to offset the costs incurred to purchase biomass for use by such facility.

      (2) GRANT AMOUNTS- A grant under this subsection may not exceed $20 per green ton of biomass delivered.

      (3) MONITORING OF GRANT RECIPIENT ACTIVITIES- As a condition of a grant under this subsection, 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 representative reasonable access to the facility that purchases or uses biomass and an opportunity to examine 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 improve the use of, or add value to, biomass. In making 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 benefits of the project, including the potential to develop thermal or electric energy resources or affordable energy, opportunities for the creation or expansion of small businesses and micro-businesses, and the potential for new job creation.

      (3) GRANT AMOUNT- A grant under this subsection 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 Secretary of the Interior, shall submit to the Committee on Energy and Natural Resources and the Committee on Agriculture, 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 report shall include the following:

      (1) An identification of the size, type, and the use of biomass by persons that receive grants under this section.

      (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 regulations 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 Geothermal 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 qualified companies and individuals under this Act.

    ‘(b) Competitive Lease Sale Required- The Secretary shall hold a competitive lease sale at least once 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 noncompetitive 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 expected 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 Interior, and for the Secretary of Agriculture with respect to National Forest Systems lands, to ensure timely completion of administrative actions necessary to process applications for geothermal leasing pending on April 1, 2003. Such an application, and any lease issued pursuant to such an application--

      ‘(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 Geothermal Steam Act of 1970 (30 U.S.C. 1004) is amended--

      (1) in paragraph (c) by redesignating subparagraphs (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 resources 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 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 royalty and the fee charged shall be nominal. Leases in existence 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 further 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 resources shall embrace not more than the amount of acreage determined by the Secretary to be reasonably necessary for such proposed utilization.’.

    (c) Existing Leases With a Direct Use Facility-

      (1) APPLICATION TO CONVERT- Any lessee under a lease under the Geothermal Steam Act of 1970 that was issued before the date of the enactment 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 resources 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.

SEC. 214. ROYALTIES AND NEAR-TERM PRODUCTION INCENTIVES.

    (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 geothermal 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 royalty rates under this section, the Secretary shall seek--

      ‘(1) to provide lessees a simplified administrative system;

      ‘(2) to encourage new development; and

      ‘(3) to achieve the same long-term level of royalty revenues to States and counties as the regulation in effect on the date of enactment of this subsection.

    ‘(d) Credits for In-Kind Payments of Electricity- 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 methodology 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 Government to that entity.’.

    (b) Disposal of Moneys From Sales, Bonuses, Royalties, and Rentals- Section 20 of the Geothermal 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, subject 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 within the boundaries of which the leased lands or geothermal 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 Existing Leases-

      (1) IN GENERAL- Notwithstanding section 5(a) of the Geothermal Steam Act of 1970, the royalty 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 production in the 6-year period beginning on the date of the enactment of this Act; or

        (B) on qualified expansion geothermal energy.

      (2) 4-YEAR APPLICATION- Paragraph (1) applies only to new commercial production of energy from a facility in the first 4 years of such production.

    (d) Definition of Qualified Expansion Geothermal 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 carried 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 during 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 before the date of the enactment of this Act may modify the terms of the lease relating to payment of royalties to comply with the amendment made by subsection (a), by applying to the Secretary of the Interior 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 percentage within the range specified in the amendment made by subsection (a)(1) and with the concurrence of the lessee and the State.

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 permitting for geothermal development of public lands and National Forest System lands under their respective jurisdictions.

    (b) Lease and Permit Applications- The memorandum 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 system that is capable of tracking lease and permit applications and providing to the applicant information as to their status within the Departments of the Interior and 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 ANALYSES, 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 ANALYSES, DOCUMENTATION, AND STUDIES.

    ‘(a) In General- The Secretary of the Interior may reimburse a person that is a lessee, operator, operating rights owner, or applicant for any lease under this Act for reasonable amounts paid by the person for preparation for the Secretary by a contractor or other person selected by the Secretary of any project-level analysis, documentation, or related study required pursuant to the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) with respect to the lease.

    ‘(b) Conditions- The Secretary may provide reimbursement under subsection (a) only if--

      ‘(1) adequate funding to enable the Secretary to timely prepare the analysis, documentation, or related 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 Secretary;

      ‘(4) the reimbursement is in the form of a reduction in the Federal share of the royalty required to be paid for the lease for which the analysis, documentation, or related study is conducted, and is agreed to by the Secretary and the person reimbursed prior to commencing the analysis, documentation, or related study; and

      ‘(5) the agreement required under paragraph (4) contains provisions--

        ‘(A) reducing royalties owed on lease production based on market prices;

        ‘(B) stipulating an automatic termination of the royalty reduction upon recovery of documented costs; and

        ‘(C) providing a process by which the lessee 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, documentation, 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 POTENTIAL.

    The Secretary of Interior, acting through the Director of the United States Geological Survey and in cooperation with the States, shall update the 1978 Assessment of Geothermal Resources, and submit that updated assessment to Congress--

      (1) not later than 3 years after the date of enactment of this Act; and

      (2) thereafter as the availability of data and developments in technology warrant.

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 Agreement (cooperative plan of development or operation)), 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 determined and certified by the Secretary to be necessary or advisable in the public interest. A majority interest of owners of any single lease shall have the authority 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 interest.

      ‘(2) MODIFICATION OF LEASE REQUIREMENTS BY SECRETARY- The Secretary may, in the discretion of the Secretary, and with the consent of the holders of leases involved, establish, alter, change, or revoke rates of operations (including drilling, operations, 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 adequately protect the rights of all parties in interest, including the United States.

    ‘(c) Modification of Rate of Prospecting, Development, and Production- The Secretary may require that any Agreement authorized by this section that applies to lands owned by the United States contain a provision 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 Holding 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 holdings or control under any provision of this Act.

    ‘(e) Pooling of Certain Lands- If separate tracts of lands cannot be independently developed and operated 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 providing for an apportionment of production or royalties 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 production 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 opportunity 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 extension.

    ‘(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 resources 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 or development contracts, and interests thereunder, shall be excepted in determining holdings or control under section 7.

    ‘(h) Coordination With State Governments- The Secretary shall coordinate unitization and pooling activities with the appropriate State agencies and shall ensure that State leases included in any unitization or pooling 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 mineral named in the first section of the Mineral Leasing 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 READJUST 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).

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 respect 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 REQUIREMENTS.

    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

      (3) by inserting before subsection (g), as so redesignated, the following:

‘SEC. 6. LEASE TERM AND WORK COMMITMENT REQUIREMENTS.

    ‘(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 subsection (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 requirements.

      ‘(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 determined under subsection (c) that the lessee satisfied 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 prescribed by the Secretary that apply to the lease for that year.

      ‘(2) PRESCRIPTION OF WORK COMMITMENT REQUIREMENTS- 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 regulations apply, the lessee shall significantly reduce the amount of work that remains to be done to achieve such production or utilization;

        ‘(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 production 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 will not impair achieving diligent development of the geothermal resource.

      ‘(3) TERMINATION OF APPLICATION OF REQUIREMENTS- Work commitment requirements prescribed 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 commercial 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 commitment requirements under subsection (b) apply to a geothermal 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 completed 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 commitment 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 period, the lease shall terminate upon the expiration of the period.

    ‘(e) Continuation After Commercial Production or Utilization- If geothermal steam is produced or utilized in commercial quantities within the primary term of the lease under subsection (a) (including any extension 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.

    ‘(f) Conversion of Geothermal Lease to Mineral Lease- The lessee under a lease that has produced geothermal steam for electrical generation, has been determined by the Secretary to be incapable of any further commercial production or utilization of geothermal steam, and that is producing any valuable byproduct in payable quantities 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 SUSPENSION 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 Suspension of Production-

      ‘(1) CONTINUATION OF LEASE FOLLOWING CESSATION OF PRODUCTION- If, at any time after commercial production under a lease is achieved, production ceases for any cause the lease shall remain 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 resumed the steps, operations, or procedures necessary to cause a resumption of such production.

      ‘(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 advance 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 suspension.

      ‘(3) Paragraph (2) shall not apply if the suspension is required or otherwise caused by the Secretary, the Secretary of a military department, a State or local government, or a force majeure.’.

SEC. 225. ANNUAL RENTAL.

    (a) Annual Rental Rate- Section 5 of the Geothermal 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 terminate 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.

      ‘(2) NOTIFICATION- The Secretary shall promptly notify a lessee that has not paid rental required under the lease that the lease will be terminated at the end of the period referred to in paragraph (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 withdrawn 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 required security procedures, and operational considerations, and discussions as to the differences, and why they are important. Further, the report shall describe revenues or energy provided to the Department 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 leasing 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 military purposes, and an identification of any new procedures 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.

      (3) Recommendations for any legislative or administrative actions that might better achieve increased geothermal production, including a common royalty structure, leasing procedures, or other changes that increase production, offset military operation costs, or enhance the Federal agencies’ ability to develop geothermal resources.

    Except as provided in this section, nothing in this subtitle shall affect the legal status of the Department of the Interior 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 associated geothermal resources’ each place it appears and inserting ‘geothermal resources’.

      (2) Section 2(e) (30 U.S.C. 1001(e)) is amended 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’.

      (3) Section 21 (30 U.S.C. 1020) is amended by striking ‘(a) Within one hundred’ and all that follows through ‘(b) Geothermal’ and inserting ‘Geothermal’.

      (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 following:

‘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 immediately before and above subsection (a) the following:

‘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 following:

‘SEC. 8. READJUSTMENT OF LEASE TERMS AND CONDITIONS.

    ‘(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 following:

‘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 following:

‘SEC. 11. SUSPENSION OF OPERATIONS AND PRODUCTION.

    ‘The’.

      (13) Section 12 (30 U.S.C. 1011) is amended by striking ‘Sec. 12. Leases’ and inserting the following:

‘SEC. 12. TERMINATION OF LEASES.

    ‘Leases’.

      (14) Section 13 (30 U.S.C. 1012) is amended by striking ‘Sec. 13. The’ and inserting the following:

‘SEC. 13. WAIVER, SUSPENSION, OR REDUCTION OF RENTAL OR ROYALTY.

    ‘The’.

      (15) Section 14 (30 U.S.C. 1013) is amended by striking ‘Sec. 14. Subject’ and inserting the following:

‘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 following:

‘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 following:

‘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; RESERVATION 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 following:

‘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 following:

‘SEC. 24. RULES AND REGULATIONS.

    ‘The’.

      (24) Section 25 (30 U.S.C. 1024) is amended by striking ‘Sec. 25. As’ and inserting the following:

‘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 following:

‘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:

‘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 following:

‘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 inserting 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 conducted in accordance with procedures established by agency 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 Commerce.’ 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 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 Prescriptions- 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 reservation 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 condition 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--

      ‘(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 necessary 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 alternative condition under this section. The written statement must demonstrate that the Secretary gave equal consideration to the effects of the condition adopted and alternatives not accepted on energy supply, distribution, cost, and use; flood control; navigation; water supply; and air quality (in addition to the preservation of other aspects of environmental quality); based on such 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, and other factual information available to the Secretary and relevant to the Secretary’s decision.

    ‘(4) Nothing in this section shall prohibit other interested parties from proposing alternative conditions.

    ‘(5) If the Secretary does not accept an applicant’s alternative condition under this section, and the Commission finds that the Secretary’s condition would be inconsistent with the purposes of this part, or other applicable law, the Commission may refer the dispute to the Commission’s Dispute Resolution Service. The Dispute Resolution Service shall consult with the Secretary and the Commission and issue a non-binding advisory within 90 days. The Secretary may accept the Dispute Resolution Service advisory 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 applicant or licensee may propose an alternative to such prescription to construct, maintain, or operate a fishway.

    ‘(2) Notwithstanding section 18, the Secretary of the Interior or the Secretary of Commerce, as appropriate, shall accept and prescribe, and the Commission shall require, the proposed alternative referred to in paragraph (1), if the Secretary of the appropriate department determines, based on substantial evidence provided by the licensee 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 necessary by the Secretary.

    ‘(3) The Secretary concerned shall submit into the public record of the Commission proceeding with any prescription under section 18 or alternative prescription it accepts under this section, a written statement explaining the basis for such prescription, and reason for not accepting any alternative prescription under this section. The written statement must demonstrate that the Secretary gave equal consideration to the effects of the condition adopted and alternatives not accepted on energy supply, distribution, cost, and use; flood control; navigation; water supply; and air quality (in addition to the preservation of other aspects of environmental quality); based on such 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, and other factual information available to the Secretary and relevant to the Secretary’s decision.

    ‘(4) Nothing in this section shall prohibit other interested 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 dispute to the Commission’s Dispute Resolution Service. The Dispute Resolution Service shall consult with the Secretary and the Commission and issue a non-binding advisory within 90 days. The Secretary may accept the Dispute Resolution Service advisory unless the Secretary finds that the recommendation will be less protective than the fishway initially prescribed by the Secretary. The Secretary shall submit the advisory and the Secretary’s final written determination into the record of the Commission’s proceeding.’.

PART II--ADDITIONAL HYDROPOWER

SEC. 241. HYDROELECTRIC PRODUCTION INCENTIVES.

    (a) Incentive Payments- For electric energy generated 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 establishes that the applicant is eligible to receive such payment and which satisfies such other requirements as the Secretary deems necessary. Such application shall be in such form, and shall be submitted at such time, as the Secretary 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 conduit 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 repair or reconstruction) in connection with the installation 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 operation 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 period of 10 fiscal years (referred to in this section as the ‘incentive period’). Such period shall begin with the fiscal year in which electric energy generated from the facility is first eligible for such payments.

    (e) Amount of Payment-

      (1) IN GENERAL- Payments made by the Secretary 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 availability 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 payment made to any person under this section as provided 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 provisions of section 29(d)(2)(B) of the Internal Revenue Code of 1986, except that in applying such provisions 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 expiration of the period of 20 fiscal years beginning with the first full fiscal year occurring after the date of enactment 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 Energy shall make incentive payments to the owners or operators of hydroelectric facilities at existing dams to be used to make capital improvements in the facilities that are directly 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 capital 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 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 Secretary of the Army, shall jointly conduct a study of the potential for increasing electric power production capability at federally owned or operated water regulation, storage, and conveyance facilities.

    (b) Content- The study under this section shall include identification and description in detail of each facility that is capable, with or without modification, of producing additional hydroelectric power, including estimation 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 Representatives and the Committee on Energy and Natural Resources of the Senate a report on the findings, conclusions, and recommendations of the study under this section 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 estimations referred to in subsection (b).

      (2) A description of activities currently conducted 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 additional hydroelectric power from each identified facility and the level of Federal power customer involvement 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 energy or capacity from each facility identified under subsection (b).

      (6) A description of actions that are planned, underway, or might reasonably be considered to increase hydroelectric power production by replacing turbine runners, by performing generator upgrades or rewinds, or construction of pumped storage facilities.

      (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 PERIODS.

    (a) In General- The Secretary of the Interior shall--

      (1) review electric power consumption by Bureau 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 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 adjustment.

    (c) Existing Obligations not Affected- This section shall not be construed to affect any existing obligation of the Secretary to provide electric power, water, or other benefits from Bureau of Reclamation facilities, including 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 ‘CONTINUING FUND, SOUTHEASTERN POWER ADMINISTRATION’ 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 Western Area Power Administration may credit to the Secretary of the Army (referred to in this section as the ‘Secretary’), receipts, in an amount determined under subsection (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 administration 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.

      (2) EXCEPTION- The Secretary may use amounts credited by the Southwestern Power Administration 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 consultation with the power customers of the Administrator’s power marketing administration, determines to be appropriate to apply to the costs referred to in subsection (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 purposes of operating and maintaining a hydroelectric development licensed by the Federal Energy Regulatory Commission (referred to in this section as the ‘Commission’), any political subdivision of the State of Montana that holds a license for Commission Project No. 1473 in Granite 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 Government may assess.

SEC. 248. REINSTATEMENT AND TRANSFER.

    (a) Reinstatement and Transfer of Federal License for Project Numbered 2696- Notwithstanding section 8 of the Federal Power Act (16 U.S.C. 801) or any other provision of such Act, the Federal Energy 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 Regulatory 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 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 municipal preference. The town shall be entitled, to the extent that funds are available or shall be made available, to receive loans under sections 402 and 403 of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2702 and 2703), or similar programs, for the reimbursement of feasibility 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.

TITLE III--OIL AND GAS

Subtitle A--Petroleum Reserve and Home Heating Oil

SEC. 301. PERMANENT AUTHORITY TO OPERATE THE STRATEGIC PETROLEUM RESERVE AND OTHER ENERGY PROGRAMS.

    (a) Amendment to Title I of the Energy Policy and Conservation Act- Title I of the Energy Policy 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 expended.’;

      (2) by striking section 186 (42 U.S.C. 6250e); and

      (3) by striking part E (42 U.S.C. 6251; relating to the expiration of title I of the Act).

    (b) Amendment to Title II of the Energy Policy and Conservation Act- Title II of the Energy Policy and Conservation Act (42 U.S.C. 6271 et seq.) is amended--

      (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; relating to the expiration of title II of the Act).

    (c) Technical Amendments- The table of contents 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 Conservation Act- Section 183(b)(1) of the Energy Policy 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-October through March (considered as a heating season average)’.

    (e) Fill Strategic Petroleum Reserve to Capacity- 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 Energy 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 Secretary 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 royalty in-kind accepted by the Secretary on or after the date 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 development.

    (b) Terms and Conditions- All royalty accruing to the United States shall, on the demand of the Secretary, 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 reimbursements 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 CONDITION- In this paragraph, the term ‘in marketable condition’ means sufficiently free from impurities and otherwise in a condition that the royalty production will be accepted by a purchaser 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 royalty production taken in-kind.

      (4) RETENTION BY THE SECRETARY- The Secretary 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 production’) to pay the cost of--

        (A) transporting the royalty production;

        (B) processing the royalty production;

        (C) disposing of the royalty production; or

        (D) any combination of transporting, processing, 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 administrative costs of the Federal Government.

        (B) EXCEPTION- Notwithstanding subparagraph (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 administrative costs directly related to filling the Strategic Petroleum Reserve.

    (c) Reimbursement of Cost- If the lessee, pursuant to an agreement with the United States or as provided in the lease, processes the royalty gas or delivers the royalty 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

      (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 support 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 operation 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 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 royalties 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 expected 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, including, 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-

      (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 Secretary may not reduce any payments to recipients of revenues derived from any other Federal oil and gas lease as a consequence of that deduction.

    (g) Consultation With States- The Secretary--

      (1) shall consult with a State before conducting a royalty in-kind program under this subtitle within the State, and may delegate management of any portion of the Federal royalty in-kind program to the State except as otherwise prohibited by Federal law; and

      (2) shall consult annually with any State from which Federal oil or gas royalty is being taken in-kind to ensure, to the maximum extent practicable, that the royalty in-kind program provides revenues to the State greater than or equal to those likely to have been received had royalties been taken in-value.

    (h) Small Refineries-

      (1) PREFERENCE- If the Secretary finds that sufficient supplies of crude oil are not available in the open market to refineries that do not have their own source of supply for crude oil, the Secretary may grant preference to such refineries in the sale of any royalty oil accruing or reserved to the United States under Federal oil and gas leases issued under any mineral leasing law, for processing or use in such refineries at private sale at not less than the market price.

      (2) PRORATION AMONG REFINERIES IN PRODUCTION AREA- In disposing of oil under this subsection, the Secretary of Energy may, at the discretion of the Secretary, prorate the oil among refineries described in paragraph (1) in the area in which the oil is produced.

    (i) Disposition to Federal Agencies-

      (1) ONSHORE ROYALTY- Any royalty oil or gas taken by the Secretary in-kind from onshore oil and gas leases may be sold at not less than the market price to any Federal agency.

      (2) OFFSHORE ROYALTY- Any royalty oil or gas taken in-kind from a Federal oil or gas lease on the outer Continental Shelf may be disposed of only under section 27 of the Outer Continental Shelf Lands Act (43 U.S.C. 1353).

    (j) Federal Low-Income Energy Assistance Programs-

      (1) PREFERENCE- In disposing of royalty oil or gas taken in-kind under this section, the Secretary may grant a preference to any person, including any Federal or State agency, for the purpose of providing additional resources to any Federal low-income energy assistance program.

      (2) REPORT- Not later than 3 years after the date of enactment of this Act, the Secretary shall transmit a report to Congress, assessing the effectiveness of granting preferences specified in paragraph (1) and providing a specific recommendation on the continuation of authority to grant preferences.

SEC. 313. MARGINAL PROPERTY PRODUCTION INCENTIVES.

    (a) Definition of Marginal Property- Until such time as the Secretary issues regulations under subsection (e) that prescribe a different definition, in this section the term ‘marginal property’ means an onshore unit, communitization agreement, or lease not within a unit or communitization agreement, that produces on average the combined equivalent of less than 15 barrels of oil per well per day or 90 million British thermal units of gas per well per day calculated based on the average over the 3 most recent production months, including only wells that produce on more than half of the days during those 3 production months.

    (b) Conditions for Reduction of Royalty Rate- Until such time as the Secretary issues regulations under subsection (e) that prescribe different thresholds or standards, the Secretary shall reduce the royalty rate on--

      (1) oil production from marginal properties as prescribed in subsection (c) when the spot price of West Texas Intermediate crude oil at Cushing, Oklahoma, is, on average, less than $15 per barrel for 90 consecutive trading days; and

      (2) gas production from marginal properties as prescribed in subsection (c) when the spot price of natural gas delivered at Henry Hub, Louisiana, is, on average, less than $2.00 per million British thermal units for 90 consecutive trading days.

    (c) Reduced Royalty Rate-

      (1) IN GENERAL- When a marginal property meets the conditions specified in subsection (b), the royalty rate shall be the lesser of--

        (A) 5 percent; or

        (B) the applicable rate under any other statutory or regulatory royalty relief provision that applies to the affected production.

      (2) PERIOD OF EFFECTIVENESS- The reduced royalty rate under this subsection shall be effective beginning on the first day of the production month following the date on which the applicable condition specified in subsection (b) is met.

    (d) Termination of Reduced Royalty Rate- A royalty rate prescribed in subsection (d)(1)(A) shall terminate--

      (1) with respect to oil production from a marginal property, on the first day of the production month following the date on which--

        (A) the spot price of West Texas Intermediate crude oil at Cushing, Oklahoma, on average, exceeds $15 per barrel for 90 consecutive trading days; or

        (B) the property no longer qualifies as a marginal property; and

      (2) with respect to gas production from a marginal property, on the first day of the production month following the date on which--

        (A) the spot price of natural gas delivered at Henry Hub, Louisiana, on average, exceeds $2.00 per million British thermal units for 90 consecutive trading days; or

        (B) the property no longer qualifies as a marginal property.

    (e) Regulations Prescribing Different Relief-

      (1) DISCRETIONARY REGULATIONS- The Secretary may by regulation prescribe different parameters, standards, and requirements for, and a different degree or extent of, royalty relief for marginal properties in lieu of those prescribed in subsections (a) through (d).

      (2) MANDATORY REGULATIONS- Not later than 18 months after the date of enactment of this Act, the Secretary shall by regulation--

        (A) prescribe standards and requirements for, and the extent of royalty relief for, marginal properties for oil and gas leases on the outer Continental Shelf; and

        (B) define what constitutes a marginal property on the outer Continental Shelf for purposes of this section.

      (3) CONSIDERATIONS- In promulgating regulations under this subsection, the Secretary may consider--

        (A) oil and gas prices and market trends;

        (B) production costs;

        (C) abandonment costs;

        (D) Federal and State tax provisions and the effects of those provisions on production economics;

        (E) other royalty relief programs;

        (F) regional differences in average wellhead prices;

        (G) national energy security issues; and

        (H) other relevant matters.

    (f) Savings Provision- Nothing in this section prevents a lessee from receiving royalty relief or a royalty reduction pursuant to any other law (including a regulation) that provides more relief than the amounts provided by this section.

SEC. 314. INCENTIVES FOR NATURAL GAS PRODUCTION FROM DEEP WELLS IN THE SHALLOW WATERS OF THE GULF OF MEXICO.

    (a) Royalty Incentive Regulations- The Secretary shall publish a final regulation to complete the rulemaking begun by the Notice of Proposed Rulemaking entitled ‘Relief or Reduction in Royalty Rates--Deep Gas Provisions’, published in the Federal Register on March 26, 2003 (Federal Register, volume 68, number 58, 14868-14886).

    (b) Royalty Incentive Regulations for Ultra Deep Gas Wells-

      (1) IN GENERAL- Not later than 180 days after the date of enactment of this Act, in addition to any other regulations that may provide royalty incentives for natural gas produced from deep wells on oil and gas leases issued pursuant to the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.), the Secretary shall issue regulations, in accordance with the regulations published pursuant to subsection (a), granting royalty relief suspension volumes of not less than 35,000,000,000 cubic feet with respect to the production of natural gas from ultra deep wells on leases issued before January 1, 2001, in shallow waters less than 200 meters deep located in the Gulf of Mexico wholly west of 87 degrees, 30 minutes West longitude. Regulations issued under this subsection shall be retroactive to the date that the Notice of Proposed Rulemaking is published in the Federal Register.

      (2) DEFINITION OF ULTRA DEEP WELL- In this subsection, the term ‘ultra deep well’ means a well drilled with a perforated interval, the top of which is at least 20,000 feet true vertical depth below the datum at mean sea level.

SEC. 315. ROYALTY RELIEF FOR DEEP WATER PRODUCTION.

    (a) In General- For all tracts located in water depths of greater than 400 meters in the Western and Central Planning Area of the Gulf of Mexico, including the portion of the Eastern Planning Area of the Gulf of Mexico encompassing whole lease blocks lying west of 87 degrees, 30 minutes West longitude, any oil or gas lease sale under the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) occurring within 5 years after the date of enactment of this Act shall use the bidding system authorized in section 8(a)(1)(H) of the Outer Continental Shelf Lands Act (43 U.S.C. 1337(a)(1)(H)), except that the suspension of royalties shall be set at a volume of not less than--

      (1) 5,000,000 barrels of oil equivalent for each lease in water depths of 400 to 800 meters;

      (2) 9,000,000 barrels of oil equivalent for each lease in water depths of 800 to 1,600 meters; and

      (3) 12,000,000 barrels of oil equivalent for each lease in water depths greater than 1,600 meters.

    (b) Limitation- The Secretary may place limitations on the suspension of royalty relief granted based on market price.

SEC. 316. ALASKA OFFSHORE ROYALTY SUSPENSION.

    Section 8(a)(3)(B) of the Outer Continental Shelf Lands Act (43 U.S.C. 1337(a)(3)(B)) is amended by inserting ‘and in the Planning Areas offshore Alaska’ after ‘West longitude’.

SEC. 317. OIL AND GAS LEASING IN THE NATIONAL PETROLEUM RESERVE IN ALASKA.

    (a) Transfer of Authority-

      (1) REDESIGNATION- The Naval Petroleum Reserves Production Act of 1976 (42 U.S.C. 6501 et seq.) is amended by redesignating section 107 (42 U.S.C. 6507) as section 108.

      (2) TRANSFER- The matter under the heading ‘EXPLORATION OF NATIONAL PETROLEUM RESERVE IN ALASKA’ under the heading ‘ENERGY AND MINERALS’ of title I of Public Law 96-514 (42 U.S.C. 6508) is--

        (A) transferred to the Naval Petroleum Reserves Production Act of 1976 (42 U.S.C. 6501 et seq.);

        (B) redesignated as section 107 of that Act; and

        (C) moved so as to appear after section 106 of that Act (42 U.S.C. 6506).

    (b) Competitive Leasing- Section 107 of the Naval Petroleum Reserves Production Act of 1976 (as amended by subsection (a) of this section) is amended--

      (1) by striking the heading and all that follows through ‘Provided, That (1) activities’ and inserting the following:

‘SEC. 107. COMPETITIVE LEASING OF OIL AND GAS.

    ‘(a) In General- Notwithstanding any other provision of law and pursuant to regulations issued by the Secretary, the Secretary shall conduct an expeditious program of competitive leasing of oil and gas in the National Petroleum Reserve in Alaska (referred to in this section as the ‘Reserve’).

    ‘(b) Mitigation of Adverse Effects- Activities’;

      (2) by striking ‘Alaska (the Reserve); (2) the’ and inserting ‘Alaska.

    ‘(c) Land Use Planning; BLM Wilderness Study- The’;

      (3) by striking ‘Reserve; (3) the’ and inserting ‘Reserve.

    ‘(d) First Lease Sale- The’;

      (4) by striking ‘4332); (4) the’ and inserting ‘4321 et seq.).

    ‘(e) Withdrawals- The’;

      (5) by striking ‘herein; (5) bidding’ and inserting ‘under this section.

    ‘(f) Bidding Systems- Bidding’;

      (6) by striking ‘629); (6) lease’ and inserting ‘629).

    ‘(g) Geological Structures- Lease’;

      (7) by striking ‘structures; (7) the’ and inserting ‘structures.

    ‘(h) Size of Lease Tracts- The’;

      (8) by striking ‘Secretary; (8)’ and all that follows through ‘Drilling, production,’ and inserting ‘Secretary.

    ‘(i) Terms-

      ‘(1) IN GENERAL- Each lease shall be--

        ‘(A) issued for an initial period of not more than 10 years; and

        ‘(B) renewed for successive 10-year terms if--

          ‘(i) oil or gas is produced from the lease in paying quantities;

          ‘(ii) oil or gas is capable of being produced in paying quantities; or

          ‘(iii) drilling or reworking operations, as approved by the Secretary, are conducted on the leased land.

      ‘(2) RENEWAL OF NONPRODUCING LEASES- The Secretary shall renew for an additional 10-year term a lease that does not meet the requirements of paragraph (1)(B) if the lessee submits to the Secretary an application for renewal not later than 60 days before the expiration of the primary lease and--

        ‘(A) the lessee certifies, and the Secretary agrees, that hydrocarbon resources were discovered on 1 or more wells drilled on the leased land in such quantities that a prudent operator would hold the lease for potential future development;

        ‘(B) the lessee--

          ‘(i) pays the Secretary a renewal fee of $100 per acre of leased land; and

          ‘(ii) provides evidence, and the Secretary agrees that, the lessee has diligently pursued exploration that warrants continuation with the intent of continued exploration or future development of the leased land; or

        ‘(C) all or part of the lease--

          ‘(i) is part of a unit agreement covering a lease described in subparagraph (A) or (B); and

          ‘(ii) has not been previously contracted out of the unit.

      ‘(3) APPLICABILITY- This subsection applies to a lease that--

        ‘(A) is entered into before, on, or after the date of enactment of the Energy Policy Act of 2003; and

        ‘(B) is effective on or after the date of enactment of that Act.

    ‘(j) Unit Agreements-

      ‘(1) IN GENERAL- For the purpose of conservation of the natural resources of all or part of any oil or gas pool, field, reservoir, or like area, lessees (including representatives) of the pool, field, reservoir, or like area may unite with each other, or jointly or separately with others, in collectively adopting and operating under a unit agreement for all or part of the pool, field, reservoir, or like area (whether or not any other part of the oil or gas pool, field, reservoir, or like area is already subject to any cooperative or unit plan of development or operation), if the Secretary determines the action to be necessary or advisable in the public interest.

      ‘(2) PARTICIPATION BY STATE OF ALASKA- The Secretary shall ensure that the State of Alaska is provided the opportunity for active participation concerning creation and management of units formed or expanded under this subsection that include acreage in which the State of Alaska has an interest in the mineral estate.

      ‘(3) PARTICIPATION BY REGIONAL CORPORATIONS- The Secretary shall ensure that any Regional Corporation (as defined in section 3 of the Alaska Native Claims Settlement Act (43 U.S.C. 1602)) is provided the opportunity for active participation concerning creation and management of units that include acreage in which the Regional Corporation has an interest in the mineral estate.

      ‘(4) PRODUCTION ALLOCATION METHODOLOGY- The Secretary may use a production allocation methodology for each participating area within a unit created for land in the Reserve, State of Alaska land, or Regional Corporation land shall, when appropriate, be based on the characteristics of each specific oil or gas pool, field, reservoir, or like area to take into account reservoir heterogeneity and a real variation in reservoir producibility across diverse leasehold interests.

      ‘(5) BENEFIT OF OPERATIONS- Drilling, production,’;

      (9) by striking ‘When separate’ and inserting the following:

      ‘(6) POOLING- If separate’;

      (10) by inserting ‘(in consultation with the owners of the other land)’ after ‘determined by the Secretary of the Interior’;

      (11) by striking ‘thereto; (10) to’ and all that follows through ‘the terms provided therein’ and inserting ‘to the agreement.

    ‘(k) Exploration Incentives-

      ‘(1) IN GENERAL-

        ‘(A) WAIVER, SUSPENSION, OR REDUCTION- To encourage the greatest ultimate recovery of oil or gas or in the interest of conservation, the Secretary may waive, suspend, or reduce the rental fees or minimum royalty, or reduce the royalty on an entire leasehold (including on any lease operated pursuant to a unit agreement), if (after consultation with the State of Alaska and the North Slope Borough of Alaska and the concurrence of any Regional Corporation for leases that include lands available for acquisition by the Regional Corporation under the provisions of section 1431(o) of the Alaska National Interest Lands Conservation Act (16 U.S.C. 3101 et seq.)) the Secretary determines that the waiver, suspension, or reduction is in the public interest.

        ‘(B) APPLICABILITY- This paragraph applies to a lease that--

          ‘(i) is entered into before, on, or after the date of enactment of the Energy Policy Act of 2003; and

          ‘(ii) is effective on or after the date of enactment of that Act.’;

      (12) by striking ‘The Secretary is authorized to’ and inserting the following:

      ‘(2) SUSPENSION OF OPERATIONS AND PRODUCTION- The Secretary may’;

      (13) by striking ‘In the event’ and inserting the following:

      ‘(3) SUSPENSION OF PAYMENTS- If’;

      (14) by striking ‘thereto; and (11) all’ and inserting ‘to the lease.

    ‘(l) Receipts- All’;

      (15) by redesignating clauses (A), (B), and (C) as clauses (1), (2), and (3), respectively;

      (16) by striking ‘Any agency’ and inserting the following:

    ‘(m) Explorations- Any agency’;

      (17) by striking ‘Any action’ and inserting the following:

    ‘(n) Environmental Impact Statements-

      ‘(1) JUDICIAL REVIEW- Any action’;

      (18) by striking ‘The detailed’ and inserting the following:

      ‘(2) INITIAL LEASE SALES- The detailed’;

      (19) by striking ‘of the Naval Petroleum Reserves Production Act of 1976 (90 Stat. 304; 42 U.S.C. 6504)’; and

      (20) by adding at the end the following:

    ‘(o) Waiver of Administration for Conveyed Lands- Notwithstanding section 14(g) of the Alaska Native Claims Settlement Act (43 U.S.C. 1613(g)) or any other provision of law--

      ‘(1) the Secretary of the Interior shall waive administration of any oil and gas lease insofar as such lease covers any land in the National Petroleum Reserve in Alaska in which the subsurface estate is conveyed to the Arctic Slope Regional Corporation; and

      ‘(2) if any such conveyance of such subsurface estate does not cover all the land embraced within any such oil and gas lease--

        ‘(A) the person who owns the subsurface estate in any particular portion of the land covered by such lease shall be entitled to all of the revenues reserved under such lease as to such portion, including, without limitation, all the royalty payable with respect to oil or gas produced from or allocated to such particular portion of the land covered by such lease; and

        ‘(B) the Secretary of the Interior shall segregate such lease into 2 leases, 1 of which shall cover only the subsurface estate conveyed to the Arctic Slope Regional Corporation, and operations, production, or other circumstances (other than payment of rentals or royalties) that satisfy obligations of the lessee under, or maintain, either of the segregated leases shall likewise satisfy obligations of the lessee under, or maintain, the other segregated lease to the same extent as if such segregated leases remained a part of the original unsegregated lease.’.

SEC. 318. ORPHANED, ABANDONED, OR IDLED WELLS ON FEDERAL LAND.

    (a) In General- The Secretary, in cooperation with the Secretary of Agriculture, shall establish a program not later than 1 year after the date of enactment of this Act to remediate, reclaim, and close orphaned, abandoned, or idled oil and gas wells located on land administered by the land management agencies within the Department of the Interior and the Department of Agriculture.

    (b) Activities- The program under subsection (a) shall--

      (1) include a means of ranking orphaned, abandoned, or idled wells sites for priority in remediation, reclamation, and closure, based on public health and safety, potential environmental harm, and other land use priorities;

      (2) provide for identification and recovery of the costs of remediation, reclamation, and closure from persons or other entities currently providing a bond or other financial assurance required under State or Federal law for an oil or gas well that is orphaned, abandoned, or idled; and

      (3) provide for recovery from the persons or entities identified under paragraph (2), or their sureties or guarantors, of the costs of remediation, reclamation, and closure of such wells.

    (c) Cooperation and Consultations- In carrying out the program under subsection (a), the Secretary shall--

      (1) work cooperatively with the Secretary of Agriculture and the States within which Federal land is located; and

      (2) consult with the Secretary of Energy and the Interstate Oil and Gas Compact Commission.

    (d) Plan- Not later than 1 year after the date of enactment of this Act, the Secretary, in cooperation with the Secretary of Agriculture, shall submit to Congress a plan for carrying out the program under subsection (a).

    (e) Idled Well- For the purposes of this section, a well is idled if--

      (1) the well has been nonoperational for at least 7 years; and

      (2) there is no anticipated beneficial use for the well.

    (f) Technical Assistance Program for Non-Federal Land-

      (1) IN GENERAL- The Secretary of Energy shall establish a program to provide technical and financial assistance to oil and gas producing States to facilitate State efforts over a 10-year period to ensure a practical and economical remedy for environmental problems caused by orphaned or abandoned oil and gas exploration or production well sites on State or private land.

      (2) ASSISTANCE- The Secretary of Energy shall work with the States, through the Interstate Oil and Gas Compact Commission, to assist the States in quantifying and mitigating environmental risks of onshore orphaned or abandoned oil or gas wells on State and private land.

      (3) ACTIVITIES- The program under paragraph (1) shall include--

        (A) mechanisms to facilitate identification, if feasible, of the persons currently providing a bond or other form of financial assurance required under State or Federal law for an oil or gas well that is orphaned or abandoned;

        (B) criteria for ranking orphaned or abandoned well sites based on factors such as public health and safety, potential environmental harm, and other land use priorities;

        (C) information and training programs on best practices for remediation of different types of sites; and

        (D) funding of State mitigation efforts on a cost-shared basis.

    (g) Federal Reimbursement for Orphaned Well Reclamation Pilot Program-

      (1) REIMBURSEMENT FOR REMEDIATING, RECLAIMING, AND CLOSING WELLS ON LAND SUBJECT TO A NEW LEASE- The Secretary shall carry out a pilot program under which, in issuing a new oil and gas lease on federally owned land on which 1 or more orphaned wells are located, the Secretary--

        (A) may require, but not as a condition of the lease, that the lessee remediate, reclaim, and close in accordance with standards established by the Secretary, all orphaned wells on the land leased; and

        (B) shall develop a program to reimburse a lessee, through a royalty credit against the Federal share of royalties owed or other means, for the reasonable actual costs of remediating, reclaiming, and closing the orphaned well pursuant to that requirement.

      (2) REIMBURSEMENT FOR RECLAIMING ORPHANED WELLS ON OTHER LAND- In carrying out this subsection, the Secretary--

        (A) may authorize any lessee under an oil and gas lease on federally owned land to reclaim in accordance with the Secretary’s standards--

          (i) an orphaned well on unleased federally owned land; or

          (ii) an orphaned well located on an existing lease on federally owned land for the reclamation of which the lessee is not legally responsible; and

        (B) shall develop a program to provide reimbursement of 115 percent of the reasonable actual costs of remediating, reclaiming, and closing the orphaned well, through credits against the Federal share of royalties or other means.

      (3) EFFECT OF REMEDIATION, RECLAMATION, OR CLOSURE OF WELL PURSUANT TO AN APPROVED REMEDIATION PLAN-

        (A) DEFINITION OF REMEDIATING PARTY- In this paragraph the term ‘remediating party’ means a person who remediates, reclaims, or closes an abandoned, orphaned, or idled well pursuant to this subsection.

        (B) GENERAL RULE- A remediating party who remediates, reclaims, or closes an abandoned, orphaned, or idled well in accordance with a detailed written remediation plan approved by the Secretary under this subsection, shall be immune from civil liability under Federal environmental laws, for--

          (i) pre-existing environmental conditions at or associated with the well, unless the remediating party owns or operates, in the past owned or operated, or is related to a person that owns or operates or in the past owned or operated, the well or the land on which the well is located; or

          (ii) any remaining releases of pollutants from the well during or after completion of the remediation, reclamation, or closure of the well, unless the remediating party causes increased pollution as a result of activities that are not in accordance with the approved remediation plan.

        (C) LIMITATIONS- Nothing in this section shall limit in any way the liability of a remediating party for injury, damage, or pollution resulting from the remediating party’s acts or omissions that are not in accordance with the approved remediation plan, are reckless or willful, constitute gross negligence or wanton misconduct, or are unlawful.

      (4) REGULATIONS- The Secretary may issue such regulations as are appropriate to carry out this subsection.

    (h) Authorization of Appropriations-

      (1) IN GENERAL- There are authorized to be appropriated to carry out this section $25,000,000 for each of fiscal years 2005 through 2009.

      (2) USE- Of the amounts authorized under paragraph (1), $5,000,000 are authorized for each fiscal year for activities under subsection (f).

SEC. 319. COMBINED HYDROCARBON LEASING.

    (a) Special Provisions Regarding Leasing- Section 17(b)(2) of the Mineral Leasing Act (30 U.S.C. 226(b)(2)) is amended--

      (1) by inserting ‘(A)’ after ‘(2)’; and

      (2) by adding at the end the following:

    ‘(B) For any area that contains any combination of tar sand and oil or gas (or both), the Secretary may issue under this Act, separately--

      ‘(i) a lease for exploration for and extraction of tar sand; and

      ‘(ii) a lease for exploration for and development of oil and gas.

    ‘(C) A lease issued for tar sand shall be issued using the same bidding process, annual rental, and posting period as a lease issued for oil and gas, except that the minimum acceptable bid required for a lease issued for tar sand shall be $2 per acre.

    ‘(D) The Secretary may waive, suspend, or alter any requirement under section 26 that a permittee under a permit authorizing prospecting for tar sand must exercise due diligence, to promote any resource covered by a combined hydrocarbon lease.’.

    (b) Conforming Amendment- Section 17(b)(1)(B) of the Mineral Leasing Act (30 U.S.C. 226(b)(1)(B)) is amended in the second sentence by inserting ‘, subject to paragraph (2)(B),’ after ‘Secretary’.

    (c) Regulations- Not later than 45 days after the date of enactment of this Act, the Secretary shall issue final regulations to implement this section.

SEC. 320. LIQUIFIED NATURAL GAS.

    Section 3 of the Natural Gas Act (15 U.S.C. 717b) is amended by adding at the end the following:

    ‘(d) Limitation on Commission Authority- If an applicant under this section proposes to construct or expand a liquified natural gas terminal either onshore or in State waters for the purpose of importing liquified natural gas into the United States, the Commission shall not deny or condition the application solely on the basis that the applicant proposes to utilize the terminal exclusively or partially for gas that the applicant or any affiliate thereof will supply thereto. In all other respects, subsection (a) shall remain applicable to any such proposal.’.

SEC. 321. ALTERNATE ENERGY-RELATED USES ON THE OUTER CONTINENTAL SHELF.

    (a) Amendment to Outer Continental Shelf Lands Act- Section 8 of the Outer Continental Shelf Lands Act (43 U.S.C. 1337) is amended by adding at the end the following:

    ‘(p) Leases, Easements, or Rights-Of-Way for Energy and Related Purposes-

      ‘(1) IN GENERAL- The Secretary, in consultation with the Secretary of the Department in which the Coast Guard is operating and other relevant departments and agencies of the Federal Government, may grant a lease, easement, or right-of-way on the outer Continental Shelf for activities not otherwise authorized in this Act, the Deepwater Port Act of 1974 (33 U.S.C. 1501 et seq.), or the Ocean Thermal Energy Conversion Act of 1980 (42 U.S.C. 9101 et seq.), or other applicable law, if those activities--

        ‘(A) support exploration, development, production, transportation, or storage of oil, natural gas, or other minerals;

        ‘(B) produce or support production, transportation, or transmission of energy from sources other than oil and gas; or

        ‘(C) use, for energy-related or marine-related purposes, facilities currently or previously used for activities authorized under this Act.

      ‘(2) PAYMENTS- The Secretary shall establish reasonable forms of payments for any easement or right-of-way granted under this subsection. Such payments shall not be assessed on the basis of throughput or production. The Secretary may establish fees, rentals, bonus, or other payments by rule or by agreement with the party to which the lease, easement, or right-of-way is granted.

      ‘(3) CONSULTATION- Before exercising authority under this subsection, the Secretary shall consult with the Secretary of Defense and other appropriate agencies concerning issues related to national security and navigational obstruction.

      ‘(4) COMPETITIVE OR NONCOMPETITIVE BASIS-

        ‘(A) IN GENERAL- The Secretary may issue a lease, easement, or right-of-way for energy and related purposes as described in paragraph (1) on a competitive or noncompetitive basis.

        ‘(B) CONSIDERATIONS- In determining whether a lease, easement, or right-of-way shall be granted competitively or noncompetitively, the Secretary shall consider such factors as--

          ‘(i) prevention of waste and conservation of natural resources;

          ‘(ii) the economic viability of an energy project;

          ‘(iii) protection of the environment;

          ‘(iv) the national interest and national security;

          ‘(v) human safety;

          ‘(vi) protection of correlative rights; and

          ‘(vii) potential return for the lease, easement, or right-of-way.

      ‘(5) REGULATIONS- Not later than 270 days after the date of enactment of the Energy Policy Act of 2003, the Secretary, in consultation with the Secretary of the Department in which the Coast Guard is operating and other relevant agencies of the Federal Government and affected States, shall issue any necessary regulations to ensure safety, protection of the environment, prevention of waste, and conservation of the natural resources of the outer Continental Shelf, protection of national security interests, and protection of correlative rights in the outer Continental Shelf.

      ‘(6) SECURITY- The Secretary shall require the holder of a lease, easement, or right-of-way granted under this subsection to furnish a surety bond or other form of security, as prescribed by the Secretary, and to comply with such other requirements as the Secretary considers necessary to protect the interests of the United States.

      ‘(7) EFFECT OF SUBSECTION- Nothing in this subsection displaces, supersedes, limits, or modifies the jurisdiction, responsibility, or authority of any Federal or State agency under any other Federal law.

      ‘(8) APPLICABILITY- This subsection does not apply to any area on the outer Continental Shelf designated as a National Marine Sanctuary.’.

    (b) Conforming Amendment- Section 8 of the Outer Continental Shelf Lands Act (43 U.S.C. 1337) is amended by striking the section heading and inserting the following: ‘Leases, Easements, and Rights-of-Way on the Outer Continental Shelf- ’.

    (c) Savings Provision- Nothing in the amendment made by subsection (a) requires, with respect to any project--

      (1) for which offshore test facilities have been constructed before the date of enactment of this Act; or

      (2) for which a request for proposals has been issued by a public authority,

    any resubmittal of documents previously submitted or any reauthorization of actions previously authorized.

SEC. 322. PRESERVATION OF GEOLOGICAL AND GEOPHYSICAL DATA.

    (a) Short Title- This section may be cited as the ‘National Geological and Geophysical Data Preservation Program Act of 2004’.

    (b) Program- The Secretary shall carry out a National Geological and Geophysical Data Preservation Program in accordance with this section--

      (1) to archive geologic, geophysical, and engineering data, maps, well logs, and samples;

      (2) to provide a national catalog of such archival material; and

      (3) to provide technical and financial assistance related to the archival material.

    (c) Plan- Not later than 1 year after the date of enactment of this Act, the Secretary shall submit to Congress a plan for the implementation of the Program.

    (d) Data Archive System-

      (1) ESTABLISHMENT- The Secretary shall establish, as a component of the Program, a data archive system to provide for the storage, preservation, and archiving of subsurface, surface, geological, geophysical, and engineering data and samples. The Secretary, in consultation with the Advisory Committee, shall develop guidelines relating to the data archive system, including the types of data and samples to be preserved.

      (2) SYSTEM COMPONENTS- The system shall be comprised of State agencies that elect to be part of the system and agencies within the Department of the Interior that maintain geological and geophysical data and samples that are designated by the Secretary in accordance with this subsection. The Program shall provide for the storage of data and samples through data repositories operated by such agencies.

      (3) LIMITATION OF DESIGNATION- The Secretary may not designate a State agency as a component of the data archive system unless that agency is the agency that acts as the geological survey in the State.

      (4) DATA FROM FEDERAL LAND- The data archive system shall provide for the archiving of relevant subsurface data and samples obtained from Federal land--

        (A) in the most appropriate repository designated under paragraph (2), with preference being given to archiving data in the State in which the data were collected; and

        (B) consistent with all applicable law and requirements relating to confidentiality and proprietary data.

    (e) National Catalog-

      (1) IN GENERAL- As soon as practicable after the date of enactment of this Act, the Secretary shall develop and maintain, as a component of the Program, a national catalog that identifies--

        (A) data and samples available in the data archive system established under subsection (d);

        (B) the repository for particular material in the system; and

        (C) the means of accessing the material.

      (2) AVAILABILITY- The Secretary shall make the national catalog accessible to the public on the site of the Survey on the Internet, consistent with all applicable requirements related to confidentiality and proprietary data.

    (f) Advisory Committee-

      (1) IN GENERAL- The Advisory Committee shall advise the Secretary on planning and implementation of the Program.

      (2) NEW DUTIES- In addition to its duties under the National Geologic Mapping Act of 1992 (43 U.S.C. 31a et seq.), the Advisory Committee shall perform the following duties:

        (A) Advise the Secretary on developing guidelines and procedures for providing assistance for facilities under subsection (g)(1).

        (B) Review and critique the draft implementation plan prepared by the Secretary under subsection (c).

        (C) Identify useful studies of data archived under the Program that will advance understanding of the Nation’s energy and mineral resources, geologic hazards, and engineering geology.

        (D) Review the progress of the Program in archiving significant data and preventing the loss of such data, and the scientific progress of the studies funded under the Program.

        (E) Include in the annual report to the Secretary required under section 5(b)(3) of the National Geologic Mapping Act of 1992 (43 U.S.C. 31d(b)(3)) an evaluation of the progress of the Program toward fulfilling the purposes of the Program under subsection (b).

    (g) Financial Assistance-

      (1) ARCHIVE FACILITIES- Subject to the availability of appropriations, the Secretary shall provide financial assistance to a State agency that is designated under subsection (d)(2) for providing facilities to archive energy material.

      (2) STUDIES- Subject to the availability of appropriations, the Secretary shall provide financial assistance to any State agency designated under subsection (d)(2) for studies and technical assistance activities that enhance understanding, interpretation, and use of materials archived in the data archive system established under subsection (d).

      (3) FEDERAL SHARE- The Federal share of the cost of an activity carried out with assistance under this subsection shall be not more than 50 percent of the total cost of the activity.

      (4) PRIVATE CONTRIBUTIONS- The Secretary shall apply to the non-Federal share of the cost of an activity carried out with assistance under this subsection the value of private contributions of property and services used for that activity.

    (h) Report- The Secretary shall include in each report under section 8 of the National Geologic Mapping Act of 1992 (43 U.S.C. 31g)--

      (1) a description of the status of the Program;

      (2) an evaluation of the progress achieved in developing the Program during the period covered by the report; and

      (3) any recommendations for legislative or other action the Secretary considers necessary and appropriate to fulfill the purposes of the Program under subsection (b).

    (i) Maintenance of State Effort- It is the intent of Congress that the States not use this section as an opportunity to reduce State resources applied to the activities that are the subject of the Program.

    (j) Definitions- In this section:

      (1) ADVISORY COMMITTEE- The term ‘Advisory Committee’ means the advisory committee established under section 5 of the National Geologic Mapping Act of 1992 (43 U.S.C. 31d).

      (2) PROGRAM- The term ‘Program’ means the National Geological and Geophysical Data Preservation Program carried out under this section.

      (3) SECRETARY- The term ‘Secretary’ means the Secretary of the Interior, acting through the Director of the United States Geological Survey.

      (4) SURVEY- The term ‘Survey’ means the United States Geological Survey.

    (k) Authorization of Appropriations- There are authorized to be appropriated to carry out this section $30,000,000 for each of fiscal years 2004 through 2008.

SEC. 323. OIL AND GAS LEASE ACREAGE LIMITATIONS.

    Section 27(d)(1) of the Mineral Leasing Act (30 U.S.C. 184(d)(1)) is amended by inserting after ‘acreage held in special tar sand areas’ the following: ‘, and acreage under any lease any portion of which has been committed to a federally approved unit or cooperative plan or communitization agreement or for which royalty (including compensatory royalty or royalty in-kind) was paid in the preceding calendar year,’.

SEC. 324. ASSESSMENT OF DEPENDENCE OF STATE OF HAWAII ON OIL.

    (a) Assessment- The Secretary of Energy shall assess the economic implication of the dependence of the State of Hawaii on oil as the principal source of energy for the State, including--

      (1) the short- and long-term prospects for crude oil supply disruption and price volatility and potential impacts on the economy of Hawaii;

      (2) the economic relationship between oil-fired generation of electricity from residual fuel and refined petroleum products consumed for ground, marine, and air transportation;

      (3) the technical and economic feasibility of increasing the contribution of renewable energy resources for generation of electricity, on an island-by-island basis, including--

        (A) siting and facility configuration;

        (B) environmental, operational, and safety considerations;

        (C) the availability of technology;

        (D) effects on the utility system including reliability;

        (E) infrastructure and transport requirements;

        (F) community support; and

        (G) other factors affecting the economic impact of such an increase and any effect on the economic relationship described in paragraph (2);

      (4) the technical and economic feasibility of using liquified natural gas to displace residual fuel oil for electric generation, including neighbor island opportunities, and the effect of the displacement on the economic relationship described in paragraph (2), including--

        (A) the availability of supply;

        (B) siting and facility configuration for onshore and offshore liquified natural gas receiving terminals;

        (C) the factors described in subparagraphs (B) through (F) of paragraph (3); and

        (D) other economic factors;

      (5) the technical and economic feasibility of using renewable energy sources (including hydrogen) for ground, marine, and air transportation energy applications to displace the use of refined petroleum products, on an island-by-island basis, and the economic impact of the displacement on the relationship described in (2); and

      (6) an island-by-island approach to--

        (A) the development of hydrogen from renewable resources; and

        (B) the application of hydrogen to the energy needs of Hawaii

    (b) Contracting Authority- The Secretary of Energy may carry out the assessment under subsection (a) directly or, in whole or in part, through 1 or more contracts with qualified public or private entities.

    (c) Report- Not later than 300 days after the date of enactment of this Act, the Secretary of Energy shall prepare, in consultation with agencies of the State of Hawaii and other stakeholders, as appropriate, and submit to Congress, a report detailing the findings, conclusions, and recommendations resulting from the assessment.

    (d) Authorization of Appropriations- There are authorized to be appropriated such sums as are necessary to carry out this section.

SEC. 325. DEADLINE FOR DECISION ON APPEALS OF CONSISTENCY DETERMINATION UNDER THE COASTAL ZONE MANAGEMENT ACT OF 1972.

    (a) In General- Section 319 of the Coastal Zone Management Act of 1972 (16 U.S.C. 1465) is amended to read as follows:

‘APPEALS TO THE SECRETARY

    ‘SEC. 319. (a) Notice- The Secretary shall publish an initial notice in the Federal Register not later than 30 days after the date of the filing of any appeal to the Secretary of a consistency determination under section 307.

    ‘(b) Closure of Record-

      ‘(1) IN GENERAL- Not later than the end of the 120-day period beginning on the date of publication of an initial notice under subsection (a), the Secretary shall receive no more filings on the appeal and the administrative record regarding the appeal shall be closed.

      ‘(2) NOTICE- Upon the closure of the administrative record, the Secretary shall immediately publish a notice that the administrative record has been closed.

    ‘(c) Deadline for Decision- The Secretary shall issue a decision in any appeal filed under section 307 not later than 120 days after the closure of the administrative record.

    ‘(d) Application- This section applies to appeals initiated by the Secretary and appeals filed by an applicant.’.

    (b) Application-

      (1) IN GENERAL- Except as provided in paragraph (2), the amendment made by subsection (a) shall apply with respect to any appeal initiated or filed before, on, or after the date of enactment of this Act.

      (2) LIMITATION- Subsection (a) of section 319 of the Coastal Zone Management Act of 1972 (as amended by subsection (a)) shall not apply with respect to an appeal initiated or filed before the date of enactment of this Act.

    (c) Closure of Record for Appeal Filed Before Date of Enactment- Notwithstanding section 319(b)(1) of the Coastal Zone Management Act of 1972 (as amended by this section), in the case of an appeal of a consistency determination under section 307 of that Act initiated or filed before the date of enactment of this Act, the Secretary of Commerce shall receive no more filings on the appeal and the administrative record regarding the appeal shall be closed not later than 120 days after the date of enactment of this Act.

SEC. 326. REIMBURSEMENT FOR COSTS OF NEPA ANALYSES, DOCUMENTATION, AND STUDIES.

    (a) In General- The Mineral Leasing Act is amended by inserting after section 37 (30 U.S.C. 193) the following:

‘REIMBURSEMENT FOR COSTS OF CERTAIN ANALYSES, DOCUMENTATION, AND STUDIES

    ‘SEC. 38. (a) In General- The Secretary of the Interior may reimburse a person that is a lessee, operator, operating rights owner, or applicant for any lease under this Act for reasonable amounts paid by the person for preparation for the Secretary by a contractor or other person selected by the Secretary of any project-level analysis, documentation, or related study required pursuant to the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) with respect to the lease.

    ‘(b) Conditions- The Secretary may provide reimbursement under subsection (a) only if--

      ‘(1) adequate funding to enable the Secretary to timely prepare the analysis, documentation, or related 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 Secretary;

      ‘(4) the reimbursement is in the form of a reduction in the Federal share of the royalty required to be paid for the lease for which the analysis, documentation, or related study is conducted, and is agreed to by the Secretary and the person reimbursed prior to commencing the analysis, documentation, or related study; and

      ‘(5) the agreement required under paragraph (4) contains provisions--

        ‘(A) reducing royalties owed on lease production based on market prices;

        ‘(B) stipulating an automatic termination of the royalty reduction upon recovery of documented costs; and

        ‘(C) providing a process by which the lessee 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, documentation, 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. 327. HYDRAULIC FRACTURING.

    Paragraph (1) of section 1421(d) of the Safe Drinking Water Act (42 U.S.C. 300h(d)) is amended to read as follows:

      ‘(1) UNDERGROUND INJECTION- The term ‘underground injection’--

        ‘(A) means the subsurface emplacement of fluids by well injection; and

        ‘(B) excludes--

          ‘(i) the underground injection of natural gas for purposes of storage; and

          ‘(ii) the underground injection of fluids or propping agents pursuant to hydraulic fracturing operations related to oil or gas production activities.’.

SEC. 328. OIL AND GAS EXPLORATION AND PRODUCTION DEFINED.

    Section 502 of the Federal Water Pollution Control Act (33 U.S.C. 1362) is amended by adding at the end the following:

      ‘(24) OIL AND GAS EXPLORATION AND PRODUCTION- The term ‘oil and gas exploration, production, processing, or treatment operations or transmission facilities’ means all field activities or operations associated with exploration, production, processing, or treatment operations, or transmission facilities, including activities necessary to prepare a site for drilling and for the movement and placement of drilling equipment, whether or not such field activities or operations may be considered to be construction activities.’.

SEC. 329. OUTER CONTINENTAL SHELF PROVISIONS.

    (a) Storage on the Outer Continental Shelf- Section 5(a)(5) of the Outer Continental Shelf Lands Act (43 U.S.C. 1334(a)(5)) is amended by inserting ‘from any source’ after ‘oil and gas’.

    (b) Deepwater Projects- Section 6 of the Deepwater Port Act of 1974 (33 U.S.C. 1505) is amended by adding at the end the following:

    ‘(d) Reliance on Activities of Other Agencies- In fulfilling the requirements of section 5(f)--

      ‘(1) to the extent that other Federal agencies have prepared environmental impact statements, are conducting studies, or are monitoring the affected human, marine, or coastal environment, the Secretary may use the information derived from those activities in lieu of directly conducting such activities; and

      ‘(2) the Secretary may use information obtained from any State or local government or from any person.’.

    (c) Natural Gas Defined- Section 3(13) of the Deepwater Port Act of 1974 (33 U.S.C. 1502(13)) is amended to read as follows:

      ‘(13) natural gas means--

        ‘(A) natural gas unmixed; or

        ‘(B) any mixture of natural or artificial gas, including compressed or liquefied natural gas, natural gas liquids, liquefied petroleum gas, and condensate recovered from natural gas;’.

SEC. 330. APPEALS RELATING TO PIPELINE CONSTRUCTION OR OFFSHORE MINERAL DEVELOPMENT PROJECTS.

    (a) Agency of Record, Pipeline Construction Projects- Any Federal administrative agency proceeding that is an appeal or review under section 319 of the Coastal Zone Management Act of 1972 (16 U.S.C. 1465), as amended by this Act, related to Federal authority for an interstate natural gas pipeline construction project, including construction of natural gas storage and liquefied natural gas facilities, shall use as its exclusive record for all purposes the record compiled by the Federal Energy Regulatory Commission pursuant to the Commission’s proceeding under sections 3 and 7 of the Natural Gas Act (15 U.S.C. 717b, 717f).

    (b) Sense of Congress- It is the sense of Congress that all Federal and State agencies with jurisdiction over interstate natural gas pipeline construction activities should coordinate their proceedings within the timeframes established by the Federal Energy Regulatory Commission when the Commission is acting under sections 3 and 7 of the Natural Gas Act (15 U.S.C. 717b, 717f) to determine whether a certificate of public convenience and necessity should be issued for a proposed interstate natural gas pipeline.

    (c) Agency of Record, Offshore Mineral Development Projects- Any Federal administrative agency proceeding that is an appeal or review under section 319 of the Coastal Zone Management Act of 1972 (16 U.S.C. 1465), as amended by this Act, related to Federal authority for the permitting, approval, or other authorization of energy projects, including projects to explore, develop, or produce mineral resources in or underlying the outer Continental Shelf shall use as its exclusive record for all purposes (except for the filing of pleadings) the record compiled by the relevant Federal permitting agency.

SEC. 331. BILATERAL INTERNATIONAL OIL SUPPLY AGREEMENTS.

    (a) In General- Notwithstanding any other provision of law, the President may export oil to, or secure oil for, any country pursuant to a bilateral international oil supply agreement entered into by the United States with the country before June 25, 1979, or to any country pursuant to the International Emergency Oil Sharing Plan of the International Energy Agency.

    (b) Memorandum of Agreement- The following agreements are deemed to have entered into force by operation of law and are deemed to have no termination date:

      (1) The agreement entitled ‘Agreement amending and extending the memorandum of agreement of June 22, 1979’, entered into force November 13, 1994 (TIAS 12580).

      (2) The agreement entitled ‘Agreement amending the contingency implementing arrangements of October 17, 1980’, entered into force June 27, 1995 (TIAS 12670).

SEC. 332. NATURAL GAS MARKET REFORM.

    (a) Clarification of Existing CFTC Authority-

      (1) FALSE REPORTING- Section 9(a)(2) of the Commodity Exchange Act (7 U.S.C. 13(a)(2)) is amended by striking ‘false or misleading or knowingly inaccurate reports’ and inserting ‘knowingly false or knowingly misleading or knowingly inaccurate reports’.

      (2) COMMISSION ADMINISTRATIVE AND CIVIL AUTHORITY- Section 9 of the Commodity Exchange Act (7 U.S.C. 13) is amended by redesignating subsection (f) as subsection (e), and adding:

    ‘(f) Commission Administrative and Civil Authority- The Commission may bring administrative or civil actions as provided in this Act against any person for a violation of any provision of this section including, but not limited to, false reporting under subsection (a)(2).’.

      (3) EFFECT OF AMENDMENTS- The amendments made by paragraphs (1) and (2) restate, without substantive change, existing burden of proof provisions and existing Commission civil enforcement authority, respectively. These clarifying changes do not alter any existing burden of proof or grant any new statutory authority. The provisions of this section, as restated herein, continue to apply to any action pending on or commenced after the date of enactment of this Act for any act, omission, or violation occurring before, on, or after, such date of enactment.

    (b) Fraud Authority- Section 4b of the Commodity Exchange Act (7 U.S.C. 6b) is amended--

      (1) by redesignating subsections (b) and (c) as subsections (c) and (d), respectively; and

      (2) by striking subsection (a) and inserting the following:

    ‘(a) It shall be unlawful--

      ‘(1) for any person, in or in connection with any order to make, or the making of, any contract of sale of any commodity for future delivery or in interstate commerce, that is made, or to be made, on or subject to the rules of a designated contract market, for or on behalf of any other person; or

      ‘(2) for any person, in or in connection with any order to make, or the making of, any contract of sale of any commodity for future delivery, or other agreement, contract, or transaction subject to section 5a(g) (1) and (2) of this Act, that is made, or to be made, for or on behalf of, or with, any other person, other than on or subject to the rules of a designated contract market--

        ‘(A) to cheat or defraud or attempt to cheat or defraud such other person;

        ‘(B) willfully to make or cause to be made to such other person any false report or statement or willfully to enter or cause to be entered for such other person any false record;

        ‘(C) willfully to deceive or attempt to deceive such other person by any means whatsoever in regard to any order or contract or the disposition or execution of any order or contract, or in regard to any act of agency performed, with respect to any order or contract for or, in the case of subsection (a)(2), with such other person; or

        ‘(D)(i) to bucket an order if such order is either represented by such person as an order to be executed, or required to be executed, on or subject to the rules of a designated contract market; or

        ‘(ii) to fill an order by offset against the order or orders of any other person, or willfully and knowingly and without the prior consent of such other person to become the buyer in respect to any selling order of such other person, or become the seller in respect to any buying order of such other person, if such order is either represented by such person as an order to be executed, or required to be executed, on or subject to the rules of a designated contract market.

    ‘(b) Subsection (a)(2) shall not obligate any person, in connection with a transaction in a contract of sale of a commodity for future delivery, or other agreement, contract or transaction subject to section 5a(g) (1) and (2) of this Act, with another person, to disclose to such other person nonpublic information that may be material to the market price of such commodity or transaction, except as necessary to make any statement made to such other person in connection with such transaction, not misleading in any material respect.’.

    (c) Jurisdiction of the CFTC- The Natural Gas Act (15 U.S.C. 717 et seq.) is amended by adding at the end:

‘SEC. 26. JURISDICTION.

    ‘This Act shall not affect the exclusive jurisdiction of the Commodity Futures Trading Commission with respect to accounts, agreements, contracts, or transactions in commodities under the Commodity Exchange Act (7 U.S.C. 1 et seq.). Any request for information by the Commission to a designated contract market, registered derivatives transaction execution facility, board of trade, exchange, or market involving accounts, agreements, contracts, or transactions in commodities (including natural gas, electricity, and other energy commodities) within the exclusive jurisdiction of the Commodity Futures Trading Commission shall be directed to the Commodity Futures Trading Commission, which shall cooperate in responding to any information request by the Commission.’.

    (d) Increased Penalties- Section 21 of the Natural Gas Act (15 U.S.C. 717t) is amended--

      (1) in subsection (a)--

        (A) by striking ‘$5,000’ and inserting ‘$1,000,000’; and

        (B) by striking ‘two years’ and inserting ‘5 years’; and

      (2) in subsection (b), by striking ‘$500’ and inserting ‘$50,000’.

SEC. 333. NATURAL GAS MARKET TRANSPARENCY.

    The Natural Gas Act (15 U.S.C 717 et seq.) is amended--

      (1) by redesignating section 24 as section 25; and

      (2) by inserting after section 23 the following:

‘SEC. 24. NATURAL GAS MARKET TRANSPARENCY.

    ‘(a) Authorization- (1) Not later than 180 days after the date of enactment of the Energy Policy Act of 2003, the Federal Energy Regulatory Commission shall issue rules directing all entities subject to the Commission’s jurisdiction as provided under this Act to timely report information about the availability and prices of natural gas sold at wholesale in interstate commerce to the Commission and price publishers.

    ‘(2) The Commission shall evaluate the data for adequate price transparency and accuracy.

    ‘(3) Rules issued under this subsection requiring the reporting of information to the Commission that may become publicly available shall be limited to aggregate data and transaction-specific data that are otherwise required by the Commission to be made public.

    ‘(4) In exercising its authority under this section, the Commission shall not--

      ‘(A) compete with, or displace from the market place, any price publisher; or

      ‘(B) regulate price publishers or impose any requirements on the publication of information.

    ‘(b) Timely Enforcement- No person shall be subject to any penalty under this section with respect to a violation occurring more than 3 years before the date on which the Federal Energy Regulatory Commission seeks to assess a penalty.

    ‘(c) Limitation on Commission Authority- (1) The Commission shall not condition access to interstate pipeline transportation upon the reporting requirements authorized under this section.

    ‘(2) Natural gas sales by a producer that are attributable to volumes of natural gas produced by such producer shall not be subject to the rules issued pursuant to this section.

    ‘(3) The Commission shall not require natural gas producers, processors, or users who have a de minimis market presence to participate in the reporting requirements provided in this section.’.

Subtitle C--Access to Federal Land

SEC. 341. OFFICE OF FEDERAL ENERGY PROJECT COORDINATION.

    (a) Establishment- The President shall establish the Office of Federal Energy Project Coordination (referred to in this section as the ‘Office’) within the Executive Office of the President in the same manner and with the same mission as the White House Energy Projects Task Force established by Executive Order No. 13212 (42 U.S.C. 13201 note).

    (b) Staffing- The Office shall be staffed by functional experts from relevant Federal agencies on a nonreimbursable basis to carry out the mission of the Office.

    (c) Report- The Office shall transmit an annual report to Congress that describes the activities put in place to coordinate and expedite Federal decisions on energy projects. The report shall list accomplishments in improving the Federal decisionmaking process and shall include any additional recommendations or systemic changes needed to establish a more effective and efficient Federal permitting process.

SEC. 342. FEDERAL ONSHORE OIL AND GAS LEASING AND PERMITTING PRACTICES.

    (a) Review of Onshore Oil and Gas Leasing Practices-

      (1) IN GENERAL- The Secretary of the Interior, in consultation with the Secretary of Agriculture with respect to National Forest System lands under the jurisdiction of the Department of Agriculture, shall perform an internal review of current Federal onshore oil and gas leasing and permitting practices.

      (2) INCLUSIONS- The review shall include the process for--

        (A) accepting or rejecting offers to lease;

        (B) administrative appeals of decisions or orders of officers or employees of the Bureau of Land Management with respect to a Federal oil or gas lease;

        (C) considering surface use plans of operation, including the timeframes in which the plans are considered, and any recommendations for improving and expediting the process; and

        (D) identifying stipulations to address site-specific concerns and conditions, including those stipulations relating to the environment and resource use conflicts.

    (b) Report- Not later than 180 days after the date of enactment of this Act, the Secretary of the Interior and the Secretary of Agriculture shall transmit a report to Congress that describes--

      (1) actions taken under section 3 of Executive Order No. 13212 (42 U.S.C. 13201 note); and

      (2) actions taken or any plans to improve the Federal onshore oil and gas leasing program.

SEC. 343. MANAGEMENT OF FEDERAL OIL AND GAS LEASING PROGRAMS.

    (a) Timely Action on Leases and Permits- To ensure timely action on oil and gas leases and applications for permits to drill on land otherwise available for leasing, the Secretary of the Interior (in this section referred to as the ‘Secretary’) shall--

      (1) ensure expeditious compliance with section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C));

      (2) improve consultation and coordination with the States and the public; and

      (3) improve the collection, storage, and retrieval of information relating to the leasing activities.

    (b) Best Management Practices-

      (1) IN GENERAL- Not later than 18 months after the date of enactment of this Act, the Secretary shall develop and implement best management practices to--

        (A) improve the administration of the onshore oil and gas leasing program under the Mineral Leasing Act (30 U.S.C. 181 et seq.); and

        (B) ensure timely action on oil and gas leases and applications for permits to drill on lands otherwise available for leasing.

      (2) CONSIDERATIONS- In developing the best management practices under paragraph (1), the Secretary shall consider any recommendations from the review under section 342.

      (3) REGULATIONS- Not later than 180 days after the development of best management practices under paragraph (1), the Secretary shall publish, for public comment, proposed regulations that set forth specific timeframes for processing leases and applications in accordance with the practices, including deadlines for--

        (A) approving or disapproving resource management plans and related documents, lease applications, and surface use plans; and

        (B) related administrative appeals.

    (c) Improved Enforcement- The Secretary shall improve inspection and enforcement of oil and gas activities, including enforcement of terms and conditions in permits to drill.

    (d) Authorization of Appropriations- In addition to amounts authorized to be appropriated to carry out section 17 of the Mineral Leasing Act (30 U.S.C. 226), there are authorized to be appropriated to the Secretary for each of fiscal years 2004 through 2007--

      (1) $40,000,000 to carry out subsections (a) and (b); and

      (2) $20,000,000 to carry out subsection (c).

SEC. 344. CONSULTATION REGARDING OIL AND GAS LEASING ON PUBLIC LAND.

    (a) In General- Not later than 180 days after the date of enactment of this Act, the Secretary of the Interior and the Secretary of Agriculture shall enter into a memorandum of understanding regarding oil and gas leasing on--

      (1) public lands under the jurisdiction of the Secretary of the Interior; and

      (2) National Forest System lands under the jurisdiction of the Secretary of Agriculture.

    (b) Contents- The memorandum of understanding shall include provisions that--

      (1) establish administrative procedures and lines of authority that ensure timely processing of oil and gas lease applications, surface use plans of operation, and applications for permits to drill, including steps for processing surface use plans and applications for permits to drill consistent with the timelines established by the amendment made by section 348;

      (2) eliminate duplication of effort by providing for coordination of planning and environmental compliance efforts; and

      (3) ensure that lease stipulations are--

        (A) applied consistently;

        (B) coordinated between agencies; and

        (C) only as restrictive as necessary to protect the resource for which the stipulations are applied.

    (c) Data Retrieval System-

      (1) IN GENERAL- Not later than 1 year after the date of enactment of this Act, the Secretary of the Interior and the Secretary of Agriculture shall establish a joint data retrieval system that is capable of--

        (A) tracking applications and formal requests made in accordance with procedures of the Federal onshore oil and gas leasing program; and

        (B) providing information regarding the status of the applications and requests within the Department of the Interior and the Department of Agriculture.

      (2) RESOURCE MAPPING- Not later than 2 years after the date of enactment of this Act, the Secretary of the Interior and the Secretary of Agriculture shall establish a joint Geographic Information System mapping system for use in--

        (A) tracking surface resource values to aid in resource management; and

        (B) processing surface use plans of operation and applications for permits to drill.

SEC. 345. ESTIMATES OF OIL AND GAS RESOURCES UNDERLYING ONSHORE FEDERAL LAND.

    (a) Assessment- Section 604 of the Energy Act of 2000 (42 U.S.C. 6217) is amended--

      (1) in subsection (a)--

        (A) in paragraph (1)--

          (i) by striking ‘reserve’; and

          (ii) by striking ‘and’ after the semicolon; and

        (B) by striking paragraph (2) and inserting the following:

      ‘(2) the extent and nature of any restrictions or impediments to the development of the resources, including--

        ‘(A) impediments to the timely granting of leases;

        ‘(B) post-lease restrictions, impediments, or delays on development for conditions of approval, applications for permits to drill, or processing of environmental permits; and

        ‘(C) permits or restrictions associated with transporting the resources for entry into commerce; and

      ‘(3) the quantity of resources not produced or introduced into commerce because of the restrictions.’;

      (2) in subsection (b)--

        (A) by striking ‘reserve’ and inserting ‘resource’; and

        (B) by striking ‘publically’ and inserting ‘publicly’; and

      (3) by striking subsection (d) and inserting the following:

    ‘(d) Assessments- Using the inventory, the Secretary of Energy shall make periodic assessments of economically recoverable resources accounting for a range of parameters such as current costs, commodity prices, technology, and regulations.’.

    (b) Methodology- The Secretary of the Interior shall use the same assessment methodology across all geological provinces, areas, and regions in preparing and issuing national geological assessments to ensure accurate comparisons of geological resources.

SEC. 346. COMPLIANCE WITH EXECUTIVE ORDER NO. 13211; ACTIONS CONCERNING REGULATIONS THAT SIGNIFICANTLY AFFECT ENERGY SUPPLY, DISTRIBUTION, OR USE.

    (a) Requirement- The head of each Federal agency shall require that before the Federal agency takes any action that could have a significant adverse effect on the supply of domestic energy resources from Federal public land, the Federal agency taking the action shall comply with Executive Order No. 13211 (42 U.S.C. 13201 note).

    (b) Guidance- Not later than 180 days after the date of enactment of this Act, the Secretary of Energy shall publish guidance for purposes of this section describing what constitutes a significant adverse effect on the supply of domestic energy resources under Executive Order No. 13211 (42 U.S.C. 13201 note).

    (c) Memorandum of Understanding- The Secretary of the Interior and the Secretary of Agriculture shall include in the memorandum of understanding under section 344 provisions for implementing subsection (a) of this section.

SEC. 347. PILOT PROJECT TO IMPROVE FEDERAL PERMIT COORDINATION.

    (a) Establishment- The Secretary of the Interior (in this section referred to as the ‘Secretary’) shall establish a Federal Permit Streamlining Pilot Project (in this section referred to as the ‘Pilot Project’).

    (b) Memorandum of Understanding-

      (1) IN GENERAL- Not later than 90 days after the date of enactment of this Act, the Secretary shall enter into a memorandum of understanding with the Secretary of Agriculture, the Administrator of the Environmental Protection Agency, and the Chief of Engineers of the Army Corps of Engineers for purposes of this section.

      (2) STATE PARTICIPATION- The Secretary may request that the Governors of Wyoming, Montana, Colorado, Utah, and New Mexico be signatories to the memorandum of understanding.

    (c) Designation of Qualified Staff-

      (1) IN GENERAL- Not later than 30 days after the date of the signing of the memorandum of understanding under subsection (b), all Federal signatory parties shall assign to each of the field offices identified in subsection (d), on a nonreimbursable basis, an employee who has expertise in the regulatory issues relating to the office in which the employee is employed, including, as applicable, particular expertise in--

        (A) the consultations and the preparation of biological opinions under section 7 of the Endangered Species Act of 1973 (16 U.S.C. 1536);

        (B) permits under section 404 of Federal Water Pollution Control Act (33 U.S.C. 1344);

        (C) regulatory matters under the Clean Air Act (42 U.S.C. 7401 et seq.);

        (D) planning under the National Forest Management Act of 1976 (16 U.S.C. 472a et seq.); and

        (E) the preparation of analyses under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).

      (2) DUTIES- Each employee assigned under paragraph (1) shall--

        (A) not later than 90 days after the date of assignment, report to the Bureau of Land Management Field Managers in the office to which the employee is assigned;

        (B) be responsible for all issues relating to the jurisdiction of the home office or agency of the employee; and

        (C) participate as part of the team of personnel working on proposed energy projects, planning, and environmental analyses.

    (d) Field Offices- The following Bureau of Land Management Field Offices shall serve as the Pilot Project offices:

      (1) Rawlins, Wyoming.

      (2) Buffalo, Wyoming.

      (3) Miles City, Montana.

      (4) Farmington, New Mexico.

      (5) Carlsbad, New Mexico.

      (6) Glenwood Springs, Colorado.

      (7) Vernal, Utah.

    (e) Reports- Not later than 3 years after the date of enactment of this Act, the Secretary shall transmit to Congress a report that--

      (1) outlines the results of the Pilot Project to date; and

      (2) makes a recommendation to the President regarding whether the Pilot Project should be implemented throughout the United States.

    (f) Additional Personnel- The Secretary shall assign to each field office identified in subsection (d) any additional personnel that are necessary to ensure the effective implementation of--

      (1) the Pilot Project; and

      (2) other programs administered by the field offices, including inspection and enforcement relating to energy development on Federal land, in accordance with the multiple use mandate of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1701 et seq).

    (g) Savings Provision- Nothing in this section affects--

      (1) the operation of any Federal or State law; or

      (2) any delegation of authority made by the head of a Federal agency whose employees are participating in the Pilot Project.

SEC. 348. DEADLINE FOR CONSIDERATION OF APPLICATIONS FOR PERMITS.

    Section 17 of the Mineral Leasing Act (30 U.S.C. 226) is amended by adding at the end the following:

    ‘(p) Deadlines for Consideration of Applications for Permits-

      ‘(1) IN GENERAL- Not later than 10 days after the date on which the Secretary receives an application for any permit to drill, the Secretary shall--

        ‘(A) notify the applicant that the application is complete; or

        ‘(B) notify the applicant that information is missing and specify any information that is required to be submitted for the application to be complete.

      ‘(2) ISSUANCE OR DEFERRAL- Not later than 30 days after the applicant for a permit has submitted a complete application, the Secretary shall--

        ‘(A) issue the permit; or

        ‘(B)(i) defer decision on the permit; and

        ‘(ii) provide to the applicant a notice that specifies any steps that the applicant could take for the permit to be issued.

      ‘(3) REQUIREMENTS FOR DEFERRED APPLICATIONS-

        ‘(A) IN GENERAL- If the Secretary provides notice under paragraph (2)(B)(ii), the applicant shall have a period of 2 years from the date of receipt of the notice in which to complete all requirements specified by the Secretary, including providing information needed for compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).

        ‘(B) ISSUANCE OF DECISION ON PERMIT- If the applicant completes the requirements within the period specified in subparagraph (A), the Secretary shall issue a decision on the permit not later than 10 days after the date of completion of the requirements described in subparagraph (A).

        ‘(C) DENIAL OF PERMIT- If the applicant does not complete the requirements within the period specified in subparagraph (A), the Secretary shall deny the permit.

    ‘(q) Report- On a quarterly basis, each field office of the Bureau of Land Management and the Forest Service shall transmit to the Secretary of the Interior or the Secretary of Agriculture, respectively, a report that--

      ‘(1) specifies the number of applications for permits to drill received by the field office in the period covered by the report; and

      ‘(2) describes how each of the applications was disposed of by the field office.’.

SEC. 349. CLARIFICATION OF FAIR MARKET RENTAL VALUE DETERMINATIONS FOR PUBLIC LAND AND FOREST SERVICE RIGHTS-OF-WAY.

    (a) Linear Rights-Of-Way Under Federal Land Policy and Management Act of 1976- Section 504 of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1764) is amended by adding at the end the following:

    ‘(k) Determination of Fair Market Value of Linear Rights-of-way-

      ‘(1) IN GENERAL- Effective beginning on the date of the issuance of the rules required by paragraph (2), for purposes of subsection (g), the Secretary concerned shall determine the fair market value for the use of land encumbered by a linear right-of-way granted, issued, or renewed under this title using the valuation method described in paragraphs (2), (3), and (4).

      ‘(2) REVISIONS- Not later than 1 year after the date of enactment of this subsection--

        ‘(A) the Secretary of the Interior shall amend section 2803.1-2 of title 43, Code of Federal Regulations, as in effect on the date of enactment of this subsection, to revise the per acre rental fee zone value schedule by State, county, and type of linear right-of-way use to reflect current values of land in each zone; and

        ‘(B) the Secretary of Agriculture shall make the same revision for linear rights-of-way granted, issued, or renewed under this title on National Forest System land.

      ‘(3) UPDATES- The Secretary concerned shall annually update the schedule revised under paragraph (2) by multiplying the current year’s rental per acre by the annual change, second quarter to second quarter (June 30 to June 30) in the Gross National Product Implicit Price Deflator Index published in the Survey of Current Business of the Department of Commerce, Bureau of Economic Analysis.

      ‘(4) REVIEW- If the cumulative change in the index referred to in paragraph (3) exceeds 30 percent, or the change in the 3-year average of the 1-year Treasury interest rate used to determine per acre rental fee zone values exceeds plus or minus 50 percent, the Secretary concerned shall conduct a review of the zones and rental per acre figures to determine whether the value of Federal land has differed sufficiently from the index referred to in paragraph (3) to warrant a revision in the base zones and rental per acre figures. If, as a result of the review, the Secretary concerned determines that such a revision is warranted, the Secretary concerned shall revise the base zones and rental per acre figures accordingly. Any revision of base zones and rental per acre figure shall only affect lease rental rates at inception or renewal.’.

    (b) Rights-Of-Way Under Mineral Leasing Act- Section 28(l) of the Mineral Leasing Act (30 U.S.C. 185(l)) is amended by inserting before the period at the end the following: ‘using the valuation method described in section 2803.1-2 of title 43, Code of Federal Regulations, as revised in accordance with section 504(k) of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1764(k))’.

SEC. 350. ENERGY FACILITY RIGHTS-OF-WAY AND CORRIDORS ON FEDERAL LAND.

    (a) Report to Congress-

      (1) IN GENERAL- Not later than 1 year after the date of enactment of this Act, the Secretary of Agriculture and the Secretary of the Interior, in consultation with the Secretary of Commerce, the Secretary of Defense, the Secretary of Energy, and the Federal Energy Regulatory Commission, shall submit to Congress a joint report--

        (A) that addresses--

          (i) the location of existing rights-of-way and designated and de facto corridors for oil and gas pipelines and electric transmission and distribution facilities on Federal land; and

          (ii) opportunities for additional oil and gas pipeline and electric transmission capacity within those rights-of-way and corridors; and

        (B) that includes a plan for making available, on request, to the appropriate Federal, State, and local agencies, tribal governments, and other persons involved in the siting of oil and gas pipelines and electricity transmission facilities Geographic Information System-based information regarding the location of the existing rights-of-way and corridors and any planned rights-of-way and corridors.

      (2) CONSULTATIONS AND CONSIDERATIONS- In preparing the report, the Secretary of the Interior and the Secretary of Agriculture shall consult with--

        (A) other agencies of Federal, State, tribal, or local units of government, as appropriate;

        (B) persons involved in the siting of oil and gas pipelines and electric transmission facilities; and

        (C) other interested members of the public.

      (3) LIMITATION- The Secretary of the Interior and the Secretary of Agriculture shall limit the distribution of the report and Geographic Information System-based information referred to in paragraph (1) as necessary for national and infrastructure security reasons, if either Secretary determines that the information may be withheld from public disclosure under a national security or other exception under section 552(b) of title 5, United States Code.

    (b) Corridor Designations-

      (1) 11 CONTIGUOUS WESTERN STATES- Not later than 2 years after the date of enactment of this Act, the Secretary of Agriculture, the Secretary of Commerce, the Secretary of Defense, the Secretary of Energy, and the Secretary of the Interior, in consultation with the Federal Energy Regulatory Commission and the affected utility industries, shall jointly--

        (A) designate, under title V of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1761 et seq.) and other applicable Federal laws, corridors for oil and gas pipelines and electricity transmission and facilities on Federal land in the eleven contiguous Western States (as defined in section 103 of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1702));

        (B) perform any environmental reviews that may be required to complete the designations of corridors for the facilities on Federal land in the eleven contiguous Western States; and

        (C) incorporate the designated corridors into--

          (i) the relevant departmental and agency land use and resource management plans; or

          (ii) equivalent plans.

      (2) OTHER STATES- Not later than 4 years after the date of enactment of this Act, the Secretary of Agriculture, the Secretary of Commerce, the Secretary of Defense, the Secretary of Energy, and the Secretary of the Interior, in consultation with the Federal Energy Regulatory Commission and the affected utility industries, shall jointly--

        (A) identify corridors for oil and gas pipelines and electricity transmission and distribution facilities on Federal land in the States other than those described in paragraph (1); and

        (B) schedule prompt action to identify, designate, and incorporate the corridors into the land use plan.

      (3) ONGOING RESPONSIBILITIES- After completing the requirements under paragraphs (1) and (2), the Secretary of Agriculture, the Secretary of Commerce, the Secretary of Defense, the Secretary of Energy, and the Secretary of the Interior, with respect to lands under their respective jurisdictions, in consultation with the Federal Energy Regulatory Commission and the affected utility industries, shall establish procedures that--

        (A) ensure that additional corridors for oil and gas pipelines and electricity transmission and distribution facilities on Federal land are promptly identified and designated; and

        (B) expedite applications to construct or modify oil and gas pipelines and electricity transmission and distribution facilities within the corridors, taking into account prior analyses and environmental reviews undertaken during the designation of corridors.

    (c) Considerations- In carrying out this section, the Secretaries shall take into account the need for upgraded and new electricity transmission and distribution facilities to--

      (1) improve reliability;

      (2) relieve congestion; and

      (3) enhance the capability of the national grid to deliver electricity.

    (d) Definition of Corridor-

      (1) IN GENERAL- In this section and title V of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1761 et seq.), the term ‘corridor’ means--

        (A) a linear strip of land--

          (i) with a width determined with consideration given to technological, environmental, and topographical factors; and

          (ii) that contains, or may in the future contain, 1 or more utility, communication, or transportation facilities;

        (B) a land use designation that is established--

          (i) by law;

          (ii) by Secretarial Order;

          (iii) through the land use planning process; or

          (iv) by other management decision; and

        (C) a designation made for the purpose of establishing the preferred location of compatible linear facilities and land uses.

      (2) SPECIFICATIONS OF CORRIDOR- On designation of a corridor under this section, the centerline, width, and compatible uses of a corridor shall be specified.

SEC. 351. CONSULTATION REGARDING ENERGY RIGHTS-OF-WAY ON PUBLIC LAND.

    (a) Memorandum of Understanding-

      (1) IN GENERAL- Not later than 6 months after the date of enactment of this Act, the Secretary of Energy, in consultation with the Secretary of the Interior, the Secretary of Agriculture, and the Secretary of Defense with respect to lands under their respective jurisdictions, shall enter into a memorandum of understanding to coordinate all applicable Federal authorizations and environmental reviews relating to a proposed or existing utility facility. To the maximum extent practicable under applicable law, the Secretary of Energy shall, to ensure timely review and permit decisions, coordinate such authorizations and reviews with any Indian tribes, multi-State entities, and State agencies that are responsible for conducting any separate permitting and environmental reviews of the affected utility facility.

      (2) CONTENTS- The memorandum of understanding shall include provisions that--

        (A) establish--

          (i) a unified right-of-way application form; and

          (ii) an administrative procedure for processing right-of-way applications, including lines of authority, steps in application processing, and timeframes for application processing;

        (B) provide for coordination of planning relating to the granting of the rights-of-way;

        (C) provide for an agreement among the affected Federal agencies to prepare a single environmental review document to be used as the basis for all Federal authorization decisions; and

        (D) provide for coordination of use of right-of-way stipulations to achieve consistency.

    (b) Natural Gas Pipelines-

      (1) IN GENERAL- With respect to permitting activities for interstate natural gas pipelines, the May 2002 document entitled ‘Interagency Agreement On Early Coordination Of Required Environmental And Historic Preservation Reviews Conducted In Conjunction With The Issuance Of Authorizations To Construct And Operate Interstate Natural Gas Pipelines Certificated By The Federal Energy Regulatory Commission’ shall constitute compliance with subsection (a).

      (2) REPORT-

        (A) IN GENERAL- Not later than 1 year after the date of enactment of this Act, and every 2 years thereafter, agencies that are signatories to the document referred to in paragraph (1) shall transmit to Congress a report on how the agencies under the jurisdiction of the Secretaries are incorporating and implementing the provisions of the document referred to in paragraph (1).

        (B) CONTENTS- The report shall address--

          (i) efforts to implement the provisions of the document referred to in paragraph (1);

          (ii) whether the efforts have had a streamlining effect;

          (iii) further improvements to the permitting process of the agency; and

          (iv) recommendations for inclusion of State and tribal governments in a coordinated permitting process.

    (c) Definition of Utility Facility- In this section, the term ‘utility facility’ means any privately, publicly, or cooperatively owned line, facility, or system--

      (1) for the transportation of--

        (A) oil, natural gas, synthetic liquid fuel, or gaseous fuel;

        (B) any refined product produced from oil, natural gas, synthetic liquid fuel, or gaseous fuel; or

        (C) products in support of the production of material referred to in subparagraph (A) or (B);

      (2) for storage and terminal facilities in connection with the production of material referred to in paragraph (1); or

      (3) for the generation, transmission, and distribution of electric energy.

SEC. 352. RENEWABLE ENERGY ON FEDERAL LAND.

    (a) Report-

      (1) IN GENERAL- Not later than 24 months after the date of enactment of this Act, the Secretary of the Interior, in cooperation with the Secretary of Agriculture, shall develop and transmit to Congress a report that includes recommendations on opportunities to develop renewable energy on--

        (A) public lands under the jurisdiction of the Secretary of the Interior; and

        (B) National Forest System lands under the jurisdiction of the Secretary of Agriculture.

      (2) CONTENTS- The report shall include--

        (A) 5-year plans developed by the Secretary of the Interior and the Secretary of Agriculture, respectively, for encouraging the development of renewable energy consistent with applicable law and management plans;

        (B) an analysis of--

          (i) the use of rights-of-way, leases, or other methods to develop renewable energy on such lands;

          (ii) the anticipated benefits of grants, loans, tax credits, or other provisions to promote renewable energy development on such lands; and

          (iii) any issues that the Secretary of the Interior or the Secretary of Agriculture have encountered in managing renewable energy projects on such lands, believe are likely to arise in relation to the development of renewable energy on such lands;

        (C) a list, developed in consultation with the Secretary of Energy and the Secretary of Defense, of lands under the jurisdiction of the Department of Energy or the Department of Defense that would be suitable for development for renewable energy, and any recommended statutory and regulatory mechanisms for such development; and

        (D) any recommendations relating to the issues addressed in the report.

    (b) National Academy of Sciences Study-

      (1) IN GENERAL- Not later than 90 days after the date of enactment of this Act, the Secretary of the Interior shall contract with the National Academy of Sciences to--

        (A) study the potential for the development of wind, solar, and ocean energy (including tidal, wave, and thermal energy) on the outer Continental Shelf;

        (B) assess existing Federal authorities for the development of such resources; and

        (C) recommend statutory and regulatory mechanisms for such development.

      (2) TRANSMITTAL- The results of the study shall be transmitted to Congress not later than 2 years after the date of enactment of this Act.

    (c) Generation Capacity of Electricity From Renewable Energy Resources on Public Land- The Secretary of the Interior shall, not later than 10 years after the date of enactment of this Act, seek to approve renewable energy projects located (or to be located) on public lands with a generation capacity of at least 10,000 megawatts of electricity.

SEC. 353. ELECTRICITY TRANSMISSION LINE RIGHT-OF-WAY, CLEVELAND NATIONAL FOREST AND ADJACENT PUBLIC LAND, CALIFORNIA.

    (a) Issuance-

      (1) IN GENERAL- Not later than 60 days after the completion of the environmental reviews under subsection (c), the Secretary of the Interior and the Secretary of Agriculture shall issue all necessary grants, easements, permits, plan amendments, and other approvals to allow for the siting and construction of a high-voltage electricity transmission line right-of-way running approximately north to south through the Trabuco Ranger District of the Cleveland National Forest in the State of California and adjacent lands under the jurisdiction of the Bureau of Land Management and the Forest Service.

      (2) INCLUSIONS- The right-of-way approvals under paragraph (1) shall provide all necessary Federal authorization from the Secretary of the Interior and the Secretary of Agriculture for the routing, construction, operation, and maintenance of a 500-kilovolt transmission line capable of meeting the long-term electricity transmission needs of the region between the existing Valley-Serrano transmission line to the north and the Telega-Escondido transmission line to the south, and for connecting to future generating capacity that may be developed in the region.

    (b) Protection of Wilderness Areas- The Secretary of the Interior and the Secretary of Agriculture shall not allow any portion of a transmission line right-of-way corridor identified in subsection (a) to enter any identified wilderness area in existence as of the date of enactment of this Act.

    (c) Environmental and Administrative Reviews-

      (1) DEPARTMENT OF INTERIOR OR LOCAL AGENCY- The Secretary of the Interior, acting through the Director of the Bureau of Land Management, shall be the lead Federal agency with overall responsibility to ensure completion of required environmental and other reviews of the approvals to be issued under subsection (a).

      (2) NATIONAL FOREST SYSTEM LAND- For the portions of the corridor on National Forest System lands, the Secretary of Agriculture shall complete all required environmental reviews and administrative actions in coordination with the Secretary of the Interior.

      (3) EXPEDITIOUS COMPLETION- The reviews required for issuance of the approvals under subsection (a) shall be completed not later than 1 year after the date of the enactment of this Act.

    (d) Other Terms and Conditions- The transmission line right-of-way shall be subject to such terms and conditions as the Secretary of the Interior and the Secretary of Agriculture consider necessary, based on the environmental reviews under subsection (c), to protect the value of historic, cultural, and natural resources under the jurisdiction of the Secretary of the Interior or the Secretary of Agriculture.

    (e) Preference Among Proposals- The Secretary of the Interior and the Secretary of Agriculture shall give a preference to any application or preapplication proposal for a transmission line right-of-way referred to in subsection (a) that was submitted before December 31, 2002, over all other applications and proposals for the same or a similar right-of-way submitted on or after that date.

SEC. 354. SENSE OF CONGRESS REGARDING DEVELOPMENT OF MINERALS UNDER PADRE ISLAND NATIONAL SEASHORE.

    (a) Findings- Congress finds the following:

      (1) Pursuant to Public Law 87-712 (16 U.S.C. 459d et seq.; popularly known as the ‘Federal Enabling Act’) and various deeds and actions under that Act, the United States is the owner of only the surface estate of certain lands constituting the Padre Island National Seashore.

      (2) Ownership of the oil, gas, and other minerals in the subsurface estate of the lands constituting the Padre Island National Seashore was never acquired by the United States, and ownership of those interests is held by the State of Texas and private parties.

      (3) Public Law 87-712 (16 U.S.C. 459d et seq.)--

        (A) expressly contemplated that the United States would recognize the ownership and future development of the oil, gas, and other minerals in the subsurface estate of the lands constituting the Padre Island National Seashore by the owners and their mineral lessees; and

        (B) recognized that approval of the State of Texas was required to create Padre Island National Seashore.

      (4) Approval was given for the creation of Padre Island National Seashore by the State of Texas through Tex. Rev. Civ. Stat. Ann. Art. 6077(t) (Vernon 1970), which expressly recognized that development of the oil, gas, and other minerals in the subsurface of the lands constituting Padre Island National Seashore would be conducted with full rights of ingress and egress under the laws of the State of Texas.

    (b) Sense of Congress- It is the sense of Congress that with regard to Federal law, any regulation of the development of oil, gas, or other minerals in the subsurface of the lands constituting Padre Island National Seashore should be made as if those lands retained the status that the lands had on September 27, 1962.

SEC. 355. ENCOURAGING PROHIBITION OF OFF-SHORE DRILLING IN THE GREAT LAKES.

    Congress encourages--

      (1) the States of Illinois, Michigan, New York, Pennsylvania, and Wisconsin to continue to prohibit offshore drilling in the Great Lakes for oil and gas; and

      (2) the States of Indiana, Minnesota, and Ohio to enact a prohibition of such drilling.

SEC. 356. FINGER LAKES NATIONAL FOREST WITHDRAWAL.

    All Federal land within the boundary of Finger Lakes National Forest in the State of New York is withdrawn from--

      (1) all forms of entry, appropriation, or disposal under the public land laws; and

      (2) disposition under all laws relating to oil and gas leasing.

SEC. 357. STUDY ON LEASE EXCHANGES IN THE ROCKY MOUNTAIN FRONT.

    (a) Definitions- For the purposes of this section:

      (1) BADGER-TWO MEDICINE AREA- The term ‘Badger-Two Medicine Area’ means the Forest Service land located in--

        (A) T. 31 N., R. 12-13 W.;

        (B) T. 30 N., R. 11-13 W.;

        (C) T. 29 N., R. 10-16 W.; and

        (D) T. 28 N., R. 10-14 W.

      (2) BLACKLEAF AREA- The term ‘Blackleaf Area’ means the Federal land owned by the Forest Service and Bureau of Land Management that is located in--

        (A) T. 27 N., R. 9 W.;

        (B) T. 26 N., R. 9-10 W.;

        (C) T. 25 N., R. 8-10 W.; and

        (D) T. 24 N., R. 8-9 W.

      (3) ELIGIBLE LESSEE- The term ‘eligible lessee’ means a lessee under a nonproducing lease.

      (4) NONPRODUCING LEASE- The term ‘nonproducing lease’ means a Federal oil or gas lease--

        (A) that is in existence and in good standing on the date of enactment of this Act; and

        (B) that is located in the Badger-Two Medicine Area or the Blackleaf Area.

      (5) SECRETARY- The term ‘Secretary’ means the Secretary of the Interior.

      (6) STATE- The term ‘State’ means the State of Montana.

    (b) Evaluation-

      (1) IN GENERAL- The Secretary, in consultation with the Governor of the State, and the eligible lessees, shall evaluate opportunities for domestic oil and gas production through the exchange of the nonproducing leases.

      (2) REQUIREMENTS- In carrying out the evaluation under subsection (a), the Secretary shall--

        (A) consider opportunities for domestic production of oil and gas through--

          (i) the exchange of the nonproducing leases for oil and gas lease tracts of comparable value in the State; and

          (ii) the issuance of bidding, royalty, or rental credits for Federal oil and gas leases in the State in exchange for the cancellation of the nonproducing leases;

        (B) consider any other appropriate means to exchange, or provide compensation for the cancellation of, nonproducing leases, subject to the consent of the eligible lessees;

        (C) consider the views of any interested persons, including the State;

        (D) determine the level of interest of the eligible lessees in exchanging the nonproducing leases;

        (E) assess the economic impact on the lessees and the State of lease exchange, lease cancellation, and final judicial or administrative decisions related to the nonproducing leases; and

        (F) provide recommendations on--

          (i) whether to pursue an exchange of the nonproducing leases;

          (ii) any changes in laws (including regulations) that are necessary for the Secretary to carry out the exchange; and

          (iii) any other appropriate means to exchange or provide compensation for the cancellation of a nonproducing lease, subject to the consent of the eligible lessee.

    (c) Valuation of Nonproducing Leases- For the purpose of the evaluation under subsection (a), the value of a nonproducing lease shall be an amount equal to the difference between--

      (1) the sum of--

        (A) the amount paid by the eligible lessee for the nonproducing lease;

        (B) any direct expenditures made by the eligible lessee before the transmittal of the report in subsection (c) associated with the exploration and development of the nonproducing lease; and

        (C) interest on any amounts under subparagraphs (A) and (B) during the period beginning on the date on which the amount was paid and ending on the date on which credits are issued under subsection (b)(2)(A)(ii); and

      (2) the sum of the revenues from the nonproducing lease.

    (d) Report to Congress- Not later than 2 years after the date of the enactment of this Act, the Secretary shall initiate the evaluation in subsection (b) and transmit to Congress a report on the evaluation.

SEC. 358. FEDERAL COALBED METHANE REGULATION.

    Any State currently on the list of Affected States established under section 1339(b) of the Energy Policy Act of 1992 (42 U.S.C. 13368(b)) shall be removed from the list if, not later than 3 years after the date of enactment of this Act, the State takes, or prior to the date of enactment has taken, any of the actions required for removal from the list under such section 1339(b).

SEC. 359. LIVINGSTON PARISH MINERAL RIGHTS TRANSFER.

    (a) Amendments- Section 102 of Public Law 102-562 (106 Stat. 4234) is amended--

      (1) by striking ‘(a) In General- ’;

      (2) by striking ‘and subject to the reservation in subsection (b),’; and

      (3) by striking subsection (b).

    (b) Implementation of Amendment- The Secretary of the Interior shall execute the legal instruments necessary to effectuate the amendment made by subsection (a)(3).

Subtitle D--Alaska Natural Gas Pipeline

SEC. 371. SHORT TITLE.

    This subtitle may be cited as the ‘Alaska Natural Gas Pipeline Act’.

SEC. 372. DEFINITIONS.

    In this subtitle:

      (1) ALASKA NATURAL GAS- The term ‘Alaska natural gas’ means natural gas derived from the area of the State of Alaska lying north of 64 degrees north latitude.

      (2) ALASKA NATURAL GAS TRANSPORTATION PROJECT- The term ‘Alaska natural gas transportation project’ means any natural gas pipeline system that carries Alaska natural gas to the border between Alaska and Canada (including related facilities subject to the jurisdiction of the Commission) that is authorized under--

        (A) the Alaska Natural Gas Transportation Act of 1976 (15 U.S.C. 719 et seq.); or

        (B) section 373.

      (3) ALASKA NATURAL GAS TRANSPORTATION SYSTEM- The term ‘Alaska natural gas transportation system’ means the Alaska natural gas transportation project authorized under the Alaska Natural Gas Transportation Act of 1976 (15 U.S.C. 719 et seq.) and designated and described in section 2 of the President’s decision.

      (4) COMMISSION- The term ‘Commission’ means the Federal Energy Regulatory Commission.

      (5) FEDERAL COORDINATOR- The term ‘Federal Coordinator’ means the head of the Office of the Federal Coordinator for Alaska Natural Gas Transportation Projects established by section 376(a).

      (6) PRESIDENT’S DECISION- The term ‘President’s decision’ means the decision and report to Congress on the Alaska natural gas transportation system--

        (A) issued by the President on September 22, 1977, in accordance with section 7 of the Alaska Natural Gas Transportation Act of 1976 (15 U.S.C. 719e); and

        (B) approved by Public Law 95-158 (15 U.S.C. 719f note; 91 Stat. 1268).

      (7) SECRETARY- The term ‘Secretary’ means the Secretary of Energy.

      (8) STATE- The term ‘State’ means the State of Alaska.

SEC. 373. ISSUANCE OF CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY.

    (a) Authority of the Commission- Notwithstanding the Alaska Natural Gas Transportation Act of 1976 (15 U.S.C. 719 et seq.), the Commission may, in accordance with section 7(c) of the Natural Gas Act (15 U.S.C. 717f(c)), consider and act on an application for the issuance of a certificate of public convenience and necessity authorizing the construction and operation of an Alaska natural gas transportation project other than the Alaska natural gas transportation system.

    (b) Issuance of Certificate-

      (1) IN GENERAL- The Commission shall issue a certificate of public convenience and necessity authorizing the construction and operation of an Alaska natural gas transportation project under this section if the applicant has satisfied the requirements of section 7(e) of the Natural Gas Act (15 U.S.C. 717f(e)).

      (2) CONSIDERATIONS- In considering an application under this section, the Commission shall presume that--

        (A) a public need exists to construct and operate the proposed Alaska natural gas transportation project; and

        (B) sufficient downstream capacity will exist to transport the Alaska natural gas moving through the project to markets in the contiguous United States.

    (c) Expedited Approval Process- Not later than 60 days after the date of issuance of the final environmental impact statement under section 374 for an Alaska natural gas transportation project, the Commission shall issue a final order granting or denying any application for a certificate of public convenience and necessity for the project under section 7(c) of the Natural Gas Act (15 U.S.C. 717f(c)) and this section.

    (d) Prohibition of Certain Pipeline Route- No license, permit, lease, right-of-way, authorization, or other approval required under Federal law for the construction of any pipeline to transport natural gas from land within the Prudhoe Bay oil and gas lease area may be granted for any pipeline that follows a route that--

      (1) traverses land beneath navigable waters (as defined in section 2 of the Submerged Lands Act (43 U.S.C. 1301)) beneath, or the adjacent shoreline of, the Beaufort Sea; and

      (2) enters Canada at any point north of 68 degrees north latitude.

    (e) Open Season-

      (1) IN GENERAL- Not later than 120 days after the date of enactment of this Act, the Commission shall issue regulations governing the conduct of open seasons for Alaska natural gas transportation projects (including procedures for the allocation of capacity).

      (2) REGULATIONS- The regulations referred to in paragraph (1) shall--

        (A) include the criteria for and timing of any open seasons;

        (B) promote competition in the exploration, development, and production of Alaska natural gas; and

        (C) for any open season for capacity exceeding the initial capacity, provide the opportunity for the transportation of natural gas other than from the Prudhoe Bay and Point Thomson units.

      (3) APPLICABILITY- Except in a case in which an expansion is ordered in accordance with section 375, initial or expansion capacity on any Alaska natural gas transportation project shall be allocated in accordance with procedures to be established by the Commission in regulations issued under paragraph (1).

    (f) Projects in the Contiguous United States-

      (1) IN GENERAL- An application for additional or expanded pipeline facilities that may be required to transport Alaska natural gas from Canada to markets in the contiguous United States may be made in accordance with the Natural Gas Act (15 U.S.C. 717a et seq.).

      (2) EXPANSION- To the extent that a pipeline facility described in paragraph (1) includes the expansion of any facility constructed in accordance with the Alaska Natural Gas Transportation Act of 1976 (15 U.S.C. 719 et seq.), that Act shall continue to apply.

    (g) Study of In-State Needs- The holder of the certificate of public convenience and necessity issued, modified, or amended by the Commission for an Alaska natural gas transportation project shall demonstrate that the holder has conducted a study of Alaska in-State needs, including tie-in points along the Alaska natural gas transportation project for in-State access.

    (h) Alaska Royalty Gas-

      (1) IN GENERAL- Except as provided in paragraph (2), the Commission, on a request by the State and after a hearing, may provide for reasonable access to the Alaska natural gas transportation project by the State (or State designee) for the transportation of royalty gas of the State for the purpose of meeting local consumption needs within the State.

      (2) EXCEPTION- The rates of shippers of subscribed capacity on an Alaska natural gas transportation project described in paragraph (1), as in effect as of the date on which access under that paragraph is granted, shall not be increased as a result of such access.

    (i) Regulations- The Commission may issue such regulations as are necessary to carry out this section.

SEC. 374. ENVIRONMENTAL REVIEWS.

    (a) Compliance With NEPA- The issuance of a certificate of public convenience and necessity authorizing the construction and operation of any Alaska natural gas transportation project under section 373 shall be treated as a major Federal action significantly affecting the quality of the human environment within the meaning of section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)).

    (b) Designation of Lead Agency-

      (1) IN GENERAL- The Commission--

        (A) shall be the lead agency for purposes of complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.); and

        (B) shall be responsible for preparing the environmental impact statement required by section 102(2)(c) of that Act (42 U.S.C. 4332(2)(c)) with respect to an Alaska natural gas transportation project under section 373.

      (2) CONSOLIDATION OF STATEMENTS- In carrying out paragraph (1), the Commission shall prepare a single environmental impact statement, which shall consolidate the environmental reviews of all Federal agencies considering any aspect of the Alaska natural gas transportation project covered by the environmental impact statement.

    (c) Other Agencies-

      (1) IN GENERAL- Each Federal agency considering an aspect of the construction and operation of an Alaska natural gas transportation project under section 373 shall--

        (A) cooperate with the Commission; and

        (B) comply with deadlines established by the Commission in the preparation of the environmental impact statement under this section.

      (2) SATISFACTION OF NEPA REQUIREMENTS- The environmental impact statement prepared under this section shall be adopted by each Federal agency described in paragraph (1) in satisfaction of the responsibilities of the Federal agency under section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)) with respect to the Alaska natural gas transportation project covered by the environmental impact statement.

    (d) Expedited Process- The Commission shall--

      (1) not later than 1 year after the Commission determines that the application under section 373 with respect to an Alaska natural gas transportation project is complete, issue a draft environmental impact statement under this section; and

      (2) not later than 180 days after the date of issuance of the draft environmental impact statement, issue a final environmental impact statement, unless the Commission for good cause determines that additional time is needed.

SEC. 375. PIPELINE EXPANSION.

    (a) Authority- With respect to any Alaska natural gas transportation project, on a request by 1 or more persons and after giving notice and an opportunity for a hearing, the Commission may order the expansion of the Alaska natural gas project if the Commission determines that such an expansion is required by the present and future public convenience and necessity.

    (b) Responsibilities of Commission- Before ordering an expansion under subsection (a), the Commission shall--

      (1) approve or establish rates for the expansion service that are designed to ensure the recovery, on an incremental or rolled-in basis, of the cost associated with the expansion (including a reasonable rate of return on investment);

      (2) ensure that the rates do not require existing shippers on the Alaska natural gas transportation project to subsidize expansion shippers;

      (3) find that a proposed shipper will comply with, and the proposed expansion and the expansion of service will be undertaken and implemented based on, terms and conditions consistent with the tariff of the Alaska natural gas transportation project in effect as of the date of the expansion;

      (4) find that the proposed facilities will not adversely affect the financial or economic viability of the Alaska natural gas transportation project;

      (5) find that the proposed facilities will not adversely affect the overall operations of the Alaska natural gas transportation project;

      (6) find that the proposed facilities will not diminish the contract rights of existing shippers to previously subscribed certificated capacity;

      (7) ensure that all necessary environmental reviews have been completed; and

      (8) find that adequate downstream facilities exist or are expected to exist to deliver incremental Alaska natural gas to market.

    (c) Requirement for a Firm Transportation Agreement- Any order of the Commission issued in accordance with this section shall be void unless the person requesting the order executes a firm transportation agreement with the Alaska natural gas transportation project within such reasonable period of time as the order may specify.

    (d) Limitation- Nothing in this section expands or otherwise affects any authority of the Commission with respect to any natural gas pipeline located outside the State.

    (e) Regulations- The Commission may issue such regulations as are necessary to carry out this section.

SEC. 376. FEDERAL COORDINATOR.

    (a) Establishment- There is established, as an independent office in the executive branch, the Office of the Federal Coordinator for Alaska Natural Gas Transportation Projects.

    (b) Federal Coordinator-

      (1) APPOINTMENT- The Office shall be headed by a Federal Coordinator for Alaska Natural Gas Transportation Projects, who shall be appointed by the President, by and with the advice and consent of the Senate, to serve a term to last until 1 year following the completion of the project referred to in section 373.

      (2) COMPENSATION- The Federal Coordinator shall be compensated at the rate prescribed for level III of the Executive Schedule (5 U.S.C. 5314).

    (c) Duties- The Federal Coordinator shall be responsible for--

      (1) coordinating the expeditious discharge of all activities by Federal agencies with respect to an Alaska natural gas transportation project; and

      (2) ensuring the compliance of Federal agencies with the provisions of this subtitle.

    (d) Reviews and Actions of Other Federal Agencies-

      (1) EXPEDITED REVIEWS AND ACTIONS- All reviews conducted and actions taken by any Federal agency relating to an Alaska natural gas transportation project authorized under this section shall be expedited, in a manner consistent with completion of the necessary reviews and approvals by the deadlines under this subtitle.

      (2) PROHIBITION OF CERTAIN TERMS AND CONDITIONS- No Federal agency may include in any certificate, right-of-way, permit, lease, or other authorization issued to an Alaska natural gas transportation project any term or condition that may be permitted, but is not required, by any applicable law if the Federal Coordinator determines that the term or condition would prevent or impair in any significant respect the expeditious construction and operation, or an expansion, of the Alaska natural gas transportation project.

      (3) PROHIBITION OF CERTAIN ACTIONS- Unless required by law, no Federal agency shall add to, amend, or abrogate any certificate, right-of-way, permit, lease, or other authorization issued to an Alaska natural gas transportation project if the Federal Coordinator determines that the action would prevent or impair in any significant respect the expeditious construction and operation, or an expansion, of the Alaska natural gas transportation project.

      (4) LIMITATION- The Federal Coordinator shall not have authority to--

        (A) override--

          (i) the implementation or enforcement of regulations issued by the Commission under section 373; or

          (ii) an order by the Commission to expand the project under section 375; or

        (B) impose any terms, conditions, or requirements in addition to those imposed by the Commission or any agency with respect to construction and operation, or an expansion of, the project.

    (e) State Coordination-

      (1) IN GENERAL- The Federal Coordinator and the State shall enter into a joint surveillance and monitoring agreement similar to the agreement in effect during construction of the Trans-Alaska Pipeline, to be approved by the President and the Governor of the State, for the purpose of monitoring the construction of the Alaska natural gas transportation project.

      (2) PRIMARY RESPONSIBILITY- With respect to an Alaska natural gas transportation project--

        (A) the Federal Government shall have primary surveillance and monitoring responsibility in areas where the Alaska natural gas transportation project crosses Federal land or private land; and

        (B) the State government shall have primary surveillance and monitoring responsibility in areas where the Alaska natural gas transportation project crosses State land.

    (f) Transfer of Federal Inspector Functions and Authority- On appointment of the Federal Coordinator by the President, all of the functions and authority of the Office of Federal Inspector of Construction for the Alaska Natural Gas Transportation System vested in the Secretary under section 3012(b) of the Energy Policy Act of 1992 (15 U.S.C. 719e note; Public Law 102-486), including all functions and authority described and enumerated in the Reorganization Plan No. 1 of 1979 (44 Fed. Reg. 33663), Executive Order No. 12142 of June 21, 1979 (44 Fed. Reg. 36927), and section 5 of the President’s decision, shall be transferred to the Federal Coordinator.

    (g) Temporary Authority- The functions, authorities, duties, and responsibilities of the Federal Coordinator shall be vested in the Secretary until the later of the appointment of the Federal Coordinator by the President, or 18 months after the date of enactment of this Act.

SEC. 377. JUDICIAL REVIEW.

    (a) Exclusive Jurisdiction- Except for review by the Supreme Court on writ of certiorari, the United States Court of Appeals for the District of Columbia Circuit shall have original and exclusive jurisdiction to determine--

      (1) the validity of any final order or action (including a failure to act) of any Federal agency or officer under this subtitle;

      (2) the constitutionality of any provision of this subtitle, or any decision made or action taken under this subtitle; or

      (3) the adequacy of any environmental impact statement prepared under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) with respect to any action under this subtitle.

    (b) Deadline for Filing Claim- A claim arising under this subtitle may be brought not later than 60 days after the date of the decision or action giving rise to the claim.

    (c) Expedited Consideration- The United States Court of Appeals for the District of Columbia Circuit shall set any action brought under subsection (a) for expedited consideration, taking into account the national interest of enhancing national energy security by providing access to the significant gas reserves in Alaska needed to meet the anticipated demand for natural gas.

    (d) Amendment of the Alaska Natural Gas Transportation Act of 1976- Section 10(c) of the Alaska Natural Gas Transportation Act of 1976 (15 U.S.C. 719h) is amended--

      (1) by striking ‘(c)(1) A claim’ and inserting the following:

    ‘(c) Jurisdiction-

      ‘(1) SPECIAL COURTS-

        ‘(A) IN GENERAL- A claim’;

      (2) by striking ‘Such court shall have’ and inserting the following:

        ‘(B) EXCLUSIVE JURISDICTION- The Special Court shall have’;

      (3) by inserting after paragraph (1) the following:

      ‘(2) EXPEDITED CONSIDERATION- The Special Court shall set any action brought under this section for expedited consideration, taking into account the national interest described in section 2.’; and

      (4) in paragraph (3), by striking ‘(3) The enactment’ and inserting the following:

      ‘(3) ENVIRONMENTAL IMPACT STATEMENTS- The enactment’.

SEC. 378. STATE JURISDICTION OVER IN-STATE DELIVERY OF NATURAL GAS.

    (a) Local Distribution- Any facility receiving natural gas from an Alaska natural gas transportation project for delivery to consumers within the State--

      (1) shall be deemed to be a local distribution facility within the meaning of section 1(b) of the Natural Gas Act (15 U.S.C. 717(b)); and

      (2) shall not be subject to the jurisdiction of the Commission.

    (b) Additional Pipelines- Except as provided in section 373(d), nothing in this subtitle shall preclude or otherwise affect a future natural gas pipeline that may be constructed to deliver natural gas to Fairbanks, Anchorage, Matanuska-Susitna Valley, or the Kenai peninsula or Valdez or any other site in the State for consumption within or distribution outside the State.

    (c) Rate Coordination-

      (1) IN GENERAL- In accordance with the Natural Gas Act (15 U.S.C. 717a et seq.), the Commission shall establish rates for the transportation of natural gas on any Alaska natural gas transportation project.

      (2) CONSULTATION- In carrying out paragraph (1), the Commission, in accordance with section 17(b) of the Natural Gas Act (15 U.S.C. 717p(b)), shall consult with the State regarding rates (including rate settlements) applicable to natural gas transported on and delivered from the Alaska natural gas transportation project for use within the State.

SEC. 379. STUDY OF ALTERNATIVE MEANS OF CONSTRUCTION.

    (a) Requirement of Study- If no application for the issuance of a certificate or amended certificate of public convenience and necessity authorizing the construction and operation of an Alaska natural gas transportation project has been filed with the Commission by the date that is 18 months after the date of enactment of this Act, the Secretary shall conduct a study of alternative approaches to the construction and operation of such an Alaska natural gas transportation project.

    (b) Scope of Study- The study under subsection (a) shall take into consideration the feasibility of--

      (1) establishing a Federal Government corporation to construct an Alaska natural gas transportation project; and

      (2) securing alternative means of providing Federal financing and ownership (including alternative combinations of Government and private corporate ownership) of the Alaska natural gas transportation project.

    (c) Consultation- In conducting the study under subsection (a), the Secretary shall consult with the Secretary of the Treasury and the Secretary of the Army (acting through the Chief of Engineers).

    (d) Report- On completion of any study under subsection (a), the Secretary shall submit to Congress a report that describes--

      (1) the results of the study; and

      (2) any recommendations of the Secretary (including proposals for legislation to implement the recommendations).

SEC. 380. CLARIFICATION OF ANGTA STATUS AND AUTHORITIES.

    (a) Savings Clause- Nothing in this subtitle affects--

      (1) any decision, certificate, permit, right-of-way, lease, or other authorization issued under section 9 of the Alaska Natural Gas Transportation Act of 1976 (15 U.S.C. 719g); or

      (2) any Presidential finding or waiver issued in accordance with that Act.

    (b) Clarification of Authority to Amend Terms and Conditions to Meet Current Project Requirements- Any Federal agency responsible for granting or issuing any certificate, permit, right-of-way, lease, or other authorization under section 9 of the Alaska Natural Gas Transportation Act of 1976 (15 U.S.C. 719g) may add to, amend, or rescind any term or condition included in the certificate, permit, right-of-way, lease, or other authorization to meet current project requirements (including the physical design, facilities, and tariff specifications), if the addition, amendment, or rescission--

      (1) would not compel any change in the basic nature and general route of the Alaska natural gas transportation system as designated and described in section 2 of the President’s decision; or

      (2) would not otherwise prevent or impair in any significant respect the expeditious construction and initial operation of the Alaska natural gas transportation system.

    (c) Updated Environmental Reviews- The Secretary shall require the sponsor of the Alaska natural gas transportation system to submit such updated environmental data, reports, permits, and impact analyses as the Secretary determines are necessary to develop detailed terms, conditions, and compliance plans required by section 5 of the President’s decision.

SEC. 381. SENSE OF CONGRESS CONCERNING USE OF STEEL MANUFACTURED IN NORTH AMERICA NEGOTIATION OF A PROJECT LABOR AGREEMENT.

    It is the sense of Congress that--

      (1) an Alaska natural gas transportation project would provide significant economic benefits to the United States and Canada; and

      (2) to maximize those benefits, the sponsors of the Alaska natural gas transportation project should make every effort to--

        (A) use steel that is manufactured in North America; and

        (B) negotiate a project labor agreement to expedite construction of the pipeline.

SEC. 382. SENSE OF CONGRESS AND STUDY CONCERNING PARTICIPATION BY SMALL BUSINESS CONCERNS.

    (a) Definition of Small Business Concern- In this section, the term ‘small business concern’ has the meaning given the term in section 3(a) of the Small Business Act (15 U.S.C. 632(a)).

    (b) Sense of Congress- It is the sense of Congress that--

      (1) an Alaska natural gas transportation project would provide significant economic benefits to the United States and Canada; and

      (2) to maximize those benefits, the sponsors of the Alaska natural gas transportation project should maximize the participation of small business concerns in contracts and subcontracts awarded in carrying out the project.

    (c) Study-

      (1) IN GENERAL- The Comptroller General of the United States shall conduct a study to determine the extent to which small business concerns participate in the construction of oil and gas pipelines in the United States.

      (2) REPORT- Not later that 1 year after the date of enactment of this Act, the Comptroller General shall submit to Congress a report that describes results of the study under paragraph (1).

      (3) UPDATES- The Comptroller General shall--

        (A) update the study at least once every 5 years until construction of an Alaska natural gas transportation project is completed; and

        (B) on completion of each update, submit to Congress a report containing the results of the update.

SEC. 383. ALASKA PIPELINE CONSTRUCTION TRAINING PROGRAM.

    (a) Program-

      (1) ESTABLISHMENT- The Secretary of Labor (in this section referred to as the ‘Secretary’) shall make grants to the Alaska Workforce Investment Board--

        (A) to recruit and train adult and dislocated workers in Alaska, including Alaska Natives, in the skills required to construct and operate an Alaska gas pipeline system; and

        (B) for the design and construction of a training facility to be located in Fairbanks, Alaska, to support an Alaska gas pipeline training program.

      (2) COORDINATION WITH EXISTING PROGRAMS- The training program established with the grants authorized under paragraph (1) shall be consistent with the vision and goals set forth in the State of Alaska Unified Plan, as developed pursuant to the Workforce Investment Act of 1998 (29 U.S.C. 2801 et seq.).

    (b) Requirements for Grants- The Secretary shall make a grant under subsection (a) only if--

      (1) the Governor of the State of Alaska requests the grant funds and certifies in writing to the Secretary that there is a reasonable expectation that the construction of the Alaska natural gas pipeline system will commence by the date that is 2 years after the date of the certification; and

      (2) the Secretary of Energy concurs in writing to the Secretary with the certification made under paragraph (1) after considering--

        (A) the status of necessary Federal and State permits;

        (B) the availability of financing for the Alaska natural gas pipeline project; and

        (C) other relevant factors.

    (c) Authorization of Appropriations- There are authorized to be appropriated to the Secretary to carry out this section $20,000,000. Not more than 15 percent of the funds may be used for the facility described in subsection (a)(1)(B).

SEC. 384. SENSE OF CONGRESS CONCERNING NATURAL GAS DEMAND.

    It is the sense of Congress that--

      (1) North American demand for natural gas will increase dramatically over the course of the next several decades;

      (2) both the Alaska Natural Gas Pipeline and the Mackenzie Delta Natural Gas project in Canada will be necessary to help meet the increased demand for natural gas in North America;

      (3) Federal and State officials should work together with officials in Canada to ensure both projects can move forward in a mutually beneficial fashion;

      (4) Federal and State officials should acknowledge that the smaller scope, fewer permitting requirements, and lower cost of the Mackenzie Delta project means it will most likely be completed before the Alaska Natural Gas Pipeline;

      (5) natural gas production in the 48 contiguous States and Canada will not be able to meet all domestic demand in the coming decades; and

      (6) as a result, natural gas delivered from Alaskan North Slope will not displace or reduce the commercial viability of Canadian natural gas produced from the Mackenzie Delta or production from the 48 contiguous States.

SEC. 385. SENSE OF CONGRESS CONCERNING ALASKAN OWNERSHIP.

    It is the sense of Congress that--

      (1) Alaska Native Regional Corporations, companies owned and operated by Alaskans, and individual Alaskans should have the opportunity to own shares of the Alaska natural gas pipeline in a way that promotes economic development for the State; and

      (2) to facilitate economic development in the State, all project sponsors should negotiate in good faith with any willing Alaskan person that desires to be involved in the project.

SEC. 386. LOAN GUARANTEES.

    (a) Authority- (1) The Secretary may enter into agreements with 1 or more holders of a certificate of public convenience and necessity issued under section 373(b) of this Act or section 9 of the Alaska Natural Gas Transportation Act of 1976 (15 U.S.C. 719g) to issue Federal guarantee instruments with respect to loans and other debt obligations for a qualified infrastructure project.

    (2) Subject to the requirements of this section, the Secretary may also enter into agreements with 1 or more owners of the Canadian portion of a qualified infrastructure project to issue Federal guarantee instruments with respect to loans and other debt obligations for a qualified infrastructure project as though such owner were a holder described in paragraph (1).

    (3) The authority of the Secretary to issue Federal guarantee instruments under this section for a qualified infrastructure project shall expire on the date that is 2 years after the date on which the final certificate of public convenience and necessity (including any Canadian certificates of public convenience and necessity) is issued for the project. A final certificate shall be considered to have been issued when all certificates of public convenience and necessity have been issued that are required for the initial transportation of commercially economic quantities of natural gas from Alaska to the continental United States.

    (b) Conditions- (1) The Secretary may issue a Federal guarantee instrument for a qualified infrastructure project only after a certificate of public convenience and necessity under section 373(b) of this Act or an amended certificate under section 9 of the Alaska Natural Gas Transportation Act of 1976 (15 U.S.C. 719g) has been issued for the project.

    (2) The Secretary may issue a Federal guarantee instrument under this section for a qualified infrastructure project only if the loan or other debt obligation guaranteed by the instrument has been issued by an eligible lender.

    (3) The Secretary shall not require as a condition of issuing a Federal guarantee instrument under this section any contractual commitment or other form of credit support of the sponsors (other than equity contribution commitments and completion guarantees), or any throughput or other guarantee from prospective shippers greater than such guarantees as shall be required by the project owners.

    (c) Limitations on Amounts- (1) The amount of loans and other debt obligations guaranteed under this section for a qualified infrastructure project shall not exceed 80 percent of the total capital costs of the project, including interest during construction.

    (2) The principal amount of loans and other debt obligations guaranteed under this section shall not exceed, in the aggregate, $18,000,000,000, which amount shall be indexed for United States dollar inflation from the date of enactment of this Act, as measured by the Consumer Price Index.

    (d) Loan Terms and Fees- (1) The Secretary may issue Federal guarantee instruments under this section that take into account repayment profiles and grace periods justified by project cash flows and project-specific considerations. The term of any loan guaranteed under this section shall not exceed 30 years.

    (2) An eligible lender may assess and collect from the borrower such other fees and costs associated with the application and origination of the loan or other debt obligation as are reasonable and customary for a project finance transaction in the oil and gas sector.

    (e) Regulations- The Secretary may issue regulations to carry out this section.

    (f) Authorization of Appropriations- There are authorized to be appropriated such sums as may be necessary to cover the cost of loan guarantees under this section, as defined by section 502(5) of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5)). Such sums shall remain available until expended.

    (g) Definitions- In this section, the following definitions apply:

      (1) The term ‘Consumer Price Index’ means the Consumer Price Index for all-urban consumers, United States city average, as published by the Bureau of Labor Statistics, or if such index shall cease to be published, any successor index or reasonable substitute thereof.

      (2) The term ‘eligible lender’ means any non-Federal qualified institutional buyer (as defined by section 230.144A(a) of title 17, Code of Federal Regulations (or any successor regulation), known as Rule 144A(a) of the Securities and Exchange Commission and issued under the Securities Act of 1933), including--

        (A) a qualified retirement plan (as defined in section 4974(c) of the Internal Revenue Code of 1986 (26 U.S.C. 4974(c)) that is a qualified institutional buyer; and

        (B) a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986 (26 U.S.C. 414(d)) that is a qualified institutional buyer.

      (3) The term ‘Federal guarantee instrument’ means any guarantee or other pledge by the Secretary to pledge the full faith and credit of the United States to pay all of the principal and interest on any loan or other debt obligation entered into by a holder of a certificate of public convenience and necessity.

      (4) The term ‘qualified infrastructure project’ means an Alaskan natural gas transportation project consisting of the design, engineering, finance, construction, and completion of pipelines and related transportation and production systems (including gas treatment plants), and appurtenances thereto, that are used to transport natural gas from the Alaska North Slope to the continental United States.

TITLE IV--COAL

Subtitle A--Clean Coal Power Initiative

SEC. 401. AUTHORIZATION OF APPROPRIATIONS.

    (a) Clean Coal Power Initiative- There are authorized to be appropriated to the Secretary of Energy (referred to in this title as the ‘Secretary’) to carry out the activities authorized by this subtitle $200,000,000 for each of fiscal years 2004 through 2012, to remain available until expended.

    (b) Report- The Secretary shall submit to Congress the report required by this subsection not later than March 31, 2005. The report shall include, with respect to subsection (a), a 10-year plan containing--

      (1) a detailed assessment of whether the aggregate funding levels provided under subsection (a) are the appropriate funding levels for that program;

      (2) a detailed description of how proposals will be solicited and evaluated, including a list of all activities expected to be undertaken;

      (3) a detailed list of technical milestones for each coal and related technology that will be pursued; and

      (4) a detailed description of how the program will avoid problems enumerated in General Accounting Office reports on the Clean Coal Technology Program, including problems that have resulted in unspent funds and projects that failed either financially or scientifically.

SEC. 402. PROJECT CRITERIA.

    (a) In General- The Secretary shall not provide funding under this subtitle for any project that does not advance efficiency, environmental performance, and cost competitiveness well beyond the level of technologies that are in commercial service or have been demonstrated on a scale that the Secretary determines is sufficient to demonstrate that commercial service is viable as of the date of enactment of this Act.

    (b) Technical Criteria for Clean Coal Power Initiative-

      (1) GASIFICATION PROJECTS-

        (A) IN GENERAL- In allocating the funds made available under section 401(a), the Secretary shall ensure that at least 60 percent of the funds are used only for projects on coal-based gasification technologies, including gasification combined cycle, gasification fuel cells, gasification coproduction, and hybrid gasification/combustion.

        (B) TECHNICAL MILESTONES- The Secretary shall periodically set technical milestones specifying the emission and thermal efficiency levels that coal gasification projects under this subtitle shall be designed, and reasonably expected, to achieve. The technical milestones shall become more restrictive during the life of the program. The Secretary shall set the periodic milestones so as to achieve by 2020 coal gasification projects able--

          (i) to remove 99 percent of sulfur dioxide;

          (ii) to emit not more than .05 lbs of NOx per million Btu;

          (iii) to achieve substantial reductions in mercury emissions; and

          (iv) to achieve a thermal efficiency of--

            (I) 60 percent for coal of more than 9,000 Btu;

            (II) 59 percent for coal of 7,000 to 9,000 Btu; and

            (III) 50 percent for coal of less than 7,000 Btu.

      (2) OTHER PROJECTS- The Secretary shall periodically set technical milestones and ensure that up to 40 percent of the funds appropriated pursuant to section 401(a) are used for projects not described in paragraph (1). The milestones shall specify the emission and thermal efficiency levels that projects funded under this paragraph shall be designed to and reasonably expected to achieve. The technical milestones shall become more restrictive during the life of the program. The Secretary shall set the periodic milestones so as to achieve by 2010 projects able--

        (A) to remove 97 percent of sulfur dioxide;

        (B) to emit no more than .08 lbs of NOx per million Btu;

        (C) to achieve substantial reductions in mercury emissions; and

        (D) to achieve a thermal efficiency of--

          (i) 45 percent for coal of more than 9,000 Btu;

          (ii) 44 percent for coal of 7,000 to 9,000 Btu; and

          (iii) 40 percent for coal of less than 7,000 Btu.

      (3) CONSULTATION- Before setting the technical milestones under paragraphs (1)(B) and (2), the Secretary shall consult with the Administrator of the Environmental Protection Agency and interested entities, including coal producers, industries using coal, organizations to promote coal or advanced coal technologies, environmental organizations, and organizations representing workers.

      (4) EXISTING UNITS- In the case of projects at units in existence on the date of enactment of this Act, in lieu of the thermal efficiency requirements set forth in paragraph (1)(B)(iv) and (2)(D), the milestones shall be designed to achieve an overall thermal design efficiency improvement, compared to the efficiency of the unit as operated, of not less than--

        (A) 7 percent for coal of more than 9,000 Btu;

        (B) 6 percent for coal of 7,000 to 9,000 Btu; or

        (C) 4 percent for coal of less than 7,000 Btu.

      (5) PERMITTED USES- In carrying out this subtitle, the Secretary may fund projects that include, as part of the project, the separation and capture of carbon dioxide.

    (c) Financial Criteria- The Secretary shall not provide a funding award under this subtitle unless the recipient documents to the satisfaction of the Secretary that--

      (1) the award recipient is financially viable without the receipt of additional Federal funding;

      (2) the recipient will provide sufficient information to the Secretary to enable the Secretary to ensure that the award funds are spent efficiently and effectively; and

      (3) a market exists for the technology being demonstrated or applied, as evidenced by statements of interest in writing from potential purchasers of the technology.

    (d) Financial Assistance- The Secretary shall provide financial assistance to projects that meet the requirements of subsections (a), (b), and (c) and are likely to--

      (1) achieve overall cost reductions in the utilization of coal to generate useful forms of energy;

      (2) improve the competitiveness of coal among various forms of energy in order to maintain a diversity of fuel choices in the United States to meet electricity generation requirements; and

      (3) demonstrate methods and equipment that are applicable to 25 percent of the electricity generating facilities, using various types of coal, that use coal as the primary feedstock as of the date of enactment of this Act.

    (e) Federal Share- The Federal share of the cost of a coal or related technology project funded by the Secretary under this subtitle shall not exceed 50 percent.

    (f) Applicability- No technology, or level of emission reduction, shall be treated as adequately demonstrated for purposes of section 111 of the Clean Air Act (42 U.S.C. 7411), achievable for purposes of section 169 of that Act (42 U.S.C. 7479), or achievable in practice for purposes of section 171 of that Act (42 U.S.C. 7501) solely by reason of the use of such technology, or the achievement of such emission reduction, by 1 or more facilities receiving assistance under this subtitle.

SEC. 403. REPORT.

    Not later than 1 year after the date of enactment of this Act, and once every 2 years thereafter through 2012, the Secretary, in consultation with other appropriate Federal agencies, shall submit to Congress a report describing--

      (1) the technical milestones set forth in section 402 and how those milestones ensure progress toward meeting the requirements of subsections (b)(1)(B) and (b)(2) of section 402; and

      (2) the status of projects funded under this subtitle.

SEC. 404. CLEAN COAL CENTERS OF EXCELLENCE.

    As part of the program authorized in section 401, the Secretary shall award competitive, merit-based grants to universities for the establishment of Centers of Excellence for Energy Systems of the Future. The Secretary shall provide grants to universities that show the greatest potential for advancing new clean coal technologies.

Subtitle B--Clean Power Projects

SEC. 411. COAL TECHNOLOGY LOAN.

    There are authorized to be appropriated to the Secretary $125,000,000 to provide a loan to the owner of the experimental plant constructed under United States Department of Energy cooperative agreement number DE-FC-22-91PC90544 on such terms and conditions as the Secretary determines, including interest rates and upfront payments.

SEC. 412. COAL GASIFICATION.

    The Secretary is authorized to provide loan guarantees for a project to produce energy from a plant using integrated gasification combined cycle technology of at least 400 megawatts in capacity that produces power at competitive rates in deregulated energy generation markets and that does not receive any subsidy (direct or indirect) from ratepayers.

SEC. 413. INTEGRATED GASIFICATION COMBINED CYCLE TECHNOLOGY.

    The Secretary is authorized to provide loan guarantees for a project to produce energy from a plant using integrated gasification combined cycle technology located in a taconite-producing region of the United States that is entitled under the law of the State in which the plant is located to enter into a long-term contract approved by a State Public Utility Commission to sell at least 450 megawatts of output to a utility.

SEC. 414. PETROLEUM COKE GASIFICATION.

    The Secretary is authorized to provide loan guarantees for at least 1 petroleum coke gasification polygeneration project.

SEC. 415. INTEGRATED COAL/RENEWABLE ENERGY SYSTEM.

    The Secretary is authorized, subject to the availability of appropriations, to provide loan guarantees for a project to produce energy from coal of less than 7000 btu/lb using appropriate advanced integrated gasification combined cycle technology, including repowering of existing facilities, that is combined with wind and other renewable sources, minimizes and offers the potential to sequester carbon dioxide emissions, and provides a ready source of hydrogen for near-site fuel cell demonstrations. The facility may be built in stages, combined output shall be at least 200 megawatts at successively more competitive rates, and the facility shall be located in the Upper Great Plains. Section 402(b) technical criteria apply, and the Federal cost share shall not exceed 50 percent. The loan guarantees provided under this section do not preclude the facility from receiving an allocation for investment tax credits under section 48A of the Internal Revenue Code of 1986. Utilizing this investment tax credit does not prohibit the use of other Clean Coal Program funding.

SEC. 416. ELECTRON SCRUBBING DEMONSTRATION.

    The Secretary shall use $5,000,000 from amounts appropriated to initiate, through the Chicago Operations Office, a project to demonstrate the viability of high-energy electron scrubbing technology on commercial-scale electrical generation using high-sulfur coal.

Subtitle C--Federal Coal Leases

SEC. 421. REPEAL OF THE 160-ACRE LIMITATION FOR COAL LEASES.

    Section 3 of the Mineral Leasing Act (30 U.S.C. 203) is amended--

      (1) in the first sentence--

        (A) by striking ‘Any person’ and inserting ‘(a) Any person’;

        (B) by inserting a comma after ‘may’; and

        (C) by striking ‘upon’ and all that follows through the period and inserting the following: ‘upon a finding by the Secretary that the lease--

      ‘(1) would be in the interest of the United States;

      ‘(2) would not displace a competitive interest in the land; and

      ‘(3) would not include land or deposits that can be developed as part of another potential or existing operation;

    secure modifications of the original coal lease by including additional coal land or coal deposits contiguous or cornering to those embraced in the lease, but in no event shall the total area added by any modifications to an existing coal lease exceed 1280 acres, or add acreage larger than the acreage in the original lease.’;

      (2) in the second sentence, by striking ‘The Secretary’ and inserting the following:

    ‘(b) The Secretary’; and

      (3) in the third sentence, by striking ‘The minimum’ and inserting the following:

    ‘(c) The minimum’.

SEC. 422. MINING PLANS.

    Section 2(d)(2) of the Mineral Leasing Act (30 U.S.C. 202a(2)) is amended--

      (1) by inserting ‘(A)’ after ‘(2)’; and

      (2) by adding at the end the following:

    ‘(B) The Secretary may establish a period of more than 40 years if the Secretary determines that the longer period--

      ‘(i) will ensure the maximum economic recovery of a coal deposit; or

      ‘(ii) the longer period is in the interest of the orderly, efficient, or economic development of a coal resource.’.

SEC. 423. PAYMENT OF ADVANCE ROYALTIES UNDER COAL LEASES.

    Section 7(b) of the Mineral Leasing Act (30 U.S.C. 207(b)) is amended to read as follows:

    ‘(b)(1) Each lease shall be subjected to the condition of diligent development and continued operation of the mine or mines, except in a case in which operations under the lease are interrupted by strikes, the elements, or casualties not attributable to the lessee.

    ‘(2)(A) The Secretary of the Interior may suspend the condition of continued operation upon the payment of advance royalties, if the Secretary determines that the public interest will be served by the suspension.

    ‘(B) Advance royalties required under subparagraph (A) shall be computed based on--

      ‘(i) the average price for coal sold in the spot market from the same region during the last month of each applicable continued operation year; or

      ‘(ii) by using other methods established by the Secretary of the Interior to capture the commercial value of coal,

    and based on commercial quantities, as defined by regulation by the Secretary of the Interior.

    ‘(C) The aggregate number of years during the initial and any extended term of any lease for which advance royalties may be accepted in lieu of the condition of continued operation shall not exceed 20.

    ‘(3) The amount of any production royalty paid for any year shall be reduced (but not below 0) by the amount of any advance royalties paid under the lease, to the extent that the advance royalties have not been used to reduce production royalties for a prior year.

    ‘(4) The Secretary may, upon 6 months’ notice to a lessee, cease to accept advance royalties in lieu of the requirement of continued operation.

    ‘(5) Nothing in this subsection affects the requirement contained in the second sentence of subsection (a) relating to commencement of production at the end of 10 years.’.

SEC. 424. ELIMINATION OF DEADLINE FOR SUBMISSION OF COAL LEASE OPERATION AND RECLAMATION PLAN.

    Section 7(c) of the Mineral Leasing Act (30 U.S.C. 207(c)) is amended in the first sentence by striking ‘and not later than three years after a lease is issued,’.

SEC. 425. AMENDMENT RELATING TO FINANCIAL ASSURANCES WITH RESPECT TO BONUS BIDS.

    Section 2(a) of the Mineral Leasing Act (30 U.S.C. 201(a)) is amended by adding at the end the following:

    ‘(4)(A) The Secretary shall not require a surety bond or any other financial assurance to guarantee payment of deferred bonus bid installments with respect to any coal lease issued on a cash bonus bid to a lessee or successor in interest having a history of a timely payment of noncontested coal royalties and advanced coal royalties in lieu of production (where applicable) and bonus bid installment payments.

    ‘(B) The Secretary may waive any requirement that a lessee provide a surety bond or other financial assurance for a coal lease issued before the date of the enactment of the Energy Policy Act of 2003 only if the Secretary determines that the lessee has a history of making timely payments referred to in subparagraph (A).

    ‘(5) Notwithstanding any other provision of law, if the lessee under a coal lease fails to pay any installment of a deferred cash bonus bid within 10 days after the Secretary provides written notice that payment of the installment is past due--

      ‘(A) the lease shall automatically terminate; and

      ‘(B) any bonus payments already made to the United States with respect to the lease shall not be returned to the lessee or credited in any future lease sale.’.

SEC. 426. INVENTORY REQUIREMENT.

    (a) Review of Assessments-

      (1) IN GENERAL- The Secretary of the Interior, in consultation with the Secretary of Agriculture and the Secretary, shall review coal assessments and other available data to identify--

        (A) public lands, other than National Park lands, with coal resources;

        (B) the extent and nature of any restrictions or impediments to the development of coal resources on public lands identified under subparagraph (A); and

        (C) with respect to areas of such lands for which sufficient data exists, resources of compliant coal and supercompliant coal.

      (2) DEFINITIONS- In this subsection:

        (A) COMPLIANT COAL- The term ‘compliant coal’ means coal that contains not less than 1.0 and not more than 1.2 pounds of sulfur dioxide per million Btu.

        (B) SUPERCOMPLIANT COAL- The term ‘supercompliant coal’ means coal that contains less than 1.0 pounds of sulfur dioxide per million Btu.

    (b) Completion and Updating of the Inventory- The Secretary of the Interior--

      (1) shall complete the inventory under subsection (a)(1) by not later than 2 years after the date of the enactment of this Act; and

      (2) shall update the inventory as the availability of data and developments in technology warrant.

    (c) Report- The Secretary of the Interior shall submit to Congress, and make publicly available--

      (1) a report containing the inventory under this section by not later than 2 years after the effective date of this section; and

      (2) each update of that inventory.

SEC. 427. APPLICATION OF AMENDMENTS.

    The amendments made by this subtitle apply--

      (1) with respect to any coal lease issued on or after the date of enactment of this Act; and

      (2) with respect to any coal lease issued before the date of enactment of this Act, upon the earlier of--

        (A) the date of readjustment of the lease as provided for by section 7(a) of the Mineral Leasing Act (30 U.S.C. 207(a)); or

        (B) the date the lessee requests such application.

Subtitle D--Coal and Related Programs

SEC. 441. CLEAN AIR COAL PROGRAM.

    (a) Amendment- The Energy Policy Act of 1992 is amended by adding the following new title at the end thereof:

‘TITLE XXXI--CLEAN AIR COAL PROGRAM

‘SEC. 3101. FINDINGS; PURPOSES; DEFINITIONS.

    ‘(a) Findings- The Congress finds that--

      ‘(1) new environmental regulations present additional challenges for coal-fired electrical generation in the private marketplace; and

      ‘(2) the Department of Energy, in cooperation with industry, has already fully developed and commercialized several new clean-coal technologies that will allow the clean use of coal.

    ‘(b) Purposes- The purposes of this title are to--

      ‘(1) promote national energy policy and energy security, diversity, and economic competitiveness benefits that result from the increased use of coal;

      ‘(2) mitigate financial risks, reduce the cost, and increase the marketplace acceptance of the new clean coal technologies; and

      ‘(3) advance the deployment of pollution control equipment to meet the current and future obligations of coal-fired generation units regulated under the Clean Air Act (42 U.S.C. 7402 and following).

‘SEC. 3102. AUTHORIZATION OF PROGRAM.

    ‘The Secretary shall carry out a program to facilitate production and generation of coal-based power and the installation of pollution control equipment.

‘SEC. 3103. AUTHORIZATION OF APPROPRIATIONS.

    ‘(a) Pollution Control Projects- There are authorized to be appropriated to the Secretary $300,000,000 for fiscal year 2005, $100,000,000 for fiscal year 2006, $40,000,000 for fiscal year 2007, $30,000,000 for fiscal year 2008, and $30,000,000 for fiscal year 2009, to remain available until expended, for carrying out the program for pollution control projects, which may include--

      ‘(1) pollution control equipment and processes for the control of mercury air emissions;

      ‘(2) pollution control equipment and processes for the control of nitrogen dioxide air emissions or sulfur dioxide emissions;

      ‘(3) pollution control equipment and processes for the mitigation or collection of more than one pollutant;

      ‘(4) advanced combustion technology for the control of at least two pollutants, including mercury, particulate matter, nitrogen oxides, and sulfur dioxide, which may also be designed to improve the energy efficiency of the unit; and

      ‘(5) advanced pollution control equipment and processes designed to allow use of the waste byproducts or other byproducts of the equipment or an electrical generation unit designed to allow the use of byproducts.

    Funds appropriated under this subsection which are not awarded before fiscal year 2011 may be applied to projects under subsection (b), in addition to amounts authorized under subsection (b).

    ‘(b) Generation Projects- There are authorized to be appropriated to the Secretary $150,000,000 for fiscal year 2006, $250,000,000 for each of the fiscal years 2007 through 2011, and $100,000,000 for fiscal year 2012, to remain available until expended, for generation projects and air pollution control projects. Such projects may include--

      ‘(1) coal-based electrical generation equipment and processes, including gasification combined cycle or other coal-based generation equipment and processes;

      ‘(2) associated environmental control equipment, that will be cost-effective and that is designed to meet anticipated regulatory requirements;

      ‘(3) coal-based electrical generation equipment and processes, including gasification fuel cells, gasification coproduction, and hybrid gasification/combustion projects; and

      ‘(4) advanced coal-based electrical generation equipment and processes, including oxidation combustion techniques, ultra-supercritical boilers, and chemical looping, which the Secretary determines will be cost-effective and could substantially contribute to meeting anticipated environmental or energy needs.

    ‘(c) Limitation- Funds placed at risk during any fiscal year for Federal loans or loan guarantees pursuant to this title may not exceed 30 percent of the total funds obligated under this title.

‘SEC. 3104. AIR POLLUTION CONTROL PROJECT CRITERIA.

    ‘The Secretary shall pursuant to authorizations contained in section 3103 provide funding for air pollution control projects designed to facilitate compliance with Federal and State environmental regulations, including any regulation that may be established with respect to mercury.

‘SEC. 3105. CRITERIA FOR GENERATION PROJECTS.

    ‘(a) Criteria- The Secretary shall establish criteria on which selection of individual projects described in section 3103(b) should be based. The Secretary may modify the criteria as appropriate to reflect improvements in equipment, except that the criteria shall not be modified to be less stringent. These selection criteria shall include--

      ‘(1) prioritization of projects whose installation is likely to result in significant air quality improvements in nonattainment air quality areas;

      ‘(2) prioritization of projects that result in the repowering or replacement of older, less efficient units;

      ‘(3) documented broad interest in the procurement of the equipment and utilization of the processes used in the projects by electrical generator owners or operators;

      ‘(4) equipment and processes beginning in 2005 through 2010 that are projected to achieve an thermal efficiency of--

        ‘(A) 40 percent for coal of more than 9,000 Btu per pound based on higher heating values;

        ‘(B) 38 percent for coal of 7,000 to 9,000 Btu per pound based on higher heating values; and

        ‘(C) 36 percent for coal of less than 7,000 Btu per pound based on higher heating values,

      except that energy used for coproduction or cogeneration shall not be counted in calculating the thermal efficiency under this paragraph; and

      ‘(5) equipment and processes beginning in 2011 and 2012 that are projected to achieve an thermal efficiency of--

        ‘(A) 45 percent for coal of more than 9,000 Btu per pound based on higher heating values;

        ‘(B) 44 percent for coal of 7,000 to 9,000 Btu per pound based on higher heating values; and

        ‘(C) 40 percent for coal of less than 7,000 Btu per pound based on higher heating values,

      except that energy used for coproduction or cogeneration shall not be counted in calculating the thermal efficiency under this paragraph.

    ‘(b) Selection- (1) In selecting the projects, up to 25 percent of the projects selected may be either coproduction or cogeneration or other gasification projects, but at least 25 percent of the projects shall be for the sole purpose of electrical generation, and priority should be given to equipment and projects less than 600 MW to foster and promote standard designs.

    ‘(2) The Secretary shall give priority to projects that have been developed and demonstrated that are not yet cost competitive, and for coal energy generation projects that advance efficiency, environmental performance, or cost competitiveness significantly beyond the level of pollution control equipment that is in operation on a full scale.

‘SEC. 3106. FINANCIAL CRITERIA.

    ‘(a) In General- The Secretary shall only provide financial assistance to projects that meet the requirements of sections 3103 and 3104 and are likely to--

      ‘(1) achieve overall cost reductions in the utilization of coal to generate useful forms of energy; and

      ‘(2) improve the competitiveness of coal in order to maintain a diversity of domestic fuel choices in the United States to meet electricity generation requirements.

    ‘(b) Conditions- The Secretary shall not provide a funding award under this title unless--

      ‘(1) the award recipient is financially viable without the receipt of additional Federal funding; and

      ‘(2) the recipient provides sufficient information to the Secretary for the Secretary to ensure that the award funds are spent efficiently and effectively.

    ‘(c) Equal Access- The Secretary shall, to the extent practical, utilize cooperative agreement, loan guarantee, and direct Federal loan mechanisms designed to ensure that all electrical generation owners have equal access to these technology deployment incentives. The Secretary shall develop and direct a competitive solicitation process for the selection of technologies and projects under this title.

‘SEC. 3107. FEDERAL SHARE.

    ‘The Federal share of the cost of a coal or related technology project funded by the Secretary under this title shall not exceed 50 percent. For purposes of this title, Federal funding includes only appropriated funds.

‘SEC. 3108. APPLICABILITY.

    ‘No technology, or level of emission reduction, shall be treated as adequately demonstrated for purposes of section 111 of the Clean Air Act (42 U.S.C. 7411), achievable for purposes of section 169 of the Clean Air Act (42 U.S.C. 7479), or achievable in practice for purposes of section 171 of the Clean Air Act (42 U.S.C. 7501) solely by reason of the use of such technology, or the achievement of such emission reduction, by one or more facilities receiving assistance under this title.’.

    (b) Table of Contents Amendment- The table of contents of the Energy Policy Act of 1992 is amended by adding at the end the following:

‘TITLE XXXI CLEAN AIR COAL PROGRAM

      ‘Sec. 3101. Findings; purposes; definitions.

      ‘Sec. 3102. Authorization of program.

      ‘Sec. 3103. Authorization of appropriations.

      ‘Sec. 3104. Air pollution control project criteria.

      ‘Sec. 3105. Criteria for generation projects.

      ‘Sec. 3106. Financial criteria.

      ‘Sec. 3107. Federal share.

      ‘Sec. 3108. Applicability.’.

TITLE V--INDIAN ENERGY

SEC. 501. SHORT TITLE.

    This title may be cited as the ‘Indian Tribal Energy Development and Self-Determination Act of 2004’.

SEC. 502. OFFICE OF INDIAN ENERGY POLICY AND PROGRAMS.

    (a) In General- Title II of the Department of Energy Organization Act (42 U.S.C. 7131 et seq.) is amended by adding at the end the following:

‘OFFICE OF INDIAN ENERGY POLICY AND PROGRAMS

    ‘SEC. 217. (a) Establishment- There is established within the Department an Office of Indian Energy Policy and Programs (referred to in this section as the ‘Office’). The Office shall be headed by a Director, who shall be appointed by the Secretary and compensated at a rate equal to that of level IV of the Executive Schedule under section 5315 of title 5, United States Code.

    ‘(b) Duties of Director- The Director, in accordance with Federal policies promoting Indian self-determination and the purposes of this Act, shall provide, direct, foster, coordinate, and implement energy planning, education, management, conservation, and delivery programs of the Department that--

      ‘(1) promote Indian tribal energy development, efficiency, and use;

      ‘(2) reduce or stabilize energy costs;

      ‘(3) enhance and strengthen Indian tribal energy and economic infrastructure relating to natural resource development and electrification; and

      ‘(4) bring electrical power and service to Indian land and the homes of tribal members located on Indian lands or acquired, constructed, or improved (in whole or in part) with Federal funds.’.

    (b) Conforming Amendments-

      (1) The table of contents of the Department of Energy Organization Act (42 U.S.C. prec. 7101) is amended--

        (A) in the item relating to section 209, by striking ‘Section’ and inserting ‘Sec.’; and

        (B) by striking the items relating to sections 213 through 216 and inserting the following:

      ‘Sec. 213. Establishment of policy for National Nuclear Security Administration.

      ‘Sec. 214. Establishment of security, counterintelligence, and intelligence policies.

      ‘Sec. 215. Office of Counterintelligence.

      ‘Sec. 216. Office of Intelligence.

      ‘Sec. 217. Office of Indian Energy Policy and Programs.’.

      (2) Section 5315 of title 5, United States Code, is amended by inserting ‘Director, Office of Indian Energy Policy and Programs, Department of Energy.’ after ‘Inspector General, Department of Energy.’.

SEC. 503. INDIAN ENERGY.

    (a) In General- Title XXVI of the Energy Policy Act of 1992 (25 U.S.C. 3501 et seq.) is amended to read as follows:

‘TITLE XXVI--INDIAN ENERGY

‘SEC. 2601. DEFINITIONS.

    ‘For purposes of this title:

      ‘(1) The term ‘Director’ means the Director of the Office of Indian Energy Policy and Programs, Department of Energy.

      ‘(2) The term ‘Indian land’ means--

        ‘(A) any land located within the boundaries of an Indian reservation, pueblo, or rancheria;

        ‘(B) any land not located within the boundaries of an Indian reservation, pueblo, or rancheria, the title to which is held--

          ‘(i) in trust by the United States for the benefit of an Indian tribe or an individual Indian;

          ‘(ii) by an Indian tribe or an individual Indian, subject to restriction against alienation under laws of the United States; or

          ‘(iii) by a dependent Indian community; and

        ‘(C) land that is owned by an Indian tribe and was conveyed by the United States to a Native Corporation pursuant to the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.), or that was conveyed by the United States to a Native Corporation in exchange for such land.

      ‘(3) The term ‘Indian reservation’ includes--

        ‘(A) an Indian reservation in existence in any State or States as of the date of enactment of this paragraph;

        ‘(B) a public domain Indian allotment; and

        ‘(C) a dependent Indian community located within the borders of the United States, regardless of whether the community is located--

          ‘(i) on original or acquired territory of the community; or

          ‘(ii) within or outside the boundaries of any particular State.

      ‘(4) The term ‘Indian tribe’ has the meaning given the term in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b), except that the term ‘Indian tribe’, for the purpose of paragraph (11) and sections 2603(b)(3) and 2604, shall not include any Native Corporation.

      ‘(5) The term ‘integration of energy resources’ means any project or activity that promotes the location and operation of a facility (including any pipeline, gathering system, transportation system or facility, or electric transmission or distribution facility) on or near Indian land to process, refine, generate electricity from, or otherwise develop energy resources on, Indian land.

      ‘(6) The term ‘Native Corporation’ has the meaning given the term in section 3 of the Alaska Native Claims Settlement Act (43 U.S.C. 1602).

      ‘(7) The term ‘organization’ means a partnership, joint venture, limited liability company, or other unincorporated association or entity that is established to develop Indian energy resources.

      ‘(8) The term ‘Program’ means the Indian energy resource development program established under section 2602(a).

      ‘(9) The term ‘Secretary’ means the Secretary of the Interior.

      ‘(10) The term ‘tribal energy resource development organization’ means an organization of 2 or more entities, at least 1 of which is an Indian tribe, that has the written consent of the governing bodies of all Indian tribes participating in the organization to apply for a grant, loan, or other assistance authorized by section 2602.

      ‘(11) The term ‘tribal land’ means any land or interests in land owned by any Indian tribe, title to which is held in trust by the United States or which is subject to a restriction against alienation under laws of the United States.

‘SEC. 2602. INDIAN TRIBAL ENERGY RESOURCE DEVELOPMENT.

    ‘(a) Department of the Interior Program-

      ‘(1) To assist Indian tribes in the development of energy resources and further the goal of Indian self-determination, the Secretary shall establish and implement an Indian energy resource development program to assist consenting Indian tribes and tribal energy resource development organizations in achieving the purposes of this title.

      ‘(2) In carrying out the Program, the Secretary shall--

        ‘(A) provide development grants to Indian tribes and tribal energy resource development organizations for use in developing or obtaining the managerial and technical capacity needed to develop energy resources on Indian land, and to properly account for resulting energy production and revenues;

        ‘(B) provide grants to Indian tribes and tribal energy resource development organizations for use in carrying out projects to promote the integration of energy resources, and to process, use, or develop those energy resources, on Indian land; and

        ‘(C) provide low-interest loans to Indian tribes and tribal energy resource development organizations for use in the promotion of energy resource development on Indian land and integration of energy resources.

      ‘(3) There are authorized to be appropriated to carry out this subsection such sums as are necessary for each of fiscal years 2004 through 2014.

    ‘(b) Department of Energy Indian Energy Education Planning and Management Assistance Program-

      ‘(1) The Director shall establish programs to assist consenting Indian tribes in meeting energy education, research and development, planning, and management needs.

      ‘(2) In carrying out this subsection, the Director may provide grants, on a competitive basis, to an Indian tribe or tribal energy resource development organization for use in carrying out--

        ‘(A) energy, energy efficiency, and energy conservation programs;

        ‘(B) studies and other activities supporting tribal acquisitions of energy supplies, services, and facilities;

        ‘(C) planning, construction, development, operation, maintenance, and improvement of tribal electrical generation, transmission, and distribution facilities located on Indian land; and

        ‘(D) development, construction, and interconnection of electric power transmission facilities located on Indian land with other electric transmission facilities.

      ‘(3)(A) The Director may develop, in consultation with Indian tribes, a formula for providing grants under this subsection.

      ‘(B) In providing a grant under this subsection, the Director shall give priority to an application received from an Indian tribe with inadequate electric service (as determined by the Director).

      ‘(4) The Secretary of Energy may issue such regulations as necessary to carry out this subsection.

      ‘(5) There are authorized to be appropriated to carry out this subsection $20,000,000 for each of fiscal years 2004 through 2014.

    ‘(c) Department of Energy Loan Guarantee Program-

      ‘(1) Subject to paragraph (3), the Secretary of Energy may provide loan guarantees (as defined in section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) for not more than 90 percent of the unpaid principal and interest due on any loan made to any Indian tribe for energy development.

      ‘(2) A loan guarantee under this subsection shall be made by--

        ‘(A) a financial institution subject to examination by the Secretary of Energy; or

        ‘(B) an Indian tribe, from funds of the Indian tribe.

      ‘(3) The aggregate outstanding amount guaranteed by the Secretary of Energy at any time under this subsection shall not exceed $2,000,000,000.

      ‘(4) The Secretary of Energy may issue such regulations as the Secretary of Energy determines are necessary to carry out this subsection.

      ‘(5) There are authorized to be appropriated such sums as are necessary to carry out this subsection, to remain available until expended.

      ‘(6) Not later than 1 year from the date of enactment of this section, the Secretary of Energy shall report to Congress on the financing requirements of Indian tribes for energy development on Indian land.

    ‘(d) Federal Agencies-Indian Energy Preference-

      ‘(1) In purchasing electricity or any other energy product or byproduct, a Federal agency or department may give preference to an energy and resource production enterprise, partnership, consortium, corporation, or other type of business organization the majority of the interest in which is owned and controlled by 1 or more Indian tribes.

      ‘(2) In carrying out this subsection, a Federal agency or department shall not--

        ‘(A) pay more than the prevailing market price for an energy product or byproduct; or

        ‘(B) obtain less than prevailing market terms and conditions.

‘SEC. 2603. INDIAN TRIBAL ENERGY RESOURCE REGULATION.

    ‘(a) Grants- The Secretary may provide to Indian tribes, on an annual basis, grants for use in accordance with subsection (b).

    ‘(b) Use of Funds- Funds from a grant provided under this section may be used--

      ‘(1) by an Indian tribe for the development of a tribal energy resource inventory or tribal energy resource on Indian land;

      ‘(2) by an Indian tribe for the development of a feasibility study or other report necessary to the development of energy resources on Indian land;

      ‘(3) by an Indian tribe (other than an Indian Tribe in Alaska except the Metlakatla Indian Community) for the development and enforcement of tribal laws (including regulations) relating to tribal energy resource development and the development of technical infrastructure to protect the environment under applicable law; or

      ‘(4) by a Native Corporation for the development and implementation of corporate policies and the development of technical infrastructure to protect the environment under applicable law; and

      ‘(5) by an Indian tribe for the training of employees that--

        ‘(A) are engaged in the development of energy resources on Indian land; or

        ‘(B) are responsible for protecting the environment.

    ‘(c) Other Assistance- In carrying out the obligations of the United States under this title, the Secretary shall ensure, to the maximum extent practicable and to the extent of available resources, that upon the request of an Indian tribe, the Indian tribe shall have available scientific and technical information and expertise, for use in the Indian tribe’s regulation, development, and management of energy resources on Indian land. The Secretary may fulfill this responsibility either directly, through the use of Federal officials, or indirectly, by providing financial assistance to the Indian tribe to secure independent assistance.

‘SEC. 2604. LEASES, BUSINESS AGREEMENTS, AND RIGHTS-OF-WAY INVOLVING ENERGY DEVELOPMENT OR TRANSMISSION.

    ‘(a) Leases and Business Agreements- Subject to the provisions of this section--

      ‘(1) an Indian tribe may, at its discretion, enter into a lease or business agreement for the purpose of energy resource development on tribal land, including a lease or business agreement for--

        ‘(A) exploration for, extraction of, processing of, or other development of the Indian tribe’s energy mineral resources located on tribal land; and

        ‘(B) construction or operation of an electric generation, transmission, or distribution facility located on tribal land or a facility to process or refine energy resources developed on tribal land; and

      ‘(2) such lease or business agreement described in paragraph (1) shall not require the approval of the Secretary under section 2103 of the Revised Statutes (25 U.S.C. 81) or any other provision of law, if--

        ‘(A) the lease or business agreement is executed pursuant to a tribal energy resource agreement approved by the Secretary under subsection (e);

        ‘(B) the term of the lease or business agreement does not exceed--

          ‘(i) 30 years; or

          ‘(ii) in the case of a lease for the production of oil resources, gas resources, or both, 10 years and as long thereafter as oil or gas is produced in paying quantities; and

        ‘(C) the Indian tribe has entered into a tribal energy resource agreement with the Secretary, as described in subsection (e), relating to the development of energy resources on tribal land (including the periodic review and evaluation of the activities of the Indian tribe under the agreement, to be conducted pursuant to the provisions required by subsection (e)(2)(D)(i)).

    ‘(b) Rights-Of-Way for Pipelines or Electric Transmission or Distribution Lines- An Indian tribe may grant a right-of-way over tribal land for a pipeline or an electric transmission or distribution line without approval by the Secretary if--

      ‘(1) the right-of-way is executed in accordance with a tribal energy resource agreement approved by the Secretary under subsection (e);

      ‘(2) the term of the right-of-way does not exceed 30 years;

      ‘(3) the pipeline or electric transmission or distribution line serves--

        ‘(A) an electric generation, transmission, or distribution facility located on tribal land; or

        ‘(B) a facility located on tribal land that processes or refines energy resources developed on tribal land; and

      ‘(4) the Indian tribe has entered into a tribal energy resource agreement with the Secretary, as described in subsection (e), relating to the development of energy resources on tribal land (including the periodic review and evaluation of the Indian tribe’s activities under such agreement described in subparagraphs (D) and (E) of subsection (e)(2)).

    ‘(c) Renewals- A lease or business agreement entered into or a right-of-way granted by an Indian tribe under this section may be renewed at the discretion of the Indian tribe in accordance with this section.

    ‘(d) Validity- No lease, business agreement, or right-of-way relating to the development of tribal energy resources pursuant to the provisions of this section shall be valid unless the lease, business agreement, or right-of-way is authorized by the provisions of a tribal energy resource agreement approved by the Secretary under subsection (e)(2).

    ‘(e) Tribal Energy Resource Agreements-

      ‘(1) On issuance of regulations under paragraph (8), an Indian tribe may submit to the Secretary for approval a tribal energy resource agreement governing leases, business agreements, and rights-of-way under this section.

      ‘(2)(A) Not later than 180 days after the date on which the Secretary receives a tribal energy resource agreement submitted by an Indian tribe under paragraph (1), or not later than 60 days after the Secretary receives a revised tribal energy resource agreement submitted by an Indian tribe under paragraph (4)(C), (or such later date as may be agreed to by the Secretary and the Indian tribe), the Secretary shall approve or disapprove the tribal energy resource agreement.

      ‘(B) The Secretary shall approve a tribal energy resource agreement submitted under paragraph (1) if--

        ‘(i) the Secretary determines that the Indian tribe has demonstrated that the Indian tribe has sufficient capacity to regulate the development of energy resources of the Indian tribe;

        ‘(ii) the tribal energy resource agreement includes provisions required under subparagraph (D); and

        ‘(iii) the tribal energy resource agreement includes provisions that, with respect to a lease, business agreement, or right-of-way under this section--

          ‘(I) ensure the acquisition of necessary information from the applicant for the lease, business agreement, or right-of-way;

          ‘(II) address the term of the lease or business agreement or the term of conveyance of the right-of-way;

          ‘(III) address amendments and renewals;

          ‘(IV) address the economic return to the Indian tribe under leases, business agreements, and rights-of-way;

          ‘(V) address technical or other relevant requirements;

          ‘(VI) establish requirements for environmental review in accordance with subparagraph (C);

          ‘(VII) ensure compliance with all applicable environmental laws;

          ‘(VIII) identify final approval authority;

          ‘(IX) provide for public notification of final approvals;

          ‘(X) establish a process for consultation with any affected States concerning off-reservation impacts, if any, identified pursuant to the provisions required under subparagraph (C)(i);

          ‘(XI) describe the remedies for breach of the lease, business agreement, or right-of-way;

          ‘(XII) require each lease, business agreement, and right-of-way to include a statement that, in the event that any of its provisions violates an express term or requirement set forth in the tribal energy resource agreement pursuant to which it was executed--

            ‘(aa) such provision shall be null and void; and

            ‘(bb) if the Secretary determines such provision to be material, the Secretary shall have the authority to suspend or rescind the lease, business agreement, or right-of-way or take other appropriate action that the Secretary determines to be in the best interest of the Indian tribe;

          ‘(XIII) require each lease, business agreement, and right-of-way to provide that it will become effective on the date on which a copy of the executed lease, business agreement, or right-of-way is delivered to the Secretary in accordance with regulations adopted pursuant to this subsection; and

          ‘(XIV) include citations to tribal laws, regulations, or procedures, if any, that set out tribal remedies that must be exhausted before a petition may be submitted to the Secretary pursuant to paragraph (7)(B).

      ‘(C) Tribal energy resource agreements submitted under paragraph (1) shall establish, and include provisions to ensure compliance with, an environmental review process that, with respect to a lease, business agreement, or right-of-way under this section, provides for--

        ‘(i) the identification and evaluation of all significant environmental impacts (as compared with a no-action alternative), including effects on cultural resources;

        ‘(ii) the identification of proposed mitigation;

        ‘(iii) a process for ensuring that the public is informed of and has an opportunity to comment on the environmental impacts of the proposed action before tribal approval of the lease, business agreement, or right-of-way; and

        ‘(iv) sufficient administrative support and technical capability to carry out the environmental review process.

      ‘(D) A tribal energy resource agreement negotiated between the Secretary and an Indian tribe in accordance with this subsection shall include--

        ‘(i) provisions requiring the Secretary to conduct a periodic review and evaluation to monitor the performance of the Indian tribe’s activities associated with the development of energy resources under the tribal energy resource agreement; and

        ‘(ii) when such review and evaluation result in a finding by the Secretary of imminent jeopardy to a physical trust asset arising from a violation of the tribal energy resource agreement or applicable Federal laws, provisions authorizing the Secretary to take appropriate actions determined by the Secretary to be necessary to protect such asset, which actions may include reassumption of responsibility for activities associated with the development of energy resources on tribal land until the violation and conditions that gave rise to such jeopardy have been corrected.

      ‘(E) The periodic review and evaluation described in subparagraph (D) shall be conducted on an annual basis, except that, after the third such annual review and evaluation, the Secretary and the Indian tribe may mutually agree to amend the tribal energy resource agreement to authorize the review and evaluation required by subparagraph (D) to be conducted once every 2 years.

      ‘(3) The Secretary shall provide notice and opportunity for public comment on tribal energy resource agreements submitted for approval under paragraph (1). The Secretary’s review of a tribal energy resource agreement under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) shall be limited to the direct effects of that approval.

      ‘(4) If the Secretary disapproves a tribal energy resource agreement submitted by an Indian tribe under paragraph (1), the Secretary shall, not later than 10 days after the date of disapproval--

        ‘(A) notify the Indian tribe in writing of the basis for the disapproval;

        ‘(B) identify what changes or other actions are required to address the concerns of the Secretary; and

        ‘(C) provide the Indian tribe with an opportunity to revise and resubmit the tribal energy resource agreement.

      ‘(5) If an Indian tribe executes a lease or business agreement or grants a right-of-way in accordance with a tribal energy resource agreement approved under this subsection, the Indian tribe shall, in accordance with the process and requirements set forth in the Secretary’s regulations adopted pursuant to paragraph (8), provide to the Secretary--

        ‘(A) a copy of the lease, business agreement, or right-of-way document (including all amendments to and renewals of the document); and

        ‘(B) in the case of a tribal energy resource agreement or a lease, business agreement, or right-of-way that permits payments to be made directly to the Indian tribe, information and documentation of those payments sufficient to enable the Secretary to discharge the trust responsibility of the United States to enforce the terms of, and protect the Indian tribe’s rights under, the lease, business agreement, or right-of-way.

      ‘(6)(A) For purposes of the activities to be undertaken by the Secretary pursuant to this section, the Secretary shall--

        ‘(i) carry out such activities in a manner consistent with the trust responsibility of the United States relating to mineral and other trust resources; and

        ‘(ii) act in good faith and in the best interests of the Indian tribes.

      ‘(B) Subject to the provisions of subsections (a)(2), (b), and (c) waiving the requirement of Secretarial approval of leases, business agreements, and rights-of-way executed pursuant to tribal energy resource agreements approved under this section, and the provisions of subparagraph (D), nothing in this section shall absolve the United States from any responsibility to Indians or Indian tribes, including, but not limited to, those which derive from the trust relationship or from any treaties, statutes, and other laws of the United States, Executive Orders, or agreements between the United States and any Indian tribe.

      ‘(C) The Secretary shall continue to have a trust obligation to ensure that the rights and interests of an Indian tribe are protected in the event that--

        ‘(i) any other party to any such lease, business agreement, or right-of-way violates any applicable provision of Federal law or the terms of any lease, business agreement, or right-of-way under this section; or

        ‘(ii) any provision in such lease, business agreement, or right-of-way violates any express provision or requirement set forth in the tribal energy resource agreement pursuant to which the lease, business agreement, or right-of-way was executed.

      ‘(D) Notwithstanding subparagraph (B), the United States shall not be liable to any party (including any Indian tribe) for any of the negotiated terms of, or any losses resulting from the negotiated terms of, a lease, business agreement, or right-of-way executed pursuant to and in accordance with a tribal energy resource agreement approved by the Secretary under paragraph (2). For the purpose of this subparagraph, the term ‘negotiated terms’ means any terms or provisions that are negotiated by an Indian tribe and any other party or parties to a lease, business agreement, or right-of-way entered into pursuant to an approved tribal energy resource agreement.

      ‘(7)(A) In this paragraph, the term ‘interested party’ means any person or entity the interests of which have sustained or will sustain a significant adverse environmental impact as a result of the failure of an Indian tribe to comply with a tribal energy resource agreement of the Indian tribe approved by the Secretary under paragraph (2).

      ‘(B) After exhaustion of tribal remedies, and in accordance with the process and requirements set forth in regulations adopted by the Secretary pursuant to paragraph (8), an interested party may submit to the Secretary a petition to review compliance of an Indian tribe with a tribal energy resource agreement of the Indian tribe approved by the Secretary under paragraph (2).

      ‘(C)(i) Not later than 120 days after the date on which the Secretary receives a petition under subparagraph (B), the Secretary shall determine whether the Indian tribe is not in compliance with the tribal energy resource agreement, as alleged in the petition.

      ‘(ii) The Secretary may adopt procedures under paragraph (8) authorizing an extension of time, not to exceed 120 days, for making the determination under clause (i) in any case in which the Secretary determines that additional time is necessary to evaluate the allegations of the petition.

      ‘(iii) Subject to subparagraph (D), if the Secretary determines that the Indian tribe is not in compliance with the tribal energy resource agreement as alleged in the petition, the Secretary shall take such action as is necessary to ensure compliance with the provisions of the tribal energy resource agreement, which action may include--

        ‘(I) temporarily suspending some or all activities under a lease, business agreement, or right-of-way under this section until the Indian tribe or such activities are in compliance with the provisions of the approved tribal energy resource agreement; or

        ‘(II) rescinding approval of all or part of the tribal energy resource agreement, and if all of such agreement is rescinded, reassuming the responsibility for approval of any future leases, business agreements, or rights-of-way described in subsections (a) and (b).

      ‘(D) Prior to seeking to ensure compliance with the provisions of the tribal energy resource agreement of an Indian tribe under subparagraph (C)(iii), the Secretary shall--

        ‘(i) make a written determination that describes the manner in which the tribal energy resource agreement has been violated;

        ‘(ii) provide the Indian tribe with a written notice of the violations together with the written determination; and

        ‘(iii) before taking any action described in subparagraph (C)(iii) or seeking any other remedy, provide the Indian tribe with a hearing and a reasonable opportunity to attain compliance with the tribal energy resource agreement.

      ‘(E) An Indian tribe described in subparagraph (D) shall retain all rights to appeal as provided in regulations issued by the Secretary.

      ‘(8) Not later than 1 year after the date of enactment of the Indian Tribal Energy Development and Self-Determination Act of 2004, the Secretary shall issue regulations that implement the provisions of this subsection, including--

        ‘(A) criteria to be used in determining the capacity of an Indian tribe described in paragraph (2)(B)(i), including the experience of the Indian tribe in managing natural resources and financial and administrative resources available for use by the Indian tribe in implementing the approved tribal energy resource agreement of the Indian tribe;

        ‘(B) a process and requirements in accordance with which an Indian tribe may--

          ‘(i) voluntarily rescind a tribal energy resource agreement approved by the Secretary under this subsection; and

          ‘(ii) return to the Secretary the responsibility to approve any future leases, business agreements, and rights-of-way described in this subsection;

        ‘(C) provisions setting forth the scope of, and procedures for, the periodic review and evaluation described in subparagraphs (D) and (E) of paragraph (2), including provisions for review of transactions, reports, site inspections, and any other review activities the Secretary determines to be appropriate; and

        ‘(D) provisions defining final agency actions after exhaustion of administrative appeals from determinations of the Secretary under paragraph (7).

    ‘(f) No Effect on Other Law- Nothing in this section affects the application of--

      ‘(1) any Federal environment law;

      ‘(2) the Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 1201 et seq.); or

      ‘(3) except as otherwise provided in this title, the Indian Mineral Development Act of 1982 (25 U.S.C. 2101 et seq.) and the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).

    ‘(g) Authorization of Appropriations- There are authorized to be appropriated to the Secretary such sums as are necessary for each of fiscal years 2004 through 2014 to implement the provisions of this section and to make grants or provide other appropriate assistance to Indian tribes to assist the Indian tribes in developing and implementing tribal energy resource agreements in accordance with the provisions of this section.

‘SEC. 2605. INDIAN MINERAL DEVELOPMENT REVIEW.

    ‘(a) In General- The Secretary shall conduct a review of all activities being conducted under the Indian Mineral Development Act of 1982 (25 U.S.C. 2101 et seq.) as of that date.

    ‘(b) Report- Not later than 1 year after the date of enactment of the Indian Tribal Energy Development and Self-Determination Act of 2004, the Secretary shall submit to Congress a report that includes--

      ‘(1) the results of the review;

      ‘(2) recommendations to ensure that Indian tribes have the opportunity to develop Indian energy resources; and

      ‘(3) an analysis of the barriers to the development of energy resources on Indian land (including legal, fiscal, market, and other barriers), along with recommendations for the removal of those barriers.

‘SEC. 2606. FEDERAL POWER MARKETING ADMINISTRATIONS.

    ‘(a) Definitions- In this section:

      ‘(1) The term ‘Administrator’ means the Administrator of the Bonneville Power Administration and the Administrator of the Western Area Power Administration.

      ‘(2) The term ‘power marketing administration’ means--

        ‘(A) the Bonneville Power Administration;

        ‘(B) the Western Area Power Administration; and

        ‘(C) any other power administration the power allocation of which is used by or for the benefit of an Indian tribe located in the service area of the administration.

    ‘(b) Encouragement of Indian Tribal Energy Development- Each Administrator shall encourage Indian tribal energy development by taking such actions as are appropriate, including administration of programs of the Bonneville Power Administration and the Western Area Power Administration, in accordance with this section.

    ‘(c) Action by the Administrator- In carrying out this section, and in accordance with existing law--

      ‘(1) each Administrator shall consider the unique relationship that exists between the United States and Indian tribes;

      ‘(2) power allocations from the Western Area Power Administration to Indian tribes may be used to meet firming and reserve needs of Indian-owned energy projects on Indian land;

      ‘(3) the Administrator of the Western Area Power Administration may purchase non-federally generated power from Indian tribes to meet the firming and reserve requirements of the Western Area Power Administration; and

      ‘(4) each Administrator shall not pay more than the prevailing market price for an energy product nor obtain less than prevailing market terms and conditions.

    ‘(d) Assistance for Transmission System Use- (1) An Administrator may provide technical assistance to Indian tribes seeking to use the high-voltage transmission system for delivery of electric power.

    ‘(2) The costs of technical assistance provided under paragraph (1) shall be funded by the Secretary of Energy using nonreimbursable funds appropriated for that purpose, or by the applicable Indian tribes.

    ‘(e) Power Allocation Study- Not later than 2 years after the date of enactment of the Indian Tribal Energy Development and Self-Determination Act of 2004, the Secretary of Energy shall submit to Congress a report that--

      ‘(1) describes the use by Indian tribes of Federal power allocations of the Western Area Power Administration (or power sold by the Southwestern Power Administration) and the Bonneville Power Administration to or for the benefit of Indian tribes in service areas of those administrations; and

      ‘(2) identifies--

        ‘(A) the quantity of power allocated to, or used for the benefit of, Indian tribes by the Western Area Power Administration;

        ‘(B) the quantity of power sold to Indian tribes by other power marketing administrations; and

        ‘(C) barriers that impede tribal access to and use of Federal power, including an assessment of opportunities to remove those barriers and improve the ability of power marketing administrations to deliver Federal power.

    ‘(f) Authorization of Appropriations- There are authorized to be appropriated to carry out this section $750,000, which shall remain available until expended and shall not be reimbursable.

‘SEC. 2607. WIND AND HYDROPOWER FEASIBILITY STUDY.

    ‘(a) Study- The Secretary of Energy, in coordination with the Secretary of the Army and the Secretary, shall conduct a study of the cost and feasibility of developing a demonstration project that would use wind energy generated by Indian tribes and hydropower generated by the Army Corps of Engineers on the Missouri River to supply firming power to the Western Area Power Administration.

    ‘(b) Scope of Study- The study shall--

      ‘(1) determine the feasibility of the blending of wind energy and hydropower generated from the Missouri River dams operated by the Army Corps of Engineers;

      ‘(2) review historical and projected requirements for firming power and the patterns of availability and use of firming power;

      ‘(3) assess the wind energy resource potential on tribal land and projected cost savings through a blend of wind and hydropower over a 30-year period;

      ‘(4) determine seasonal capacity needs and associated transmission upgrades for integration of tribal wind generation; and

      ‘(5) include an independent tribal engineer as a study team member.

    ‘(c) Report- Not later than 1 year after the date of enactment of the Energy Policy Act of 2003, the Secretary and Secretary of the Army shall submit to Congress a report that describes the results of the study, including--

      ‘(1) an analysis of the potential energy cost or benefits to the customers of the Western Area Power Administration through the use of combined wind and hydropower;

      ‘(2) an evaluation of whether a combined wind and hydropower system can reduce reservoir fluctuation, enhance efficient and reliable energy production, and provide Missouri River management flexibility;

      ‘(3) recommendations for a demonstration project that could be carried out by the Western Area Power Administration in partnership with an Indian tribal government or tribal energy resource development organization to demonstrate the feasibility and potential of using wind energy produced on Indian land to supply firming energy to the Western Area Power Administration or any other Federal power marketing agency; and

      ‘(4) an identification of--

        ‘(A) the economic and environmental costs or benefits to be realized through such a Federal-tribal partnership; and

        ‘(B) the manner in which such a partnership could contribute to the energy security of the United States.

    ‘(d) Funding-

      ‘(1) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out this section $500,000, to remain available until expended.

    ‘(2) Nonreimbursability- Costs incurred by the Secretary in carrying out this section shall be nonreimbursable.’.

    (b) Conforming Amendments- The table of contents for the Energy Policy Act of 1992 is amended by striking the items relating to title XXVI and inserting the following:

      ‘Sec. 2601. Definitions.

      ‘Sec. 2602. Indian tribal energy resource development.

      ‘Sec. 2603. Indian tribal energy resource regulation.

      ‘Sec. 2604. Leases, business agreements, and rights-of-way involving energy development or transmission.

      ‘Sec. 2605. Indian mineral development review.

      ‘Sec. 2606. Federal Power Marketing Administrations.

      ‘Sec. 2607. Wind and hydropower feasibility study.’.

SEC. 504. FOUR CORNERS TRANSMISSION LINE PROJECT.

    The Dine Power Authority, an enterprise of the Navajo Nation, shall be eligible to receive grants and other assistance as authorized by section 217 of the Department of Energy Organization Act, as added by section 502 of this title, and section 2602 of the Energy Policy Act of 1992, as amended by this title, for activities associated with the development of a transmission line from the Four Corners Area to southern Nevada, including related power generation opportunities.

SEC. 505. ENERGY EFFICIENCY IN FEDERALLY ASSISTED HOUSING.

    (a) In General- The Secretary of Housing and Urban Development shall promote energy conservation in housing that is located on Indian land and assisted with Federal resources through--

      (1) the use of energy-efficient technologies and innovations (including the procurement of energy-efficient refrigerators and other appliances);

      (2) the promotion of shared savings contracts; and

      (3) the use and implementation of such other similar technologies and innovations as the Secretary of Housing and Urban Development considers to be appropriate.

    (b) Amendment- Section 202(2) of the Native American Housing and Self-Determination Act of 1996 (25 U.S.C. 4132(2)) is amended by inserting ‘improvement to achieve greater energy efficiency,’ after ‘planning,’.

SEC. 506. CONSULTATION WITH INDIAN TRIBES.

    In carrying out this title and the amendments made by this title, the Secretary of Energy and the Secretary shall, as appropriate and to the maximum extent practicable, involve and consult with Indian tribes in a manner that is consistent with the Federal trust and the government-to-government relationships between Indian tribes and the United States.

TITLE VI--NUCLEAR MATTERS

Subtitle A--Price-Anderson Act Amendments

SEC. 601. SHORT TITLE.

    This subtitle may be cited as the ‘Price-Anderson Amendments Act of 2003’.

SEC. 602. EXTENSION OF INDEMNIFICATION AUTHORITY.

    (a) Indemnification of Nuclear Regulatory Commission Licensees- Section 170 c. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(c)) is amended--

      (1) in the subsection heading, by striking ‘Licenses’ and inserting ‘Licensees’; and

      (2) by striking ‘December 31, 2003’ each place it appears and inserting ‘December 31, 2023’.

    (b) Indemnification of Department of Energy Contractors- Section 170 d.(1)(A) of the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)(1)(A)) is amended by striking ‘December 31, 2004’ and inserting ‘December 31, 2023’.

    (c) Indemnification of Nonprofit Educational Institutions- Section 170 k. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(k)) is amended by striking ‘August 1, 2002’ each place it appears and inserting ‘December 31, 2023’.

SEC. 603. MAXIMUM ASSESSMENT.

    Section 170 of the Atomic Energy Act of 1954 (42 U.S.C. 2210) is amended--

      (1) in the second proviso of the third sentence of subsection b.(1)--

        (A) by striking ‘$63,000,000’ and inserting ‘$95,800,000’; and

        (B) by striking ‘$10,000,000 in any 1 year’ and inserting ‘$15,000,000 in any 1 year (subject to adjustment for inflation under subsection t.)’; and

      (2) in subsection t.(1)--

        (A) by inserting ‘total and annual’ after ‘amount of the maximum’;

        (B) by striking ‘the date of the enactment of the Price-Anderson Amendments Act of 1988’ and inserting ‘August 20, 2003’; and

        (C) in subparagraph (A), by striking ‘such date of enactment’ and inserting ‘August 20, 2003’.

SEC. 604. DEPARTMENT OF ENERGY LIABILITY LIMIT.

    (a) Indemnification of Department of Energy Contractors- Section 170 d. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)) is amended by striking paragraph (2) and inserting the following:

    ‘(2) In an agreement of indemnification entered into under paragraph (1), the Secretary--

      ‘(A) may require the contractor to provide and maintain financial protection of such a type and in such amounts as the Secretary shall determine to be appropriate to cover public liability arising out of or in connection with the contractual activity; and

      ‘(B) shall indemnify the persons indemnified against such liability above the amount of the financial protection required, in the amount of $10,000,000,000 (subject to adjustment for inflation under subsection t.), in the aggregate, for all persons indemnified in connection with the contract and for each nuclear incident, including such legal costs of the contractor as are approved by the Secretary.’.

    (b) Contract Amendments- Section 170 d. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)) is further amended by striking paragraph (3) and inserting the following--

    ‘(3) All agreements of indemnification under which the Department of Energy (or its predecessor agencies) may be required to indemnify any person under this section shall be deemed to be amended, on the date of enactment of the Price-Anderson Amendments Act of 2003, to reflect the amount of indemnity for public liability and any applicable financial protection required of the contractor under this subsection.’.

    (c) Liability Limit- Section 170 e.(1)(B) of the Atomic Energy Act of 1954 (42 U.S.C. 2210(e)(1)(B)) is amended--

      (1) by striking ‘the maximum amount of financial protection required under subsection b. or’; and

      (2) by striking ‘paragraph (3) of subsection d., whichever amount is more’ and inserting ‘paragraph (2) of subsection d.’.

SEC. 605. INCIDENTS OUTSIDE THE UNITED STATES.

    (a) Amount of Indemnification- Section 170 d.(5) of the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)(5)) is amended by striking ‘$100,000,000’ and inserting ‘$500,000,000’.

    (b) Liability Limit- Section 170 e.(4) of the Atomic Energy Act of 1954 (42 U.S.C. 2210(e)(4)) is amended by striking ‘$100,000,000’ and inserting ‘$500,000,000’.

SEC. 606. REPORTS.

    Section 170 p. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(p)) is amended by striking ‘August 1, 1998’ and inserting ‘December 31, 2019’.

SEC. 607. INFLATION ADJUSTMENT.

    Section 170 t. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(t)) is amended--

      (1) by redesignating paragraph (2) as paragraph (3); and

      (2) by inserting after paragraph (1) the following:

    ‘(2) The Secretary shall adjust the amount of indemnification provided under an agreement of indemnification under subsection d. not less than once during each 5-year period following July 1, 2003, in accordance with the aggregate percentage change in the Consumer Price Index since--

      ‘(A) that date, in the case of the first adjustment under this paragraph; or

      ‘(B) the previous adjustment under this paragraph.’.

SEC. 608. TREATMENT OF MODULAR REACTORS.

    Section 170 b. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(b)) is amended by adding at the end the following:

    ‘(5)(A) For purposes of this section only, the Commission shall consider a combination of facilities described in subparagraph (B) to be a single facility having a rated capacity of 100,000 electrical kilowatts or more.

    ‘(B) A combination of facilities referred to in subparagraph (A) is 2 or more facilities located at a single site, each of which has a rated capacity of 100,000 electrical kilowatts or more but not more than 300,000 electrical kilowatts, with a combined rated capacity of not more than 1,300,000 electrical kilowatts.’.

SEC. 609. APPLICABILITY.

    The amendments made by sections 603, 604, and 605 do not apply to a nuclear incident that occurs before the date of the enactment of this Act.

SEC. 610. PROHIBITION ON ASSUMPTION BY UNITED STATES GOVERNMENT OF LIABILITY FOR CERTAIN FOREIGN INCIDENTS.

    Section 170 of the Atomic Energy Act of 1954 (42 U.S.C. 2210) is amended by adding at the end the following new subsection:

    ‘u. Prohibition on Assumption of Liability for Certain Foreign Incidents- Notwithstanding this section or any other provision of law, no officer of the United States or of any department, agency, or instrumentality of the United States Government may enter into any contract or other arrangement, or into any amendment or modification of a contract or other arrangement, the purpose or effect of which would be to directly or indirectly impose liability on the United States Government, or any department, agency, or instrumentality of the United States Government, or to otherwise directly or indirectly require an indemnity by the United States Government, for nuclear incidents occurring in connection with the design, construction, or operation of a production facility or utilization facility in any country whose government has been identified by the Secretary of State as engaged in state sponsorship of terrorist activities (specifically including any country the government of which, as of September 11, 2001, had been determined by the Secretary of State under section 620A(a) of the Foreign Assistance Act of 1961 (22 U.S.C. 2371(a)), section 6(j)(1) of the Export Administration Act of 1979 (50 U.S.C. App. 2405(j)(1)), or section 40(d) of the Arms Export Control Act (22 U.S.C. 2780(d)) to have repeatedly provided support for acts of international terrorism). This subsection shall not apply to nuclear incidents occurring as a result of missions, carried out under the direction of the Secretary of Energy, the Secretary of Defense, or the Secretary of State, that are necessary to safely secure, store, transport, or remove nuclear materials for nuclear safety or nonproliferation purposes.’.

SEC. 611. CIVIL PENALTIES.

    (a) Repeal of Automatic Remission- Section 234A b.(2) of the Atomic Energy Act of 1954 (42 U.S.C. 2282a(b)(2)) is amended by striking the last sentence.

    (b) Limitation for Not-For-Profit Institutions- Subsection d. of section 234A of the Atomic Energy Act of 1954 (42 U.S.C. 2282a(d)) is amended to read as follows:

    ‘d.(1) Notwithstanding subsection a., in the case of any not-for-profit contractor, subcontractor, or supplier, the total amount of civil penalties paid under subsection a. may not exceed the total amount of fees paid within any 1-year period (as determined by the Secretary) under the contract under which the violation occurs.

    ‘(2) For purposes of this section, the term ‘not-for-profit’ means that no part of the net earnings of the contractor, subcontractor, or supplier inures to the benefit of any natural person or for-profit artificial person.’.

    (c) Effective Date- The amendments made by this section shall not apply to any violation of the Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.) occurring under a contract entered into before the date of enactment of this section.

Subtitle B--General Nuclear Matters

SEC. 621. LICENSES.

    Section 103 c. of the Atomic Energy Act of 1954 (42 U.S.C. 2133(c)) is amended by inserting ‘from the authorization to commence operations’ after ‘forty years’.

SEC. 622. NRC TRAINING PROGRAM.

    (a) In General- In order to maintain the human resource investment and infrastructure of the United States in the nuclear sciences, health physics, and engineering fields, in accordance with the statutory authorities of the Nuclear Regulatory Commission relating to the civilian nuclear energy program, the Nuclear Regulatory Commission shall carry out a training and fellowship program to address shortages of individuals with critical nuclear safety regulatory skills.

    (b) Authorization of Appropriations-

      (1) IN GENERAL- There are authorized to be appropriated to the Nuclear Regulatory Commission to carry out this section $1,000,000 for each of fiscal years 2004 through 2008.

      (2) AVAILABILITY- Funds made available under paragraph (1) shall remain available until expended.

SEC. 623. COST RECOVERY FROM GOVERNMENT AGENCIES.

    Section 161 w. of the Atomic Energy Act of 1954 (42 U.S.C. 2201(w)) is amended--

      (1) by striking ‘for or is issued’ and all that follows through ‘1702’ and inserting ‘to the Commission for, or is issued by the Commission, a license or certificate’;

      (2) by striking ‘483a’ and inserting ‘9701’; and

      (3) by striking ‘, of applicants for, or holders of, such licenses or certificates’.

SEC. 624. ELIMINATION OF PENSION OFFSET.

    Section 161 of the Atomic Energy Act of 1954 (42 U.S.C. 2201) is amended by adding at the end the following:

    ‘y. Exempt from the application of sections 8344 and 8468 of title 5, United States Code, an annuitant who was formerly an employee of the Commission who is hired by the Commission as a consultant, if the Commission finds that the annuitant has a skill that is critical to the performance of the duties of the Commission.’.

SEC. 625. ANTITRUST REVIEW.

    Section 105 c. of the Atomic Energy Act of 1954 (42 U.S.C. 2135(c)) is amended by adding at the end the following:

    ‘(9) Applicability- This subsection does not apply to an application for a license to construct or operate a utilization facility or production facility under section 103 or 104 b. that is filed on or after the date of enactment of this paragraph.’.

SEC. 626. DECOMMISSIONING.

    Section 161 i. of the Atomic Energy Act of 1954 (42 U.S.C. 2201(i)) is amended--

      (1) by striking ‘and (3)’ and inserting ‘(3)’; and

      (2) by inserting before the semicolon at the end the following: ‘, and (4) to ensure that sufficient funds will be available for the decommissioning of any production or utilization facility licensed under section 103 or 104 b., including standards and restrictions governing the control, maintenance, use, and disbursement by any former licensee under this Act that has control over any fund for the decommissioning of the facility’.

SEC. 627. LIMITATION ON LEGAL FEE REIMBURSEMENT.

    The Department of Energy shall not, except as required under a contract entered into before the date of enactment of this Act, reimburse any contractor or subcontractor of the Department for any legal fees or expenses incurred with respect to a complaint subsequent to--

      (1) an adverse determination on the merits with respect to such complaint against the contractor or subcontractor by the Director of the Department of Energy’s Office of Hearings and Appeals pursuant to part 708 of title 10, Code of Federal Regulations, or by a Department of Labor Administrative Law Judge pursuant to section 211 of the Energy Reorganization Act of 1974 (42 U.S.C. 5851); or

      (2) an adverse final judgment by any State or Federal court with respect to such complaint against the contractor or subcontractor for wrongful termination or retaliation due to the making of disclosures protected under chapter 12 of title 5, United States Code, section 211 of the Energy Reorganization Act of 1974 (42 U.S.C. 5851), or any comparable State law,

    unless the adverse determination or final judgment is reversed upon further administrative or judicial review.

SEC. 628. DECOMMISSIONING PILOT PROGRAM.

    (a) Pilot Program- The Secretary of Energy shall establish a decommissioning pilot program to decommission and decontaminate the sodium-cooled fast breeder experimental test-site reactor located in northwest Arkansas in accordance with the decommissioning activities contained in the August 31, 1998, Department of Energy report on the reactor.

    (b) Authorization of Appropriations- There are authorized to be appropriated to the Secretary of Energy to carry out this section $16,000,000.

SEC. 629. REPORT ON FEASIBILITY OF DEVELOPING COMMERCIAL NUCLEAR ENERGY GENERATION FACILITIES AT EXISTING DEPARTMENT OF ENERGY SITES.

    Not later than 1 year after the date of the enactment of this Act, the Secretary of Energy shall submit to Congress a report on the feasibility of developing commercial nuclear energy generation facilities at Department of Energy sites in existence on the date of enactment of this Act.

SEC. 630. URANIUM SALES.

    (a) Sales, Transfers, and Services- Section 3112 of the USEC Privatization Act (42 U.S.C. 2297h-10) is amended by striking subsections (d), (e), and (f) and inserting the following:

    ‘(3) The Secretary may transfer to the Corporation, notwithstanding subsections (b)(2) and (d), natural uranium in amounts sufficient to fulfill the Department of Energy’s commitments under Article 4(B) of the Agreement between the Department and the Corporation dated June 17, 2002.

    ‘(d) Inventory Sales- (1) In addition to the transfers and sales authorized under subsections (b) and (c) and under paragraph (5) of this subsection, the United States Government may transfer or sell uranium in any form subject to paragraphs (2), (3), and (4).

    ‘(2) Except as provided in subsections (b) and (c) and paragraph (5) of this subsection, no sale or transfer of uranium shall be made under this subsection by the United States Government unless--

      ‘(A) the President determines that the material is not necessary for national security needs and the sale or transfer has no adverse impact on implementation of existing government-to-government agreements;

      ‘(B) the price paid to the appropriate Federal agency, if the transaction is a sale, will not be less than the fair market value of the material; and

      ‘(C) the sale or transfer to commercial nuclear power end users is made pursuant to a contract of at least 3 years’ duration.

    ‘(3) Except as provided in paragraph (5), the United States Government shall not make any transfer or sale of uranium in any form under this subsection that would cause the total amount of uranium transferred or sold pursuant to this subsection that is delivered for consumption by commercial nuclear power end users to exceed--

      ‘(A) 3,000,000 pounds of U3 O8 equivalent in fiscal year 2004, 2005, 2006, 2007, 2008, or 2009;

      ‘(B) 5,000,000 pounds of U3O8 equivalent in fiscal year 2010 or 2011;

      ‘(C) 7,000,000 pounds of U3O8 equivalent in fiscal year 2012; and

      ‘(D) 10,000,000 pounds of U3O8 equivalent in fiscal year 2013 or any fiscal year thereafter.

    ‘(4) Except for sales or transfers under paragraph (5), for the purposes of this subsection, the recovery of uranium from uranium bearing materials transferred or sold by the United States Government to the domestic uranium industry shall be the preferred method of making uranium available. The recovered uranium shall be counted against the annual maximum deliveries set forth in this section, when such uranium is sold to end users.

    ‘(5) The United States Government may make the following sales and transfers:

      ‘(A) Sales or transfers to a Federal agency if the material is transferred for the use of the receiving agency without any resale or transfer to another entity and the material does not meet commercial specifications.

      ‘(B) Sales or transfers to any person for national security purposes, as determined by the Secretary.

      ‘(C) Sales or transfers to any State or local agency or nonprofit, charitable, or educational institution for use other than the generation of electricity for commercial use.

      ‘(D) Sales or transfers to the Department of Energy research reactor sales program.

      ‘(E) Sales or transfers, at fair market value, for emergency purposes in the event of a disruption in supply to commercial nuclear power end users in the United States.

      ‘(F) Sales or transfers, at fair market value, for use in a commercial reactor in the United States with nonstandard fuel requirements.

      ‘(G) Sales or transfers provided for under law for use by the Tennessee Valley Authority in relation to the Department of Energy’s highly enriched uranium or tritium programs.

    ‘(6) For purposes of this subsection, the term ‘United States Government’ does not include the Tennessee Valley Authority.

    ‘(e) Savings Provision- Nothing in this subchapter modifies the terms of the Russian HEU Agreement.

    ‘(f) Services- Notwithstanding any other provision of this section, if the Secretary determines that the Corporation has failed, or may fail, to perform any obligation under the Agreement between the Department of Energy and the Corporation dated June 17, 2002, and as amended thereafter, which failure could result in termination of the Agreement, the Secretary shall notify Congress, in such a manner that affords Congress an opportunity to comment, prior to a determination by the Secretary whether termination, waiver, or modification of the Agreement is required. The Secretary is authorized to take such action as he determines necessary under the Agreement to terminate, waive, or modify provisions of the Agreement to achieve its purposes.’.

    (b) Report- Not later than 3 years after the date of enactment of this Act, the Secretary of Energy shall report to Congress on the implementation of this section. The report shall include a discussion of available excess uranium inventories; all sales or transfers made by the United States Government; the impact of such sales or transfers on the domestic uranium industry, the spot market uranium price, and the national security interests of the United States; and any steps taken to remediate any adverse impacts of such sales or transfers.

SEC. 631. COOPERATIVE RESEARCH AND DEVELOPMENT AND SPECIAL DEMONSTRATION PROJECTS FOR THE URANIUM MINING INDUSTRY.

    (a) Authorization of Appropriations- There are authorized to be appropriated to the Secretary of Energy $10,000,000 for each of fiscal years 2004, 2005, and 2006 for--

      (1) cooperative, cost-shared agreements between the Department of Energy and domestic uranium producers to identify, test, and develop improved in situ leaching mining technologies, including low-cost environmental restoration technologies that may be applied to sites after completion of in situ leaching operations; and

      (2) funding for competitively selected demonstration projects with domestic uranium producers relating to--

        (A) enhanced production with minimal environmental impacts;

        (B) restoration of well fields; and

        (C) decommissioning and decontamination activities.

    (b) Domestic Uranium Producer- For purposes of this section, the term ‘domestic uranium producer’ has the meaning given that term in section 1018(4) of the Energy Policy Act of 1992 (42 U.S.C. 2296b-7(4)), except that the term shall not include any producer that has not produced uranium from domestic reserves on or after July 30, 1998.

    (c) Limitation- No activities funded under this section may be carried out in the State of New Mexico.

SEC. 632. WHISTLEBLOWER PROTECTION.

    (a) Definition of Employer- Section 211(a)(2) of the Energy Reorganization Act of 1974 (42 U.S.C. 5851(a)(2)) is amended--

      (1) in subparagraph (C), by striking ‘and’ at the end;

      (2) in subparagraph (D), by striking the period at the end and inserting ‘; and’ and

      (3) by adding at the end the following:

        ‘(E) a contractor or subcontractor of the Commission.’.

    (b) De Novo Review- Subsection (b) of such section 211 is amended by adding at the end the following new paragraph:

      ‘(4) If the Secretary has not issued a final decision within 540 days after the filing of a complaint under paragraph (1), and there is no showing that such delay is due to the bad faith of the person seeking relief under this paragraph, such person may bring an action at law or equity for de novo review in the appropriate district court of the United States, which shall have jurisdiction over such an action without regard to the amount in controversy.’.

SEC. 633. MEDICAL ISOTOPE PRODUCTION.

    Section 134 of the Atomic Energy Act of 1954 (42 U.S.C. 2160d) is amended--

      (1) in subsection a., by striking ‘a. The Commission’ and inserting ‘a. In General- Except as provided in subsection b., the Commission’;

      (2) by redesignating subsection b. as subsection c.; and

      (3) by inserting after subsection a. the following:

    ‘b. Medical Isotope Production-

      ‘(1) DEFINITIONS- In this subsection:

        ‘(A) HIGHLY ENRICHED URANIUM- The term ‘highly enriched uranium’ means uranium enriched to include concentration of U-235 above 20 percent.

        ‘(B) MEDICAL ISOTOPE- The term ‘medical isotope’ includes Molybdenum 99, Iodine 131, Xenon 133, and other radioactive materials used to produce a radiopharmaceutical for diagnostic, therapeutic procedures or for research and development.

        ‘(C) RADIOPHARMACEUTICAL- The term ‘radiopharmaceutical’ means a radioactive isotope that--

          ‘(i) contains byproduct material combined with chemical or biological material; and

          ‘(ii) is designed to accumulate temporarily in a part of the body for therapeutic purposes or for enabling the production of a useful image for use in a diagnosis of a medical condition.

        ‘(D) RECIPIENT COUNTRY- The term ‘recipient country’ means Canada, Belgium, France, Germany, and the Netherlands.

      ‘(2) LICENSES- The Commission may issue a license authorizing the export (including shipment to and use at intermediate and ultimate consignees specified in the license) to a recipient country of highly enriched uranium for medical isotope production if, in addition to any other requirements of this Act (except subsection a.), the Commission determines that--

        ‘(A) a recipient country that supplies an assurance letter to the United States Government in connection with the consideration by the Commission of the export license application has informed the United States Government that any intermediate consignees and the ultimate consignee specified in the application are required to use the highly enriched uranium solely to produce medical isotopes; and

        ‘(B) the highly enriched uranium for medical isotope production will be irradiated only in a reactor in a recipient country that--

          ‘(i) uses an alternative nuclear reactor fuel; or

          ‘(ii) is the subject of an agreement with the United States Government to convert to an alternative nuclear reactor fuel when alternative nuclear reactor fuel can be used in the reactor.

      ‘(3) REVIEW OF PHYSICAL PROTECTION REQUIREMENTS-

        ‘(A) IN GENERAL- The Commission shall review the adequacy of physical protection requirements that, as of the date of an application under paragraph (2), are applicable to the transportation and storage of highly enriched uranium for medical isotope production or control of residual material after irradiation and extraction of medical isotopes.

        ‘(B) IMPOSITION OF ADDITIONAL REQUIREMENTS- If the Commission determines that additional physical protection requirements are necessary (including a limit on the quantity of highly enriched uranium that may be contained in a single shipment), the Commission shall impose such requirements as license conditions or through other appropriate means.

      ‘(4) FIRST REPORT TO CONGRESS-

        ‘(A) NAS STUDY- The Secretary shall enter into an arrangement with the National Academy of Sciences to conduct a study to determine--

          ‘(i) the feasibility of procuring supplies of medical isotopes from commercial sources that do not use highly enriched uranium;

          ‘(ii) the current and projected demand and availability of medical isotopes in regular current domestic use;

          ‘(iii) the progress that is being made by the Department of Energy and others to eliminate all use of highly enriched uranium in reactor fuel, reactor targets, and medical isotope production facilities; and

          ‘(iv) the potential cost differential in medical isotope production in the reactors and target processing facilities if the products were derived from production systems that do not involve fuels and targets with highly enriched uranium.

        ‘(B) FEASIBILITY- For the purpose of this subsection, the use of low enriched uranium to produce medical isotopes shall be determined to be feasible if--

          ‘(i) low enriched uranium targets have been developed and demonstrated for use in the reactors and target processing facilities that produce significant quantities of medical isotopes to serve United States needs for such isotopes;

          ‘(ii) sufficient quantities of medical isotopes are available from low enriched uranium targets and fuel to meet United States domestic needs; and

          ‘(iii) the average anticipated total cost increase from production of medical isotopes in such facilities without use of highly enriched uranium is less than 10 percent.

        ‘(C) REPORT BY THE SECRETARY- Not later than 5 years after the date of enactment of the Energy Policy Act of 2003, the Secretary shall submit to Congress a report that--

          ‘(i) contains the findings of the National Academy of Sciences made in the study under subparagraph (A); and

          ‘(ii) discloses the existence of any commitments from commercial producers to provide domestic requirements for medical isotopes without use of highly enriched uranium consistent with the feasibility criteria described in subparagraph (B) not later than the date that is 4 years after the date of submission of the report.

      ‘(5) SECOND REPORT TO CONGRESS- If the study of the National Academy of Sciences determines under paragraph (4)(A)(i) that the procurement of supplies of medical isotopes from commercial sources that do not use highly enriched uranium is feasible, but the Secretary is unable to report the existence of commitments under paragraph (4)(C)(ii), not later than the date that is 6 years after the date of enactment of the Energy Policy Act of 2003, the Secretary shall submit to Congress a report that describes options for developing domestic supplies of medical isotopes in quantities that are adequate to meet domestic demand without the use of highly enriched uranium consistent with the cost increase described in paragraph (4)(B)(iii).

      ‘(6) CERTIFICATION- At such time as commercial facilities that do not use highly enriched uranium are capable of meeting domestic requirements for medical isotopes, within the cost increase described in paragraph (4)(B)(iii) and without impairing the reliable supply of medical isotopes for domestic utilization, the Secretary shall submit to Congress a certification to that effect.

      ‘(7) SUNSET PROVISION- After the Secretary submits a certification under paragraph (6), the Commission shall, by rule, terminate its review of export license applications under this subsection.’.

SEC. 634. FERNALD BYPRODUCT MATERIAL.

    Notwithstanding any other law, the material in the concrete silos at the Fernald uranium processing facility managed on the date of enactment of this Act by the Department of Energy shall be considered byproduct material (as defined by section 11 e.(2) of the Atomic Energy Act of 1954 (42 U.S.C. 2014(e)(2))). The Department of Energy may dispose of the material in a facility regulated by the Nuclear Regulatory Commission or by an Agreement State. If the Department of Energy disposes of the material in such a facility, the Nuclear Regulatory Commission or the Agreement State shall regulate the material as byproduct material under that Act. This material shall remain subject to the jurisdiction of the Department of Energy until it is received at a commercial, Nuclear Regulatory Commission-licensed, or Agreement State-licensed facility, at which time the material shall be subject to the health and safety requirements of the Nuclear Regulatory Commission or the Agreement State with jurisdiction over the disposal site.

SEC. 635. SAFE DISPOSAL OF GREATER-THAN-CLASS C RADIOACTIVE WASTE.

    (a) Designation of Responsibility- The Secretary of Energy shall designate an Office within the Department of Energy to have the responsibility for activities needed to develop a new, or use an existing, facility for safely disposing of all low-level radioactive waste with concentrations of radionuclides that exceed the limits established by the Nuclear Regulatory Commission for Class C radioactive waste (referred to in this section as ‘GTCC waste’).

    (b) Comprehensive Plan- The Secretary of Energy shall develop a comprehensive plan for permanent disposal of GTCC waste which includes plans for a disposal facility. This plan shall be transmitted to Congress in a series of reports, including the following:

      (1) REPORT ON SHORT-TERM PLAN- Not later than 180 days after the date of enactment of this Act, the Secretary of Energy shall submit to Congress a plan describing the Secretary’s operational strategy for continued recovery and storage of GTCC waste until a permanent disposal facility is available.

      (2) UPDATE OF 1987 REPORT-

        (A) IN GENERAL- Not later than 1 year after the date of enactment of this Act, the Secretary of Energy shall submit to Congress an update of the Secretary’s February 1987 report submitted to Congress that made comprehensive recommendations for the disposal of GTCC waste.

        (B) CONTENTS- The update under this paragraph shall contain--

          (i) a detailed description and identification of the GTCC waste that is to be disposed;

          (ii) a description of current domestic and international programs, both Federal and commercial, for management and disposition of GTCC waste;

          (iii) an identification of the Federal and private options and costs for the safe disposal of GTCC waste;

          (iv) an identification of the options for ensuring that, wherever possible, generators and users of GTCC waste bear all reasonable costs of waste disposal;

          (v) an identification of any new statutory authority required for disposal of GTCC waste; and

          (vi) in coordination with the Environmental Protection Agency and the Nuclear Regulatory Commission, an identification of any new regulatory guidance needed for the disposal of GTCC waste.

      (3) REPORT ON COST AND SCHEDULE FOR COMPLETION OF ENVIRONMENTAL IMPACT STATEMENT AND RECORD OF DECISION- Not later than 180 days after the date of submission of the update required under paragraph (2), the Secretary of Energy shall submit to Congress a report containing an estimate of the cost and schedule to complete a draft and final environmental impact statement and to issue a record of decision for a permanent disposal facility, utilizing either a new or existing facility, for GTCC waste.

SEC. 636. PROHIBITION ON NUCLEAR EXPORTS TO COUNTRIES THAT SPONSOR TERRORISM.

    (a) In General- Section 129 of the Atomic Energy Act of 1954 (42 U.S.C. 2158) is amended--

      (1) by inserting ‘a.’ before ‘No nuclear materials and equipment’; and

      (2) by adding at the end the following new subsection:

    ‘b.(1) Notwithstanding any other provision of law, including specifically section 121 of this Act, and except as provided in paragraphs (2) and (3), no nuclear materials and equipment or sensitive nuclear technology, including items and assistance authorized by section 57 b. of this Act and regulated under part 810 of title 10, Code of Federal Regulations, and nuclear-related items on the Commerce Control List maintained under part 774 of title 15 of the Code of Federal Regulations, shall be exported or reexported, or transferred or retransferred whether directly or indirectly, and no Federal agency shall issue any license, approval, or authorization for the export or reexport, or transfer, or retransfer, whether directly or indirectly, of these items or assistance (as defined in this paragraph) to any country whose government has been identified by the Secretary of State as engaged in state sponsorship of terrorist activities (specifically including any country the government of which has been determined by the Secretary of State under section 620A(a) of the Foreign Assistance Act of 1961 (22 U.S.C. 2371(a)), section 6(j)(1) of the Export Administration Act of 1979 (50 U.S.C. App. 2405(j)(1)), or section 40(d) of the Arms Export Control Act (22 U.S.C. 2780(d)) to have repeatedly provided support for acts of international terrorism).

    ‘(2) This subsection shall not apply to exports, reexports, transfers, or retransfers of radiation monitoring technologies, surveillance equipment, seals, cameras, tamper-indication devices, nuclear detectors, monitoring systems, or equipment necessary to safely store, transport, or remove hazardous materials, whether such items, services, or information are regulated by the Department of Energy, the Department of Commerce, or the Nuclear Regulatory Commission, except to the extent that such technologies, equipment, seals, cameras, devices, detectors, or systems are available for use in the design or construction of nuclear reactors or nuclear weapons.

    ‘(3) The President may waive the application of paragraph (1) to a country if the President determines and certifies to Congress that the waiver will not result in any increased risk that the country receiving the waiver will acquire nuclear weapons, nuclear reactors, or any materials or components of nuclear weapons and--

      ‘(A) the government of such country has not within the preceding 12-month period willfully aided or abetted the international proliferation of nuclear explosive devices to individuals or groups or willfully aided and abetted an individual or groups in acquiring unsafeguarded nuclear materials;

      ‘(B) in the judgment of the President, the government of such country has provided adequate, verifiable assurances that it will cease its support for acts of international terrorism;

      ‘(C) the waiver of that paragraph is in the vital national security interest of the United States; or

      ‘(D) such a waiver is essential to prevent or respond to a serious radiological hazard in the country receiving the waiver that may or does threaten public health and safety.’.

    (b) Applicability to Exports Approved for Transfer but not Transferred- Subsection b. of section 129 of Atomic Energy Act of 1954, as added by subsection (a) of this section, shall apply with respect to exports that have been approved for transfer as of the date of the enactment of this Act but have not yet been transferred as of that date.

SEC. 637. URANIUM ENRICHMENT FACILITIES.

    (a) Nuclear Regulatory Commission Review of Applications-

      (1) IN GENERAL- In order to facilitate a timely review and approval of an application in a proceeding for a license for the construction and operation of a uranium enrichment facility under sections 53 and 63 of the Atomic Energy Act of 1954 (42 U.S.C. 2073, 2093) (referred to in this subsection as a ‘covered proceeding’), the Nuclear Regulatory Commission shall, not later than 30 days after the receipt of the application, establish, by order, the schedule for the conduct of any hearing that may be requested by any person whose interest may be affected by the covered proceeding.

      (2) FINAL AGENCY DECISION- The schedule shall provide that a final decision by the Commission on the application shall be made not later than the date that is 2 years after the date of submission of the application by the applicant.

      (3) COMPLIANCE WITH SCHEDULE-

        (A) IN GENERAL- The Commission shall establish a process to assess compliance with the schedule established under paragraph (1) on an ongoing basis during the course of the review of the application, including ensuring compliance with schedules and milestones that are established for the conduct of any covered proceeding by the Atomic Safety and Licensing Board.

        (B) REPORT- The Commission shall submit to Congress on a bimonthly basis a report describing the status of compliance with the schedule established under paragraph (1), including a description of the status of actions required to be completed pursuant to the schedule by officers and employees of--

          (i) the Commission in undertaking the safety and environmental review of applications; and

          (ii) the Atomic Safety and Licensing Board in the conduct of any covered proceeding.

      (4) ENVIRONMENTAL REVIEW-

        (A) IN GENERAL- In evaluating an application under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) for licensing of a facility in a covered proceeding, the Commission shall limit the consideration of need to whether the licensing of the facility would advance the national interest of encouraging in the United States--

          (i) additional secure, reliable uranium enrichment capacity;

          (ii) diverse supplies and suppliers of uranium enrichment capacity; and

          (iii) the deployment of advanced centrifuge enrichment technology.

        (B) COMMENT- In carrying out subparagraph (A), the Commission shall consider and solicit the views of other affected Federal agencies.

        (C) ATOMIC SAFETY AND LICENSING BOARD-

          (i) IN GENERAL- Except as provided in clause (ii), in any covered proceeding, the Commission shall allow the litigation and resolution by the Atomic Safety and Licensing Board of issues arising under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), on the basis of information submitted by the applicant in its environmental report, prior to publication of any required environmental impact statement.

          (ii) EXCEPTIONS- On the publication of any required environmental impact statement, issues may be proffered for resolution by the Atomic Safety and Licensing Board only if information or conclusions in the environmental impact statement differ significantly from the information or conclusions in the environmental report submitted by the applicant.

        (D) ENVIRONMENTAL JUSTICE- In a covered proceeding, the Commission shall apply the criteria in Appendix C of the final report entitled ‘Environmental Review Guidance for Licensing Actions Associated with NMSS Programs’ (NUREG-1748), published in August 2003, in any required review of environmental justice.

      (5) LOW-LEVEL WASTE- In any covered proceeding, the Commission shall--

        (A) deem the obligation of the Secretary of Energy pursuant to section 3113 of the USEC Privitization Act (42 U.S.C. 2297 h-11) to constitute a plausible strategy with regard to the disposition of depleted uranium generated by such facility; and

        (B) treat any residual material that remains following the extraction of any usable resource value from depleted uranium as low-level radioactive waste under part 61 of title 10, Code of Federal Regulations.

      (6) ADJUDICATORY HEARING ON LICENSING OF URANIUM ENRICHMENT FACILITIES- Section 193(b) of the Atomic Energy Act of 1954 (42 U.S.C. 2243(b)) is amended by striking paragraph (2) and inserting the following:

      ‘(2) TIMING- On the issuance of a final decision on the application by the Atomic Safety and Licensing Board, the Commission shall issue and make immediately effective any license for the construction and operation of a uranium enrichment facility under sections 53 and 63, on a determination by the Commission that the issuance of the license would not cause irreparable injury to the public health and safety or the common defense and security, notwithstanding the pendency before the Commission of any appeal or petition for review of any decision of the Atomic Safety and Licensing Board.’.

    (b) Department of Energy Responsibilities-

      (1) IN GENERAL- Not later than 180 days after a request is made to the Secretary of Energy by an applicant for or recipient of a license for a uranium enrichment facility under section 53, 63, or 193 of the Atomic Energy Act of 1954 ((42 U.S.C. 2073, 2093, 2243), the Secretary shall enter into a memorandum of agreement with the applicant or licensee that provides a schedule for the transfer to the Secretary, not later than 5 years after the generation of any depleted uranium hexafluoride, of title and possession of the depleted uranium hexafluoride to be generated by the applicant or licensee.

      (2) COST-

        (A) IN GENERAL- Subject to subparagraphs (B) and (C), the memorandum of agreement shall specify the cost to be assessed by the Secretary for the transfer to the Secretary of the depleted uranium hexafluoride.

        (B) NONDISCRIMINATORY BASIS- The cost shall be determined by the Secretary on a nondiscriminatory basis.

        (C) COST- Taking into account the physical and chemical characteristics of such depleted uranium hexafluoride, the cost shall not exceed the cost assessed by the Secretary for the acceptance of depleted uranium hexafluoride under--

          (i) the memorandum of agreement between the United States Department of Energy and the United States Enrichment Corporation Relating to Depleted Uranium, dated June 30, 1998; and

          (ii) the Agreement Between the U.S. Department of Energy and USEC Inc., dated June 17, 2002.

SEC. 638. NATIONAL URANIUM STOCKPILE.

    (a) Stockpile Creation- The Secretary of Energy may create a national low-enriched uranium stockpile with the goals to--

      (1) enhance national energy security; and

      (2) reduce global proliferation threats.

    (b) Source of Material- The Secretary shall obtain material for the stockpile from--

      (1) material derived from blend-down of Russian highly enriched uranium derived from weapons materials; and

      (2) domestically mined and enriched uranium.

    (c) Limitation on Sales or Transfers- Sales or transfer of materials in the stockpile shall occur pursuant to section 3112 of the USEC Privitization Act (42 U.S.C. 2297h-10), as amended by section 630 of this Act.

Subtitle C--Advanced Reactor Hydrogen Cogeneration Project

SEC. 651. PROJECT ESTABLISHMENT.

    The Secretary of Energy (in this subtitle referred to as the ‘Secretary’) is directed to establish an Advanced Reactor Hydrogen Cogeneration Project.

SEC. 652. PROJECT DEFINITION.

    The project shall consist of the research, development, design, construction, and operation of a hydrogen production cogeneration research facility that, relative to the current commercial reactors, enhances safety features, reduces waste production, enhances thermal efficiencies, increases proliferation resistance, and has the potential for improved economics and physical security in reactor siting. This facility shall be constructed so as to enable research and development on advanced reactors of the type selected and on alternative approaches for reactor-based production of hydrogen.

SEC. 653. PROJECT MANAGEMENT.

    (a) Management- The project shall be managed within the Department by the Office of Nuclear Energy, Science, and Technology.

    (b) Lead Laboratory- The lead laboratory for the project, providing the site for the reactor construction, shall be the Idaho National Engineering and Environmental Laboratory (in this subtitle referred to as ‘INEEL’).

    (c) Steering Committee- The Secretary shall establish a national steering committee with membership from the national laboratories, universities, and industry to provide advice to the Secretary and the Director of the Office of Nuclear Energy, Science, and Technology on technical and program management aspects of the project.

    (d) Collaboration- Project activities shall be conducted at INEEL, other national laboratories, universities, domestic industry, and international partners.

SEC. 654. PROJECT REQUIREMENTS.

    (a) Research and Development-

      (1) IN GENERAL- The project shall include planning, research and development, design, and construction of an advanced, next-generation, nuclear energy system suitable for enabling further research and development on advanced reactor technologies and alternative approaches for reactor-based generation of hydrogen.

      (2) REACTOR TEST CAPABILITIES AT INEEL- The project shall utilize, where appropriate, extensive reactor test capabilities resident at INEEL.

      (3) ALTERNATIVES- The project shall be designed to explore technical, environmental, and economic feasibility of alternative approaches for reactor-based hydrogen production.

      (4) INDUSTRIAL LEAD- The industrial lead for the project shall be a company incorporated in the United States.

    (b) International Collaboration-

      (1) IN GENERAL- The Secretary shall seek international cooperation, participation, and financial contribution in this project.

      (2) ASSISTANCE FROM INTERNATIONAL PARTNERS- The Secretary may contract for assistance from specialists or facilities from member countries of the Generation IV International Forum, the Russian Federation, or other international partners where such specialists or facilities provide access to cost-effective and relevant skills or test capabilities.

      (3) GENERATION IV INTERNATIONAL FORUM- International activities shall be coordinated with the Generation IV International Forum.

      (4) GENERATION IV NUCLEAR ENERGY SYSTEMS PROGRAM- The Secretary may combine this project with the Generation IV Nuclear Energy Systems Program.

    (c) Demonstration- The overall project, which may involve demonstration of selected project objectives in a partner nation, must demonstrate both electricity and hydrogen production and may provide flexibility, where technically and economically feasible in the design and construction, to enable tests of alternative reactor core and cooling configurations.

    (d) Partnerships- The Secretary shall establish cost-shared partnerships with domestic industry or international participants for the research, development, design, construction, and operation of the research facility, and preference in determining the final project structure shall be given to an overall project which retains United States leadership while maximizing cost sharing opportunities and minimizing Federal funding responsibilities.

    (e) Target Date- The Secretary shall select technologies and develop the project to provide initial testing of either hydrogen production or electricity generation by 2010, or provide a report to Congress explaining why this date is not feasible.

    (f) Waiver of Construction Timelines- The Secretary is authorized to conduct the Advanced Reactor Hydrogen Cogeneration Project without the constraints of DOE Order 413.3, relating to program and project management for the acquisition of capital assets, as necessary to meet the specified operational date.

    (g) Competition- The Secretary may fund up to 2 teams for up to 1 year to develop detailed proposals for competitive evaluation and selection of a single proposal and concept for further progress. The Secretary shall define the format of the competitive evaluation of proposals.

    (h) Use of Facilities- Research facilities in industry, national laboratories, or universities either within the United States or with cooperating international partners may be used to develop the enabling technologies for the research facility. Utilization of domestic university-based facilities shall be encouraged to provide educational opportunities for student development.

    (i) Role of Nuclear Regulatory Commission-

      (1) IN GENERAL- The Nuclear Regulatory Commission shall have licensing and regulatory authority for any reactor authorized under this subtitle, pursuant to section 202 of the Energy Reorganization Act of 1974 (42 U.S.C. 5842).

      (2) RISK-BASED CRITERIA- The Secretary shall seek active participation of the Nuclear Regulatory Commission throughout the project to develop risk-based criteria for any future commercial development of a similar reactor architecture.

    (j) Report- The Secretary shall develop and transmit to Congress a comprehensive project plan not later than April 30, 2004. The project plan shall be updated annually with each annual budget submission.

SEC. 655. AUTHORIZATION OF APPROPRIATIONS.

    (a) Research, Development, and Design Programs- The following sums are authorized to be appropriated to the Secretary for all activities under this subtitle except for construction activities described in subsection (b):

      (1) For fiscal year 2004, $35,000,000.

      (2) For each of fiscal years 2005 through 2008, $150,000,000.

      (3) For fiscal years beyond 2008, such sums as are necessary.

    (b) Construction- There are authorized to be appropriated to the Secretary for all project-related construction activities, to be available until expended, $500,000,000.

Subtitle D--Nuclear Security

SEC. 661. NUCLEAR FACILITY THREATS.

    (a) Study- The President, in consultation with the Nuclear Regulatory Commission (referred to in this subtitle as the ‘Commission’) and other appropriate Federal, State, and local agencies and private entities, shall conduct a study to identify the types of threats that pose an appreciable risk to the security of the various classes of facilities licensed by the Commission under the Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.). Such study shall take into account, but not be limited to--

      (1) the events of September 11, 2001;

      (2) an assessment of physical, cyber, biochemical, and other terrorist threats;

      (3) the potential for attack on facilities by multiple coordinated teams of a large number of individuals;

      (4) the potential for assistance in an attack from several persons employed at the facility;

      (5) the potential for suicide attacks;

      (6) the potential for water-based and air-based threats;

      (7) the potential use of explosive devices of considerable size and other modern weaponry;

      (8) the potential for attacks by persons with a sophisticated knowledge of facility operations;

      (9) the potential for fires, especially fires of long duration;

      (10) the potential for attacks on spent fuel shipments by multiple coordinated teams of a large number of individuals;

      (11) the adequacy of planning to protect the public health and safety at and around nuclear facilities, as appropriate, in the event of a terrorist attack against a nuclear facility; and

      (12) the potential for theft and diversion of nuclear materials from such facilities.

    (b) Summary and Classification Report- Not later than 180 days after the date of the enactment of this Act, the President shall transmit to Congress and the Commission a report--

      (1) summarizing the types of threats identified under subsection (a); and

      (2) classifying each type of threat identified under subsection (a), in accordance with existing laws and regulations, as either--

        (A) involving attacks and destructive acts, including sabotage, directed against the facility by an enemy of the United States, whether a foreign government or other person, or otherwise falling under the responsibilities of the Federal Government; or

        (B) involving the type of risks that Commission licensees should be responsible for guarding against.

    (c) Federal Action Report- Not later than 90 days after the date on which a report is transmitted under subsection (b), the President shall transmit to Congress a report on actions taken, or to be taken, to address the types of threats identified under subsection (b)(2)(A), including identification of the Federal, State, and local agencies responsible for carrying out the obligations and authorities of the United States. Such report may include a classified annex, as appropriate.

    (d) Regulations- Not later than 180 days after the date on which a report is transmitted under subsection (b), the Commission may revise, by rule, the design basis threats issued before the date of enactment of this section as the Commission considers appropriate based on the summary and classification report.

    (e) Physical Security Program- The Commission shall establish an operational safeguards response evaluation program that ensures that the physical protection capability and operational safeguards response for sensitive nuclear facilities, as determined by the Commission consistent with the protection of public health and the common defense and security, shall be tested periodically through Commission approved or designed, observed, and evaluated force-on-force exercises to determine whether the ability to defeat the design basis threat is being maintained. For purposes of this subsection, the term ‘sensitive nuclear facilities’ includes at a minimum commercial nuclear power plants and category I fuel cycle facilities.

    (f) Control of Information- Notwithstanding any other provision of law, the Commission may undertake any rulemaking under this subtitle in a manner that will fully protect safeguards and classified national security information.

    (g) Federal Security Coordinators-

      (1) REGIONAL OFFICES- Not later than 18 months after the date of enactment of this Act, the Commission shall assign a Federal security coordinator, under the employment of the Commission, to each region of the Commission.

      (2) RESPONSIBILITIES- The Federal security coordinator shall be responsible for--

        (A) communicating with the Commission and other Federal, State, and local authorities concerning threats, including threats against such classes of facilities as the Commission determines to be appropriate;

        (B) ensuring that such classes of facilities as the Commission determines to be appropriate maintain security consistent with the security plan in accordance with the appropriate threat level; and

        (C) assisting in the coordination of security measures among the private security forces at such classes of facilities as the Commission determines to be appropriate and Federal, State, and local authorities, as appropriate.

    (h) Training Program- The President shall establish a program to provide technical assistance and training to Federal agencies, the National Guard, and State and local law enforcement and emergency response agencies in responding to threats against a designated nuclear facility.

SEC. 662. FINGERPRINTING FOR CRIMINAL HISTORY RECORD CHECKS.

    (a) In General- Subsection a. of section 149 of the Atomic Energy Act of 1954 (42 U.S.C. 2169(a)) is amended--

      (1) by striking ‘a. The Nuclear’ and all that follows through ‘section 147.’ and inserting the following:

    ‘a. In General-

      ‘(1) REQUIREMENTS-

        ‘(A) IN GENERAL- The Commission shall require each individual or entity--

          ‘(i) that is licensed or certified to engage in an activity subject to regulation by the Commission;

          ‘(ii) that has filed an application for a license or certificate to engage in an activity subject to regulation by the Commission; or

          ‘(iii) that has notified the Commission, in writing, of an intent to file an application for licensing, certification, permitting, or approval of a product or activity subject to regulation by the Commission,

        to fingerprint each individual described in subparagraph (B) before the individual is permitted unescorted access or access, whichever is applicable, as described in subparagraph (B).

        ‘(B) INDIVIDUALS REQUIRED TO BE FINGERPRINTED- The Commission shall require to be fingerprinted each individual who--

          ‘(i) is permitted unescorted access to--

            ‘(I) a utilization facility; or

            ‘(II) radioactive material or other property subject to regulation by the Commission that the Commission determines to be of such significance to the public health and safety or the common defense and security as to warrant fingerprinting and background checks; or

          ‘(ii) is permitted access to safeguards information under section 147.’;

      (2) by striking ‘All fingerprints obtained by a licensee or applicant as required in the preceding sentence’ and inserting the following:

      ‘(2) SUBMISSION TO THE ATTORNEY GENERAL- All fingerprints obtained by an individual or entity as required in paragraph (1)’;

      (3) by striking ‘The costs of any identification and records check conducted pursuant to the preceding sentence shall be paid by the licensee or applicant.’ and inserting the following:

      ‘(3) COSTS- The costs of any identification and records check conducted pursuant to paragraph (1) shall be paid by the individual or entity required to conduct the fingerprinting under paragraph (1)(A).’; and

      (4) by striking ‘Notwithstanding any other provision of law, the Attorney General may provide all the results of the search to the Commission, and, in accordance with regulations prescribed under this section, the Commission may provide such results to licensee or applicant submitting such fingerprints.’ and inserting the following:

      ‘(4) PROVISION TO INDIVIDUAL OR ENTITY REQUIRED TO CONDUCT FINGERPRINTING- Notwithstanding any other provision of law, the Attorney General may provide all the results of the search to the Commission, and, in accordance with regulations prescribed under this section, the Commission may provide such results to the individual or entity required to conduct the fingerprinting under paragraph (1)(A).’.

    (b) Administration- Subsection c. of section 149 of the Atomic Energy Act of 1954 (42 U.S.C. 2169(c)) is amended--

      (1) by striking ‘, subject to public notice and comment, regulations--’ and inserting ‘requirements--’; and

      (2) by striking, in paragraph (2)(B), ‘unescorted access to the facility of a licensee or applicant’ and inserting ‘unescorted access to a utilization facility, radioactive material, or other property described in subsection a.(1)(B)’.

    (c) Biometric Methods- Subsection d. of section 149 of the Atomic Energy Act of 1954 (42 U.S.C. 2169(d)) is redesignated as subsection e., and the following is inserted after subsection c.:

    ‘d. Use of Other Biometric Methods- The Commission may satisfy any requirement for a person to conduct fingerprinting under this section using any other biometric method for identification approved for use by the Attorney General, after the Commission has approved the alternative method by rule.’.

SEC. 663. USE OF FIREARMS BY SECURITY PERSONNEL OF LICENSEES AND CERTIFICATE HOLDERS OF THE COMMISSION.

    Section 161 of the Atomic Energy Act of 1954 (42 U.S.C. 2201) is amended by adding at the end the following subsection:

      ‘(z)(1) notwithstanding section 922(o), (v), and (w) of title 18, United States Code, or any similar provision of any State law or any similar rule or regulation of a State or any political subdivision of a State prohibiting the transfer or possession of a handgun, a rifle or shotgun, a short-barreled shotgun, a short-barreled rifle, a machinegun, a semiautomatic assault weapon, ammunition for the foregoing, or a large capacity ammunition feeding device, authorize security personnel of licensees and certificate holders of the Commission (including employees of contractors of licensees and certificate holders) to receive, possess, transport, import, and use 1 or more of those weapons, ammunition, or devices, if the Commission determines that--

        ‘(A) such authorization is necessary to the discharge of the security personnel’s official duties; and

        ‘(B) the security personnel--

          ‘(i) are not otherwise prohibited from possessing or receiving a firearm under Federal or State laws pertaining to possession of firearms by certain categories of persons;

          ‘(ii) have successfully completed requirements established through guidelines implementing this subsection for training in use of firearms and tactical maneuvers;

          ‘(iii) are engaged in the protection of--

            ‘(I) facilities owned or operated by a Commission licensee or certificate holder that are designated by the Commission; or

            ‘(II) radioactive material or other property owned or possessed by a person that is a licensee or certificate holder of the Commission, or that is being transported to or from a facility owned or operated by such a licensee or certificate holder, and that has been determined by the Commission to be of significance to the common defense and security or public health and safety; and

          ‘(iv) are discharging their official duties.

      ‘(2) Such receipt, possession, transportation, importation, or use shall be subject to--

        ‘(A) chapter 44 of title 18, United States Code, except for section 922(a)(4), (o), (v), and (w);

        ‘(B) chapter 53 of title 26, United States Code, except for section 5844; and

        ‘(C) a background check by the Attorney General, based on fingerprints and including a check of the system established under section 103(b) of the Brady Handgun Violence Prevention Act (18 U.S.C. 922 note) to determine whether the person applying for the authority is prohibited from possessing or receiving a firearm under Federal or State law.

      ‘(3) This subsection shall become effective upon the issuance of guidelines by the Commission, with the approval of the Attorney General, to govern the implementation of this subsection.

      ‘(4) In this subsection, the terms ‘handgun’, ‘rifle’, ‘shotgun’, ‘firearm’, ‘ammunition’, ‘machinegun’, ‘semiautomatic assault weapon’, ‘large capacity ammunition feeding device’, ‘short-barreled shotgun’, and ‘short-barreled rifle’ shall have the meanings given those terms in section 921(a) of title 18, United States Code.’.

SEC. 664. UNAUTHORIZED INTRODUCTION OF DANGEROUS WEAPONS.

    Section 229 a. of the Atomic Energy Act of 1954 (42 U.S.C. 2278a(a)) is amended in the first sentence by inserting ‘or subject to the licensing authority of the Commission or to certification by the Commission under this Act or any other Act’ before the period at the end.

SEC. 665. SABOTAGE OF NUCLEAR FACILITIES OR FUEL.

    (a) In General- Section 236 a. of the Atomic Energy Act of 1954 (42 U.S.C. 2284(a)) is amended--

      (1) in paragraph (2), by striking ‘storage facility’ and inserting ‘storage, treatment, or disposal facility’;

      (2) in paragraph (3)--

        (A) by striking ‘such a utilization facility’ and inserting ‘a utilization facility licensed under this Act’; and

        (B) by striking ‘or’ at the end;

      (3) in paragraph (4)--

        (A) by striking ‘facility licensed’ and inserting ‘, uranium conversion, or nuclear fuel fabrication facility licensed or certified’; and

        (B) by striking the comma at the end and inserting a semicolon; and

      (4) by inserting after paragraph (4) the following:

      ‘(5) any production, utilization, waste storage, waste treatment, waste disposal, uranium enrichment, uranium conversion, or nuclear fuel fabrication facility subject to licensing or certification under this Act during construction of the facility, if the destruction or damage caused or attempted to be caused could adversely affect public health and safety during the operation of the facility;

      ‘(6) any primary facility or backup facility from which a radiological emergency preparedness alert and warning system is activated; or

      ‘(7) any radioactive material or other property subject to regulation by the Nuclear Regulatory Commission that, before the date of the offense, the Nuclear Regulatory Commission determines, by order or regulation published in the Federal Register, is of significance to the public health and safety or to common defense and security,’.

    (b) Penalties- Section 236 of the Atomic Energy Act of 1954 (42 U.S.C. 2284) is amended by striking ‘$10,000 or imprisoned for not more than 20 years, or both, and, if death results to any person, shall be imprisoned for any term of years or for life’ both places it appears and inserting ‘$1,000,000 or imprisoned for up to life without parole’.

SEC. 666. SECURE TRANSFER OF NUCLEAR MATERIALS.

    (a) Amendment- Chapter 14 of the Atomic Energy Act of 1954 (42 U.S.C. 2201-2210b) is amended by adding at the end the following new section:

‘SEC. 170C. SECURE TRANSFER OF NUCLEAR MATERIALS.

    ‘a. The Nuclear Regulatory Commission shall establish a system to ensure that materials described in subsection b., when transferred or received in the United States by any party pursuant to an import or export license issued pursuant to this Act, are accompanied by a manifest describing the type and amount of materials being transferred or received. Each individual receiving or accompanying the transfer of such materials shall be subject to a security background check conducted by appropriate Federal entities.

    ‘b. Except as otherwise provided by the Commission by regulation, the materials referred to in subsection a. are byproduct materials, source materials, special nuclear materials, high-level radioactive waste, spent nuclear fuel, transuranic waste, and low-level radioactive waste (as defined in section 2(16) of the Nuclear Waste Policy Act of 1982 (42 U.S.C. 10101(16))).’.

    (b) Regulations- Not later than 1 year after the date of the enactment of this Act, and from time to time thereafter as it considers necessary, the Nuclear Regulatory Commission shall issue regulations identifying radioactive materials or classes of individuals that, consistent with the protection of public health and safety and the common defense and security, are appropriate exceptions to the requirements of section 170C of the Atomic Energy Act of 1954, as added by subsection (a) of this section.

    (c) Effective Date- The amendment made by subsection (a) shall take effect upon the issuance of regulations under subsection (b), except that the background check requirement shall become effective on a date established by the Commission.

    (d) Effect on Other Law- Nothing in this section or the amendment made by this section shall waive, modify, or affect the application of chapter 51 of title 49, United States Code, part A of subtitle V of title 49, United States Code, part B of subtitle VI of title 49, United States Code, and title 23, United States Code.

    (e) Table of Sections Amendment- The table of sections for chapter 14 of the Atomic Energy Act of 1954 is amended by adding at the end the following new item:

      ‘Sec. 170C. Secure transfer of nuclear materials.’.

SEC. 667. DEPARTMENT OF HOMELAND SECURITY CONSULTATION.

    Before issuing a license for a utilization facility, the Nuclear Regulatory Commission shall consult with the Department of Homeland Security concerning the potential vulnerabilities of the location of the proposed facility to terrorist attack.

SEC. 668. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General- There are authorized to be appropriated such sums as are necessary to carry out this subtitle and the amendments made by this subtitle.

    (b) Aggregate Amount of Charges- Section 6101(c)(2)(A) of the Omnibus Budget Reconciliation Act of 1990 (42 U.S.C. 2214(c)(2)(A)) is amended--

      (1) in clause (i), by striking ‘and’ at the end;

      (2) in clause (ii), by striking the period at the end and inserting ‘; and’ and

      (3) by adding at the end the following:

          ‘(iii) amounts appropriated to the Commission for homeland security activities of the Commission for the fiscal year, except for the costs of fingerprinting and background checks required by section 149 of the Atomic Energy Act of 1954 (42 U.S.C. 2169) and the costs of conducting security inspections.’.

TITLE VII--VEHICLES AND FUELS

Subtitle A--Existing Programs

SEC. 701. USE OF ALTERNATIVE FUELS BY DUAL-FUELED VEHICLES.

    Section 400AA(a)(3)(E) of the Energy Policy and Conservation Act (42 U.S.C. 6374(a)(3)(E)) is amended to read as follows:

    ‘(E)(i) Dual fueled vehicles acquired pursuant to this section shall be operated on alternative fuels unless the Secretary determines that an agency qualifies for a waiver of such requirement for vehicles operated by the agency in a particular geographic area in which--

      ‘(I) the alternative fuel otherwise required to be used in the vehicle is not reasonably available to retail purchasers of the fuel, as certified to the Secretary by the head of the agency; or

      ‘(II) the cost of the alternative fuel otherwise required to be used in the vehicle is unreasonably more expensive compared to gasoline, as certified to the Secretary by the head of the agency.

    ‘(ii) The Secretary shall monitor compliance with this subparagraph by all such fleets and shall report annually to Congress on the extent to which the requirements of this subparagraph are being achieved. The report shall include information on annual reductions achieved from the use of petroleum-based fuels and the problems, if any, encountered in acquiring alternative fuels.’.

SEC. 702. NEIGHBORHOOD ELECTRIC VEHICLES.

    (a) Amendments- Section 301 of the Energy Policy Act of 1992 (42 U.S.C. 13211) is amended--

      (1) in paragraph (3), by striking ‘or a dual fueled vehicle’ and inserting ‘, a dual fueled vehicle, or a neighborhood electric vehicle’;

      (2) in paragraph (13), by striking ‘and’ at the end;

      (3) in paragraph (14), by striking the period at the end and inserting ‘; and’; and

      (4) by adding at the end the following:

      ‘(15) the term ‘neighborhood electric vehicle’ means a motor vehicle that--

        ‘(A) meets the definition of a low-speed vehicle (as defined in part 571 of title 49, Code of Federal Regulations);

        ‘(B) meets the definition of a zero-emission vehicle (as defined in section 86.1702-99 of title 40, Code of Federal Regulations);

        ‘(C) meets the requirements of Federal Motor Vehicle Safety Standard No. 500; and

        ‘(D) has a maximum speed of not greater than 25 miles per hour.’.

    (b) Credits- Notwithstanding section 508 of the Energy Policy Act of 1992 (42 U.S.C. 13258) or any other provision of law, a neighborhood electric vehicle shall not be allocated credit as more than 1 vehicle for purposes of determining compliance with any requirement under title III or title V of such Act.

SEC. 703. CREDITS FOR MEDIUM AND HEAVY DUTY DEDICATED VEHICLES.

    Section 508 of the Energy Policy Act of 1992 (42 U.S.C. 13258) is amended by adding at the end the following:

    ‘(e) Credit for Purchase of Medium and Heavy Duty Dedicated Vehicles-

      ‘(1) DEFINITIONS- In this subsection:

        ‘(A) HEAVY DUTY DEDICATED VEHICLE- The term ‘heavy duty dedicated vehicle’ means a dedicated vehicle that has a gross vehicle weight rating of more than 14,000 pounds.

        ‘(B) MEDIUM DUTY DEDICATED VEHICLE- The term ‘medium duty dedicated vehicle’ means a dedicated vehicle that has a gross vehicle weight rating of more than 8,500 pounds but not more than 14,000 pounds.

      ‘(2) CREDITS FOR MEDIUM DUTY VEHICLES- The Secretary shall issue 2 full credits to a fleet or covered person under this title, if the fleet or covered person acquires a medium duty dedicated vehicle.

      ‘(3) CREDITS FOR HEAVY DUTY VEHICLES- The Secretary shall issue 3 full credits to a fleet or covered person under this title, if the fleet or covered person acquires a heavy duty dedicated vehicle.

      ‘(4) USE OF CREDITS- At the request of a fleet or covered person allocated a credit under this subsection, the Secretary shall, for the year in which the acquisition of the dedicated vehicle is made, treat that credit as the acquisition of 1 alternative fueled vehicle that the fleet or covered person is required to acquire under this title.’.

SEC. 704. INCREMENTAL COST ALLOCATION.

    Section 303(c) of the Energy Policy Act of 1992 (42 U.S.C. 13212(c)) is amended by striking ‘may’ and inserting ‘shall’.

SEC. 705. ALTERNATIVE COMPLIANCE AND FLEXIBILITY.

    (a) Alternative Compliance-

      (1) IN GENERAL- Title V of the Energy Policy Act of 1992 (42 U.S.C. 13251 et seq.) is amended--

        (A) by redesignating section 514 as section 515; and

        (B) by inserting after section 513 the following:

‘SEC. 514. ALTERNATIVE COMPLIANCE.

    ‘(a) Application for Waiver- Any covered person subject to section 501 and any State subject to section 507(o) may petition the Secretary for a waiver of the applicable requirements of section 501 or 507(o).

    ‘(b) Grant of Waiver- The Secretary may grant a waiver of the requirements of section 501 or 507(o) upon a showing that the fleet owned, operated, leased, or otherwise controlled by the State or covered person--

      ‘(1) will achieve a reduction in its annual consumption of petroleum fuels equal to the reduction in consumption of petroleum that would result from 100 percent compliance with fuel use requirements in section 501, or, for entities covered under section 507(o), a reduction equal to the covered State entity’s consumption of alternative fuels if all its alternative fuel vehicles given credit under section 508 were to use alternative fuel 100 percent of the time; and

      ‘(2) is in compliance with all applicable vehicle emission standards established by the Administrator under the Clean Air Act (42 U.S.C. 7401 et seq.).

    ‘(c) Revocation of Waiver- The Secretary shall revoke any waiver granted under this section if the State or covered person fails to comply with subsection (b).’.

      (2) TABLE OF CONTENTS AMENDMENT- The table of contents of the Energy Policy Act of 1992 (42 U.S.C. prec. 13201) is amended by striking the item relating to section 514 and inserting the following:

      ‘Sec. 514. Alternative compliance.

      ‘Sec. 515. Authorization of appropriations.’.

    (b) Credits- Section 508 of the Energy Policy Act of 1992 (42 U.S.C. 13258) (as amended by section 703) is amended--

      (1) by redesignating subsections (b) through (e) as subsections (c) through (f), respectively;

      (2) by striking subsection (a) and inserting the following:

    ‘(a) In General- The Secretary shall allocate a credit to a fleet or covered person that is required to acquire an alternative fueled vehicle under this title, if that fleet or person acquires an alternative fueled vehicle--

      ‘(1) in excess of the number that fleet or person is required to acquire under this title;

      ‘(2) before the date on which that fleet or person is required to acquire an alternative fueled vehicle under this title; or

      ‘(3) that is eligible to receive credit under subsection (b).

    ‘(b) Maximum Available Power- The Secretary shall allocate credit to a fleet under subsection (a)(3) for the acquisition by the fleet of a hybrid vehicle as follows:

      ‘(1) For a hybrid vehicle with at least 4 percent but less than 10 percent maximum available power, the Secretary shall allocate 25 percent of 1 credit.

      ‘(2) For a hybrid vehicle with at least 10 percent but less than 20 percent maximum available power, the Secretary shall allocate 50 percent of 1 credit.

      ‘(3) For a hybrid vehicle with at least 20 percent but less than 30 percent maximum available power, the Secretary shall allocate 75 percent of 1 credit.

      ‘(4) For a hybrid vehicle with 30 percent or more maximum available power, the Secretary shall allocate 1 credit.’; and

      (3) by adding at the end the following:

    ‘(g) Credit for Investment in Alternative Fuel Infrastructure-

      ‘(1) DEFINITION OF QUALIFYING INFRASTRUCTURE- In this subsection, the term ‘qualifying infrastructure’ means--

        ‘(A) equipment required to refuel or recharge alternative fueled vehicles;

        ‘(B) facilities or equipment required to maintain, repair, or operate alternative fueled vehicles; and

        ‘(C) such other activities as the Secretary considers to constitute an appropriate expenditure in support of the operation, maintenance, or further widespread adoption of or utilization of alternative fueled vehicles.

      ‘(2) ISSUANCE OF CREDITS- The Secretary shall issue a credit to a fleet or covered person under this title for investment in qualifying infrastructure if the qualifying infrastructure is open to the general public during regular business hours.

      ‘(3) AMOUNT- For the purpose of credits under this subsection--

        ‘(A) 1 credit shall be equal to a minimum investment of $25,000 in cash or equivalent expenditure, as determined by the Secretary; and

        ‘(B) except in the case of a Federal or State fleet, no part of the investment may be provided by Federal or State funds.

      ‘(4) USE OF CREDITS- At the request of a fleet or covered person allocated a credit under this subsection, the Secretary shall, for the year in which the investment is made, treat that credit as the acquisition of 1 alternative fueled vehicle that the fleet or covered person is required to acquire under this title.

    ‘(h) Definition of Maximum Available Power- In this section, the term ‘maximum available power’ means the quotient obtained by dividing--

      ‘(1) the maximum power available from the energy storage device of a hybrid vehicle, during a standard 10-second pulse power or equivalent test; by

      ‘(2) the sum of--

        ‘(A) the maximum power described in subparagraph (A); and

        ‘(B) the net power of the internal combustion or heat engine, as determined in accordance with standards established by the Society of Automobile Engineers.’.

    (c) Lease Condensate Fuels- Section 301 of the Energy Policy Act of 1992 (42 U.S.C. 13211) (as amended by section 702) is amended--

      (1) in paragraph (2), by inserting ‘mixtures containing 50 percent or more by volume of lease condensate or fuels extracted from lease condensate;’ after ‘liquefied petroleum gas;’;

      (2) in paragraph (14)--

        (A) by inserting ‘mixtures containing 50 percent or more by volume of lease condensate or fuels extracted from lease condensate,’ after ‘liquefied petroleum gas,’; and

        (B) by striking ‘and’ at the end;

      (3) in paragraph (15), by striking the period at the end and inserting ‘; and’; and

      (4) by adding at the end the following:

      ‘(16) the term ‘lease condensate’ means a mixture, primarily of pentanes and heavier hydrocarbons, that is recovered as a liquid from natural gas in lease separation facilities.’.

    (d) Lease Condensate Use Credits-

      (1) IN GENERAL- Title III of the Energy Policy Act of 1992 (42 U.S.C. 13211 et seq.) is amended by adding at the end the following:

‘SEC. 313. LEASE CONDENSATE USE CREDITS.

    ‘(a) In General- Subject to subsection (d), the Secretary shall allocate 1 credit under this section to a fleet or covered person for each qualifying volume of the lease condensate component of fuel containing at least 50 percent lease condensate, or fuels extracted from lease condensate, after the date of enactment of this section for use by the fleet or covered person in vehicles owned or operated by the fleet or covered person that weigh more than 8,500 pounds gross vehicle weight rating.

    ‘(b) Requirements- A credit allocated under this section--

      ‘(1) shall be subject to the same exceptions, authority, documentation, and use of credits that are specified for qualifying volumes of biodiesel in section 312; and

      ‘(2) shall not be considered a credit under section 508.

    ‘(c) Regulation-

      ‘(1) IN GENERAL- Subject to subsection (d), not later than January 1, 2004, after the collection of appropriate information and data that consider usage options, uses in other industries, products, or processes, potential volume capacities, costs, air emissions, and fuel efficiencies, the Secretary shall issue a regulation establishing requirements and procedures for the implementation of this section.

      ‘(2) QUALIFYING VOLUME- The regulation shall include a determination of an appropriate qualifying volume for lease condensate, except that in no case shall the Secretary determine that the qualifying volume for lease condensate is less than 1,125 gallons.

    ‘(d) Applicability- This section applies unless the Secretary finds that the use of lease condensate as an alternative fuel would adversely affect public health or safety or ambient air quality or the environment.’.

      (2) TABLE OF CONTENTS AMENDMENT- The table of contents of the Energy Policy Act of 1992 (42 U.S.C. prec. 13201) is amended by adding at the end of the items relating to title III the following:

      ‘Sec. 313. Lease condensate use credits.’.

    (e) Emergency Exemption- Section 301 of the Energy Policy Act of 1992 (42 U.S.C. 13211) (as amended by section 702 and this section) is amended in paragraph (9)(E) by inserting before the semicolon at the end ‘, including vehicles directly used in the emergency repair of transmission lines and in the restoration of electricity service following power outages, as determined by the Secretary’.

SEC. 706. REVIEW OF ENERGY POLICY ACT OF 1992 PROGRAMS.

    (a) In General- Not later than 180 days after the date of enactment of this section, the Secretary of Energy shall complete a study to determine the effect that titles III, IV, and V of the Energy Policy Act of 1992 (42 U.S.C. 13211 et seq.) have had on--

      (1) the development of alternative fueled vehicle technology;

      (2) the availability of that technology in the market; and

      (3) the cost of alternative fueled vehicles.

    (b) Topics- As part of the study under subsection (a), the Secretary shall specifically identify--

      (1) the number of alternative fueled vehicles acquired by fleets or covered persons required to acquire alternative fueled vehicles;

      (2) the quantity, by type, of alternative fuel actually used in alternative fueled vehicles acquired by fleets or covered persons;

      (3) the quantity of petroleum displaced by the use of alternative fuels in alternative fueled vehicles acquired by fleets or covered persons;

      (4) the direct and indirect costs of compliance with requirements under titles III, IV, and V of the Energy Policy Act of 1992 (42 U.S.C. 13211 et seq.), including--

        (A) vehicle acquisition requirements imposed on fleets or covered persons;

        (B) administrative and recordkeeping expenses;

        (C) fuel and fuel infrastructure costs;

        (D) associated training and employee expenses; and

        (E) any other factors or expenses the Secretary determines to be necessary to compile reliable estimates of the overall costs and benefits of complying with programs under those titles for fleets, covered persons, and the national economy;

      (5) the existence of obstacles preventing compliance with vehicle acquisition requirements and increased use of alternative fuel in alternative fueled vehicles acquired by fleets or covered persons; and

      (6) the projected impact of amendments to the Energy Policy Act of 1992 made by this title.

    (c) Report- Upon completion of the study under this section, the Secretary shall submit to Congress a report that describes the results of the study and includes any recommendations of the Secretary for legislative or administrative changes concerning the alternative fueled vehicle requirements under titles III, IV and V of the Energy Policy Act of 1992 (42 U.S.C. 13211 et seq.).

SEC. 707. REPORT CONCERNING COMPLIANCE WITH ALTERNATIVE FUELED VEHICLE PURCHASING REQUIREMENTS.

    Section 310(b)(1) of the Energy Policy Act of 1992 (42 U.S.C. 13218(b)(1)) is amended by striking ‘1 year after the date of enactment of this subsection’ and inserting ‘February 15, 2004’.

Subtitle B--Hybrid Vehicles, Advanced Vehicles, and Fuel Cell Buses

PART I--HYBRID VEHICLES

SEC. 711. HYBRID VEHICLES.

    The Secretary of Energy shall accelerate efforts directed toward the improvement of batteries and other rechargeable energy storage systems, power electronics, hybrid systems integration, and other technologies for use in hybrid vehicles.

PART II--ADVANCED VEHICLES

SEC. 721. DEFINITIONS.

    In this part:

      (1) ALTERNATIVE FUELED VEHICLE-

        (A) IN GENERAL- The term ‘alternative fueled vehicle’ means a vehicle propelled solely on an alternative fuel (as defined in section 301 of the Energy Policy Act of 1992 (42 U.S.C. 13211)).

        (B) EXCLUSION- The term ‘alternative fueled vehicle’ does not include a vehicle that the Secretary determines, by regulation, does not yield substantial environmental benefits over a vehicle operating solely on gasoline or diesel derived from fossil fuels.

      (2) FUEL CELL VEHICLE- The term ‘fuel cell vehicle’ means a vehicle propelled by an electric motor powered by a fuel cell system that converts chemical energy into electricity by combining oxygen (from air) with hydrogen fuel that is stored on the vehicle or is produced onboard by reformation of a hydrocarbon fuel. Such fuel cell system may or may not include the use of auxiliary energy storage systems to enhance vehicle performance.

      (3) HYBRID VEHICLE- The term ‘hybrid vehicle’ means a medium or heavy duty vehicle propelled by an internal combustion engine or heat engine using any combustible fuel and an onboard rechargeable energy storage device.

      (4) NEIGHBORHOOD ELECTRIC VEHICLE- The term ‘neighborhood electric vehicle’ means a motor vehicle that--

        (A) meets the definition of a low-speed vehicle (as defined in part 571 of title 49, Code of Federal Regulations);

        (B) meets the definition of a zero-emission vehicle (as defined in section 86.1702-99 of title 40, Code of Federal Regulations);

        (C) meets the requirements of Federal Motor Vehicle Safety Standard No. 500; and

        (D) has a maximum speed of not greater than 25 miles per hour.

      (5) PILOT PROGRAM- The term ‘pilot program’ means the competitive grant program established under section 722.

      (6) SECRETARY- The term ‘Secretary’ means the Secretary of Energy.

      (7) ULTRA-LOW SULFUR DIESEL VEHICLE- The term ‘ultra-low sulfur diesel vehicle’ means a vehicle manufactured in any of model years 2003 through 2006 powered by a heavy-duty diesel engine that--

        (A) is fueled by diesel fuel that contains sulfur at not more than 15 parts per million; and

        (B) emits not more than the lesser of--

          (i) for vehicles manufactured in--

            (I) model year 2003, 3.0 grams per brake horsepower-hour of oxides of nitrogen and .01 grams per brake horsepower-hour of particulate matter; and

            (II) model years 2004 through 2006, 2.5 grams per brake horsepower-hour of nonmethane hydrocarbons and oxides of nitrogen and .01 grams per brake horsepower-hour of particulate matter; or

          (ii) the quantity of emissions of nonmethane hydrocarbons, oxides of nitrogen, and particulate matter of the best-performing technology of ultra-low sulfur diesel vehicles of the same class and application that are commercially available.

SEC. 722. PILOT PROGRAM.

    (a) Establishment- The Secretary, in consultation with the Secretary of Transportation, shall establish a competitive grant pilot program, to be administered through the Clean Cities Program of the Department of Energy, to provide not more than 15 geographically dispersed project grants to State governments, local governments, or metropolitan transportation authorities to carry out a project or projects for the purposes described in subsection (b).

    (b) Grant Purposes- A grant under this section may be used for the following purposes:

      (1) The acquisition of alternative fueled vehicles or fuel cell vehicles, including--

        (A) passenger vehicles (including neighborhood electric vehicles); and

        (B) motorized 2-wheel bicycles, scooters, or other vehicles for use by law enforcement personnel or other State or local government or metropolitan transportation authority employees.

      (2) The acquisition of alternative fueled vehicles, hybrid vehicles, or fuel cell vehicles, including--

        (A) buses used for public transportation or transportation to and from schools;

        (B) delivery vehicles for goods or services; and

        (C) ground support vehicles at public airports (including vehicles to carry baggage or push or pull airplanes toward or away from terminal gates).

      (3) The acquisition of ultra-low sulfur diesel vehicles.

      (4) Installation or acquisition of infrastructure necessary to directly support an alternative fueled vehicle, fuel cell vehicle, or hybrid vehicle project funded by the grant, including fueling and other support equipment.

      (5) Operation and maintenance of vehicles, infrastructure, and equipment acquired as part of a project funded by the grant.

    (c) Applications-

      (1) REQUIREMENTS-

        (A) IN GENERAL- The Secretary shall issue requirements for applying for grants under the pilot program.

        (B) MINIMUM REQUIREMENTS- At a minimum, the Secretary shall require that an application for a grant--

          (i) be submitted by the head of a State or local government or a metropolitan transportation authority, or any combination thereof, and a registered participant in the Clean Cities Program of the Department of Energy; and

          (ii) include--

            (I) a description of the project proposed in the application, including how the project meets the requirements of this part;

            (II) an estimate of the ridership or degree of use of the project;

            (III) an estimate of the air pollution emissions reduced and fossil fuel displaced as a result of the project, and a plan to collect and disseminate environmental data, related to the project to be funded under the grant, over the life of the project;

            (IV) a description of how the project will be sustainable without Federal assistance after the completion of the term of the grant;

            (V) a complete description of the costs of the project, including acquisition, construction, operation, and maintenance costs over the expected life of the project;

            (VI) a description of which costs of the project will be supported by Federal assistance under this part; and

            (VII) documentation to the satisfaction of the Secretary that diesel fuel containing sulfur at not more than 15 parts per million is available for carrying out the project, and a commitment by the applicant to use such fuel in carrying out the project.

      (2) PARTNERS- An applicant under paragraph (1) may carry out a project under the pilot program in partnership with public and private entities.

    (d) Selection Criteria- In evaluating applications under the pilot program, the Secretary shall--

      (1) consider each applicant’s previous experience with similar projects; and

      (2) give priority consideration to applications that--

        (A) are most likely to maximize protection of the environment;

        (B) demonstrate the greatest commitment on the part of the applicant to ensure funding for the proposed project and the greatest likelihood that the project will be maintained or expanded after Federal assistance under this part is completed; and

        (C) exceed the minimum requirements of subsection (c)(1)(B)(ii).

    (e) Pilot Project Requirements-

      (1) MAXIMUM AMOUNT- The Secretary shall not provide more than $20,000,000 in Federal assistance under the pilot program to any applicant.

      (2) COST SHARING- The Secretary shall not provide more than 50 percent of the cost, incurred during the period of the grant, of any project under the pilot program.

      (3) MAXIMUM PERIOD OF GRANTS- The Secretary shall not fund any applicant under the pilot program for more than 5 years.

      (4) DEPLOYMENT AND DISTRIBUTION- The Secretary shall seek to the maximum extent practicable to ensure a broad geographic distribution of project sites.

      (5) TRANSFER OF INFORMATION AND KNOWLEDGE- The Secretary shall establish mechanisms to ensure that the information and knowledge gained by participants in the pilot program are transferred among the pilot program participants and to other interested parties, including other applicants that submitted applications.

    (f) Schedule-

      (1) PUBLICATION- Not later than 90 days after the date of enactment of this Act, the Secretary shall publish in the Federal Register, Commerce Business Daily, and elsewhere as appropriate, a request for applications to undertake projects under the pilot program. Applications shall be due not later than 180 days after the date of publication of the notice.

      (2) SELECTION- Not later than 180 days after the date by which applications for grants are due, the Secretary shall select by competitive, peer reviewed proposal, all applications for projects to be awarded a grant under the pilot program.

    (g) Limit on Funding- The Secretary shall provide not less than 20 nor more than 25 percent of the grant funding made available under this section for the acquisition of ultra-low sulfur diesel vehicles.

SEC. 723. REPORTS TO CONGRESS.

    (a) Initial Report- Not later than 60 days after the date on which grants are awarded under this part, the Secretary shall submit to Congress a report containing--

      (1) an identification of the grant recipients and a description of the projects to be funded;

      (2) an identification of other applicants that submitted applications for the pilot program; and

      (3) a description of the mechanisms used by the Secretary to ensure that the information and knowledge gained by participants in the pilot program are transferred among the pilot program participants and to other interested parties, including other applicants that submitted applications.

    (b) Evaluation- Not later than 3 years after the date of enactment of this Act, and annually thereafter until the pilot program ends, the Secretary shall submit to Congress a report containing an evaluation of the effectiveness of the pilot program, including--

      (1) an assessment of the benefits to the environment derived from the projects included in the pilot program; and

      (2) an estimate of the potential benefits to the environment to be derived from widespread application of alternative fueled vehicles and ultra-low sulfur diesel vehicles.

SEC. 724. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Secretary to carry out this part $200,000,000, to remain available until expended.

PART III--FUEL CELL BUSES

SEC. 731. FUEL CELL TRANSIT BUS DEMONSTRATION.

    (a) In General- The Secretary of Energy, in consultation with the Secretary of Transportation, shall establish a transit bus demonstration program to make competitive, merit-based awards for 5-year projects to demonstrate not more than 25 fuel cell transit buses (and necessary infrastructure) in 5 geographically dispersed localities.

    (b) Preference- In selecting projects under this section, the Secretary of Energy shall give preference to projects that are most likely to mitigate congestion and improve air quality.

    (c) Authorization of Appropriations- There are authorized to be appropriated to the Secretary of Energy to carry out this section $10,000,000 for each of fiscal years 2004 through 2008.

Subtitle C--Clean School Buses

SEC. 741. DEFINITIONS.

    In this subtitle:

      (1) ADMINISTRATOR- The term ‘Administrator’ means the Administrator of the Environmental Protection Agency.

      (2) ALTERNATIVE FUEL- The term ‘alternative fuel’ means liquefied natural gas, compressed natural gas, liquefied petroleum gas, hydrogen, propane, or methanol or ethanol at no less than 85 percent by volume.

      (3) ALTERNATIVE FUEL SCHOOL BUS- The term ‘alternative fuel school bus’ means a school bus that meets all of the requirements of this subtitle and is operated solely on an alternative fuel.

      (4) EMISSIONS CONTROL RETROFIT TECHNOLOGY- The term ‘emissions control retrofit technology’ means a particulate filter or other emissions control equipment that is verified or certified by the Administrator or the California Air Resources Board as an effective emission reduction technology when installed on an existing school bus.

      (5) IDLING- The term ‘idling’ means operating an engine while remaining stationary for more than approximately 15 minutes, except that the term does not apply to routine stoppages associated with traffic movement or congestion.

      (6) SECRETARY- The term ‘Secretary’ means the Secretary of Energy.

      (7) ULTRA-LOW SULFUR DIESEL FUEL- The term ‘ultra-low sulfur diesel fuel’ means diesel fuel that contains sulfur at not more than 15 parts per million.

      (8) ULTRA-LOW SULFUR DIESEL FUEL SCHOOL BUS- The term ‘ultra-low sulfur diesel fuel school bus’ means a school bus that meets all of the requirements of this subtitle and is operated solely on ultra-low sulfur diesel fuel.

SEC. 742. PROGRAM FOR REPLACEMENT OF CERTAIN SCHOOL BUSES WITH CLEAN SCHOOL BUSES.

    (a) Establishment- The Administrator, in consultation with the Secretary and other appropriate Federal departments and agencies, shall establish a program for awarding grants on a competitive basis to eligible entities for the replacement of existing school buses manufactured before model year 1991 with alternative fuel school buses and ultra-low sulfur diesel fuel school buses.

    (b) Requirements-

      (1) IN GENERAL- Not later than 90 days after the date of enactment of this Act, the Administrator shall establish and publish in the Federal Register grant requirements on eligibility for assistance, and on implementation of the program established under subsection (a), including instructions for the submission of grant applications and certification requirements to ensure compliance with this subtitle.

      (2) APPLICATION DEADLINES- The requirements established under paragraph (1) shall require submission of grant applications not later than--

        (A) in the case of the first year of program implementation, the date that is 180 days after the publication of the requirements in the Federal Register; and

        (B) in the case of each subsequent year, June 1 of the year.

    (c) Eligible Recipients- A grant shall be awarded under this section only--

      (1) to 1 or more local or State governmental entities responsible for providing school bus service to 1 or more public school systems or responsible for the purchase of school buses;

      (2) to 1 or more contracting entities that provide school bus service to 1 or more public school systems, if the grant application is submitted jointly with the 1 or more school systems to be served by the buses, except that the application may provide that buses purchased using funds awarded shall be owned, operated, and maintained exclusively by the 1 or more contracting entities; or

      (3) to a nonprofit school transportation association representing private contracting entities, if the association has notified and received approval from the 1 or more school systems to be served by the buses.

    (d) Award Deadlines-

      (1) IN GENERAL- Subject to paragraph (2), the Administrator shall award a grant made to a qualified applicant for a fiscal year--

        (A) in the case of the first fiscal year of program implementation, not later than the date that is 90 days after the application deadline established under subsection (b)(2); and

        (B) in the case of each subsequent fiscal year, not later than August 1 of the fiscal year.

      (2) INSUFFICIENT NUMBER OF QUALIFIED GRANT APPLICATIONS- If the Administrator does not receive a sufficient number of qualified grant applications to meet the requirements of subsection (i)(1) for a fiscal year, the Administrator shall award a grant made to a qualified applicant under subsection (i)(2) not later than September 30 of the fiscal year.

    (e) Types of Grants-

      (1) IN GENERAL- A grant under this section shall be used for the replacement of school buses manufactured before model year 1991 with alternative fuel school buses and ultra-low sulfur diesel fuel school buses.

      (2) NO ECONOMIC BENEFIT- Other than the receipt of the grant, a recipient of a grant under this section may not receive any economic benefit in connection with the receipt of the grant.

      (3) PRIORITY OF GRANT APPLICATIONS- The Administrator shall give priority to applicants that propose to replace school buses manufactured before model year 1977.

    (f) Conditions of Grant- A grant provided under this section shall include the following conditions:

      (1) SCHOOL BUS FLEET- All buses acquired with funds provided under the grant shall be operated as part of the school bus fleet for which the grant was made for a minimum of 5 years.

      (2) USE OF FUNDS- Funds provided under the grant may only be used--

        (A) to pay the cost, except as provided in paragraph (3), of new alternative fuel school buses or ultra-low sulfur diesel fuel school buses, including State taxes and contract fees associated with the acquisition of such buses; and

        (B) to provide--

          (i) up to 20 percent of the price of the alternative fuel school buses acquired, for necessary alternative fuel infrastructure if the infrastructure will only be available to the grant recipient; and

          (ii) up to 25 percent of the price of the alternative fuel school buses acquired, for necessary alternative fuel infrastructure if the infrastructure will be available to the grant recipient and to other bus fleets.

      (3) GRANT RECIPIENT FUNDS- The grant recipient shall be required to provide at least--

        (A) in the case of a grant recipient described in paragraph (1) or (3) of subsection (c), the lesser of--

          (i) an amount equal to 15 percent of the total cost of each bus received; or

          (ii) $15,000 per bus; and

        (B) in the case of a grant recipient described in subsection (c)(2), the lesser of--

          (i) an amount equal to 20 percent of the total cost of each bus received; or

          (ii) $20,000 per bus.

      (4) ULTRA-LOW SULFUR DIESEL FUEL- In the case of a grant recipient receiving a grant for ultra-low sulfur diesel fuel school buses, the grant recipient shall be required to provide documentation to the satisfaction of the Administrator that diesel fuel containing sulfur at not more than 15 parts per million is available for carrying out the purposes of the grant, and a commitment by the applicant to use such fuel in carrying out the purposes of the grant.

      (5) TIMING- All alternative fuel school buses, ultra-low sulfur diesel fuel school buses, or alternative fuel infrastructure acquired under a grant awarded under this section shall be purchased and placed in service as soon as practicable.

    (g) Buses-

      (1) IN GENERAL- Except as provided in paragraph (2), funding under a grant made under this section for the acquisition of new alternative fuel school buses or ultra-low sulfur diesel fuel school buses shall only be used to acquire school buses--

        (A) with a gross vehicle weight of greater than 14,000 pounds;

        (B) that are powered by a heavy duty engine;

        (C) in the case of alternative fuel school buses manufactured in model years 2004 through 2006, that emit not more than 1.8 grams per brake horsepower-hour of nonmethane hydrocarbons and oxides of nitrogen and .01 grams per brake horsepower-hour of particulate matter; and

        (D) in the case of ultra-low sulfur diesel fuel school buses manufactured in model years 2004 through 2006, that emit not more than 2.5 grams per brake horsepower-hour of nonmethane hydrocarbons and oxides of nitrogen and .01 grams per brake horsepower-hour of particulate matter.

      (2) LIMITATIONS- A bus shall not be acquired under this section that emits nonmethane hydrocarbons, oxides of nitrogen, or particulate matter at a rate greater than the best performing technology of the same class of ultra-low sulfur diesel fuel school buses commercially available at the time the grant is made.

    (h) Deployment and Distribution- The Administrator shall--

      (1) seek, to the maximum extent practicable, to achieve nationwide deployment of alternative fuel school buses and ultra-low sulfur diesel fuel school buses through the program under this section; and

      (2) ensure a broad geographic distribution of grant awards, with a goal of no State receiving more than 10 percent of the grant funding made available under this section for a fiscal year.

    (i) Allocation of Funds-

      (1) IN GENERAL- Subject to paragraph (2), of the amount of grant funding made available to carry out this section for any fiscal year, the Administrator shall use--

        (A) 70 percent for the acquisition of alternative fuel school buses or supporting infrastructure; and

        (B) 30 percent for the acquisition of ultra-low sulfur diesel fuel school buses.

      (2) INSUFFICIENT NUMBER OF QUALIFIED GRANT APPLICATIONS- After the first fiscal year in which this program is in effect, if the Administrator does not receive a sufficient number of qualified grant applications to meet the requirements of subparagraph (A) or (B) of paragraph (1) for a fiscal year, effective beginning on August 1 of the fiscal year, the Administrator shall make the remaining funds available to other qualified grant applicants under this section.

    (j) Reduction of School Bus Idling- Each local educational agency (as defined in section 9101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801)) that receives Federal funds under the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6301 et seq.) is encouraged to develop a policy, consistent with the health, safety, and welfare of students and the proper operation and maintenance of school buses, to reduce the incidence of unnecessary school bus idling at schools when picking up and unloading students.

    (k) Annual Report-

      (1) IN GENERAL- Not later than January 31 of each year, the Administrator shall transmit to Congress a report evaluating implementation of the programs under this section and section 743.

      (2) COMPONENTS- The reports shall include a description of--

        (A) the total number of grant applications received;

        (B) the number and types of alternative fuel school buses, ultra-low sulfur diesel fuel school buses, and retrofitted buses requested in grant applications;

        (C) grants awarded and the criteria used to select the grant recipients;

        (D) certified engine emission levels of all buses purchased or retrofitted under the programs under this section and section 743;

        (E) an evaluation of the in-use emission level of buses purchased or retrofitted under the programs under this section and section 743; and

        (F) any other information the Administrator considers appropriate.

    (l) Authorization of Appropriations- There are authorized to be appropriated to the Administrator to carry out this section, to remain available until expended--

      (1) $45,000,000 for fiscal year 2005;

      (2) $65,000,000 for fiscal year 2006;

      (3) $90,000,000 for fiscal year 2007; and

      (4) such sums as are necessary for each of fiscal years 2008 and 2009.

SEC. 743. DIESEL RETROFIT PROGRAM.

    (a) Establishment- The Administrator, in consultation with the Secretary, shall establish a program for awarding grants on a competitive basis to entities for the installation of retrofit technologies for diesel school buses.

    (b) Eligible Recipients- A grant shall be awarded under this section only--

      (1) to a local or State governmental entity responsible for providing school bus service to 1 or more public school systems;

      (2) to 1 or more contracting entities that provide school bus service to 1 or more public school systems, if the grant application is submitted jointly with the 1 or more school systems that the buses will serve, except that the application may provide that buses purchased using funds awarded shall be owned, operated, and maintained exclusively by the 1 or more contracting entities; or

      (3) to a nonprofit school transportation association representing private contracting entities, if the association has notified and received approval from the 1 or more school systems to be served by the buses.

    (c) Awards-

      (1) IN GENERAL- The Administrator shall seek, to the maximum extent practicable, to ensure a broad geographic distribution of grants under this section.

      (2) PREFERENCES- In making awards of grants under this section, the Administrator shall give preference to proposals that--

        (A) will achieve the greatest reductions in emissions of nonmethane hydrocarbons, oxides of nitrogen, or particulate matter per proposal or per bus; or

        (B) involve the use of emissions control retrofit technology on diesel school buses that operate solely on ultra-low sulfur diesel fuel.

    (d) Conditions of Grant- A grant shall be provided under this section on the conditions that--

      (1) buses on which retrofit emissions-control technology are to be demonstrated--

        (A) will operate on ultra-low sulfur diesel fuel where such fuel is reasonably available or required for sale by State or local law or regulation;

        (B) were manufactured in model year 1991 or later; and

        (C) will be used for the transportation of school children to and from school for a minimum of 5 years;

      (2) grant funds will be used for the purchase of emission control retrofit technology, including State taxes and contract fees; and

      (3) grant recipients will provide at least 15 percent of the total cost of the retrofit, including the purchase of emission control retrofit technology and all necessary labor for installation of the retrofit.

    (e) Verification- Not later than 90 days after the date of enactment of this Act, the Administrator shall publish in the Federal Register procedures to verify--

      (1) the retrofit emissions-control technology to be demonstrated;

      (2) that buses powered by ultra-low sulfur diesel fuel on which retrofit emissions-control technology are to be demonstrated will operate on diesel fuel containing not more than 15 parts per million of sulfur; and

      (3) that grants are administered in accordance with this section.

    (f) Authorization of Appropriations- There are authorized to be appropriated to the Administrator to carry out this section, to remain available until expended--

      (1) $20,000,000 for fiscal year 2005;

      (2) $35,000,000 for fiscal year 2006;

      (3) $45,000,000 for fiscal year 2007; and

      (4) such sums as are necessary for each of fiscal years 2008 and 2009.

SEC. 744. FUEL CELL SCHOOL BUSES.

    (a) Establishment- The Secretary shall establish a program for entering into cooperative agreements--

      (1) with private sector fuel cell bus developers for the development of fuel cell-powered school buses; and

      (2) subsequently, with not less than 2 units of local government using natural gas-powered school buses and such private sector fuel cell bus developers to demonstrate the use of fuel cell-powered school buses.

    (b) Cost Sharing- The non-Federal contribution for activities funded under this section shall be not less than--

      (1) 20 percent for fuel infrastructure development activities; and

      (2) 50 percent for demonstration activities and for development activities not described in paragraph (1).

    (c) Reports to Congress- Not later than 3 years after the date of enactment of this Act, the Secretary shall transmit to Congress a report that--

      (1) evaluates the process of converting natural gas infrastructure to accommodate fuel cell-powered school buses; and

      (2) assesses the results of the development and demonstration program under this section.

    (d) Authorization of Appropriations- There are authorized to be appropriated to the Secretary to carry out this section $25,000,000 for the period of fiscal years 2004 through 2006.

Subtitle D--Miscellaneous

SEC. 751. RAILROAD EFFICIENCY.

    (a) Establishment- The Secretary of Energy shall, in cooperation with the Secretary of Transportation and the Administrator of the Environmental Protection Agency, establish a cost-shared, public-private research partnership involving the Federal Government, railroad carriers, locomotive manufacturers and equipment suppliers, and the Association of American Railroads, to develop and demonstrate railroad locomotive technologies that increase fuel economy, reduce emissions, and lower costs of operation.

    (b) Authorization of Appropriations- There are authorized to be appropriated to the Secretary of Energy to carry out this section--

      (1) $25,000,000 for fiscal year 2005;

      (2) $35,000,000 for fiscal year 2006; and

      (3) $50,000,000 for fiscal year 2007.

SEC. 752. MOBILE EMISSION REDUCTIONS TRADING AND CREDITING.

    (a) In General- Not later than 180 days after the date of enactment of this Act, the Administrator of the Environmental Protection Agency shall submit to Congress a report on the experience of the Administrator with the trading of mobile source emission reduction credits for use by owners and operators of stationary source emission sources to meet emission offset requirements within a nonattainment area.

    (b) Contents- The report shall describe--

      (1) projects approved by the Administrator that include the trading of mobile source emission reduction credits for use by stationary sources in complying with offset requirements, including a description of--

        (A) project and stationary sources location;

        (B) volumes of emissions offset and traded;

        (C) the sources of mobile emission reduction credits; and

        (D) if available, the cost of the credits;

      (2) the significant issues identified by the Administrator in consideration and approval of trading in the projects;

      (3) the requirements for monitoring and assessing the air quality benefits of any approved project;

      (4) the statutory authority on which the Administrator has based approval of the projects;

      (5) an evaluation of how the resolution of issues in approved projects could be used in other projects; and

      (6) any other issues that the Administrator considers relevant to the trading and generation of mobile source emission reduction credits for use by stationary sources or for other purposes.

SEC. 753. AVIATION FUEL CONSERVATION AND EMISSIONS.

    (a) In General- Not later than 60 days after the date of enactment of this Act, the Administrator of the Federal Aviation Administration and the Administrator of the Environmental Protection Agency shall jointly initiate a study to identify--

      (1) the impact of aircraft emissions on air quality in nonattainment areas; and

      (2) ways to promote fuel conservation measures for aviation to--

        (A) enhance fuel efficiency; and

        (B) reduce emissions.

    (b) Focus- The study under subsection (a) shall focus on how air traffic management inefficiencies, such as aircraft idling at airports, result in unnecessary fuel burn and air emissions.

    (c) Report- Not later than 1 year after the date of the initiation of the study under subsection (a), the Administrator of the Federal Aviation Administration and the Administrator of the Environmental Protection Agency shall jointly submit to the Committee on Energy and Commerce and the Committee on Transportation and Infrastructure of the House of Representatives and the Committee on Environment and Public Works and the Committee on Commerce, Science, and Transportation of the Senate a report that--

      (1) describes the results of the study; and

      (2) includes any recommendations on ways in which unnecessary fuel use and emissions affecting air quality may be reduced--

        (A) without adversely affecting safety and security and increasing individual aircraft noise; and

        (B) while taking into account all aircraft emissions and the impact of the emissions on human health.

SEC. 754. DIESEL FUELED VEHICLES.

    (a) Definition of Tier 2 Emission Standards- In this section, the term ‘tier 2 emission standards’ means the motor vehicle emission standards that apply to passenger cars, light trucks, and larger passenger vehicles manufactured after the 2003 model year, as issued on February 10, 2000, by the Administrator of the Environmental Protection Agency under sections 202 and 211 of the Clean Air Act (42 U.S.C. 7521, 7545).

    (b) Diesel Combustion and After-Treatment Technologies- The Secretary of Energy shall accelerate efforts to improve diesel combustion and after-treatment technologies for use in diesel fueled motor vehicles.

    (c) Goals- The Secretary shall carry out subsection (b) with a view toward achieving the following goals:

      (1) Developing and demonstrating diesel technologies that, not later than 2010, meet the following standards:

        (A) Tier 2 emission standards.

        (B) The heavy-duty emissions standards of 2007 that are applicable to heavy-duty vehicles under regulations issued by the Administrator of the Environmental Protection Agency as of the date of enactment of this Act.

      (2) Developing the next generation of low-emission, high efficiency diesel engine technologies, including homogeneous charge compression ignition technology.

SEC. 755. CONSERVE BY BICYCLING PROGRAM.

    (a) Definitions- In this section:

      (1) PROGRAM- The term ‘program’ means the Conserve by Bicycling Program established by subsection (b).

      (2) SECRETARY- The term ‘Secretary’ means the Secretary of Transportation.

    (b) Establishment- There is established within the Department of Transportation a program to be known as the ‘Conserve by Bicycling Program’.

    (c) Projects-

      (1) IN GENERAL- In carrying out the program, the Secretary shall establish not more than 10 pilot projects that are--

        (A) dispersed geographically throughout the United States; and

        (B) designed to conserve energy resources by encouraging the use of bicycles in place of motor vehicles.

      (2) REQUIREMENTS- A pilot project described in paragraph (1) shall--

        (A) use education and marketing to convert motor vehicle trips to bicycle trips;

        (B) document project results and energy savings (in estimated units of energy conserved);

        (C) facilitate partnerships among interested parties in at least 2 of the fields of--

          (i) transportation;

          (ii) law enforcement;

          (iii) education;

          (iv) public health;

          (v) environment; and

          (vi) energy;

        (D) maximize bicycle facility investments;

        (E) demonstrate methods that may be used in other regions of the United States; and

        (F) facilitate the continuation of ongoing programs that are sustained by local resources.

      (3) COST SHARING- At least 20 percent of the cost of each pilot project described in paragraph (1) shall be provided from State or local sources.

    (d) Energy and Bicycling Research Study-

      (1) IN GENERAL- Not later than 2 years after the date of enactment of this Act, the Secretary shall enter into a contract with the National Academy of Sciences for, and the National Academy of Sciences shall conduct and submit to Congress a report on, a study on the feasibility of converting motor vehicle trips to bicycle trips.

      (2) COMPONENTS- The study shall--

        (A) document the results or progress of the pilot projects under subsection (c);

        (B) determine the type and duration of motor vehicle trips that people in the United States may feasibly make by bicycle, taking into consideration factors such as--

          (i) weather;

          (ii) land use and traffic patterns;

          (iii) the carrying capacity of bicycles; and

          (iv) bicycle infrastructure;

        (C) determine any energy savings that would result from the conversion of motor vehicle trips to bicycle trips;

        (D) include a cost-benefit analysis of bicycle infrastructure investments; and

        (E) include a description of any factors that would encourage more motor vehicle trips to be replaced with bicycle trips.

    (e) Authorization of Appropriations- There are authorized to be appropriated to the Secretary to carry out this section $6,200,000, to remain available until expended, of which--

      (1) $5,150,000 shall be used to carry out pilot projects described in subsection (c);

      (2) $300,000 shall be used by the Secretary to coordinate, publicize, and disseminate the results of the program; and

      (3) $750,000 shall be used to carry out subsection (d).

SEC. 756. REDUCTION OF ENGINE IDLING OF HEAVY-DUTY VEHICLES.

    (a) Definitions- In this section:

      (1) ADMINISTRATOR- The term ‘Administrator’ means the Administrator of the Environmental Protection Agency.

      (2) ADVANCED TRUCK STOP ELECTRIFICATION SYSTEM- The term ‘advanced truck stop electrification system’ means a stationary system that delivers heat, air conditioning, electricity, and communications, and is capable of providing verifiable and auditable evidence of use of those services, to a heavy-duty vehicle and any occupants of the heavy-duty vehicle without relying on components mounted onboard the heavy-duty vehicle for delivery of those services.

      (3) AUXILIARY POWER UNIT- The term ‘auxiliary power unit’ means an integrated system that--

        (A) provides heat, air conditioning, engine warming, and electricity to the factory-installed components on a heavy-duty vehicle as if the main drive engine of the heavy-duty vehicle were running; and

        (B) is certified by the Administrator under part 89 of title 40, Code of Federal Regulations (or any successor regulation), as meeting applicable emission standards.

      (4) HEAVY-DUTY VEHICLE- The term ‘heavy-duty vehicle’ means a vehicle that--

        (A) has a gross vehicle weight rating greater than 12,500 pounds; and

        (B) is powered by a diesel engine.

      (5) IDLE REDUCTION TECHNOLOGY- The term ‘idle reduction technology’ means an advanced truck stop electrification system, auxiliary power unit, or other device or system of devices that--

        (A) is used to reduce long-duration idling of a heavy-duty vehicle; and

        (B) allows for the main drive engine or auxiliary refrigeration engine of a heavy-duty vehicle to be shut down.

      (6) LONG-DURATION IDLING-

        (A) IN GENERAL- The term ‘long-duration idling’ means the operation of a main drive engine or auxiliary refrigeration engine of a heavy-duty vehicle, for a period greater than 15 consecutive minutes, at a time at which the main drive engine is not engaged in gear.

        (B) EXCLUSIONS- The term ‘long-duration idling’ does not include the operation of a main drive engine or auxiliary refrigeration engine of a heavy-duty vehicle during a routine stoppage associated with traffic movement or congestion.

    (b) Idle Reduction Technology Benefits, Programs, and Studies-

      (1) IN GENERAL- Not later than 90 days after the date of enactment of this Act, the Administrator shall--

        (A)(i) commence a review of the mobile source air emission models of the Environmental Protection Agency used under the Clean Air Act (42 U.S.C. 7401 et seq.) to determine whether the models accurately reflect the emissions resulting from long-duration idling of heavy-duty vehicles and other vehicles and engines; and

        (ii) update those models as the Administrator determines to be appropriate; and

        (B)(i) commence a review of the emission reductions achieved by the use of idle reduction technology; and

        (ii) complete such revisions of the regulations and guidance of the Environmental Protection Agency as the Administrator determines to be appropriate.

      (2) DEADLINE FOR COMPLETION- Not later than 180 days after the date of enactment of this Act, the Administrator shall--

        (A) complete the reviews under subparagraphs (A)(i) and (B)(i) of paragraph (1); and

        (B) prepare and make publicly available 1 or more reports on the results of the reviews.

      (3) DISCRETIONARY INCLUSIONS- The reviews under subparagraphs (A)(i) and (B)(i) of paragraph (1) and the reports under paragraph (2)(B) may address the potential fuel savings resulting from use of idle reduction technology.

      (4) IDLE REDUCTION DEPLOYMENT PROGRAM-

        (A) ESTABLISHMENT-

          (i) IN GENERAL- Not later than 90 days after the date of enactment of this Act, the Administrator, in consultation with the Secretary of Transportation, shall establish a program to support deployment of idle reduction technology.

          (ii) PRIORITY- The Administrator shall give priority to the deployment of idle reduction technology based on beneficial effects on air quality and ability to lessen the emission of criteria air pollutants.

        (B) FUNDING-

          (i) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to the Administrator to carry out subparagraph (A) $19,500,000 for fiscal year 2004, $30,000,000 for fiscal year 2005, and $45,000,000 for fiscal year 2006.

          (ii) COST SHARING- Subject to clause (iii), the Administrator shall require at least 50 percent of the costs directly and specifically related to any project under this section to be provided from non-Federal sources.

          (iii) NECESSARY AND APPROPRIATE REDUCTIONS- The Administrator may reduce the non-Federal requirement under clause (ii) if the Administrator determines that the reduction is necessary and appropriate to meet the objectives of this section.

      (5) IDLING LOCATION STUDY-

        (A) IN GENERAL- Not later than 90 days after the date of enactment of this Act, the Administrator, in consultation with the Secretary of Transportation, shall commence a study to analyze all locations at which heavy-duty vehicles stop for long-duration idling, including--

          (i) truck stops;

          (ii) rest areas;

          (iii) border crossings;

          (iv) ports;

          (v) transfer facilities; and

          (vi) private terminals.

        (B) DEADLINE FOR COMPLETION- Not later than 180 days after the date of enactment of this Act, the Administrator shall--

          (i) complete the study under subparagraph (A); and

          (ii) prepare and make publicly available 1 or more reports of the results of the study.

    (c) Vehicle Weight Exemption- Section 127(a) of title 23, United States Code, is amended--

      (1) by designating the first through eleventh sentences as paragraphs (1) through (11), respectively; and

      (2) by adding at the end the following:

      ‘(12) HEAVY DUTY VEHICLES-

        ‘(A) IN GENERAL- Subject to subparagraphs (B) and (C), in order to promote reduction of fuel use and emissions because of engine idling, the maximum gross vehicle weight limit and the axle weight limit for any heavy-duty vehicle equipped with an idle reduction technology shall be increased by a quantity necessary to compensate for the additional weight of the idle reduction system.

        ‘(B) MAXIMUM WEIGHT INCREASE- The weight increase under subparagraph (A) shall be not greater than 250 pounds.

        ‘(C) PROOF- On request by a regulatory agency or law enforcement agency, the vehicle operator shall provide proof (through demonstration or certification) that--

          ‘(i) the idle reduction technology is fully functional at all times; and

          ‘(ii) the 250-pound gross weight increase is not used for any purpose other than the use of idle reduction technology described in subparagraph (A).’.

SEC. 757. BIODIESEL ENGINE TESTING PROGRAM.

    (a) In General- Not later that 180 days after the date of enactment of this Act, the Secretary shall initiate a partnership with diesel engine, diesel fuel injection system, and diesel vehicle manufacturers and diesel and biodiesel fuel providers, to include biodiesel testing in advanced diesel engine and fuel system technology.

    (b) Scope- The program shall provide for testing to determine the impact of biodiesel from different sources on current and future emission control technologies, with emphasis on--

      (1) the impact of biodiesel on emissions warranty, in-use liability, and antitampering provisions;

      (2) the impact of long-term use of biodiesel on engine operations;

      (3) the options for optimizing these technologies for both emissions and performance when switching between biodiesel and diesel fuel; and

      (4) the impact of using biodiesel in these fueling systems and engines when used as a blend with 2006 Environmental Protection Agency-mandated diesel fuel containing a maximum of 15-parts-per-million sulfur content.

    (c) Report- Not later than 2 years after the date of enactment of this Act, the Secretary shall provide an interim report to Congress on the findings of the program, including a comprehensive analysis of impacts from biodiesel on engine operation for both existing and expected future diesel technologies, and recommendations for ensuring optimal emissions reductions and engine performance with biodiesel.

    (d) Authorization of Appropriations- There are authorized to be appropriated $5,000,000 for each of fiscal years 2004 through 2008 to carry out this section.

    (e) Definition- For purposes of this section, the term ‘biodiesel’ means a diesel fuel substitute produced from nonpetroleum renewable resources that meets the registration requirements for fuels and fuel additives established by the Environmental Protection Agency under section 211 of the Clean Air Act (42 U.S.C. 7545) and that meets the American Society for Testing and Materials D6751-02a Standard Specification for Biodiesel Fuel (B100) Blend Stock for Distillate Fuels.

SEC. 758. HIGH OCCUPANCY VEHICLE EXCEPTION.

    Notwithstanding section 102(a) of title 23, United States Code, a State may permit a vehicle with fewer than 2 occupants to operate in high occupancy vehicle lanes if the vehicle--

      (1) is a dedicated vehicle (as defined in section 301 of the Energy Policy Act of 1992 (42 U.S. 13211)); or

      (2) is a hybrid vehicle (as defined by the State for the purpose of this section).

Subtitle E--Automobile Efficiency

SEC. 771. AUTHORIZATION OF APPROPRIATIONS FOR IMPLEMENTATION AND ENFORCEMENT OF FUEL ECONOMY STANDARDS.

    In addition to any other funds authorized by law, there are authorized to be appropriated to the National Highway Traffic Safety Administration to carry out its obligations with respect to average fuel economy standards $2,000,000 for each of fiscal years 2004 through 2008.

SEC. 772. REVISED CONSIDERATIONS FOR DECISIONS ON MAXIMUM FEASIBLE AVERAGE FUEL ECONOMY.

    Section 32902(f) of title 49, United States Code, is amended to read as follows:

    ‘(f) Considerations for Decisions on Maximum Feasible Average Fuel Economy- When deciding maximum feasible average fuel economy under this section, the Secretary of Transportation shall consider the following matters:

      ‘(1) Technological feasibility.

      ‘(2) Economic practicability.

      ‘(3) The effect of other motor vehicle standards of the Government on fuel economy.

      ‘(4) The need of the United States to conserve energy.

      ‘(5) The effects of fuel economy standards on passenger automobiles, nonpassenger automobiles, and occupant safety.

      ‘(6) The effects of compliance with average fuel economy standards on levels of automobile industry employment in the United States.’.

SEC. 773. EXTENSION OF MAXIMUM FUEL ECONOMY INCREASE FOR ALTERNATIVE FUELED VEHICLES.

    (a) Manufacturing Incentives- Section 32905 of title 49, United States Code, is amended--

      (1) in each of subsections (b) and (d), by striking ‘1993-2004’ and inserting ‘1993-2008’;

      (2) in subsection (f), by striking ‘2001’ and inserting ‘2005’; and

      (3) in subsection (f)(1), by striking ‘2004’ and inserting ‘2008’.

    (b) Maximum Fuel Economy Increase- Subsection (a)(1) of section 32906 of title 49, United States Code, is amended--

      (1) in subparagraph (A), by striking ‘the model years 1993-2004’ and inserting ‘model years 1993-2008’; and

      (2) in subparagraph (B), by striking ‘the model years 2005-2008’ and inserting ‘model years 2009-2012’.

SEC. 774. STUDY OF FEASIBILITY AND EFFECTS OF REDUCING USE OF FUEL FOR AUTOMOBILES.

    (a) In General- Not later than 30 days after the date of the enactment of this Act, the Administrator of the National Highway Traffic Safety Administration shall initiate a study of the feasibility and effects of reducing by model year 2012, by a significant percentage, the amount of fuel consumed by automobiles.

    (b) Subjects of Study- The study under this section shall include--

      (1) examination of, and recommendation of alternatives to, the policy under current Federal law of establishing average fuel economy standards for automobiles and requiring each automobile manufacturer to comply with average fuel economy standards that apply to the automobiles it manufactures;

      (2) examination of how automobile manufacturers could contribute toward achieving the reduction referred to in subsection (a);

      (3) examination of the potential of fuel cell technology in motor vehicles in order to determine the extent to which such technology may contribute to achieving the reduction referred to in subsection (a); and

      (4) examination of the effects of the reduction referred to in subsection (a) on--

        (A) gasoline supplies;

        (B) the automobile industry, including sales of automobiles manufactured in the United States;

        (C) motor vehicle safety; and

        (D) air quality.

    (c) Report- The Administrator shall submit to Congress a report on the findings, conclusion, and recommendations of the study under this section by not later than 1 year after the date of the enactment of this Act.

TITLE VIII--HYDROGEN

SEC. 801. DEFINITIONS.

    In this title:

      (1) ADVISORY COMMITTEE- The term ‘Advisory Committee’ means the Hydrogen Technical and Fuel Cell Advisory Committee established under section 805.

      (2) DEPARTMENT- The term ‘Department’ means the Department of Energy.

      (3) FUEL CELL- The term ‘fuel cell’ means a device that directly converts the chemical energy of a fuel and an oxidant into electricity by an electrochemical process taking place at separate electrodes in the device.

      (4) INFRASTRUCTURE- The term ‘infrastructure’ means the equipment, systems, or facilities used to produce, distribute, deliver, or store hydrogen.

      (5) LIGHT DUTY VEHICLE- The term ‘light duty vehicle’ means a car or truck classified by the Department of Transportation as a Class I or IIA vehicle.

      (6) SECRETARY- The term ‘Secretary’ means the Secretary of Energy.

SEC. 802. PLAN.

    Not later than 6 months after the date of enactment of this Act, the Secretary shall transmit to Congress a coordinated plan for the programs described in this title and any other programs of the Department that are directly related to fuel cells or hydrogen. The plan shall describe, at a minimum--

      (1) the agenda for the next 5 years for the programs authorized under this title, including the agenda for each activity enumerated in section 803(a);

      (2) the types of entities that will carry out the activities under this title and what role each entity is expected to play;

      (3) the milestones that will be used to evaluate the programs for the next 5 years;

      (4) the most significant technical and nontechnical hurdles that stand in the way of achieving the goals described in section 803(b), and how the programs will address those hurdles; and

      (5) the policy assumptions that are implicit in the plan, including any assumptions that would affect the sources of hydrogen or the marketability of hydrogen-related products.

SEC. 803. PROGRAMS.

    (a) Activities- The Secretary, in partnership with the private sector, shall conduct programs to address--

      (1) production of hydrogen from diverse energy sources, including--

        (A) fossil fuels, which may include carbon capture and sequestration;

        (B) hydrogen-carrier fuels (including ethanol and methanol);

        (C) renewable energy resources, including biomass; and

        (D) nuclear energy;

      (2) use of hydrogen for commercial, industrial, and residential electric power generation;

      (3) safe delivery of hydrogen or hydrogen-carrier fuels, including--

        (A) transmission by pipeline and other distribution methods; and

        (B) convenient and economic refueling of vehicles either at central refueling stations or through distributed on-site generation;

      (4) advanced vehicle technologies, including--

        (A) engine and emission control systems;

        (B) energy storage, electric propulsion, and hybrid systems;

        (C) automotive materials; and

        (D) other advanced vehicle technologies;

      (5) storage of hydrogen or hydrogen-carrier fuels, including development of materials for safe and economic storage in gaseous, liquid, or solid form at refueling facilities and onboard vehicles;

      (6) development of safe, durable, affordable, and efficient fuel cells, including fuel-flexible fuel cell power systems, improved manufacturing processes, high-temperature membranes, cost-effective fuel processing for natural gas, fuel cell stack and system reliability, low temperature operation, and cold start capability;

      (7) development, after consultation with the private sector, of necessary codes and standards (including international codes and standards and voluntary consensus standards adopted in accordance with OMB Circular A-119) and safety practices for the production, distribution, storage, and use of hydrogen, hydrogen-carrier fuels, and related products; and

      (8) a public education program to develop improved knowledge and acceptability of hydrogen-based systems.

    (b) Program Goals-

      (1) VEHICLES- For vehicles, the goals of the program are--

        (A) to enable a commitment by automakers no later than year 2015 to offer safe, affordable, and technically viable hydrogen fuel cell vehicles in the mass consumer market; and

        (B) to enable production, delivery, and acceptance by consumers of model year 2020 hydrogen fuel cell and other hydrogen-powered vehicles that will have--

          (i) a range of at least 300 miles;

          (ii) improved performance and ease of driving;

          (iii) safety and performance comparable to vehicle technologies in the market; and

          (iv) when compared to light duty vehicles in model year 2003--

            (I) fuel economy that is substantially higher;

            (II) substantially lower emissions of air pollutants; and

            (III) equivalent or improved vehicle fuel system crash integrity and occupant protection.

      (2) HYDROGEN ENERGY AND ENERGY INFRASTRUCTURE- For hydrogen energy and energy infrastructure, the goals of the program are to enable a commitment not later than 2015 that will lead to infrastructure by 2020 that will provide--

        (A) safe and convenient refueling;

        (B) improved overall efficiency;

        (C) widespread availability of hydrogen from domestic energy sources through--

          (i) production, with consideration of emissions levels;

          (ii) delivery, including transmission by pipeline and other distribution methods for hydrogen; and

          (iii) storage, including storage in surface transportation vehicles;

        (D) hydrogen for fuel cells, internal combustion engines, and other energy conversion devices for portable, stationary, and transportation applications; and

        (E) other technologies consistent with the Department’s plan.

      (3) FUEL CELLS- The goals for fuel cells and their portable, stationary, and transportation applications are to enable--

        (A) safe, economical, and environmentally sound hydrogen fuel cells;

        (B) fuel cells for light duty and other vehicles; and

        (C) other technologies consistent with the Department’s plan.

    (c) Demonstration- In carrying out the programs under this section, the Secretary shall fund a limited number of demonstration projects, consistent with a determination of the maturity, cost-effectiveness, and environmental impacts of technologies supporting each project. In selecting projects under this subsection, the Secretary shall, to the extent practicable and in the public interest, select projects that--

      (1) involve using hydrogen and related products at existing facilities or installations, such as existing office buildings, military bases, vehicle fleet centers, transit bus authorities, or units of the National Park System;

      (2) depend on reliable power from hydrogen to carry out essential activities;

      (3) lead to the replication of hydrogen technologies and draw such technologies into the marketplace;

      (4) include vehicle, portable, and stationary demonstrations of fuel cell and hydrogen-based energy technologies;

      (5) address the interdependency of demand for hydrogen fuel cell applications and hydrogen fuel infrastructure;

      (6) raise awareness of hydrogen technology among the public;

      (7) facilitate identification of an optimum technology among competing alternatives;

      (8) address distributed generation using renewable sources; and

      (9) address applications specific to rural or remote locations, including isolated villages and islands, the National Park System, and tribal entities.

    The Secretary shall give preference to projects which address multiple elements contained in paragraphs (1) through (9).

    (d) Deployment- In carrying out the programs under this section, the Secretary shall, in partnership with the private sector, conduct activities to facilitate the deployment of hydrogen energy and energy infrastructure, fuel cells, and advanced vehicle technologies.

    (e) Funding-

      (1) IN GENERAL- The Secretary shall carry out the programs under this section using a competitive, merit-based review process and consistent with the generally applicable Federal laws and regulations governing awards of financial assistance, contracts, or other agreements.

      (2) RESEARCH CENTERS- Activities under this section may be carried out by funding nationally recognized university-based or Federal laboratory research centers.

    (f) Cost Sharing-

      (1) RESEARCH AND DEVELOPMENT- Except as otherwise provided in this title, for research and development programs carried out under this title the Secretary shall require a commitment from non-Federal sources of at least 20 percent of the cost of the project. The Secretary may reduce or eliminate the non-Federal requirement under this paragraph if the Secretary determines that the research and development is of a basic or fundamental nature or involves technical analyses or educational activities.

      (2) DEMONSTRATION AND COMMERCIAL APPLICATION- Except as otherwise provided in this title, the Secretary shall require at least 50 percent of the costs directly and specifically related to any demonstration or commercial application project under this title to be provided from non-Federal sources. The Secretary may reduce the non-Federal requirement under this paragraph if the Secretary determines that the reduction is necessary and appropriate considering the technological risks involved in the project and is necessary to meet the objectives of this title.

      (3) CALCULATION OF AMOUNT- In calculating the amount of the non-Federal commitment under paragraph (1) or (2), the Secretary may include personnel, services, equipment, and other resources.

      (4) SIZE OF NON-FEDERAL SHARE- The Secretary may consider the size of the non-Federal share in selecting projects.

    (g) Disclosure- Section 623 of the Energy Policy Act of 1992 (42 U.S.C. 13293) relating to the protection of information shall apply to projects carried out through grants, cooperative agreements, or contracts under this title.

SEC. 804. INTERAGENCY TASK FORCE.

    (a) Establishment- Not later than 120 days after the date of enactment of this Act, the President shall establish an interagency task force chaired by the Secretary with representatives from each of the following:

      (1) The Office of Science and Technology Policy within the Executive Office of the President.

      (2) The Department of Transportation.

      (3) The Department of Defense.

      (4) The Department of Commerce (including the National Institute of Standards and Technology).

      (5) The Department of State.

      (6) The Environmental Protection Agency.

      (7) The National Aeronautics and Space Administration.

      (8) Other Federal agencies as the Secretary determines appropriate.

    (b) Duties-

      (1) PLANNING- The interagency task force shall work toward--

        (A) a safe, economical, and environmentally sound fuel infrastructure for hydrogen and hydrogen-carrier fuels, including an infrastructure that supports buses and other fleet transportation;

        (B) fuel cells in government and other applications, including portable, stationary, and transportation applications;

        (C) distributed power generation, including the generation of combined heat, power, and clean fuels including hydrogen;

        (D) uniform hydrogen codes, standards, and safety protocols; and

        (E) vehicle hydrogen fuel system integrity safety performance.

      (2) ACTIVITIES- The interagency task force may organize workshops and conferences, may issue publications, and may create databases to carry out its duties. The interagency task force shall--

        (A) foster the exchange of generic, nonproprietary information and technology among industry, academia, and government;

        (B) develop and maintain an inventory and assessment of hydrogen, fuel cells, and other advanced technologies, including the commercial capability of each technology for the economic and environmentally safe production, distribution, delivery, storage, and use of hydrogen;

        (C) integrate technical and other information made available as a result of the programs and activities under this title;

        (D) promote the marketplace introduction of infrastructure for hydrogen fuel vehicles; and

        (E) conduct an education program to provide hydrogen and fuel cell information to potential end-users.

    (c) Agency Cooperation- The heads of all agencies, including those whose agencies are not represented on the interagency task force, shall cooperate with and furnish information to the interagency task force, the Advisory Committee, and the Department.

SEC. 805. ADVISORY COMMITTEE.

    (a) Establishment- The Hydrogen Technical and Fuel Cell Advisory Committee is established to advise the Secretary on the programs and activities under this title.

    (b) Membership-

      (1) MEMBERS- The Advisory Committee shall be comprised of not fewer than 12 nor more than 25 members. The members shall be appointed by the Secretary to represent domestic industry, academia, professional societies, government agencies, Federal laboratories, previous advisory panels, and financial, environmental, and other appropriate organizations based on the Department’s assessment of the technical and other qualifications of committee members and the needs of the Advisory Committee.

      (2) TERMS- The term of a member of the Advisory Committee shall not be more than 3 years. The Secretary may appoint members of the Advisory Committee in a manner that allows the terms of the members serving at any time to expire at spaced intervals so as to ensure continuity in the functioning of the Advisory Committee. A member of the Advisory Committee whose term is expiring may be reappointed.

      (3) CHAIRPERSON- The Advisory Committee shall have a chairperson, who is elected by the members from among their number.

    (c) Review- The Advisory Committee shall review and make recommendations to the Secretary on--

      (1) the implementation of programs and activities under this title;

      (2) the safety, economical, and environmental consequences of technologies for the production, distribution, delivery, storage, or use of hydrogen energy and fuel cells; and

      (3) the plan under section 802.

    (d) Response-

      (1) CONSIDERATION OF RECOMMENDATIONS- The Secretary shall consider, but need not adopt, any recommendations of the Advisory Committee under subsection (c).

      (2) BIENNIAL REPORT- The Secretary shall transmit a biennial report to Congress describing any recommendations made by the Advisory Committee since the previous report. The report shall include a description of how the Secretary has implemented or plans to implement the recommendations, or an explanation of the reasons that a recommendation will not be implemented. The report shall be transmitted along with the President’s budget proposal.

    (e) Support- The Secretary shall provide resources necessary in the judgment of the Secretary for the Advisory Committee to carry out its responsibilities under this title.

SEC. 806. EXTERNAL REVIEW.

    (a) Plan- The Secretary shall enter into an arrangement with the National Academy of Sciences to review the plan prepared under section 802, which shall be completed not later than 6 months after the Academy receives the plan. Not later than 45 days after receiving the review, the Secretary shall transmit the review to Congress along with a plan to implement the review’s recommendations or an explanation of the reasons that a recommendation will not be implemented.

    (b) Additional Review- The Secretary shall enter into an arrangement with the National Academy of Sciences under which the Academy will review the programs under section 803 during the fourth year following the date of enactment of this Act. The Academy’s review shall include the research priorities and technical milestones, and evaluate the progress toward achieving them. The review shall be completed not later than 5 years after the date of enactment of this Act. Not later than 45 days after receiving the review, the Secretary shall transmit the review to Congress along with a plan to implement the review’s recommendations or an explanation for the reasons that a recommendation will not be implemented.

SEC. 807. MISCELLANEOUS PROVISIONS.

    (a) Representation- The Secretary may represent the United States interests with respect to activities and programs under this title, in coordination with the Department of Transportation, the National Institute of Standards and Technology, and other relevant Federal agencies, before governments and nongovernmental organizations including--

      (1) other Federal, State, regional, and local governments and their representatives;

      (2) industry and its representatives, including members of the energy and transportation industries; and

      (3) in consultation with the Department of State, foreign governments and their representatives including international organizations.

    (b) Regulatory Authority- Nothing in this title shall be construed to alter the regulatory authority of the Department.

SEC. 808. SAVINGS CLAUSE.

    Nothing in this title shall be construed to affect the authority of the Secretary of Transportation that may exist prior to the date of enactment of this Act with respect to--

      (1) research into, and regulation of, hydrogen-powered vehicles fuel systems integrity, standards, and safety under subtitle VI of title 49, United States Code;

      (2) regulation of hazardous materials transportation under chapter 51 of title 49, United States Code;

      (3) regulation of pipeline safety under chapter 601 of title 49, United States Code;

      (4) encouragement and promotion of research, development, and deployment activities relating to advanced vehicle technologies under section 5506 of title 49, United States Code;

      (5) regulation of motor vehicle safety under chapter 301 of title 49, United States Code;

      (6) automobile fuel economy under chapter 329 of title 49, United States Code; or

      (7) representation of the interests of the United States with respect to the activities and programs under the authority of title 49, United States Code.

SEC. 809. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Secretary to carry out this title, in addition to any amounts made available for these purposes under other Acts--

      (1) $273,500,000 for fiscal year 2004;

      (2) $375,000,000 for fiscal year 2005;

      (3) $450,000,000 for fiscal year 2006;

      (4) $500,000,000 for fiscal year 2007; and

      (5) $550,000,000 for fiscal year 2008.

TITLE IX--RESEARCH AND DEVELOPMENT

SEC. 901. GOALS.

    (a) In General- The Secretary shall conduct a balanced set of programs of energy research, development, demonstration, and commercial application to support Federal energy policy and programs by the Department. Such programs shall be focused on--

      (1) increasing the efficiency of all energy intensive sectors through conservation and improved technologies;

      (2) promoting diversity of energy supply;

      (3) decreasing the Nation’s dependence on foreign energy supplies;

      (4) improving United States energy security; and

      (5) decreasing the environmental impact of energy-related activities.

    (b) Goals- The Secretary shall publish measurable 5-year cost and performance-based goals with each annual budget submission in at least the following areas:

      (1) Energy efficiency for buildings, energy-consuming industries, and vehicles.

      (2) Electric energy generation (including distributed generation), transmission, and storage.

      (3) Renewable energy technologies including wind power, photovoltaics, solar thermal systems, geothermal energy, hydrogen-fueled systems, biomass-based systems, biofuels, and hydropower.

      (4) Fossil energy including power generation, onshore and offshore oil and gas resource recovery, and transportation.

      (5) Nuclear energy including programs for existing and advanced reactors and education of future specialists.

    (c) Public Comment- The Secretary shall provide mechanisms for input on the annually published goals from industry, university, and other public sources.

    (d) Effect of Goals-

      (1) NO NEW AUTHORITY OR REQUIREMENT- Nothing in subsection (a) or the annually published goals shall--

        (A) create any new--

          (i) authority for any Federal agency; or

          (ii) requirement for any other person;

        (B) be used by a Federal agency to support the establishment of regulatory standards or regulatory requirements; or

        (C) alter the authority of the Secretary to make grants or other awards.

      (2) NO LIMITATION- Nothing in this subsection shall be construed to limit the authority of the Secretary to impose conditions on grants or other awards based on the goals in subsection (a) or any subsequent modification thereto.

SEC. 902. DEFINITIONS.

    For purposes of this title:

      (1) DEPARTMENT- The term ‘Department’ means the Department of Energy.

      (2) DEPARTMENTAL MISSION- The term ‘departmental mission’ means any of the functions vested in the Secretary of Energy by the Department of Energy Organization Act (42 U.S.C. 7101 et seq.) or other law.

      (3) INSTITUTION OF HIGHER EDUCATION- The term ‘institution of higher education’ has the meaning given that term in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)).

      (4) NATIONAL LABORATORY- The term ‘National Laboratory’ means any of the following laboratories owned by the Department:

        (A) Ames Laboratory.

        (B) Argonne National Laboratory.

        (C) Brookhaven National Laboratory.

        (D) Fermi National Accelerator Laboratory.

        (E) Idaho National Engineering and Environmental Laboratory.

        (F) Lawrence Berkeley National Laboratory.

        (G) Lawrence Livermore National Laboratory.

        (H) Los Alamos National Laboratory.

        (I) National Energy Technology Laboratory.

        (J) National Renewable Energy Laboratory.

        (K) Oak Ridge National Laboratory.

        (L) Pacific Northwest National Laboratory.

        (M) Princeton Plasma Physics Laboratory.

        (N) Sandia National Laboratories.

        (O) Stanford Linear Accelerator Center.

        (P) Thomas Jefferson National Accelerator Facility.

      (5) NONMILITARY ENERGY LABORATORY- The term ‘nonmilitary energy laboratory’ means the laboratories listed in paragraph (4), except for those listed in subparagraphs (G), (H), and (N).

      (6) SECRETARY- The term ‘Secretary’ means the Secretary of Energy.

      (7) SINGLE-PURPOSE RESEARCH FACILITY- The term ‘single-purpose research facility’ means any of the primarily single-purpose entities owned by the Department or any other organization of the Department designated by the Secretary.

Subtitle A--Energy Efficiency

SEC. 904. ENERGY EFFICIENCY.

    (a) In General- The following sums are authorized to be appropriated to the Secretary for energy efficiency and conservation research, development, demonstration, and commercial application activities, including activities authorized under this subtitle:

      (1) For fiscal year 2004, $616,000,000.

      (2) For fiscal year 2005, $695,000,000.

      (3) For fiscal year 2006, $772,000,000.

      (4) For fiscal year 2007, $865,000,000.

      (5) For fiscal year 2008, $920,000,000.

    (b) Allocations- From amounts authorized under subsection (a), the following sums are authorized:

      (1) For activities under section 905--

        (A) for fiscal year 2004, $20,000,000;

        (B) for fiscal year 2005, $30,000,000;

        (C) for fiscal year 2006, $50,000,000;

        (D) for fiscal year 2007, $50,000,000; and

        (E) for fiscal year 2008, $50,000,000.

      (2) For activities under section 907--

        (A) for fiscal year 2004, $4,000,000; and

        (B) for each of fiscal years 2005 through 2008, $7,000,000.

      (3) For activities under section 908--

        (A) for fiscal year 2004, $20,000,000;

        (B) for fiscal year 2005, $25,000,000;

        (C) for fiscal year 2006, $30,000,000;

        (D) for fiscal year 2007, $35,000,000; and

        (E) for fiscal year 2008, $40,000,000.

      (4) For activities under section 909, $2,000,000 for each of fiscal years 2005 through 2008.

    (c) Extended Authorization- There are authorized to be appropriated to the Secretary for activities under section 905, $50,000,000 for each of fiscal years 2009 through 2013.

    (d) Limitation on Use of Funds- None of the funds authorized to be appropriated under this section may be used for--

      (1) the issuance and implementation of energy efficiency regulations;

      (2) the Weatherization Assistance Program under part A of title IV of the Energy Conservation and Production Act (42 U.S.C. 6861 et seq.);

      (3) the State Energy Program under part D of title III of the Energy Policy and Conservation Act (42 U.S.C. 6321 et seq.); or

      (4) the Federal Energy Management Program under part 3 of title V of the National Energy Conservation Policy Act (42 U.S.C. 8251 et seq.).

SEC. 905. NEXT GENERATION LIGHTING INITIATIVE.

    (a) In General- The Secretary shall carry out a Next Generation Lighting Initiative in accordance with this section to support research, development, demonstration, and commercial application activities related to advanced solid-state lighting technologies based on white light emitting diodes.

    (b) Objectives- The objectives of the initiative shall be to develop advanced solid-state organic and inorganic lighting technologies based on white light emitting diodes that, compared to incandescent and fluorescent lighting technologies, are longer lasting; more energy-efficient; and cost-competitive, and have less environmental impact.

    (c) Industry Alliance- The Secretary shall, not later than 3 months after the date of enactment of this section, competitively select an Industry Alliance to represent participants that are private, for-profit firms which, as a group, are broadly representative of United States solid state lighting research, development, infrastructure, and manufacturing expertise as a whole.

    (d) Research-

      (1) IN GENERAL- The Secretary shall carry out the research activities of the Next Generation Lighting Initiative through competitively awarded grants to researchers, including Industry Alliance participants, National Laboratories, and institutions of higher education.

      (2) ASSISTANCE FROM THE INDUSTRY ALLIANCE- The Secretary shall annually solicit from the Industry Alliance--

        (A) comments to identify solid-state lighting technology needs;

        (B) assessment of the progress of the Initiative’s research activities; and

        (C) assistance in annually updating solid-state lighting technology roadmaps.

      (3) AVAILABILITY OF INFORMATION AND ROADMAPS- The information and roadmaps under paragraph (2) shall be available to the public and public response shall be solicited by the Secretary.

    (e) Development, Demonstration, and Commercial Application- The Secretary shall carry out a development, demonstration, and commercial application program for the Next Generation Lighting Initiative through competitively selected awards. The Secretary may give preference to participants of the Industry Alliance selected pursuant to subsection (c).

    (f) Intellectual Property- The Secretary may require, in accordance with the authorities provided in section 202(a)(ii) of title 35, United States Code, section 152 of the Atomic Energy Act of 1954 (42 U.S.C. 2182), and section 9 of the Federal Nonnuclear Energy Research and Development Act of 1974 (42 U.S.C. 5908), that--

      (1) for any new invention resulting from activities under subsection (d)--

        (A) the Industry Alliance members that are active participants in research, development, and demonstration activities related to the advanced solid-state lighting technologies that are the subject of this section shall be granted first option to negotiate with the invention owner nonexclusive licenses and royalties for uses of the invention related to solid-state lighting on terms that are reasonable under the circumstances; and

        (B)(i) for 1 year after a United States patent is issued for the invention, the patent holder shall not negotiate any license or royalty with any entity that is not a participant in the Industry Alliance described in subparagraph (A); and

        (ii) during the year described in clause (i), the invention owner shall negotiate nonexclusive licenses and royalties in good faith with any interested participant in the Industry Alliance described in subparagraph (A); and

      (2) such other terms as the Secretary determines are required to promote accelerated commercialization of inventions made under the Initiative.

    (g) National Academy Review- The Secretary shall enter into an arrangement with the National Academy of Sciences to conduct periodic reviews of the Next Generation Lighting Initiative. The Academy shall review the research priorities, technical milestones, and plans for technology transfer and progress towards achieving them. The Secretary shall consider the results of such reviews in evaluating the information obtained under subsection (d)(2).

    (h) Definitions- As used in this section:

      (1) ADVANCED SOLID-STATE LIGHTING- The term ‘advanced solid-state lighting’ means a semiconducting device package and delivery system that produces white light using externally applied voltage.

      (2) RESEARCH- The term ‘research’ includes research on the technologies, materials, and manufacturing processes required for white light emitting diodes.

      (3) INDUSTRY ALLIANCE- The term ‘Industry Alliance’ means an entity selected by the Secretary under subsection (c).

      (4) WHITE LIGHT EMITTING DIODE- The term ‘white light emitting diode’ means a semiconducting package, utilizing either organic or inorganic materials, that produces white light using externally applied voltage.

SEC. 906. NATIONAL BUILDING PERFORMANCE INITIATIVE.

    (a) Interagency Group- Not later than 90 days after the date of enactment of this Act, the Director of the Office of Science and Technology Policy shall establish an interagency group to develop, in coordination with the advisory committee established under subsection (e), a National Building Performance Initiative (in this section referred to as the ‘Initiative’). The interagency group shall be co-chaired by appropriate officials of the Department and the Department of Commerce, who shall jointly arrange for the provision of necessary administrative support to the group.

    (b) Integration of Efforts- The Initiative, working with the National Institute of Building Sciences, shall integrate Federal, State, and voluntary private sector efforts to reduce the costs of construction, operation, maintenance, and renovation of commercial, industrial, institutional, and residential buildings.

    (c) Plan- Not later than 1 year after the date of enactment of this Act, the interagency group shall submit to Congress a plan for carrying out the appropriate Federal role in the Initiative. The plan shall include--

      (1) research, development, demonstration, and commercial application of systems and materials for new construction and retrofit relating to the building envelope and building system components; and

      (2) the collection, analysis, and dissemination of research results and other pertinent information on enhancing building performance to industry, government entities, and the public.

    (d) Department of Energy Role- Within the Federal portion of the Initiative, the Department shall be the lead agency for all aspects of building performance related to use and conservation of energy.

    (e) Advisory Committee-

      (1) ESTABLISHMENT- The Secretary, in consultation with the Secretary of Commerce and the Director of the Office of Science and Technology Policy, shall establish an advisory committee to--

        (A) analyze and provide recommendations on potential private sector roles and participation in the Initiative; and

        (B) review and provide recommendations on the plan described in subsection (c).

      (2) MEMBERSHIP- Membership of the advisory committee shall include representatives with a broad range of appropriate expertise, including expertise in--

        (A) building research and technology;

        (B) architecture, engineering, and building materials and systems; and

        (C) the residential, commercial, and industrial sectors of the construction industry.

    (f) Construction- Nothing in this section provides any Federal agency with new authority to regulate building performance.

SEC. 907. SECONDARY ELECTRIC VEHICLE BATTERY USE PROGRAM.

    (a) Definitions- For purposes of this section:

      (1) ASSOCIATED EQUIPMENT- The term ‘associated equipment’ means equipment located where the batteries will be used that is necessary to enable the use of the energy stored in the batteries.

      (2) BATTERY- The term ‘battery’ means an energy storage device that previously has been used to provide motive power in a vehicle powered in whole or in part by electricity.

    (b) Program- The Secretary shall establish and conduct a research, development, demonstration, and commercial application program for the secondary use of batteries if the Secretary finds that there are sufficient numbers of such batteries to support the program. The program shall be--

      (1) designed to demonstrate the use of batteries in secondary applications, including utility and commercial power storage and power quality;

      (2) structured to evaluate the performance, including useful service life and costs, of such batteries in field operations, and the necessary supporting infrastructure, including reuse and disposal of batteries; and

      (3) coordinated with ongoing secondary battery use programs at the National Laboratories and in industry.

    (c) Solicitation- Not later than 180 days after the date of enactment of this Act, if the Secretary finds under subsection (b) that there are sufficient numbers of batteries to support the program, the Secretary shall solicit proposals to demonstrate the secondary use of batteries and associated equipment and supporting infrastructure in geographic locations throughout the United States. The Secretary may make additional solicitations for proposals if the Secretary determines that such solicitations are necessary to carry out this section.

    (d) Selection of Proposals-

      (1) IN GENERAL- The Secretary shall, not later than 90 days after the closing date established by the Secretary for receipt of proposals under subsection (c), select up to 5 proposals which may receive financial assistance under this section, subject to the availability of appropriations.

      (2) DIVERSITY; ENVIRONMENTAL EFFECT- In selecting proposals, the Secretary shall consider diversity of battery type, geographic and climatic diversity, and life-cycle environmental effects of the approaches.

      (3) LIMITATION- No 1 project selected under this section shall receive more than 25 percent of the funds authorized for the program under this section.

      (4) OPTIMIZATION OF FEDERAL RESOURCES- The Secretary shall consider the extent of involvement of State or local government and other persons in each demonstration project to optimize use of Federal resources.

      (5) OTHER CRITERIA- The Secretary may consider such other criteria as the Secretary considers appropriate.

    (e) Conditions- The Secretary shall require that--

      (1) relevant information be provided to the Department, the users of the batteries, the proposers, and the battery manufacturers;

      (2) the proposer provide at least 50 percent of the costs associated with the proposal; and

      (3) the proposer provide to the Secretary such information regarding the disposal of the batteries as the Secretary may require to ensure that the proposer disposes of the batteries in accordance with applicable law.

SEC. 908. ENERGY EFFICIENCY SCIENCE INITIATIVE.

    (a) Establishment- The Secretary shall establish an Energy Efficiency Science Initiative to be managed by the Assistant Secretary in the Department with responsibility for energy conservation under section 203(a)(9) of the Department of Energy Organization Act (42 U.S.C. 7133(a)(9)), in consultation with the Director of the Office of Science, for grants to be competitively awarded and subject to peer review for research relating to energy efficiency.

    (b) Report- The Secretary shall submit to Congress, along with the President’s annual budget request under section 1105(a) of title 31, United States Code, a report on the activities of the Energy Efficiency Science Initiative, including a description of the process used to award the funds and an explanation of how the research relates to energy efficiency.

SEC. 909. ELECTRIC MOTOR CONTROL TECHNOLOGY.

    The Secretary shall conduct a research, development, demonstration, and commercial application program on advanced control devices to improve the energy efficiency of electric motors used in heating, ventilation, air conditioning, and comparable systems.

SEC. 910. ADVANCED ENERGY TECHNOLOGY TRANSFER CENTERS.

    (a) Grants- Not later than 18 months after the date of enactment of this Act, the Secretary shall make grants to nonprofit institutions, State and local governments, or universities (or consortia thereof), to establish a geographically dispersed network of Advanced Energy Technology Transfer Centers, to be located in areas the Secretary determines have the greatest need of the services of such Centers.

    (b) Activities-

      (1) IN GENERAL- Each Center shall operate a program to encourage demonstration and commercial application of advanced energy methods and technologies through education and outreach to building and industrial professionals, and to other individuals and organizations with an interest in efficient energy use.

      (2) ADVISORY PANEL- Each Center shall establish an advisory panel to advise the Center on how best to accomplish the activities under paragraph (1).

    (c) Application- A person seeking a grant under this section shall submit to the Secretary an application in such form and containing such information as the Secretary may require. The Secretary may award a grant under this section to an entity already in existence if the entity is otherwise eligible under this section.

    (d) Selection Criteria- The Secretary shall award grants under this section on the basis of the following criteria, at a minimum:

      (1) The ability of the applicant to carry out the activities in subsection (b).

      (2) The extent to which the applicant will coordinate the activities of the Center with other entities, such as State and local governments, utilities, and educational and research institutions.

    (e) Matching Funds- The Secretary shall require a non-Federal matching requirement of at least 50 percent of the costs of establishing and operating each Center.

    (f) Advisory Committee- The Secretary shall establish an advisory committee to advise the Secretary on the establishment of Centers under this section. The advisory committee shall be composed of individuals with expertise in the area of advanced energy methods and technologies, including at least 1 representative from--

      (1) State or local energy offices;

      (2) energy professionals;

      (3) trade or professional associations;

      (4) architects, engineers, or construction professionals;

      (5) manufacturers;

      (6) the research community; and

      (7) nonprofit energy or environmental organizations.

    (g) Definitions- For purposes of this section:

      (1) ADVANCED ENERGY METHODS AND TECHNOLOGIES- The term ‘advanced energy methods and technologies’ means all methods and technologies that promote energy efficiency and conservation, including distributed generation technologies, and life-cycle analysis of energy use.

      (2) CENTER- The term ‘Center’ means an Advanced Energy Technology Transfer Center established pursuant to this section.

      (3) DISTRIBUTED GENERATION- The term ‘distributed generation’ means an electric power generation facility that is designed to serve retail electric consumers at or near the facility site.

Subtitle B--Distributed Energy and Electric Energy Systems

SEC. 911. DISTRIBUTED ENERGY AND ELECTRIC ENERGY SYSTEMS.

    (a) In General- The following sums are authorized to be appropriated to the Secretary for distributed energy and electric energy systems activities, including activities authorized under this subtitle:

      (1) For fiscal year 2004, $190,000,000.

      (2) For fiscal year 2005, $200,000,000.

      (3) For fiscal year 2006, $220,000,000.

      (4) For fiscal year 2007, $240,000,000.

      (5) For fiscal year 2008, $260,000,000.

    (b) Micro-Cogeneration Energy Technology- From amounts authorized under subsection (a), $20,000,000 for each of fiscal years 2004 and 2005 is authorized for activities under section 914.

SEC. 912. HYBRID DISTRIBUTED POWER SYSTEMS.

    (a) Requirement- Not later than 1 year after the date of enactment of this Act, the Secretary shall develop and transmit to Congress a strategy for a comprehensive research, development, demonstration, and commercial application program to develop hybrid distributed power systems that combine--

      (1) 1 or more renewable electric power generation technologies of 10 megawatts or less located near the site of electric energy use; and

      (2) nonintermittent electric power generation technologies suitable for use in a distributed power system.

    (b) Contents- The strategy shall--

      (1) identify the needs best met with such hybrid distributed power systems and the technological barriers to the use of such systems;

      (2) provide for the development of methods to design, test, integrate into systems, and operate such hybrid distributed power systems;

      (3) include, as appropriate, research, development, demonstration, and commercial application on related technologies needed for the adoption of such hybrid distributed power systems, including energy storage devices and environmental control technologies;

      (4) include research, development, demonstration, and commercial application of interconnection technologies for communications and controls of distributed generation architectures, particularly technologies promoting real-time response to power market information and physical conditions on the electrical grid; and

      (5) describe how activities under the strategy will be integrated with other research, development, demonstration, and commercial application activities supported by the Department related to electric power technologies.

SEC. 913. HIGH POWER DENSITY INDUSTRY PROGRAM.

    The Secretary shall establish a comprehensive research, development, demonstration, and commercial application program to improve energy efficiency of high power density facilities, including data centers, server farms, and telecommunications facilities. Such program shall consider technologies that provide significant improvement in thermal controls, metering, load management, peak load reduction, or the efficient cooling of electronics.

SEC. 914. MICRO-COGENERATION ENERGY TECHNOLOGY.

    The Secretary shall make competitive, merit-based grants to consortia for the development of micro-cogeneration energy technology. The consortia shall explore--

      (1) the use of small-scale combined heat and power in residential heating appliances; and

      (2) the use of excess power to operate other appliances within the residence and supply excess generated power to the power grid.

SEC. 915. DISTRIBUTED ENERGY TECHNOLOGY DEMONSTRATION PROGRAM.

    The Secretary, within the sums authorized under section 911(a), may provide financial assistance to coordinating consortia of interdisciplinary participants for demonstrations designed to accelerate the utilization of distributed energy technologies, such as fuel cells, microturbines, reciprocating engines, thermally activated technologies, and combined heat and power systems, in highly energy intensive commercial applications.

SEC. 916. RECIPROCATING POWER.

    The Secretary shall conduct a research, development, and demonstration program regarding fuel system optimization and emissions reduction after-treatment technologies for industrial reciprocating engines. Such after-treatment technologies shall use processes that reduce emissions by recirculating exhaust gases and shall be designed to be retrofitted to any new or existing diesel or natural gas engine used for power generation, peaking power generation, combined heat and power, or compression.

Subtitle C--Renewable Energy

SEC. 918. RENEWABLE ENERGY.

    (a) In General- The following sums are authorized to be appropriated to the Secretary for renewable energy research, development, demonstration, and commercial application activities, including activities authorized under this subtitle:

      (1) For fiscal year 2004, $480,000,000.

      (2) For fiscal year 2005, $550,000,000.

      (3) For fiscal year 2006, $610,000,000.

      (4) For fiscal year 2007, $659,000,000.

      (5) For fiscal year 2008, $710,000,000.

    (b) Bioenergy- From the amounts authorized under subsection (a), the following sums are authorized to be appropriated to carry out section 919:

      (1) For fiscal year 2004, $135,425,000.

      (2) For fiscal year 2005, $155,600,000.

      (3) For fiscal year 2006, $167,650,000.

      (4) For fiscal year 2007, $180,000,000.

      (5) For fiscal year 2008, $192,000,000.

    (c) Concentrating Solar Power- From amounts authorized under subsection (a), the following sums are authorized to be appropriated to carry out section 920:

      (1) For fiscal year 2004, $20,000,000.

      (2) For fiscal year 2005, $40,000,000.

      (3) For each of fiscal years 2006, 2007 and 2008, $50,000,000.

    (d) Public Buildings- From the amounts authorized under subsection (a), $30,000,000 for each of the fiscal years 2004 through 2008 are authorized to be appropriated to carry out section 922.

    (e) Limits on Use of Funds-

      (1) NO FUNDS FOR RENEWABLE SUPPORT AND IMPLEMENTATION- None of the funds authorized to be appropriated under this section may be used for Renewable Support and Implementation.

      (2) GRANTS- Of the funds authorized under subsection (b), not less than $5,000,000 for each fiscal year shall be made available for grants to Historically Black Colleges and Universities, Tribal Colleges, and Hispanic-Serving Institutions.

      (3) REGIONAL FIELD VERIFICATION PROGRAM- Of the funds authorized under subsection (a), not less than $4,000,000 for each fiscal year shall be made available for the Regional Field Verification Program of the Department.

      (4) OFF-STREAM PUMPED STORAGE HYDROPOWER- Of the funds authorized under subsection (a), such sums as may be necessary shall be made available for demonstration projects of off-stream pumped storage hydropower.

    (f) Consultation- In carrying out this subtitle, the Secretary, in consultation with the Secretary of Agriculture, shall demonstrate the use of advanced wind power technology, including combined use with coal gasification; biomass; geothermal energy systems; and other renewable energy technologies to assist in delivering electricity to rural and remote locations.

SEC. 919. BIOENERGY PROGRAMS.

    (a) Definitions- For the purposes of this section:

      (1) The term ‘agricultural byproducts’ includes waste products, including poultry fat and poultry waste.

      (2) The term ‘cellulosic biomass’ means any portion of a crop containing lignocellulose or hemicellulose, including barley grain, grapeseed, forest thinnings, rice bran, rice hulls, rice straw, soybean matter, and sugarcane bagasse, or any crop grown specifically for the purpose of producing cellulosic feedstocks.

    (b) Program- The Secretary shall conduct a program of research, development, demonstration, and commercial application for bioenergy, including--

      (1) biopower energy systems;

      (2) biofuels;

      (3) bio-based products;

      (4) integrated biorefineries that may produce biopower, biofuels, and bio-based products;

      (5) cross-cutting research and development in feedstocks and enzymes; and

      (6) economic analysis.

    (c) Biofuels and Bio-Based Products- The goals of the biofuels and bio-based products programs shall be to develop, in partnership with industry--

      (1) advanced biochemical and thermochemical conversion technologies capable of making biofuels that are price-competitive with gasoline or diesel in either internal combustion engines or fuel cell-powered vehicles, and bio-based products from a variety of feedstocks, including grains, cellulosic biomass, and other agricultural byproducts; and

      (2) advanced biotechnology processes capable of making biofuels and bio-based products with emphasis on development of biorefinery technologies using enzyme-based processing systems.

SEC. 920. CONCENTRATING SOLAR POWER RESEARCH AND DEVELOPMENT PROGRAM.

    (a) In General- The Secretary shall conduct a program of research and development to evaluate the potential of concentrating solar power for hydrogen production, including cogeneration approaches for both hydrogen and electricity. Such program shall take advantage of existing facilities to the extent possible and shall include--

      (1) development of optimized technologies that are common to both electricity and hydrogen production;

      (2) evaluation of thermochemical cycles for hydrogen production at the temperatures attainable with concentrating solar power;

      (3) evaluation of materials issues for the thermochemical cycles described in paragraph (2);

      (4) system architectures and economics studies; and

      (5) coordination with activities in the Advanced Reactor Hydrogen Cogeneration Project on high temperature materials, thermochemical cycles, and economic issues.

    (b) Assessment- In carrying out the program under this section, the Secretary shall--

      (1) assess conflicting guidance on the economic potential of concentrating solar power for electricity production received from the National Research Council report entitled ‘Renewable Power Pathways: A Review of the U.S. Department of Energy’s Renewable Energy Programs’ in 2000 and subsequent Department-funded reviews of that report; and

      (2) provide an assessment of the potential impact of the technology before, or concurrent with, submission of the fiscal year 2006 budget.

    (c) Report- Not later than 5 years after the date of enactment of this Act, the Secretary shall provide a report to Congress on the economic and technical potential for electricity or hydrogen production, with or without cogeneration, with concentrating solar power, including the economic and technical feasibility of potential construction of a pilot demonstration facility suitable for commercial production of electricity or hydrogen from concentrating solar power.

SEC. 921. MISCELLANEOUS PROJECTS.

    The Secretary may conduct research, development, demonstration, and commercial application programs for--

      (1) ocean energy, including wave energy; and

      (2) the combined use of renewable energy technologies with one another and with other energy technologies, including the combined use of wind power and coal gasification technologies.

SEC. 922. RENEWABLE ENERGY IN PUBLIC BUILDINGS.

    (a) Demonstration and Technology Transfer Program- The Secretary shall establish a program for the demonstration of innovative technologies for solar and other renewable energy sources in buildings owned or operated by a State or local government, and for the dissemination of information resulting from such demonstration to interested parties.

    (b) Limit on Federal Funding- The Secretary shall provide under this section no more than 40 percent of the incremental costs of the solar or other renewable energy source project funded.

    (c) Requirement- As part of the application for awards under this section, the Secretary shall require all applicants--

      (1) to demonstrate a continuing commitment to the use of solar and other renewable energy sources in buildings they own or operate; and

      (2) to state how they expect any award to further their transition to the significant use of renewable energy.

SEC. 923. STUDY OF MARINE RENEWABLE ENERGY OPTIONS.

    (a) In General- The Secretary shall enter into an arrangement with the National Academy of Sciences to conduct a study on--

      (1) the feasibility of various methods of renewable generation of energy from the ocean, including energy from waves, tides, currents, and thermal gradients; and

      (2) the research, development, demonstration, and commercial application activities required to make marine renewable energy generation competitive with other forms of electricity generation.

    (b) Transmittal- Not later than 1 year after the date of enactment of this Act, the Secretary shall transmit the study to Congress along with the Secretary’s recommendations for implementing the results of the study.

Subtitle D--Nuclear Energy

SEC. 924. NUCLEAR ENERGY.

    (a) Core Programs- The following sums are authorized to be appropriated to the Secretary for nuclear energy research, development, demonstration, and commercial application activities, including activities authorized under this subtitle, other than those described in subsection (b):

      (1) For fiscal year 2004, $273,000,000.

      (2) For fiscal year 2005, $355,000,000.

      (3) For fiscal year 2006, $430,000,000.

      (4) For fiscal year 2007, $455,000,000.

      (5) For fiscal year 2008, $545,000,000.

    (b) Nuclear Infrastructure Support- The following sums are authorized to be appropriated to the Secretary for activities under section 925(e):

      (1) For fiscal year 2004, $125,000,000.

      (2) For fiscal year 2005, $130,000,000.

      (3) For fiscal year 2006, $135,000,000.

      (4) For fiscal year 2007, $140,000,000.

      (5) For fiscal year 2008, $145,000,000.

    (c) Allocations- From amounts authorized under subsection (a), the following sums are authorized:

      (1) For activities under section 926--

        (A) for fiscal year 2004, $140,000,000;

        (B) for fiscal year 2005, $145,000,000;

        (C) for fiscal year 2006, $150,000,000;

        (D) for fiscal year 2007, $155,000,000; and

        (E) for fiscal year 2008, $275,000,000.

      (2) For activities under section 927--

        (A) for fiscal year 2004, $35,200,000;

        (B) for fiscal year 2005, $44,350,000;

        (C) for fiscal year 2006, $49,200,000;

        (D) for fiscal year 2007, $54,950,000; and

        (E) for fiscal year 2008, $60,000,000.

      (3) For activities under section 929, for each of fiscal years 2004 through 2008, $6,000,000.

    (d) Limitation on Use of Funds- None of the funds authorized under this section may be used for decommissioning the Fast Flux Test Facility.

SEC. 925. NUCLEAR ENERGY RESEARCH AND DEVELOPMENT PROGRAMS.

    (a) Nuclear Energy Research Initiative- The Secretary shall carry out a Nuclear Energy Research Initiative for research and development related to nuclear energy.

    (b) Nuclear Energy Plant Optimization Program- The Secretary shall carry out a Nuclear Energy Plant Optimization Program to support research and development activities addressing reliability, availability, productivity, component aging, safety, and security of existing nuclear power plants.

    (c) Nuclear Power 2010 Program- The Secretary shall carry out a Nuclear Power 2010 Program, consistent with recommendations in the October 2001 report entitled ‘A Roadmap to Deploy New Nuclear Power Plants in the United States by 2010’ issued by the Nuclear Energy Research Advisory Committee of the Department. Whatever type of reactor is chosen for the hydrogen cogeneration project under subtitle C of title VI, that type shall not be addressed in the Program under this section. The Program shall include--

      (1) support for first-of-a-kind engineering design and certification expenses of advanced nuclear power plant designs, which offer improved safety and economics over current conventional plants and the promise of near-term to medium-term commercial deployment;

      (2) action by the Secretary to encourage domestic power companies to install new nuclear plant capacity as soon as possible;

      (3) utilization of the expertise and capabilities of industry, universities, and National Laboratories in evaluation of advanced nuclear fuel cycles and fuels testing;

      (4) consideration of proliferation-resistant passively-safe, small reactors suitable for long-term electricity production without refueling and suitable for use in remote installations;

      (5) participation of international collaborators in research, development, design, and deployment efforts as appropriate and consistent with United States interests in nonproliferation of nuclear weapons;

      (6) encouragement for university and industry participation; and

      (7) selection of projects such as to strengthen the competitive position of the domestic nuclear power industrial infrastructure.

    (d) Generation IV Nuclear Energy Systems Initiative- The Secretary shall carry out a Generation IV Nuclear Energy Systems Initiative to develop an overall technology plan and to support research and development necessary to make an informed technical decision about the most promising candidates for eventual commercial application. The Initiative shall examine advanced proliferation-resistant and passively safe reactor designs, including designs that--

      (1) are economically competitive with other electric power generation plants;

      (2) have higher efficiency, lower cost, and improved safety compared to reactors in operation on the date of enactment of this Act;

      (3) use fuels that are proliferation-resistant and have substantially reduced production of high-level waste per unit of output; and

      (4) use improved instrumentation.

    (e) Nuclear Infrastructure Support- The Secretary shall develop and implement a strategy for the facilities of the Office of Nuclear Energy, Science, and Technology and shall transmit a report containing the strategy along with the President’s budget request to Congress for fiscal year 2006.

SEC. 926. ADVANCED FUEL CYCLE INITIATIVE.

    (a) In General- The Secretary, through the Director of the Office of Nuclear Energy, Science, and Technology, shall conduct an advanced fuel recycling technology research and development program to evaluate proliferation-resistant fuel recycling and transmutation technologies that minimize environmental or public health and safety impacts as an alternative to aqueous reprocessing technologies deployed as of the date of enactment of this Act in support of evaluation of alternative national strategies for spent nuclear fuel and the Generation IV advanced reactor concepts, subject to annual review by the Secretary’s Nuclear Energy Research Advisory Committee or other independent entity, as appropriate. Opportunities to enhance progress of the program through international cooperation should be sought.

    (b) Reports- The Secretary shall report on the activities of the advanced fuel recycling technology research and development program as part of the Department’s annual budget submission.

SEC. 927. UNIVERSITY NUCLEAR SCIENCE AND ENGINEERING SUPPORT.

    (a) Establishment- The Secretary shall support a program to invest in human resources and infrastructure in the nuclear sciences and engineering and related fields (including health physics and nuclear and radiochemistry), consistent with departmental missions related to civilian nuclear research and development.

    (b) Duties- In carrying out the program under this section, the Secretary shall establish fellowship and faculty assistance programs, as well as provide support for fundamental research and encourage collaborative research among industry, National Laboratories, and universities through the Nuclear Energy Research Initiative. The Secretary is encouraged to support activities addressing the entire fuel cycle through involvement of both the Office of Nuclear Energy, Science, and Technology and the Office of Civilian Radioactive Waste Management. The Secretary shall support communication and outreach related to nuclear science, engineering, and nuclear waste management, consistent with interests of the United States in nonproliferation of nuclear weapons capabilities.

    (c) Strengthening University Research and Training Reactors and Associated Infrastructure- Activities under this section may include--

      (1) converting research and training reactors currently using high-enrichment fuels to low-enrichment fuels, upgrading operational instrumentation, and sharing of reactors among institutions of higher education;

      (2) providing technical assistance, in collaboration with the United States nuclear industry, in relicensing and upgrading research and training reactors as part of a student training program; and

      (3) providing funding, through the Innovations in Nuclear Infrastructure and Education Program, for reactor improvements as part of a focused effort that emphasizes research, training, and education.

    (d) University National Laboratory Interactions- The Secretary shall develop sabbatical fellowship and visiting scientist programs to encourage sharing of personnel between National Laboratories and universities.

    (e) Operating and Maintenance Costs- Funding for a research project provided under this section may be used to offset a portion of the operating and maintenance costs of a research and training reactor at an institution of higher education used in the research project.

SEC. 928. SECURITY OF REACTOR DESIGNS.

    The Secretary, through the Director of the Office of Nuclear Energy, Science, and Technology, shall conduct a research and development program on cost-effective technologies for increasing the safety of reactor designs from natural phenomena and the security of reactor designs from deliberate attacks.

SEC. 929. ALTERNATIVES TO INDUSTRIAL RADIOACTIVE SOURCES.

    (a) Study- The Secretary shall conduct a study and provide a report to Congress not later than August 1, 2004. The study shall--

      (1) survey industrial applications of large radioactive sources, including well-logging sources;

      (2) review current domestic and international Department, Department of Defense, Department of State, and commercial programs to manage and dispose of radioactive sources;

      (3) discuss disposal options and practices for currently deployed or future sources and, if deficiencies are noted in existing disposal options or practices for either deployed or future sources, recommend options to remedy deficiencies; and

      (4) develop a program plan for research and development to develop alternatives to large industrial sources that reduce safety, environmental, or proliferation risks to either workers using the sources or the public.

    (b) Program- The Secretary shall establish a research and development program to implement the program plan developed under subsection (a)(4). The program shall include miniaturized particle accelerators for well-logging or other industrial applications and portable accelerators for production of short-lived radioactive materials at an industrial site.

SEC. 930. GEOLOGICAL ISOLATION OF SPENT FUEL.

    The Secretary shall conduct a study to determine the feasibility of deep borehole disposal of spent nuclear fuel and high-level radioactive waste. The study shall emphasize geological, chemical, and hydrological characterization of, and design of engineered structures for, deep borehole environments. Not later than 1 year after the date of enactment of this Act, the Secretary shall transmit the study to Congress.

Subtitle E--Fossil Energy

PART I--RESEARCH PROGRAMS

SEC. 931. FOSSIL ENERGY.

    (a) In General- The following sums are authorized to be appropriated to the Secretary for fossil energy research, development, demonstration, and commercial application activities, including activities authorized under this part:

      (1) For fiscal year 2004, $530,000,000.

      (2) For fiscal year 2005, $556,000,000.

      (3) For fiscal year 2006, $583,000,000.

      (4) For fiscal year 2007, $611,000,000.

      (5) For fiscal year 2008, $626,000,000.

    (b) Allocations- From amounts authorized under subsection (a), the following sums are authorized:

      (1) For activities under section 932(b)(2), $28,000,000 for each of the fiscal years 2004 through 2008.

      (2) For activities under section 934--

        (A) for fiscal year 2004, $12,000,000;

        (B) for fiscal year 2005, $15,000,000; and

        (C) for each of fiscal years 2006 through 2008, $20,000,000.

      (3) For activities under section 935--

        (A) for fiscal year 2004, $259,000,000;

        (B) for fiscal year 2005, $272,000,000;

        (C) for fiscal year 2006, $285,000,000;

        (D) for fiscal year 2007, $298,000,000; and

        (E) for fiscal year 2008, $308,000,000.

      (4) For the Office of Arctic Energy under section 3197 of the Floyd D. Spence National Defense Authorization Act for Fiscal Year 2001 (42 U.S.C. 7144d), $25,000,000 for each of fiscal years 2004 through 2008.

      (5) For activities under section 933, $4,000,000 for fiscal year 2004 and $2,000,000 for each of fiscal years 2005 through 2008.

    (c) Extended Authorization- There are authorized to be appropriated to the Secretary for the Office of Arctic Energy under section 3197 of the Floyd D. Spence National Defense Authorization Act for Fiscal Year 2001 (42 U.S.C. 7144d), $25,000,000 for each of fiscal years 2009 through 2012.

    (d) Limits on Use of Funds-

      (1) NO FUNDS FOR CERTAIN PROGRAMS- None of the funds authorized under this section may be used for Fossil Energy Environmental Restoration or Import/Export Authorization.

      (2) INSTITUTIONS OF HIGHER EDUCATION- Of the funds authorized under subsection (b)(2), not less than 20 percent of the funds appropriated for each fiscal year shall be dedicated to research and development carried out at institutions of higher education.

SEC. 932. OIL AND GAS RESEARCH PROGRAMS.

    (a) Oil and Gas Research- The Secretary shall conduct a program of research, development, demonstration, and commercial application on oil and gas, including--

      (1) exploration and production;

      (2) gas hydrates;

      (3) reservoir life and extension;

      (4) transportation and distribution infrastructure;

      (5) ultraclean fuels;

      (6) heavy oil and oil shale;

      (7) related environmental research; and

      (8) compressed natural gas marine transport.

    (b) Fuel Cells-

      (1) IN GENERAL- The Secretary shall conduct a program of research, development, demonstration, and commercial application on fuel cells for low-cost, high-efficiency, fuel-flexible, modular power systems.

      (2) IMPROVED MANUFACTURING PRODUCTION AND PROCESSES- The demonstrations under paragraph (1) shall include fuel cell technology for commercial, residential, and transportation applications, and distributed generation systems, utilizing improved manufacturing production and processes.

    (c) Natural Gas and Oil Deposits Report- Not later than 2 years after the date of enactment of this Act, and every 2 years thereafter, the Secretary of the Interior, in consultation with other appropriate Federal agencies, shall transmit a report to Congress of the latest estimates of natural gas and oil reserves, reserves growth, and undiscovered resources in Federal and State waters off the coast of Louisiana and Texas.

    (d) Integrated Clean Power and Energy Research-

      (1) NATIONAL CENTER OR CONSORTIUM OF EXCELLENCE- The Secretary shall establish a national center or consortium of excellence in clean energy and power generation, utilizing the resources of the existing Clean Power and Energy Research Consortium, to address the Nation’s critical dependence on energy and the need to reduce emissions.

      (2) PROGRAM- The center or consortium shall conduct a program of research, development, demonstration, and commercial application on integrating the following focus areas:

        (A) Efficiency and reliability of gas turbines for power generation.

        (B) Reduction in emissions from power generation.

        (C) Promotion of energy conservation issues.

        (D) Effectively utilizing alternative fuels and renewable energy.

        (E) Development of advanced materials technology for oil and gas exploration and utilization in harsh environments.

        (F) Education on energy and power generation issues.

SEC. 933. TECHNOLOGY TRANSFER.

    The Secretary shall establish a competitive program to award a contract to a nonprofit entity for the purpose of transferring technologies developed with public funds. The entity selected under this section shall have experience in offshore oil and gas technology research management, in the transfer of technologies developed with public funds to the offshore and maritime industry, and in management of an offshore and maritime industry consortium. The program consortium selected under section 942 shall not be eligible for selection under this section. When appropriate, the Secretary shall consider utilizing the entity selected under this section when implementing the activities authorized by section 975.

SEC. 934. RESEARCH AND DEVELOPMENT FOR COAL MINING TECHNOLOGIES.

    (a) Establishment- The Secretary shall carry out a program of research and development on coal mining technologies. The Secretary shall cooperate with appropriate Federal agencies, coal producers, trade associations, equipment manufacturers, institutions of higher education with mining engineering departments, and other relevant entities.

    (b) Program- The research and development activities carried out under this section shall--

      (1) be guided by the mining research and development priorities identified by the Mining Industry of the Future Program and in the recommendations from relevant reports of the National Academy of Sciences on mining technologies;

      (2) include activities exploring minimization of contaminants in mined coal that contribute to environmental concerns including development and demonstration of electromagnetic wave imaging ahead of mining operations;

      (3) develop and demonstrate electromagnetic wave imaging and radar techniques for horizontal drilling in coal beds in order to increase methane recovery efficiency, prevent spoilage of domestic coal reserves, and minimize water disposal associated with methane extraction; and

      (4) expand mining research capabilities at institutions of higher education.

SEC. 935. COAL AND RELATED TECHNOLOGIES PROGRAM.

    (a) In General- In addition to the programs authorized under title IV, the Secretary shall conduct a program of technology research, development, demonstration, and commercial application for coal and power systems, including programs to facilitate production and generation of coal-based power through--

      (1) innovations for existing plants;

      (2) integrated gasification combined cycle;

      (3) advanced combustion systems;

      (4) turbines for synthesis gas derived from coal;

      (5) carbon capture and sequestration research and development;

      (6) coal-derived transportation fuels and chemicals;

      (7) solid fuels and feedstocks;

      (8) advanced coal-related research;

      (9) advanced separation technologies; and

      (10) a joint project for permeability enhancement in coals for natural gas production and carbon dioxide sequestration.

    (b) Cost and Performance Goals- In carrying out programs authorized by this section, the Secretary shall identify cost and performance goals for coal-based technologies that would permit the continued cost-competitive use of coal for electricity generation, as chemical feedstocks, and as transportation fuel in 2007, 2015, and the years after 2020. In establishing such cost and performance goals, the Secretary shall--

      (1) consider activities and studies undertaken to date by industry in cooperation with the Department in support of such assessment;

      (2) consult with interested entities, including coal producers, industries using coal, organizations to promote coal and advanced coal technologies, environmental organizations, and organizations representing workers;

      (3) not later than 120 days after the date of enactment of this Act, publish in the Federal Register proposed draft cost and performance goals for public comments; and

      (4) not later than 180 days after the date of enactment of this Act and every 4 years thereafter, submit to Congress a report describing final cost and performance goals for such technologies that includes a list of technical milestones as well as an explanation of how programs authorized in this section will not duplicate the activities authorized under the Clean Coal Power Initiative authorized under subtitle A of title IV.

SEC. 936. COMPLEX WELL TECHNOLOGY TESTING FACILITY.

    The Secretary, in coordination with industry leaders in extended research drilling technology, shall establish a Complex Well Technology Testing Facility at the Rocky Mountain Oilfield Testing Center to increase the range of extended drilling technologies.

SEC. 937. FISCHER-TROPSCH DIESEL FUEL LOAN GUARANTEE PROGRAM.

    (a) Definition of Fischer-Tropsch Diesel Fuel- In this section, the term ‘Fischer-Tropsch diesel fuel’ means diesel fuel that--

      (1) contains less than 10 parts per million sulfur; and

      (2) is produced through the Fischer-Tropsch liquification process from coal or waste from coal that was mined in the United States.

    (b) Loan Guarantees-

      (1) ESTABLISHMENT OF PROGRAM- The Secretary of Energy shall establish a program to provide guarantees of loans by private lending institutions for the construction of facilities for the production of Fischer-Tropsch diesel fuel and commercial byproducts of that production.

      (2) REQUIREMENTS- The Secretary may provide a loan guarantee under paragraph (1) if--

        (A) without a loan guarantee, credit is not available to the applicant under reasonable terms or conditions sufficient to finance the construction of a facility described in paragraph (1);

        (B) the prospective earning power of the applicant and the character and value of the security pledged provide a reasonable assurance of repayment of the loan to be guaranteed in accordance with the terms of the loan; and

        (C) the loan bears interest at a rate determined by the Secretary to be reasonable, taking into account the current average yield on outstanding obligations of the United States with remaining periods of maturity comparable to the maturity of the loan.

      (3) CRITERIA- In selecting recipients of loan guarantees from among applicants, the Secretary shall give preference to proposals that--

        (A) meet all Federal and State permitting requirements;

        (B) are most likely to be successful; and

        (C) are located in local markets that have the greatest need for the facility because of--

          (i) the availability of domestic coal or coal waste for conversion; or

          (ii) a projected high level of demand for Fischer-Tropsch diesel fuel or other commercial byproducts of the facility.

      (4) MATURITY- A loan guaranteed under paragraph (1) shall have a maturity of not more than 25 years.

      (5) TERMS AND CONDITIONS- The loan agreement for a loan guaranteed under paragraph (1) shall provide that no provision of the loan may be amended or waived without the consent of the Secretary.

      (6) GUARANTEE FEE- A recipient of a loan guarantee under paragraph (1) shall pay the Secretary an amount to be determined by the Secretary to be sufficient to cover the administrative costs of the Secretary relating to the loan guarantee.

      (7) FULL FAITH AND CREDIT-

        (A) IN GENERAL- The full faith and credit of the United States is pledged to payment of loan guarantees made under this section.

        (B) CONCLUSIVE EVIDENCE- Any loan guarantee made by the Secretary under this section shall be conclusive evidence of the eligibility of the loan for the guarantee with respect to principal and interest.

        (C) VALIDITY- The validity of a loan guarantee shall be incontestable in the hands of a holder of the guaranteed loan.

      (8) REPORTS- Until each guaranteed loan under this section is repaid in full, the Secretary shall annually submit to Congress a report on the activities of the Secretary under this section.

      (9) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated such sums as are necessary to carry out this section.

      (10) TERMINATION OF AUTHORITY- The authority of the Secretary to issue a new loan guarantee under paragraph (1) terminates on the date that is 5 years after the date of enactment of this Act.

PART II--ULTRA-DEEPWATER AND UNCONVENTIONAL NATURAL GAS AND OTHER PETROLEUM RESOURCES

SEC. 941. PROGRAM AUTHORITY.

    (a) In General- The Secretary shall carry out a program under this part of research, development, demonstration, and commercial application of technologies for ultra-deepwater and unconventional natural gas and other petroleum resource exploration and production, including addressing the technology challenges for small producers, safe operations, and environmental mitigation (including reduction of greenhouse gas emissions and sequestration of carbon).

    (b) Program Elements- The program under this part shall address the following areas, including improving safety and minimizing environmental impacts of activities within each area:

      (1) Ultra-deepwater technology, including drilling to formations in the Outer Continental Shelf to depths greater than 15,000 feet.

      (2) Ultra-deepwater architecture.

      (3) Unconventional natural gas and other petroleum resource exploration and production technology, including the technology challenges of small producers.

    (c) Limitation on Location of Field Activities- Field activities under the program under this part shall be carried out only--

      (1) in--

        (A) areas in the territorial waters of the United States not under any Outer Continental Shelf moratorium as of September 30, 2002;

        (B) areas onshore in the United States on public land administered by the Secretary of the Interior available for oil and gas leasing, where consistent with applicable law and land use plans; and

        (C) areas onshore in the United States on State or private land, subject to applicable law; and

      (2) with the approval of the appropriate Federal or State land management agency or private land owner.

    (d) Research at National Energy Technology Laboratory- The Secretary, through the National Energy Technology Laboratory, shall carry out research complementary to research under subsection (b).

    (e) Consultation With Secretary of the Interior- In carrying out this part, the Secretary shall consult regularly with the Secretary of the Interior.

SEC. 942. ULTRA-DEEPWATER PROGRAM.

    (a) In General- The Secretary shall carry out the activities under section 941(a), to maximize the use of the ultra-deepwater natural gas and other petroleum resources of the United States by increasing the supply of such resources, through reducing the cost and increasing the efficiency of exploration for and production of such resources, while improving safety and minimizing environmental impacts.

    (b) Role of the Secretary- The Secretary shall have ultimate responsibility for, and oversight of, all aspects of the program under this section.

    (c) Role of the Program Consortium-

      (1) IN GENERAL- The Secretary may contract with a consortium to--

        (A) manage awards pursuant to subsection (f)(4);

        (B) make recommendations to the Secretary for project solicitations;

        (C) disburse funds awarded under subsection (f) as directed by the Secretary in accordance with the annual plan under subsection (e); and

        (D) carry out other activities assigned to the program consortium by this section.

      (2) LIMITATION- The Secretary may not assign any activities to the program consortium except as specifically authorized under this section.

      (3) CONFLICT OF INTEREST-

        (A) PROCEDURES- The Secretary shall establish procedures--

          (i) to ensure that each board member, officer, or employee of the program consortium who is in a decision-making capacity under subsection (f)(3) or (4) shall disclose to the Secretary any financial interests in, or financial relationships with, applicants for or recipients of awards under this section, including those of his or her spouse or minor child, unless such relationships or interests would be considered to be remote or inconsequential; and

          (ii) to require any board member, officer, or employee with a financial relationship or interest disclosed under clause (i) to recuse himself or herself from any review under subsection (f)(3) or oversight under subsection (f)(4) with respect to such applicant or recipient.

        (B) FAILURE TO COMPLY- The Secretary may disqualify an application or revoke an award under this section if a board member, officer, or employee has failed to comply with procedures required under subparagraph (A)(ii).

    (d) Selection of the Program Consortium-

      (1) IN GENERAL- The Secretary shall select the program consortium through an open, competitive process.

      (2) MEMBERS- The program consortium may include corporations, trade associations, institutions of higher education, National Laboratories, or other research institutions. After submitting a proposal under paragraph (4), the program consortium may not add members without the consent of the Secretary.

      (3) TAX STATUS- The program consortium shall be an entity that is exempt from tax under section 501(c)(3) of the Internal Revenue Code of 1986.

      (4) SCHEDULE- Not later than 180 days after the date of enactment of this Act, the Secretary shall solicit proposals from eligible consortia to perform the duties in subsection (c)(1), which shall be submitted not later than 360 days after the date of enactment of this Act. The Secretary shall select the program consortium not later than 18 months after such date of enactment.

      (5) APPLICATION- Applicants shall submit a proposal including such information as the Secretary may require. At a minimum, each proposal shall--

        (A) list all members of the consortium;

        (B) fully describe the structure of the consortium, including any provisions relating to intellectual property; and

        (C) describe how the applicant would carry out the activities of the program consortium under this section.

      (6) ELIGIBILITY- To be eligible to be selected as the program consortium, an applicant must be an entity whose members collectively have demonstrated capabilities in planning and managing research, development, demonstration, and commercial application programs in natural gas or other petroleum exploration or production.

      (7) CRITERION- The Secretary shall consider the amount of the fee an applicant proposes to receive under subsection (g) in selecting a consortium under this section.

    (e) Annual Plan-

      (1) IN GENERAL- The program under this section shall be carried out pursuant to an annual plan prepared by the Secretary in accordance with paragraph (2).

      (2) DEVELOPMENT-

        (A) SOLICITATION OF RECOMMENDATIONS- Before drafting an annual plan under this subsection, the Secretary shall solicit specific written recommendations from the program consortium for each element to be addressed in the plan, including those described in paragraph (4). The Secretary may request that the program consortium submit its recommendations in the form of a draft annual plan.

        (B) SUBMISSION OF RECOMMENDATIONS; OTHER COMMENT- The Secretary shall submit the recommendations of the program consortium under subparagraph (A) to the Ultra-Deepwater Advisory Committee established under section 945(a) for review, and such Advisory Committee shall provide to the Secretary written comments by a date determined by the Secretary. The Secretary may also solicit comments from any other experts.

        (C) CONSULTATION- The Secretary shall consult regularly with the program consortium throughout the preparation of the annual plan.

      (3) PUBLICATION- The Secretary shall transmit to Congress and publish in the Federal Register the annual plan, along with any written comments received under paragraph (2)(A) and (B).

      (4) CONTENTS- The annual plan shall describe the ongoing and prospective activities of the program under this section and shall include--

        (A) a list of any solicitations for awards that the Secretary plans to issue to carry out research, development, demonstration, or commercial application activities, including the topics for such work, who would be eligible to apply, selection criteria, and the duration of awards; and

        (B) a description of the activities expected of the program consortium to carry out subsection (f)(4).

      (5) ESTIMATES OF INCREASED ROYALTY RECEIPTS- The Secretary, in consultation with the Secretary of the Interior, shall provide an annual report to Congress with the President’s budget on the estimated cumulative increase in Federal royalty receipts (if any) resulting from the implementation of this part. The initial report under this paragraph shall be submitted in the first President’s budget following the completion of the first annual plan required under this subsection.

    (f) Awards-

      (1) IN GENERAL- The Secretary shall make awards to carry out research, development, demonstration, and commercial application activities under the program under this section. The program consortium shall not be eligible to receive such awards, but members of the program consortium may receive such awards.

      (2) PROPOSALS- The Secretary shall solicit proposals for awards under this subsection in such manner and at such time as the Secretary may prescribe, in consultation with the program consortium.

      (3) REVIEW- The Secretary shall make awards under this subsection through a competitive process, which shall include a review by individuals selected by the Secretary. Such individuals shall include, for each application, Federal officials, the program consortium, and non-Federal experts who are not board members, officers, or employees of the program consortium or of a member of the program consortium.

      (4) OVERSIGHT-

        (A) IN GENERAL- The program consortium shall oversee the implementation of awards under this subsection, consistent with the annual plan under subsection (e), including disbursing funds and monitoring activities carried out under such awards for compliance with the terms and conditions of the awards.

        (B) EFFECT- Nothing in subparagraph (A) shall limit the authority or responsibility of the Secretary to oversee awards, or limit the authority of the Secretary to review or revoke awards.

        (C) PROVISION OF INFORMATION- The Secretary shall provide to the program consortium the information necessary for the program consortium to carry out its responsibilities under this paragraph.

    (g) Administrative Costs-

      (1) IN GENERAL- To compensate the program consortium for carrying out its activities under this section, the Secretary shall provide to the program consortium funds sufficient to administer the program. This compensation may include a management fee consistent with Department of Energy contracting practices and procedures.

      (2) ADVANCE- The Secretary shall advance funds to the program consortium upon selection of the consortium, which shall be deducted from amounts to be provided under paragraph (1).

    (h) Audit- The Secretary shall retain an independent, commercial auditor to determine the extent to which funds provided to the program consortium, and funds provided under awards made under subsection (f), have been expended in a manner consistent with the purposes and requirements of this part. The auditor shall transmit a report annually to the Secretary, who shall transmit the report to Congress, along with a plan to remedy any deficiencies cited in the report.

SEC. 943. UNCONVENTIONAL NATURAL GAS AND OTHER PETROLEUM RESOURCES PROGRAM.

    (a) In General- The Secretary shall carry out activities under subsection 941(b)(3), to maximize the use of the onshore unconventional natural gas and other petroleum resources of the United States, by increasing the supply of such resources, through reducing the cost and increasing the efficiency of exploration for and production of such resources, while improving safety and minimizing environmental impacts.

    (b) Awards-

      (1) IN GENERAL- The Secretary shall carry out this section through awards to research consortia made through an open, competitive process. As a condition of award of funds, qualified research consortia shall--

        (A) demonstrate capability and experience in unconventional onshore natural gas or other petroleum research and development;

        (B) provide a research plan that demonstrates how additional natural gas or oil production will be achieved; and

        (C) at the request of the Secretary, provide technical advice to the Secretary for the purposes of developing the annual plan required under subsection (e).

      (2) PRODUCTION POTENTIAL- The Secretary shall seek to ensure that the number and types of awards made under this subsection have reasonable potential to lead to additional oil and natural gas production on Federal lands.

      (3) SCHEDULE- To carry out this subsection, not later than 180 days after the date of enactment of this Act, the Secretary shall solicit proposals from research consortia, which shall be submitted not later than 360 days after the date of enactment of this Act. The Secretary shall select the first group of research consortia to receive awards under this subsection not later than 18 months after such date of enactment.

    (c) Audit- The Secretary shall retain an independent, commercial auditor to determine the extent to which funds provided under awards made under this section have been expended in a manner consistent with the purposes and requirements of this part. The auditor shall transmit a report annually to the Secretary, who shall transmit the report to Congress, along with a plan to remedy any deficiencies cited in the report.

    (d) Focus Areas for Awards-

      (1) UNCONVENTIONAL RESOURCES- Awards from allocations under section 949(d)(2) shall focus on areas including advanced coalbed methane, deep drilling, natural gas production from tight sands, natural gas production from gas shales, stranded gas, innovative exploration and production techniques, enhanced recovery techniques, and environmental mitigation of unconventional natural gas and other petroleum resources exploration and production.

      (2) SMALL PRODUCERS- Awards from allocations under section 949(d)(3) shall be made to consortia consisting of small producers or organized primarily for the benefit of small producers, and shall focus on areas including complex geology involving rapid changes in the type and quality of the oil and gas reservoirs across the reservoir; low reservoir pressure; unconventional natural gas reservoirs in coalbeds, deep reservoirs, tight sands, or shales; and unconventional oil reservoirs in tar sands and oil shales.

    (e) Annual Plan-

      (1) IN GENERAL- The program under this section shall be carried out pursuant to an annual plan prepared by the Secretary in accordance with paragraph (2).

      (2) DEVELOPMENT-

        (A) WRITTEN RECOMMENDATIONS- Before drafting an annual plan under this subsection, the Secretary shall solicit specific written recommendations from the research consortia receiving awards under subsection (b) and the Unconventional Resources Technology Advisory Committee for each element to be addressed in the plan, including those described in subparagraph (D).

        (B) CONSULTATION- The Secretary shall consult regularly with the research consortia throughout the preparation of the annual plan.

        (C) PUBLICATION- The Secretary shall transmit to Congress and publish in the Federal Register the annual plan, along with any written comments received under subparagraph (A).

        (D) CONTENTS- The annual plan shall describe the ongoing and prospective activities under this section and shall include a list of any solicitations for awards that the Secretary plans to issue to carry out research, development, demonstration, or commercial application activities, including the topics for such work, who would be eligible to apply, selection criteria, and the duration of awards.

      (3) ESTIMATES OF INCREASED ROYALTY RECEIPTS- The Secretary, in consultation with the Secretary of the Interior, shall provide an annual report to Congress with the President’s budget on the estimated cumulative increase in Federal royalty receipts (if any) resulting from the implementation of this part. The initial report under this paragraph shall be submitted in the first President’s budget following the completion of the first annual plan required under this subsection.

    (f) Activities by the United States Geological Survey- The Secretary of the Interior, through the United States Geological Survey, shall, where appropriate, carry out programs of long-term research to complement the programs under this section.

SEC. 944. ADDITIONAL REQUIREMENTS FOR AWARDS.

    (a) Demonstration Projects- An application for an award under this part for a demonstration project shall describe with specificity the intended commercial use of the technology to be demonstrated.

    (b) Flexibility in Locating Demonstration Projects- Subject to the limitation in section 941(c), a demonstration project under this part relating to an ultra-deepwater technology or an ultra-deepwater architecture may be conducted in deepwater depths.

    (c) Intellectual Property Agreements- If an award under this part is made to a consortium (other than the program consortium), the consortium shall provide to the Secretary a signed contract agreed to by all members of the consortium describing the rights of each member to intellectual property used or developed under the award.

    (d) Technology Transfer- 2.5 percent of the amount of each award made under this part shall be designated for technology transfer and outreach activities under this title.

    (e) Cost Sharing Reduction for Independent Producers- In applying the cost sharing requirements under section 972 to an award under this part the Secretary may reduce or eliminate the non-Federal requirement if the Secretary determines that the reduction is necessary and appropriate considering the technological risks involved in the project.

SEC. 945. ADVISORY COMMITTEES.

    (a) Ultra-Deepwater Advisory Committee-

      (1) ESTABLISHMENT- Not later than 270 days after the date of enactment of this Act, the Secretary shall establish an advisory committee to be known as the Ultra-Deepwater Advisory Committee.

      (2) MEMBERSHIP- The advisory committee under this subsection shall be composed of members appointed by the Secretary including--

        (A) individuals with extensive research experience or operational knowledge of offshore natural gas and other petroleum exploration and production;

        (B) individuals broadly representative of the affected interests in ultra-deepwater natural gas and other petroleum production, including interests in environmental protection and safe operations;

        (C) no individuals who are Federal employees; and

        (D) no individuals who are board members, officers, or employees of the program consortium.

      (3) DUTIES- The advisory committee under this subsection shall--

        (A) advise the Secretary on the development and implementation of programs under this part related to ultra-deepwater natural gas and other petroleum resources; and

        (B) carry out section 942(e)(2)(B).

      (4) COMPENSATION- A member of the advisory committee under this subsection shall serve without compensation but shall receive travel expenses in accordance with applicable provisions under subchapter I of chapter 57 of title 5, United States Code.

    (b) Unconventional Resources Technology Advisory Committee-

      (1) ESTABLISHMENT- Not later than 270 days after the date of enactment of this Act, the Secretary shall establish an advisory committee to be known as the Unconventional Resources Technology Advisory Committee.

      (2) MEMBERSHIP- The advisory committee under this subsection shall be composed of members appointed by the Secretary including--

        (A) a majority of members who are employees or representatives of independent producers of natural gas and other petroleum, including small producers;

        (B) individuals with extensive research experience or operational knowledge of unconventional natural gas and other petroleum resource exploration and production;

        (C) individuals broadly representative of the affected interests in unconventional natural gas and other petroleum resource exploration and production, including interests in environmental protection and safe operations; and

        (D) no individuals who are Federal employees.

      (3) DUTIES- The advisory committee under this subsection shall advise the Secretary on the development and implementation of activities under this part related to unconventional natural gas and other petroleum resources.

      (4) COMPENSATION- A member of the advisory committee under this subsection shall serve without compensation but shall receive travel expenses in accordance with applicable provisions under subchapter I of chapter 57 of title 5, United States Code.

    (c) Prohibition- No advisory committee established under this section shall make recommendations on funding awards to particular consortia or other entities, or for specific projects.

SEC. 946. LIMITS ON PARTICIPATION.

    An entity shall be eligible to receive an award under this part only if the Secretary finds--

      (1) that the entity’s participation in the program under this part would be in the economic interest of the United States; and

      (2) that either--

        (A) the entity is a United States-owned entity organized under the laws of the United States; or

        (B) the entity is organized under the laws of the United States and has a parent entity organized under the laws of a country that affords--

          (i) to United States-owned entities opportunities, comparable to those afforded to any other entity, to participate in any cooperative research venture similar to those authorized under this part;

          (ii) to United States-owned entities local investment opportunities comparable to those afforded to any other entity; and

          (iii) adequate and effective protection for the intellectual property rights of United States-owned entities.

SEC. 947. SUNSET.

    The authority provided by this part shall terminate on September 30, 2011.

SEC. 948. DEFINITIONS.

    In this part:

      (1) DEEPWATER- The term ‘deepwater’ means a water depth that is greater than 200 but less than 1,500 meters.

      (2) INDEPENDENT PRODUCER OF OIL OR GAS-

        (A) IN GENERAL- The term ‘independent producer of oil or gas’ means any person that produces oil or gas other than a person to whom subsection (c) of section 613A of the Internal Revenue Code of 1986 does not apply by reason of paragraph (2) (relating to certain retailers) or paragraph (4) (relating to certain refiners) of section 613A(d) of such Code.

        (B) RULES FOR APPLYING PARAGRAPHS (2) AND (4) OF SECTION 613A(d)- For purposes of subparagraph (A), paragraphs (2) and (4) of section 613A(d) of the Internal Revenue Code of 1986 shall be applied by substituting ‘calendar year’ for ‘taxable year’ each place it appears in such paragraphs.

      (3) PROGRAM CONSORTIUM- The term ‘program consortium’ means the consortium selected under section 942(d).

      (4) REMOTE OR INCONSEQUENTIAL- The term ‘remote or inconsequential’ has the meaning given that term in regulations issued by the Office of Government Ethics under section 208(b)(2) of title 18, United States Code.

      (5) SMALL PRODUCER- The term ‘small producer’ means an entity organized under the laws of the United States with production levels of less than 1,000 barrels per day of oil equivalent.

      (6) ULTRA-DEEPWATER- The term ‘ultra-deepwater’ means a water depth that is equal to or greater than 1,500 meters.

      (7) ULTRA-DEEPWATER ARCHITECTURE- The term ‘ultra-deepwater architecture’ means the integration of technologies for the exploration for, or production of, natural gas or other petroleum resources located at ultra-deepwater depths.

      (8) ULTRA-DEEPWATER TECHNOLOGY- The term ‘ultra-deepwater technology’ means a discrete technology that is specially suited to address 1 or more challenges associated with the exploration for, or production of, natural gas or other petroleum resources located at ultra-deepwater depths.

      (9) UNCONVENTIONAL NATURAL GAS AND OTHER PETROLEUM RESOURCE- The term ‘unconventional natural gas and other petroleum resource’ means natural gas and other petroleum resource located onshore in an economically inaccessible geological formation, including resources of small producers.

SEC. 949. FUNDING.

    (a) In General-

      (1) OIL AND GAS LEASE INCOME- For each of fiscal years 2004 through 2013, from any Federal royalties, rents, and bonuses derived from Federal onshore and offshore oil and gas leases issued under the Outer Continental Shelf Lands Act and the Mineral Leasing Act which are deposited in the Treasury, and after distribution of any such funds as described in subsection (c), $150,000,000 shall be deposited into the Ultra-Deepwater and Unconventional Natural Gas and Other Petroleum Research Fund (in this section referred to as the Fund). For purposes of this section, the term ‘royalties’ excludes proceeds from the sale of royalty production taken in kind and royalty production that is transferred under section 27(a)(3) of the Outer Continental Shelf Lands Act (43 U.S.C. 1353(a)(3)).

      (2) AUTHORIZATION OF APPROPRIATIONS- In addition to amounts described in paragraph (1), there are authorized to be appropriated to the Secretary, to be deposited in the Fund, $50,000,000 for each of the fiscal years 2004 through 2013, to remain available until expended.

    (b) Obligational Authority- Monies in the Fund shall be available to the Secretary for obligation under this part without fiscal year limitation, to remain available until expended.

    (c) Prior Distributions- The distributions described in subsection (a) are those required by law--

      (1) to States and to the Reclamation Fund under the Mineral Leasing Act (30 U.S.C. 191(a)); and

      (2) to other funds receiving monies from Federal oil and gas leasing programs, including--

        (A) any recipients pursuant to section 8(g) of the Outer Continental Shelf Lands Act (43 U.S.C. 1337(g));

        (B) the Land and Water Conservation Fund, pursuant to section 2(c) of the Land and Water Conservation Fund Act of 1965 (16 U.S.C. 4601-5(c));

        (C) the Historic Preservation Fund, pursuant to section 108 of the National Historic Preservation Act (16 U.S.C. 470h); and

        (D) the Secure Energy Reinvestment Fund.

    (d) Allocation- Amounts obligated from the Fund under this section in each fiscal year shall be allocated as follows:

      (1) 50 percent shall be for activities under section 942.

      (2) 35 percent shall be for activities under section 943(d)(1).

      (3) 10 percent shall be for activities under section 943(d)(2).

      (4) 5 percent shall be for research under section 941(d).

    (e) Fund- There is hereby established in the Treasury of the United States a separate fund to be known as the ‘Ultra-Deepwater and Unconventional Natural Gas and Other Petroleum Research Fund’.

Subtitle F--Science

SEC. 951. SCIENCE.

    (a) In General- The following sums are authorized to be appropriated to the Secretary for research, development, demonstration, and commercial application activities of the Office of Science, including activities authorized under this subtitle, including the amounts authorized under the amendment made by section 958(c)(2)(C), and including basic energy sciences, advanced scientific computing research, biological and environmental research, fusion energy sciences, high energy physics, nuclear physics, and research analysis and infrastructure support:

      (1) For fiscal year 2004, $3,785,000,000.

      (2) For fiscal year 2005, $4,153,000,000.

      (3) For fiscal year 2006, $4,618,000,000.

      (4) For fiscal year 2007, $5,310,000,000.

      (5) For fiscal year 2008, $5,800,000,000.

    (b) Allocations- From amounts authorized under subsection (a), the following sums are authorized:

      (1) For activities of the Fusion Energy Sciences Program, including activities under sections 952 and 953--

        (A) for fiscal year 2004, $335,000,000;

        (B) for fiscal year 2005, $349,000,000;

        (C) for fiscal year 2006, $362,000,000;

        (D) for fiscal year 2007, $377,000,000; and

        (E) for fiscal year 2008, $393,000,000.

      (2) For the Spallation Neutron Source--

        (A) for construction in fiscal year 2004, $124,600,000;

        (B) for construction in fiscal year 2005, $79,800,000;

        (C) for completion of construction in fiscal year 2006, $41,100,000; and

        (D) for other project costs (including research and development necessary to complete the project, preoperations costs, and capital equipment related to construction), $103,279,000 for the period encompassing fiscal years 2003 through 2006, to remain available until expended through September 30, 2006.

      (3) For Catalysis Research activities under section 956--

        (A) for fiscal year 2004, $33,000,000;

        (B) for fiscal year 2005, $35,000,000;

        (C) for fiscal year 2006, $36,500,000;

        (D) for fiscal year 2007, $38,200,000; and

        (E) for fiscal year 2008, $40,100,000.

      (4) For Nanoscale Science and Engineering Research activities under section 957--

        (A) for fiscal year 2004, $270,000,000;

        (B) for fiscal year 2005, $292,000,000;

        (C) for fiscal year 2006, $322,000,000;

        (D) for fiscal year 2007, $355,000,000; and

        (E) for fiscal year 2008, $390,000,000.

      (5) For activities under section 957(c), from the amounts authorized under paragraph (4) of this subsection--

        (A) for fiscal year 2004, $135,000,000;

        (B) for fiscal year 2005, $150,000,000;

        (C) for fiscal year 2006, $120,000,000;

        (D) for fiscal year 2007, $100,000,000; and

        (E) for fiscal year 2008, $125,000,000.

      (6) For activities in the Genomes to Life Program under section 959--

        (A) for fiscal year 2004, $100,000,000; and

        (B) for fiscal years 2005 through 2008, such sums as may be necessary.

      (7) For activities in the Energy-Water Supply Program under section 961, $30,000,000 for each of fiscal years 2004 through 2008.

    (c) ITER Construction- In addition to the funds authorized under subsection (b)(1), such sums as may be necessary for costs associated with ITER construction, consistent with limitations under section 952.

SEC. 952. UNITED STATES PARTICIPATION IN ITER.

    (a) In General- The United States may participate in ITER in accordance with the provisions of this section.

    (b) Agreement-

      (1) IN GENERAL- The Secretary is authorized to negotiate an agreement for United States participation in ITER.

      (2) CONTENTS- Any agreement for United States participation in ITER shall, at a minimum--

        (A) clearly define the United States financial contribution to construction and operating costs;

        (B) ensure that the share of ITER’s high-technology components manufactured in the United States is at least proportionate to the United States financial contribution to ITER;

        (C) ensure that the United States will not be financially responsible for cost overruns in components manufactured in other ITER participating countries;

        (D) guarantee the United States full access to all data generated by ITER;

        (E) enable United States researchers to propose and carry out an equitable share of the experiments at ITER;

        (F) provide the United States with a role in all collective decisionmaking related to ITER; and

        (G) describe the process for discontinuing or decommissioning ITER and any United States role in those processes.

    (c) Plan- The Secretary, in consultation with the Fusion Energy Sciences Advisory Committee, shall develop a plan for the participation of United States scientists in ITER that shall include the United States research agenda for ITER, methods to evaluate whether ITER is promoting progress toward making fusion a reliable and affordable source of power, and a description of how work at ITER will relate to other elements of the United States fusion program. The Secretary shall request a review of the plan by the National Academy of Sciences.

    (d) Limitation- No funds shall be expended for the construction of ITER until the Secretary has transmitted to Congress--

      (1) the agreement negotiated pursuant to subsection (b) and 120 days have elapsed since that transmission;

      (2) a report describing the management structure of ITER and providing a fixed dollar estimate of the cost of United States participation in the construction of ITER, and 120 days have elapsed since that transmission;

      (3) a report describing how United States participation in ITER will be funded without reducing funding for other programs in the Office of Science, including other fusion programs, and 60 days have elapsed since that transmission; and

      (4) the plan required by subsection (c) (but not the National Academy of Sciences review of that plan), and 60 days have elapsed since that transmission.

    (e) Alternative to ITER- If at any time during the negotiations on ITER, the Secretary determines that construction and operation of ITER is unlikely or infeasible, the Secretary shall send to Congress, as part of the budget request for the following year, a plan for implementing the domestic burning plasma experiment known as FIRE, including costs and schedules for such a plan. The Secretary shall refine such plan in full consultation with the Fusion Energy Sciences Advisory Committee and shall also transmit such plan to the National Academy of Sciences for review.

    (f) Definitions- In this section and sections 951(b)(1) and (c):

      (1) CONSTRUCTION- The term ‘construction’ means the physical construction of the ITER facility, and the physical construction, purchase, or manufacture of equipment or components that are specifically designed for the ITER facility, but does not mean the design of the facility, equipment, or components.

      (2) FIRE- The term ‘FIRE’ means the Fusion Ignition Research Experiment, the fusion research experiment for which design work has been supported by the Department as a possible alternative burning plasma experiment in the event that ITER fails to move forward.

      (3) ITER- The term ‘ITER’ means the international burning plasma fusion research project in which the President announced United States participation on January 30, 2003.

SEC. 953. PLAN FOR FUSION ENERGY SCIENCES PROGRAM.

    (a) Declaration of Policy- It shall be the policy of the United States to conduct research, development, demonstration, and commercial application to provide for the scientific, engineering, and commercial infrastructure necessary to ensure that the United States is competitive with other nations in providing fusion energy for its own needs and the needs of other nations, including by demonstrating electric power or hydrogen production for the United States energy grid utilizing fusion energy at the earliest date possible.

    (b) Planning-

      (1) IN GENERAL- Not later than 180 days after the date of enactment of this Act, the Secretary shall present to Congress a plan, with proposed cost estimates, budgets, and potential international partners, for the implementation of the policy described in subsection (a). The plan shall ensure that--

        (A) existing fusion research facilities are more fully utilized;

        (B) fusion science, technology, theory, advanced computation, modeling, and simulation are strengthened;

        (C) new magnetic and inertial fusion research facilities are selected based on scientific innovation, cost effectiveness, and their potential to advance the goal of practical fusion energy at the earliest date possible, and those that are selected are funded at a cost-effective rate;

        (D) communication of scientific results and methods between the fusion energy science community and the broader scientific and technology communities is improved;

        (E) inertial confinement fusion facilities are utilized to the extent practicable for the purpose of inertial fusion energy research and development; and

        (F) attractive alternative inertial and magnetic fusion energy approaches are more fully explored.

      (2) COSTS AND SCHEDULES- Such plan shall also address the status of and, to the degree possible, costs and schedules for--

        (A) in coordination with the program under section 960, the design and implementation of international or national facilities for the testing of fusion materials; and

        (B) the design and implementation of international or national facilities for the testing and development of key fusion technologies.

SEC. 954. SPALLATION NEUTRON SOURCE.

    (a) Definition- For the purposes of this section, the term ‘Spallation Neutron Source’ means Department Project 99-E-334, Oak Ridge National Laboratory, Oak Ridge, Tennessee.

    (b) Report- The Secretary shall report on the Spallation Neutron Source as part of the Department’s annual budget submission, including a description of the achievement of milestones, a comparison of actual costs to estimated costs, and any changes in estimated project costs or schedule.

    (c) Limitations- The total amount obligated by the Department, including prior year appropriations, for the Spallation Neutron Source shall not exceed--

      (1) $1,192,700,000 for costs of construction;

      (2) $219,000,000 for other project costs; and

      (3) $1,411,700,000 for total project cost.

SEC. 955. SUPPORT FOR SCIENCE AND ENERGY FACILITIES AND INFRASTRUCTURE.

    (a) Facility and Infrastructure Policy- The Secretary shall develop and implement a strategy for facilities and infrastructure supported primarily from the Office of Science, the Office of Energy Efficiency and Renewable Energy, the Office of Fossil Energy, or the Office of Nuclear Energy, Science, and Technology Programs at all National Laboratories and single-purpose research facilities. Such strategy shall provide cost-effective means for--

      (1) maintaining existing facilities and infrastructure, as needed;

      (2) closing unneeded facilities;

      (3) making facility modifications; and

      (4) building new facilities.

    (b) Report-

      (1) IN GENERAL- The Secretary shall prepare and transmit, along with the President’s budget request to Congress for fiscal year 2006, a report containing the strategy developed under subsection (a).

      (2) CONTENTS- For each National Laboratory and single-purpose research facility, for the facilities primarily used for science and energy research, such report shall contain--

        (A) the current priority list of proposed facilities and infrastructure projects, including cost and schedule requirements;

        (B) a current 10-year plan that demonstrates the reconfiguration of its facilities and infrastructure to meet its missions and to address its long-term operational costs and return on investment;

        (C) the total current budget for all facilities and infrastructure funding; and

        (D) the current status of each facility and infrastructure project compared to the original baseline cost, schedule, and scope.

SEC. 956. CATALYSIS RESEARCH AND DEVELOPMENT PROGRAM.

    (a) Establishment- The Secretary, through the Office of Science, shall support a program of research and development in catalysis science consistent with the Department’s statutory authorities related to research and development. The program shall include efforts to--

      (1) enable catalyst design using combinations of experimental and mechanistic methodologies coupled with computational modeling of catalytic reactions at the molecular level;

      (2) develop techniques for high throughput synthesis, assay, and characterization at nanometer and subnanometer scales in situ under actual operating conditions;

      (3) synthesize catalysts with specific site architectures;

      (4) conduct research on the use of precious metals for catalysis; and

      (5) translate molecular understanding to the design of catalytic compounds.

    (b) Duties of the Office of Science- In carrying out the program under this section, the Director of the Office of Science shall--

      (1) support both individual investigators and multidisciplinary teams of investigators to pioneer new approaches in catalytic design;

      (2) develop, plan, construct, acquire, share, or operate special equipment or facilities for the use of investigators in collaboration with national user facilities such as nanoscience and engineering centers;

      (3) support technology transfer activities to benefit industry and other users of catalysis science and engineering; and

      (4) coordinate research and development activities with industry and other Federal agencies.

    (c) Triennial Assessment- The National Academy of Sciences shall review the catalysis program every 3 years to report on gains made in the fundamental science of catalysis and its progress towards developing new fuels for energy production and material fabrication processes.

SEC. 957. NANOSCALE SCIENCE AND ENGINEERING RESEARCH, DEVELOPMENT, DEMONSTRATION, AND COMMERCIAL APPLICATION.

    (a) Establishment- The Secretary, acting through the Office of Science, shall support a program of research, development, demonstration, and commercial application in nanoscience and nanoengineering. The program shall include efforts to further the understanding of the chemistry, physics, materials science, and engineering of phenomena on the scale of nanometers and to apply that knowledge to the Department’s mission areas.

    (b) Duties of the Office of Science- In carrying out the program under this section, the Office of Science shall--

      (1) support both individual investigators and teams of investigators, including multidisciplinary teams;

      (2) carry out activities under subsection (c);

      (3) support technology transfer activities to benefit industry and other users of nanoscience and nanoengineering;

      (4) coordinate research and development activities with other Department programs, industry, and other Federal agencies;

      (5) ensure that societal and ethical concerns will be addressed as the technology is developed by--

        (A) establishing a research program to identify societal and ethical concerns related to nanotechnology, and ensuring that the results of such research are widely disseminated; and

        (B) integrating, insofar as possible, research on societal and ethical concerns with nanotechnology research and development; and

      (6) ensure that the potential of nanotechnology to produce or facilitate the production of clean, inexpensive energy is realized by supporting nanotechnology energy applications research and development.

    (c) Nanoscience and Nanoengineering Research Centers and Major Instrumentation-

      (1) IN GENERAL- The Secretary shall carry out projects to develop, plan, construct, acquire, operate, or support special equipment, instrumentation, or facilities for investigators conducting research and development in nanoscience and nanoengineering.

      (2) ACTIVITIES- Projects under paragraph (1) may include the measurement of properties at the scale of nanometers, manipulation at such scales, and the integration of technologies based on nanoscience or nanoengineering into bulk materials or other technologies.

      (3) FACILITIES- Facilities under paragraph (1) may include electron microcharacterization facilities, microlithography facilities, scanning probe facilities, and related instrumentation.

      (4) COLLABORATIONS- The Secretary shall encourage collaborations among Department programs, institutions of higher education, laboratories, and industry at facilities under this subsection.

SEC. 958. ADVANCED SCIENTIFIC COMPUTING FOR ENERGY MISSIONS.

    (a) In General- The Secretary, acting through the Office of Science, shall support a program to advance the Nation’s computing capability across a diverse set of grand challenge, computationally based, science problems related to departmental missions.

    (b) Duties of the Office of Science- In carrying out the program under this section, the Office of Science shall--

      (1) advance basic science through computation by developing software to solve grand challenge science problems on new generations of computing platforms in collaboration with other Department program offices;

      (2) enhance the foundations for scientific computing by developing the basic mathematical and computing systems software needed to take full advantage of the computing capabilities of computers with peak speeds of 100 teraflops or more, some of which may be unique to the scientific problem of interest;

      (3) enhance national collaboratory and networking capabilities by developing software to integrate geographically separated researchers into effective research teams and to facilitate access to and movement and analysis of large (petabyte) data sets;

      (4) develop and maintain a robust scientific computing hardware infrastructure to ensure that the computing resources needed to address departmental missions are available; and

      (5) explore new computing approaches and technologies that promise to advance scientific computing, including developments in quantum computing.

    (c) High-Performance Computing Act of 1991 Amendments- The High-Performance Computing Act of 1991 is amended--

      (1) in section 4 (15 U.S.C. 5503)--

        (A) in paragraph (3) by striking ‘means’ and inserting ‘and networking and information technology mean’, and by striking ‘(including vector supercomputers and large scale parallel systems)’; and

        (B) in paragraph (4), by striking ‘packet switched’; and

      (2) in section 203 (15 U.S.C. 5523)--

        (A) in subsection (a), by striking all after ‘As part of the’ and inserting ‘Networking and Information Technology Research and Development Program, the Secretary of Energy shall conduct basic and applied research in networking and information technology, with emphasis on supporting fundamental research in the physical sciences and engineering, and energy applications; providing supercomputer access and advanced communication capabilities and facilities to scientific researchers; and developing tools for distributed scientific collaboration.’;

        (B) in subsection (b), by striking ‘Program’ and inserting ‘Networking and Information Technology Research and Development Program’; and

        (C) by amending subsection (e) to read as follows:

    ‘(e) Authorization of Appropriations- There are authorized to be appropriated to the Secretary of Energy to carry out the Networking and Information Technology Research and Development Program such sums as may be necessary for fiscal years 2004 through 2008.’.

    (d) Coordination- The Secretary shall ensure that the program under this section is integrated and consistent with--

      (1) the Advanced Simulation and Computing Program, formerly known as the Accelerated Strategic Computing Initiative, of the National Nuclear Security Administration; and

      (2) other national efforts related to advanced scientific computing for science and engineering.

    (e) Report-

      (1) IN GENERAL- Before undertaking any new initiative to develop any new advanced architecture for high-speed computing, the Secretary, through the Director of the Office of Science, shall transmit a report to Congress describing--

        (A) the expected duration and cost of the initiative;

        (B) the technical milestones the initiative is designed to achieve;

        (C) how institutions of higher education and private firms will participate in the initiative; and

        (D) why the goals of the initiative could not be achieved through existing programs.

      (2) LIMITATION- No funds may be expended on any initiative described in paragraph (1) until 30 days after the report required by that paragraph is transmitted to Congress.

SEC. 959. GENOMES TO LIFE PROGRAM.

    (a) Program-

      (1) ESTABLISHMENT- The Secretary shall establish a research, development, and demonstration program in genetics, protein science, and computational biology to support the energy, national security, and environmental mission of the Department.

      (2) GRANTS- The program shall support individual investigators and multidisciplinary teams of investigators through competitive, merit-reviewed grants.

      (3) CONSULTATION- In carrying out the program, the Secretary shall consult with other Federal agencies that conduct genetic and protein research.

    (b) Goals- The program shall have the goal of developing technologies and methods based on the biological functions of genomes, microbes, and plants that--

      (1) can facilitate the production of fuels, including hydrogen;

      (2) convert carbon dioxide to organic carbon;

      (3) improve national security and combat terrorism;

      (4) detoxify soils and water at Department facilities contaminated with heavy metals and radiological materials; and

      (5) address other Department missions as identified by the Secretary.

    (c) Plan-

      (1) DEVELOPMENT OF PLAN- Not later than 1 year after the date of enactment of this Act, the Secretary shall prepare and transmit to Congress a research plan describing how the program authorized pursuant to this section will be undertaken to accomplish the program goals established in subsection (b).

      (2) REVIEW OF PLAN- The Secretary shall contract with the National Academy of Sciences to review the research plan developed under this subsection. The Secretary shall transmit the review to Congress not later than 18 months after transmittal of the research plan under paragraph (1), along with the Secretary’s response to the recommendations contained in the review.

    (d) Genomes to Life User Facilities and Ancillary Equipment-

      (1) IN GENERAL- Within the funds authorized to be appropriated pursuant to this Act, the amounts specified under section 951(b)(6) shall, subject to appropriations, be available for projects to develop, plan, construct, acquire, or operate special equipment, instrumentation, or facilities for investigators conducting research, development, demonstration, and commercial application in systems biology and proteomics and associated biological disciplines.

      (2) FACILITIES- Facilities under paragraph (1) may include facilities, equipment, or instrumentation for--

        (A) the production and characterization of proteins;

        (B) whole proteome analysis;

        (C) characterization and imaging of molecular machines; and

        (D) analysis and modeling of cellular systems.

      (3) COLLABORATIONS- The Secretary shall encourage collaborations among universities, laboratories, and industry at facilities under this subsection. All facilities under this subsection shall have a specific mission of technology transfer to other institutions.

    (e) Prohibition on Biomedical and Human Cell and Human Subject Research-

      (1) NO BIOMEDICAL RESEARCH- In carrying out the program under this section, the Secretary shall not conduct biomedical research.

      (2) LIMITATIONS- Nothing in this section shall authorize the Secretary to conduct any research or demonstrations--

        (A) on human cells or human subjects; or

        (B) designed to have direct application with respect to human cells or human subjects.

SEC. 960. FISSION AND FUSION ENERGY MATERIALS RESEARCH PROGRAM.

    In the President’s fiscal year 2006 budget request, the Secretary shall establish a research and development program on material science issues presented by advanced fission reactors and the Department’s fusion energy program. The program shall develop a catalog of material properties required for these applications, develop theoretical models for materials possessing the required properties, benchmark models against existing data, and develop a roadmap to guide further research and development in this area.

SEC. 961. ENERGY-WATER SUPPLY PROGRAM.

    (a) Establishment- There is established within the Department the Energy-Water Supply Program, to study energy-related and certain other issues associated with the supply of drinking water and operation of community water systems and to study water supply issues related to energy.

    (b) Definitions- For the purposes of this section:

      (1) ADMINISTRATOR- The term ‘Administrator’ means the Administrator of the Environmental Protection Agency.

      (2) AGENCY- The term ‘Agency’ means the Environmental Protection Agency.

      (3) FOUNDATION- The term ‘Foundation’ means the American Water Works Association Research Foundation.

      (4) INDIAN TRIBE- The term ‘Indian tribe’ has the meaning given the term in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b).

      (5) PROGRAM- The term ‘Program’ means the Energy-Water Supply Program established by this section.

    (c) Program Areas- The Program shall develop methods, means, procedures, equipment, and improved technologies relating to--

      (1) the arsenic removal program under subsection (d);

      (2) the desalination program under subsection (e); and

      (3) the water and energy sustainability program under subsection (f).

    (d) Arsenic Removal Program-

      (1) IN GENERAL- As soon as practicable after the date of enactment of this Act, the Secretary, in coordination with the Administrator and in partnership with the Foundation, shall utilize the facilities, institutions, and relationships established in the Consolidated Appropriations Resolution, 2003 as described in Senate Report 107-220 to carry out a research program to provide innovative methods and means for removal of arsenic.

      (2) REQUIRED EVALUATIONS- The program shall, to the maximum extent practicable, evaluate the means of--

        (A) reducing energy costs incurred in using arsenic removal technologies;

        (B) minimizing materials, operating, and maintenance costs; and

        (C) minimizing any quantities of waste (especially hazardous waste) that result from use of arsenic removal technologies.

      (3) PEER REVIEW- Where applicable and reasonably available, projects undertaken under this subsection shall be peer-reviewed.

      (4) COMMUNITY WATER SYSTEMS- In carrying out the program under this subsection, the Secretary, in coordination with the Administrator, shall--

        (A) select projects involving a geographically and hydrologically diverse group of community water systems (as defined in section 1003 of the Public Health Service Act (42 U.S.C. 300)) and water chemistries, that have experienced technical or economic difficulties in providing drinking water with levels of arsenic at 10 parts-per-billion or lower, which projects shall be designed to develop innovative methods and means to deliver drinking water that contains less than 10 parts per billion of arsenic; and

        (B) provide not less than 40 percent of all funds spent pursuant to this subsection to address the needs of, and in collaboration with, rural communities or Indian tribes.

      (5) COST EFFECTIVENESS- The Foundation shall create methods for determining cost effectiveness of arsenic removal technologies used in the program.

      (6) EDUCATION, TRAINING, AND TECHNOLOGY- The Foundation shall include education, training, and technology transfer as part of the program.

      (7) COORDINATION- The Secretary shall consult with the Administrator to ensure that all activities conducted under the program are coordinated with the Agency and do not duplicate other programs in the Agency and other Federal agencies, State programs, and academia.

      (8) REPORTS- Not later than 1 year after the date of commencement of the program under this subsection, and once every year thereafter, the Secretary shall submit to the Committee on Energy and Commerce of the House of Representatives and the Committee on Environment and Public Works and the Committee on Energy and Natural Resources of the Senate a report on the results of the program under this subsection.

    (e) Desalination Program-

      (1) IN GENERAL- The Secretary, in cooperation with the Commissioner of Reclamation of the Department of the Interior, shall carry out a program to conduct research and develop methods and means for desalination in accordance with the desalination technology progress plan developed under title II of the Energy and Water Development Appropriations Act, 2002 (115 Stat. 498), and described in Senate Report 107-39 under the heading ‘WATER AND RELATED RESOURCES’ in the ‘Bureau of Reclamation’ section.

      (2) REQUIREMENTS- The desalination program shall--

        (A) use the resources of the Department and the Department of the Interior that were involved in the development of the 2003 National Desalination and Water Purification Technology Roadmap for next-generation desalination technology;

        (B) focus on technologies that are appropriate for use in desalinating brackish groundwater, drinking water, wastewater and other saline water supplies, or disposal of residual brine or salt; and

        (C) consider the use of renewable energy sources.

      (3) CONSTRUCTION PROJECTS- Funds made available to carry out this subsection may be used for construction projects, including completion of the National Desalination Research Center for brackish groundwater and ongoing operational costs of this facility.

      (4) STEERING COMMITTEE- The Secretary and the Commissioner of Reclamation of the Department of the Interior shall jointly establish a steering committee for activities conducted under this subsection. The steering committee shall be jointly chaired by 1 representative from the program and 1 representative from the Bureau of Reclamation.

    (f) Water and Energy Sustainability Program-

      (1) IN GENERAL- The Secretary shall develop a program to identify methods, means, procedures, equipment, and improved technologies necessary to ensure that sufficient quantities of water are available to meet energy needs and sufficient energy is available to meet water needs.

      (2) ASSESSMENTS- In order to acquire information and avoid duplication, the Secretary shall work in collaboration with the Secretary of the Interior, the Army Corps of Engineers, the Administrator, the Secretary of Commerce, the Secretary of Defense, relevant State agencies, nongovernmental organizations, and academia, to assess--

        (A) future water resources needed to support energy development and production within the United States including water used for hydropower, and production of, or electricity generation by, hydrogen, biomass, fossil fuels, and nuclear fuel;

        (B) future energy resources needed to support water purification and wastewater treatment, including desalination and water conveyance;

        (C) use of impaired and nontraditional water supplies for energy production other than oil and gas extraction;

        (D) technology and programs for improving water use efficiency; and

        (E) technologies to reduce water use in energy development and production.

      (3) ROADMAP; TOOLS- The Secretary shall--

        (A) develop a program plan and technology development roadmap for the Water and Energy Sustainability Program to identify scientific and technical requirements and activities that are required to support planning for energy sustainability under current and potential future conditions of water availability, use of impaired water for energy production and other uses, and reduction of water use in energy development and production;

        (B) develop tools for national and local energy and water sustainability planning, including numerical models, decision analysis tools, economic analysis tools, databases, and planning methodologies and strategies;

        (C) implement at least 3 planning projects involving energy development or production that use the tools described in subparagraph (B) and assess the viability of those tools at the scale of river basins with at least 1 demonstration involving an international border; and

        (D) transfer those tools to other Federal agencies, State agencies, nonprofit organizations, industry, and academia.

      (4) REPORT- Not later than 1 year after the date of enactment of this Act, the Secretary shall submit to Congress a report on the Water and Energy Sustainability Program that--

        (A) includes the results of the assessment under paragraph (2) and the program plan and technology development roadmap; and

        (B) identifies policy, legal, and institutional issues related to water and energy sustainability.

SEC. 962. NITROGEN FIXATION.

    The Secretary, acting through the Office of Science, shall support a program of research, development, demonstration, and commercial application on biological nitrogen fixation, including plant genomics research relevant to the development of commercial crop varieties with enhanced nitrogen fixation efficiency and ability.

Subtitle G--Energy and Environment

SEC. 964. UNITED STATES-MEXICO ENERGY TECHNOLOGY COOPERATION.

    (a) Program- The Secretary shall establish a research, development, demonstration, and commercial application program to be carried out in collaboration with entities in Mexico and the United States to promote energy efficient, environmentally sound economic development along the United States-Mexico border that minimizes public health risks from industrial activities in the border region.

    (b) Program Management- The program under subsection (a) shall be managed by the Department of Energy Carlsbad Environmental Management Field Office.

    (c) Technology Transfer- In carrying out projects and activities under this section, the Secretary shall assess the applicability of technology developed under the Environmental Management Science Program of the Department.

    (d) Intellectual Property- In carrying out this section, the Secretary shall comply with the requirements of any agreement entered into between the United States and Mexico regarding intellectual property protection.

    (e) Authorization of Appropriations- The following sums are authorized to be appropriated to the Secretary to carry out activities under this section:

      (1) For each of fiscal years 2004 and 2005, $5,000,000.

      (2) For each of fiscal years 2006, 2007, and 2008, $6,000,000.

SEC. 965. WESTERN HEMISPHERE ENERGY COOPERATION.

    (a) Program- The Secretary shall carry out a program to promote cooperation on energy issues with Western Hemisphere countries.

    (b) Activities- Under the program, the Secretary shall fund activities to work with Western Hemisphere countries to--

      (1) assist the countries in formulating and adopting changes in economic policies and other policies to--

        (A) increase the production of energy supplies; and

        (B) improve energy efficiency; and

      (2) assist in the development and transfer of energy supply and efficiency technologies that would have a beneficial impact on world energy markets.

    (c) University Participation- To the extent practicable, the Secretary shall carry out the program under this section with the participation of universities so as to take advantage of the acceptance of universities by Western Hemisphere countries as sources of unbiased technical and policy expertise when assisting the Secretary in--

      (1) evaluating new technologies;

      (2) resolving technical issues;

      (3) working with those countries in the development of new policies; and

      (4) training policymakers, particularly in the case of universities that involve the participation of minority students, such as Hispanic-serving institutions and Historically Black Colleges and Universities.

    (d) Authorization of Appropriations- There are authorized to be appropriated to carry out this section--

      (1) $8,000,000 for fiscal year 2004;

      (2) $10,000,000 for fiscal year 2005;

      (3) $13,000,000 for fiscal year 2006;

      (4) $16,000,000 for fiscal year 2007; and

      (5) $19,000,000 for fiscal year 2008.

SEC. 966. WASTE REDUCTION AND USE OF ALTERNATIVES.

    (a) Grant Authority- The Secretary may make a single grant to a qualified institution to examine and develop the feasibility of burning post-consumer carpet in cement kilns as an alternative energy source. The purposes of the grant shall include determining--

      (1) how post-consumer carpet can be burned without disrupting kiln operations;

      (2) the extent to which overall kiln emissions may be reduced;

      (3) the emissions of air pollutants and other relevant environmental impacts; and

      (4) how this process provides benefits to both cement kiln operations and carpet suppliers.

    (b) Qualified Institution- For the purposes of subsection (a), a qualified institution is a research-intensive institution of higher education with demonstrated expertise in the fields of fiber recycling and logistical modeling of carpet waste collection and preparation.

    (c) Authorization of Appropriations- There are authorized to be appropriated to the Secretary for carrying out this section $500,000.

SEC. 967. REPORT ON FUEL CELL TEST CENTER.

    (a) Report- Not later than 1 year after the date of enactment of this Act, the Secretary shall transmit to Congress a report on the results of a study of the establishment of a test center for next-generation fuel cells at an institution of higher education that has available a continuous source of hydrogen and access to the electric transmission grid. Such report shall include a conceptual design for such test center and a projection of the costs of establishing the test center.

    (b) Authorization of Appropriations- There are authorized to be appropriated to the Secretary for carrying out this section $500,000.

SEC. 968. ARCTIC ENGINEERING RESEARCH CENTER.

    (a) In General- The Secretary of Energy (referred to in this section as the ‘Secretary’) in consultation with the Secretary of Transportation and the United States Arctic Research Commission shall provide annual grants to a university located adjacent to the Arctic Energy Office of the Department of Energy, to establish and operate a university research center to be headquartered in Fairbanks and to be known as the ‘Arctic Engineering Research Center’ (referred to in this section as the ‘Center’).

    (b) Purpose- The purpose of the Center shall be to conduct research on, and develop improved methods of, construction and use of materials to improve the overall performance of roads, bridges, residential, commercial, and industrial structures, and other infrastructure in the Arctic region, with an emphasis on developing--

      (1) new construction techniques for roads, bridges, rail, and related transportation infrastructure and residential, commercial, and industrial infrastructure that are capable of withstanding the Arctic environment and using limited energy resources as efficiently as possible;

      (2) technologies and procedures for increasing road, bridge, rail, and related transportation infrastructure and residential, commercial, and industrial infrastructure safety, reliability, and integrity in the Arctic region;

      (3) new materials and improving the performance and energy efficiency of existing materials for the construction of roads, bridges, rail, and related transportation infrastructure and residential, commercial, and industrial infrastructure in the Arctic region; and

      (4) recommendations for new local, regional, and State permitting and building codes to ensure transportation and building safety and efficient energy use when constructing, using, and occupying such infrastructure in the Arctic region.

    (c) Objectives- The Center shall carry out--

      (1) basic and applied research in the subjects described in subsection (b), the products of which shall be judged by peers or other experts in the field to advance the body of knowledge in road, bridge, rail, and infrastructure engineering in the Arctic region; and

      (2) an ongoing program of technology transfer that makes research results available to potential users in a form that can be implemented.

    (d) Amount of Grant- For each of fiscal years 2004 through 2009, the Secretary shall provide a grant in the amount of $3,000,000 to the institution specified in subsection (a) to carry out this section.

    (e) Authorization of Appropriations- There are authorized to be appropriated to carry out this section $3,000,000 for each of fiscal years 2004 through 2009.

SEC. 969. BARROW GEOPHYSICAL RESEARCH FACILITY.

    (a) Establishment- The Secretary of Commerce, in consultation with the Secretaries of Energy and the Interior, the Director of the National Science Foundation, and the Administrator of the Environmental Protection Agency, shall establish a joint research facility in Barrow, Alaska, to be known as the ‘Barrow Geophysical Research Facility’, to support scientific research activities in the Arctic.

    (b) Authorization of Appropriations- There are authorized to be appropriated to the Secretaries of Commerce, Energy, and the Interior, the Director of the National Science Foundation, and the Administrator of the Environmental Protection Agency for the planning, design, construction, and support of the Barrow Geophysical Research Facility $61,000,000.

SEC. 970. WESTERN MICHIGAN DEMONSTRATION PROJECT.

    The Administrator of the Environmental Protection Agency, in consultation with the State of Michigan and affected local officials, shall conduct a demonstration project to address the effect of transported ozone and ozone precursors in Southwestern Michigan. The demonstration program shall address projected nonattainment areas in Southwestern Michigan that include counties with design values for ozone of less than .095 based on years 2000 to 2002 or the most current 3-year period of air quality data. The Administrator shall assess any difficulties such areas may experience in meeting the 8 hour national ambient air quality standard for ozone due to the effect of transported ozone or ozone precursors into the areas. The Administrator shall work with State and local officials to determine the extent of ozone and ozone precursor transport, to assess alternatives to achieve compliance with the 8 hour standard apart from local controls, and to determine the timeframe in which such compliance could take place. The Administrator shall complete this demonstration project no later than 2 years after the date of enactment of this section and shall not impose any requirement or sanction that might otherwise apply during the pendency of the demonstration project.

Subtitle H--Management

SEC. 971. AVAILABILITY OF FUNDS.

    Funds authorized to be appropriated to the Department under this title shall remain available until expended.

SEC. 972. COST SHARING.

    (a) Research and Development- Except as otherwise provided in this title, for research and development programs carried out under this title the Secretary shall require a commitment from non-Federal sources of at least 20 percent of the cost of the project. The Secretary may reduce or eliminate the non-Federal requirement under this subsection if the Secretary determines that the research and development is of a basic or fundamental nature or involves technical analyses or educational activities.

    (b) Demonstration and Commercial Application- Except as otherwise provided in this title, the Secretary shall require at least 50 percent of the costs directly and specifically related to any demonstration or commercial application project under this title to be provided from non-Federal sources. The Secretary may reduce the non-Federal requirement under this subsection if the Secretary determines that the reduction is necessary and appropriate considering the technological risks involved in the project and is necessary to meet the objectives of this title.

    (c) Calculation of Amount- In calculating the amount of the non-Federal commitment under subsection (a) or (b), the Secretary may include personnel, services, equipment, and other resources.

    (d) Size of Non-Federal Share- The Secretary may consider the size of the non-Federal share in selecting projects.

SEC. 973. MERIT REVIEW OF PROPOSALS.

    Awards of funds authorized under this title shall be made only after an impartial review of the scientific and technical merit of the proposals for such awards has been carried out by or for the Department.

SEC. 974. EXTERNAL TECHNICAL REVIEW OF DEPARTMENTAL PROGRAMS.

    (a) National Energy Research and Development Advisory Boards-

      (1) IN GENERAL- The Secretary shall establish 1 or more advisory boards to review Department research, development, demonstration, and commercial application programs in energy efficiency, renewable energy, nuclear energy, and fossil energy.

      (2) EXISTING ADVISORY BOARDS- The Secretary may designate an existing advisory board within the Department to fulfill the responsibilities of an advisory board under this subsection, and may enter into appropriate arrangements with the National Academy of Sciences to establish such an advisory board.

    (b) Office of Science Advisory Committees-

      (1) UTILIZATION OF EXISTING COMMITTEES- The Secretary shall continue to use the scientific program advisory committees chartered under the Federal Advisory Committee Act (5 U.S.C. App.) by the Office of Science to oversee research and development programs under that Office.

      (2) SCIENCE ADVISORY COMMITTEE-

        (A) ESTABLISHMENT- There shall be in the Office of Science a Science Advisory Committee that includes the chairs of each of the advisory committees described in paragraph (1).

        (B) RESPONSIBILITIES- The Science Advisory Committee shall--

          (i) serve as the science advisor to the Director of the Office of Science;

          (ii) advise the Director with respect to the well-being and management of the National Laboratories and single-purpose research facilities;

          (iii) advise the Director with respect to education and workforce training activities required for effective short-term and long-term basic and applied research activities of the Office of Science; and

          (iv) advise the Director with respect to the well being of the university research programs supported by the Office of Science.

    (c) Membership- Each advisory board under this section shall consist of persons with appropriate expertise representing a diverse range of interests.

    (d) Meetings and Purposes- Each advisory board under this section shall meet at least semiannually to review and advise on the progress made by the respective research, development, demonstration, and commercial application program or programs. The advisory board shall also review the measurable cost and performance-based goals for such programs as established under section 901(b), and the progress on meeting such goals.

    (e) Periodic Reviews and Assessments- The Secretary shall enter into appropriate arrangements with the National Academy of Sciences to conduct periodic reviews and assessments of the programs authorized by this title, the measurable cost and performance-based goals for such programs as established under section 901(b), if any, and the progress on meeting such goals. Such reviews and assessments shall be conducted every 5 years, or more often as the Secretary considers necessary, and the Secretary shall transmit to Congress reports containing the results of all such reviews and assessments.

SEC. 975. IMPROVED COORDINATION OF TECHNOLOGY TRANSFER ACTIVITIES.

    (a) Technology Transfer Coordinator- The Secretary shall designate a Technology Transfer Coordinator to perform oversight of and policy development for technology transfer activities at the Department. The Technology Transfer Coordinator shall--

      (1) coordinate the activities of the Technology Transfer Working Group;

      (2) oversee the expenditure of funds allocated to the Technology Transfer Working Group; and

      (3) coordinate with each technology partnership ombudsman appointed under section 11 of the Technology Transfer Commercialization Act of 2000 (42 U.S.C. 7261c).

    (b) Technology Transfer Working Group- The Secretary shall establish a Technology Transfer Working Group, which shall consist of representatives of the National Laboratories and single-purpose research facilities, to--

      (1) coordinate technology transfer activities occurring at National Laboratories and single-purpose research facilities;

      (2) exchange information about technology transfer practices, including alternative approaches to resolution of disputes involving intellectual property rights and other technology transfer matters; and

      (3) develop and disseminate to the public and prospective technology partners information about opportunities and procedures for technology transfer with the Department, including those related to alternative approaches to resolution of disputes involving intellectual property rights and other technology transfer matters.

    (c) Technology Transfer Responsibility- Nothing in this section shall affect the technology transfer responsibilities of Federal employees under the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3701 et seq.).

SEC. 976. FEDERAL LABORATORY EDUCATIONAL PARTNERS.

    (a) Distribution of Royalties Received by Federal Agencies- Section 14(a)(1)(B)(v) of the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3710c(a)(1)(B)(v)), is amended to read as follows:

        ‘(v) for scientific research and development and for educational assistance and other purposes consistent with the missions and objectives of the agency and the laboratory.’.

    (b) Cooperative Research and Development Agreements- Section 12(b)(5)(C) of the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3710a(b)(5)(C)) is amended to read as follows:

      ‘(C) for scientific research and development and for educational assistance consistent with the missions and objectives of the agency and the laboratory.’.

SEC. 977. INTERAGENCY COOPERATION.

    The Secretary shall enter into discussions with the Administrator of the National Aeronautics and Space Administration with the goal of reaching an interagency working agreement between the 2 agencies that would make the National Aeronautics and Space Administration’s expertise in energy, gained from its existing and planned programs, more readily available to the relevant research, development, demonstration, and commercial applications programs of the Department. Technologies to be discussed should include the National Aeronautics and Space Administration’s modeling, research, development, testing, and evaluation of new energy technologies, including solar, wind, fuel cells, and hydrogen storage and distribution.

SEC. 978. TECHNOLOGY INFRASTRUCTURE PROGRAM.

    (a) Establishment- The Secretary shall establish a Technology Infrastructure Program in accordance with this section.

    (b) Purpose- The purpose of the Technology Infrastructure Program shall be to improve the ability of National Laboratories and single-purpose research facilities to support departmental missions by--

      (1) stimulating the development of technology clusters that can support departmental missions at the National Laboratories or single-purpose research facilities;

      (2) improving the ability of National Laboratories and single-purpose research facilities to leverage and benefit from commercial research, technology, products, processes, and services; and

      (3) encouraging the exchange of scientific and technological expertise between National Laboratories or single-purpose research facilities and entities that can support departmental missions at the National Laboratories or single-purpose research facilities, such as institutions of higher education; technology-related business concerns; nonprofit institutions; and agencies of State, tribal, or local governments.

    (c) Projects- The Secretary shall authorize the Director of each National Laboratory or single-purpose research facility to implement the Technology Infrastructure Program at such National Laboratory or facility through projects that meet the requirements of subsections (d) and (e).

    (d) Program Requirements- Each project funded under this section shall meet the following requirements:

      (1) Each project shall include at least 1 of each of the following entities: a business; an institution of higher education; a nonprofit institution; and an agency of a State, local, or tribal government.

      (2) Not less than 50 percent of the costs of each project funded under this section shall be provided from non-Federal sources. The calculation of costs paid by the non-Federal sources to a project shall include cash, personnel, services, equipment, and other resources expended on the project after start of the project. Independent research and development expenses of Government contractors that qualify for reimbursement under section 31.205-18(e) of the Federal Acquisition Regulation issued pursuant to section 25(c)(1) of the Office of Federal Procurement Policy Act (41 U.S.C. 421(c)(1)) may be credited toward costs paid by non-Federal sources to a project, if the expenses meet the other requirements of this section.

      (3) All projects under this section shall be competitively selected using procedures determined by the Secretary.

      (4) Any participant that receives funds under this section may use generally accepted accounting principles for maintaining accounts, books, and records relating to the project.

      (5) No Federal funds shall be made available under this section for construction or any project for more than 5 years.

    (e) Selection Criteria-

      (1) IN GENERAL- The Secretary shall allocate funds under this section only if the Director of the National Laboratory or single-purpose research facility managing the project determines that the project is likely to improve the ability of the National Laboratory or single-purpose research facility to achieve technical success in meeting departmental missions.

      (2) CRITERIA- The Secretary shall consider the following criteria in selecting a project to receive Federal funds:

        (A) The potential of the project to promote the development of a commercially sustainable technology cluster following the period of Department investment, which will derive most of the demand for its products or services from the private sector, and which will support departmental missions at the participating National Laboratory or single-purpose research facility.

        (B) The potential of the project to promote the use of commercial research, technology, products, processes, and services by the participating National Laboratory or single-purpose research facility to achieve its mission or the commercial development of technological innovations made at the participating National Laboratory or single-purpose research facility.

        (C) The extent to which the project involves a wide variety and number of institutions of higher education, nonprofit institutions, and technology-related business concerns that can support the missions of the participating National Laboratory or single-purpose research facility and that will make substantive contributions to achieving the goals of the project.

        (D) The extent to which the project focuses on promoting the development of technology-related business concerns that are small businesses or involves such small businesses substantively in the project.

        (E) Such other criteria as the Secretary determines to be appropriate.

    (f) Allocation- In allocating funds for projects approved under this section, the Secretary shall provide--

      (1) the Federal share of the project costs; and

      (2) additional funds to the National Laboratory or single-purpose research facility managing the project to permit the National Laboratory or single-purpose research facility to carry out activities relating to the project, and to coordinate such activities with the project.

    (g) Report to Congress- Not later than July 1, 2006, the Secretary shall report to Congress on whether the Technology Infrastructure Program should be continued and, if so, how the program should be managed.

    (h) Definitions- In this section:

      (1) TECHNOLOGY CLUSTER- The term ‘technology cluster’ means a concentration of technology-related business concerns, institutions of higher education, or nonprofit institutions that reinforce each other’s performance in the areas of technology development through formal or informal relationships.

      (2) TECHNOLOGY-RELATED BUSINESS CONCERN- The term ‘technology-related business concern’ means a for-profit corporation, company, association, firm, partnership, or small business concern that conducts scientific or engineering research; develops new technologies; manufactures products based on new technologies; or performs technological services.

    (i) Authorization of Appropriations- There are authorized to be appropriated to the Secretary for activities under this section $10,000,000 for each of fiscal years 2004, 2005, and 2006.

SEC. 979. REPROGRAMMING.

    (a) Distribution Report- Not later than 60 days after the date of the enactment of an Act appropriating amounts authorized under this title, the Secretary shall transmit to the appropriate authorizing committees of Congress a report explaining how such amounts will be distributed among the authorizations contained in this title.

    (b) Prohibition-

      (1) IN GENERAL- No amount identified under subsection (a) shall be reprogrammed if such reprogramming would result in an obligation which changes an individual distribution required to be reported under subsection (a) by more than 5 percent unless the Secretary has transmitted to the appropriate authorizing committees of Congress a report described in subsection (c) and a period of 30 days has elapsed after such committees receive the report.

      (2) COMPUTATION- In the computation of the 30-day period described in paragraph (1), there shall be excluded any day on which either House of Congress is not in session because of an adjournment of more than 3 days to a day certain.

    (c) Reprogramming Report- A report referred to in subsection (b)(1) shall contain a full and complete statement of the action proposed to be taken and the facts and circumstances relied on in support of the proposed action.

SEC. 980. CONSTRUCTION WITH OTHER LAWS.

    Except as otherwise provided in this title, the Secretary shall carry out the research, development, demonstration, and commercial application programs, projects, and activities authorized by this title in accordance with the applicable provisions of the Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.), the Federal Nonnuclear Research and Development Act of 1974 (42 U.S.C. 5901 et seq.), the Energy Policy Act of 1992 (42 U.S.C. 13201 et seq.), the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3701 et seq.), chapter 18 of title 35, United States Code (commonly referred to as the Bayh-Dole Act), and any other Act under which the Secretary is authorized to carry out such activities.

SEC. 981. REPORT ON RESEARCH AND DEVELOPMENT PROGRAM EVALUATION METHODOLOGIES.

    Not later than 180 days after the date of enactment of this Act, the Secretary shall enter into appropriate arrangements with the National Academy of Sciences to investigate and report on the scientific and technical merits of any evaluation methodology currently in use or proposed for use in relation to the scientific and technical programs of the Department by the Secretary or other Federal official. Not later than 6 months after receiving the report of the National Academy, the Secretary shall submit such report to Congress, along with any other views or plans of the Secretary with respect to the future use of such evaluation methodology.

SEC. 982. DEPARTMENT OF ENERGY SCIENCE AND TECHNOLOGY SCHOLARSHIP PROGRAM.

    (a) Establishment of Program-

      (1) IN GENERAL- The Secretary is authorized to establish a Department of Energy Science and Technology Scholarship Program to award scholarships to individuals that is designed to recruit and prepare students for careers in the Department.

      (2) COMPETITIVE PROCESS- Individuals shall be selected to receive scholarships under this section through a competitive process primarily on the basis of academic merit, with consideration given to financial need and the goal of promoting the participation of individuals identified in section 33 or 34 of the Science and Engineering Equal Opportunities Act (42 U.S.C. 1885a or 1885b).

      (3) SERVICE AGREEMENTS- To carry out the Program the Secretary shall enter into contractual agreements with individuals selected under paragraph (2) under which the individuals agree to serve as full-time employees of the Department, for the period described in subsection (f)(1), in positions needed by the Department and for which the individuals are qualified, in exchange for receiving a scholarship.

    (b) Scholarship Eligibility- In order to be eligible to participate in the Program, an individual must--

      (1) be enrolled or accepted for enrollment as a full-time student at an institution of higher education in an academic program or field of study described in the list made available under subsection (d);

      (2) be a United States citizen; and

      (3) at the time of the initial scholarship award, not be a Federal employee as defined in section 2105 of title 5 of the United States Code.

    (c) Application Required- An individual seeking a scholarship under this section shall submit an application to the Secretary at such time, in such manner, and containing such information, agreements, or assurances as the Secretary may require.

    (d) Eligible Academic Programs- The Secretary shall make publicly available a list of academic programs and fields of study for which scholarships under the Program may be utilized, and shall update the list as necessary.

    (e) Scholarship Requirement-

      (1) IN GENERAL- The Secretary may provide a scholarship under the Program for an academic year if the individual applying for the scholarship has submitted to the Secretary, as part of the application required under subsection (c), a proposed academic program leading to a degree in a program or field of study on the list made available under subsection (d).

      (2) DURATION OF ELIGIBILITY- An individual may not receive a scholarship under this section for more than 4 academic years, unless the Secretary grants a waiver.

      (3) SCHOLARSHIP AMOUNT- The dollar amount of a scholarship under this section for an academic year shall be determined under regulations issued by the Secretary, but shall in no case exceed the cost of attendance.

      (4) AUTHORIZED USES- A scholarship provided under this section may be expended for tuition, fees, and other authorized expenses as established by the Secretary by regulation.

      (5) CONTRACTS REGARDING DIRECT PAYMENTS TO INSTITUTIONS- The Secretary may enter into a contractual agreement with an institution of higher education under which the amounts provided for a scholarship under this section for tuition, fees, and other authorized expenses are paid directly to the institution with respect to which the scholarship is provided.

    (f) Period of Obligated Service-

      (1) DURATION OF SERVICE- The period of service for which an individual shall be obligated to serve as an employee of the Department is, except as provided in subsection (h)(2), 24 months for each academic year for which a scholarship under this section is provided.

      (2) SCHEDULE FOR SERVICE-

        (A) IN GENERAL- Except as provided in subparagraph (B), obligated service under paragraph (1) shall begin not later than 60 days after the individual obtains the educational degree for which the scholarship was provided.

        (B) DEFERRAL- The Secretary may defer the obligation of an individual to provide a period of service under paragraph (1) if the Secretary determines that such a deferral is appropriate. The Secretary shall prescribe the terms and conditions under which a service obligation may be deferred through regulation.

    (g) Penalties for Breach of Scholarship Agreement-

      (1) FAILURE TO COMPLETE ACADEMIC TRAINING- Scholarship recipients who fail to maintain a high level of academic standing, as defined by the Secretary by regulation, who are dismissed from their educational institutions for disciplinary reasons, or who voluntarily terminate academic training before graduation from the educational program for which the scholarship was awarded, shall be in breach of their contractual agreement and, in lieu of any service obligation arising under such agreement, shall be liable to the United States for repayment not later than 1 year after the date of default of all scholarship funds paid to them and to the institution of higher education on their behalf under the agreement, except as provided in subsection (h)(2). The repayment period may be extended by the Secretary when determined to be necessary, as established by regulation.

      (2) FAILURE TO BEGIN OR COMPLETE THE SERVICE OBLIGATION OR MEET THE TERMS AND CONDITIONS OF DEFERMENT- A scholarship recipient who, for any reason, fails to begin or complete a service obligation under this section after completion of academic training, or fails to comply with the terms and conditions of deferment established by the Secretary pursuant to subsection (f)(2)(B), shall be in breach of the contractual agreement. When a recipient breaches an agreement for the reasons stated in the preceding sentence, the recipient shall be liable to the United States for an amount equal to--

        (A) the total amount of scholarships received by such individual under this section; plus

        (B) the interest on the amounts of such awards which would be payable if at the time the awards were received they were loans bearing interest at the maximum legal prevailing rate, as determined by the Treasurer of the United States,

      multiplied by 3.

    (h) Waiver or Suspension of Obligation-

      (1) DEATH OF INDIVIDUAL- Any obligation of an individual incurred under the Program (or a contractual agreement thereunder) for service or payment shall be canceled upon the death of the individual.

      (2) IMPOSSIBILITY OR EXTREME HARDSHIP- The Secretary shall by regulation provide for the partial or total waiver or suspension of any obligation of service or payment incurred by an individual under the Program (or a contractual agreement thereunder) whenever compliance by the individual is impossible or would involve extreme hardship to the individual, or if enforcement of such obligation with respect to the individual would be contrary to the best interests of the Government.

    (i) Definitions- In this section the following definitions apply:

      (1) COST OF ATTENDANCE- The term ‘cost of attendance’ has the meaning given that term in section 472 of the Higher Education Act of 1965 (20 U.S.C. 1087ll).

      (2) PROGRAM- The term ‘Program’ means the Department of Energy Science and Technology Scholarship Program established under this section.

    (j) Authorization of Appropriations- There are authorized to be appropriated to the Secretary for activities under this section--

      (1) for fiscal year 2004, $800,000;

      (2) for fiscal year 2005, $1,600,000;

      (3) for fiscal year 2006, $2,000,000;

      (4) for fiscal year 2007, $2,000,000; and

      (5) for fiscal year 2008, $2,000,000.

SEC. 983. REPORT ON EQUAL EMPLOYMENT OPPORTUNITY PRACTICES.

    Not later than 12 months after the date of enactment of this Act, and biennially thereafter, the Secretary shall transmit to Congress a report on the equal employment opportunity practices at National Laboratories. Such report shall include--

      (1) a thorough review of each laboratory contractor’s equal employment opportunity policies, including promotion to management and professional positions and pay raises;

      (2) a statistical report on complaints and their disposition in the laboratories;

      (3) a description of how equal employment opportunity practices at the laboratories are treated in the contract and in calculating award fees for each contractor;

      (4) a summary of disciplinary actions and their disposition by either the Department or the relevant contractors for each laboratory;

      (5) a summary of outreach efforts to attract women and minorities to the laboratories;

      (6) a summary of efforts to retain women and minorities in the laboratories; and

      (7) a summary of collaboration efforts with the Office of Federal Contract Compliance Programs to improve equal employment opportunity practices at the laboratories.

SEC. 984. SMALL BUSINESS ADVOCACY AND ASSISTANCE.

    (a) Small Business Advocate- The Secretary shall require the Director of each National Laboratory, and may require the Director of a single-purpose research facility, to designate a small business advocate to--

      (1) increase the participation of small business concerns, including socially and economically disadvantaged small business concerns, in procurement, collaborative research, technology licensing, and technology transfer activities conducted by the National Laboratory or single-purpose research facility;

      (2) report to the Director of the National Laboratory or single-purpose research facility on the actual participation of small business concerns, including socially and economically disadvantaged small business concerns, in procurement, collaborative research, technology licensing, and technology transfer activities along with recommendations, if appropriate, on how to improve participation;

      (3) make available to small businesses training, mentoring, and information on how to participate in procurement and collaborative research activities;

      (4) increase the awareness inside the National Laboratory or single-purpose research facility of the capabilities and opportunities presented by small business concerns; and

      (5) establish guidelines for the program under subsection (b) and report on the effectiveness of such program to the Director of the National Laboratory or single-purpose research facility.

    (b) Establishment of Small Business Assistance Program- The Secretary shall require the Director of each National Laboratory, and may require the Director of a single-purpose research facility, to establish a program to provide small business concerns--

      (1) assistance directed at making them more effective and efficient subcontractors or suppliers to the National Laboratory or single-purpose research facility; or

      (2) general technical assistance, the cost of which shall not exceed $10,000 per instance of assistance, to improve the small business concerns’ products or services.

    (c) Use of Funds- None of the funds expended under subsection (b) may be used for direct grants to the small business concerns.

    (d) Definitions- In this section:

      (1) SMALL BUSINESS CONCERN- The term ‘small business concern’ has the meaning given such term in section 3 of the Small Business Act (15 U.S.C. 632).

      (2) SOCIALLY AND ECONOMICALLY DISADVANTAGED SMALL BUSINESS CONCERNS- The term ‘socially and economically disadvantaged small business concerns’ has the meaning given such term in section 8(a)(4) of the Small Business Act (15 U.S.C. 637(a)(4)).

    (e) Authorization of Appropriations- There are authorized to be appropriated to the Secretary for activities under this section $5,000,000 for each of fiscal years 2004 through 2008.

SEC. 985. REPORT ON MOBILITY OF SCIENTIFIC AND TECHNICAL PERSONNEL.

    Not later than 2 years after the date of enactment of this Act, the Secretary shall transmit a report to Congress identifying any policies or procedures of a contractor operating a National Laboratory or single-purpose research facility that create disincentives to the temporary transfer of scientific and technical personnel among the contractor-operated National Laboratories or contractor-operated single-purpose research facilities and provide suggestions for improving interlaboratory exchange of scientific and technical personnel.

SEC. 986. NATIONAL ACADEMY OF SCIENCES REPORT.

    Not later than 90 days after the date of enactment of this Act, the Secretary shall enter into an arrangement with the National Academy of Sciences for the Academy to--

      (1) conduct a study on--

        (A) the obstacles to accelerating the commercial application of energy technology; and

        (B) the adequacy of Department policies and procedures for, and oversight of, technology transfer-related disputes between contractors of the Department and the private sector; and

      (2) transmit a report to Congress on recommendations developed as a result of the study.

SEC. 987. OUTREACH.

    The Secretary shall ensure that each program authorized by this title includes an outreach component to provide information, as appropriate, to manufacturers, consumers, engineers, architects, builders, energy service companies, institutions of higher education, small businesses, facility planners and managers, State and local governments, and other entities.

SEC. 988. COMPETITIVE AWARD OF MANAGEMENT CONTRACTS.

    None of the funds authorized to be appropriated to the Secretary by this title may be used to award a management and operating contract for a nonmilitary energy laboratory of the Department unless such contract is competitively awarded or the Secretary grants, on a case-by-case basis, a waiver to allow for such a deviation. The Secretary may not delegate the authority to grant such a waiver and shall submit to Congress a report notifying Congress of the waiver and setting forth the reasons for the waiver at least 60 days prior to the date of the award of such a contract.

SEC. 989. EDUCATIONAL PROGRAMS IN SCIENCE AND MATHEMATICS.

    (a) Activities- Section 3165(a) of the Department of Energy Science Education Enhancement Act (42 U.S.C. 7381b(a)) is amended by adding at the end the following:

      ‘(14) Support competitive events for students, under supervision of teachers, designed to encourage student interest and knowledge in science and mathematics.’.

    (b) Authorization of Appropriations- Section 3169 of the Department of Energy Science Education Enhancement Act (42 U.S.C. 7381e), as so redesignated by section 1102(b), is amended by inserting before the period ‘; and $40,000,000 for each of fiscal years 2004 through 2008’.

TITLE X--DEPARTMENT OF ENERGY MANAGEMENT

SEC. 1001. ADDITIONAL ASSISTANT SECRETARY POSITION.

    (a) Additional Assistant Secretary Position to Enable Improved Management of Nuclear Energy Issues-

      (1) IN GENERAL- Section 203(a) of the Department of Energy Organization Act (42 U.S.C. 7133(a)) is amended by striking ‘six Assistant Secretaries’ and inserting ‘7 Assistant Secretaries’.

      (2) SENSE OF CONGRESS- It is the sense of Congress that the leadership for departmental missions in nuclear energy should be at the Assistant Secretary level.

    (b) Technical and Conforming Amendments-

      (1) TITLE 5- Section 5315 of title 5, United States Code, is amended by striking ‘Assistant Secretaries of Energy (6)’ and inserting ‘Assistant Secretaries of Energy (7)’.

      (2) DEPARTMENT OF ENERGY ORGANIZATION ACT- The table of contents for the Department of Energy Organization Act (42 U.S.C. 7101 note) is amended--

        (A) by striking ‘Section 209’ and inserting ‘Sec. 209’;

        (B) by striking ‘213.’ and inserting ‘Sec. 213.’;

        (C) by striking ‘214.’ and inserting ‘Sec. 214.’;

        (D) by striking ‘215.’ and inserting ‘Sec. 215.’; and

        (E) by striking ‘216.’ and inserting ‘Sec. 216.’.

SEC. 1002. OTHER TRANSACTIONS AUTHORITY.

    Section 646 of the Department of Energy Organization Act (42 U.S.C. 7256) is amended by adding at the end the following:

    ‘(g)(1) In addition to other authorities granted to the Secretary under law, the Secretary may enter into other transactions on such terms as the Secretary may deem appropriate in furtherance of research, development, or demonstration functions vested in the Secretary. Such other transactions shall not be subject to the provisions of section 9 of the Federal Nonnuclear Energy Research and Development Act of 1974 (42 U.S.C. 5908) or section 152 of the Atomic Energy Act of 1954 (42 U.S.C. 2182).

    ‘(2)(A) The Secretary shall ensure that--

      ‘(i) to the maximum extent the Secretary determines practicable, no transaction entered into under paragraph (1) provides for research, development, or demonstration that duplicates research, development, or demonstration being conducted under existing projects carried out by the Department;

      ‘(ii) to the extent the Secretary determines practicable, the funds provided by the Government under a transaction authorized by paragraph (1) do not exceed the total amount provided by other parties to the transaction; and

      ‘(iii) to the extent the Secretary determines practicable, competitive, merit-based selection procedures shall be used when entering into transactions under paragraph (1).

    ‘(B) A transaction authorized by paragraph (1) may be used for a research, development, or demonstration project only if the Secretary makes a written determination that the use of a standard contract, grant, or cooperative agreement for the project is not feasible or appropriate.

    ‘(3)(A) The Secretary shall protect from disclosure, including disclosure under section 552 of title 5, United States Code, for up to 5 years after the date the information is received by the Secretary--

      ‘(i) a proposal, proposal abstract, and supporting documents submitted to the Department in a competitive or noncompetitive process having the potential for resulting in an award under paragraph (1) to the party submitting the information; and

      ‘(ii) a business plan and technical information relating to a transaction authorized by paragraph (1) submitted to the Department as confidential business information.

    ‘(B) The Secretary may protect from disclosure, for up to 5 years after the information was developed, any information developed pursuant to a transaction under paragraph (1) which developed information is of a character that it would be protected from disclosure under section 552(b)(4) of title 5, United States Code, if obtained from a person other than a Federal agency.

    ‘(4) Not later than 90 days after the date of enactment of this subsection, the Secretary shall prescribe guidelines for using other transactions authorized by paragraph (1). Such guidelines shall be published in the Federal Register for public comment under rulemaking procedures of the Department.

    ‘(5) The authority of the Secretary under this subsection may be delegated only to an officer of the Department who is appointed by the President by and with the advice and consent of the Senate and may not be delegated to any other person.

    ‘(6)(A) Not later than September 31, 2005, the Comptroller General of the United States shall report to Congress on the Department’s use of the authorities granted under this section, including the ability to attract nontraditional government contractors and whether additional safeguards are needed with respect to the use of such authorities.

    ‘(B) In this section, the term ‘nontraditional Government contractor’ has the same meaning as the term ‘nontraditional defense contractor’ as defined in section 845(e) of the National Defense Authorization Act for Fiscal Year 1994 (Public Law 103-160; 10 U.S.C. 2371 note).’.

TITLE XI--PERSONNEL AND TRAINING

SEC. 1101. TRAINING GUIDELINES FOR ELECTRIC ENERGY INDUSTRY PERSONNEL.

    The Secretary of Energy, in consultation with the Secretary of Labor and jointly with the electric industry and recognized employee representatives, shall develop model personnel training guidelines to support electric system reliability and safety. The training guidelines shall, at a minimum--

      (1) include training requirements for workers engaged in the construction, operation, inspection, and maintenance of electric generation, transmission, and distribution, including competency and certification requirements, and assessment requirements that include initial and ongoing evaluation of workers, recertification assessment procedures, and methods for examining or testing the qualification of individuals performing covered tasks; and

      (2) consolidate existing training guidelines on the construction, operation, maintenance, and inspection of electric generation, transmission, and distribution facilities, such as those established by the National Electric Safety Code and other industry consensus standards.

SEC. 1102. IMPROVED ACCESS TO ENERGY-RELATED SCIENTIFIC AND TECHNICAL CAREERS.

    (a) Department of Energy Science Education Programs- Section 3164 of the Department of Energy Science Education Enhancement Act (42 U.S.C. 7381a) is amended by adding at the end the following:

    ‘(c) Programs for Students From Underrepresented Groups- In carrying out a program under subsection (a), the Secretary shall give priority to activities that are designed to encourage students from underrepresented groups to pursue scientific and technical careers.’.

    (b) Partnerships With Historically Black Colleges and Universities, Hispanic-Servicing Institutions, and Tribal Colleges- The Department of Energy Science Education Enhancement Act (42 U.S.C. 7381 et seq.) is amended--

      (1) by redesignating sections 3167 and 3168 as sections 3168 and 3169, respectively; and

      (2) by inserting after section 3166 the following:

‘SEC. 3167. PARTNERSHIPS WITH HISTORICALLY BLACK COLLEGES AND UNIVERSITIES, HISPANIC-SERVING INSTITUTIONS, AND TRIBAL COLLEGES.

    ‘(a) Definitions- In this section:

      ‘(1) HISPANIC-SERVING INSTITUTION- The term ‘Hispanic-serving institution’ has the meaning given that term in section 502(a) of the Higher Education Act of 1965 (20 U.S.C. 1101a(a)).

      ‘(2) HISTORICALLY BLACK COLLEGE OR UNIVERSITY- The term ‘historically Black college or university’ has the meaning given the term ‘part B institution’ in section 322 of the Higher Education Act of 1965 (20 U.S.C. 1061).

      ‘(3) NATIONAL LABORATORY- The term ‘National Laboratory’ has the meaning given that term in section 902 of the Energy Policy Act of 2003.

      ‘(4) SCIENCE FACILITY- The term ‘science facility’ has the meaning given the term ‘single-purpose research facility’ in section 902 of the Energy Policy Act of 2003.

      ‘(5) TRIBAL COLLEGE- The term ‘tribal college’ has the meaning given the term ‘Tribal College or University’ in section 316(b)(3) of the Higher Education Act of 1965 (20 U.S.C. 1059c(b)(3)).

    ‘(b) Education Partnership- The Secretary shall direct the Director of each National Laboratory and, to the extent practicable, the head of any science facility to increase the participation of historically Black colleges or universities, Hispanic-serving institutions, or tribal colleges in activities that increase the capacity of the historically Black colleges or universities, Hispanic-serving institutions, or tribal colleges to train personnel in science or engineering.

    ‘(c) Activities- An activity under subsection (b) may include--

      ‘(1) collaborative research;

      ‘(2) equipment transfer;

      ‘(3) training activities conducted at a National Laboratory or science facility; and

      ‘(4) mentoring activities conducted at a National Laboratory or science facility.

    ‘(d) Report- Not later than 2 years after the date of enactment of the Energy Policy Act of 2003, the Secretary shall submit to Congress a report on the activities carried out under this section.’.

SEC. 1103. NATIONAL POWER PLANT OPERATIONS TECHNOLOGY AND EDUCATION CENTER.

    (a) Establishment- The Secretary shall support the establishment of a National Power Plant Operations Technology and Education Center (in this section referred to as the ‘Center’), to address the need for training and educating certified operators for nonnuclear electric power generation plants.

    (b) Role- The Center shall provide both training and continuing education relating to nonnuclear electric power generation plant technologies and operations. The Center shall conduct training and education activities on site and through Internet-based information technologies that allow for learning at remote sites.

    (c) Criteria for Competitive Selection- The Secretary shall support the establishment of the Center at an institution of higher education with expertise in power plant technology and operation and with the ability to provide onsite as well as Internet-based training.

SEC. 1104. INTERNATIONAL ENERGY TRAINING.

    (a) In General- The Secretary of Energy, in consultation with the Secretaries of Commerce, Interior, and State and the Federal Energy Regulatory Commission, shall coordinate training and outreach efforts for international commercial energy markets in countries with developing and restructuring economies.

    (b) Components- The efforts may address--

      (1) production-related fiscal regimes;

      (2) grid and network issues;

      (3) energy user and demand side response;

      (4) international trade of energy; and

      (5) international transportation of energy.

    (c) Authorization of Appropriations- There are authorized to be appropriated to carry out this section $1,500,000 for each of fiscal years 2004 through 2007.

TITLE XII--ELECTRICITY

SEC. 1201. SHORT TITLE.

    This title may be cited as the ‘Electric Reliability Act of 2004’.

Subtitle A--Reliability Standards

SEC. 1211. ELECTRIC RELIABILITY STANDARDS.

    (a) In General- Part II of the Federal Power Act (16 U.S.C 824 et seq.) is amended by adding at the end the following:

‘SEC. 215. ELECTRIC RELIABILITY.

    ‘(a) Definitions- For purposes of this section:

      ‘(1) The term ‘bulk-power system’ means--

        ‘(A) facilities and control systems necessary for operating an interconnected electric energy transmission network (or any portion thereof); and

        ‘(B) electric energy from generation facilities needed to maintain transmission system reliability.

      The term does not include facilities used in the local distribution of electric energy.

      ‘(2) The terms ‘Electric Reliability Organization’ and ‘ERO’ mean the organization certified by the Commission under subsection (c) the purpose of which is to establish and enforce reliability standards for the bulk-power system, subject to Commission review.

      ‘(3) The term ‘reliability standard’ means a requirement, approved by the Commission under this section, to provide for reliable operation of the bulk-power system. The term includes requirements for the operation of existing bulk-power system facilities and the design of planned additions or modifications to such facilities to the extent necessary to provide for reliable operation of the bulk-power system, but the term does not include any requirement to enlarge such facilities or to construct new transmission capacity or generation capacity.

      ‘(4) The term ‘reliable operation’ means operating the elements of the bulk-power system within equipment and electric system thermal, voltage, and stability limits so that instability, uncontrolled separation, or cascading failures of such system will not occur as a result of a sudden disturbance or unanticipated failure of system elements.

      ‘(5) The term ‘Interconnection’ means a geographic area in which the operation of bulk-power system components is synchronized such that the failure of 1 or more of such components may adversely affect the ability of the operators of other components within the system to maintain reliable operation of the facilities within their control.

      ‘(6) The term ‘transmission organization’ means a Regional Transmission Organization, Independent System Operator, independent transmission provider, or other transmission organization finally approved by the Commission for the operation of transmission facilities.

      ‘(7) The term ‘regional entity’ means an entity having enforcement authority pursuant to subsection (e)(4).

    ‘(b) Jurisdiction and Applicability- (1) The Commission shall have jurisdiction, within the United States, over the ERO certified by the Commission under subsection (c), any regional entities, and all users, owners and operators of the bulk-power system, including but not limited to the entities described in section 201(f), for purposes of approving reliability standards established under this section and enforcing compliance with this section. All users, owners and operators of the bulk-power system shall comply with reliability standards that take effect under this section.

    ‘(2) The Commission shall issue a final rule to implement the requirements of this section not later than 180 days after the date of enactment of this section.

    ‘(c) Certification- Following the issuance of a Commission rule under subsection (b)(2), any person may submit an application to the Commission for certification as the Electric Reliability Organization. The Commission may certify 1 such ERO if the Commission determines that such ERO--

      ‘(1) has the ability to develop and enforce, subject to subsection (e)(2), reliability standards that provide for an adequate level of reliability of the bulk-power system; and

      ‘(2) has established rules that--

        ‘(A) assure its independence of the users and owners and operators of the bulk-power system, while assuring fair stakeholder representation in the selection of its directors and balanced decisionmaking in any ERO committee or subordinate organizational structure;

        ‘(B) allocate equitably reasonable dues, fees, and other charges among end users for all activities under this section;

        ‘(C) provide fair and impartial procedures for enforcement of reliability standards through the imposition of penalties in accordance with subsection (e) (including limitations on activities, functions, or operations, or other appropriate sanctions);

        ‘(D) provide for reasonable notice and opportunity for public comment, due process, openness, and balance of interests in developing reliability standards and otherwise exercising its duties; and

        ‘(E) provide for taking, after certification, appropriate steps to gain recognition in Canada and Mexico.

    ‘(d) Reliability Standards- (1) The Electric Reliability Organization shall file each reliability standard or modification to a reliability standard that it proposes to be made effective under this section with the Commission.

    ‘(2) The Commission may approve, by rule or order, a proposed reliability standard or modification to a reliability standard if it determines that the standard is just, reasonable, not unduly discriminatory or preferential, and in the public interest. The Commission shall give due weight to the technical expertise of the Electric Reliability Organization with respect to the content of a proposed standard or modification to a reliability standard and to the technical expertise of a regional entity organized on an Interconnection-wide basis with respect to a reliability standard to be applicable within that Interconnection, but shall not defer with respect to the effect of a standard on competition. A proposed standard or modification shall take effect upon approval by the Commission.

    ‘(3) The Electric Reliability Organization shall rebuttably presume that a proposal from a regional entity organized on an Interconnection-wide basis for a reliability standard or modification to a reliability standard to be applicable on an Interconnection-wide basis is just, reasonable, and not unduly discriminatory or preferential, and in the public interest.

    ‘(4) The Commission shall remand to the Electric Reliability Organization for further consideration a proposed reliability standard or a modification to a reliability standard that the Commission disapproves in whole or in part.

    ‘(5) The Commission, upon its own motion or upon complaint, may order the Electric Reliability Organization to submit to the Commission a proposed reliability standard or a modification to a reliability standard that addresses a specific matter if the Commission considers such a new or modified reliability standard appropriate to carry out this section.

    ‘(6) The final rule adopted under subsection (b)(2) shall include fair processes for the identification and timely resolution of any conflict between a reliability standard and any function, rule, order, tariff, rate schedule, or agreement accepted, approved, or ordered by the Commission applicable to a transmission organization. Such transmission organization shall continue to comply with such function, rule, order, tariff, rate schedule or agreement accepted approved, or ordered by the Commission until--

      ‘(A) the Commission finds a conflict exists between a reliability standard and any such provision;

      ‘(B) the Commission orders a change to such provision pursuant to section 206 of this part; and

      ‘(C) the ordered change becomes effective under this part.

    If the Commission determines that a reliability standard needs to be changed as a result of such a conflict, it shall order the ERO to develop and file with the Commission a modified reliability standard under paragraph (4) or (5) of this subsection.

    ‘(e) Enforcement- (1) The ERO may impose, subject to paragraph (2), a penalty on a user or owner or operator of the bulk-power system for a violation of a reliability standard approved by the Commission under subsection (d) if the ERO, after notice and an opportunity for a hearing--

      ‘(A) finds that the user or owner or operator has violated a reliability standard approved by the Commission under subsection (d); and

      ‘(B) files notice and the record of the proceeding with the Commission.

    ‘(2) A penalty imposed under paragraph (1) may take effect not earlier than the 31st day after the ERO files with the Commission notice of the penalty and the record of proceedings. Such penalty shall be subject to review by the Commission, on its own motion or upon application by the user, owner or operator that is the subject of the penalty filed within 30 days after the date such notice is filed with the Commission. Application to the Commission for review, or the initiation of review by the Commission on its own motion, shall not operate as a stay of such penalty unless the Commission otherwise orders upon its own motion or upon application by the user, owner or operator that is the subject of such penalty. In any proceeding to review a penalty imposed under paragraph (1), the Commission, after notice and opportunity for hearing (which hearing may consist solely of the record before the ERO and opportunity for the presentation of supporting reasons to affirm, modify, or set aside the penalty), shall by order affirm, set aside, reinstate, or modify the penalty, and, if appropriate, remand to the ERO for further proceedings. The Commission shall implement expedited procedures for such hearings.

    ‘(3) On its own motion or upon complaint, the Commission may order compliance with a reliability standard and may impose a penalty against a user or owner or operator of the bulk-power system if the Commission finds, after notice and opportunity for a hearing, that the user or owner or operator of the bulk-power system has engaged or is about to engage in any acts or practices that constitute or will constitute a violation of a reliability standard.

    ‘(4) The Commission shall issue regulations authorizing the ERO to enter into an agreement to delegate authority to a regional entity for the purpose of proposing reliability standards to the ERO and enforcing reliability standards under paragraph (1) if--

      ‘(A) the regional entity is governed by--

        ‘(i) an independent board;

        ‘(ii) a balanced stakeholder board; or

        ‘(iii) a combination independent and balanced stakeholder board.

      ‘(B) the regional entity otherwise satisfies the provisions of subsection (c)(1) and (2); and

      ‘(C) the agreement promotes effective and efficient administration of bulk-power system reliability.

    The Commission may modify such delegation. The ERO and the Commission shall rebuttably presume that a proposal for delegation to a regional entity organized on an Interconnection-wide basis promotes effective and efficient administration of bulk-power system reliability and should be approved. Such regulation may provide that the Commission may assign the ERO’s authority to enforce reliability standards under paragraph (1) directly to a regional entity consistent with the requirements of this paragraph.

    ‘(5) The Commission may take such action as is necessary or appropriate against the ERO or a regional entity to ensure compliance with a reliability standard or any Commission order affecting the ERO or a regional entity.

    ‘(6) Any penalty imposed under this section shall bear a reasonable relation to the seriousness of the violation and shall take into consideration the efforts of such user, owner, or operator to remedy the violation in a timely manner.

    ‘(f) Changes in Electric Reliability Organization Rules- The Electric Reliability Organization shall file with the Commission for approval any proposed rule or proposed rule change, accompanied by an explanation of its basis and purpose. The Commission, upon its own motion or complaint, may propose a change to the rules of the ERO. A proposed rule or proposed rule change shall take effect upon a finding by the Commission, after notice and opportunity for comment, that the change is just, reasonable, not unduly discriminatory or preferential, is in the public interest, and satisfies the requirements of subsection (c).

    ‘(g) Reliability Reports- The ERO shall conduct periodic assessments of the reliability and adequacy of the bulk-power system in North America.

    ‘(h) Coordination With Canada and Mexico- The President is urged to negotiate international agreements with the governments of Canada and Mexico to provide for effective compliance with reliability standards and the effectiveness of the ERO in the United States and Canada or Mexico.

    ‘(i) Savings Provisions- (1) The ERO shall have authority to develop and enforce compliance with reliability standards for only the bulk-power system.

    ‘(2) This section does not authorize the ERO or the Commission to order the construction of additional generation or transmission capacity or to set and enforce compliance with standards for adequacy or safety of electric facilities or services.

    ‘(3) Nothing in this section shall be construed to preempt any authority of any State to take action to ensure the safety, adequacy, and reliability of electric service within that State, as long as such action is not inconsistent with any reliability standard.

    ‘(4) Within 90 days of the application of the Electric Reliability Organization or other affected party, and after notice and opportunity for comment, the Commission shall issue a final order determining whether a State action is inconsistent with a reliability standard, taking into consideration any recommendation of the ERO.

    ‘(5) The Commission, after consultation with the ERO and the State taking action, may stay the effectiveness of any State action, pending the Commission’s issuance of a final order.

    ‘(j) Regional Advisory Bodies- The Commission shall establish a regional advisory body on the petition of at least 2/3 of the States within a region that have more than 1/2 of their electric load served within the region. A regional advisory body shall be composed of 1 member from each participating State in the region, appointed by the Governor of each State, and may include representatives of agencies, States, and provinces outside the United States. A regional advisory body may provide advice to the Electric Reliability Organization, a regional entity, or the Commission regarding the governance of an existing or proposed regional entity within the same region, whether a standard proposed to apply within the region is just, reasonable, not unduly discriminatory or preferential, and in the public interest, whether fees proposed to be assessed within the region are just, reasonable, not unduly discriminatory or preferential, and in the public interest and any other responsibilities requested by the Commission. The Commission may give deference to the advice of any such regional advisory body if that body is organized on an Interconnection-wide basis.

    ‘(k) Alaska and Hawaii- The provisions of this section do not apply to Alaska or Hawaii.’.

    (b) Status of ERO- The Electric Reliability Organization certified by the Federal Energy Regulatory Commission under section 215(c) of the Federal Power Act and any regional entity delegated enforcement authority pursuant to section 215(e)(4) of that Act are not departments, agencies, or instrumentalities of the United States Government.

Subtitle B--Transmission Infrastructure Modernization

SEC. 1221. SITING OF INTERSTATE ELECTRIC TRANSMISSION FACILITIES.

    (a) Amendment of Federal Power Act- Part II of the Federal Power Act is amended by adding at the end the following:

‘SEC. 216. SITING OF INTERSTATE ELECTRIC TRANSMISSION FACILITIES.

    ‘(a) Designation of National Interest Electric Transmission Corridors-

      ‘(1) TRANSMISSION CONGESTION STUDY- Within 1 year after the enactment of this section, and every 3 years thereafter, the Secretary of Energy, in consultation with affected States, shall conduct a study of electric transmission congestion. After considering alternatives and recommendations from interested parties, including an opportunity for comment from affected States, the Secretary shall issue a report, based on such study, which may designate any geographic area experiencing electric energy transmission capacity constraints or congestion that adversely affects consumers as a national interest electric transmission corridor. The Secretary shall conduct the study and issue the report in consultation with any appropriate regional entity referenced in section 215 of this Act.

      ‘(2) CONSIDERATIONS- In determining whether to designate a national interest electric transmission corridor referred to in paragraph (1) under this section, the Secretary may consider whether--

        ‘(A) the economic vitality and development of the corridor, or the end markets served by the corridor, may be constrained by lack of adequate or reasonably priced electricity;

        ‘(B)(i) economic growth in the corridor, or the end markets served by the corridor, may be jeopardized by reliance on limited sources of energy; and

        ‘(ii) a diversification of supply is warranted;

        ‘(C) the energy independence of the United States would be served by the designation;

        ‘(D) the designation would be in the interest of national energy policy; and

        ‘(E) the designation would enhance national defense and homeland security.

    ‘(b) Construction Permit- Except as provided in subsection (i), the Commission is authorized, after notice and an opportunity for hearing, to issue a permit or permits for the construction or modification of electric transmission facilities in a national interest electric transmission corridor designated by the Secretary under subsection (a) if the Commission finds that--

      ‘(1)(A) a State in which the transmission facilities are to be constructed or modified is without authority to--

        ‘(i) approve the siting of the facilities; or

        ‘(ii) consider the interstate benefits expected to be achieved by the proposed construction or modification of transmission facilities in the State;

      ‘(B) the applicant for a permit is a transmitting utility under this Act but does not qualify to apply for a permit or siting approval for the proposed project in a State because the applicant does not serve end-use customers in the State; or

      ‘(C) a State commission or other entity that has authority to approve the siting of the facilities has--

        ‘(i) withheld approval for more than 1 year after the filing of an application pursuant to applicable law seeking approval or 1 year after the designation of the relevant national interest electric transmission corridor, whichever is later; or

        ‘(ii) conditioned its approval in such a manner that the proposed construction or modification will not significantly reduce transmission congestion in interstate commerce or is not economically feasible;

      ‘(2) the facilities to be authorized by the permit will be used for the transmission of electric energy in interstate commerce;

      ‘(3) the proposed construction or modification is consistent with the public interest;

      ‘(4) the proposed construction or modification will significantly reduce transmission congestion in interstate commerce and protects or benefits consumers; and

      ‘(5) the proposed construction or modification is consistent with sound national energy policy and will enhance energy independence.

    ‘(c) Permit Applications- Permit applications under subsection (b) shall be made in writing to the Commission. The Commission shall issue rules setting forth the form of the application, the information to be contained in the application, and the manner of service of notice of the permit application upon interested persons.

    ‘(d) Comments- In any proceeding before the Commission under subsection (b), the Commission shall afford each State in which a transmission facility covered by the permit is or will be located, each affected Federal agency and Indian tribe, private property owners, and other interested persons, a reasonable opportunity to present their views and recommendations with respect to the need for and impact of a facility covered by the permit.

    ‘(e) Rights-of-way- In the case of a permit under subsection (b) for electric transmission facilities to be located on property other than property owned by the United States or a State, if the permit holder cannot acquire by contract, or is unable to agree with the owner of the property to the compensation to be paid for, the necessary right-of-way to construct or modify such transmission facilities, the permit holder may acquire the right-of-way by the exercise of the right of eminent domain in the district court of the United States for the district in which the property concerned is located, or in the appropriate court of the State in which the property is located. The practice and procedure in any action or proceeding for that purpose in the district court of the United States shall conform as nearly as may be with the practice and procedure in similar action or proceeding in the courts of the State where the property is situated.

    ‘(f) State Law- Nothing in this section shall preclude any person from constructing or modifying any transmission facility pursuant to State law.

    ‘(g) Compensation- Any exercise of eminent domain authority pursuant to this section shall be considered a taking of private property for which just compensation is due. Just compensation shall be an amount equal to the full fair market value of the property taken on the date of the exercise of eminent domain authority, except that the compensation shall exceed fair market value if necessary to make the landowner whole for decreases in the value of any portion of the land not subject to eminent domain. Any parcel of land acquired by eminent domain under this subsection shall be transferred back to the owner from whom it was acquired (or his heirs or assigns) if the land is not used for the construction or modification of electric transmission facilities within a reasonable period of time after the acquisition. Other than construction, modification, operation, or maintenance of electric transmission facilities and related facilities, property acquired under subsection (e) may not be used for any purpose (including use for any heritage area, recreational trail, or park) without the consent of the owner of the parcel from whom the property was acquired (or the owner’s heirs or assigns).

    ‘(h) Coordination of Federal Authorizations for Transmission and Distribution Facilities-

      ‘(1) LEAD AGENCY- If an applicant, or prospective applicant, for a Federal authorization related to an electric transmission or distribution facility so requests, the Department of Energy (DOE) shall act as the lead agency for purposes of coordinating all applicable Federal authorizations and related environmental reviews of the facility. For purposes of this subsection, the term ‘Federal authorization’ means any authorization required under Federal law in order to site a transmission or distribution facility, including but not limited to such permits, special use authorizations, certifications, opinions, or other approvals as may be required, whether issued by a Federal or a State agency. To the maximum extent practicable under applicable Federal law, the Secretary of Energy shall coordinate this Federal authorization and review process with any Indian tribes, multi-State entities, and State agencies that are responsible for conducting any separate permitting and environmental reviews of the facility, to ensure timely and efficient review and permit decisions.

      ‘(2) AUTHORITY TO SET DEADLINES- As lead agency, the Department of Energy, in consultation with agencies responsible for Federal authorizations and, as appropriate, with Indian tribes, multi-State entities, and State agencies that are willing to coordinate their own separate permitting and environmental reviews with the Federal authorization and environmental reviews, shall establish prompt and binding intermediate milestones and ultimate deadlines for the review of, and Federal authorization decisions relating to, the proposed facility. The Secretary of Energy shall ensure that once an application has been submitted with such data as the Secretary considers necessary, all permit decisions and related environmental reviews under all applicable Federal laws shall be completed within 1 year or, if a requirement of another provision of Federal law makes this impossible, as soon thereafter as is practicable. The Secretary of Energy also shall provide an expeditious pre-application mechanism for prospective applicants to confer with the agencies involved to have each such agency determine and communicate to the prospective applicant within 60 days of when the prospective applicant submits a request for such information concerning--

        ‘(A) the likelihood of approval for a potential facility; and

        ‘(B) key issues of concern to the agencies and public.

      ‘(3) CONSOLIDATED ENVIRONMENTAL REVIEW AND RECORD OF DECISION- As lead agency head, the Secretary of Energy, in consultation with the affected agencies, shall prepare a single environmental review document, which shall be used as the basis for all decisions on the proposed project under Federal law. The document may be an environmental assessment or environmental impact statement under the National Environmental Policy Act of 1969 if warranted, or such other form of analysis as may be warranted. The Secretary of Energy and the heads of other agencies shall streamline the review and permitting of transmission and distribution facilities within corridors designated under section 503 of the Federal Land Policy and Management Act (43 U.S.C. 1763) by fully taking into account prior analyses and decisions relating to the corridors. Such document shall include consideration by the relevant agencies of any applicable criteria or other matters as required under applicable laws.

      ‘(4) APPEALS- In the event that any agency has denied a Federal authorization required for a transmission or distribution facility, or has failed to act by the deadline established by the Secretary pursuant to this section for deciding whether to issue the authorization, the applicant or any State in which the facility would be located may file an appeal with the Secretary, who shall, in consultation with the affected agency, review the denial or take action on the pending application. Based on the overall record and in consultation with the affected agency, the Secretary may then either issue the necessary authorization with any appropriate conditions, or deny the application. The Secretary shall issue a decision within 90 days of the filing of the appeal. In making a decision under this paragraph, the Secretary shall comply with applicable requirements of Federal law, including any requirements of the Endangered Species Act, the Clean Water Act, the National Forest Management Act, the National Environmental Policy Act of 1969, and the Federal Land Policy and Management Act.

      ‘(5) CONFORMING REGULATIONS AND MEMORANDA OF UNDERSTANDING- Not later than 18 months after the date of enactment of this section, the Secretary of Energy shall issue any regulations necessary to implement this subsection. Not later than 1 year after the date of enactment of this section, the Secretary and the heads of all Federal agencies with authority to issue Federal authorizations shall enter into Memoranda of Understanding to ensure the timely and coordinated review and permitting of electricity transmission and distribution facilities. The head of each Federal agency with authority to issue a Federal authorization shall designate a senior official responsible for, and dedicate sufficient other staff and resources to ensure, full implementation of the DOE regulations and any Memoranda. Interested Indian tribes, multi-State entities, and State agencies may enter such Memoranda of Understanding.

      ‘(6) DURATION AND RENEWAL- Each Federal land use authorization for an electricity transmission or distribution facility shall be issued--

        ‘(A) for a duration, as determined by the Secretary of Energy, commensurate with the anticipated use of the facility, and

        ‘(B) with appropriate authority to manage the right-of-way for reliability and environmental protection.

      Upon the expiration of any such authorization (including an authorization issued prior to enactment of this section), the authorization shall be reviewed for renewal taking fully into account reliance on such electricity infrastructure, recognizing its importance for public health, safety and economic welfare and as a legitimate use of Federal lands.

      ‘(7) MAINTAINING AND ENHANCING THE TRANSMISSION INFRASTRUCTURE- In exercising the responsibilities under this section, the Secretary of Energy shall consult regularly with the Federal Energy Regulatory Commission (FERC), FERC-approved electric reliability organizations (including related regional entities), and FERC-approved Regional Transmission Organizations and Independent System Operators.

    ‘(i) Interstate Compacts- The consent of Congress is hereby given for 3 or more contiguous States to enter into an interstate compact, subject to approval by Congress, establishing regional transmission siting agencies to facilitate siting of future electric energy transmission facilities within such States and to carry out the electric energy transmission siting responsibilities of such States. The Secretary of Energy may provide technical assistance to regional transmission siting agencies established under this subsection. Such regional transmission siting agencies shall have the authority to review, certify, and permit siting of transmission facilities, including facilities in national interest electric transmission corridors (other than facilities on property owned by the United States). The Commission shall have no authority to issue a permit for the construction or modification of electric transmission facilities within a State that is a party to a compact, unless the members of a compact are in disagreement and the Secretary makes, after notice and an opportunity for a hearing, the finding described in section (b)(1)(C).

    ‘(j) Savings Clause- Nothing in this section shall be construed to affect any requirement of the environmental laws of the United States, including, but not limited to, the National Environmental Policy Act of 1969. Subsection (h)(4) of this section shall not apply to any Congressionally-designated components of the National Wilderness Preservation System, the National Wild and Scenic Rivers System, or the National Park system (including National Monuments therein).

    ‘(k) ERCOT- This section shall not apply within the area referred to in section 212(k)(2)(A).’.

    (b) Reports to Congress on Corridors and Rights of Way on Federal Lands- The Secretary of the Interior, the Secretary of Energy, the Secretary of Agriculture, and the Chairman of the Council on Environmental Quality shall, within 90 days of the date of enactment of this subsection, submit a joint report to Congress identifying each of the following:

      (1) All existing designated transmission and distribution corridors on Federal land and the status of work related to proposed transmission and distribution corridor designations under Title V of the Federal Land Policy and Management Act (43 U.S.C. 1761 et. Seq.), the schedule for completing such work, any impediments to completing the work, and steps that Congress could take to expedite the process.

      (2) The number of pending applications to locate transmission and distribution facilities on Federal lands, key information relating to each such facility, how long each application has been pending, the schedule for issuing a timely decision as to each facility, and progress in incorporating existing and new such rights-of-way into relevant land use and resource management plans or their equivalent.

      (3) The number of existing transmission and distribution rights-of-way on Federal lands that will come up for renewal within the following 5, 10, and 15 year periods, and a description of how the Secretaries plan to manage such renewals.

SEC. 1222. THIRD-PARTY FINANCE.

    (a) Existing Facilities- The Secretary of Energy (hereinafter in this section referred to as the ‘Secretary’), acting through the Administrator of the Western Area Power Administration (hereinafter in this section referred to as ‘WAPA’), or through the Administrator of the Southwestern Power Administration (hereinafter in this section referred to as ‘SWPA’), or both, may design, develop, construct, operate, maintain, or own, or participate with other entities in designing, developing, constructing, operating, maintaining, or owning, an electric power transmission facility and related facilities (‘Project’) needed to upgrade existing transmission facilities owned by SWPA or WAPA if the Secretary of Energy, in consultation with the applicable Administrator, determines that the proposed Project--

      (1)(A) is located in a national interest electric transmission corridor designated under section 216(a) of the Federal Power Act and will reduce congestion of electric transmission in interstate commerce; or

      (B) is necessary to accommodate an actual or projected increase in demand for electric transmission capacity;

      (2) is consistent with--

        (A) transmission needs identified, in a transmission expansion plan or otherwise, by the appropriate Regional Transmission Organization or Independent System Operator (as defined in the Federal Power Act), if any, or approved regional reliability organization; and

        (B) efficient and reliable operation of the transmission grid; and

      (3) would be operated in conformance with prudent utility practice.

    (b) New Facilities- The Secretary, acting through WAPA or SWPA, or both, may design, develop, construct, operate, maintain, or own, or participate with other entities in designing, developing, constructing, operating, maintaining, or owning, a new electric power transmission facility and related facilities (‘Project’) located within any State in which WAPA or SWPA operates if the Secretary, in consultation with the applicable Administrator, determines that the proposed Project--

      (1)(A) is located in an area designated under section 216(a) of the Federal Power Act and will reduce congestion of electric transmission in interstate commerce; or

      (B) is necessary to accommodate an actual or projected increase in demand for electric transmission capacity;

      (2) is consistent with--

        (A) transmission needs identified, in a transmission expansion plan or otherwise, by the appropriate Regional Transmission Organization or Independent System Operator, if any, or approved regional reliability organization; and

        (B) efficient and reliable operation of the transmission grid;

      (3) will be operated in conformance with prudent utility practice;

      (4) will be operated by, or in conformance with the rules of, the appropriate (A) Regional Transmission Organization or Independent System Operator, if any, or (B) if such an organization does not exist, regional reliability organization; and

      (5) will not duplicate the functions of existing transmission facilities or proposed facilities which are the subject of ongoing or approved siting and related permitting proceedings.

    (c) Other Funds-

      (1) IN GENERAL- In carrying out a Project under subsection (a) or (b), the Secretary may accept and use funds contributed by another entity for the purpose of carrying out the Project.

      (2) AVAILABILITY- The contributed funds shall be available for expenditure for the purpose of carrying out the Project--

        (A) without fiscal year limitation; and

        (B) as if the funds had been appropriated specifically for that Project.

      (3) ALLOCATION OF COSTS- In carrying out a Project under subsection (a) or (b), any costs of the Project not paid for by contributions from another entity shall be collected through rates charged to customers using the new transmission capability provided by the Project and allocated equitably among these project beneficiaries using the new transmission capability.

    (d) Relationship to Other Laws- Nothing in this section affects any requirement of--

      (1) any Federal environmental law, including the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.);

      (2) any Federal or State law relating to the siting of energy facilities; or

      (3) any existing authorizing statutes.

    (e) Savings Clause- Nothing in this section shall constrain or restrict an Administrator in the utilization of other authority delegated to the Administrator of WAPA or SWPA.

    (f) Secretarial Determinations- Any determination made pursuant to subsections (a) or (b) shall be based on findings by the Secretary using the best available data.

    (g) Maximum Funding Amount- The Secretary shall not accept and use more than $100,000,000 under subsection (c)(1) for the period encompassing fiscal years 2004 through 2013.

SEC. 1223. TRANSMISSION SYSTEM MONITORING.

    Within 6 months after the date of enactment of this Act, the Secretary of Energy and the Federal Energy Regulatory Commission shall study and report to Congress on the steps which must be taken to establish a system to make available to all transmission system owners and Regional Transmission Organizations (as defined in the Federal Power Act) within the Eastern and Western Interconnections real-time information on the functional status of all transmission lines within such Interconnections. In such study, the Commission shall assess technical means for implementing such transmission information system and identify the steps the Commission or Congress must take to require the implementation of such system.

SEC. 1224. ADVANCED TRANSMISSION TECHNOLOGIES.

    (a) Authority- The Federal Energy Regulatory Commission, in the exercise of its authorities under the Federal Power Act and the Public Utility Regulatory Policies Act of 1978, shall encourage the deployment of advanced transmission technologies.

    (b) Definition- For the purposes of this section, the term ‘advanced transmission technologies’ means technologies that increase the capacity, efficiency, or reliability of existing or new transmission facilities, including, but not limited to--

      (1) high-temperature lines (including superconducting cables);

      (2) underground cables;

      (3) advanced conductor technology (including advanced composite conductors, high-temperature low-sag conductors, and fiber optic temperature sensing conductors);

      (4) high-capacity ceramic electric wire, connectors, and insulators;

      (5) optimized transmission line configurations (including multiple phased transmission lines);

      (6) modular equipment;

      (7) wireless power transmission;

      (8) ultra-high voltage lines;

      (9) high-voltage DC technology;

      (10) flexible AC transmission systems;

      (11) energy storage devices (including pumped hydro, compressed air, superconducting magnetic energy storage, flywheels, and batteries);

      (12) controllable load;

      (13) distributed generation (including PV, fuel cells, microturbines);

      (14) enhanced power device monitoring;

      (15) direct system state sensors;

      (16) fiber optic technologies;

      (17) power electronics and related software (including real time monitoring and analytical software); and

      (18) any other technologies the Commission considers appropriate.

    (c) Obsolete or Impracticable Technologies- The Commission is authorized to cease encouraging the deployment of any technology described in this section on a finding that such technology has been rendered obsolete or otherwise impracticable to deploy.

SEC. 1225. ELECTRIC TRANSMISSION AND DISTRIBUTION PROGRAMS.

    (a) Electric Transmission and Distribution Program- The Secretary of Energy (hereinafter in this section referred to as the ‘Secretary’) acting through the Director of the Office of Electric Transmission and Distribution shall establish a comprehensive research, development, demonstration and commercial application program to promote improved reliability and efficiency of electrical transmission and distribution systems. This program shall include--

      (1) advanced energy delivery and storage technologies, materials, and systems, including new transmission technologies, such as flexible alternating current transmission systems, composite conductor materials and other technologies that enhance reliability, operational flexibility, or power-carrying capability;

      (2) advanced grid reliability and efficiency technology development;

      (3) technologies contributing to significant load reductions;

      (4) advanced metering, load management, and control technologies;

      (5) technologies to enhance existing grid components;

      (6) the development and use of high-temperature superconductors to--

        (A) enhance the reliability, operational flexibility, or power-carrying capability of electric transmission or distribution systems; or

        (B) increase the efficiency of electric energy generation, transmission, distribution, or storage systems;

      (7) integration of power systems, including systems to deliver high-quality electric power, electric power reliability, and combined heat and power;

      (8) supply of electricity to the power grid by small scale, distributed and residential-based power generators;

      (9) the development and use of advanced grid design, operation and planning tools;

      (10) any other infrastructure technologies, as appropriate; and

      (11) technology transfer and education.

    (b) Program Plan- Not later than 1 year after the date of the enactment of this legislation, the Secretary, in consultation with other appropriate Federal agencies, shall prepare and transmit to Congress a 5-year program plan to guide activities under this section. In preparing the program plan, the Secretary may consult with utilities, energy services providers, manufacturers, institutions of higher education, other appropriate State and local agencies, environmental organizations, professional and technical societies, and any other persons the Secretary considers appropriate.

    (c) Implementation- The Secretary shall consider implementing this program using a consortium of industry, university and national laboratory participants.

    (d) Report- Not later than 2 years after the transmittal of the plan under subsection (b), the Secretary shall transmit a report to Congress describing the progress made under this section and identifying any additional resources needed to continue the development and commercial application of transmission and distribution infrastructure technologies.

    (e) Power Delivery Research Initiative-

      (1) IN GENERAL- The Secretary shall establish a research, development, demonstration, and commercial application initiative specifically focused on power delivery utilizing components incorporating high temperature superconductivity.

      (2) GOALS- The goals of this initiative shall be to--

        (A) establish facilities to develop high temperature superconductivity power applications in partnership with manufacturers and utilities;

        (B) provide technical leadership for establishing reliability for high temperature superconductivity power applications including suitable modeling and analysis;

        (C) facilitate commercial transition toward direct current power transmission, storage, and use for high power systems utilizing high temperature superconductivity; and

        (D) facilitate the integration of very low impedance high temperature superconducting wires and cables in existing electric networks to improve system performance, power flow control and reliability.

      (3) REQUIREMENTS- The initiative shall include--

        (A) feasibility analysis, planning, research, and design to construct demonstrations of superconducting links in high power, direct current and controllable alternating current transmission systems;

        (B) public-private partnerships to demonstrate deployment of high temperature superconducting cable into testbeds simulating a realistic transmission grid and under varying transmission conditions, including actual grid insertions; and

        (C) testbeds developed in cooperation with national laboratories, industries, and universities to demonstrate these technologies, prepare the technologies for commercial introduction, and address cost or performance roadblocks to successful commercial use.

      (4) AUTHORIZATION OF APPROPRIATIONS- For purposes of carrying out this subsection, there are authorized to be appropriated--

        (A) for fiscal year 2004, $15,000,000;

        (B) for fiscal year 2005, $20,000,000;

        (C) for fiscal year 2006, $30,000,000;

        (D) for fiscal year 2007, $35,000,000; and

        (E) for fiscal year 2008, $40,000,000.

SEC. 1226. ADVANCED POWER SYSTEM TECHNOLOGY INCENTIVE PROGRAM.

    (a) Program- The Secretary of Energy is authorized to establish an Advanced Power System Technology Incentive Program to support the deployment of certain advanced power system technologies and to improve and protect certain critical governmental, industrial, and commercial processes. Funds provided under this section shall be used by the Secretary to make incentive payments to eligible owners or operators of advanced power system technologies to increase power generation through enhanced operational, economic, and environmental performance. Payments under this section may only be made upon receipt by the Secretary of an incentive payment application establishing an applicant as either--

      (1) a qualifying advanced power system technology facility; or

      (2) a qualifying security and assured power facility.

    (b) Incentives- Subject to availability of funds, a payment of 1.8 cents per kilowatt-hour shall be paid to the owner or operator of a qualifying advanced power system technology facility under this section for electricity generated at such facility. An additional 0.7 cents per kilowatt-hour shall be paid to the owner or operator of a qualifying security and assured power facility for electricity generated at such facility. Any facility qualifying under this section shall be eligible for an incentive payment for up to, but not more than, the first 10,000,000 kilowatt-hours produced in any fiscal year.

    (c) Eligibility- For purposes of this section:

      (1) QUALIFYING ADVANCED POWER SYSTEM TECHNOLOGY FACILITY- The term ‘qualifying advanced power system technology facility’ means a facility using an advanced fuel cell, turbine, or hybrid power system or power storage system to generate or store electric energy.

      (2) QUALIFYING SECURITY AND ASSURED POWER FACILITY- The term ‘qualifying security and assured power facility’ means a qualifying advanced power system technology facility determined by the Secretary of Energy, in consultation with the Secretary of Homeland Security, to be in critical need of secure, reliable, rapidly available, high-quality power for critical governmental, industrial, or commercial applications.

    (d) Authorization- There are authorized to be appropriated to the Secretary of Energy for the purposes of this section, $10,000,000 for each of the fiscal years 2004 through 2010.

SEC. 1227. OFFICE OF ELECTRIC TRANSMISSION AND DISTRIBUTION.

    (a) Creation of an Office of Electric Transmission and Distribution- Title II of the Department of Energy Organization Act (42 U.S.C. 7131 et seq.) (as amended by section 502(a) of this Act) is amended by inserting the following after section 217, as added by title V of this Act:

‘SEC. 218. OFFICE OF ELECTRIC TRANSMISSION AND DISTRIBUTION.

    ‘(a) Establishment- There is established within the Department an Office of Electric Transmission and Distribution. This Office shall be headed by a Director, subject to the authority of the Secretary. The Director shall be appointed by the Secretary. The Director shall be compensated at the annual rate prescribed for level IV of the Executive Schedule under section 5315 of title 5, United States Code.

    ‘(b) Director- The Director shall--

      ‘(1) coordinate and develop a comprehensive, multi-year strategy to improve the Nation’s electricity transmission and distribution;

      ‘(2) implement or, where appropriate, coordinate the implementation of, the recommendations made in the Secretary’s May 2002 National Transmission Grid Study;

      ‘(3) oversee research, development, and demonstration to support Federal energy policy related to electricity transmission and distribution;

      ‘(4) grant authorizations for electricity import and export pursuant to section 202(c), (d), (e), and (f) of the Federal Power Act (16 U.S.C. 824a);

      ‘(5) perform other functions, assigned by the Secretary, related to electricity transmission and distribution; and

      ‘(6) develop programs for workforce training in power and transmission engineering.’.

    (b) Conforming Amendments- (1) The table of contents of the Department of Energy Organization Act (42 U.S.C. 7101 note) is amended by inserting after the item relating to section 217 the following new item:

      ‘Sec. 218. Office of Electric Transmission and Distribution.’.

    (2) Section 5315 of title 5, United States Code, is amended by inserting after the item relating to ‘Inspector General, Department of Energy.’ the following:

      ‘Director, Office of Electric Transmission and Distribution, Department of Energy.’.

Subtitle C--Transmission Operation Improvements

SEC. 1231. OPEN NONDISCRIMINATORY ACCESS.

    Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended by inserting after section 211 the following new section:

‘SEC. 211A. OPEN ACCESS BY UNREGULATED TRANSMITTING UTILITIES.

    ‘(a) Transmission Services- Subject to section 212(h), the Commission may, by rule or order, require an unregulated transmitting utility to provide transmission services--

      ‘(1) at rates that are comparable to those that the unregulated transmitting utility charges itself; and

      ‘(2) on terms and conditions (not relating to rates) that are comparable to those under which such unregulated transmitting utility provides transmission services to itself and that are not unduly discriminatory or preferential.

    ‘(b) Exemption- The Commission shall exempt from any rule or order under this section any unregulated transmitting utility that--

      ‘(1) sells no more than 4,000,000 megawatt hours of electricity per year; or

      ‘(2) does not own or operate any transmission facilities that are necessary for operating an interconnected transmission system (or any portion thereof); or

      ‘(3) meets other criteria the Commission determines to be in the public interest.

    ‘(c) Local Distribution Facilities- The requirements of subsection (a) shall not apply to facilities used in local distribution.

    ‘(d) Exemption Termination- Whenever the Commission, after an evidentiary hearing held upon a complaint and after giving consideration to reliability standards established under section 215, finds on the basis of a preponderance of the evidence that any exemption granted pursuant to subsection (b) unreasonably impairs the continued reliability of an interconnected transmission system, it shall revoke the exemption granted to that transmitting utility.

    ‘(e) Application to Unregulated Transmitting Utilities- The rate changing procedures applicable to public utilities under subsections (c) and (d) of section 205 are applicable to unregulated transmitting utilities for purposes of this section.

    ‘(f) Remand- In exercising its authority under paragraph (1) of subsection (a), the Commission may remand transmission rates to an unregulated transmitting utility for review and revision where necessary to meet the requirements of subsection (a).

    ‘(g) Other Requests- The provision of transmission services under subsection (a) does not preclude a request for transmission services under section 211.

    ‘(h) Limitation- The Commission may not require a State or municipality to take action under this section that would violate a private activity bond rule for purposes of section 141 of the Internal Revenue Code of 1986 (26 U.S.C. 141).

    ‘(i) Transfer of Control of Transmitting Facilities- Nothing in this section authorizes the Commission to require an unregulated transmitting utility to transfer control or operational control of its transmitting facilities to an RTO or any other Commission-approved independent transmission organization designated to provide nondiscriminatory transmission access.

    ‘(j) Definition- For purposes of this section, the term ‘unregulated transmitting utility’ means an entity that--

      ‘(1) owns or operates facilities used for the transmission of electric energy in interstate commerce; and

      ‘(2) is an entity described in section 201(f).’.

SEC. 1232. SENSE OF CONGRESS ON REGIONAL TRANSMISSION ORGANIZATIONS.

    It is the sense of Congress that, in order to promote fair, open access to electric transmission service, benefit retail consumers, facilitate wholesale competition, improve efficiencies in transmission grid management, promote grid reliability, remove opportunities for unduly discriminatory or preferential transmission practices, and provide for the efficient development of transmission infrastructure needed to meet the growing demands of competitive wholesale power markets, all transmitting utilities in interstate commerce should voluntarily become members of Regional Transmission Organizations as defined in section 3 of the Federal Power Act.

SEC. 1233. REGIONAL TRANSMISSION ORGANIZATION APPLICATIONS PROGRESS REPORT.

    Not later than 120 days after the date of enactment of this section, the Federal Energy Regulatory Commission shall submit to Congress a report containing each of the following:

      (1) A list of all regional transmission organization applications filed at the Commission pursuant to subpart F of part 35 of title 18, Code of Federal Regulations (in this section referred to as ‘Order No. 2000’), including an identification of each public utility and other entity included within the proposed membership of the regional transmission organization.

      (2) A brief description of the status of each pending regional transmission organization application, including a precise explanation of how each fails to comply with the minimal requirements of Order No. 2000 and what steps need to be taken to bring each application into such compliance.

      (3) For any application that has not been finally approved by the Commission, a detailed description of every aspect of the application that the Commission has determined does not conform to the requirements of Order No. 2000.

      (4) For any application that has not been finally approved by the Commission, an explanation by the Commission of why the items described pursuant to paragraph (3) constitute material noncompliance with the requirements of the Commission’s Order No. 2000 sufficient to justify denial of approval by the Commission.

      (5) For all regional transmission organization applications filed pursuant to the Commission’s Order No. 2000, whether finally approved or not--

        (A) a discussion of that regional transmission organization’s efforts to minimize rate seams between itself and--

          (i) other regional transmission organizations; and

          (ii) entities not participating in a regional transmission organization;

        (B) a discussion of the impact of such seams on consumers and wholesale competition; and

        (C) a discussion of minimizing cost-shifting on consumers.

SEC. 1234. FEDERAL UTILITY PARTICIPATION IN REGIONAL TRANSMISSION ORGANIZATIONS.

    (a) Definitions- For purposes of this section--

      (1) APPROPRIATE FEDERAL REGULATORY AUTHORITY- The term ‘appropriate Federal regulatory authority’ means--

        (A) with respect to a Federal power marketing agency (as defined in the Federal Power Act), the Secretary of Energy, except that the Secretary may designate the Administrator of a Federal power marketing agency to act as the appropriate Federal regulatory authority with respect to the transmission system of that Federal power marketing agency; and

        (B) with respect to the Tennessee Valley Authority, the Board of Directors of the Tennessee Valley Authority.

      (2) FEDERAL UTILITY- The term ‘Federal utility’ means a Federal power marketing agency or the Tennessee Valley Authority.

      (3) TRANSMISSION SYSTEM- The term ‘transmission system’ means electric transmission facilities owned, leased, or contracted for by the United States and operated by a Federal utility.

    (b) Transfer- The appropriate Federal regulatory authority is authorized to enter into a contract, agreement or other arrangement transferring control and use of all or part of the Federal utility’s transmission system to an RTO or ISO (as defined in the Federal Power Act), approved by the Federal Energy Regulatory Commission. Such contract, agreement or arrangement shall include--

      (1) performance standards for operation and use of the transmission system that the head of the Federal utility determines necessary or appropriate, including standards that assure recovery of all the Federal utility’s costs and expenses related to the transmission facilities that are the subject of the contract, agreement or other arrangement; consistency with existing contracts and third-party financing arrangements; and consistency with said Federal utility’s statutory authorities, obligations, and limitations;

      (2) provisions for monitoring and oversight by the Federal utility of the RTO’s or ISO’s fulfillment of the terms and conditions of the contract, agreement or other arrangement, including a provision for the resolution of disputes through arbitration or other means with the regional transmission organization or with other participants, notwithstanding the obligations and limitations of any other law regarding arbitration; and

      (3) a provision that allows the Federal utility to withdraw from the RTO or ISO and terminate the contract, agreement or other arrangement in accordance with its terms.

    Neither this section, actions taken pursuant to it, nor any other transaction of a Federal utility using an RTO or ISO shall confer upon the Federal Energy Regulatory Commission jurisdiction or authority over the Federal utility’s electric generation assets, electric capacity or energy that the Federal utility is authorized by law to market, or the Federal utility’s power sales activities.

    (c) Existing Statutory and Other Obligations-

      (1) SYSTEM OPERATION REQUIREMENTS- No statutory provision requiring or authorizing a Federal utility to transmit electric power or to construct, operate or maintain its transmission system shall be construed to prohibit a transfer of control and use of its transmission system pursuant to, and subject to all requirements of subsection (b).

      (2) OTHER OBLIGATIONS- This subsection shall not be construed to--

        (A) suspend, or exempt any Federal utility from, any provision of existing Federal law, including but not limited to any requirement or direction relating to the use of the Federal utility’s transmission system, environmental protection, fish and wildlife protection, flood control, navigation, water delivery, or recreation; or

        (B) authorize abrogation of any contract or treaty obligation.

      (3) REPEAL- Section 311 of title III of Appendix B of the Act of October 27, 2000 (P.L. 106-377, section 1(a)(2); 114 Stat. 1441, 1441A-80; 16 U.S.C. 824n) is repealed.

SEC. 1235. STANDARD MARKET DESIGN.

    (a) Remand- The Commission’s proposed rulemaking entitled ‘Remedying Undue Discrimination through Open Access Transmission Service and Standard Electricity Market Design’ (Docket No. RM01-12-000) (‘SMD NOPR’) is remanded to the Commission for reconsideration. No final rule mandating a standard electricity market design pursuant to the proposed rulemaking, including any rule or order of general applicability within the scope of the proposed rulemaking, may be issued before October 31, 2006, or take effect before December 31, 2006. Any final rule issued by the Commission pursuant to the proposed rulemaking shall be preceded by a second notice of proposed rulemaking issued after the date of enactment of this Act and an opportunity for public comment.

    (b) Savings Clause- This section shall not be construed to modify or diminish any authority or obligation the Commission has under this Act, the Federal Power Act, or other applicable law, including, but not limited to, any authority to--

      (1) issue any rule or order (of general or particular applicability) pursuant to any such authority or obligation; or

      (2) act on a filing or filings by 1 or more transmitting utilities for the voluntary formation of a Regional Transmission Organization or Independent System Operator (as defined in the Federal Power Act) (and related market structures or rules) or voluntary modification of an existing Regional Transmission Organization or Independent System Operator (and related market structures or rules).

SEC. 1236. NATIVE LOAD SERVICE OBLIGATION.

    Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended by adding at the end the following:

‘SEC. 217. NATIVE LOAD SERVICE OBLIGATION.

    ‘(a) Meeting Service Obligations- (1) Any load-serving entity that, as of the date of enactment of this section--

      ‘(A) owns generation facilities, markets the output of Federal generation facilities, or holds rights under 1 or more wholesale contracts to purchase electric energy, for the purpose of meeting a service obligation, and

      ‘(B) by reason of ownership of transmission facilities, or 1 or more contracts or service agreements for firm transmission service, holds firm transmission rights for delivery of the output of such generation facilities or such purchased energy to meet such service obligation,

    is entitled to use such firm transmission rights, or, equivalent tradable or financial transmission rights, in order to deliver such output or purchased energy, or the output of other generating facilities or purchased energy to the extent deliverable using such rights, to the extent required to meet its service obligation.

    ‘(2) To the extent that all or a portion of the service obligation covered by such firm transmission rights or equivalent tradable or financial transmission rights is transferred to another load-serving entity, the successor load-serving entity shall be entitled to use the firm transmission rights or equivalent tradable or financial transmission rights associated with the transferred service obligation. Subsequent transfers to another load-serving entity, or back to the original load-serving entity, shall be entitled to the same rights.

    ‘(3) The Commission shall exercise its authority under this Act in a manner that facilitates the planning and expansion of transmission facilities to meet the reasonable needs of load-serving entities to satisfy their service obligations.

    ‘(b) Allocation of Transmission Rights- Nothing in this section shall affect any methodology approved by the Commission prior to September 15, 2003, for the allocation of transmission rights by an RTO or ISO that has been authorized by the Commission to allocate transmission rights.

    ‘(c) Certain Transmission Rights- The Commission may exercise authority under this Act to make transmission rights not used to meet an obligation covered by subsection (a) available to other entities in a manner determined by the Commission to be just, reasonable, and not unduly discriminatory or preferential.

    ‘(d) Obligation to Build- Nothing in this Act shall relieve a load-serving entity from any obligation under State or local law to build transmission or distribution facilities adequate to meet its service obligations.

    ‘(e) Contracts- Nothing in this section shall provide a basis for abrogating any contract or service agreement for firm transmission service or rights in effect as of the date of the enactment of this subsection.

    ‘(f) Water Pumping Facilities- The Commission shall ensure that any entity described in section 201(f) that owns transmission facilities used predominately to support its own water pumping facilities shall have, with respect to such facilities, protections for transmission service comparable to those provided to load-serving entities pursuant to this section.

    ‘(g) ERCOT- This section shall not apply within the area referred to in section 212(k)(2)(A).

    ‘(h) Jurisdiction- This section does not authorize the Commission to take any action not otherwise within its jurisdiction.

    ‘(i) Effect of Exercising Rights- An entity that lawfully exercises rights granted under subsection (a) shall not be considered by such action as engaging in undue discrimination or preference under this Act.

    ‘(j) TVA Area- For purposes of subsection (a)(1)(B), a load-serving entity that is located within the service area of the Tennessee Valley Authority and that has a firm wholesale power supply contract with the Tennessee Valley Authority shall be deemed to hold firm transmission rights for the transmission of such power.

    ‘(k) Definitions- For purposes of this section:

      ‘(1) The term ‘distribution utility’ means an electric utility that has a service obligation to end-users or to a State utility or electric cooperative that, directly or indirectly, through 1 or more additional State utilities or electric cooperatives, provides electric service to end-users.

      ‘(2) The term ‘load-serving entity’ means a distribution utility or an electric utility that has a service obligation.

      ‘(3) The term ‘service obligation’ means a requirement applicable to, or the exercise of authority granted to, an electric utility under Federal, State or local law or under long-term contracts to provide electric service to end-users or to a distribution utility.

      ‘(4) The term ‘State utility’ means a State or any political subdivision of a State, or any agency, authority, or instrumentality of any 1 or more of the foregoing, or a corporation which is wholly owned, directly or indirectly, by any 1 or more of the foregoing, competent to carry on the business of developing, transmitting, utilizing or distributing power.’.

SEC. 1237. STUDY ON THE BENEFITS OF ECONOMIC DISPATCH.

    (a) Study- The Secretary of Energy, in coordination and consultation with the States, shall conduct a study on--

      (1) the procedures currently used by electric utilities to perform economic dispatch;

      (2) identifying possible revisions to those procedures to improve the ability of nonutility generation resources to offer their output for sale for the purpose of inclusion in economic dispatch; and

      (3) the potential benefits to residential, commercial, and industrial electricity consumers nationally and in each state if economic dispatch procedures were revised to improve the ability of nonutility generation resources to offer their output for inclusion in economic dispatch.

    (b) Definition- The term ‘economic dispatch’ when used in this section means the operation of generation facilities to produce energy at the lowest cost to reliably serve consumers, recognizing any operational limits of generation and transmission facilities.

    (c) Report to Congress and the States- Not later than 90 days after the date of enactment of this Act, and on a yearly basis following, the Secretary of Energy shall submit a report to Congress and the States on the results of the study conducted under subsection (a), including recommendations to Congress and the States for any suggested legislative or regulatory changes.

Subtitle D--Transmission Rate Reform

SEC. 1241. TRANSMISSION INFRASTRUCTURE INVESTMENT.

    Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended by adding at the end the following:

‘SEC. 218. TRANSMISSION INFRASTRUCTURE INVESTMENT.

    ‘(a) Rulemaking Requirement- Within 1 year after the enactment of this section, the Commission shall establish, by rule, incentive-based (including, but not limited to performance-based) rate treatments for the transmission of electric energy in interstate commerce by public utilities for the purpose of benefiting consumers by ensuring reliability and reducing the cost of delivered power by reducing transmission congestion. Such rule shall--

      ‘(1) promote reliable and economically efficient transmission and generation of electricity by promoting capital investment in the enlargement, improvement, maintenance and operation of facilities for the transmission of electric energy in interstate commerce;

      ‘(2) provide a return on equity that attracts new investment in transmission facilities (including related transmission technologies);

      ‘(3) encourage deployment of transmission technologies and other measures to increase the capacity and efficiency of existing transmission facilities and improve the operation of such facilities; and

      ‘(4) allow recovery of all prudently incurred costs necessary to comply with mandatory reliability standards issued pursuant to section 215 of this Act.

    The Commission may, from time to time, revise such rule.

    ‘(b) Additional Incentives for RTO Participation- In the rule issued under this section, the Commission shall, to the extent within its jurisdiction, provide for incentives to each transmitting utility or electric utility that joins a Regional Transmission Organization or Independent System Operator. Incentives provided by the Commission pursuant to such rule shall include--

      ‘(1) recovery of all prudently incurred costs to develop and participate in any proposed or approved RTO, ISO, or independent transmission company;

      ‘(2) recovery of all costs previously approved by a State commission which exercised jurisdiction over the transmission facilities prior to the utility’s participation in the RTO or ISO, including costs necessary to honor preexisting transmission service contracts, in a manner which does not reduce the revenues the utility receives for transmission services for a reasonable transition period after the utility joins the RTO or ISO;

      ‘(3) recovery as an expense in rates of the costs prudently incurred to conduct transmission planning and reliability activities, including the costs of participating in RTO, ISO and other regional planning activities and design, study and other precertification costs involved in seeking permits and approvals for proposed transmission facilities;

      ‘(4) a current return in rates for construction work in progress for transmission facilities and full recovery of prudently incurred costs for constructing transmission facilities;

      ‘(5) formula transmission rates; and

      ‘(6) a maximum 15 year accelerated depreciation on new transmission facilities for rate treatment purposes.

    The Commission shall ensure that any costs recoverable pursuant to this subsection may be recovered by such utility through the transmission rates charged by such utility or through the transmission rates charged by the RTO or ISO that provides transmission service to such utility.

    ‘(c) Just and Reasonable Rates- All rates approved under the rules adopted pursuant to this section, including any revisions to such rules, are subject to the requirement of sections 205 and 206 that all rates, charges, terms, and conditions be just and reasonable and not unduly discriminatory or preferential.’.

SEC. 1242. VOLUNTARY TRANSMISSION PRICING PLANS.

    Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended by adding at the end the following:

‘SEC. 219. VOLUNTARY TRANSMISSION PRICING PLANS.

    ‘(a) In General- Any transmission provider, including an RTO or ISO, may submit to the Commission a plan or plans under section 205 containing the criteria for determining the person or persons that will be required to pay for any construction of new transmission facilities or expansion, modification or upgrade of transmission facilities (in this section referred to as ‘transmission service related expansion’) or new generator interconnection.

    ‘(b) Voluntary Transmission Pricing Plans- (1) Any plan or plans submitted under subsection (a) shall specify the method or methods by which costs may be allocated or assigned. Such methods may include, but are not limited to:

      ‘(A) directly assigned;

      ‘(B) participant funded; or

      ‘(C) rolled into regional or sub-regional rates.

    ‘(2) FERC shall approve a plan or plans submitted under subparagraph (B) of paragraph (1) if such plan or plans--

      ‘(A) result in rates that are just and reasonable and not unduly discriminatory or preferential consistent with section 205; and

      ‘(B) ensure that the costs of any transmission service related expansion or new generator interconnection not required to meet applicable reliability standards established under section 215 are assigned in a fair manner, meaning that those who benefit from the transmission service related expansion or new generator interconnection pay an appropriate share of the associated costs, provided that--

        ‘(i) costs may not be assigned or allocated to an electric utility if the native load customers of that utility would not have required such transmission service related expansion or new generator interconnection absent the request for transmission service related expansion or new generator interconnection that necessitated the investment;

        ‘(ii) the party requesting such transmission service related expansion or new generator interconnection shall not be required to pay for both--

          ‘(I) the assigned cost of the upgrade; and

          ‘(II) the difference between--

            ‘(aa) the embedded cost paid for transmission services (including the cost of the requested upgrade); and

            ‘(bb) the embedded cost that would have been paid absent the upgrade; and

        ‘(iii) the party or parties who pay for facilities necessary for the transmission service related expansion or new generator interconnection receives full compensation for its costs for the participant funded facilities in the form of--

          ‘(I) monetary credit equal to the cost of the participant funded facilities (accounting for the time value of money at the Gross Domestic Product deflator), which credit shall be pro-rated in equal installments over a period of not more than 30 years and shall not exceed in total the amount of the initial investment, against the transmission charges that the funding entity or its assignee is otherwise assessed by the transmission provider;

          ‘(II) appropriate financial or physical rights; or

          ‘(III) any other method of cost recovery or compensation approved by the Commission.

    ‘(3) A plan submitted under this section shall apply only to--

      ‘(A) a contract or interconnection agreement executed or filed with the Commission after the date of enactment of this section; or

      ‘(B) an interconnection agreement pending rehearing as of November 1, 2003.

    ‘(4) Nothing in this section diminishes or alters the rights of individual members of an RTO or ISO under this Act.

    ‘(5) Nothing in this section shall affect the allocation of costs or the cost methodology employed by an RTO or ISO authorized by the Commission to allocate costs (including costs for transmission service related expansion or new generator interconnection) prior to the date of enactment of this section.

    ‘(6) This section shall not apply within the area referred to in section 212(k)(2)(A).

    ‘(7) The term ‘transmission provider’ means a public utility that owns or operates facilities that provide interconnection or transmission service in interstate commerce.’.

Subtitle E--Amendments to PURPA

SEC. 1251. NET METERING AND ADDITIONAL STANDARDS.

    (a) Adoption of Standards- Section 111(d) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by adding at the end the following:

      ‘(11) NET METERING- Each electric utility shall make available upon request net metering service to any electric consumer that the electric utility serves. For purposes of this paragraph, the term ‘net metering service’ means service to an electric consumer under which electric energy generated by that electric consumer from an eligible on-site generating facility and delivered to the local distribution facilities may be used to offset electric energy provided by the electric utility to the electric consumer during the applicable billing period.

      ‘(12) FUEL SOURCES- Each electric utility shall develop a plan to minimize dependence on 1 fuel source and to ensure that the electric energy it sells to consumers is generated using a diverse range of fuels and technologies, including renewable technologies.

      ‘(13) FOSSIL FUEL GENERATION EFFICIENCY- Each electric utility shall develop and implement a 10-year plan to increase the efficiency of its fossil fuel generation.’.

    (b) Compliance-

      (1) TIME LIMITATIONS- Section 112(b) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(b)) is amended by adding at the end the following:

    ‘(3)(A) Not later than 2 years after the enactment of this paragraph, each State regulatory authority (with respect to each electric utility for which it has ratemaking authority) and each nonregulated electric utility shall commence the consideration referred to in section 111, or set a hearing date for such consideration, with respect to each standard established by paragraphs (11) through (13) of section 111(d).

    ‘(B) Not later than 3 years after the date of the enactment of this paragraph, each State regulatory authority (with respect to each electric utility for which it has ratemaking authority), and each nonregulated electric utility, shall complete the consideration, and shall make the determination, referred to in section 111 with respect to each standard established by paragraphs (11) through (13) of section 111(d).’.

      (2) FAILURE TO COMPLY- Section 112(c) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(c)) is amended by adding at the end the following:

    ‘In the case of each standard established by paragraphs (11) through (13) of section 111(d), the reference contained in this subsection to the date of enactment of this Act shall be deemed to be a reference to the date of enactment of such paragraphs (11) through (13).’.

      (3) PRIOR STATE ACTIONS-

        (A) IN GENERAL- Section 112 of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622) is amended by adding at the end the following:

    ‘(d) Prior State Actions- Subsections (b) and (c) of this section shall not apply to the standards established by paragraphs (11) through (13) of section 111(d) in the case of any electric utility in a State if, before the enactment of this subsection--

      ‘(1) the State has implemented for such utility the standard concerned (or a comparable standard);

      ‘(2) the State regulatory authority for such State or relevant nonregulated electric utility has conducted a proceeding to consider implementation of the standard concerned (or a comparable standard) for such utility; or

      ‘(3) the State legislature has voted on the implementation of such standard (or a comparable standard) for such utility.’.

        (B) CROSS REFERENCE- Section 124 of such Act (16 U.S.C. 2634) is amended by adding the following at the end thereof: ‘In the case of each standard established by paragraphs (11) through (13) of section 111(d), the reference contained in this subsection to the date of enactment of this Act shall be deemed to be a reference to the date of enactment of such paragraphs (11) through (13).’.

SEC. 1252. SMART METERING.

    (a) In General- Section 111(d) of the Public Utilities Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by adding at the end the following:

      ‘(14) TIME-BASED METERING AND COMMUNICATIONS-

        ‘(A) Not later than 18 months after the date of enactment of this paragraph, each electric utility shall offer each of its customer classes, and provide individual customers upon customer request, a time-based rate schedule under which the rate charged by the electric utility varies during different time periods and reflects the variance, if any, in the utility’s costs of generating and purchasing electricity at the wholesale level. The time-based rate schedule shall enable the electric consumer to manage energy use and cost through advanced metering and communications technology.

        ‘(B) The types of time-based rate schedules that may be offered under the schedule referred to in subparagraph (A) include, among others--

          ‘(i) time-of-use pricing whereby electricity prices are set for a specific time period on an advance or forward basis, typically not changing more often than twice a year, based on the utility’s cost of generating and/or purchasing such electricity at the wholesale level for the benefit of the consumer. Prices paid for energy consumed during these periods shall be pre-established and known to consumers in advance of such consumption, allowing them to vary their demand and usage in response to such prices and manage their energy costs by shifting usage to a lower cost period or reducing their consumption overall;

          ‘(ii) critical peak pricing whereby time-of-use prices are in effect except for certain peak days, when prices may reflect the costs of generating and/or purchasing electricity at the wholesale level and when consumers may receive additional discounts for reducing peak period energy consumption; and

          ‘(iii) real-time pricing whereby electricity prices are set for a specific time period on an advanced or forward basis, reflecting the utility’s cost of generating and/or purchasing electricity at the wholesale level, and may change as often as hourly.

        ‘(C) Each electric utility subject to subparagraph (A) shall provide each customer requesting a time-based rate with a time-based meter capable of enabling the utility and customer to offer and receive such rate, respectively.

        ‘(D) For purposes of implementing this paragraph, any reference contained in this section to the date of enactment of the Public Utility Regulatory Policies Act of 1978 shall be deemed to be a reference to the date of enactment of this paragraph.

        ‘(E) In a State that permits third-party marketers to sell electric energy to retail electric consumers, such consumers shall be entitled to receive the same time-based metering and communications device and service as a retail electric consumer of the electric utility.

        ‘(F) Notwithstanding subsections (b) and (c) of section 112, each State regulatory authority shall, not later than 18 months after the date of enactment of this paragraph conduct an investigation in accordance with section 115(i) and issue a decision whether it is appropriate to implement the standards set out in subparagraphs (A) and (C).’.

    (b) State Investigation of Demand Response and Time-Based Metering- Section 115 of the Public Utilities Regulatory Policies Act of 1978 (16 U.S.C. 2625) is amended as follows:

      (1) By inserting in subsection (b) after the phrase ‘the standard for time-of-day rates established by section 111(d)(3)’ the following: ‘and the standard for time-based metering and communications established by section 111(d)(14)’.

      (2) By inserting in subsection (b) after the phrase ‘are likely to exceed the metering’ the following: ‘and communications’.

      (3) By adding the at the end the following:

    ‘(i) Time-Based Metering and Communications- In making a determination with respect to the standard established by section 111(d)(14), the investigation requirement of section 111(d)(14)(F) shall be as follows: Each State regulatory authority shall conduct an investigation and issue a decision whether or not it is appropriate for electric utilities to provide and install time-based meters and communications devices for each of their customers which enable such customers to participate in time-based pricing rate schedules and other demand response programs.’.

    (c) Federal Assistance on Demand Response- Section 132(a) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2642(a)) is amended by striking ‘and’ at the end of paragraph (3), striking the period at the end of paragraph (4) and inserting ‘; and’, and by adding the following at the end thereof:

      ‘(5) technologies, techniques, and rate-making methods related to advanced metering and communications and the use of these technologies, techniques and methods in demand response programs.’.

    (d) Federal Guidance- Section 132 of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2642) is amended by adding the following at the end thereof:

    ‘(d) Demand Response- The Secretary shall be responsible for--

      ‘(1) educating consumers on the availability, advantages, and benefits of advanced metering and communications technologies, including the funding of demonstration or pilot projects;

      ‘(2) working with States, utilities, other energy providers and advanced metering and communications experts to identify and address barriers to the adoption of demand response programs; and

      ‘(3) not later than 180 days after the date of enactment of the Energy Policy Act of 2003, providing Congress with a report that identifies and quantifies the national benefits of demand response and makes a recommendation on achieving specific levels of such benefits by January 1, 2005.’.

    (e) Demand Response and Regional Coordination-

      (1) IN GENERAL- It is the policy of the United States to encourage States to coordinate, on a regional basis, State energy policies to provide reliable and affordable demand response services to the public.

      (2) TECHNICAL ASSISTANCE- The Secretary of Energy shall provide technical assistance to States and regional organizations formed by 2 or more States to assist them in--

        (A) identifying the areas with the greatest demand response potential;

        (B) identifying and resolving problems in transmission and distribution networks, including through the use of demand response;

        (C) developing plans and programs to use demand response to respond to peak demand or emergency needs; and

        (D) identifying specific measures consumers can take to participate in these demand response programs.

      (3) REPORT- Not later than 1 year after the date of enactment of the Energy Policy Act of 2003, the Commission shall prepare and publish an annual report, by appropriate region, that assesses demand response resources, including those available from all consumer classes, and which identifies and reviews--

        (A) saturation and penetration rate of advanced meters and communications technologies, devices and systems;

        (B) existing demand response programs and time-based rate programs;

        (C) the annual resource contribution of demand resources;

        (D) the potential for demand response as a quantifiable, reliable resource for regional planning purposes; and

        (E) steps taken to ensure that, in regional transmission planning and operations, demand resources are provided equitable treatment as a quantifiable, reliable resource relative to the resource obligations of any load-serving entity, transmission provider, or transmitting party.

    (f) Federal Encouragement of Demand Response Devices- It is the policy of the United States that time-based pricing and other forms of demand response, whereby electricity customers are provided with electricity price signals and the ability to benefit by responding to them, shall be encouraged, and the deployment of such technology and devices that enable electricity customers to participate in such pricing and demand response systems shall be facilitated. It is further the policy of the United States that the benefits of such demand response that accrue to those not deploying such technology and devices, but who are part of the same regional electricity entity, shall be recognized.

    (g) Time Limitations- Section 112(b) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(b)) is amended by adding at the end the following:

      ‘(4)(A) Not later than 1 year after the enactment of this paragraph, each State regulatory authority (with respect to each electric utility for which it has ratemaking authority) and each nonregulated electric utility shall commence the consideration referred to in section 111, or set a hearing date for such consideration, with respect to the standard established by paragraph (14) of section 111(d).

      ‘(B) Not later than 2 years after the date of the enactment of this paragraph, each State regulatory authority (with respect to each electric utility for which it has ratemaking authority), and each nonregulated electric utility, shall complete the consideration, and shall make the determination, referred to in section 111 with respect to the standard established by paragraph (14) of section 111(d).’.

    (h) Failure to Comply- Section 112(c) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(c)) is amended by adding at the end the following:

    ‘In the case of the standard established by paragraph (14) of section 111(d), the reference contained in this subsection to the date of enactment of this Act shall be deemed to be a reference to the date of enactment of such paragraph (14).’.

    (i) Prior State Actions Regarding Smart Metering Standards-

      (1) IN GENERAL- Section 112 of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622) is amended by adding at the end the following:

    ‘(e) Prior State Actions- Subsections (b) and (c) of this section shall not apply to the standard established by paragraph (14) of section 111(d) in the case of any electric utility in a State if, before the enactment of this subsection--

      ‘(1) the State has implemented for such utility the standard concerned (or a comparable standard);

      ‘(2) the State regulatory authority for such State or relevant nonregulated electric utility has conducted a proceeding to consider implementation of the standard concerned (or a comparable standard) for such utility within the previous 3 years; or

      ‘(3) the State legislature has voted on the implementation of such standard (or a comparable standard) for such utility within the previous 3 years.’.

      (2) CROSS REFERENCE- Section 124 of such Act (16 U.S.C. 2634) is amended by adding the following at the end thereof: ‘In the case of the standard established by paragraph (14) of section 111(d), the reference contained in this subsection to the date of enactment of this Act shall be deemed to be a reference to the date of enactment of such paragraph (14).’.

SEC. 1253. COGENERATION AND SMALL POWER PRODUCTION PURCHASE AND SALE REQUIREMENTS.

    (a) Termination of Mandatory Purchase and Sale Requirements- Section 210 of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 824a-3) is amended by adding at the end the following:

    ‘(m) Termination of Mandatory Purchase and Sale Requirements-

      ‘(1) OBLIGATION TO PURCHASE- After the date of enactment of this subsection, no electric utility shall be required to enter into a new contract or obligation to purchase electric energy from a qualifying cogeneration facility or a qualifying small power production facility under this section if the Commission finds that the qualifying cogeneration facility or qualifying small power production facility has nondiscriminatory access to--

        ‘(A)(i) independently administered, auction-based day ahead and real time wholesale markets for the sale of electric energy; and (ii) wholesale markets for long-term sales of capacity and electric energy; or

        ‘(B)(i) transmission and interconnection services that are provided by a Commission-approved regional transmission entity and administered pursuant to an open access transmission tariff that affords nondiscriminatory treatment to all customers; and (ii) competitive wholesale markets that provide a meaningful opportunity to sell capacity, including long-term and short-term sales, and electric energy, including long-term, short-term and real-time sales, to buyers other than the utility to which the qualifying facility is interconnected. In determining whether a meaningful opportunity to sell exists, the Commission shall consider, among other factors, evidence of transactions within the relevant market; or

        ‘(C) wholesale markets for the sale of capacity and electric energy that are, at a minimum, of comparable competitive quality as markets described in subparagraphs (A) and (B).

      ‘(2) REVISED PURCHASE AND SALE OBLIGATION FOR NEW FACILITIES- (A) After the date of enactment of this subsection, no electric utility shall be required pursuant to this section to enter into a new contract or obligation to purchase from or sell electric energy to a facility that is not an existing qualifying cogeneration facility unless the facility meets the criteria for qualifying cogeneration facilities established by the Commission pursuant to the rulemaking required by subsection (n).

      ‘(B) For the purposes of this paragraph, the term ‘existing qualifying cogeneration facility’ means a facility that--

        ‘(i) was a qualifying cogeneration facility on the date of enactment of subsection (m); or

        ‘(ii) had filed with the Commission a notice of self-certification, self recertification or an application for Commission certification under 18 C.F.R. 292.207 prior to the date on which the Commission issues the final rule required by subsection (n).

      ‘(3) COMMISSION REVIEW- Any electric utility may file an application with the Commission for relief from the mandatory purchase obligation pursuant to this subsection on a service territory-wide basis. Such application shall set forth the factual basis upon which relief is requested and describe why the conditions set forth in subparagraphs (A), (B) or (C) of paragraph (1) of this subsection have been met. After notice, including sufficient notice to potentially affected qualifying cogeneration facilities and qualifying small power production facilities, and an opportunity for comment, the Commission shall make a final determination within 90 days of such application regarding whether the conditions set forth in subparagraphs (A), (B) or (C) of paragraph (1) have been met.

      ‘(4) REINSTATEMENT OF OBLIGATION TO PURCHASE- At any time after the Commission makes a finding under paragraph (3) relieving an electric utility of its obligation to purchase electric energy, a qualifying cogeneration facility, a qualifying small power production facility, a State agency, or any other affected person may apply to the Commission for an order reinstating the electric utility’s obligation to purchase electric energy under this section. Such application shall set forth the factual basis upon which the application is based and describe why the conditions set forth in subparagraphs (A), (B) or (C) of paragraph (1) of this subsection are no longer met. After notice, including sufficient notice to potentially affected utilities, and opportunity for comment, the Commission shall issue an order within 90 days of such application reinstating the electric utility’s obligation to purchase electric energy under this section if the Commission finds that the conditions set forth in subparagraphs (A), (B) or (C) of paragraph (1) which relieved the obligation to purchase, are no longer met.

      ‘(5) OBLIGATION TO SELL- After the date of enactment of this subsection, no electric utility shall be required to enter into a new contract or obligation to sell electric energy to a qualifying cogeneration facility or a qualifying small power production facility under this section if the Commission finds that--

        ‘(A) competing retail electric suppliers are willing and able to sell and deliver electric energy to the qualifying cogeneration facility or qualifying small power production facility; and

        ‘(B) the electric utility is not required by State law to sell electric energy in its service territory.

      ‘(6) NO EFFECT ON EXISTING RIGHTS AND REMEDIES- Nothing in this subsection affects the rights or remedies of any party under any contract or obligation, in effect or pending approval before the appropriate State regulatory authority or non-regulated electric utility on the date of enactment of this subsection, to purchase electric energy or capacity from or to sell electric energy or capacity to a qualifying cogeneration facility or qualifying small power production facility under this Act (including the right to recover costs of purchasing electric energy or capacity).

      ‘(7) RECOVERY OF COSTS- (A) The Commission shall issue and enforce such regulations as are necessary to ensure that an electric utility that purchases electric energy or capacity from a qualifying cogeneration facility or qualifying small power production facility in accordance with any legally enforceable obligation entered into or imposed under this section recovers all prudently incurred costs associated with the purchase.

      ‘(B) A regulation under subparagraph (A) shall be enforceable in accordance with the provisions of law applicable to enforcement of regulations under the Federal Power Act (16 U.S.C. 791a et seq.).

    ‘(n) Rulemaking for New Qualifying Facilities- (1)(A) Not later than 180 days after the date of enactment of this section, the Commission shall issue a rule revising the criteria in 18 C.F.R. 292.205 for new qualifying cogeneration facilities seeking to sell electric energy pursuant to section 210 of this Act to ensure--

      ‘(i) that the thermal energy output of a new qualifying cogeneration facility is used in a productive and beneficial manner;

      ‘(ii) the electrical, thermal, and chemical output of the cogeneration facility is used fundamentally for industrial, commercial, or institutional purposes and is not intended fundamentally for sale to an electric utility, taking into account technological, efficiency, economic, and variable thermal energy requirements, as well as State laws applicable to sales of electric energy from a qualifying facility to its host facility; and

      ‘(iii) continuing progress in the development of efficient electric energy generating technology.

    ‘(B) The rule issued pursuant to section (n)(1)(A) shall be applicable only to facilities that seek to sell electric energy pursuant to section 210 of this Act. For all other purposes, except as specifically provided in section (m)(2)(A), qualifying facility status shall be determined in accordance with the rules and regulations of this Act.

    ‘(2) Notwithstanding rule revisions under paragraph (1), the Commission’s criteria for qualifying cogeneration facilities in effect prior to the date on which the Commission issues the final rule required by paragraph (1) shall continue to apply to any cogeneration facility that--

      ‘(A) was a qualifying cogeneration facility on the date of enactment of subsection (m), or

      ‘(B) had filed with the Commission a notice of self-certification, self-recertification or an application for Commission certification under 18 C.F.R. 292.207 prior to the date on which the Commission issues the final rule required by paragraph (1).’.

    (b) Elimination of Ownership Limitations-

      (1) QUALIFYING SMALL POWER PRODUCTION FACILITY- Section 3(17)(C) of the Federal Power Act (16 U.S.C. 796(17)(C)) is amended to read as follows:

        ‘(C) ‘qualifying small power production facility’ means a small power production facility that the Commission determines, by rule, meets such requirements (including requirements respecting fuel use, fuel efficiency, and reliability) as the Commission may, by rule, prescribe;’.

      (2) QUALIFYING COGENERATION FACILITY- Section 3(18)(B) of the Federal Power Act (16 U.S.C. 796(18)(B)) is amended to read as follows:

        ‘(B) ‘qualifying cogeneration facility’ means a cogeneration facility that the Commission determines, by rule, meets such requirements (including requirements respecting minimum size, fuel use, and fuel efficiency) as the Commission may, by rule, prescribe;’.

Subtitle F--Repeal of PUHCA

SEC. 1261. SHORT TITLE.

    This subtitle may be cited as the ‘Public Utility Holding Company Act of 2004’.

SEC. 1262. DEFINITIONS.

    For purposes of this subtitle:

      (1) AFFILIATE- The term ‘affiliate’ of a company means any company, 5 percent or more of the outstanding voting securities of which are owned, controlled, or held with power to vote, directly or indirectly, by such company.

      (2) ASSOCIATE COMPANY- The term ‘associate company’ of a company means any company in the same holding company system with such company.

      (3) COMMISSION- The term ‘Commission’ means the Federal Energy Regulatory Commission.

      (4) COMPANY- The term ‘company’ means a corporation, partnership, association, joint stock company, business trust, or any organized group of persons, whether incorporated or not, or a receiver, trustee, or other liquidating agent of any of the foregoing.

      (5) ELECTRIC UTILITY COMPANY- The term ‘electric utility company’ means any company that owns or operates facilities used for the generation, transmission, or distribution of electric energy for sale.

      (6) EXEMPT WHOLESALE GENERATOR AND FOREIGN UTILITY COMPANY- The terms ‘exempt wholesale generator’ and ‘foreign utility company’ have the same meanings as in sections 32 and 33, respectively, of the Public Utility Holding Company Act of 1935 (15 U.S.C. 79z-5a, 79z-5b), as those sections existed on the day before the effective date of this subtitle.

      (7) GAS UTILITY COMPANY- The term ‘gas utility company’ means any company that owns or operates facilities used for distribution at retail (other than the distribution only in enclosed portable containers or distribution to tenants or employees of the company operating such facilities for their own use and not for resale) of natural or manufactured gas for heat, light, or power.

      (8) HOLDING COMPANY- The term ‘holding company’ means--

        (A) any company that directly or indirectly owns, controls, or holds, with power to vote, 10 percent or more of the outstanding voting securities of a public-utility company or of a holding company of any public-utility company; and

        (B) any person, determined by the Commission, after notice and opportunity for hearing, to exercise directly or indirectly (either alone or pursuant to an arrangement or understanding with 1 or more persons) such a controlling influence over the management or policies of any public-utility company or holding company as to make it necessary or appropriate for the rate protection of utility customers with respect to rates that such person be subject to the obligations, duties, and liabilities imposed by this subtitle upon holding companies.

      (9) HOLDING COMPANY SYSTEM- The term ‘holding company system’ means a holding company, together with its subsidiary companies.

      (10) JURISDICTIONAL RATES- The term ‘jurisdictional rates’ means rates accepted or established by the Commission for the transmission of electric energy in interstate commerce, the sale of electric energy at wholesale in interstate commerce, the transportation of natural gas in interstate commerce, and the sale in interstate commerce of natural gas for resale for ultimate public consumption for domestic, commercial, industrial, or any other use.

      (11) NATURAL GAS COMPANY- The term ‘natural gas company’ means a person engaged in the transportation of natural gas in interstate commerce or the sale of such gas in interstate commerce for resale.

      (12) PERSON- The term ‘person’ means an individual or company.

      (13) PUBLIC UTILITY- The term ‘public utility’ means any person who owns or operates facilities used for transmission of electric energy in interstate commerce or sales of electric energy at wholesale in interstate commerce.

      (14) PUBLIC-UTILITY COMPANY- The term ‘public-utility company’ means an electric utility company or a gas utility company.

      (15) STATE COMMISSION- The term ‘State commission’ means any commission, board, agency, or officer, by whatever name designated, of a State, municipality, or other political subdivision of a State that, under the laws of such State, has jurisdiction to regulate public utility companies.

      (16) SUBSIDIARY COMPANY- The term ‘subsidiary company’ of a holding company means--

        (A) any company, 10 percent or more of the outstanding voting securities of which are directly or indirectly owned, controlled, or held with power to vote, by such holding company; and

        (B) any person, the management or policies of which the Commission, after notice and opportunity for hearing, determines to be subject to a controlling influence, directly or indirectly, by such holding company (either alone or pursuant to an arrangement or understanding with 1 or more other persons) so as to make it necessary for the rate protection of utility customers with respect to rates that such person be subject to the obligations, duties, and liabilities imposed by this subtitle upon subsidiary companies of holding companies.

      (17) VOTING SECURITY- The term ‘voting security’ means any security presently entitling the owner or holder thereof to vote in the direction or management of the affairs of a company.

SEC. 1263. REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935.

    The Public Utility Holding Company Act of 1935 (15 U.S.C. 79 et seq.) is repealed.

SEC. 1264. FEDERAL ACCESS TO BOOKS AND RECORDS.

    (a) In General- Each holding company and each associate company thereof shall maintain, and shall make available to the Commission, such books, accounts, memoranda, and other records as the Commission determines are relevant to costs incurred by a public utility or natural gas company that is an associate company of such holding company and necessary or appropriate for the protection of utility customers with respect to jurisdictional rates.

    (b) Affiliate Companies- Each affiliate of a holding company or of any subsidiary company of a holding company shall maintain, and shall make available to the Commission, such books, accounts, memoranda, and other records with respect to any transaction with another affiliate, as the Commission determines are relevant to costs incurred by a public utility or natural gas company that is an associate company of such holding company and necessary or appropriate for the protection of utility customers with respect to jurisdictional rates.

    (c) Holding Company Systems- The Commission may examine the books, accounts, memoranda, and other records of any company in a holding company system, or any affiliate thereof, as the Commission determines are relevant to costs incurred by a public utility or natural gas company within such holding company system and necessary or appropriate for the protection of utility customers with respect to jurisdictional rates.

    (d) Confidentiality- No member, officer, or employee of the Commission shall divulge any fact or information that may come to his or her knowledge during the course of examination of books, accounts, memoranda, or other records as provided in this section, except as may be directed by the Commission or by a court of competent jurisdiction.

SEC. 1265. STATE ACCESS TO BOOKS AND RECORDS.

    (a) In General- Upon the written request of a State commission having jurisdiction to regulate a public-utility company in a holding company system, the holding company or any associate company or affiliate thereof, other than such public-utility company, wherever located, shall produce for inspection books, accounts, memoranda, and other records that--

      (1) have been identified in reasonable detail in a proceeding before the State commission;

      (2) the State commission determines are relevant to costs incurred by such public-utility company; and

      (3) are necessary for the effective discharge of the responsibilities of the State commission with respect to such proceeding.

    (b) Limitation- Subsection (a) does not apply to any person that is a holding company solely by reason of ownership of 1 or more qualifying facilities under the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2601 et seq.).

    (c) Confidentiality of Information- The production of books, accounts, memoranda, and other records under subsection (a) shall be subject to such terms and conditions as may be necessary and appropriate to safeguard against unwarranted disclosure to the public of any trade secrets or sensitive commercial information.

    (d) Effect on State Law- Nothing in this section shall preempt applicable State law concerning the provision of books, accounts, memoranda, and other records, or in any way limit the rights of any State to obtain books, accounts, memoranda, and other records under any other Federal law, contract, or otherwise.

    (e) Court Jurisdiction- Any United States district court located in the State in which the State commission referred to in subsection (a) is located shall have jurisdiction to enforce compliance with this section.

SEC. 1266. EXEMPTION AUTHORITY.

    (a) Rulemaking- Not later than 90 days after the effective date of this subtitle, the Commission shall issue a final rule to exempt from the requirements of section 1264 (relating to Federal access to books and records) any person that is a holding company, solely with respect to 1 or more--

      (1) qualifying facilities under the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2601 et seq.);

      (2) exempt wholesale generators; or

      (3) foreign utility companies.

    (b) Other Authority- The Commission shall exempt a person or transaction from the requirements of section 1264 (relating to Federal access to books and records) if, upon application or upon the motion of the Commission--

      (1) the Commission finds that the books, accounts, memoranda, and other records of any person are not relevant to the jurisdictional rates of a public utility or natural gas company; or

      (2) the Commission finds that any class of transactions is not relevant to the jurisdictional rates of a public utility or natural gas company.

SEC. 1267. AFFILIATE TRANSACTIONS.

    (a) Commission Authority Unaffected- Nothing in this subtitle shall limit the authority of the Commission under the Federal Power Act (16 U.S.C. 791a et seq.) to require that jurisdictional rates are just and reasonable, including the ability to deny or approve the pass through of costs, the prevention of cross-subsidization, and the issuance of such rules and regulations as are necessary or appropriate for the protection of utility consumers.

    (b) Recovery of Costs- Nothing in this subtitle shall preclude the Commission or a State commission from exercising its jurisdiction under otherwise applicable law to determine whether a public-utility company, public utility, or natural gas company may recover in rates any costs of an activity performed by an associate company, or any costs of goods or services acquired by such public-utility company from an associate company.

SEC. 1268. APPLICABILITY.

    Except as otherwise specifically provided in this subtitle, no provision of this subtitle shall apply to, or be deemed to include--

      (1) the United States;

      (2) a State or any political subdivision of a State;

      (3) any foreign governmental authority not operating in the United States;

      (4) any agency, authority, or instrumentality of any entity referred to in paragraph (1), (2), or (3); or

      (5) any officer, agent, or employee of any entity referred to in paragraph (1), (2), (3), or (4) acting as such in the course of his or her official duty.

SEC. 1269. EFFECT ON OTHER REGULATIONS.

    Nothing in this subtitle precludes the Commission or a State commission from exercising its jurisdiction under otherwise applicable law to protect utility customers.

SEC. 1270. ENFORCEMENT.

    The Commission shall have the same powers as set forth in sections 306 through 317 of the Federal Power Act (16 U.S.C. 825e-825p) to enforce the provisions of this subtitle.

SEC. 1271. SAVINGS PROVISIONS.

    (a) In General- Nothing in this subtitle, or otherwise in the Public Utility Holding Company Act of 1935, or rules, regulations, or orders thereunder, prohibits a person from engaging in or continuing to engage in activities or transactions in which it is legally engaged or authorized to engage on the date of enactment of this Act, if that person continues to comply with the terms (other than an expiration date or termination date) of any such authorization, whether by rule or by order.

    (b) Effect on Other Commission Authority- Nothing in this subtitle limits the authority of the Commission under the Federal Power Act (16 U.S.C. 791a et seq.) or the Natural Gas Act (15 U.S.C. 717 et seq.).

SEC. 1272. IMPLEMENTATION.

    Not later than 12 months after the date of enactment of this subtitle, the Commission shall--

      (1) issue such regulations as may be necessary or appropriate to implement this subtitle (other than section 1265, relating to State access to books and records); and

      (2) submit to Congress detailed recommendations on technical and conforming amendments to Federal law necessary to carry out this subtitle and the amendments made by this subtitle.

SEC. 1273. TRANSFER OF RESOURCES.

    All books and records that relate primarily to the functions transferred to the Commission under this subtitle shall be transferred from the Securities and Exchange Commission to the Commission.

SEC. 1274. EFFECTIVE DATE.

    (a) In General- Except for section 1272 (relating to implementation), this subtitle shall take effect 12 months after the date of enactment of this subtitle.

    (b) Compliance With Certain Rules- If the Commission approves and makes effective any final rulemaking modifying the standards of conduct governing entities that own, operate, or control facilities for transmission of electricity in interstate commerce or transportation of natural gas in interstate commerce prior to the effective date of this subtitle, any action taken by a public-utility company or utility holding company to comply with the requirements of such rulemaking shall not subject such public-utility company or utility holding company to any regulatory requirement applicable to a holding company under the Public Utility Holding Company Act of 1935 (15 U.S.C. 79 et seq.).

SEC. 1275. SERVICE ALLOCATION.

    (a) FERC Review- In the case of non-power goods or administrative or management services provided by an associate company organized specifically for the purpose of providing such goods or services to any public utility in the same holding company system, at the election of the system or a State commission having jurisdiction over the public utility, the Commission, after the effective date of this subtitle, shall review and authorize the allocation of the costs for such goods or services to the extent relevant to that associate company in order to assure that each allocation is appropriate for the protection of investors and consumers of such public utility.

    (b) Cost Allocation- Nothing in this section shall preclude the Commission or a State commission from exercising its jurisdiction under other applicable law with respect to the review or authorization of any costs allocated to a public utility in a holding company system located in the affected State as a result of the acquisition of non-power goods or administrative and management services by such public utility from an associate company organized specifically for that purpose.

    (c) Rules- Not later than 6 months after the date of enactment of this Act, the Commission shall issue rules (which rules shall be effective no earlier than the effective date of this subtitle) to exempt from the requirements of this section any company in a holding company system whose public utility operations are confined substantially to a single State and any other class of transactions that the Commission finds is not relevant to the jurisdictional rates of a public utility.

    (d) Public Utility- As used in this section, the term ‘public utility’ has the meaning given that term in section 201(e) of the Federal Power Act.

SEC. 1276. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated such funds as may be necessary to carry out this subtitle.

SEC. 1277. CONFORMING AMENDMENTS TO THE FEDERAL POWER ACT.

    (a) Conflict of Jurisdiction- Section 318 of the Federal Power Act (16 U.S.C. 825q) is repealed.

    (b) Definitions- (1) Section 201(g)(5) of the Federal Power Act (16 U.S.C. 824(g)(5)) is amended by striking ‘1935’ and inserting ‘2003’.

    (2) Section 214 of the Federal Power Act (16 U.S.C. 824m) is amended by striking ‘1935’ and inserting ‘2003’.

Subtitle G--Market Transparency, Enforcement, and Consumer Protection

SEC. 1281. MARKET TRANSPARENCY RULES.

    Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended by adding at the end the following:

‘SEC. 220. MARKET TRANSPARENCY RULES.

    ‘(a) In General- Not later than 180 days after the date of enactment of this section, the Commission shall issue rules establishing an electronic information system to provide the Commission and the public with access to such information as is necessary or appropriate to facilitate price transparency and participation in markets subject to the Commission’s jurisdiction under this Act. Such systems shall provide information about the availability and market price of wholesale electric energy and transmission services to the Commission, State commissions, buyers and sellers of wholesale electric energy, users of transmission services, and the public on a timely basis. The Commission shall have authority to obtain such information from any electric utility or transmitting utility, including any entity described in section 201(f).

    ‘(b) Exemptions- The Commission shall exempt from disclosure information it determines would, if disclosed, be detrimental to the operation of an effective market or jeopardize system security. This section shall not apply to transactions for the purchase or sale of wholesale electric energy or transmission services within the area described in section 212(k)(2)(A). In determining the information to be made available under this section and time to make such information available, the Commission shall seek to ensure that consumers and competitive markets are protected from the adverse effects of potential collusion or other anti-competitive behaviors that can be facilitated by untimely public disclosure of transaction-specific information.

    ‘(c) Commodity Futures Trading Commission- This section shall not affect the exclusive jurisdiction of the Commodity Futures Trading Commission with respect to accounts, agreements, contracts, or transactions in commodities under the Commodity Exchange Act (7 U.S.C. 1 et seq.). Any request for information to a designated contract market, registered derivatives transaction execution facility, board of trade, exchange, or market involving accounts, agreements, contracts, or transactions in commodities (including natural gas, electricity and other energy commodities) within the exclusive jurisdiction of the Commodity Futures Trading Commission shall be directed to the Commodity Futures Trading Commission.

    ‘(d) Savings Provision- In exercising its authority under this section, the Commission shall not--

      ‘(1) compete with, or displace from the market place, any price publisher; or

      ‘(2) regulate price publishers or impose any requirements on the publication of information.’.

SEC. 1282. MARKET MANIPULATION.

    Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended by adding at the end the following:

‘SEC. 221. PROHIBITION ON FILING FALSE INFORMATION.

    ‘No person or other entity (including an entity described in section 201(f)) shall willfully and knowingly report any information relating to the price of electricity sold at wholesale or availability of transmission capacity, which information the person or any other entity knew to be false at the time of the reporting, to a Federal agency with intent to fraudulently affect the data being compiled by such Federal agency.

‘SEC. 222. PROHIBITION ON ROUND TRIP TRADING.

    ‘(a) Prohibition- No person or other entity (including an entity described in section 201(f)) shall willfully and knowingly enter into any contract or other arrangement to execute a ‘round trip trade’ for the purchase or sale of electric energy at wholesale.

    ‘(b) Definition- For the purposes of this section, the term ‘round trip trade’ means a transaction, or combination of transactions, in which a person or any other entity--

      ‘(1) enters into a contract or other arrangement to purchase from, or sell to, any other person or other entity electric energy at wholesale;

      ‘(2) simultaneously with entering into the contract or arrangement described in paragraph (1), arranges a financially offsetting trade with such other person or entity for the same such electric energy, at the same location, price, quantity and terms so that, collectively, the purchase and sale transactions in themselves result in no financial gain or loss; and

      ‘(3) enters into the contract or arrangement with a specific intent to fraudulently affect reported revenues, trading volumes, or prices.’.

SEC. 1283. ENFORCEMENT.

    (a) Complaints- Section 306 of the Federal Power Act (16 U.S.C. 825e) is amended as follows:

      (1) By inserting ‘electric utility,’ after ‘Any person,’.

      (2) By inserting ‘, transmitting utility,’ after ‘licensee’ each place it appears.

    (b) Review of Commission Orders- Section 313(a) of the Federal Power Act (16 U.S.C. 8251) is amended by inserting ‘electric utility,’ after ‘person,’ in the first 2 places it appears and by striking ‘any person unless such person’ and inserting ‘any entity unless such entity’.

    (c) Investigations- Section 307(a) of the Federal Power Act (16 U.S.C. 825f(a)) is amended as follows:

      (1) By inserting ‘, electric utility, transmitting utility, or other entity’ after ‘person’ each time it appears.

      (2) By striking the period at the end of the first sentence and inserting the following: ‘or in obtaining information about the sale of electric energy at wholesale in interstate commerce and the transmission of electric energy in interstate commerce.’.

    (d) Criminal Penalties- Section 316 of the Federal Power Act (16 U.S.C. 825o) is amended--

      (1) in subsection (a), by striking ‘$5,000’ and inserting ‘$1,000,000’, and by striking ‘two years’ and inserting ‘5 years’;

      (2) in subsection (b), by striking ‘$500’ and inserting ‘$25,000’; and

      (3) by striking subsection (c).

    (e) Civil Penalties- Section 316A of the Federal Power Act (16 U.S.C. 825o-1) is amended as follows:

      (1) In subsections (a) and (b), by striking ‘section 211, 212, 213, or 214’ each place it appears and inserting ‘Part II’.

      (2) In subsection (b), by striking ‘$10,000’ and inserting ‘$1,000,000’.

SEC. 1284. REFUND EFFECTIVE DATE.

    Section 206(b) of the Federal Power Act (16 U.S.C. 824e(b)) is amended as follows:

      (1) By striking ‘the date 60 days after the filing of such complaint nor later than 5 months after the expiration of such 60-day period’ in the second sentence and inserting ‘the date of the filing of such complaint nor later than 5 months after the filing of such complaint’.

      (2) By striking ‘60 days after’ in the third sentence and inserting ‘of’.

      (3) By striking ‘expiration of such 60-day period’ in the third sentence and inserting ‘publication date’.

      (4) By striking the fifth sentence and inserting the following: ‘If no final decision is rendered by the conclusion of the 180-day period commencing upon initiation of a proceeding pursuant to this section, the Commission shall state the reasons why it has failed to do so and shall state its best estimate as to when it reasonably expects to make such decision.’.

SEC. 1285. REFUND AUTHORITY.

    Section 206 of the Federal Power Act (16 U.S.C. 824e) is amended by adding the following new subsection at the end thereof:

    ‘(e)(1) Except as provided in paragraph (2), if an entity described in section 201(f) voluntarily makes a short-term sale of electric energy and the sale violates Commission rules in effect at the time of the sale, such entity shall be subject to the Commission’s refund authority under this section with respect to such violation.

    ‘(2) This section shall not apply to--

      ‘(A) any entity that sells less than 8,000,000 megawatt hours of electricity per year; or

      ‘(B) any electric cooperative.

    ‘(3) For purposes of this subsection, the term ‘short-term sale’ means an agreement for the sale of electric energy at wholesale in interstate commerce that is for a period of 31 days or less (excluding monthly contracts subject to automatic renewal).

    ‘(4) The Commission shall have refund authority under subsection (e)(1) with respect to a voluntary short-term sale of electric energy by the Bonneville Power Administration (in this section ‘Bonneville’) only if the sale is at an unjust and unreasonable rate and, in that event, may order a refund only for short-term sales made by Bonneville at rates that are higher than the highest just and reasonable rate charged by any other entity for a short-term sale of electric energy in the same geographic market for the same, or most nearly comparable, period as the sale by Bonneville.

    ‘(5) With respect to any Federal power marketing agency or the Tennessee Valley Authority, the Commission shall not assert or exercise any regulatory authority or powers under subsection (e)(1) other than the ordering of refunds to achieve a just and reasonable rate.’.

SEC. 1286. SANCTITY OF CONTRACT.

    (a) In General- The Federal Energy Regulatory Commission (in this section, ‘the Commission’) shall have no authority to abrogate or modify any provision of an executed contract or executed contract amendment described in subsection (b) that has been entered into or taken effect, except upon a finding that failure to take such action would be contrary to the public interest.

    (b) Limitation- Except as provided in subsection (c), this section shall apply only to a contract or contract amendment--

      (1) executed on or after the date of enactment of this Act; and

      (2) entered into--

        (A) for the purchase or sale of electric energy under section 205 of the Federal Power Act (16 U.S.C. 824d) where the seller has been authorized by the Commission to charge market-based rates; or

        (B) under section 4 of the Natural Gas Act (15 U.S.C. 717c) where the natural gas company has been authorized by the Commission to charge market-based rates for the service described in the contract.

    (c) Exclusion- This section shall not apply to an executed contract or executed contract amendment that expressly provides for a standard of review other than the public interest standard.

    (d) Savings Provision- With respect to contracts to which this section does not apply, nothing in this section alters existing law regarding the applicable standard of review for a contract subject to the jurisdiction of the Commission.

SEC. 1287. CONSUMER PRIVACY AND UNFAIR TRADE PRACTICES.

    (a) Privacy- The Federal Trade Commission may issue rules protecting the privacy of electric consumers from the disclosure of consumer information obtained in connection with the sale or delivery of electric energy to electric consumers.

    (b) Slamming- The Federal Trade Commission may issue rules prohibiting the change of selection of an electric utility except with the informed consent of the electric consumer or if approved by the appropriate State regulatory authority.

    (c) Cramming- The Federal Trade Commission may issue rules prohibiting the sale of goods and services to an electric consumer unless expressly authorized by law or the electric consumer.

    (d) Rulemaking- The Federal Trade Commission shall proceed in accordance with section 553 of title 5, United States Code, when prescribing a rule under this section.

    (e) State Authority- If the Federal Trade Commission determines that a State’s regulations provide equivalent or greater protection than the provisions of this section, such State regulations shall apply in that State in lieu of the regulations issued by the Commission under this section.

    (f) Definitions- For purposes of this section:

      (1) STATE REGULATORY AUTHORITY- The term ‘State regulatory authority’ has the meaning given that term in section 3(21) of the Federal Power Act (16 U.S.C. 796(21)).

      (2) ELECTRIC CONSUMER AND ELECTRIC UTILITY- The terms ‘electric consumer’ and ‘electric utility’ have the meanings given those terms in section 3 of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2602).

Subtitle H--Merger Reform

SEC. 1291. MERGER REVIEW REFORM AND ACCOUNTABILITY.

    (a) Merger Review Reform- Within 180 days after the date of enactment of this Act, the Secretary of Energy, in consultation with the Federal Energy Regulatory Commission and the Attorney General of the United States, shall prepare, and transmit to Congress each of the following:

      (1) A study of the extent to which the authorities vested in the Federal Energy Regulatory Commission under section 203 of the Federal Power Act are duplicative of authorities vested in--

        (A) other agencies of Federal and State Government; and

        (B) the Federal Energy Regulatory Commission, including under sections 205 and 206 of the Federal Power Act.

      (2) Recommendations on reforms to the Federal Power Act that would eliminate any unnecessary duplication in the exercise of regulatory authority or unnecessary delays in the approval (or disapproval) of applications for the sale, lease, or other disposition of public utility facilities.

    (b) Merger Review Accountability- Not later than 1 year after the date of enactment of this Act and annually thereafter, with respect to all orders issued within the preceding year that impose a condition on a sale, lease, or other disposition of public utility facilities under section 203(b) of the Federal Power Act, the Federal Energy Regulatory Commission shall transmit a report to Congress explaining each of the following:

      (1) The condition imposed.

      (2) Whether the Commission could have imposed such condition by exercising its authority under any provision of the Federal Power Act other than under section 203(b).

      (3) If the Commission could not have imposed such condition other than under section 203(b), why the Commission determined that such condition was consistent with the public interest.

SEC. 1292. ELECTRIC UTILITY MERGERS.

    (a) Amendment- Section 203(a) of the Federal Power Act (16 U.S.C. 824b(a)) is amended to read as follows:

    ‘(a)(1) No public utility shall, without first having secured an order of the Commission authorizing it to do so--

      ‘(A) sell, lease, or otherwise dispose of the whole of its facilities subject to the jurisdiction of the Commission, or any part thereof of a value in excess of $10,000,000;

      ‘(B) merge or consolidate, directly or indirectly, such facilities or any part thereof with those of any other person, by any means whatsoever; or

      ‘(C) purchase, acquire, or take any security with a value in excess of $10,000,000 of any other public utility.

    ‘(2) No holding company in a holding company system that includes a public utility shall purchase, acquire, or take any security with a value in excess of $10,000,000 of, or, by any means whatsoever, directly or indirectly, merge or consolidate with, a public utility or a holding company in a holding company system that includes a public utility with a value in excess of $10,000,000 without first having secured an order of the Commission authorizing it to do so.

    ‘(3) Upon receipt of an application for such approval the Commission shall give reasonable notice in writing to the Governor and State commission of each of the States in which the physical property affected, or any part thereof, is situated, and to such other persons as it may deem advisable.

    ‘(4) After notice and opportunity for hearing, the Commission shall approve the proposed disposition, consolidation, acquisition, or change in control, if it finds that the proposed transaction will be consistent with the public interest. In evaluating whether a transaction will be consistent with the public interest, the Commission shall consider whether the proposed transaction--

      ‘(A) will adequately protect consumer interests;

      ‘(B) will be consistent with competitive wholesale markets;

      ‘(C) will impair the financial integrity of any public utility that is a party to the transaction or an associate company of any party to the transaction; and

      ‘(D) satisfies such other criteria as the Commission considers consistent with the public interest.

    ‘(5) The Commission shall, by rule, adopt procedures for the expeditious consideration of applications for the approval of dispositions, consolidations, or acquisitions under this section. Such rules shall identify classes of transactions, or specify criteria for transactions, that normally meet the standards established in paragraph (4). The Commission shall provide expedited review for such transactions. The Commission shall grant or deny any other application for approval of a transaction not later than 180 days after the application is filed. If the Commission does not act within 180 days, such application shall be deemed granted unless the Commission finds, based on good cause, that further consideration is required to determine whether the proposed transaction meets the standards of paragraph (4) and issues an order tolling the time for acting on the application for not more than 180 days, at the end of which additional period the Commission shall grant or deny the application.

    ‘(6) For purposes of this subsection, the terms ‘associate company’, ‘holding company’, and ‘holding company system’ have the meaning given those terms in the Public Utility Holding Company Act of 2004.’.

    (b) Effective Date- The amendments made by this section shall take effect 12 months after the date of enactment of this section.

Subtitle I--Definitions

SEC. 1295. DEFINITIONS.

    (a) Electric Utility- Section 3(22) of the Federal Power Act (16 U.S.C. 796(22)) is amended to read as follows:

      ‘(22) ELECTRIC UTILITY- The term ‘electric utility’ means any person or Federal or State agency (including any entity described in section 201(f)) that sells electric energy; such term includes the Tennessee Valley Authority and each Federal power marketing administration.’.

    (b) Transmitting Utility- Section 3(23) of the Federal Power Act (16 U.S.C. 796(23)) is amended to read as follows:

      ‘(23) TRANSMITTING UTILITY- The term ‘transmitting utility’ means an entity, including any entity described in section 201(f), that owns, operates, or controls facilities used for the transmission of electric energy--

        ‘(A) in interstate commerce; or

        ‘(B) for the sale of electric energy at wholesale.’.

    (c) Additional Definitions- Section 3 of the Federal Power Act (16 U.S.C. 796) is amended by adding at the end the following:

      ‘(26) ELECTRIC COOPERATIVE- The term ‘electric cooperative’ means a cooperatively owned electric utility.

      ‘(27) RTO- The term ‘Regional Transmission Organization’ or ‘RTO’ means an entity of sufficient regional scope approved by the Commission to exercise operational or functional control of facilities used for the transmission of electric energy in interstate commerce and to ensure nondiscriminatory access to such facilities.

      ‘(28) ISO- The term ‘Independent System Operator’ or ‘ISO’ means an entity approved by the Commission to exercise operational or functional control of facilities used for the transmission of electric energy in interstate commerce and to ensure nondiscriminatory access to such facilities.’.

    (d) Commission- For the purposes of this title, the term ‘Commission’ means the Federal Energy Regulatory Commission.

    (e) Applicability- Section 201(f) of the Federal Power Act (16 U.S.C. 824(f)) is amended by adding after ‘political subdivision of a state,’ the following: ‘an electric cooperative that has financing under the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.) or that sells less than 4,000,000 megawatt hours of electricity per year,’.

Subtitle J--Technical and Conforming Amendments

SEC. 1297. CONFORMING AMENDMENTS.

    The Federal Power Act is amended as follows:

      (1) Section 201(b)(2) of such Act (16 U.S.C. 824(b)(2)) is amended as follows:

        (A) In the first sentence by striking ‘210, 211, and 212’ and inserting ‘203(a)(2), 206(e), 210, 211, 211A, 212, 215, 216, 217, 218, 219, 220, 221, and 222’.

        (B) In the second sentence by striking ‘210 or 211’ and inserting ‘203(a)(2), 206(e), 210, 211, 211A, 212, 215, 216, 217, 218, 219, 220, 221, and 222’.

        (C) Section 201(b)(2) of such Act is amended by striking ‘The’ in the first place it appears and inserting ‘Notwithstanding section 201(f), the’ and in the second sentence after ‘any order’ by inserting ‘or rule’.

      (2) Section 201(e) of such Act is amended by striking ‘210, 211, or 212’ and inserting ‘206(e), 206(f), 210, 211, 211A, 212, 215, 216, 217, 218, 219, 220, 221, and 222’.

      (3) Section 206 of such Act (16 U.S.C. 824e) is amended as follows:

        (A) In subsection (b), in the seventh sentence, by striking ‘the public utility to make’.

        (B) In the first sentence of subsection (a), by striking ‘hearing had’ and inserting ‘hearing held’.

      (4) Section 211(c) of such Act (16 U.S.C. 824j(c)) is amended by--

        (A) striking ‘(2)’;

        (B) striking ‘(A)’ and inserting ‘(1)’

        (C) striking ‘(B)’ and inserting ‘(2)’; and

        (D) striking ‘termination of modification’ and inserting ‘termination or modification’.

      (5) Section 211(d)(1) of such Act (16 U.S.C. 824j(d)(1)) is amended by striking ‘electric utility’ the second time it appears and inserting ‘transmitting utility’.

      (6) Section 315 (c) of such Act (16 U.S.C. 825n(c)) is amended by striking ‘subsection’ and inserting ‘section’.

TITLE XIII--ENERGY TAX INCENTIVES

SEC. 1300. SHORT TITLE; AMENDMENT OF 1986 CODE.

    (a) Short Title- This title may be cited as the ‘Energy Tax Policy Act of 2004’.

    (b) Amendment of 1986 Code- Except as otherwise expressly provided, whenever in this title an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.

Subtitle A--Conservation

PART I--RESIDENTIAL AND BUSINESS PROPERTY

SEC. 1301. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.

    (a) In General- Subpart A of part IV of subchapter A of chapter 1 (relating to nonrefundable personal credits) is amended by inserting after section 25B the following new section:

‘SEC. 25C. RESIDENTIAL ENERGY EFFICIENT PROPERTY.

    ‘(a) Allowance of Credit- In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of--

      ‘(1) 15 percent of the qualified solar water heating property expenditures made by the taxpayer during such year,

      ‘(2) 15 percent of the qualified photovoltaic property expenditures made by the taxpayer during such year,

      ‘(3) 15 percent of the qualified wind energy property expenditures made by the taxpayer during such year, and

      ‘(4) 20 percent of the qualified fuel cell property expenditures made by the taxpayer during such year.

    ‘(b) Limitations-

      ‘(1) MAXIMUM CREDIT-

        ‘(A) IN GENERAL- The credit allowed under subsection (a) shall not exceed--

          ‘(i) $2,000 for property described in paragraph (1), (2), or (3) of subsection (c), and

          ‘(ii) $500 for each 0.5 kilowatt of capacity of property described in subsection (c)(4).

        ‘(B) PRIOR EXPENDITURES BY TAXPAYER ON SAME RESIDENCE TAKEN INTO ACCOUNT- In determining the amount of the credit allowed to a taxpayer with respect to any dwelling unit under this section, the dollar amount under subparagraph (A)(i) with respect to each type of property described in such subparagraph shall be reduced by the credit allowed to the taxpayer under this section with respect to such property for all preceding taxable years with respect to such dwelling unit.

      ‘(2) PROPERTY STANDARDS- No credit shall be allowed under this section for an item of property unless--

        ‘(A) the original use of such property commences with the taxpayer,

        ‘(B) such property reasonably can be expected to remain in use for at least 5 years,

        ‘(C) such property is installed on or in connection with a dwelling unit located in the United States and used as a residence by the taxpayer,

        ‘(D) in the case of solar water heating property, such property is certified for performance by the non-profit Solar Rating and Certification Corporation or a comparable entity endorsed by the government of the State in which such property is installed,

        ‘(E) in the case of fuel cell property, such property meets the performance and quality standards (if any) which have been prescribed by the Secretary by regulations (after consultation with the Secretary of Energy), and

        ‘(F) in the case of any photovoltaic property, fuel cell property, or wind energy property, such property meets appropriate fire and electric code requirements.

    ‘(c) Definitions- For purposes of this section--

      ‘(1) QUALIFIED SOLAR WATER HEATING PROPERTY EXPENDITURE- The term ‘qualified solar water heating property expenditure’ means an expenditure for property which uses solar energy to heat water for use in a dwelling unit.

      ‘(2) QUALIFIED PHOTOVOLTAIC PROPERTY EXPENDITURE- The term ‘qualified photovoltaic property expenditure’ means an expenditure for property which uses solar energy to generate electricity for use in a dwelling unit and which is not described in paragraph (1).

      ‘(3) QUALIFIED WIND ENERGY PROPERTY EXPENDITURE- The term ‘qualified wind energy property expenditure’ means an expenditure for property which uses wind energy to generate electricity for use in a dwelling unit.

      ‘(4) QUALIFIED FUEL CELL PROPERTY EXPENDITURE- The term ‘qualified fuel cell property expenditure’ means an expenditure for any qualified fuel cell property (as defined in section 48(c)(1)).

    ‘(d) Special Rules- For purposes of this section--

      ‘(1) SOLAR PANELS- No expenditure relating to a solar panel or other property installed as a roof (or portion thereof) shall fail to be treated as property described in paragraph (1) or (2) of subsection (c) solely because it constitutes a structural component of the structure on which it is installed.

      ‘(2) SWIMMING POOLS, ETC., USED AS STORAGE MEDIUM- Expenditures which are properly allocable to a swimming pool, hot tub, or any other energy storage medium which has a function other than the function of such storage shall not be taken into account for purposes of this section.

      ‘(3) DOLLAR AMOUNTS IN CASE OF JOINT OCCUPANCY- In the case of any dwelling unit which is jointly occupied and used during any calendar year as a residence by 2 or more individuals, the following rules shall apply:

        ‘(A) The amount of the credit allowable under subsection (a) by reason of expenditures made during such calendar year by any of such individuals with respect to such dwelling unit shall be determined by treating all of such individuals as 1 taxpayer whose taxable year is such calendar year.

        ‘(B) There shall be allowable, with respect to such expenditures to each of such individuals, a credit under subsection (a) for the taxable year in which such calendar year ends in an amount which bears the same ratio to the amount determined under subparagraph (A) as the amount of such expenditures made by such individual during such calendar year bears to the aggregate of such expenditures made by all of such individuals during such calendar year.

        ‘(C) Subparagraphs (A) and (B) shall be applied separately with respect to expenditures described in paragraphs (1), (2), (3), and (4) of subsection (c).

      ‘(4) TENANT-STOCKHOLDER IN COOPERATIVE HOUSING CORPORATION- In the case of an individual who is a tenant-stockholder (as defined in section 216) in a cooperative housing corporation (as defined in such section), such individual shall be treated as having made the individual’s tenant-stockholder’s proportionate share (as defined in section 216(b)(3)) of any expenditures of such corporation.

      ‘(5) CONDOMINIUMS-

        ‘(A) IN GENERAL- In the case of an individual who is a member of a condominium management association with respect to a condominium which the individual owns, such individual shall be treated as having made the individual’s proportionate share of any expenditures of such association.

        ‘(B) CONDOMINIUM MANAGEMENT ASSOCIATION- For purposes of this paragraph, the term ‘condominium management association’ means an organization which meets the requirements of paragraph (1) of section 528(c) (other than subparagraph (E) thereof) with respect to a condominium project substantially all of the units of which are used as residences.

      ‘(6) ALLOCATION IN CERTAIN CASES- Except in the case of qualified wind energy property expenditures, if less than 80 percent of the use of an item is for nonbusiness purposes, only that portion of the expenditures for such item which is properly allocable to use for nonbusiness purposes shall be taken into account.

      ‘(7) WHEN EXPENDITURE MADE; AMOUNT OF EXPENDITURE-

        ‘(A) IN GENERAL- Except as provided in subparagraph (B), an expenditure with respect to an item shall be treated as made when the original installation of the item is completed.

        ‘(B) EXPENDITURES PART OF BUILDING CONSTRUCTION- In the case of an expenditure in connection with the construction or reconstruction of a structure, such expenditure shall be treated as made when the original use of the constructed or reconstructed structure by the taxpayer begins.

        ‘(C) AMOUNT- The amount of any expenditure shall be the cost thereof.

      ‘(8) PROPERTY FINANCED BY SUBSIDIZED ENERGY FINANCING- For purposes of determining the amount of expenditures made by any individual with respect to any dwelling unit, there shall not be taken into account expenditures which are made from subsidized energy financing (as defined in section 48(a)(4)(C)).

      ‘(9) DENIAL OF DEPRECIATION ON WIND ENERGY PROPERTY FOR WHICH CREDIT ALLOWED- No deduction shall be allowed under section 167 for property which uses wind energy to generate electricity if the taxpayer is allowed a credit under this section with respect to such property.

    ‘(e) Basis Adjustments- For purposes of this subtitle, if a credit is allowed under this section for any expenditure with respect to any property, the increase in the basis of such property which would (but for this subsection) result from such expenditure shall be reduced by the amount of the credit so allowed.

    ‘(f) Termination- The credit allowed under this section shall not apply to taxable years beginning after December 31, 2006 (December 31, 2008, with respect to qualified photovoltaic property expenditures).’.

    (b) Conforming Amendments-

      (1) Section 1016(a) is amended by striking ‘and’ at the end of paragraph (27), by striking the period at the end of paragraph (28) and inserting ‘, and’, and by adding at the end the following new paragraph:

      ‘(29) to the extent provided in section 25C(e), in the case of amounts with respect to which a credit has been allowed under section 25C.’.

      (2) The table of sections for subpart A of part IV of subchapter A of chapter 1 is amended by inserting after the item relating to section 25B the following new item:

      ‘Sec. 25C. Residential energy efficient property.’.

    (c) Effective Date- The amendments made by this section shall apply to taxable years ending after December 31, 2003.

SEC. 1302. EXTENSION AND EXPANSION OF CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN RENEWABLE RESOURCES.

    (a) Expansion of Qualified Energy Resources- Subsection (c) of section 45 (relating to electricity produced from certain renewable resources) is amended to read as follows:

    ‘(c) Qualified Energy Resources- For purposes of this section--

      ‘(1) IN GENERAL- The term ‘qualified energy resources’ means--

        ‘(A) wind,

        ‘(B) closed-loop biomass,

        ‘(C) open-loop biomass,

        ‘(D) geothermal energy,

        ‘(E) solar energy,

        ‘(F) small irrigation power, and

        ‘(G) municipal solid waste.

      ‘(2) CLOSED-LOOP BIOMASS- The term ‘closed-loop biomass’ means any organic material from a plant which is planted exclusively for purposes of being used at a qualified facility to produce electricity.

      ‘(3) OPEN-LOOP BIOMASS-

        ‘(A) IN GENERAL- The term ‘open-loop biomass’ means--

          ‘(i) any agricultural livestock waste nutrients, or

          ‘(ii) any solid, nonhazardous, cellulosic waste material which is segregated from other waste materials and which is derived from--

            ‘(I) any of the following forest-related resources: mill and harvesting residues, precommercial thinnings, slash, and brush,

            ‘(II) solid wood waste materials, including waste pallets, crates, dunnage, manufacturing and construction wood wastes (other than pressure-treated, chemically-treated, or painted wood wastes), and landscape or right-of-way tree trimmings, but not including municipal solid waste, gas derived from the biodegradation of solid waste, or paper which is commonly recycled, or

            ‘(III) agriculture sources, including orchard tree crops, vineyard, grain, legumes, sugar, and other crop by-products or residues.

        Such term shall not include closed-loop biomass.

        ‘(B) AGRICULTURAL LIVESTOCK WASTE NUTRIENTS-

          ‘(i) IN GENERAL- The term ‘agricultural livestock waste nutrients’ means agricultural livestock manure and litter, including wood shavings, straw, rice hulls, and other bedding material for the disposition of manure.

          ‘(ii) AGRICULTURAL LIVESTOCK- The term ‘agricultural livestock’ includes bovine, swine, poultry, and sheep.

      ‘(4) GEOTHERMAL ENERGY- The term ‘geothermal energy’ means energy derived from a geothermal deposit (within the meaning of section 613(e)(2)).

      ‘(5) SMALL IRRIGATION POWER- The term ‘small irrigation power’ means power--

        ‘(A) generated without any dam or impoundment of water through an irrigation system canal or ditch, and

        ‘(B) the nameplate capacity rating of which is not less than 150 kilowatts but is less than 5 megawatts.

      ‘(6) MUNICIPAL SOLID WASTE- The term ‘municipal solid waste’ has the meaning given the term ‘solid waste’ under section 2(27) of the Solid Waste Disposal Act (42 U.S.C. 6903).’.

    (b) Extension and Expansion of Qualified Facilities-

      (1) IN GENERAL- Section 45 is amended by redesignating subsection (d) as subsection (e) and by inserting after subsection (c) the following new subsection:

    ‘(d) Qualified Facilities- For purposes of this section--

      ‘(1) WIND FACILITY- In the case of a facility using wind to produce electricity, the term ‘qualified facility’ means any facility owned by the taxpayer which is originally placed in service after December 31, 1993, and before January 1, 2007.

      ‘(2) CLOSED-LOOP BIOMASS FACILITY-

        ‘(A) IN GENERAL- In the case of a facility using closed-loop biomass to produce electricity, the term ‘qualified facility’ means any facility--

          ‘(i) owned by the taxpayer which is originally placed in service after December 31, 1992, and before January 1, 2007, or

          ‘(ii) owned by the taxpayer which before January 1, 2007, is originally placed in service and modified to use closed-loop biomass to co-fire with coal, with other biomass, or with both, but only if the modification is approved under the Biomass Power for Rural Development Programs or is part of a pilot project of the Commodity Credit Corporation as described in 65 Fed. Reg. 63052.

        ‘(B) SPECIAL RULES- In the case of a qualified facility described in subparagraph (A)(ii)--

          ‘(i) the 10-year period referred to in subsection (a) shall be treated as beginning no earlier than the date of the enactment of the Energy Tax Policy Act of 2004,

          ‘(ii) the amount of the credit determined under subsection (a) with respect to the facility shall be an amount equal to the amount determined without regard to this clause multiplied by the ratio of the thermal content of the closed-loop biomass used in such facility to the thermal content of all fuels used in such facility, and

          ‘(iii) if the owner of such facility is not the producer of the electricity, the person eligible for the credit allowable under subsection (a) shall be the lessee or the operator of such facility.

      ‘(3) OPEN-LOOP BIOMASS FACILITIES-

        ‘(A) IN GENERAL- In the case of a facility using open-loop biomass to produce electricity, the term ‘qualified facility’ means any facility owned by the taxpayer which--

          ‘(i) in the case of a facility using agricultural livestock waste nutrients--

            ‘(I) is originally placed in service after the date of the enactment of the Energy Tax Policy Act of 2004 and before January 1, 2007, and

            ‘(II) the nameplate capacity rating of which is not less than 150 kilowatts, and

          ‘(ii) in the case of any other facility, is originally placed in service before January 1, 2007.

        ‘(B) CREDIT ELIGIBILITY- In the case of any facility described in subparagraph (A), if the owner of such facility is not the producer of the electricity, the person eligible for the credit allowable under subsection (a) shall be the lessee or the operator of such facility.

      ‘(4) GEOTHERMAL OR SOLAR ENERGY FACILITY- In the case of a facility using geothermal or solar energy to produce electricity, the term ‘qualified facility’ means any facility owned by the taxpayer which is originally placed in service after the date of the enactment of the Energy Tax Policy Act of 2004 and before January 1, 2007. Such term shall not include any property described in section 48(a)(3) the basis of which is taken into account by the taxpayer for purposes of determining the energy credit under section 48.

      ‘(5) SMALL IRRIGATION POWER FACILITY- In the case of a facility using small irrigation power to produce electricity, the term ‘qualified facility’ means any facility owned by the taxpayer which is originally placed in service after the date of the enactment of the Energy Tax Policy Act of 2004 and before January 1, 2007.

      ‘(6) LANDFILL GAS FACILITIES- In the case of a facility producing electricity from gas derived from the biodegradation of municipal solid waste, the term ‘qualified facility’ means any facility owned by the taxpayer which is originally placed in service after the date of the enactment of the Energy Tax Policy Act of 2004 and before January 1, 2007.

      ‘(7) TRASH COMBUSTION FACILITIES- In the case of a facility which burns municipal solid waste to produce electricity, the term ‘qualified facility’ means any facility owned by the taxpayer which is originally placed in service after the date of the enactment of the Energy Tax Policy Act of 2004 and before January 1, 2007.’.

      (2) CONFORMING AMENDMENT- Section 45(e), as so redesignated, is amended by striking ‘subsection (c)(3)(A)’ in paragraph (7)(A)(i) and inserting ‘subsection (d)(1)’.

    (c) Special Credit Rate and Period for Electricity Produced and Sold After Enactment Date- Section 45(b) is amended by adding at the end the following new paragraph:

      ‘(4) CREDIT RATE AND PERIOD FOR ELECTRICITY PRODUCED AND SOLD FROM CERTAIN FACILITIES-

        ‘(A) CREDIT RATE- In the case of electricity produced and sold in any calendar year after 2003 at any qualified facility described in paragraph (3), (5), (6), or (7) of subsection (d), the amount in effect under subsection (a)(1) for such calendar year (determined before the application of the last sentence of paragraph (2) of this subsection) shall be reduced by one-third.

        ‘(B) CREDIT PERIOD-

          ‘(i) IN GENERAL- Except as provided in clause (ii), in the case of any facility described in paragraph (3), (4), (5), (6), or (7) of subsection (d), the 5-year period beginning on the date the facility was originally placed in service shall be substituted for the 10-year period in subsection (a)(2)(A)(ii).

          ‘(ii) CERTAIN OPEN-LOOP BIOMASS FACILITIES- In the case of any facility described in subsection (d)(3)(A)(ii) placed in service before the date of the enactment of this paragraph, the 5-year period beginning on January 1, 2004, shall be substituted for the 10-year period in subsection (a)(2)(A)(ii).’.

    (d) Coordination With Other Credits- Section 45(e), as so redesignated, is amended by adding at the end the following new paragraph:

      ‘(8) COORDINATION WITH OTHER CREDITS- The term ‘qualified facility’ shall not include--

        ‘(A) any property with respect to which a credit is allowed under section 25C, and

        ‘(B) any facility the production from which is allowed as a credit under section 45K,

      for the taxable year or any prior taxable year.’.

    (e) Coordination With Section 48- Section 48(a)(3) (defining energy property) is amended by adding at the end the following new sentence: ‘Such term shall not include any property which is part of a facility the production from which is allowed as a credit under section 45 for the taxable year or any prior taxable year.’.

    (f) Elimination of Certain Credit Reductions- Section 45(b)(3) (relating to credit reduced for grants, tax-exempt bonds, subsidized energy financing, and other credits) is amended--

      (1) by inserting ‘the lesser of 1/2 or’ before ‘a fraction’ in the matter preceding subparagraph (A), and

      (2) by adding at the end the following new sentence: ‘This paragraph shall not apply with respect to any facility described in subsection (d)(2)(A)(ii).’.

    (g) Effective Dates-

      (1) IN GENERAL- Except as otherwise provided in this subsection, the amendments made by this section shall apply to electricity produced and sold after the date of the enactment of this Act, in taxable years ending after such date.

      (2) CERTAIN BIOMASS FACILITIES- With respect to any facility described in section 45(d)(3)(A)(ii) of the Internal Revenue Code of 1986, as added by subsection (b)(1), which is placed in service before the date of the enactment of this Act, the amendments made by this section shall apply to electricity produced and sold after December 31, 2003, in taxable years ending after such date.

      (3) CREDIT RATE AND PERIOD FOR NEW FACILITIES- The amendments made by subsection (c) shall apply to electricity produced and sold after December 31, 2003, in taxable years ending after such date.

      (4) NONAPPLICATION OF AMENDMENTS TO PREEFFECTIVE DATE POULTRY WASTE FACILITIES- The amendments made by this section shall not apply with respect to any poultry waste facility (within the meaning of section 45(c)(3)(C), as in effect on the day before the date of the enactment of this Act) placed in service before January 1, 2004.

    (h) GAO Study- The Comptroller General of the United States shall conduct a study on the market viability of producing electricity from resources with respect to which credit is allowed under section 45 of the Internal Revenue Code of 1986 but without such credit. In the case of open-loop biomass and municipal solid waste resources, the study should take into account savings associated with not having to dispose of such resources. In conducting such study, the Comptroller shall estimate the dollar value of the environmental impact of producing electricity from such resources relative to producing electricity from fossil fuels using the latest generation of technology. Not later than June 30, 2006, the Comptroller shall report on such study to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate.

SEC. 1303. CREDIT FOR BUSINESS INSTALLATION OF QUALIFIED FUEL CELLS.

    (a) In General- Section 48(a)(3)(A) (defining energy property) is amended by striking ‘or’ at the end of clause (i), by adding ‘or’ at the end of clause (ii), and by inserting after clause (ii) the following new clause:

          ‘(iii) qualified fuel cell property,’.

    (b) Qualified Fuel Cell Property- Section 48 (relating to energy credit; reforestation credit) is amended by adding at the end the following new subsection:

    ‘(c) Qualified Fuel Cell Property- For purposes of subsection (a)(3)(A)(iii)--

      ‘(1) IN GENERAL- The term ‘qualified fuel cell property’ means a fuel cell power plant which generates at least 0.5 kilowatt of electricity using an electrochemical process.

      ‘(2) LIMITATION- The energy credit with respect to any qualified fuel cell property shall not exceed an amount equal to $500 for each 0.5 kilowatt of capacity of such property.

      ‘(3) FUEL CELL POWER PLANT- The term ‘fuel cell power plant’ means an integrated system, comprised of a fuel cell stack assembly and associated balance of plant components, which converts a fuel into electricity using electrochemical means.

      ‘(4) TERMINATION- The term ‘qualified fuel cell property’ shall not include any property placed in service after December 31, 2006.’.

    (c) Energy Percentage- Subparagraph (A) of section 48(a)(2) (relating to energy percentage) is amended to read as follows:

        ‘(A) IN GENERAL- The energy percentage is--

          ‘(i) in the case of qualified fuel cell property, 20 percent, and

          ‘(ii) in the case of any other energy property, 10 percent.’.

    (d) Conforming Amendment- Section 48(a)(1) is amended by inserting ‘except as provided in subsection (c)(2),’ before ‘the energy’.

    (e) Effective Date- The amendments made by this section shall apply to periods after December 31, 2003, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).

SEC. 1304. CREDIT FOR ENERGY EFFICIENCY IMPROVEMENTS TO EXISTING HOMES.

    (a) In General- Subpart A of part IV of subchapter A of chapter 1 (relating to nonrefundable personal credits), as amended by this Act, is amended by inserting after section 25C the following new section:

‘SEC. 25D. ENERGY EFFICIENCY IMPROVEMENTS TO EXISTING HOMES.

    ‘(a) Allowance of Credit- In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 20 percent of the amount paid or incurred by the taxpayer for qualified energy efficiency improvements installed during such taxable year.

    ‘(b) Limitations-

      ‘(1) MAXIMUM CREDIT- The credit allowed by this section with respect to a dwelling unit shall not exceed $2,000.

      ‘(2) PRIOR CREDIT AMOUNTS FOR TAXPAYER ON SAME DWELLING TAKEN INTO ACCOUNT- If a credit was allowed to the taxpayer under subsection (a) with respect to a dwelling unit in 1 or more prior taxable years, the amount of the credit otherwise allowable for the taxable year with respect to that dwelling unit shall be reduced by the sum of the credits allowed under subsection (a) to the taxpayer with respect to the dwelling unit for all prior taxable years.

    ‘(c) Qualified Energy Efficiency Improvements- For purposes of this section, the term ‘qualified energy efficiency improvements’ means any energy efficient building envelope component which meets the prescriptive criteria for such component established by the 2000 International Energy Conservation Code, as such Code (including supplements) is in effect on the date of the enactment of this section (or, in the case of a metal roof with appropriate pigmented coatings which meet the Energy Star program requirements), if--

      ‘(1) such component is installed in or on a dwelling unit--

        ‘(A) located in the United States,

        ‘(B) owned and used by the taxpayer as the taxpayer’s principal residence (within the meaning of section 121), and

        ‘(C) which has not been treated as a qualified new energy efficient home for purposes of any credit allowed under section 45G,

      ‘(2) the original use of such component commences with the taxpayer, and

      ‘(3) such component reasonably can be expected to remain in use for at least 5 years.

    If the aggregate cost of such components with respect to any dwelling unit exceeds $1,000, such components shall be treated as qualified energy efficiency improvements only if such components are also certified in accordance with subsection (d) as meeting such prescriptive criteria.

    ‘(d) Certification- The certification described in subsection (c) shall be--

      ‘(1) determined on the basis of the technical specifications or applicable ratings (including product labeling requirements) for the measurement of energy efficiency (based upon energy use or building envelope component performance) for the energy efficient building envelope component,

      ‘(2) provided by a local building regulatory authority, a utility, a manufactured home production inspection primary inspection agency (IPIA), or an accredited home energy rating system provider who is accredited by or otherwise authorized to use approved energy performance measurement methods by the Residential Energy Services Network (RESNET), and

      ‘(3) made in writing in a manner which specifies in readily verifiable fashion the energy efficient building envelope components installed and their respective energy efficiency levels.

    ‘(e) Definitions and Special Rules- For purposes of this section--

      ‘(1) BUILDING ENVELOPE COMPONENT- The term ‘building envelope component’ means--

        ‘(A) any insulation material or system which is specifically and primarily designed to reduce the heat loss or gain of a dwelling unit when installed in or on such dwelling unit,

        ‘(B) exterior windows (including skylights),

        ‘(C) exterior doors, and

        ‘(D) any metal roof installed on a dwelling unit, but only if such roof has appropriate pigmented coatings which are specifically and primarily designed to reduce the heat gain of such dwelling unit.

      ‘(2) MANUFACTURED HOMES INCLUDED- The term ‘dwelling unit’ includes a manufactured home which conforms to Federal Manufactured Home Construction and Safety Standards (section 3280 of title 24, Code of Federal Regulations).

      ‘(3) APPLICATION OF RULES- Rules similar to the rules under paragraphs (3), (4), and (5) of section 25C(d) shall apply.

    ‘(f) Basis Adjustment- For purposes of this subtitle, if a credit is allowed under this section for any expenditure with respect to any property, the increase in the basis of such property which would (but for this subsection) result from such expenditure shall be reduced by the amount of the credit so allowed.

    ‘(g) Application of Section- This section shall apply to qualified energy efficiency improvements installed after December 31, 2003, and before January 1, 2007.’.

    (b) Conforming Amendments-

      (1) Subsection (a) of section 1016, as amended by this Act, is amended by striking ‘and’ at the end of paragraph (28), by striking the period at the end of paragraph (29) and inserting ‘, and’, and by adding at the end the following new paragraph:

      ‘(30) to the extent provided in section 25D(f), in the case of amounts with respect to which a credit has been allowed under section 25D.’.

      (2) The table of sections for subpart A of part IV of subchapter A of chapter 1, as amended by this Act, is amended by inserting after the item relating to section 25C the following new item:

      ‘Sec. 25D. Energy efficiency improvements to existing homes.’.

    (c) Effective Date- The amendments made by this section shall apply to taxable years ending after December 31, 2003.

SEC. 1305. CREDIT FOR CONSTRUCTION OF NEW ENERGY EFFICIENT HOMES.

    (a) In General- Subpart D of part IV of subchapter A of chapter 1 (relating to business related credits) is amended by adding at the end the following new section:

‘SEC. 45G. NEW ENERGY EFFICIENT HOME CREDIT.

    ‘(a) In General- For purposes of section 38, in the case of an eligible contractor with respect to a qualified new energy efficient home, the credit determined under this section for the taxable year with respect to such home is an amount equal to the aggregate adjusted bases of all energy efficient property installed in such home during construction of such home.

    ‘(b) Limitations-

      ‘(1) MAXIMUM CREDIT-

        ‘(A) IN GENERAL- The credit allowed by this section with respect to a dwelling unit shall not exceed--

          ‘(i) in the case of a dwelling unit described in clause (i) or (iii) of subsection (c)(3)(D), $1,000, and

          ‘(ii) in the case of a dwelling unit described in subsection (c)(3)(D)(ii), $2,000.

        ‘(B) PRIOR CREDIT AMOUNTS ON SAME DWELLING UNIT TAKEN INTO ACCOUNT- If a credit was allowed under subsection (a) with respect to a dwelling unit in 1 or more prior taxable years, the amount of the credit otherwise allowable for the taxable year with respect to such dwelling unit shall be reduced by the sum of the credits allowed under subsection (a) with respect to the dwelling unit for all prior taxable years.

      ‘(2) COORDINATION WITH CERTAIN CREDITS- For purposes of this section--

        ‘(A) the basis of any property referred to in subsection (a) shall be reduced by that portion of the basis of any property which is attributable to qualified rehabilitation expenditures (as defined in section 47(c)(2)) or to the energy percentage of energy property (as determined under section 48(a)), and

        ‘(B) expenditures taken into account under section 47 or 48(a) shall not be taken into account under this section.

    ‘(c) Definitions- For purposes of this section--

      ‘(1) ELIGIBLE CONTRACTOR- The term ‘eligible contractor’ means--

        ‘(A) the person who constructed the qualified new energy efficient home, or

        ‘(B) in the case of a qualified new energy efficient home which is a manufactured home, the manufactured home producer of such home.

      If more than 1 person is described in subparagraph (A) or (B) with respect to any qualified new energy efficient home, such term means the person designated as such by the owner of such home.

      ‘(2) ENERGY EFFICIENT PROPERTY- The term ‘energy efficient property’ means any energy efficient building envelope component, and any energy efficient heating or cooling equipment or system, which can, individually or in combination with other components, result in a dwelling unit meeting the requirements of this section.

      ‘(3) QUALIFIED NEW ENERGY EFFICIENT HOME- The term ‘qualified new energy efficient home’ means a dwelling unit--

        ‘(A) located in the United States,

        ‘(B) the construction of which is substantially completed after December 31, 2003,

        ‘(C) the original use of which, after such construction, is reasonably expected to be as a residence by the person who acquires such dwelling unit from the eligible contractor,

        ‘(D) which is--

          ‘(i) certified to have a level of annual heating and cooling energy consumption which is at least 30 percent below the annual level of heating and cooling energy consumption of a comparable dwelling unit constructed in accordance with the standards of chapter 4 of the 2000 International Energy Conservation Code, as such Code (including supplements) is in effect on the date of the enactment of this section, and to have building envelope component improvements account for at least 1/3 of such 30 percent,

          ‘(ii) certified to have a level of annual heating and cooling energy consumption which is at least 50 percent below such annual level and to have building envelope component improvements account for at least 1/5 of such 50 percent, or

          ‘(iii) a manufactured home which--

            ‘(I) conforms to Federal Manufactured Home Construction and Safety Standards (section 3280 of title 24, Code of Federal Regulations), and

            ‘(II) meets the applicable standards required by the Administrator of the Environmental Protection Agency under the Energy Star Labeled Homes program.

      ‘(4) CONSTRUCTION- The term ‘construction’ includes substantial reconstruction and rehabilitation.

      ‘(5) ACQUIRE- The term ‘acquire’ includes purchase and, in the case of reconstruction and rehabilitation, such term includes a binding written contract for such reconstruction or rehabilitation.

      ‘(6) BUILDING ENVELOPE COMPONENT- The term ‘building envelope component’ means--

        ‘(A) any insulation material or system which is specifically and primarily designed to reduce the heat loss or gain of a dwelling unit when installed in or on such dwelling unit,

        ‘(B) exterior windows (including skylights),

        ‘(C) exterior doors, and

        ‘(D) any metal roof installed on a dwelling unit, but only if such roof has appropriate pigmented coatings which--

          ‘(i) are specifically and primarily designed to reduce the heat gain of such dwelling unit, and

          ‘(ii) meet the Energy Star program requirements.

    ‘(d) Certification-

      ‘(1) METHOD OF CERTIFICATION- A certification described in subsection (c)(3)(D) shall be determined in accordance with guidance prescribed by the Secretary. Such guidance shall specify procedures and methods for calculating energy and cost savings.

      ‘(2) FORM- A certification described in subsection (c)(3)(D) shall be made in writing--

        ‘(A) in a manner which specifies in readily verifiable fashion the energy efficient building envelope components and energy efficient heating or cooling equipment installed and their respective rated energy efficiency performance, and

        ‘(B) in the case of a qualified new energy efficient home which is a manufactured home, accompanied by such documentation as required by the Administrator of the Environmental Protection Agency under the Energy Star Labeled Homes program.

    ‘(e) Basis Adjustment- For purposes of this subtitle, if a credit is determined under this section for any expenditure with respect to any property, the increase in the basis of such property which would (but for this subsection) result from such expenditure shall be reduced by the amount of the credit so determined.

    ‘(f) Application of Section- Subsection (a) shall apply to qualified new energy efficient homes acquired during the period beginning on January 1, 2004, and ending on December 31, 2006.’.

    (b) Credit Made Part of General Business Credit- Section 38(b) (relating to current year business credit) is amended by striking ‘plus’ at the end of paragraph (14), by striking the period at the end of paragraph (15) and inserting ‘, plus’, and by adding at the end the following new paragraph:

      ‘(16) the new energy efficient home credit determined under section 45G(a).’.

    (c) Basis Adjustment- Subsection (a) of section 1016, as amended by this Act, is amended by striking ‘and’ at the end of paragraph (29), by striking the period at the end of paragraph (30) and inserting ‘, and’, and by adding at the end the following new paragraph:

      ‘(31) to the extent provided in section 45G(e), in the case of amounts with respect to which a credit has been allowed under section 45G.’.

    (d) Limitation on Carryback-

      (1) IN GENERAL- Subsection (d) of section 39 is amended to read as follows:

    ‘(d) Transitional Rule- No portion of the unused business credit for any taxable year which is attributable to a credit specified in section 38(b) or any portion thereof may be carried back to any taxable year before the first taxable year for which such specified credit or such portion is allowable (without regard to subsection (a)).’.

      (2) EFFECTIVE DATE- The amendment made by paragraph (1) shall apply with respect to taxable years ending after December 31, 2002.

    (e) Deduction for Certain Unused Business Credits- Section 196(c) (defining qualified business credits) is amended by striking ‘and’ at the end of paragraph (10), by striking the period at the end of paragraph (11) and inserting ‘, and’, and by adding after paragraph (11) the following new paragraph:

      ‘(12) the new energy efficient home credit determined under section 45G(a).’.

    (f) Clerical Amendment- The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item:

      ‘Sec. 45G. New energy efficient home credit.’.

    (g) Effective Date- The amendments made by this section shall apply to taxable years ending after December 31, 2003.

SEC. 1306. ENERGY CREDIT FOR COMBINED HEAT AND POWER SYSTEM PROPERTY.

    (a) In General- Section 48(a)(3)(A) (defining energy property), as amended by this Act, is amended by striking ‘or’ at the end of clause (ii), by adding ‘or’ at the end of clause (iii), and by inserting after clause (iii) the following new clause:

          ‘(iv) combined heat and power system property,’.

    (b) Combined Heat and Power System Property- Section 48 (relating to energy credit; reforestation credit), as amended by this Act, is amended by adding at the end the following new subsection:

    ‘(d) Combined Heat and Power System Property- For purposes of subsection (a)(3)(A)(iv)--

      ‘(1) COMBINED HEAT AND POWER SYSTEM PROPERTY- The term ‘combined heat and power system property’ means property comprising a system--

        ‘(A) which uses the same energy source for the simultaneous or sequential generation of electrical power, mechanical shaft power, or both, in combination with the generation of steam or other forms of useful thermal energy (including heating and cooling applications),

        ‘(B) which has an electrical capacity of not more than 15 megawatts or a mechanical energy capacity of not more than 2,000 horsepower or an equivalent combination of electrical and mechanical energy capacities,

        ‘(C) which produces--

          ‘(i) at least 20 percent of its total useful energy in the form of thermal energy which is not used to produce electrical or mechanical power (or combination thereof), and

          ‘(ii) at least 20 percent of its total useful energy in the form of electrical or mechanical power (or combination thereof),

        ‘(D) the energy efficiency percentage of which exceeds 60 percent, and

        ‘(E) which is placed in service before January 1, 2007.

      ‘(2) SPECIAL RULES-

        ‘(A) ENERGY EFFICIENCY PERCENTAGE- For purposes of this subsection, the energy efficiency percentage of a system is the fraction--

          ‘(i) the numerator of which is the total useful electrical, thermal, and mechanical power produced by the system at normal operating rates, and expected to be consumed in its normal application, and

          ‘(ii) the denominator of which is the lower heating value of the fuel sources for the system.

        ‘(B) DETERMINATIONS MADE ON BTU BASIS- The energy efficiency percentage and the percentages under paragraph (1)(C) shall be determined on a Btu basis.

        ‘(C) INPUT AND OUTPUT PROPERTY NOT INCLUDED- The term ‘combined heat and power system property’ does not include property used to transport the energy source to the facility or to distribute energy produced by the facility.

        ‘(D) PUBLIC UTILITY PROPERTY-

          ‘(i) ACCOUNTING RULE FOR PUBLIC UTILITY PROPERTY- If the combined heat and power system property is public utility property (as defined in section 168(i)(10)), the taxpayer may only claim the credit under subsection (a) if, with respect to such property, the taxpayer uses a normalization method of accounting.

          ‘(ii) CERTAIN EXCEPTION NOT TO APPLY- The matter in subsection (a)(3) which follows subparagraph (D) thereof shall not apply to combined heat and power system property.

      ‘(3) SYSTEMS USING BAGASSE- If a system is designed to use bagasse for at least 90 percent of the energy source--

        ‘(A) paragraph (1)(D) shall not apply, but

        ‘(B) the amount of credit determined under subsection (a) with respect to such system shall not exceed the amount which bears the same ratio to such amount of credit (determined without regard to this paragraph) as the energy efficiency percentage of such system bears to 60 percent.’.

    (c) Effective Date- The amendments made by this subsection shall apply to periods after December 31, 2003, in taxable years ending after such date, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).

SEC. 1307. CREDIT FOR ENERGY EFFICIENT APPLIANCES.

    (a) In General- Subpart D of part IV of subchapter A of chapter 1 (relating to business-related credits), as amended by this Act, is amended by adding at the end the following new section:

‘SEC. 45H. ENERGY EFFICIENT APPLIANCE CREDIT.

    ‘(a) Allowance of Credit- For purposes of section 38, the energy efficient appliance credit determined under this section for the taxable year is an amount equal to the sum of--

      ‘(1) the tier I appliance amount, and

      ‘(2) the tier II appliance amount,

    with respect to qualified energy efficient appliances produced by the taxpayer during the calendar year ending with or within the taxable year.

    ‘(b) Appliance Amounts- For purposes of subsection (a)--

      ‘(1) TIER I APPLIANCE AMOUNT- The tier I appliance amount is equal to--

        ‘(A) $100, multiplied by

        ‘(B) an amount (rounded to the nearest whole number) equal to the applicable percentage of the eligible production.

      ‘(2) TIER II APPLIANCE AMOUNT- The tier II appliance amount is equal to $150, multiplied by an amount equal to the eligible production reduced by the amount determined under paragraph (1)(B).

      ‘(3) APPLICABLE PERCENTAGE- The applicable percentage is the percentage determined by dividing the tier I appliances produced by the taxpayer during the calendar year by the sum of the tier I and tier II appliances so produced.

      ‘(4) ELIGIBLE PRODUCTION- The eligible production of qualified energy efficient appliances by the taxpayer for any calendar year is the excess of--

        ‘(A) the number of such appliances which are produced by the taxpayer during such calendar year, over

        ‘(B) 110 percent of the average annual number of such appliances which were produced by the taxpayer (or any predecessor) during the preceding 3-calendar year period.

    ‘(c) Qualified Energy Efficient Appliance- For purposes of this section--

      ‘(1) IN GENERAL- The term ‘qualified energy efficient appliance’ means any tier I appliance or tier II appliance which is produced in the United States.

      ‘(2) TIER I APPLIANCE- The term ‘tier I appliance’ means--

        ‘(A) a clothes washer which is produced with at least a 1.50 MEF, and

        ‘(B) a refrigerator which consumes at least 15 percent (20 percent in the case of a refrigerator produced after 2006) less kilowatt hours per year than the energy conservation standards for refrigerators promulgated by the Department of Energy and effective on July 1, 2001.

      ‘(3) TIER II APPLIANCE- The term ‘tier II appliance’ means a refrigerator produced before 2007 which consumes at least 20 percent less kilowatt hours per year than the energy conservation standards described in paragraph (2)(B).

      ‘(4) CLOTHES WASHER- The term ‘clothes washer’ means a residential clothes washer, including a residential style coin operated washer.

      ‘(5) REFRIGERATOR- The term ‘refrigerator’ means an automatic defrost refrigerator-freezer which has an internal volume of at least 16.5 cubic feet.

      ‘(6) MEF- The term ‘MEF’ means Modified Energy Factor (as determined by the Secretary of Energy).

      ‘(7) PRODUCED- The term ‘produced’ includes manufactured.

    ‘(d) Limitation on Maximum Credit-

      ‘(1) IN GENERAL- The amount of credit allowed under subsection (a) with respect to a taxpayer for any taxable year shall not exceed $60,000,000, reduced by the amount of the credit allowed under subsection (a) to the taxpayer (or any predecessor) for any prior taxable year.

      ‘(2) LIMITATION BASED ON GROSS RECEIPTS- The credit allowed under subsection (a) with respect to a taxpayer for the taxable year shall not exceed an amount equal to 2 percent of the average annual gross receipts of the taxpayer for the 3 taxable years preceding the taxable year for which the credit is determined.

      ‘(3) GROSS RECEIPTS- For purposes of this subsection, the rules of paragraphs (2) and (3) of section 448(c) shall apply.

    ‘(e) Special Rules- For purposes of this section--

      ‘(1) IN GENERAL- Rules similar to the rules of subsections (c), (d), and (e) of section 52 shall apply.

      ‘(2) CONTROLLED GROUPS-

        ‘(A) IN GENERAL- All persons treated as a single employer under subsection (a) or (b) of section 52 or subsection (m) or (o) of section 414 shall be treated as a single manufacturer.

        ‘(B) INCLUSION OF FOREIGN CORPORATIONS- For purposes of subparagraph (A), in applying subsections (a) and (b) of section 52 to this section, section 1563 shall be applied without regard to subsection (b)(2)(C) thereof.

    ‘(f) Verification- The taxpayer shall submit such information or certification as the Secretary, after consultation with the Secretary of Energy, determines necessary to claim the credit amount under subsection (a).

    ‘(g) Termination- This section shall not apply with respect to appliances produced after December 31, 2007.’.

    (b) Credit Made Part of General Business Credit- Section 38(b) (relating to current year business credit), as amended by this Act, is amended by striking ‘plus’ at the end of paragraph (15), by striking the period at the end of paragraph (16) and inserting ‘, plus’, and by adding at the end the following new paragraph:

      ‘(17) the energy efficient appliance credit determined under section 45H(a).’.

    (c) Clerical Amendment- The table of sections for subpart D of part IV of subchapter A of chapter 1, as amended by this Act, is amended by adding at the end the following new item:

      ‘Sec. 45H. Energy efficient appliance credit.’.

    (d) Effective Date- The amendments made by this section shall apply to appliances produced after December 31, 2003, in taxable years ending after such date.

SEC. 1308. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

    (a) In General- Part VI of subchapter B of chapter 1 (relating to itemized deductions for individuals and corporations) is amended by inserting after section 179A the following new section:

‘SEC. 179B. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

    ‘(a) In General- There shall be allowed as a deduction an amount equal to the cost of energy efficient commercial building property placed in service during the taxable year.

    ‘(b) Maximum Amount of Deduction- The deduction under subsection (a) with respect to any building for the taxable year and all prior taxable years shall not exceed an amount equal to the product of--

      ‘(1) $1.50, and

      ‘(2) the square footage of the building.

    ‘(c) Definitions- For purposes of this section--

      ‘(1) ENERGY EFFICIENT COMMERCIAL BUILDING PROPERTY- The term ‘energy efficient commercial building property’ means property--

        ‘(A) which is installed on or in a building--

          ‘(i) which is located in the United States, and

          ‘(ii) which is the type of structure to which the Standard 90.1-2001 is applicable,

        ‘(B) which is installed as part of--

          ‘(i) the lighting systems,

          ‘(ii) the heating, cooling, ventilation, and hot water systems, or

          ‘(iii) the building envelope, and

        ‘(C) which is certified in accordance with subsection (d)(4) as being installed as part of a plan designed to reduce the total annual energy and power costs with respect to the lighting systems, heating, cooling, ventilation, and hot water systems of the building by 50 percent or more in comparison to a reference building which meets the minimum requirements of Standard 90.1-2001 using methods of calculation under subsection (d)(2).

      ‘(2) STANDARD 90.1-2001- The term ‘Standard 90.1-2001’ means Standard 90.1-2001 of the American Society of Heating, Refrigerating, and Air Conditioning Engineers and the Illuminating Engineering Society of North America (as in effect on April 2, 2003).

    ‘(d) Special Rules-

      ‘(1) PARTIAL ALLOWANCE-

        ‘(A) IN GENERAL- Except as provided in subsection (f), in the case of a building placed in service on or before the date of the enactment of this section, if--

          ‘(i) the requirement of subsection (c)(1)(C) is not met, but

          ‘(ii) there is a certification in accordance with subsection (d)(4) that any system referred to in subsection (c)(1)(B) satisfies the energy-savings targets established by the Secretary under subparagraph (B) with respect to such system,

        then the requirement of subsection (c)(1)(C) shall be treated as met with respect to such system, and the deduction under subsection (a) shall be allowed with respect to energy efficient commercial building property installed as part of such system and as part of a plan to meet such targets, except that subsection (b) shall be applied to such property by substituting ‘$.50’ for ‘$1.50’.

        ‘(B) REGULATIONS- The Secretary, after consultation with the Secretary of Energy, shall establish a target for each system described in subsection (c)(1)(B) which, if such targets were met for all such systems, the building would meet the requirements of subsection (c)(1)(C).

      ‘(2) METHODS OF CALCULATION- The Secretary, after consultation with the Secretary of Energy, shall promulgate regulations which describe in detail methods for calculating and verifying energy and power cost for purposes of this section.

      ‘(3) NOTICE TO OWNER- Each certification required under this section shall include an explanation to the building owner regarding the energy efficiency features of the building and its projected annual energy costs.

      ‘(4) CERTIFICATION-

        ‘(A) IN GENERAL- The Secretary shall prescribe the manner and method for the making of certifications under this section.

        ‘(B) PROCEDURES- The Secretary shall include as part of the certification process procedures for inspection and testing by qualified individuals described in subparagraph (C) to ensure compliance of buildings with energy-savings plans and targets. Such procedures shall be--

          ‘(i) comparable, given the difference between commercial and residential buildings, to the requirements in the Mortgage Industry National Accreditation Procedures for Home Energy Rating Systems, and

          ‘(ii) fuel neutral such that the same energy efficiency measures allow a building to be eligible for the deduction under this section regardless of whether such building uses a gas or oil furnace or boiler, an electric heat pump, or other fuel source.

        ‘(C) QUALIFIED INDIVIDUALS- Individuals qualified to determine compliance shall be only those individuals who are recognized by an organization certified by the Secretary for such purposes.

    ‘(e) Basis Reduction- For purposes of this subtitle, if a deduction is allowed under this section with respect to any energy efficient commercial building property, the basis of such property shall be reduced by the amount of the deduction so allowed.

    ‘(f) Interim Rules for Lighting Systems- Until such time as the Secretary issues final regulations under subsection (d)(1)(B) with respect to property which is part of a lighting system--

      ‘(1) IN GENERAL- The lighting system target under subsection (d)(1)(A)(ii) shall be a reduction in lighting power density of 25 percent (50 percent in the case of a warehouse) of the minimum requirements in Table 9.3.1.1 or Table 9.3.1.2 (not including additional interior lighting power allowances) of Standard 90.1-2001.

      ‘(2) REDUCTION IN DEDUCTION IF REDUCTION LESS THAN 40 PERCENT-

        ‘(A) IN GENERAL- If, with respect to the lighting system of any building other than a warehouse, the reduction in lighting power density of the lighting system is not at least 40 percent, only the applicable percentage of the amount of deduction otherwise allowable under this section with respect to such property shall be allowed.

        ‘(B) APPLICABLE PERCENTAGE- For purposes of subparagraph (A), the applicable percentage is the number of percentage points (not greater than 100) equal to the sum of--

          ‘(i) 50, and

          ‘(ii) the amount which bears the same ratio to 50 as the excess of the reduction of lighting power density of the lighting system over 25 percentage points bears to 15.

        ‘(C) EXCEPTIONS- This subsection shall not apply to any system--

          ‘(i) the controls and circuiting of which do not comply fully with the mandatory and prescriptive requirements of Standard 90.1-2001 and which do not include provision for bilevel switching in all occupancies except hotel and motel guest rooms, store rooms, restrooms, and public lobbies, or

          ‘(ii) which does not meet the minimum requirements for calculated lighting levels as set forth in the Illuminating Engineering Society of North America Lighting Handbook, Performance and Application, Ninth Edition, 2000.

    ‘(g) Regulations- The Secretary shall promulgate such regulations as necessary--

      ‘(1) to take into account new technologies regarding energy efficiency and renewable energy for purposes of determining energy efficiency and savings under this section, and

      ‘(2) to provide for a recapture of the deduction allowed under this section if the plan described in subsection (c)(1)(C) or (d)(1)(A) is not fully implemented.

    ‘(h) Termination- This section shall not apply with respect to property placed in service after December 31, 2007.’.

    (b) Conforming Amendments-

      (1) Section 1016(a), as amended by this section, is amended by striking ‘and’ at the end of paragraph (30), by striking the period at the end of paragraph (31) and inserting ‘, and’, and by adding at the end the following new paragraph:

      ‘(32) to the extent provided in section 179B(e).’.

      (2) Section 1245(a) is amended by inserting ‘179B,’ after ‘179A,’ both places it appears in paragraphs (2)(C) and (3)(C).

      (3) Section 1250(b)(3) is amended by inserting before the period at the end of the first sentence ‘or by section 179B’.

      (4) Section 263(a)(1) is amended by striking ‘or’ at the end of subparagraph (G), by striking the period at the end of subparagraph (H) and inserting ‘, or’, and by inserting after subparagraph (H) the following new subparagraph:

        ‘(I) expenditures for which a deduction is allowed under section 179B.’.

      (5) Section 312(k)(3)(B) is amended by striking ‘or 179A’ each place it appears in the heading and text and inserting ‘, 179A, or 179B’.

    (c) Clerical Amendment- The table of sections for part VI of subchapter B of chapter 1 is amended by inserting after section 179A the following new item:

      ‘Sec. 179B. Energy efficient commercial buildings deduction.’.

    (d) Effective Date- The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act in taxable years ending after such date.

SEC. 1309. THREE-YEAR APPLICABLE RECOVERY PERIOD FOR DEPRECIATION OF QUALIFIED ENERGY MANAGEMENT DEVICES.

    (a) In General- Section 168(e)(3)(A) (defining 3-year property) is amended by striking ‘and’ at the end of clause (ii), by striking the period at the end of clause (iii) and inserting ‘, and’, and by adding at the end the following new clause:

          ‘(iv) any qualified energy management device.’.

    (b) Definition of Qualified Energy Management Device- Section 168(i) (relating to definitions and special rules) is amended by inserting at the end the following new paragraph:

      ‘(15) QUALIFIED ENERGY MANAGEMENT DEVICE-

        ‘(A) IN GENERAL- The term ‘qualified energy management device’ means any energy management device which is placed in service before January 1, 2008, by a taxpayer who is a supplier of electric energy or a provider of electric energy services.

        ‘(B) ENERGY MANAGEMENT DEVICE- For purposes of subparagraph (A), the term ‘energy management device’ means any meter or metering device which is used by the taxpayer--

          ‘(i) to measure and record electricity usage data on a time-differentiated basis in at least 4 separate time segments per day, and

          ‘(ii) to provide such data on at least a monthly basis to both consumers and the taxpayer.’.

    (c) Alternative System- The table contained in section 168(g)(3)(B) is amended by inserting after the item relating to subparagraph (A)(iii) the following:

--20’.

    (d) Effective Date- The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act, in taxable years ending after such date.

SEC. 1310. CREDIT FOR PRODUCTION FROM ADVANCED NUCLEAR POWER FACILITIES.

    (a) In General- Subpart D of part IV of subchapter A of chapter 1 (relating to business related credits), as amended by this Act, is amended by adding after section 45K the following new section:

‘SEC. 45L. CREDIT FOR PRODUCTION FROM ADVANCED NUCLEAR POWER FACILITIES.

    ‘(a) General Rule- For purposes of section 38, the advanced nuclear power facility production credit of any taxpayer for any taxable year is equal to the product of--

      ‘(1) 1.8 cents, multiplied by

      ‘(2) the kilowatt hours of electricity--

        ‘(A) produced by the taxpayer at an advanced nuclear power facility during the 8-year period beginning on the date the facility was originally placed in service, and

        ‘(B) sold by the taxpayer to an unrelated person during the taxable year.

    ‘(b) National Limitation-

      ‘(1) IN GENERAL- The amount of credit which would (but for this subsection and subsection (c)) be allowed with respect to any facility for any taxable year shall not exceed the amount which bears the same ratio to such amount of credit as--

        ‘(A) the national megawatt capacity limitation allocated to the facility, bears to

        ‘(B) the total megawatt nameplate capacity of such facility.

      ‘(2) AMOUNT OF NATIONAL LIMITATION- The national megawatt capacity limitation shall be 6,000 megawatts.

      ‘(3) ALLOCATION OF LIMITATION- The Secretary shall allocate the national megawatt capacity limitation in such manner as the Secretary may prescribe.

      ‘(4) REGULATIONS- Not later than 6 months after the date of the enactment of this section, the Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection. Such regulations shall provide a certification process under which the Secretary, after consultation with the Secretary of Energy, shall approve and allocate the national megawatt capacity limitation.

    ‘(c) Other Limitations-

      ‘(1) ANNUAL LIMITATION- The amount of the credit allowable under subsection (a) (after the application of subsection (b)) for any taxable year with respect to any facility shall not exceed an amount which bears the same ratio to $125,000,000 as--

        ‘(A) the national megawatt capacity limitation allocated under subsection (b) to the facility, bears to

        ‘(B) 1,000.

      ‘(2) OTHER LIMITATIONS- Rules similar to the rules of section 45(b) shall apply for purposes of this section, except that paragraph (2) thereof shall not apply to the 1.8 cents under subsection (a)(1).

    ‘(d) Advanced Nuclear Power Facility- For purposes of this section--

      ‘(1) IN GENERAL- The term ‘advanced nuclear power facility’ means any advanced nuclear facility--

        ‘(A) which is owned by the taxpayer and which uses nuclear energy to produce electricity, and

        ‘(B) which is placed in service after the date of the enactment of this paragraph and before January 1, 2021.

      ‘(2) ADVANCED NUCLEAR FACILITY- For purposes of paragraph (1), the term ‘advanced nuclear facility’ means any nuclear facility the reactor design for which is approved after the date of the enactment of this paragraph by the Nuclear Regulatory Commission (and such design or a substantially similar design of comparable capacity was not approved on or before such date).

    ‘(e) Other Rules to Apply- Rules similar to the rules of paragraphs (1), (2), (3), (4), and (5) of section 45(e) shall apply for purposes of this section.’.

    (b) Credit Treated as Business Credit- Section 38(b), as amended by this Act, is amended by striking ‘plus’ at the end of paragraph (20), by striking the period at the end of paragraph (21) and inserting ‘, plus’, and by adding at the end the following:

      ‘(22) the advanced nuclear power facility production credit determined under section 45L(a).’.

    (c) Clerical Amendment- The table of sections for subpart D of part IV of subchapter A of chapter 1, as amended by this Act, is amended by adding at the end the following:

      ‘Sec. 45L. Credit for production from advanced nuclear power facilities.’.

    (d) Effective Date- The amendments made by this section shall apply to production in taxable years beginning after December 31, 2003.

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.

    (a) Taxes on Trains-

      (1) IN GENERAL- Subparagraph (A) of section 4041(a)(1) is amended by striking ‘or a diesel-powered train’ each place it appears and by striking ‘or train’.

      (2) CONFORMING AMENDMENTS-

        (A) Subparagraph (C) of section 4041(a)(1) is amended by striking clause (ii) and by redesignating clause (iii) as clause (ii).

        (B) Subparagraph (C) of section 4041(b)(1) is amended by striking all that follows ‘section 6421(e)(2)’ and inserting a period.

        (C) Subsection (d) of section 4041 is amended by redesignating paragraph (3) as paragraph (4) and by inserting after paragraph (2) the following new paragraph:

      ‘(3) DIESEL FUEL USED IN TRAINS- There is hereby imposed a tax of 0.1 cent per gallon on any liquid other than gasoline (as defined in section 4083)--

        ‘(A) sold by any person to an owner, lessee, or other operator of a diesel-powered train for use as a fuel in such train, or

        ‘(B) used by any person as a fuel in a diesel-powered train unless there was a taxable sale of such fuel under subparagraph (A).

      No tax shall be imposed by this paragraph on the sale or use of any liquid if tax was imposed on such liquid under section 4081.’.

        (D) Subsection (f) of section 4082 is amended by striking ‘section 4041(a)(1)’ and inserting ‘subsections (d)(3) and (a)(1) of section 4041, respectively’.

        (E) Paragraph (3) of section 4083(a) is amended by striking ‘or a diesel-powered train’.

        (F) Paragraph (3) of section 6421(f) is amended to read as follows:

      ‘(3) GASOLINE USED IN TRAINS- In the case of gasoline used as a fuel in a train, this section shall not apply with respect to the Leaking Underground Storage Tank Trust Fund financing rate under section 4081.’.

        (G) Paragraph (3) of section 6427(l) is amended to read as follows:

      ‘(3) REFUND OF CERTAIN TAXES ON FUEL USED IN DIESEL-POWERED TRAINS- For purposes of this subsection, the term ‘nontaxable use’ includes fuel used in a diesel-powered train. The preceding sentence shall not apply to the tax imposed by section 4041(d) and the Leaking Underground Storage Tank Trust Fund financing rate under section 4081 except with respect to fuel sold for exclusive use by a State or any political subdivision thereof.’.

    (b) Fuel Used on Inland Waterways-

      (1) IN GENERAL- Paragraph (1) of section 4042(b) is amended by adding ‘and’ at the end of subparagraph (A), by striking ‘, and’ at the end of subparagraph (B) and inserting a period, and by striking subparagraph (C).

      (2) CONFORMING AMENDMENT- Paragraph (2) of section 4042(b) is amended by striking subparagraph (C).

    (c) Effective Date- The amendments made by this section shall take effect on January 1, 2004.

SEC. 1312. REDUCED MOTOR FUEL EXCISE TAX ON CERTAIN MIXTURES OF DIESEL FUEL.

    (a) In General- Paragraph (2) of section 4081(a) is amended by adding at the end the following:

        ‘(C) DIESEL-WATER FUEL EMULSION- In the case of diesel-water fuel emulsion at least 14 percent of which is water and with respect to which the emulsion additive is registered by a United States manufacturer with the Environmental Protection Agency pursuant to section 211 of the Clean Air Act (as in effect on March 31, 2003), subparagraph (A)(iii) shall be applied by substituting ‘19.7 cents’ for ‘24.3 cents’.’.

    (b) Special Rules for Diesel-Water Fuel Emulsions-

      (1) REFUNDS FOR TAX-PAID PURCHASES- Section 6427 is amended by redesignating subsections (m) through (p) as subsections (n) through (q), respectively, and by inserting after subsection (l) the following new subsection:

    ‘(m) Diesel Fuel Used to Produce Emulsion-

      ‘(1) IN GENERAL- Except as provided in subsection (k), if any diesel fuel on which tax was imposed by section 4081 at the regular tax rate is used by any person in producing an emulsion described in section 4081(a)(2)(C) which is sold or used in such person’s trade or business, the Secretary shall pay (without interest) to such person an amount equal to the excess of the regular tax rate over the incentive tax rate with respect to such fuel.

      ‘(2) DEFINITIONS- For purposes of paragraph (1)--

        ‘(A) REGULAR TAX RATE- The term ‘regular tax rate’ means the aggregate rate of tax imposed by section 4081 determined without regard to section 4081(a)(2)(C).

        ‘(B) INCENTIVE TAX RATE- The term ‘incentive tax rate’ means the aggregate rate of tax imposed by section 4081 determined with regard to section 4081(a)(2)(C).’.

      (2) LATER SEPARATION OF FUEL-

        (A) IN GENERAL- Section 4081 (relating to imposition of tax) is amended by redesignating subsections (d) and (e) as subsections (e) and (f), respectively, and by inserting after subsection (c) the following new subsection:

    ‘(d) Later Separation of Fuel From Diesel-Water Fuel Emulsion- If any person separates the taxable fuel from a diesel-water fuel emulsion on which tax was imposed under subsection (a) at a rate determined under subsection (a)(2)(C) (or with respect to which a credit or payment was allowed or made by reason of section 6427), such person shall be treated as the refiner of such taxable fuel. The amount of tax imposed on any removal of such fuel by such person shall be reduced by the amount of tax imposed (and not credited or refunded) on any prior removal or entry of such fuel.’.

        (B) CONFORMING AMENDMENT- Subsection (d) of section 6416 is amended by striking ‘section 4081(e)’ and inserting ‘section 4081(f)’.

    (c) Effective Date- The amendments made by this section shall take effect on January 1, 2004.

SEC. 1313. SMALL ETHANOL PRODUCER CREDIT.

    (a) Allocation of Alcohol Fuels Credit to Patrons of a Cooperative- Section 40(g) (relating to definitions and special rules for eligible small ethanol producer credit) is amended by adding at the end the following new paragraph:

      ‘(6) ALLOCATION OF SMALL ETHANOL PRODUCER CREDIT TO PATRONS OF COOPERATIVE-

        ‘(A) ELECTION TO ALLOCATE-

          ‘(i) IN GENERAL- In the case of a cooperative organization described in section 1381(a), any portion of the credit determined under subsection (a)(3) for the taxable year may, at the election of the organization, be apportioned pro rata among patrons of the organization on the basis of the quantity or value of business done with or for such patrons for the taxable year.

          ‘(ii) FORM AND EFFECT OF ELECTION- An election under clause (i) for any taxable year shall be made on a timely filed return for such year. Such election, once made, shall be irrevocable for such taxable year.

        ‘(B) TREATMENT OF ORGANIZATIONS AND PATRONS- The amount of the credit apportioned to patrons under subparagraph (A)--

          ‘(i) shall not be included in the amount determined under subsection (a) with respect to the organization for the taxable year, and

          ‘(ii) shall be included in the amount determined under subsection (a) for the taxable year of each patron for which the patronage dividends for the taxable year described in subparagraph (A) are included in gross income.

        ‘(C) SPECIAL RULE- If the amount of a credit which has been apportioned to any patron under this paragraph is decreased for any reason--

          ‘(i) such amount shall not increase the tax imposed on such patron, and

          ‘(ii) the tax imposed by this chapter on such organization shall be increased by such amount.

        The increase under clause (ii) shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit under this chapter or for purposes of section 55.’.

    (b) Definition of Small Ethanol Producer- Section 40(g) (relating to definitions and special rules for eligible small ethanol producer credit) is amended by striking ‘30,000,000’ each place it appears and inserting ‘60,000,000’.

    (c) Conforming Amendment- Section 1388 (relating to definitions and special rules for cooperative organizations) is amended by adding at the end the following new subsection:

    ‘(k) Cross Reference- For provisions relating to the apportionment of the alcohol fuels credit between cooperative organizations and their patrons, see section 40(g)(6).’.

    (d) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2003.

SEC. 1314. INCENTIVES FOR BIODIESEL.

    (a) In General- Subpart D of part IV of subchapter A of chapter 1 (relating to business related credits) is amended by inserting after section 40 the following new section:

‘SEC. 40A. BIODIESEL USED AS FUEL.

    ‘(a) General Rule- For purposes of section 38, the biodiesel fuels credit determined under this section for the taxable year is an amount equal to the sum of--

      ‘(1) the biodiesel mixture credit, plus

      ‘(2) the biodiesel credit.

    ‘(b) Definition of Biodiesel Mixture Credit and Biodiesel Credit- For purposes of this section--

      ‘(1) BIODIESEL MIXTURE CREDIT-

        ‘(A) IN GENERAL- The biodiesel mixture credit of any taxpayer for any taxable year is 50 cents for each gallon of biodiesel used by the taxpayer in the production of a qualified biodiesel mixture.

        ‘(B) QUALIFIED BIODIESEL MIXTURE- The term ‘qualified biodiesel mixture’ means a mixture of biodiesel and a taxable fuel (within the meaning of section 4083(a)(1)) which--

          ‘(i) is sold by the taxpayer producing such mixture to any person for use as a fuel, or

          ‘(ii) is used as a fuel by the taxpayer producing such mixture.

        ‘(C) SALE OR USE MUST BE IN TRADE OR BUSINESS, ETC- Biodiesel used in the production of a qualified biodiesel mixture shall be taken into account--

          ‘(i) only if the sale or use described in subparagraph (B) is in a trade or business of the taxpayer, and

          ‘(ii) for the taxable year in which such sale or use occurs.

        ‘(D) CASUAL OFF-FARM PRODUCTION NOT ELIGIBLE- No credit shall be allowed under this section with respect to any casual off-farm production of a qualified biodiesel mixture.

      ‘(2) BIODIESEL CREDIT-

        ‘(A) IN GENERAL- The biodiesel credit of any taxpayer for any taxable year is 50 cents for each gallon of biodiesel which is not in a mixture and which during the taxable year--

          ‘(i) is used by the taxpayer as a fuel in a trade or business, or

          ‘(ii) is sold by the taxpayer at retail to a person and placed in the fuel tank of such person’s vehicle.

        ‘(B) USER CREDIT NOT TO APPLY TO BIODIESEL SOLD AT RETAIL- No credit shall be allowed under subparagraph (A)(i) with respect to any biodiesel which was sold in a retail sale described in subparagraph (A)(ii).

      ‘(3) CREDIT FOR AGRI-BIODIESEL- In the case of any biodiesel which is agri-biodiesel, paragraphs (1)(A) and (2)(A) shall be applied by substituting ‘$1.00’ for ‘50 cents’.

      ‘(4) CERTIFICATION FOR BIODIESEL- No credit shall be allowed under this section unless the taxpayer obtains a certification (in such form and manner as prescribed by the Secretary) from the producer of the biodiesel which identifies the product produced and the percentage of biodiesel and agri-biodiesel in the product.

    ‘(c) Coordination With Credit Against Excise Tax- The amount of the credit determined under this section with respect to any biodiesel shall be properly reduced to take into account any benefit provided with respect to such biodiesel solely by reason of the application of section 6426.

    ‘(d) Definitions and Special Rules- For purposes of this section--

      ‘(1) BIODIESEL- The term ‘biodiesel’ means the monoalkyl esters of long chain fatty acids derived from plant or animal matter which meet--

        ‘(A) the registration requirements for fuels and fuel additives established by the Environmental Protection Agency under section 211 of the Clean Air Act (42 U.S.C. 7545), and

        ‘(B) the requirements of the American Society of Testing and Materials D6751.

      ‘(2) AGRI-BIODIESEL- The term ‘agri-biodiesel’ means biodiesel derived solely from virgin oils, including esters derived from virgin vegetable oils from corn, soybeans, sunflower seeds, cottonseeds, canola, crambe, rapeseeds, safflowers, flaxseeds, rice bran, and mustard seeds, and from animal fats.

      ‘(3) MIXTURE OR BIODIESEL NOT USED AS A FUEL, ETC-

        ‘(A) MIXTURES- If--

          ‘(i) any credit was determined under this section with respect to biodiesel used in the production of any qualified biodiesel mixture, and

          ‘(ii) any person--

            ‘(I) separates the biodiesel from the mixture, or

            ‘(II) without separation, uses the mixture other than as a fuel,

        then there is hereby imposed on such person a tax equal to the product of the rate applicable under subsection (b)(1)(A) and the number of gallons of such biodiesel in such mixture.

        ‘(B) BIODIESEL- If--

          ‘(i) any credit was determined under this section with respect to the retail sale of any biodiesel, and

          ‘(ii) any person mixes such biodiesel or uses such biodiesel other than as a fuel,

        then there is hereby imposed on such person a tax equal to the product of the rate applicable under subsection (b)(2)(A) and the number of gallons of such biodiesel.

        ‘(C) APPLICABLE LAWS- All provisions of law, including penalties, shall, insofar as applicable and not inconsistent with this section, apply in respect of any tax imposed under subparagraph (A) or (B) as if such tax were imposed by section 4081 and not by this chapter.

      ‘(4) PASS-THRU IN THE CASE OF ESTATES AND TRUSTS- Under regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply.

    ‘(e) Termination- This section shall not apply to any sale or use after December 31, 2005.’.

    (b) Credit Treated as Part of General Business Credit- Section 38(b) (relating to current year business credit) is amended by striking ‘plus’ at the end of paragraph (16), by striking the period at the end of paragraph (17) and inserting ‘, plus’, and by adding at the end the following new paragraph:

      ‘(18) the biodiesel fuels credit determined under section 40A(a).’.

    (c) Conforming Amendments-

      (1)(A) Section 87 is amended to read as follows:

‘SEC. 87. ALCOHOL AND BIODIESEL FUELS CREDITS.

    ‘Gross income includes--

      ‘(1) the amount of the alcohol fuels credit determined with respect to the taxpayer for the taxable year under section 40(a), and

      ‘(2) the biodiesel fuels credit determined with respect to the taxpayer for the taxable year under section 40A(a).’.

      (B) The item relating to section 87 in the table of sections for part II of subchapter B of chapter 1 is amended by striking ‘fuel credit’ and inserting ‘and biodiesel fuels credits’.

      (2) Section 196(c), as amended by this Act, is amended by striking ‘and’ at the end of paragraph (11), by striking the period at the end of paragraph (12) and inserting ‘, and’, and by adding at the end the following new paragraph:

      ‘(13) the biodiesel fuels credit determined under section 40A(a).’.

      (3) The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by adding after the item relating to section 40 the following new item:

      ‘Sec. 40A. Biodiesel used as fuel.’.

    (d) Effective Date- The amendments made by this section shall apply to fuel produced, and sold or used, after December 31, 2003, in taxable years ending after such date.

SEC. 1315. ALCOHOL FUEL AND BIODIESEL MIXTURES EXCISE TAX CREDIT.

    (a) In General- Subchapter B of chapter 65 (relating to rules of special application) is amended by inserting after section 6425 the following new section:

‘SEC. 6426. CREDIT FOR ALCOHOL FUEL AND BIODIESEL MIXTURES.

    ‘(a) Allowance of Credits- There shall be allowed as a credit against the tax imposed by section 4081 an amount equal to the sum of--

      ‘(1) the alcohol fuel mixture credit, plus

      ‘(2) the biodiesel mixture credit.

    ‘(b) Alcohol Fuel Mixture Credit-

      ‘(1) IN GENERAL- For purposes of this section, the alcohol fuel mixture credit is the product of the applicable amount and the number of gallons of alcohol used by the taxpayer in producing any alcohol fuel mixture for sale or use in a trade or business of the taxpayer.

      ‘(2) APPLICABLE AMOUNT- For purposes of this subsection--

        ‘(A) IN GENERAL- Except as provided in subparagraph (B), the applicable amount is 52 cents (51 cents in the case of any sale or use after 2004).

        ‘(B) MIXTURES NOT CONTAINING ETHANOL- In the case of an alcohol fuel mixture in which none of the alcohol consists of ethanol, the applicable amount is 60 cents.

      ‘(3) ALCOHOL FUEL MIXTURE- For purposes of this subsection, the term ‘alcohol fuel mixture’ means a mixture of alcohol and a taxable fuel which--

        ‘(A) is sold by the taxpayer producing such mixture to any person for use as a fuel,

        ‘(B) is used as a fuel by the taxpayer producing such mixture, or

        ‘(C) is removed from the refinery by a person producing such mixture.

      ‘(4) OTHER DEFINITIONS- For purposes of this subsection--

        ‘(A) ALCOHOL- The term ‘alcohol’ includes methanol and ethanol but does not include--

          ‘(i) alcohol produced from petroleum, natural gas, or coal (including peat), or

          ‘(ii) alcohol with a proof of less than 190 (determined without regard to any added denaturants).

        Such term also includes an alcohol gallon equivalent of ethyl tertiary butyl ether or other ethers produced from such alcohol.

        ‘(B) TAXABLE FUEL- The term ‘taxable fuel’ has the meaning given such term by section 4083(a)(1).

      ‘(5) TERMINATION- This subsection shall not apply to any sale, use, or removal for any period after December 31, 2010.

    ‘(c) Biodiesel Mixture Credit-

      ‘(1) IN GENERAL- For purposes of this section, the biodiesel mixture credit is the product of the applicable amount and the number of gallons of biodiesel used by the taxpayer in producing any biodiesel mixture for sale or use in a trade or business of the taxpayer.

      ‘(2) APPLICABLE AMOUNT- For purposes of this subsection--

        ‘(A) IN GENERAL- Except as provided in subparagraph (B), the applicable amount is 50 cents.

        ‘(B) AMOUNT FOR AGRI-BIODIESEL- In the case of any biodiesel which is agri-biodiesel, the applicable amount is $1.00.

      ‘(3) BIODIESEL MIXTURE- For purposes of this section, the term ‘biodiesel mixture’ means a mixture of biodiesel and a taxable fuel which--

        ‘(A) is sold by the taxpayer producing such mixture to any person for use as a fuel,

        ‘(B) is used as a fuel by the taxpayer producing such mixture, or

        ‘(C) is removed from the refinery by a person producing such mixture.

      ‘(4) CERTIFICATION FOR BIODIESEL- No credit shall be allowed under this section unless the taxpayer obtains a certification (in such form and manner as prescribed by the Secretary) from the producer of the biodiesel which identifies the product produced and the percentage of biodiesel and agri-biodiesel in the product.

      ‘(5) OTHER DEFINITIONS- Any term used in this subsection which is also used in section 40A shall have the meaning given such term by section 40A.

      ‘(6) TERMINATION- This subsection shall not apply to any sale, use, or removal for any period after December 31, 2005.

    ‘(d) Mixture not Used as a Fuel, Etc-

      ‘(1) IMPOSITION OF TAX- If--

        ‘(A) any credit was determined under this section with respect to alcohol or biodiesel used in the production of any alcohol fuel mixture or biodiesel mixture, respectively, and

        ‘(B) any person--

          ‘(i) separates the alcohol or biodiesel from the mixture, or

          ‘(ii) without separation, uses the mixture other than as a fuel,

        then there is hereby imposed on such person a tax equal to the product of the applicable amount and the number of gallons of such alcohol or biodiesel.

      ‘(2) APPLICABLE LAWS- All provisions of law, including penalties, shall, insofar as applicable and not inconsistent with this section, apply in respect of any tax imposed under paragraph (1) as if such tax were imposed by section 4081 and not by this section.

    ‘(e) Coordination With Exemption From Excise Tax- Rules similar to the rules under section 40(c) shall apply for purposes of this section.’.

    (b) Registration Requirement- Section 4101(a) (relating to registration) is amended by inserting ‘and every person producing biodiesel (as defined in section 40A(d)(1)) or alcohol (as defined in section 6426(b)(4)(A))’ after ‘4091’.

    (c) Additional Amendments-

      (1) Section 40(c) is amended by striking ‘or section 4091(c)’ and inserting ‘section 4091(c), or section 6426’.

      (2) Section 40(e)(1) is amended--

        (A) by striking ‘2007’ in subparagraph (A) and inserting ‘2010’, and

        (B) by striking ‘2008’ in subparagraph (B) and inserting ‘2011’.

      (3) Section 40(h) is amended--

        (A) by striking ‘2007’ in paragraph (1) and inserting ‘2010’, and

        (B) by striking ‘, 2006, or 2007’ in the table contained in paragraph (2) and inserting ‘through 2010’.

      (4)(A) Subpart C of part III of subchapter A of chapter 32 is amended by adding at the end the following new section:

‘SEC. 4104. INFORMATION REPORTING FOR PERSONS CLAIMING CERTAIN TAX BENEFITS.

    ‘(a) In General- The Secretary shall require any person claiming tax benefits under the provisions of section 34, 40, 40A, 4041(b)(2), 4041(k), 4081(c), 6426, or 6427(f) to file a quarterly return (in such manner as the Secretary may prescribe) providing such information relating to such benefits and the coordination of such benefits as the Secretary may require to ensure the proper administration and use of such benefits.

    ‘(b) Enforcement- With respect to any person described in subsection (a) and subject to registration requirements under this title, rules similar to rules of section 4222(c) shall apply with respect to any requirement under this section.’.

      (B) The table of sections for subpart C of part III of subchapter A of chapter 32 is amended by adding at the end the following new item:

      ‘Sec. 4104. Information reporting for persons claiming certain tax benefits.’.

      (5) Section 6427(i)(3) is amended--

        (A) by adding at the end of subparagraph (A) the following new flush sentence:

        ‘In the case of an electronic claim, this subparagraph shall be applied without regard to clause (i).’, and

        (B) by striking ‘20 days of the date of the filing of such claim’ in subparagraph (B) and inserting ‘45 days of the date of the filing of such claim (20 days in the case of an electronic claim)’.

      (6) Section 9503(b)(1) is amended by adding at the end the following new flush sentence:

      ‘For purposes of this paragraph, taxes received under sections 4041 and 4081 shall be determined without reduction for credits under section 6426.’.

    (d) Clerical Amendment- The table of sections for subchapter B of chapter 65 is amended by inserting after the item relating to section 6425 the following new item:

      ‘Sec. 6426. Credit for alcohol fuel and biodiesel mixtures.’.

    (e) Effective Dates-

      (1) IN GENERAL- Except as provided in paragraphs (2) and (3), the amendments made by this section shall apply to fuel sold, used, or removed after December 31, 2003.

      (2) SUBSECTION (c)(4)- The amendments made by subsection (c)(4) shall take effect on January 1, 2004.

      (3) SUBSECTION (c)(5)- The amendments made by subsection (c)(5) shall apply to claims filed after December 31, 2004.

    (f) Format for Filing- The Secretary of the Treasury shall prescribe the electronic format for filing claims described in section 6427(i)(3)(B) of the Internal Revenue Code of 1986 (as amended by subsection (c)(5)(A)) not later than December 31, 2004.

SEC. 1316. NONAPPLICATION OF EXPORT EXEMPTION TO DELIVERY OF FUEL TO MOTOR VEHICLES REMOVED FROM UNITED STATES.

    (a) In General- Section 4221(d)(2) (defining export) is amended by adding at the end the following new sentence: ‘Such term does not include the delivery of a taxable fuel (as defined in section 4083(a)(1)) into a fuel tank of a motor vehicle which is shipped or driven out of the United States.’.

    (b) Conforming Amendments-

      (1) Section 4041(g) (relating to other exemptions) is amended by adding at the end the following new sentence: ‘Paragraph (3) shall not apply to the sale for delivery of a liquid into a fuel tank of a motor vehicle which is shipped or driven out of the United States.’.

      (2) Clause (iv) of section 4081(a)(1)(A) (relating to tax on removal, entry, or sale) is amended by inserting ‘or at a duty-free sales enterprise (as defined in section 555(b)(8) of the Tariff Act of 1930)’ after ‘section 4101’.

    (c) Effective Date- The amendments made by this section shall apply to sales or deliveries made after the date of the enactment of this Act.

SEC. 1317. REPEAL OF PHASEOUTS FOR QUALIFIED ELECTRIC VEHICLE CREDIT AND DEDUCTION FOR CLEAN FUEL-VEHICLES.

    (a) Credit for Qualified Electric Vehicles- Subsection (b) of section 30 (relating to limitations) is amended by striking paragraph (2) and redesignating paragraph (3) as paragraph (2).

    (b) Deduction for Clean-Fuel Vehicles and Certain Refueling Property- Paragraph (1) of section 179A(b) (relating to qualified clean-fuel vehicle property) is amended to read as follows:

      ‘(1) QUALIFIED CLEAN-FUEL VEHICLE PROPERTY- The cost which may be taken into account under subsection (a)(1)(A) with respect to any motor vehicle shall not exceed--

        ‘(A) in the case of a motor vehicle not described in subparagraph (B) or (C), $2,000,

        ‘(B) in the case of any truck or van with a gross vehicle weight rating greater than 10,000 pounds but not greater than 26,000 pounds, $5,000, or

        ‘(C) $50,000 in the case of--

          ‘(i) a truck or van with a gross vehicle weight rating greater than 26,000 pounds, or

          ‘(ii) any bus which has a seating capacity of at least 20 adults (not including the driver).’.

    (c) Effective Date- The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act.

SEC. 1318. ALTERNATIVE MOTOR VEHICLE CREDIT.

    (a) In General- Subpart B of part IV of subchapter A of chapter 1 (relating to foreign tax credit, etc.) is amended by adding at the end the following:

‘SEC. 30B. ALTERNATIVE MOTOR VEHICLE CREDIT.

    ‘(a) Allowance of Credit- There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of--

      ‘(1) the new qualified fuel cell motor vehicle credit determined under subsection (b),

      ‘(2) the new advanced lean burn technology motor vehicle credit determined under subsection (c),

      ‘(3) the new qualified hybrid motor vehicle credit determined under subsection (d), and

      ‘(4) the new qualified alternative fuel motor vehicle credit determined under subsection (e).

    ‘(b) New Qualified Fuel Cell Motor Vehicle Credit-

      ‘(1) IN GENERAL- For purposes of subsection (a), the new qualified fuel cell motor vehicle credit determined under this subsection with respect to a new qualified fuel cell motor vehicle placed in service by the taxpayer during the taxable year shall be determined in accordance with the following table:

‘In the case of a vehicle which has a gross vehicle weight rating of--

The new qualified fuel cell motor vehicle credit is--

Not more than 8,500 lbs

--$4,000

More than 8,500 lbs but not more than 14,000 lbs

--$10,000

More than 14,000 lbs but not more than 26,000 lbs

--$20,000

More than 26,000 lbs

--$40,000.

      ‘(2) INCREASE FOR FUEL EFFICIENCY-

        ‘(A) IN GENERAL- The amount determined under paragraph (1) with respect to a new qualified fuel cell motor vehicle which is a passenger automobile or light truck shall be increased by the additional credit amount.

        ‘(B) ADDITIONAL CREDIT AMOUNT- For purposes of subparagraph (A), the additional credit amount shall be determined in accordance with the following table: