Energy Policy Act of 2003

        [Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1644 Reported in House (RH)]

Union Calendar No. 42
108th CONGRESS
1st Session
H. R. 1644

[Report No. 108-65, Part I]

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.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

April 7, 2003

Mr. Barton of Texas introduced the following bill; which was referred
to the Committee on Energy and Commerce, and in addition to the
Committees on Science, Resources, Education and the Workforce, and
Transportation and Infrastructure, for a period to be subsequently
determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned

April 8, 2003

Reported from the Committee on Energy and Commerce with an amendment
[Strike out all after the enacting clause and insert the part printed
in italic]

April 8, 2003

Referred to the Committee on the Judiciary for a period ending not
later than April 9, 2003, for consideration of such provisions of the
bill and amendment as fall within the jurisdiction of that committee
pursuant to clause 1(k), rule X

April 8, 2003

Referral to the Committees on Science, Resources, Education and the
Workforce, and Transportation and Infrastructure extended for a period
ending not later than April 9, 2003

April 9, 2003

Referred to the Committee on Government Reform for a period ending not
later than April 9, 2003, for consideration of such provisions of the
bill and amendment as fall within the jurisdiction of that committee
pursuant to clause 1(h), rule X

April 9, 2003

The Committees on Science, Resources, Education and the Workforce,
Transportation and Infrastructure, the Judiciary, and Government Reform
discharged; referred to the Committee of the Whole House on the State
of the Union and ordered to be printed
[For text of introduced bill, see copy of bill as introduced on April
7, 2003]

_______________________________________________________________________

A BILL

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 2003''.
(b) Table of Contents.--The table of contents for this Act is as
follows:

Sec. 1. Short title; table of contents.

TITLE I--ENERGY CONSERVATION

Subtitle A--Federal Leadership in Energy Conservation

Sec. 1001. Energy and water saving measures in congressional buildings.
Sec. 1002. Energy management requirements.
Sec. 1003. Energy use measurement and accountability.
Sec. 1004. Federal building performance standards.
Sec. 1005. Procurement of energy efficient products.
Sec. 1006. Energy savings performance contracts.
Sec. 1007. Voluntary commitments to reduce industrial energy intensity.
Sec. 1008. Federal agency participation in demand reduction programs.
Sec. 1009. Advanced Building Efficiency Testbed.
Sec. 1010. Increased use of recovered mineral component in federally
funded projects involving procurement of
cement or concrete.

Subtitle B--Energy Assistance and State Programs

Sec. 1021. LIHEAP and weatherization assistance.
Sec. 1022. State energy programs.
Sec. 1023. Energy efficient appliance rebate programs.
Sec. 1024. Energy efficient public buildings.
Sec. 1025. Low income community energy efficiency pilot program.

Subtitle C--Energy Efficient Products

Sec. 1041. Energy Star program.
Sec. 1042. Consumer education on energy efficiency benefits of air
conditioning, heating, and ventilation
maintenance.
Sec. 1043. Additional definitions.
Sec. 1044. Additional test procedures.
Sec. 1045. Energy conservation standards for additional consumer and
commercial products.
Sec. 1046. Energy labeling.
Sec. 1047. Study of energy efficiency standards.

TITLE II--OIL AND GAS

Subtitle A--Alaska Natural Gas Pipeline

Sec. 2001. Short title.
Sec. 2002. Findings and purposes.
Sec. 2003. Definitions.
Sec. 2004. Issuance of certificate of public convenience and necessity.
Sec. 2005. Environmental reviews.
Sec. 2006. Pipeline expansion.
Sec. 2007. Federal Coordinator.
Sec. 2008. Judicial review.
Sec. 2009. State jurisdiction over in-State delivery of natural gas.
Sec. 2010. Study of alternative means of construction.
Sec. 2011. Clarification of ANGTA status and authorities.
Sec. 2012. Sense of Congress.
Sec. 2013. Participation of small business concerns.
Sec. 2014. Alaska pipeline construction training program.

Subtitle B--Strategic Petroleum Reserve

Sec. 2101. Full capacity of Strategic Petroleum Reserve.
Sec. 2102. Strategic Petroleum Reserve expansion.
Sec. 2103. Permanent authority to operate the Strategic Petroleum
Reserve and other energy programs.

Subtitle C--Hydraulic Fracturing

Sec. 2201. Hydraulic fracturing.

Subtitle D--Unproven Oil and Natural Gas Reserves Recovery Program

Sec. 2301. Program.
Sec. 2302. Eligible reservoirs.
Sec. 2303. Focus areas.
Sec. 2304. Limitation on location of activities.
Sec. 2305. Program administration.
Sec. 2306. Advisory Committee.
Sec. 2307. Limits on participation.
Sec. 2308. Payments to Federal Government.
Sec. 2309. Authorization of appropriations.
Sec. 2310. Public availability of project results and methodologies.
Sec. 2311. Sunset.
Sec. 2312. Definitions.

Subtitle E--Miscellaneous

Sec. 2401. Appeals relating to pipeline construction projects.
Sec. 2402. Natural gas market data transparency.
Sec. 2403. Oil and gas exploration and production defined.

TITLE III--HYDROELECTRIC RELICENSING

Subtitle A--Alternative Conditions

Sec. 3001. Alternative conditions and fishways.

Subtitle B--Additional Hydropower

Sec. 3201. Hydroelectric production incentives.
Sec. 3202. Hydroelectric efficiency improvement.
Sec. 3203. Small hydroelectric power projects.
Sec. 3204. Increased hydroelectric generation at existing Federal
facilities.

TITLE IV--NUCLEAR MATTERS

Subtitle A--Price-Anderson Act Amendments

Sec. 4001. Short title.
Sec. 4002. Extension of indemnification authority.
Sec. 4003. Maximum assessment.
Sec. 4004. Department of Energy liability limit.
Sec. 4005. Incidents outside the United States.
Sec. 4006. Reports.
Sec. 4007. Inflation adjustment.
Sec. 4008. Price-Anderson treatment of modular reactors.
Sec. 4009. Applicability.
Sec. 4010. Prohibition on assumption by United States Government of
liability for certain foreign accidents.
Sec. 4011. Secure transfer of nuclear materials.
Sec. 4012. Nuclear facility threats.
Sec. 4013. Unreasonable risk consultation.
Sec. 4014. Financial accountability.
Sec. 4015. Civil penalties.

Subtitle B--Miscellaneous Matters

Sec. 4021. Licenses.
Sec. 4022. Nuclear Regulatory Commission meetings.
Sec. 4023. NRC training program.
Sec. 4024. Cost recovery from Government agencies.
Sec. 4025. Elimination of pension offset.
Sec. 4026. Carrying of firearms by licensee employees.
Sec. 4027. Unauthorized introduction of dangerous weapons.
Sec. 4028. Sabotage of nuclear facilities or fuel.
Sec. 4029. Cooperative research and development and special
demonstration projects for the uranium
mining industry.
Sec. 4030. Uranium sales.
Sec. 4031. Medical isotope production.
Sec. 4032. Highly enriched uranium diversion threat report.
Sec. 4033. Whistleblower protection.

TITLE V--VEHICLES AND FUELS

Subtitle A--Energy Policy Act Amendments

Sec. 5011. Credit for substantial contribution toward noncovered
fleets.
Sec. 5012. Credit for alternative fuel infrastructure.
Sec. 5013. Alternative fueled vehicle report.
Sec. 5014. Allocation of incremental costs.

Subtitle B--FreedomCAR and Hydrogen Fuel Program

Sec. 5021. Short title.
Sec. 5022. Findings, purpose, and definitions.
Sec. 5023. Plan; report.
Sec. 5024. Public-private partnership.
Sec. 5025. Deployment.
Sec. 5026. Assessment and transfer.
Sec. 5027. Interagency task force.
Sec. 5028. Advisory Committee.
Sec. 5029. Authorization of appropriations.
Sec. 5030. Fuel cell program at National Parks.
Sec. 5030A. Advanced power system technology incentive program.

Subtitle C--Clean School Buses

Sec. 5031. Establishment of pilot program.
Sec. 5032. Fuel cell bus development and demonstration program.
Sec. 5033. Authorization of appropriations.

Subtitle D--Advanced Vehicles

Sec. 5041. Definitions.
Sec. 5042. Pilot program.
Sec. 5043. Reports to Congress.
Sec. 5044. Authorization of appropriations.

Subtitle E--Hydrogen Fuel Cell Heavy-Duty Vehicles

Sec. 5051. Definition.
Sec. 5052. Findings.
Sec. 5053. Hydrogen fuel cell buses.
Sec. 5054. Authorization of appropriations.

Subtitle F--Miscellaneous

Sec. 5061. Railroad efficiency.
Sec. 5062. Mobile emission reductions trading and crediting.
Sec. 5063. Idle reduction technologies.
Sec. 5064. Study of aviation fuel conservation and emissions.
Sec. 5065. Diesel fueled vehicles.
Sec. 5066. Hybrid vehicles.
Sec. 5067. Waivers of alternative fueled vehicle fueling requirement.

TITLE VI--DOE PROGRAMS

Sec. 6001. Purposes.
Sec. 6002. Definitions.

Subtitle A--Energy Efficiency

Part 1--Authorization of Appropriations

Sec. 6011. Energy efficiency.

Part 2--Lighting Systems

Sec. 6021. Next Generation Lighting Initiative.

Part 3--Vehicles

Sec. 6031. Definitions.
Sec. 6032. Establishment of secondary electric vehicle battery use
program.

Subtitle B--Distributed Energy and Electric Energy Systems

Part 1--Authorization of Appropriations

Sec. 6201. Distributed energy and electric energy systems.

Part 2--Distributed Power

Sec. 6221. Strategy.
Sec. 6222. High power density industry program.
Sec. 6223. Micro-cogeneration energy technology.

Part 3--Transmission Systems

Sec. 6231. Transmission infrastructure systems.

Subtitle C--Renewable Energy

Part 1--Authorization of Appropriations

Sec. 6301. Renewable energy.

Part 2--Bioenergy

Sec. 6321. Bioenergy programs.

Subtitle D--Nuclear Energy

Part 1--Authorization of Appropriations

Sec. 6411. Nuclear energy.

Part 2--Nuclear Energy Research Programs

Sec. 6421. Nuclear energy research programs.

Part 3--Advanced Fuel Recycling

Sec. 6431. Advanced fuel recycling program.

Part 4--University Programs

Sec. 6441. University nuclear science and engineering support.

Subtitle E--Fossil Energy

Part 1--Authorization of Appropriations

Sec. 6501. Fossil energy.

Part 2--Ultra-deepwater and Unconventional Natural Gas and Other
Petroleum Resources

Sec. 6521. Program authority.
Sec. 6522. Ultra-deepwater program.
Sec. 6523. Unconventional natural gas and other petroleum resources
program.
Sec. 6524. Additional requirements for awards.
Sec. 6525. Advisory committees.
Sec. 6526. Limits on participation.
Sec. 6527. Fund.
Sec. 6528. Sunset.
Sec. 6529. Definitions.

Subtitle F--Miscellaneous

Sec. 6601. Waste reduction and use of alternatives.
Sec. 6602. Coal gasification.
Sec. 6603. Petroleum coke gasification.
Sec. 6604. Other biopower and bioenergy.
Sec. 6605. Technology transfer.
Sec. 6606. Limitation on legal fee reimbursement.
Sec. 6607. Complex well technology testing facility.
Sec. 6608. Total integrated thermal systems.
Sec. 6609. Oil bypass filtration technology.

TITLE VII--ELECTRICITY

Subtitle A--Transmission Capacity

Sec. 7011. Transmission infrastructure improvement rulemaking.
Sec. 7012. Siting of interstate electrical transmission facilities.

Subtitle B--Transmission Operation

Sec. 7021. Open access transmission by certain utilities.
Sec. 7022. Regional transmission organizations.
Sec. 7023. Native load.

Subtitle C--Reliability

Sec. 7031. Electric reliability standards.

Subtitle D--PUHCA Amendments

Sec. 7041. Short title.
Sec. 7042. Definitions.
Sec. 7043. Repeal of the Public Utility Holding Company Act of 1935.
Sec. 7044. Federal access to books and records.
Sec. 7045. State access to books and records.
Sec. 7046. Exemption authority.
Sec. 7047. Affiliate transactions.
Sec. 7048. Applicability.
Sec. 7049. Effect on other regulations.
Sec. 7050. Enforcement.
Sec. 7051. Savings provisions.
Sec. 7052. Implementation.
Sec. 7053. Transfer of resources.
Sec. 7054. Effective date.
Sec. 7055. Authorization of appropriations.
Sec. 7056. Conforming amendments to the Federal Power Act.

Subtitle E--PURPA Amendments

Sec. 7061. Real-time pricing and time-of-use metering standards.
Sec. 7062. Cogeneration and small power production purchase and sale
requirements.
Sec. 7063. Smart metering.

Subtitle F--Renewable Energy

Sec. 7071. Net metering.
Sec. 7072. Renewable energy production incentive.
Sec. 7073. Renewable energy on Federal lands.
Sec. 7074. Assessment of renewable energy resources.

Subtitle G--Market Transparency, Round Trip Trading Prohibition, and
Enforcement

Sec. 7081. Market transparency rules.
Sec. 7082. Prohibition on round trip trading.
Sec. 7083. Conforming changes.
Sec. 7084. Enforcement.

Subtitle H--Consumer Protections

Sec. 7091. Refund effective date.
Sec. 7092. Jurisdiction over interstate sales.
Sec. 7093. Consumer privacy.
Sec. 7094. Unfair trade practices.

Subtitle I--Merger Review Reform and Accountability

Sec. 7101. Merger review reform and accountability.

Subtitle J--Study of Economic Dispatch

Sec. 7111. Study on the benefits of economic dispatch.

TITLE VIII--COAL

Sec. 8001. Authorization of appropriations.
Sec. 8002. Project criteria.
Sec. 8003. Report.
Sec. 8004. Clean coal centers of excellence.

TITLE IX--MOTOR FUELS

Subtitle A--General Provisions

Sec. 9101. Renewable content of motor vehicle fuel.
Sec. 9102. Fuels safe harbor.
Sec. 9103. Findings and MTBE transition assistance.
Sec. 9104. Elimination of oxygen content requirement for reformulated
gasoline.
Sec. 9105. Analyses of motor vehicle fuel changes.
Sec. 9106. Data collection.
Sec. 9107. Fuel system requirements harmonization study.

Subtitle B--MTBE Cleanup

Sec. 9201. Funding for MTBE contamination.

TITLE X--AUTOMOBILE EFFICIENCY

Sec. 10001. Authorization of appropriations for implementation and
enforcement of fuel economy standards.
Sec. 10002. Study of feasibility and effects of reducing use of fuel
for automobiles.

TITLE XI--PREVENTING THE MISUSE OF NUCLEAR MATERIALS AND TECHNOLOGY

Sec. 11001. Preventing the misuse of nuclear materials and technology.

TITLE XII--ADDITIONAL PROVISIONS

Sec. 12001. Transmission technologies.

TITLE I--ENERGY CONSERVATION

Subtitle A--Federal Leadership in Energy Conservation

SEC. 1001. ENERGY AND WATER SAVING MEASURES IN CONGRESSIONAL BUILDINGS.

(a) In General.--Part 3 of title V of the National Energy
Conservation Policy Act is amended by adding at the end:

``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 the
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 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 (40 U.S.C. 166i), 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.--There are authorized to be appropriated to the
Architect of the Capitol to carry out subsection (d), not more than
$2,000,000 for fiscal years after the enactment of this Act.

SEC. 1002. 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, as amended by
paragraph (1) of 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''; and
(2) by striking ``a finding of impracticability'' and
inserting ``the exclusion''.
(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 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 Savings.--An agency may retain any funds
appropriated to that agency for energy expenditures, at buildings
subject to the requirements of section 543(a) and (b), that are not
made because of energy savings. Except as otherwise provided by law,
such funds may be used only for energy efficiency 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. 1003. 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, 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 one 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.--No 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. 1004. 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 2000 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, if 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 most recent ASHRAE Standard 90.1 or the
most recent version of 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.
``(B) Additional revisions.--Not later than 1 year after
the date of approval of amendments to ASHRAE Standard 90.1 or
the 2000 International Energy Conservation Code, 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. 1005. PROCUREMENT OF ENERGY EFFICIENT PRODUCTS.

(a) Requirements.--Part 3 of title V of the National Energy
Conservation Policy Act 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) Designation of Electric Motors.--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 within 120 days after the
date of the enactment of this section, after considering the
recommendations of associated electric motor manufacturers and energy
efficiency groups.
``(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 in section 101(b)
of the National Energy Conservation Policy Act (42 U.S.C. 8201 note),
as amended by section 1001(b) of this Act, is further amended by
inserting after the item relating to section 552 the following:

``Sec. 553. Federal procurement of energy efficient products.''.

SEC. 1006. ENERGY SAVINGS PERFORMANCE CONTRACTS.

(a) Permanent Extension.--Section 801(c) of the National Energy
Conservation Policy Act (42 U.S.C. 8287(c)) is repealed.
(b) Replacement Facilities.--Section 801(a) of the National Energy
Conservation Policy Act (42 U.S.C. 8287(a)) is amended by adding at the
end the following new paragraph:
``(3)(A) In the case of an energy savings contract or
energy savings performance contract providing for energy
savings through the construction and operation of one or more
buildings or facilities to replace one or more existing
buildings or facilities, benefits ancillary to the purpose of
such contract under paragraph (1) may include savings resulting
from reduced costs of operation and maintenance at such
replacement buildings or facilities when compared with costs of
operation and maintenance at the buildings or facilities being
replaced, established through a methodology set forth in the
contract.
``(B) Notwithstanding paragraph (2)(B), aggregate annual
payments by an agency under an energy savings contract or
energy savings performance contract referred to in subparagraph
(A) may take into account (through the procedures developed
pursuant to this section) savings resulting from reduced costs
of operation and maintenance as described in that
subparagraph.''.
(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) a reduction in the cost of energy or water,
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--
``(i) the lease or purchase of operating
equipment, improvements, altered operation and
maintenance, or technical services;
``(ii) 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
``(iii) the increased efficient use of
existing water sources; or
``(B) in the case of a replacement building or
facility described in section 801(a)(3), a reduction in
the cost of energy, from a base cost established
through a methodology set forth in the contract, that
would otherwise be utilized in one or more existing
federally owned buildings or other federally owned
facilities by reason of the construction and operation
of the replacement building or facility.''.
(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 which provides
for--
``(A) the performance of services for the design,
acquisition, installation, testing, operation, and,
where appropriate, maintenance and repair, of an
identified energy or water conservation measure or
series of measures at one or more locations; or
``(B) energy savings through the construction and
operation of one or more buildings or facilities to
replace one or more existing buildings or facilities.
Such contracts shall, with respect to an agency facility that
is a public building as such term is defined in section 13(1)
of the Public Buildings Act of 1959 (40 U.S.C. 3301), be in
compliance with the prospectus requirements and procedures of
section 7 of the Public Buildings Act of 1959 (40 U.S.C.
3307).''.
(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(4) (42 U.S.C. 8259(4)); or
``(B) a water conservation measure that improves
water efficiency, 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.--Within 180 days after the date of the enactment of
this section, 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, and energy efficiency services covered. The
Secretary shall report these findings to the Committee on Energy and
Commerce of the House of Representatives and the Committee on Energy
and Natural Resources of the Senate, 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.

SEC. 1007. VOLUNTARY COMMITMENTS TO REDUCE INDUSTRIAL ENERGY INTENSITY.

(a) Voluntary Agreements.--The Secretary of Energy shall enter into
voluntary agreements with one 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.
(b) Goal.--Voluntary agreements under this section shall have a
goal of reducing energy intensity by not less than 2.5 percent each
year from 2004 through 2014.
(c) Recognition.--The Secretary of Energy, in cooperation with the
Administrator of the Environmental Protection Agency and other
appropriate Federal agencies, shall develop mechanisms to recognize and
publicize the achievements of participants in voluntary agreements
under this section.
(d) Definition.--In this section, the term ``energy intensity''
means the primary energy consumed per unit of physical output in an
industrial process.
(e) Technical Assistance.--An entity that enters into an agreement
under this section and continues to make a good faith effort to achieve
the energy efficiency goals specified in the agreement shall be
eligible to receive from the Secretary a grant or technical assistance
as appropriate to assist in the achievement of those goals.
(f) Report.--Not later than June 30, 2010 and June 30, 2014, the
Secretary shall submit to Congress a report that evaluates the success
of the voluntary agreements, with independent verification of a sample
of the energy savings estimates provided by participating firms.

SEC. 1008. FEDERAL AGENCY PARTICIPATION IN DEMAND REDUCTION PROGRAMS.

Section 546(c) of the National Energy Conservation Policy Act (42
U.S.C. 8256(c)) is amended by adding at the end of the following new
paragraph:
``(6) Federal agencies are encouraged to participate in State or
regional demand side reduction programs. The availability of such
programs, including measures employing onsite generation, and the
savings resulting from such participation, should be included in the
evaluation of energy options for Federal facilities.''.

SEC. 1009. ADVANCED BUILDING EFFICIENCY TESTBED.

(a) Establishment.--The Secretary of Energy, in consultation with
the Administrator of the General Services Administration, 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 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 one-third of
the total amount to the lead university described in subsection (b),
and provide the remaining two-thirds to the other participants referred
to in subsection (b) on an equal basis.

SEC. 1010. 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 fuller 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
the Committee on Appropriations and Committee on Environment
and Public Works of the Senate and the Committee on
Appropriations, Committee on Energy and Commerce, and Committee
on Transportation and Infrastructure of the House of
Representatives 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, within 1 year of
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. 1021. LIHEAP AND WEATHERIZATION ASSISTANCE.

(a) 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 ``each of fiscal years 2002 through 2004'' and
inserting ``each of fiscal years 2002 and 2003, and $3,400,000,000 for
each of fiscal years 2004 through 2006''.
(b) Weatherization.--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''.
(c) Report to Congress.--Not later than 1 year after the date of
enactment of this Act, the Secretary of Health and Human Services shall
transmit to the Congress a report on how the Low-Income Home Energy
Assistance Program could be used more effectively to prevent loss of
life from extreme temperatures. In preparing such report, the Secretary
shall consult with appropriate officials in all 50 States and the
District of Columbia.

SEC. 1022. 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. 1023. 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) 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).
(5) 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 carry out this section $50,000,000 for each of the
fiscal years 2004 through 2008.

SEC. 1024. 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 chapter 8 of the 2000 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 such sums as may be necessary for each of fiscal years 2004
through 2013. Not more than 30 percent of appropriated funds shall be
used for administration.

SEC. 1025. 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.), which 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 fiscal year 2004 and each fiscal year thereafter
through fiscal year 2006.

Subtitle C--Energy Efficient Products

SEC. 1041. ENERGY STAR PROGRAM.

(a) Amendment.--The Energy Policy and Conservation Act (42 U.S.C.
6201 and following) 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 program to identify and promote
energy-efficient products and buildings in order to reduce energy
consumption, improve energy security, and reduce pollution through
labeling of and 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 two 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; and
``(4) solicit the comments of interested parties in
establishing a new Energy Star product category or in revising
a product category, and upon adoption of a new or revised
product category provide an explanation of the decision that
responds to significant public comments.''.
(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. 1042. CONSUMER EDUCATION ON ENERGY EFFICIENCY BENEFITS OF AIR
CONDITIONING, HEATING, AND VENTILATION MAINTENANCE.

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.--(1) For the purpose of ensuring that
installed air conditioning and heating systems operate at their maximum
rated efficiency levels, the Secretary shall, within 180 days of 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.
``(2) The Secretary shall carry out the program 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 business 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 shall make the program information
available directly to small businesses and through other Federal
agencies, including the Federal Emergency Management Agency, and the
Department of Agriculture.''.

SEC. 1043. ADDITIONAL DEFINITIONS.

Section 321 of the Energy Policy and Conservation Act (42 U.S.C.
6291) is amended by adding at the end the following:
``(32) The term `battery charger' means a device that
charges batteries for consumer products.
``(33) The term `commercial refrigerator, freezer and
refrigerator-freezer' means a refrigerator, freezer or
refrigerator-freezer that--
``(A) is not a consumer product regulated under
this Act; and
``(B) incorporates 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--
``(i) an electrically powered integral
light source that illuminates the legend `EXIT'
and any directional indicators; and
``(ii) provides contrast between the
legend, any directional indicators, and the
background.
``(36)(A) Except as provided in subparagraph (B), the term
`low-voltage dry-type transformer' means a transformer that--
``(i) has an input voltage of 600 volts or less;
``(ii) is air-cooled;
``(iii) does not use oil as a coolant; and
``(iv) is rated for operation at a frequency of 60
Hertz.
``(B) The term `low-voltage dry-type 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 that are designed to be used in
a special purpose application, such as transformers
commonly known as drive transformers, rectifier
transformers, autotransformers, Uninterruptible Power
System transformers, impedance transformers, harmonic
transformers, regulating transformers, sealed and
nonventilating transformers, machine tool transformers,
welding transformers, grounding transformers, or
testing transformers; or
``(iii) any transformer not listed in clause (ii)
that is excluded by the Secretary by rule because the
transformer is designed for a special application and
the application of standards to the transformer would
not result in significant energy savings.
``(37) The term `standby mode' means the lowest amount of
electric power used by a household appliance when not
performing its active functions, as defined on an individual
product basis by the Secretary.
``(38) The term `torchiere' means a portable electric lamp
with a reflector bowl that directs light upward so as to give
indirect illumination.
``(39) The term `transformer' means a device consisting of
two or more coils of insulated wire that transfers alternating
current by electromagnetic induction from one coil to another
to change the original voltage or current value.
``(40) 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.
``(41) 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.''.

SEC. 1044. ADDITIONAL TEST PROCEDURES.

(a) Exit Signs.--Section 323(b) of the Energy Policy and
Conservation Act (42 U.S.C. 6293) is amended 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 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 based on future revisions
to such standard test method.
``(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.''.
(b) Additional Consumer and Commercial Products.--Section 323 of
the Energy Policy and Conservation Act (42 U.S.C. 6293) is further
amended by adding at the end the following:
``(f) Additional Consumer and Commercial Products.--The Secretary
shall within 24 months after the date of enactment of this subsection
prescribe testing requirements for suspended ceiling fans, refrigerated
bottled or canned beverage vending machines, commercial unit heaters,
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.''.

SEC. 1045. ENERGY CONSERVATION STANDARDS FOR ADDITIONAL CONSUMER AND
COMMERCIAL PRODUCTS.

Section 325 of the Energy Policy and Conservation Act (42 U.S.C.
6295) is amended by adding at the end the following:
``(u) Standby Mode 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 of standby mode
and test procedures for the standby mode power use of battery
chargers and external power supplies. In establishing these
test procedures, the Secretary shall consider, among other
factors, existing test procedures used for measuring energy
consumption in standby mode 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 standby mode 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
promulgated 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 standby energy use that--
``(i) meets the criteria 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) Designation of additional covered products.--(A) Not
later than 180 days after the date of enactment of this
subsection, the Secretary shall publish for public comment and
public hearing a notice to determine whether any noncovered
products should be designated as covered products for the
purpose of instituting a rulemaking under this section to
determine whether an energy conservation standard restricting
standby mode energy consumption, should be promulgated; except
that any restriction on standby mode energy consumption shall
be limited to major sources of such consumption.
``(B) In making the determinations pursuant to subparagraph
(A) of whether to designate new covered products and institute
rulemakings, the Secretary shall, among other relevant factors
and in addition to the criteria in section 322(b), consider--
``(i) standby mode power consumption compared to
overall product energy consumption; and
``(ii) the priority and energy savings potential of
standards which may be promulgated under this
subsection compared to other required rulemakings under
this section and the available resources of the
Department to conduct such rulemakings.
``(C) Not later than 1 year after the date of enactment of
this subsection, the Secretary shall issue a determination of
any new covered products for which he intends to institute
rulemakings on standby mode pursuant to this section and he
shall state the dates by which he intends to initiate those
rulemakings.
``(3) 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
which 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, the criteria for non-covered products
in subparagraph (B) of paragraph (2) of this subsection.
``(4) Rulemaking for standby mode.--(A) Any rulemaking
instituted under this subsection or for covered products under
this section which restricts standby mode power consumption
shall be subject to the criteria and procedures for issuing
energy conservation standards set forth in this section and the
criteria set forth in subparagraph (B) of paragraph (2) of this
subsection.
``(B) No standard can be proposed for new covered products
or covered products in a standby mode unless the Secretary has
promulgated applicable test procedures for each product
pursuant to section 323.
``(C) The provisions of section 327 shall apply to new
covered products which are subject to the rulemakings for
standby mode after a final rule has been issued.
``(5) Effective date.--Any standard promulgated under this
subsection shall be applicable to products manufactured or
imported 3 years after the date of promulgation.
``(6) Voluntary programs to reduce standby mode energy
use.--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, which are designed to reduce
standby mode energy use.
``(v) Suspended Ceiling Fans, Vending Machines, Unit Heaters, and
Commercial Refrigerators, Freezers and Refrigerator-Freezers.--The
Secretary shall within 24 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,
unit heaters, and commercial refrigerators, freezers and refrigerator-
freezers. In establishing standards under this subsection, the
Secretary shall use the criteria and procedures contained in
subsections (l) and (m). 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 Transformers.--The efficiency of low
voltage dry-type transformers manufactured on or after January 1, 2005
shall be the Class I Efficiency Levels for low voltage dry-type
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-1-1996).
``(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 paragraph, and shall be installed with compatible, electrically-
connected signal control interface devices and conflict monitoring
systems.
``(aa) Effective Date of Section 327.--The provisions of section
327 shall apply to products for which standards are set in subsections
(v) through (z) of this section after the effective date for such
standards.''.

SEC. 1046. ENERGY LABELING.

(a) Rulemaking on Effectiveness of Consumer Product Labeling.--
Paragraph (2) of section 324(a) 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 within 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 (z) 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.''.

SEC. 1047. STUDY OF ENERGY EFFICIENCY STANDARDS.

The Secretary of Energy shall contract with the National Academy of
Sciences for a study, to be completed within 1 year of enactment of
this Act, to examine whether the goals of energy efficiency standards
are best served by measurement of energy consumed, and efficiency
improvements, at the actual site of energy consumption, or through the
full fuel cycle, beginning at the source of energy production. The
Secretary shall submit the report to the Congress.

TITLE II--OIL AND GAS

Subtitle A--Alaska Natural Gas Pipeline

SEC. 2001. SHORT TITLE.

This subtitle may be cited as the ``Alaska Natural Gas Pipeline Act
of 2003''.

SEC. 2002. FINDINGS AND PURPOSES.

(a) Findings.--Congress finds the following:
(1) Construction of a natural gas pipeline system from the
Alaskan North Slope to United States markets is in the national
interest and will enhance national energy security by providing
access to the significant gas reserves in Alaska needed to meet
the anticipated demand for natural gas.
(2) The Commission issued a conditional certificate of
public convenience and necessity for the Alaska natural gas
transportation system, which remains in effect.
(b) Purposes.--The purposes of this subtitle are as follows:
(1) To provide a statutory framework for the expedited
approval, construction, and initial operation of an Alaska
natural gas transportation project, as an alternative to the
framework provided in the Alaska Natural Gas Transportation Act
of 1976 (15 U.S.C. 719 et seq.), which remains in effect.
(2) To establish a process for providing access to such
transportation project in order to promote competition in the
exploration, development, and production of Alaska natural gas.
(3) To clarify Federal authorities under the Alaska Natural
Gas Transportation Act of 1976.

SEC. 2003. DEFINITIONS.

In this subtitle, the following definitions apply:
(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 either--
(A) the Alaska Natural Gas Transportation Act of
1976 (15 U.S.C. 719 et seq.); or
(B) section 2004.
(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 and designated and
described in section 2 of the President's decision.
(4) Commission.--The term ``Commission'' means the Federal
Energy Regulatory Commission.
(5) President's decision.--The term ``President's
decision'' means the decision and report to Congress on the
Alaska natural gas transportation system issued by the
President on September 22, 1977, pursuant to section 7 of the
Alaska Natural Gas Transportation Act of 1976 (15 U.S.C. 719e)
and approved by Public Law 95-158 (91 Stat. 1268).

SEC. 2004. ISSUANCE OF CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY.

(a) Authority of the Commission.--Notwithstanding the provisions of
the Alaska Natural Gas Transportation Act of 1976 (15 U.S.C. 719 et
seq.), the Commission may, pursuant to 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 such
project to markets in the contiguous United States.
(c) Expedited Approval Process.--The Commission shall issue a final
order granting or denying any application for a certificate of public
convenience and necessity under section 7(c) of the Natural Gas Act (15
U.S.C. 717f(c)) and this section not more than 60 days after the
issuance of the final environmental impact statement for that project
pursuant to section 2005.
(d) Prohibition on 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 lands within the Prudhoe Bay oil and gas lease area may be
granted for any pipeline that follows a route that traverses--
(1) the submerged lands (as defined by the Submerged Lands
Act) 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.--Except where an expansion is ordered pursuant to
section 2006, 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 governing the
conduct of open seasons for such project. Such procedures shall include
the criteria for and timing of any open seasons, be consistent with the
purposes set forth in section 2002(b)(2), and, for any open season for
capacity beyond the initial capacity, provide the opportunity for the
transportation of natural gas other than from the Prudhoe Bay and Point
Thompson units. The Commission shall issue such regulations not later
than 120 days after the date of enactment of this Act.
(f) Projects in the Contiguous United States.--Applications 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 pursuant to the Natural Gas Act. To the
extent such pipeline facilities include the expansion of any facility
constructed pursuant to the Alaska Natural Gas Transportation Act of
1976, the provisions of 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 it 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.--The Commission, upon the request of the
State of Alaska and after a hearing, may provide for reasonable access
to the Alaska natural gas transportation project for the State of
Alaska or its designee for the transportation of the State's royalty
gas for local consumption needs within the State; except that the rates
of existing shippers of subscribed capacity on such project shall not
be increased as a result of such access.
(i) Regulations.--The Commission may issue regulations to carry out
the provisions of this section.

SEC. 2005. 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 2004 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.--The Commission shall be the lead
agency for purposes of complying with the National Environmental Policy
Act of 1969, and shall be responsible for preparing the 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
2004. The Commission shall prepare a single environmental statement
under this section, which shall consolidate the environmental reviews
of all Federal agencies considering any aspect of the project.
(c) Other Agencies.--All Federal agencies considering aspects of
the construction and operation of an Alaska natural gas transportation
project under section 2004 shall cooperate with the Commission, and
shall comply with deadlines established by the Commission in the
preparation of the statement under this section. The statement prepared
under this section shall be used by all such agencies to satisfy their
responsibilities under section 102(2)(C) of the National Environmental
Policy Act of 1969 (42 U.S.C. 4332(2)(C)) with respect to such project.
(d) Expedited Process.--The Commission shall issue a draft
statement under this section not later than 12 months after the
Commission determines the application to be complete and shall issue
the final statement not later than 6 months after the Commission issues
the draft statement, unless the Commission for good cause finds that
additional time is needed.

SEC. 2006. PIPELINE EXPANSION.

(a) Authority.--With respect to any Alaska natural gas
transportation project, upon the request of one or more persons and
after giving notice and an opportunity for a hearing, the Commission
may order the expansion of such project if it determines that such
expansion is required by the present and future public convenience and
necessity.
(b) Requirements.--Before ordering an expansion, 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 as established do not require
existing shippers on the Alaska natural gas transportation
project to subsidize expansion shippers;
(3) find that the 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 then-effective tariff of the Alaska natural
gas transportation project;
(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 pursuant to this section shall be null and void
unless the person or persons requesting the order executes a firm
transportation agreement with the Alaska natural gas transportation
project within a reasonable period of time as specified in such order.
(d) Limitation.--Nothing in this section shall be construed to
expand or otherwise affect any authorities of the Commission with
respect to any natural gas pipeline located outside the State of
Alaska.
(e) Regulations.--The Commission may issue regulations to carry out
the provisions of this section.

SEC. 2007. 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.--The Office shall be headed by a Federal
Coordinator for Alaska Natural Gas Transportation Projects, who shall--
(1) be appointed by the President, by and with the advice
of the Senate;
(2) hold office at the pleasure of the President; and
(3) 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 officer or 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 set forth in this subtitle.
(2) Prohibition on certain terms and conditions.--Except
with respect to Commission actions under sections 2004, 2005,
and 2006, no Federal officer or agency shall have the authority
to include terms and conditions that are permitted, but not
required, by law on 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 terms and conditions would prevent or impair in any
significant respect the expeditious construction and operation
of the project.
(3) Prohibition on certain actions.--Except with respect to
Commission actions under sections 2004, 2005, and 2006, unless
required by law, no Federal officer or 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 such action would prevent or impair in any significant
respect the expeditious construction and operation of the
project.
(e) State Coordination.--The Federal Coordinator shall enter into a
Joint Surveillance and Monitoring Agreement, approved by the President
and the Governor of Alaska, with the State of Alaska similar to that in
effect during construction of the Trans-Alaska Oil Pipeline to monitor
the construction of the Alaska natural gas transportation project. The
Federal Government shall have primary surveillance and monitoring
responsibility where the Alaska natural gas transportation project
crosses Federal lands and private lands, and the State government shall
have primary surveillance and monitoring responsibility where the
Alaska natural gas transportation project crosses State lands.
(f) Transfer of Federal Inspector Functions and Authority.--Upon
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 of Energy pursuant to section 3012(b) of Public Law 102-
486 (15 U.S.C. 719e(b)), including all functions and authority
described and enumerated in the Reorganization Plan No. 1 of 1979 (44
Fed. Reg. 33,663), Executive Order No. 12142 of June 21, 1979 (44 Fed.
Reg. 36,927), and section 5 of the President's decision, shall be
transferred to the Federal Coordinator.

SEC. 2008. JUDICIAL REVIEW.

(a) Exclusive Jurisdiction.--Except for review by the Supreme Court
of the United States 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
with respect to any action under this subtitle.
(b) Deadline for Filing Claim.--Claims 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 as described in section 2002(a).
(d) Amendment to ANGTA.--Section 10(c) of the Alaska Natural Gas
Transportation Act of 1976 (15 U.S.C. 719h) is amended by inserting
after paragraph (1) the following:
``(2) The United States Court of Appeals for the District of
Columbia Circuit shall set any action brought under this section for
expedited consideration, taking into account the national interest
described in section 2.''.

SEC. 2009. STATE JURISDICTION OVER IN-STATE DELIVERY OF NATURAL GAS.

(a) Local Distribution.--Any facility receiving natural gas from
the Alaska natural gas transportation project for delivery to consumers
within the State of Alaska 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 therefore not subject to the jurisdiction of the
Commission.
(b) Additional Pipelines.--Nothing in this subtitle, except as
provided in section 2004(d), shall preclude or affect a future 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 of Alaska for consumption within or
distribution outside the State of Alaska.
(c) Rate Coordination.--Pursuant to the Natural Gas Act, the
Commission shall establish rates for the transportation of natural gas
on the Alaska natural gas transportation project. In exercising such
authority, the Commission, pursuant to section 17(b) of the Natural Gas
Act (15 U.S.C. 717p(b)), shall confer with the State of Alaska
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 of Alaska.

SEC. 2010. 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 not later
than 18 months after the date of enactment of this Act, the Secretary
of Energy shall conduct a study of alternative approaches to the
construction and operation of the project.
(b) Scope of Study.--The study shall consider the feasibility of
establishing a Government corporation to construct an Alaska natural
gas transportation project, and alternative means of providing Federal
financing and ownership (including alternative combinations of
Government and private corporate ownership) of the project.
(c) Consultation.--In conducting the study, the Secretary of Energy
shall consult with the Secretary of the Treasury and the Secretary of
the Army (acting through the Commanding General of the Corps of
Engineers).
(d) Report.--If the Secretary of Energy is required to conduct a
study under subsection (a), the Secretary shall submit a report
containing the results of the study, the Secretary's recommendations,
and any proposals for legislation to implement the Secretary's
recommendations to Congress.

SEC. 2011. CLARIFICATION OF ANGTA STATUS AND AUTHORITIES.

(a) Savings Clause.--Nothing in this subtitle affects 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 any Presidential findings or waivers issued in
accordance with that Act.
(b) Clarification of Authority to Amend Terms and Conditions to
Meet Current Project Requirements.--Any Federal officer or 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 abrogate any term or condition included in such certificate,
permit, right-of-way, lease, or other authorization to meet current
project requirements (including the physical design, facilities, and
tariff specifications), so long as such action does not compel a 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 would otherwise prevent or impair in any
significant respect the expeditious construction and initial operation
of such transportation system.
(c) Updated Environmental Reviews.--The Secretary of Energy 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. 2012. SENSE OF CONGRESS.

It is the sense of Congress that an Alaska natural gas
transportation project will provide significant economic benefits to
the United States and Canada. In order to maximize those benefits,
Congress urges the sponsors of the pipeline project to make every
effort to use steel that is manufactured or produced in North America
and to negotiate a project labor agreement to expedite construction of
the pipeline.

SEC. 2013. PARTICIPATION OF SMALL BUSINESS CONCERNS.

(a) Sense of Congress.--It is the sense of Congress that an Alaska
natural gas transportation project will provide significant economic
benefits to the United States and Canada. In order to maximize those
benefits, Congress urges the sponsors of the pipeline project to
maximize the participation of small business concerns in contracts and
subcontracts awarded in carrying out the project.
(b) Study.--
(1) In general.--The Comptroller General shall conduct a
study on 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 transmit
to Congress a report containing the results of the study.
(3) Updates.--The Comptroller General shall update the
study at least once every 5 years and transmit to Congress a
report containing the results of the update.
(4) Applicability.--After the date of completion of the
construction of an Alaska natural gas transportation project,
this subsection shall no longer apply.
(c) Small Business Concern Defined.--In this section, the term
``small business concern'' has the meaning given such term in section
3(a) of the Small Business Act (15 U.S.C. 632(a)).

SEC. 2014. ALASKA PIPELINE CONSTRUCTION TRAINING PROGRAM.

(a) Establishment of Program.--The Secretary of Labor (in this
section referred to as the ``Secretary'') may make grants to the Alaska
Department of Labor and Workforce Development to--
(1) develop a plan to train, through the workforce
investment system established in the State of Alaska under the
Workforce Investment Act of 1998 (112 Stat. 936 et seq.), adult
and dislocated workers, including Alaska Natives, in urban and
rural Alaska in the skills required to construct and operate an
Alaska gas pipeline system; and
(2) implement the plan developed pursuant to paragraph (1).
(b) Requirements for Planning Grants.--The Secretary may make a
grant under subsection (a)(1) only if--
(1) the Governor of Alaska certifies in writing to the
Secretary that there is a reasonable expectation that
construction of an Alaska gas pipeline will commence within 3
years after the date of such certification; and
(2) the Secretary of the Interior concurs in writing to the
Secretary with the certification made under paragraph (1).
(c) Requirements for Implementation Grants.--The Secretary may make
a grant under subsection (a)(2) only if--
(1) the Secretary has approved a plan developed pursuant to
subsection (a)(1);
(2) the Governor of Alaska requests the grant funds and
certifies in writing to the Secretary that there is a
reasonable expectation that the construction of an Alaska gas
pipeline system will commence within 2 years after the date of
such certification;
(3) the Secretary of the Interior concurs in writing to the
Secretary with the certification made under paragraph (2) after
considering--
(A) the status of necessary State and Federal
permits;
(B) the availability of financing for the pipeline
project; and
(C) other relevant factors and circumstances.
(d) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary of Labor such sums as may be necessary,
but not to exceed $20,000,000, to carry out this section.

Subtitle B--Strategic Petroleum Reserve

SEC. 2101. FULL CAPACITY OF STRATEGIC PETROLEUM RESERVE.

The President shall--
(1) fill the Strategic Petroleum Reserve established
pursuant to part B of title I of the Energy Policy and
Conservation Act (42 U.S.C. 6231 et seq.) to full capacity as
soon as practicable;
(2) acquire petroleum for the Strategic Petroleum Reserve
by the most practicable and cost-effective means, with
consideration being given to domestically produced petroleum,
including the acquisition of crude oil the United States is
entitled to receive in kind as royalties from production on
Federal lands; and
(3) ensure that the fill rate minimizes impacts on
petroleum markets.

SEC. 2102. STRATEGIC PETROLEUM RESERVE EXPANSION.

(a) Plan.--Not later than 180 days after the date of the enactment
of this Act, the Secretary of Energy shall transmit to the Congress a
plan for the expansion of the Strategic Petroleum Reserve to
1,000,000,000 barrels, including--
(1) plans for the elimination of infrastructure impediments
to maximum drawdown capability;
(2) a schedule for the completion of all required
environmental reviews;
(3) provision for consultation with Federal and State
environmental agencies;
(4) a schedule and procedures for site selection; and
(5) anticipated annual budget requests.
(b) Construction of Additional Capacity.--The Secretary of Energy
shall acquire property and complete construction for the expansion of
the Strategic Petroleum Reserve in accordance with the plan transmitted
under subsection (a).
(c) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary of Energy $1,500,000,000 for carrying out
this section, to remain available until expended.

SEC. 2103. 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--

``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.
6250b(b)(1)) is amended by inserting ``(considered as a heating season
average)'' after ``mid-October through March''.

Subtitle C--Hydraulic Fracturing

SEC. 2201. 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) 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.''.

Subtitle D--Unproven Oil and Natural Gas Reserves Recovery Program

SEC. 2301. PROGRAM.

The Secretary shall carry out a program to demonstrate technologies
for the recovery of oil and natural gas reserves from reservoirs
described in section 2302.

SEC. 2302. ELIGIBLE RESERVOIRS.

The program under this subtitle shall only address oil and natural
gas reservoirs with 1 or more of the following characteristics:
(1) Complex geology involving rapid changes in the type and
quality of the oil reservoir across the reservoir.
(2) Low reservoir pressure.
(3) Unconventional natural gas reservoirs in coalbeds,
tight sands, or shales.

SEC. 2303. FOCUS AREAS.

The program under this subtitle may focus on areas including coal-
bed methane, deep drilling, natural gas production from tight sands,
natural gas production from gas shales, innovative production
techniques (including horizontal drilling, fracture detection
methodologies, and three-dimensional seismic), and enhanced recovery
techniques.

SEC. 2304. LIMITATION ON LOCATION OF ACTIVITIES.

Activities under this subtitle shall be carried out only--
(1) in--
(A) 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
(B) 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.

SEC. 2305. PROGRAM ADMINISTRATION.

(a) Role of the Secretary.--The Secretary shall have ultimate
responsibility for, and oversight of, all aspects of the program under
this subtitle.
(b) Role of the Program Consortium.--
(1) In general.--The Secretary shall contract with a
consortium to--
(A) manage awards pursuant to subsection (e)(4);
(B) make recommendations to the Secretary for
project solicitations;
(C) disburse funds awarded under subsection (e) as
directed by the Secretary in accordance with the annual
plan under subsection (d); 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) The Secretary shall
establish procedures--
(i) to ensure that each board member, officer, or
employee of the program consortium who is in a
decisionmaking capacity under subsection (e)(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 (e)(3) or oversight
under subsection (e)(4) with respect to such applicant
or recipient.
(B) 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).
(c) 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 and institutions of higher education. The
Secretary shall give preference in the selection of the program
consortium to applicants with broad representation from the
various major oil and natural gas basins in the United States.
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 90 days after the date of
enactment of this Act, the Secretary shall solicit proposals
for the creation of the program consortium, which must be
submitted not less than 180 days after the date of enactment of
this Act. The Secretary shall select the program consortium not
later than 240 days 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 programs for the production of oil or natural gas.
(7) Criterion.--The Secretary may consider the amount of
the fee an applicant proposes to receive under subsection (f)
in selecting a consortium under this section.
(d) Annual Plan.--
(1) In general.--The program under this subtitle shall be
carried out pursuant to an annual plan prepared by the
Secretary in accordance with paragraph (2).
(2) Development.--(A) 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) The Secretary shall submit the recommendations of the
program consortium under subparagraph (A) to the Advisory
Committee for review, and the 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) The Secretary shall consult regularly with the program
consortium throughout the preparation of the annual plan.
(3) Publication.--The Secretary shall transmit to the
Congress and publish in the Federal Register the annual plan,
along with any written comments received under paragraph (2)(A)
and (B). The annual plan shall be transmitted and published not
later than 60 days after the date of enactment of an Act making
appropriations for a fiscal year for the program under this
subtitle.
(4) Contents.--The annual plan shall describe the ongoing
and prospective activities of the program under this subtitle
and shall include--
(A) a list of any solicitations for awards that the
Secretary plans to issue to carry out 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 (e)(4).
(e) Awards.--
(1) In general.--The Secretary shall make awards to carry
out activities under the program under this subtitle. The
program consortium shall not be eligible to receive such
awards, but members of the program consortium may receive such
awards.
(2) Proposals.--
(A) Solicitation.--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.
(B) Contents.--Each proposal submitted shall
include the following:
(i) An estimate of the potential unproven
reserves in the reservoir, established by a
registered petroleum engineer.
(ii) An estimate of the potential for
success of the project.
(iii) A detailed project plan.
(iv) A detailed analysis of the costs
associated with the project.
(v) A time frame for project completion.
(vi) Evidence that any lienholder on the
project will subordinate its interests to the
extent necessary to ensure that the Federal
government receives its portion of any revenues
pursuant to section 2308.
(vii) Such other matters as the Secretary
considers appropriate.
(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) The program consortium shall oversee
the implementation of awards under this subsection, consistent
with the annual plan under subsection (d), including disbursing
funds and monitoring activities carried out under such awards
for compliance with the terms and conditions of the awards.
(B) 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) The Secretary shall provide to the program consortium
the information necessary for the program consortium to carry
out its responsibilities under this paragraph.
(f) Fee.--To compensate the program consortium for carrying out its
activities under this section, the Secretary shall provide to the
program consortium a fee in an amount not to exceed 7.5 percent of the
amounts awarded under subsection (e) for each fiscal year.
(g) Disallowed Expenses.--No portion of any award shall be used by
a recipient for general or administrative expenses of any kind.
(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 (e),
have been expended in a manner consistent with the purposes and
requirements of this subtitle. 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. 2306. ADVISORY COMMITTEE.

(a) Establishment.--Not later than 270 days after the date of
enactment of this Act, the Secretary shall establish an Advisory
Committee.
(b) Membership.--The Advisory Committee shall be composed of
members appointed by the Secretary and including--
(1) individuals with extensive experience or operational
knowledge of oil and natural gas production, including
independent oil and gas producers;
(2) individuals broadly representative of oil and natural
gas production; and
(3) no individuals who are Federal employees.
(c) Duties.--The Advisory Committee shall advise the Secretary on
the development and implementation of activities under this subtitle.
(d) Compensation.--A member of the Advisory Committee shall serve
without compensation but shall receive travel expenses, including per
diem in lieu of subsistence, in accordance with applicable provisions
under subchapter I of chapter 57 of title 5, United States Code.
(e) Prohibition.--The Advisory Committee shall not make
recommendations on funding awards to consortia or for specific
projects.

SEC. 2307. LIMITS ON PARTICIPATION.

An entity shall be eligible to receive an award under this subtitle
only if the Secretary finds--
(1) that the entity's participation in the program under
this subtitle would be in the economic interest of the United
States;
(2) that the entity is a United States-owned entity
organized under the laws of the United States with production
levels of less than 1,000 barrels per day of oil equivalent;
and
(3) that the entity has demonstrated that nongovernmental
third party sources of financing are not available for the
proposal project.

SEC. 2308. PAYMENTS TO FEDERAL GOVERNMENT.

(a) Initial Rate.--Until the amount of a grant under this subtitle
has been fully repaid to the Federal Government under this subsection,
95 percent of all revenues derived from increased incremental
production attributable to participation in the program under this
subtitle shall be paid to the Secretary by the purchaser of such
increased production.
(b) Rate After Repayment.--After the Federal Government has been
fully repaid under subsection (a), 5 percent of all revenues derived
from increased incremental production attributable to participation in
the program under this subtitle shall be paid to the Secretary by the
purchaser of such increased production.

SEC. 2309. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated to the Secretary for
carrying out this subtitle $100,000,000, to remain available until
expended.

SEC. 2310. PUBLIC AVAILABILITY OF PROJECT RESULTS AND METHODOLOGIES.

The results of any project undertaken pursuant to this subtitle and
the methodologies used to achieve those results shall be made public by
the Secretary. The methodologies used shall not be proprietary so that
such methodologies may be used for other projects by persons not
seeking awards pursuant to this subtitle.

SEC. 2311. SUNSET.

The authority provided by this subtitle shall terminate on
September 30, 2010.

SEC. 2312. DEFINITIONS.

In this subtitle:
(1) Program consortium.--The term ``program consortium''
means the consortium selected under section 2305(c).
(2) 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.
(3) Secretary.--The term ``Secretary'' means the Secretary
of Energy.

Subtitle E--Miscellaneous

SEC. 2401. APPEALS RELATING TO PIPELINE CONSTRUCTION PROJECTS.

(a) Agency of Record.--Any Federal administrative agency proceeding
that is an appeal or review of 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 such Commission's
proceeding under section 7 of the Natural Gas Act.
(b) Sense of the Congress.--It is the sense of the Congress that
all Federal and State agencies with jurisdiction over interstate
natural gas pipeline construction activities should coordinate their
proceedings within the time frames established by the Federal Energy
Regulatory Commission while it is acting pursuant to section 7 of the
Natural Gas Act to determine whether a proposed interstate natural gas
pipeline is in the public convenience and necessity.

SEC. 2402. NATURAL GAS MARKET DATA TRANSPARENCY.

(a) Establishment of System.--Not later than 180 days after the
date of enactment of this Act, the Federal Energy Regulatory Commission
shall issue rules authorizing or establishing an electronic information
system to provide the Commission and the public with timely access to
such information as is necessary or appropriate to facilitate price
transparency and participation in natural gas markets. Such system
shall provide information about the market price of natural gas sold in
interstate commerce.
(b) Data Subject to Disclosure.--Rules issued under subsection (a)
shall require public availability only of--
(1) aggregate data; and
(2) transaction-specific data that is otherwise required by
the Federal Energy Regulatory Commission to be made public.
(c) Civil Penalty.--Any person who violates any provision of a rule
issued under subsection (a) shall be subject to a civil penalty of not
more than $1,000,000 for each day that such violation continues. Such
penalty shall be assessed by the Federal Energy Regulatory Commission,
after notice and opportunity for public hearing. In determining the
amount of a proposed penalty, the Commission shall take into
consideration the seriousness of the violation and the efforts of such
person to remedy the violation in a timely manner.

SEC. 2403. 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) The term `oil and gas exploration and production' means all
field operations necessary for both exploration and production of oil
and gas, including activities necessary to prepare a site for drilling
and for the movement and placement of drilling equipment, whether or
not such activities may be considered construction activities.''.

TITLE III--HYDROELECTRIC RELICENSING

Subtitle A--Alternative Conditions

SEC. 3001. 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 agency trial-type
hearing of any disputed issues of material fact, with respect to such
conditions.''.
(b) Fishways.--Section 18 of the Federal Power Act (16 U.S.C. 811)
is amended by inserting after ``and such fishways as may be prescribed
by the Secretary of Commerce.'' the following: ``The license applicant
shall be entitled to a determination on the record, after opportunity
for an agency trial-type hearing of any disputed issues of material
fact, with respect to such fishways.''.
(c) Alternative Conditions and 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 adequately protect 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. The alternative may include a fishway or an alternative to a
fishway.
``(2) Notwithstanding section 18, the Secretary of the Interior or
the Secretary of Commerce, as appropriate, shall accept and prescribe,
and the Commission shall 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 of the fish resources 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 not adequately protect the
fish resources. The Secretary shall submit the advisory and the
Secretary's final written determination into the record of the
Commission's proceeding.''.

Subtitle B--Additional Hydropower

SEC. 3201. 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.
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 one 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. 3202. 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 one 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.--There is 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. 3203. SMALL HYDROELECTRIC POWER PROJECTS.

Section 408(a)(6) of the Public Utility Regulatory Policies Act of
1978 is amended by striking ``April 20, 1977'' and inserting ``March 4,
2003''.

SEC. 3204. INCREASED HYDROELECTRIC GENERATION AT EXISTING FEDERAL
FACILITIES.

(a) In General.--The Secretary of Energy, in consultation with the
Secretary of the Interior and Secretary of the Army, shall conduct
studies of the cost-effective opportunities to increase hydropower
generation at existing federally-owned or operated water regulation,
storage, and conveyance facilities. Such studies shall be completed
within two years after the date of enactment of this subtitle and
transmitted to the Committee on Commerce of the House of
Representatives and the Committee on Energy and Natural Resources of
the Senate. An individual study shall be prepared for each of the
Nation's principal river basins. Each such study shall identify and
describe with specificity the following matters:
(1) Opportunities to improve the efficiency of hydropower
generation at such facilities through, but not limited to,
mechanical, structural, or operational changes.
(2) Opportunities to improve the efficiency of the use of
water supplied or regulated by Federal projects where such
improvement could, in the absence of legal or administrative
constraints, make additional water supplies available for
hydropower generation or reduce project energy use.
(3) Opportunities to create additional hydropower
generating capacity at existing facilities through, but not
limited to, the construction of additional generating
facilities, the uprating of generators and turbines, and the
construction of pumped storage facilities.
(4) Preliminary assessment of the costs and the economic
and environmental consequences of such measures.
(b) Previous Studies.--If studies of the type required by
subsection (a) have been prepared by any agency of the United States
and published within the five years prior to the date of enactment of
this subtitle, the Secretary of Energy may choose not to perform new
studies and incorporate the information in such studies into the
studies required by subsection (a).
(c) Authorization.--There is authorized to be appropriated such
sums as may be necessary to carry out the purposes of this section.

TITLE IV--NUCLEAR MATTERS

Subtitle A--Price-Anderson Act Amendments

SEC. 4001. SHORT TITLE.

This subtitle may be cited as the ``Price-Anderson Amendments Act
of 2003''.

SEC. 4002. 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 ``August 1, 2017''.
(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 ``August 1,
2017''.
(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
``August 1, 2017''.

SEC. 4003. MAXIMUM ASSESSMENT.

Section 170 of the Atomic Energy Act of 1954 (42 U.S.C. 2210) is
amended--
(1) in subsection b.(1), in the second proviso of the third
sentence--
(A) by striking ``$63,000,000'' and inserting
``$94,000,000''; and
(B) by striking ``$10,000,000 in any 1 year'' and
inserting ``$15,000,000 in any 1 year (subject to
adjustment for inflation under subsection t.)''; and
(2) in subsection t.--
(A) by inserting ``total and annual'' after
``amount of the maximum'';
(B) by striking ``the date of the enactment of the
Price-Anderson Amendments Act of 1988'' and inserting
``July 1, 2002''; and
(C) by striking ``such date of enactment'' and
inserting ``July 1, 2002''.

SEC. 4004. 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
the financial protection of such a type and in such amounts as
the Secretary shall determine to be appropriate to cover public
liability arising out of or in connection with the contractual
activity; and
``(B) shall indemnify the persons indemnified against such
liability above the amount of the 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 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. 4005. 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. 4006. REPORTS.

Section 170 p. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(p))
is amended by striking ``August 1, 1998'' and inserting ``August 1,
2013''.

SEC. 4007. 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 adding 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, 2002, 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. 4008. PRICE-ANDERSON TREATMENT OF MODULAR REACTORS.

Section 170 b. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(b))
is amended by adding at the end the following new paragraph:
``(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. 4009. APPLICABILITY.

The amendments made by sections 4003, 4004, and 4005 do not apply
to a nuclear incident that occurs before the date of enactment of this
Act.

SEC. 4010. PROHIBITION ON ASSUMPTION BY UNITED STATES GOVERNMENT OF
LIABILITY FOR CERTAIN FOREIGN ACCIDENTS.

Section 170 of the Atomic Energy Act of 1954 (42 U.S.C. 2210) is
amended by adding at the end the following new subsection:
``u. Prohibition on Assumption of Liability for Certain Foreign
Accidents.--Notwithstanding this section or any other provision of law,
no officer of the United States or of any department, agency, or
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 accidents
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, section 6(j)(1) of the Export
Administration Act of 1979, or section 40(d) of the Arms Export Control
Act to have repeatedly provided support for acts of international
terrorism).''.

SEC. 4011. 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, with respect to activities by any party pursuant to a
license issued under this Act--
``(1) materials described in subsection b., when
transferred or received in the United States--
``(A) from a facility licensed by the Nuclear
Regulatory Commission;
``(B) from a facility licensed by an agreement
State; or
``(C) from a country with whom the United States
has an agreement for cooperation under section 123,
are accompanied by a manifest describing the type and amount of
materials being transferred;
``(2) each individual transferring or accompanying the
transfer of such materials has been subject to a security
background check by appropriate Federal entities; and
``(3) such materials are not transferred to or received at
a destination other than a facility licensed by the Nuclear
Regulatory Commission or an agreement State under this Act or other
appropriate Federal facility, or a destination outside the United
States in a country with whom the United States has an agreement for
cooperation under section 123.
``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 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).
(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. 4012. NUCLEAR FACILITY THREATS.

(a) Study.--The President, in consultation with the Nuclear
Regulatory Commission and other appropriate Federal, State, and local
agencies and private entities, shall conduct a study to identify the
types of threats that pose an appreciable risk to the security of the
various classes of facilities licensed by the Nuclear Regulatory
Commission under the Atomic Energy Act of 1954. Such study shall take
into account, but not be limited to--
(1) the events of September 11, 2001;
(2) an assessment of physical, cyber, 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; and
(10) the potential for attacks on spent fuel shipments by
multiple coordinated teams of a large number of individuals.
(b) Summary and Classification Report.--Not later than 180 days
after the date of the enactment of this Act, the President shall
transmit to the Congress and the Nuclear Regulatory Commission a
report--
(1) summarizing the types of threats identified under
subsection (a); and
(2) classifying each type of threat identified under
subsection (a), in accordance with existing laws and
regulations, as either--
(A) involving attacks and destructive acts,
including sabotage, directed against the facility by an
enemy of the United States, whether a foreign
government or other person, or otherwise falling under
the responsibilities of the Federal Government; or
(B) involving the type of risks that Nuclear
Regulatory 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 the Congress a report on actions taken, or to be
taken, to address the types of threats identified under subsection
(b)(2)(A). Such report may include a classified annex as appropriate.
(d) Regulations.--Not later than 270 days after the date on which a
report is transmitted under subsection (b), the Nuclear Regulatory
Commission shall issue regulations, including changes to the design
basis threat, to ensure that licensees address the threats identified
under subsection (b)(2)(B).
(e) Physical Security Program.--The Nuclear Regulatory Commission
shall establish an operational safeguards response evaluation program
that ensures that the physical protection capability and operational
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, including associated spent fuel storage
facilities, spent fuel storage pools and dry cask storage at closed
reactors, independent spent fuel storage facilities and geologic
repository operations areas, category I fuel cycle facilities, and
gaseous diffusion plants.
(f) Control of Information.--In carrying out this section, the
President and the Nuclear Regulatory Commission shall control the
dissemination of restricted data, safeguards information, and other
classified national security information in a manner so as to ensure
the common defense and security, consistent with chapter 12 of the
Atomic Energy Act of 1954.

SEC. 4013. UNREASONABLE RISK CONSULTATION.

Section 170 of the Atomic Energy Act of 1954 (42 U.S.C. 2210) is
amended by adding at the end the following new subsection:
``v. Unreasonable Risk Consultation.--(1) Before entering into an
agreement of indemnification under this section with respect to a
utilization facility, the Nuclear Regulatory Commission shall consult
with the Assistant to the President for Homeland Security (or any
successor official) concerning whether the location of the proposed
facility and the design of that type of facility ensure that the
facility provides for adequate protection of public health and safety
if subject to a terrorist attack.
``(2) Before issuing a license or a license renewal for a sensitive
nuclear facility, the Nuclear Regulatory Commission shall consult with
the Secretary of Homeland Security or his designee concerning the
emergency evacuation plan for the communities living near the sensitive
nuclear facility. For purposes of this paragraph, the term `sensitive
nuclear facility' has the meaning given that term in section 4012 of
the Energy Policy Act of 2003.''.

SEC. 4014. FINANCIAL ACCOUNTABILITY.

(a) Amendment.--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:
``w. Financial Accountability.--(1) Notwithstanding subsection d.,
the Attorney General may bring an action in the appropriate United
States district court to recover from a contractor of the Secretary (or
subcontractor or supplier of such contractor) amounts paid by the
Federal Government under an agreement of indemnification under
subsection d. for public liability resulting from conduct which
constitutes intentional misconduct of any corporate officer, manager,
or superintendent of such contractor (or subcontractor or supplier of
such contractor).
``(2) The Attorney General may recover under paragraph (1) an
amount not to exceed the amount of the profit derived by the defendant
from the contract.
``(3) No amount recovered from any contractor (or subcontractor or
supplier of such contractor) under paragraph (1) may be reimbursed
directly or indirectly by the Department of Energy.
``(4) Paragraph (1) shall not apply to any nonprofit entity
conducting activities under contract for the Secretary.
``(5) No waiver of a defense required under this section shall
prevent a defendant from asserting such defense in an action brought
under this subsection.
``(6) The Secretary shall, by rule, define the terms `profit' and
`nonprofit entity' for purposes of this subsection. Such rulemaking
shall be completed not later than 180 days after the date of the
enactment of this subsection.''.
(b) Effective Date.--The amendment made by this section shall not
apply to any agreement of indemnification entered into under section
170 d. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)) before the
date of the enactment of this Act.

SEC. 4015. CIVIL PENALTIES.

(a) Repeal of Automatic Remission.--Section 234A b. (2) of the
Atomic Energy Act of 1954 (42 U.S.C. 2282a(b)(2)) is amended by
striking the last sentence.
(b) Limitation for Nonprofit Institutions.--Subsection d. of
section 234A of the Atomic Energy Act of 1954 (42 U.S.C. 2282a(d)) is
amended to read as follows:
``d. Notwithstanding subsection a., a civil penalty for a violation
under subsection a. shall not exceed the amount of any discretionary
fee paid under the contract under which such violation occurs for any
nonprofit contractor, subcontractor, or supplier--
``(1) described in section 501(c)(3) of the Internal
Revenue Code of 1986 and exempt from tax under section 501(a)
of such Code; or
``(2) identified by the Secretary by rule as appropriate to
be treated the same under this subsection as an entity
described in paragraph (1), consistent with the purposes of
this section.''.
(c) Effective Date.--The amendments made by this section shall not
apply to any violation of the Atomic Energy Act of 1954 occurring under
a contract entered into before the date of the enactment of this Act.
(d) Rulemaking.--Not later than 6 months after the date of the
enactment of this Act, the Secretary of Energy shall issue a rule for
the implementation of the amendment made by subsection (b).

Subtitle B--Miscellaneous Matters

SEC. 4021. 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. 4022. NUCLEAR REGULATORY COMMISSION MEETINGS.

If a quorum of the Nuclear Regulatory Commission gathers to discuss
official Commission business the discussions shall be recorded, and the
Commission shall notify the public of such discussions within 15 days
after they occur. The Commission shall promptly make a transcript of
the recording available to the public on request, except to the extent
that public disclosure is exempted or prohibited by law. This section
shall not apply to a meeting, within the meaning of that term under
section 552b(a)(2) of title 5, United States Code.

SEC. 4023. 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 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
carry out this section $1,000,000 for each of fiscal years 2004
through 2007.
(2) Availability.--Funds made available under paragraph (1)
shall remain available until expended.

SEC. 4024. 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. 4025. 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. 4026. CARRYING OF FIREARMS BY LICENSEE EMPLOYEES.

Section 161 k. of the Atomic Energy Act of 1954 (42 U.S.C. 2201(k))
is amended to read as follows:
``k. authorize such of its members, officers, and employees
as it deems necessary in the interest of the common defense and
security to carry firearms while in the discharge of their
official duties. The Commission may also authorize--
``(1) such of those employees of its contractors
and subcontractors (at any tier) engaged in the
protection of property under the jurisdiction of the
United States located at facilities owned by or
contracted to the United States or being transported to
or from such facilities as it deems necessary in the
interests of the common defense and security; and
``(2) such of those employees of persons licensed
or certified by the Commission (including employees of
contractors of licensees or certificate holders)
engaged in the protection of property of (A) facilities
owned or operated by a Commission licensee or
certificate holder that are designated by the
Commission, or (B) property of significance to the
common defense and security located at facilities owned
or operated by a Commission licensee or certificate
holder or being transported to or from such facilities;
to carry firearms while in the discharge of their official
duties. A person authorized to carry firearms under this
subsection may, while in the performance of, and in connection
with, official duties, make arrests without warrant for any
offense against the United States committed in that person's
presence or for any felony cognizable under the laws of the
United States if that person has reasonable grounds to believe
that the individual to be arrested has committed or is
committing such felony. An employee of a contractor or
subcontractor or of a Commission licensee or certificate holder
(or a contractor of a licensee or certificate holder)
authorized to carry firearms under this subsection may make
such arrests only when the individual to be arrested is within,
or in direct flight from, the area of such offense. A person
granted authority to make arrests by this subsection may
exercise that authority only in the enforcement of laws
regarding the property of the United States in the custody of
the Department of Energy, the Nuclear Regulatory Commission, or
a contractor of the Department of Energy or Nuclear Regulatory
Commission or of a licensee or certificate holder of the
Commission, laws applicable to facilities owned or operated by
a Commission licensee or certificate holder that are designated
by the Commission pursuant to this subsection and property of
significance to the common defense and security that is in the
custody of a licensee or certificate holder or a contractor of
a licensee or certificate holder of the Commission, or any
provision of this Act that may subject an offender to a fine,
imprisonment, or both. The arrest authority conferred by this
subsection is in addition to any arrest authority under other
laws. The Secretary and the Commission, with the approval of
the Attorney General, shall issue guidelines to implement this
subsection;''.

SEC. 4027. UNAUTHORIZED INTRODUCTION OF DANGEROUS WEAPONS.

Section 229 a. of the Atomic Energy Act of 1954 (42 U.S.C.
2278a(a)) is amended by adding after ``custody of the Commission'' the
following: ``or subject to its licensing authority or to certification
by the Commission under this Act or any other Act''.

SEC. 4028. SABOTAGE OF NUCLEAR FACILITIES OR FUEL.

Section 236 a. of the Atomic Energy Act of 1954 (42 U.S.C. 2284(a))
is amended to read as follows:
``a. Any person who intentionally and willfully destroys or causes
physical damage to, or who intentionally and willfully attempts to
destroy or cause physical damage to--
``(1) any production facility or utilization facility
licensed under this Act;
``(2) any nuclear waste storage, treatment, or disposal
facility licensed under this Act;
``(3) any nuclear fuel for a utilization facility licensed
under this Act or any spent nuclear fuel from such a facility;
``(4) any uranium enrichment or nuclear fuel fabrication
facility licensed or certified by the Nuclear Regulatory
Commission; or
``(5) any production, utilization, waste storage, waste
treatment, waste disposal, uranium enrichment, or nuclear fuel
fabrication facility subject to licensing or certification
under this Act during its construction where the destruction or
damage caused or attempted to be caused could affect public
health and safety during the operation of the facility,
shall be fined not more than $1,000,000 or imprisoned for up to life in
prison without parole, or both.''.

SEC. 4029. 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, in
Colorado, Nebraska, Texas, Utah, or Wyoming.

SEC. 4030. URANIUM SALES.

(a) Restrictions on Inventory Sales.--Section 3112(d) of the USEC
Privatization Act (42 U.S.C. 2297h-10(d)) is amended to read as
follows:
``(d) Inventory Sales.--(1) In addition to the transfers and sales
authorized under subsections (b), (c), and (e), the Secretary of Energy
or the Secretary of the Army may transfer or sell uranium subject to
paragraph (2).
``(2) Except as provided in subsections (b), (c), and (e), no sale
or transfer of uranium shall be made under this subsection by the
Secretary of Energy or the Secretary of the Army unless--
``(A) the President determines that the material is not
necessary for national security needs;
``(B) the price paid to the appropriate Secretary, if the
transaction is a sale, will not be less that the fair market
value of the material; and
``(C) the sale or transfer to end users is made pursuant to
a contract of at least 3 years duration.
``(3) The Secretary of Energy shall not make any transfer or sale
of uranium under this subsection that would cause the total amount of
uranium transferred or sold pursuant to this subsection that is
delivered for consumption by end users to exceed--
``(A) 3 million pounds of U<INF>3</INF>O<INF>8</INF>
equivalent in fiscal year 2004, 2005, 2006, 2007, 2008, or
2009;
``(B) 5 million pounds of U<INF>3</INF>O<INF>8</INF>
equivalent in fiscal year 2010 or 2011;
``(C) 7 million pounds of U<INF>3</INF>O<INF>8</INF>
equivalent in fiscal year 2012; and
``(D) 10 million pounds of U<INF>3</INF>O<INF>8</INF>
equivalent in fiscal year 2013 or any fiscal year thereafter.
``(4) For the purposes of this subsection, the recovery of uranium
from uranium bearing materials transferred or sold by the Secretary of
Energy or the Secretary of the Army 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 for in this section, when such uranium is sold to end
users.''.
(b) Transfers to Corporation.--Section 3112 of the USEC
Privatization Act (42 U.S.C. 2297h-10) is further amended by adding at
the end the following new subsection:
``(g) Transfers to Corporation.--Notwithstanding subsection (b)(2)
and subsection (d)(2), the Secretary may transfer up to 9,550 metric
tons of uranium to the Corporation to replace uranium that the
Secretary transferred to the Corporation on or about June 30, 1993,
April 20, 1998, and May 18, 1998, and that does not meet commercial
specifications.''.
(c) Services.--Section 3112 of the USEC Privatization Act (42
U.S.C. 2297h-10) is further amended by adding at the end the following
new subsection:
``(h) Services.--(1) Notwithstanding any other provision of this
section, if the Secretary determines that if the Corporation has
failed, or may fail, to perform any obligation under the Agreement
between the Department of Energy and the Corporation dated June 17,
2002, and as amended thereafter, which failure could result in
termination of the Agreement, the Secretary shall notify the Committee
on Energy and Commerce of the House of Representatives and the
Committee on Energy and Natural Resources of the Senate, in such a
manner that affords the Committees an opportunity to comment, prior to
a determination by the Secretary whether termination, waiver, or
modification of the Agreement is required. The Secretary is authorized
to take such action as he determines necessary under the Agreement to
terminate, waive, or modify provisions of the Agreement to achieve its
purposes.
``(2) Notwithstanding any other provision of this section, if the
Secretary determines in accordance with Article 2D of the Agreement
between the Department of Energy and the Corporation dated June 17,
2002, and as amended thereafter, to transition operation of the Paducah
gaseous diffusion plant, the Secretary may provide uranium enrichment
services in a manner consistent with Article 2D of such Agreement.''.
(d) Report.--Within 3 years after the date of enactment of this
Act, the Secretary shall report to the 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
Secretary of Energy or the Secretary of the Army, 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. 4031. MEDICAL ISOTOPE PRODUCTION.

Section 134 of the Atomic Energy Act of 1954 (42 U.S.C. 2160d) is
amended--
(1) by redesignating subsection b. as subsection f.;
(2) by inserting after subsection a. the following:
``b. The Commission may issue a license authorizing the export
(including shipment to and use at intermediate and ultimate consignees
specified in the license) to a Recipient Country of highly enriched
uranium for medical isotope production if, in addition to any other
requirements of this Act, the Commission determines that--
``(1) a Recipient Country that supplies an assurance letter
to the United States Government in connection with the
Commission's consideration of the export license application
has informed the United States Government that any intermediate
consignees and the ultimate consignee specified in the
application are required to use such highly enriched uranium
solely to produce medical isotopes; and
``(2) the highly enriched uranium for medical isotope
production will be irradiated only in a reactor in a Recipient
Country that--
``(A) uses an alternative nuclear reactor fuel; or
``(B) is the subject of an agreement with the
United States Government to convert to an alternative
nuclear reactor fuel when such fuel can be used in that
reactor.
``c. Applications to the Commission for licenses authorizing the
export to a Recipient Country of highly enriched uranium for medical
isotope production shall be subject to subsection b., and subsection a.
shall not be applicable to such exports.
``d. The Commission is authorized to specify, by rulemaking or
decision in connection with an export license application, that a
country other than a Recipient Country may receive exports of highly
enriched uranium for medical isotope production in accordance with the
same criteria established by subsection b. for exports to a Recipient
Country, upon the Commission's finding that such additional country is
a party to the Treaty on the Nonproliferation of Nuclear Weapons and
the Convention on the Physical Protection of Nuclear Material and will
receive such highly enriched uranium pursuant to an agreement with the
United States concerning peaceful uses of nuclear energy.
``e. The Commission shall review the adequacy of physical
protection requirements that are currently applicable to the
transportation of highly enriched uranium for medical isotope
production. If it determines that additional physical protection
measures are necessary, including any limits that the Commission finds
are necessary on the quantity of highly enriched uranium contained in a
single shipment for medical isotope production, the Commission shall
impose such requirements, as license conditions or through other
appropriate means.''; and
(3) in subsection f., as so redesignated by paragraph (1)
of this section--
(A) by striking ``and'' at the end of paragraph
(2);
(B) by striking the period at the end of paragraph
(3)(B) and inserting a semicolon; and
(C) by adding at the end the following:
``(4) the term `medical isotopes' means radioactive
isotopes, including Molybdenum 99, Iodine 131, and Xenon 133,
that are used to produce radiopharmaceuticals for diagnostic or
therapeutic procedures on patients, or in connection with
research and development of radiopharmaceuticals;
``(5) the term `highly enriched uranium for medical isotope
production' means highly enriched uranium contained in, or for
use in, targets to be irradiated for the sole purpose of
producing medical isotopes;
``(6) the term `radiopharmaceuticals' means radioactive
isotopes containing byproduct material combined with chemical
or biological material that are designed to accumulate
temporarily in a part of the body, for therapeutic purposes or
for enabling the production of a useful image of the
appropriate body organ or function for use in diagnosis of
medical conditions; and
``(7) the term `Recipient Country' means Canada, Belgium,
France, Germany, and the Netherlands.''.

SEC. 4032. HIGHLY ENRICHED URANIUM DIVERSION THREAT REPORT.

Section 307 of the Energy Reorganization Act of 1974 (42 U.S.C.
5877) is amended by adding at the end the following new subsection:
``(d) Not later than 6 months after the date of the enactment of
this Act, the Secretary of Energy shall transmit to the Congress a
report with recommendations on reducing the threat resulting from the
theft or diversion of highly enriched uranium. Such report shall
address--
``(1) monitoring of highly enriched uranium supplies at any
commercial companies who have access to substantial amounts of
highly enriched uranium;
``(2) assistance to companies described in paragraph (1)
with security and personnel checks;
``(3) acceleration of the process of blending down excess
highly enriched uranium into low-enriched uranium;
``(4) purchasing highly enriched uranium (except for
production of medical isotopes);
``(5) paying the cost of shipping highly enriched uranium;
``(6) accelerating the conversion of commercial research
reactors and energy reactors to the use of low-enriched uranium
fuel where they now use highly enriched uranium fuel; and
``(7) minimizing, and encouraging transparency in, the
further enrichment of low-enriched uranium to highly enriched
uranium.''.

SEC. 4033. WHISTLEBLOWER PROTECTION.

(a) Definition of Employer.--Section 211(a)(2) of the Energy
Reorganization Act of 1974 (42 U.S.C. 5851(a)(2)) is amended--
(1) by striking ``and'' at the end of subparagraph (C);
(2) in subparagraph (D), by striking ``that is
indemnified'' and all that follows through ``12344.'' and
inserting ``or the Commission; and''; and
(3) by adding at the end the following new subparagraph:
``(E) the Department of Energy and 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 180
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 claimant, the
claimant 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.''.

TITLE V--VEHICLES AND FUELS

Subtitle A--Energy Policy Act Amendments

SEC. 5011. CREDIT FOR SUBSTANTIAL CONTRIBUTION TOWARD NONCOVERED
FLEETS.

Section 508 of the Energy Policy Act of 1992 (42 U.S.C. 13258) is
amended by adding at the end the following new subsection:
``(e) Credit for Substantial Contribution Toward Use of Dedicated
Vehicles in Noncovered Fleets.--
``(1) Definitions.--In this subsection:
``(A) Medium or heavy duty vehicle.--The term
`medium or heavy duty vehicle' means a dedicated
vehicle that--
``(i) in the case of a medium duty vehicle,
has a gross vehicle weight rating of more than
8,500 pounds but not more than 14,000 pounds;
or
``(ii) in the case of a heavy duty vehicle,
has a gross vehicle weight rating of more than
14,000 pounds.
``(B) Substantial contribution.--The term
`substantial contribution' means not less than $15,000
in cash or in kind services, as determined by the
Secretary.
``(2) Allocation of credits.--The Secretary shall allocate
a credit to a fleet or covered person under this section if the
fleet or person makes a substantial contribution toward the
acquisition and use of dedicated vehicles or neighborhood
electric vehicles by a person that owns, operates, leases, or
otherwise controls a fleet that is not covered by this title.
``(3) Multiple credits for medium and heavy duty
vehicles.--The Secretary shall issue 2 full credits to a fleet
or covered person under this section if the fleet or person
makes a substantial contribution toward the acquisition and use
of a medium or heavy duty vehicle.
``(4) Use of credits.--At the request of a fleet or covered
person allocated a credit under this subsection, the Secretary
shall, for the year in which the acquisition of the dedicated
vehicle or neighborhood electric vehicle is made, treat that
credit as the acquisition of 1 alternative fueled vehicle that
the fleet or covered person is required to acquire under this
title.
``(5) Limitation.--Except as provided in paragraph (3), no
more than 1 credit shall be allocated under this subsection for
each vehicle.''.

SEC. 5012. CREDIT FOR ALTERNATIVE FUEL INFRASTRUCTURE.

Section 508 of the Energy Policy Act of 1992 (42 U.S.C. 13258), as
amended by this Act, is further amended by adding at the end the
following new subsection:
``(f) Credit for Investment in Alternative Fuel Infrastructure.--
``(1) Definition.--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;
``(C) training programs, educational materials, or
other activities necessary to provide information
regarding the operation, maintenance, or benefits
associated with alternative fueled vehicles; and
``(D) such other activities 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) Allocation of credits.--The Secretary shall allocate
a credit to a fleet or covered person under this section for
investment in qualifying infrastructure if the qualifying
infrastructure is open to the general public during regular
business hours.
``(3) Amount.--For the purposes of credits under this
subsection--
``(A) 1 credit shall be equal to a minimum
investment of $25,000 in cash or in kind services, 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.''.

SEC. 5013. ALTERNATIVE FUELED VEHICLE REPORT.

(a) Definitions.--In this section:
(1) Alternative fuel.--The term ``alternative fuel'' has
the meaning given the term in section 301 of the Energy Policy
Act of 1992 (42 U.S.C. 13211).
(2) Alternative fueled vehicle.--The term ``alternative
fueled vehicle'' has the meaning given the term in section 301
of the Energy Policy Act of 1992 (42 U.S.C. 13211).
(3) Light duty motor vehicle.--The term ``light duty motor
vehicle'' has the meaning given the term in section 301 of the
Energy Policy Act of 1992 (42 U.S.C. 13211).
(4) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
(b) Report.--Not later than 1 year after the date of enactment of
this Act, the Secretary shall submit to Congress a report on the effect
that titles III, IV, and V of the Energy Policy Act of 1992 have had on
the development of alternative fueled vehicle technology, the
availability of alternative fueled vehicles in the market, the cost of
light duty motor vehicles that are alternative fueled vehicles, and the
availability, cost, and use of alternative fuels and biodiesel. Such
report shall include any recommendations of the Secretary for
legislation concerning the alternative fueled vehicle requirements
under the Energy Policy Act of 1992, and shall examine, discuss, and
determine the following:
(1) The number of alternative fueled vehicles acquired by
fleets or covered persons required to acquire alternative
fueled vehicles.
(2) The extent to which fleets subject to alternative
fueled vehicle acquisition requirements have met those
requirements through the use of fuel mixtures that contain at
least 20 percent biodiesel pursuant to section 312 of the
Energy Policy Act of 1992 (42 U.S.C. 13220).
(3) The amount of alternative fuel used in alternative
fueled vehicles acquired by fleets required to acquire
alternative fueled vehicles under the Energy Policy Act of
1992.
(4) The amount of petroleum displaced by the use of
alternative fueled vehicles acquired by fleets or covered
persons.
(5) The cost of compliance with vehicle acquisition
requirements under the Energy Policy Act of 1992, and the
benefits of using such fuel and vehicles.
(6) Projections of the amount of biodiesel, the number of
alternative fueled vehicles, and the amount of alternative fuel
that will be used over the next decade by fleets required to
acquire alternative fueled vehicles under the Energy Policy Act
of 1992.
(7) The existence of any obstacles to increased use of
alternative fuel and biodiesel in vehicles acquired or
maintained by fleets required to acquire alternative fueled
vehicles under the Energy Policy Act of 1992, and the benefits
of using such fuel and vehicles.

SEC. 5014. ALLOCATION OF INCREMENTAL COSTS.

Section 303(c) of the Energy Policy Act of 1992 (42 U.S.C.
13212(c)) is amended by striking ``may'' and inserting ``shall''.

Subtitle B--FreedomCAR and Hydrogen Fuel Program

SEC. 5021. SHORT TITLE.

This subtitle may be cited as the ``FreedomCAR and Hydrogen Fuel
Act of 2003'' or ``Freedom Act''.

SEC. 5022. FINDINGS, PURPOSE, AND DEFINITIONS.

(a) Findings.--Congress finds that--
(1) the United States is currently dependent on foreign
sources for a majority of its petroleum supply;
(2) the Nation's dependence on foreign petroleum is
expected to increase in the decades ahead;
(3) it is in the national interest to reduce dependence on
imported petroleum by accelerating Federal efforts to partner
with the private sector by deploying hydrogen fuel cell
vehicles and the refueling infrastructure to support those
vehicles;
(4) it is in the national interest to develop a light duty
vehicle fleet that substantially reduces dependence on foreign
petroleum, assists the Nation in meeting its requirements under
the Clean Air Act and reduces greenhouse gas emissions in a
manner that maintains the freedom of consumers to purchase the
kinds of vehicles they wish to drive and the freedom to refuel
those vehicles safely, affordably, and conveniently;
(5) hydrogen fuel cell vehicles and supporting
infrastructure have the potential to accelerate the parallel
advancement of fuel cells for stationary power that will
enhance the resiliency, reliability, and environmental
performance of the Nation's electricity infrastructure;
(6) ancillary benefits for the Nation, including the
acceleration of fuel cell technology for consumer electronics
and portable power, are likely to result from the advancement
of hydrogen fuel cell vehicles and supporting infrastructure;
(7) there is a need for deployment of bridging technologies
including gasoline electric and diesel electric hybrid drive
systems, advanced combustion engines including clean diesel,
electric battery, and power electronics, and alternative fuels
and other technology that can contribute to reducing petroleum
demand and decreasing air emissions;
(8) low-cost hydrogen production, storage, and delivery
facilities are essential to the success of the FreedomCAR
Vehicle Programs; and
(9) work should be performed in a manner that is cognizant
of consumer acceptance, passenger safety, and marketplace
success.
(b) Purpose.--The purpose of this subtitle is to reduce
significantly the Nation's dependence on imported petroleum, enhance
the production and conservation of energy, and reduce air emissions
through support of the following Department of Energy actions:
(1) Programs and activities leading to--
(A) a commitment by automakers and hydrogen energy
and energy infrastructure providers no later than year
2015 to offer safe, affordable, and technically viable
hydrogen fuel cell vehicles and refueling
infrastructure in the mass consumer market; and
(B) a commitment by the automakers and hydrogen
energy and energy infrastructure providers to the
deployment of hydrogen fuel cell vehicles and
affordable and convenient refueling infrastructure no
later than year 2020.
(2) A program to establish international codes, standards,
and safety protocols for the use and manufacture of domestic
and foreign products.
(3) Interagency, intergovernmental, and international
programs and activities for education, information exchange,
and cooperation.
(c) Definitions.--In this subtitle:
(1) The term ``Advisory Committee'' means the Hydrogen
Technical and Fuel Cell Advisory Committee established under
section 5028 of this Act.
(2) The term ``Department'' means the Department of Energy.
(3) The term ``FreedomCAR'' is the acronym for a Department
initiative in automotive research and development entitled
``Freedom Cooperative Automotive Research''.
(4) 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.
(5) The term ``infrastructure'' means the equipment,
systems, or facilities used to produce, distribute, deliver, or
store hydrogen and other advanced clean fuels.
(6) The term ``light duty vehicle'' means a car or truck,
classified by the Department of Transportation as a Class I or
IIA vehicle.
(7) The term ``Secretary'' means the Secretary of Energy.

SEC. 5023. PLAN; REPORT.

(a) Plan.--The Secretary, in consultation with other appropriate
Federal agencies, shall prepare a comprehensive interagency
coordination plan for activities under this subtitle. This plan may be
provided as part of the President's annual budget submission to
Congress.
(b) Report.--Not later than one year after the date of enactment of
this subtitle, and biennially thereafter, the Secretary shall transmit
to the Congress a report on the status of programs and activities under
this subtitle. This report may be provided as part of the President's
annual budget submission to Congress. This report may include, in
addition to any views and recommendations of the Secretary--
(1) an assessment of the effectiveness of the programs and
activities under this subtitle and the extent to which the
purposes in section 5022(b) have been met; and
(2) the potential for interagency, intergovernmental,
international, or private sector collaboration opportunities
and activities under this subtitle.-

SEC. 5024. PUBLIC-PRIVATE PARTNERSHIP.

(a) Program.--In partnership with the private sector, the Secretary
shall conduct a program designed to facilitate the production and
conservation of energy and the deployment of energy infrastructure,
including all of the following:
(1) Hydrogen energy.
(2) Fuel cells.
(3) Advanced vehicle technologies.
(4) Clean fuels in addition to hydrogen.
(5) Codes, standards, and safety protocols.-
(b) Program Goals.--
(1) Automakers.--For automakers 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 into
commerce; and
(B) to enable production, delivery, and acceptance
by consumers of model year 2020 hydrogen fuel cell and
other vehicles that will have--
(i) a range of at least three hundred
miles;
(ii) improved performance and ease of
driving;
(iii) met all light duty safety regulations
created under section 30111 of title 49, United
States Code; and
(iv) when compared to light duty vehicles
in model year 2003--
(I) a fuel economy that is two and
one half times the equivalent fuel
economy of these vehicles as regulated
under the Motor Vehicle Information and
Cost Savings Act, or about 70 miles per
gallon, and
(II) near zero emissions of air
pollutants regulated under the Clean
Air Act.
(2) Hydrogen energy and energy infrastructure.--For
hydrogen energy and energy infrastructure the goals of the
program include, but are not limited to, a commitment not later
than 2015 that will enable the deployment by 2020 of
infrastructure to provide--
(A) safe and convenient refueling;
(B) activities leading to widespread availability
of hydrogen from domestic energy sources through--
(i) production, including consideration of
cost-effective production from domestic energy
sources;
(ii) delivery, including transmission by
pipeline and other distribution methods for
hydrogen; and
(iii) storage, including storage in surface
transportation vehicles;
(C) hydrogen for fuel cells, internal combustion
engines, and other energy conversion devices for
portable, stationary, and transportation applications;
and
(D) other technologies consistent with the
Department's plan.
(3) Fuel cells.--The program for fuel cells and their
portable, stationary, and transportation applications may
include, but is not limited to--
(A) a safe, economical, and environmentally sound
hydrogen fuel cell;
(B) a fuel cell for light duty and other vehicles;
and
(C) other technologies consistent with the
Department's plan.
(4) Advanced Vehicle Technologies.--The program for
advanced vehicle technologies may include, but is not limited
to--
(A) advanced combustion;
(B) materials;
(C) energy storage;
(D) control systems; and
(E) other technologies consistent with the
Department's plan.
(5) Codes, Standards, and Safety Protocols.--(A) The
Department's program for codes, standards, and safety protocols
shall strive towards establishment of international codes,
standards, and safety protocols for the use and manufacture of
domestic and foreign products.
(B) The Secretary may represent the United States interests
with respect to activities and programs under this subsection,
collaborating with the Secretary of Transportation, and in
consultation with other appropriate governments and
nongovernmental organizations including the following:
(i) Other Federal, State, regional, and local
governments and their representatives.
(ii) Industry and its representatives, including
members of the energy and transportation industries.
(iii) Foreign governments and their representatives
including international organizations.
(c) Federal Funding.--(1) The Secretary shall carry out the
programs and activities under this section consistent with the
generally applicable Federal laws and regulations governing awards of
financial assistance, contracts, or other agreements, and may include
funding to nationally recognized university-based research centers.
(2) The Secretary shall endeavor to avoid duplication or
displacement of other research and development programs and activities.
(d) Cost Sharing.--(1) The Secretary shall require a commitment
from non-Federal sources of at least 20 percent of the cost of proposed
programs under this section.
(2) The Secretary may reduce or eliminate the cost sharing
requirement under paragraph (1)--
(A) if the Secretary determines that the activity is of a
basic or fundamental nature which is vital to the success of
the program and unlikely to occur in a timely manner without
reduction or elimination of the cost-sharing requirement; or
(B) for technical analyses, outreach programs, and other
activities including educational programs under section 5027 of
this subtitle that the Secretary does not expect to result in a
marketable product.

SEC. 5025. DEPLOYMENT.

(a) Deployment Program.--In partnership with the private sector,
the Secretary shall conduct a program to facilitate the deployment of--
(1) hydrogen energy and energy infrastructure;
(2) fuel cells;
(3) advanced vehicle technologies;
(4) clean fuels in addition to hydrogen; and
(5) codes, standards, and safety protocols.-
(b) Program Goals.--(1) For automakers, the goals of the program
are--
(A) to enable a decision by automakers no later than year
2015 to offer safe, affordable, and technically viable hydrogen
fuel cell vehicles into commerce; and
(B) to enable production and delivery to, and acceptance
by, consumers of model year 2020 hydrogen fuel cell and other
vehicles that will have--
(i) a range of at least 300 miles;
(ii) improved performance and ease of driving;
(iii) met all light duty safety regulations created
under section 30111 of title 49, United States Code;
and
(iv) when compared to light duty vehicles in model
year 2003--
(I) a fuel economy that is two and one half
times the equivalent fuel economy of these
vehicles under the Motor Vehicle Information
and Cost Savings Act, or about 70 miles per
gallon; and
(II) near zero emissions of air pollutants
regulated under the Clean Air Act.
(2) For hydrogen energy and energy infrastructure the goals of the
program include, but are not limited to, a commitment not later than
2015 that will enable the deployment by 2020 of infrastructure to
provide--
(A) safe, convenient, and affordable refueling;
(B) widespread availability of hydrogen from domestic
energy sources through--
(i) production, including consideration of cost-
effective production from domestic energy sources;
(ii) delivery, including transmission by pipeline
and other distribution methods, for hydrogen in its
gaseous, liquid, and solid states; and
(iii) storage, including storage in surface
transportation vehicles;
(C) hydrogen for fuel cells, internal combustion engines,
and other energy conversion devices for portable, stationary,
and transportation applications; and
(D) other technologies consistent with the Department's
plan.
(c) Fuel Cells.--The program for fuel cells and their portable,
stationary, and transportation applications may include but is not
limited to--
(1) a safe, economical, and environmentally sound hydrogen
fuel cell;
(2) a fuel cell for light duty and other vehicles; and
(3) other technologies consistent with the Department's
plan.
(d) Advanced Vehicle Technologies.--The program for advanced
vehicle technologies may include, but is not limited to--
(1) advanced combustion;
(2) materials;
(3) energy storage;
(4) control systems; and
(5) other technologies consistent with the Department's
plan.
(e) Federal Funding.--The Secretary shall carry out the program and
activities under this section consistent with laws and regulations
governing awards of financial assistance, contracts or other
agreements, and may include funding to nationally recognized
university-based research centers. The Secretary shall endeavor to
avoid duplication or displacement of other programs.
(f) Cost Sharing.--
(1) In general.--The Secretary shall require a commitment
from non-Federal sources of at least 50 percent of the costs
directly relating to a demonstration under this section.
(2) Reduction.--The Secretary may reduce the non-Federal
requirement under paragraph (1) if the Secretary determines
that--
(A) the reduction is appropriate considering the
technological risks involved; and
(B) the terms and conditions are consistent with
the Agreement on Subsidies and Countervailing Measures.
(3) Cooperative agreements with governments.--The Secretary
may enter into cooperative and cost sharing agreements with
Federal, State, or local governments to deploy vehicles,
vehicle systems, and refueling infrastructure using hydrogen,
fuel cells, or other advanced technologies in government
facilities or fleet transportation systems.

SEC. 5026. ASSESSMENT AND TRANSFER.

(a) Program.--The Secretary may conduct a program to transfer
technology to the private sector under this subtitle.
(b) Disclosure.--The Secretary may protect from disclosure, for up
to 5 years after the information was developed, any information
developed pursuant to a cost shared transaction, or subagreement
thereunder, entered into under this subtitle to advance the goals of
the programs, 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 this developed information had been obtained
from a person other than a Federal agency.

SEC. 5027. 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 or his designee 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 Environmental Protection Agency.
(6) The National Aeronautics and Space Administration.
(7) Other Federal agencies as the Secretary determines
appropriate.
(b) Duties of the Interagency Task Force.--
(1) Planning.--The task force shall coordinate the
implementation of the interagency plan in section 5023(a), and
work towards deployment of--
(A) a safe, economical, and environmentally sound
fuel infrastructure, including an infrastructure that
supports buses and other fleet transportation;
(B) fuel cells in government and other
applications, including portable, stationary, and
transportation applications; and
(C) distributed power generation, including the
generation of combined heat, power, and clean fuels
including hydrogen.
(2) Information exchange.--(A) The interagency task force
shall coordinate interagency programs and activities including
the exchange of information.
(B) 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.
(C) The information exchange may consist of workshops,
publications, conferences, and a database for use by the public
and private sectors. The interagency task force is expected
to--
(i) foster the exchange of generic, nonproprietary
information and technology among industry, academia,
and government;
(ii) update the inventory and assessment of
hydrogen, fuel cells, and other advanced technologies,
including their commercial capability for the economic
and environmentally safe production, distribution,
delivery, storage, and use of clean fuels including
hydrogen;
(iii) integrate technical and other information
made available as a result of the programs and
activities under this subtitle;
(iv) promote the marketplace introduction of
infrastructure for hydrogen and other clean fuel
vehicles; and
(v) conduct an education program to provide
FreedomCAR and hydrogen fuel information to potential
end-users.

SEC. 5028. 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 subtitle.
(b) Membership.--
(1) Members.--The Advisory Committee is comprised of not
fewer than 12 nor more than 25 members. These members shall be
appointed by the Secretary to represent domestic industry,
academia, professional societies, government agencies, 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 subtitle;
(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 interagency coordination plan under section 5023(a)
of this Act.
(d) Response to Recommendations.--The Secretary shall consider, but
need not adopt, any recommendations of the Advisory Committee under
subsection (c).
(e) Advisory Committee Support.--The Secretary shall provide
resources necessary in the judgment of the Secretary for the Advisory
Committee to carry out its responsibilities under this subtitle.

SEC. 5029. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated to carry out the purposes
of this subtitle including programs for light duty vehicles, in
addition to any amounts made available for these purposes under other
Acts--
(1) $273,500,000 for fiscal year 2004;
(2) $325,000,000 for fiscal year 2005;
(3) $375,000,000 for fiscal year 2006;
(4) $400,000,000 for fiscal year 2007; and
(5) $425,000,000 for fiscal year 2008.

SEC. 5030. FUEL CELL PROGRAM AT NATIONAL PARKS.

The Secretary of Energy, in cooperation with the Secretary of
Interior and the National Park Service, is authorized to establish a
program to provide matching funds to assist in the deployment of fuel
cells at one or more prominent National Parks. The Secretary of Energy
shall transmit to Congress within 1 year, and annually thereafter, a
report describing any activities taken pursuant to such program. The
report shall address whether activities taken pursuant to such program
reduce the environmental impacts of energy use at National Parks. There
are authorized to be appropriated $2,000,000 for each of fiscal years
2004 through 2010 to carry out the purposes of this section.

SEC. 5030A. 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) 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; and
(2) 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.

Subtitle C--Clean School Buses

SEC. 5031. ESTABLISHMENT OF PILOT PROGRAM.

(a) Establishment.--The Secretary of Energy, in consultation with
the Secretary of Transportation and the Administrator of the
Environmental Protection Agency, shall establish a pilot program for
awarding grants on a competitive basis to eligible entities for the
acquisition of alternative fuel school buses and ultra-low sulfur
diesel school buses.
(b) Requirements.--Not later than 3 months after the date of the
enactment of this Act, the Secretary 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 certification requirements to ensure compliance with this
subtitle.
(c) Solicitation.--Not later than 6 months after the date of the
enactment of this Act, the Secretary shall solicit proposals for grants
under this section.
(d) 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 one or more public school
systems or responsible for the purchase of school buses; or
(2) to a contracting entity that provides school bus
service to one or more public school systems, if the grant
application is submitted jointly with the school system or
systems which the buses will serve.
(e) Types of Grants.--
(1) In general.--Grants under this section shall promote
the conservation of energy and improvement of public health and
the environment by facilitating the acquisition of alternative
fuel school buses and ultra-low sulfur diesel school buses in
lieu of buses manufactured before model year 1977 and diesel-
powered buses manufactured before model year 1991.
(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 Secretary shall
give priority to awarding grants to applicants who will utilize
grants to replace buses manufactured before model year 1977.
(f) Conditions of Grant.--A grant provided under this section shall
include the following conditions:
(1) 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) 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 school buses, including State
taxes and contract fees; and
(B) to provide--
(i) up to 10 percent of the price of the
alternative fuel buses acquired, for necessary
alternative fuel infrastructure if the
infrastructure will only be available to the
grant recipient; and
(ii) up to 15 percent of the price of the
alternative fuel buses acquired, for necessary
alternative fuel infrastructure if the
infrastructure will be available to the grant
recipient and to other bus fleets.
(3) The grant recipient shall be required to provide at
least the lesser of 15 percent of the total cost of each bus
received or $15,000 per bus.
(4) In the case of a grant recipient receiving a grant to
demonstrate ultra-low sulfur diesel school buses, the grant
recipient shall be required to provide 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 purposes of the grant, and a commitment by the
applicant to use such fuel in carrying out the purposes of the
grant.
(g) Buses.--Funding under a grant made under this section may be
used to facilitate the use only of new alternative fuel school buses or
ultra-low sulfur diesel school buses--
(1) with a gross vehicle weight of greater than 14,000
pounds;
(2) that are powered by a heavy duty engine;
(3) that, in the case of alternative fuel school buses,
emit not more than--
(A) for buses manufactured in model year 2002, 2.5
grams per brake horsepower-hour of nonmethane
hydrocarbons and oxides of nitrogen and .01 grams per
brake horsepower-hour of particulate matter; and
(B) for buses manufactured in model years 2003
through 2006, 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
(4) that, in the case of ultra-low sulfur diesel school
buses, emit not more than--
(A) for buses manufactured in model years 2002
through 2003, 3.0 grams per brake horsepower-hour of
oxides of nitrogen and .01 grams per brake horsepower-
hour of particulate matter; and
(B) for buses manufactured in 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,
except that under no circumstances shall buses be acquired
under this section that emit 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 school buses commercially available at the time the
grant is made.
(h) Deployment and Distribution.--The Secretary shall seek to the
maximum extent practicable to achieve nationwide deployment of
alternative fuel school buses and ultra-low sulfur diesel school buses
through the program under this section, and shall 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) Limit on Funding.--The Secretary shall provide not less than 20
percent and not more than 25 percent of the grant funding made
available under this section for any fiscal year for the acquisition of
ultra-low sulfur diesel school buses.
(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.--Not later than January 31 of each year, the
Secretary of Energy shall provide a report evaluating implementation of
the program under this section to the Congress. Such report shall
include the total number of grant applications received, the number and
types of alternative fuel school buses and ultra-low sulfur diesel
school buses requested in grant applications, a list of grants awarded
and the criteria used to select the grant recipients, certified engine
emission levels of all buses purchased under the program, and any other
information the Secretary considers appropriate.
(l) Definitions.--For purposes of this section--
(1) the term ``alternative fuel school bus'' means a school
bus powered substantially by electricity (including electricity
supplied by a fuel cell), or by liquefied natural gas,
compressed natural gas, liquefied petroleum gas, hydrogen,
propane, or methanol or ethanol at no less than 85 percent by
volume;
(2) the term ``idling'' means operating an engine while
remaining stationary for more than approximately 3 minutes,
except that such term does not apply to routine stoppages
associated with traffic movement or congestion; and
(3) the term ``ultra-low sulfur diesel school bus'' means a
school bus powered by diesel fuel which contains sulfur at not
more than 15 parts per million.

SEC. 5032. FUEL CELL BUS DEVELOPMENT AND DEMONSTRATION PROGRAM.

(a) Establishment of Program.--The Secretary shall establish a
program for entering into cooperative agreements with private sector
fuel cell bus developers for the acquisition of fuel cell-powered
school buses, and 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 facilitate 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 20 percent for fuel
infrastructure development activities.
(c) Funding.--No more than $25,000,000 of the amounts authorized
under section 5033 may be used for carrying out this section for the
period encompassing fiscal years 2003 through 2006.
(d) Reports to Congress.--Not later than 3 years after the date of
the enactment of this Act, and not later than October 1, 2006, the
Secretary shall transmit to the Congress a report that--
(1) evaluates the process of converting natural gas
infrastructure to accommodate fuel cell-powered school buses;
and
(2) assesses the overall impact on energy conservation,
public health, and the environment as a result of this program
under this section.

SEC. 5033. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated to the Secretary for
carrying out this subtitle, to remain available until expended--
(1) $60,000,000 for fiscal year 2004;
(2) $70,000,000 for fiscal year 2005; and
(3) $80,000,000 for fiscal year 2006.

Subtitle D--Advanced Vehicles

SEC. 5041. DEFINITIONS.

For the purposes of this subtitle, the following definitions apply:
(1) Alternative fueled vehicle.--The term ``alternative
fueled vehicle'' means a vehicle propelled solely on an
alternative fuel as defined in section 301 of the Energy Policy
Act of 1992 (42 U.S.C. 13211), except the term does not include
any vehicle that the Secretary determines, by rule, does not
yield substantial environmental benefits over a vehicle
operating solely on gasoline or diesel derived from fossil
fuels.
(2) Fuel cell vehicle.--The term ``fuel cell vehicle''
means a vehicle propelled by one or more cells that convert
chemical energy directly into electricity by combining oxygen
with hydrogen fuel which is stored on board the vehicle in any
form and may or may not require reformation prior to use.
(3) Hybrid vehicle.--The term ``hybrid vehicle'' means a
medium or heavy duty vehicle propelled by an internal
combustion engine using any combustible fuel and an onboard
rechargeable battery storage system.
(4) Neighborhood electric vehicle.--The term ``neighborhood
electric vehicle'' means a motor vehicle that qualifies as
both--
(A) a low-speed vehicle, as such term is defined in
section 571.3(b) of title 49, Code of Federal
Regulations; and
(B) a zero-emission vehicle, as such term is
defined in section 86.1702-99 of title 40, Code of
Federal Regulations.
(5) Pilot program.--The term ``pilot program'' means the
competitive grant program established under section 5042.
(6) Ultra-low sulfur diesel vehicle.--The term ``ultra-low
sulfur diesel vehicle'' means a vehicle manufactured in model
years 2002 through 2006 powered by a heavy-duty diesel engine
that--
(A) is fueled by diesel fuel which contains sulfur
at not more than 15 parts per million; and
(B) emits not more than the lesser of--
(i) for vehicles manufactured in--
(I) model years 2002 and 2003, 3.0
grams per brake horsepower-hour of
oxides of nitrogen and .01 grams per
brake horsepower-hour of 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 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. 5042. PILOT PROGRAM.

(a) Establishment.--The Secretary 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 10
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.--Grants under this section may be used for the
following purposes:
(1) The acquisition of alternative fueled vehicles or fuel
cell vehicles, including--
(A) passenger vehicles including neighborhood
electric vehicles; and
(B) motorized two-wheel bicycles, scooters, or
other vehicles for use by law enforcement personnel or
other State or local government or metropolitan
transportation authority 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 airplanes
away from terminal gates.
(3) The acquisition of ultra-low sulfur diesel vehicles.
(4) 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.--The Secretary shall issue requirements
for applying for grants under the pilot program. At a minimum,
the Secretary shall require that applications be submitted by
the head of a State or local government or a metropolitan
transportation authority, or any combination thereof, and a
registered participant in the Clean Cities Program of the
Department of Energy, and shall include--
(A) a description of the projects proposed in the
application, including how they meet the requirements
of this subtitle;
(B) an estimate of the ridership or degree of use
of the projects proposed in the application;
(C) an estimate of the air pollution emissions
reduced and fossil fuel displaced as a result of the
projects proposed in the application, and a plan to
collect and disseminate environmental data, related to
the projects to be funded under the grant, over the
life of the projects;
(D) a description of how the projects proposed in
the application will be sustainable without Federal
assistance after the completion of the term of the
grant;
(E) a complete description of the costs of each
project proposed in the application, including
acquisition, construction, operation, and maintenance
costs over the expected life of the project;
(F) a description of which costs of the projects
proposed in the application will be supported by
Federal assistance under this subtitle; and
(G) documentation to the satisfaction of the
Secretary that diesel fuel containing sulfur at not
more than 15 parts per million is available for
carrying out the projects, and a commitment by the
applicant to use such fuel in carrying out the
projects.
(2) Partners.--An applicant under paragraph (1) may carry
out projects under the pilot program in partnership with public
and private entities.
(d) Selection Criteria.--In evaluating applications under the pilot
program, the Secretary shall consider each applicant's previous
experience with similar projects and shall give priority consideration
to applications that--
(1) are most likely to maximize protection of the
environment;
(2) demonstrate the greatest commitment on the part of the
applicant to ensure funding for the proposed projects and the
greatest likelihood that each project proposed in the
application will be maintained or expanded after Federal
assistance under this subtitle is completed; and
(3) exceed the minimum requirements of subsection
(c)(1)(A).
(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 3 months after the date of
the 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 within 6
months of the publication of the notice.
(2) Selection.--Not later than 6 months after the date by
which applications for grants are due, the Secretary shall
select by competitive, peer review all applications for
projects to be awarded a grant under the pilot program.
(g) Limit on Funding.--The Secretary shall provide not less than 20
percent and not more than 25 percent of the grant funding made
available under this section for the acquisition of ultra-low sulfur
diesel vehicles.

SEC. 5043. REPORTS TO CONGRESS.

(a) Initial Report.--Not later than 2 months after the date grants
are awarded under this subtitle, the Secretary shall transmit to the
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 the
enactment of this Act, and annually thereafter until the pilot program
ends, the Secretary shall transmit to the Congress a report containing
an evaluation of the effectiveness of the pilot program, including an
assessment of the benefits to the environment derived from the projects
included in the pilot program as well as an 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. 5044. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated to the Secretary
$200,000,000 to carry out this subtitle, to remain available until
expended.

Subtitle E--Hydrogen Fuel Cell Heavy-Duty Vehicles

SEC. 5051. DEFINITION.

For the purposes of this subtitle, the term ``advanced vehicle
technologies program'' means the program created pursuant to section
5506 of title 49, United States Code.

SEC. 5052. FINDINGS.

The Congress makes the following findings:
(1) The Department of Energy and the Department of
Transportation jointly developed the consortium-based advanced
vehicle technologies program to develop energy efficient and
clean heavy-duty vehicles in 1998.
(2) The majority of clean fuel vehicles in operation today
are transit buses.
(3) Hydrogen fuel cell heavy-duty vehicle bus deployments
can most appropriately advance hydrogen fuel cell technology
development due to centralized refueling, stable duty cycles,
and fixed routes.
(4) Hydrogen fuel cell heavy-duty vehicle bus deployments
are the most effective manner in which to advance technology
developments for public awareness, consumption, and acceptance.

SEC. 5053. HYDROGEN FUEL CELL BUSES.

The Secretary of Energy, through the advanced vehicle technologies
program, in coordination with the Secretary of Transportation, shall
advance the development of fuel cell bus technologies by providing
funding for 4 demonstration sites that--
(1) have or will soon have hydrogen infrastructure for fuel
cell bus operation; and
(2) are operated by entities with experience in the
development of fuel cell bus technologies,
to enable the widespread utilization of fuel cell buses. Such
demonstrations shall address the reliability of fuel cell heavy-duty
vehicles, expense, infrastructure, containment, storage, safety,
training, and other issues.

SEC. 5054. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated to the Secretary of Energy
$10,000,000 for each of the fiscal years 2004 through 2008 for carrying
out this subtitle.

Subtitle F--Miscellaneous

SEC. 5061. RAILROAD EFFICIENCY.

(a) Establishment.--The Secretary shall, in conjunction with the
Secretary of Transportation and the Administrator of the Environmental
Protection Agency, establish a public-private research partnership
involving the Federal Government, the railroad industry, locomotive
manufacturers and equipment suppliers, and the research facility owned
by the Federal Railroad Administration and operated by contract. The
goal of the research partnership shall include developing and
demonstrating locomotive technologies that increase fuel economy,
reduce emissions, and lower costs.
(b) Authorization of Appropriations.--There are authorized to be
appropriated to carry out the requirements of this section $25,000,000
for fiscal year 2004, $30,000,000 for fiscal year 2005, and $35,000,000
for fiscal year 2006.

SEC. 5062. MOBILE EMISSION REDUCTIONS TRADING AND CREDITING.

Within 180 days after the date of enactment of this Act, the
Administrator of the Environmental Protection Agency shall provide a
report to the Congress on the Environmental Protection Agency's
experience 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. The
report shall describe--
(1) projects approved by the Environmental Protection
Agency that include the trading of mobile source emission
reduction credits for use by stationary sources in complying
with offset requirements, including project and stationary
sources location, volumes of emissions offset and traded, a
description of the sources of mobile emission reduction
credits, and, if available, the cost of the credits;
(2) the significant issues identified by the Environmental
Protection Agency in its consideration and approval of trading
in such projects;
(3) the requirements for monitoring and assessing the air
quality benefits of any approved project;
(4) the statutory authority upon which the Environmental
Protection Agency has based approval of such projects;
(5) an evaluation of how the resolution of issues in
approved projects could be utilized in other projects; and
(6) any other issues the Environmental Protection Agency
considers relevant to the trading and generation of mobile
source emission reduction credits for use by stationary sources
or for other purposes.

SEC. 5063. IDLE REDUCTION TECHNOLOGIES.

(a) Definitions.--For purposes of this section:
(1) Idle reduction technology.--The term ``idle reduction
technology'' means a device or system of devices utilized to
reduce long-duration idling of a heavy-duty vehicle.
(2) Heavy-duty vehicle.--The term ``heavy-duty vehicle''
means a vehicle that has a gross vehicle weight rating greater
than 26,000 pounds and is powered by a diesel engine.
(3) Long-duration idling.--The term ``long-duration
idling'' means the operation of a main drive engine, for a
period greater than 15 consecutive minutes, where the main
drive engine is not engaged in gear. Such term does not apply
to routine stoppages associated with traffic movement or
congestion.
(b) Studies of the Benefits of Idle Reduction Technologies.--
(1) Potential fuel savings.--Not later than 90 days after
the date of enactment of this section, the Secretary of Energy
shall, in consultation with the Secretary of Transportation,
commence a study to analyze the potential fuel savings
resulting from use of idle reduction technologies.
(2) Recognition of benefits of advanced idle reduction
technologies.--Within 90 days after the date of enactment of
this section, the Administrator of the Environmental Protection
Agency is directed to commence a review of the Agency's mobile
source air emissions models used under the Clean Air Act to
determine whether such models accurately reflect the emissions
resulting from long-duration idling of heavy-duty trucks and
other vehicles and engines, and shall update those models as
the Administrator deems appropriate. Additionally, within 90
days after the date of enactment of this section, the
Administrator shall commence a review as to the appropriate
emissions reductions credit that should be allotted under the
Clean Air Act for the use of advanced idle reduction
technologies, and whether such credits should be subject to an
emissions trading system, and shall revise Agency regulations
and guidance as the Administrator deems appropriate.
(3) Idling technologies.--Not later than 180 days after the
date of the enactment of this section, the Secretary of Energy,
in consultation with the Secretary of Transportation and the
Administrator of the Environmental Protection Agency, shall
commence a study to analyze where heavy duty and other vehicles
stop for long duration idling.
(c) Vehicle Weight Exemption.--Section 127(a) of title 23, United
States Code, is amended by adding at the end the following: ``In
instances where an idle reduction technology is installed onboard a
motor vehicle, the maximum gross vehicle weight limit and the axle
weight limit for any motor vehicle equipped with an idling reduction
system may be increased by an amount necessary to compensate for the
additional weight of the idling reduction system, except that the
weight limit increase shall be no greater than 400 pounds.''.

SEC. 5064. STUDY OF AVIATION FUEL CONSERVATION AND EMISSIONS.

The Administrator of the Federal Aviation Administration and the
Administrator of the Environmental Protection Agency shall jointly
commence a study within 60 days after the date of enactment of this Act
to identify the impact of aircraft emissions on air quality in
nonattainment areas and to identify ways to promote fuel conservation
measures for aviation, enhance fuel efficiency, and reduce emissions.
As part of this study, the Administrator of the Federal Aviation
Administration and the Administrator of the Environmental Protection
Agency shall focus on how air traffic management inefficiencies, such
as aircraft idling at airports, result in unnecessary fuel burn and air
emissions. Within 180 days after the commencement of the study, the
Administrator of the Federal Aviation Administration and the
Administrator of the Environmental Protection Agency shall submit a
report to the Committees on Energy and Commerce and Transportation and
Infrastructure of the House of Representatives and the Committees on
Environment and Public Works and Commerce, Science, and Transportation
of the Senate containing the results of the study and recommendations
as to how unnecessary fuel use and emissions affecting air quality may
be reduced, without impacting safety and security, increasing
individual aircraft noise, and taking into account all aircraft
emissions and their relative impact on human health.

SEC. 5065. DIESEL FUELED VEHICLES.

(a) 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.
(b) Goal.--
(1) Compliance with tier 2 emission standards by 2010.--The
Secretary shall carry out subsection (a) with a view to
developing and demonstrating diesel technology meeting tier 2
emission standards not later than 2010.
(2) Tier 2 emission standards defined.--In this subsection,
the term ``tier 2 emission standards'' means the motor vehicle
emission standards promulgated by the Administrator of the
Environmental Protection Agency on February 10, 2000, under
sections 202 and 211 of the Clean Air Act to apply to passenger
cars, light trucks, and larger passenger vehicles of model
years after the 2003 vehicle model year.

SEC. 5066. HYBRID VEHICLES.

(a) In General.--Notwithstanding section 102(a)(1) of title 23,
United States Code, a State may, for the purpose of promoting energy
conservation, permit a hybrid vehicle which is either a passenger
automobile or light duty truck with fewer than 2 occupants to operate
in high occupancy vehicle lanes.
(b) Definition.--In this section, the term ``hybrid vehicle'' means
a motor vehicle which draws propulsion energy from both--
(1) an internal combustion or heat engine using combustible
fuel; and
(2) an onboard rechargeable energy storage system.

SEC. 5067. WAIVERS OF ALTERNATIVE FUELED VEHICLE FUELING REQUIREMENT.

Section 400AA(a)(3)(E) of the Energy Policy and Conservation Act
(42 U.S.C. 6374(a)(3)(E)) is amended to read as follows:
``(E)(i) Dual fueled vehicles acquired pursuant to this section
shall be operated on alternative fuels unless the Secretary determines
that an agency needs a waiver of such requirement for vehicles in the
fleet of the agency in a particular geographic area where--
``(I) the alternative fuel otherwise required to be used in
the vehicle is not reasonably available to retail purchasers of
the fuel, as certified to the 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 by the head of the agency.
``(ii) The Secretary shall monitor compliance with this
subparagraph by all such fleets and shall report annually to the
Congress on the extent to which the requirements of this subparagraph
are being achieved. The report shall include information on annual
reductions achieved of petroleum-based fuels and the problems, if any,
encountered in acquiring alternative fuels.''.

TITLE VI--DOE PROGRAMS

SEC. 6001. PURPOSES.

The purposes of this title are to--
(1) contribute to a national energy strategy through
Department of Energy programs that promote the production and
conservation of energy in partnership with industry;
(2) protect and strengthen the Nation's economy, standard
of living, and national security by reducing dependence on
imported energy;
(3) meet future needs for energy services at the lowest
total cost to the Nation, giving balanced and comprehensive
consideration to technologies that improve the efficiency of
energy end uses and that enhance energy supply;
(4) reduce the environmental impacts of energy production,
distribution, transportation, and use;
(5) help increase domestic production of energy, increase
the availability of hydrocarbon reserves, and lower energy
prices; and
(6) stimulate economic growth and enhance the ability of
United States companies to compete in future markets for
advanced energy technologies.

SEC. 6002. 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) Joint venture.--The term ``joint venture'' has the
meaning given that term under section 2 of the National
Cooperative Research and Production Act of 1993 (15 U.S.C.
4301).
(5) National laboratory.--The term ``National Laboratory''
means any of the following laboratories owned by the
Department:
(A) Ames National Laboratory.
(B) Argonne National Laboratory.
(C) Brookhaven National Laboratory.
(D) Fermi National 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) Thomas Jefferson National Accelerator Facility.
(6) Nonmilitary energy laboratory.--The term ``nonmilitary
energy laboratory'' means any of the following laboratories of
the Department:
(A) Ames National Laboratory.
(B) Argonne National Laboratory.
(C) Brookhaven National Laboratory.
(D) Fermi National Laboratory.
(E) Lawrence Berkeley National Laboratory.
(F) Oak Ridge National Laboratory.
(G) Pacific Northwest National Laboratory.
(H) Princeton Plasma Physics Laboratory.
(I) Stanford Linear Accelerator Center.
(J) Thomas Jefferson National Accelerator Facility.
(7) Secretary.--The term ``Secretary'' means the Secretary
of Energy.

Subtitle A--Energy Efficiency

PART 1--AUTHORIZATION OF APPROPRIATIONS

SEC. 6011. ENERGY EFFICIENCY.

(a) In General.--The following sums are authorized to be
appropriated to the Secretary for energy efficiency and conservation
activities, including activities authorized under this subtitle:
(1) For fiscal year 2003, $560,000,000.
(2) For fiscal year 2004, $616,000,000.
(3) For fiscal year 2005, $695,000,000.
(4) For fiscal year 2006, $772,000,000.
(5) For fiscal year 2007, $865,000,000.
(b) Allocations.--From amounts authorized under subsection (a), the
following sums are authorized:
(1) Lighting systems.--For activities under section 6021,
$10,000,000 for fiscal year 2003 and $50,000,000 for each of
fiscal years 2004 through 2007.
(2) Secondary electric vehicle battery use program.--For
activities under section 6032--
(A) for fiscal year 2003, $1,000,000;
(B) for fiscal year 2004, $4,000,000;
(C) for fiscal year 2005, $7,000,000;
(D) for fiscal year 2006, $7,000,000; and
(E) for fiscal year 2007, $7,000,000.
(c) Extended authorization.--There are authorized to be
appropriated to the Secretary for activities under section 6021,
$50,000,000 for each of fiscal years 2008 through 2012.
(d) Limits on Use of Funds.--None of the funds authorized to be
appropriated under this section may be used for--
(1) the promulgation and implementation of energy
efficiency regulations;
(2) the Weatherization Assistance Program under part A of
title IV of the Energy Conservation and Production Act;
(3) the State Energy Program under part D of title III of
the Energy Policy and Conservation Act; or
(4) the Federal Energy Management Program under part 3 of
title V of the National Energy Conservation Policy Act.

PART 2--LIGHTING SYSTEMS

SEC. 6021. NEXT GENERATION LIGHTING INITIATIVE.

(a) In General.--The Secretary shall carry out a Next Generation
Lighting Initiative in accordance with this section to support
activities related to advanced solid-state lighting technologies based
on white light emitting diodes.
(b) Objectives.--The objectives of the initiative shall be--
(1) to develop, by 2012, advanced solid-state lighting
technologies based on white light emitting diodes that,
compared to incandescent and fluorescent lighting technologies,
are--
(A) longer lasting;
(B) more energy-efficient; and
(C) cost-competitive;
(2) to develop an inorganic white light emitting diode that
has an efficiency of 160 lumens per watt and a 10-year
lifetime; and
(3) to develop an organic white light emitting diode with
an efficiency of 100 lumens per watt with a 5-year lifetime
that--
(A) illuminates over a full color spectrum;
(B) covers large areas over flexible surfaces; and
(C) does not contain harmful pollutants, such as
mercury, typical of fluorescent lamps.
(c) Consortium.--
(1) In general.--The Secretary shall establish the Next
Generation Lighting Initiative through a private consortium
(which may include private firms, trade associations and
institutions of higher education), which the Secretary shall
select through a competitive process. Each proposed consortium
shall submit to the Secretary such information as the Secretary
may require, including a program plan agreed to by all
participants of the consortium.
(2) Joint venture.--The consortium shall be structured as a
joint venture among the participants of the consortium. The
Secretary shall serve on the governing council of the
consortium.
(3) Eligibility.--To be eligible to be selected as the
consortium under paragraph (1), an applicant must be broadly
representative of United States solid-state lighting research,
development, and manufacturing expertise as a whole.
(4) Grants.--(A) The Secretary shall award grants to the
consortium, which the consortium may disburse to researchers,
including those who are not participants of the consortium.
(B) To receive a grant, the consortium must provide a
description to the Secretary of the proposed activities and
list the parties that will receive funding.
(5) National laboratories.--National Laboratories may
participate in the activities described in this section, and
may receive funds from the consortium.
(6) Intellectual property.--Participants in the consortium
and the Federal Government shall have royalty-free nonexclusive
rights to use intellectual property derived from activities
funded pursuant to this subsection.
(d) Development, Demonstration, and Commercial Application.--The
Secretary shall carry out the development, demonstration, and
commercial application activities of the Next Generation Lighting
Initiative through awards to private firms, trade associations, and
institutions of higher education. In selecting awardees, the Secretary
may give preference to members of the consortium selected pursuant to
subsection (c).
(e) Plans and Assessments.--(1) The consortium shall formulate an
annual operating plan which shall include priorities, technical
milestones, and plans for technology transfer, and which shall be
subject to approval by the Secretary.
(2) 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 priorities, technical
milestones, and plans for technology transfer established under
paragraph (1) and evaluate the progress toward achieving them. The
Secretary shall consider the results of such reviews in evaluating the
plans submitted under paragraph (1).
(f) Audit.--The Secretary shall retain an independent, commercial
auditor to perform an audit of the consortium to determine the extent
to which the funds authorized by this section have been expended in a
manner consistent with the purposes of this section. The auditor shall
transmit a report annually to the Secretary, who shall transmit the
report to the Congress, along with a plan to remedy any deficiencies
cited in the report.
(g) Sunset.--The Next Generation Lighting Initiative shall
terminate no later than September 30, 2013.
(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) Inorganic white light emitting diode.--The term
``inorganic white light emitting diode'' means an inorganic
semiconducting package that produces white light using
externally applied voltage.
(3) Organic white light emitting diode.--The term ``organic
white light emitting diode'' means an organic semiconducting
compound that produces white light using externally applied
voltage.

PART 3--VEHICLES

SEC. 6031. DEFINITIONS.

For purposes of this part, the term--
(1) ``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; and
(2) ``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.

SEC. 6032. ESTABLISHMENT OF SECONDARY ELECTRIC VEHICLE BATTERY USE
PROGRAM.

(a) Program.--The Secretary shall establish and conduct a program
for the secondary use of batteries. Such program shall be--
(1) designed to demonstrate the use of batteries in
secondary application, 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 evaluate 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.
(b) Solicitation.--(1) Not later than 6 months after the date of
the enactment of this Act, 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.
(2)(A) Proposals submitted in response to a solicitation under this
section shall include--
(i) a description of the project, including the batteries
to be used in the project, the proposed locations and
applications for the batteries, the number of batteries to be
demonstrated, and the type, characteristics, and estimated
life-cycle costs of the batteries compared to other energy
storage devices currently used;
(ii) the contribution, if any, of State or local
governments and other persons to the demonstration project;
(iii) the type of associated equipment and supporting
infrastructure to be demonstrated; and
(iv) any other information the Secretary considers
appropriate.
(B) If the proposal includes a lease arrangement, the proposal
shall indicate the terms of such lease arrangement for the batteries
and associated equipment.
(c) Selection of Proposals.--(1)(A) The Secretary, in cooperation
with affected Federal Regulatory agencies, shall, not later than 3
months after the closing date established by the Secretary for receipt
of proposals under subsection (b), select at least 5 proposals to
receive financial assistance under this section.
(B) No one project selected under this section shall receive more
than 25 percent of the funds authorized under this section. No more
than 3 projects selected under this section shall demonstrate the same
battery type.
(2) In selecting a proposal under this section, the Secretary shall
consider--
(A) the ability of the proposer to acquire the batteries
and associated equipment and to successfully manage and conduct
the demonstration project, including satisfying the reporting
requirements set forth in paragraph (3)(B);
(B) the geographic and climatic diversity of the projects
selected;
(C) the long-term technical and competitive viability of
the batteries to be used in the project and of the original
manufacturer of such batteries;
(D) the suitability of the batteries for their intended
uses;
(E) the technical performance of the batteries, including
the expected additional useful life and the batteries' ability
to retain energy;
(F) the environmental effects of the use of and disposal of
the batteries proposed to be used in the project selected;
(G) the extent of involvement of State or local government
and other persons in the demonstration project and whether such
involvement will--
(i) permit a reduction of the Federal cost share
per project; or
(ii) otherwise be used to allow the Federal
contribution to be provided to demonstrate a greater
number of batteries; and
(H) such other criteria as the Secretary considers
appropriate.
(3) Conditions.--The Secretary shall require that--
(A) as a part of a demonstration project, the users of the
batteries provide to the proposer information regarding the
operation, maintenance, performance, and use of the batteries,
and the proposer provide such information to the battery
manufacturer, for 3 years after the beginning of the
demonstration project;
(B) the proposer provide to the Secretary and the
Administrator of the United States Environmental Protection
Agency such information regarding the operation, maintenance,
performance, and use of the batteries as the Secretary or the
Administrator may request;
(C) 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; and
(D) the proposer provide at least 50 percent of the costs
associated with the proposal.

Subtitle B--Distributed Energy and Electric Energy Systems

PART 1--AUTHORIZATION OF APPROPRIATIONS

SEC. 6201. DISTRIBUTED ENERGY AND ELECTRIC ENERGY SYSTEMS.

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.

PART 2--DISTRIBUTED POWER

SEC. 6221. STRATEGY.

(a) Requirement.--Not later than 1 year after the date of enactment
of this Act, the Secretary shall develop and transmit to the Congress a
strategy for a comprehensive program to develop hybrid distributed
power systems that combine--
(1) one 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, activities needed for the
adoption of such hybrid distributed power systems, including
energy storage devices and environmental control technologies;
and
(4) describe how activities under the strategy will be
integrated with other activities supported by the Department of
Energy related to electric power technologies.

SEC. 6222. HIGH POWER DENSITY INDUSTRY PROGRAM.

The Secretary shall establish a comprehensive 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. 6223. 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 the use of small-scale combined heat and
power in residential heating appliances.

PART 3--TRANSMISSION SYSTEMS

SEC. 6231. TRANSMISSION INFRASTRUCTURE SYSTEMS.

(a) Program Authorized.--The Secretary shall develop a program to
promote improved reliability and efficiency of electrical transmission
systems. Such program may include--
(1) advanced energy technologies, materials, and systems;
(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) any other infrastructure technologies, as appropriate;
and
(9) technology transfer and education.
(b) Program Plan.--Not later than 1 year after the date of the
enactment of this Act, 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 shall 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) 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 infrastructure technologies.

Subtitle C--Renewable Energy

PART 1--AUTHORIZATION OF APPROPRIATIONS

SEC. 6301. RENEWABLE ENERGY.

(a) In General.--The following sums are authorized to be
appropriated to the Secretary for renewable energy activities,
including activities authorized under this subtitle:
(1) For fiscal year 2004, $460,000,000.
(2) For fiscal year 2005, $510,000,000.
(3) For fiscal year 2006, $560,000,000.
(4) For fiscal year 2007, $609,000,000.
(b) Bioenergy.--From the amounts authorized under subsection (a),
the following sums are authorized to be appropriated to carry out
section 6321 and other bioenergy activities:
(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.
(c) Use of Funds.--
(1) Bioenergy.--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.
(2) Rural and remote locations.--In carrying out this
section, the Secretary, in consultation with the Secretary of
Agriculture, shall demonstrate the production and use of energy
from advanced wind power technology, biomass, geothermal energy
systems, and other renewable energy technologies in order to
assist in delivering electricity to rural and remote locations.
(3) Hydropower.--Of the funds authorized under subsection
(a), not less than $5,000,000 for each fiscal year shall be
made available for demonstration projects of off-stream pumped
storage hydropower.

PART 2--BIOENERGY

SEC. 6321. BIOENERGY PROGRAMS.

(a) Program.--The Secretary shall conduct a program to facilitate
the production of bioenergy, including--
(1) biopower energy systems;
(2) biofuels;
(3) integrated applications of both biopower and biofuels;
(4) feedstocks; and
(5) economic analysis.
(b) Definition.--For purposes of this section, the term
``bioenergy'' includes energy produced from animal waste and
agricultural crops.

Subtitle D--Nuclear Energy

PART 1--AUTHORIZATION OF APPROPRIATIONS

SEC. 6411. NUCLEAR ENERGY.

(a) Core Programs.--The following sums are authorized to be
appropriated to the Secretary for nuclear energy activities, regulation
of research and development activities and nuclear regulatory research,
including activities authorized under this subtitle, other than those
described in subsection (b):
(1) For fiscal year 2004, $200,000,000.
(2) For fiscal year 2005, $233,000,000.
(3) For fiscal year 2006, $266,000,000.
(4) For fiscal year 2007, $300,000,000.
(b) Nuclear Infrastructure Support.--The following sums are
authorized to be appropriated to the Secretary for activities under
section 6421(f):
(1) For fiscal year 2004, $120,000,000.
(2) For fiscal year 2005, $125,000,000.
(3) For fiscal year 2006, $130,000,000.
(4) For fiscal year 2007, $135,000,000.
(c) Allocations.--From amounts authorized under subsection (a), the
following sums are authorized:
(1) Advanced fuel recycling program.--For activities under
section 6431--
(A) for fiscal year 2004, $80,000,000;
(B) for fiscal year 2005, $93,000,000;
(C) for fiscal year 2006, $106,000,000; and
(D) for fiscal year 2007, $120,000,000.
(2) University programs.--For activities under section
6441--
(A) for fiscal year 2004, $25,000,000;
(B) for fiscal year 2005, $33,900,000;
(C) for fiscal year 2006, $37,900,000; and
(D) for fiscal year 2007, $43,600,000.
(d) Limit on Use of Funds.--None of the funds authorized under this
section may be used for decommissioning the Fast Flux Test Facility.

PART 2--NUCLEAR ENERGY RESEARCH PROGRAMS

SEC. 6421. NUCLEAR ENERGY RESEARCH 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, and component aging in 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. The Program shall--
(1) rely on the expertise and capabilities of the National
Laboratories in the areas of advanced nuclear fuels cycles and
fuels testing;
(2) pursue an approach that considers a variety of reactor
designs;
(3) include participation of international collaborators in
research, development, and design efforts as appropriate; and
(4) encourage industry participation.
(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) utilize improved instrumentation.
(e) Reactor Production of Hydrogen.--The Secretary shall carry out
research to examine designs for high-temperature reactors capable of
producing large-scale quantities of hydrogen using thermochemical
processes.
(f) 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 the Congress
for fiscal year 2005. Such strategy shall provide a cost-effective
means for--
(1) maintaining existing facilities and infrastructure, as
needed;
(2) closing unneeded facilities;
(3) making facility upgrades and modifications; and
(4) building new facilities.

PART 3--ADVANCED FUEL RECYCLING

SEC. 6431. ADVANCED FUEL RECYCLING PROGRAM.

(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
which 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 this 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.

PART 4--UNIVERSITY PROGRAMS

SEC. 6441. 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--
(1) establish a graduate and undergraduate fellowship
program to attract new and talented students;
(2) establish a Junior Faculty Research Initiation Grant
Program to assist institutions of higher education in
recruiting and retaining new faculty in the nuclear sciences
and engineering;
(3) support fundamental nuclear sciences and engineering
research through the Nuclear Engineering Education Research
Program;
(4) encourage collaborative nuclear research among
industry, National Laboratories, and institutions of higher
education through the Nuclear Energy Research Initiative; and
(5) support communication and outreach related to nuclear
science and engineering.
(c) Maintaining University Research and Training Reactors and
Associated Infrastructure.--Activities under this section may include--
(1) converting research 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 training reactors as part of a student training
program; and
(3) providing funding for reactor improvements as part of a
focused effort that emphasizes research, training, and
education.
(d) University-National Laboratory Interactions.--The Secretary
shall develop--
(1) a sabbatical fellowship program for professors at
institutions of higher education to spend extended periods of
time at National Laboratories in the areas of nuclear science
and technology; and
(2) a visiting scientist program in which National
Laboratory staff can spend time in academic nuclear science and
engineering departments.
The Secretary may provide fellowships for students to spend time at
National Laboratories in the area of nuclear science with a member of
the Laboratory staff acting as a mentor.
(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 reactor at an
institution of higher education used in the research project.

Subtitle E--Fossil Energy

PART 1--AUTHORIZATION OF APPROPRIATIONS

SEC. 6501. FOSSIL ENERGY.

There are authorized to be appropriated to the Secretary for fossil
energy activities, including activities authorized under this
subtitle--
(1) $523,000,000 for fiscal year 2004;
(2) $542,000,000 for fiscal year 2005;
(3) $558,000,000 for fiscal year 2006; and
(4) $585,000,000 for fiscal year 2007.

PART 2--ULTRA-DEEPWATER AND UNCONVENTIONAL NATURAL GAS AND OTHER
PETROLEUM RESOURCES

SEC. 6521. PROGRAM AUTHORITY.

(a) In General.--The Secretary shall carry out a program under this
part for ultra-deepwater and unconventional natural gas and other
petroleum resource exploration and production, including safe
operations and environmental mitigation.
(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.
(2) Ultra-deepwater architecture.
(3) Unconventional natural gas and other petroleum resource
exploration and production technology.
(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) National Energy Technology Laboratory.--The Secretary, through
the National Energy Technology Laboratory, shall carry out activities
complementary to activities under subsection (b)(1).
(e) Consultation with Secretary of the Interior.--In carrying out
this part, the Secretary shall consult regularly with the Secretary of
the Interior.

SEC. 6522. ULTRA-DEEPWATER PROGRAM.

(a) In General.--The Secretary shall carry out the activities under
paragraphs (1) and (2) of section 6521(b), to maximize the value of the
ultra-deepwater natural gas and other petroleum resources of the United
States by increasing the supply of such resources and by 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 shall 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) The Secretary shall
establish procedures--
(i) to ensure that each board member, officer, or
employee of the program consortium who is in a
decisionmaking 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) 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, 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 90 days after the date of
enactment of this Act, the Secretary shall solicit proposals
for the creation of the program consortium, which must be
submitted not less than 180 days after the date of enactment of
this Act. The Secretary shall select the program consortium not
later than 240 days 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 programs in natural gas or other petroleum
exploration or production.
(7) Criterion.--The Secretary may 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) 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) The Secretary shall submit the recommendations of the
program consortium under subparagraph (A) to the Ultra-
Deepwater Advisory Committee established under section 6525(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) The Secretary shall consult regularly with the program
consortium throughout the preparation of the annual plan.
(3) Publication.--The Secretary shall transmit to the
Congress and publish in the Federal Register the annual plan,
along with any written comments received under paragraph (2)(A)
and (B). The annual plan shall be transmitted and published not
later than 60 days after the date of enactment of an Act making
appropriations for a fiscal year for the program under this section.
(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 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).
(f) Awards.--
(1) In general.--The Secretary shall make awards to carry
out 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) 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) 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) The Secretary shall provide to the program consortium
the information necessary for the program consortium to carry
out its responsibilities under this paragraph.
(g) Fee.--
(1) In general.--To compensate the program consortium for
carrying out its activities under this section, the Secretary
shall provide to the program consortium a fee in an amount not
to exceed 7.5 percent of the amounts awarded under subsection
(f) for each fiscal year.
(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. 6523. UNCONVENTIONAL NATURAL GAS AND OTHER PETROLEUM RESOURCES
PROGRAM.

(a) In General.--The Secretary, after consulting with appropriate
Federal regulatory agencies, shall carry out activities under section
6521(b)(3), to maximize the value of the onshore unconventional natural
gas and other petroleum resources of the United States by increasing
the supply of such resources and by 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 made through an open, competitive process.
(2) Consortia.--In carrying out paragraph (1), the
Secretary shall give preference to making awards to consortia.
(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.--Awards under this section may focus on areas
including advanced coal-bed methane, deep drilling, natural gas
production from tight sands, natural gas production from gas shales,
innovative exploration and production techniques, enhanced recovery
techniques, and environmental mitigation of unconventional natural gas
and other petroleum resources exploration and production.
(e) Activities by the United States Geological Survey.--The
Secretary of the Interior, through the United States Geological Survey,
shall, where appropriate, carry out programs to complement the programs
under this section.

SEC. 6524. 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 6521(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.--Each recipient of an award under this
part shall conduct technology transfer activities, as appropriate.

SEC. 6525. ADVISORY COMMITTEES.

(a) Ultra-Deepwater Advisory Committee.--
(1) Establishment.--Not later than 270 days after the date
of enactment of this section, 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 and including--
(A) individuals with extensive 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 6522(e)(2)(B).
(4) Compensation.--A member of the advisory committee under
this subsection shall serve without compensation but shall
receive travel expenses, including per diem in lieu of
subsistence, 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 section, 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 and including--
(A) individuals with extensive experience or
operational knowledge of unconventional natural gas and
other petroleum resource exploration and production,
including independent oil and gas producers;
(B) 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
(C) 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, including per diem in lieu of
subsistence, 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 consortia or
for specific projects.

SEC. 6526. LIMITS ON PARTICIPATION.

(a) In General.--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 which affords--
(i) to United States-owned entities
opportunities, comparable to those afforded to
any other entity, to participate in any
cooperative 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.
(b) Sense of Congress and Report.--It is the Sense of the Congress
that ultra-deepwater technology developed under this part is to be
developed primarily for production of ultra-deepwater natural gas and
other petroleum resources of the United States, and that this priority
is to be reflected in the terms of grants, contracts, and cooperative
agreements entered under this part. As part of the annual Departmental
budget submission, the Secretary shall report on all steps taken to
implement the policy described in this subsection.

SEC. 6527. 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 Products Fund''.

SEC. 6528. SUNSET.

The authority provided by this part shall terminate on September
30, 2010.

SEC. 6529. 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) Program consortium.--The term ``program consortium''
means the consortium selected under section 6522(d).
(3) 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.
(4) Ultra-deepwater.--The term ``ultra-deepwater'' means a
water depth that is equal to or greater than 1,500 meters.
(5) 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.
(6) Ultra-deepwater technology.--The term ``ultra-deepwater
technology'' means a discrete technology that is specially
suited to address one or more challenges associated with the
exploration for, or production of, natural gas or other
petroleum resources located at ultra-deepwater depths.
(7) 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.

Subtitle F--Miscellaneous

SEC. 6601. WASTE REDUCTION AND USE OF ALTERNATIVES.

(a) Grant Authority.--The Secretary is authorized to 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) Waste Reduction and Use of Alternatives.--There are authorized
to be appropriated to the Secretary to carry out activities under this
section $500,000 for fiscal year 2004.

SEC. 6602. 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. 6603. PETROLEUM COKE GASIFICATION.

The Secretary is authorized to provide loan guarantees for at least
one petroleum coke gasification polygeneration project.

SEC. 6604. OTHER BIOPOWER AND BIOENERGY.

The Secretary shall conduct a program to assist in the planning,
design, and implementation of projects to convert rice straw, rice
hulls, sugarcane bagasse, forest thinnings, and barley grain into
biopower and biofuels.

SEC. 6605. TECHNOLOGY TRANSFER.

There are authorized to be appropriated to the Secretary $1,000,000
for a competitively awarded contract, to an entity with offshore oil
and gas management experience, for the transfer of technologies
relating to ultra-deepwater research and development developed at the
Naval Surface Warfare Center, Carderock Division.

SEC. 6606. 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 section 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. 6607. COMPLEX WELL TECHNOLOGY TESTING FACILITY.

The Secretary, in coordination with industry leaders in extended
reach drilling technology, shall establish a Complex Well Technology
Testing Facility at the Rocky Mountain Oilfield Testing Center to
increase the range of extended drilling technology to 50,000 feet, so
that more energy resources can be realized with fewer drilling
facilities.

SEC. 6608. TOTAL INTEGRATED THERMAL SYSTEMS.

The Secretary shall--
(1) conduct a study of the benefits of total integrated
thermal systems in reducing demand for oil and protecting the
environment; and
(2) examine the feasibility of using total integrated
thermal systems in Department of Defense and other Federal
motor vehicle fleets.

SEC. 6609. OIL BYPASS FILTRATION TECHNOLOGY.

The Secretary of Energy and the Administrator of the Environmental
Protection Agency shall--
(1) conduct a joint study of the benefits of oil bypass
filtration technology in reducing demand for oil and protecting
the environment; and
(2) examine the feasibility of using oil bypass filtration
technology in Federal motor vehicle fleets.

TITLE VII--ELECTRICITY

Subtitle A--Transmission Capacity

SEC. 7011. TRANSMISSION INFRASTRUCTURE IMPROVEMENT RULEMAKING.

Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended
by adding the following new section at the end thereof:

``SEC. 215. TRANSMISSION INFRASTRUCTURE IMPROVEMENT RULEMAKING.

``(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) transmission rate
treatments to promote capital investment in the enlargement and
improvement of facilities for the transmission of electric energy in
interstate commerce as appropriate to--
``(1) promote economically efficient transmission and
generation of electricity;
``(2) provide a return on equity that attracts new
investment in transmission facilities and reasonably reflects
the risks taken by public utilities in restructuring control of
transmission assets; and
``(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.
The Commission may, from time to time, revise such rule.
``(b) Funding of Certain Facilities.--The rule promulgated pursuant
to this section shall provide that, upon the request of a regional
transmission organization or other Commission-approved transmission
organization, new transmission facilities that increase the transfer
capability of the transmission system shall be participant funded. In
such rules, the Commission shall also provide guidance as to what types
of facilities may be participant funded.
``(c) Just and Reasonable Rates.--With respect to any transmission
rate filed with the Commission on or after the effective date of the
rule promulgated under this section, the Commission shall, in its
review of such rate under sections 205 and 206, apply the rules adopted
pursuant to this section, including any revisions thereto. Nothing in
this section shall be construed to override, weaken, or conflict with
the procedural and other requirements of this part, including the
requirement of sections 205 and 206 that all rates, charges, terms, and
conditions be just and reasonable and not unduly discriminatory or
preferential.''.

SEC. 7012. SITING OF INTERSTATE ELECTRICAL 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 ELECTRICAL TRANSMISSION FACILITIES

``(a) Transmission Studies.--Within one year after the enactment of
this section, and every 3 years thereafter, the Secretary of Energy
shall conduct a study of electric transmission congestion. After
considering alternatives and recommendations from interested parties
the Secretary shall issue a report, based on such study, which may
designate one or more geographic areas experiencing electric energy
transmission congestion as `interstate congestion areas'.
``(b) Construction Permit.--The Commission is authorized, after
notice and an opportunity for hearing, to issue permits for the
construction or modification of electric transmission facilities in
interstate congestion areas designated by the Secretary under
subsection (a) if the Commission makes each of the following findings:
``(1) A finding that--
``(A) the State in which the transmission
facilities are to be constructed or modified is without
authority to approve the siting of the facilities, or
``(B) a State commission or body in the State in
which the transmission facilities are to be constructed
or modified that has authority to approve the siting of
the facilities has withheld approval, conditioned its
approval in such a manner that the proposed
construction or modification will not significantly
reduce transmission congestion in interstate commerce
and is otherwise not economically feasible, or delayed
final approval for more than one year after the filing
of an application seeking approval or one year after
the designation of the relevant interstate congestion
area, whichever is later.
``(2) A finding that the facilities to be authorized by the
permit will be used for the transmission of electric energy in
interstate commerce.
``(3) A finding that the proposed construction or
modification is consistent with the public interest.
``(4) A finding that the proposed construction or
modification will significantly reduce transmission congestion
in interstate commerce.
The Commission may include in a permit issued under this section
conditions consistent with the public interest.
``(c) Permit Applications.--Permit applications under subsection
(b) shall be made in writing to the Commission and verified under oath.
The Commission shall issue rules setting forth the form of the
application, the information it is to contain, and the manner of
service of notice of the permit application upon interested persons.
``(d) Comments.--In any proceeding before the Commission under
subsection (b), the Commission shall afford each State in which a
transmission facility covered by the permit is or will be located, each
affected Federal agency and Indian tribe, private property owners, and
other interested persons, a reasonable opportunity to present their
views and recommendations with respect to the need for and impact of a
facility covered by the permit.
``(e) Rights-of-Way.--In the case of a permit under subsection (b)
for electric transmission facilities to be 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 any transmission facilities pursuant to State law.
``(g) Compliance With Other Laws.--Commission action under this
section shall be subject to the National Environmental Policy Act of
1969 (42 U.S.C. 4321 et seq.) and all other applicable Federal laws.
``(h) 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 power line construction or modification within a reasonable
period of time after the acquisition. Property acquired under this
subsection may not be used for any heritage area, recreational trail,
or park, or for any other purpose (other than power line construction
or modification, and for power line operation and maintenance) without
the consent of the owner of the parcel from whom the property was
acquired (or his heirs or assigns).
``(i) ERCOT.--Nothing in this section shall be construed to
authorize any interconnection with any facility owned or operated by an
entity referred to in section 212(k)(2)(B).
``(j) Rights of Way on Federal Lands.--
``(1) Lead agency.--If an applicant, or prospective
applicant, for Federal authorization related to an electricity
transmission or distribution facility so requests, the
Department of Energy (DOE) shall act as the lead agency for
purposes of coordinating all applicable Federal authorization
and related environmental review of the facility. The term
`Federal authorization' shall mean 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 other Federal 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 deems 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.--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.
DOE and other agencies shall streamline the review and
permitting of transmission and distribution facilities within
corridors designated under section 503 of the Federal Land
Policy and Management Act (43 U.S.C. 1763) by fully taking into
account prior analyses and decisions as to the corridors. The
document under this section may consist of or include an
environmental assessment, if allowed by law, or an
environmental impact statement, if warranted or required by
law, or such other form of analysis as warranted, consistent
with any requirement of the National Environmental Policy Act,
the Federal Land Policy and Management Act, or any other
applicable law. Such document shall include consideration by
the relevant agencies of any applicable criteria or other
matters as required under applicable laws.
``(4) Appeals.--In the event that any agency has denied a
Federal authorization required for a transmission or
distribution facility, or has failed to act by the deadline
established by the Secretary 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 of Energy, 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
all 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, and the Federal
Land Management and Policy Act.
``(5) Conforming regulations and memoranda of agreement.--
Not later than 18 months after the date of enactment of this
section, the Secretary of Energy shall issue any regulations
necessary to implement the foregoing provisions. Not later than
1 year after the date of enactment of this section, the
Secretary and the heads of all relevant Federal departments and
non-departmental agencies shall, and interested Indian tribes,
multi-State entities, and State agencies may, enter into
Memoranda of Agreement to ensure the timely and coordinated
review and permitting of electricity transmission and
distribution facilities. The head of each Federal department or
non-departmental agency with approval authority shall designate
a senior responsible official and dedicate sufficient other
staff and resources to ensure that the DOE regulations and any
Memoranda are fully implemented.
``(6) Miscellaneous.--Each Federal authorization for an
electricity transmission or distribution facility shall be
issued for a duration, as determined by the Secretary of
Energy, commensurate with the anticipated use of the facility
and with appropriate authority to manage the right-of-way for
reliability and environmental protection. Further, when such
authorizations expire, they shall be reviewed for 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) and FERC-
approved Regional Transmission Organizations and Independent
System Operators.
``(k) Interstate Compacts.--The consent of Congress is hereby given
for States to enter into interstate compacts establishing regional
transmission siting agencies to facilitate coordination among the
States within such areas for purposes of siting future electric energy
transmission facilities and to carry out State electric energy
transmission siting responsibilities. The Secretary of Energy may
provide technical assistance to regional transmission siting agencies
established under this subsection.
``(l) 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. This section shall not apply to any component of
the National Wilderness Preservation System, the National Wild and
Scenic Rivers System, or the National Park system (including National
Monuments therein).''.
(b) Federal Corridors.--The Secretary of the 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 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,
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; and
(3) the number of existing transmission and distribution
rights-of-way on Federal lands that will come up for renewal
within the following 5, 10, and 15 year periods, and a
description of how the Secretaries plan to manage such
renewals.

Subtitle B--Transmission Operation

SEC. 7021. OPEN ACCESS TRANSMISSION BY CERTAIN UTILITIES.

Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended
by inserting after section 211 the following:

``SEC. 211A. OPEN ACCESS BY UNREGULATED TRANSMITTING UTILITIES.

``(a) In General.--Subject to section 212(h), the Commission may,
by rule or order, require an unregulated transmitting utility to
provide transmission services--
``(1) at rates that are comparable to those that the
unregulated transmitting utility charges itself, and
``(2) on terms and conditions (not relating to rates) that
are comparable to those under which such unregulated
transmitting utility provides transmission services to itself
and that are not unduly discriminatory or preferential.
``(b) Exemptions.--
``(1) In general.--The Commission shall exempt from any
rule or order under this subsection any unregulated
transmitting utility that--
``(A)(i) sells no more than 4,000,000 megawatt
hours of electricity per year; and
``(ii) is a distribution utility; or
``(B) does not own or operate any transmission
facilities that are necessary for operating an
interconnected transmission system (or any portion
thereof); or
``(C) meets other criteria the Commission
determines to be in the public interest.
``(2) Local distribution.-- The requirements of subsection
(a) shall not apply to facilities used in local distribution.
``(c) Rate Changing Procedures.--The rate changing procedures
applicable to public utilities under subsections (c) and (d) of section
205 are applicable to unregulated transmitting utilities for purposes
of this section.
``(d) Remand.--In exercising its authority under paragraph (1), the
Commission may remand transmission rates to an unregulated transmitting
utility for review and revision where necessary to meet the
requirements of subsection (a).
``(e) Section 211 Requests.--The provision of transmission services
under subsection (a) does not preclude a request for transmission
services under section 211.
``(f) Definitions.--For purposes of this section--
``(1) The term `unregulated transmitting utility' means an
entity that--
``(A) owns or operates facilities used for the
transmission of electric energy in interstate commerce,
and
``(B) is either an entity described in section
201(f) or a rural electric cooperative.
``(2) The term `distribution utility' means an unregulated
transmitting utility that serves at least ninety percent of its
electric customers at retail.''.

SEC. 7022. REGIONAL TRANSMISSION ORGANIZATIONS.

(a) Sense of the Congress on RTOs.--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
independently administered regional transmission organizations that
have operational control of interstate transmission facilities and do
not own or control generation facilities used to supply electric energy
for sale at wholesale.
(b) Sense of the Congress on Capital Investment.--It is the sense
of the Congress that the Federal Energy Regulatory Commission should
provide to any transmitting utility that becomes a member of an
operational regional transmitting organization approved by the
Commission a return on equity sufficient to attract new investment
capital for expansion of transmission capacity, in accordance with
sections 205 and 206 of the Federal Power Act (16 U.S.C. 824d and
824e), including the requirement that rates be just and reasonable.
(c) Report on Pending Applications.--Not later than 120 days after
the date of enactment of this section, the Federal Energy Regulatory
Commission shall submit to the Committee on Energy and Commerce of the
United States House of Representatives and the Committee on Energy and
Natural Resources of the United States Senate a report containing the
following:
(1) A list of all regional transmission organization
applications filed at the Commission pursuant to the
Commission's 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 table showing the date each such application was
filed, the date of any revised filings of such application, the
date of each preliminary or final Commission order regarding
such application, and a statement of whether the application
has been rejected, preliminarily approved, finally approved, or
has some other status (including a description of that status).
(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; and
(B) a discussion of the impact of such seams on
consumers and wholesale competition; and
(C) a discussion of minimizing cost-shifting on
consumers.
(d) Federal Utility Participation in RTOS.--
(1) Definitions.--For purposes of this section--
(A) The term ``appropriate Federal regulatory
authority'' means--
(i) with respect to a Federal power
marketing agency, 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
(ii) with respect to the Tennessee Valley
Authority, the Board of Directors of the
Tennessee Valley Authority.
(B) The term ``Federal utility'' means a Federal
power marketing agency or the Tennessee Valley
Authority.
(C) The term ``transmission system'' means electric
transmission facilities owned, leased, or contracted
for by the United States and operated by a Federal
utility.
(2) Transfer.--The appropriate Federal 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 a regional
transmission organization approved by the Federal Energy
Regulatory Commission. Such contract, agreement or arrangement
shall include--
(A) performance standards for operation and use of
the transmission system that the head of the Federal
utility determines necessary or appropriate, including
standards that assure 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;
(B) provisions for monitoring and oversight by the
Federal utility of the regional transmission
organization's fulfillment of the terms and conditions
of the contract, agreement or other arrangement,
including a provision that may provide for the
resolution of disputes through arbitration or other
means with the regional transmission organization or
with other participants, notwithstanding the
obligations and limitations of any other law regarding
arbitration; and
(C) a provision that allows the Federal utility to
withdraw from the regional transmission organization
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 a regional
transmission organization shall serve to 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.
(3) Existing statutory and other obligations.--
(A) System operation requirements.--Any statutory
provision requiring or authorizing a Federal utility to
transmit electric power or to construct, operate or
maintain its transmission system shall not be construed
to prohibit a transfer of control and use of its
transmission system pursuant to, and subject to all
requirements of paragraph (2).
(B) Other obligations.--This subsection shall not
be construed to--
(i) 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
(ii) authorize abrogation of any contract
or treaty obligation.

SEC. 7023. NATIVE LOAD.

Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended
by adding the following new section at the end thereof:

``SEC. 217. SERVICE OBLIGATIONS OF LOAD-SERVING ENTITIES.

``(a) In General.--In exercising authority under this Act, the
Commission shall ensure that any load-serving entity that either--
``(1) owns transmission facilities for the transmission of
electric energy in interstate commerce used to purchase or
deliver electric energy to meet--
``(A) a service obligation to customers; or
``(B) an existing wholesale contractual obligation;
or
``(2) holds a contract or service agreement for firm
transmission service used to purchase or deliver electric
energy to meet--
``(A) a service obligation to customers; or
``(B) an existing wholesale contractual obligation
shall be entitled to use such transmission facilities or equivalent
transmission rights to meet such obligations before transmission
capacity is made available for other uses.
``(b) Use by Successor in Interest.--To the extent that all or a
portion of the service obligation or contractual obligation covered by
subsection (a) is transferred to another load serving entity, the
successor shall be entitled to use such transmission facilities or firm
transmission rights associated with the transferred service obligation
consistent with subsection (a). Subsequent transfers to another load
serving entity, or back to the original load-serving entity, shall be
entitled to the same rights.
``(c) Other Entities.--The Commission may 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 not unduly discriminatory or
preferential.
``(d) Definitions.--For the purposes of this section:
``(1) The term `load-serving entity' means an electric
utility, transmitting utility or Federal power marketing agency
that has an obligation under Federal, State, or local law, or
under long-term contracts, to provide electric service to
either--
``(A) electric consumers (as defined in section
3(5) of the Public Utility Regulatory Policies Act of
1978 (16 U.S.C. 2602(5)); or
``(B) an electric utility as defined in section
3(4) of the Public Utility Regulatory Policies Act of
1978 (16 U.S.C. 2602(5)) that has an obligation to
provide electric service to electric consumers.
Such obligations shall be deemed `service obligations'.
``(2) The term `existing wholesale contractual obligation'
means an obligation under a firm long-term wholesale contract
that was in effect on March 28, 2003. A contract modification
after March 28, 2003 (other than one that increases the
quantity of electric energy sold under the contract) shall not affect
the status of such contract as an existing wholesale contractual
obligation.
``(e) Relationship to Other Provisions.--To the extent that a
transmitting utility reserves transmission capacity (or reserves the
equivalent amount of tradable transmission rights) to provide firm
transmission service to meet service obligations or firm long-term
wholesale contractual obligations pursuant to subsection (a), that
transmitting utility shall not be considered as engaging in undue
discrimination or preference under this Act.
``(f) Jurisdiction.--This section shall not apply to an entity
located in an area referred to in section 212(k)(2)(A).
``(g) Savings Clause.--Nothing in this section shall affect any
allocation of transmission rights by the PJM Interconnection, the New
York Independent System Operator, the New England Independent System
Operator, the Midwest Independent System Operator, or the California
Independent System Operator. Nothing in this section shall provide a
basis for abrogating any contract for firm transmission service or
rights in effect as of the date of enactment of this section.''.

Subtitle C--Reliability

SEC. 7031. ELECTRIC RELIABILITY STANDARDS.

Part II of the Federal Power Act (16 U.S.C 824 et seq.) is amended
by inserting the following new section at the end thereof:

``SEC. 218. ELECTRIC RELIABILITY.

``(a) Definitions.--For purposes of this section--
``(1) The term `bulk-power system' means--
``(A) facilities and control systems 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 one 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
(ERO). The Commission may certify one 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;
``(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 electric reliability organization
files with the Commission notice of the penalty and the record of
proceedings. Such penalty shall be subject to review by the Commission,
on its own motion or upon application by the user, owner or operator
that is the subject of the penalty filed within 30 days after the date
such notice is filed with the Commission. 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 electric reliability
organization and opportunity for the presentation of supporting reasons
to affirm, modify, or set aside the penalty), shall by order affirm,
set aside, reinstate, or modify the penalty, and, if appropriate,
remand to the electric reliability organization 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 establish 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 Electricity 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 Electric
Reliability Organization. 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 Electric Reliability Organization
shall conduct periodic assessments of the reliability and adequacy of
the bulk-power system in North America.
``(h) Coordination with Canada and Mexico.--The President is urged
to negotiate international agreements with the governments of Canada
and Mexico to provide for effective compliance with reliability
standards and the effectiveness of the Electric Reliability
Organization in the United States and Canada or Mexico.
``(i) Savings Provisions.--(1) The Electric Reliability
Organization shall have authority to develop and enforce compliance
with reliability standards for only the bulk-power system.
``(2) This section does not authorize the Electric Reliability
Organization 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, except that
the State of New York may establish rules that result in greater
reliability within that State, as long as such action does not result
in lesser reliability outside the State than that provided by the
reliability standards.
``(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 Electric
Reliability Organization.
``(5) The Commission, after consultation with the Electric
Reliability Organization 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 two-thirds of the
States within a region that have more than one-half of their electric
load served within the region. A regional advisory body shall be
composed or of one 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) Application to Alaska and Hawaii.--The provisions of this
section do not apply to Alaska or Hawaii.''.

Subtitle D--PUHCA Amendments

SEC. 7041. SHORT TITLE.

This subtitle may be cited as the ``Public Utility Holding Company
Act of 2003''.

SEC. 7042. DEFINITIONS.

For purposes of this subtitle:
(1) 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) The term ``associate company'' of a company means any
company in the same holding company system with such company.
(3) The term ``Commission'' means the Federal Energy
Regulatory Commission.
(4) 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) 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) 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) 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) 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 one 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) The term ``holding company system'' means a holding
company, together with its subsidiary companies.
(10) The term ``jurisdictional rates'' means rates
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) 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) The term ``person'' means an individual or company.
(13) 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) The term ``public utility company'' means an electric
utility company or a gas utility company.
(15) 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) 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 one 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) 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. 7043. 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. 7044. 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
deems to be 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 deems to be 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 deems to be
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. 7045. 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 by the State
commission;
(2) the State commission deems 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 one 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. 7046. EXEMPTION AUTHORITY.

(a) Rulemaking.--Not later than 90 days after the effective date of
this subtitle, the Commission shall promulgate a final rule to exempt
from the requirements of section 7044 (relating to Federal access to
books and records) any person that is a holding company, solely with
respect to one 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 7044 (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. 7047. 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
promulgation 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. 7048. 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), or (3) acting as such in the course
of his or her official duty.

SEC. 7049. 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. 7050. 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. 7051. SAVINGS PROVISIONS.

(a) In General.--Nothing in this subtitle 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, so long as that person continues to comply with
the terms 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.) (including section 301 of that Act) or the Natural
Gas Act (15 U.S.C. 717 et seq.) (including section 8 of that Act).

SEC. 7052. IMPLEMENTATION.

Not later than 12 months after the date of enactment of this
subtitle, the Commission shall--
(1) promulgate such regulations as may be necessary or
appropriate to implement this subtitle (other than section
7045, relating to State access to books and records); and
(2) submit to the 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. 7053. 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. 7054. EFFECTIVE DATE.

This subtitle shall take effect 12 months after the date of
enactment of this subtitle.

SEC. 7055. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated such funds as may be
necessary to carry out this subtitle.

SEC. 7056. 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 E--PURPA Amendments

SEC. 7061. REAL-TIME PRICING AND TIME-OF-USE METERING 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) Real-time pricing.--(A) Each electric utility shall,
at the request of an electric consumer, provide electric
service under a real-time rate schedule, under which the rate
charged by the electric utility varies by the hour (or smaller
time interval) according to changes in the electric utility's
wholesale power cost. The real-time pricing service shall
enable the electric consumer to manage energy use and cost
through real-time metering and communications technology.
``(B) 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.
``(C) Notwithstanding subsections (b) and (c) of section
112, each State regulatory authority shall consider and make a
determination concerning whether it is appropriate to implement
the standard set out in subparagraph (A) not later than 1 year
after the date of enactment of this paragraph.
``(12) Time-of-use metering.--(A) Each electric utility
shall, at the request of an electric consumer, provide electric
service under a time-of-use rate schedule which enables the
electric consumer to manage energy use and cost through time-
of-use metering and technology.
``(B) 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.
``(C) Notwithstanding subsections (b) and (c) of section
112, each State regulatory authority shall consider and make a
determination concerning whether it is appropriate to implement
the standards set out in subparagraph (A) not later than 1 year
after the date of enactment of this paragraph.''.
(b) Special Rules.--Section 115 of the Public Utility Regulatory
Policies Act of 1978 (16 U.S.C. 2625) is amended by adding at the end
the following:
``(i) Real-Time Pricing.--In a State that permits third-party
marketers to sell electric energy to retail electric consumers, the
electric consumer shall be entitled to receive the same real-time
metering and communication service as a direct retail electric consumer
of the electric utility.
``(j) Time-of-Use Metering.--In a State that permits third-party
marketers to sell electric energy to retail electric consumers, the
electric consumer shall be entitled to receive the same time-of-use
metering and communication service as a direct retail electric consumer
of the electric utility.''.

SEC. 7062. 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--
``(A) the qualifying cogeneration facility or
qualifying small power production facility has access
to
``(i) independently administered, auction-
based day ahead and real time wholesale markets
for the sale of electric energy, and
``(ii) long-term wholesale markets for the
sale of capacity and electric energy;
``(B) the qualifying cogeneration facility or
qualifying small power production facility has access
to a competitive wholesale market for the sale of
electric energy that provides such qualifying
cogeneration facility or qualifying small power
production facility with opportunities to sell electric
energy that, at a minimum, are comparable to the
opportunities provided by the markets, or some minimum
combination thereof, described in subparagraph (A); or
``(C) the qualifying cogeneration facility does not
meet criteria established by the Commission pursuant to
the rulemaking set forth in subparagraph (n) and has
not filed with the Commission a notice of self-
certification or an application for Commission
certification under 18 C.F.R. 292.207 prior to the date
of enactment of this subsection.
``(2) Commission review.--(A) Any electric utility may file
an application with the Commission for relief from the
mandatory purchase obligation pursuant to this subsection on a
utility-wide basis. Such application shall set forth the
reasons why such relief is appropriate and describe how the
conditions set forth in subparagraphs (A) and (B) of paragraph
(1) of this subsection have been met.
``(B) After notice, including sufficient notice to
potentially affected qualifying facilities, and an opportunity
for comment, and within 90 days of the filing of an application
under subparagraph (A), the Commission shall make a final
determination as to whether the conditions set forth in
subparagraphs (A) and (B) of paragraph (1) have been met. The
Commission shall not be authorized to issue a tolling order
regarding such application or otherwise delay a final decision
regarding such application.
``(3) Reinstatement of obligation to purchase.--(A) At any
time after the Commission makes a finding under paragraph (2)
relieving an electric utility of its obligation to purchase
electric energy, a qualifying cogeneration facility or a
qualifying small power production facility 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 reasons why such relief is no
longer appropriate and describe how the tests set forth in
subparagraphs (A) and (B) of paragraph (1) of this subsection
are no longer met.
``(B) After notice, including sufficient notice to
potentially affected utilities, and opportunity for comment,
and within 90 days of the filing of an application under
subparagraph (A), the Commission shall issue an order
reinstating the electric utility's obligation to purchase
electric energy under this section if the Commission finds that
the condition in paragraph (1), which relieved the obligation
to purchase, is no longer met. The Commission shall not be
authorized to issue a tolling order regarding such application
or otherwise delay a final decision regarding such application.
``(4) 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 if--
``(A) competing retail electric suppliers are
willing and able to provide 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.
``(5) 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
nonregulated 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 facility under this Act
(including the right to recover costs of purchasing electric
energy or capacity).
``(6) Recovery of costs.--
``(A) Regulation.--To ensure recovery by an
electric utility that purchases electric energy or
capacity from a qualifying facility pursuant to any
legally enforceable obligation entered into or imposed
under this section of all prudently incurred costs
associated with the purchases, the Commission shall
issue and enforce such regulations as may be required
to ensure that the electric utility shall recover the
prudently incurred costs associated with such
purchases.
``(B) Enforcement.--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 Facilities.--
``(1) In general.--Not later than 180 days after the date
of enactment of this subsection, the Commission shall issue a
rule revising the criteria for qualifying cogeneration
facilities in 18 C.F.R. 292.205. In particular, the Commission
shall evaluate the rules regarding qualifying facility criteria
and revise such rules, as necessary, to ensure--
``(A) that the thermal energy output of a new
qualifying cogeneration facility is used in a
productive and beneficial manner;
``(B) the electrical and thermal output of the
cogeneration facility is used predominantly for
commercial or industrial processes and not intended
predominantly for sale to an electric utility; and
``(C) continuing progress in the development of
efficient electric energy generating technology.
``(2) Applicability.--Any revisions made to operating and
efficiency standards shall be applicable only to a cogeneration
facility that--
``(A) was not a qualifying cogeneration facility,
or
``(B) had not filed with the Commission a notice of
self-certification or an application for Commission
certification under 18 C.F.R. 292.207
prior to the date of enactment of this subsection.
``(3) Definition.--For purposes of this subsection, the
term `commercial processes' includes uses of thermal and
electric energy for educational and healthcare facilities.
``(o) Rules for Existing Facilities.--Notwithstanding rule
revisions under subsection (n), the Commission's rules in effect prior
to the effective date of any revised rules prescribed under subsection
(n) shall continue to apply to any cogeneration facility or small power
production facility that--
``(1) was a qualifying cogeneration facility or a
qualifying small power production facility, or
``(2) had filed with the Commission a notice of self-
certification or an application for Commission certification
under 18 C.F.R. 292.207
prior to the date of enactment of subsections (m) and (n).''.
(b) Elimination of Ownership Limitations.--(1) 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 minimum
size, fuel use, and fuel efficiency) as the Commission may, by rule,
prescribe.''.
(2) 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.''.

SEC. 7063. 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:
``(13) Time-based metering and communications.--(A) Not
later than eighteen (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 in the 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, each of the following:
``(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. 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
purchasing electricity at the wholesale level and when
consumers may receive additional discounts for reducing
peak period energy consumption.
``(iii) Real-Time pricing whereby electricity
prices are set for a specific time period on an
advanced or forward basis 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 that 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
twelve (12) months after 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 by adding the at the end the following:
``(k) Time-Based Metering and Communications.--Each State
regulatory authority shall, not later than twelve (12) months after
enactment of this subsection, 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 Polices 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. 2643) is amended by adding the
following at the end thereof:
``(d) Demand Response.--The Secretary shall be responsible for each
of the following:
``(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) Within 6 months of enactment, provide the Congress
with a report that identifies and quantifies the national
benefits of demand response and provides policy recommendations
as to how to achieve specific levels of such benefits by
January 1, 2005.''.
(e) Demand Response and Regional Coordination.--
(1) Policy.--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 two 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; and
(C) developing plans and programs to use demand
response to respond to peak demand or emergency needs.
(3) Report.--The Federal Energy Regulatory 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 each of the following:
(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, including the prior year and following
years.
(D) The potential for demand response as a
quantifiable, reliable resource for regional planning
purposes.
(E) Steps taken to ensure that, in regional
transmission planning and operations, that 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) Cost Recovery 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.

Subtitle F--Renewable Energy

SEC. 7071. NET METERING.

(a) Adoption of Standard.--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:
``(14) Net metering.--(A) Each electric utility shall make
available upon request net metering service to any electric
consumer that the electric utility serves.
``(B) 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.
``(C) Notwithstanding subsections (b) and (c) of section
112, each State regulatory authority shall consider and make a
determination concerning whether it is appropriate to implement
the standard set out in subparagraph (A) not later than 1 year
after the date of enactment of this paragraph.''.
(b) Special Rules for Net Metering.--Section 115 of the Public
Utility Regulatory Policies Act of 1978 (16 U.S.C. 2625) is amended by
adding at the end the following:
``(l) Net Metering.--In undertaking the consideration and making
the determination under section 111 with respect to the standard
concerning net metering established by section 111(d)(14), the term
`net metering service' shall mean a service provided in accordance with
the following standards:
``(1) Rates and charges.--An electric utility--
``(A) shall charge the owner or operator of an on-
site generating facility rates and charges that are
identical to those that would be charged other electric
consumers of the electric utility in the same rate
class; and
``(B) shall not charge the owner or operator of an
on-site generating facility any additional standby,
capacity, interconnection, or other rate or charge.
``(2) Measurement.--An electric utility that sells electric
energy to the owner or operator of an on-site generating
facility shall measure the quantity of electric energy produced
by the on-site facility and the quantity of electric energy
consumed by the owner or operator of an on-site generating
facility during a billing period in accordance with normal
metering practices.
``(3) Electric energy supplied exceeding electric energy
generated.--If the quantity of electric energy sold by the
electric utility to an on-site generating facility exceeds the
quantity of electric energy supplied by the on-site generating
facility to the electric utility during the billing period, the
electric utility may bill the owner or operator for the net
quantity of electric energy sold, in accordance with normal
metering practices.
``(4) Electric energy generated exceeding electric energy
supplied.--If the quantity of electric energy supplied by the
on-site generating facility to the electric utility exceeds the
quantity of electric energy sold by the electric utility to the
on-site generating facility during the billing period--
``(A) the electric utility may bill the owner or
operator of the on-site generating facility for the
appropriate charges for the billing period in
accordance with paragraph (2); and
``(B) the owner or operator of the on-site
generating facility shall be credited for the excess
kilowatt-hours generated during the billing period,
with the kilowatt-hour credit appearing on the bill for
the following billing period.
``(5) Safety and performance standards.--An eligible on-
site generating facility and net metering system used by an
electric consumer shall meet all applicable safety,
performance, reliability, and interconnection standards
established by the National Electrical Code, the Institute of
Electrical and Electronics Engineers, and Underwriters
Laboratories.
``(6) Additional control and testing requirements.--The
Commission, after consultation with State regulatory
authorities and nonregulated electric utilities and after
notice and opportunity for comment, may adopt, by rule,
additional control and testing requirements for on-site
generating facilities and net metering systems that the
Commission determines are necessary to protect public safety
and system reliability.
``(7) Definitions.--For purposes of this subsection:
``(A) The term `eligible on-site generating
facility' means--
``(i) a facility on the site of a
residential electric consumer with a maximum
generating capacity of 10 kilowatts or less
that is fueled by solar energy, wind energy, or
fuel cells; or
``(ii) a facility on the site of a
commercial electric consumer with a maximum
generating capacity of 500 kilowatts or less
that is fueled solely by a renewable energy
resource, landfill gas, or a high efficiency
system.
``(B) The term `renewable energy resource' means
solar, wind, biomass, or geothermal energy.
``(C) The term `high efficiency system' means
service fuel cells or combined heat and power.
``(D) The term `net metering' 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.''

SEC. 7072. 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 the
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 of
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. 7073. RENEWABLE ENERGY ON FEDERAL LANDS.

(a) Report to Congress.--Within 24 months after the date of
enactment of this section, the Secretary of the Interior, in
cooperation with the Secretary of Agriculture, shall develop and report
to the Congress recommendations on opportunities to develop renewable
energy on public lands under the jurisdiction of the Secretary of the
Interior and National Forest System lands under the jurisdiction of the
Secretary of Agriculture. The report shall include--
(1) 5-year plans developed by the Secretary of the Interior
and the Secretary of Agriculture, respectively, for encouraging
the development of wind and solar energy consistent with
applicable law and management plans; and
(2) an analysis of--
(A) the use of rights-of-ways, leases, or other
methods to develop wind and solar energy on such lands;
(B) the anticipated benefits of grants, loans, tax
credits, or other provisions to promote wind and solar
energy development on such lands; and
(C) any issues that the Secretary of the Interior
or the Secretary of Agriculture have encountered in
managing wind or solar energy projects on such lands,
or believe are likely to arise in relation to the
development of wind or solar energy on such lands;
(3) 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 Defense that would
be suitable for development for wind or solar energy, and any
recommended statutory and regulatory mechanisms for such
development; and
(4) any recommendations pertaining to the issues addressed
in the report.
(b) National Academy of Sciences Study.--
(1) In general.--Within 90 days after the date of the
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 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 of results.--The results of the study shall
be transmitted to the Congress within 24 months after the date
of the enactment of this Act.

SEC. 7074. ASSESSMENT OF RENEWABLE ENERGY RESOURCES.

(a) Resource Assessment.--Not later than 3 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 available within the United States, including solar, wind,
biomass, ocean, 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.

Subtitle G--Market Transparency, Round Trip Trading Prohibition, and
Enforcement

SEC. 7081. MARKET TRANSPARENCY RULES.

Part II of the Federal Power Act is amended by adding the following
new section at the end thereof:

``SEC. 219. MARKET TRANSPARENCY RULES.

``(a) Commission Rules.--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. Such systems shall
provide information about the availability and market price of sales of
electric energy at wholesale in interstate commerce and transmission of
electric energy in interstate commerce 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 person, and
any entity described in section 201(f), who sells electric energy at
wholesale in interstate commerce or provides transmission services in
interstate commerce.
``(b) Exemptions.--The Commission shall exempt from disclosure
information it determines would, if disclosed, (1) be detrimental to
the operation of an effective market; or (2) jeopardize system
security. This section shall not apply to an entity described in
section 212(k)(2)(B) with respect to transactions for the purchase or
sale of wholesale electric energy and transmission services within the
area described in section 212(k)(2)(A).''.

SEC. 7082. PROHIBITION ON ROUND-TRIP TRADING.

Part II of the Federal Power Act is amended by adding the following
new section at the end thereof:

``SEC. 220. PROHIBITION ON ROUND-TRIP TRADING.

``(a) Prohibition.--It shall be a violation of this Act for any
person, and any entity described in section 201(f), willfully and
knowingly to 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 of Round-Trip Trade.--For the purposes of this
section, the term `round-trip trade' means a transaction, or
combination of transactions, in which a person or 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
described in paragraph (1), arranges a financially offsetting
trade with such other person or entity for the same quantity of
electric energy so that, collectively, the purchase and sale
transactions in themselves result in no financial gain or loss;
and
``(3) has a specific intent to distort reported revenues,
trading volumes, or prices.''.

SEC. 7083. CONFORMING CHANGES.

Section 201(e) of the Federal Power Act is amended by striking ``or
212'' and inserting ``212, 215, 216, 217, 218, 219, or 220''. Section
201(b)(2) of such Act is amended by striking ``and 212'' and inserting
``212, 215, 216, 217, 218, 219, and 220''.

SEC. 7084. ENFORCEMENT.

(a) Complaints.--Section 306 of the Federal Power Act (16 U.S.C.
825e) is amended by--
(1) inserting ``electric utility,'' after ``Any person,'';
and
(2) 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 place it appears and by
striking ``any person unless such person'' and inserting ``any entity
unless such entity''.
(c) 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
``five years'';
(2) in subsection (b), by striking ``$500'' and inserting
``$25,000''; and
(3) by striking subsection (c).
(d) Civil Penalties.--Section 316A of the Federal Power Act (16
U.S.C. 825-1) is amended--
(1) in subsections (a) and (b), by striking ``section 211,
212, 213, or 214'' each place it appears and inserting ``Part
II''; and
(2) in subsection (b), by striking ``$10,000'' and
inserting ``$1,000,000''.

Subtitle H--Consumer Protections

SEC. 7091. REFUND EFFECTIVE DATE.

Section 206(b) of the Federal Power Act (16 U.S.C. 824e(b)) is
amended by--
(1) 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) striking ``60 days after'' in the third sentence and
inserting ``of'';
(3) striking ``expiration of such 60-day period'' in the
third sentence and inserting ``publication date''; and
(4) in the fifth sentence after ``rendered by the'' insert
``date 60 days after the''.

SEC. 7092. JURISDICTION OVER INTERSTATE SALES.

(a) Scope of 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) If an entity that is not a public utility (including an
entity referred to in section 201(f)) voluntarily makes a spot market
sale of electric energy and such sale violates Commission rules in
effect at the time of such 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 any entity that is either--
``(A) an entity described in section 201(f); or
``(B) a rural electric cooperative
that does not sell more than 4,000,000 megawatt hours of electricity
per year.
``(3) For purposes of this subsection, the term `spot market sale'
means an agreement for the sale of electric energy at wholesale in
interstate commerce that is for 24 hours or less and that is entered
into the day of, or the day prior to, delivery.''.
(b) Conforming Amendments.--(1) Section 206 of the Federal Power
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''.
(2) 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 ``sections 210'' and
inserting ``sections 206(f), 210''.
(B) In the second sentence by striking ``section 210'' and
inserting ``section 206(f), 210,''.
(3) Section 201(e) of the Federal Power Act is amended by striking
``section 210'' and inserting ``section 206(f), 210''.
(c) Uniform Investigation Authority.--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) Sanctity of Contract.--(1) The Federal Energy Regulatory
Commission shall have no authority to abrogate or modify any provision
of a contract, except upon a finding, after notice and opportunity for
a hearing, that such action is necessary to protect the public
interest, unless such contract expressly provides for a different
standard of review.
(2) For purposes of this subsection, a contract is any agreement,
in effect and subject to the jurisdiction of the Commission--
(A) under section 4 of the Natural Gas Act or section 205
of the Federal Power Act; and
(B) that is not for sales in an organized exchange or
auction spot market.
(3) This subsection shall not apply to any contract executed before
the date of enactment of this section unless such contract is an
interconnection agreement, nor shall this subsection affect the outcome
in any proceeding regarding any contract for sales of electric power
executed before the date of enactment of this section.

SEC. 7093. CONSUMER PRIVACY.

(a) In General.--The Federal Trade Commission shall 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. The Federal Trade Commission
shall proceed in accordance with section 553 of title 5, United States
Code, when prescribing a rule under this section.
(b) 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.

SEC. 7094. UNFAIR TRADE PRACTICES.

(a) Slamming.--The Federal Trade Commission shall 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.
(b) Cramming.--The Federal Trade Commission shall issue rules
prohibiting the sale of goods and services to an electric consumer
unless expressly authorized by law or the electric consumer.
(c) 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.
(d) 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.

Subtitle I--Merger Review Reform and Accountability

SEC. 7101. 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 Department of Justice,
shall prepare, and transmit to the Committee on Energy and Commerce of
the House of Representatives and the Committee on Energy and Natural
Resources of the Senate 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 the Committee on Energy and
Commerce of the House of Representatives and the Committee on Energy
and Natural Resources of the Senate 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.

Subtitle J--Study of Economic Dispatch

SEC. 7111. 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 the
Congress and the States on the results of the study conducted under
subsection (a), including recommendations to the Congress and the
States for any suggested legislative or regulatory changes.

TITLE VIII--COAL

SEC. 8001. AUTHORIZATION OF APPROPRIATIONS.

(a) Clean Coal Power Initiative.--Except as provided in subsection
(b), there are authorized to be appropriated to the Secretary to carry
out the activities authorized by this title $200,000,000 for each of
the fiscal years 2005 through 2013, to remain available until expended.
(b) Limit on Use of Funds.--The Secretary shall transmit to the
Congress the report required by this subsection not later than
September 30, 2004. Notwithstanding subsection (a), no funds may be
used to carry out the activities authorized by this title after
September 30, 2004, unless the report has been transmitted. 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.
(c) Applicability.--Subsection (b) shall not apply to any project
begun before September 30, 2004.

SEC. 8002. PROJECT CRITERIA.

(a) In General.--The Secretary shall not provide funding under this
title for any project that does not advance efficiency, environmental
performance, and cost competitiveness well beyond the level of
technologies that on a full scale are in operation or have been
demonstrated as of the date of the enactment of this Act.
(b) Technical Criteria for Clean Coal Power Initiative.--
(1) Gasification.--(A) In allocating the funds made
available under section 8001(a), the Secretary shall ensure
that up to 80 percent of the funds are used only for coal-based
gasification technologies, including gasification combined
cycle, gasification fuel cells, gasification coproduction and
hybrid gasification/combustion.
(B) The Secretary shall set technical milestones specifying
emissions levels for projects funded under this paragraph. The
milestones shall be designed to increasingly restrict emission
levels through the life of the program. The milestones shall be
designed to achieve by 2020 coal gasification projects able--
(i) to remove 99 percent of sulfur dioxide;
(ii) to emit no 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.--For projects not described in
paragraph (1), the Secretary shall set technical milestones
specifying emissions levels. The milestones shall be designed
to increasingly restrict emission levels through the life of
the program. The milestones shall be designed 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) except as provided in paragraph (4), 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) 42 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 existing
units, in lieu of the thermal efficiency requirements set forth
in paragraph (1)(B)(iv) and (2)(D), the projects 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 allocating funds made available
under section 8001, 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 title unless the recipient has documented 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 for 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,
utilizing different types of coal, that use coal as the primary
feedstock as of the date of the enactment of this Act.
(e) Federal Share.--The Federal share of the cost of a project
funded by the Secretary under this title 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, achievable for purposes of section 169 of that
Act, or achievable in practice for purposes of section 171 of that Act
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.

SEC. 8003. REPORT.

Not later than 1 year after the date of the enactment of this Act,
and once every 2 years thereafter for the following 8 years, the
Secretary, in consultation with other appropriate Federal agencies,
shall transmit to the Congress a report describing--
(1) the technical milestones set forth in section 8002 and
how those milestones ensure progress toward meeting the
requirements of subsections (b)(1)(B) and (b)(2) of section
8002; and
(2) the status of projects funded under this title.

SEC. 8004. CLEAN COAL CENTERS OF EXCELLENCE.

As part of the program authorized in section 8001, 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 can
show the greatest potential for advancing new clean coal technologies.

TITLE IX--MOTOR FUELS

Subtitle A--General Provisions

SEC. 9101. RENEWABLE CONTENT OF MOTOR VEHICLE FUEL.

(a) In General.--Section 211 of the Clean Air Act (42 U.S.C. 7545)
is amended--
(1) by redesignating subsection (o) as subsection (q); and
(2) by inserting after subsection (n) the following:
``(o) Renewable Fuel Program.--
``(1) Definitions.--In this section:
``(A) Cellulosic biomass ethanol.--The term
`cellulosic biomass ethanol' means ethanol derived from
any lignocellulosic or hemicellulosic matter that is
available on a renewable or recurring basis,
including--
``(i) dedicated energy crops and trees;
``(ii) wood and wood residues;
``(iii) plants;
``(iv) grasses;
``(v) agricultural residues;
``(vi) fibers;
``(vii) animal wastes and other waste
materials; and
``(viii) municipal solid waste.
``(B) Renewable fuel.--
``(i) In general.--The term `renewable
fuel' means motor vehicle fuel that--
``(I)(aa) is produced from grain,
starch, oilseeds, or other biomass; or
``(bb) is natural gas produced from
a biogas source, including a landfill,
sewage waste treatment plant, feedlot,
or other place where decaying organic
material is found; and
``(II) is used to replace or reduce
the quantity of fossil fuel present in
a fuel mixture used to operate a motor
vehicle.
``(ii) Inclusion.--The term `renewable
fuel' includes cellulosic biomass ethanol and
biodiesel (as defined in section 312(f) of the
Energy Policy Act of 1992 (42 U.S.C. 13220(f))
and any blending components derived from
renewable fuel (provided that only the
renewable fuel portion of any such blending
component shall be considered part of the
applicable volume under the renewable fuel
program established by this subsection).
``(C) Small refinery.--The term `small refinery'
means a refinery for which average aggregate daily
crude oil throughput for the calendar year (as
determined by dividing the aggregate throughput for the
calendar year by the number of days in the calendar
year) does not exceed 75,000 barrels.
``(2) Renewable fuel program.--
``(A) In general.--Not later than 1 year from
enactment of this provision, the Administrator shall
promulgate regulations ensuring that gasoline sold or
dispensed to consumers in the contiguous United States,
on an annual average basis, contains the applicable
volume of renewable fuel as specified in subparagraph
(B). Regardless of the date of promulgation, such
regulations shall contain compliance provisions for
refiners, blenders, and importers, as appropriate, to
ensure that the requirements of this section are met,
but shall not restrict where renewables can be used, or
impose any per-gallon obligation for the use of
renewables. If the Administrator does not promulgate
such regulations, the applicable percentage, on a
volume percentage of gasoline basis, shall be 1.62 in
2005.
``(B) Applicable volume.--
``(i) Calendar years 2005 through 2015.--
For the purpose of subparagraph (A), the
applicable volume for any of calendar years
2005 through 2015 shall be determined in
accordance with the following table:

Applicable volume of renewable fuel

``Calendar year:                           (In billions of gallons)
2005.......................................         2.7
2006.......................................         2.7
2007.......................................         2.9
2008.......................................         2.9
2009.......................................         3.4
2010.......................................         3.4
2011.......................................         3.4
2012.......................................         4.2
2013.......................................         4.2
2014.......................................         4.2
2015.......................................        5.0.
``(ii) Calendar year 2016 and thereafter.--
For the purpose of subparagraph (A), the
applicable volume for calendar year 2016 and
each calendar year thereafter shall be equal to
the product obtained by multiplying--
``(I) the number of gallons of
gasoline that the Administrator
estimates will be sold or introduced
into commerce in the calendar year; and
``(II) the ratio that--
``(aa) 5.0 billion gallons
of renewable fuels; bears to
``(bb) the number of
gallons of gasoline sold or
introduced into commerce in
calendar year 2015.
``(3) Applicable percentages.--Not later than October 31 of
each calendar year after 2002, the Administrator of the Energy
Information Administration shall provide the Administrator an
estimate of the volumes of gasoline sales in the United States
for the coming calendar year. Based on such estimates, the
Administrator shall, by November 30 of each calendar year after
2003, determine and publish in the Federal Register, the
renewable fuel obligation, on a volume percentage of gasoline
basis, applicable to refiners, blenders, and importers, as
appropriate, for the coming calendar year, to ensure that the
requirements of paragraph (2) are met. For each calendar year,
the Administrator shall establish a single applicable
percentage that applies to all parties, and make provision to
avoid redundant obligations. In determining the applicable
percentages, the Administrator shall make adjustments to
account for the use of renewable fuels by exempt small
refineries during the previous year.
``(4) Cellulosic biomass ethanol.--For the purpose of
paragraph (2), 1 gallon of cellulosic biomass ethanol shall be
considered to be the equivalent of 1.5 gallon of renewable
fuel.
``(5) Credit program.--
``(A) In general.--The regulations promulgated to
carry out this subsection shall provide for the
generation of an appropriate amount of credits by any
person that refines, blends, or imports gasoline that
contains a quantity of renewable fuel that is greater
than the quantity required under paragraph (2). Such
regulations shall provide for the generation of an
appropriate amount of credits for biodiesel fuel. If a
small refinery notifies the Administrator that it
waives the exemption provided by this Act, the
regulations shall provide for the generation of credits
by the small refinery beginning in the year following
such notification.
``(B) Use of credits.--A person that generates
credits under subparagraph (A) may use the credits, or
transfer all or a portion of the credits to another
person, for the purpose of complying with paragraph
(2).
``(C) Life of credits.--A credit generated under
this paragraph shall be valid to show compliance:
``(i) in the calendar year in which the
credit was generated or the next calendar year,
or
``(ii) in the calendar year in which the
credit was generated or next two consecutive
calendar years if the Administrator promulgates
regulations under paragraph (6).
``(D) Inability to purchase sufficient credits.--
The regulations promulgated to carry out this
subsection shall include provisions allowing any person that is unable
to generate or purchase sufficient credits to meet the requirements
under paragraph (2) to carry forward a renewables deficit provided
that, in the calendar year following the year in which the renewables
deficit is created, such person shall achieve compliance with the
renewables requirement under paragraph (2), and shall generate or
purchase additional renewables credits to offset the renewables deficit
of the previous year.
``(6) Seasonal variations in renewable fuel use.--
``(A) Study.--For each of calendar years 2005
through 2015, the Administrator of the Energy
Information Administration, shall conduct a study of
renewable fuels blending to determine whether there are
excessive seasonal variations in the use of renewable
fuels.
``(B) Regulation of excessive seasonal
variations.--If, for any calendar year, the
Administrator of the Energy Information Administration,
based on the study under subparagraph (A), makes the
determinations specified in subparagraph (C), the
Administrator shall promulgate regulations to ensure
that 35 percent or more of the quantity of renewable
fuels necessary to meet the requirement of paragraph
(2) is used during each of the periods specified in
subparagraph (D) of each subsequent calendar year.
``(C) Determinations.--The determinations referred
to in subparagraph (B) are that--
``(i) less than 35 percent of the quantity
of renewable fuels necessary to meet the
requirement of paragraph (2) has been used
during one of the periods specified in
subparagraph (D) of the calendar year;
``(ii) a pattern of excessive seasonal
variation described in clause (i) will continue
in subsequent calendar years; and
``(iii) promulgating regulations or other
requirements to impose a 35% or more seasonal
use of renewable fuels will not prevent or
interfere with the attainment of national
ambient air quality standards or significantly
increase the price of motor fuels to the
consumer.
``(D) Periods.--The two periods referred to in this
paragraph are--
``(i) April through September; and
``(ii) January through March and October
through December.
``(E) Exclusions.--Renewable fuels blended or
consumed in 2005 in a State which has received a waiver
under section 209(b) shall not be included in the study
in subparagraph (A).
``(7) Waivers.--
``(A) In general.--The Administrator, in
consultation with the Secretary of Agriculture and the
Secretary of Energy, may waive the requirement of
paragraph (2) in whole or in part on petition by one or
more States by reducing the national quantity of
renewable fuel required under this subsection--
``(i) based on a determination by the
Administrator, after public notice and
opportunity for comment, that implementation of
the requirement would have a significant and
meaningful adverse impact on the economy or
environment of a State, a region, or the United
States, or will prevent or interfere with the
attainment of a national ambient air quality
standard in any area of a State; or
``(ii) based on a determination by the
Administrator, after public notice and
opportunity for comment, that there is an
inadequate domestic supply or distribution
capacity to meet the requirement.
``(B) Petitions for waivers.--The Administrator,
in consultation with the Secretary of Agriculture and
the Secretary of Energy, shall approve or disapprove a
State petition for a waiver of the requirement of
paragraph (2) within 90 days after the date on which
the petition is received by the Administrator. If the
Administrator does not act to approve or disapprove a
State petition for a waiver within 90 days, the
Administrator shall publish a notice setting forth the
reasons for not acting within the required 90-day
period.
``(C) Termination of waivers.--A waiver granted
under subparagraph (A) shall terminate after 1 year,
but may be renewed by the Administrator after
consultation with the Secretary of Agriculture and the
Secretary of Energy.
``(8) Study and waiver for initial year of program.--Not
later than 180 days from enactment, the Secretary of Energy
shall complete for the Administrator a study assessing whether
the renewable fuels requirement under paragraph (2) will likely
result in significant adverse consumer impacts in 2005, on a
national, regional or State basis. Such study shall evaluate
renewable fuel supplies and prices, blendstock supplies, and
supply and distribution system capabilities. Based on such
study, the Secretary shall make specific recommendations to the
Administrator regarding waiver of the requirements of paragraph
(2), in whole or in part, to avoid any such adverse impacts.
Within 270 days from enactment, the Administrator shall,
consistent with the recommendations of the Secretary waive, in
whole or in part, the renewable fuels requirement under
paragraph (2) by reducing the national quantity of renewable
fuel required under this subsection in 2005. This provision
shall not be interpreted as limiting the Administrator's
authority to waive the requirements of paragraph (2) in whole,
or in part, under paragraph (7) or paragraph (9), pertaining to
waivers.
``(9) Assessment and waiver.--The Secretary of Energy, in
consultation with the Administrator of the Environmental
Protection Agency and the Secretary of Agriculture on his own
motion, or upon petition of any State shall evaluate the
requirement of paragraph (2) and determine, prior to January 1,
2007, or prior to January 1 of any subsequent year in which the
applicable volume of renewable fuel is increased under paragraph
(2)(B), whether the requirement of paragraph (2), including the
applicable volume of renewable fuel contained in paragraph (2)(B)
should remain in effect, in whole or in part, during 2007 or any year
or years subsequent to 2007. In evaluating the requirement of paragraph
(2) and in making any determination under this section, the Secretary
shall consider the best available information and data collected by
accepted methods or best available means regarding--
``(A) the capacity of renewable fuel producers to
supply an adequate amount of renewable fuel at
competitive prices to fulfill the requirement in
paragraph (2);
``(B) the potential of the requirement in paragraph
(2) to significantly raise the price of gasoline, food
or heating oil for consumers in any significant area or
region of the country above the price that would
otherwise apply to such commodities in the absence of
the requirement;
``(C) the potential of the requirement in paragraph
(2) to interfere with the supply of fuel in any
significant gasoline market or region of the country,
including interference with the efficient operation of
refiners, blenders, importers, wholesale suppliers, and
retail vendors of gasoline, and other motor fuels; and
``(D) the potential of the requirement to cause or
promote exceedences of Federal, State, or local air
quality standards.
If the Secretary determines, after public notice and the
opportunity for comment, that the requirement of paragraph (2)
would have significant and meaningful adverse impact on the
supply of fuel and related infrastructure or on the economy,
environment, public health or environment of any significant
area or region of the country, the Secretary may waive, in
whole or in part, the requirement of paragraph (2) in any one
year or period of years as well as reduce the applicable volume
of renewable fuel contained in paragraph (2)(B) in any one year
or period of years.
``(10) Small refineries.--
``(A) In general.--The requirement of paragraph (2)
shall not apply to small refineries until the first
calendar year beginning more than 5 years after the
first year set forth in the table in paragraph
(2)(B)(i). Not later than December 31, 2006, the
Secretary of Energy shall complete for the
Administrator a study to determine whether the
requirement of paragraph (2) would impose a
disproportionate economic hardship on small refineries.
For any small refinery that the Secretary of Energy
determines would experience a disproportionate economic
hardship, the Administrator shall extend the small
refinery exemption for such small refinery for no less
than two additional years.
``(B) Economic hardship.--
``(i) Extension of exemption.--A small
refinery may at any time petition the
Administrator for an extension of the exemption
from the requirement of paragraph (2) for the
reason of disproportionate economic hardship.
In evaluating a hardship petition, the
Administrator, in consultation with the
Secretary of Energy, shall consider the
findings of the study in addition to other
economic factors.
``(ii) Deadline for action on petitions.--
The Administrator shall act on any petition
submitted by a small refinery for a hardship
exemption not later than 90 days after the
receipt of the petition.
``(C) Credit program.--If a small refinery notifies
the Administrator that it waives the exemption provided
by this Act, the regulations shall provide for the
generation of credits by the small refinery beginning
in the year following such notification.
``(D) Opt-in for small refiners.--A small refinery
shall be subject to the requirements of this section if
it notifies the Administrator that it waives the
exemption under subparagraph (A).''.
(b) Penalties and Enforcement.--Section 211(d) of the Clean Air Act
(42 U.S.C. 7545(d)) is amended--
(1) in paragraph (1)--
(A) in the first sentence, by striking ``or (n)''
each place it appears and inserting ``(n) or (o)''; and
(B) in the second sentence, by striking ``or (m)''
and inserting ``(m), or (o)''; and
(2) in the first sentence of paragraph (2), by striking
``and (n)'' each place it appears and inserting ``(n), and
(o)''.
(c) Survey of Renewable Fuel Market.--
(1) Survey and report.--Not later than December 1, 2006,
and annually thereafter, the Administrator of the Environmental
Protection Agency (in consultation with the Secretary of Energy
acting through the Administrator of the Energy Information
Administration) shall--
(A) conduct, with respect to each conventional
gasoline use area and each reformulated gasoline use
area in each State, a survey to determine the market
shares of--
(i) conventional gasoline containing
ethanol;
(ii) reformulated gasoline containing
ethanol;
(iii) conventional gasoline containing
renewable fuel; and
(iv) reformulated gasoline containing
renewable fuel; and
(B) submit to Congress, and make publicly
available, a report on the results of the survey under
subparagraph (A).
(2) Recordkeeping and reporting requirements.--The
Administrator may require any refiner, blender, or importer to
keep such records and make such reports as are necessary to
ensure that the survey conducted under paragraph (1) is accurate. The
Administrator shall rely, to the extent practicable, on existing
reporting and recordkeeping requirements to avoid duplicative
requirements.
(3) Applicable law.--Activities carried out under this
subsection shall be conducted in a manner designed to protect
confidentiality of individual responses.
(4) Calculation of market shares.--Market shares for
conventional gasoline and reformulated gasoline use areas will
be calculated on a statewide basis using information collected
under paragraph (2) and other information available to the
Administrator. Market share information may be based upon
gasoline distribution patterns that include multistate use
areas.

SEC. 9102. FUELS SAFE HARBOR.

(a) In General.--Notwithstanding any other provision of Federal or
State law, no renewable fuel, as defined by section 211(o)(1) of the
Clean Air Act, or fuel containing MTBE, used or intended to be used as
a motor vehicle fuel, nor any motor vehicle fuel containing such
renewable fuel or MTBE, shall be deemed defective in design or
manufacture by virtue of the fact that it is, or contains, such a
renewable fuel or MTBE, if it does not violate a control or prohibition
imposed by the Administrator under section 211 of such Act, and the
manufacturer is in compliance with all requests for information under
subsection (b) of such section 211(b) of the Clean Air Act. If the safe
harbor provided by this section does not apply, the existence of a
design defect or manufacturing defect shall be determined under
otherwise applicable law. Nothing in this paragraph shall be construed
to affect the liability of any person for environmental remediation
costs, drinking water contamination, negligence, public nuisance or any
other liability other than liability for a defect in design or
manufacture of a motor vehicle fuel.
(b) Effective Date.--This section shall be effective as of the date
of enactment and shall apply with respect to all claims filed on or
after that date.

SEC. 9103. FINDINGS AND MTBE TRANSITION ASSISTANCE.

(a) Findings.--Congress finds that--
(1) since 1979, methyl tertiary butyl ether (referred to in
this section as ``MTBE'') has been used nationwide at low
levels in gasoline to replace lead as an octane booster or
anti-knocking agent;
(2) Public Law 101-549 (commonly known as the ``Clean Air
Act Amendments of 1990'') (42 U.S.C. 7401 et seq.) established
a fuel oxygenate standard under which reformulated gasoline
must contain at least 2 percent oxygen by weight;
(3) at the time of the adoption of the fuel oxygen
standard, Congress was aware that significant use of MTBE would
result from the adoption of that standard, and that the use of
MTBE would likely be important to the cost-effective
implementation of that program;
(4) Congress was aware that gasoline and its component
additives can and do leak from storage tanks;
(5) the fuel industry responded to the fuel oxygenate
standard established by Public Law 101-549 by making
substantial investments in--
(A) MTBE production capacity; and
(B) systems to deliver MTBE-containing gasoline to
the marketplace;
(6) Congress has--
(A) reconsidered the relative value of the
oxygenate requirement for reformulated gasoline; and
(B) decided to provide for the elimination of the
oxygenate requirement for reformulated gasoline and to
provide for a renewable content requirement for motor
fuel; and
(7) it is appropriate for Congress to provide some limited
transition assistance--
(A) to merchant producers of MTBE who produced MTBE
in response to a market created by the oxygenate
requirement contained in the Clean Air Act; and
(B) for the purpose of mitigating any fuel supply
problems that may result from the elimination of the
oxygenate requirement for reformulated gasoline.
(b) Purposes.--The purpose of this section is to provide assistance
to merchant producers of MTBE in making the transition from producing
MTBE to producing other fuel additives.
(c) MTBE Merchant Producer Conversion Assistance.--Section 211(c)
of the Clean Air Act (42 U.S.C. 7545(c)) is amended by adding at the
end the following:
``(5) MTBE merchant producer conversion assistance.--
``(A) In general.--
``(i) Grants.--The Secretary of Energy, in
consultation with the Administrator, may make
grants to merchant producers of methyl tertiary
butyl ether in the United States to assist the
producers in the conversion of eligible
production facilities described in subparagraph
(C) to the production of iso-octane and
alkylates.
``(ii) Determination.--The Administrator,
in consultation with the Secretary of Energy,
may determine that transition assistance for
the production of iso-octane and alkylates is
inconsistent with the provisions of
subparagraph (B) and, on that basis, may deny
applications for grants authorized by this
provision.
``(B) Further grants.--The Secretary of Energy, in
consultation with the Administrator, may also further
make grants to merchant producers of MTBE in the United
States to assist the producers in the conversion of
eligible production facilities described in
subparagraph (C) to the production of such other fuel
additives that, consistent with this subsection--
``(i) unless the Administrator determines
that such fuel additives may reasonably be
anticipated to endanger public health or the
environment;
``(ii) have been registered and have been
tested or are being tested in accordance with
the requirements of this section; and
``(iii) will contribute to replacing
gasoline volumes lost as a result of paragraph
(5).
``(C) Eligible production facilities.--A production
facility shall be eligible to receive a grant under
this paragraph if the production facility--
``(i) is located in the United States; and
``(ii) produced methyl tertiary butyl ether
for consumption before April 1, 2003 and ceased
production at any time after the date of
enactment.
``(D) Authorization of appropriations.--There is
authorized to be appropriated to carry out this
paragraph $250,000,000 for each of fiscal years 2004
through 2006, to remain available until expended.''.
(d) Effect on State Law.--The amendments made to the Clean Air Act
by this title have no effect regarding any available authority of
States to limit the use of methyl tertiary butyl ether in motor vehicle
fuel.

SEC. 9104. ELIMINATION OF OXYGEN CONTENT REQUIREMENT FOR REFORMULATED
GASOLINE.

(a) Elimination.--
(1) In general.--Section 211(k) of the Clean Air Act (42
U.S.C. 7545(k)) is amended--
(A) in paragraph (2)--
(i) in the second sentence of subparagraph
(A), by striking ``(including the oxygen
content requirement contained in subparagraph
(B))'';
(ii) by striking subparagraph (B); and
(iii) by redesignating subparagraphs (C)
and (D) as subparagraphs (B) and (C),
respectively;
(B) in paragraph (3)(A), by striking clause (v);
(C) in paragraph (7)--
(i) in subparagraph (A)--
(I) by striking clause (i); and
(II) by redesignating clauses (ii)
and (iii) as clauses (i) and (ii),
respectively; and
(ii) in subparagraph (C)--
(I) by striking clause (ii); and
(II) by redesignating clause (iii)
as clause (ii); and
(2) Effective date.--The amendments made by paragraph (1)
take effect 270 days after the date of enactment of this Act,
except that such amendments shall take effect upon enactment in
any State that has received a waiver under section 209(b) of
the Clean Air Act.
(b) Maintenance of Toxic Air Pollutant Emission Reductions.--
Section 211(k)(1) of the Clean Air Act (42 U.S.C. 7545(k)(1)) is
amended--
(1) by striking ``Within 1 year after the enactment of the
Clean Air Act Amendments of 1990,'' and inserting the
following:
``(A) In general.--Not later than November 15,
1991,''; and
(2) by adding at the end the following:
``(B) Maintenance of toxic air pollutant emissions
reductions from reformulated gasoline.--
``(i) Definitions.--In this subparagraph
the term `PADD' means a Petroleum
Administration for Defense District.
``(ii) Regulations regarding emissions of
toxic air pollutants.--Not later than 270 days
after the date of enactment of this
subparagraph the Administrator shall establish,
for each refinery or importer, standards for
toxic air pollutants from use of the
reformulated gasoline produced or distributed
by the refinery or importer that maintain the
reduction of the average annual aggregate
emissions of toxic air pollutants for
reformulated gasoline produced or distributed
by the refinery or importer during calendar
years 1999 and 2000, determined on the basis of
data collected by the Administrator with
respect to the refinery or importer.
``(iii) Standards applicable to specific
refineries or importers.--
``(I) Applicability of standards.--
For any calendar year, the standards
applicable to a refinery or importer
under clause (ii) shall apply to the
quantity of gasoline produced or
distributed by the refinery or importer
in the calendar year only to the extent
that the quantity is less than or equal
to the average annual quantity of
reformulated gasoline produced or
distributed by the refinery or importer
during calendar years 1999 and 2000.
``(II) Applicability of other
standards.--For any calendar year, the
quantity of gasoline produced or
distributed by a refinery or importer
that is in excess of the quantity
subject to subclause (I) shall be
subject to standards for toxic air
pollutants promulgated under
subparagraph (A) and paragraph (3)(B).
``(iv) Credit program.--The Administrator
shall provide for the granting and use of
credits for emissions of toxic air pollutants
in the same manner as provided in paragraph
(7).
``(v) Regional protection of toxics
reduction baselines.--
``(I) In general.--Not later than
60 days after the date of enactment of
this subparagraph, and not later than
April 1 of each calendar year that
begins after that date of enactment,
the Administrator shall publish in the
Federal Register a report that
specifies, with respect to the previous
calendar year--
``(aa) the quantity of
reformulated gasoline produced
that is in excess of the
average annual quantity of
reformulated gasoline produced
in 1999 and 2000; and
``(bb) the reduction of the
average annual aggregate
emissions of toxic air
pollutants in each PADD, based
on retail survey data or data
from other appropriate sources.
``(II) Effect of failure to
maintain aggregate toxics reductions.--
If, in any calendar year, the reduction
of the average annual aggregate
emissions of toxic air pollutants in a
PADD fails to meet or exceed the
reduction of the average annual
aggregate emissions of toxic air
pollutants in the PADD in calendar
years 1999 and 2000, the Administrator,
not later than 90 days after the date
of publication of the report for the
calendar year under subclause (I),
shall--
``(aa) identify, to the
maximum extent practicable, the
reasons for the failure,
including the sources, volumes,
and characteristics of
reformulated gasoline that
contributed to the failure; and
``(bb) promulgate revisions
to the regulations promulgated
under clause (ii), to take
effect not earlier than 180
days but not later than 270
days after the date of
promulgation, to provide that,
notwithstanding clause
(iii)(II), all reformulated
gasoline produced or
distributed at each refinery or
importer shall meet the
standards applicable under
clause (ii) not later than
April 1 of the year following
the report in subclause (II)
and for subsequent years.
``(vi) Regulations to control hazardous air
pollutants from motor vehicles and motor
vehicle fuels.--Not later than July 1, 2004,
the Administrator shall promulgate final
regulations to control hazardous air pollutants
from motor vehicles and motor vehicle fuels, as
provided for in section 80.1045 of title 40,
Code of Federal Regulations (as in effect on
the date of enactment of this subparagraph).''.
(c) Consolidation in Reformulated Gasoline Regulations.--Not later
than 180 days after the date of enactment of this Act, the
Administrator shall revise the reformulated gasoline regulations under
subpart D of part 80 of title 40, Code of Federal Regulations, to
consolidate the regulations applicable to VOC-Control Regions 1 and 2
under section 80.41 of that title by eliminating the less stringent
requirements applicable to gasoline designated for VOC-Control Region 2
and instead applying the more stringent requirements applicable to
gasoline designated for VOC-Control Region 1.
(d) Savings Clause.--Nothing in this section is intended to affect
or prejudice either any legal claims or actions with respect to
regulations promulgated by the Administrator prior to enactment of this
Act regarding emissions of toxic air pollutants from motor vehicles or
the adjustment of standards applicable to a specific refinery or
importer made under such prior regulations and the Administrator may
apply such adjustments to the standards applicable to such refinery or
importer under clause (iii)(I) of section 211(k)(1)(B) of the Clean Air
Act, except that--
(1) the Administrator shall revise such adjustments to be
based only on calendar years 1999-2000, and
(2) for adjustments based on toxic air pollutant emissions
from reformulated gasoline significantly below the national
annual average emissions of toxic air pollutants from all
reformulated gasoline, the Administrator may revise such
adjustments to take account of the scope of any lawful and
enforceable Federal or State prohibition on methyl tertiary
butyl ether imposed after the effective date of the enactment
of this paragraph, except that any such adjustment shall
require such refiner or importer, to the greatest extent
practicable, to maintain the reduction achieved during calendar
year 1999-2000 in the average annual aggregate emissions of
toxic air pollutants from reformulated gasoline produced or
distributed by the refinery or importer. Any such adjustment
shall not be made at a level below the average percentage of
reductions of emissions of toxic air pollutants for
reformulated gasoline supplied to PADD I during calendar years
1999-2000.

SEC. 9105. ANALYSES OF MOTOR VEHICLE FUEL CHANGES.

Section 211 of the Clean Air Act (42 U.S.C. 7545) is amended by
inserting after subsection (o) the following:
``(p) Analyses of Motor Vehicle Fuel Changes and Emissions Model.--
``(1) Anti-backsliding analysis.--
``(A) Draft analysis.--Not later than 4 years after
the date of enactment of this paragraph, the
Administrator shall publish for public comment a draft
analysis of the changes in emissions of air pollutants
and air quality due to the use of motor vehicle fuel
and fuel additives resulting from implementation of the
amendments made by title IX of the Energy Policy Act of
2003.
``(B) Final analysis.--After providing a reasonable
opportunity for comment but not later than 5 years
after the date of enactment of this paragraph, the
Administrator shall publish the analysis in final form.
``(2) Emissions model.--For the purposes of this
subsection, as soon as the necessary data are available, the
Administrator shall develop and finalize an emissions model
that reasonably reflects the effects of gasoline
characteristics or components on emissions from vehicles in the
motor vehicle fleet during calendar year 2005.''.

SEC. 9106. DATA COLLECTION.

Section 205 of the Department of Energy Organization Act (42 U.S.C.
7135) is amended by adding at the end the following:
``(m) Renewable fuels survey.--(1) In order to improve the ability
to evaluate the effectiveness of the Nation's renewable fuels mandate,
the Administrator shall conduct and publish the results of a survey of
renewable fuels demand in the motor vehicle fuels market in the United
States monthly, and in a manner designed to protect the confidentiality
of individual responses. In conducting the survey, the Administrator
shall collect information both on a national and regional basis,
including--
``(A) the quantity of renewable fuels produced;
``(B) the quantity of renewable fuels blended;
``(C) the quantity of renewable fuels imported;
``(D) the quantity of renewable fuels demanded;
``(E) market price data; and
``(F) such other analyses or evaluations as the
Administrator finds is necessary to achieve the purposes of
this section.
``(2) The Administrator shall also collect or estimate information
both on a national and regional basis, pursuant to subparagraphs (A)
through (F) of paragraph (1), for the five years prior to
implementation of this subsection.
``(3) This subsection does not affect the authority of the
Administrator to collect data under section 52 of the Federal Energy
Administration Act of 1974 (15 U.S.C. 790a).''.

SEC. 9107. FUEL SYSTEM REQUIREMENTS HARMONIZATION STUDY.

(a) Study.--
(1) In general.--The Administrator of the Environmental
Protection Agency and the Secretary of Energy shall jointly
conduct a study of Federal, State, and local requirements
concerning motor vehicle fuels, including--
(A) requirements relating to reformulated gasoline,
volatility (measured in Reid vapor pressure),
oxygenated fuel, and diesel fuel; and
(B) other requirements that vary from State to
State, region to region, or locality to locality.
(2) Required elements.--The study shall assess--
(A) the effect of the variety of requirements
described in paragraph (1) on the supply, quality, and
price of motor vehicle fuels available to consumers in
various States and localities;
(B) the effect of the requirements described in
paragraph (1) on achievement of--
(i) national, regional, and local air
quality standards and goals; and
(ii) related environmental and public
health protection standards and goals;
(C) the effect of Federal, State, and local motor
vehicle fuel regulations, including multiple motor
vehicle fuel requirements, on--
(i) domestic refineries;
(ii) the fuel distribution system; and
(iii) industry investment in new capacity;
(D) the effect of the requirements described in
paragraph (1) on emissions from vehicles, refineries,
and fuel handling facilities;
(E) the feasibility of developing national or
regional motor vehicle fuel slates for the 48
contiguous States that, while improving air quality at
the national, regional and local levels consistent with
the attainment of national ambient air quality
standards, could--
(i) enhance flexibility in the fuel
distribution infrastructure and improve fuel
fungibility;
(ii) reduce price volatility and costs to
consumers and producers;
(iii) provide increased liquidity to the
gasoline market; and
(iv) enhance fuel quality, consistency, and
supply;
(F) the feasibility of providing incentives, to
promote cleaner burning motor vehicle fuel; and
(G) the extent to which improvements in air quality
and any increases or decreases in the price of motor
fuel can be projected to result from the Environmental
Protection Agency's Tier II requirements for
conventional gasoline and vehicle emission systems, the
reformulated gasoline program, the renewable content
requirements established by this subtitle, State
programs regarding gasoline volatility, and any other
requirements imposed by States or localities affecting
the composition of motor fuel.
(b) Report.--
(1) In general.--Not later than December 31, 2006, the
Administrator of the Environmental Protection Agency and the
Secretary of Energy shall submit to Congress a report on the
results of the study conducted under subsection (a).
(2) Recommendations.--
(A) In general.--The report shall contain
recommendations for legislative and administrative
actions that may be taken--
(i) to improve air quality;
(ii) to reduce costs to consumers and
producers; and
(iii) to increase supply liquidity.
(B) Required considerations.--The recommendations
under subparagraph (A) shall take into account the need
to provide advance notice of required modifications to
refinery and fuel distribution systems in order to
ensure an adequate supply of motor vehicle fuel in all
States.
(3) Consultation.--In developing the report, the
Administrator of the Environmental Protection Agency and the
Secretary of Energy shall consult with--
(A) the Governors of the States;
(B) automobile manufacturers;
(C) motor vehicle fuel producers and distributors;
and
(D) the public.

Subtitle B--MTBE Cleanup

SEC. 9201. FUNDING FOR MTBE CONTAMINATION.

Notwithstanding any other provision of law, there is authorized to
be appropriated to the Administrator of the United States Environmental
Protection Agency from the Leaking Underground Storage Tank Trust Fund
not more than $850,000,000 to be used for taking such action limited to
site assessment (including exposure assessment), corrective action,
inspection of underground storage tank systems, and groundwater
monitoring as the Administrator deems necessary to protect human
health, welfare, and the environment from underground storage tank
releases of fuel containing fuel oxygenates.

TITLE X--AUTOMOBILE EFFICIENCY

SEC. 10001. 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 implement and enforce average fuel economy standards
$5,000,000 for fiscal years 2004 through 2006.

SEC. 10002. 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 study the feasibility and effects
of reducing by model year 2012, by a significant percentage, the use of
fuel for 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 the 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 XI--PREVENTING THE MISUSE OF NUCLEAR MATERIALS AND TECHNOLOGY

SEC. 11001. PREVENTING THE MISUSE OF NUCLEAR MATERIALS AND TECHNOLOGY.

(a) Amendment.--Chapter 14 of the Atomic Energy Act of 1954 (42
U.S.C. 2201 et seq.) is amended by adding at the end the following new
section:
``Sec. 170D. Preventing the Misuse of Nuclear Materials and
Technology.--
``a. In order to successfully promote the development of nuclear
energy as a safe and reliable source of electrical energy, it is the
policy of the United States to prevent any nuclear materials,
technology, components, substances, technical information, or related
goods or services from being misused or diverted from peaceful nuclear
energy purposes.
``b. In order to further advance the policy set forth in subsection
a., notwithstanding any other provision of law, no Federal agency shall
issue any license, approval, or authorization for the export or
reexport, or the transfer or retransfer, either directly or indirectly,
to any country whose government has been identified by the Secretary of
State as engaged in state sponsorship of terrorist activities
(specifically including any country the government of which, as of
September 11, 2001, had been determined by the Secretary of State under
section 620A(a) of the Foreign Assistance Act of 1961, section 6(j)(1)
of the Export Administration Act of 1979, or section 40(d) of the Arms
Export Control Act to have repeatedly provided support for acts of
international terrorism) of--
``(1) any special nuclear material or byproduct material;
``(2) any nuclear production or utilization facilities; or
``(3) any components, technologies, substances, technical
information, or related goods or services used (or which could
be used) in a nuclear production or utilization facility.
``c. Any license, approval, or authorization described in
subsection b. made prior to the date of enactment of this section is
hereby revoked.''.
(b) Table of Contents Amendment.--The table of contents of such
chapter 14 is amended by adding at the end the following item:

``Sec. 170D. Preventing the misuse of nuclear materials and
technology.''.

TITLE XII--ADDITIONAL PROVISIONS

SEC. 12001. TRANSMISSION TECHNOLOGIES.

The Federal Energy Regulatory Commission shall take affirmative
steps in the exercise of its authorities under the Federal Power Act to
encourage the deployment of transmission technologies that utilize real
time monitoring and analytical software to increase and maximize the
capacity and efficiency of transmission networks and to reduce line
losses.

Union Calendar No. 42

108th CONGRESS

1st Session

H. R. 1644

[Report No. 108-65, Part I]

_______________________________________________________________________

A BILL

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.

_______________________________________________________________________

April 8, 2003

Reported from the Committee on Energy and Commerce with an amendment

Referred to the Committee on the Judiciary for a period ending not
later than April 9, 2003, for consideration of such provisions of the
bill and amendment as fall within the jurisdiction of that committee
pursuant to clause 1(k), rule X

Referral to the Committees on Science, Resources, Education and the
Workforce, and Transportation and Infrastructure extended for a period
ending not later than April 9, 2003

April 9, 2003

Referred to the Committee on Government Reform for a period ending not
later than April 9, 2003, for consideration of such provisions of the
bill and amendment as fall within the jurisdiction of that committee
pursuant to clause 1(h), rule X

The Committees on Science, Resources, Education and the Workforce,
Transportation and Infrastructure, the Judiciary, and Government Reform
discharged; referred to the Committee of the Whole House on the State
of the Union and ordered to be printed